# EDGAR Filing Document

**Accession Number:** 0000835403
**File Stem:** 0000835403-25-000021
**Filing Date:** 2025-8
**Character Count:** 1510673
**Document Hash:** 64e9cdf1f568ceec1b18b97389bdc288
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000835403-25-000021.hdr.sgml**: 20250814

**ACCESSION NUMBER**: 0000835403-25-000021

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 464

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250814

**DATE AS OF CHANGE**: 20250814

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** DIAGEO PLC
- **CENTRAL INDEX KEY:** 0000835403
- **STANDARD INDUSTRIAL CLASSIFICATION:** BEVERAGES [2080]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 000000000
- **STATE OF INCORPORATION:** X0
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-10691
- **FILM NUMBER:** 251214514

**BUSINESS ADDRESS:**
- **STREET 1:** 16 GREAT MARLBOROUGH STREET
- **CITY:** LONDON
- **STATE:** X0
- **ZIP:** W1F 7HS
- **BUSINESS PHONE:** 020 7947 9100

**MAIL ADDRESS:**
- **STREET 1:** 16 GREAT MARLBOROUGH STREET
- **CITY:** LONDON
- **STATE:** X0
- **ZIP:** W1F 7HS

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** GRAND METROPOLITAN PUBLIC LIMITED CO
- **DATE OF NAME CHANGE:** 19971218

?xml version='1.0' encoding='ASCII'? deo-20250630

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| | |
|:---|:---|
| F-1 | **Diageo** Form 20-F 2025 |

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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 2025**

**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, LondonW1F 7HS, England**

(Address of principal executive offices)

**Randall Ingber, General Counsel & Company Secretary**

**Tel: +4420 7947 9100**

**E-mail: the.cosec@diageo.com**

**16 Great Marlborough Street, 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:

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| | | |
|:---|:---|:---|
| **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<sup>101</sup>/108 pence each |  | New York Stock Exchange<sup>(i)</sup> |

---

(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.

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| | |
|:---|:---|
| F-2 | **Diageo** Form 20-F 2025 |

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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: 2,432,425,127 ordinary shares of 28<sup>101</sup>/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🗹 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🗹

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🗹 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🗹 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 :

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| Large Accelerated Filer | 🗹 | 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. ◻

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| | |
|:---|:---|
| †  | The term 'new or revised financial accounting standard' refers to any update issued by the Financial Accounting <br>Standards Board to its Accounting Standards Codification after April 5, 2012.<br>|

---

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. 🗹

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:

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| | | | |
|:---|:---|:---|:---|
| 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 🗹

---

| | |
|:---|:---|
| F-3 | **Diageo** Form 20-F 2025 |

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| | |
|:---|:---|
| **Contents** | **Contents** |
| **F-5** | **Cross reference to Form 20-F** |
| **F-7** | **Introduction** |
| **1** | **Strategic report: Our business** |
| 1 | Diageo at a glance |
| 2 | Chair's statement |
| 4 | Chief Executive's statement |
| 6 | Performance highlights |
| 8 | Investment case |
| 9 | Market dynamics |
| 10 | Our Growth Ambition |
| 11 | Our strategy |
| **16** | **Strategic report: Our performance** |
| 16 | Our performance |
| 20 | Summary financial review |
| 24 | Business review |
| F-9 | Business review - Corporate |
| 33 | Group financial review |
| F-10 | Operating results 2024 compared with 2023 |
| 36 | 'Spirit of Progress' |
| 38 | Business integrity and human rights |
| 40 | Our people and culture |
| 42 | Health and safety |
| 44 | Promote positive drinking |
| 46 | Pioneering grain to glass sustainability |
| 58 | Champion inclusion and diversity |
| 60 | Our ESG reporting approach |
| 63 | Risk factors |
| **74** | **Governance report** |
| 75 | Chair's introduction to Governance |
| 76 | Corporate governance structure and division of responsibilities |
| 78 | Board of Directors |
| 80 | Executive Committee |
| 82 | Corporate governance report |
| 97 | Audit Committee report |
| F-11 | Management's report on internal control over financial reporting |
| 104 | Nomination Committee report |
| 108 | Directors' Remuneration report |
| 135 | Directors' report |
| **139** | **Financial statements** |
| 140 | Report of Independent Registered Public Accounting Firm - PCAOB ID 876 |

---

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| | |
|:---|:---|
| F-4 | **Diageo** Form 20-F 2025 |

---

---

| | |
|:---|:---|
| **Contents (continued)** | **Contents (continued)** |
| **213** | **Additional information** |
| 213 | Unaudited financial information |
| 222 | Cautionary statement concerning forward-looking statements  |
| 226 | Other additional information |
| **233** | **Liquidity and capital resources** |
| **238** | **Exhibits** |
| **240** | **Signature** |
| **241** | **Glossary of terms and US equivalents** |

---

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| | |
|:---|:---|
| F-5 | **Diageo** Form 20-F 2025 |

---

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| | | |
|:---|:---|:---|
| **Cross reference to Form 20-F** | **Cross reference to Form 20-F** | |
| **Item** | **Required item in Form 20-F** | <br>**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 | 63-73 |
| 4. | **Information on the company** |  |
|  | A. History and development of the company | F-7-F-8, 2-5, 22-32, 37-38, 45, 47-50, 64-70, <br>73, 82, 155-157, 170-176, 226-232<br>|
|  | B. Business overview | F-7-F-8, 2-5, 22-32, 37-38, 45, 47-50, 64-70, <br>73, 82, 155-157, 170-176, 226-232<br>|
|  | C. Organisational structure | 200 |
|  | D. Property, plant and equipment | 25, 174-176, 226-227 |
| 4A. | **Unresolved staff comments** | Not applicable |
| 5. | **Operating and financial review and prospects** |  |
|  | A. Operating results | 2-5, 16-17, 20-22, 24-35, F-9, F-10, 63-64, <br>67, 71, 153-159, 161, 184-193, 213-215, 222<br>|
|  | B. Liquidity and capital resources | 6, 16-17, 20, 22, 184-192, 217-218, 232-236 |
|  | C. Research and development, patents and licenses, etc. | 160, 227 |
|  | D. Trend information | 2-5, 8-19, 24-32, F-9, 222 |
|  | E. Critical Accounting Estimates | 102, 153-154 |
| 6. | **Directors, senior management and employees** |  |
|  | A. Directors and senior management | 76-83 |
|  | B. Compensation | 35, 78-81, 108-134, 176-180, 199-200 |
|  | C. Board practices | 3, 75-85, 95-98, 100-101, F-11, 104-106, <br>108-110, 118<br>|
|  | D. Employees | 24, 41, 160, 227 |
|  | E. Share ownership | 112-132, 196 |
|  | F. Disclosure of a registrant's action to recover erroneously awarded <br>compensation<br>| Not applicable |
| 7. | **Major shareholders and related party transactions** |  |
|  | A. Major shareholders | 135 |
|  | B. Related party transactions | 134, 199-200 |
|  | C. Interests of experts and counsel | Not applicable |
| 8. | **Financial information** |  |
|  | A. Consolidated statements and other financial information | 34, 148-200 |
|  | B. Significant changes | 102, 153-154, 216 |
| 9. | **The offer and listing** |  |
|  | A. Offer and listing details | 82-83, 136, 228-229 |
|  | B. Plan of distribution | Not applicable |
|  | C. Markets | 82-83, 136 |
|  | D. Selling shareholders | Not applicable |
|  | E. Dilution | Not applicable |
|  | F. Expenses of the issue | Not applicable |

---

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| | |
|:---|:---|
| F-6 | **Diageo** Form 20-F 2025 |

---

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| | | |
|:---|:---|:---|
| **Cross reference to Form 20-F (continued)** | **Cross reference to Form 20-F (continued)** | |
| **Item** | **Required item in Form 20-F** | <br>**Page(s)** |
| 10. | **Additional information** |  |
|  | A. Share capital | Not applicable |
|  | B. Memorandum and articles of association | 82-83, 135-137 |
|  | C. Material contracts | 135, 227, 237 |
|  | D. Exchange controls | 232 |
|  | E. Taxation | 228-230 |
|  | F. Dividends and paying agents | Not applicable |
|  | G. Statement by experts | Not applicable |
|  | H. Documents on display | 232 |
|  | I. Subsidiary information | Not applicable |
|  | J. Annual report to security holders | Exhibit 15.2 |
| 11. | **Quantitative and qualitative disclosures about market risk** | 184-192 |
| 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 | 136-137, 228-230 |
| **Part II** |  |  |
| 13. | **Defaults, dividend arrearages and delinquencies** | Not applicable |
| 14. | **Material modifications to the rights of security holders and use of** <br>**proceeds**<br>| Not applicable |
| 15. | **Controls and procedures** |  |
|  | A. Disclosure controls and procedures | 98 |
|  | B. Management's report on internal control over financial reporting | 101, F-11 |
|  | C. Attestation report of the registered public accounting firm | 140-142 |
|  | D. Changes in internal control over financial reporting | 101, F-11 |
| 16A. | **Audit committee financial expert** | 101 |
| 16B. | **Code of ethics** | 82-83, 101 |
| 16C. | **Principal accountant fees and services** | 98-99, 160 |
| 16D. | **Exemptions from the listing standards for audit committees** | Not applicable |
| 16E. | **Purchases of equity securities by the issuer and affiliated** <br>**purchasers**<br>| 194 |
| 16F. | **Change in registrant's certifying accountant** | Not applicable |
| 16G. | **Corporate governance** | 75-85, 95-106 |
| 16H. | **Mine safety disclosure** | Not applicable |
| 16I. | **Disclosure Regarding Foreign Jurisdictions that Prevent** <br>**Inspections**<br>| Not applicable |
| 16J. | **Insider trading policies** | 101 |
| 16K. | **Cybersecurity** | 103 |
| **Part III** |  |  |
| 17. | **Financial statements** | Not applicable |
| 18. | **Financial statements** | 148-200 |
| 19. | **Exhibits** | 238-239 |
| **Additional information** | **Additional information** |  |
|  | **Glossary of terms and US equivalents** | 241-242 |

---

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|:---|:---|
| F-7 | **Diageo** Form 20-F 2025 |

---

**Introduction**

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 2025. 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 2025, 30 June 2024

and/or 30 June 2023. The accounts for the years ended 30 June 2024 and 30 June 2023 have been delivered to the registrar of

companies for England and Wales and those for the year ended 30 June 2025 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 222.

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<sup>®</sup> 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.

The financial performance expectations related to Diageo's Accelerate programme, Diageo's fiscal 26 outlook, Diageo's medium-

term guidance and any other statements related to Diageo's performance expectations for the year ending 30 June 2026 or thereafter

included in this document have been prepared by and are the responsibility of Diageo's management. PricewaterhouseCoopers LLP

has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the financial performance

expectations and, accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect

thereto. The PricewaterhouseCoopers LLP report included in this document relates to Diageo's historical financial statements. It does

not extend to the financial performance expectations and should not be read to do so. The financial performance expectations were

not prepared with a view toward compliance with published guidelines of the Securities and Exchange Commission or the guidelines

established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial

information.

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|:---|:---|
| F-8 | **Diageo** Form 20-F 2025 |

---

**Introduction (continued)**

**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 213 for explanation and reconciliation of non-

GAAP measures, including organic net sales, organic operating profit, free cash flow, eps before 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.

**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 'Statement on Section 172 of the Companies Act 2006' on page 2.

• Disclosures under the headings 'Spirit of Progress' and 'Looking ahead to fiscal 26 and beyond' in the Chair's statement on page 3.

• Disclosures under the headings 'Accelerate: Strengthening Diageo for the future', 'Leadership: Executive Committee changes this

fiscal' and 'Looking ahead' in the Chief Executive's statement on page 5.

• Disclosures under the heading 'Fiscal 25 non-financial performance' on page 6.

• Disclosures under the heading 'A strong investment case' on page 8.

• Disclosures under the heading 'Progressing our Growth Ambition' on page 10.

• Disclosures under the heading 'Our Strategy' on page 11.

• Disclosures under the headings 'Don Julio Presents 194GOU' and 'The Sweeter Side of Johnnie Walker Black Label' on page 12.

• Disclosures under the heading 'Guinness' Lovely Day in the United States' on page 13.

• Disclosures under the heading 'Non-financial performance' on pages 18 to 19.

• Disclosures under the heading 'Health and safety' on pages 42 to 43.

• Disclosures under the headings 'Stakeholder engagement', 'Wider stakeholder engagement' and 'Workforce Engagement

statement' on pages 86 to 93.

• Disclosures under the headings 'Internal control and risk management', 'Viability statement', 'Going concern', and 'Political

donations' on page 95.

• Disclosures under the headings 'Disclosure of information to the auditor' and 'Corporate governance statement' on page 135.

---

| | |
|:---|:---|
| 1 | **Diageo** Annual Report 2025 |

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A broad portfolio of *iconic brands*

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| | |
|:---|:---|
| OUR PURPOSE | OUR STRATEGY |
| ![At A Glance Purpose.jpg](deo-20250630_g1.jpg) | Unleash the power of our *brands* and <br>portfolio to lead and shape *consumer trends* <br>executed with *operational excellence* <br>|

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| |
|:---|
| OUR PERFORMANCE |
| **$20.2bn**<br>fiscal 25 reported net sales<br>**13**<br>billion dollar brands<sup>(1)</sup><br>**#1**<br>in international spirits by retail <br>sales value<sup>(1)</sup><br>**1.4x** <br>larger than nearest international <br>spirits competitor<sup>(1)</sup><br>|

---

![](deo-20250630_g2.gif)

![1-1.jpg](deo-20250630_g3.jpg)

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| | | | |
|:---|:---|:---|:---|
| OUR GLOBAL FOOTPRINT | OUR GLOBAL FOOTPRINT |  |  |
| **∼180**<br>countries and territories<br>| **200+** <br>brands<br>| **29,000+**<br>employees<br>| **110+**<br>manufacturing sites<br>|

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OUR CATEGORIES AND PRICE POINTS<br>

**#1 in**

whisk(e)y

![Tick.gif](deo-20250630_g4.gif)

tequila

![Tick.gif](deo-20250630_g4.gif)

vodka

![Tick.gif](deo-20250630_g4.gif)

gin

![Tick.gif](deo-20250630_g4.gif)

liqueurs

![Tick.gif](deo-20250630_g4.gif)

non-alc spirits

![Tick.gif](deo-20250630_g4.gif)

by retail sales value<sup>(1)</sup>

(1) IWSR, 2024 (USD value)

**Fiscal 25 reported net sales by price tier**

![1-2.jpg](deo-20250630_g5.jpg)

![221](deo-20250630_g6.gif)

Value

Standard

Premium

Super-premium

Ultra-

premium

Luxury

![](deo-20250630_g7.gif)

![](deo-20250630_g8.gif)

![](deo-20250630_g9.gif)

**25%**

![](deo-20250630_g10.gif)

![](deo-20250630_g11.gif)

**62%**

![2.jpg](deo-20250630_g12.jpg)

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| | |
|:---|:---|
| 2 | **Diageo** Form 20-F 2025 |

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CHAIR'S STATEMENT

**Sir John Manzoni**

Chair

**Reflections on my first six months**

In February 2025, I was appointed as Chair of the Diageo Board after

three and a half years as a Non-Executive Director, succeeding Javier

Ferrán. I would first like to extend my sincere thanks to Javier, who

led the Board with great dedication and stewardship.

Having been a member of the Board since 2020, I have a deep

appreciation for the legacy of the company and its iconic brands, and I

am committed to ensuring we do more to unlock the full potential of

Diageo.

Over these last six months, I have spent extensive time with our

leadership, colleagues, customers and stakeholders in almost every

corner of the organisation around the globe. I have listened to their

views and insights into Diageo, our industry and the broader

consumer environment.

From our breweries in Ireland and our tequila operations in Mexico, to

sales teams across Europe and the United States, and of course our

historic scotch distilleries – what has stood out consistently is our

unrivalled portfolio of brands, our truly global footprint, our fantastic

brand-building capabilities and our dedicated workforce.

These distinctive qualities give me confidence in our abilities over the

long-term. There is no question that current industry conditions are

challenging, but we are taking steps with urgency to ensure Diageo is

positioned to win in the short-term, and emerge stronger and more

agile when conditions improve.

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| | |
|:---|:---|
| STATEMENT ON SECTION 172 OF THE COMPANIES <br>ACT 2006  | STATEMENT ON SECTION 172 OF THE COMPANIES <br>ACT 2006  |
| Section 172 of the Companies Act 2006 requires the Directors to <br>promote the success of the company for the benefit of the <br>members as a whole, having regard to the interests of stakeholders <br>in their decision-making. In making decisions, the Directors consider <br>what is most likely to promote the success of the company for its <br>shareholders in the long term, as well as the interests of the <br>group's stakeholders. The Directors understand the importance of <br>taking into account the views of stakeholders and the impact of <br>the company's activities on local communities, the environment, <br>including climate change, and the group's reputation. | Section 172 of the Companies Act 2006 requires the Directors to <br>promote the success of the company for the benefit of the <br>members as a whole, having regard to the interests of stakeholders <br>in their decision-making. In making decisions, the Directors consider <br>what is most likely to promote the success of the company for its <br>shareholders in the long term, as well as the interests of the <br>group's stakeholders. The Directors understand the importance of <br>taking into account the views of stakeholders and the impact of <br>the company's activities on local communities, the environment, <br>including climate change, and the group's reputation. |
| ![read-more-white.gif](deo-20250630_g13.gif) | **Read more about how stakeholders were taken into account in** <br>**decision-making on pages 86-90.**<br>|

---

**Fiscal 25 performance**

The macroeconomic and geopolitical environment continues to be

challenging for the Total Beverage Alcohol (TBA) industry, as well as

broader consumer goods, particularly in the United States and China.

Over the past two years, consumer wallets and confidence have been

under sustained pressure.

Despite this, Diageo delivered organic net sales growth in fiscal 25 of

1.7%, driven by organic volume growth of 0.9% and positive price/mix

of 0.8%. Don Julio, Guinness and Crown Royal were the standout

performers, seeing good growth in the year. Whilst there is clearly

more to do, I am pleased that we are showing organic growth ahead of

competition.

In a challenging year we kept the dividend flat, which we feel is

prudent. This brings our full year dividend to 103.48 cents per share.

This decision has been made with reference to performance trends and

short-term macroeconomic and geopolitical pressures, and does not

reflect reduced confidence in the long-term strength and growth

potential of the business. Going forward, we remain committed to a

progressive dividend policy.

This year, we launched and have made good progress on the initial

phase of Accelerate, our company-wide programme to strengthen the

business.

Accelerate is helping to drive a disciplined focus on cost management

and consistent cash delivery, as well as strengthening our operating

model, and improving commercial and digital capabilities. It is clear

that we must do more to rebuild confidence and grow quality

market share.

Whilst this is only the first phase of the programme, these changes are

a vital opportunity to make Diageo a more efficient and agile company,

delivering both more consistent growth and cash flow, as well as

stronger shareholder returns.

**Consumer trends and industry fundamentals**

Looking more broadly at the industry, there has been considerable

discussion on emerging new consumer trends, which our Board and

management team continue to monitor. Moderation is a theme we are

monitoring particularly closely, as well as many sub-factors, including

the impact of GLP-1s (weight-loss drugs), cannabis and Gen Z

consumption patterns.

We see moderation as a significant opportunity for Diageo, with the

inherent versatility of spirits making moderation more accessible and

appealing. Diageo's long-term conviction that consumers want to

'drink better, not more' remains one of the key building blocks of our

strategy.

Our position in the non-alcoholic space is already strong. We are now

the world's largest non-alcoholic spirits player, more than four times

bigger than any of our competitors in this space<sup>(1)</sup>.This fiscal, we

expanded our portfolio with the acquisition of Ritual Beverage

Company LLC and rolled out Captain Morgan 0.0 to more markets,

complementing our existing non-alcoholic options: Guinness 0.0,

Tanqueray 0.0, Gordon's 0.0 and Seedlip.

As well as moderation, other long-standing consumer dynamics remain

significant for Diageo, including premiumisation, where we are

positioned to win across different categories and occasions. Over the

last 10 years, premium and above international spirits grew from 26%

of category value to almost 35%. The super-premium plus price-tier has

grown in value more than 50% faster than other price tiers in the

category.<sup>(1)</sup>

(1) IWSR, 2024 (by retail sales value)

---

| | |
|:---|:---|
| 3 | **Diageo** Form 20-F 2025 |

---

Whilst macroeconomic uncertainty is impacting both the timing and

pace of recovery, we continue to believe in the attractive long-term

fundamentals of our industry and in our ability to outperform the

market, underpinned by our portfolio of 13 billion-dollar brands.

Changing consumer tastes are not new for a business like Diageo and

they present us with opportunities to leverage our scale in our leading

positions, across more categories than anyone else.

**Board changes for a new chapter**

In July, we announced that Debra Crew had stepped down as Diageo

Chief Executive and as a Board Director. On behalf of Diageo and the

Board, I would like to thank Debra for her many contributions to

Diageo, including steering the company through the challenging

aftermath of the global pandemic and the ensuing volatility.

The Board is engaged in a comprehensive search process for Debra's

successor, which includes consideration of internal and external

candidates, to secure the best individual to lead Diageo and to take

the company forward. Nik Jhangiani, Chief Financial Officer, has been

appointed Interim Chief Executive until a permanent appointment is

made. We are pleased that our former Chief Financial Officer, Deirdre

Mahlan, has agreed to rejoin Diageo as Interim Chief Financial Officer.

Nik joined us as Chief Financial Officer in September 2024, bringing

with him more than 30 years of finance experience gained in roles in

the United Kingdom, Europe, India, Africa and the United States. This

includes 20 years as a Chief Financial Officer, spending most of his

career in consumer and beverage industries, including within the Coca-

Cola system.

In addition, we were delighted to welcome Julie Brown in August 2024

as a Non-Executive Director and Chair of the Audit Committee,

succeeding Alan Stewart. Julie currently serves as Chief Financial Officer

of GSK plc and was previously Chief Operating and Financial Officer

and Executive Director at Burberry Group plc. She has decades of

experience in financial, commercial and strategic roles in complex

multi-national organisations within highly regulated and consumer

industries.

These additions to our Board and leadership team bring invaluable

breadth and depth of experience. Looking ahead, we will continue

to keep the composition of the Board under regular review and will add

skills and expertise as necessary and where it enhances our overall

capabilities.

**Spirit of Progress**

Hand-in-hand with our ambition for Diageo to be one of the best-

performing consumer products companies is our ambition to remain

highly trusted and respected across everything we do.

This is why we remain strongly committed to our 'Spirit of Progress' ESG

action plan. Over the past 12 months, the Board has been particularly

focused on the aspects where we believe we can have the most

substantial impact – positive drinking and water stewardship.

I am proud that Diageo has promoted responsible drinking since its

formation in 1997. We continue that commitment today by investing in

education programmes to discourage the harmful use of alcohol and

encouraging moderate drinking.

This includes DRINKiQ, established in 2008, to provide people with

world class information so they can make informed choices around

alcohol consumption, which is now communicated on our brand

packaging.

We also ensure our marketeers put their creative talents towards

moderation advertising. For example, during this fiscal we launched

our bold new 'Take a Minute. Make a Plan. Never Drive Impaired'

campaign in the United States, in partnership with Mothers Against

Drunk Driving, the National Football League and Uber, to tackle

impaired driving. This campaign reached millions of consumers.

Our focus on water-stressed areas has continued to deliver strong

water-use efficiency performance with a 2.6% improvement in the

water efficiency index versus last year and a 20.6% improvement since

our 2020 baseline. We continued to replenish water in our priority

water basins, this year delivering over 3 million cubic metres of

additional capacity, collaborating with key partners to support the

communities in which we operate.

After careful review of our carbon reduction goals, we proposed new

science-based targets, reflecting both the opportunities and challenges

associated with reducing emissions, which were approved by the

Science Based Targets initiative (SBTi). These include new interim

targets for direct and value chain emissions and longer-term net zero

targets. We remain committed to a science-based approach and

delivering against stretching ambitions.

**Looking ahead to fiscal 26 and beyond**

In the immediate term, my focus, and that of the Board, is to appoint

the right Chief Executive, and support our leadership team to get

Diageo back to delivering consistent growth, maximising the

opportunities to strengthen the business and deliver stronger

shareholder returns.

We will continue to prioritise a culture with our customers and

consumers at the core, encouraging accountability, agility and

adaptability.

Finally, I want to thank our employees around the world. Their energy,

ideas, work ethic, passion for our brands, and commitment to our

business in what has been a particularly difficult operating

environment is deeply appreciated. I was delighted to hear that our

employee engagement levels have remained high this year, with 90% of

our employees stating they are proud to work for Diageo.

The Board and I are committed to working closely with the Executive

Committee to ensure the decisions we make today position Diageo to

thrive and deliver for shareholders. More resilient, more responsive,

and more relevant to consumers than ever before.

![John Sig.jpg](deo-20250630_g14.jpg)

**Sir John Manzoni** 

Chair

![4.jpg](deo-20250630_g15.jpg)

---

| | |
|:---|:---|
| 4 | **Diageo** Form 20-F 2025 |

---

CHIEF EXECUTIVE'S STATEMENT

**Nik Jhangiani**

Interim Chief Executive

**Introduction**

Having been appointed Interim Chief Executive in July 2025, I am pleased

to be sharing Diageo's Annual Report for the 2025 fiscal year with our

shareholders and wider stakeholders. I would like to thank Debra Crew for

her significant contribution to Diageo. I know I speak for everyone at the

company in thanking her for her work over the last six years and wishing

her the very best for the future.

I joined Diageo as Chief Financial Officer in September 2024. Since then,

I have fully immersed myself into the company and have seen first-

hand that this is a business full of passionate people who want to win.

The purpose Diageo was founded with in 1997 remains the same today:

to help consumers around the world to celebrate life, every day,

everywhere. With a broad portfolio of iconic brands in many of the

largest categories in Total Beverage Alcohol (TBA), 13 billion-dollar

brands, several of which are leading in their respective categories, and

sales in nearly 180 countries, we are fortunate to have a number of

competitive advantages. However, we must do more to continue to

lead the way in premium drinks and drive growth in an evolving TBA

landscape, and deliver stronger shareholder returns.

I look forward to working in my new capacity alongside the Board of

Directors, the Executive Committee and our broader workforce in doing

this.

**Delivering on guidance despite a challenging** 

**market**

Our industry backdrop has remained highly challenging in fiscal 25 –

arguably tougher than in many previous cycles.

We have continued to undertake considerable contingency planning in

recent months in relation to tariffs, and have taken action to help

mitigate their potential impact including inventory management,

supply chain optimisation and re-allocation of investments. Looking

ahead, we will continue to work on mitigating measures, and our long

track record of managing international tariffs gives us confidence in

our ability to navigate this successfully.

We continue to believe in the attractive long-term fundamentals of our

industry and in our ability to continue to outperform the market as the

TBA landscape evolves. This is consistent with the consumer data that

we have collated and continue to track across our markets, including

early findings from our recent proprietary survey of 21 markets. We

will continue to track the evolving landscape closely to understand

nuances and changes.

In fiscal 25, organic net sales grew 1.7%, including the impact of the

Cîroc transaction. Excluding this impact, Diageo's organic net sales

growth was 1.5% and organic operating profit declined by 1.0%,

consistent with our guidance.

Organic operating profit declined by 0.7% including the impact of the

Cîroc transaction, mainly due to continued investment in overheads and

partly offset by slight gross margin expansion. Net cash flow from

operating activities increased by $0.2 billion to $4.3 billion. Free cash

flow increased by $0.1 billion to $2.7 billion.

Despite the tough consumer landscape, many of our markets and

brands have delivered positive performance this year.

Tequila organic net sales were up 18% in the fiscal, with share gains

across our business. Diageo is the #1 tequila player globally and our

portfolio gained share in 94% of reported net sales in measured

markets, with strong performance particularly from Don Julio

Reposado. Building on this, Don Julio was activated at scale with Día

de los Muertos across 24 countries. Don Julio 1942 also saw its first

ever global product collaboration with DJ Peggy Gou.

Diageo remains the global leader in international whisk(e)y,<sup>(1)</sup> with

nearly 25% value share.<sup>(2)</sup>In fiscal 25, our Canadian whisky Crown Royal

grew by 3%. Johnnie Walker, while gaining share of international

whisk(e)y and scotch and recruiting consumers including through the

launch of Johnnie Walker Black Ruby, saw an organic net sales decline,

largely driven by the United States, Asia Pacific Travel Retail and

Greater China. When the consumer wallet is under pressure, scotch is

typically one of the most adversely impacted categories. In fiscal 26,

we are focused on accelerating Johnnie Walker recruitment through

both premiumisation and scaling innovation.

Guinness has continued its remarkable growth journey, with over 3.8

million new LPA+ drinkers since 2019. It became the number one beer

in football occasions in Great Britain<sup>(3)</sup> thanks to our English Premier

League partnership. It has expanded to 88 markets, and continues to

make strides in the United States, which we believe is a major long-

term opportunity. Guinness has also recruited a significant number of

new consumers in new occasions. For instance, in Ireland, Guinness is

now more popular in the summer than at Christmas; and Guinness 0.0

is playing a key role in addressing moderation, becoming Great

Britain's number one non-alcoholic beer.<sup>(4)</sup>

We have made a number of selective disposals consistent with

our long-term strategy of deleveraging and improving balance sheet

flexibility. This includes the sale of non-core brands Pampero, Safari

and Cacique, as well as a shift to an asset-light model in many parts

of Africa, with the disposal of shareholdings in Guinness Nigeria,

Guinness Ghana and Seychelles Breweries. We also made the strategic

decision to move forward with a reduced number of investments within

Distill Ventures and to no longer bring in any new brands through the

programme. Going forward, we remain committed to actively pursuing

disposals of appropriate, non-core assets.

We have made progress this fiscal, but there is clearly more work to

do. I am focused on driving accelerated growth, sharpening our

strategy and improving the performance of our broader portfolio and

brands.

**Addressing the moderation opportunity**

Our strategy has long been centred on consumers drinking better, not

more, and moderation is one of the most significant long-term trends

we track. I am proud that Diageo has advocated for responsible

drinking since our formation, funding and championing consumer

education through our brands as well as specific programmes that

target underage drinking and drink-driving.

(1) Includes Scotch, Irish, US, Canadian and Japanese whiskeys

(2) IWSR, 2024 (by retail sales value)

(3) Alcovision data to March 2025

(4) IWSR, 2024 (by retail sales value)

---

| | |
|:---|:---|
| 5 | **Diageo** Form 20-F 2025 |

---

In fiscal 25, we have seen increased attention on the moderation

agenda. We view moderation as one of our greatest opportunities. The

inherent versatility of spirits makes moderation more accessible and

appealing, and we are leaders in the fast-growing non-alcoholic spirits

category.

In addition, this segment not only clearly supports moderation but

enables us to recruit consumers from beyond spirits. To extend our

leadership, in fiscal 25, we acquired Ritual Beverage Company LLC, the

#1 non-alcoholic spirits brand in the United States.

Our broader non-alcoholic portfolio also delivered strong performance

in fiscal 25, growing c.40%, with particularly strong momentum in

Guinness 0.0 which delivered double-digit net sales growth, with

standout performance in Great Britain, Ireland and the United States.

**Accelerate: Strengthening Diageo for the future** 

This year marked the launch of Accelerate, our company-wide

initiative to build a stronger, more efficient and agile business, setting

out clear cash delivery targets and a disciplined approach to

operational excellence and cost efficiency.

The first phase of the Accelerate programme is progressing well.

Underpinning delivery of our guidance are the following targets:

1.**Consistent cash delivery:** Guidance remains to sustainably deliver c.

$3 billion free cash flow per annum from fiscal 26, increasing as

business performance improves. A renewed focus on cash has been

implemented across the organisation, including delivering a positive

operating leverage and reduced capex from fiscal 26.

2.**Cost savings**: We now expect to deliver c.$625 million cost savings

over the next three years. This includes savings from A&P

efficiencies, overheads, supply chain efficiencies and trade

investment.

3**Commitment to deleveraging:** We continue to expect to be well

within the leverage target range of 2.5-3.0x net debt to adjusted

EBITDA no later than fiscal 28. This will be delivered through a

combination of organic growth and positive operating leverage,

combined with tighter capital discipline, and appropriate and

selective disposals over the coming years.

As part of Accelerate, we are also evolving our operating model to give

us a competitive advantage. For example, in Europe, we have

undertaken work to unlock the region's full potential. This includes

targeted investments and the creation of more standalone markets,

such as Iberia and Italy, to bring us closer to customers and consumers,

while driving better performance.

**Leadership: Executive Committee changes this** 

**fiscal** 

In March 2025, Praveen Someshwar joined Diageo as Managing Director

of Diageo India and CEO of USL, taking over from Hina Nagarajan. Prior

to this, Praveen was MD and CEO of HT Media, one of India's largest

and best-known media groups.

After four years as Diageo India Managing Director and CEO of USL, in

March 2025, Hina Nagarajan took on the role of President of our Africa

business. Prior to her successful period leading Diageo India, Hina's

first role in Diageo from 2018 onwards was Managing Director of Africa

Emerging Markets.

Dayalan Nayager, previously President of Diageo Africa since July 2022,

became President of Diageo Europe, taking over from John Kennedy,

retaining his role of Chief Commercial Officer. Over the last 12 years,

Dayalan has led several Diageo businesses in Europe, including Great

Britain, Ireland and France. I want to thank John for leading the

Europe business on an interim basis since January 2024 and completing

his 30-year tenure at Diageo in 2023.

Randall Ingber re-joined Diageo in June 2025, succeeding Tom Shropshire

as General Counsel, and taking over as Company Secretary from the

start of fiscal 26. Randall had a successful 19-year career within our

Legal function before serving as General Counsel and Company

Secretary at Lion Group, a leading Australasian beverage alcohol

business and one of the largest craft brewers in the United States.

I would like to thank Tom for his significant impact during his time with

Diageo. Since 2021, he has been instrumental to shaping our agenda,

advising our Board and Executive Committee on a range of topics.

Lastly, we are looking forward to Deirdre Mahlan rejoining Diageo as

our interim Chief Financial Officer later in August. Deirdre's deep

spirits industry experience and financial expertise includes a 27-year

career with Diageo and predecessor companies, culminating in five

years as CFO and five more leading our North American business.

I am looking forward to working with the Executive Committee and the

Board as we work to deliver our commitments to shareholders for fiscal

26. **Looking ahead**

We look ahead to fiscal 26 with a strong sense of purpose and resolve.

Alongside the Board and the Executive Committee, I am committed

to driving sustainable net sales growth, leveraging the strength of our

portfolio and brand-building capabilities whilst strengthening Diageo's

commercial execution.

Our Accelerate programme is progressing at pace and is central to

creating a more agile and performance-focused organisation. All of the

actions currently underway will position us well to drive increased

growth as the market recovers and the TBA landscape evolves.

We look forward to continuing to bring our brands to life in fiscal 26,

both through superior commercial execution and via high profile

partnerships and events, such as the FIFA 2026 World Cup, for which

we are the official spirits partner in the Americas.

Lastly and most importantly, I want to thank my Diageo colleagues

around the world, whose commitment, agility, and passion for our

brands is our greatest asset and a deep source of pride.

Diageo's ambition remains clear: to be one of the best performing,

most trusted and respected consumer products companies in the

world. With world-class brands and talent, highly effective global

consumer insights and an ongoing focus on efficiency and

effectiveness, we are confident in our ability to outperform the

market, restore Diageo to a top quartile TSR consumer company, and

provide stronger returns to shareholders.

![Nik Jhangiani E-signature (002).jpg](deo-20250630_g16.jpg)

**Nik Jhangiani**

Interim Chief Executive

![6.jpg](deo-20250630_g17.jpg)

---

| | |
|:---|:---|
| 6 | **Diageo** Form 20-F 2025 |

---

PERFORMANCE HIGHLIGHTS

*Fiscal 25 financial* performance

---

| | | | |
|:---|:---|:---|:---|
| **Volume** (equivalent units) | **Volume** (equivalent units) | **Reported net sales**<sup>(2)</sup> |  |
| **EU230.1m** | **EU230.1m** | **$20,245m** | **$20,245m** |
| **(2024: EU230.5m)** | | **(2024: $20,269m)** | |
| Reported movement | —% | Reported movement | —% |
| Organic movement<sup>(1)</sup> | 1% | Organic movement<sup>(1)</sup> | 2% |
| **Reported operating profit** | **Reported operating profit** | **Net cash from operating** <br>**activities** | **Net cash from operating** <br>**activities** |
| **$4,335m** | **$4,335m** | **$4,297m** | **$4,297m** |
| **(2024: $6,001m)** |  | **(2024: $4,105m)** |  |
| Reported movement | (28)% | 2025 free cash flow<sup>(1)</sup> | $2,748m |
| Organic movement<sup>(1)</sup> | (1)% | 2024 free cash flow<sup>(1)</sup> | $2,609m |
| **Earnings per share** <br>**(eps)** | **Earnings per share** <br>**(eps)** | **Total recommended dividend** <br>**per share**<sup>(3)</sup> | **Total recommended dividend** <br>**per share**<sup>(3)</sup> |
| **105.9c** | **105.9c** | **103.48c** | **103.48c** |
| **(2024: 173.2c)** |  | **(2024: 103.48c)** |  |
| Reported movement | (39)% |  |  |
| Eps before exceptional items <br>movement<sup>(1)</sup><br>| (9)% |  |  |

---

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | **Visit diageo.com for more information.** |

---

## Fiscal 25 non-financial performance

---

| | | |
|:---|:---|:---|
| **Positive drinking** | **Inclusion and diversity** | **Inclusion and diversity** |
| **2.0m** | **43%** | **46%** |
| **(2024: 2.2m)** | **(2024: 44%)** | **(2024: 46%)** |
| Number of people educated on the dangers <br>of underage drinking through a Diageo <br>supported education programme <br>| Percentage of <br>female leaders <br>globally<br>| Percentage of <br>ethnically diverse <br>leaders globally <br>|
| **Water efficiency – across the** <br>**company**<br>| **Greenhouse gas emissions** | **Greenhouse gas emissions** |
| **(15.8)%** | **(18.8)%** | **(18.8)%** |
| **(2024:(12.9)%)** | **(2024: (14.4)%)** | **(2024: (14.4)%)** |
| Percentage change in water efficiency across <br>the company compared to fiscal 20 baseline<br>| Percentage change in total direct and indirect <br>greenhouse gas emissions (market/net based) <br>compared to fiscal 22 baseline | Percentage change in total direct and indirect <br>greenhouse gas emissions (market/net based) <br>compared to fiscal 22 baseline |

---

---

| | |
|:---|:---|
| GROUP | GROUP |
| **The Accelerate** <br>**programme**<br>In May, we launched the first phase of <br>Accelerate, a company-wide initiative <br>to help us deliver consistent, <br>sustainable performance including $3 <br>billion in free cash flow per year, <br>starting in fiscal 26. To achieve this we <br>aim to: | **The Accelerate** <br>**programme**<br>In May, we launched the first phase of <br>Accelerate, a company-wide initiative <br>to help us deliver consistent, <br>sustainable performance including $3 <br>billion in free cash flow per year, <br>starting in fiscal 26. To achieve this we <br>aim to: |
| ![Operating-Model.gif](deo-20250630_g18.gif) | ![Operating-Model.gif](deo-20250630_g18.gif) |
| **Build a more simplified,** <br>**integrated operating model**<br>to optimise investment and allocate <br>resources effectively towards long-<br>term sustainable growth. | **Build a more simplified,** <br>**integrated operating model**<br>to optimise investment and allocate <br>resources effectively towards long-<br>term sustainable growth. |
| ![Cost-Savings.gif](deo-20250630_g19.gif) | ![Cost-Savings.gif](deo-20250630_g19.gif) |
| **Achieve c.$625 million in cost** <br>**savings** <br>over three years, to enable <br>reinvestment in future growth and <br>improved operating leverage. | **Achieve c.$625 million in cost** <br>**savings** <br>over three years, to enable <br>reinvestment in future growth and <br>improved operating leverage. |
| ![Deleveraging.gif](deo-20250630_g20.gif) | ![Deleveraging.gif](deo-20250630_g20.gif) |
| **Return to well within our** <br>**leverage ratio target** <br>of 2.5x–3.0x net debt to adjusted <br>EBITDA no later than fiscal 28 <br>providing a lot more flexibility, and <br>supported by selective disposals of <br>non-core assets. | **Return to well within our** <br>**leverage ratio target** <br>of 2.5x–3.0x net debt to adjusted <br>EBITDA no later than fiscal 28 <br>providing a lot more flexibility, and <br>supported by selective disposals of <br>non-core assets. |
| ![read-more-purple.gif](deo-20250630_g21.gif) | **Read more on *page 23*.** |

---

(1)See definitions and reconciliation of non-GAAP measures to GAAP measures on pages[213](#i2a439a8f411e49deb31670665dbd0981_727)-[220](#i2a439a8f411e49deb31670665dbd0981_751).

(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 <u>[213](#i2a439a8f411e49deb31670665dbd0981_727)</u>-<u>[220](#i2a439a8f411e49deb31670665dbd0981_751)</u>. Leverage ratio calculated using adjusted net debt which is the equivalent to adjusted net borrowings (net borrowings plus post-employment benefit liabilities before tax). Share

refers to value share. Percentage figures presented are reflective of a year-on-year comparison, namely 2024-2025, unless otherwise specified.

![7-new.jpg](deo-20250630_g22.jpg)

---

| | |
|:---|:---|
| 7 | **Diageo** Form 20-F 2025 |

---

*Regional*

performance

Our regional presidents share

their fiscal 25 perspectives.

---

| | | |
|:---|:---|:---|
| Latin America & Caribbean | Latin America & Caribbean | Latin America & Caribbean |
| **Alvaro Cardenas**<br>President, Latin <br>America and <br>Caribbean | **Alvaro Cardenas**<br>President, Latin <br>America and <br>Caribbean | ![7-3.jpg](deo-20250630_g23.jpg) |
| Fiscal 25 was a year of significant <br>progress for us, during which we <br>became stronger and more resilient, <br>accelerating growth in the second <br>half. We harnessed the experience of <br>a challenging fiscal 24 and grew wiser, <br>making a conscious decision to focus <br>on operational excellence, enabling <br>our leaders to identify and pursue <br>opportunities across the region and <br>gain market share in key <br>battlegrounds. | Fiscal 25 was a year of significant <br>progress for us, during which we <br>became stronger and more resilient, <br>accelerating growth in the second <br>half. We harnessed the experience of <br>a challenging fiscal 24 and grew wiser, <br>making a conscious decision to focus <br>on operational excellence, enabling <br>our leaders to identify and pursue <br>opportunities across the region and <br>gain market share in key <br>battlegrounds. | Fiscal 25 was a year of significant <br>progress for us, during which we <br>became stronger and more resilient, <br>accelerating growth in the second <br>half. We harnessed the experience of <br>a challenging fiscal 24 and grew wiser, <br>making a conscious decision to focus <br>on operational excellence, enabling <br>our leaders to identify and pursue <br>opportunities across the region and <br>gain market share in key <br>battlegrounds. |
| **$1.8bn**<br>Reported net sales | **$1.8bn**<br>Reported net sales | **$1.8bn**<br>Reported net sales |
| ![read-more-purple.gif](deo-20250630_g21.gif) | **Read more on *page <u>[30](#i2a439a8f411e49deb31670665dbd0981_112)</u>.*** | **Read more on *page <u>[30](#i2a439a8f411e49deb31670665dbd0981_112)</u>.*** |

---

---

| | | |
|:---|:---|:---|
| North America | North America | North America |
| **Sally Grimes**<br>Chief Executive <br>Officer, Diageo <br>North America | **Sally Grimes**<br>Chief Executive <br>Officer, Diageo <br>North America | ![7-1.jpg](deo-20250630_g24.jpg) |
| As Diageo's largest region, I am proud <br>we have delivered growth this fiscal, <br>particularly in a challenging <br>environment. This growth has been <br>driven by areas including tequila, in <br>particular the strong performance of <br>Don Julio Reposado, and our world-<br>class brand building, including joining <br>the 2026 FIFA World Cup as Official <br>Spirits Supporter. We have also made <br>significant progress in our journey <br>towards increased marketing <br>effectiveness and efficiency, improved <br>commercial execution through our <br>route-to-market transformation and <br>supply chain resiliency. | As Diageo's largest region, I am proud <br>we have delivered growth this fiscal, <br>particularly in a challenging <br>environment. This growth has been <br>driven by areas including tequila, in <br>particular the strong performance of <br>Don Julio Reposado, and our world-<br>class brand building, including joining <br>the 2026 FIFA World Cup as Official <br>Spirits Supporter. We have also made <br>significant progress in our journey <br>towards increased marketing <br>effectiveness and efficiency, improved <br>commercial execution through our <br>route-to-market transformation and <br>supply chain resiliency. | As Diageo's largest region, I am proud <br>we have delivered growth this fiscal, <br>particularly in a challenging <br>environment. This growth has been <br>driven by areas including tequila, in <br>particular the strong performance of <br>Don Julio Reposado, and our world-<br>class brand building, including joining <br>the 2026 FIFA World Cup as Official <br>Spirits Supporter. We have also made <br>significant progress in our journey <br>towards increased marketing <br>effectiveness and efficiency, improved <br>commercial execution through our <br>route-to-market transformation and <br>supply chain resiliency. |
| **$8.0bn**<br>Reported net sales | **$8.0bn**<br>Reported net sales | **$8.0bn**<br>Reported net sales |
| ![read-more-purple.gif](deo-20250630_g21.gif) | **Read more on** pages <u>[26](#i2a439a8f411e49deb31670665dbd0981_100)</u>-<u>[27](#i2a439a8f411e49deb31670665dbd0981_103)</u>. | **Read more on** pages <u>[26](#i2a439a8f411e49deb31670665dbd0981_100)</u>-<u>[27](#i2a439a8f411e49deb31670665dbd0981_103)</u>. |

---

---

| | | |
|:---|:---|:---|
| Africa | Africa | Africa |
| **Hina Nagarajan** <br>President, Africa | **Hina Nagarajan** <br>President, Africa | ![7-4.jpg](deo-20250630_g25.jpg) |
| In Africa, we have worked hard over <br>the last few years to put this business <br>on a bigger growth trajectory. This is <br>evident from our results this fiscal <br>year, delivering reported net sales <br>growth with double-digit growth in <br>Ghana, South Africa and Tanzania. As <br>one of the fastest growing regions, we <br>believe the fundamentals are now in <br>place for us to be a steady growth <br>engine for Diageo, fully leveraging the <br>investments we are making to take <br>advantage of our outstanding <br>portfolio.  | In Africa, we have worked hard over <br>the last few years to put this business <br>on a bigger growth trajectory. This is <br>evident from our results this fiscal <br>year, delivering reported net sales <br>growth with double-digit growth in <br>Ghana, South Africa and Tanzania. As <br>one of the fastest growing regions, we <br>believe the fundamentals are now in <br>place for us to be a steady growth <br>engine for Diageo, fully leveraging the <br>investments we are making to take <br>advantage of our outstanding <br>portfolio.  | In Africa, we have worked hard over <br>the last few years to put this business <br>on a bigger growth trajectory. This is <br>evident from our results this fiscal <br>year, delivering reported net sales <br>growth with double-digit growth in <br>Ghana, South Africa and Tanzania. As <br>one of the fastest growing regions, we <br>believe the fundamentals are now in <br>place for us to be a steady growth <br>engine for Diageo, fully leveraging the <br>investments we are making to take <br>advantage of our outstanding <br>portfolio.  |
| **$1.8bn**<br>Reported net sales | **$1.8bn**<br>Reported net sales | **$1.8bn**<br>Reported net sales |
| ![read-more-purple.gif](deo-20250630_g21.gif) | **Read more on *page <u>[31](#i2a439a8f411e49deb31670665dbd0981_115)</u>.*** | **Read more on *page <u>[31](#i2a439a8f411e49deb31670665dbd0981_115)</u>.*** |

---

---

| | | |
|:---|:---|:---|
| Europe | Europe | Europe |
| **Dayalan Nayager** <br>President, Europe <br>and Chief <br>Commercial <br>Officer | **Dayalan Nayager** <br>President, Europe <br>and Chief <br>Commercial <br>Officer | ![7-2.jpg](deo-20250630_g26.jpg) |
| In fiscal 25, we have demonstrated <br>resilience delivering positive net sales <br>growth and expanding Diageo's market <br>share in both spirits and total <br>beverage alcohol. This success was <br>significantly bolstered by Guinness <br>which saw double-digit growth, <br>reflecting the enduring strength of <br>the brand. Guinness' strategic <br>alignment with major sporting events, <br>including the English Premier League <br>and the Six Nations, has been key to <br>driving these positive results, <br>reaching new and diverse audiences. | In fiscal 25, we have demonstrated <br>resilience delivering positive net sales <br>growth and expanding Diageo's market <br>share in both spirits and total <br>beverage alcohol. This success was <br>significantly bolstered by Guinness <br>which saw double-digit growth, <br>reflecting the enduring strength of <br>the brand. Guinness' strategic <br>alignment with major sporting events, <br>including the English Premier League <br>and the Six Nations, has been key to <br>driving these positive results, <br>reaching new and diverse audiences. | In fiscal 25, we have demonstrated <br>resilience delivering positive net sales <br>growth and expanding Diageo's market <br>share in both spirits and total <br>beverage alcohol. This success was <br>significantly bolstered by Guinness <br>which saw double-digit growth, <br>reflecting the enduring strength of <br>the brand. Guinness' strategic <br>alignment with major sporting events, <br>including the English Premier League <br>and the Six Nations, has been key to <br>driving these positive results, <br>reaching new and diverse audiences. |
| **$4.8bn**<br>Reported net sales | **$4.8bn**<br>Reported net sales | **$4.8bn**<br>Reported net sales |
| ![read-more-purple.gif](deo-20250630_g21.gif) | **Read more on** page <u>[28](#i2a439a8f411e49deb31670665dbd0981_106)</u>. | **Read more on** page <u>[28](#i2a439a8f411e49deb31670665dbd0981_106)</u>. |

---

---

| | | |
|:---|:---|:---|
| Asia pacific | Asia pacific | Asia pacific |
| **John O'Keeffe**<br>President, Asia <br>Pacific, Global <br>Travel and India | **John O'Keeffe**<br>President, Asia <br>Pacific, Global <br>Travel and India | ![7-6.jpg](deo-20250630_g27.jpg) |
| This year has been challenging but <br>we've been able to execute amplified <br>strategic innovations with the <br>launches of Johnnie Walker Blonde, <br>Johnnie Walker Black Ruby and <br>Smirnoff Crush RTD whilst also making <br>structural interventions across the <br>business, setting up the region for <br>sustainable success moving forward. | This year has been challenging but <br>we've been able to execute amplified <br>strategic innovations with the <br>launches of Johnnie Walker Blonde, <br>Johnnie Walker Black Ruby and <br>Smirnoff Crush RTD whilst also making <br>structural interventions across the <br>business, setting up the region for <br>sustainable success moving forward. | This year has been challenging but <br>we've been able to execute amplified <br>strategic innovations with the <br>launches of Johnnie Walker Blonde, <br>Johnnie Walker Black Ruby and <br>Smirnoff Crush RTD whilst also making <br>structural interventions across the <br>business, setting up the region for <br>sustainable success moving forward. |
| **$3.6bn**<br>Reported net sales | **$3.6bn**<br>Reported net sales | **$3.6bn**<br>Reported net sales |
| ![read-more-purple.gif](deo-20250630_g21.gif) | **Read more on** page <u>[29](#i2a439a8f411e49deb31670665dbd0981_109)</u>. | **Read more on** page <u>[29](#i2a439a8f411e49deb31670665dbd0981_109)</u>. |

---

---

| | |
|:---|:---|
| 8 | **Diageo** Form 20-F 2025 |

---

**Investment case**

A strong investment case

![Investment-Case-1.gif](deo-20250630_g28.gif)

Attractive,

long-term

industry

fundamentals

VERSATILITY OF SPIRITS<br>

The versatility of spirits positions

the category well for the future

across occasions, premiumisation

and the evolution of consumer

trends including moderation and

sourcing growth from beer and

wine. Continued category

momentum comes from spirit's

cultural relevance, innovation and

consumers' desire to explore new

categories and experiences.

People are drinking better, <br>not more<br>

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 50% faster than other

price tiers in the category. This

price tier gained c.600 basis points

of share of international spirits

retail sales value (RSV) since 2014.

<sup>(1)</sup>

Long runway <br>for growth<br>

Diageo sees a substantial runway

for sustainable growth. With a

global TBA share of 4.5%,<sup>(1)</sup>we

have significant headroom for

future growth. In the United

States, our largest market, we

remain underpenetrated in key

categories with our leading

brands, presenting a strong

opportunity to recruit consumers

and drive growth.

![Investment-Case-2.gif](deo-20250630_g29.gif)

...aligned to

our

competitive

advantages

A BROAD portfolio of iconic <br>brands<br>

We are #1 in international

spirits, the #3 player in TBA

and have 13 billion-dollar

brands.<sup>(1)</sup> We have a diverse

portfolio of brands, providing a

broad range of choices for

consumers across occasions.

A diversified geographical <br>footprint<br>

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. Our regional breadth

allows us to flex prioritisation,

investment and activation,

increasing our ability to capture

growth and reduces dependency

on any single region or market.

A leading portfolio across <br>price points<br>

Our portfolio is spread broadly

across the pricing ladder – across

and within categories, providing

choice in most

economic environments.

Diverse and <br>engaged talent<br>

Diageo has an entrepreneurial,

talented and diverse workforce of

more than 29,000 people globally

and are led by a highly

experienced Executive

Committee. Our Executive

Committee combines home-grown

talent with externally recruited

leaders who bring invaluable

market experience and fresh

perspectives.

![Investment-Case-3.gif](deo-20250630_g30.gif)

...as we

execute *with* 

*focus*

RESHAPED PRIORITIES <br>SUPPORTED BY ACCELERATE<br>

In fiscal 25, we introduced our

reshaped priorities to drive

improved performance:

delivering sustainable top-line

growth, increasing operating

leverage, maximising cash flow

and optimising returns. These

strategic outcomes are being

embedded across the business,

with further opportunity. We are

moving at pace and this is

underpinned by the work

underway on our Accelerate

programme.

We launched the first phase of

Accelerate in May 2025 to build

a more agile operating model,

with clear cash delivery targets

and a disciplined focus on

operational excellence and cost

efficiency. These changes are

creating a stronger platform for

optimising investment and

enabling more effective

resource allocation towards

long-term growth. While the

programme has defined financial

targets, it is equally focused on

enabling better, faster growth.

It is supported by operating

model changes designed to

enhance Diageo's global agility

— leveraging scale more

effectively, sharpening

investment priorities, and

accelerating decision-making.

![Investment-Case-4.gif](deo-20250630_g31.gif)

...to position

Diageo for

*long-term* 

*growth.*

Attractive financial <br>foundations<br>

Driving long-term sustainable

growth is a strategic priority for

Diageo. We are committed to

gaining quality market share in a

disciplined and sustainable

manner. Diageo maintains an

attractive margin profile, with

further room for expansion. Our

business is highly cash generative,

enabling us to reinvest behind our

brands to fuel future growth. As

Accelerate progresses, this will be

further enhanced through

consistency of cash delivery and

the ability to reinvest and allocate

resources behind growth

opportunities. This disciplined

approach strengthens our

resilience and agility in a dynamic

global environment.

Focused strategy <br>

Diageo's focused strategy is

centred on delivering growth by

maximising the potential of our

advantaged portfolio. We are

making meaningful progress in

an evolving consumer landscape

and challenging macroeconomic

environment, by concentrating

on what we can manage and

control. While our strategic

outcomes remain consistent, we

are sharpening their application

and pace of execution. This is

enabling us to prioritise

resources toward the most

attractive growth opportunities,

refine our portfolio choices and

position the business to emerge

stronger.

(1) IWSR, 2024 (by retail sales value)

---

| | |
|:---|:---|
| 9 | **Diageo** Form 20-F 2025 |

---

**Market dynamics**

Market dynamics

Established

tailwinds

---

| |
|:---|
| Growing LPA+ population |
| Rising middle class |
| Premiumisation |
| Spirits gaining share of TBA |
| Spirits household penetration |

---

Potential

headwinds

---

| |
|:---|
| Pressured consumer wallet |
| Cannabis |
| Weight-loss drugs (GLP-1s) |

---

**Gen Z**<sup>(1)</sup>

US household penetration

---

| | | | |
|:---|:---|:---|:---|
|  | **F20** |  | **F24** |
| **TBA** | 83% | ![Change-upwards.gif](deo-20250630_g32.gif) | **88%** |
| **Spirits** | 49% | ![Change-upwards.gif](deo-20250630_g32.gif) | **55%** |

---

(1) Numerator

(2) Oxford Economics

(3) NielsenIQ

(4) Numerator

(5) US Bureau of Labor Statistics

(6) IWSR, Bevtrac 2025

(7) IWSR, Oxford Economics

---

| |
|:---|
| Gen z behaviours |
| Moderation |

---

**We believe that** 

**near-term industry** 

**pressures are largely** 

**cyclical and** 

**macroeconomic driven.** 

**We continue** 

**to believe in the** 

**attractive long-term** 

**fundamentals of** 

**our industry in an** 

**evolving TBA landscape.** 

Long-term fundamentals

remain compelling. By 2035,

600 million new legal-

purchase-age consumers will

enter the market,<sup>(2)</sup> with Gen Z

becoming the first 2-billion-

strong generation.<sup>(3)</sup>

Gen Z penetration in spirits is

increasing in the United States,

primarily driven by spirits-

based ready-to-drink products

and tequila.<sup>(4)</sup> Across our key

markets, their engagement

with spirits is higher than the

average for the total drinking

population, indicating they are

entering the category earlier.<sup>(4)</sup>

They also allocate a similar

proportion of their annual

expenditure on alcohol as

other generations.<sup>(5)</sup> Recent

data shows an increase in LPA+

Gen Z consumption compared

to the levels in 2023.<sup>(6)</sup>

Our recent US research

indicates that cannabis and

GLP-1s have not yet shown

significant disruption to spirits

consumption, and we continue

to monitor them closely.

Moderation is a long-term

consumer trend, where we see

consumers choosing to drink

better not more. Between

2009-2024, international spirits

(excluding baijiu and RTDs) per

capita consumption has

remained broadly stable

(2009-2024 CAGR -0.4%), even

as total beverage alcohol

declined by 1.2%.<sup>(7)</sup> This

highlights the strength of the

spirits category and the

category's resilience in a

moderating environment;

gaining share from beer

and wine.

Moderation presents a

significant opportunity for

Diageo, the inherent versatility

of spirits makes moderation

more accessible and appealing.

We have a broad portfolio and

leadership in non-alcoholic

innovation, including Seedlip,

Ritual Zero Proof, Tanqueray

0.0, Gordon's 0.0 and Guinness

0.0. These offerings

complement our core

portfolio, support responsible

choices and position Diageo

to help shape the future

of moderation.

---

| | |
|:---|:---|
| 10 | **Diageo** Form 20-F 2025 |

---

OUR GROWTH AMBITION

**Progressing our** 

**Growth Ambition**

![Growth Ambition.jpg](deo-20250630_g33.jpg)

---

| | |
|:---|:---|
| 11 | **Diageo** Form 20-F 2025 |

---

OUR STRATEGY

**OUR STRATEGY**<br>

![11-x3.jpg](deo-20250630_g34.jpg)

Unleash the power

of our brands and

portfolio…

**Whisk(e)y and tequila**

Our focus is to maintain our undisputed

number one value position in both the

whisk(e)y and tequila categories. To achieve

this, we are sharpening our focus on a clear

and distinctive portfolio participation

strategy across price tiers and consumption

occasions. For example, we are accelerating

recruitment into Johnnie Walker by scaling

innovation and extending the brand into new

occasions through Johnnie Walker Blonde and

Johnnie Walker Black Ruby.

**Winning local portfolio**

Developing a winning local portfolio enables

us to serve culturally relevant tastes and

consumption moments with authenticity.

Scaling Buchanan's Pineapple in Mexico

exemplifies this approach, infusing

Buchanan's with local flavour preferences

inspired by the popular 'Buchanita' serve. This

has successfully expanded the brand's appeal,

attracting new customers and deepening

engagement with existing ones.

**Guinness growth**

Guinness remains a key strategic growth

priority for us, underpinned by consistent

double-digit net sales growth and strong

brand equity in core markets such as Great

Britain and Ireland. The brand continues to

broaden its consumer base, with innovations

such as Guinness 0.0 enhancing relevance

among more audiences. Strategic

partnerships with major global sporting

platforms and an efficient asset-light

production model enable scalable and

sustainable growth.

…to lead and

shape consumer

trends…

---

| | |
|:---|:---|
| ![Cocktail-Culture.gif](deo-20250630_g35.gif) | **Cocktail culture**<br>We are shaping global cocktail culture, <br>leveraging our premium portfolio and <br>platforms like World Class, our <br>bartending competition. <br>|
| ![Moderation.gif](deo-20250630_g36.gif) | **Moderation**<br>We are well placed to serve many <br>moderation strategies including no- and <br>lower-alcohol offerings. Many <br>consumers prefer to drink better, not <br>more, which we actively champion.<br>|
| ![Exploration.gif](deo-20250630_g37.gif) | **Exploration**<br>We are enabling greater discovery and <br>personalisation through digital tools like <br>'What's Your Whisky', using AI to <br>recommend serves.<br>|
| ![Convenience.gif](deo-20250630_g38.gif) | **Convenience**<br>To meet demand for accessible, high-<br>quality offerings, we have expanded our <br>ready-to-drink portfolio with exciting <br>innovations including Casamigos <br>Margarita.<br>|
| ![With-Food.gif](deo-20250630_g39.gif) | **With food**<br>We continue to unlock opportunities in <br>food-led occasions by suggesting ideal <br>pairings through digital tools like 'What's <br>Your Cocktail'.<br>|
| ![Luxury.gif](deo-20250630_g40.gif) | **Luxury**<br>Diageo Luxury Group (read more on <br>page 15) focuses on accelerating growth <br>in the super-premium segment through <br>exceptional brands such as Johnnie <br>Walker Blue Label and Don Julio 1942. <br>|

---

…executed

with operational

excellence

Our strategic priorities are underpinned by:

1.**Evolving brand building muscle**: to

optimise effectiveness of our A&P by

prioritising resource allocation into the

right brands, in the right markets, through

the most impactful channels.

2.**Enhancing commercial excellence**: by

strengthening execution partnerships,

enhancing end-to-end brand experiences

and embedding digital innovation across

our merchandising and sales processes.

3.**Accelerated productivity**: by enhancing

Revenue Growth Management capabilities

and supply chain excellence.

To improve our operational efficiency, we

have introduced the first phase of our

Accelerate programme. This includes the

following goals:

1.**Consistent cash delivery**: we expect to

sustainably deliver c.$3bn free cash flow

per annum from fiscal 26, increasing as

business performance improves.

2.**Cost savings**: c.$625m cost savings

programme over three years which will

enable both reinvestment in future growth

and improved operating leverage.

3.**Commitment to deleveraging**: we expect

to be well within the leverage target range

of 2.5-3.0x net debt to adjusted EBITDA no

later than fiscal 28, providing us with a lot

more flexibility. This will be delivered

through a combination of organic growth

and positive operating leverage, combined

with tighter capital discipline, and

appropriate and selective disposals over

the coming years.

![12.jpg](deo-20250630_g41.jpg)

---

| | |
|:---|:---|
| 12 | **Diageo** Form 20-F 2025 |

---

Our strategy continued

Our strategy in action

WHISK(E)Y and tequila<br>

Don Julio Presents *194GOU*![Cocktail-Culture-Purple.gif](deo-20250630_g42.gif)

![Exploration-Purple.gif](deo-20250630_g43.gif)

![Luxury-Purple.gif](deo-20250630_g44.gif)

This year, Don Julio 1942 teamed up with renowned DJ, producer and cultural

powerhouse Peggy Gou to release its first ever collaborative limited-time

product – a special edition bottle called 194구 ('194Gou'). The new bottle is a

striking take on the luxury Don Julio 1942 bottle, fusing heritage with nightlife

and music culture.

The launch was an example of executing on our commitment to take tequila

around the world. We hosted exclusive pop ups, after parties, and retail

takeovers in cities including New York City, London, Milan and Seoul.

Events featured bespoke Don Julio 1942 cocktails, surprise DJ sets, Don Julio

194구 merchandise and bottle signings. This went hand-in-hand with a

culture-first social campaign, which has received more than 52 million views,<sup>(1)</sup>

and allowed fans to follow the launch in real time.

This first of its kind collaboration has been successful with global consumers.

Don Julio 194구 sold out at events in the United States, Asia Pacific and

Europe, whilst dedicated retail builds inside airports in Europe and the United

Arab Emirates are experiencing a significant sales increase versus Don Julio

1942 sales for the same period last year.

The success of this partnership has ensured the brand is culturally relevant

with consumers, whilst also driving halo demand for Don Julio across the

globe.

(1) GALE (the campaign PR agency)

WINNING LOCAL PORTFOLIO<br>

The *Sweeter Side* of Johnnie Walker

Black Label

![Cocktail-Culture-Purple.gif](deo-20250630_g42.gif)

![Exploration-Purple.gif](deo-20250630_g43.gif)

Johnnie Walker has reimagined the whisky scene in Latin America and

Caribbean (LAC) with the launch of Johnnie Walker Black Ruby – a sweeter

take on Johnnie Walker Black Label, created to elevate classic cocktails.

Countering preconceptions about the 'typical scotch drinker', the team saw

this as opportunity to evolve the flavour of the product, opening it up to a

new generation.

Given the target market, the launch strategy was focused on local events

popular with younger LPA+ consumers including Mexico Fashion Week and

Puerto Rico Cocktail Week. Bartenders were briefed to use Johnnie Walker

Black Ruby to put a twist on classic cocktails.

Across the board, Johnnie Walker Black Ruby has successfully recruited

consumers in LAC back into scotch through exploration, sourcing 72% of volume

from outside of scotch <sup>(2)</sup> 73% of Mexican consumers who have tried Black Ruby

have repeated purchase.<sup>(2)</sup> This expansion of the Johnnie Walker family has

overturned whisky stereotypes in LAC, demonstrating the part the brand can

play in contemporary nightlife. And, given the success of the launch, we are

starting the global roll out of Johnnie Walker Black Ruby, bringing this new take

on our classic scotch worldwide.

(2) Kantar IDD Mexico 2024 (claimed data)

![13.jpg](deo-20250630_g45.jpg)

---

| | |
|:---|:---|
| 13 | **Diageo** Form 20-F 2025 |

---

The Chicago Plumbers Union Local 130, with ongoing support from Guinness, has been responsible

for dyeing the Chicago River green for the city's St. Patrick's Day since 1962. They use an eco-friendly

vegetable-based dye, turning the river into a shimmering emerald tribute. This ritual has become

more than a tradition—it's the heartbeat of the city's celebration. And when the work is done, they

gather with a pint of Guinness, reflecting on the legacy they keep alive, one green wave at a time.

guinness GROWTH<br>

Guinness' Lovely Day

in the United States

![Moderation-Purple.gif](deo-20250630_g46.gif)

![Convenience-Purple.gif](deo-20250630_g47.gif)

It is an exciting time for Guinness in the United

States. In the second half of fiscal 25, it was the

fastest growing major beer brand in the on-

trade by volume,<sup>(1)</sup> and the number one draft

beer in major metropolitan areas like Boston

and New York.<sup>(1)</sup>

We have worked strategically to reach this level

of success, but there is still a significant runway

for growth – a cornerstone of building on the

momentum this fiscal is the 'A Lovely Day' US

Campaign, launched in April 2025.

The campaign, which has received 474 million<sup>(2)</sup>

impressions and counting, merges the success of

the iconic 'Lovely Day for a Guinness' tag line,

with a uniquely American perspective, sharing

50 real stories illustrating the role of Guinness

and Guinness 0.0 in celebrations.

From Michigan ice fishermen to a Louisiana brass

band, to the roller-skating dads of Pennsylvania,

these stories capture both the American spirit

and the communion of Guinness.

Hand-in-hand with the campaign, we created a

limited-edition Guinness Draught Stout can,

tapping into the consumer trend of

convenience. The design reimagines the classic

Lovely Day toucan art with a modern, American

twist.

Market testing has found that this campaign has

resonated strongest with younger LPA+ beer

drinkers, our target audience for expansion,

with one-third expressing intent to purchase

Guinness after viewing the campaign.

Whilst this is just the foundation of our plans to

capture further growth, the campaign is

meaningfully building brand equity and driving

household penetration with key consumers.

(1) Nielsen CGA L12Wks ending 17 May 2025

(2) Taylor (the campaign PR agency)

---

| | |
|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | Find out more at www.diageo.com |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Consumer trends key | Consumer trends key | Consumer trends key | Consumer trends key | Consumer trends key | Consumer trends key |
| ![Cocktail-Culture.gif](deo-20250630_g35.gif) | Cocktail culture | ![Exploration.gif](deo-20250630_g37.gif) | Exploration | ![With-Food.gif](deo-20250630_g39.gif) | With food |
| ![Moderation.gif](deo-20250630_g36.gif) | Moderation | ![Convenience.gif](deo-20250630_g38.gif) | Convenience | ![Luxury.gif](deo-20250630_g40.gif) | Luxury |

---

![14.jpg](deo-20250630_g48.jpg)

---

| | |
|:---|:---|
| 14 | **Diageo** Form 20-F 2025 |

---

our strategy continued

**OUR BUSINESS MODEL**<br>

**Operational excellence runs through our business model**

---

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

---

Fiscal 25 progress

**This fiscal, we have developed,** 

**established and executed** 

**substantial projects as we strive to** 

**continually improve on our track** 

**record of operational excellence.** 

---

| |
|:---|
| Commercial excellence: Stepping up our route-to-market and <br>commercial execution in the United States |
| This fiscal, our spirits organisation in the United States has undergone its biggest <br>transformation in over a decade, evolving how we work with our distributors to achieve <br>sustainable growth.<br>Over the past year, we have collaborated with our partners to add new brand building <br>and sales roles in key geographies. These roles are dedicated to our key categories, <br>whisk(e)y and tequila, and the outlets with the greatest potential for growth. Our <br>teams are equipped with training, tools and insights to grow these categories for the <br>retailer, while increasing Diageo's share. <br>We also launched the Academy for Beverage Leadership (ABL) to provide foundational <br>training for business development managers at Diageo and our distributors. Upon <br>completion, sales leaders have practical skills to help customers grow their whisk(e)y <br>and tequila businesses. |

---

![15.jpg](deo-20250630_g49.jpg)

---

| | |
|:---|:---|
| 15 | **Diageo** Form 20-F 2025 |

---

**Creating value**

Our business model allows us to create

value across three main areas:

Financial – for our investors

Human – for our people, suppliers,

customers and consumers

Social – for our communities

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Our stakeholders** | **Our stakeholders** | **Our stakeholders** | **Our stakeholders** | **Our stakeholders** | **Our stakeholders** | **Our stakeholders** | **Our stakeholders** |
| ![artboard1.gif](deo-20250630_g50.gif) | Our people | ![artboard3.gif](deo-20250630_g51.gif) | Customers | ![artboard5.gif](deo-20250630_g52.gif) | Communities | ![artboard7.gif](deo-20250630_g53.gif) | Government <br>and regulators<br>|
| ![artboard2.gif](deo-20250630_g54.gif) | Consumers | ![artboard4.gif](deo-20250630_g55.gif) | Suppliers | ![artboard6.gif](deo-20250630_g56.gif) | Investors |  |  |
| ![read-more-white.gif](deo-20250630_g13.gif) | Read more on pages <br>86-89. | Read more on pages <br>86-89. |  |  |  |  |  |

---

---

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

---

---

| |
|:---|
| Accelerated productivity: Digitising our <br>supply chain through SIP |
| This fiscal, we have made significant progress digitising our <br>supply chain from grain to glass with the deployment of our <br>Scotch Intelligence Platform (SIP). This includes: <br>•Optimising pre-bottling allocations – maximising the value <br>of our premium whiskies through a digital marketplace. <br>•Maturation performance – using data and AI to target the <br>'angels' share' and improve maturation yield. <br>•Liquid logistics – synchronising our cask-to-bottle flows of <br>wood and whisky. <br>This platform has measurable benefits for Diageo, <br>augmenting the craft of our scotch category and improving <br>our productivity and performance. |

---

---

| |
|:---|
| Evolve brand building muscle: Creating the <br>Diageo Luxury Group |
| In November, we established the Diageo Luxury Group, <br>bringing together our most premium offerings within spirits, <br>brand homes and private client experiences.<br>The Diageo Luxury Group unites a premium brand portfolio, <br>as we aim to become the number one luxury spirits company <br>in the world. It is responsible for Diageo's luxury strategy and <br>accelerating the growth of brands that retail at $100 and <br>above, as well as leading luxury experiences and an <br>extensive network of expert craftspeople.<br>Since its creation, product launches have included Johnnie <br>Walker Ice Chalet, The Twelve by Casks of Distinction, <br>Talisker 45-Year-Old and Johnnie Walker Vault x Olivier <br>Rousteing. |

---

---

| | |
|:---|:---|
| 16 | **Diageo** Form 20-F 2025 |

---

OUR PERFORMANCE

Monitoring *performance* and *progress*

**Reported measures**<br>

---

| | | |
|:---|:---|:---|
| **Net sales growth** <br>(%)<br>| **Operating profit growth**<br>(%)<br>| **Basic earnings per share** <br>(cents)<br>|

---

![44](deo-20250630_g57.gif)

![46](deo-20250630_g58.gif)

![48](deo-20250630_g59.gif)

---

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

---

**Non-GAAP measures**<br>

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Organic net sales growth**<br>(%)<sup>(1)</sup> | **Organic net sales growth**<br>(%)<sup>(1)</sup> | **Organic net sales growth**<br>(%)<sup>(1)</sup> | **Organic operating profit growth**<br>(%)<sup>(1)</sup> | **Organic operating profit growth**<br>(%)<sup>(1)</sup> | **Organic operating profit growth**<br>(%)<sup>(1)</sup> | **Earnings per share before** <br>**exceptional items** (cents)<sup>(1)</sup> | **Earnings per share before** <br>**exceptional items** (cents)<sup>(1)</sup> | **Earnings per share before** <br>**exceptional items** (cents)<sup>(1)</sup> |
| **1.7%** | ![Icon-KPI-R.jpg](deo-20250630_g60.jpg) | ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) | **(0.7)%** | ![Icon-KPI-R.jpg](deo-20250630_g60.jpg) | ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) | **164.2** | ![Icon-KPI-R.jpg](deo-20250630_g60.jpg) | ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) |

---

![56](deo-20250630_g62.gif)

![58](deo-20250630_g63.gif)

![60](deo-20250630_g64.gif)

---

| | | |
|:---|:---|:---|
| **Definition** |  |  |
| Sales growth after deducting excise duties, <br>excluding the impact of exchange rate <br>movements, hyperinflation adjustment and <br>acquisitions and disposals.<br>| Organic operating profit growth is calculated <br>on a constant currency basis, excluding the <br>impact of exceptional items, certain fair value <br>remeasurement, hyperinflation adjustment <br>and acquisitions and disposals.<br>| Profit before exceptional items <br>attributable to equity shareholders of the <br>parent company, divided by the weighted <br>average number of shares in issue.<br>|
| **Why we measure** |  |  |
| This measure reflects our delivery of <br>sustainable top-line growth. Organic net sales <br>growth is the result of the choices we make <br>between categories and market participation, <br>and reflects Diageo's ability to build brand <br>equity, increase prices and grow market share.<br>| The movement in operating profit measures <br>our delivery of increasing operating leverage <br>and optimising returns. Consistent operating <br>profit growth is a business imperative, <br>driven by investment choices, our focus on <br>driving out costs across the business and <br>improving mix.<br>| Earnings per share reflects the <br>profitability of the business and how <br>effectively we finance our balance sheet. <br>Eps measures our delivery of optimised <br>returns over time.<br>|
| **Performance** |  |  |
| Reported net sales of $20.2 billion declined <br>0.1% due to unfavourable foreign exchange of <br>(0.6)% and acquisition and disposal <br>adjustments of (1.1)%, partially offset by <br>hyperinflation adjustments and organic net <br>sales growth. Organic net sales growth of 1.7% <br>was driven by organic volume growth of 0.9% <br>and positive price/mix of 0.8%. Excluding the <br>impact of the Cîroc transaction, organic net <br>sales growth was 1.5%, with 0.8% volume <br>growth and 0.7% price/mix.(1)<br>| Reported operating profit declined 27.8% <br>and reported operating profit margin <br>declined 819bps, primarily due to <br>exceptional impairment and restructuring <br>costs, unfavourable foreign exchange and a <br>decline in organic operating margin. Organic <br>operating profit declined by 0.7%; organic <br>operating profit margin declined 68bps, <br>mainly due to continued investment in <br>overheads, partly offset by slight gross <br>margin expansion. Excluding the impact of <br>the Cîroc transaction,<sup>(1)</sup> organic operating <br>profit declined 1.0%, in line with prior <br>guidance, and organic operating margin <br>declined 70bps.<br>| Basic EPS decreased 67.3 cents, mainly <br>driven by higher impairment charge in <br>fiscal 25, a significantly lower Moët <br>Hennessy contribution and unfavourable <br>foreign exchange.<br>Basic EPS before exceptional items <br>declined 8.6% from 179.6 cents to <br>164.2cents, primarily driven by a <br>significantly lower associate income <br>fromMoët Hennessy and unfavourable <br>foreign exchange.<br>|

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on page 21. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on page 21. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on page 21. |

---

(1) On 7 April 2025, Diageo entered into a strategic partnership with Main Street Advisors. As part of the transaction, Diageo transferred its majority ownership interest in Cîroc in North America in

exchange for interest in Lobos 1707 Tequila globally. The transaction was completed in June 2025. As a result, Cîroc in North America is no longer consolidated in the group's financial statements

and is now accounted for as an investment in associate.

---

| | |
|:---|:---|
| 17 | **Diageo** Form 20-F 2025 |

---

**Reported measures**<br>

---

| | | | |
|:---|:---|:---|:---|
| **Net cash from operating activities**<br>($ million) | **Return on closing net assets**<br>(%) | ![Icon-KPI-R.jpg](deo-20250630_g60.jpg) | **Remuneration** |

---

![75](deo-20250630_g65.gif)

![77](deo-20250630_g66.gif)

Key Performance Indicators, which are

included within incentive plans to assess

performance for Directors' remuneration

purposes. More details can be found from

---

| | |
|:---|:---|
| ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) | KPI: Key Performance Indicator |
| ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) | KPI: Key Performance Indicator |

---

---

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

---

**Non-GAAP measures**<br>

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Free cash flow**<br>($ million)<sup>(1),(2)</sup> | **Free cash flow**<br>($ million)<sup>(1),(2)</sup> | **Free cash flow**<br>($ million)<sup>(1),(2)</sup> | **Return on average invested capital (ROIC)**<br>(%) | **Return on average invested capital (ROIC)**<br>(%) | **Total shareholder return (TSR)**<br>(%) | **Total shareholder return (TSR)**<br>(%) | **Total shareholder return (TSR)**<br>(%) |
| **2748** | ![Icon-KPI-R.jpg](deo-20250630_g60.jpg) | ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) | **13.7%** | ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) | **(24)%** | ![Icon-KPI-R.jpg](deo-20250630_g60.jpg) | ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) |

---

![245](deo-20250630_g67.gif)

![247](deo-20250630_g68.gif)

![249](deo-20250630_g69.gif)

---

| | | |
|:---|:---|:---|
| **Definition** |  |  |
| Free cash flow comprises the net cash flow <br>from operating activities aggregated with the <br>net cash expenditure paid for property, plant <br>and equipment, and computer software.<br>| Profit before finance charges and exceptional <br>items attributable to equity shareholders <br>divided by average invested capital. Invested <br>capital comprises net assets excluding net <br>post-employment benefit assets/liabilities, net <br>borrowings and non-controlling interests.<br>| Percentage growth in the value of a Diageo <br>share (assuming all dividends and capital <br>distributions are re-invested).<br>|
| **Why we measure** |  |  |
| Free cash flow is a key indicator of the <br>financial management of the business. Free <br>cash flow reflects the delivery of <br>cash generated by the business to fund <br>payments to our shareholders and future <br>growth.<br>| ROIC is used by management to assess the <br>return obtained from the group's asset base. <br>Over time, ROIC reflects optimised returns, as <br>the returns Diageo generates from its asset <br>base are both reinvested in the business and <br>used to generate returns for investors through <br>dividends and return of capital programmes.<br>| Diageo's directors have a fiduciary <br>responsibility to maximise long-term value for <br>shareholders. TSR measures reflects the <br>returns Diageo has delivered to investors in <br>the year and over time. We also monitor our <br>relative TSR performance against our peers.<br>|
| **Performance** |  |  |
| Net cash from operating activities was $4,297 <br>million, an increase of $192 million compared to <br>fiscal 24. Free cash flow increased by $139 million <br>to $2,748 million. <br>Free cash flow growth was driven by solid working <br>capital management including higher creditors <br>and lower maturing stock movement year on <br>year.<br>Net capital expenditure in fiscal 25 was $1,549 <br>million (fiscal 24: $1,496 million) to support <br>supply capacity expansion projects, North <br>America supply chain transformation and <br>furthering digital capability. <br>| ROIC was 13.7% (fiscal 24: 15.8%) with the <br>decrease driven mainly by lower associate income <br>from Moët Hennessy and unfavourable exchange. <br>| TSR was down 24% over the past 12 months <br>driven by the lower year-on-year share price.<br>|

---

---

| | | | |
|:---|:---|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on page 22. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on page 22. |

---

(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 213-220.

(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.

---

| | |
|:---|:---|
| 18 | **Diageo** Form 20-F 2025 |

---

OUR PERFORMANCE continued

**Non-financial performance**<br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Positive drinking** | **Positive drinking** | **Employee engagement index** | **Employee engagement index** | **Inclusion and diversity** | **Inclusion and diversity** |
| ![Icon-KPI-R.jpg](deo-20250630_g60.jpg) | ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) | **83%** | ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) | ![Icon-KPI-R.jpg](deo-20250630_g60.jpg) | ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) |

---

---

| | |
|:---|:---|
| Number of people educated <br>on the dangers of underage <br>drinking through a Diageo <br>supported education <br>programme  | **2.0m** |
| Number of people educated <br>on the dangers of underage <br>drinking through a Diageo <br>supported education <br>programme  | **(2024: 2.2m)** |
| Number of people educated <br>on the dangers of underage <br>drinking through a Diageo <br>supported education <br>programme  | Total to date: |
| Number of people educated <br>on the dangers of underage <br>drinking through a Diageo <br>supported education <br>programme  | 8.2m |

---

![11](deo-20250630_g70.gif)

---

| | |
|:---|:---|
| Percentage of female <br>leaders globally | **43%** |
| Percentage of female <br>leaders globally | **(2024: 44%)** |
| Percentage of <br>ethnically diverse <br>leaders globally | **46%** |
| Percentage of <br>ethnically diverse <br>leaders globally | **(2024: 46%)** |

---

---

| | | |
|:---|:---|:---|
| **Target** |  | **Ambition** |
| 10 million people educated on the dangers <br>of underage drinking by 2030, starting from <br>fiscal 18.<br>|  | 50% female and 45% ethnically diverse <br>global leader representation by 2030<br>|
| **Definition** |  |  |
| Number of people educated on the dangers <br>of underage drinking through a Diageo <br>supported education programme.<br>| Measured through our Your Voice survey; <br>includes metrics for employee satisfaction, <br>advocacy and pride.<br>| The percentage of women and the percentage <br>of ethnically diverse individuals who are in <br>Diageo leadership roles globally.<br>|
| **Why we measure** |  |  |
| We want to change the way the world drinks<br>for the better by promoting moderation <br>and addressing the harmful use of alcohol. <br>We build credibility and trust by <br>transparently reporting the total number of <br>people educated on the dangers of underage <br>drinking. This figure also demonstrates our <br>commitment to engaging people on the <br>dangers of harmful alcohol use.<br>| Employee engagement releases the full <br>potential of our people and our business, <br>and it's a key enabler to our performance. <br>The survey allows us to measure the extent <br>to which employees believe we are living <br>our values and is one of the measures of our <br>culture. Reflecting on the results of our <br>employee engagement level and taking <br>action on important areas where needed <br>each year helps us build credibility and trust <br>with our people.<br>| Building an inclusive and diverse culture helps <br>drive commercial performance and ensures <br>we access the best talent. Transparently <br>reporting the gender and ethnic diversity of <br>our leadership cohort reflects our <br>commitment to consistent value creation <br>through our diverse workforce.<br>|
| **Performance** |  |  |
| Globally, we educated 2.0m young people <br>about the dangers of underage drinking, <br>with strong performance again in Latin <br>America and Caribbean (LAC).<br>| This year 86% of our people completed our <br>Your Voice survey. 83% were identified as <br>highly engaged. 90% declared themselves <br>proud to work for Diageo, 83% would <br>recommend Diageo as a great place to work <br>and 76% were extremely satisfied with <br>Diageo as a place to work.<br>| This year, 43% of our leadership roles were <br>held by women and 46% of our leaders were <br>ethnically diverse. <br>|

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on pages 44-45. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on pages 40-41. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on pages 58-59. |

---

---

| | |
|:---|:---|
| 19 | **Diageo** Form 20-F 2025 |

---

**Non-financial performance**<br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Water efficiency**<sup>(1)</sup> | **Water efficiency**<sup>(1)</sup> | **Water efficiency**<sup>(1)</sup> | **Scope 1 and 2 greenhouse gas** <br>**emissions**<sup>(1)</sup> | **Scope 1 and 2 greenhouse gas** <br>**emissions**<sup>(1)</sup> | **Scope 1 and 2 greenhouse gas** <br>**emissions**<sup>(1)</sup> |
| Change vs baseline year |  |  | Change vs baseline year |  |  |
| **(15.8)%** | ![Icon-KPI-R.jpg](deo-20250630_g60.jpg) | ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) | **(18.8)%** | ![Icon-KPI-R.jpg](deo-20250630_g60.jpg) | ![Icon-KPI-K.jpg](deo-20250630_g61.jpg) |

---

![25](deo-20250630_g71.gif)

![27](deo-20250630_g72.gif)

---

| | |
|:---|:---|
| **Target** | **Target** |
| 30% reduction versus 2020 baseline year <br>by 2030<br>| 50% reduction versus 2022 baseline year by 2030 |
| **Definition** |  |
| Percentage change in the water efficiency <br>index across the company compared to fiscal <br>20 baseline. <br>| Percentage change in total direct and indirect <br>greenhouse gas emissions (market/net based) <br>compared to fiscal 22 baseline.<br>|
| **Why we measure** |  |
| Our water efficiency programme is critical to <br>addressing water security, particularly in <br>water-stressed areas. In addition to preserving <br>our licence to operate, minimising water use <br>within our own operations underpins our <br>commitment to delivering long-term value by <br>future-proofing our business against the <br>impacts of a changing climate. It also helps to <br>ensure this precious resource can continue to <br>be shared with the communities we live and <br>work amongst.<br>| Mitigating our impact on climate change is a <br>business imperative. Reporting on our efforts to <br>reduce Scope 1 and 2 greenhouse gas emissions <br>demonstrates our commitment to reducing our <br>contribution to global warming and helps build <br>credibility and trust. This is an important area for <br>our business and external stakeholders, supporting <br>our commitment to consistent value creation by <br>future-proofing our business.<br>|
| **Performance** |  |
| This year, our water efficiency across the <br>company improved in total by 15.8% since our <br>fiscal 20 baseline. The most significant drivers <br>of the strong performance in fiscal 25 were the <br>continuous improvement initiatives delivered <br>in our East Africa beer sites, Scotland <br>distilleries and our Runcorn and St. James's <br>Gate beer sites.<br>| Our Scope 1 and 2 greenhouse gas emissions <br>reduced in total by 18.8% from our fiscal 22 <br>baseline. The main drivers contributing to the <br>lower emissions this year are the increased use of <br>liquid biofuel at our Scotland distilleries and <br>energy efficiency improvements at our distilleries, <br>breweries and packaging sites in our biggest <br>energy consuming markets.<br>|

---

---

| | | | |
|:---|:---|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on pages 52-53. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on pages 53-55. |

---

(1)In accordance with Diageo's environmental reporting methodologies and, where relevant, WRI/WBCSD GHG Protocol; data for the baseline year and for the intervening period up to the end of

last financial year has been restated where relevant.

---

| | |
|:---|:---|
| 20 | **Diageo** Form 20-F 2025 |

---

SUMMARY FINANCIAL REVIEW

Summary Financial

Review

Reported net

sales growth

**(0.1)%**

Reported operating

profit growth

**(27.8)%**

Reported operating

profit margin

**21.4%**

Net cash from

operating activities

**$4,297m**

Return on closing

net assets

**19.3%** 

Basic earnings

per share

**105.9c** 

Total shareholder

return

**(24)%**

Organic net

sales growth<sup>(1)</sup>

**1.7%**

Organic operating

profit growth<sup>(1)</sup>

**(0.7)%**

Organic operating

profit margin<sup>(1)</sup>

**28.0%**

Free cash

flow<sup>(1)</sup>

**$2,748m**

Return on average

invested capital<sup>(1)</sup>

**13.7%**

Earnings per share before

exceptional items<sup>(1)</sup>

**164.2c**

(1)Organic net sales growth, organic operating profit growth, organic operating profit

margin, 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 213-220.

---

| | |
|:---|:---|
| 21 | **Diageo** Form 20-F 2025 |

---

**Net sales**

Reported net sales for the full year were down 0.1% to $20,245 million

(fiscal 24: $20,269 million) and were impacted by unfavourable foreign

exchange of $119 million (-0.6%) and acquisition and disposal

adjustments reduced this by $229 million (-1.1%), partially offset by

hyperinflation adjustments of $53 million.

Organic net sales grew $338 million or 1.7% with organic growth in four

of the five regions, including in North America, where Don Julio,

Guinness and Crown Royal were the standout performers. Growth was

supported by positive price/mix of 0.8% and 0.9% volume growth.

Volume increased in three of the five regions, with continued pressure

in North America and Europe. There was positive price/mix in four of

the five regions, but negative price/mix in Asia Pacific driven by

consumer downtrading in South East Asia and China and unfavourable

market mix with strong volume performance in India. The four

percentage points of phasing which favourably benefitted Q3 organic

net sales growth rate mostly reversed in Q4 fiscal 25.

Excluding the impact of the Cîroc transaction organic net sales growth

was 1.5%, with 0.8% volume and 0.7% price/mix.<sup>(1)</sup>

**Cost of sales**

Cost of sales broadly flat on a reported basis at $7,997 million (fiscal

24: $8,014 million), the positive impact of productivity savings offset

moderating inflationary pressure.

**Marketing**

Marketing investment declined by 0.8% on a reported basis to $3,662

million (fiscal 2024: $3,691 million), reflecting a reinvestment rate of

18.1% (fiscal 2024: 18.2%). On an organic basis, investment was flat as

we strategically reshaped our A&P spend across regions, prioritising

high-growth opportunities and demonstrating agility in resource

allocation with a focus on reducing development spend. Development

costs were reduced to 14% in fiscal 25 (fiscal 24: 21%), this reduction

was driven by the accelerated adoption of AI-enabled content creation

(Virtual Content Studios) and operational model changes, including the

launch of Agile Brand Communities and Conscious Create teams, which

encourage improved co-creation and collaboration.

**Other operating items**

Other operating items before exceptional items increased by 10% to

$2,882 million (fiscal 24: $2,619 million), largely driven by higher staff

costs, including incentives and wage cost inflation, as well as strategic

investments in RTM changes in the United States.

Exceptional operating items increased to $1,369 million (fiscal 24: $56

million (exceptional operating income)) largely driven by impairment,

including $458 million in respect of Diageo's investment in various

Distill Ventures business, as a result of the strategic decision to exit

Distill Ventures, and $231 million in respect of Aviation American Gin.

Exceptional operating items also included restructuring costs of $225

million relating to charges for the Accelerate programme and supply

chain agility programme. The distribution model change in France

resulted in an exceptional operating charge of $145 million.

**Operating profit**

Organic operating profit declined by 0.7%, with operating margin down

68bps organically, mainly due to higher overheads partly offset by a

slight improvement in gross margin. Reported operating profit declined

27.8% and reported operating profit margin declined 819bps, primarily

due to exceptional costs including impairment and restructuring costs,

unfavourable foreign exchange and a lower operating margin.

Excluding the impact of the Cîroc transaction, organic operating profit

and operating margin declined 1.0% and 70bps respectively.<sup>(1)</sup>

**Non-operating exceptional items**

In the year ended 30 June 2025, exceptional non-operating items were

a loss of $220 million, mainly driven by the loss on the sale of Guinness

Nigeria PLC ($125 million) and loss on the prospective sale of Guinness

Ghana Breweries PLC ($114 million).

**Net finance charges**

Net finance costs were $771 million (fiscal 24: $885 million), with the

decrease driven by the capitalisation of borrowing costs on capital

expenditure and the reduced costs of cash management swaps.

**Taxation**

The income tax charge of $999 million (fiscal 24: $1,294 million)

represented an effective tax rate of 29.9% (fiscal 24: 25.6%). The

effective tax rate before exceptional items was 24.9% (fiscal 24:

25.1%).

**Share of after tax results of associates and joint** 

**ventures**

Share of after tax results of associates and joint ventures declined by

53.4% to $193 million (fiscal 24: $414 million), largely due to a

significantly lower Moët Hennessy contribution.

**Profit attributable to non-controlling interest**

Profit attributable to non-controlling interests was $184 million (fiscal

24: $296 million), driven mainly by the lapping of exceptional items in

Shui Jing Fang in the prior year.

**Basic earnings per share (EPS)** 

Basic EPS before exceptional items declined 8.6% from 179.6 cents to

164.2 cents, primarily driven by a significantly lower associate income

from Moët Hennessy and unfavourable foreign exchange. This was

calculated using a weighted average number of shares in issue

excluding own shares of 2,222 million (fiscal 24: 2,234 million).

(1) On 7 April 2025, Diageo entered into a strategic partnership with Main Street Advisors. As part of the

transaction, Diageo transferred its majority ownership interest in Cîroc in North America in exchange for

interest in Lobos 1707 Tequila globally. The transaction was completed in June 2025. As a result, Cîroc in

North America is no longer consolidated in the group's financial statements and is now accounted for as an

investment in associate.

---

| | |
|:---|:---|
| 22 | **Diageo** Form 20-F 2025 |

---

SUMMARY FINANCIAL REVIEW continued

**Net cash flow from operating activities and free** 

**cash flow**

Net cash from operating activities was $4,297 million, an increase of

$192 million compared to fiscal 24. Free cash flow increased by $139

million to $2,748 million.

Free cash flow growth was driven by solid working capital management

including higher creditors and lower maturing stock movement year on

year.

Net capital expenditure in fiscal 25 was $1,549 million (fiscal 24:

$1,496 million) to support supply capacity expansion projects, North

America supply chain transformation and furthering digital capability.

**Return on average invested capital (ROIC)**

ROIC was 13.7% (fiscal 24: 15.8%) with the decrease driven mainly by

lower associate income from Moët Hennessy and unfavourable exchange.

**Net debt**

As at 30 June 2025, the group's net debt was $21,854 million (fiscal 24:

$21,017 million), the increase was mainly due to foreign exchange

movement on non-US dollar debt.

Tariff update<br>**Update on implications of tariff implementation and developments**<br>We have continued to undertake considerable contingency planning in recent months and are focused on what we can control in relation to <br>tariffs. Assuming the current 10% tariff remains on UK and 15% European imports into the US, that Mexican and Canadian spirits imports into <br>the US remain exempt under the United States - Mexico - Canada Agreement (USMCA), and that there are no other changes to tariffs, the <br>unmitigated impact of these tariffs is estimated to be c.$200 million on an annualised basis.<br>As a result of our extensive supply chain and broad and advantaged portfolio, we have undertaken a number of actions to help mitigate the <br>potential impact including inventory management, supply chain optimisation and re-allocation of investments. Given the actions to date and <br>before any pricing, we expect to be able to mitigate around half of this impact on operating profit on an ongoing basis. Looking ahead, we will <br>continue to work on measures to mitigate this impact further. Our long track record of managing international tariffs gives us confidence in our <br>ability to navigate this successfully. The expected impact of tariffs on the above basis for fiscal 26 is included in our guidance.<br>

![21.jpg](deo-20250630_g73.jpg)

---

| | |
|:---|:---|
| 23 | **Diageo** Form 20-F 2025 |

---

![14](deo-20250630_g74.gif)

Reshaped priorities for sustainable growth<br>

Reshaped priorities to

**Deliver sustainable** <br>**top-line growth**<br>

**Increase operating** <br>**leverage**<br>

deliver sustainable

long-term performance

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | Read more from page 10. |

---

**Optimise returns**<br>

**Maximise** <br>**cash flow**<br>

Accelerate programme<br>

Accelerate: to deliver

sustainable

consistent

performance, first

phase underway

**$3bn**

![](deo-20250630_g75.gif)

**Consistent cash delivery c.$3bn** 

**free cash flow per annum from** 

**fiscal 26, increasing as** 

**performance improves**

![Operating-Model.gif](deo-20250630_g18.gif)

**Operating model**

More agile global

operating model to

optimise investment and

allocate resources

effectively towards

long-term sustainable

growth

![Cost-Savings.gif](deo-20250630_g19.gif)

**Cost savings target**

**c.$625m** 

in cost savings

programme, evenly over

3 years, to enable

reinvestment in future

growth and improved

operating leverage

![Deleveraging.gif](deo-20250630_g20.gif)

**Deleveraging**

To be well within

leverage target range of

2.5–3.0x net debt to

adjusted EBITDA no later

than fiscal 28 providing a

lot more financial

flexibility, and supported

by selective disposals

We aim to strengthen

Diageo for the future by

increasing agility,

driving sustainable

outperformance and

increasing operating

leverage

A&P

Trade spend optimisation

Overheads

Supply

c.50% dropping

through to bottom

line

c.50% re-invested

for future growth

**Accelerate - strengthening Diageo for the future**

In May 2025, we launched the first phase of our Accelerate programme to create a more agile operating model, with clear cash delivery targets and

a disciplined focus on operational excellence and cost efficiency. This change in how we do business is creating a stronger platform to optimise

investment and is helping us allocate resources effectively towards long-term sustainable growth. The programme has been rolled out globally and

is progressing well.

From fiscal 26, we aim to sustainably deliver c.$3 billion in free cash flow per annum, with further increases expected as business performance

improves. We expect this to be supported by positive operating leverage from fiscal 26, reduced capital expenditure (down from around 7.7% of net

sales in fiscal 25 to a mid-single-digit percentage over three years), and improvements in working capital, particularly in receivables and stock,

including opportunities on maturing stock without compromising long-term growth.

This transformation is not just about cost efficiency, it is about enabling better, faster growth. Our operating model changes are designed to

enhance Diageo's global agility by leveraging our scale more effectively, sharpening investment priorities, and accelerating decision-making. These

efforts are closely linked to our internal drive to embed a mindset of everyday productivity across the organisation.

We expect to deliver approximately c.$625 million in cost savings over the next three years through efficiencies in A&P, overheads, supply chain,

and trade investment. Around c.50% of these savings are expected to contribute to operating profit, with the remaining c.50% reinvested in growth

areas such as digital and commercial capabilities.

We expect to be well within the leverage target range of 2.5-3.0x net debt to adjusted EBITDA no later than fiscal 28, which will provide much

more financial flexibility. We intend to deliver this through a combination of organic growth and positive operating leverage, combined with tighter

capital discipline, and appropriate and selective disposals over the coming years.

---

| | |
|:---|:---|
| 24 | **Diageo** Form 20-F 2025 |

---

BUSINESS REVIEW

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**<sup>(1)(2)</sup><br>

**Europe**

**24%**

![24-1.jpg](deo-20250630_g76.jpg)

**North America**

**40%**

**Latin America and Caribbean**

**9%**

**Asia Pacific**

**18%**

![62](deo-20250630_g77.gif)

---

| |
|:---|
| US Spirits |
| Diageo Beer Company (DBC) USA |
| Canada |

---

Other (principally Travel

Retail)

![107](deo-20250630_g78.gif)

---

| |
|:---|
| Brazil |
| Mexico |
| CCA (Central America and Caribbean) |
| Andean |
| South LAC |
| Other (principally<br>Travel Retail)<br>|

---

![132](deo-20250630_g79.gif)

---

| |
|:---|
| East Africa |
| South-West-Central Africa |
| Other |

---

**Africa**

**9%**

![173](deo-20250630_g80.gif)

---

| |
|:---|
| India |
| Greater China |
| Australia |
| South East Asia |
| North Asia |
| Travel Retail Asia |

---

![198](deo-20250630_g81.gif)

---

| | |
|:---|:---|
| Great Britain |  |
| Great Britain | Southern Europe |
| Northern Europe |  |
| Ireland |  |
| Türkiye |  |
| Eastern Europe |  |
| Other (principally Travel Retail) |  |

---

MENA

![](deo-20250630_g82.gif)

![](deo-20250630_g83.gif)

(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 2025. Does not include corporate net sales of $135 million (2024 – $123 million).

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fiscal 25** | **North America** | **Europe**  | **Asia Pacific** | **Latin America**<br>**and Caribbean**<br>| **Africa** |
| Volume (EU million) | 49.5 | 48.9 | 77.7 | 22.9 | 31.1 |
| Reported net sales<sup>(1)</sup>($ million) | 7973 | 4821 | 3635 | 1847 | 1834 |
| Reported operating profit<sup>(2)</sup>($ million) | 2222 | 823 | 890 | 509 | 283 |
| Operating profit before exceptional items<sup>(3)</sup>($ million) | 3053 | 1302 | 930 | 528 | 283 |
| Water efficiency index, percentage change compared to fiscal 20 baseline | 5% | (17)% | (45)% | (18)% | (20)% |
| Percentage change in total direct and indirect greenhouse gas emissions <br>(market/net based) compared to fiscal 22 baseline<br>| (23)% | 13% | (38)% | (62)% | (45)% |
| Average number of employees<sup>(4)</sup> | 3243 | 10608 | 8634 | 4408 | 2967 |

---

(1)Excluding corporate net sales of $135 million (2024 – $123 million).

(2)Excluding net corporate operating costs of $392 million (2024 – $366 million).

(3)Excluding exceptional operating charges of $1,369 million (2024 – $56 million) and net corporate operating costs of $392 million (2024 – $366 million).

(4)Employees have been allocated to the region where they live.

---

| | |
|:---|:---|
| 25 | **Diageo** Form 20-F 2025 |

---

**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 of 30 June 2025.

---

| | | |
|:---|:---|:---|
| **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 |
| Southern Europe | 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, <br>bottled in East Africa (scotch)<br>|
| South-West-<br>Central Africa<br>| distilling, brewing, bottling, warehousing | beer, rum, 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 |

---

---

| | |
|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | For more details about our capital investments please see page <u>[226](#i2a439a8f411e49deb31670665dbd0981_769)</u>.  |

---

**Our route to consumer**

We have five different routes 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. This model

is less common than the other models. For example, it is used in

Ireland for beer distribution.

---

| | |
|:---|:---|
| 26 | **Diageo** Form 20-F 2025 |

---

BUSINESS REVIEW continued

North America

**North America is the largest market for Diageo and represents over one-third of our net sales. We have a well-positioned** 

**portfolio of brands that leans into premiumisation and high-growth categories such as tequila. Our strategy is focused on** 

**accelerating sustainable growth through data-led insights, targeted investment and excellence in innovation and our** 

**route to market.**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| Key financials | 2024 | Exchange | Acquisitions<br>and disposals<br>| Organic <br>movement<br>| Other<sup>(1)</sup> | **2025** | Reported <br>movement<br>|
| Key financials | $ million | $ million | $ million | $ million | $ million | **$ million** | % |
| Net sales | 7908 | (10) | (41) | 116 |  | **7973** | 1 |
| Marketing | 1627 |  | (1) | (10) |  | **1616** | (1) |
| Operating profit before exceptional items | 3236 | (149) | (40) | 9 | (3) | **3053** | (6) |
| Exceptional operating items<sup>(2)</sup> | (197) |  |  |  |  | **(831)** |  |
| Operating profit | 3039 |  |  |  |  | **2222** | (27) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| Markets | **Organic**<br>**volume**<br>**movement**<br>| **Organic**<br>**net sales**<br>**movement**<br>| **Reported**<br>**volume**<br>**movement**<br>| **Reported**<br>**net sales**<br>**movement**<br>|
| Markets | **%** | **%** | **%** | **%** |
| North America<sup>(3)</sup> | **(0.8)** | **1.5** | **(1.2)** | **0.8** |
| US Spirits<sup>(3)</sup> | **(1.3)** | **1.6** | **(1.8)** | **1.0** |
| DBC USA<sup>(4)</sup> | **2.6** | **4.8** | **2.7** | **4.9** |
| Canada<sup>(3)</sup> | **(3.2)** | **(0.9)** | **(3.3)** | **(3.7)** |

---

(1) Fair value remeasurements. For further details see page 33.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)For further details on exceptional operating items see pages 33 and 158-160.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Reported volume movement includes impacts from acquisitions and/or disposals. For further details see pages 213-220.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

**Key financials:**

Reported net sales grew 0.8%, mainly driven by organic growth which

was partly offset by the impact of the Cîroc transaction.<sup>(5)</sup> Organic net

sales grew 1.5%, with growth in US Spirits and Diageo Beer Company

(DBC USA) offset by a slight decline in Canada. Volume declined 0.8%,

with a slight decline in US Spirits and Canada offsetting positive growth

in DBC USA, which was offset by positive price/mix of 2.3%.

Organic operating profit grew 0.3%, with marketing and supply

efficiencies and productivity savings partially offset by increased

overheads cost. Marketing spend which was targeted behind growth

drivers, Don Julio and Crown Royal Blackberry, reduced by 0.7% through

efficiencies. Operating margin of 38.3%, decreased 42bps organically.

Excluding the impact of the Cîroc transaction,<sup>(5)</sup> organic net sales grew

0.8% and organic operating profit declined 0.4%.

**US Spirits highlights**<sup>(6)</sup>**:**

Overall US Spirits net sales grew 1.6%, with positive price/mix of 2.9%

offset by slight volume decline. Overall shipment growth was 1.6

percentage points ahead of depletions growth, with some variations

across brands. US Spirits shipments grew ahead of depletions growth as

distributors replenished inventory in particular of Don Julio and Crown

Royal. We believe overall distributor inventory levels at the end of

fiscal 25 remain appropriate for the current consumer environment and

in line with historical levels.

Tequila net sales grew 16.9%, driven by Don Julio, in particular strong

growth in Don Julio Reposado, partially offset by a decline in

Casamigos. Don Julio net sales grew 41.9%, growing both spirits

industry and tequila category share, driven by the brand's cultural

relevance and successful activation. Don Julio shipments grew ahead of

depletions growth of 36% as distributors replenished inventory to levels

we believe appropriate to accommodate strong consumer demand.

Casamigos net sales declined 18% as a result of increased category

competition driving lower demand.

Crown Royal whisky net sales grew 3.8%, primarily driven by continued

strong consumer demand for Crown Royal Blackberry, launched in the

second half of fiscal 24. The innovation supported recruitment of

consumers into spirits, the category and the Crown Royal trademark.

Buchanan's net sales declined 26.0%, as the trademark lapped

innovation inventory build on Buchanan's Pineapple in the prior year.

Depletions declined 13%. Buchanan's scotch variants held share of the

overall scotch category.

Johnnie Walker net sales declined 10.6%, due to overall scotch

category weakness. The Johnnie Walker trademark gained share of the

scotch category and held share of total spirits, led by Johnnie Walker

Black Label and Johnnie Walker Red Label.

Vodka net sales declined 4.5%, due to increased competition in the

category from RTD formats and overall category weakness. While

Smirnoff lost category share, Ketel One gained share.

Captain Morgan net sales declined 9.3%, due to rum category

weakness. The primary Captain Morgan variant, Captain Morgan

Original Spiced, gained share of the category.

Bulleit whiskey net sales declined 7.3%. Bulleit held its share of US

spirits but lost category share due to increased competition in the US

whiskey category.

(5) On 7 April 2025, Diageo entered into a strategic partnership with Main Street Advisors. As part of the transaction, Diageo transferred its majority ownership interest in Cîroc in North America in exchange for interest in

Lobos 1707 Tequila globally. The transaction was completed in June 2025. As a result, Cîroc in North America is no longer consolidated in the group's financial statements and is now accounted for as an investment in

associate.

(6) Spirits brands and categories excluding cocktails, which includes ready to drink, ready-to-serve and non-alcoholic variants, except where noted.

---

| | |
|:---|:---|
| 27 | **Diageo** Form 20-F 2025 |

---

**Rest of North America**

DBC USA net sales grew 4.8%, driven by strong growth in Guinness

variants including Guinness Draught, Guinness Extra Stout, and

Guinness 0.0. Growth in innovations including Captain Morgan Sliced,

Smirnoff Sunny Days, and Smirnoff Shorties was partially offset by

softer Smirnoff Ice performance.

Canada net sales declined 0.9%, reflecting a weaker spirits category

amid a challenging regulatory and operational backdrop which was

partially offset by strong growth in Guinness.

---

| | |
|:---|:---|
| 28 | **Diageo** Form 20-F 2025 |

---

BUSINESS REVIEW continued

Europe

**Europe is a diverse region with a trend-leading on-trade channel and tourism hotspots, all of which offer a strong** 

**platform for the development of our premium brands. It is also home to Diageo's biggest beer business and a** 

**stronghold for Guinness. We hold a leadership position across major categories and markets.**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Key financials | 2024 | Exchange | Acquisitions<br>and disposals<br>| Organic <br>movement<br>| Other<sup>(1)</sup> | Hyperinflation<br><sup>(2)</sup><br>| **2025** | Reported <br>movement <br>|
| Key financials | $ million | $ million | $ million | $ million | $ million | $ million | **$ million** | % |
| Net sales | 4804 | (12) | (24) | 15 |  | 38 | **4821** |  |
| Marketing | 873 | 11 | (5) | 16 |  | 3 | **898** | 3 |
| Operating profit before exceptional <br>items<br>| 1379 | (34) | (10) | (32) | (14) | 13 | **1302** | (6) |
| Exceptional operating items<sup>(3)</sup> | (122) |  |  |  |  |  | **(479)** |  |
| Operating profit | 1257 |  |  |  |  |  | **823** | (35) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| Markets | **Organic**<br>**volume**<br>**movement**<br>| **Organic**<br>**net sales**<br>**movement**<br>| **Reported**<br>**volume**<br>**movement**<br>| **Reported**<br>**net sales**<br>**movement**<br>|
| Markets | **%** | **%** | **%** | **%** |
| Europe<sup>(4)</sup> | **(4.3)** | **0.3** | **(4.7)** | **0.4** |
| Great Britain<sup>(4)</sup> | **(0.9)** | **3.5** | **(0.8)** | **6.7** |
| Southern Europe<sup>(4)</sup> | **(6.3)** | **(6.0)** | **(8.2)** | **(7.0)** |
| Ireland<sup>(4)</sup> | **0.1** | **5.5** | **0.3** | **7.0** |
| Northern Europe<sup>(4)</sup> | **(14.0)** | **(13.9)** | **(14.4)** | **(13.2)** |
| Türkiye<sup>(4)</sup> | **(3.7)** | **20.9** | **(3.8)** | **4.6** |
| Eastern Europe<sup>(4)</sup> | **1.5** | **1.1** | **1.7** | **2.9** |
| MENA | **1.8** | **2.3** | **1.9** | **2.5** |

---

(1) Fair value remeasurements. For further details see page<u>[33](#i2a439a8f411e49deb31670665dbd0981_142)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) See pages 154 and 214-215 for details on hyperinflation adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) For further details on exceptional items see pages<u>[33](#i2a439a8f411e49deb31670665dbd0981_139)</u> and 158-160.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Reported volume movement includes impacts from acquisitions and/or disposals. For further details see page<u>[213](#i2a439a8f411e49deb31670665dbd0981_727)</u>-<u>[220](#i2a439a8f411e49deb31670665dbd0981_751)</u>.

**Key financials:**

Reported net sales grew 0.4% broadly in line with organic net sales,

which increased 0.3%. Volume decline of 4.3% was offset by price/mix

up 4.5%. Growth in Türkiye, Great Britain and Ireland was mostly offset

by Northern Europe and Southern Europe. Favourable price/mix in

Guinness in Great Britain and Ireland, coupled with Türkiye pricing

adjustments in response to inflation helped overall price/mix.

Organic operating profit declined 2.5%, driven by the global Premier

League partnership and increased investment in technology, this was

partially offset by positive price, largely driven by Türkiye. Marketing

investment grew 1.9%, ahead of organic sales growth, supporting

strong Guinness growth in Great Britain, Ireland and Eastern Europe.

Operating margin of 27.0%, decreased 80bps organically.

**Market highlights:**

Great Britain net sales grew 3.5%, driven by double-digit organic net

sales growth in Guinness despite temporary supply constraints. This

was partially offset by a mid-single-digit decline in spirits net sales due

to overall category weakness. In spirits, a continued focus on tequila

delivered strong growth, particularly in Casamigos. Guinness gained

category share in both the on-trade and off-trade channels, supported

by effective brand building, the Premier League partnership and very

strong momentum in Guinness 0.0. Notably, Guinness 0.0 is now the #1

non-alc beer in Great Britain and is the fastest growing non-alc beer.<sup>(5)</sup>

Following a period of decline, RTD net sales were broadly flat,

resulting from a number of initiatives implemented to stabilise

demand.

Southern Europe net sales declined 6.0%, due to performance in France

which was adversely impacted by the transition to a new distribution

model, and a broader decline in the spirits category. Diageo transitioned

distribution of its malts and luxury brands in March 2024 from its joint

venture with Moët Hennessy to direct distribution by Diageo France with

the remaining brands moved in January 2025. Despite category challenges

in the wider market, our market share of spirits grew, led by Johnnie

Walker and Don Julio and supported by strong activation.

Ireland net sales grew 5.5%, driven by the continued growth of Guinness.

Strong share gain in the on-trade in Guinness was supported by effective

brand building and the continued roll-out of Guinness 0.0 Draught which

is now in more than 2,300 on-trade outlets. The market also delivered

market share gain in spirits and TBA in a declining environment,

supported by strong in-market execution.

Northern Europe net sales declined 13.9%, primarily driven by strategic

scotch pricing in Germany which negatively impacted performance.

While the overall spirits category remained challenging, share gains

were delivered across key categories including gin, rum, tequila and

liqueurs.

Türkiye net sales grew 20.9%, primarily driven by pricing adjustments

in response to inflation. This resulted in a 3.7% volume decline, mainly

in raki, as tight monetary policy and stagnant minimum wages slowed

consumption. Despite the challenging environment, Johnnie Walker,

Gordon's and Baileys delivered strong double-digit volume and organic

net sales growth, supported by focused investment and targeted

pricing actions.

Rest of Europe net sales declined 0.4%, growth was impacted by the

volatile environment influenced by political conflicts in the region

which has impacted consumers; this was largely offset by strong

Guinness performance in Eastern Europe and tequila in MENA. A

dedicated MENA market was established at the end of fiscal 24 to

capture long-term growth opportunities across the region.

(5) RSV R12M Nielsen (14/06/2025)/CGA (17/05/2025).

---

| | |
|:---|:---|
| 29 | **Diageo** Form 20-F 2025 |

---

Asia Pacific

**In Asia Pacific, our focus is to grow in both developed and emerging markets across our entire portfolio. We** 

**manage our portfolio to meet the demands of the growing middle class, and aim to inspire our consumers to drink** 

**better, not more.**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Key financials | 2024 | Exchange | Acquisitions<br>and disposals<br>| Organic <br>movement<br>| **2025** | Reported <br>movement <br>|
| Key financials | $ million | $ million | $ million | $ million | **$ million** | % |
| Net sales | 3817 | (41) | (21) | (120) | **3635** | (5) |
| Marketing | 651 |  | (5) | (16) | **630** | (3) |
| Operating profit before exceptional items | 1063 | (11) | (7) | (115) | **930** | (13) |
| Exceptional operating items<sup>(1)</sup> | 375 |  |  |  | **(40)** |  |
| Operating profit | 1438 |  |  |  | **890** | (38) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| Markets | **Organic**<br>**volume**<br>**movement**<br>| **Organic**<br>**net sales**<br>**movement**<br>| **Reported**<br>**volume**<br>**movement**<br>| **Reported**<br>**net sales**<br>**movement**<br>|
| Markets | **%** | **%** | **%** | **%** |
| Asia Pacific<sup>(2)</sup> | **3.9** | **(3.2)** | **3.7** | **(4.8)** |
| India | **5.1** | **7.1** | **5.1** | **4.6** |
| Greater China<sup>(2)</sup> | **8.4** | **(9.0)** | **8.5** | **(8.9)** |
| Australia<sup>(2)</sup> | **(2.4)** | **(6.9)** | **(2.4)** | **(7.8)** |
| South East Asia<sup>(2)</sup> | **(3.7)** | **(7.0)** | **(3.6)** | **(6.0)** |
| Travel Retail Asia<sup>(2)</sup> | **(8.7)** | **(24.3)** | **(8.5)** | **(23.3)** |
| North Asia<sup>(2)</sup> | **(7.3)** | **0.9** | **(13.2)** | **(10.4)** |

---

(1) For further details on exceptional items see pages <u>[33](#i2a439a8f411e49deb31670665dbd0981_139)</u> and 158-160.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Reported volume movement includes impacts from acquisitions and/or disposals. For further details see pages <u>[213](#i2a439a8f411e49deb31670665dbd0981_727)</u>-<u>[220](#i2a439a8f411e49deb31670665dbd0981_751)</u>.

**Key financials:**

Reported net sales declined 4.8%, due to organic net sales decline, the

disposal of Windsor and unfavourable foreign exchange. Organic net

sales declined by 3.2%, due to continued macroeconomic challenges,

notably in China and South East Asia, category pressure in Travel Retail

Asia and the transition to a licence brewing model for Guinness in

Australia and New Zealand. This was partially offset by India where

performance was strong, supported by good volume growth.

Organic operating profit declined 11.0%, driven by adverse market and

category mix, particularly the decline in Travel Retail Asia. Marketing

investment declined 2.5%, largely driven by reduced investment in

China, which was partially offset by increased spend in India.

Operating margin of 25.6%, decreased 223bps organically.

**Market highlights:**

India net sales grew 7.1%, driven by strong volume growth in the

Prestige & Above segment supported by positive price/mix, and

business re-commencing in the state of Andhra Pradesh after a five-

year hiatus. Double-digit growth in Black & White, Signature and Royal

Challenge stood out along with positive growth in McDowell's.

Greater China net sales declined 9.0%, resulting from challenging

macroeconomic conditions. In response to the consumer environment

there was a deliberate strategic portfolio shift towards white spirits

and lower aged malts, which supported strong volume growth and

market share gain in international spirits, but resulted in negative

price/mix. Chinese white spirits was adversely impacted by lapping

strong double-digit growth due to last year's inventory restocking and

reduced consumption occasions across the baijiu category.

Australia net sales declined 6.9%, reflecting softness in Johnnie Walker

and in RTDs. This was partially offset by strong Guinness performance

in the first half. In the second half, Diageo transitioned its beer route-

to-market to a licence brewing model, a strategic shift to support the

long-term growth of Guinness in the market.

South East Asia net sales declined 7.0%, mainly due to a double-digit

decline in Vietnam where performance was adversely impacted by

a route-to-market transformation implemented in response to evolving

local market dynamics.

North Asia net sales grew 0.9%, driven by strong performance in Japan

offset by a decline in Korea given overall market weakness. Growth in

Japan was underpinned by the launch of Johnnie Walker Black Ruby

and the stabilisation of Johnnie Walker Black Label in the on and off-

trade.

Travel Retail Asia net sales declined 24.3%, due to softer consumption

and continued retail inventory destocking. Despite this, the business

gained share, driven by the Johnnie Walker portfolio and Don Julio.

---

| | |
|:---|:---|
| 30 | **Diageo** Form 20-F 2025 |

---

BUSINESS REVIEW continued

Latin America and Caribbean

**In Latin America and Caribbean (LAC), we are aiming to increase our market share through focused consumer-**

**centric delivery across core categories including whiskey, gin, tequila and vodka. We do this through targeted** 

**marketing investment in consumer-focused occasions where traditionally non-spirit TBA products have had a** 

**strong presence.** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Key financials | 2024 | Exchange | Acquisitions<br>and disposals<br>| Organic <br>movement<br>| Hyperinflation<br><sup>(1)</sup><br>| Other<sup>(2)</sup> | **2025** | Reported <br>movement <br>|
| Key financials | $ million | $ million | $ million | $ million | $ million | $ million | **$ million** | % |
| Net sales | 1839 | (179) | 3 | 167 | 17 |  | **1847** | **—** |
| Marketing | 306 | (35) |  | 26 | 7 |  | **304** | **(1)** |
| Operating profit before exceptional <br>items<br>| 502 | (61) | (7) | 63 | 1 | 30 | **528** | **5** |
| Exceptional operating items<sup>(3)</sup> |  |  |  |  |  |  | **(19)** |  |
| Operating profit | 502 |  |  |  |  |  | **509** | **1** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| Markets | **Organic**<br>**volume**<br>**movement**<br>| **Organic**<br>**net sales**<br>**movement**<br>| **Reported**<br>**volume**<br>**movement**<br>| **Reported**<br>**net sales**<br>**movement**<br>|
| Markets | **%** | **%** | **%** | **%** |
| Latin America and Caribbean | **3.2** | **9.2** | **3.6** | **0.4** |
| Brazil | **3.8** | **18.0** | **3.8** | **4.1** |
| Mexico | **(4.3)** | **5.4** | **(4.3)** | **(7.3)** |
| CCA | **7.3** | **6.4** | **7.5** | **6.9** |
| Andean<sup>(4)</sup> | **23.2** | **21.5** | **32.9** | **12.9** |
| South LAC<sup>(4)</sup> | **(2.9)** | **(6.3)** | **(2.9)** | **(14.1)** |

---

(1) See pages 154 and 214-215 for details on hyperinflation adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Fair value remeasurements. For further details see page<u>[33](#i2a439a8f411e49deb31670665dbd0981_142)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) For further details on exceptional items see pages<u>[33](#i2a439a8f411e49deb31670665dbd0981_139)</u> and 158-160.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Reported volume movement includes impacts from acquisitions and/or disposals. For further details see pages <u>[213](#i2a439a8f411e49deb31670665dbd0981_727)</u>-<u>[220](#i2a439a8f411e49deb31670665dbd0981_751)</u>.

**Key financials:**

Reported net sales grew 0.4%, with unfavourable foreign exchange

almost fully offsetting strong organic growth. Organic net sales grew

9.2%, with volume up 3.2% and price/mix growth of 6.0%. Price/mix

benefitted from favourable comparatives given lapping prior year

promotion activity and effective pricing in Brazil due to

premiumisation. We believe that inventory levels at the end of fiscal

25 remain at an appropriate level for the current consumer

environment.

Organic operating profit increased 11.7%, driven by productivity

savings, pricing in Brazil, positive mix and reduced levels of

promotional spend. Marketing investment increased 8.7% and was

focused on core brands. Operating margin of 28.6%, increased 68bps

organically.

**Market highlights:**

Brazil net sales grew 18.0%, driven by volume growth and positive

price/mix. This strong performance reflects premiumisation and

strategic pricing actions, supported by a more stable consumer

environment and targeted investment. Growth was led by scotch,

particularly Johnnie Walker and Old Parr, supported by both positive

volume and price/mix. Brazil is a key strategic market for RTDs, with

Smirnoff driving strong growth through targeted investment and strong

in-market execution.

Mexico net sales grew 5.4%, as the consumer environment began to

stabilise over the year, though momentum remained subdued. Growth

was largely driven by Don Julio, primarily reflecting the lapping of

significant promotional activity in the prior year and suppressed

volume. This was partially offset by a decline in whisky, mainly

Buchanan's.

CCA net sales grew 6.4%, given favourable scotch and tequila

performance.

Andean (Colombia and Venezuela) net sales increased 21.5%, mainly

due to Buchanan's and Old Parr, as a result of market stabilisation.

South LAC (Argentina, Bolivia, Chile, Ecuador, Paraguay, Peru and

Uruguay) net sales declined 6.3%, driven by the volatile

macroeconomic and the weakening consumer environment adversely

impacting consumption. Despite the challenging environment, the

market delivered market share gain.

---

| | |
|:---|:---|
| 31 | **Diageo** Form 20-F 2025 |

---

Africa

**In Africa, we manage an exciting TBA portfolio. With a growing emphasis on premiumisation, we're focusing on** 

**Scotch, vodka, gin, and tequila alongside a vibrant local spirits portfolio. We hold a leading position in premium beer** 

**in many countries with Guinness and are expanding our footprint in the ready-to-drink category.**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Key financials | 2024 | Exchange | Reclassification<br><sup>(1)</sup><br>| Acquisitions<br>and disposals<br>| Organic <br>movement<br>| Hyperinflation<br><sup>(2)</sup><br>| **2025** | Reported <br>movement <br>|
| Key financials | $ million | $ million | $ million | $ million | $ million | $ million | **$ million** | % |
| Net sales | 1778 | 121 | (67) | (146) | 150 | (2) | **1834** | 3 |
| Marketing | 205 | 8 |  | (13) | (8) |  | **192** | (6) |
| Operating profit before exceptional items | 131 | 59 |  | 37 | 59 | (3) | **283** | 116 |
| Exceptional operating items<sup>(3)</sup> |  |  |  |  |  |  | **—** |  |
| Operating profit | 131 |  |  |  |  |  | **283** | 116 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| Markets | **Organic**<br>**volume**<br>**movement**<br>| **Organic**<br>**net sales**<br>**movement**<br>| **Reported**<br>**volume**<br>**movement**<br>| **Reported**<br>**net sales**<br>**movement**<br>|
| Markets | **%** | **%** | **%** | **%** |
| Africa<sup>(4)</sup> | **3.7** | **10.5** | **(3.1)** | **3.1** |
| East Africa | **2.0** | **0.1** | **0.0** | **0.1** |
| SWC Africa<sup>(4)(5)</sup> | **6.1** | **15.8** | **25.8** | **26.6** |

---

(1) Reclassification between net sales and cost of goods sold to accurately reflect the impact of a route-to-market change in Africa.

(2) See pages 154 and 214-215 for details on hyperinflation adjustments.

(3) For further details on exceptional items see pages <u>[33](#i2a439a8f411e49deb31670665dbd0981_139)</u> and 158-160.

(4) Reported volume movement includes impacts from acquisitions and/or disposals. For further details see pages <u>[213](#i2a439a8f411e49deb31670665dbd0981_727)</u>-<u>[220](#i2a439a8f411e49deb31670665dbd0981_751)</u>.

(5) Reported volume and reported net sales movements do not include the Guinness Nigeria PLC disposal.

**Key financials:**

Reported net sales grew 3.1%, with strong organic net sales growth

partly offset by a reclassification as a result of route-to-market

change. Organic net sales grew 10.5%, with growth across all markets,

most notably, double-digit growth in Ghana, South Africa and

Tanzania. Volume grew 3.7% and price/mix grew 6.9%, with the latter

mainly due to pricing and premiumisation through East Africa.

Organic operating profit grew 27.7% driven by the positive impact of

pricing. Marketing investment declined by 4.4% due to efficiencies and

change in portfolio and marketing mix. Operating margin of 15.4%,

increased 232bps organically.

**Market highlights:**

East Africa net sales grew 7.0%, with growth delivered across Kenya,

Uganda and Tanzania. Performance was driven by strong growth in

beer, rum, and scotch, partially offset by declines in gin and vodka.

Beer delivered strong single-digit growth, led by local brands,

Serengeti and White Cap, as well as Guinness. Performance in rum was

driven by local flavour innovation on Kenya Cane. The transition to an

independent route-to-market for premium-plus-spirits supported

double-digit growth in Johnnie Walker.

SWC Africa (South, West and Central Africa) net sales grew 15.8%,

driven by double-digit organic volume and net sales growth in Ghana

supported by an improving macroeconomic environment. Double-digit

growth in Malta Guinness and Guinness was the result of increased

distribution and favourable pricing. Strong growth in Gordon's led to

share gains in the gin category in South Africa, following the change in

the route-to-market. This was partially offset by softness in Johnnie

Walker, attributed to increased competition. In the second half of the

fiscal year, a route-to-market change was implemented on Smirnoff

RTDs in South Africa, to unlock growth in one of the fastest growing

TBA categories.

---

| | |
|:---|:---|
| 32 | **Diageo** Form 20-F 2025 |

---

Business review continued

Category and brand review

For the year ended 30 June 2025

**Key categories**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Organic<br>volume<br>movement<sup>(1)</sup>%<br>| Organic<br>net sales<br>movement%<br>| Reported<br>net sales<br>movement%<br>| Reported<br>net sales<br>by category%<br>|
| **Spirits**<sup>(2)</sup> | **—** | **—** | **(2)** | **76** |
| Scotch | (2) | (4) | (7) | 22 |
| Tequila | 15 | 18 | 17 | 13 |
| Vodka<sup>(3)(4)</sup> | (4) | (5) | (9) | 8 |
| Canadian whisky | 5 | 3 | 3 | 7 |
| Rum<sup>(4)</sup> | (3) | (5) | (7) | 5 |
| Liqueurs | (7) | (4) | (4) | 5 |
| Gin<sup>(4)</sup> | (1) | (4) | (11) | 4 |
| IMFL whisky | 7 | 10 | 8 | 4 |
| Chinese white spirits | 5 | (8) | (8) | 3 |
| US whiskey | (8) | (9) | (9) | 2 |
| **Beer** | **6** | **10** | **10** | **18** |
| **Ready to drink** | **4** | **2** | **—** | **4** |

---

**Key brands**<sup>(5)</sup>

---

| | | | |
|:---|:---|:---|:---|
|  | Organic<br>volume<br>movement<sup>(6)</sup>%<br>| Organic<br>net sales<br>movement%<br>| Reported<br>net sales<br>movement%<br>|
| Johnnie Walker | (3) | (5) | (7) |
| Don Julio | 41 | 38 | 37 |
| Guinness | 14 | 13 | 12 |
| Crown Royal | 4 | 3 | 3 |
| Smirnoff | (3) | (5) | (6) |
| Baileys | (1) | (4) | (3) |
| Captain Morgan | (3) | (6) | (6) |
| Casamigos<sup>(7)</sup> | (16) | (16) | (16) |
| Shui Jing Fang<sup>(8)</sup> | 5 | (8) | (8) |
| McDowell's | 2 | 7 | 4 |

---

(1)Organic equals reported volume movement except for spirits (1)%, vodka (5)%, liqueurs (8)%, gin (2)%, beer 3%, and ready to drink (2)%.

(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)Brands excluding ready to drink, non-alcoholic variants and beer except Guinness.

(6)Organic equals reported volume movement, except for Guinness 11%, Baileys (2)% and Captain Morgan (4)%.

(7)Casamigos trademark includes both tequila and mezcal.

(8)Growth figures represent total Chinese white spirits of which Shui Jing Fang is the principal brand.

---

| | |
|:---|:---|
| F-9 | **Diageo** Form 20-F 2025 |

---

Group financial review

**Business review (continued)**

**Corporate**

**Performance 2025**

**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 $135 million in the year ended 30 June 2025, an increase of $12 million. Net sales were favorably impacted by an organic

increase of $10 million as well as by $2 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 $392 million in the year ended 30 June 2025 increased by $26 million compared to

operating costs of $366 million in the year ended 30 June 2024. The $22 million increase in costs in the year ended 30 June 2025 was

principally a result of D&T Voyager cost increase, as well as unfavorable exchange rate movement of $4 million.

**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 an 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 favorable exchange rate movements of $22 million.

---

| | |
|:---|:---|
| 33 | **Diageo** Form 20-F 2025 |

---

Group financial review

Group financial review

**Key financials - certain line items**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 30 June 2024 | **Exceptional** <br>**operating** <br>**items (c)** | **Exchange**<br>**(a)** | **Acquisitions** <br>**and disposals**<br>**(b)** | **Organic** <br>**movement**<sup>(1)</sup> | **Fair value** <br>**remeasurement**<br>**(d)** | **Reclassification**<sup>(2)</sup> | **Hyperinflation**<sup>(1)</sup> | **30 June 2025** |
|  | Reported | **Exceptional** <br>**operating** <br>**items (c)** | **Exchange**<br>**(a)** | **Acquisitions** <br>**and disposals**<br>**(b)** | **Organic** <br>**movement**<sup>(1)</sup> | **Fair value** <br>**remeasurement**<br>**(d)** | **Reclassification**<sup>(2)</sup> | **Hyperinflation**<sup>(1)</sup> | **Reported** |
| **Year ended 30 June 2025** | $ million | **$ million** | **$ million** | **$ million** | **$ million** | **$ million** | **$ million** | **$ million** | **$ million** |
| Sales | 27891 | **—** | **(283)** | **(264)** | **570** | **—** | **—** | **50** | **27964** |
| Excise duties | (7622) | **—** | **164** | **35** | **(232)** | **—** | **(67)** | **3** | **(7719)** |
| **Net sales** | 20269 | **—** | **(119)** | **(229)** | **338** | **—** | **(67)** | **53** | **20245** |
| Cost of sales | (8071) | **(18)** | **(88)** | **180** | **(114)** | **30** | **67** | **(58)** | **(8072)** |
| **Gross profit** | 12198 | **(18)** | **(207)** | **(49)** | **224** | **30** | **—** | **(5)** | **12173** |
| Marketing | (3691) | **—** | **17** | **24** | **(2)** | **—** | **—** | **(10)** | **(3662)** |
| Other operating items | (2506) | **(1407)** | **(10)** | **(2)** | **(260)** | **(17)** | **—** | **26** | **(4176)** |
| **Operating profit** | 6001 | **(1425)** | **(200)** | **(27)** | **(38)** | **13** | **—** | **11** | **4335** |
| **Other line items:** |  |  |  |  |  |  |  |  |  |
| Non-operating items | (70) |  |  |  |  |  |  |  | **(220)** |
| Taxation (e) | (1294) |  |  |  |  |  |  |  | **(999)** |

---

(1) For the definition of organic movement and hyperinflation, see pages <u>[213](#i2a439a8f411e49deb31670665dbd0981_727)</u>-<u>[220](#i2a439a8f411e49deb31670665dbd0981_751)</u>.

(2) Reclassification between net sales and cost of goods sold to accurately reflect the impact of a route-to-market change in Africa.

(i) Reported figures in the table above have been extracted from the condensed consolidated income statement for the years ended 30 June 2024 and 30 June 2025.

(ii)Acquisitions and disposals, organic movement, fair value remeasurement, reclassification and hyperinflation figures have been calculated at the prior period weighted average exchange rates.

**(a) Exchange**

The impact of movements in exchange rates on reported figures for

operating profit was principally due to the weakening of the Mexican

peso, the Turkish lira and the Brazilian real, partially offset by the

strengthening of the 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 2025 is set out in the table below.

---

| | |
|:---|:---|
|  | **Gains/(losses)**<br>**$ million**<br>|
| Translation impact | **4** |
| Transaction impact | **(204)** |
| **Operating profit before exceptional items** | **(200)** |
| Net finance charges – translation impact | **(69)** |
| Net finance charges – transaction impact | **70** |
| Net finance charges<sup>(1)</sup> | **1** |
| Associates – translation impact | **2** |
| **Profit before exceptional items and taxation** | **(197)** |

---

(1) For more information about Finance income and charges please see page [161](#i2a439a8f411e49deb31670665dbd0981_535).

---

| | | |
|:---|:---|:---|
|  | **Year ended** | Year ended |
|  | **30 June 2025** | 30 June 2024 |
| **Exchange rates** |  |  |
| Translation $1 = | **£0.77** | £0.80 |
| Transaction $1 = | **£0.80** | £0.82 |
| Translation $1 = | **€0.92** | €0.93 |

---

**(b) Acquisitions and disposals** 

The acquisitions and disposals movement in the year ended 30 June

2025 was primarily attributable to the acquisition of Ritual Beverage

Company LLC, the disposals of the Pampero brand and the Cacique

brand, the new Cîroc contractual arrangement in North America and

the disposal of Guinness Nigeria PLC.

---

| | |
|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | See pages <u>[166](#i2a439a8f411e49deb31670665dbd0981_547)</u>-<u>[169](#i2a439a8f411e49deb31670665dbd0981_556)</u> for further details.  |

---

**(c) Exceptional items** 

In the year ended 30 June 2025, exceptional operating items were a

charge of $1,369 milliondue to impairment of investments in

associates and other investments, brands, tangible fixed assets,

other assets and other related charges ($910 million), charges for the

Accelerate programme, that includes supply chain agility programme

($225 million), the distribution model change in France ($145 million),

various dispute and litigation matters ($51 million) and the reversal of

rum cover-over income ($38 million). In the year ended 30 June 2024,

exceptional operating items were a gain of $56 million, mainly driven

by a net gain of $224 million due to impairment reversal, 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 2025, exceptional non-operating items were

a loss of $220 million,mainly driven by the loss on the sale of Guinness

Nigeria PLC ($125 million) and loss on the prospective sale of Guinness

Ghana Breweries PLC ($114 million).In the year ended 30 June 2024,

exceptional non-operating items were a loss of $70 million, mainly

driven by the loss on the sale of the Windsor business in Korea ($58

million).

In the year ended 30 June 2025, exceptional finance income was in

relation to borrowing costs capitalised of $58 million in respect of

purchases of property, plant, equipment and computer software in the

prior years.

---

| | |
|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | See pages 158-160 for further details. |

---

**(d) Fair value remeasurement**

In the year ended 30 June 2025, the adjustment to cost of sales of a

gain of $13 million reflects the elimination of fair value changes for

biological assets in respect of growing agave plants for the production

of tequila (2024 – $17 million loss). The adjustments to marketing and

other operating expenses of a gain of $139 million were the elimination

of fair value changes to contingent consideration liabilities and earn-out

arrangements in respect of prior year acquisitions (2024 – $156 million

gain).

---

| | |
|:---|:---|
| 34 | **Diageo** Form 20-F 2025 |

---

GROUP FINANCIAL REVIEW continued

**(e) Taxation** 

In theyear ended 30 June 2025,Diageo changed the definition of the

reported tax rate and the tax rate before exceptional items to exclude

the share of after-tax results of associates and joint ventures from

profit before tax, as this represents post-tax profit, hence is

considered as a non-essential factor of the calculation. The

presentation of the tax rate after exceptional items and the tax rate

before exceptional items for theyear ended 30 June 2024 has been

aligned to this new definition.

On this new basis, the reported tax rate for the year ended 30 June 2025

was 29.9% compared with 25.6% for the year ended 30 June 2024.

Included in the tax charge of $999 million in the year ended 30 June

2025 is a net exceptional tax credit of $214 million, including an

exceptional tax credit of $138 millionin relation to brand impairments

and tangible fixed assets, a tax credit of$46 millionin respect of

restructuring programmes, a tax credit of $36 million in respect of

Diageo's agreement with LVMH on the termination of their joint

operation in France, and a tax credit of$12 millionin respect of

various dispute and litigation matters in North America, partially offset

by$15 milliontax charge in respect of capitalised borrowing costs and

$3 million tax charge in respect of sale of businesses and brands.

Included in the tax charge of $1,294 millionin theyear ended 30 June

2024is a net exceptional tax charge of$24 million, including an

exceptional tax charge of$95 millionin relation to the reversal of the

Shui Jing Fang brand impairment charge, partly offset by a tax credit of

$19 millionin respect of the Chase brand impairment and the related

tangible fixed assets, a tax credit of$13 millioncomprised 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 millionin respect of the supply chain agility

programme.

The tax rate before exceptional items for the year ended 30 June 2025

was 24.9% compared with 25.1% for the year ended 30 June 2024.

We expect the tax rate before exceptional items for theyear ending 30

June 2026 to be in the region of 25%.

**(f) Dividend**

The group aims to maximise its return of capital to shareholders each

year. The decision in respect of the dividend is made with reference to

the dividend policy for the respective period that includes current

performance trends, including sales, profit after tax and cash

generation. Diageo aims for 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 2025, dividend

cover was 1.6 times (2024 – 1.7 times). The group will keep future

returns of capital, including dividends, under review 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 of 62.98 cents

per share (2024 – 62.98 cents per share) will be paid to holders of

ordinary shares and US ADRs on register as of 17 October 2025. The ex-

dividend date is 16 October 2025 for holders of ordinary shares and

17 October 2025 for holders of US ADRs. Holders of ordinary shares will

receive their dividends in sterling unless they elect to receive their

dividends in US dollars by 7 November 2025. The dividend per share in

pence to be paid to ordinary shareholders will be announced on

20 November 2025 and will be determined by the actual foreign

exchange rates achieved by Diageo buying forward contracts for

sterling currency, entered into during the three trading days preceding

the sterling equivalent announcement of the final dividend. The final

dividend, once approved by shareholders, will be paid to both holders

of ordinary shares and US ADRs on 4 December 2025. A dividend

reinvestment plan is available to holders of ordinary shares in respect

of the final dividend and the plan notice date is 7 November 2025.

**Movements in net borrowings and equity**

**Movements in net borrowings**

---

| | | |
|:---|:---|:---|
|  | **2025** | 2024 |
|  | **$ million** | $ million |
| **Net borrowings at the beginning of the year** | **(21017)** | (19582) |
| Free cash flow (1) | **2748** | 2609 |
| Movements in loans, other investments and <br>other financial assets<br>| **(195)** | (47) |
| Acquisitions (2) | **(35)** | (6) |
| Investment in associates (2) | **(84)** | (133) |
| Sale of businesses and brands (3) | **143** | 87 |
| Share buyback programme | **—** | (987) |
| Net sale of own shares for share schemes | **15** | 21 |
| Net sale/(purchase) of treasury shares in <br>respect of subsidiaries<br>| **8** | (10) |
| Dividend paid to non-controlling interests | **(138)** | (117) |
| Net movements in bonds (4) | **1527** | 558 |
| Purchase of shares of non-controlling interests <br>(5)<br>| **(9)** | (223) |
| Net movements in other borrowings (6) | **(629)** | (106) |
| Equity dividend paid | **(2298)** | (2242) |
| Unclaimed dividends and share forfeiture | **30** |  |
| **Net increase/(decrease) in cash and cash** <br>**equivalents**<br>| **1083** | (596) |
| Net increase in bonds and other borrowings | **(898)** | (453) |
| Exchange differences (7) | **(921)** | (199) |
| Other non-cash items | **(101)** | (187) |
| **Net borrowings at the end of the year** | **(21854)** | (21017) |

---

(1) See page [217](#i2a439a8f411e49deb31670665dbd0981_736) for the analysis of free cash flow.

(2) On 24 September 2024, Diageo completed the acquisition of, and

paid $23 million, net of cash acquired, for the remaining issued share

capital of Ritual Beverage Company LLC (owner of Ritual Zero Proof

non-alcoholic spirits brand), that it did not already own. On 19 June

2025, Diageo announced that it acquired a controlling stake in Nao

Spirits & Beverages Private Limited. In the year ended 30 June 2024,

Diageo paid $6 million in respect of prior year acquisitions. In the years

ended 30 June 2025 and 30 June 2024, investment in associates

included additional investments in a number of Distill Ventures

associates.

(3) In the year ended 30 June 2025, sale of businesses and brands

included the disposal of the Cacique brand for a net cash

consideration, net of disposal costs, of $67 million, the disposal of

Guinness Nigeria PLC for a net cash consideration, net of disposal

costs, of $53 million and the disposal of the Pampero brand for a net

cash consideration, net of disposal costs, of $55 million. 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.

---

| | |
|:---|:---|
| 35 | **Diageo** Form 20-F 2025 |

---

(4) In the year ended 30 June 2025, the group issued bonds of

€2,200 million ($2,452 million – net of discount and fee) consisting of

€700 million ($780 million – net of discount and fee) 3.125% fixed rate

notes due 2031, €300 million ($346 million – including issuance premium)

3.125% fixed rate notes due 2031, €700 million ($776 million – net of

discount and fee) 3.375% fixed rate notes due 2035, €500 million

($550 million – net of discount and fee) 3.75% fixed rate notes due

2044, $750 million ($748 million – net of discount and fee) 5.125% fixed

rate notes due 2030, $750 million ($743 million – net of discount and fee)

5.625% fixed rate notes due 2035 and repaid bonds of $600 million and

€1,600 million ($1,816 million). 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 million5.375%fixed rate notes due 2026,

$900 million5.625%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 €1,100 million ($1,167 million).

(5) In the year ended 30 June 2024, Diageo agreed with Combs Wine

and Spirits LLC to purchase the remaining 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.

(6) In the year ended 30 June 2025, the net movements in other

borrowings principally arose from the $479 million repayment of

commercial paper and $114 million repayment of lease liabilities. In

the year ended 30 June 2024, the net movements in other borrowings

principally arose from the increase in commercial paper, collateral and

bank loan balances, cash outflows of foreign currency swaps and

forwards, and repayment of lease liabilities.

(7) In the year ended 30 June 2025, exchange losses arising on net

borrowings of $921 million were primarily driven by unfavourable

exchange movements on sterling and euro denominated borrowings and

on foreign currency swaps and forwards. 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.

**Movements in equity**

---

| | | |
|:---|:---|:---|
|  | **2025** | 2024 |
|  | **$ million** | $ million |
| **Equity at the beginning of the year** | **12070** | 11709 |
| Adjustment to 2023 closing equity in respect of <br>hyperinflation in Ghana (1)<br>| **—** | 51 |
| **Adjusted equity at the beginning of the year** | **12070** | 11760 |
| Profit for the year | **2538** | 4166 |
| Exchange adjustments (2) | **452** | (645) |
| Remeasurement of post-employment benefit <br>plans net of taxation<br>| **(2)** | (61) |
| Purchase of shares of non-controlling interests <br>(3)<br>| **(7)** | (223) |
| Change in non-controlling interests from sale of <br>business<br>| **9** |  |
| Hyperinflation adjustments net of taxation (1) | **264** | 365 |
| Dividend declared to non-controlling interests | **(140)** | (121) |
| Equity dividend declared | **(2298)** | (2243) |
| Share buyback programme | **—** | (997) |
| Other reserve movements | **292** | 69 |
| **Equity at the end of the year** | **13178** | 12070 |

---

(1) See pages 154 and 214-215 for details on hyperinflation

adjustments.

(2) Exchange movements in the year ended 30 June 2025 primarily

arose from exchange gains driven by sterling. Exchange movements in

the year ended 30 June 2024 primarily arose from exchange losses

driven by the Turkish lira, the Mexican peso, sterling and the euro.

(3) In the year ended 30 June 2024, the purchase of shares of non-

controlling interests of $223 million represented the acquisition of 50%

of DeLeon Holdco LLC's share capital.

**Post-employment benefit plans** 

The net surplus of the group's post-employment benefit plans

increased by $35 million from $717 million at 30 June 2024 to $752

million at 30 June 2025. The increase in net surplus was predominantly

attributable to the favourable changes in the discount and inflation

rates in the UK and Ireland that was partially offset by the adverse

change in the market value of assets held by the post-employment

benefit plans in the UK and the experience loss arising from the

triennial valuation of the UK post-employment schemes.

Total cash contributions by the group to all post-employment benefit

plans in the year ending 30 June 2026 are estimated to be

approximately $45 million.

---

| | |
|:---|:---|
| F-10 | **Diageo** Form 20-F 2025 |

---

GROUP FINANCIAL REVIEW *continued*

**Operating results 2024 compared with 2023**

For the discussion on our operating results for the year ended 30 June 2023, including certain comparative discussion on our

operating results for the years ended 30 June 2023 and 2024, please refer to 'Operating results 2024 compared with 2023' from page

43 in our Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 1 August 2024.

![36.jpg](deo-20250630_g84.jpg)

---

| | |
|:---|:---|
| 36 | **Diageo** Form 20-F 2025 |

---

Spirit of progress

![GIF_sop_logo_master_RGB.gif](deo-20250630_g85.gif)

Doing business the right way,

from grain to glass

**We manage our business for the long-term, and have always believed that doing business the right way, from grain to** 

**glass, builds trust and credibility with our stakeholders. 'Spirit of Progress' is our action plan to deliver on this** 

**commitment. We identify and monitor the most material risks and opportunities for our business, using these insights** 

**to shape our strategy and drive change where we can have impact at scale. The plan evolves over time to ensure we** 

**focus our resources on the most critical issues aligned with our footprint and areas of influence.**

![36-1.jpg](deo-20250630_g86.jpg)

![GIF_sop_logo_business_RGB.gif](deo-20250630_g87.gif)

Embed integrity in everything we do

Stand up for human rights

---

| | |
|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on pages 38-39. |

---

Build and monitor our distinct culture

Protect our people through a robust

health and safety strategy

---

| | |
|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on pages 40-43. |

---

Doing Business the Right Way is core to our three 'Spirit of Progress' priorities<br>

![GIF_sop_logo_positive_RGB.gif](deo-20250630_g88.gif)

Change the way the world drinks for the

better

Address the harmful use of alcohol and

promote moderation

Responsibly market our products

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | Read more on pages 44-45. |

---

![GIF_sop_logo_sustainability_RGB.gif](deo-20250630_g89.gif)

Preserve the natural resources we all

depend on, building the resilience of our

business and protecting our licence to

operate

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | Read more on pages 46-57. |

---

![GIF_sop_logo_inclusion_RGB.gif](deo-20250630_g90.gif)

Create an environment where everyone

contributes to a better business

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | Read more on pages 58-59. |

---

---

| | |
|:---|:---|
| 37 | **Diageo** Form 20-F 2025 |

---

As our stakeholders' expectations and business evolve, so does our

assessment of material impacts, risks and opportunities and our

strategy to address them. To update our strategy, we regularly assess

stakeholder feedback, performance against targets and business needs.

While we focus on factors we can influence, external uncertainties

remain, making our roadmaps subject to change.

Each year, we conduct a review of our targets. This year, we further

considered the results of an updated ESG issues assessment<sup>(1)</sup> ahead of

compliance with the European Union's (EU) Corporate Sustainability

Reporting Directive (CSRD) in 2028, as well as updated Science Based

Targets initiative (SBTi) emission reduction targets.

Our updated emissions reductions, regenerative agriculture and

packaging ambitions were adjusted in fiscal 25 to reflect the updated

ESG issues assessment and our new SBTi targets. The target review was

led by the Executive Committee members and approved by the Board.

**How we take action and measure our performance**

This section of the Annual Report sets out our progress against our

priority 'Spirit of Progress*'* ambitions. In our ESG Reporting Index, we

include reporting on other goals and other actions which support

our strategy.

---

| | | |
|:---|:---|:---|
| Doing business the right way | Doing business the right way | Doing business the right way |
| **Key policies**<br>Code of Business Conduct<br>Global Human Rights Policy<br>Dignity at Work Policy<br>Global Health, Safety and Wellbeing Policy | **Key policies**<br>Code of Business Conduct<br>Global Human Rights Policy<br>Dignity at Work Policy<br>Global Health, Safety and Wellbeing Policy | **Key policies**<br>Code of Business Conduct<br>Global Human Rights Policy<br>Dignity at Work Policy<br>Global Health, Safety and Wellbeing Policy |
| Promote positive drinking | Pioneer grain to glass sustainability | Champion inclusion and diversity |
| **Key policies**<br>Global Employee Alcohol Policy<br>Diageo Marketing Code<br>| **Key policy**<br>Global Environment Policy<br>| **Key policy**<br>Code of Business Conduct<br>|
| **Targets**![Targets.gif](deo-20250630_g91.gif)<br>| **Targets**![Targets.gif](deo-20250630_g91.gif)<br>| **Ambitions**![Targets.gif](deo-20250630_g91.gif)<br>|
| Education on the dangers of alcohol misuse<br>Underage drinking<sup>\*,^</sup><br>Drink driving<sup>^</sup><br>| Water stewardship <br>Using water efficiently\*<br>Replenishing water for communities<sup>^</sup><br>Advocating for water stewardship<br>| Increasing the diversity of our leadership team<br>Gender diversity\*<br>Ethnic diversity\*<br>|
|  | Responsible sourcing<br>Launching regenerative agriculture programmes<br>| Promoting inclusivity through hospitality and <br>skills education<br>Learning for Life and other hospitality and <br>skills programmes |
|  | Emission reductions <br>Reducing emissions from our operations<sup>\*,^</sup><br>Reducing emissions from our value chain<br>Increasing the recycled content of our packaging<br>| Promoting inclusivity through hospitality and <br>skills education<br>Learning for Life and other hospitality and <br>skills programmes |

---

\*Targets and ambitions which are included in our long-term incentive plans (through fiscal 27).

^ Targets and ambitions which are included in our long-term incentive plans (from fiscal 26). For more details refer to page 133.

**Governance**

Both the Board and the Executive Committee oversee 'Spirit of Progress'.

The Board reviews our most material topics through our ESG issues

assessment, our ESG strategy and our targets used to measure our

strategy in action. The Chief Executive is ultimately accountable for the

performance against 'Spirit of Progress*'* ambitions. Each target has an

Executive Committee member accountable for the delivery with

regular performance reviews conducted by the Executive Working

Group (EWG).

**New regulatory frameworks**

We continue to voluntarily report against the Global Reporting

Initiative (GRI) and Sustainability Accounting Standards Board (SASB)

frameworks in our ESG Reporting Index.

We are monitoring regulation developments in both the United Kingdom

and the EU. In February 2025, the EU proposed changes to CSRD through

an Omnibus package, including a two-year delay for companies with

significant operations in the EU. We are also monitoring the 'UK

Sustainability Reporting Standards', which are aligned to International

Sustainability Standards Board (ISSB) requirements. We intend to apply

both CSRD and the UK standards as soon as required under EU and UK law.

Given the interconnectivity of climate and nature, we have

incorporated some of the Task Force for Nature-related Financial

Disclosures (TNFD) into our Task Force on Climate-related Financial

Disclosures (TCFD) reporting.

In the United States, California has 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 emissions reduction claims, and voluntary carbon offsets. We

provide disclosures pursuant to AB-1305 in this section of the Annual

Report, our ESG Reporting Index 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 more details, see

the website.

(1) Refer to our ESG Reporting Index, page 3, for information on our updated ESG issues

assessment, conducted with reference to the EU's Corporate Sustainability

Reporting Directive, in advance of compliance with the directive in fiscal 28.

![38.jpg](deo-20250630_g92.jpg)

---

| | |
|:---|:---|
| 38 | **Diageo** Form 20-F 2025 |

---

DOING BUSINESS THE RIGHT WAY

---

| | |
|:---|:---|
| ![GIF_sop_logo_business_RGB.gif](deo-20250630_g87.gif) | **Business integrity and** <br>**Human rights**<br>|

---

**We want to do business 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.**

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | For more details, see the website www.diageo.com. |

---

**Business Integrity**

A culture of business integrity is foundational to our identity and delivery

of our Growth Ambition. 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.

**Code of Business Conduct (Our Code)** 

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.

All Diageo employees are required to complete our Code of Business

Conduct training annually, via either routine annual training or as part

of new-joiner onboarding.

Additionally, all eligible<sup>(1)</sup> employees are required to certify that they

have read, understood and complied with our Code of Business Conduct

and supporting global policies during the previous financial year

through an annual compliance certification declaration.

The training is delivered through an interactive e-learning module,

with classroom sessions provided for those without regular

computer access.

In fiscal 25, employees engaged with our Code through local Business

Integrity Day activations. Markets shaped integrity conversations

around their local priorities, supported by global resources and

guidance. This flexibility led to more relevant, resonant sessions that

strengthened understanding, sparked meaningful dialogue, and

reinforced the everyday role of integrity in how we work.

**Encouraging people to speak up**

We encourage our employees to report potential breaches of our Code

or policies through our global confidential grievance and

whistleblowing service, SpeakUp. The service, which is available

through various channels (email, telephone and internet) in 20

languages, is monitored by the business integrity team to ensure that

all allegations are handled appropriately, confidentially and fairly.

**Managing third-party risks**

Maintaining business integrity is crucial in our interactions with third

parties. Our Know Your Business Partner (KYBP) programme is designed

to identify potential risks before entering into contractual agreements.

In fiscal 25, we enhanced our KYBP governance process and tools by

leveraging our KYBP centres of practice, which has led to greater

standardisation of our procedures.

**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. 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 supply chain. Our policies cover our

responsibilities to protect the human rights of everyone working in our

direct operations, value chain and communities.

**Our human rights governance**

Our Code and Global Human Rights Policy play an integral part

of ensuring that Diageo's culture is aligned with our purpose and

values. Our Code has been approved by our Board of Directors and our

Global Human Rights Policy has been approved by our Chief Executive.

Our human rights strategy is reviewed on a periodic basis by the Audit

Committee of the Board and by the Executive's Audit and Risk

Committee (ARC) as part of our mitigation of our principal risk on

business ethics and integrity. 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. 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.

**Providing access to grievance mechanisms**

We encourage everyone, including any affected stakeholders, to

report potential breaches of our Code or policies, including human

rights, through our global confidential grievance and whistleblowing

service, SpeakUp.

**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.

**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, contract

and temporary workers, and children.

(1) For more details, see the Non-Financial Reporting Boundaries and Methodologies, available on

our website.

---

| | |
|:---|:---|
| 39 | **Diageo** Form 20-F 2025 |

---

**Assessing risk in our direct operations**

We use a variety of risk assessment tools in our direct operations to

identify risk.

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 our salient risks. In fiscal 25, all direct operations

completed an annual self-assessment questionnaire and four high-risk

direct operations undertook a third-party assessment, keeping us on

track to assess all high-risk direct operations by the end of fiscal 27.

We use the insights from the assessments to develop action plans to

resolve material human rights concerns and strengthen our approach.

Where needed, we involve external experts to ensure our plans are

robust.

**Assessing risk and compliance in our supply chain**

Our Responsible Sourcing programme, led by our Supplier Excellence

team, 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, 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. This year we strengthened our approach by increasing

our supplier compliance target from 65% to 85%. We began screening

for human rights with higher-risk potential suppliers before

onboarding. This helps us make more informed decisions on human

rights risks and gives us the chance to assess and mitigate the salient

issues before we contract with a supplier.

We have also mapped our salient risks within our priority supply chains

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 rights issues in the

supply chain for greater impact. For more information, please refer to

the ESG Reporting Index and Modern Slavery Statement.

**Taking action to mitigate human rights risks**

Where we identify human rights risks, we take actions to mitigate

them. Some examples of these mitigations are:

Building the capability of our Risk Management Committees and

conducting a mandatory risk deep dive to ensure we are effectively

managing the risk.

Our Global Brand Promoter standard and training establishes principles

and guidelines to protect brand promoters from the risk of sexual

harassment. This training is now available in 17 languages globally. To

date we have trained over 200 agencies and over 18,000 brand

promoters.

Our Child Labour Prevention programme provides training for

smallholder farmers in Africa. This year we trained 282 farmers

in Uganda, who will go on to train up to 10,000 people in

their communities.

Our collaboration with AIM-Progress has resulted in targeted training

on child and forced labour in the United States. This free, open-access

training is available to all our suppliers, labour and service providers.

Our partnership with external parties assesses and addresses the health

impacts of heat stress in sugarcane farming for our rum supply chain

through improved access to sunshades, drinking water, personal

protective equipment and adequate rest schedules.

Our collaboration with AIM-Progress and Oxfam aims to strengthen

supplier grievance mechanisms, improve access to remediation for

workers and build supplier capability to support long-term

improvement.

**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. We continue to enhance our risk mitigation plans based

on lessons learned.

We also externally benchmark our progress against best practice

through rankings such as the World Benchmarking Alliance (WBA) Social

Transformation Benchmark. In July 2024, Diageo was ranked joint fifth

out of 2,000 companies assessed.

**Engaging our stakeholders**

We recognise the importance of listening to and consulting

stakeholders, especially the most vulnerable ones, 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 within our community investment programmes.

This year we took steps to improve our processes for responding to investor

and customer requests and piloted new ways to collect worker data to

better understand suppliers' practices and identify potential issues.

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 all stakeholders and drive continuous improvements

in our approach. 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 supply chain.

---

| | | |
|:---|:---|:---|
| ![39-1.jpg](deo-20250630_g93.jpg) |  |  |
| ![39-1.jpg](deo-20250630_g93.jpg) | **Randall Ingber**<br>General Counsel and <br>Company Secretary<br>| ![randal.jpg](deo-20250630_g94.jpg) |
| ![39-1.jpg](deo-20250630_g93.jpg) | **Business integrity is at the heart of who we** <br>**are as a company – it is a competitive** <br>**advantage and integral to maintain the** <br>**trust we need to achieve our Growth** <br>**Ambition.'** | **Business integrity is at the heart of who we** <br>**are as a company – it is a competitive** <br>**advantage and integral to maintain the** <br>**trust we need to achieve our Growth** <br>**Ambition.'** |
| ![39-1.jpg](deo-20250630_g93.jpg) |  |  |

---

![41.jpg](deo-20250630_g95.jpg)

---

| | |
|:---|:---|
| 40 | **Diageo** Form 20-F 2025 |

---

DOING BUSINESS THE RIGHT WAY

continued

---

| | |
|:---|:---|
| ![GIF_sop_logo_business_RGB.gif](deo-20250630_g87.gif) | Our people and <br>culture<br>|

---

**Our talented and diverse workforce, together with our** <br>**people's passion for our brands and inclusive culture** <br>**continues to be a competitive advantage for our** <br>**business, enabling our people to perform at their best.** <br>

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | For more details, see the website www.diageo.com. |

---

**Highly engaged talent**

At Diageo, we are proud to have strong employee engagement levels

across our organisation. Despite macroeconomic uncertainty, 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 (90%) are proud to work for Diageo, exceeding

the external benchmark<sup>(1)</sup> by 12 percentage points which is consistent

with our previous survey. Our overall engagement score also remains

high at 83%, which is 7 percentage points higher than the external

benchmark and 2 percentage points higher than fiscal 24.

Benchmarking in the top quartile positions us advantageously as an

employer of choice and supports efforts to attract and retain quality,

diverse talent. There were increasing levels of engagement from

external talent with 23% more career site visits since fiscal 24. To

sustain this position, we recently refreshed our employee value

proposition to strengthen the connection to our purpose, values,

behaviours and culture. Understanding where we can be better is also

important to maintain employee engagement, so this year we have

introduced several new questions to our Your Voice survey in relation

to reward packages and opportunities for growth.

**Growing our talent**

Growth is a core part of who we are at Diageo; we encourage all

employees to continue to develop through stretching career

opportunities and experiences. Career growth is also critical to

sustaining high employee engagement levels and future-proofing

business performance. In fiscal 25, 79% of our leadership appointments

were internal talent and of this, 21% were international moves and 16%

were cross-functional moves. In the broader workforce, over 5,000

people made career moves. In addition, in our most recent Your Voice

survey, 77% said they feel empowered to seek opportunities to learn

and develop new skills.

We believe that coaching and feedback are critical to unlock career

growth, development and performance. 78% of employees say

their line manager provides feedback and coaching to support their

growth. Our performance enablement programme ('My Performance

for Growth') encourages continuous feedback with managers having

regular conversations with their teams, coaching them to define bold

goals, unlock opportunities for growth and build the right skills and

capabilities to drive competitive advantage. In fiscal 25, we also

invested in a new people manager development programme,

'Impact', which equips people managers across the globe with the

skills and knowledge needed to inspire, develop and grow high-

performing teams.

To fuel business and individual growth, we prioritise building skills and

capabilities required to win now and in the future. Our groundbreaking

development programme for emerging general managers (GMs),

'Horizons', helps leaders elevate their entrepreneurship, strategic

framing and enterprise-wide thinking. The programme runs for 12

months, combining in-person training, live simulations, project

assignments, coaching and mentoring and is complemented by a tailored

onboarding experience for first-time GMs. Since its launch in October

2023, six participants have been appointed into GM roles and a further

three have been promoted into more senior roles.

Our externally recognised marketing programme Diageo Way of Brand

Building (DWBB) has been updated in fiscal 25 to integrate the very

latest in consumer trends, marketing science and technology including

AI. We piloted a five-day training programme in North America and

South, West and Central Africa, and launched an online DWBB training

hub for all employees with 14 brand-building skills modules. 'How we

Build Brands' has also been integrated into all employee onboarding

with over 900 completions since December 2024. Within commercial,

we launched the 'Igniting Commercial Excellence' programme which

provides specialised training to our market teams. Finally, we offer a

series of trainings to build capability in digital skills including data and

digital transformation and omnichannel best practices for marketing.

**Continuing to evolve our culture**

n our recent Your Voice survey, Diageo employees characterised our

culture as engaging, ambitious and collaborative. Our purpose, along

with the pride and passion for our brands, forms a fundamental part of

this vibrant culture. Embedding a culture of speed and agility remains

pivotal to our ability to achieve our Growth Ambition and ensure long-

term success. In fiscal 25, we have kept up the momentum, by

reinforcing our dial-up behaviours 'Be Externally Curious', 'Collaborate

Efficiently', 'Experiment and Learn' and 'Act Decisively'. Our over 550

culture change champions represent all levels and parts of the business

and play a pivotal role in reinforcing behaviours, sharing and

embracing best practice across Diageo.

In fiscal 25, we concluded the expansion of 'Celebrate', our global

recognition platform. Across the business, employees have delighted in the

opportunity to spot behaviours in real time and recognise colleagues. This

fiscal the 'Celebrate' platform has received more than 140,000

nominations of colleagues demonstrating our values and 'dial-up

behaviours'; this amounts to one recognition being received every four

minutes. We also launched the inaugural CEO Celebrate Awards to

recognise the remarkable impact teams had on driving growth and

performance through our cultural shifts. In July 2025, Diageo Ireland won

'Market of the Year' award for exceptional performance in fiscal 24,

demonstrating strong growth, whilst also driving high levels of employee

engagement and fostering a culture of speed and agility.

In the first half of the fiscal, we ran a Pulse Check to measure progress

against the dial-up behaviours. Results showed that 84% of employees felt

encouraged to practise the dial-up behaviours and 75% felt supported in

applying them.

We are already seeing the impact of our cultural transformation on

business performance with our dial-up behaviours enabling us to disrupt

our innovation-to-launch process times, enter white spaces in Brazil by

adapting our route to consumer approach and establish and grow a new

standalone market in the Middle East and North Africa (MENA) with the

strategic vision and operating model established in under three months.

(1) Based on a blend of Ipsos Karian and Box, Qualtrics benchmark data. The Global

Manufacturing benchmark includes organisations with global coverage that

operate within FMCG and other industry sectors.

---

| | |
|:---|:---|
| 41 | **Diageo** Form 20-F 2025 |

---

![41-1.jpg](deo-20250630_g96.jpg)

**Barry O'Sullivan (MD Diageo Ireland in July 2024) winning 'Market of the Year'** 

**award as part of our CEO Celebrate Awards**

Culture change is a multi-year journey and there is more to do. Leaders'

role-modelling the dial-up behaviours consistently is key to success and

driving sustainable change. This is a key focus of our culture change

plan, and we are working closely with our leaders to reinforce this.

Alongside our dial-up behaviours, we continue to cultivate a culture of

integrity, accountability and operational excellence, ensuring we

continue to strengthen our focus on execution.

**Enabling our people to thrive** 

Employee wellbeing is a key driver of sustainable performance. 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 Global Health, Safety

and Wellbeing Policy integrates these four dimensions into our daily

culture, by providing tools and resources on topics like healthy habits,

menopause and sleep. We also help employees connect to our purpose

as a source of energy, with leaders sharing examples of how our

consumers, brands, people, sustainability and society fuel their

motivation and drive.

We recognise the role line managers play in creating an environment

where people can prioritise their wellbeing. Through our new 'Impact'

people manager development programme, our line managers are now

trained on how to build inclusive teams and create an environment to

perform by enhancing their own and their team's energy and resilience.

Our wellbeing champions are key to embedding wellbeing into our

culture. Our headquarters 'Wellbeing Day' is an example of how

employees take ownership of our four wellbeing dimensions in their

local communities. Many markets have also led employee physical

wellness challenges, such as Türkiye's partnership with Heltia and

Ireland's Wellbeing Warriors, an employee-led resource group,

establishing bespoke physical and social wellbeing initiatives whilst

also creating awareness of global events.

In fiscal 25, we were pleased to launch the One World all-employee

global share plan across over 50 countries and during the year all

17,000 eligible employees were awarded £500 of Free Shares, creating

15,000 new Diageo employee shareholders.

In February 2025, we launched 'nudge' in the United Kingdom, South

Africa and India to support financial wellbeing through improved

literacy, security and confidence. The interactive platform offers

clear, personal financial guidance for all life stages. So far, 72% of

eligible employees have used it and shared positive feedback.In terms

of mental wellbeing, our Mental Health Awareness eLearning helps to

normalise mental health discussions, complemented by our celebration

of World Mental Health Day across the organisation. Our Employee

Assistance Programme offers employees free, confidential advice and

counselling around the clock on personal, emotional and work-life

issues. Lastly, Diageo's Flex philosophy continues to offer employees

opportunities to balance their work and life activities.

**Average number of employees by region and gender**<sup>(1)</sup>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Region<sup>(2)</sup> | Men | % | Women | % | Not <br>declared<sup>(</sup><br><sup>3)</sup><br>| Total |
| North America | 1924 | 60% | 1307 | 40% | 12 | 3243 |
| Europe | 5979 | 56% | 4613 | 44% | 16 | 10608 |
| Asia Pacific | 5638 | 65% | 2995 | 35% | 1 | 8634 |
| Latin America <br>and Caribbean<br>| 2689 | 61% | 1719 | 39% |  | 4408 |
| Africa | 1823 | 61% | 1143 | 39% | 1 | 2967 |
| **Diageo (total)** | **18053** | **61%** | **11777** | **39%** | **30** | **29860** |

---

**Average number of employees by role and gender**<sup>(1)</sup>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Role | Men | % | Women | % | Not <br>declared<sup>(3)</sup><br>| Total |
| Executive<sup>(4)</sup> | 8 | 62% | 5 | 38% |  | 13 |
| Senior <br>manager<sup>(5)</sup><br>| 335 | 57% | 253 | 43% |  | 588 |
| Line manager<sup>(6)</sup> | 2797 | 64% | 1602 | 36% | 6 | 4405 |
| Supervised <br>employee<sup>(7)</sup><br>| 14913 | 60% | 9917 | 40% | 24 | 24854 |
| **Diageo (total)** | **18053** | **61%** | **11777** | **39%** | **30** | **29860** |

---

(1)This data has been compiled as a monthly average based on the proportion of employees who

have identified their gender as male, female or undisclosed. In some cases assumptions have

been applied where data is not available.

(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 as male or female.

(4)The number of executive positions have been calculated based on data at 30 June 2025.

(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.

---

| | | |
|:---|:---|:---|
| ![53.jpg](deo-20250630_g97.jpg) |  |  |
| ![53.jpg](deo-20250630_g97.jpg) | **Louise Prashad**<br>Chief HR Officer<br>| ![42-2.jpg](deo-20250630_g98.jpg) |
| ![53.jpg](deo-20250630_g97.jpg) |  |  |
| ![53.jpg](deo-20250630_g97.jpg) | I am thankful to our 29,000+ employees who collectively foster a <br>culture of pride in our brands and our purpose of celebrating life <br>every day, everywhere. Their ownership for business <br>performance working together with customers, partners and <br>colleagues helps us to attract and retain the very best talent for <br>Diageo.' | I am thankful to our 29,000+ employees who collectively foster a <br>culture of pride in our brands and our purpose of celebrating life <br>every day, everywhere. Their ownership for business <br>performance working together with customers, partners and <br>colleagues helps us to attract and retain the very best talent for <br>Diageo.' |
| ![53.jpg](deo-20250630_g97.jpg) |  |  |

---

![44.jpg](deo-20250630_g99.jpg)

---

| | |
|:---|:---|
| 42 | **Diageo** Form 20-F 2025 |

---

DOING BUSINESS THE RIGHT WAY

continued

---

| | |
|:---|:---|
| ![GIF_sop_logo_business_RGB.gif](deo-20250630_g87.gif) | Health <br>and safety<br>|

---

**We prioritise the health and safety of our people** <br>**throughout our value chain to ensure everyone is safe** <br>**when working, every day, everywhere.** <br>

**3-year trend: Lost Time Accident Frequency Rate (LTAFR)**<br>

![10](deo-20250630_g100.gif)

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | For more details, see the Non-Financial Reporting Boundaries and <br>Methodologies found on our website www.diageo.com.<br>|

---

**Embedding a culture of health and safety** 

Safety is a collective responsibility and an essential aspect of every role.

By empowering and engaging our employees in safety practices, we

reinforce our commitment to the principle that no level of accidents is

acceptable.

Our approach to health and safety is built upon our Global Health,

Safety and Wellbeing Policy and our Global Risk Management

Standards. We perform risk assessments, leveraging compliance

systems, technology, and training to develop and implement innovative

working methods that strive for continuous safety improvement.

We actively promote employee engagement in accident investigations

and improvement initiatives, ensuring they receive the latest health

and safety training to perform their daily tasks safely. Additionally, we

run company-wide communication campaigns and in fiscal 25 we used

data to inform our monthly safety campaigns highlighting specific

hazards, such as fire safety, working at heights and safe driving.

The 'Safer Together' strategy incorporates both a strong safety culture

and a comprehensive technology roadmap. Designed to prevent severe,

fatal and process safety incidents, the overall approach also aims to

enhance health and safety standards across the organisation.

Roadmaps support the integration of an improved safety culture at all

locations. The technology roadmap features digital solutions,

automation, forklift truck advancements including camera technology,

manual handling wearable kits and artificial intelligence, each

contributing to better health and safety performance. During fiscal 25,

over $40 million was invested in shuttle warehousing, where casks are

put away on pallets by an automatic shuttle rather than manual

handling. An additional investment is expected next year to complete

the shuttle warehouse complex, helping improve safety and boost

productivity. These strategies and roadmaps are also extended to

contractors and third-party providers.

We recognise that process safety events<sup>(1)</sup>pose significant risks to the

health and safety of employees, communities and the environment, as

well as potential damage to property, reputation and business

continuity. To manage these risks, our comprehensive process safety

strategy has been reviewed with the objective to ensure regulatory

compliance. We drive continuous improvement through incident

analysis and performance monitoring to foster a strong safety culture

across the organisation. Integral to this strategy is Diageo's risk-based

process safety framework, consisting of 20 elements designed to

proactively identify, assess and mitigate hazards that could cause

major incidents such as fires, explosions or toxic releases. In fiscal 26,

the focus will be monitoring early warning signs such as equipment

anomalies, procedural deviations and near misses to enable proactive

risk management. Efforts will also continue to build process safety

capabilities. Targeted audits will be performed at key sites to verify

compliance, address gaps and enhance overall safety performance.

**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. We expect all employees to take

responsibility for their health and safety and those around them, by

acting in accordance with our Code of Business Conduct. We utilise a

variety of tools to identify health and safety risks as per our Global

Health, Safety and Wellbeing Policy. Each location performs hazard

identification and risk assessments which identify and address unsafe

conditions. We also have a safe observation programme across all

locations to identify unsafe behaviours, recognise best practices 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 regularly

monitor and review health and safety performance. We report the

results monthly to the Global Supply Chain and Procurement leadership

team, to the Executive Committee at quarterly meetings and to the

Board twice yearly.

**Our performance** 

We report on lost time accident frequency rate (LTAFR). This year, our

rate was 0.82 (fiscal 24: 1.06) lost time accidents (LTAs) per 1,000 full-

time employees (including directly supervised contractors). Over the

last three fiscal years LTAFR has shown year-to-year variability with a

decrease in fiscal 25 following an increase in fiscal 24 reflecting the

dynamic nature of our risk environment and ongoing efforts to enhance

workplace safety. Our LTAFR decreased against last fiscal, driven by

reductions in accidents across a number of markets but most

significantly in the scotch category and North America.

Our total recordable accident frequency rate (TRAFR) which records

work-related injuries that need more than first aid treatment increased

during this fiscal. In absolute numbers, our total accidents reduced (fiscal

25: 89 accidents, fiscal 24: 90 accidents) however the average total

headcount used as the denominator in the calculation reduced therefore

impacting the rate. We investigate each recordable accident to establish

the root cause, contributing factors and insights. We share the key

learnings across the organisation aiming to prevent recurrences. For more

information, please refer to our ESG Reporting Index.

(1) Industrial incidents involving an unintended release or loss of control of hazardous

materials or energy from a process system.

---

| | |
|:---|:---|
| 43 | **Diageo** Form 20-F 2025 |

---

**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 25, we introduced and

continued several important programmes, as included below. We will

continue to advance these programmes as part of our culture and

technology roadmaps in fiscal 26.

**Culture assessment**

During fiscal 25, we launched our first ever global governance

baseline culture survey to our supply organisation. We used an

independent provider to complete a culture assessment across our

most material areas, including health and safety, food safety and

quality. With more than 5,000 responses, the overall health and safety

maturity values were 86% for supply sites and 84% for technical

centres. The culture assessment focused on four key themes: people,

process, purpose and proactivity. The assessment demonstrated a

strong level of maturity across all key themes as well as a favourable

comparison against industry benchmarking.

**Behavioural Standard**

Since fiscal 24, the Behaviour Standard workshops, aimed at enhancing

safety culture, have been implemented across 19 individual sites. In

the current fiscal year, the programme has been further expanded to

include manufacturing facilities in Mexico, Türkiye and Australia. Each

workshop produced a comprehensive action plan. All participating sites

have demonstrated substantial progress in executing and closing out

the action plans, thereby contributing to the development of a more

robust and sustainable safety culture.

**Monthly health and safety campaigns**

Based on insights from fiscal 24 as well as performance through fiscal

25, our communication campaigns focused on the themes of 'Strive for

Zero', 'Life Saving Rules', 'Fire Safety' and 'Process Safety'. These

campaigns were introduced to raise awareness of increasing incident

trends and areas where there may be the potential for a life-

threatening or life-altering injury.

Over and above the monthly campaigns, we launched a refocused

safety campaign to highlight the need for locations to remind their

employees on the basic principles of 'eyes and mind on task'.

**Safer Driver Programme**

Diageo's commitment to improving workplace safety standards includes

a driver training programme implemented to promote safe driving

behaviours across five key pillars (risk, speed, distraction, fatigue, eco)

among commercial employees who drive for business purposes. It also

features short, customised e-learning modules that are tailored to

individual driving behaviours, helping to educate drivers on safe driving

practices. During fiscal 25, the programme has been rolled out to 1,700

drivers across multiple markets. This brings the total rollout across

fiscal 24 and 25 to approximately 3,500 drivers. The aim of the

programme is to reduce accidents and enhance the overall safety of

company drivers. The programme is expected to lower insurance and

maintenance costs, but also boost driver morale and improve

operational efficiency.

**World Health and Safety Day**

We celebrated World Health and Safety Day as part of a wider global

health and safety awareness week. The topics included in the campaign

focused on revolutionising health and safety through AI and digital

technologies, launch of a process safety senior leadership observation

tour and a high-level overview of the recent culture assessment.

Beyond our own operations we also extend our health and safety

standards to strategic suppliers, working closely with them to improve

safety practices that promote safer working within their workforces.

---

| | | |
|:---|:---|:---|
| ![43-1.jpg](deo-20250630_g101.jpg) |  |  |
| ![43-1.jpg](deo-20250630_g101.jpg) | **Ewan Andrew**<br>President, Global Supply <br>and Procurement & Chief <br>Sustainability Officer<br>| ![55-1.jpg](deo-20250630_g102.jpg) |
| ![43-1.jpg](deo-20250630_g101.jpg) |  |  |
| ![43-1.jpg](deo-20250630_g101.jpg) | Our health and safety results for this <br>year demonstrate a well-embedded <br>strategy to prevent injury, but we are <br>never complacent. Our continuous <br>improvement programmes and <br>introduction of technology solutions <br>continue to be top priorities to ensure the <br>health and safety of all.' | Our health and safety results for this <br>year demonstrate a well-embedded <br>strategy to prevent injury, but we are <br>never complacent. Our continuous <br>improvement programmes and <br>introduction of technology solutions <br>continue to be top priorities to ensure the <br>health and safety of all.' |
| ![43-1.jpg](deo-20250630_g101.jpg) |  |  |

---

![44.jpg](deo-20250630_g103.jpg)

---

| | |
|:---|:---|
| 44 | **Diageo** Form 20-F 2025 |

---

PROMOTE POSITIVE DRINKING

---

| | |
|:---|:---|
| ![GIF_sop_logo_positive_RGB.gif](deo-20250630_g88.gif) | Promote positive <br>drinking<br>|

---

**We want to change the way people drink – for the** <br>**better, by engaging, educating and empowering** <br>**consumers to make informed choices about** <br>**drinking.**<br>

---

| | |
|:---|:---|
| ![Targets.gif](deo-20250630_g91.gif) | **Key Targets** |

---

---

| | |
|:---|:---|
| Tackling underage drinking<br> through SMASHED<sup>(1)</sup> | Tackling underage drinking<br> through SMASHED<sup>(1)</sup> |
| Year | People <br>educate<br>d<br>|
| Target by 2030<br>Scale up our SMASHED partnership and educate 10 <br>million young people, parents and teachers on the <br>dangers of underage drinking<br>| **10m** |
| 2025 cumulative progress | **8.2m** |
| 2024 cumulative progress<sup>(2)</sup> | **6.2m** |
| 2025 Performance<br>Number of people educated on the dangers of <br>underage drinking through a Diageo-supported <br>education programme in fiscal 25<br>| **2.0m** |

---

---

| | |
|:---|:---|
| Changing attitudes to drink driving<sup>(3)</sup> | Changing attitudes to drink driving<sup>(3)</sup> |
| Year | People <br>educate<br>d<br>|
| Target by 2030<br>Through our programmes, deliver five million <br>educational experiences that promote changes in <br>attitude to drink driving.<br>| **5m** |
| 2025 cumulative progress | **3.8m** |
| 2024 cumulative progress | **2.2m** |
| 2025 Performance<br>Number of educational experiences delivered for people <br>to change their attitude to drink driving in fiscal 25<br>| **1.6m** |

---

(1) Baseline year fiscal 18.

(2) Prior year cumulative figures have been restated due to a change in rounding methodology.

(3) Baseline year fiscal 20.

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | For more details, see the website www.diageo.com. |

---

Our brands have been part of people's celebrations for generations; we

make them with pride, and they are made to be enjoyed responsibly.

Our Positive Drinking approach includes three pillars addressing

different types of harmful use and promotes responsible use of alcohol:

Education to tackle harmful drinking with a focus on underage

drinking, drink driving and binge drinking.

Promoting moderation through aspiration and choice by

encouraging moderation through our brands.

Advocating for alcohol policies that support consumer choice,

deepen understanding of alcohol and tackle illicit production

and consumption.

We apply creative, innovative solutions to tackle the harmful use of alcohol

globally. Our markets use global assets but also use local partnerships and

innovation to ensure cultural relevance.

Our people are champions for promoting positive drinking. This year,

we launched 'The Measure', a campaign designed to provide more

information on how our employees can advocate for moderation.

Through activations with brand ambassadors including Gary Neville,

English football pundit, and Ben Branson, founder of Seedlip, we are

empowering our people to speak candidly with family and friends

about the importance of moderation. 93% of our employees stated in

our employee engagement survey that they feel confident to talk about

positive drinking in both professional and personal situations.

**Education to tackle harmful drinking**

**Underage drinking**

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 on the

dangers of underage drinking. It was developed by Collingwood Learning,

and we have been proud to sponsor it for the past 16 years. This year,

the programme was recognised as the gold winner in the Good Awards

for Educational Excellence (large organisations category).

SMASHED began in 2005 as a live theatre production and has since been

enhanced to enable online learning. To make the programme as

successful as possible, the performance can be tailored to specific

countries using local actors and cultural references.

We continued to deliver a very strong performance on the programme

this year, with delivery partner collaborations across Latin America and

Africa, driving participation. In fiscal 25, a projected 1.6m people have

confirmed changed attitudes to the dangers of underage drinking based

on our sampling of participant surveys.

**Drink driving**

We have long championed awareness on the risks of drink driving,

including collaborating with law enforcement and local authorities. In

2021, we launched 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. WSOTR is available in digital and classroom formats and is now

in 26 different modules, each with distinct video content.

This year we scaled WSOTR in China, delivering increased participation

in tier one cities, through digital news, graphics, podcast, Weibo and

on-site activations.

In addition, we continue to innovate to raise awareness and drive

meaningful behaviour change. In partnership with Mothers Against

Drunk Driving (MADD), the National Football League (NFL) and Uber, we

launched a comprehensive campaign in the United States 'Take a

minute. Make a plan. Never Drive Impaired'. Running from December 2024

through February 2025, the campaign spanned TV, streaming, radio, out-of-

home, in-game integrations, in-bar messaging, digital and social media.

Results show that the campaign reached over 100 million people with

more than one million Uber rides redeemed using discount codes in

December alone.

---

| | |
|:---|:---|
| 45 | **Diageo** Form 20-F 2025 |

---

**Informed choices about drinking**

Our DRINKiQ web-based platform gives everyone the facts, tools and

support to help make informed choices about their relationship with

alcohol. DRINKiQ is available in all our strategic markets, with regular

campaigns to promote usage of the site. This year, we invested in

improving the user interface and functionality of the website and

updating content. We also launched DRINKiQ China linked directly from

the WeChat app, including new and improved educational content

reflecting local moderation trends.

**Promoting moderation through aspiration and** 

**choice**

We know that making moderation feel aspirational and therefore a

popular choice is critical in driving positive drinking attitudes and

behaviours. We also know that we must couple aspiration with choice,

delivering a wide range of products and strategies that empower

consumers to moderate effectively. Alongside this, we invest each year

in training which helps our marketers understand how to best promote

moderation through our brands and innovations.

We launched several new campaigns this year which leveraged strong

consumer insights and delivered against our goal of making moderation

more aspirational including:

-Johnnie Walker in Brazil 'Strong are the women': A powerful and

engaging campaign designed to encourage moderation through

education and empowering women. The campaign reached 38 million

consumers, with 91% of consumers agreeing that the campaign made

them 'feel good about drinking moderately'.

-DRINKiQ and Men's Shed, Great Britain: Through our newly formed

partnership with Men's Shed UK, we targeted older men with a

campaign to foster social connection, improve wellbeing and promote

moderation, highlighting DRINKiQ as a resource. Supported by former

boxer Tony Bellew, the campaign reached over 27 million consumers

and provoked a positive response amongst consumers, with 84%

agreeing that it made them 'feel good about drinking moderately'.

We also continue to expand delivery of choice to consumers through our

non-alcoholic portfolio, with the total number of non-alcoholic options

increasing from three in fiscal 20 to 20 in fiscal 25. We now have a non-

alcoholic choice available in 15 markets (63% of our strategic markets).

**Advocating improved laws and industry standards**

We believe that industry-wide standards and sensible regulation create

an important framework to encourage responsible drinking. We support

policies that are evidence-based, account for drinking patterns, target

at-risk groups, treat all forms of alcohol equally and involve all

stakeholders. We publicly advocate that governments adopt effective

new regulation based on evidence including blood-alcohol volume

driving limits, responsible digital marketing and legal purchase age

laws. In addition, we advocate for effective industry-wide standards in

responsible marketing and consumer information. We support effective

programmes to tackle alcohol misuse.

The last 10 years have seen declines in binge drinking, drinking and

driving and underage drinking in many countries. As members of IARD

(International Alliance for Responsible Drinking) we are committed to

building on these positive trends and actively support international

goals to reduce harmful drinking. This includes delivering on the

recommendations presented to the sector in the United Nations 2018

Political Declaration on non-communicable diseases, in particular by

taking concrete steps towards eliminating the marketing, advertising,

and sale of alcohol products to minors.

**Marketing in a responsible way**

The Diageo Marketing Code (DMC) sets our principles for responsible

marketing, and it represents a cornerstone of the way we do business.

The DMC includes our commitment to encouraging only responsible and

moderate drinking and never targeting underage audiences. We are

proud to have a proven track record of compliance, which is

underpinned by appropriate checks in every market we operate in.

This year we havetested and deployed an AI-based assistant to support

human DMC reviews, which has reduced the time needed to review

content, whilst keeping the highest standard of compliance. Now

deployed to a large group of our marketers, the tool can review imagery,

video and text against DMC requirements. We continue to train and test

the system with new creative assets, and as the accuracy improves,

more users will be adopting the technology for AI assisted reviews.

We regularly review reporting from advertising monitoring and industry

bodies across key markets, for breaches of self-regulatory alcohol

marketing codes. No complaints relating to Diageo marketing were

upheld by key industry bodies this fiscal year.

Complaints upheld by key industry bodies that report publicly are

presented below.

---

| | | | |
|:---|:---|:---|:---|
| **Incidents of non-compliance concerning** <br>**marketing communications – fiscal 25**<sup>(1)</sup> | **Incidents of non-compliance concerning** <br>**marketing communications – fiscal 25**<sup>(1)</sup> | **Incidents of non-compliance concerning** <br>**marketing communications – fiscal 25**<sup>(1)</sup> | **Incidents of non-compliance concerning** <br>**marketing communications – fiscal 25**<sup>(1)</sup> |
| Country | Body | Complaints upheld <br>against alcohol <br>advertisers<br>| Complaints about <br>Diageo brands <br>upheld<br>|
| United States | Distilled Spirits <br>Council of the United <br>States<br>|  |  |
| Australia | ABAC Scheme | 42 |  |
| United <br>Kingdom | Advertising<br>Standards Authority<br>| 5 |  |
| United <br>Kingdom | Portman Group | 6 |  |
| Republic of <br>Ireland<br>| Advertising Standards <br>Authority for Ireland<br>| 2 |  |

---

(1) From 1 July 2024 to 5 May 2025.

---

| | | |
|:---|:---|:---|
| ![052019 - DRINKiQ Roadshow.jpg](deo-20250630_g104.jpg) |  |  |
| ![052019 - DRINKiQ Roadshow.jpg](deo-20250630_g104.jpg) | **Daniel Mobley**<br>Global Corporate Relations Director<br>| ![62-2.jpg](deo-20250630_g105.jpg) |
| ![052019 - DRINKiQ Roadshow.jpg](deo-20250630_g104.jpg) |  |  |
| ![052019 - DRINKiQ Roadshow.jpg](deo-20250630_g104.jpg) | We have a long and proud record of promoting positive drinking. Every <br>year we educate millions of consumers to drink in moderation through <br>our global brands and DRINKiQ platform. Our programmes and <br>partnerships that tackle underage drinking, drink driving and binge <br>drinking reach millions of people each year, changing attitudes towards <br>harmful drinking for the better.' | We have a long and proud record of promoting positive drinking. Every <br>year we educate millions of consumers to drink in moderation through <br>our global brands and DRINKiQ platform. Our programmes and <br>partnerships that tackle underage drinking, drink driving and binge <br>drinking reach millions of people each year, changing attitudes towards <br>harmful drinking for the better.' |
| ![052019 - DRINKiQ Roadshow.jpg](deo-20250630_g104.jpg) |  |  |

---

![46.jpg](deo-20250630_g106.jpg)

---

| | |
|:---|:---|
| 46 | **Diageo** Form 20-F 2025 |

---

pioneering grain to glass

sustainability

Pioneering grain to <br>glass sustainability<br>

**Our business depends on natural resources. We are** <br>**directly affected by changes in climate and the** <br>**related challenges of nature loss, particularly** <br>**freshwater. We continue to address the risks and** <br>**opportunities climate change and nature loss pose to** <br>**our business through focused actions to mitigate our** <br>**most material risks.**<br>

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | For more details, see the website <br>www.diageo.com.<br>|

---

**Introduction**

Our exposure to climate risk is intensifying, due to extreme weather

events and rising temperatures. Although our analysis indicates that

our business is resilient in the short- and medium-term, we continue to

monitor what is needed to sustain this resilience, both for our

operations and our communities in which we operate. We are

committed to acting responsibly to mitigate our contribution to global

warming and adapt to changing conditions, to support our licence to

operate. We respond to climate change and biodiversity, mitigating the

risks associated with changing environmental and biodiversity factors

through our grain-to-glass sustainability strategy.

Our 'Spirit of Progress' targets reflect our most material ESG issues

and align to the UN Sustainable Development Goals. We are signatories

to the UN's 'Race to Zero' and 'Race to Resilience' campaigns reflecting

our commitment to tackle climate change. We are focusing our work in

the areas most at risk in our business across water, agriculture and

communities.

We are proud of our accomplishments to date, including reaching

several of our goals earlier than planned. However, we have identified

several critical external factors beyond our control that influence the

timing and pace of our efforts. Some of these challenges include wider

energy infrastructure availability, appropriate policy frameworks,

consumer acceptance, financing solutions and cost burdens which need

to be shared. We have also faced challenges reaching our packaging

goals. For example, increasing recycled content in our packaging is

hindered by external factors such as cullet availability.

To tackle these challenges, we are increasing the number and depth of

our partnerships to leverage shared resources and aligned interests,

while advocating for transformative change. As we meet goals and

experience challenges, we learn and adapt. We have revised our

aspirations across several targets this year, accelerating our ambition

across water and regenerative agriculture while reconsidering the scale

and pace of decarbonisation and packaging optimisation.

Our updated decarbonisation targets reinforce our commitment to

tackling climate change. These science-based targets, validated

against the Paris-aligned 1.5°C reduction pathway, encompass both

near- and long-term objectives across our value chain. Our revised

targets are shown on page 51 and 53-55. Performance against

supporting targets, including some of our packaging and electricity

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. Increasingly we are

incorporating nature risks and dependencies into our strategic planning. We

continue 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 climate and nature risks, we have governance

processes in place to ensure that we factor the risks into our business

operations and planning processes. To supplement our 'Spirit of

Progress' governance (summarised on page 37), our sustainability

performance is integrated into our operational and strategic review

processes. We track water efficiency and greenhouse gas reduction

projects and hold quarterly strategic business reviews focusing on

multi-year plans. Significant risks identified are escalated to enterprise

risk management forums at group level. We oversee climate and nature

risk through these governance structures and processes:

Executive sponsorship is shared jointly between the President, Global

Supply & Procurement and Chief Sustainability Officer and the Global

Corporate Relations Director.

They are supported by our cross-functional Climate, Water and Nature

Risk Steering Group.

The Climate, Water and Nature Risk Steering Group provides regular

updates to the executive sponsors and the Board.

The Board retains ultimate responsibility for the oversight of climate

related risks and opportunities, including monitoring progress against

climate-related targets.

Any impacts, including actual and potential, on our consolidated

financial statements from climate and nature risks and

performance against non-financial metrics are shared with the

Audit Committee annually.

**Board oversight**

**Executive Committee ownership**

President of Global Supply

& Procurement and Chief

Sustainability Officer

Global Corporate

Relations Director

**Audit Committee**

**Executive sponsors**

**Cross-functional Climate, Water and Nature Risk Steering Group**

Finance

Corporate

Relations

Marketing

**Working groups assigned to address key risks** 

**and opportunities identified**

Supply &

Procurement

Legal

Risk

Strategy

---

| | |
|:---|:---|
| 47 | **Diageo** Form 20-F 2025 |

---

**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 regulatory

shifts; technology evolution or consumer behaviour fluctuations. Both

categories of risk are already occurring and are likely to increase. As

temperatures continue to rise globally, we continue to assess and prepare

for emerging physical and transition risks.

We partner with climate resilience and nature experts to identify and

assess how generally recognised climate and nature risks apply to

our business.

**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 have embedded careful planning in our

supply chain and procurement organisation over many years. 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. 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 recognise that thriving natural ecosystems are

essential for long-term agricultural productivity and climate resilience,

and we aim to protect and restore nature across our sourcing regions.

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. As we continue to build and strengthen our adaptation plans,

we see our work on water, agriculture and communities as particularly

important in increasing our climate resilience.

---

| | |
|:---|:---|
| ![Physical-Risk.gif](deo-20250630_g107.gif) | **Identifying and assessing our physical risks** |

---

For the last four years, we have worked with climate resilience experts

to analyse all of our direct operations sites and key third-party

suppliers' sites to assess the physical risks that we are exposed to and

how they may develop under various scenarios. The analysis included

some sites that are planned or under construction, to ensure we

understand their exposure and prepare their resilience before

commissioning the site. The scenario analysis and phasing of the risk

assessments are outlined in the Non-Financial Reporting Boundaries

and Methodologies, available on our website.

Following each successive year's analysis, the total global physical risk

footprint was refreshed.

The physical risk assessments measured the exposure and vulnerability

of the activities at the sites in scope 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 future warming scenarios and

over two timeframes:

Intergovernmental Panel on Climate Change (IPCC) scenario RCP

(Representative Concentration Pathway) 4.5 – medium warming of 2-3°C;

IPCC scenario RCP8.5 – severe warming of 4-5°C; and

• with both scenarios evaluated for the periods up to 2030 and up

to 2050.

These scenarios were chosen to represent a 'worst case' (RCP8.5) and a

'medium case' (RCP4.5) under which we assess our resilience.

For our own sites and many of our third-party operators producing

beverages on our behalf, we analysed climate-related risks which are

more likely to materialise. 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 risks in the future.

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 to inform our mitigation strategy. 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) at our sites located in water-stressed

areas to further our understanding of the risks and how to address

them. 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 chain.

We can then use these insights to help us act where we believe it is

most needed, whether that is improving our water efficiency,

increasing our replenishment commitments or prioritising climate

adaptation planning. In fiscal 25, we updated our water risk

assessments for the purposes of informing our future water strategy,

and carried out SVAs with our external partner on an

additional six sites. For more information, please see page 31 of our

ESG Reporting Index.

**Risk assessment results – our most important** 

**physical risks**

Our assessment 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,

access to agricultural ingredients that we need and, ultimately, our

licence to operate.

2.**Agricultural raw materials** are at risk from climate change, and we

see that risk increasing under the scenarios and timeframes we

analysed. Our models suggest that the costs of most commodities are

likely to increase because of climate change, although estimates of

the precise impact vary significantly depending on the model used,

underscoring the difficulty of such 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 to cause

interruption to operations, although their impact is unlikely to be as

significant as that of the risks related to water and agricultural

materials.

---

| | |
|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | For more details on our scenario analysis approach, see the Non-<br>Financial Reporting Boundaries and Methodologies on our website <br>www.diageo.com.<br>|

---

---

| | |
|:---|:---|
| 48 | **Diageo** Form 20-F 2025 |

---

PIONEERING GRAIN TO GLASS SUSTAINABILITY continued

**Quantitative impact of physical risk determined by** 

**scenario analysis**

In fiscal 24, 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 marked a pivotal

advancement in integrating climate risk into our strategic planning

processes. This year, we updated our modelling data to reflect our

latest volumes and growth estimates, and remodelled the chronic risk

of water availability, the acute risk of drought, commodity price

increases due to climate change and one-off climate-related events.

The precise risks and opportunities that were modelled in our scenario

analysis are outlined in the Non-Financial Reporting Boundaries and

Methodologies, pages 4-7.

**Water stress, including 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, as well as local communities.

Analysing the financial impact of drought presents particular challenges

due to numerous factors, such as the probability of occurrence, duration

of operational suspension and effectiveness of adaptation or contingency

measures. We have modelled what we are currently able to through

scenario analysis, considered our own assessment of vulnerability and

applied highly conservative assumptions (e.g. downtime in all sites due to

drought). We have concluded that, by 2030, we do not anticipate drought

to have a significant impact on our operations (including key third-party

operations) or on our financial position. Beyond 2030, it is more difficult

to analyse, given the increased uncertainties inherent in modelling over

an extended timeframe. Our models show that adaptation actions are

needed, particularly in the period between 2030 and 2050, in order to

prevent significant interruption to our operations and supply chain. If no

action is taken, it 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.

**Agricultural raw materials**

Agricultural commodity price increases due to climate change are more

difficult to estimate, with our models 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 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 price variability 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.

**Acute weather events**

Acute weather events, such as 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.

---

| | |
|:---|:---|
| ![Transitional-Risk.gif](deo-20250630_g108.gif) | **Identifying and assessing our transition** <br>**risks and opportunities**<br>|

---

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 estimate and gained further clarity on how to

respond.

We identified the risks with the most potential impact by looking at

our agricultural inputs, production and packaging, distribution and

sales channels. We were able to determine the most important

transition risks and opportunities to monitor, including:

• Decarbonisation costs: Changes to our supply chain and production

costs, including carbon taxes and related changes to input costs (risk

and opportunity).

• Consumer behaviour: Changes in consumer behaviour to favour more

sustainable options, e.g. choosing circular products or locally

produced brands (risk and opportunity).

• 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).

• 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 the risks and opportunities outlined above, the greatest impacts are

likely to arise from consumer behaviour and decarbonisation costs. The

table on page 49 summarises the physical and transition risks and

opportunities we consider the most important.

**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 changes in production costs.

**Packaging is the key transition risk and opportunity**

We identified that the key driver of transition risk to 2050 is 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. 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, after considering some of the possible

mitigating actions we plan to take, which can include pricing,

improvement in energy use, sourcing and using lighter weight

packaging, 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 of tangible

and intangible assets (see pages 72-73 and 154).

---

| | |
|:---|:---|
| 49 | **Diageo** Form 20-F 2025 |

---

**Summary of our most important climate risks and opportunities**

---

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

---

(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 and long-term (10 to 30 years) includes the timeframe to 2050.

(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 inability to service a significant portion of our customer base, or major reputational damage.

**Results of our nature risk assessment**

The greatest risk to our agricultural raw material sourcing arises from

water scarcity, as much of our agricultural materials are grown in water-

stressed regions. These 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.

We are making continuous progress in understanding our nature-related

dependencies, impacts, risks and opportunities, while integrating these

insights into our broader strategy. Our integrated approach aims to

recognise the ways in which taking holistic action on climate change,

water stewardship and regenerative agriculture can build resilience.

---

| | |
|:---|:---|
| 50 | **Diageo** Form 20-F 2025 |

---

PIONEERING GRAIN TO GLASS SUSTAINABILITY continued

**Our strategy for grain-to-glass sustainability**

Our sustainability strategy acknowledges the breadth of the environmental

and social consequences of a changing climate and our dependencies on

nature and people. It recognises the interlinkages between climate,

nature, agriculture and people, and the connections to our value chain.

Our strategy, underpinned by targets, addresses our most material

impacts, risks and opportunities, primarily related to water use and

greenhouse gas emissions. The strategy reflects the complexity of the

challenges faced by society and the environment and is reviewed regularly

as regulations evolve or we gain more information on the timeframe

required to address systemic issues, like greenhouse gas emissions. By

acting on, delivering and regularly reviewing our commitments, we are

enhancing our business resilience while safeguarding our licence to operate

and grow.

Whilst the fundamentals of our strategy to preserve water and take a

focused approach to greenhouse gas emission reductions have not

changed, we undertook a review of the targets we use to measure

progress. This review, conducted as part of our regular update of

Science Based Targets initiative (SBTi) targets, resulted in changes to

greenhouse gas emission reduction percentages and timeframes to

achieve those reductions (summarised on page 53). We also reframed

our packaging targets due to both external factors and our growth

ambitions, shifting our focus to recycled content of our packaging,

with lightweight packaging reporting focused on examples, rather than

a formal target.

Our greenhouse gas and water roadmaps outline the projects needed

to deliver our targets. These plans are backed by capital investment

and are regularly reviewed to build confidence in our ability to deliver

our targets. Enhancing and digitising our data has and will continue to

provide more insight into what is required to deliver our strategy.

In 2020, we announced the intention to invest $1.2 billion between

2020 and 2030 to accelerate our ambition to preserve water and

reduce greenhouse gas emissions, with $358 million invested so far.

After updating our greenhouse gas emission reduction targets, we will

be further phasing our investment beyond 2030 and reconsidering the

total amount funded by Diageo. The timing and level of future

investment are dependent on infrastructure changes and regulation,

which we are monitoring. We are committed to optimising scale and

returns through partnerships and our own funding.

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 and

we are building this into our strategic approach on nature. We

conducted a nature baseline during fiscal 24, that encompassed our

agricultural upstream supply chains, our direct operations and an

initial assessment of parts of our packaging supply chain. 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. In fiscal 25, we continued this work to further our

understanding of our nature-related dependencies, impacts, risks

and opportunities.

---

| | | | | |
|:---|:---|:---|:---|:---|
| ![62-1 (1).jpg](deo-20250630_g109.jpg) |  |  |  |  |
| ![62-1 (1).jpg](deo-20250630_g109.jpg) | **Ewan Andrew**<br>President Global <br>Supply and <br>Procurement & <br>Chief Sustainability <br>Officer<br>| ![55-1.jpg](deo-20250630_g102.jpg) | **Daniel Mobley**<br>Global Corporate <br>Relations Director<br>| ![62-2.jpg](deo-20250630_g105.jpg) |
| ![62-1 (1).jpg](deo-20250630_g109.jpg) |  |  |  |  |
| ![62-1 (1).jpg](deo-20250630_g109.jpg) | We are proud of the real world <br>impact of our progress so far and <br>have taken forward significant <br>learnings to help us refine our <br>ambition for the future.' | We are proud of the real world <br>impact of our progress so far and <br>have taken forward significant <br>learnings to help us refine our <br>ambition for the future.' | Doing business the right way is at <br>the core of our Growth Ambition. <br>We are accelerating our action on <br>water, delivering impactful change <br>to address our most material <br>environmental risks.' | Doing business the right way is at <br>the core of our Growth Ambition. <br>We are accelerating our action on <br>water, delivering impactful change <br>to address our most material <br>environmental risks.' |
| ![62-1 (1).jpg](deo-20250630_g109.jpg) |  |  |  |  |

---

![66.jpg](deo-20250630_g110.jpg)

---

| | |
|:---|:---|
| 51 | **Diageo** Form 20-F 2025 |

---

---

| | |
|:---|:---|
| ![Targets.gif](deo-20250630_g91.gif) | **Key Sustainability Targets** |

---

---

| | |
|:---|:---|
| Water efficiency<sup>(1)</sup> | Water efficiency<sup>(1)</sup> |
| Improvement in water use efficiency in water-stressed areas | Improvement in water use efficiency in water-stressed areas |
| Year | % |
| Target by 2030<br>Reduce water use in our operations with a <br>40% improvement in water use efficiency<br>| **(40)%** |
| 2025 cumulative progress | **(20.6)%** |
| 2024 cumulative progress | **(18.5)%** |
| 2025 performance<br>Percentage change in water efficiency index from the <br>prior year<br>| **(2.6)%** |
| **Improvement in water use efficiency across the company** | **Improvement in water use efficiency across the company** |
| Year | % |
| Target by 2030<br>Reduce water use in our operations with a <br>30% improvement in water use efficiency<br>| **(30)%** |
| 2025 cumulative progress | **(15.8)%** |
| 2024 cumulative progress | **(12.9)%** |
| 2025 performance<br>Percentage change in water efficiency index from the <br>prior year<br>| **(3.3)%** |

---

---

| | |
|:---|:---|
| Water replenishment<sup>(3)</sup> | Water replenishment<sup>(3)</sup> |
| Year | % |
| Target by 2026<br>Replenish more water than we use for operations in <br>water-stressed areas<br>| **100%** |
| 2025 cumulative progress | **84%** |
| 2024 cumulative progress | **70%** |

---

---

| | |
|:---|:---|
| Water collective action<sup>(1)</sup> | Water collective action<sup>(1)</sup> |
| Year |  |
| Target by 2030<br>Engage in collective action in all priority water basins to <br>improve water accessibility, availability and quality and <br>contribute to net positive water impact<br>| **12** |
| 2025 cumulative progress | **9** |
| 2024 cumulative progress | **8** |

---

---

| | |
|:---|:---|
| Emissions from our direct operations<sup>(2)</sup> | Emissions from our direct operations<sup>(2)</sup> |
| Year | % |
| Target by 2030<br>Reduce our direct operations greenhouse gas emissions by 50% <br>(Scope 1 and 2)<br>| **(50)%** |
| 2025 cumulative progress | **(18.8)%** |
| 2024 cumulative progress | **(14.4)%** |
| 2025 performance<br>Percentage change in absolute greenhouse gas emissions <br>(direct and indirect greenhouse gas emissions by weight <br>(market/net based) from the prior year<br>| **(5.2)%** |

---

---

| | |
|:---|:---|
| Emissions from our value chain<sup>(2)</sup> | Emissions from our value chain<sup>(2)</sup> |
| Year | % |
| Target by 2030<br>Reduce our value chain (Scope 3) greenhouse gas <br>emissions by 26%<br>| **(26)%** |
| 2025 cumulative progress | **(10.2)%** |
| 2024 cumulative progress | **(11.5)%** |
| 2025 performance<br>Percentage change in absolute greenhouse gas <br>emissions (ktCO2e) from the prior year<br>| **1.5%** |

---

---

| | |
|:---|:---|
| Regenerative agriculture programmes<sup>(1)</sup> | Regenerative agriculture programmes<sup>(1)</sup> |
| Year |  |
| Target by 2030<br>Develop regenerative agriculture programmes in five <br>key sourcing landscapes<br>| **5** |
| 2025 cumulative progress | **5** |
| 2024 cumulative progress | **4** |

---

---

| | |
|:---|:---|
| increasing recycled content | increasing recycled content |
| Year | % |
| Target by 2030<br>Continue our work to increase recycled content in our <br>total packaging (increasing the percentage of recycled <br>content in our packaging to 50%)<br>| **50%** |
| 2025 cumulative progress | **46%** |
| 2024 cumulative progress | **42%** |
| 2025 performance<br>Change in percentage of recycled content in fiscal 25<br>| **4%** |

---

(1) Baseline year fiscal 20

(2) Baseline year fiscal 22

(3) Baseline year fiscal 16

---

| | |
|:---|:---|
| 52 | **Diageo** Form 20-F 2025 |

---

PIONEERING GRAIN TO GLASS SUSTAINABILITY continued

**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, water stress is our most important climate

risk.

Water stewardship forms a key pillar of our 'Spirit of Progress' strategy,

contributing to our climate resilience.

Our water strategy, which aims to build resilience and enable growth,

has four interdependent pillars that are integrated with other actions

to address impacts on climate, nature and people:

Operations: delivering industry-leading water management across our

own sites, including improving water-use efficiency in our operations

and replenishing the water we use in water-stressed areas.

Supply chain: amplifying water stewardship across our supply chain,

focusing on agriculture and partnering with suppliers in priority basins

on water replenishment and collective action.

Communities: building resilience in our communities, including

providing access to water, sanitation and hygiene (WASH).

Advocacy: driving systemic change, including leading and/or

participating in collective action in our priority water basins to drive

positive change.

More information on our refreshed water strategy can be found on our

website at www.diageo.com.

In fiscal 25, we advanced our ongoing efforts to extend our water

replenishment and collective action programmes to include indirect

water use by key third-party operators in our priority water basins. We

are increasing the number of these priority water basins to accelerate

action, and will incorporate extended collective action and

replenishment targets in fiscal 27.

We also aim to leverage our brands to deliver our goals, such as Don

Julio's support for water replenishment in Jalisco, and increase our

engagement with governments to encourage investments and

progressive climate and water policy. Our ambitious actions on water

will help to ensure our sites, supply chain and communities build

resiliency in a changing climate.

---

| | |
|:---|:---|
| ![Targets.gif](deo-20250630_g91.gif) | **Water efficiency** |

---

Our focus on water-stressed areas has continued to deliver strong water-

use efficiency performance with a 2.6% improvement in the water

efficiency index versus fiscal 24 and 20.6% improvement since our fiscal 20

baseline.<sup>(1)</sup> This was primarily driven by efficiency improvement initiatives

at our sites in East Africa. In fiscal 25, the volume of water recovered and

recycled in water-stressed areas reached approximately 816,000 m<sup>3</sup> –

equivalent to 16.4% of the total water used in these areas.

Our performance across the company on water-use efficiency has improved

by 3.3% in comparison to the previous fiscal and by 15.8% since our fiscal 20

baseline.<sup>(1)</sup> This was mainly driven by a range of improvement initiatives

delivered in our Scotland distilleries and our Runcorn and St. James' Gate

beer sites in addition to the efficiency improvements initiatives from our

East Africa sites.<sup>(2)</sup>

Innovation and new technologies continue to be essential for achieving

our water-use efficiency targets and improving water management.

Through Diageo Sustainable Solutions (DSS) we are continuously looking

to identify, test and integrate new technologies into our plans. Last

year, we launched a DSS innovation round focused on five water

challenges, including efficiency and maximising wastewater value. We

have now selected three partners to demonstrate their technologies,

one of which has been piloted at one of our sites to test their

alternative to reverse osmosis. This complements our ongoing pilot

partnership with Aquacycl in our La Primavera site, where we have

demonstrated the capability of this technology to be integrated as

pretreatment within existing wastewater treatment systems, achieving

over 80% removal in biological oxygen demand (BOD).

---

| | | | |
|:---|:---|:---|:---|
| **Previous water efficiency** <br>**methodology**<br>| Fiscal 25 | Percentage change <br>compared to fiscal 24<br>| Improvement <br>compared to fiscal 20 <br>baseline<br>|
| Water use efficiency per <br>litre of product <br>packaged (litres/litre) - <br>across the company<br>| 3.98 | 6.4% <br>improvement<br>| 14.5% <br>improvement<br>|
| Water use efficiency per <br>litre of product <br>packaged (litres/litre) - <br>water-stressed areas<br>| 3.25 | 1.1%<br>improvement<br>| 19.6% <br>improvement<br>|

---

---

| | |
|:---|:---|
| ![Targets.gif](deo-20250630_g91.gif) | **Water replenishment** |

---

Our water replenishment programme continues to deliver beneficial

impact, with another strong year of delivering local water projects. We are

on track to reach our fiscal 26 target of replenishing more water than we

use for our operations in water-stressed areas. In fiscal 25, we

implemented projects that have the annual volumetric replenishment

capacity of 3,084,000 m<sup>3</sup> of water. Cumulatively we have replenished 84%

of our estimated fiscal 26 volume with projects such as reforestation,

wetland restoration, agricultural water supply improvements, leak repair

and rainwater harvesting.

In fiscal 25, we completed 30 replenishment projects in 10 countries,

cumulatively implementing over 150 projects between fiscal 21 and

fiscal 25. In Jalisco, Mexico, we were proud to partner with the local

authorities in Atotonilco, where we have two tequila distilleries, to

repair local infrastructure which was leaking water. The project will

reduce water loss for the community by over 1.73 million m<sup>3</sup> of water per

year. In Türkiye, we continued to progress agricultural water supply

projects, this year providing more water for farming communities in

Mersin's Gülnar district.

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

maintain this commitment, investing every year to 2030. For more

information, please refer to our ESG Reporting Index.

(1) The water efficiency index across the company and in water-stressed areas was materially impacted by the disposal of Guinness Nigeria PLC. The impacts of Guinness Nigeria PLC on water use

efficiency were removed from both the baseline and the performance in the intervening years.

(2) Under the previous water efficiency methodology, water efficiency was measured in litres of water per litre of product packaged (litres/litre). Performance under the previous methodology

continues to be measured for long-term incentive programmes (refer to page 123). Under the new methodology, the water efficiency index – across the company was 84.2 and the water efficiency

index – water-stressed areas was 79.4 in fiscal 25.

---

| | |
|:---|:---|
| 53 | **Diageo** Form 20-F 2025 |

---

---

| | |
|:---|:---|
| ![Targets.gif](deo-20250630_g91.gif) | **Water Collective Action** |

---

We recognise that businesses need to partner with other water users,

non-governmental organisations (NGOs) and governments to build

climate resilience and ensure water security. Our collective action

programme embraces a collaborative approach towards water

stewardship in our priority water 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 25, we joined the White Volta Basin Watershed Fund, which

aims to enhance water security in the Greater Tamale area in Ghana,

where we source raw materials. We also continued to participate in

collective action groups in Scotland, Uganda and India, with multiple

aims including implementation of nature-based solutions and

advocating for equitable access to water. The percentage of our

priority water basins with collective action participation was 75% at

the end of fiscal 25 (9 out of 12 basins).

We continue to act as water basin champion in the Santiago Lerma

River Basin in Mexico, where we have driven the transition of Charco

Bendito collective action; the Upper Godavari River Basin in India; and

Kenya's Upper Tana Basin where our increased investment will extend

the Upper Tana-Nairobi Water Fund's work into new counties.

As basin champion, Diageo commits to providing overall leadership on

efforts to rejuvenate selected basins. For example, we have

established a project management office to co-ordinate activities for

The Godavari Initiative in India and played a leading role in

transforming the governance and ambition of Charco Bendito in

Mexico, increasing corporate funding and participation from 10 to 12

companies. In Kenya, our cumulative contribution to the Upper Tana-

Nairobi Water Fund from fiscal 24 to date has resulted in over 580,000

trees planted, over 600 water pans constructed to promote rainwater

harvesting, 27 drip irrigation kits provided to enhance water-use

efficiency and increase yields, 52,500 metres of terraces, 52,500

metres of grass strips and 17,500 metres of permanent river bank

buffer strips to promote sustainable land management.

**Advocacy**

At COP29 in Baku, we were among businesses continuing to call 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 and

Alliance for Water Stewardship, and we have strategic partnerships with

WaterAid and The Nature Conservancy that support this call to action.

**Our carbon strategy**

We are committed to a low-carbon future and following a science-

based approach to drive the pace and scale of change required. In

fiscal 25, we continued to reflect on learnings from our first five years

tracking against our 'Spirit of Progress' greenhouse gas emissions

reductions targets.

Based on those learnings, new targets were approved by the Board and

the Science Based Targets initiative (SBTi). They include interim, near-

term targets for direct operations and value chain emissions, as well as

long-term net zero<sup>(1)</sup> targets. Our targets resulted from analysis of all

categories of material emissions in our own operations and value chain

to reflect the changes in our business since our first submission of SBTi

targets in 2021. We also updated our baseline year to fiscal 22 to align

to normalised production levels, which were not impacted by the

Covid-19 pandemic and adjusted packaging targets in alignment with

our revised value chain emissions reductions targets.

As required by SBTi, we further disaggregated our targets between

those which are Forest, Land and Agriculture (FLAG) emissions and

other (Non-FLAG) emissions, which we will report on separately in our

ESG Reporting Index.

---

| | | |
|:---|:---|:---|
| **Target reduction from baseline fiscal 22**<sup>(2)</sup> | Date to <br>achieve<br>| Metric |
| Reduce our direct operations <br>greenhouse gas emissions by 50% <br>(Scope 1 and 2)<br>| 2030 | Percentage change in <br>absolute greenhouse gas <br>emissions (direct and <br>indirect greenhouse gas <br>emissions by weight <br>(market/net based)) |
| Become net zero<sup>(1)</sup> in our direct <br>operations (Scope 1 and 2)<br>| 2040 | Percentage change in <br>absolute greenhouse gas <br>emissions (direct and <br>indirect greenhouse gas <br>emissions by weight <br>(market/net based)) |
| Reduce our value chain (Scope 3) <br>greenhouse gas emissions by 26%<br>| 2030 | Percentage change in <br>absolute greenhouse gas <br>emissions (ktCO2e) |
| Become net zero<sup>(1)</sup> in our full <br>value chain <br>| 2050 | Percentage change in <br>absolute greenhouse gas <br>emissions (ktCO2e) |

---

(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. Targets are based on our SBTi target boundary.

(2) Fiscal 25 is the first year that we measure progress against our 2022 baseline. Fiscal 24

progress reported has been restated to reflect this new baseline year.

---

| | |
|:---|:---|
| 54 | **Diageo** Form 20-F 2025 |

---

PIONEERING GRAIN TO GLASS SUSTAINABILITY continued

We refined our decarbonisation roadmaps detailing the measures we will take to reduce greenhouse gas 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. In due course, we will be publishing our Climate Transition Plan, which will

detail the pathway to achieve our targets, with more detail on the actions we intend to take to meet our ambitions. Our approach to deliver will

include:

---

| | | |
|:---|:---|:---|
| Scope 1 (5.5%)<sup>(1)</sup> | Scope 2 (0.1%)<sup>(1)</sup> | Scope 3 (94.4%)<sup>(1)</sup> |
| •Embedding energy efficiency into our processes. <br>•Switching to renewable electricity, fuel and <br>heat across our sites. <br>•Utilising renewable energy certificates, <br>innovations, partnerships and carbon removals <br>to close the gap.<sup>(1)</sup><br>| •Continuing to switch to renewable electricity. <br>•Creating additional renewable energy capacity <br>to power our sites, exporting surplus energy to <br>the local grid, through on-site developments <br>and using power purchase agreements.<br>| •For Scope 3 emissions, our strategy includes <br>three areas:<br>•Diageo enabled projects: projects where we <br>have the greatest control and confidence in <br>delivery.<br>•Selective engagement: projects that engage <br>and influence external stakeholders.<br>•Strategic innovation: projects that bring <br>disruptive new products and approaches.<br>|

---

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 our suppliers and partners are at the same stage, 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 solutions to some of the external challenges we face.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Streamlined Energy and Carbon Reporting (SECR) | Streamlined Energy and Carbon Reporting (SECR) | Streamlined Energy and Carbon Reporting (SECR) | Streamlined Energy and Carbon Reporting (SECR) | Streamlined Energy and Carbon Reporting (SECR) | Streamlined Energy and Carbon Reporting (SECR) |
|  | 2021 | 2022 | 2023 | 2024 | **2025** |
| Total Global energy consumption (MWh) | 3123048 | 3299189 | 3267486 | 3296096 | **3289237** |
| Total UK energy consumption (MWh) | 1050459 | 1078943 | 1223347 | 1259921 | **1244702** |
| Direct (MWh) | 913581 | 939092 | 1076462 | 1105054 | **1087704** |
| Indirect (MWh) | 136878 | 139851 | 146885 | 154867 | **156998** |
| Total UK direct and indirect greenhouse gas emissions (kt CO2e) | 71 | 83 | 134 | 118 | **101** |
| Scope 1 | 71 | 83 | 134 | 118 | **101** |
| Scope 2 |  |  |  |  |  |
| Market-based (net) intensity ratio of greenhouse gas emissions (g CO2e per litre of <br>packaged product)<br>| 119 | 104 | 105 | 94 | 85 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| Total direct and indirect greenhouse gas emissions by region by year<sup>(2)</sup> | Total direct and indirect greenhouse gas emissions by region by year<sup>(2)</sup> | Total direct and indirect greenhouse gas emissions by region by year<sup>(2)</sup> | Total direct and indirect greenhouse gas emissions by region by year<sup>(2)</sup> | Total direct and indirect greenhouse gas emissions by region by year<sup>(2)</sup> |
| **Total direct and indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO2e)** | **Total direct and indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO2e)** | **Total direct and indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO2e)** | **Total direct and indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO2e)** | **Total direct and indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO2e)** |
| **Region** | 2022 | 2023 | 2024 | **2025** |
| North America | 100 | 83 | 86 | **77** |
| Europe  | 144 | 193 | 176 | **162** |
| Asia Pacific | 8 | 6 | 5 | **5** |
| Latin America and Caribbean | 37 | 27 | 9 | **15** |
| Africa | 93 | 55 | 51 | **51** |
| **Diageo (total)** | 382 | 364 | 327 | **310** |
| of which |  |  |  |  |
| direct greenhouse gas emissions | 376 | 359 | 323 | **306** |
| indirect greenhouse gas emissions | 6 | 5 | 4 | **4** |

---

(1) This information reflects current management estimates and expectations. It is based on assumptions available at the time of reporting, and both underlying data and future developments may

evolve. As a result, our projections and interpretations may change. See pages 47–49 for further details on how climate change may affect Diageo and the actions we are taking to manage and

mitigate related risks.

(2) The table covers our market-based direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions.

---

| | |
|:---|:---|
| 55 | **Diageo** Form 20-F 2025 |

---

---

| | |
|:---|:---|
| ![Targets.gif](deo-20250630_g91.gif) | **Direct operations** |

---

In fiscal 25, we decreased greenhouse gas emissions from our direct

operations by a further 5.2% versus fiscal 24. Investing in renewable

energy and improved energy performance across our global footprint

have enabled us to reduce our emissions this year.

We have benefitted from the continued use, and optimised output,

from our on-site bioenergy facilities across multiple markets.

Additional purchased liquid biofuel across a number of scotch distillery

and malting sites has helped to drive our emission reduction across our

direct operations greenhouse gas emissions (Scope 1) this year. The

percentage of renewable energy used as a proportion of total energy

across our direct operations footprint increased in fiscal 25.

Our energy performance has improved across our largest markets, driving

emission savings and enabling decoupling of emissions from production.

Several incremental and continuous improvement projects have delivered

positive energy efficiency outcomes, particularly across our brewing and

distilling sites. In our scotch footprint, we have successfully implemented

a number of heat recovery, process optimisation and insulation projects,

improving our energy efficiency. Our breweries in East Africa have

continued to optimise their processes and use of bioenergy, resulting in

an overall energy efficiency improvement. At our packaging sites in the

United Kingdom, Europe and Australia, electrification of heat, pasteuriser

process optimisation and replacement of old equipment has also led to

energy efficiency gains.

Our continued reduction of greenhouse gas emissions has driven a

cumulative saving of 18.8% in greenhouse gas emissions versus our

fiscal 22 baseline. We have delivered these savings through investment

in bioenergy plants in East Africa, Scotland and Mexico, with additional

savings being delivered through electrification of heat, fuel switching

to lower emission alternatives like biofuel or renewable gas and

optimising our energy use. We source renewable electricity widely

across our portfolio, investing in on-site solutions as well, particularly

across sites in Africa and, Latin America and Caribbean which has

helped us reduce our indirect greenhouse gas emissions (Scope 2) from

our fiscal 22 baseline.

---

| | |
|:---|:---|
| ![Targets.gif](deo-20250630_g91.gif) | **Value chain emissions** |

---

In fiscal 25, we continued to review our greenhouse gas emissions

inventory and calculation methodologies, adjusting our assumptions to

further refine our full greenhouse gas emissions profile. We enhanced

our value chain emissions (Scope 3) reporting, ensuring that any

material updates, including to emissions factors, were applied across

all prior years back to our revised fiscal 22 baseline, in line with our

Non-Financial Reporting Boundaries and Methodologies.

Our updated Scope 3 emissions target represents the weighted average

of our targets to reduce Forest, Land and Agriculture (FLAG) and non-

FLAG (energy and industry) emissions. This separation of the emissions

target supports prioritisation, and focuses our efforts on where we can

make the most impact.

When compared to the prior year, our fiscal 25 Scope 3 emissions

increased by 1.5%, which was mainly driven by increased volumes of

finished products. This included increases in purchased packaging

materials (glass bottles, closures and kegs). Packaging improvements

from lightweighting programmes and switching to lower emission

formats reduced some of the impact from these increased emissions.

Our logistics and distribution emissions increased between fiscal 24 and

25, corresponding to increased volumes but also impacts from

increased distances and emission factor updates.

Our emissions associated with raw material and ingredient purchases

also increased slightly.

Our Scope 3 greenhouse gas emissions have decreased by 10.2%

compared to our fiscal 22 baseline. Coupled with volume decreases,

progress to our 2030 target has been enabled through packaging

sustainability initiatives like lightweighting, format changes and

increased recycled content. We have partnered with a number of

suppliers to optimise our raw material sourcing and better understand

our value chain emissions.

In fiscal 26, we will continue to improve our supplier engagement and

our Scope 3 decarbonisation roadmaps, particularly focusing on

mapping our FLAG initiatives, targeting areas that deliver emission

reductions and value for the business. We recognise that external

factors are the driver of Scope 3 emissions, which is why we continue

to engage with our key suppliers to enhance our Scope 3 data and to

find solutions together.

---

| | |
|:---|:---|
| ![Targets.gif](deo-20250630_g91.gif) | **Moving towards regenerative agricultural** <br>**sourcing**<br>|

---

Businesses have a shared interest in helping to restore the natural

resources on which we all depend. We are committed to supporting the

economic, social and environmental sustainability of our agricultural supply

chains.

In fiscal 25, we reached our target of launching five regenerative

agriculture programmes across key sourcing geographies. Our

programmes, which ran through the fiscal, covered agave in Mexico,

broken rice in India, barley in Ireland and separately, wheat and barley

in the United Kingdom.

We continue to learn from the regenerative agricultural programmes in

place, with critical data being gathered to inform an updated strategy

to address the dependencies, impacts, risks and opportunities from our

agricultural sourcing activities. Sustainable sourcing is a critical lever

to reducing carbon emissions, water usage and biodiversity loss. In

fiscal 26, we will extend the target to deliver a total of 10

collaborative regenerative agriculture programmes between 2020 and

2030, aiming to address key climate, nature and water risks.

---

| | |
|:---|:---|
| ![Targets.gif](deo-20250630_g91.gif) | **Reducing emissions through packaging** <br>**improvements**<br>|

---

Greenhouse gas emissions from packaging represent 33% of our total

Scope 3 value chain emissions. We are committed to reducing our value

chain carbon footprint by increasing our recycled content, reducing

single-use packaging, reducing packaging weight and deploying and

scaling circular business models.

Given that reducing the absolute weight of our packaging competes

with volume growth, we will no longer be reporting against a specific

packaging weight reduction target. However, we will continue pursuing

lightweighting projects which are good for both the business and

emissions reduction, reporting on examples each year. We have also

revised our 2030 ambition for recycled content in our packaging to 50%

(previously 60%), based on our latest forecasts for cullet availability.

This year, we further integrated our technical supply, marketing and

innovation teams to deliver the triple win: increased value for our

consumers, reduced greenhouse gas emissions and improved bottom

line performance through cost efficiency or top line growth.

---

| | |
|:---|:---|
| 56 | **Diageo** Form 20-F 2025 |

---

PIONEERING GRAIN TO GLASS SUSTAINABILITY continued

In fiscal 25, we delivered a number of key projects including:

• Reducing the glass bottle weight of our core size Johnnie Walker

Gold, Green and Double Black Label as well as Baileys and Cîroc

brands. This programme delivered an average 15% weight reduction

and a total of 5,100 tonnes CO2e savings per annum across all brands

in scope.

• Expanding the availability of Smirnoff Ice and Gordon's Space in cans

for select markets, providing the opportunity to move away from

glass and resulting in 530 tonnes CO2e savings.

• Launching a pilot programme for Johnnie Walker Black Label in a

paper bottle, building on previous work for Baileys and employing a

different solution as we continue to test and learn from consumer

reaction to new packaging formats for spirits.

• Removing excess packaging including gift cartons from Zacapa 23

and optimising the carton design for scotch brands including Johnnie

Walker Gold and Green Label.

We continue to trial and test circular solutions for packaging with

Everpour, our first in-house led bespoke spirits keg and dispense system for

the on-trade, with each keg replacing 500 single use 70cl glass bottles.

**Increasing recycled content in our packaging**

In fiscal 25, we surpassed our recycled content in plastic bottles

target.

Our recycled content in plastic bottles was 43% versus a target of 35%

which we had reset in fiscal 24 from 40% due to supply constraints,

technical barriers and legislation changes. We overcame these

challenges to drive a 21% increase within the year and will continue to

plan for incremental improvements in future years.

Our total packaging recycled content inclusion increased to 46% versus

our 2030 target of 50%. We continue to see year-on-year improvement

across our packaging categories, primarily driven by recycled content

in glass bottles.

Increasing glass cullet availability through improved collection and

sorting schemes in partnership with our glass vendors continues to be a

focus area for the business and we are engaging our key packaging

suppliers across a comprehensive range of business objectives.

Sustainability initiatives and the ability to help unlock industry-wide

challenges are central to our joint business planning.

---

| | |
|:---|:---|
| 57 | **Diageo** Form 20-F 2025 |

---

**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 UK LR6.6.6R (8). 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 46** |  |
| a.Describe the board's oversight of climate-related risks and opportunities. | Yes. See page 46. |
| b.Describe management's role in assessing and managing climate-related risks <br>and opportunities.<br>| Yes. See page 46. |
| **RISK MANAGEMENT See pages 47-49** |  |
| a.Describe the organisation's processes for identifying and assessing climate-<br>related risks.<br>| Yes. See pages 47-49. Having completed comprehensive risk <br>assessments, our focus is now on ensuring appropriate adaptation <br>plans are in place for all risks identified. |
| b.Describe the organisation's processes for managing climate-related risks. | Yes. See pages 47-49. Having completed comprehensive risk <br>assessments, our focus is now on ensuring appropriate adaptation <br>plans are in place for all risks identified. |
| c.Describe how processes for identifying, assessing and managing climate-<br>related risks are integrated into the organisation's overall risk management.<br>| Yes. See pages 47-49. Having completed comprehensive risk <br>assessments, our focus is now on ensuring appropriate adaptation <br>plans are in place for all risks identified. |
| **STRATEGY See pages 47-50** |  |
| a.Describe the climate-related risks and opportunities the organisation has <br>identified over the short-, medium-, and long-term.<br>| We have described risks and opportunities for our business, in all of <br>our owned operating locations and our most important third-party <br>operations, as well as the impact of those risks and opportunities on <br>our strategy. We have modelled the resilience of our strategy under <br>different climate-related scenarios. We have co-developed a scenario <br>analysis tool with climate experts to enable regular updates to our <br>scenario analyses. The precise risks and opportunities that were <br>modelled in our scenario analysis are outlined in the Non-Financial <br>Reporting Boundaries and Methodologies, pages 4-7. |
| b.Describe the impact of climate-related risks and opportunities on the <br>organisation's businesses, strategy and financial planning.<br>| We have described risks and opportunities for our business, in all of <br>our owned operating locations and our most important third-party <br>operations, as well as the impact of those risks and opportunities on <br>our strategy. We have modelled the resilience of our strategy under <br>different climate-related scenarios. We have co-developed a scenario <br>analysis tool with climate experts to enable regular updates to our <br>scenario analyses. The precise risks and opportunities that were <br>modelled in our scenario analysis are outlined in the Non-Financial <br>Reporting Boundaries and Methodologies, pages 4-7. |
| c.Describe the resilience of the organisation's strategy, taking into <br>consideration different climate-related scenarios, including a 2°C or lower <br>scenario.<br>| We have described risks and opportunities for our business, in all of <br>our owned operating locations and our most important third-party <br>operations, as well as the impact of those risks and opportunities on <br>our strategy. We have modelled the resilience of our strategy under <br>different climate-related scenarios. We have co-developed a scenario <br>analysis tool with climate experts to enable regular updates to our <br>scenario analyses. The precise risks and opportunities that were <br>modelled in our scenario analysis are outlined in the Non-Financial <br>Reporting Boundaries and Methodologies, pages 4-7. |
| **METRICS & TARGETS See pages 50-56** |  |
| a.Disclose the metrics used by the organisation to assess climate-related risks <br>and opportunities in line with its strategy and risk management process.<br>| Yes. See pages 50-56. |
| b.Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) <br>emissions and the related risks.<br>| Yes, for Scope 1 and 2 see page 51 and 53-55. For Scope 3 see our <br>ESG Reporting Index on page 41. We are continually enhancing our <br>Scope 3 GHG emissions footprint through supplier engagement and <br>refining our data granularity in line with GHG accounting standards.<br>|
| c.Describe the targets used by the organisation to manage climate-related <br>risks and opportunities and performance against targets.<br>| Yes. See pages 50-56. |

---

---

| | |
|:---|:---|
| 58 | **Diageo** Form 20-F 2025 |

---

CHAMPION INCLUSION AND DIVERSITY

---

| | |
|:---|:---|
| ![GIF_sop_logo_inclusion_RGB.gif](deo-20250630_g90.gif) | Champion inclusion <br>and diversity<br>|

---

**Championing inclusion and diversity helps us drive** <br>**performance, and is crucial to our purpose of** <br>**'celebrating life, every day, everywhere'.**<br>

**Key Ambitions**<sup>(1, 2, 3)</sup>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Gender representation of our leadership | Gender representation of our leadership | Gender representation of our leadership | Gender representation of our leadership | Gender representation of our leadership | Gender representation of our leadership |
| 2030 Ambition<br>Champion gender diversity, with an ambition to achieve <br>50% representation of women in leadership roles by 2030 | 2030 Ambition<br>Champion gender diversity, with an ambition to achieve <br>50% representation of women in leadership roles by 2030 | 2030 Ambition<br>Champion gender diversity, with an ambition to achieve <br>50% representation of women in leadership roles by 2030 | 2030 Ambition<br>Champion gender diversity, with an ambition to achieve <br>50% representation of women in leadership roles by 2030 | 2030 Ambition<br>Champion gender diversity, with an ambition to achieve <br>50% representation of women in leadership roles by 2030 | **50%** |
| Role | Men | % | Women | % | Total |
| Leadership population <sup>(3)</sup> | 335 | 57% | 256 | **43%** | 591 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Ethnic representation of our leadership<sup>(4)</sup> | Ethnic representation of our leadership<sup>(4)</sup> | Ethnic representation of our leadership<sup>(4)</sup> | Ethnic representation of our leadership<sup>(4)</sup> | Ethnic representation of our leadership<sup>(4)</sup> | Ethnic representation of our leadership<sup>(4)</sup> | Ethnic representation of our leadership<sup>(4)</sup> | Ethnic representation of our leadership<sup>(4)</sup> | Ethnic representation of our leadership<sup>(4)</sup> |
| 2030 Ambition<br>Champion ethnic diversity, with an ambition to increase <br>representation of leaders from ethnically diverse <br>backgrounds to 45% by 2030 | 2030 Ambition<br>Champion ethnic diversity, with an ambition to increase <br>representation of leaders from ethnically diverse <br>backgrounds to 45% by 2030 | 2030 Ambition<br>Champion ethnic diversity, with an ambition to increase <br>representation of leaders from ethnically diverse <br>backgrounds to 45% by 2030 | 2030 Ambition<br>Champion ethnic diversity, with an ambition to increase <br>representation of leaders from ethnically diverse <br>backgrounds to 45% by 2030 | 2030 Ambition<br>Champion ethnic diversity, with an ambition to increase <br>representation of leaders from ethnically diverse <br>backgrounds to 45% by 2030 | 2030 Ambition<br>Champion ethnic diversity, with an ambition to increase <br>representation of leaders from ethnically diverse <br>backgrounds to 45% by 2030 | 2030 Ambition<br>Champion ethnic diversity, with an ambition to increase <br>representation of leaders from ethnically diverse <br>backgrounds to 45% by 2030 | 2030 Ambition<br>Champion ethnic diversity, with an ambition to increase <br>representation of leaders from ethnically diverse <br>backgrounds to 45% by 2030 | **45%** |
| Ethnically <br>diverse<br>| % | Non-<br>ethnically<br>diverse<br>| % | Decline<br>to self <br>identify<br>| % | Not<br>disclosed<br>| % | Total |
| 265 | **46%** | 272 | 48% | 17 | 3% | 17 | 3% | 571 |

---

(1) Statements on representation should be considered an ambition for Diageo, not a target.

(2) This data is calculated as an average across the four quarters of fiscal 25.

(3) Leadership population encompasses the Executive Committee and senior managers.

(4) 20 leaders are based in countries that do not collect ethnicity data. As such, these leaders are not in

scope.

For more details, see the Non-Financial Reporting Boundaries and Methodologies on our website.

---

| | |
|:---|:---|
| Building a thriving and inclusive <br>hospitality industry  | Building a thriving and inclusive <br>hospitality industry  |
| Year | Number of <br>people <br>reached<br>|
| 2030 Ambition<br>Provide business and hospitality skills to 200,000 people, <br>increasing employability and improving livelihoods <br>through Learning for Life and our other skills programmes<br>| **200k** |
| 2025 cumulative progress | **133k** |
| 2024 cumulative progress | **98k** |

---

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | For more details, see the website www.diageo.com. |

---

At Diageo, our purpose is to 'celebrate life, every day, everywhere' –

we want everyone to feel invited and included. We believe that

inclusivity is not just the right thing to do, it makes good business

sense. We remain committed to our 'Spirit of Progress' ambitions,

recognising the need to continually evolve, whilst reinforcing our

commitment to advancing inclusion and cultural transformation, so

every employee can thrive.

As a global business with stretching growth ambitions, it is imperative

we employ the most talented and diverse teams and create a truly

inclusive culture to help us reach and appeal to the broadest range of

consumers who enjoy our brands. We look to champion inclusion and

diversity across our entire business – with our people, through our

value chain, across our brands and within the communities in which we

operate.

**A culture that supports all**

We believe everyone should work in an environment where they are

empowered, respected and their contributions are valued. In our most

recent survey, 83% (fiscal 24: 81%) of employees would recommend

Diageo as a great place to work, and 85% (fiscal 24: 83%) agreed that

people from different backgrounds can be themselves and thrive.

**Building an inclusive culture through policies and** 

**practices**

In recent years, we have developed policies and practices to support

employees at various life stages, partnering with employee resource

groups (ERGs) and external experts. In fiscal 25, we expanded our

'Carers Leave' policy to 30 countries across Asia Pacific, Latin America

and Caribbean, and North America, offering 10 days of paid leave for

dependent care. Over 470 employees utilised more than 1,500 days in

fiscal 25. Our long-standing Family Leave Policy remains well-adopted,

with over 1,400 parents using it in fiscal 25. We are proud to have

received external recognition in Hungary, North America, and the

United Kingdom as a top employer for parental benefits. In partnership

with our employees and the Spirited Women Network, we continue to

strengthen our approach to ensure a smooth and inclusive return-to-

work experience for all.

This fiscal, the 'Fertility Support Guidelines' providing paid leave to

assist all employees undergoing fertility treatment, were extended to

Australia, Caribbean and Central America (CCA), and Middle East and

North Africa (MENA) markets. We also refreshed and revised our

'Global Disability Inclusion' guidelines to include broader emphasis on

Universal Design Principles to improve accessibility, usability and

inclusivity in our digital and physical spaces.

We remain committed to creating an age-positive environment where

all employees can feel valued at each life stage. In fiscal 25, we

piloted an age inclusion initiative within our Scotland Supply Chain and

Procurement business, engaging employees through surveys and focus

groups. Additionally, 60 employees participated in a 12-week self-paced

life coaching programme, delivered in partnership with our external

partner, 55/Redefined, providing valuable insights to better support

colleagues in later career stages.

**Supporting female talent for the future**

Since setting our 2030 ambition in 2020 to reach 50% women in

leadership, we have increased representation from 39% to 43%. This

reflects our long-term commitment to building a more inclusive

leadership team. We are investing in the next generation of female

leaders, with a focus on underrepresented functions such as

commercial, digital, general management and supply, particularly

across countries in Africa and Asia Pacific, where local cultural norms

have created disadvantages.

Our commitment to sustainable progress is underpinned by focused

talent development and succession planning. Our 'Horizons'

programme accelerates emerging general managers, with a goal of at

least 50% female participation. In Latin America and Caribbean,

'Striding Women' provides coaching and leadership training, and in

Africa, 23 women graduated from the 'BLOOM' programme, delivered

in partnership with Strathmore University to prepare women for future

senior roles.

In the 2025 FTSE Women Leader Review, Diageo ranked fourth overall

in the FTSE 100 for combined executive and executive direct report

roles held by women, up from eighth in 2024. This progress highlights

our continued commitment to advancing gender equality in leadership.

**Supporting our ethnically diverse talent for the future**

We are proud for a second consecutive year to have maintained 46%

ethnically diverse leadership representation, surpassing our 2030 goal.

We achieved this through 46% of internal promotions and 54% of external

appointments into the leadership cohort being ethnically diverse in fiscal

25. We are proud to continue participating in the Parker Review Report

---

| | |
|:---|:---|
| 59 | **Diageo** Form 20-F 2025 |

---

---

| | | | |
|:---|:---|:---|:---|
| [STRATEGIC](#i2a439a8f411e49deb31670665dbd0981_43)<br>[REPORT](#i2a439a8f411e49deb31670665dbd0981_43)<br>| [GOVERNANCE](#i2a439a8f411e49deb31670665dbd0981_337)<br>[report](#i2a439a8f411e49deb31670665dbd0981_337)<br>| [FINANCIAL](#i2a439a8f411e49deb31670665dbd0981_469)<br>[STATEMENTS](#i2a439a8f411e49deb31670665dbd0981_469)<br>| [ADDITIONAL](#i2a439a8f411e49deb31670665dbd0981_721)<br>[INFORMATI](#i2a439a8f411e49deb31670665dbd0981_721)<br>[ON](#i2a439a8f411e49deb31670665dbd0981_721)<br>|

---

2025, where Diageo stands out for its strong ethnic diversity at both

Board and senior leadership levels, significantly surpassing the FTSE 100

average. Our people continue to demonstrate their commitment to our

inclusion journey by voluntarily sharing information about how they self-

identify their ethnic background. We are proud that 97% of our

leadership population and 72% of all employees, in the markets where

data collection is live, have completed the ethnicity field. We continue

to drive local initiatives to cultivate leadership pipelines. In Brazil, more

than 120 Diageo employees took part in the cross-industry MOVER

programme benefiting from leadership capability build, mentoring and

postgraduate scholarships. Of the cohort, 62% identified as Pardo, 38% as

Black and 6% as disabled. In Ireland, fiscal 25 marked the third annual

World Culture Day, led by the REACH (Race, Ethnicity and Cultural

Heritage) Network, celebrating the market's rich diversity with

representation of more than 15 nationalities.

**Leveraging the power of our Resource Groups locally**

We empower our people to drive inclusion and diversity through over

60 global Employee Resource Groups (ERGs). These ERGs continue to

grow in influence, shaping strategy, policy and brand campaigns.

Sponsored by senior leaders and open to all, ERGs spark meaningful

conversations and engagement across our business. With more than 20

ERGs focused on advancing gender equality, including three dedicated

specifically to engaging men across Africa, we continue to drive

inclusive dialogue and meaningful action. Our 2025 International

Women's Day celebrations embraced the theme 'Rights. Equality.

Empowerment. For ALL,' with three global sessions attracting nearly

2,000 live participants and over 30 local activations across the month

of March. This year, our South East Asia chapter hosted conversations

on masculinity and breaking gender stereotypes; and in Tanzania's

B.R.E.W. (Brotherhood, Responsibility, Equality and Wellness) Network

expanded its reach, deepening its focus on men's holistic growth and

inclusive leadership.

**Promoting inclusivity through our value chain**

We strive to have a positive impact on society and promote sustainable

growth by providing resources, learning and livelihood opportunities for

communities where we source, make and sell our brands. All our

programmes are 'inclusive by design' aiming for 50% of beneficiaries to

be women, whilst also adopting inclusive recruitment practices,

providing training content and accessibility, as well as dedicated

modules on inclusion and diversity.

In fiscal 25, Learning for Life (L4L), our business and hospitality skills

programme for people from under-represented groups, reached 35,000

people in 34 countries and over 50% of them were women. In the

fiscal, we assessed and enhanced our programme controls to improve

programme quality, impact and reporting globally and fostered new

partnerships to increase employment rates upon graduation.

Where we provided Water Sanitation and Hygiene (WASH) to

communities in water-stressed markets, we partnered with leading

NGOs to ensure equal representation on WASH committees. These

committees 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.

We continued to expand our inclusive approach to supporting

smallholder farmers in Kenya, Tanzania and Ghana, providing equal

access to agricultural training and resources for women, youth and

people with disabilities, building their economic and environmental

resilience and strengthening our supply chain.

**Championing a diverse supply chain** 

In fiscal 25, we have grown our diverse supplier base across 28

countries, actively engaging with over 930 diverse suppliers, more than

60% of them being women-owned. We continue to champion inclusion

across our value chain, working with organisations like WEConnect

International and OutBritain, to identify, connect with and grow

diverse suppliers. This year, we also partnered with the World

Federation of Advertising to launch a supplier diversity playbook,

offering guidance for marketing leaders on inclusive procurement

strategies. More information can be found in our ESG Reporting Index.

**Creating an inclusive and thriving hospitality industry** 

Through Diageo Bar Academy, we aim to foster a thriving and inclusive

hospitality sector that works for all. In fiscal 25, we continued to

provide highly accessible educational resources and training. Our

resources are designed to help hospitality workers meet guests'

expectations, upskill new hires and support their career progression

and wellbeing. We led dedicated training and mentoring sessions in

areas where we see opportunities to support women's advancement

within the hospitality sector.

**Inclusive marketing: Good for society and good for business** 

We craft and market our products for everyone (Legal Drinking Age+)

and, through our advertising, we want our brands to reflect all

consumers around the world. As one of the world's largest advertisers,

we're committed to ensuring that everyone, from script to screen,

sees themselves represented, and we continue to play our role to make

mainstream media more inclusive. In fiscal 25, we made significant

advancements to improve the accessibility of our content, and

developed and scaled training for our marketing teams and agency

partners. We further embedded inclusion into our Guinness Six Nations

campaigns with expanded live audio description, sign language

commentary and additional in-stadium accessibility. This includes the

use of the 'Field of Vision' devices to enhance the live experience for

blind and visually impaired fans. With Guinness, we announced a

collaboration with IDA Sports to create the first-ever soft ground boot

engineered for female athletes. We also partnered with 'She Said So', a

non-profit organisation committed to gender equality within the music

industry. Johnnie Walker worked on the campaign 'Pass the Mic' with

WE ARE Pi, which celebrates female game changers in hip-hop.

---

| | | |
|:---|:---|:---|
| ![59-1.jpg](deo-20250630_g111.jpg) |  |  |
| ![59-1.jpg](deo-20250630_g111.jpg) | **Louise Prashad**<br>Chief HR Officer<br>| ![42-2.jpg](deo-20250630_g98.jpg)<br>|
| ![59-1.jpg](deo-20250630_g111.jpg) |  |  |
| ![59-1.jpg](deo-20250630_g111.jpg) | We are proud of our progress over many decades in championing <br>inclusion and diversity with our brands, communities and workforce, <br>and we want to continue to build on our strong foundations.' | We are proud of our progress over many decades in championing <br>inclusion and diversity with our brands, communities and workforce, <br>and we want to continue to build on our strong foundations.' |
| ![59-1.jpg](deo-20250630_g111.jpg) |  |  |

---

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|:---|:---|
| 60 | **Diageo** Form 20-F 2025 |

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OUR ESG REPORTING APPROACH

Our ESG reporting approach

Reporting transparently on the ESG issues that affect our business, and that our business contributes to, 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 reporting regulations, 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**

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|:---|:---|:---|:---|
| ![ESG Reporting-AR25.jpg](deo-20250630_g112.jpg) | ![ESG Reporting-ERI25.jpg](deo-20250630_g113.jpg) | ![ESG Reporting-RB25.jpg](deo-20250630_g114.jpg) | ![60-2.jpg](deo-20250630_g115.jpg) |
| **Annual Report** Where we present <br>our most material disclosures and <br>describe how our strategy delivers <br>value for our business and other <br>stakeholders. Performance <br>against our most material targets <br>is integrated into the relevant <br>focus area sections.<br>| **ESG Reporting Index** Where we <br>provide additional disclosures in <br>line with the GRI (Global <br>Reporting Initiative) Standards, <br>our materiality assessment and <br>our response to the Sustainability <br>Accounting Standards Board <br>(SASB). We also consider the <br>UNGC requirements in our <br>ESG reporting.<br>| **Non-Financial Reporting** <br>**Boundaries and Methodologies** <br>Where we provide information on <br>the boundaries and calculations <br>applied to derive information set <br>out in the Annual Report and the <br>ESG Reporting Index.<br>| **Diageo.com** Where, through the <br>'Spirit of Progress' section, we <br>give more details of our approach <br>and performance, with examples <br>of our strategy in action. <br>|

---

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 86-93 of this Annual Report.

This non-financial and sustainability information statement provided on pages 61-62 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.

---

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| 61 | **Diageo** Form 20-F 2025 |

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**Non-financial and sustainability information statement** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Reporting requirement as per Companies Act 2006** <br>**414CA and 414CB**<br>| **Focus area** | **Read more in Diageo's reports** | **Relevant policies, standards or documents** | **Page** <br>**reference** <br>|
| **Environmental matters** |  |  |  |  |
| 1(a) environmental matters (including <br>the impact of the company's business <br>on the environment)<br>| **Pioneering grain to** <br>**glass sustainability**<br>| •Doing business the right way, <br>from grain to glass<br>•Risk Management – Identifying <br>climate risks and opportunities<br>•Climate change resilience<br>•Identifying and assessing our <br>physical risks<br>•Identifying and assessing our <br>transition risks and opportunities<br>•Summary of our most important <br>climate risks and opportunities<br>•Our strategy for grain-to-glass <br>sustainability<br>•How we have reported <br>consistently with the <br>recommendations of the Task <br>Force on Climate-related <br>Financial Disclosures (TCFD)<br>| •Global Environment Policy<sup>(1)</sup><br>•Sustainable Agriculture <br>Guidelines<sup>(1)</sup><br>•Sustainable Packaging <br>Commitments<sup>(1)</sup><br>•Partnering with Suppliers <br>Standard<sup>(1)</sup><br>•Deforestation Guidelines<sup>(4)</sup><br>•Water Stewardship Strategy<sup>(4)</sup><br>•Reinventing Packaging <br>Strategy<sup>(4)</sup> | p.36-37<br>p.46-57<br>|
| **Our people** |  |  |  |  |
| 1(b) the company's employees | **Our people and** <br>**culture**<br>| •Highly engaged talent<br>Growing our talent <br>Continuing to evolve our culture<br>Enabling our people to thrive<br>Champion inclusion and diversity<br>•Gender and ethnic <br>representation of our leadership<br>•Promoting inclusivity through our <br>value chain<br>•Championing a diverse supply <br>chain<br>•Inclusive marketing: Good for <br>society and good for business | Code of Business Conduct<sup>(2)</sup><br>Great Britain/Scotland and <br>Republic of Ireland Gender Pay <br>Gap Report 2024<sup>(4)</sup><br>Global Human Rights Policy<sup>(1)</sup><br>Directors' Remuneration Policy<sup>(4)</sup><br>Board Diversity Policy<sup>(4)</sup> | p.40-41 |
| 1(b) the company's employees | **Champion inclusion** <br>**and diversity**<br>| •Highly engaged talent<br>Growing our talent <br>Continuing to evolve our culture<br>Enabling our people to thrive<br>Champion inclusion and diversity<br>•Gender and ethnic <br>representation of our leadership<br>•Promoting inclusivity through our <br>value chain<br>•Championing a diverse supply <br>chain<br>•Inclusive marketing: Good for <br>society and good for business | Code of Business Conduct<sup>(2)</sup><br>Great Britain/Scotland and <br>Republic of Ireland Gender Pay <br>Gap Report 2024<sup>(4)</sup><br>Global Human Rights Policy<sup>(1)</sup><br>Directors' Remuneration Policy<sup>(4)</sup><br>Board Diversity Policy<sup>(4)</sup> | p.58-59 |
|  | **Health and safety** | •Embedding a culture of health <br>and safety<br>•Empowering responsibility: <br>Fostering a safe work <br>environment<br>•Continuous improvement <br>initiatives<br>| •Global Health, Safety and <br>Wellbeing Policy<sup>(1)</sup> | p.42-43 |
| 1(c) social matters | **Promote positive** <br>**drinking**<br>| •Education to tackle harmful <br>drinking<br>•Promoting moderation through <br>aspiration and choice<br>•Advocating improved laws and <br>industry standards<br>•Marketing in a responsible way<br>| Global Marketing and Digital <br>Marketing Policy<sup>(1)</sup><br>Global Employee Alcohol Policy<sup>(1)</sup> | p.44-45 |
| **Human rights** |  |  |  |  |
| 1(d) respect for human rights | **Business integrity and** <br>**Human rights**<br>| Standing up for human rights | •Global Human Rights Policy<sup>(1)</sup><br>•Modern Slavery Statement<sup>(3)</sup><br>•Global Brand Promoter <br>Standard<sup>(1)</sup><br>•Privacy Policy<sup>(1)</sup> | p.38-39 |
| **Anti-bribery and corruption** |  |  |  |  |
| 1(e) anti-corruption and anti-bribery <br>matters<br>| **Business integrity and** <br>**Human rights, Doing** <br>**business the right way**<br>| •Business integrity<br>•Code of Business Conduct (Our <br>Code)<br>•Encouraging people to speak up<br>•Managing third-party risks<br>| •Code of Business Conduct<sup>(2)</sup><br>•Data Privacy Policy<sup>(4)</sup><br>•Global Information <br>Management and Security <br>Policy<sup>(4)</sup><br>•Countering Corruption Policy<sup>(1)</sup><br>•Competition and Antitrust <br>Policy<sup>(1)</sup> | p.38-39 |

---

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| 62 | **Diageo** Form 20-F 2025 |

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OUR ESG REPORTING APPROACH continued

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| | | | | |
|:---|:---|:---|:---|:---|
| **Reporting requirement as per Companies Act 2006** <br>**414CA and 414CB**<br>| **Focus area** | **Read more in Diageo's reports** | **Relevant policies, standards or documents** | **Page** <br>**reference** <br>|
| **Business model** |  |  |  |  |
| 2(a) a brief description of the <br>company's business model<br>| **Diageo's business** <br>**model**<br>| •Strategic Report<br>•Our principal risks and risk <br>management<br>•Stakeholder engagement<br>|  | p1-15<br>p.63-71<br>p.86-93<br>|
| **Risk management** |  |  |  |  |
| 2(d) a description of the principal risks <br>relating to the matters mentioned in <br>subsection | **Our principal risks and** <br>**risk management**<br>| Effective risk management<br>Our principal risks and risk <br>management<br>| •Risk Management Standard<sup>(4)</sup><br>Business Continuity Management <br>Standard<sup>(4)</sup> | p.63-71 |
| 2(d) a description of the principal risks <br>relating to the matters mentioned in <br>subsection | **Viability statement** | Viability statement | •Risk Management Standard<sup>(4)</sup><br>Business Continuity Management <br>Standard<sup>(4)</sup> | p.72-73 |
| **Non-financial performance** |  |  |  |  |
| 2(e) a description of the non-financial <br>key performance indicators relevant to <br>the company's business<br>| **Monitoring** <br>**performance and** <br>**progress**<br>| Non-financial performance<br>'Spirit of Progress'<br>Key Sustainability Targets<br>|  | p.18-19<br>p.36-60<br>p.51<br>|
| **Climate-related financial disclosures as required by sections 414CA and 414CB of the Companies Act 2006** | **Climate-related financial disclosures as required by sections 414CA and 414CB of the Companies Act 2006** | **Climate-related financial disclosures as required by sections 414CA and 414CB of the Companies Act 2006** | **Climate-related financial disclosures as required by sections 414CA and 414CB of the Companies Act 2006** | **Climate-related financial disclosures as required by sections 414CA and 414CB of the Companies Act 2006** |
| (a) description of the company's <br>governance arrangements in relation to <br>assessing and managing climate-related <br>risks and opportunities;<br>| **Pioneering grain to** <br>**glass sustainability** | •Governance (Pioneering grain to <br>glass sustainability)<br>| See above, under Environmental <br>matters | p.46 |
| (b) a description of how the company <br>identifies, assesses, and manages <br>climate-related risks and opportunities;<br>| **Pioneering grain to** <br>**glass sustainability** | •Risk Management – Identifying <br>climate risks and opportunities<br>| See above, under Environmental <br>matters | p.47-49 |
| (c) a description of how processes for <br>identifying, assessing, and managing <br>climate-related risks are integrated <br>into the company's overall risk <br>management process;<br>| **Pioneering grain to** <br>**glass sustainability** | •Effective risk management<br>•Risk Management – Identifying <br>climate risks and opportunities<br>| See above, under Environmental <br>matters | p.63-71<br>p.47-49<br>|
| (d) a description of — (i) the principal <br>climate-related risks and opportunities <br>arising in connection with the <br>company's operations, and<br>| **Pioneering grain to** <br>**glass sustainability** | •Effective risk management:<br>•Risk Management – Identifying <br>climate risks and opportunities<br>| See above, under Environmental <br>matters | p.63-71<br>p.47-49<br>|
| (d) a description of — (ii) the time <br>periods by reference to which those <br>risks and opportunities are assessed;<br>| **Pioneering grain to** <br>**glass sustainability** | •Risk Management – Identifying <br>climate risks and opportunities<br>•Quantitative impact of transition <br>risks and opportunities<br>| See above, under Environmental <br>matters | p.47-49 |
| (e) a description of the actual and <br>potential impacts of the principal <br>climate-related risks and opportunities <br>on the company's business model and <br>strategy;<br>| **Pioneering grain to** <br>**glass sustainability** | •Risk Management – Identifying <br>climate risks and opportunities <br>•Identifying and assessing our <br>transitions risks and <br>opportunities<br>| See above, under Environmental <br>matters | p.47-49 |
| (f) an analysis of the resilience of the <br>company's business model and <br>strategy, taking into consideration <br>different climate-related scenarios;<br>| **Pioneering grain to** <br>**glass sustainability** | •Climate change resilience <br>•Viability statement<br>•Scenario analysis of physical and <br>transition risks (in the Non-<br>Financial Reporting Boundaries <br>and Methodologies)<br>| See above, under Environmental <br>matters | p.47-49 <br>p.72-73<br>*p.4-7*<br>|
| (g) a description of the targets used by <br>the company to manage climate-<br>related risks and to realise climate-<br>related opportunities and of <br>performance against those targets; and<br>| **Pioneering grain to** <br>**glass sustainability** | •Our strategy for grain-to-glass <br>sustainability<br>•Key Sustainability Targets<br>| See above, under Environmental <br>matters | p.50-56<br>p.51<br>|
| (h) a description of the key <br>performance indicators used to assess <br>progress against targets used to <br>manage climate-related risks and <br>realise climate-related opportunities <br>and of the calculations on which those <br>key performance indicators are based<br>| **Pioneering grain to** <br>**glass sustainability** | •Our strategy for grain-to-glass <br>sustainability<br>•Key Sustainability Targets<br>| See above, under Environmental <br>matters | p.50-56<br>p.51<br>|

---

(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

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| 63 | **Diageo** Form 20-F 2025 |

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**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 conflicts in the Middle East, tariffs 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 conflicts in the Middle East have, 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 rising costs of living, 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 key markets, including economic

slowdowns, global, regional or local recessions or depressions, currency instability, increased unemployment levels, new or 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.

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| 64 | **Diageo** Form 20-F 2025 |

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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. For example, the

United States has announced and/or implemented significant new tariffs on imports into the United States, including a baseline 10%

tariff on most goods imported from most countries, which has prompted retaliatory tariffs by a number of countries (e.g. in March

2025, several Canadian provinces removed all American beverage alcohol from store shelves, in response to the United States

announcing a 25% tariff on goods imported from Canada). If maintained, the recently announced tariffs, and any tariffs to be

announced in the future by the United States, could result in further retaliatory measures and an escalation of trade disputes which

could pose a significant risk to Diageo's business, including an increase to the cost of Diageo's products and, to the extent Diageo

absorbs the costs of tariffs and does not pass them through to customers, higher cost of goods sold and decreased profit and margins.

The extent and duration of the tariffs and the resulting impact on general economic conditions and on Diageo's business are uncertain

and depend on various factors, including negotiations between the United States and affected countries, the responses of other

countries or regions, deferments, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply,

and demand for Diageo's product in affected markets. Further, actions Diageo takes to adapt to new tariffs or trade restrictions may

cause Diageo to modify operations or forgo business opportunities. Tariffs and import and export regulations could also limit the

availability of Diageo's products, prompt consumers to seek alternative products and provide an opportunity for competitors not

subject to such tariffs to establish a presence in markets where Diageo conducts business. 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.

Many of the above risks are heightened, or occur more frequently, in emerging markets, such as Colombia, Kenya and Mexico. 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, such as Storm Eowyn which caused minor disruptions. 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.

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| 65 | **Diageo** Form 20-F 2025 |

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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 UK Financial Conduct Authority, US and European regulators

and other regulatory bodies, 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 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.

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| 66 | **Diageo** Form 20-F 2025 |

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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, THC and hemp-based THC beverages or other alternative

products), increased use of GLP-1 medications (which may have the effect of reducing alcohol consumption in certain customers),

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, 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 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 and the United States, 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 Johnnie Walker Black Ruby), 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 or ventures 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.

**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 and increased

complexity of data requirements and compliance processes. 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.

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| 67 | **Diageo** Form 20-F 2025 |

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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, or 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 consumption or 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 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, 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. For example, in January 2025, the United States' outgoing Surgeon General issued an

advisory recommending that labels on beverage alcohol products include increased and more prominent warnings regarding the

health risks of alcohol consumption. Additionally, Ireland passed a law requiring new health warning labels on alcohol beverage

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. For example, heightened regulatory

scrutiny due to macroeconomic volatility is impacting competition within consumer goods sectors, leading to increased dawn raids

and investigations in Europe, Africa and India, with structured collaborations posing additional risks. 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.

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| 68 | **Diageo** Form 20-F 2025 |

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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** 

**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 enhanced 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

which will come into effect in September 2025.

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 or other conflicts, 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.

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| 69 | **Diageo** Form 20-F 2025 |

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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.

**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 and deepfake deception and impersonation attacks through platforms like

WhatsApp aimed at gaining access to internal information. 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.

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| 70 | **Diageo** Form 20-F 2025 |

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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.

**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 rise in methanol poisoning

in South East Asia, Türkiye and India poses an increased risk to consumer safety from counterfeit spirits. 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

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| 71 | **Diageo** Form 20-F 2025 |

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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 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 have had and may continue to

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.

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 and** 

**operating processes, or its business and financial results**

Failure to execute strategic business transformation projects effectively, namely the implementation of SAP S/4 Hana, the Accelerate

programme, the Supply Chain Agility programme and Diageo's portfolio of digital capability builds, has resulted in delays and could

result in further delays or changes to their expected benefits or negatively affect Diageo's ability to continuously improve its internal

control and reporting environment. Any delay or disruption in Diageo's strategic business transformation projects may have a

negative impact on Diageo's critical business and operating processes and/or impact the ability of management to focus on other

business matters, and may adversely affect its business and operating processes, and its business and financial results.

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 Diageo's strategic transformation

initiatives may need to adapt, which may require new and different capabilities and skills within Diageo's workforce and may

negatively impact Diageo's 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 Diageo's business and industry, failure to have the right strategic partnerships and talent in key positions to deliver

and sustain our strategic business transformation initiatives going forward may result in delays, unforeseen costs and other

disruptions to Diageo's business, competitive positioning and financial performance.

---

| | |
|:---|:---|
| 72 | **Diageo** Form 20-F 2025 |

---

**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, including in whisk(e)y and tequila, in markets 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.

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.

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, transport strikes, work stoppages

or slowdowns within Diageo's operations or those of Diageo's suppliers could adversely impact Diageo.

---

| | |
|:---|:---|
| 73 | **Diageo** Form 20-F 2025 |

---

**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

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.

![GOV-DIV.jpg](deo-20250630_g116.jpg)

---

| | |
|:---|:---|
| 74 | **Diageo** Form 20-F 2025 |

---

Governance report

---

| | |
|:---|:---|
| **Contents** |  |
| Chair's introduction to Governance | [75](#i2a439a8f411e49deb31670665dbd0981_340) |
| Corporate Governance Structure and Division of Responsibilities | [76](#i2a439a8f411e49deb31670665dbd0981_343) |
| Board of Directors  | [78](#i2a439a8f411e49deb31670665dbd0981_352) |
| Executive Committee  | [80](#i2a439a8f411e49deb31670665dbd0981_358) |
| Corporate governance report | [82](#i2a439a8f411e49deb31670665dbd0981_361) |
| Audit Committee report  | [97](#i2a439a8f411e49deb31670665dbd0981_394) |
| Nomination Committee report  | [104](#i2a439a8f411e49deb31670665dbd0981_418) |
| Directors' remuneration report  | [108](#i2a439a8f411e49deb31670665dbd0981_433) |
| Directors' report  | [135](#ic6570498c9204988a04852ed256bc072_23465) |

---

![75.jpg](deo-20250630_g117.jpg)

---

| | |
|:---|:---|
| 75 | **Diageo** Form 20-F 2025 |

---

CHAIR'S INTRODUCTION TO GOVERNANCE

**Sir John Manzoni**

Chair

Resilient *Leadership* 

and long-term *Strategy*

'I am confident in our clear long-term strategy to achieve Diageo's Growth

Ambition, despite market uncertainties, through resilient leadership, strong culture

and values.'

**Dear Shareholder**<br>On behalf of the Board, I am delighted to present <br>Diageo's corporate governance report for the year <br>ended 30 June 2025 highlighting the role of <br>Diageo's Board and governance structures over <br>the course of the year in seeking to achieve long-<br>term sustainable success of the company. <br>Your Board is responsible for maintaining the <br>health of the company, providing leadership and <br>strategic direction which enable management to <br>deliver growth and shareholder value over the <br>long term. It is also responsible for ensuring the <br>company has a clearly defined and articulated <br>purpose and strategy, underpinned by values and <br>behaviours which shape the company's culture <br>and how it goes about its business. During the <br>year, your Board has worked closely with <br>management shaping Diageo's strategy to be <br>more agile, focused and adaptable to current <br>macroeconomic uncertainties, consumer <br>sentiment and opportunities. We have continued <br>our focus on more effective and regular <br>stakeholder engagement, especially in relation to <br>our shareholders, investors and market <br>participants, but also with our employees and <br>broader workforce, including through our <br>workforce engagement activities. I thank you for <br>continuing to invest in Diageo.<br>![John Sig Purple.jpg](deo-20250630_g118.jpg)<br>Sir John Manzoni<br>Chair<br>

---

| | |
|:---|:---|
| Principal Board decisions | Principal Board decisions |
| •Adapting Board ways of working, <br>including committee structure <br>and composition. <br>•Reshaping strategic priorities in light <br>of the external environment to help <br>deliver Diageo's long-term, sustainable <br>Growth Ambition.<br>•Active portfolio management and <br>disposals in line with our strategy. | •Adapting Board ways of working, <br>including committee structure <br>and composition. <br>•Reshaping strategic priorities in light <br>of the external environment to help <br>deliver Diageo's long-term, sustainable <br>Growth Ambition.<br>•Active portfolio management and <br>disposals in line with our strategy. |
| ![read-more-purple.gif](deo-20250630_g21.gif) | **Read more about our principal** <br>**decisions on page 90.**<br>|

---

---

| | |
|:---|:---|
| Highlights of fiscal 25 | Highlights of fiscal 25 |
| •Deep dive into our African business <br>including engaging with customers and <br>workforce in South Africa. <br>•Engaging directly with a panel of <br>sell-side analysts to understand <br>their perspective of our business.<br>•Welcoming new directors, Nik Jhangiani<br>and Julie Brown, and Sir John Manzoni <br>becoming Chair. | •Deep dive into our African business <br>including engaging with customers and <br>workforce in South Africa. <br>•Engaging directly with a panel of <br>sell-side analysts to understand <br>their perspective of our business.<br>•Welcoming new directors, Nik Jhangiani<br>and Julie Brown, and Sir John Manzoni <br>becoming Chair. |
| ![read-more-purple.gif](deo-20250630_g21.gif) | Read more about our highlights <br>on pages 84-85.<br>|

---

---

| | |
|:---|:---|
| Board evaluation ACTIONS | Board evaluation ACTIONS |
| •Improved focus on consistency and <br>regularity of investor and shareholder <br>engagement.<br>•Increased use of reporting tools to <br>enable efficient communication of <br>strategy implementation. <br>•Maintain focus on talent pipeline for <br>candidates for non-executive roles. | •Improved focus on consistency and <br>regularity of investor and shareholder <br>engagement.<br>•Increased use of reporting tools to <br>enable efficient communication of <br>strategy implementation. <br>•Maintain focus on talent pipeline for <br>candidates for non-executive roles. |
| ![read-more-purple.gif](deo-20250630_g21.gif) | Read more about our actions <br>on pages 91-92.<br>|

---

---

| | |
|:---|:---|
| **Board composition**<sup>(1)</sup> | **Board composition**<sup>(1)</sup> |
| 🟇 | Chair |
| 🟇 | Executive director |
| 🟇 | Non-executive director |

---

![1](deo-20250630_g119.gif)

---

| | |
|:---|:---|
| Non-Executive Director tenure<sup>(1)</sup> | Non-Executive Director tenure<sup>(1)</sup> |
| 🟇 | 0 – 3 years |
| 🟇 | 3 – 6 years |
| 🟇 | 6 – 9 years |

---

![13](deo-20250630_g120.gif)

---

| |
|:---|
| **Board gender diversity**<sup>(1)</sup> |
| 🟇<br> Male |
| 🟇<br> Female |

---

![25](deo-20250630_g121.gif)

---

| | |
|:---|:---|
| **Board ethnic diversity**<sup>(1)</sup> | **Board ethnic diversity**<sup>(1)</sup> |
| 🟇 | Director of colour |
| 🟇 | White European |

---

![37](deo-20250630_g122.gif)

(1) Data as at 30 June 2025.

![GOV-purple.jpg](deo-20250630_g123.jpg)

---

| | |
|:---|:---|
| 76 | **Diageo** Form 20-F 2025 |

---

Corporate governance structure and division of responsibilities

The role

of the *Board*

The Board is committed to the highest standards

of corporate governance and risk management,

which is demonstrated in its established

corporate governance framework.

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).

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | Read more about our committees on pages <br>97-134.<br>|

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Reporting | ![The role board arrows-01.gif](deo-20250630_g124.gif) | **Board of Directors** | **Board of Directors** | ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) | Informing |
| Reporting | ![The role board arrows-01.gif](deo-20250630_g124.gif) | Chair, Non-Executive Directors, Senior Independent Director | Chair, Non-Executive Directors, Senior Independent Director | ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) | Informing |
| Reporting | ![The role board arrows-01.gif](deo-20250630_g124.gif) |  |  | ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) | Informing |
| Reporting | ![The role board arrows-01.gif](deo-20250630_g124.gif) | **Board Committees** | **Board Committees** | ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) | Informing |
| Reporting | ![The role board arrows-01.gif](deo-20250630_g124.gif) | Audit Committee, Nomination Committee, Remuneration Committee | Audit Committee, Nomination Committee, Remuneration Committee | ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) | Informing |
| Reporting | ![The role board arrows-01.gif](deo-20250630_g124.gif) |  |  | ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) | Informing |
| Reporting | ![The role board arrows-01.gif](deo-20250630_g124.gif) | **Executive Leadership** | **Executive Leadership** | ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) | Informing |
| Reporting | ![The role board arrows-01.gif](deo-20250630_g124.gif) | Chief Executive, Chief Financial Officer, Executive Committee, <br>Finance Committee, Audit & Risk Committee, Filings Assurance <br>Committee | Chief Executive, Chief Financial Officer, Executive Committee, <br>Finance Committee, Audit & Risk Committee, Filings Assurance <br>Committee | ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) | Informing |
| Reporting | ![The role board arrows-01.gif](deo-20250630_g124.gif) | ![The role board arrows-02.gif](deo-20250630_g127.gif) | ![The role board arrows-02.gif](deo-20250630_g127.gif) | ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) | Informing |
| Reporting | ![The role board arrows-01.gif](deo-20250630_g124.gif) | Business unit risk <br>management<br>| Risk & Controls <br>Steering Committee<br>| ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) | Informing |
| Reporting | ![The role board arrows-01.gif](deo-20250630_g124.gif) |  |  | ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) | Informing |
|  | ![The role board arrows-01.gif](deo-20250630_g124.gif) | **Company Secretary** | **Company Secretary** | ![The role board arrows-03.gif](deo-20250630_g125.gif) | ![The role board arrows-04.gif](deo-20250630_g126.gif) |  |

---

---

| | | |
|:---|:---|:---|
| **Roles and division of responsibilities –** *Board positions* | **Roles and division of responsibilities –** *Board positions* | **Roles and division of responsibilities –** *Board positions* |
| CHAIR | NON-EXECUTIVE <br>DIRECTORS<br>| Senior Independent Director |
| •Responsible for the operation, <br>leadership and governance of the Board.<br>•Ensures all Directors are fully informed <br>of matters and receive precise, timely <br>and clear information sufficient to <br>make informed judgements.<br>•Sets Board agendas and ensures <br>sufficient time is allocated to ensure <br>effective debate to support sound <br>decision-making.<br>•Ensures the effectiveness of the Board. <br>•Engages in discussions with <br>shareholders.<br>•Meets with the Non-Executive Directors <br>independently of the Executive <br>Directors.<br>| •Independent, experienced and <br>influential individuals from diverse <br>range of industries, backgrounds <br>and countries. <br>•Constructively challenge the <br>Executive Directors, develop strategy <br>and scrutinise performance.<br>•Satisfy themselves on the integrity <br>of the financial information, controls <br>and systems of risk management. <br>•Set the levels of remuneration <br>for Executive Directors and senior <br>management.<br>•Make recommendations to the Board <br>concerning appointments to the Board.<br>| •Acts as a sounding board for the Chair <br>and serves as an intermediary for the <br>other Directors when necessary.<br>•Responsible for managing an orderly <br>succession process for the Chair. <br>•Together with the other Non-<br>Executive Directors, leads the review <br>of the performance of the Chair, <br>taking into account the views of the <br>Executive Directors.<br>•Available to shareholders if they have <br>concerns where contact through the <br>normal channels has failed.<br>|

---

---

| | | |
|:---|:---|:---|
| **Roles and division of responsibilities –** *Executive leadership positions* | **Roles and division of responsibilities –** *Executive leadership positions* | **Roles and division of responsibilities –** *Executive leadership positions* |
| chief Executive | Chief financial officer  | COMPANY SECRETARY  |
| •Develops the group's strategic direction <br>for consideration and approval by <br>the Board. <br>•Implements the strategy agreed by <br>the Board.<br>•Leads and is supported by the <br>Executive Committee. <br>•Manages the company and the group. <br>•Along with the Chief Financial Officer, <br>leads discussions with investors.<br>•Is supported by the Finance Committee <br>and Filings Assurance Committee in the <br>management of financial reporting of <br>the company. <br>| •Manages all aspects of the group's <br>financial affairs. <br>•Responsible for the management of <br>the capital structure of the company.<br>•Contributes to the management of the <br>group's operations.<br>•Along with the Chief Executive, leads <br>discussions with investors.<br>•Is supported by the Finance <br>Committee and Filings Assurance <br>Committee in the management of <br>the financial affairs and reporting <br>of the company.<br>•Is a member of the Executive <br>Committee.<br>| •The Board is supported by the <br>Company Secretary who ensures <br>information is made available to <br>Board members in a timely fashion.<br>•Supports the Chair in setting Board <br>agendas, designing and delivering <br>Board inductions and Board <br>evaluations, and co-ordinates post-<br>evaluation action plans, including risk <br>review and training requirements for <br>the Board.<br>•Advises on corporate governance <br>matters.<br>•Is a member of the Executive <br>Committee as General Counsel.<br>|

---

![GOV-purple.jpg](deo-20250630_g123.jpg)

---

| | |
|:---|:---|
| 77 | **Diageo** Form 20-F 2025 |

---

**Compliance with the UK Corporate Governance Code**

The Board considers that, for the year ended 30 June 2025, 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.

---

| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | **Visit diageo.com for more information.** |

---

---

| | | | |
|:---|:---|:---|:---|
| **1** | **Board Leadership & Company Purpose** | **Board Leadership & Company Purpose** | **Board Leadership & Company Purpose** |
| **A.** | **Board of Directors** | Board of Directors  | **78** |
| **A.** | **Board of Directors** | Board Committee Composition | **105** |
| **A.** | **Board of Directors** | Performance Evaluation | **91** |
| **B.** | **Purpose, Values and** <br>**Culture** | Our Growth Ambition | **10** |
| **B.** | **Purpose, Values and** <br>**Culture** | 'Spirit of Progress' | **36** |
| **C.** | **Resources and** <br>**Control Framework** | Our Strategy | **11** |
|  | **Resources and** <br>**Control Framework** | Our Principal Risks and Risk <br>Management<br>| **63** |
|  | **Resources and** <br>**Control Framework** | Corporate Governance Structure <br>and Division of Responsibilities <br>| **76** |
| **D.** | **Stakeholder** <br>**Engagement** | Stakeholder Engagement | **86** |
|  | **Stakeholder** <br>**Engagement** | Section 172 Statement | **2** |
| **E.** | **Workforce Policies** <br>**and Practices** | Our Growth Ambition | **10** |
|  | **Workforce Policies** <br>**and Practices** | 'Spirit of Progress' | **36** |
|  | **Workforce Policies** <br>**and Practices** | Business integrity and Human <br>Rights<br>| **38** |
|  | **Workforce Policies** <br>**and Practices** | Business Integrity Programmes | **100** |
| **2** | **Division of Responsibilities** | **Division of Responsibilities** |  |
| **F.** | **Role of the Chair** | Chair's Introduction to Governance | **75** |
|  | **Role of the Chair** | Corporate Governance Structure <br>and Division of Responsibilities<br>| **76** |
|  | **Role of the Chair** | Performance Evaluation | **91** |
| **G.** | **Division of** <br>**Responsibilities**<br>| Corporate Governance Structure <br>and Division of Responsibilities<br>| **76** |
|  |  | Composition of the Board | **82** |
| **H.** | **Role of the Non-**<br>**Executive Director** | Corporate Governance Structure <br>and Division of Responsibilities<br>| **76** |
|  | **Role of the Non-**<br>**Executive Director** | Board of Directors | **78** |
| **I.** | **Board Policies,** <br>**Process,** <br>**Information, Time** <br>**and Resources** | How the Board Monitors Culture | **94** |
|  | **Board Policies,** <br>**Process,** <br>**Information, Time** <br>**and Resources** | Duties of the Board | **82** |
|  | **Board Policies,** <br>**Process,** <br>**Information, Time** <br>**and Resources** | Board Activities | **84** |

---

---

| | | | |
|:---|:---|:---|:---|
| **3** | **Composition, Succession and Evaluation** | **Composition, Succession and Evaluation** | **Composition, Succession and Evaluation** |
| **J.** | **Appointments to the** <br>**Board** | Diversity<br>Succession Planning | **106** |
| **J.** | **Appointments to the** <br>**Board** | Diversity<br>Succession Planning | **105** |
| **J.** | **Appointments to the** <br>**Board** | Recruitment and election <br>procedures<br>| **105** |
| **K.** | **Board Skills,** <br>**Experience and** <br>**Knowledge**<br>| Composition of the Board | **82** |
| **L.** | **Board Evaluation** | Performance Evaluation | **91** |
| **4** | **Audit, Risk and Internal Controls** | **Audit, Risk and Internal Controls** | **Audit, Risk and Internal Controls** |
| **M.** | **Independence, and** <br>**Effectiveness of** <br>**Internal and External** <br>**Auditors**<br>| Audit Committee Report | **97** |
| **N.** | **Fair, Balanced, and** <br>**Understandable** <br>**Assessment** <br>| Directors' Confirmations | **96** |
| **O.** | **Risk and Internal** <br>**Controls** | Corporate Governance <br>Structure and Division of <br>Responsibilities<br>| **76** |
| **O.** | **Risk and Internal** <br>**Controls** | Our Principal Risks and <br>Risk Management<br>| **63** |
| **5** | **Remuneration** | **Remuneration** | **Remuneration** |
| **P.** | **Alignment to Purpose,** <br>**Values and Long-Term** <br>**Success** | Remuneration Committee <br>Chair's letter<br>| **108** |
| **P.** | **Alignment to Purpose,** <br>**Values and Long-Term** <br>**Success** | Remuneration at a Glance | **111** |
| **P.** | **Alignment to Purpose,** <br>**Values and Long-Term** <br>**Success** | Director's Remuneration Policy | **114** |
| **Q.** | **Remuneration Policy** | Remuneration Committee <br>Chair's letter<br>| **108** |
| **Q.** | **Remuneration Policy** | Director's Remuneration Policy | **114** |
| **R.** | **Independent** <br>**Judgement and** <br>**Discretion** | Remuneration Committee <br>Chair's letter<br>| **108** |
| **R.** | **Independent** <br>**Judgement and** <br>**Discretion** | Consideration of wider <br>workforce remuneration<br>| **119** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fiscal 25 Board Attendance** | Annual General <br>Meeting 2024<br>| Board <br>(maximum 8)<br>| Audit Committee <br>(maximum 5)<br>| Nomination <br>Committee <br>(maximum 6)<br>| Remuneration <br>Committee <br>(maximum 4)<br>|
| Sir John Manzoni, KCB | ✔ | 8/8 | 5/5 | 6/6 | 4/4 |
| Debra Crew<sup>(1)</sup> | ✔ | 7/8 |  |  |  |
| Nik Jhangiani<sup>(2)</sup> | ✔ | 6/7 |  |  |  |
| Susan Kilsby | ✔ | 8/8 | 5/5 | 6/6 | 4/4 |
| Melissa Bethell | ✔ | 8/8 | 5/5 | 6/6 | 4/4 |
| Karen Blackett, CBE | ✔ | 8/8 | 5/5 | 6/6 | 4/4 |
| Julie Brown  | ✔ | 8/8 | 5/5 |  |  |
| Valérie Chapoulaud-Floquet | ✔ | 8/8 | 5/5 | 6/6 | 4/4 |
| Ireena Vittal | ✔ | 8/8 | 5/5 | 6/6 | 4/4 |
| **Former Directors** |  |  |  |  |  |
| Javier Ferrán<sup>(3)</sup> | ✔ | 5/5 | 4/4 | 5/5 | 3/3 |
| Lavanya Chandrashekar<sup>(4)</sup> | n/a | 1/1 |  |  |  |
| Alan Stewart<sup>(5)</sup> | ✔ | 2/2 | 1/1 | 1/1 | 1/1 |

---

(1)Debra Crew retired from the Board on 16 July 2025.

(2)Nik Jhangiani was appointed to the Board on 1 September 2024.

(3)Javier Ferrán retired from the Board on 5 February 2025.

(4)Lavanya Chandrashekar retired from the Board on 1 September 2024.

(5)Alan Stewart retired from the Board on 26 September 2024.

![GOV-purple.jpg](deo-20250630_g123.jpg)

---

| | |
|:---|:---|
| 78 | **Diageo** Form 20-F 2025 |

---

BOARD OF DIRECTORS

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| | | | |
|:---|:---|:---|:---|
|  |  | Board skills <br>and competencies<br>| Key external appointments |
| SIR JOHN MANZONI, KCB  | SIR JOHN MANZONI, KCB  |  |  |
| ![1.jpg](deo-20250630_g128.jpg) | ![BOD-N-Pink.gif](deo-20250630_g129.gif) | Has strong commercial <br>executive experience as a <br>former CEO in the energy <br>sector and non-executive <br>board level experience, <br>including in the alcoholic <br>beverage industry, as well <br>as more recent expertise in <br>public policy and <br>government affairs | **Current:** Chair, SSE plc; Non-Executive Director, <br>KBR Inc.<br>**Previous relevant experience:** Chair, Atomic <br>Weapons Establishment; Chief Executive of the <br>Civil Service and Permanent Secretary of the <br>Cabinet Office, HM Government; President and <br>Chief Executive Officer, Talisman Energy Inc; <br>Chief Executive, Refining & Marketing, BP p.l.c.; <br>Chief Executive, Gas & Power, BP p.l.c.; <br>Non-Executive Director, SABMiller plc |
| ![1.jpg](deo-20250630_g128.jpg) | **Chair** | Has strong commercial <br>executive experience as a <br>former CEO in the energy <br>sector and non-executive <br>board level experience, <br>including in the alcoholic <br>beverage industry, as well <br>as more recent expertise in <br>public policy and <br>government affairs | **Current:** Chair, SSE plc; Non-Executive Director, <br>KBR Inc.<br>**Previous relevant experience:** Chair, Atomic <br>Weapons Establishment; Chief Executive of the <br>Civil Service and Permanent Secretary of the <br>Cabinet Office, HM Government; President and <br>Chief Executive Officer, Talisman Energy Inc; <br>Chief Executive, Refining & Marketing, BP p.l.c.; <br>Chief Executive, Gas & Power, BP p.l.c.; <br>Non-Executive Director, SABMiller plc |
| ![1.jpg](deo-20250630_g128.jpg) | **Nationality:** British | Has strong commercial <br>executive experience as a <br>former CEO in the energy <br>sector and non-executive <br>board level experience, <br>including in the alcoholic <br>beverage industry, as well <br>as more recent expertise in <br>public policy and <br>government affairs | **Current:** Chair, SSE plc; Non-Executive Director, <br>KBR Inc.<br>**Previous relevant experience:** Chair, Atomic <br>Weapons Establishment; Chief Executive of the <br>Civil Service and Permanent Secretary of the <br>Cabinet Office, HM Government; President and <br>Chief Executive Officer, Talisman Energy Inc; <br>Chief Executive, Refining & Marketing, BP p.l.c.; <br>Chief Executive, Gas & Power, BP p.l.c.; <br>Non-Executive Director, SABMiller plc |
| ![1.jpg](deo-20250630_g128.jpg) | **Appointed:** Chair and <br>Chair of the Nomination <br>Committee: February <br>2025 (Appointed Non-<br>Executive Director: <br>October 2020) | Has strong commercial <br>executive experience as a <br>former CEO in the energy <br>sector and non-executive <br>board level experience, <br>including in the alcoholic <br>beverage industry, as well <br>as more recent expertise in <br>public policy and <br>government affairs | **Current:** Chair, SSE plc; Non-Executive Director, <br>KBR Inc.<br>**Previous relevant experience:** Chair, Atomic <br>Weapons Establishment; Chief Executive of the <br>Civil Service and Permanent Secretary of the <br>Cabinet Office, HM Government; President and <br>Chief Executive Officer, Talisman Energy Inc; <br>Chief Executive, Refining & Marketing, BP p.l.c.; <br>Chief Executive, Gas & Power, BP p.l.c.; <br>Non-Executive Director, SABMiller plc |
| ![1.jpg](deo-20250630_g128.jpg) | **Appointed:** Chair and <br>Chair of the Nomination <br>Committee: February <br>2025 (Appointed Non-<br>Executive Director: <br>October 2020) | Has strong commercial <br>executive experience as a <br>former CEO in the energy <br>sector and non-executive <br>board level experience, <br>including in the alcoholic <br>beverage industry, as well <br>as more recent expertise in <br>public policy and <br>government affairs | **Current:** Chair, SSE plc; Non-Executive Director, <br>KBR Inc.<br>**Previous relevant experience:** Chair, Atomic <br>Weapons Establishment; Chief Executive of the <br>Civil Service and Permanent Secretary of the <br>Cabinet Office, HM Government; President and <br>Chief Executive Officer, Talisman Energy Inc; <br>Chief Executive, Refining & Marketing, BP p.l.c.; <br>Chief Executive, Gas & Power, BP p.l.c.; <br>Non-Executive Director, SABMiller plc |
| Nik Jhangiani | Nik Jhangiani |  |  |
| ![3.jpg](deo-20250630_g130.jpg) | ![BOD-E-Pink.gif](deo-20250630_g131.gif) | Has many years' finance <br>experience in roles in the <br>United Kingdom, Europe, <br>India, Africa and the United <br>States, including 20 years in <br>various chief financial <br>officer roles, having spent <br>most of his career in <br>consumer and beverage <br>industries | **Previous relevant experience:** Chief Financial <br>Officer, Coca-Cola Europacific Partners; Chief <br>Financial Officer and SVP, Coca-Cola Enterprises; <br>Chief Financial Officer, Europe, Coca-Cola <br>European Partners; Group Chief Financial Officer, <br>Bharti Enterprises; Chief Financial Officer, <br>Coca-Cola Hellenic Bottling Company; Group <br>Financial Director for Nigeria, Colgate Palmolive |
| ![3.jpg](deo-20250630_g130.jpg) | **Interim Chief Executive** <br>**and Chief Financial** <br>**Officer** <br>| Has many years' finance <br>experience in roles in the <br>United Kingdom, Europe, <br>India, Africa and the United <br>States, including 20 years in <br>various chief financial <br>officer roles, having spent <br>most of his career in <br>consumer and beverage <br>industries | **Previous relevant experience:** Chief Financial <br>Officer, Coca-Cola Europacific Partners; Chief <br>Financial Officer and SVP, Coca-Cola Enterprises; <br>Chief Financial Officer, Europe, Coca-Cola <br>European Partners; Group Chief Financial Officer, <br>Bharti Enterprises; Chief Financial Officer, <br>Coca-Cola Hellenic Bottling Company; Group <br>Financial Director for Nigeria, Colgate Palmolive |
| ![3.jpg](deo-20250630_g130.jpg) | **Nationality:** American/<br>British<br>| Has many years' finance <br>experience in roles in the <br>United Kingdom, Europe, <br>India, Africa and the United <br>States, including 20 years in <br>various chief financial <br>officer roles, having spent <br>most of his career in <br>consumer and beverage <br>industries | **Previous relevant experience:** Chief Financial <br>Officer, Coca-Cola Europacific Partners; Chief <br>Financial Officer and SVP, Coca-Cola Enterprises; <br>Chief Financial Officer, Europe, Coca-Cola <br>European Partners; Group Chief Financial Officer, <br>Bharti Enterprises; Chief Financial Officer, <br>Coca-Cola Hellenic Bottling Company; Group <br>Financial Director for Nigeria, Colgate Palmolive |
| ![3.jpg](deo-20250630_g130.jpg) | **Appointed:** Interim Chief <br>Executive: July 2025, <br>Chief Financial Officer <br>and Executive Director: <br>September 2024<br>| Has many years' finance <br>experience in roles in the <br>United Kingdom, Europe, <br>India, Africa and the United <br>States, including 20 years in <br>various chief financial <br>officer roles, having spent <br>most of his career in <br>consumer and beverage <br>industries | **Previous relevant experience:** Chief Financial <br>Officer, Coca-Cola Europacific Partners; Chief <br>Financial Officer and SVP, Coca-Cola Enterprises; <br>Chief Financial Officer, Europe, Coca-Cola <br>European Partners; Group Chief Financial Officer, <br>Bharti Enterprises; Chief Financial Officer, <br>Coca-Cola Hellenic Bottling Company; Group <br>Financial Director for Nigeria, Colgate Palmolive |
| Susan Kilsby  | Susan Kilsby  |  |  |
| ![4.jpg](deo-20250630_g132.jpg) | ![BOD-A-Purple.gif](deo-20250630_g133.gif)<br>![BOD-N-Purple.gif](deo-20250630_g134.gif)<br>![BOD-R-Pink.gif](deo-20250630_g135.gif)<br>| Brings wide-ranging <br>corporate governance <br>and board-level experience <br>across a number of <br>industries, including a <br>consumer goods sector <br>focus, with particular <br>expertise in mergers and <br>acquisitions, corporate <br>finance and transaction <br>advisory work | **Current external appointments:** Non-Executive <br>Chair, Fortune Brands Innovations, Inc.; Vice <br>Chair and Senior Independent Director, Unilever <br>PLC; Non-Executive Director and Chair of Talent <br>and Remuneration Committee, COFRA Holding <br>AG; Member and Chair of Remuneration <br>Committee, the Takeover Panel<br>**Previous relevant experience:** Senior <br>Independent Director and Chair of Remuneration <br>Committee, BHP Group Plc, BHP Group Limited; <br>Senior Independent Director, BBA Aviation plc; <br>Chair, Shire plc; Chair, Mergers and Acquisitions <br>EMEA, Credit Suisse; Non- Executive Director, <br>Goldman Sachs International, Keurig Green <br>Mountain, L'Occitane International, Coca-Cola <br>HBC, NHS England |
| ![4.jpg](deo-20250630_g132.jpg) | **Senior Independent** <br>**Director**<br>| Brings wide-ranging <br>corporate governance <br>and board-level experience <br>across a number of <br>industries, including a <br>consumer goods sector <br>focus, with particular <br>expertise in mergers and <br>acquisitions, corporate <br>finance and transaction <br>advisory work | **Current external appointments:** Non-Executive <br>Chair, Fortune Brands Innovations, Inc.; Vice <br>Chair and Senior Independent Director, Unilever <br>PLC; Non-Executive Director and Chair of Talent <br>and Remuneration Committee, COFRA Holding <br>AG; Member and Chair of Remuneration <br>Committee, the Takeover Panel<br>**Previous relevant experience:** Senior <br>Independent Director and Chair of Remuneration <br>Committee, BHP Group Plc, BHP Group Limited; <br>Senior Independent Director, BBA Aviation plc; <br>Chair, Shire plc; Chair, Mergers and Acquisitions <br>EMEA, Credit Suisse; Non- Executive Director, <br>Goldman Sachs International, Keurig Green <br>Mountain, L'Occitane International, Coca-Cola <br>HBC, NHS England |
| ![4.jpg](deo-20250630_g132.jpg) | **Nationality:** American/<br>British<br>| Brings wide-ranging <br>corporate governance <br>and board-level experience <br>across a number of <br>industries, including a <br>consumer goods sector <br>focus, with particular <br>expertise in mergers and <br>acquisitions, corporate <br>finance and transaction <br>advisory work | **Current external appointments:** Non-Executive <br>Chair, Fortune Brands Innovations, Inc.; Vice <br>Chair and Senior Independent Director, Unilever <br>PLC; Non-Executive Director and Chair of Talent <br>and Remuneration Committee, COFRA Holding <br>AG; Member and Chair of Remuneration <br>Committee, the Takeover Panel<br>**Previous relevant experience:** Senior <br>Independent Director and Chair of Remuneration <br>Committee, BHP Group Plc, BHP Group Limited; <br>Senior Independent Director, BBA Aviation plc; <br>Chair, Shire plc; Chair, Mergers and Acquisitions <br>EMEA, Credit Suisse; Non- Executive Director, <br>Goldman Sachs International, Keurig Green <br>Mountain, L'Occitane International, Coca-Cola <br>HBC, NHS England |
| ![4.jpg](deo-20250630_g132.jpg) | **Appointed:** Senior <br>Independent Director: <br>October 2019 (Appointed <br>Non-Executive Director: <br>April 2018 and Chair of <br>the Remuneration <br>Committee: January 2019)<br>| Brings wide-ranging <br>corporate governance <br>and board-level experience <br>across a number of <br>industries, including a <br>consumer goods sector <br>focus, with particular <br>expertise in mergers and <br>acquisitions, corporate <br>finance and transaction <br>advisory work | **Current external appointments:** Non-Executive <br>Chair, Fortune Brands Innovations, Inc.; Vice <br>Chair and Senior Independent Director, Unilever <br>PLC; Non-Executive Director and Chair of Talent <br>and Remuneration Committee, COFRA Holding <br>AG; Member and Chair of Remuneration <br>Committee, the Takeover Panel<br>**Previous relevant experience:** Senior <br>Independent Director and Chair of Remuneration <br>Committee, BHP Group Plc, BHP Group Limited; <br>Senior Independent Director, BBA Aviation plc; <br>Chair, Shire plc; Chair, Mergers and Acquisitions <br>EMEA, Credit Suisse; Non- Executive Director, <br>Goldman Sachs International, Keurig Green <br>Mountain, L'Occitane International, Coca-Cola <br>HBC, NHS England |
| Melissa Bethell | Melissa Bethell |  |  |
| ![5.jpg](deo-20250630_g136.jpg) | ![BOD-A-Purple.gif](deo-20250630_g133.gif)<br>![BOD-N-Purple.gif](deo-20250630_g134.gif)<br>![BOD-R-Purple.gif](deo-20250630_g137.gif)<br>| Has extensive international <br>corporate and financial <br>experience, including in <br>relation to private equity, <br>financial sectors, strategic <br>consultancy and advisory <br>services, as well as having <br>strong non-executive <br>experience at board level <br>across a range of industries, <br>including retail, consumer <br>goods and financial services | **Current external appointments:** Non-Executive <br>Director, Tesco PLC, Exor N.V.; Senior <br>Independent Director, Ocean Outdoor plc; Senior <br>Advisor, Atairos Europe<br>**Previous relevant experience:** Managing Director <br>and Senior Advisor, Private Equity, Bain Capital; <br>Non-Executive Director, Atento S.A., Worldpay <br>plc, Samsonite S.A. |
| ![5.jpg](deo-20250630_g136.jpg) | **Non-Executive Director** | Has extensive international <br>corporate and financial <br>experience, including in <br>relation to private equity, <br>financial sectors, strategic <br>consultancy and advisory <br>services, as well as having <br>strong non-executive <br>experience at board level <br>across a range of industries, <br>including retail, consumer <br>goods and financial services | **Current external appointments:** Non-Executive <br>Director, Tesco PLC, Exor N.V.; Senior <br>Independent Director, Ocean Outdoor plc; Senior <br>Advisor, Atairos Europe<br>**Previous relevant experience:** Managing Director <br>and Senior Advisor, Private Equity, Bain Capital; <br>Non-Executive Director, Atento S.A., Worldpay <br>plc, Samsonite S.A. |
| ![5.jpg](deo-20250630_g136.jpg) | **Nationality:** American/<br>British<br>| Has extensive international <br>corporate and financial <br>experience, including in <br>relation to private equity, <br>financial sectors, strategic <br>consultancy and advisory <br>services, as well as having <br>strong non-executive <br>experience at board level <br>across a range of industries, <br>including retail, consumer <br>goods and financial services | **Current external appointments:** Non-Executive <br>Director, Tesco PLC, Exor N.V.; Senior <br>Independent Director, Ocean Outdoor plc; Senior <br>Advisor, Atairos Europe<br>**Previous relevant experience:** Managing Director <br>and Senior Advisor, Private Equity, Bain Capital; <br>Non-Executive Director, Atento S.A., Worldpay <br>plc, Samsonite S.A. |
| ![5.jpg](deo-20250630_g136.jpg) | **Appointed:** Non-<br>Executive Director: <br>June 2020<br>| Has extensive international <br>corporate and financial <br>experience, including in <br>relation to private equity, <br>financial sectors, strategic <br>consultancy and advisory <br>services, as well as having <br>strong non-executive <br>experience at board level <br>across a range of industries, <br>including retail, consumer <br>goods and financial services | **Current external appointments:** Non-Executive <br>Director, Tesco PLC, Exor N.V.; Senior <br>Independent Director, Ocean Outdoor plc; Senior <br>Advisor, Atairos Europe<br>**Previous relevant experience:** Managing Director <br>and Senior Advisor, Private Equity, Bain Capital; <br>Non-Executive Director, Atento S.A., Worldpay <br>plc, Samsonite S.A. |

---

![GOV-purple.jpg](deo-20250630_g123.jpg)

---

| | |
|:---|:---|
| 79 | **Diageo** Form 20-F 2025 |

---

---

| | | | |
|:---|:---|:---|:---|
|  |  | Board skills <br>and competencies<br>| Key external appointments |
| Karen Blackett, CBE | Karen Blackett, CBE |  |  |
| ![6.jpg](deo-20250630_g138.jpg) | ![BOD-N-Purple.gif](deo-20250630_g134.gif)<br>![BOD-R-Purple.gif](deo-20250630_g137.gif)<br>| Brings expertise in <br>marketing, media and the <br>creative industries, as well <br>as broad experience in <br>public policy and strategic <br>initiatives through a number <br>of different government, <br>industry and public bodies | **Current external appointments:** Chancellor, <br>University of Portsmouth; Founding Trustee, <br>BEO (Black Equity Organisation); Non-Executive <br>Director, British Fashion Council, HM UK <br>Government Foreign Commonwealth and <br>Development Office<br>**Previous relevant experience:** UK President, <br>WPP plc; UK Race Equality Business Champion, HM <br>UK Government; Business Ambassador, <br>Department for International Trade, Chairwoman; <br>MediaCom UK & Ireland; Chief Executive Officer, <br>GroupM UK, MediaCom UK; Chief Operations <br>Officer, MediaCom EMEA; Marketing Director, <br>MediaCom; UK Country Manager, WPP plc; Non-<br>Executive Director, The Pipeline, Creative UK |
| ![6.jpg](deo-20250630_g138.jpg) | **Non-Executive Director** | Brings expertise in <br>marketing, media and the <br>creative industries, as well <br>as broad experience in <br>public policy and strategic <br>initiatives through a number <br>of different government, <br>industry and public bodies | **Current external appointments:** Chancellor, <br>University of Portsmouth; Founding Trustee, <br>BEO (Black Equity Organisation); Non-Executive <br>Director, British Fashion Council, HM UK <br>Government Foreign Commonwealth and <br>Development Office<br>**Previous relevant experience:** UK President, <br>WPP plc; UK Race Equality Business Champion, HM <br>UK Government; Business Ambassador, <br>Department for International Trade, Chairwoman; <br>MediaCom UK & Ireland; Chief Executive Officer, <br>GroupM UK, MediaCom UK; Chief Operations <br>Officer, MediaCom EMEA; Marketing Director, <br>MediaCom; UK Country Manager, WPP plc; Non-<br>Executive Director, The Pipeline, Creative UK |
| ![6.jpg](deo-20250630_g138.jpg) | **Nationality:** British  | Brings expertise in <br>marketing, media and the <br>creative industries, as well <br>as broad experience in <br>public policy and strategic <br>initiatives through a number <br>of different government, <br>industry and public bodies | **Current external appointments:** Chancellor, <br>University of Portsmouth; Founding Trustee, <br>BEO (Black Equity Organisation); Non-Executive <br>Director, British Fashion Council, HM UK <br>Government Foreign Commonwealth and <br>Development Office<br>**Previous relevant experience:** UK President, <br>WPP plc; UK Race Equality Business Champion, HM <br>UK Government; Business Ambassador, <br>Department for International Trade, Chairwoman; <br>MediaCom UK & Ireland; Chief Executive Officer, <br>GroupM UK, MediaCom UK; Chief Operations <br>Officer, MediaCom EMEA; Marketing Director, <br>MediaCom; UK Country Manager, WPP plc; Non-<br>Executive Director, The Pipeline, Creative UK |
| ![6.jpg](deo-20250630_g138.jpg) | **Appointed:** Non-<br>Executive Director: June <br>2022<br>| Brings expertise in <br>marketing, media and the <br>creative industries, as well <br>as broad experience in <br>public policy and strategic <br>initiatives through a number <br>of different government, <br>industry and public bodies | **Current external appointments:** Chancellor, <br>University of Portsmouth; Founding Trustee, <br>BEO (Black Equity Organisation); Non-Executive <br>Director, British Fashion Council, HM UK <br>Government Foreign Commonwealth and <br>Development Office<br>**Previous relevant experience:** UK President, <br>WPP plc; UK Race Equality Business Champion, HM <br>UK Government; Business Ambassador, <br>Department for International Trade, Chairwoman; <br>MediaCom UK & Ireland; Chief Executive Officer, <br>GroupM UK, MediaCom UK; Chief Operations <br>Officer, MediaCom EMEA; Marketing Director, <br>MediaCom; UK Country Manager, WPP plc; Non-<br>Executive Director, The Pipeline, Creative UK |
| ![6.jpg](deo-20250630_g138.jpg) |  | Brings expertise in <br>marketing, media and the <br>creative industries, as well <br>as broad experience in <br>public policy and strategic <br>initiatives through a number <br>of different government, <br>industry and public bodies | **Current external appointments:** Chancellor, <br>University of Portsmouth; Founding Trustee, <br>BEO (Black Equity Organisation); Non-Executive <br>Director, British Fashion Council, HM UK <br>Government Foreign Commonwealth and <br>Development Office<br>**Previous relevant experience:** UK President, <br>WPP plc; UK Race Equality Business Champion, HM <br>UK Government; Business Ambassador, <br>Department for International Trade, Chairwoman; <br>MediaCom UK & Ireland; Chief Executive Officer, <br>GroupM UK, MediaCom UK; Chief Operations <br>Officer, MediaCom EMEA; Marketing Director, <br>MediaCom; UK Country Manager, WPP plc; Non-<br>Executive Director, The Pipeline, Creative UK |
| Julie brown | Julie brown |  |  |
| ![7.jpg](deo-20250630_g139.jpg) | ![BOD-N-Purple.gif](deo-20250630_g134.gif)<br>![BOD-A-Pink.gif](deo-20250630_g140.gif)<br>| Has extensive experience <br>in financial, commercial <br>and strategic roles in <br>international companies <br>operating in highly regulated<br>industries, in both executive <br>and non-executive capacities, <br>including in her current role <br>as Chief Financial Officer of <br>a pharmaceuticals company  | **Current external appointments:** Chief Financial <br>Officer and Executive Director, GSK plc; Patron, <br>Oxford University Women in Business; Member, <br>Business Advisory Board to the Mayor of London; <br>Member, CFO Leadership Network, Accounting for <br>Sustainability (part of the King Charles III <br>Charitable Fund Group of Companies)<br>**Previous relevant experience:** Chief Operating <br>and Financial Officer and Executive Director, <br>Burberry Group plc; Non-Executive Director and <br>Chair of the Audit Committee, Roche Holding AG; <br>Group Chief Financial Officer and Executive <br>Director, Smith & Nephew plc; Various senior <br>commercial, strategy and finance roles including <br>Interim Group Chief Financial Officer, <br>AstraZeneca PLC |
| ![7.jpg](deo-20250630_g139.jpg) | **Non-Executive Director** | Has extensive experience <br>in financial, commercial <br>and strategic roles in <br>international companies <br>operating in highly regulated<br>industries, in both executive <br>and non-executive capacities, <br>including in her current role <br>as Chief Financial Officer of <br>a pharmaceuticals company  | **Current external appointments:** Chief Financial <br>Officer and Executive Director, GSK plc; Patron, <br>Oxford University Women in Business; Member, <br>Business Advisory Board to the Mayor of London; <br>Member, CFO Leadership Network, Accounting for <br>Sustainability (part of the King Charles III <br>Charitable Fund Group of Companies)<br>**Previous relevant experience:** Chief Operating <br>and Financial Officer and Executive Director, <br>Burberry Group plc; Non-Executive Director and <br>Chair of the Audit Committee, Roche Holding AG; <br>Group Chief Financial Officer and Executive <br>Director, Smith & Nephew plc; Various senior <br>commercial, strategy and finance roles including <br>Interim Group Chief Financial Officer, <br>AstraZeneca PLC |
| ![7.jpg](deo-20250630_g139.jpg) | **Nationality:** British  | Has extensive experience <br>in financial, commercial <br>and strategic roles in <br>international companies <br>operating in highly regulated<br>industries, in both executive <br>and non-executive capacities, <br>including in her current role <br>as Chief Financial Officer of <br>a pharmaceuticals company  | **Current external appointments:** Chief Financial <br>Officer and Executive Director, GSK plc; Patron, <br>Oxford University Women in Business; Member, <br>Business Advisory Board to the Mayor of London; <br>Member, CFO Leadership Network, Accounting for <br>Sustainability (part of the King Charles III <br>Charitable Fund Group of Companies)<br>**Previous relevant experience:** Chief Operating <br>and Financial Officer and Executive Director, <br>Burberry Group plc; Non-Executive Director and <br>Chair of the Audit Committee, Roche Holding AG; <br>Group Chief Financial Officer and Executive <br>Director, Smith & Nephew plc; Various senior <br>commercial, strategy and finance roles including <br>Interim Group Chief Financial Officer, <br>AstraZeneca PLC |
| ![7.jpg](deo-20250630_g139.jpg) | **Appointed:** Non-<br>Executive Director and <br>Chair of the Audit <br>Committee: August 2024<br>| Has extensive experience <br>in financial, commercial <br>and strategic roles in <br>international companies <br>operating in highly regulated<br>industries, in both executive <br>and non-executive capacities, <br>including in her current role <br>as Chief Financial Officer of <br>a pharmaceuticals company  | **Current external appointments:** Chief Financial <br>Officer and Executive Director, GSK plc; Patron, <br>Oxford University Women in Business; Member, <br>Business Advisory Board to the Mayor of London; <br>Member, CFO Leadership Network, Accounting for <br>Sustainability (part of the King Charles III <br>Charitable Fund Group of Companies)<br>**Previous relevant experience:** Chief Operating <br>and Financial Officer and Executive Director, <br>Burberry Group plc; Non-Executive Director and <br>Chair of the Audit Committee, Roche Holding AG; <br>Group Chief Financial Officer and Executive <br>Director, Smith & Nephew plc; Various senior <br>commercial, strategy and finance roles including <br>Interim Group Chief Financial Officer, <br>AstraZeneca PLC |
| ![7.jpg](deo-20250630_g139.jpg) |  | Has extensive experience <br>in financial, commercial <br>and strategic roles in <br>international companies <br>operating in highly regulated<br>industries, in both executive <br>and non-executive capacities, <br>including in her current role <br>as Chief Financial Officer of <br>a pharmaceuticals company  | **Current external appointments:** Chief Financial <br>Officer and Executive Director, GSK plc; Patron, <br>Oxford University Women in Business; Member, <br>Business Advisory Board to the Mayor of London; <br>Member, CFO Leadership Network, Accounting for <br>Sustainability (part of the King Charles III <br>Charitable Fund Group of Companies)<br>**Previous relevant experience:** Chief Operating <br>and Financial Officer and Executive Director, <br>Burberry Group plc; Non-Executive Director and <br>Chair of the Audit Committee, Roche Holding AG; <br>Group Chief Financial Officer and Executive <br>Director, Smith & Nephew plc; Various senior <br>commercial, strategy and finance roles including <br>Interim Group Chief Financial Officer, <br>AstraZeneca PLC |
| Valérie Chapoulaud-Floquet  | Valérie Chapoulaud-Floquet  |  |  |
| ![8.jpg](deo-20250630_g141.jpg) | ![BOD-N-Purple.gif](deo-20250630_g134.gif)<br>![BOD-R-Purple.gif](deo-20250630_g137.gif)<br>| Brings strong experience <br>and expertise in the luxury <br>consumer goods sector, <br>having spent her career in <br>the industry working in a <br>number of international <br>markets, including <br>developed and emerging <br>markets, and as a former <br>chief executive in the <br>premium drinks industry | **Current external appointments:** Non-Executive <br>Director, Lead Independent Director and Chair <br>of Governance Committee, Danone S.A.; Non-<br>Executive Director, Acné Studios A.B., Agrolimen <br>S.A., Nextstage S.C.A.; Vice Chair, Sofisport <br>**Previous relevant experience:** Chief Executive <br>Officer, Rémy Cointreau S.A.; President and CEO <br>for the Americas, President and CEO for North <br>America; President South Europe, Luis Vuitton, <br>LVMH Group; President and CEO, Louis Vuitton <br>Taiwan, LVMH Group; President, Luxury Product <br>Division USA, L'Oréal Group; Non-Executive <br>Director, Jacobs Holding AG |
| ![8.jpg](deo-20250630_g141.jpg) | **Non-Executive Director** | Brings strong experience <br>and expertise in the luxury <br>consumer goods sector, <br>having spent her career in <br>the industry working in a <br>number of international <br>markets, including <br>developed and emerging <br>markets, and as a former <br>chief executive in the <br>premium drinks industry | **Current external appointments:** Non-Executive <br>Director, Lead Independent Director and Chair <br>of Governance Committee, Danone S.A.; Non-<br>Executive Director, Acné Studios A.B., Agrolimen <br>S.A., Nextstage S.C.A.; Vice Chair, Sofisport <br>**Previous relevant experience:** Chief Executive <br>Officer, Rémy Cointreau S.A.; President and CEO <br>for the Americas, President and CEO for North <br>America; President South Europe, Luis Vuitton, <br>LVMH Group; President and CEO, Louis Vuitton <br>Taiwan, LVMH Group; President, Luxury Product <br>Division USA, L'Oréal Group; Non-Executive <br>Director, Jacobs Holding AG |
| ![8.jpg](deo-20250630_g141.jpg) | **Nationality:** French | Brings strong experience <br>and expertise in the luxury <br>consumer goods sector, <br>having spent her career in <br>the industry working in a <br>number of international <br>markets, including <br>developed and emerging <br>markets, and as a former <br>chief executive in the <br>premium drinks industry | **Current external appointments:** Non-Executive <br>Director, Lead Independent Director and Chair <br>of Governance Committee, Danone S.A.; Non-<br>Executive Director, Acné Studios A.B., Agrolimen <br>S.A., Nextstage S.C.A.; Vice Chair, Sofisport <br>**Previous relevant experience:** Chief Executive <br>Officer, Rémy Cointreau S.A.; President and CEO <br>for the Americas, President and CEO for North <br>America; President South Europe, Luis Vuitton, <br>LVMH Group; President and CEO, Louis Vuitton <br>Taiwan, LVMH Group; President, Luxury Product <br>Division USA, L'Oréal Group; Non-Executive <br>Director, Jacobs Holding AG |
| ![8.jpg](deo-20250630_g141.jpg) | **Appointed:** Non-<br>Executive Director: <br>January 2021<br>| Brings strong experience <br>and expertise in the luxury <br>consumer goods sector, <br>having spent her career in <br>the industry working in a <br>number of international <br>markets, including <br>developed and emerging <br>markets, and as a former <br>chief executive in the <br>premium drinks industry | **Current external appointments:** Non-Executive <br>Director, Lead Independent Director and Chair <br>of Governance Committee, Danone S.A.; Non-<br>Executive Director, Acné Studios A.B., Agrolimen <br>S.A., Nextstage S.C.A.; Vice Chair, Sofisport <br>**Previous relevant experience:** Chief Executive <br>Officer, Rémy Cointreau S.A.; President and CEO <br>for the Americas, President and CEO for North <br>America; President South Europe, Luis Vuitton, <br>LVMH Group; President and CEO, Louis Vuitton <br>Taiwan, LVMH Group; President, Luxury Product <br>Division USA, L'Oréal Group; Non-Executive <br>Director, Jacobs Holding AG |
| Ireena Vittal | Ireena Vittal |  |  |
| ![9.jpg](deo-20250630_g142.jpg) | ![BOD-A-Purple.gif](deo-20250630_g133.gif)<br>![BOD-N-Purple.gif](deo-20250630_g134.gif)<br>| Brings a wealth of FMCG <br>experience from a career in <br>executive consulting with a <br>focus on consumer goods <br>and emerging markets, <br>including India, as well as <br>broad experience in non-<br>executive board roles in the <br>United Kingdom and India | **Current external appointments:** Non-Executive <br>Director, Maruti Suzuki India Limited, Asian Paints <br>Limited; Director and Advisory Board member, <br>UrbanClap Technologies India Private Limited; <br>Advisory Board member, Russell Reynolds Associates<br>**Previous relevant experience:** Head of Marketing <br>and Sales, Hutchinson Max Telecom; Partner, <br>McKinsey and Company; Non-Executive Director, <br>Wipro Limited, Housing Development Finance <br>Corporation Limited, Titan Company Limited, <br>Tata Global Beverages Limited, GlaxoSmithKline <br>Consumer Healthcare, Godrej Consumer Products <br>Limited, Compass Group PLC |
| ![9.jpg](deo-20250630_g142.jpg) | **Non-Executive Director** | Brings a wealth of FMCG <br>experience from a career in <br>executive consulting with a <br>focus on consumer goods <br>and emerging markets, <br>including India, as well as <br>broad experience in non-<br>executive board roles in the <br>United Kingdom and India | **Current external appointments:** Non-Executive <br>Director, Maruti Suzuki India Limited, Asian Paints <br>Limited; Director and Advisory Board member, <br>UrbanClap Technologies India Private Limited; <br>Advisory Board member, Russell Reynolds Associates<br>**Previous relevant experience:** Head of Marketing <br>and Sales, Hutchinson Max Telecom; Partner, <br>McKinsey and Company; Non-Executive Director, <br>Wipro Limited, Housing Development Finance <br>Corporation Limited, Titan Company Limited, <br>Tata Global Beverages Limited, GlaxoSmithKline <br>Consumer Healthcare, Godrej Consumer Products <br>Limited, Compass Group PLC |
| ![9.jpg](deo-20250630_g142.jpg) | **Nationality:** Indian | Brings a wealth of FMCG <br>experience from a career in <br>executive consulting with a <br>focus on consumer goods <br>and emerging markets, <br>including India, as well as <br>broad experience in non-<br>executive board roles in the <br>United Kingdom and India | **Current external appointments:** Non-Executive <br>Director, Maruti Suzuki India Limited, Asian Paints <br>Limited; Director and Advisory Board member, <br>UrbanClap Technologies India Private Limited; <br>Advisory Board member, Russell Reynolds Associates<br>**Previous relevant experience:** Head of Marketing <br>and Sales, Hutchinson Max Telecom; Partner, <br>McKinsey and Company; Non-Executive Director, <br>Wipro Limited, Housing Development Finance <br>Corporation Limited, Titan Company Limited, <br>Tata Global Beverages Limited, GlaxoSmithKline <br>Consumer Healthcare, Godrej Consumer Products <br>Limited, Compass Group PLC |
| ![9.jpg](deo-20250630_g142.jpg) | **Appointed:** Non-<br>Executive Director: <br>October 2020<br>| Brings a wealth of FMCG <br>experience from a career in <br>executive consulting with a <br>focus on consumer goods <br>and emerging markets, <br>including India, as well as <br>broad experience in non-<br>executive board roles in the <br>United Kingdom and India | **Current external appointments:** Non-Executive <br>Director, Maruti Suzuki India Limited, Asian Paints <br>Limited; Director and Advisory Board member, <br>UrbanClap Technologies India Private Limited; <br>Advisory Board member, Russell Reynolds Associates<br>**Previous relevant experience:** Head of Marketing <br>and Sales, Hutchinson Max Telecom; Partner, <br>McKinsey and Company; Non-Executive Director, <br>Wipro Limited, Housing Development Finance <br>Corporation Limited, Titan Company Limited, <br>Tata Global Beverages Limited, GlaxoSmithKline <br>Consumer Healthcare, Godrej Consumer Products <br>Limited, Compass Group PLC |
| ![9.jpg](deo-20250630_g142.jpg) |  | Brings a wealth of FMCG <br>experience from a career in <br>executive consulting with a <br>focus on consumer goods <br>and emerging markets, <br>including India, as well as <br>broad experience in non-<br>executive board roles in the <br>United Kingdom and India | **Current external appointments:** Non-Executive <br>Director, Maruti Suzuki India Limited, Asian Paints <br>Limited; Director and Advisory Board member, <br>UrbanClap Technologies India Private Limited; <br>Advisory Board member, Russell Reynolds Associates<br>**Previous relevant experience:** Head of Marketing <br>and Sales, Hutchinson Max Telecom; Partner, <br>McKinsey and Company; Non-Executive Director, <br>Wipro Limited, Housing Development Finance <br>Corporation Limited, Titan Company Limited, <br>Tata Global Beverages Limited, GlaxoSmithKline <br>Consumer Healthcare, Godrej Consumer Products <br>Limited, Compass Group PLC |

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| | | | |
|:---|:---|:---|:---|
| Board committees | Board committees |  |  |
| ![BOD-A-Purple.gif](deo-20250630_g133.gif) | Audit Committee | ![BOD-R-Purple.gif](deo-20250630_g137.gif) | Remuneration Committee |
| ![BOD-E-Purple.gif](deo-20250630_g143.gif) | Executive Committee | ![BOD-Pink.gif](deo-20250630_g144.gif) | Chair of the committee |
| ![BOD-N-Purple.gif](deo-20250630_g134.gif) | Nomination Committee |  |  |

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![84.jpg](deo-20250630_g110.jpg)

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| | |
|:---|:---|
| 80 | **Diageo** Form 20-F 2025 |

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EXECUTIVE COMMITTEE

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| |
|:---|
| Ewan Andrew |
| ![1.jpg](deo-20250630_g145.jpg) |
| **President, Global Supply and** <br>**Procurement & Chief Sustainability** <br>**Officer**<br>|
| **Nationality:** British  |
| **Appointed:** September 2019 |
| **Current external appointments:** <br>Member, Scotch Whisky Association <br>Council, Scottish Business Climate <br>Collaboration Board, One Planet <br>Business for Biodiversity Board, <br>Gartner Executive Advisory Board<br>**Previous Diageo roles:** Supply <br>Director, International Supply Centre; <br>Senior VicePresident, Supply Chain & <br>Procurement, Latin America and <br>Caribbean; Senior Vice President <br>Manufacturing & Distilling, North <br>America; various supply chain, <br>operational management and <br>procurement roles<br>|

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| |
|:---|
| Sally Grimes |
| ![4.jpg](deo-20250630_g146.jpg) |
| **Chief Executive, North America** |
| **Nationality:** American |
| **Appointed:** October 2023 |
| **Current external appointments:**<br>Director, Continental Grains Company<br>**Previous relevant experience:** <br>Chief Executive Officer, Clif Bar & <br>Company; Group President, Prepared <br>Foods, President, International & <br>Chief Global Growth Officer, Tyson <br>Foods; President, Chief Innovation <br>Officer, Hillshire Brands Company; <br>Vice President, Global Business <br>Leader, Writing and Creative <br>Expression, Newell Brands; various <br>Kraft Foods roles |
| **Current external appointments:**<br>Director, Continental Grains Company<br>**Previous relevant experience:** <br>Chief Executive Officer, Clif Bar & <br>Company; Group President, Prepared <br>Foods, President, International & <br>Chief Global Growth Officer, Tyson <br>Foods; President, Chief Innovation <br>Officer, Hillshire Brands Company; <br>Vice President, Global Business <br>Leader, Writing and Creative <br>Expression, Newell Brands; various <br>Kraft Foods roles |

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| |
|:---|
| Alvaro Cardenas |
| ![2.jpg](deo-20250630_g147.jpg) |
| **President, Latin America and** <br>**Caribbean**<br>|
| **Nationality:** Colombian |
| **Appointed:** January 2021 |
| **Previous Diageo roles:** Managing <br>Director, Andean Region; Director, <br>End-to-End Global Commercial <br>Processes; Finance Director, <br>South East Asia Region, PUB <br>(Paraguay, Uruguay and Brazil) Region, <br>Andean Region, Colombia<br>|

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| |
|:---|
| RANDALL INGBER |
| ![5.jpg](deo-20250630_g148.jpg) |
| **General Counsel and Company** <br>**Secretary**<br>|
| **Nationality:** Australian / American |
| **Appointed:** June 2025 |
| **Previous Diageo roles:** Global Counsel,<br>Asia Pacific, Brands, Innovation & <br>Commerce; General Counsel, Asia <br>Pacific, Supply & Procurement, Global <br>Litigation and Africa; Deputy General <br>Counsel, Corporate; Senior Counsel, <br>Global Corporate Relations and <br>Antitrust; Regional Counsel, Southeast <br>Asia and India, Australasia and Japan <br>**Previous relevant experience:** <br>General Counsel and Company <br>Secretary, <br>Lion Group |
| **Previous Diageo roles:** Global Counsel,<br>Asia Pacific, Brands, Innovation & <br>Commerce; General Counsel, Asia <br>Pacific, Supply & Procurement, Global <br>Litigation and Africa; Deputy General <br>Counsel, Corporate; Senior Counsel, <br>Global Corporate Relations and <br>Antitrust; Regional Counsel, Southeast <br>Asia and India, Australasia and Japan <br>**Previous relevant experience:** <br>General Counsel and Company <br>Secretary, <br>Lion Group |

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| |
|:---|
| Cristina Diezhandino |
| ![3.jpg](deo-20250630_g149.jpg) |
| **Chief Marketing Officer** |
| **Nationality:** Spanish |
| **Appointed:** July 2020 |
| **Current external appointments:** Non-<br>Executive Director, Mandarin Oriental<br>**Previous Diageo roles:** Global Category<br>Director, Scotch & Managing Director, <br>Reserve Brands; Managing Director, <br>Caribbean and Central America; <br>Marketing & Innovation Director, <br>Diageo Africa; Category Director, <br>Scotch Portfolio & Gins; Global Brand <br>Director, Johnnie Walker<br>**Previous relevant experience:** <br>Various marketing roles, Allied <br>Domecq Spain, Unilever HPC US, <br>United Kingdom and Spain <br>|

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| |
|:---|
| Daniel Mobley |
| ![6.jpg](deo-20250630_g150.jpg) |
| **Global Corporate Relations Director** |
| **Nationality:** British |
| **Appointed:** June 2017 |
| **Previous Diageo roles:** Corporate <br>Relations Director, Europe<br>**Previous relevant experience:** <br>Regional Head of Corporate Affairs, <br>India & South Asia, Regional Head of <br>Corporate Affairs, Africa, Group Head <br>of Government Relations, Standard <br>Chartered; extensive government <br>experience including in HM Treasury <br>and Foreign & Commonwealth Office |
| **Previous Diageo roles:** Corporate <br>Relations Director, Europe<br>**Previous relevant experience:** <br>Regional Head of Corporate Affairs, <br>India & South Asia, Regional Head of <br>Corporate Affairs, Africa, Group Head <br>of Government Relations, Standard <br>Chartered; extensive government <br>experience including in HM Treasury <br>and Foreign & Commonwealth Office |

---

![84.jpg](deo-20250630_g110.jpg)

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| | |
|:---|:---|
| 81 | **Diageo** Form 20-F 2025 |

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| |
|:---|
| Hina Nagarajan |
| ![7.jpg](deo-20250630_g151.jpg) |
| **President, Africa** |
| **Nationality:** Indian |
| **Appointed:** July 2021 |
| **Current external appointments:** <br>Non-Executive Director, BP p.l.c.<br>**Previous Diageo roles:** Managing <br>Director and CEO, Diageo India; <br>Managing Director, Africa <br>Regional Markets<br>**Previous relevant experience:** <br>Managing Director, China & SVP North <br>Asia, Reckitt Benckiser; <br>General Manager, Malaysia <br>& Singapore, Reckitt Benckiser; <br>MD & CEO Mary Kay India; senior <br>marketing and general management <br>roles, ICI Paints India and Nestlé India<br>|

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| |
|:---|
| Louise Prashad |
| ![10.jpg](deo-20250630_g152.jpg) |
| **Chief HR Officer** |
| **Nationality:** British |
| **Appointed:** January 2022 |
| **Previous Diageo roles:** Global Talent <br>Director; Talent & OE Director, Africa; <br>HR Director, Europe, West Latin <br>America and Caribbean, Global <br>Functions; Talent and Learning <br>Director UK, Ireland and North <br>America; HR Director Great Britain; <br>Global Supply; Global Commercial<br>**Previous relevant experience:** <br>Various HR roles, Stakis Group <br>and Hilton Hotels<br>|

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| |
|:---|
| Dayalan Nayager |
| ![8.jpg](deo-20250630_g153.jpg) |
| **President, Europe and Chief** <br>**Commercial Officer**<br>|
| **Nationality:** South African/British |
| **Appointed:** July 2022 |
| **Previous Diageo roles:** President, <br>Africa; Managing Director, Great <br>Britain and Justerini & Brooks, Ireland <br>and France, Global Travel; Regional <br>Director, Global Travel Europe; <br>Commercial Director, South Africa; <br>Customer Marketing Director, <br>South Africa; Key Account Director, <br>South Africa<br>**Previous relevant experience:** <br>Various positions, Heinz, Mars<br>|

---

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| |
|:---|
| Praveen Someshwar |
| ![11.jpg](deo-20250630_g154.jpg) |
| **Managing Director and CEO of Diageo** <br>**India**<br>|
| **Nationality:** Indian |
| **Appointed:** April 2025 |
| **Previous relevant experience:**<br>Managing Director and CEO, HT Media <br>Group; Senior Vice President <br>& General Manager, CEO India Foods,<br>CEO South Asia Beverages, PepsiCo<br>|

---

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| |
|:---|
| John O'Keeffe |
| ![9.jpg](deo-20250630_g155.jpg) |
| **President, Asia Pacific, Global Travel** <br>**and India**<br>|
| **Nationality:** Irish |
| **Appointed:** July 2015 |
| **Previous Diageo roles:** President, <br>Asia Pacific & Global Travel; <br>President, Africa & Beer; CEO and <br>Managing Director, Guinness Nigeria; <br>Global Head, Innovation; Global Head, <br>Beer and Baileys; Managing Director, <br>Russia and Eastern Europe; various <br>management and marketing positions<br>|

---

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| | |
|:---|:---|
| ![read-more-white.gif](deo-20250630_g13.gif) | **Nik Jhangiani is also a member of the** <br>**Executive Committee.**<br>**His biography can be found on page 78.**<br>|

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| | |
|:---|:---|
| 82 | **Diageo** Form 20-F 2025 |

---

Corporate governance report

**Board of Directors**

**Composition of the Board**

The Board currently comprises the Non-Executive Chair, one Executive

Director, the Senior Independent Director, and six independent Non-

Executive Directors. The biographies of all directors are set out in this

Annual Report on pages 78 and 79.

**Diverse range of skills and backgrounds**

The Board believes that having directors from a diverse range and

combination of skills, experience and knowledge is a critical enabler

supporting achievement of our Growth Ambition. Engaging talent

and enabling an inclusive working environment are also core principles

of the company's ethical framework which incorporates our Code

of Business Conduct as well as our Global Human Rights Policy,

which applies to all employees, subsidiaries and third-party

contractors. 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, and in accordance with the UK Corporate

Governance Code, the Board has adopted a Board Diversity Policy

alongside Diageo's Code of Business Conduct and associated global

policies. Consistent with the rest of the organisation, Diageo aims to

recruit and engage inclusive and diverse talent to form its Board of

Directors. The Board is comprised of individuals from a diverse range of

skills, industries, backgrounds, genders, ages, nationalities and

ethnicities, which enables a broader 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 4 August 2025, women make up 75% of the Board and

there are four directors 50% who self-disclose as being from minority

ethnic groups. 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 2025 and is available

at https://www.diageo.com/en/our-business/corporate-governance/

committees. 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 decisionson

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 46.

The terms of reference of Board Committees are reviewed regularly,

most recently in July 2025, 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 applies to Diageo

for financial periods starting on or after 1 January 2025, as a company

listed on the equity shares (commercial companies) sector on the London

Stock Exchange. Accordingly, the principal corporate governance rules

applying to Diageo for the year ended 30 June 2025 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 2025 can be found on page 77. 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.

**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/en/

our-business/corporate-governance..

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 seven of Diageo's directors are

independent. Further details of this determination are set out below.

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

---

| | |
|:---|:---|
| 83 | **Diageo** Form 20-F 2025 |

---

without the Executive Directors present seven times and independent

Non-Executive Directors meeting without the Chair or Executive

Directors present once.

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 91-92 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 108-134.

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 101 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 76. 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 and is set out in writing,

which was last approved by the Board in May 2025. 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.

---

| | |
|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | Further details on the Board Committees can be found in the separate <br>reports from each committee on pages 97-134, and details of the <br>Executive Committee can be found on pages 80-81.<br>|

---

**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 78 and 79,

and a matrix of the Board's current skills and experience for the year

ended 30 June 2025 is set out below.

![12504](deo-20250630_g156.gif)

**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 a director's independence. A non-exhaustive list of such

circumstances is set out in provision 10 of the Code. The Board has

considered the individual circumstances of each Non-Executive

Director, in light of provision 10 and other relevant factors, and

concluded that all of the Non-Executive Directors are independent. The

Board noted that, during the year, an additional fee of £20,000 had

been agreed to be paid to Karen Blackett CBE in respect of her role as

designated Non-Executive Director with responsibility for leading the

Board's workforce engagement programme, effective 1 July 2024,

reflecting the increased time commitment required and contribution

made by her on behalf of the Board. The Board concluded that,

notwithstanding this fee, Karen continues to provide constructive

contributions and challenge to management during Board discussions,

demonstrating her continued objective judgement and independence.

**Board and Committee attendance**

Directors' attendance record at the last Annual General Meeting (AGM),

scheduled Board meetings and Board Committee meetings, for the year

ended 30 June 2025 is set out in the table shown on page 77. 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 2024 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 2025 AGM is scheduled to be held on 6 November 2025.

![83.jpg](deo-20250630_g157.jpg)

---

| | |
|:---|:---|
| 84 | **Diageo** Form 20-F 2025 |

---

CORPORATE GOVERNANCE REPORT continued

Board and Committees' activities *timeline*

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | **July** |
| LONDON, UK | LONDON, UK | LONDON, UK | **July** |
| **Discussion:** Full year performance, <br>external reporting, competitive <br>intelligence review, workforce <br>engagement activities and marketing <br>transformation programme.<br>**Approvals:** Fiscal 24 preliminary results <br>and annual report, final dividend, <br>funding plan, and business development. | **Discussion:** Full year performance, <br>external reporting, competitive <br>intelligence review, workforce <br>engagement activities and marketing <br>transformation programme.<br>**Approvals:** Fiscal 24 preliminary results <br>and annual report, final dividend, <br>funding plan, and business development. | **Discussion:** Full year performance, <br>external reporting, competitive <br>intelligence review, workforce <br>engagement activities and marketing <br>transformation programme.<br>**Approvals:** Fiscal 24 preliminary results <br>and annual report, final dividend, <br>funding plan, and business development. |  |
| Strategy | ![artboard1.gif](deo-20250630_g158.gif) | ![artboard2.gif](deo-20250630_g159.gif) |  |
| Meeting type | 🟇 | 🟇 |  |
|  |  |  | **October** |
| Cape town, south africa | Cape town, south africa | Cape town, south africa | **October** |
| **Discussion:** Focus on Africa region, <br>including strategic review, digital <br>marketing and values, behaviours and <br>culture.<br>**Engagement events:** Discussions with <br>customers, visits to on- and off-trade <br>customers and townhall sessions <br>with employees. | **Discussion:** Focus on Africa region, <br>including strategic review, digital <br>marketing and values, behaviours and <br>culture.<br>**Engagement events:** Discussions with <br>customers, visits to on- and off-trade <br>customers and townhall sessions <br>with employees. | **Discussion:** Focus on Africa region, <br>including strategic review, digital <br>marketing and values, behaviours and <br>culture.<br>**Engagement events:** Discussions with <br>customers, visits to on- and off-trade <br>customers and townhall sessions <br>with employees. |  |
| Strategy | ![artboard1.gif](deo-20250630_g158.gif) | ![artboard2.gif](deo-20250630_g159.gif) |  |
| Meeting type | 🟇 | 🟇 |  |
|  |  |  | **January &** <br>**February** |
| London, UK | London, UK | London, UK | **January &** <br>**February** |
| **Discussion:** Half year performance, <br>global tequila strategy, return of capital <br>and corporate culture review.<br>**Approvals:** Interim results and dividend <br>and business development. | **Discussion:** Half year performance, <br>global tequila strategy, return of capital <br>and corporate culture review.<br>**Approvals:** Interim results and dividend <br>and business development. | **Discussion:** Half year performance, <br>global tequila strategy, return of capital <br>and corporate culture review.<br>**Approvals:** Interim results and dividend <br>and business development. |  |
| Strategy | ![artboard1.gif](deo-20250630_g158.gif) | ![artboard3.gif](deo-20250630_g160.gif) |  |
| Meeting type | 🟇 | 🟇 |  |
|  |  |  | **May** |
| Scotland, UK | Scotland, UK | Scotland, UK | **May** |
| **Discussion:** Annual Strategy Conference, <br>including category review, digital <br>capabilities and marketing efficiency.<br>**Approval**: Launch of Accelerate. | **Discussion:** Annual Strategy Conference, <br>including category review, digital <br>capabilities and marketing efficiency.<br>**Approval**: Launch of Accelerate. | **Discussion:** Annual Strategy Conference, <br>including category review, digital <br>capabilities and marketing efficiency.<br>**Approval**: Launch of Accelerate. |  |
| Strategy | ![artboard1.gif](deo-20250630_g158.gif) | ![artboard2.gif](deo-20250630_g159.gif) |  |
| Meeting type | 🟇 | 🟇 |  |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| 2024 |  |  |  |  |
| **September** |  |  |  |  |
| **September** | LONDON, UK | LONDON, UK | LONDON, UK | LONDON, UK |
|  | **Engagement events:** Annual General <br>Meeting, presentation and Q&A with <br>investors and voting on resolutions.<br>**Discussion:** Reputation management <br>review and supply chain contract <br>approvals. | **Engagement events:** Annual General <br>Meeting, presentation and Q&A with <br>investors and voting on resolutions.<br>**Discussion:** Reputation management <br>review and supply chain contract <br>approvals. | **Engagement events:** Annual General <br>Meeting, presentation and Q&A with <br>investors and voting on resolutions.<br>**Discussion:** Reputation management <br>review and supply chain contract <br>approvals. | **Engagement events:** Annual General <br>Meeting, presentation and Q&A with <br>investors and voting on resolutions.<br>**Discussion:** Reputation management <br>review and supply chain contract <br>approvals. |
|  | Strategy | ![artboard1.gif](deo-20250630_g158.gif) | ![artboard3.gif](deo-20250630_g160.gif) |  |
|  | Meeting type | 🟇 | 🟇 |  |
| **December** |  |  |  |  |
| **December** | LONDON, UK | LONDON, UK | LONDON, UK | LONDON, UK |
|  | **Discussion:** Public health policy and <br>measures, India strategic review and <br>digital supply chain review.<br>**Engagement events**: Discussion with <br>analyst panel | **Discussion:** Public health policy and <br>measures, India strategic review and <br>digital supply chain review.<br>**Engagement events**: Discussion with <br>analyst panel | **Discussion:** Public health policy and <br>measures, India strategic review and <br>digital supply chain review.<br>**Engagement events**: Discussion with <br>analyst panel | **Discussion:** Public health policy and <br>measures, India strategic review and <br>digital supply chain review.<br>**Engagement events**: Discussion with <br>analyst panel |
| 2025 | Strategy | ![artboard2.gif](deo-20250630_g159.gif) | ![artboard3.gif](deo-20250630_g160.gif) |  |
| 2025 | Meeting type | 🟇 | 🟇 | 🟇 |
| 2025 |  |  |  |  |
| 2025 |  |  |  |  |
| **March** |  |  |  |  |
| **March** | Virtual | Virtual | Virtual | Virtual |
|  | **Discussion:** Business development <br>update, review of board ways of working <br>and board evaluation feedback. | **Discussion:** Business development <br>update, review of board ways of working <br>and board evaluation feedback. | **Discussion:** Business development <br>update, review of board ways of working <br>and board evaluation feedback. | **Discussion:** Business development <br>update, review of board ways of working <br>and board evaluation feedback. |
|  | Strategy | ![artboard3.gif](deo-20250630_g160.gif) |  |  |
|  | Meeting type | 🟇 | 🟇 |  |
| **June** |  |  |  |  |
| **June** | London, UK | London, UK | London, UK | London, UK |
|  | **Discussion:** Review audit status and year-<br>end reporting and reward processes. | **Discussion:** Review audit status and year-<br>end reporting and reward processes. | **Discussion:** Review audit status and year-<br>end reporting and reward processes. | **Discussion:** Review audit status and year-<br>end reporting and reward processes. |
|  | Strategy | ![artboard3.gif](deo-20250630_g160.gif) |  |  |
|  | Meeting type | 🟇 | 🟇 |  |

---

---

| | |
|:---|:---|
| Link to strategy | Link to strategy |
| ![artboard1.gif](deo-20250630_g158.gif) | Brands and portfolio |
| ![artboard2.gif](deo-20250630_g159.gif) | Consumer trends |
| ![artboard3.gif](deo-20250630_g160.gif) | Operational excellence |

---

---

| | |
|:---|:---|
| Meeting type | Meeting type |
| 🟇 | Board Meeting |
| 🟇 | Audit Committee |
| 🟇 | Remuneration Committee |
| 🟇 | Nomination Committee |
| 🟇 | Annual General Meeting |
| 🟇 | Annual Strategy Conference |

---

---

| | |
|:---|:---|
| 85 | **Diageo** Form 20-F 2025 |

---

**Board activities**

Details of the main areas of focus of the Board and its Committees during the year include those summarised below:

---

| | | | |
|:---|:---|:---|:---|
| **Focus area** |  | **Strategic** <br>**priority**<br>| **Stakeholders** |
| Strategic matters |  |  |  |
| •Held a two-day Annual Strategy Conference (ASC) <br>focusing on analysis of consumer dynamics and <br>moderation trends, strategic role of convenience and <br>ready-to-drink products, and other key strategic topics.<br>•Received reports on the financial performance of the <br>group as against the annual plan.<br>•Reviewed the group's governance frameworks for <br>reputation management, tax strategy and policy.<br>| •Received reports on the macroeconomic <br>environment, socio-political matters and <br>emerging trends.<br>•Carried out deep dives into key strategic topics <br>including the group's supply chain footprint and <br>efficiency, its digital marketing strategy, health <br>and positive drinking strategy.<br>| ![artboard1.gif](deo-20250630_g158.gif)<br>![artboard2.gif](deo-20250630_g159.gif)<br>| ![artboard2.gif](deo-20250630_g54.gif)<br>![artboard5.gif](deo-20250630_g52.gif)<br>![artboard3.gif](deo-20250630_g51.gif)<br>![artboard6.gif](deo-20250630_g56.gif)<br>|
| Operational matters |  |  |  |
| •Reviewed and approved the group's three-year plan and <br>annual funding plan, insurance, banking and capital <br>expenditure requirements.<br>•Regularly reviewed and approved the group's business <br>development activities, reorganisations and various <br>other projects.<br>•Reviewed the group's internal culture and values, <br>including in respect of inclusion and diversity, <br>values and behaviours.<br>•Approved capital expenditure investments, and various <br>significant procurement, systems and other contracts, <br>having taken into consideration financial, operational, <br>sustainability and other ESG related factors.<br>| •Reviewed the company's capital allocation, <br>funding and liquidity positions, and those of <br>its pension schemes.<br>•Reviewed and approved the company's return <br>of capital proposals, including interim and final <br>dividends.<br>•Acting through the Nomination Committee, <br>reviewed the company's executive and non-<br>executive succession planning and talent strategy.<br>•Reviewed the group's operating model, <br>maturing stock inventory positions, marketing <br>and trade spend effectiveness, and its capital <br>expenditure programme.<br>| ![artboard1.gif](deo-20250630_g158.gif)<br>![artboard2.gif](deo-20250630_g159.gif)<br>![artboard3.gif](deo-20250630_g160.gif)<br>| ![artboard1.gif](deo-20250630_g50.gif)<br>![artboard4.gif](deo-20250630_g55.gif)<br>![artboard2.gif](deo-20250630_g54.gif)<br>![artboard3.gif](deo-20250630_g51.gif)<br>|
| ESG matters |  |  |  |
| •Supervised update to double materiality assessment, <br>reviewed progress in relation to the group's 'Spirit of <br>Progress' ESG action plan and reviewed the programme <br>in light of the updated double materiality assessment <br>results.<br>•Reviewed updated emissions reductions targets prior <br>to submission to SBTi for approval.<br>•Received reports on workforce engagement over the year.<br>•Received regular investor reports.<br>| •Received regular updates on ESG matters and <br>progress towards 'Spirit of Progress' targets.<br>•Carried out an internal evaluation of the Board's <br>performance, reviewed results and agreed <br>action points.<br>•Reviewed and updated split of responsibilities <br>summary, schedule of matters reserved for the <br>Board and terms of reference of its Committees.<br>| ![artboard2.gif](deo-20250630_g159.gif)<br>![artboard3.gif](deo-20250630_g160.gif)<br>| ![artboard1.gif](deo-20250630_g50.gif)<br>![artboard5.gif](deo-20250630_g52.gif)<br>![artboard6.gif](deo-20250630_g56.gif)<br>![artboard7.gif](deo-20250630_g53.gif)<br>|
| Assurance and risk management |  |  |  |
| •Received reports in relation to material legal matters, <br>including disputes, regulatory and governance <br>developments, and areas of legal or regulatory risk.<br>•On the recommendation of the Audit Committee, <br>approved the company's risk footprint, including <br>reviewing and updating the principal risks.<br>| •On the recommendation of the Audit Committee, <br>approved the company's filings, financial and non-<br>financial reporting including quarterly trading <br>updates, interim and preliminary results <br>announcements, US filings and Annual Report.<br>| ![artboard3.gif](deo-20250630_g160.gif)<br>| ![artboard6.gif](deo-20250630_g56.gif)<br>![artboard7.gif](deo-20250630_g53.gif)<br>|

---

---

| | |
|:---|:---|
| Link to strategy | Link to strategy |
| ![artboard1.gif](deo-20250630_g158.gif) | Brands and portfolio |
| ![artboard2.gif](deo-20250630_g159.gif) | Consumer trends |
| ![artboard3.gif](deo-20250630_g160.gif) | Operational excellence |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Stakeholders | Stakeholders |  |  |  |  |
| ![artboard8.gif](deo-20250630_g161.gif) | Our people | ![artboard11.gif](deo-20250630_g162.gif) | Suppliers | ![artboard14.gif](deo-20250630_g163.gif) | Government and regulators |
| ![artboard9.gif](deo-20250630_g164.gif) | Consumers | ![artboard12.gif](deo-20250630_g165.gif) | Communities |  |  |
| ![artboard10.gif](deo-20250630_g166.gif) | Customers | ![artboard13.gif](deo-20250630_g167.gif) | Investors |  |  |

---

---

| | |
|:---|:---|
| 86 | **Diageo** Form 20-F 2025 |

---

CORPORATE GOVERNANCE REPORT continued

## Stakeholder engagement
**We aim to maintain open and positive dialogue with** 

**our stakeholders, considering their key interests in our** 

**decision-making and maintaining communications with** 

**them in different ways. This helps build trust, respect** 

**and informs our decisions and the role we play in society.**

The development of strong 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 2, 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.

The stakeholders listed below are not set out in order of priority.

---

| | | |
|:---|:---|:---|
| Stakeholder and why we engage | Stakeholder and why we engage | Stakeholder and why we engage |
| Our people |  |  |
| ![artboard8.gif](deo-20250630_g161.gif)<br>•People are at the core of <br>our business.<br>•We aim to build a trusting, <br>respectful and inclusive culture <br>where people feel engaged <br>and fulfilled.<br>•We want our people to be treated <br>with dignity at work and their <br>human rights respected.<br>| What we believe matters most to them<br>•Prioritisation of health, safety and wellbeing.<br>•Learning and development opportunities.<br>•Purpose, culture and benefits.<br>•Contributing to the growth of our brands <br>and performance.<br>•Inclusion and diversity.<br>Sustainability and societal credentials.<br>How the Board seeks to engage<br>•Active dialogue maintained throughout the year as <br>part of the Board's ongoing workforce engagement <br>programme.<br>•Direct engagement through visits to offices, <br>production and supply chain sites during the year.<br>•Indirect engagement through feedback from <br>works councils, employee and workforce forums, <br>community groups, employee surveys and <br>townhall meetings.<br>| Reporting to the Board<br>•Regular reports from workforce engagement <br>activities.<br>•Feedback through employee surveys, <br>including annual group-wide Your Voice <br>survey.<br>Sessions on different aspects of culture, values <br>and behaviours at Board meetings led by Chief <br>HR Officer.<br>Upcoming priorities<br>•Maintaining focus on simplifying internal <br>processes, including upgrading and <br>transforming business operations and <br>systems, including as part of the <br>Accelerate programme.<br>•Continuing workforce engagement activities <br>including as part of business transformation <br>implementation and change management.<br>|
| Consumers |  |  |
| ![artboard9.gif](deo-20250630_g164.gif)<br>•Understanding our consumers is <br>critical for our business's long-<br>term growth.<br>•Consumer motivations, attitudes <br>and behaviours form the basis of <br>our business strategy, brand <br>marketing and innovation.<br>•We want consumers to enjoy our <br>products responsibly and for them <br>to 'drink better, not more'.<br>| What we believe matters most to them<br>•Choice of brands for different occasions, <br>including no- and lower-alcohol.<br>•Innovation in heritage brands and creation <br>and nurturing of new brands.<br>•Responsible marketing.<br>•Great experiences.<br>•Product quality.<br>•Sustainability and societal credentials.<br>•Price.<br>How the Board seeks to engage<br>•Monitoring consumer behaviours, motivations <br>and insights.<br>•Responding to and anticipating emerging consumer <br>trends as part of strategic sessions, including the <br>Annual Strategy Conference.<br>•Regular review of business development <br>opportunities, including active brand <br>portfolio management.<br>•Review of innovation pipeline as part of the <br>Annual Strategy Conference.<br>| Reporting to the Board<br>•Regular performance updates by the <br>Chief Executive, including on key <br>consumer trends.<br>•Papers on evolving consumer behaviours <br>globally and in key regions. <br>Regular updates from business development <br>and innovation teams on organic and inorganic <br>opportunities and portfolio choices.<br>Upcoming priorities<br>•Ongoing review of portfolio and category <br>participation opportunities.<br>•Developing pipeline of innovation informed <br>by consumer insights.<br>•Enhancing marketing effectiveness <br>through detailed understanding of consumer <br>motivation, globally and by region or market.<br>|

---

---

| | |
|:---|:---|
| 87 | **Diageo** Form 20-F 2025 |

---

---

| | | |
|:---|:---|:---|
| Stakeholder and why we engage | Stakeholder and why we engage | Stakeholder and why we engage |
| Customers |  |  |
| ![artboard10.gif](deo-20250630_g166.gif)<br>**•**Our customers are a <br>broad range of businesses, <br>large and small, on-trade <br>and off-trade, retailers, <br>wholesalers and distributors, <br>digital and e-commerce.<br>•We want to nurture mutually <br>beneficial relationships to <br>deliver joint value and great <br>consumer experiences.<br>| What we believe matters most to them<br>•A portfolio of leading brands that meets evolving <br>consumer preferences.<br>•Identification of opportunities that offer profitable growth.<br>•Insights into consumer behaviour and shopper trends.<br>•Trusted product quality.<br>•Innovation, promotional support and merchandising.<br>•Availability and reliable supply of stock.<br>•Technical expertise.<br>•Joint risk assessment and mitigation.<br>Sustainability and societal credentials.<br>How the Board seeks to engage<br>•Regular review of innovation pipeline and inorganic <br>opportunities to ensure a broad portfolio at multiple <br>price points.<br>•Review of supply chain footprint to ensure efficient delivery <br>of products to customers.<br>•Direct engagement with key customers during market visits.<br>| Reporting to the Board<br>•Regular performance updates by the <br>Chief Executive, including customer <br>and route to consumer concerns.<br>Deep dive reviews on key regions or <br>markets, such as North America and Great <br>Britain, including consideration of key <br>customer relationships and ways of <br>working.<br>Upcoming priorities<br>•Scheduling face-to-face meetings for <br>Directors to meet representatives of <br>key customers during market visits <br>and throughout Board calendar.<br>•Enhancing relationships between the <br>company and its customers through <br>engagement opportunities.<br>|
| Suppliers |  |  |
| ![artboard11.gif](deo-20250630_g162.gif)<br>**•**Our suppliers, service <br>providers and agencies <br>are experts in their fields.<br>•We rely on them to deliver <br>high-quality products and <br>market responsibly.<br>•We collaborate with them <br>to improve our collective <br>impact, ensure sustainable <br>and resilient supply chains, <br>and make positive <br>contributions to society.<br>| What we believe matters most to them<br>•Strong, mutually beneficial partnerships.<br>•Strategic alignment and growth opportunities.<br>•Fair contract and payment terms.<br>•Collaboration through the innovation lifecycle.<br>•Consistent performance measures.<br>•Joint risk assessment and mitigation.<br>Sustainability and societal credentials.<br>How the Board seeks to engage<br>•Periodic review of our supply chain footprint in key markets <br>to ensure resilience and flexibility, monitoring <br>environmental impacts and efficiencies.<br>•Review and approval of material supply and procurement <br>contracts including for critical raw materials.<br>•Supporting management in improving supplier relationships <br>through fair contract and payment terms, compliance with <br>our 'Partnering with Suppliers Standard' and working <br>collaboratively to mitigate environmental impacts and <br>achieve ESG goals.<br>| Reporting to the Board<br>•Terms of material contracts with <br>suppliers are reviewed by the Board.<br>•Periodic updates provided to the Board <br>in relation to the supply chain agility <br>programme rollout.<br>Proposals put to the Board include <br>summaries of potential implications for <br>suppliers as a key stakeholder group.<br>Upcoming priorities<br>•Focus on roll-out of the Accelerate <br>programme.<br>•Monitoring impact of supply chain <br>disruption on operations.<br>•Supervision of initiatives to improve <br>efficiency, sustainability and supply <br>chain resilience.<br>|
| Communities |  |  |
| ![artboard12.gif](deo-20250630_g165.gif)<br>**•**We aim to create long-term <br>value for the communities <br>in which we live, work, <br>source and sell.<br>•We can help build thriving <br>communities and strengthen <br>our business through <br>empowering people, <br>increasing access to <br>opportunities and <br>championing inclusion <br>and diversity.<br>| What we believe matters most to them<br>•Impact of our operations on the local economy.<br>•Access to skills development, employment and <br>supplier opportunities.<br>•Inclusion, diversity and tackling inequality in all forms.<br>•Responsible use of natural resources, biodiversity <br>and sustainability.<br>Transparency and engagement.<br>How the Board seeks to engage<br>•Setting targets and monitoring progress on broader societal <br>matters, including promoting positive drinking and <br>championing inclusion and diversity.<br>•Considering the environmental and social consequences <br>for communities of its key decisions, including encouraging <br>inclusion and diversity, equal employment opportunities, <br>skills development and support for communities and through <br>wider value chains.<br>| Reporting to the Board<br>•Reports provided to Board on progress <br>made in relation to 'Spirit of Progress' <br>targets.<br>•Proposals put to the Board include <br>summaries of potential implications <br>for local communities.<br>Reports on macroeconomic and socio-<br>political events provided to Board by <br>management.<br>Upcoming priorities<br>•Continued focus on key aspects of 'Spirit <br>of Progress' targets, including in respect <br>of carbon reduction, positive drinking <br>and water stewardship.<br>•Ensuring continued consideration of <br>impact of our business decisions <br>and operations on local communities and <br>economies.<br>|

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| 88 | **Diageo** Form 20-F 2025 |

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CORPORATE GOVERNANCE REPORT continued

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|:---|:---|:---|
| Stakeholder and why we engage | Stakeholder and why we engage | Stakeholder and why we engage |
| Governments and regulators | Governments and regulators |  |
| ![artboard14.gif](deo-20250630_g163.gif)<br>•The regulatory environment <br>is critical to the success of <br>our business.<br>•We share information and <br>perspectives with those who <br>influence policy and regulation <br>to enable them to understand <br>our views on areas that can <br>impact public health and <br>our business.<br>| What we believe matters most to them<br>•Compliance with applicable laws and regulations.<br>•Contribution to national and local economic development <br>and public health priorities.<br>•International trade, excise, regulation and tackling illicit <br>trade.<br>•Tackling harmful drinking and the impact of responsible <br>drinking initiatives.<br>Climate change and water sustainability agendas, <br>including greenhouse gas emissions reduction, human rights, <br>environmental impacts, sustainable agriculture, biodiversity <br>and support for communities.<br>How the Board seeks to engage<br>•Indirect engagement through periodic updates from <br>the Chief Executive and corporate relations executives.<br>•Review of macroeconomic and geopolitical developments as <br>part of strategy sessions.<br>•Updates on regulatory developments, including in relation <br>to non-financial reporting, corporate governance and <br>public policy.<br>| Reporting to the Board<br>•Reports on socio-political events and <br>issues periodically provided to the Board.<br>Developments in regulatory matters, <br>including governance and reporting <br>obligations, are included in biannual <br>reports to the Board prepared by <br>management.<br>Upcoming priorities<br>•Monitoring developments in regulation <br>and best practice in respect of non-<br>financial reporting requirements, corporate <br>governance and audit regime. <br>•Supporting management's advocacy <br>in relation to key public policy matters <br>including water stewardship, positive <br>drinking and inclusion and diversity.<br>|
| Investors |  |  |
| ![artboard13.gif](deo-20250630_g167.gif)<br>•We want to enable equity <br>and debt investors to have <br>an in-depth understanding of <br>our strategy, our <br>operational, financial and <br>holistic performance, so that <br>they can more accurately <br>assess the value of our <br>business and the <br>opportunities and risks of <br>investing in it.<br>| What we believe matters most to them<br>•Strategic priorities, opportunities and risks.<br>•Financial performance.<br>•Corporate governance.<br>•Leadership credentials, experience and succession.<br>•Executive remuneration policy.<br>•Shareholder returns.<br>Environmental, inclusion and diversity and social commitments <br>and progress.<br>How the Board seeks to engage<br>•Regular engagement between key investors and Chief <br>Executive and Chief Financial Officer through a programme <br>of events, expanded during the year to include quarterly <br>trading updates. <br>•Participation in investor conferences such as the Consumer <br>Analyst Group of New York meeting (CAGNY).<br>•Hosting investor events such as the Guinness Investor <br>and Analyst Event held in Dublin in May 2025.<br>•Attendance at the Annual General Meeting in September <br>2024, including responding to questions from shareholders.<br>| Reporting to the Board<br>•Monthly reports provided to the Board, <br>providing details on engagement sessions <br>with investors and key trends.<br>Chief Executive reporting investor <br>sentiment to the Board as part of regular <br>updates at Board meetings, including <br>feedback following participation at analyst <br>and investor conferences.<br>Upcoming priorities<br>•Continued proactive engagement with <br>investors through structured programme <br>of engagement activities over the year.<br>•Preparing for the Annual General Meeting <br>to be held in November 2025.<br>•Engaging directly with investors through <br>post-results announcement roadshows.<br>|

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| 89 | **Diageo** Form 20-F 2025 |

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|:---|:---|
| ![89-1.jpg](deo-20250630_g168.jpg) | Regular reports, including feedback from investors, are provided to <br>theBoard. Examples of engagement activities include attendance at <br>key events such as the Consumer Analysts Group of New York <br>(CAGNY) conference, attending key investor conferences and <br>hosting many meetings and calls with analysts, investors and <br>potential investors. <br>During the year, Diageo has also launched and completed an asset <br>reunification programme with the aim of re-establishing contact <br>with inactive shareholders, both institutional and retail, and <br>reuniting them with unclaimed dividends.<br>A highlight of the year was the Guinness Investor and Analyst Event <br>in May 2025 when we hosted a group of 48 investor representatives, <br>including many of the company's largest investors, and 22 analysts <br>at the Guinness Storehouse in Dublin, Ireland. The event focused <br>primarily on the Guinness brand, including its recent performance, <br>marketing strategy and how it was recruiting new consumers, <br>as well as the opportunities for future growth, while also covering <br>the group's overall performance, outlook and actions being taken <br>to drive growth. Speakers at the event included not only the Chief <br>Executive and Chief Financial Officer but also other members of <br>the Executive Committee and senior leaders, including the general <br>managers of Ireland, Great Britain and the beer business in the <br>United States. <br>From May 2025, we commenced providing trading updates on <br>a quarterly basis in addition to our previous half and full year <br>reporting. By updating the market more frequently in this way <br>on performance, Diageo aims to provide investors, analysts, <br>shareholders and other market participants with a better <br>understanding of performance and the drivers of this, <br>including business seasonality through the year. |
|  | Regular reports, including feedback from investors, are provided to <br>theBoard. Examples of engagement activities include attendance at <br>key events such as the Consumer Analysts Group of New York <br>(CAGNY) conference, attending key investor conferences and <br>hosting many meetings and calls with analysts, investors and <br>potential investors. <br>During the year, Diageo has also launched and completed an asset <br>reunification programme with the aim of re-establishing contact <br>with inactive shareholders, both institutional and retail, and <br>reuniting them with unclaimed dividends.<br>A highlight of the year was the Guinness Investor and Analyst Event <br>in May 2025 when we hosted a group of 48 investor representatives, <br>including many of the company's largest investors, and 22 analysts <br>at the Guinness Storehouse in Dublin, Ireland. The event focused <br>primarily on the Guinness brand, including its recent performance, <br>marketing strategy and how it was recruiting new consumers, <br>as well as the opportunities for future growth, while also covering <br>the group's overall performance, outlook and actions being taken <br>to drive growth. Speakers at the event included not only the Chief <br>Executive and Chief Financial Officer but also other members of <br>the Executive Committee and senior leaders, including the general <br>managers of Ireland, Great Britain and the beer business in the <br>United States. <br>From May 2025, we commenced providing trading updates on <br>a quarterly basis in addition to our previous half and full year <br>reporting. By updating the market more frequently in this way <br>on performance, Diageo aims to provide investors, analysts, <br>shareholders and other market participants with a better <br>understanding of performance and the drivers of this, <br>including business seasonality through the year. |
| **Increasing engagement with investors** <br>**and shareholders**<br>| Regular reports, including feedback from investors, are provided to <br>theBoard. Examples of engagement activities include attendance at <br>key events such as the Consumer Analysts Group of New York <br>(CAGNY) conference, attending key investor conferences and <br>hosting many meetings and calls with analysts, investors and <br>potential investors. <br>During the year, Diageo has also launched and completed an asset <br>reunification programme with the aim of re-establishing contact <br>with inactive shareholders, both institutional and retail, and <br>reuniting them with unclaimed dividends.<br>A highlight of the year was the Guinness Investor and Analyst Event <br>in May 2025 when we hosted a group of 48 investor representatives, <br>including many of the company's largest investors, and 22 analysts <br>at the Guinness Storehouse in Dublin, Ireland. The event focused <br>primarily on the Guinness brand, including its recent performance, <br>marketing strategy and how it was recruiting new consumers, <br>as well as the opportunities for future growth, while also covering <br>the group's overall performance, outlook and actions being taken <br>to drive growth. Speakers at the event included not only the Chief <br>Executive and Chief Financial Officer but also other members of <br>the Executive Committee and senior leaders, including the general <br>managers of Ireland, Great Britain and the beer business in the <br>United States. <br>From May 2025, we commenced providing trading updates on <br>a quarterly basis in addition to our previous half and full year <br>reporting. By updating the market more frequently in this way <br>on performance, Diageo aims to provide investors, analysts, <br>shareholders and other market participants with a better <br>understanding of performance and the drivers of this, <br>including business seasonality through the year. |
| During fiscal 25, we have maintained our focus on ensuring active <br>and regular engagement with our shareholders and investors, <br>especially over the period from January to June 2025 during which <br>we have carried out extensive investor engagement consistent with <br>our commitment to increase visibility with the financial markets. <br>These engagement sessions enable investors to get a more <br>detailed understanding of our Growth Ambition and strategy, <br>opportunities for growth of our business, our industry and market <br>dynamics while also enabling our senior management to understand<br>the perspectives, investment criteria and strategy of our investors. <br>Our Investor Relations (IR) team takes the lead in organising an <br>annual programme of engagement events, reviewing analyst <br>research notes and recommendations, monitoring share price <br>and trading patterns, peer group and sector news. <br>| Regular reports, including feedback from investors, are provided to <br>theBoard. Examples of engagement activities include attendance at <br>key events such as the Consumer Analysts Group of New York <br>(CAGNY) conference, attending key investor conferences and <br>hosting many meetings and calls with analysts, investors and <br>potential investors. <br>During the year, Diageo has also launched and completed an asset <br>reunification programme with the aim of re-establishing contact <br>with inactive shareholders, both institutional and retail, and <br>reuniting them with unclaimed dividends.<br>A highlight of the year was the Guinness Investor and Analyst Event <br>in May 2025 when we hosted a group of 48 investor representatives, <br>including many of the company's largest investors, and 22 analysts <br>at the Guinness Storehouse in Dublin, Ireland. The event focused <br>primarily on the Guinness brand, including its recent performance, <br>marketing strategy and how it was recruiting new consumers, <br>as well as the opportunities for future growth, while also covering <br>the group's overall performance, outlook and actions being taken <br>to drive growth. Speakers at the event included not only the Chief <br>Executive and Chief Financial Officer but also other members of <br>the Executive Committee and senior leaders, including the general <br>managers of Ireland, Great Britain and the beer business in the <br>United States. <br>From May 2025, we commenced providing trading updates on <br>a quarterly basis in addition to our previous half and full year <br>reporting. By updating the market more frequently in this way <br>on performance, Diageo aims to provide investors, analysts, <br>shareholders and other market participants with a better <br>understanding of performance and the drivers of this, <br>including business seasonality through the year. |

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| Fiscal 25 investor activity timeline | Fiscal 25 investor activity timeline | Fiscal 25 investor activity timeline | Fiscal 25 investor activity timeline | Fiscal 25 investor activity timeline |
| JULY AND AUGUST 2024 | AUGUST 2024 | SEPTEMBER 2024 | OCTOBER AND <br>NOVEMBER 2024<br>| DECEMBER 2024 |
| Announcement of Preliminary <br>Results for fiscal 24 on 30 July <br>2024.<br>Post-results announcement <br>meetings with investors, media <br>and analysts carried out by the <br>IR team, Chief Executive <br>and Chief Financial Officer.<br>| Roadshow by the Chief <br>Executive and the Chief <br>Financial Officer in the United <br>Kingdom and the United <br>States.<br>Publication of the Annual <br>Report and Accounts for fiscal <br>24 on 1 August 2024.<br>| Annual General Meeting held <br>on 26 September 2024 in <br>London, including presentation <br>by the Chief Executive, <br>followed by Q&A with <br>shareholders and investors.<br>IR team held various one-to-<br>one meetings and conference <br>calls with investors.<br>| IR had one-to-one meetings <br>and conference calls with <br>various investors.<br>| Sell-side analysts joined the <br>Head of IR for a panel <br>discussion with the Board, <br>highlighting investor <br>perceptions of the company.<br>The Chief Executive, Chief <br>Financial Officer and other <br>Executive Committee members <br>had various meetings and calls <br>with investors.<br>|
| FEBRUARY 2025 | MARCH 2025 | APRIL 2025 | MAY 2025 | JUNE 2025 |
| Announcement of Interim <br>Results for fiscal 25 on <br>4 February 2025.<br>Post-results announcement <br>meetings with investors, media <br>and analysts.<br>The Chief Executive and the <br>Chief Financial Officer <br>presented at the CAGNY <br>conference in Orlando.<br>| Various meetings between the <br>Chief Executive, the Chief <br>Financial Officer and the IR <br>team with investors, <br>individually and in groups.<br>| The Chief Executive, the Chief <br>Financial Officer and the IR <br>team met with several investors, <br>individually and in groups.<br>| Released trading update for Q3 <br>fiscal 25.<br>Hosted Guinness Investor and <br>Analyst Event in the Guinness <br>Storehouse, Dublin, <br>showcasing the Guinness brand, <br>its growth strategy including <br>the potential of Guinness 0.0.<br>| The Chief Executive and the <br>Chief Financial Officer <br>participated in BNP Paribas <br>Exane conference in Paris, <br>discussing strategy, <br>performance and outlook.<br>The Chief Financial Officer <br>hosted a fireside chat at <br>Deutsche Bank's Global <br>Consumer Conference in Paris.<br>|

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| 90 | **Diageo** Form 20-F 2025 |

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CORPORATE GOVERNANCE REPORT continued

**Principal Board decisions**

Below are some examples of the principal decisions taken by the Board during fiscal 25 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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|:---|:---|
| Decision made | Stakeholder considerations |
| REVISING BOARD PROCESSES TO IMPROVE EFFECTIVE DECISION-MAKING | REVISING BOARD PROCESSES TO IMPROVE EFFECTIVE DECISION-MAKING |
| The Board has adapted its processes, <br>annual cycle and schedule of events, <br>committee composition and ways of <br>working in order to improve its <br>effectiveness and ability to support <br>management in responding to the <br>external macroeconomic environment.<br>| The Board is conscious of the need to continually review, monitor and adapt its practices in order to <br>maintain its efficiency and enhance its responsiveness to external factors and stakeholders' needs. This is <br>particularly important during periods of macroeconomic uncertainty impacting consumer behaviour and <br>the market's perception of the spirits sector, and of the company, as an investment opportunity. As part of <br>the transition in Chair in February 2025, the Board took the opportunity to conduct a thorough review of its <br>decision-making processes, schedule of events and meeting cycle, means of stakeholder engagement, <br>composition and committee structure. The purpose of the review was to ensure that the Board was able <br>to respond appropriately to continued disruption in the external consumer environment and was informed <br>by observations and feedback received as part of the recent board evaluation exercise, by discussions <br>between the incoming Chair, the Senior Independent Director and the Executive Directors, and by <br>feedback received from external stakeholders, including the investor community, on market perceptions <br>of the company. An important consideration was to enhance how the Board could support management in <br>communications with its shareholders, investors, analysts and other market participants. This had been <br>a topic discussed by the Board in December 2024, during which a panel of leading sell-side and buy-side <br>analysts had been invited to give their views directly to directors. Certain changes in ways of working <br>were agreed by the Board in March 2025, including moving to a more conventional model for board <br>committee membership enabling more depth in committee deliberations, more regular engagement <br>between Board members and investors on governance matters, and adjusting the annual cycle of board <br>meetings to enable more frequent interaction between directors, Executive Committee members and <br>senior management. <br>|
| ENHANCING OUR OPERATING MODEL AND MANAGING OUR PORTFOLIO THROUGH DISPOSALS | ENHANCING OUR OPERATING MODEL AND MANAGING OUR PORTFOLIO THROUGH DISPOSALS |
| The Board continued its strategy of <br>using disposals to actively manage the <br>portfolio and enhance the asset-light <br>beer operating model.<br>| We have taken an active approach to managing our portfolio of brands and investments for a number of <br>years, with the aim of ensuring that the portfolio remains sufficiently broad to respond to consumer <br>demand in different categories and across price points, whilst also being sufficiently focused to enable <br>effective advertising, marketing and investment support. During fiscal 25, several brands were disposed <br>including Safari liqueur, Pampero rum and Cacique rum. These selective disposals enable management to <br>improve their focus on the core portfolio, enhancing the offering to customers and consumers. The Board <br>also continued the implementation of an asset-light operating model for the beer portfolio, supporting <br>management to select the most appropriate structure and route to consumer in each impacted market. <br>During the year, the Board approved the disposals of the company's shareholdings in Guinness Ghana <br>Breweries Plc and Seychelles Breweries Limited. In reaching its decision, the Board considered the views <br>and impact of these transactions on multiple stakeholders. For example, it was critically important that <br>our brands remain available for its customers and consumers with minimal disruption. The negotiating <br>team was instructed to focus on ensuring long-term partnerships were maintained through beer <br>production and distribution licensing arrangements in those markets. The interests of impacted <br>employees, both in the markets concerned and in the broader organisation, were also considered as part <br>of the Board's decision-making process. Lastly, there was active engagement with local government and <br>regulatory authorities in order to address any local concerns with these transactions. <br>|
| RESHAPING OUR STRATEGIC PRIORITIES FOR SUSTAINABLE GROWTH | RESHAPING OUR STRATEGIC PRIORITIES FOR SUSTAINABLE GROWTH |
| The Board approved the launch of the <br>Accelerate programme to reshape our <br>priorities to deliver sustainable long-<br>term performance.<br>| In May 2025, the Board approved the introduction of the first phase of the Accelerate programme to <br>help deliver the Growth Ambition. This programme had been developed to ensure that the company is <br>well-positioned to deliver sustainable, consistent performance despite the continued uncertainties in the <br>external consumer market. Key components of the Accelerate programme include increasing agility <br>and refocusing resources on delivering sustainable top-line growth, increasing operating leverage, <br>maximising free cash flow and optimising shareholder returns. As part of the programme, the Board <br>approved clear cash delivery targets for the business, further details of which are set out on page 23. In <br>creating and implementing the Accelerate programme, consideration was given to a wide variety of <br>external and internal stakeholders. A core principle was to maintain focus on the consumer, how it was <br>responding to macroeconomic pressures, and to strengthen Diageo's operational excellence and ability to <br>respond accordingly. Implications on the company's workforce and suppliers were also considered as part <br>of the programme, with changes to the group's operating model implemented, including roles and <br>accountabilities, simplified ways of working and increased use of technology. Ensuring that the <br>programme was rolled out in a swift and efficient manner, consistent with our purpose and values, <br>was of critical importance.<br>|

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| 91 | **Diageo** Form 20-F 2025 |

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**Wider stakeholder engagement**

We have ambitious goals across a variety of social and environmental

targets and 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 25 in

order to respond to stakeholder considerations in making its decisions

and determining the company's strategy and goals. These include

the following activities:

The Board met and engaged with customers and retailers in

South Africa during October 2024, touring a range of on-trade and off-

trade outlets, shops and stores. Directors discussed with retail staff

and owners the latest consumer trends and buying patterns. The Board

also invited the owner of one of Diageo's largest customers in South

Africa to give feedback on his experience of working with the company

over many years. Market views and customer feedback is frequently

reported to the Board by the Chief Executive as part of regular

performance summaries. We partner with our customers to analyse the

performance of the portfolio and marketing investment as well as

market trends and consumer activity, in order to enhance the

company's consumer insights tools which enhance innovation, product

development and marketing initiatives.

The Chair, Chief Executive and Chief Financial Officer travel regularly

to different Diageo offices, production facilities and sites around the

world. Non-executive directors also have opportunities to visit sites

over the course of the year, including with the Chair or executive

directors. Whilst most meetings of the Board are held at the company's

headquarters in London, ordinarily once a year meetings are held in an

overseas market in order to enable the Board to get a deeper

understanding and insight as to that market or region. This will usually

involve visits to offices and production facilities, enabling directors to

familiarise themselves with the consumer landscape in that market and

its production processes and facilities. Directors also engage directly

with the local workforce and employees during these visits,

supplementing the regular workforce engagement sessions conducted

during the year.

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 92-93 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 team. Increasing

investor engagement has been a particular priority for the Board this

year, with a small group of sell-side and buy-side analysts meeting with

the Board during December 2024 to provide their perspectives on how

effectively the company engages with the market. See page 89 for a

timeline summarising other investor events during fiscal 25 including

the company's Guinness Investor and Analyst Event hosted in the

Guinness Storehouse in Dublin in May 2025 and the company's

participation at the annual conference of the Consumer Analyst Group

of New York held in Florida in February 2025. Materials from these

sessions are available on www.diageo.com.

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 86-88. Case studies summarising how stakeholder

considerations were taken into account by the Board during fiscal 25,

as required by Section 172 of the Companies Act 2006, in respect of

three of its principal decisions are set out on page 90.

**Executive direction and control**

**Executive Committee**

The Executive Committee, appointed and chaired by the Chief

Executive, supports the Chief Executive in discharging the

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 aligns its agenda to the Growth Ambition and

how to achieve 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 www.diageo.com.

**Performance evaluation**

With the support of the Company Secretary, an evaluation of the

Board's effectiveness, including that of its Committees and Directors,

was conducted from December 2024 to January 2025. This evaluation

aimed to assess how the Board and its Committees function against

current best practice corporate governance principles, specifically

referencing Principle L and Provisions 21, 22, and 23 of the Code.

This year's evaluation was internally managed through an online

questionnaire completed by all directors. The questionnaire was

designed to assess satisfaction levels with specific areas and allow

directors to express their views. The evaluation focused on directors'

views on three areas, being (i) Board composition, balance and

performance, (ii) Board and Committee topics, support and provision of

information and (iii) Committees' effectiveness and performance.

Responses were submitted to the Chair of the Board, while feedback

on Committee effectiveness was also provided to respective

Committee Chairs. The Senior Independent Director also held a

meeting with directors, excluding the Chair, in line with Code

requirements. The Chair, Senior Independent Director and the

Company Secretary discussed the feedback and, together with other

input including a general review of the ways of working and

composition of the Board and its Committees, drew up a proposed plan

and next steps or actions for further consideration by the Board.

The Board reviewed the results at its March 2025 meeting and agreed

on various actions for implementation. The Board remains committed

to annually reviewing its performance as well as that of its committees

and individual directors, with such evaluation being carried out by an

external facilitator every three years. The evaluation in fiscal 26 is

expected to be managed and facilitated internally.

The Chair has confirmed that the non-executive directors standing for

re-election at this year's AGM continue to perform effectively, both

individually and collectively as a Board, and that each demonstrates

commitment to their roles.

The general feedback and actions for focus in the following year as

identified during the December 2024 evaluation are detailed in the

following table.

---

| | |
|:---|:---|
| 92 | **Diageo** Form 20-F 2025 |

---

CORPORATE GOVERNANCE REPORT continued

---

| | |
|:---|:---|
| Key recommendations  | Actions for focus in 2025/26 |
| General feedback  |  |
| Continue engagement between Board members and the workforce. | Ensure timely finalisation and circulation of board papers ahead <br>of meetings.<br>|
| Continued recognition for an experienced and effective Company <br>Secretarial function.<br>| Ensure adequate time is allocated for presentations, deep dives <br>and discussion during meetings.<br>|
| Board composition and succession |  |
| Recent appointments of directors have ensured appropriate <br>quality, experience, background and diversity of the Board.<br>| Continue to review the succession planning and pipeline at <br>executive and senior management level.<br>|
| Ensure continuation of board-level knowledge while considering <br>technical areas such as AI, digital and public policy amongst <br>others.<br>| Review alternative models for the current composition for Board <br>committee membership.<br>|
|  | Continue to focus on recruitment and talent pipeline on key areas <br>for additional expertise.<br>|
| People and culture |  |
| Continue to promote and protect the company's corporate culture, <br>values and focus on talent development.<br>| Maintain ongoing function in talent development and <br>workforce engagement.<br>|
| Continue to ensure a clear and structured approach to <br>leadership development.<br>| Increase focus on Executive talent succession planning and tenure. |
| •Review and track the success of Executive development programmes. | Deeper analysis and insight of employee survey results to <br>Board members.<br>|
| Strategy and risk |  |
| Improved clarity in strategic focus and visibility of external <br>stakeholder sentiment and significant improvement in <br>stakeholder communication.<br>| Enhance strategic focus and horizon scanning while encouraging <br>discussion and dialogue concerning key issues across different <br>time scales.<br>|
| Improved clarity and consistency in use of dashboard updates for <br>the company's key priorities, issues and imperatives.<br>| Allow for more opportunities for third-party input and insights into <br>how Diageo is perceived and recognised externally.<br>|
| Strong feedback in relation to deep-dive sessions with regional <br>team management.<br>| Continue to build strong and collaborative approach between <br>management and Board members.<br>|

---

**Progress made against prior year's actions** 

Good progress has been made against the actions identified following

last year's externally facilitated performance evaluation:

The Board has continued to promote and protect the company's culture

and values.

There has been a continued focus on Board and management

succession planning and ensuring a pipeline of high-quality,

diverse talent.

The Board has continued to maintain strategic focus, monitor the

changing business landscape and align the company's approach to

strategic matters.

**Workforce Engagement statement**

At Diageo, our people are our most important asset and are critical to

our company's success. We know that creating an inclusive and diverse

culture where colleagues can freely express their views and feel

listened to is not only core to our purpose of 'celebrating life, every

day, everywhere' but is also 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 Diageo plc Board

to hear 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 F25, Karen Blackett CBE, our designated Non-Executive Director for

workforce engagement, alongside all Non-Executive Directors, held 14

virtual and in-person sessions across the year, formally engaging with

654 colleagues from all regions, functions, and organisational levels

below senior leadership. Diageo Chair, Sir John Manzoni, also visited

several markets in the year, engaging a further 1705 colleagues in

informal townhall conversations, and Karen Blackett joined two

inclusion and diversity events with 956 colleagues. Sessions have been

highly engaging and Board members have valued the openness of

conversations and the opportunity to gather insights on many positive

aspects of working at Diageo, as well as clear areas for improvement.

The key themes emerging from these workforce engagement

discussions are:

Diageo's culture is often described as engaging, ambitious and

collaborative, and this continues to be a source of pride

amongst ouremployees, alongside their passion for our

brands. Progress is being made with our dial up behaviours,

with scope to further embed these in our culture for greater

speed and agility. Diageo's formal recognition platform,

Celebrate, is widely used and praised, as a way of reinforcing

the dial up behaviours being demonstrated by colleagues.

Diageo's approach and sustained commitment to inclusion and

diversity, progressive employment policies, and its broader

Spirit of Progress commitments are highlighted frequently as

reasons colleagues join and remain at Diageo. Pride in the

company's approach to doing business the right way and

acting with integrity were also consistently shared in

conversations.

We must continue to simplify our business, addressing day-to-day

barriers people face in their jobs, which can hold us back

from performing at our best and can at times impact

motivation.

There are also opportunities to communicate with increased

transparency and provide greater clarity on priorities,

accountabilities and decision rights.

Whilst there has been progress in building core capabilities in

Digital,Data and Analytics, employees are keen to see these

furtherembedded.

These improvement areas are points of focus within our Accelerate

programme in F26 and beyond.

The key 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 83% engagement levels

(+2 vs 2024) and 90% proud to work for Diageo (+1 vs 2024).

Insights gathered from workforce engagement sessions held by the

Board, alongside broader listening tools such as the Your Voice 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.

---

| | |
|:---|:---|
| 93 | **Diageo** Form 20-F 2025 |

---

**Purpose, values and culture**

The Board is responsible for establishing the company's purpose, values

and culture and for monitoring the level of culture embedment within

our business. We have a long-established purpose and set of values

which resonate strongly with our employees, as indicated by the

Board's engagement sessions with our workforce and employee surveys.

We are very conscious that we 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 to further their

understanding of the business and increase interactions with

employees and the wider workforce. During fiscal 25, the majority of

Board meetings have been held in the company's headquarters in

London, enabling Directors to meet and interact with employees, while

the Board also met with the company's regional management team for

Africa in October 2024. 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 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 the company's

purpose and of their people 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 40.

**SpeakUp allegation reporting**

Regular reports are provided by the business integrity team to the

Audit Committee with 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 action planning, as well as

providing insights into the purpose, values and culture embedment

across its markets and functions.

---

| | |
|:---|:---|
| ![read-more-purple.gif](deo-20250630_g21.gif) | **For more details of the SpeakUp service, see page 100.** |

---

**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. Recommendations are fed back to management regularly

with workforce engagement being discussed at Board meeting sessions

twice a year. The engagement programme, which is led by Karen

Blackett CBE, has enabled all non-executive directors to participate by

directly engaging with employees from a variety of regions, functions

and levels in the business. For more information on workforce

engagement, see page92.

![109.jpg](deo-20250630_g169.jpg)

---

| | |
|:---|:---|
| 94 | **Diageo** Form 20-F 2025 |

---

CORPORATE GOVERNANCE REPORT continued

How the Board monitors *culture*

**How the Board** 

**assesses** 

**Diageo's culture**

---

| |
|:---|
| Site <br>visits<br>|
| Directors regularly visit Diageo's offices <br>and production sites as part of the <br>Board's annual cycle of meetings. In <br>addition to the head office in London, <br>Directors visit other Diageo locations, <br>offices and sites during the course of the <br>year for meetings and for familiarisation <br>visits. During fiscal 25, the Board met <br>leaders of the Africa region during board <br>meetings held in Cape Town, South <br>Africa, at which the Board also met <br>representatives of key customers in that <br>market.<br>|

---

---

| |
|:---|
| Town hall and focus <br>group meetings<br>|
| Non-executive directors participate in <br>both virtual and physical town hall <br>sessions and smaller focus group sessions <br>during the year, as part of the Board's <br>workforce engagement programme. <br>Attendees are invited from particular <br>markets and functions, including <br>contractors, temporary and remote <br>workers, often in non-leadership roles. <br>The scope of topics discussed is <br>relatively broad, covering culture and <br>aspects of working at the company. <br>|

---

---

| |
|:---|
| Remuneration <br>engagement<br>|
| The Chair of the Remuneration Committee <br>meets with a focus group of employees to <br>discuss the approach to executive pay <br>annually. The focus group is comprised of <br>cross-market and functional employee <br>representatives. Through this engagement, <br>we aim to both deepen employees' <br>understanding of the ways in which <br>executive pay decisions are made and <br>receive feedback and views from <br>employees on the company's approach to <br>executive remuneration in the context of <br>broader reward and pay policy within <br>the group. <br>|

---

---

| |
|:---|
| Employee Resource <br>Groups<br>|
| We have a network of employee <br>resource groups (ERGs) which create <br>connections and community within our <br>employee and workforce population, <br>both in regions and globally. For <br>example, the Spirited Women Network <br>and our Rainbow Network operate <br>several markets internationally. The <br>ERGs provide communities of support <br>and enable management to better <br>understand concerns of diverse groups <br>within our workforce. Feedback from <br>the ERGs is used to assist the Board in <br>monitoring the culture.<br>|

---

---

| |
|:---|
| Your Voice <br>surveys<br>|
| Our annual global employee engagement <br>survey, Your Voice, provides employees <br>with an opportunity to feedback their <br>experience of working at the company, <br>including areas which are working well <br>and those that could be improved. The <br>survey, which takes the form of a <br>questionnaire with the ability to provide <br>commentary, is conducted and managed <br>by a third-party provider in multiple <br>languages. All responses are treated <br>confidentially with the results being <br>reported back to management, enabling <br>them to create action plans per team. <br>Key themes and feedback is also <br>reported to the Board.<br>|

---

---

| |
|:---|
| Workforce engagement sessions |
| All non-executive directors participate <br>in the Board's workforce engagement <br>programme, meeting and engaging <br>directly with groups of employees. We <br>aim to provide the Board with a greater <br>understanding of the views of colleagues <br>on the company's strategy, performance, <br>values, governance, culture, working <br>environment or any other topic of <br>importance to workers, and to inform <br>the Board on related decision-making. <br>For further information on the workforce <br>engagement programme, see page 93.<br>|

---

---

| | |
|:---|:---|
| 95 | **Diageo** Form 20-F 2025 |

---

**Additional information**

**Appointment and re-appointment at the AGM**

The Chair has confirmed that the non-executive directors standing for

re-appointment at this year's Annual General Meeting (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

77, Directors' attendance levels have been consistently high

throughout the year ended 30 June 2025. Further details, including

biographies, are set out in the Notice of Meeting for this year's AGM.

**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 Financial Reporting Council (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, it has

completed 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. These risks and their mitigations

are set out above in the section of this Annual Report dealing with principal

and emerging risks on pages 63-71.

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 May in Scotland, 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 page 97.

**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 pages72-73.

**Going concern**

Management prepared 18-month cash flow forecasts which reflect

severe but plausible downside scenarios taking into consideration the

group's principal risks. In the base case scenario, management included

assumptions to deliver positive operating leverage, with organic profit

growth ahead of organic net sales growth. In light of the ongoing

geopolitical 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

geopolitical 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 marketing spend and investment in

maturing stock, as well as a temporary suspension or reduction in

dividend to shareholders in the next 12 months, or drawdowns on

committed facilities. Having considered the outcome of these

assessments, the Directors are comfortable that the group (and

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. 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 $1.36 million (2024: $1.1 million)

were made by Diageo North America, Inc. during the financial year to

state and local candidates and committees, consistent with applicable

laws. Additionally, our Australian based subsidiary made contributions,

solely at its own discretion, totalling approximately $0.09 million

(2024: $0.01 million).

The contributions in the United States 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.

---

| | |
|:---|:---|
| 96 | **Diageo** Form 20-F 2025 |

---

CORPORATE GOVERNANCE REPORT continued

**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 (IFRS 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, IFRS 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 78-79 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 13 August 2025.

![95.jpg](deo-20250630_g170.jpg)

---

| | |
|:---|:---|
| 97 | **Diageo** Form 20-F 2025 |

---

AUDIT COMMITTEE REPORT

Ensuring *integrity*

across the business

**Dear Shareholder**

**I am pleased to present the Audit** 

**Committee's report for the year ended** 

**30 June 2025, which describes how** 

**the Committee has carried out its** 

**responsibilities over the year.**

The role of the Audit Committee is to monitor

and review the integrity of financial information

and external reporting, and to provide

assurance to the Board that the company's

internal controls and risk management

processes, including its internal audit, controls,

business integrity and compliance processes, are

appropriate and regularly reviewed. The Audit

Committee 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 reviews and deep dives.

During the year, the Committee has maintained

its focus on areas of significant and particular

importance. The Committee closely monitors

the company's processes and functions with

respect to internal audit, controls assurance,

risk and business integrity with reports being

issued at regular intervals over the year. The

Committee reviews progress against annual

plans and targets, including compliance and

breach allegation investigation rates, internal

audit findings, and work on controls

assessment. Each principal risk is reviewed by

the Committee on a regular basis over the

year including, for example, Diageo's cyber

security risk management processes,

governance systems and capabilities, which

are of key importance in light of continuously

evolving risks in respect of cyber threats.

Further information is provided on pages

98-101.

Having taken over as Chair of the Committee in

August 2024, I have been pleased to find that

the relationship between the Committee,

management and the external auditors is

transparent, open and constructive. I am sure

that the Committeewill continue to discharge

its duties in an effective and diligent manner

during fiscal 26.

![Julie Sig.jpg](deo-20250630_g171.jpg)

**Julie Brown** 

Chair of the Audit Committee

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| role of the committee | role of the committee | committee members | committee members | Principal areas of focus | Principal areas of focus |
| Monitors the integrity of the company's <br>financial statements and formal <br>statements relating to the company's <br>financial performance. <br>Considers whether the annual report <br>and accounts, taken as a whole, is fair, <br>balanced and understandable, and <br>provides information necessary toassess <br>the company's position <br>andperformance. <br>Reviews the company's risk management <br>and internal control framework, <br>including effectiveness of internal audit. | Monitors the integrity of the company's <br>financial statements and formal <br>statements relating to the company's <br>financial performance. <br>Considers whether the annual report <br>and accounts, taken as a whole, is fair, <br>balanced and understandable, and <br>provides information necessary toassess <br>the company's position <br>andperformance. <br>Reviews the company's risk management <br>and internal control framework, <br>including effectiveness of internal audit. | Julie Brown (Committee Chair) <br>Melissa Bethell<br>Karen Blackett CBE <br>Valérie Chapoulaud-Floquet <br>Susan Kilsby <br>Ireena Vittal <br>As at the end of fiscal 25, the above <br>directors were members of the <br>Committee. As set out on page 105, the <br>Board has moved to a more focused <br>Committee structure in fiscal 26, which <br>includes a reduced number of members <br>on the Audit Committee. | Julie Brown (Committee Chair) <br>Melissa Bethell<br>Karen Blackett CBE <br>Valérie Chapoulaud-Floquet <br>Susan Kilsby <br>Ireena Vittal <br>As at the end of fiscal 25, the above <br>directors were members of the <br>Committee. As set out on page 105, the <br>Board has moved to a more focused <br>Committee structure in fiscal 26, which <br>includes a reduced number of members <br>on the Audit Committee. | Review of financial and non-financial <br>reporting.<br>Supervising the group's internal <br>audit,risk and controls functions <br>andprocesses including in respect <br>ofviability.<br>Selection and oversight of external <br>auditors, and review of audit quality.<br>Review of the group's systems <br>offinancial reporting and <br>accountingissues.<br>Oversight of the group's regulatory <br>compliance, business integrity and <br>whistleblowing mechanisms. | Review of financial and non-financial <br>reporting.<br>Supervising the group's internal <br>audit,risk and controls functions <br>andprocesses including in respect <br>ofviability.<br>Selection and oversight of external <br>auditors, and review of audit quality.<br>Review of the group's systems <br>offinancial reporting and <br>accountingissues.<br>Oversight of the group's regulatory <br>compliance, business integrity and <br>whistleblowing mechanisms. |
| ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on pages 98-101. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on page 98. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on page 101. |

---

---

| | |
|:---|:---|
| 98 | **Diageo** Form 20-F 2025 |

---

AUDIT COMMITTEE REPORT continued

**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. During fiscal 25, there were a number

of changes in committee membership with Sir John Manzoni stepping

down as a member on 5 February 2025, on his appointment as Chair of

the Board, and Karen Blackett CBE and Valérie Chapoulaud-Floquet

stepping down from the end of fiscal 25. The Audit Committee is now

comprised of four independent non-executive directors, being Julie

Brown (Committee Chair), Melissa Bethell, Susan Kilsby and Ireena

Vittal. The Chair of the Board, the Chief Financial Officer, the General

Counsel and Company Secretary, the Group Controller, the Head of

Controls, Assurance and Risk Excellence (CARE), the Chief Business

Integrity Officer, the General Counsel Corporate and Deputy Company

Secretary, 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 CARE regularly during the year. During the course of

the year, the Committee met five times and constituted a

subcommittee 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 77.

**Reporting and financial statements**

During the year, the Audit Committee reviewed the quarterly trading

updates, 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 non-

financial reporting in order to emphasise the most material goals and

actions taken against our 'Spirit of Progress' action plan, 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 thecompany's disclosures are accurate and adequate. This

year the FAC has continued to focus on the adequacy of the group's

inventory monitoring processes across all regions. The FAC comprises

senior executives such as the Chief Executive, the Chief Financial

Officer, theGeneral Counsel and Company Secretary, the General

Counsel Corporate and Deputy Company Secretary, the Group

Controller, theGroup Chief Accountant, the Head of Investor

Relations, the Headof CARE 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. TheAuditCommittee 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 Interim 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 Interim Chief

Executive and Chief Financial Officer concluded that, as of 30 June 2025,

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 Financial Reporting Council

(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'.

**FRC correspondence**

The Committee reviewed a comment letter addressed to the company

which had been received from the FRC in March 2025 relating to its

review of the company's annual report and accounts for the year ended

30 June 2024. The Committee was pleased to note that the letter

confirmed that the FRC had no questions or queries to raise, although

it did note some matters which the FRC believed could be improved for

the benefit of users. The company responded by confirming that it

would consider those matters in the context of future reporting.

Updates have been made in the fiscal 25 Annual Report to reflect the

FRC's observations. The Committee notes that the FRC's review does not

provide assurance that the annual report and accounts were correct in

all material respects as the FRC's role is not to verify information but

to consider compliance with reporting requirements.

**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. There are no

contractual obligations that restrict the company's current choice of

external auditor. Following the last tender carried out during fiscal 24,

PwC was re-appointed as Diageo's external auditor, having first been

appointed as such in fiscal 16. PwC's re-appointment for fiscal 25 was

approved by shareholders at the 2024 AGM. The company is required to

have a mandatory audit tender after 10 years by the Statutory Auditors

and Third Country Auditors Regulations 2016, and, as the Audit

Committee considers the relationship with the auditors to be working

well and remains satisfied with their effectiveness and the quality of

their audit work, the Audit Committee does not currently anticipate

that it will conduct an audit tender before it is required to do so. The

Audit Committee considers this to be in the best interests of the

company's shareholders for the reasons outlined above and will

continue to monitor this annually to ensure the timing for the audit

tender remains appropriate, taking into account the effectiveness and

independence of the auditor. The company has complied with the

provisions of The Statutory Audit Services for Large Companies Market

Investigation (Mandatory Use of Competitive Tender Processes and

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| | |
|:---|:---|
| 99 | **Diageo** Form 20-F 2025 |

---

Audit Committee Responsibilities) Order 2014 for the year ended

30June 2025.

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 2026. The Board will

propose the reappointment of PwC at the AGM to be held in November

2025. **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 interim

results in January, and year end, in July. Following completion of the

audit process, feedback on its effectiveness was provided during

review meetings with management, who also completed questionnaires

on their experience with 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 Audit Committees and the External Audit: Minimum

Standard 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 2023/24 Audit Quality

Inspection and Supervision report on PwC in July 2024, 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 in October 2024 indicated that overall

satisfaction with PwC's performance had slightly improved compared to

the previous year's survey, with the consensus view being that overall

performance is solid. Consistent strong feedback was received in

relation to professional expertise, business knowledge, auditor

independence, quality control processes, challenges and

communication between PwC and management. Feedback from

management suggested that areas where continued focus was required

included timing of planning, timely review and feedback onaudit

matters, improvement in internal communications and co-ordination,

continuity of resources, more efficient and proactive query resolution,

use 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 continued

to be strong and open. The external audit 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 and asset impairment testing, including

reviewing management's updated trigger assessment. The auditors also

reviewed underlying contractual documentation relating to Distill

Ventures investments, considering past performance in order to assess

whether the impairment recognised by management was reasonable. In

relation to brand impairment testing, the auditors discussed with

management their 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 the

potential impact of US tariffs on goodwill and carrying value of certain

brands. The auditor also challenged management while preparing the

Annual Report as to disclosures of critical accounting policies and

practices, including those relating to uncertain tax positions, valuation

of pension obligations and the treatment of certain capitalised costs.

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.

**FRC quality review**

The FRC's quality review team routinely monitors the quality of the

audit work of certain UK audit firms through inspections of sample

audits and related quality processes. PwC was reviewed on the audit of

our financial reporting for the year ended 30 June 2023. A copy of the

FRC team's report was provided to the Audit Committee.

**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 2025. 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 which 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 £125,000. 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.

---

| | |
|:---|:---|
| 100 | **Diageo** Form 20-F 2025 |

---

AUDIT COMMITTEE REPORT continued

**Internal audit, controls assurance and risk**

The company's internal audit 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, the internal audit team 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 CARE on the latest reports issued.

This year a number of internal audits have been undertaken 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 the company's internal audit processes 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

the internal audit team 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, anti-counterfeit and product

quality, geopolitical volatility and business interruption, business

transformation, stock in trade, cyber security and IT resilience,

climate change and sustainability, strategic business transformation and

international taxation.

**Business Integrity programmes**

Diageo is committed to conducting its business responsibly and in

accordance with all laws and regulations to which its business activities are

subject. We hold ourselves to the principles in our Code of Business

Conduct, which is embedded through a training and education programme

for all employees. Our employees are expected to act in accordance with

our values, the Code of Business Conduct, our policies and in compliance

with applicable laws and regulations. The Audit Committee monitors

compliance with the company's ethical standards through the Business

Integrity framework. The Chief Business Integrity Officer provides

regular updates to the Audit Committee on the business integrity

programme, including the annual Code of Business Conduct training

and completion rates, the launch and roll-out of new programmes and

policies, and the SpeakUp hotline and investigations process.

Our Code of Business Conduct, available in 18 languages, sets out what

Diageo stands for as a company and our expectations for our

employees. The Code of Business Conduct annual training is mandatory

for eligible<sup>(1)</sup> employees which, for fiscal 25, comprised over 23,800

employees globally. 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 is available at https://www.diageo.com/en/our-business/

corporate-governance/code-of-business-conduct.

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 are encouraged to raise concerns about potential breaches

of the Code of Business Conduct or policies to line managers, Legal or

HR colleagues, the global Business Integrity team or via SpeakUp, a

confidential whistleblowing mechanism. SpeakUp is a global service

administered by an independent provider, accessible via online or by

telephone. Where legally permitted, it can be used anonymously and

reports kept confidential. Allegations are investigated and, if

substantiated, appropriate disciplinary and corrective actions are

taken. The Audit Committee receives and reviews reports on

allegations, including root cause analysis and investigation closure

rates. During fiscal 25, all of Diageo's Non-Executive Directors attended

the Audit Committee and therefore all Non-Executive Directors who

make up the Board routinely reviewed the findings of the company's

whistleblowing processes in accordance with the UK Corporate

Governance Code.

During fiscal 25, 891 allegations of breaches were reported, which is a

17% increase on the prior fiscal year. Of those reported allegations,

32% were substantiated with 94 people leaving the business as a result

of breaches of our Code of Business Conduct, compared with 101 Code

of Business Conduct-related leavers<sup>(1)</sup> in fiscal 24. Below is a summary

of reported and substantiated breaches over the past three fiscal

years.

(1) For more details, see Non-Financial Reporting Boundaries and

Methodologies, available on our website.

**Reported and substantiated breaches**

Fiscal 23

![5204](deo-20250630_g172.gif)

Fiscal 24

![5216](deo-20250630_g173.gif)

Fiscal 25

![5227](deo-20250630_g174.gif)

---

| | |
|:---|:---|
| 🟇 | Reported breaches |
| 🟇 | Substantiated <br>breaches<br>|
| 🟇 | Code-related leavers |

---

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| | |
|:---|:---|
| 101 | **Diageo** Form 20-F 2025 |

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**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.

**Management's report on internal control over financial** 

**reporting** 

Management, under the supervision of the Interim Chief Executive and

Chief Financial Officer, is responsible for establishing and maintaining

adequate control over the group's financial reporting. The Filings

Assurance Committee supports the Interim Chief Executive and Chief

Financial Officer in ensuring the accuracy of the company's financial

reporting, filings and disclosures. As summarised on page 98, prior to

interim reporting and preliminary reporting each year, the Filings

Assurance Committee examines the company's financial information

and processes, the effectiveness of its controls in respect of financial

reporting and the contents of its disclosures.

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 2025, internal control over financial

reporting was effective. 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. The same

independent registered public accounting firm which audits the group's

consolidated financial statements has audited the effectiveness of the

group's internal control over financial reporting, and has issued an

unqualified report thereon, which is included in the integrated audit

report which is included in the company's Form 20-F to be filed with

the SEC.

**'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 Julie Brown 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 78-79 for details

of relevant experience of Directors.

**Committee activities**

Details of the main areas of focus of the Audit Committee during the year include those summarised below:

---

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

---

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| | |
|:---|:---|
| F-11 | **Diageo** Form 20-F 2025 |

---

**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 2025, 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, 2025, and has issued an

unqualified report thereon, which is included on pages 140 to 142 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.

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| | |
|:---|:---|
| 102 | **Diageo** Form 20-F 2025 |

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AUDIT COMMITTEE REPORT continued

**Significant issues and judgements**

Significant issues and judgements that were considered in respect of the fiscal 25 financial statements are set out below. Our consideration of

issues included discussion of the critical audit matters as outlined in the appendix to the independent auditors' report.

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| | |
|:---|:---|
| Matter considered | How the Audit Committee addressed the matter |
| The nature and size of any one-off items <br>impacting the quality of the earnings and <br>cashflows.<br>| The Audit Committee assessed whether the related presentation and disclosure of those items in <br>the financial statements were appropriate based on management's analysis, and concluded that <br>they were.<br>|
| Items that were to be presented as <br>exceptional. Refer to note 3 of the Financial <br>Statements.<br>| The Audit Committee assessed whether the reporting of those items as exceptional, was in line <br>with the group's accounting policy, and that sufficient disclosure was provided in the financial <br>statements, and concluded that they were.<br>|
| Whether the carrying value of assets, in <br>particular intangible assets and investment <br>inassociates, was supportable.<br>Refer to notes 6, 9, 10 and 13 of the <br>FinancialStatements.<br>| The Audit Committee reviewed the methodology applied in conducting impairment reviews and <br>the result of management's impairment assessments that were performed during the year. The <br>Committee was provided with information about the carrying amounts and the key assumptions <br>incorporated in management's estimate of discounted cash flows of significant assets that are <br>sensitive to key assumptions. The Committee reviewed the key assumptions used in the <br>impairment testing, including management's cash flow forecasts, growth rates and the discount <br>rate used in value in use calculations and agreed they were appropriate. The Committee agreed <br>with management's judgements and conclusions, whereby investment in Distill Ventures <br>companies, Aviation American Gin and other various brands and related tangible fixed assets and <br>inventory have been impaired. The intangible asset impairment charge and accelerated <br>depreciation related to the fixed assets are included in the total exceptional operating charge of <br>$970 million. The Committee agreed that the recoverable amount of the company's other assets <br>was in excess of their carrying value and that appropriate disclosure was provided with respect to <br>assets impaired, and whose value is more sensitive to changes in assumptions.<br>|
| The group's more significant tax exposures and <br>the appropriateness of any related provisions <br>and financial statement disclosures. Refer to <br>page 67 of 'Our principal risks and risk <br>management' and note 7 of the Financial <br>Statements.<br>| The Audit Committee agreed that the disclosure of tax risk appropriately addresses the significant <br>change in the international tax environment, and that appropriate provisions and other disclosure <br>with respect to uncertain tax positions were reflected in the financial statements.<br>|
| The appropriateness of the valuation of post-<br>employment liabilities, and the recognition <br>ofany surplus. Refer to note 14 of the <br>FinancialStatements.<br>| The measurement of post-employment liabilities is sensitive to changes in long-term interest <br>rates, inflation and mortality assumptions. Having reviewed management's papers setting out key <br>changes to actuarial assumptions, the Audit Committee agreed that the assumptions used in the <br>valuation are appropriate. The Committee reviewed management's assessment of the economic <br>benefit available as a refund of the surplus or as a reduction of contribution and the key <br>judgements made in respect of the surplus restriction and concluded that those judgements were <br>appropriate. The Committee reviewed and concluded that sufficient disclosures were provided in <br>the financial statements.<br>|
| Significant legal matters impacting the group. <br>Refer to note 19 of the Financial Statements. <br>| The Committee agreed that adequate provision and/or disclosure have been made for all material <br>litigation and disputes, based on the current most likely outcomes, including the litigation <br>summarised in note 19 of the Financial Statements.<br>|
| Whether the Annual Report is fair, balanced <br>and understandable.<br>| The Audit Committee concluded that the Annual Report, taken as a whole, is fair, balanced and <br>understandable and provides the information necessary for shareholders to assess the company's <br>performance, business model and strategy and that there is an appropriate balance between <br>statutory (GAAP) and adjusted (non-GAAP) measures.<br>|
| The impact of climate change on the group's <br>financial reporting and financial statements. <br>Refer to pages 46-57 and note 1 and note 9 of <br>the Financial Statements.<br>| The Audit Committee agreed that the disclosures on pages 46-57 made in response to the <br>recommendations of the Task Force on Climate-related Financial Disclosures are appropriate and <br>that the assumptions used in the financial statements are consistent with these disclosures.<br>|

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| | |
|:---|:---|
| 103 | **Diageo** Form 20-F 2025 |

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Cyber Security Risk Management<br>

As Diageo becomes more connected and digitally enabled, we

recognise the growing risks from increasingly sophisticated cyber

threats. Cyber security is aligned to our group risk framework and is

central to our principal risk area of 'Cyber and IT resilience'.

We continue to strengthen how we protect our systems, data and

brands through governance, employee awareness and regular

assessments. Our approach includes working to keep pace with

globalregulatory changes, such as the EU's Network and Information

Security Directive 2 (NIS2), where we are enhancing our incident

response, supplier oversight and risk reporting processes to meet

evolving expectations.

Cyber security remains key to safeguarding our most valuable assets

and ensuring trust in our products, services and operations worldwide.

We align our cyber security practices with recognised industry

standards to help us respond effectively to threats and incidents across

our global operations. In today's environment, we are seeing increased

risks from social engineering attacks and vulnerabilities in cloud

infrastructure.A key area of focus is strengthening third-party risk

management. We continue to work closely with our vendors and

suppliers to ensure they meet our security expectations, including

safeguards for systems, data and recovery capabilities, helping to build

greater resilience across our end-to-end supply chain.

Our cyber security framework operates consistently across all regions

and functions, enabling us to assess risks, respond quickly to threats

and implement appropriate countermeasures. We are enhancing and

clarifying existing protocols for escalating material cyber incidents to

senior management and the Board.

In line with evolving regulatory requirements, we are progressing a

structured programme to align with NIS2, focusing on governance,

incident response and third-party risk obligations across our operations

in Europe and globally.

We regularly engage independent cyber security experts to benchmark

our capabilities and test the resilience of our systems. Alongside this,

all employees and certain contractors are required to complete cyber

training, with additional targeted education to address specific roles,

risks and evolving threat scenarios.

The Board retains overall responsibility for risk management, including

cyber security, with oversight delegated to the Audit Committee. The

Audit Committee reviews management's actions with the aim of

ensuring that robust processes are in place to identify, assess and

manage cyber risks, and that appropriate measures are taken to

mitigate potential incidents across the business.

Under our protocols, material cyber risks would be escalated by the

Audit Committee to the Board, while day-to-day responsibility lies with

management. Our cyber programmes are led by our Chief Information

Security Officer (CISO), supported by a team of experienced industry

professionals. Together, they oversee the continuous monitoring of

emerging cyber trends and vulnerabilities, actions taken to prevent,

respond to and mitigate potential cyber threats across the business.

Management, including the CISO and cyber security team, provides

regular updates to the Audit Committee, including formal reporting

twice a year. These reports cover key developments, programme

assessments, risk trends and mitigation strategies aligned to our

riskappetite.

In fiscal 25, we did not identify any cyber threats that materially

affected, or are reasonably likely to materially affect, our strategy,

operations or financial condition. However, we acknowledge that no

system is immune, and undetected incidents remain a possibility. For

more information, please see the section on 'Our Principal Risks and

Risk Management' on pages 63-71.

![106.jpg](deo-20250630_g175.jpg)

---

| | |
|:---|:---|
| 104 | **Diageo** Form 20-F 2025 |

---

NOMINATION COMMITTEE REPORT

*Championing* our

talent strategy

**Dear Shareholder**

**Having taken over as its Chair earlier** 

**in the year, I am pleased to provide** 

**the report of the Nomination** 

**Committee for the year ended 30** 

**June 2025.**

The Nomination Committee plays a key role

in ensuring adequate succession planning for

Board appointments, maintenance of a

pipeline of high-quality candidates for

potential nomination to the Board, and

supervising transitions for new appointments.

We aim to ensure that the Board is comprised

of independent, experienced and influential

individuals from a broad range of

**Sir John Manzoni**

Chair of the Nomination Committee

backgrounds, with appropriate skills and

capabilities to contribute to discussions on

multiple complex topics.

Following the announcement on 16 July 2025

that Debra Crew had stepped down from the

Board and as Chief Executive, the Committee

is supervising a comprehensive formal search

process for her successor. Until a permanent

appointment is made, Nik Jhangiani has

assumed the role of Chief Executive on an

interim basis. We have also recently

announced that Deirdre Mahlan will rejoin

Diageo as Interim Chief Financial Officer.

Earlier in the year, we welcomed Nik and

Julie Brown to the Board in the roles of Chief

Financial Officer and Chair of the Audit

Committee respectively.

Both Nik and Julie have many years'

experience in different consumer products

sectors which add to the Board's ability to

navigate the external consumer market.

Over the year, the Committee has continued

to carry out its role in overseeing the

company's talent planning and succession for

Executive Committee members. With John

Kennedy's retirement from the company, in

April 2025 Dayalan Nayager succeeded him as

President, Europe with Hina Nagarajan

stepping into the role of President, Africa.

Praveen Someshwar joined the company as

Managing Director and CEO, Diageo India. In

June 2025, Randall Ingber succeeded Tom

Shropshire as General Counsel and Company

Secretary.

This year the Nomination Committee has

overseen a change in board committee

composition moving from a model where all

independent Non-Executive Directors were

members of all board committees to a more

conventional model effective 1 July 2025.

TheNomination Committee has also managed

the annual evaluation process, thisyear

conducted as an internal exercise assessing

the performance, composition, diversity and

effectiveness of the Board and its

committees.

The Committee's focus is now on securing

the best candidate to lead the company as

Chief Executive, supported by a strong and

experienced Board and an agile and

ambitious Executive Committee. We

strongly believe that Diageo is well placed

to deliver long-term, sustainable value for

its shareholders and other stakeholders.

![John Sig Purple.jpg](deo-20250630_g118.jpg)

**Sir John Manzoni**

Chair of the Nomination Committee

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| role of the committee | role of the committee | committee members | committee members | Principal areas of focus | Principal areas of focus |
| Leads process for appointments to the <br>Board. <br>Ensures adequate succession plans in <br>place for Board and senior management <br>positions. <br>Oversees development of a diverse <br>pipeline for succession.<br>Comprised of independent non-<br>executive directors.  | Leads process for appointments to the <br>Board. <br>Ensures adequate succession plans in <br>place for Board and senior management <br>positions. <br>Oversees development of a diverse <br>pipeline for succession.<br>Comprised of independent non-<br>executive directors.  | Sir John Manzoni (Committee Chair) <br>Melissa Bethell<br>Karen Blackett CBE<br>Julie Brown<br>Susan Kilsby <br>Valérie Chapoulaud-Floquet<br>Ireena Vittal | Sir John Manzoni (Committee Chair) <br>Melissa Bethell<br>Karen Blackett CBE<br>Julie Brown<br>Susan Kilsby <br>Valérie Chapoulaud-Floquet<br>Ireena Vittal | Succession planning and ensuring a <br>strong pipeline of talent for non-<br>executive and executive roles. <br>Adapting ways of working at Board and <br>board committee levels to support the <br>new Board Chair.<br>Ensuring smooth transitions and <br>inductions for new members of the <br>Board, including this year the Audit <br>Committee Chair and CFO. <br>Supervising Executive Committee <br>membership changes. | Succession planning and ensuring a <br>strong pipeline of talent for non-<br>executive and executive roles. <br>Adapting ways of working at Board and <br>board committee levels to support the <br>new Board Chair.<br>Ensuring smooth transitions and <br>inductions for new members of the <br>Board, including this year the Audit <br>Committee Chair and CFO. <br>Supervising Executive Committee <br>membership changes. |
| ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on pages 105-106. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on page 105. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on pages 105-106. |

---

---

| | |
|:---|:---|
| 105 | **Diageo** Form 20-F 2025 |

---

---

| | | | |
|:---|:---|:---|:---|
| [STRATEGIC](#i2a439a8f411e49deb31670665dbd0981_43)<br>[REPORT](#i2a439a8f411e49deb31670665dbd0981_43)<br>| [GOVERNANCE](#i2a439a8f411e49deb31670665dbd0981_337)<br>[Report](#i2a439a8f411e49deb31670665dbd0981_337)<br>| [FINANCIAL](#i2a439a8f411e49deb31670665dbd0981_469)<br>[STATEMENTS](#i2a439a8f411e49deb31670665dbd0981_469)<br>| [ADDITIONAL](#i2a439a8f411e49deb31670665dbd0981_721)<br>[INFORMATI](#i2a439a8f411e49deb31670665dbd0981_721)<br>[ON](#i2a439a8f411e49deb31670665dbd0981_721)<br>|

---

**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 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 Sir John Manzoni (Committee

Chair), Melissa Bethell, Karen Blackett CBE, Julie Brown, Valérie

Chapoulaud-Floquet, Susan Kilsby 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 encourage

inclusion and diversity. Consideration is given to the length of tenure

of each incumbent with the aim to anticipate potential changes to the

Board or Executive Committee prospectively 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 belief that it benefits from

having a broad and diverse range of views expressed amongst its

members, which enhances 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

forDiageo.

**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. We have engaged executive search company Egon

Zehnder to assist with our current recruitment and pipelining

requirements. Egon Zehnder has no connection with the company aside

from providing executive search consultancy services to it.

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

Annual General Meeting (AGM) to continue in office. All existing

directors retire by rotation and stand for re-election every year.

Thecompany'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 77.

The2025AGM is scheduled to be held on 6 November 2025.

**External appointments**

While the Board does not have a written policy with regards to 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.

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 Boardmeeting. The Board has concluded that each non-

executive director has sufficient time to discharge their duties as a

director of thecompany, taking into consideration their external

appointments and commitments.

**Board committee composition**

As part of the review of Board ways of working carried out following

the transition in Board Chair in February 2025, the Nomination

Committee reviewed Diageo's practice of having all its non-executive

directors as members of all Board committees. It was concluded that,

while this practice had positive benefits, on balance it would be

preferable to refresh membership of the Board committees by changing

to a more conventional structure whereby each Board committee was

comprised of a smaller group of non-executive directors. The

Nomination Committee then considered relevant requirements of the

Code, including that consideration should be given to ensure that the

membership of each Board committee includes a range of skills,

experience, knowledge, and professional qualifications to meet its

requirements. Each Board committee, as a whole, should have

competence relevant to the sector in which the company operates, and

where possible the matters for which that committee is responsible. In

light of these requirements and informed by broader considerations

including the frequency of Board and committee meetings, the range

and depth of topics being discussed and considering feedback received

as part of the Board evaluation exercise, the Nomination Committee

recommended to the Board that with effect from fiscal 26 the Audit

Committee be comprised of Julie Brown (Chair), Melissa Bethell, Susan

Kilsby and Ireena Vittal and that the Remuneration Committee be

comprised of Susan Kilsby (Chair), Melissa Bethell, Karen Blackett CBE

and Valérie Chapoulaud-Floquet. Itwas proposed that the Nomination

Committee would continue to be comprised of all non-executive

directors and chaired by Sir John Manzoni, given the importance of

Board succession and talent pipeline to the Board as a whole. The

Board approved this recommendation inMay 2025.

---

| | |
|:---|:---|
| 106 | **Diageo** Form 20-F 2025 |

---

NOMINATION COMMITTEE REPORT continued

**Activities of the Nomination Committee**

The principal activities of the Nomination Committee during the year

were:

• the consideration of the talent pipeline for potential new executive

and non-executive directors and other appointments to the Board;

• the design and conduct of the annual review of Board, Committee

and individual director effectiveness and performance, 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 2025;

• consideration and recommendation to the Board of proposed changes

in directors' outside interests, status as to independence and any

potential conflicts of interest;

• the approval of the adoption of guidelines in relation to Diageo's

procedures for appointing employees to boards of its listed

subsidiaries;

• consideration and recommendation to the Board of proposed changes

in Board committee composition and membership, taking effect from

the start of fiscal 26; and

• a review of the succession plans for Executive Committee roles,

including potential candidates for such roles, their backgrounds and

experience.

**Board evaluation**

As part of the annual Board evaluation, all members of the Nomination

Committee participated in an internal evaluation of the Committee.

Feedback indicated that the Committee was effective and that

directors were satisfied with its performance, and that it had been

efficient in managing key executive and non-executive role succession

during the year. Further details of the evaluation can be found on

pages 91-92.

**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, the 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 committee meetings. In addition,

Executive Committee members and other senior executives are invited,

as appropriate, to Board and strategy meetings to give 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 view that it benefits from having an

independent, broad and diverse membership. The Board 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's approach to inclusion and diversity

includes objectively considering candidates for Board and Executive

Committee roles from multiple perspectives, including 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 the diversity targets

set out in the Board Diversity Policy and by the FCA in the UK Listing

Rules have 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 ethnic

minority backgrounds and other under-represented groups. As at 30

June 2025, the percentage of women on the Executive Committee and

their direct reports is 47%.

---

| | |
|:---|:---|
| 107 | **Diageo** Form 20-F 2025 |

---

**Board and Executive Committee reporting on gender identity or sex** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Number of Board <br>members<br>| Percentage of the <br>Board<br>| Number of senior <br>positions on the <br>Board (CEO, CFO, <br>SID and Chair)<br>| Number in <br>executive <br>management<br>| Percentage of <br>executive <br>management<br>|
| Men | 2 | 22.2% | 2 | 8 | 61.5% |
| Women | 7 | 77.8% | 2 | 5 | 38.5% |
| Not specified/prefer not to say |  |  |  |  |  |

---

**Board and Executive Committee reporting on ethnic background**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Number of Board <br>members<br>| Percentage of the <br>Board<br>| Number of senior <br>positions on the <br>Board (CEO, CFO, <br>SID and Chair)<br>| Number in <br>executive <br>management<br>| Percentage of <br>executive <br>management<br>|
| White British or other White (including minority-white groups) | 5 | 55.6% | 3 | 7 | 53.8% |
| Mixed/Multiple Ethnic Groups |  |  |  | 1 | 7.7% |
| Asian/Asian British | 3 | 33.3% | 1 | 3 | 23.1% |
| Black/African/Caribbean/Black British | 1 | 11.1% |  |  |  |
| Other ethnic group, including Arab |  |  |  | 2 | 15.4% |
| Not specified/prefer not to say |  |  |  |  |  |

---

---

| | | | |
|:---|:---|:---|:---|
| **Board**<br>**composition**<sup>(1)</sup><br>| **Non-Executive** <br>**Director tenure**<sup>(1)</sup><br>| **Board gender** <br>**diversity**<sup>(1)</sup><br>| **Board ethnic** <br>**diversity**<sup>(1)</sup><br>|

---

![5318](deo-20250630_g176.gif)

![5320](deo-20250630_g177.gif)

![5322](deo-20250630_g178.gif)

![5324](deo-20250630_g179.gif)

---

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

---

**Executive committee nationality**<sup>(1)</sup><br>

![5330](deo-20250630_g180.gif)

---

| | | | |
|:---|:---|:---|:---|
| 🟇 | British | 🟇 | Spanish |
| 🟇 | American | 🟇 | Colombian |
| 🟇 | Indian | 🟇 | South African |
| 🟇 | Irish | 🟇 | Australian/American |

---

**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

Reviewdefinitions as those 'who identify as or have evident heritage

from African, Asian, Middle Eastern, Central and South American

regions'.<sup>(1)</sup>

(1) Graphs and data above are as at 30 June 2025

![108.jpg](deo-20250630_g181.jpg)

---

| | |
|:---|:---|
| 108 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION REPORT

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 2025, which contains:

• The current Directors' Remuneration

Policy, which was approved at the AGM

on 28 September 2023; and

• The annual report on remuneration,

describing how the Directors'

Remuneration Policy has been put into

practice in 2025 and will be

implemented in 2026.

**Susan Kilsby**

Senior Independent Director and Chair of the

Remuneration Committee

**Strategic context**

Our industry has remained highly challenging

in fiscal 25 with significant short-term

headwinds impacting consumer confidence

and spending in many of our key markets.

Despite this backdrop Diageo delivered

positive organic net sales growth of 1.7%

during the year.

Notwithstanding the challenges facing our

business, the Board believes Diageo remains

well positioned to capture future growth

opportunities. This includes leading and

shaping consumer trends through our strong

and balanced portfolio of brands across both

geographies and price tiers.

The Board is committed to ensuring Diageo

emerges from this period stronger and more

competitive, with the Remuneration

Committee clear on its role in attracting,

retaining and motivating the global talent

required to deliver on our strategy.

**Executive Director changes**

Debra Crew stepped down as Chief Executive,

and from the Board, by mutual agreement

shortly after the end of fiscal 25. Details of

Debra's leaving arrangements, which were in

line with her contractual entitlement and the

Directors' Remuneration Policy, are set out

on page 131. Nik Jhangiani was subsequently

appointed as Interim Chief Executive on 16

July 2025 and will fulfil this role whilst the

Board carries out a comprehensive formal

search process, and until a permanent

appointment is made. Details of Nik's

arrangements during this interim period are

set out on page 133.

Nik joined Diageo early in fiscal 25 with his

appointment to the Board as Chief Financial

Officer on 1 September 2024. Nik's

remuneration package was designed in line

with our approved Directors' Remuneration

Policy, and in consideration of the

Committee's remuneration principles which

are set out at the end of this letter.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| role of the committee | role of the committee | committee members | committee members | Principal areas of focus | Principal areas of focus |
| Responsible for the design and <br>implementation of the Directors' <br>Remuneration Policy (the Policy), <br>ensuring our approach to remuneration <br>attracts and retains talented executives, <br>and incentivises the delivery of our <br>strategy.<br>Sets remuneration for Executive <br>Directors, the Chair of the Board and the <br>Executive Committee in line with the <br>principles of the UK Corporate <br>Governance Code. | Responsible for the design and <br>implementation of the Directors' <br>Remuneration Policy (the Policy), <br>ensuring our approach to remuneration <br>attracts and retains talented executives, <br>and incentivises the delivery of our <br>strategy.<br>Sets remuneration for Executive <br>Directors, the Chair of the Board and the <br>Executive Committee in line with the <br>principles of the UK Corporate <br>Governance Code. | Susan Kilsby (Committee Chair)<br>Melissa Bethell<br>Karen Blackett CBE<br>Valérie Chapoulaud-Floquet<br>Ireena Vittal<br>As at the end of fiscal 25 the above <br>directors were members of the <br>Committee. As set out on page 105, <br>the Board has moved to a more <br>focused Committee structure in fiscal <br>26 which includes a reduced number <br>of members on the Remuneration <br>Committee. | Susan Kilsby (Committee Chair)<br>Melissa Bethell<br>Karen Blackett CBE<br>Valérie Chapoulaud-Floquet<br>Ireena Vittal<br>As at the end of fiscal 25 the above <br>directors were members of the <br>Committee. As set out on page 105, <br>the Board has moved to a more <br>focused Committee structure in fiscal <br>26 which includes a reduced number <br>of members on the Remuneration <br>Committee. | Ensures the Policy supports delivery of our <br>strategy, and considers the views of our <br>shareholders, employees, and other <br>stakeholders.<br>Sets the level of fixed, short- and long-<br>term pay opportunity for Executive <br>Directors.<br>Reviews the design and operation of the <br>Annual Incentive Plan and Diageo Long-<br>Term Incentive Plan.<br>Reviews wider workforce remuneration, <br>considering the alignment between <br>executive pay and our employees.  | Ensures the Policy supports delivery of our <br>strategy, and considers the views of our <br>shareholders, employees, and other <br>stakeholders.<br>Sets the level of fixed, short- and long-<br>term pay opportunity for Executive <br>Directors.<br>Reviews the design and operation of the <br>Annual Incentive Plan and Diageo Long-<br>Term Incentive Plan.<br>Reviews wider workforce remuneration, <br>considering the alignment between <br>executive pay and our employees.  |
| ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on page 113. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on page 113. | ![read-more-purple.gif](deo-20250630_g21.gif) | Read more on pages 113-119. |

---

![GOV-purple.jpg](deo-20250630_g123.jpg)

---

| | |
|:---|:---|
| 109 | **Diageo** Form 20-F 2025 |

---

When developing a competitive offer for Nik, the Committee carefully

considered his existing package, his in-flight short- and long-term

incentive opportunity, and the need to attract and retain high-calibre

talent to drive delivery of our Growth Ambition. Details of Nik's

package as Chief Financial Officer, and his joining arrangements, are

set out on pages 120 and 125.

**Incentive outcomes**

Achieving our ambition to create one of the best performing, most

trusted and respected consumer products companies in the world

requires the appropriate balance of annual and long-term incentive

measures and a process to ensure the targets we set are challenging

and aligned to shareholders' interests. When determining performance

metric outcomes, the Committee 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 including our employees.

**Annual incentive**

The annual incentive plan (AIP) outcomes for 2025 in relation to net

sales growth, operating profit growth and operating cash conversion

resulted in a payment of 40% of maximum on financials. Further detail

is provided on page 121. This outcome was considered by the

Committee in the context of wider business performance, and it

concluded that the AIP worked effectively to deliver a fair outcome

aligning reward and performance.

The AIP also includes Individual Business Objectives (IBOs) comprising

20% of the overall opportunity. Details on the performance and

outcomes for the Executive Directors who served during the year are

set out in more detail on page 121. As a result of the financial and

individual performance for fiscal 25, overall AIP outcomes against

maximum opportunity were 42.0% for Debra Crew, 44.4% for Nik

Jhangiani and 42.0% for Lavanya Chandrashekar.

**Long-term incentives**

Our Diageo Long Term Incentive Plan (DLTIP) consists of both a

performance shares element and a share options element. For the

three-year performance period ending 30 June 2025, performance

outcomes against all financial measures under both elements of the

DLTIP were below threshold performance resulting in no vesting under

these measures. Further details can be found on page 123.

The performance shares element also included metrics supporting our

'Spirit of Progress' ESG action plan, worth 20% of the overall award.

The four metrics measure reduction in carbon emissions, improvement

in water efficiency, education on positive drinking and the building of

diverse representation in leadership. Demanding three-year targets

were established for our goals in this area and the achievement across

all ESG metrics resulted in 62.5% of maximum vesting under these

metrics (equivalent to 12.5% of the overall performance shares

awarded). Further detail of performance against these metrics is set

out on page 123 and more information on the 'Spirit of Progress' ESG

action plan can be found on pages 36-37.

Following the Committee's consideration of the outcome in the

context of wider performance, the performance share element of the

DLTIP will vest at 12.5% of maximum opportunity whilst the share

option award will lapse in full. Both outcomes are applicable to the

awards granted to Debra Crew and Lavanya Chandrashekar.

**Implementation for 2026** 

**Incentivising the delivery of our financial priorities**

Diageo's reshaped financial priorities are focused on delivering

sustainable top-line growth, increasing operating leverage, maintaining

free cash flow and optimising returns. To ensure executive

remuneration is aligned with these priorities, the Committee reviewed

the performance measures used within both the AIP and DLTIP.

As a result, and following constructive engagement with shareholders,

we will introduce changes to the performance measures within our

short- and long-term incentive plans for fiscal 26. Further detail

including all measures and weightings is set out on page 134. In

summary:

▪A new cash measure of adjusted operating cash flow will

replace operating cash conversion within the AIP, ensuring

we elevate the focus on absolute free cash flow delivery

across the business.

▪To ensure our total shareholder return peer group used

within the share options element of the DLTIP remains

appropriately balanced across sectors and geographies, we

will add Campari Group, Rémy Cointreau and Constellation

Brands to the group, and remove Kimberly-Clark.

▪We will introduce a return on invested capital measure

within the performance shares element of the DLTIP further

driving disciplined investment.

▪We will reshape our approach to incentivising Diageo's 'Spirit

of Progress' ESG goals within the performance shares

element of the DLTIP, focusing on positive drinking, carbon

and water measures.

As we reach the midpoint of our 'Spirit of Progress' ESG action plan,

and with the progress made to date against our two leadership

representation goals, it was an appropriate time to review and evolve

our approach to how these ambitions are incentivised. Inclusion has

been core to Diageo and many of our brands for decades, and whilst

our gender and diversity leadership representation metrics will be

retired from the DLTIP, we will continue to focus on and monitor

leadership representation as part of our 'Spirit of Progress'ambitions.

In fiscal 26, we will be including an annual talent goal in our wider

leadership population plans, to enable leaders to focus on localised

and tailored actions.

**Salary review for fiscal 26**

The Committee conducted an annual salary review in respect of the

Executive Committee, taking into account both internal factors,

including wider employee pay decisions, and external considerations

including the current challenging conditions in the wider industry.

Following the review, the Committee agreed to a salary freeze for the

majority of the Executive Committee members for fiscal 26. Globally

Diageo maintained lower than typical salary increase budgets for the

wider workforce with spend focused on ensuring pay levels remain

locally competitive.

![128.jpg](deo-20250630_g182.jpg)

---

| | |
|:---|:---|
| 110 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION

REPORT continued

**Looking ahead to our new Directors' Remuneration Policy**

Our Policy is due for renewal at our 2026 AGM. We look forward to

engaging with shareholders over the course of next year to ensure that

the Policy continues to align executive pay with our strategic

priorities, balanced as always with the interests of our stakeholders.

Diageo is a global business with over 200 brands and sales in nearly 180

countries and territories (including a large presence in North America

where the remuneration context is materially different compared to

the United Kingdom), and therefore, we compete for talent in a global

marketplace. The Committee remains mindful that a key enabler of

our strategy is the company's ability to attract and retain high-calibre

talent, and to achieve this we must ensure that remuneration

structures remain competitive at all levels. This enabler will be of

particular importance during the Board's current comprehensive search

process for the next Chief Executive.

As a Committee we have closely followed the debate in recent years on

the UK executive pay landscape, its attractiveness to globally mobile

talent and the evolving responses in policy design across the UK listed

company environment. As we undertake the review of our Policy to be

put for approval at next year's AGM, the Committee will be open-

minded in its approach to ensure we remain globally competitive and

attractive to the best talent from all over the world.

The Committee will also review any opportunities to simplify the

current policy and is conscious that clarity in a remuneration policy is

critical in driving business performance. We will be engaging openly

and constructively with investors and stakeholders across the year, and

very much look forward to hearing their views and perspectives.

**In summary**

In fiscal 25 our remuneration outcomes demonstrated strong alignment

between pay and performance, with the context of a challenging

consumer environment reflected in incentive outcomes and the

decisions made by the Committee during the year.

On behalf of the Committee I would like to thank all of our investors,

employees and stakeholders for their continued support and

engagement and I ask that shareholders vote to approve this Directors'

Remuneration Report at the AGM on 6 November 2025.

![Signature-3.gif](deo-20250630_g183.gif)

**Susan Kilsby**

Senior Independent 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 business and wider

employee context, delivering market-competitive pay in return for

high performance against the company's strategic objectives.

---

| | |
|:---|:---|
| ![Delivery-of-Business-Strategy.gif](deo-20250630_g184.gif) | **Delivery of business strategy**  |
| ![Delivery-of-Business-Strategy.gif](deo-20250630_g184.gif) | Short- and long-term incentive plans reward the <br>delivery of our business strategy and Growth Ambition. <br>Performance measures are reviewed regularly and <br>stretching targets are set relative to the company's <br>growth plans and peer group forecasted performance. <br>The Committee seeks to embed simplicity and <br>transparency in the design and delivery of <br>executivereward.<br>|
| ![Creating-sustainable-performance.gif](deo-20250630_g185.gif) | **Creating sustainable, long-term** <br>**performance** <br>|
| ![Creating-sustainable-performance.gif](deo-20250630_g185.gif) | A significant proportion of remuneration is delivered in <br>variable pay linked to business and individual <br>performance, focused on consistent and responsible <br>drivers of long-term growth. Performance against <br>targets is assessed in the context of underlying <br>business performance and the 'quality of earnings'.<br>|
| ![Winning-Best-Talent.gif](deo-20250630_g186.gif) | **Winning best talent**  |
| ![Winning-Best-Talent.gif](deo-20250630_g186.gif) | Well designed and market-competitive total <br>remuneration, with an appropriate balance of fixed <br>reward and upside opportunity, allows us to attract <br>and retain the best talent from all over the world in a <br>competitive talent market, which is critical to our <br>continued business success.<br>|
| ![Stakeholder-Interests.gif](deo-20250630_g187.gif) | **Consideration of stakeholder interests**  |
| ![Stakeholder-Interests.gif](deo-20250630_g187.gif) | Executives are focused on creating sustainable share <br>price growth. The requirement to build significant <br>personal shareholdings in Diageo, and to hold shares <br>acquired from long-term incentive awards for two <br>years post-vesting aligns executives and shareholders. <br>Decisions on executive remuneration are made with <br>consideration of the interests of the wider workforce <br>and other stakeholders, as well as the external <br>climate.<br>|

---

---

| | |
|:---|:---|
| 111 | **Diageo** Form 20-F 2025 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| Remuneration at *a glance* | Remuneration at *a glance* | Remuneration at *a glance* | Remuneration at *a glance* | Remuneration at *a glance* |
| Salary | Allowances and <br>benefits<br>| Annual incentive | Long-term incentives | Shareholding <br>requirement<br>|
| **Purpose** | **Purpose** | **Purpose** | **Purpose** | **Purpose** |
| •Supports the <br>attraction and <br>retention of the <br>best global talent <br>with the capability <br>to deliver Diageo's <br>strategy.<br>| •Provision of market-<br>competitive and cost-<br>effective benefits <br>supports attraction and <br>retention of talent.<br>| •Incentivises delivery of <br>Diageo's financial and <br>strategic targets.<br>•Provides focus on key <br>financial metrics and <br>the individual's <br>contribution to the <br>company's performance.<br>| •Rewards consistent long-term <br>performance in line with <br>Diageo's business strategy.<br>•Provides focus on delivering <br>superior long-term returns to <br>shareholders.<br>| •Ensures alignment between <br>the interests of Executive <br>Directors and shareholders.<br>|
| **Key features of current policy** | **Key features of current policy** | **Key features of current policy** | **Key features of current policy** | **Key features of current policy** |
| •Normally reviewed <br>annually on 1 <br>October.<br>•Salaries take <br>account of external <br>market and internal <br>employee context.<br>| •Provision of competitive <br>benefits linked to local <br>market practice.<br>•Maximum company <br>pension contribution is <br>14% of salary, which is <br>aligned to the offering <br>for the wider workforce <br>in the United Kingdom.<br>| •Target opportunity is <br>100% of salary and <br>maximum is 200% of <br>salary.<br>•Performance measures, <br>weightings and <br>stretching targets are <br>set by the Remuneration <br>Committee.<br>•Subject to malus and <br>clawback provisions.<br>•Executive Directors <br>defer a minimum of one-<br>third of earned bonus <br>payment into Diageo <br>shares held for three <br>years.<br>•Remainder paid out in <br>cash after the end of <br>the financial year.<br>| •Annual grant of performance <br>shares and share options:<br>•Chief Executive award up to <br>500% of salary.<br>•Chief Financial Officer award <br>up to 480% of salary.<br>(% of salary for both <br>Executive Directors described <br>in performance share <br>equivalents).<br>•Performance measures, <br>weightings and stretching <br>targets are set annually.<br>•Three-year performance period <br>plus two-year retention period<br>•Subject to malus and clawback <br>provisions.<br>•Number of awards granted is <br>based on a six-month average <br>share price to 30 June <br>preceding grant date.<br>| •Minimum shareholding <br>requirement within five <br>years of appointment:<br>•Chief Executive: 500% of <br>salary.<br>•Chief Financial Officer: <br>400% of salary.<br>•Post-employment <br>shareholding requirement <br>for Executive Directors of <br>100% of the in-employment <br>requirement (or, if lower, <br>their actual shareholding on <br>cessation) to be retained in <br>full for two years after <br>leaving the company.<br>|
| **Planned for year ending 30 June 2026** | **Planned for year ending 30 June 2026** | **Planned for year ending 30 June 2026** | **Planned for year ending 30 June 2026** | **Planned for year ending 30 June 2026** |
| •No salary increase <br>will apply for Nik <br>Jhangiani in fiscal <br>26.<br>| Allowances and benefits <br>unchanged from prior <br>year, other than the <br>annual Salary Supplement <br>Allowance of £300,000 <br>introduced for Nik <br>Jhangiani, pro-rata for the <br>period as Interim Chief <br>Executive.<br>Company pension <br>contributions 14% of <br>salary.<br>| •Size of annual incentive <br>award opportunity is <br>unchanged from prior <br>year. For fiscal 26, <br>measures are net sales <br>growth, operating profit <br>growth and adjusted <br>operating cash flow, 80% <br>in total weighted <br>equally, with remaining <br>20% on individual <br>business objectives. <br>| •Performance measures are net <br>sales growth, relative TSR, <br>cumulative free cash flow, <br>profit before exceptional <br>items and tax, adjusted return <br>on invested capital and 'Spirit <br>of Progress' measures.<br>•Size of long-term incentive <br>award opportunity is in line <br>with the policy.<br>| •No change to in-employment <br>shareholding requirement.<br>•Post-employment <br>shareholding in line with the <br>policy.<br>|
| **Implementation in year ended 30 June 2025** | **Implementation in year ended 30 June 2025** | **Implementation in year ended 30 June 2025** | **Implementation in year ended 30 June 2025** | **Implementation in year ended 30 June 2025** |
| •4.25% salary <br>increase for Debra <br>Crew, slightly below <br>the annual salary <br>budgets for the <br>wider workforce in <br>the United Kingdom.<br>•No increase for Nik <br>Jhangiani in fiscal <br>25 following <br>appointment on 1 <br>September 2024.<br>| •Debra Crew's allowances <br>changed in fiscal 25, <br>with an increased tax <br>advice allowance <br>introduced in line with <br>the level of the previous <br>Chief Executive, <br>alongside a housing <br>allowance connected to <br>her relocation to the <br>UK.<br>•Company pension <br>contribution of 14% for <br>both Executive <br>Directors. Aligned to the <br>UK workforce.<br>| Payout of 40% of maximum <br>for the financial elements <br>of the plan.<br>Total payout of 42.0% of <br>maximum for Debra Crew <br>and 44.4% for Nik <br>Jhangiani.<br>| •Vesting of 2022 performance <br>shares at 12.5% of maximum for <br>Debra Crew.<br>•The 2022 share options lapsed <br>for Debra Crew.<br>| •As at 30 June 2025, Debra <br>Crew's shareholding was <br>239% of salary.<br>•As at 30 June 2025, Nik <br>Jhangiani's shareholding was<br>166%of salary (he has until <br>December 2029 to meet his <br>requirement).<br>|

---

![GOV-purple.jpg](deo-20250630_g123.jpg)

---

| | |
|:---|:---|
| 112 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION REPORT continued

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. Further details on performance

outcomes can be found on pages 121 and 123.

Long-term incentives (for the period 1 July 2022 to 30 June 2025)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Organic net sales growth** | **Organic net sales growth** | **Organic net sales growth** | **Organic net sales growth** | **Cumulative free cash flow** | **Cumulative free cash flow** | **Cumulative free cash flow** |
| CAGR | **Threshold** | **Midpoint** | **Maximum** | **Threshold** | **Midpoint** | **Maximum** |
|  | 4.5% | 6.5% | 8.5% | $10,175m | $11,372m | $12,569m |
| ●  |  |  |  | ●  |  |  |
| Actual 2.5% | Actual 2.5% |  |  | Actual $8,875m |  |  |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Organic profit before exceptional items and tax growth** | **Organic profit before exceptional items and tax growth** | **Organic profit before exceptional items and tax growth** | **Organic profit before exceptional items and tax growth** | **Relative TSR ranking vs peer group** | **Relative TSR ranking vs peer group** | **Relative TSR ranking vs peer group** |
| CAGR | **Threshold** | **Midpoint** | **Maximum** | **Threshold** | **Midpoint** | **Maximum** |
|  | 5.0% | 8.5% | 12.0% | 9<sup>th</sup> (median) | – | 3<sup>rd</sup> (upper quintile) |
| ●  |  |  |  | ●  |  |  |
| Actual -3.5% | Actual -3.5% |  |  | Actual 15<sup>th</sup> |  |  |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **ESG measure** | **Unit of measurement** | **Threshold** | **Midpoint** | **Maximum** | **Actual** |
| **Carbon reduction** | Reduction in greenhouse gas emissions (cum%) | 10.7% | 14.2% | 17.6% | 18.8% |
| **Water efficiency** | Improvement in water efficiency (cum%) | 6.3% | 9.2% | 12.1% | 6.0% |
| **Positive drinking** | Number of people who confirmed changed attitudes on the dangers of <br>underage drinking following participation in a Diageo supported education <br>programme<br>| 2.6m | 3.3m | 4.0m | **5.0m** |
| **Inclusion & diversity** | % female leaders globally | 45% | 46% | 47% | 43% |
|  | % ethnically diverse leaders globally | 42% | 43% | 44% | 46% |

---

Annual incentive (for the period 1 July 2024 to 30 June 2025)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net sales growth** | **Net sales growth** | **Net sales growth** | **Operating profit growth** | **Operating profit growth** | **Operating profit growth** |
| **Threshold** | **Target** | **Maximum** | **Threshold** | **Midpoint** | **Maximum** |
| 0.3% | 2.9% | 5.7% | 0.3% | 3.3% | 6.3% |
|  | ● |  | ●  |  |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Actual 1.5% |  | Actual -1.0% |  |  |

---

---

| | | |
|:---|:---|:---|
| **Operating cash conversion** | **Operating cash conversion** | **Operating cash conversion** |
| **Threshold** | **Target** | **Maximum** |
| 93.0% | 98.1% | 103.0% |
|  |  | ●  |
|  |  | Actual 101.4% |

---

---

| | |
|:---|:---|
| Diageo's share price growth <br>over the period 30 June 2022 to <br>30 June 2025<br>| Growth in dividend distribution <br>to shareholders in year ended to <br>30 June 2025 (cents)<br>|
| **(48.2)%** | **—%** |

---

![1](deo-20250630_g188.gif)

![12](deo-20250630_g189.gif)

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 total shareholder return for the three-year performance period ended in the year of vesting (i.e. TSR for

the three years ended 30 June 2025 is shown against the vesting outcome for the 2022 DLTIP award vesting in 2025). Outcomes against AIP 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 (DLTIP)** | **5-year vesting outcomes of long-term incentives (DLTIP)** | **5-year history of annual incentive (AIP) payouts** | **5-year history of annual incentive (AIP) payouts** |
| Executive Director vesting outcome<br>(% of maximum)<br>| Annualised TSR %<br>| Payout<br>(% of maximum)<br>| Operating profit growth %<br>|

---

![1089](deo-20250630_g190.gif)

---

| |
|:---|
| Performance shares |
| Share options |
| Total shareholder return over three-year long-term incentive <br>performance period<br>|

---

![1093](deo-20250630_g191.gif)

---

| | |
|:---|:---|
| 🟇 | Annual incentive payout (financial measures excluding <br>individual business objectives)<br>|
| 🟇 | Organic operating profit growth (% on prior year) |

---

---

| | |
|:---|:---|
| 113 | **Diageo** Form 20-F 2025 |

---

Remuneration Committee *Governance*

**Remuneration Committee**

The Remuneration Committee consisted of the following independent

Non-Executive Directors in fiscal 25: Susan Kilsby, Melissa Bethell,

Karen Blackett CBE, Valérie Chapoulaud-Floquet, 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 Directors' Remuneration Policy (page 136 of

the 2023 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 2025, the Remuneration Committee

received advice on Directors' remuneration from both FIT

Remuneration Consultants (FIT) and WTW. WTW were appointed by the

Committee in April 2025 as its new external advisor, following a

comprehensive tendering process led by the Chair with several leading

advisors.

The fees paid to FIT in fiscal 25 (until the end of their appointment)

for advice provided to the Committee were £20,607. The fees paid to

WTW in fiscal 25 following the date of their appointment were

£39,000. All fees were determined on a time and expenses basis.

The Committee is satisfied that WTW's (and previously 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 did not provide Diageo with any other

services, and WTW provided consultancy and advice to management

includingmarket pay data to assist in the annual employee pay review

and global employee benefits support. WTW and FIT are members 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. WTW (and FIT

previously) attended Remuneration Committee meetings during the

year following their appointment and the Committee is satisfied that

the advice it has received has been objective and independent.

**Statement of voting**

The following table summarises the details of votes cast in respect of

the resolutions on the Directors' Remuneration Policy at the AGM on 28

September 2023, and the Directors' Remuneration Report at the AGM

on 26 September 2024.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | **For** | **Against** | **Total votes cast** | **Abstentions** |
| **Directors' Remuneration Policy**<br><sup>As shown on pa</sup><sup>ges 132–138 of</sup><sup>the 2023 Annual Report</sup> | Total number of votes | 1663080546 | 80098370 | 1743178916 | 1023145 |
| **Directors' Remuneration Policy**<br><sup>As shown on pa</sup><sup>ges 132–138 of</sup><sup>the 2023 Annual Report</sup> | Percentage of votes cast | 95.41% | 4.59% | 100% | n/a |
| **Directors' Remuneration Report for** <br>**2024** | Total number of votes  | 1652770668 | 66983213 | 1719753881 | 19727804 |
| **Directors' Remuneration Report for** <br>**2024** | Percentage of votes cast | 96.11% | 3.89% | 100% | n/a |

---

---

| | |
|:---|:---|
| 114 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION REPORT continued

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 'Chair of the Board

and Non-Executive Directors' fees' section of the policy table has been

updated to reflect the appointment of Sir John Manzoni as Chair, effective

5 February 2025. The Policy Considerations section has been updated to

reflect updated NED terms of appointment and our approach to employee

engagement.

The current approved policy can be found in full on the company's

website at https://www.diageo.com/en/our-business/corporate-

governance/remuneration-at-diageo.

The Committee reserves the right to make minor changes to the policy,

where required for regulatory, tax or administrative reasons.

---

| |
|:---|
| 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 <br>October. <br>The Remuneration Committee considers the following parameters when reviewing base salary levels:<br>Pay increases for other employees across the group.<br>Economic conditions and governance trends.<br>The individual's performance, skills and responsibilities.<br>Base salaries (and total remuneration) at companies of similar size and international scope to Diageo, with roles typically benchmarked against the <br>FTSE 30 excluding financial services companies, or against similar comparator groups in other locations dependent on the Executive Director's home <br>market as well as global consumer goods companies.<br>|
| **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 <br>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 <br>responsibility or other exceptional circumstances.<br>|

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| |
|:---|
| 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 <br>car or travel allowance, the provision of a contracted car service or equivalent, product allowance, life insurance, accidental death and disability <br>insurance, medical and dental cover, tax support and tax return preparation costs.<br>•The Remuneration Committee has discretion to offer additional allowances, or benefits, to Executive Directors, if considered appropriate and <br>reasonable. These may include, but are not limited to, relocation expenses, housing allowance and school fees where a Director is asked to <br>relocate from his/her home location as part of their appointment. Where appropriate, for example in relation to relocation benefits, the company <br>may also meet the tax costs associated with the benefit provision.<br>|
| **Opportunity** |
| The benefits package is set at a level which the Remuneration Committee considers:<br>provides an appropriate level of benefits depending on the role and individual circumstances;<br>is appropriate in the context of the benefits offered to the wider workforce in the relevant market; and<br>is in line with comparable roles in companies of a similar size and complexity in the relevant market.<br>|

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| |
|:---|
| 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 Chief Executive and Chief Financial <br>Officer receive a pension contribution of 14% of salary, in line with the UK workforce. <br>|

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| | |
|:---|:---|
| 115 | **Diageo** Form 20-F 2025 |

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| |
|:---|
| 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 <br>business strategy and create a platform for sustainable longer-term performance. Compulsory deferral of a minimum of one-third of any annual <br>incentive earned into shares for three years promotes longer-term alignment of Executive Directors' interests with shareholders' interests.<br>|
| **Operation** |
| •Performance measures, weightings and targets are set by the Remuneration Committee. Appropriately stretching targets are set by reference to <br>the operating plan and historical and projected performance for the company and its peer group.<br>•The level of award is determined with reference to Diageo's overall financial and strategic performance and individual performance.<br>•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-<br>tax deferral) under the Deferred Bonus Share Plan, to be held for a minimum period of three years, other than in exceptional circumstances. <br>The remainder of the bonus payment is paid out in cash after the end of the financial year.<br>•The Remuneration Committee has discretion to adjust the level of payment if it is not deemed to reflect appropriately the individual's <br>contribution or the overall business performance. Any discretionary adjustments will be detailed in the following year's annual report on <br>remuneration.<br>•The Remuneration Committee has discretion to apply malus or clawback to bonus as detailed in the 'Malus and Clawback' section below.<br>•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 <br>Remuneration Committee at the end of the vesting period (on post-tax deferral into owned shares, actual dividends are payable).<br>|
| **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 <br>200% of salary payable for outstanding performance. The maximum includes the deferred share element but excludes dividend equivalents payable <br>in respect of deferred share awards.<br>|
| **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, <br>profit and cash, and 0-30% on broader objectives based on strategic goals and/or individual contribution.<br>The Remuneration Committee has discretion to amend the performance measures in exceptional circumstances if it considers it appropriate to do <br>so, e.g. in cases of accounting policy changes, merger and acquisition activities or disposals. Any such amendments would be fully disclosed and <br>explained in the following year's annual report on remuneration. <br>|

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| |
|:---|
| 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 <br>shareholders. <br>|
| **Operation** |
| •An annual grant of performance shares and/or market-price share options which vest subject to a performance test and continued employment, <br>normally over a period of three years.<br>•Measures and stretching targets are reviewed annually by the Remuneration Committee for each new award.<br>•The Remuneration Committee has the authority to exercise discretion to adjust the vesting outcome based on its assessment of the overall <br>business performance over the performance period. This may include the consideration of factors such as holistic performance relative to peers, <br>stakeholder outcomes and significant investment projects, for example.<br>•Following vesting, there is normally a further retention period of two years. Executive Directors are able to exercise an option or sell sufficient <br>shares to cover any tax liability when an award vests, provided they retain the net shares arising for the two-year retention period.<br>•Notional dividends accrue on performance share awards to the extent that the performance conditions have been met, delivered as shares or <br>cash at the discretion of the Remuneration Committee at the end of the vesting period.<br>•The Remuneration Committee has discretion to apply malus or clawback to bonus as detailed in the 'Malus and Clawback' section below.<br>|
| **Opportunity** |
| The maximum annual grants for the Chief Executive and Chief Financial Officer are 500% and 480% of salary in performance share equivalents, <br>respectively (where a market-price option is valued at one-third of a performance share). Included within that maximum, no more than 375% of <br>salary will be awarded in face-value terms in options, with the balance awarded in performance shares, to any Executive Director in any year.<br>Awards vest at 20% of maximum for threshold performance and 100% of maximum if the performance conditions are met in full. The vesting <br>schedule related to the levels of performance between threshold and maximum, including whether or not this will include an interim stretch <br>performance level, will be determined by the Remuneration Committee on an annual basis and disclosed in the relevant remuneration report for <br>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 <br>for achieving the threshold.<br>|

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| | |
|:---|:---|
| 116 | **Diageo** Form 20-F 2025 |

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DIRECTORS' REMUNERATION REPORT continued

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| |
|:---|
| Diageo Long-Term Incentive Plan (DLTIP) continued |
| **Performance conditions** |
| The vesting of awards is linked to a range of measures which may include, but are not limited to:<br>•a growth measure (e.g. net sales growth, operating profit growth);<br>•a measure of efficiency (e.g. operating margin, cumulative free cash flow, return on invested capital);<br>•a measure of Diageo's performance in relation to its peers (e.g. relative total shareholder return); and<br>•a measure relating to our 'Spirit of Progress' (environmental, social or governance) priorities.<br>Measures that apply to performance shares and market-price options may differ, as is the case for current awards. Weightings of these measures <br>may also vary year-on-year.<br>The Remuneration Committee has discretion to amend the performance conditions in exceptional circumstances if it considers it appropriate to do <br>so, e.g. in cases of accounting policy changes, merger and acquisition activities or disposals. Any such amendments would be fully disclosed and <br>explained in the following year's annual report on remuneration.<br>|
| Malus and Clawback |
| Under the AIP and DLTIP, the Remuneration Committee has discretion to apply malus and clawback in the circumstances specified in the <br>applicable malus and clawback policy from time to time in place, for example: <br>•Material misstatement of results or an error resulting in overpayment. <br>•Risk failure resulting in material financial loss or any business area being the subject of a regulatory investigation or in breach of regulation.<br>•Employee misconduct/disciplinary action.<br>•Employee accountability for material reputational damage to the group which could have been avoided.<br>•In respect of the application of malus, deterioration in the financial situation of the group which limits the ability to fund incentive awards.<br>•Any other matter which, in the reasonable opinion of the Remuneration Committee, is required to be considered to comply with prevailing legal <br>and/or regulatory requirements. <br>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 <br>Remuneration Committee determines that malus and/or clawback will apply, the Remuneration Committee has discretion to determine the basis <br>of application and the means by which malus and/or clawback will be implemented.<br>The malus and clawback policy will be reviewed from time to time to ensure that the policy is compliant with any regulatory requirements, such <br>as the NYSE listing rules.<br>|

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| |
|:---|
| 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.<br>•Executive Directors' eligibility may depend on their country of residence, tax status and employment company.<br>|
| **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 <br>limited to, measures of sales, profit and cash.<br>|

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| |
|:---|
| 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 <br>Executive Directors.<br>•Executive Directors are normally expected to build up their in-employment shareholding within five years of their appointment to the Board.<br>•Shares that count towards these minimum shareholding requirements are shares beneficially held by the Executive Director and their connected <br>persons, including Deferred Bonus Share Plan (DBSP) shares within the three-year deferral period, on a net (if post-tax deferral)/notional net (if <br>pre-tax deferral) of tax basis.<br>•Executive Directors are restricted from selling more than 50% of shares which vest under the long-term incentive plan or deferred bonus share <br>plan (excluding the sale of shares to cover tax on vesting and other exceptional circumstances to be specifically approved by the Chief <br>Executive and/or Chair), until the shareholding requirement is met.<br>•In order to provide further long-term alignment with shareholders, Executive Directors will normally be expected to maintain a Diageo <br>shareholding of 100% of the in-employment shareholding requirement (or, if lower, their actual shareholding on cessation) for two years after <br>leaving the company. <br>•The Executive Directors enter into a deed undertaking to comply with the requirement and committing to hold the required number of shares in <br>a specified nominee account. |
| •The minimum in-employment shareholding requirement is 500% of base salary for the Chief Executive and 400% of base salary for any other <br>Executive Directors.<br>•Executive Directors are normally expected to build up their in-employment shareholding within five years of their appointment to the Board.<br>•Shares that count towards these minimum shareholding requirements are shares beneficially held by the Executive Director and their connected <br>persons, including Deferred Bonus Share Plan (DBSP) shares within the three-year deferral period, on a net (if post-tax deferral)/notional net (if <br>pre-tax deferral) of tax basis.<br>•Executive Directors are restricted from selling more than 50% of shares which vest under the long-term incentive plan or deferred bonus share <br>plan (excluding the sale of shares to cover tax on vesting and other exceptional circumstances to be specifically approved by the Chief <br>Executive and/or Chair), until the shareholding requirement is met.<br>•In order to provide further long-term alignment with shareholders, Executive Directors will normally be expected to maintain a Diageo <br>shareholding of 100% of the in-employment shareholding requirement (or, if lower, their actual shareholding on cessation) for two years after <br>leaving the company. <br>•The Executive Directors enter into a deed undertaking to comply with the requirement and committing to hold the required number of shares in <br>a specified nominee account. |

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| | |
|:---|:---|
| 117 | **Diageo** Form 20-F 2025 |

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| | |
|:---|:---|
| 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 Chair and Non-Executive Directors are normally reviewed every year.<br>A proportion of the Chair's annual fee may be used for the monthly purchase of Diageo ordinary shares, which have to be retained until the Chair <br>retires from the company or ceases to be a Director.<br>Fees are reviewed in light of market practice in the FTSE 30, excluding financial services companies, and anticipated workload, tasks and <br>potential liabilities.<br>The Chair and Non-Executive Directors do not participate in any of the company's incentive plans nor do they receive pension contributions <br>orbenefits. Their travel and accommodation expenses in connection with attendance at Board meetings (and any tax thereon) are paid by <br>thecompany.<br>The Chair and the Non-Executive Directors are eligible to receive a product allowance or cash equivalent at the same level as the <br>ExecutiveDirectors.<br>All Non-Executive Directors have letters of appointment. A summary of their terms and conditions of appointment is available at <br>www.diageo.com. Sir John Manzoni was appointed as Chair of the Board on 5 February 2025 (having been a Non-Executive Director since 1October <br>2020), terminable on three months' notice by either party or, if terminated by the company, by payment of three months' fees in lieu ofnotice. |  |
| Fees for the Chair and Non-Executive Directors are normally reviewed every year.<br>A proportion of the Chair's annual fee may be used for the monthly purchase of Diageo ordinary shares, which have to be retained until the Chair <br>retires from the company or ceases to be a Director.<br>Fees are reviewed in light of market practice in the FTSE 30, excluding financial services companies, and anticipated workload, tasks and <br>potential liabilities.<br>The Chair and Non-Executive Directors do not participate in any of the company's incentive plans nor do they receive pension contributions <br>orbenefits. Their travel and accommodation expenses in connection with attendance at Board meetings (and any tax thereon) are paid by <br>thecompany.<br>The Chair and the Non-Executive Directors are eligible to receive a product allowance or cash equivalent at the same level as the <br>ExecutiveDirectors.<br>All Non-Executive Directors have letters of appointment. A summary of their terms and conditions of appointment is available at <br>www.diageo.com. Sir John Manzoni was appointed as Chair of the Board on 5 February 2025 (having been a Non-Executive Director since 1October <br>2020), terminable on three months' notice by either party or, if terminated by the company, by payment of three months' fees in lieu ofnotice. | **Opportunity** |
| Fees for the Chair and Non-Executive Directors are normally reviewed every year.<br>A proportion of the Chair's annual fee may be used for the monthly purchase of Diageo ordinary shares, which have to be retained until the Chair <br>retires from the company or ceases to be a Director.<br>Fees are reviewed in light of market practice in the FTSE 30, excluding financial services companies, and anticipated workload, tasks and <br>potential liabilities.<br>The Chair and Non-Executive Directors do not participate in any of the company's incentive plans nor do they receive pension contributions <br>orbenefits. Their travel and accommodation expenses in connection with attendance at Board meetings (and any tax thereon) are paid by <br>thecompany.<br>The Chair and the Non-Executive Directors are eligible to receive a product allowance or cash equivalent at the same level as the <br>ExecutiveDirectors.<br>All Non-Executive Directors have letters of appointment. A summary of their terms and conditions of appointment is available at <br>www.diageo.com. Sir John Manzoni was appointed as Chair of the Board on 5 February 2025 (having been a Non-Executive Director since 1October <br>2020), terminable on three months' notice by either party or, if terminated by the company, by payment of three months' fees in lieu ofnotice. | 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 <br>the Chair's fees.<br>|
| Fees for the Chair and Non-Executive Directors are normally reviewed every year.<br>A proportion of the Chair's annual fee may be used for the monthly purchase of Diageo ordinary shares, which have to be retained until the Chair <br>retires from the company or ceases to be a Director.<br>Fees are reviewed in light of market practice in the FTSE 30, excluding financial services companies, and anticipated workload, tasks and <br>potential liabilities.<br>The Chair and Non-Executive Directors do not participate in any of the company's incentive plans nor do they receive pension contributions <br>orbenefits. Their travel and accommodation expenses in connection with attendance at Board meetings (and any tax thereon) are paid by <br>thecompany.<br>The Chair and the Non-Executive Directors are eligible to receive a product allowance or cash equivalent at the same level as the <br>ExecutiveDirectors.<br>All Non-Executive Directors have letters of appointment. A summary of their terms and conditions of appointment is available at <br>www.diageo.com. Sir John Manzoni was appointed as Chair of the Board on 5 February 2025 (having been a Non-Executive Director since 1October <br>2020), terminable on three months' notice by either party or, if terminated by the company, by payment of three months' fees in lieu ofnotice. |  |
| Fees for the Chair and Non-Executive Directors are normally reviewed every year.<br>A proportion of the Chair's annual fee may be used for the monthly purchase of Diageo ordinary shares, which have to be retained until the Chair <br>retires from the company or ceases to be a Director.<br>Fees are reviewed in light of market practice in the FTSE 30, excluding financial services companies, and anticipated workload, tasks and <br>potential liabilities.<br>The Chair and Non-Executive Directors do not participate in any of the company's incentive plans nor do they receive pension contributions <br>orbenefits. Their travel and accommodation expenses in connection with attendance at Board meetings (and any tax thereon) are paid by <br>thecompany.<br>The Chair and the Non-Executive Directors are eligible to receive a product allowance or cash equivalent at the same level as the <br>ExecutiveDirectors.<br>All Non-Executive Directors have letters of appointment. A summary of their terms and conditions of appointment is available at <br>www.diageo.com. Sir John Manzoni was appointed as Chair of the Board on 5 February 2025 (having been a Non-Executive Director since 1October <br>2020), terminable on three months' notice by either party or, if terminated by the company, by payment of three months' fees in lieu ofnotice. |  |
| Fees for the Chair and Non-Executive Directors are normally reviewed every year.<br>A proportion of the Chair's annual fee may be used for the monthly purchase of Diageo ordinary shares, which have to be retained until the Chair <br>retires from the company or ceases to be a Director.<br>Fees are reviewed in light of market practice in the FTSE 30, excluding financial services companies, and anticipated workload, tasks and <br>potential liabilities.<br>The Chair and Non-Executive Directors do not participate in any of the company's incentive plans nor do they receive pension contributions <br>orbenefits. Their travel and accommodation expenses in connection with attendance at Board meetings (and any tax thereon) are paid by <br>thecompany.<br>The Chair and the Non-Executive Directors are eligible to receive a product allowance or cash equivalent at the same level as the <br>ExecutiveDirectors.<br>All Non-Executive Directors have letters of appointment. A summary of their terms and conditions of appointment is available at <br>www.diageo.com. Sir John Manzoni was appointed as Chair of the Board on 5 February 2025 (having been a Non-Executive Director since 1October <br>2020), terminable on three months' notice by either party or, if terminated by the company, by payment of three months' fees in lieu ofnotice. |  |
| Fees for the Chair and Non-Executive Directors are normally reviewed every year.<br>A proportion of the Chair's annual fee may be used for the monthly purchase of Diageo ordinary shares, which have to be retained until the Chair <br>retires from the company or ceases to be a Director.<br>Fees are reviewed in light of market practice in the FTSE 30, excluding financial services companies, and anticipated workload, tasks and <br>potential liabilities.<br>The Chair and Non-Executive Directors do not participate in any of the company's incentive plans nor do they receive pension contributions <br>orbenefits. Their travel and accommodation expenses in connection with attendance at Board meetings (and any tax thereon) are paid by <br>thecompany.<br>The Chair and the Non-Executive Directors are eligible to receive a product allowance or cash equivalent at the same level as the <br>ExecutiveDirectors.<br>All Non-Executive Directors have letters of appointment. A summary of their terms and conditions of appointment is available at <br>www.diageo.com. Sir John Manzoni was appointed as Chair of the Board on 5 February 2025 (having been a Non-Executive Director since 1October <br>2020), terminable on three months' notice by either party or, if terminated by the company, by payment of three months' fees in lieu ofnotice. |  |

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Policy considerations

**Performance measures**

Further details of the performance measures under the fiscal 26 annual incentive plan and measures and targets for DLTIP awards to be made in

September 2025 are set out on page 133. 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.

TheRemuneration 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 and territories 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.

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|:---|:---|
| 118 | **Diageo** Form 20-F 2025 |

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DIRECTORS' REMUNERATION REPORT continued

**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.

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| | |
|:---|:---|
| **Executive Director** | **Date of service contract** |
| Debra Crew | 28 March 2023 |
| Nik Jhangiani | 3 May 2024 |

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

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|:---|:---|
| 119 | **Diageo** Form 20-F 2025 |

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**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

tablebelow.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Non-Executive Directors** | **Date of appointment** <br>**to the Board** | **Current letter** <br>**of appointment** <br>**expires** |  |  |  |
| **Non-Executive Directors** | **Date of appointment** <br>**to the Board** | **Current letter** <br>**of appointment** <br>**expires** | Sir John Manzoni | 1 October 2020 | AGM 2026 |
| Susan Kilsby | 4 April 2018 | AGM 2027 |  |  |  |
| Melissa Bethell | 30 June 2020 | AGM 2026 |  |  |  |
| Karen Blackett CBE | 1 June 2022 | AGM 2025 |  |  |  |
| Valérie Chapoulaud-Floquet | 1 January 2021 | AGM 2027 |  |  |  |
| Ireena Vittal | 2 October 2020 | AGM 2026 |  |  |  |
| Julie Brown | 5 August 2024 | AGM 2027 |  |  |  |

---

**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 values 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. The responses received from

shareholders were supportive of the proposed change to enhance the

post-cessation shareholding requirement.

Employee engagement on executive remuneration

Karen Blackett took over accountability for global workforce

engagement sessions in fiscal 24 and continued as the designated Non-

Executive Director for workforce engagement through fiscal 25 with

focus group sessions led by her and other Non-Executive Directors. In

fiscal 25, there were two sessions 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. Fiscal 25 was the second year of undertaking the

engagement on remuneration in this format and it was, again, found

tobe productive and informative by the Committee Chair and the

participating employees.

Diageo also runs annual employee engagement surveys, which

givesemployees 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

asthe 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

intoaccount 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

forexecutives 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.

---

| | |
|:---|:---|
| 120 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION REPORT continued

Annual report on remuneration

The following section provides details of how the company's 2023 Directors' Remuneration Policy was implemented during the year ended 30 June

2025, and how the Remuneration Committee intends to implement the Policy in the year ending 30 June 2026.

**Single total figure of remuneration for Executive Directors**

The table below details the Executive Directors' remuneration for the year ended 30 June 2025.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Debra Crew**<sup>(1)</sup> | **Debra Crew**<sup>(1)</sup> | **Nik Jhangiani**<sup>(1),(9)</sup> | **Nik Jhangiani**<sup>(1),(9)</sup> | **Lavanya Chandrashekar**<sup>(1),(10)</sup> | **Lavanya Chandrashekar**<sup>(1),(10)</sup> |
| | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 |
| | **$'000** | $'000 | **$'000** | $'000 | **$'000** | $'000 |
| **Fixed pay** |  |  |  |  |  |  |
| Salary | **$1806** | $1750 | **$972** |  | **$174** | $1034 |
| Benefits<sup>(2)</sup> | **$317** | $140 | **$90** |  | **$8** | $47 |
| Pension<sup>(3)</sup> | **$269** | $242 | **$136** |  | **$20** | $140 |
| **Total fixed pay**<sup>(7)</sup> | **$2392** | $2132 | **$1198** |  | **$202** | $1221 |
| **Performance related pay** |  |  |  |  |  |  |
| Annual incentive<sup>(4)</sup> | **$1532** | $868 | **$863** |  | **$146** | $476 |
| Long-term incentives<sup>(5)</sup> | **$931** | $800 | **—** |  | **$198** | $1593 |
| Other incentives<sup>(6)</sup> | **$4** | $4 | **—** |  | **—** | $5 |
| **Total variable pay**<sup>(7)</sup> | **$2467** | $1672 | **$863** |  | **$344** | $2075 |
| **Other**<sup>(8)</sup> | **—** |  | **$10224** |  | **—** |  |
| Total single figure of remuneration<sup>(7)</sup> | **$4859** | $3804 | **$12285** |  | **$546** | $3296 |

---

**Notes**

---

| | | | |
|:---|:---|:---|:---|
| (1) | Exchange <br>rate<br>| Nik Jhangiani is paid in GBP (annual base salary of £900,000) and shown here in USD for consistency, converted using the cumulative <br>weighted average exchange rate for the 2025 fiscal year. For the year ended 30 June 2025, the exchange rate was £1 = $1.30. Debra <br>Crew and Lavanya Chandrashekar were paid in US dollars.<br>|  |
| (2) | Benefits | Includes the gross value of all taxable benefits. For Debra Crew, these include a flexible benefits allowance ($22k), tax return <br>preparation ($39k), a housing allowance ($150k), contracted car service ($62k), medical and dental ($24k), product allowance and life <br>and long-term disability cover. Nik Jhangiani's include a flexible benefits allowance ($19k), travel allowance ($11k), tax advice ($26k) <br>and medical, life and long-term disability cover. Lavanya Chandrashekar's benefits included a flexible benefits allowance ($4k), travel <br>allowance ($2k), product allowance and life and long-term disability cover (pro-rata for the period she was an Executive Director).<br>|  |
| (3) | Pension  | For Debra Crew and Lavanya Chandrashekar, pension benefits reflect the increase in the pension fund balances over the year in the Diageo <br>North America Inc. pension plans which are over and above the increase due to inflation. Nik Jhangiani received a pension allowance of 14% of <br>salary, and can opt to take all or part as cash or as a contribution to the Diageo UK Pension Plan. The company pension contribution has been <br>14% of salary from 1 January 2023 for all Executive Directors, aligned to the rate for the UK workforce. <br>| Page <br>124<br>|
| (4) | Annual<br>incentive<br>| In accordance with their elections to defer post-tax, one-third of the annual incentive for fiscal 25 shown in the table above for Debra <br>Crew and Lavanya Chandrashekar will be deferred into owned shares. For Debra Crew, these will be released on her termination date of <br>30 September 2025, and for Lavanya Chandrashekar they will be released immediately, with both required to hold these shares if <br>needed in line with their post-employment shareholding requirement. Nik Jhangiani opted to defer one-third of the annual incentive for <br>fiscal 25 pre-tax into conditional RSUs that will vest after three years.<br>| Page <br>121<br>|
| (5) | Long-<br>term <br>incentives<br>| Long-term incentives represent the estimated gain (based on the average three-month ADR price to 30 June 2025 of $108.49 for Debra <br>Crew and Lavanya Chandrashekar) delivered through share options and performance shares (including a DESAP award for Debra Crew <br>with a performance period across F23-F25, due to be released on 3 September 2026 subject to the treatment set out on page 131) where <br>performance conditions have been met in the respective financial year. Performance outcomes are shown on page 123. It also includes <br>the value of additional shares earned in lieu of dividends on vested DLTIP performance shares. For Debra Crew, the total reflects the <br>proportion of the performance period since her appointment as interim Chief Executive on 5 June 2023 (appointed as Chief Executive <br>and Executive Director on 8 June 2023). For Lavanya Chandrashekar, the total reflects the proportion of the performance period up to <br>her resignation from the Board and as Chief Financial Officer on 1 September 2024. Of the 2025 long-term incentive amounts shown in <br>the table above, none are related to share price appreciation over the fiscal 23 to fiscal 25 performance period.<br>For fiscal 24, long-term incentives comprise performance shares and share options awarded in 2021 that vested in September 2024 at <br>58.9% and 56.5% of maximum respectively for Debra Crew and Lavanya Chandrashekar, including dividend equivalents on <br>performance shares. These 2021 long-term incentive amounts have been restated to reflect the ADR share price on the vesting date of <br>$129.11 instead of the average three-month ADR share price used in last year's report of $137.77.<br>| Page <br>122<br>|
| (6) | Other <br>incentives<br>| Other incentives include the grant face value of awards made under the all-employee share plans (no 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 'Other' total for Nik Jhangiani notes the joining arrangements awarded to him to compensate for the loss of (1) in-flight share <br>awards and (2) 2024 bonus eligibility, when he joined Diageo from his former employer, Coca-Cola Europacific Partners. (1) Details of <br>the shares granted are detailed on page 125, totals shown here note the Restricted Share Units granted on 3 September 2024 at the value <br>on grant, an award of 260,898 ordinary shares at a grant price of £27.98. (2) Nik was awarded a cash payment of £593,120 in April <br>2025 to compensate him for loss of 2024 pro-rata bonus eligibility. This was calculated based on the financial multiplier as disclosed in <br>the Coca-Cola Europacific Partners 2024 Annual Report, Nik's former base salary and target opportunity, and a personal multiplier of <br>1.1x. GBP figures are converted using the cumulative weighted average exchange rate for fiscal 25 of £1 = $1.30.<br>|  |
| (9) | Other | Nik Jhangiani was appointed Chief Financial Officer on 1 September 2024. Figures are therefore pro-rata where applicable. |  |
| (10) | Other | Lavanya Chandrashekar stepped down from the Board on 1 September 2024. Figures are therefore pro-rata where applicable. |  |

---

---

| | |
|:---|:---|
| 121 | **Diageo** Form 20-F 2025 |

---

Looking back on 2025

Annual incentive plan (AIP) payouts for 2025 <br>

**AIP payout for the year ended 30 June 2025**

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**<sup>(1)</sup> | **Group financial measures**<sup>(1)</sup> | **Group financial measures**<sup>(1)</sup> | **Group financial measures**<sup>(1)</sup> | **Group financial measures**<sup>(1)</sup> |  |  |
| **Measure** | **Weighting** | **Threshold** | **Target** | **Maximum** | **Actual** | **Payout**<br>**(% of total AIP** <br>**opportunity)**<br>|
| Payout opportunity (% maximum) |  | 25% | 50% | 100% |  |  |
| Net sales value (% growth)<sup>(2)</sup> | 26.67% | 0.3% | 2.9% | 5.7% | **1.5%** | **10.0%** |
| Operating profit (% growth)<sup>(2)</sup> | 26.67% | 0.3% | 3.3% | 6.3% | **(1.0)%** | **—%** |
| Operating cash conversion<sup>(3)</sup> | 26.67% | 93.0% | 98.1% | 103.0% | **101.4%** | **22.0%** |
| Full year performance for 1 July 2024 - 30 June 2025 | **80.00%** |  |  |  |  | **32.0%** |

---

---

| | | | |
|:---|:---|:---|:---|
| **Individual business objectives**  | **Individual business objectives**  | **Individual business objectives**  | **Individual business objectives**  |
| **Measure and target** | **Weighting** | **Result** | **Payout**<br>**(% of total AIP** <br>**opportunity)**<br>|
| **Debra Crew** Chief Executive | **20.0%** |  | **10.0%** |
| **Global market share performance**<br>•Grow or hold total trade market share in <br>2/3<sup>rds</sup> of total net sales in measured <br>markets.<br>| 7.5% | We gained or held total trade market share in markets that total 65% <br>of our net sales in fiscal 25.<sup>(6)</sup><br>| 3.4% |
| **Productivity improvement**<br>•Deliver an overall productivity improvement <br>in fiscal 25 of $482m across all cost <br>categories.<br>| 7.5% | The productivity target for fiscal 25 has been exceeded: by the end of <br>fiscal 25, we delivered $568m in productivity savings acrossall cost <br>categories including supply, A&P and indirect overheads.<br>| 4.1% |
| **Positive Drinking**<br>**•**Deliver an improvement in our promotion of <br>positive drinking in fiscal 25.<br>| 5.0% | In fiscal 25 we deliveredstrong progress against our Positive Drinking <br>ambition: 2.0m people were educated via an underage <br>drinking programme, with 1.6m educational experiences delivered to <br>promote changes in attitudes to drink driving. <br>| 2.5% |
| **Nik Jhangiani** Chief Financial Officer (from 1 <br>September 2024)<br>| **20.0%** |  | **12.4%** |
| **Accelerating our Growth Ambition**<br>•Design and communication of a new <br>integrated framework to further support the <br>delivery of our Growth Ambition.<br>| 7.5% | Reshaped financial priorities communicated, internally and externally. <br>Fiscal 25 saw the design and launch of the Accelerate programme, with <br>the foundations set to deliver $3 billion in free cash flow per year <br>starting in fiscal 26, with a targeted 3-year cost savings programme <br>identified (as set out on page 23), enabling both reinvestment in future <br>growth and improved operating leverage.<br>| 5.6% |
| **Finance function strategy review**<br>•Development of the Finance functional <br>strategy, reviewing the operating model to <br>ensure the capability and talent pipeline <br>delivers a high-performing function which <br>enables the Growth Ambition.<br>| 7.5% | Defined and embedded new Finance strategic pillars, leadership <br>purpose, and functional priorities to support our Growth Ambition.<br>Detailed review conducted of the talent landscape, with clear and <br>actionable goals set, and significant progress on internal leadership <br>promotions in fiscal 25. <br>Development of best-in-class Senior Finance Leadership development <br>programme, facilitating succession to critical roles and strengthening <br>our Finance talent pipeline.<br>| 4.7% |
| **Technology transformation**<br>•Design of an assured plan with key <br>milestones agreed to ensure the successful <br>delivery of enterprise-wide Finance and <br>technology transformation within budget.<br>| 5.0% | New SAP S/4 HANA upgrade plan designed and launched, which is <br>intended to deliver a derisked technical solution in fiscal 26 for <br>significantly less cost than previous run rate. <br>| 2.1% |
| **Lavanya Chandrashekar** Chief Financial Officer <br>(to 1 September 2024)<br>| **20.0%** |  | **10.0%** |
| **Fiscal 2024 close**<br>•Ensure the timely and efficient closure to the <br>F24 financial year including delivery of <br>preliminary results and final accounts. <br>| 10.0% | Fiscal 24 closed efficiently and in line with expectations.  | 5.0% |
| **CFO transition**<br>•Ensure a smooth transition is provided to the <br>new CFO in order to enable a successful <br>transfer of responsibilities for the function. <br>| 10.0% | The Committee judged that an effective and smooth transition to <br>Nik Jhangiani was achieved in fiscal 25.<br>| 5.0% |

---

---

| | |
|:---|:---|
| 122 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION REPORT continued

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Payout** | **Payout** | **Payout** | **Payout** | **Payout** |  |
|  | Group<br>(weighted 80%)<br>| IBO<br>(weighted 20%)<br>| **Total**<br>**(% max)**<br>| Total<br>(% annual <br>salary)<br>| Total<br> ('000) USD<br>|
| Debra Crew<sup>(4),(5)</sup> | 32.0% | 10.0% | **42.0%** | 84.0% | $1532 |
| Nik Jhangiani<sup>(4),(5)</sup> | 32.0% | 12.4% | **44.4%** | 88.8% | $863 |
| Lavanya Chandrashekar<sup>(4),(5)</sup> | 32.0% | 10.0% | **42.0%** | 84.0% | $146 |

---

(1) Performance against the AIP measures is calculated using fiscal 25 budgeted exchange rates and is measured on a currency-neutral basis. Performance across net sales value growth, operating

profit growth, and operating cash conversion for fiscal 25 has been assessed including the performance of Cîroc which was disposed of prior to year end.

(2) For AIP purposes, net sales value growth and operating profit 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 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 2025 (or, in the case of Lavanya Chandrashekar, 1 September 2024), in line with the global policy that applies to other employees

across the company.

(5) In accordance with the 2023 Directors' Remuneration Policy and their individual elections to defer post-tax, one-third of Debra Crew and Lavanya Chandrashekar's after-tax AIP payout disclosed in

the table above will be deferred into Diageo shares. For Debra Crew, these will be released on her termination date of 30 September 2025, and for Lavanya Chandrashekar they will be released

immediately, with both required to hold these shares if needed in line with their post-employment shareholding requirement. Nik Jhangiani opted to defer one-third of the AIP award pre-tax into

conditional RSUs that will vest after three years. The number of shares will be disclosed in the fiscal 26 Directors' Remuneration Report.

(6) Market share reflects internal estimates incorporating Nielsen, Association of Canadian Distillers, CGA, Dichter and Neira, Frontline, Intage, IRI, ISCAM, NABCA, State Monopolies, TRAC, Ipsos and

other third-party providers.

(i) No discretion was exercised by the Remuneration Committee in determining the AIP outcome.

Long-term incentive plans (LTIP) vesting in 2025 <br>

Long-term incentive awards up to and including September 2023 were made under the Diageo 2014 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 2022, vesting in September 2025**

In September 2022, Debra Crew (although not an Executive Director at the time of grant) received share option awards over ADRs under the DLTIP,

with an exercise price of $176.95. Nik Jhangiani was appointed to the Board in September 2024, and therefore does not have a 2022 DLTIP share

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

---

**Performance shares – awarded in September 2022, vesting in September 2025**

In September 2022, Debra Crew (although not Executive Director at the time of grant) received a performance share award under the DLTIP. Nik

Jhangiani was appointed to the Board in September 2024, and therefore does not have a 2022 DLTIP performance share award. Awards vest after a

three-year period subject to the achievement of three performance conditions outlined below:

Organic net sales value growth (weighted 40%);

Profit before exceptional items and tax (PBET) growth (weighted 40%); and

ESG measures (water efficiency, carbon reduction, positive drinking, and inclusion and diversity metrics) weighted 20%.

Notional dividends accrue on awards and are paid out either in cash or shares on the number of shares which vest.

---

| | |
|:---|:---|
| 123 | **Diageo** Form 20-F 2025 |

---

**Vesting outcome for 2022 DLTIP performance share and share option awards in September 2025** 

The 2022 DLTIP performance share award vested at 12.5% of maximum for Debra Crew. Vesting and treatment for Lavanya Chandrashekar's 2022

DLTIP award can be found in the 'Payments to former Directors' section on page 131. The 2022 DLTIP share options lapsed having not met the

threshold performance level for either performance measure as detailed below:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| Vesting of 2022 DLTIP<sup>(5)</sup> | Weighting | Threshold | Midpoint | Maximum | Actual | Debra Crew <br>vesting<br>(% <br>maximum)<sup>(5)(6)</sup><br>| Lavanya <br>Chandrashekar <br>vesting<br>(% <br>maximum)<sup>(5)(6)</sup><br>|
| Vesting if performance achieved (% maximum)<sup>(6)</sup> |  | 20%/25% | 60%/62.5% | 100% |  |  |  |
| Organic net sales value growth<sup>(1)</sup> | 40.0% | 4.5% | 6.5% | 8.5% | 2.5% |  |  |
| Profit before exceptional items and tax (PBET) growth<sup>(2)</sup> | 40.0% | 5% | 8.5% | 12% | (3.5%) |  |  |
| Carbon reduction (ESG) | 5.0% | 10.7% | 14.2% | 17.6% | 18.8% | 5.0% | 5.0% |
| Water efficiency (ESG) | 5.0% | 6.3% | 9.2% | 12.1% | 6.0% |  |  |
| Positive drinking (ESG) | 5.0% | 2.6m | 3.3m | 4.0m | 5.0m | 5.0% | 5.0% |
| Inclusion & diversity - % female leaders globally (ESG) | 2.5% | 45% | 46% | 47% | 43.0% |  |  |
| Inclusion & diversity - % ethnically diverse leaders globally <br>(ESG)<br>| 2.5% | 42.0% | 43.0% | 44.0% | 46.0% | 2.5% | 2.5% |
| **Vesting of performance shares (% maximum)** |  |  |  |  |  | **12.5%** | **12.5%** |
| Cumulative free cash flow (FCF)<sup>(3)</sup> | 50.0% | $10,175m | $11,372m | $12,569m | $8,875m |  |  |
| Relative total shareholder return<sup>(4)</sup> | 50.0% | 9<sup>th</sup> |  | 3<sup>rd</sup> | 15<sup>th</sup> |  |  |
| **Vesting of share options (% maximum)** |  |  |  |  |  | **—** | **—** |

---

(1) Organic net sales 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 programme (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 WTW.

(5) No discretion was exercised by the Remuneration Committee in determining the long-term incentive outcomes.

(6) At the time of grant of the 2022 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% at midpoint).

**Vesting outcome for 2022 DESAP performance share award for Debra Crew**

In March 2022 Debra Crew was granted an award of performance shares under the Diageo Exceptional Stock Award Plan (DESAP). Vesting of the first

tranche of shares under this award was subject to the achievement of a performance hurdle based on winning or holding Diageo global market share

in at least 2/3<sup>rds</sup> of total net sales value in measured markets in fiscal 23, 24 and 25 (average across the three years, with each year measured

separately). The performance condition has been met with an average over the three financial years of 70%. Diageo achieved 70% in fiscal 23, 75% in

fiscal 24, and 65% in fiscal 25. 8,796 shares in total were awarded, of which 6,075 applied during the performance period in relation to time as

Chief Executive and therefore disclosed with the single figure of remuneration on page 120. Shares will be released on the original vesting date in

September 2026, as per the loss of office details set out in page 131.

**Summary of DESAP, DLTIP performance share awards and DLTIP options vesting** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Award | Award Date | Awarded<br>(ADRs)<br>| Vesting<br>(% Max)<br>| Vesting<br>(ADRs)<br>| Option price | ADR grant <br>price<br>| Dividend <br>equivalent <br>share<br>| Estimated <br>value<br>($'000)<sup>(1)</sup><br>|
| Debra Crew<sup>(2)</sup> | DESAP | 03/03/2022 | 6075 | 100% | 6075 |  | $197.06 |  | $659 |
|  | Performance Shares | 02/09/2022 | 18392 | 12.5% | 2299 |  | $195.29 | 203 | $272 |
|  | Share Options | 02/09/2022 | 18392 |  |  | $176.95 | $195.29 |  |  |

---

(1) The total long-term incentives value shown in the single figure of remuneration on page 120 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 ($108.49).

(2) The number of ADRs and the resulting value of DESAP, DLTIP performance shares and DLTIP 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 (pro-rata from 5 June 2023). The original number of DESAP, DLTIP performance shares and DLTIP share options

awarded is shown on page 126. The total number of DESAP shares awarded was 8,796 of which 6,075 is shown above. The total number of DLTIP performance shares awarded was 26,629 and

3,328 vested in total of which 2,299 is shown above. The total value of the vested awards including dividend equivalent shares (203ADRs) is $930,609. No DLTIP 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 2025.

---

| | |
|:---|:---|
| 124 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION REPORT continued

Pensions and benefits in the year ended 30 June 2025<br>

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 2025.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.

Nik Jhangiani receives a 14% of base salary pension allowance and can opt to use this in full or in part and contribute to the UK Diageo Pension Plan.

In fiscal 25, Nik contributed £8,333 to the UK plan (£833.33 per month), with the balance of the pension allowance paid in cash.

In the event of death in service, a lump sum of six times base salary is payable for Debra Crew and Nik Jhangiani.

The table below shows the pension benefits accrued by each current and former Executive Director as at year end. The accrued US benefits for

Debra Crew and Lavanya Chandrashekar are one-off cash balance amounts.

---

| | | | |
|:---|:---|:---|:---|
|  | **30 June 2025** | **30 June 2025**<sup>(2)</sup> | 30 June 2024 |
| Executive Director | **UK benefit value** <br>**£'000**<br>| **US benefit value** <br>**$'000**<br>| US benefit value <br>$'000<br>|
| Debra Crew<sup>(1)</sup> | **n/a** | **1558** | 1245 |
| Nik Jhangiani | **105** | **n/a** | n/a |
| Lavanya Chandrashekar<sup>(2)</sup> | **n/a** | **719** | 689 |

---

(1) Debra Crew's US benefits reflect an increase of $313,000 over the year to 30 June 2025. This increase reflects $275,000 which is due to additional pension benefits earned over the year (of which

$269,000 is over and above the increase due to inflation, and is reported in the total single figure of remuneration table on page 120); and, $38,000which is due to interest earned over the

year on her deferred US benefits.

(2) Lavanya Chandrashekar's US benefits reflect an increase of $30,000 over the year pro-rated to 1 September 2024. This increase reflects $28,000 which is due to additional pension benefits earned

over the year (of which $20,000 is over and above the increase due to inflation, and is reported in the total single figure of remuneration table on page 120); and $2,000 of which is due to

interest earned on her deferred US benefits.

The Normal Retirement Age applicable to each Director's US benefits depends on the pension scheme, as outlined below.

---

| | | | |
|:---|:---|:---|:---|
| Executive Director | US benefits <br>(Cash <br>Balance Plan)<br>| US benefits <br>(BSP)<br>| US benefits <br>(SERP)<br>|
| Debra Crew | 65 | 6 months after leaving service, or age 55 if later | 6 months after leaving service, or age 55 if later |
| Lavanya Chandrashekar | 65 | 6 months after leaving service, or age 55 if later | 6 months after leaving service, or age 55 if later |

---

---

| | |
|:---|:---|
| 125 | **Diageo** Form 20-F 2025 |

---

Long-term incentive awards made during the year ended 30 June 2025<br>

On 3 September 2024, Debra Crew and Nik Jhangiani 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 2024 to 30 June 2027.

The performance measures and targets for awards granted in September 2024 are outlined below. Net sales 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 'Spirit of Progress' ESG action plan to help create an inclusive and sustainable world. The

definitions for the ESG measures were set out on page 146 of the annual remuneration report for fiscal 24.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Performance shares | Performance shares | Performance shares | Performance shares | Performance shares | Performance shares | Performance shares | Share options | Share options |
| 2024 DLTIP | Organic net sales <br>value (CAGR)<br>| Organic profit <br>before <br>exceptional items <br>and tax (CAGR)<br>| Greenhouse gas <br>reduction<br>| Water efficiency <br>index<br>| Positive drinking | % Female <br>leaders<br>| % Ethnically <br>diverse leaders<br>| Cumulative free <br>cash flow<br>| Relative TSR |
| Weighting | 40% | 40% | 5% | 5% | 5% | 2.5% | 2.5% | 50% | 50% |
| Target range | 3.0% - 6.0% | 3.1% - 9.1% | 16.3% - 29.9% | 6.2% - 11.2% | 2.5m - 3.7m | 46% - 50% | 45% - 49% | $7,150m - <br>$9,950m<br>| 9<sup>th</sup> - 3<sup>rd</sup> and <br>above<br>|

---

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 <br>during the year<br>| Exercise <br>price<br>| Face value<br>'000<br>| Face value<br>(% of salary)<br>|
| Debra Crew | 03/09/2024 | DLTIP - share options | ADR | 48182 | $132.46 | $6841 | 375% |
| Debra Crew | 03/09/2024 | DLTIP - performance shares | ADR | 48182 |  | $6841 | 375% |
| Nik Jhangiani | 03/09/2024 | DLTIP - share options | ORD | 115796 | £24.79 | £3,240 | 360% |
| Nik Jhangiani | 03/09/2024 | DLTIP - performance shares | ORD | 115796 |  | £3,240 | 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 2027 Directors' 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 Ordinary Share (ORD) and ADR price for the last six months of the preceding financial year (£27.98 and $141.99, respectively). 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 ORD and ADR price of the three days preceding the grant date (£24.79 and $132.46, respectively).

**Grant of share awards**

The Directors' Remuneration Policy specifically permits the company to introduce a one-off share award as part of recruitment arrangements for

Executive Directors. The Committee was satisfied that the circumstances of Nik Jhangiani's recruitment and, in particular, the forfeiture of

incentives that he would have otherwise been entitled with his previous employer, Coca-Cola Europacific Partners, were sufficiently unusual such

that a one-off share award fully met the requirements of LR9.3.2.

The terms of these awards are materially in the same form as awards granted under the Diageo 2023 Long-Term Incentive Plan which was approved

by shareholders in September 2023, as set out in the 2023 AGM notice available on the company's website, except the plan terms relating to the

timing of awards and shareholder approval of amendments to the terms do not apply. In the event Nik resigns or is dismissed by the company within

a year of his start date he will pay back to the company 100% of the net of tax value of his vested awards, reducing to 50% of the net of tax value of

his vested awards if this happens between one and two years of his start date.

Details of the awards are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Name | Plan | Grant date | Ordinary shares <br>granted<br>| Award calculation <br>share price<sup>(2)</sup><br>| Face value on grant <br>'000<br>| Vesting date |
| Nik Jhangiani | Special Recruitment Award - Restricted Stock Unit | 03/09/2024 | 139385 | £27.98 | £3,900 | 03/03/2025 |
| Nik Jhangiani | Special Recruitment Award - Performance <br>Shares<sup>(1)</sup><br>| 03/09/2024 | 42172 | £27.98 | £1,180 | 09/03/2026 |
| Nik Jhangiani | Special Recruitment Award - Restricted Stock Unit | 03/09/2024 | 58970 | £27.98 | £1,650 | 09/03/2026 |
| Nik Jhangiani | Special Recruitment Award - Restricted Stock Unit | 03/09/2024 | 8934 | £27.98 | £250 | 07/03/2027 |
| Nik Jhangiani | Special Recruitment Award - Restricted Stock Unit | 03/09/2024 | 53609 | £27.98 | £1,500 | 07/03/2027 |

---

(1) Vesting of this tranche is subject to a performance underpin. The performance underpin is based on the achievement of a productivity savings target across fiscal 25 and H1 in fiscal 26. The

relevant target and level of performance achievement will be disclosed in the fiscal 26 Directors' Remuneration Report. All other tranches are released subject only to continued employment.

(2) Based on the average six-month ordinary share price between 1 January 2024 - 30 June 2024.

---

| | |
|:---|:---|
| 126 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION REPORT continued

Outstanding share plan interests<br>

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Plan name  | Date of <br>award<br>| Performance <br>period<br>| Year of <br>vesting<br>| Award <br>calculatio<br>n share <br>price<br>| Exercise <br>price<br>| Number of <br>shares/<br>options at <br>30 June <br>2024<sup>(1)</sup><br>| Granted | Vested/<br>exercised<br>| Dividend <br>equivalen<br>t shares <br>released<br>| Lapsed | Number of <br>shares/<br>options at <br>30 June <br>2025<sup>(1)</sup><br>|  |
| **Debra Crew** | **Debra Crew** | **Debra Crew** | **Debra Crew** | **Debra Crew** | **Debra Crew** | **Debra Crew** | **Debra Crew** | **Debra Crew** | **Debra Crew** | **Debra Crew** | **Debra Crew** |  |
| DLTIP - Share Options | Sep 2022 | 2022-2025 | 2025 |  | $176.95 | 26629 |  |  |  |  | 26629 | ADR |
| DLTIP - Share Options | Sep 2023 | 2023-2026 | 2026 |  | $166.67 | 36971 |  |  |  |  | 36971 | ADR |
| DLTIP - Share Options | Sep 2024 | 2024-2027 | 2027 |  | $132.46 |  | 48182 |  |  |  | 48182 | ADR |
| **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **447128** | **ORD** |
| DLTIP - Share Options<sup>(3)</sup> | Sep 2020 | 2020-2023 | 2023 |  | $133.88 | 23308 |  |  |  |  | 23308 | ADR |
| DLTIP - Share Options<sup>(3)</sup> | Sep 2021 | 2021-2024 | 2024 |  | $194.75 | 27019 |  |  |  | 27019 |  | ADR |
| **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **93232** | **ORD** |
| DLTIP - Performance Shares | Sep 2021 | 2021-2024 | 2024 | $174.97 |  | 27019 |  | 17331 | 1417 | 11105 |  | ADR |
| **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **—** | **ORD** |
| DLTIP - Performance Shares<sup>(4)</sup> | Sep 2022 | 2022-2025 | 2025 | $195.29 |  | 26629 |  |  |  |  | 26629 | ADR |
| DLTIP - Performance Shares | Sep 2023 | 2023-2026 | 2026 | $177.50 |  | 36971 |  |  |  |  | 36971 | ADR |
| DLTIP - Performance Shares | Sep 2024 | 2024-2027 | 2027 | $141.99 |  |  | 48182 |  |  |  | 48182 | ADR |
| DESAP - Performance Shares<sup>(5)</sup> | Mar 2022 | 2023-2025 | 2026 | $197.06 |  | 8796 |  |  |  |  | 8796 | ADR |
| DESAP - Performance Shares<sup>(5)</sup> | Mar 2022 | 2024-2026 | 2027 | $197.06 |  | 8930 |  |  |  |  | 8930 | ADR |
| DESAP - Performance Shares<sup>(5)</sup> | Mar 2022 | 2025-2027 | 2028 | $197.06 |  | 8930 |  |  |  |  | 8930 | ADR |
| **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **553752** | **ORD** |
| DESAP - Restricted Stock Unit<sup>(5)</sup> | Mar 2022 |  | 2027 | $197.06 |  | 8796 |  |  |  |  | 8796 | ADR |
| DESAP - Restricted Stock Unit<sup>(5)</sup> | Mar 2022 |  | 2028 | $197.06 |  | 8930 |  |  |  |  | 8930 | ADR |
| DESAP - Restricted Stock Unit<sup>(5)</sup> | Mar 2022 |  | 2029 | $197.06 |  | 8930 |  |  |  |  | 8930 | ADR |
| **Total unvested shares not subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares not subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares not subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares not subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares not subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares not subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares not subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares not subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares not subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares not subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares not subject to performance in ordinary shares**<sup>(2)</sup> | **106624** | **ORD** |
| **Lavanya Chandrashekar**<sup>(6)</sup> | **Lavanya Chandrashekar**<sup>(6)</sup> | **Lavanya Chandrashekar**<sup>(6)</sup> | **Lavanya Chandrashekar**<sup>(6)</sup> | **Lavanya Chandrashekar**<sup>(6)</sup> | **Lavanya Chandrashekar**<sup>(6)</sup> | **Lavanya Chandrashekar**<sup>(6)</sup> | **Lavanya Chandrashekar**<sup>(6)</sup> | **Lavanya Chandrashekar**<sup>(6)</sup> | **Lavanya Chandrashekar**<sup>(6)</sup> | **Lavanya Chandrashekar**<sup>(6)</sup> | **Lavanya Chandrashekar**<sup>(6)</sup> |  |
| DLTIP - Share Options<sup>(3)</sup> | Sep 2018 | 2018-2021 | 2021 |  | $140.89 | 3832 |  |  |  |  | 3832 | ADR |
| DLTIP - Share Options<sup>(3)</sup> | Sep 2018 | 2018-2021 | 2021 |  | $140.89 | 1064 |  |  |  |  | 1064 | ADR |
| DLTIP - Share Options<sup>(3)</sup> | Sep 2021 | 2021-2024 | 2024 |  | $194.75 | 20060 |  |  |  | 20060 |  | ADR |
| **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **Total vested but unexercised share options in ordinary shares**<sup>(2)</sup> | **19584** | **ORD** |
| DLTIP - Share Options | Sep 2022 | 2022-2025 | 2025 |  | $176.95 | 18512 |  |  |  | 3058 | 15454 | ADR |
| DLTIP - Share Options | Sep 2023 | 2023-2026 | 2026 |  | $166.67 | 21182 |  |  |  | 10553 | 10629 | ADR |
| **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested share options subject to performance in ordinary shares**<sup>(2)</sup> | **104332** | **ORD** |
| DLTIP - Performance Shares | Sep 2021 | 2021-2024 | 2024 | $174.97 |  | 20060 |  | 12342 | 1009 | 8727 |  | ADR |
| **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total vested shares subject to performance in ordinary shares**<sup>(2)</sup> | **—** | **ORD** |
| DLTIP - Performance Shares<sup>(4)</sup> | Sep 2022 | 2022-2025 | 2025 | $195.29 |  | 18512 |  |  |  | 3058 | 15454 | ADR |
| DLTIP - Performance Shares | Sep 2023 | 2023-2026 | 2026 | $177.50 |  | 21182 |  |  |  | 10553 | 10629 | ADR |
| **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **Total unvested shares subject to performance in ordinary shares**<sup>(2)</sup> | **104332** | **ORD** |
| **Nik Jhangiani** | **Nik Jhangiani** | **Nik Jhangiani** | **Nik Jhangiani** | **Nik Jhangiani** | **Nik Jhangiani** | **Nik Jhangiani** | **Nik Jhangiani** | **Nik Jhangiani** | **Nik Jhangiani** | **Nik Jhangiani** | **Nik Jhangiani** |  |
| DLTIP - Share Options | Sep 2024 | 2024-2027 | 2027 |  | £24.79 |  | 115796 |  |  |  | 115796 | ORD |
| **Total unvested share options subject to performance in ordinary shares** | **Total unvested share options subject to performance in ordinary shares** | **Total unvested share options subject to performance in ordinary shares** | **Total unvested share options subject to performance in ordinary shares** | **Total unvested share options subject to performance in ordinary shares** | **Total unvested share options subject to performance in ordinary shares** | **Total unvested share options subject to performance in ordinary shares** | **Total unvested share options subject to performance in ordinary shares** | **Total unvested share options subject to performance in ordinary shares** | **Total unvested share options subject to performance in ordinary shares** | **Total unvested share options subject to performance in ordinary shares** | **115796** | **ORD** |
| DLTIP - Performance Shares | Sep 2024 | 2024-2027 | 2027 | £27.98 |  |  | 115796 |  |  |  | 115796 | ORD |
| SRA - Performance Shares<sup>(7)</sup> | Sep 2024 | 2024-2026 | 2026 | £27.98 |  |  | 42172 |  |  |  | 42172 | ORD |
| **Total unvested shares subject to performance in ordinary shares** | **Total unvested shares subject to performance in ordinary shares** | **Total unvested shares subject to performance in ordinary shares** | **Total unvested shares subject to performance in ordinary shares** | **Total unvested shares subject to performance in ordinary shares** | **Total unvested shares subject to performance in ordinary shares** | **Total unvested shares subject to performance in ordinary shares** | **Total unvested shares subject to performance in ordinary shares** | **Total unvested shares subject to performance in ordinary shares** | **Total unvested shares subject to performance in ordinary shares** | **Total unvested shares subject to performance in ordinary shares** | **157968** | **ORD** |
| SRA - Restricted Stock Unit<sup>(7)</sup> | Sep 2024 | 2024-2025 | 2025 | £27.98 |  |  | 139385 | 139385 |  |  |  | ORD |
| SRA - Restricted Stock Unit<sup>(7)</sup> | Sep 2024 | 2024-2026 | 2026 | £27.98 |  |  | 58970 |  |  |  | 58970 | ORD |
| SRA - Restricted Stock Unit<sup>(7)</sup> | Sep 2024 | 2024-2027 | 2027 | £27.98 |  |  | 8934 |  |  |  | 8934 | ORD |
| SRA - Restricted Stock Unit<sup>(7)</sup> | Sep 2024 | 2024-2027 | 2027 | £27.98 |  |  | 53609 |  |  |  | 53609 | ORD |
| **Total unvested shares not subject to performance in ordinary shares** | **Total unvested shares not subject to performance in ordinary shares** | **Total unvested shares not subject to performance in ordinary shares** | **Total unvested shares not subject to performance in ordinary shares** | **Total unvested shares not subject to performance in ordinary shares** | **Total unvested shares not subject to performance in ordinary shares** | **Total unvested shares not subject to performance in ordinary shares** | **Total unvested shares not subject to performance in ordinary shares** | **Total unvested shares not subject to performance in ordinary shares** | **Total unvested shares not subject to performance in ordinary shares** | **Total unvested shares not subject to performance in ordinary shares** | **121513** | **ORD** |

---

---

| | |
|:---|:---|
| 127 | **Diageo** Form 20-F 2025 |

---

(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 2018, 2020 and 2021 showing as outstanding as at 30 June 2025 are vested but unexercised share options.

(4) Performance shares and share options granted under the DLTIP in September 2022 and due to vest in September 2025 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 on page 120, since the performance period ended during the year ended 30 June 2025.

(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 2/3rds of total NSV in measured markets over the 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) The shareholding information for Lavanya Chandrashekar is stated as at her resignation date from the Board on 1 September 2024.

(7) These awards were granted to Nik Jhangiani on joining Diageo as compensation for loss of in-flight long-term incentives from his former employer. Details are set out on page 125.

Directors' shareholding requirement and share interests <br>

The beneficial interests of the Directors who held office during the year ended30 June 2025 (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<sup>(1),(2)</sup> | Ordinary shares or equivalent<sup>(1),(2)</sup> | Ordinary shares or equivalent<sup>(1),(2)</sup> |  |  |  |
|  | **4 August 2025** | **30 June 2025** <br>**(or date of** <br>**cessation, if** <br>**earlier)**<br>| 30 June 2024 <br>(or date of <br>appointment <br>if later)<br>| Shareholding <br>requirement<br>(% salary)<sup>(3)</sup><br>| Shareholding at <br>30 June 2025 <br>(% salary)<sup>(3)</sup><br>| Shareholding requirement met |
| **Chair** |  |  |  |  |  |  |
| Sir John Manzoni | **4683** | **4348** | 3007 |  |  |  |
| Javier Ferrán<sup>(4)(8)</sup> | **n/a** | **317717** | 314498 |  |  |  |
| **Executive Directors** |  |  |  |  |  |  |
| Debra Crew<sup>(4)(5)(8)</sup> | **n/a** | **166100** | 122736 | 500% | 239% | No - see 'Loss of office' section on page 131 |
| Lavanya Chandrashekar<sup>(4)(5)(6)</sup> | **n/a** | **59402** | 30406 | 400% | 149% | Shareholding at time of cessation shown |
| Nik Jhangiani<sup>(7)</sup> | **73758** | **73750** | n/a | 400% | 166% | No - to be met by December 2029 |
| **Non-Executive Directors** |  |  |  |  |  |  |
| Susan Kilsby<sup>(4)</sup> | **2600** | **2600** | 2600 |  |  |  |
| Melissa Bethell | **2668** | **2668** | 2668 |  |  |  |
| Valérie Chapoulaud-Floquet | **2224** | **2224** | 2154 |  |  |  |
| Alan Stewart<sup>(8)</sup> | **n/a** | **7550** | 7550 |  |  |  |
| Ireena Vittal | **—** | **—** |  |  |  |  |
| Karen Blackett CBE | **702** | **702** | 702 |  |  |  |
| Julie Brown<sup>(9)</sup> | **2700** | **2700** | n/a |  |  |  |

---

**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 2025 and the last practicable date before publication of this report, being 4 August 2025, is outlined in the table

above.

(3) Both the shareholding requirement and shareholding at 30 June 2025 are expressed as a percentage of base salary on 30 June 2025 and calculated using a three-month average share price for period

ending 30 June 2025 of £20.26. For the purposes of the shareholding requirement, any vested but unexercised share options are reflected on an estimated net of tax basis.

(4) 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.

(5) The total share interests shown above include Deferred Bonus Plan Shares for Debra Crew (1,309 ADRs) and Lavanya Chandrashekar (3,087 ADRs).

(6) Lavanya Chandrashekar resigned from the Board on 1 September 2024. Under the post-employment shareholding requirement policy, Lavanya Chandrashekar is required to continue to hold

Diageo shares equal in value to 400% of her salary, or actual shareholding if lower, for two years post-cessation of employment.

(7) Nik Jhangiani joined the Board on 1 September 2024.

(8) Debra Crew, Javier Ferrán and Alan Stewart resigned from the Board on 16 July 2025, 5 February 2025 and 26 September 2024 respectively, and therefore no details are included for their

shareholdings after their dates of cessation.

(9) Julie Brown joined the Board on 5 August 2024.

**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, for fiscal 24 only, the share buyback programme but excluding transaction costs), and the percentage change

from the year ended 30 June 2024 to the year ended 30 June 2025. There are no other significant distributions or payments of profit or cash flow.

---

| | |
|:---|:---|
| Distributions to shareholders<br>**(29.1)%**<br>| Staff pay<br>**7.5%**<br>|

---

![22346](deo-20250630_g192.gif)

![22349](deo-20250630_g193.gif)

---

| | |
|:---|:---|
| 128 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION REPORT continued

**CEO total remuneration and TSR performance**<br>

The graph below shows the total shareholder return for Diageo plc and the FTSE 100 Index since 30 June 2015 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 <br>of hypothetical £100 holding<br>| Chief Executive total remuneration <br>(includes legacy LTIP awards) (£'000)<br>|

---

---

| | |
|:---|:---|
| 🟇 | Diageo |
| 🟇 | FTSE 100 |
| 🟇 | Chief Executive <br>total remuneration<br>|

---

![22758](deo-20250630_g194.gif)

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Ivan <br>Menezes<sup>(1)</sup><br>£'000<br>F16<br>| Ivan <br>Menezes<sup>(1)</sup><br>£'000<br>F17<br>| Ivan <br>Menezes<sup>(1)</sup><br>£'000<br>F18<br>| Ivan <br>Menezes<sup>(1)</sup><br>£'000<br>F19<br>| Ivan <br>Menezes<sup>(1)</sup><br>£'000<br>F20<br>| Ivan <br>Menezes<sup>(1)</sup><br>£'000<br>F21<br>| Ivan <br>Menezes<sup>(1)</sup><br>£'000<br>F22<br>| Ivan <br>Menezes<sup>(1)</sup><br>£'000<br>F23<br>| Debra <br>Crew<sup>(1)(2)</sup><br>£'000<br>F23<br>| Debra <br>Crew<sup>(1)(2)</sup><br>£'000<br>F24<br>| **Debra** <br>**Crew**<sup>(1)(2)</sup><br>**£'000**<br>**F25**<br>|
| Chief Executive total <br>remuneration<sup>(2)</sup><br>| 4156 | 3399 | 8995 | 11776 | 2273 | 6019 | 7343 | 10582 | 403 | 3026 | **3750** |
| Annual incentive<sup>(3)</sup> | 65.0% | 68.0% | 70.0% | 61.0% | 0.0% | 93.8% | 93.8% | 37.3% | 35.4% | 24.8% | **42.0%** |
| Share options<sup>(3)</sup> | 0.0% | 0.0% | 60.0% | 73.1% | 27.5% | 10.0% | 61.5% | 77.5% | 77.5% | 0.0% | **0.0%** |
| Performance shares<sup>(3)</sup> | 31.0% | 0.0% | 70.0% | 89.3% | 10.0% | 29.3% | 59.3% | 98.7% | 98.8% | 58.9% | **12.5%** |

---

(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, fiscal 24 and fiscal 25 includes pro-rata long-term incentive plan awards proportionate from the duration of her appointment

as Chief Executive.

(3) % of total maximum opportunity. F25 total also includes a DESAP award which will vest at 100% of maximum opportunity, granted prior to Debra Crew's appointment as Chief Executive. 12.5%

shown above reflects the 2022 DLTIP performance share element only for consistency year-on-year.

Remuneration for the wider workforce and CEO pay ratio<br>

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 inclusion agenda.

During the year, and following the introduction of this format in 2024, 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.

---

| | |
|:---|:---|
| 129 | **Diageo** Form 20-F 2025 |

---

Remuneration Committee review of wider workforce pay

Each year, the Remuneration Committee has a detailed session reviewing wider workforce remuneration. In fiscal 25, the review focused on:

• the prior year's annual reward cycle outcomes;

• retaining talent in a global market including a spotlight on key talent segments within Diageo;

• the level of differentiation across our reward programmes and alignment with performance;

• an update on new global programmes such as 'One World' (Diageo's global all employee share plan);

• the progress of the 'Celebrate' recognition platform following its launch in fiscal 24;

• the global roll out of the market-leading Carers Leave policy; and

• an update on pay transparency and pay fairness given the increased emphasis in this area globally.

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 continue to focus on all aspects of the wellbeing of our employees. 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.

We monitor the cost-of-living in all our geographies using a formal monitoring process and have implemented actions, typically by awarding off-

cycle salary increases in high-inflation geographies. In fiscal 25, we rolled out our new One World all employee global share plan across over 50

countries and during the year all 17,000 eligible employees were awarded £500 of Free Shares, creating 15,000 new Diageo shareholders.

Across the year we also embedded Celebrate, our global recognition platform. This platform helps support a culture of speed and agility and

enables leaders and peers to recognise actions in the moment. This year we saw 140,000 recognition moments, equivalent to one every four

minutes. We continually look to enhance our employee offering, innovating with our market leading benefit policies that support and demonstrate

our commitment to supporting all our employees. As an example, following its introduction in the UK, this year saw a global roll out of our Carers

Leave policy providing all employees with two weeks paid leave per year to care, or arrange care, for dependents. We believe that our market

leading benefits support the attraction and, crucially, retention of the best talent.

**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 2025. 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<sup>th</sup> (P25), 50<sup>th</sup> (P50) and 75<sup>th</sup> (P75)

percentile of Diageo's workforce in the United Kingdom. Also shown are the salary and total remuneration for each quartile employee.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Method** | **25**<sup>th</sup> **percentile pay ratio** | **Median pay ratio** | **75**<sup>th</sup> **percentile pay ratio** |
| **2025**<sup>(1)</sup> | **Option A**<sup>(4)</sup> | **74:1** | **55:1** | **44:1** |
| **2025** | **Total pay and benefits** | **£50,683** | **£67,767** | **£86,061** |
| **2025** | **Salary** | **£39,907** | **£48,877** | **£66,160** |
| 2024<sup>(2)</sup> | Option A<sup>(4)</sup> | 68:1 | 50:1 | 39:1 |
| 2023<sup>(2)(3)</sup> | Option A<sup>(4)</sup> | 231:1 | 177:1 | 137:1 |
| 2022<sup>(3)</sup> | Option A<sup>(4)</sup> | 146:1 | 114:1 | 90:1 |
| 2021 | Option A<sup>(4)</sup> | 127:1 | 100:1 | 79:1 |
| 2020 | Option A<sup>(4)</sup> | 50:1 | 38:1 | 31:1 |
| 2019 | Option A<sup>(4)</sup> | 265:1 | 208:1 | 166:1 |

---

(1) Debra Crew's total single figure of remuneration figure (see page 120 for details) in fiscal 25 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 Chief Executive.

(2) 2024, 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.

(3) 2023 CEO pay ratios comprise the sum of both Sir Ivan Menezes' and Debra Crew's total single figure of remuneration converted to sterling.

(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.

---

| | |
|:---|:---|
| 130 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION REPORT continued

**Methodology** 

Consistent with the approach for Diageo's disclosure in previous years, the methodology used to identify the employees at each quartile for 2025 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 120 of this report). The total remuneration calculations were based on data as at 30 June 2025. 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<sup>th</sup>

and 75<sup>th</sup> 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<sup>th</sup> and 75<sup>th</sup> 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 2025** 

The median level of remuneration and resulting pay ratio for 2025 is 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 increased at each quartile in fiscal 25

for the Chief Executive, driven by higher annual incentive and LTI totals when compared to fiscal 24.

**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.

---

| | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2023** | **2023** | **2023** | **2022** | **2022** | **2022** | **2021** | **2021** | **2021** |
|  | **Salary** | **Bonus** | **Benefits** | Salary | Bonus | Benefits | Salary | Bonus | Benefits | Salary | Bonus | Benefits | Salary | Bonus | Benefits |
| Plc employee <br>average<sup>(1)</sup><br>| **3.4%** | **74.4%** | **6.5%** | 6.2% | (44.8)% | 10.0% | 9.0% | (61.3)% | (7.2)% | 11.1% | 25.8% | 10.5% | 5.1% | n/a<sup>(5)</sup> | 38.8% |
| Average global <br>employee<sup>(2)</sup><br>| **5.6%** | **26.9%** | **4.3%** | 11.1% | (17.6)% | 3.1% | 12.9% | (41.6)% | 17.0% | 6.4% | 38.4% | 11.7% |  | 278.8% | 12.6% |
| **Executive** <br>**Directors**<sup>(3)</sup><br>|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Debra Crew | **3.2%** | **76.6%** | **125.9%** | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> |
| Nik Jhangiani | **n/a**<sup>(5)</sup> | **n/a**<sup>(5)</sup> | **n/a**<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> |
| Lavanya <br>Chandrashekar<sup>(6)</sup><br>| **(83.2%)** | **(69.3%)** | **(69.3)%** | 3.8% | (34.1%) | (22.1%) | 2.3% | (58.8%) | (89.4%) | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> |
| **Non-Executive** <br>**Directors**<sup>(4)</sup><br>|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Sir John Manzoni <br>(Chair)<sup>(7)</sup><br>| **228.3%** | **—** | **(37.8%)** | 3.6% |  | 241.5% | 3.0% |  | 20.0% |  |  |  |  |  |  |
| Melissa Bethell | **4.1%** | **—** | **(13.3%)** | 3.6% |  | 218.4% | 3.0% |  | 10.1% | 2.3% |  | 16.0% | n/a<sup>(5)</sup> |  |  |
| Karen Blackett <br>CBE<br>| **22.8%** | **—** | **(31.6%)** | 3.6% |  | 4231.3% | n/a<sup>(5)</sup> |  | n/a<sup>(5)</sup> | n/a<sup>(5)</sup> |  | n/a<sup>(5)</sup> |  |  |  |
| Valérie <br>Chapoulaud-<br>Floquet <br>| **4.1%** | **—** | **76.4%** | 3.6% |  | 159.0% | 3.0% |  | 108.5% |  |  |  | n/a<sup>(5)</sup> |  |  |
| Javier Ferrán<sup>(8)</sup> | **(39.9%)** | **—** | **(56.2%)** | 4.1% |  | 132.9% | 2.3% |  | (22.4%) | 8.3% |  | 28.8% |  |  |  |
| Susan Kilsby | **5.3%** | **—** | **31.2%** | 4.5% |  | 182.7% | 2.6% |  | 125.7% | 3.8% |  | 300.0% | 9.6% |  | (87.7%) |
| Alan Stewart<sup>(9)</sup> | **(74.8%)** | **—** | **(47.7%)** | 2.7% |  | 252.8% | 3.2% |  |  | 4.7% |  |  | 2.4% |  |  |
| Ireena Vittal | **4.1%** | **—** | **31.9%** | 3.6% |  | 689.2% | 3.0% |  | 734.0% |  |  |  |  |  |  |

---

(1)Around 20 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 160, 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 120.

(4)Calculated using the fees and taxable benefits disclosed under Non-Executive Directors' remuneration in the table on page 132. 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.

(6)Lavanya Chandrashekar resigned from the Board on 1 September 2024.

(7)Sir John Manzoni was appointed as Chair of the Board on 5 February 2025, having served as a Non-Executive Director since 1 October 2020.

(8)Javier Ferrán retired from the Board on 5 February 2025.

(9)Alan Stewart retired from the Board on 26 September 2024.

---

| | |
|:---|:---|
| 131 | **Diageo** Form 20-F 2025 |

---

**Payments to former Directors** 

Lavanya Chandrashekar was granted a DLTIP award in 2022, whilst Chief Financial Officer and Executive Director, subsequently stepping down and

resigning from the Board on 1 September 2024 part way through the 2022 DLTIP performance period. Consistent with the performance outcomes on

page 123, 12.5% of the performance share element of the award will vest and be released on completion of a further two-year holding period. The

share options lapse, having not met the performance conditions. As set out in last year's Directors' Remuneration Report, DLTIP awards were

retained on a pro-rated basis, subject to performance conditions, on leaving Diageo. The original number of DLTIP shares granted, and the pro-rated

number retained on the termination date of 31 December 2024, can be found in the Share Interest table on page 126.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Award | Award Date | Awarded<br>(ADRs)<br>| Vesting<br>(% Max)<br>| Vesting<br>(ADRs)<br>| Option price | ADR grant <br>price<br>| Dividend <br>equivalent <br>share<br>| Estimated <br>value<br>($'000)<sup>(1)</sup><br>|
| Lavanya Chandrashekar<sup>(1)</sup> | Performance Shares | 02/09/2022 | 13394 | 12.5% | 1674 |  | $195.29 | 148 | $198 |
|  | Share Options | 02/09/2022 | 13394 |  |  | $176.95 | $195.29 |  |  |

---

(1) The number of ADRs and the resulting value of DLTP performance share awards and options relating to Lavanya Chandrashekar in the table above are pro-rata figures that reflect the proportion

of the three-year performance period in which she was in role as Chief Financial Officer before stepping down from the Board on 1 September 2024. The original number of performance shares and

share options awarded is shown on page 126. The total number of Performance Shares originally awarded was 18,512, which was reduced and pro-rated for time employed to 15,454 on leaving

Diageo. 1,931 shares vested in total of which 1,674 is shown above in relation to the proportion of time as Chief Financial Officer and Executive Director. The total value of the vested award

including dividend equivalent shares (148ADRs) is $197,721, based on an average ADR price for the last three months of the fiscal year ($108.49). No DLTIP share options vested.

**Payments for loss of office**

**Lavanya Chandrashekar**

Lavanya Chandrashekar stepped down as Chief Financial Officer and as a director of Diageo on 1 September 2024, with the relevant details and

values (if applicable) on the Committee's determination of terms set out in the 2024 Directors' Remuneration Report (pages 144-145). Lavanya's

employment with Diageo terminated on 31 December 2024.

The Remuneration Committee exercised its discretion to treat Lavanya as a good leaver under the incentive arrangements in accordance with the

Directors' Remuneration Policy. The award under Diageo's annual incentive plan (AIP) for fiscal 25, set out on page 121, is calculated on a time pro-

rated basis reflecting the period as Chief Financial Officer and a director of Diageo. Lavanya's unvested Diageo Long-Term Incentive Plan (DLTIP)

awards (granted in 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.

With 2022 options lapsed, to the extent they vest, options granted in 2023 will be exercisable until 4 September 2027. The company's malus and

clawback Policy will continue to apply.

Payments incurred in fiscal 25 were in relation to Lavanya's repatriation from the UK to the US, and salary and benefits payable over the period of

garden leave between 1 September and 31 December 2024. Flights and shipping of possessions were provided in accordance with the company's

Global Mobility Policy at a cost of £59,438. Salary and benefits over the garden leave period were $371,526.

**Debra Crew**

It was announced on 16 July 2025 that Debra Crew would be stepping down as Chief Executive and as a director of Diageo by mutual agreement with

immediate effect. Details of the remuneration arrangements for Debra, 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. Debra's service contract provides for a twelve-month notice period which commenced on 16 July 2025.

Debra will remain an employee until 30 September 2025, during which period she will receive her normal contractual remuneration and normal

benefits and allowances. On ceasing employment and subject to mitigation, Debra will receive a payment in lieu of notice in respect of salary and

benefits for the remainder of her notice period.

Incentive awards for fiscal 25 arising prior to her termination of employment will be treated in accordance with their normal terms. As disclosed in

this report, Debra remains eligible for a payment under the F25 Annual Incentive Plan (AIP) for the year completed, with one third of the payment

being deferred in to Deferred Bonus Shares. Debra also remains eligible for the vesting of Performance Shares and Share Options granted under the

2022 Diageo Long-Term Incentive Plan (DLTIP) award, subject to a two-year post-vesting holding period. Options which vest, along with the already

vested options which Debra holds, will be exercisable for 18 months following the date of termination.

Following her termination, Debra will have no entitlement for a payment under the F26 AIP and will forfeit DLTIP awards granted in 2023 and 2024

which are unvested on departure. No further LTIP awards will be granted to Debra.

Debra also holds awards granted in 2022 under the DESAP relating to her role prior to her appointment as Chief Executive. In accordance with the

Remuneration Policy, the Remuneration Committee exercised its discretion to treat Debra as a 'good leaver' in respect of these awards which will be

retained, subject to proration for time and performance, and vest on their normal terms between September 2026 and September 2029.

Debra is subject to a post-employment shareholding requirement for two years following her termination date. She is required to retain the lower of

the level of her actual shareholding as at the leave date (including any net shares released over the two-year period until the 500% of salary

requirement is met), or shares to the value of 500% of salary. The company's malus and clawback policy will also continue to apply.

In line with internal policies and the Directors' Remuneration Policy, the company has supported Debra with the cost of her repatriation back to the

United States. This support amounts to $182,438 net of tax in addition to the provision of shipping and flights. Debra is also entitled to receive

funding in respect of COBRA medical continuation coverage and access to an annual medical corresponding to the period of her notice period.

As permitted under the Directors' Remuneration Policy, Debra will receive a contribution of up to £15,000 plus VAT for legal fees incurred in

connection with agreeing her departure terms. She will also receive tax return preparation support for a period of up to five years, corresponding to

the periods over which she may receive deferred vesting of the incentive plan awards referred to above (up to a maximum cost of £40,000 plus VAT

per annum).

Non-Executive Directors <br>

**Fee policy**

Sir John Manzoni's fee as non-executive Chair was set at £700,000 on appointment in February 2025, unchanged from the fee for the former non-

executive Chair, Javier Ferrán. 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 4.2% (from £108,000 to

£112,500), effective 1 October 2024, below the level of salary increase seen across the wider UK workforce. Additionally, fees for the Chair of the

Audit Committee and Chair of the Remuneration Committee were increased from £35,000 to £37,500 to reflect the increased contribution of these

Committees and the positioning against our comparator group (previously at the lower quartile of FTSE 30 companies excluding financial services).

---

| | |
|:---|:---|
| 132 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION REPORT continued

This represents the first increase to fees for Committee Chairs since October 2021. The fee for the Senior Independent Director was also increased

from £35,000 to £37,500.

The Executive Directors and the Chair also approved the introduction of a fee for the designated Non-Executive Director accountable for workforce

engagement. The fee of £20,000 for the Workforce Engagement Lead, effective 1 July 2024, reflects the increased time commitment required and

contribution made on behalf of the Board, and was set supported by external benchmarking.

---

| | | |
|:---|:---|:---|
|  | **2025** | 2024 |
| **Per annum fees** | **£'000** | £'000 |
| **Chair of the Board** | **700** | 700 |
| **Non-Executive Directors** |  |  |
| Base fee | **113** | 108 |
| Senior Independent Director | **38** | 35 |
| Chair of the Audit Committee | **38** | 35 |
| Chair of the Remuneration Committee | **38** | 35 |
| Workforce Engagement Lead | **20** | n/a |

---

**Single total figure of remuneration for Non-Executive Directors** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Fees £'000** | **Fees £'000** | **Taxable benefits £'000**<sup>(1)</sup> | **Taxable benefits £'000**<sup>(1)</sup> | **Total £'000**<sup>(2)</sup> | **Total £'000**<sup>(2)</sup> |
|  | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 |
| **Chair** |  |  |  |  |  |  |
| Sir John Manzoni - appointed as Chair 5 February 2025<sup>(3)</sup> | **351** | 107 | **2** | 4 | **354** | 111 |
| Javier Ferrán - retired 5 February 2025 | **416** | 692 | **2** | 4 | **418** | 696 |
| **Non-Executive Directors** |  |  |  |  |  |  |
| Melissa Bethell | **111** | 107 | **4** | 5 | **115** | 112 |
| Karen Blackett, CBE | **131** | 107 | **3** | 5 | **134** | 112 |
| Valérie Chapoulaud-Floquet | **111** | 107 | **23** | 13 | **134** | 120 |
| Susan Kilsby | **185** | 176 | **19** | 14 | **204** | 190 |
| Alan Stewart<sup>(4)</sup> | **36** | 142 | **2** | 4 | **38** | 146 |
| Ireena Vittal | **111** | 107 | **13** | 10 | **124** | 117 |
| Julie Brown<sup>(5)</sup> | **135** | n/a | **2** | n/a | **138** | n/a |

---

(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) Total may not sum to fees and taxable benefits columns due to rounding.

(3) Sir John Manzoni was appointed as Chair of the Board on 5 February 2025, having served as a Non-Executive Director since 1 October 2020.

(4) Alan Stewart retired from the Board at the 2024 AGM on 26 September 2024.

(5) Julie Brown was appointed to the Board on 5 August 2024.

---

| | |
|:---|:---|
| 133 | **Diageo** Form 20-F 2025 |

---

Looking ahead to 2026

Salary increases for the <br>year ending 30 June 2026<br>

The Remuneration Committee reviewed base salaries and agreed to

maintain Nik Jhangiani's salary at the current level for fiscal 26. Nik

will receive a Salary Supplement Allowance of £300,000 per annum

which will be pro-rated to reflect the duration of his period served as

Interim Chief Executive. The Salary Supplement Allowance is

pensionable and forms part of the salary for the fiscal 26 AIP

calculation.

---

| | | |
|:---|:---|:---|
|  | **Nik Jhangiani** | **Nik Jhangiani** |
| **Salary at 1 October ('000)** | **2025** | 2024 |
| Base salary | **£900** | £900 |
| % increase (over previous year) | **0%** | n/a |

---

Annual incentive design for the <br>year ending 30 June 2026<br>

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. As set out in

the Chair's statement on page 109, we have introduced a new measure

for fiscal 26 within the annual incentive plan. Operating Cash

Conversion has been replaced with Adjusted Operating Cash Flow. The

plan design for Executive Directors for the year ending 30 June 2026

will comprise the following performance measures and weightings 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;

• **adjusted operating cash flow** (26.67% weighting): ensures focus on

efficient cash flow management through the fiscal 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 2026 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 <br>year ending 30 June 2026<br>

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 2025 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 134, assessed over a three-year performance

period. As noted in the Chair's statement on page 109, we will

introduce a return on invested capital measure within the performance

share element of the DLTIP, and the relative total shareholder return

measure within the share option element will be based on a refreshed

constituent group for the awards to be made in September 2025:

---

| | | |
|:---|:---|:---|
| **TSR peer group (18 companies)** |  |  |
| AB InBev  | Constellation Brands  | PepsiCo  |
| Brown-Forman  | Groupe Danone  | Pernod Ricard  |
| Campari Group  | Heineken  | Procter & <br>Gamble <br>|
| Carlsberg  | L'Oréal  | Reckitt <br>Benckiser <br>|
| The Coca-Cola Company  | Mondelēz <br>International <br>| Rémy Cointreau  |
| Colgate-Palmolive  | Nestlé  | Unilever  |

---

The Committee set fiscal 26 financial targets by considering a number

of factors including historical performance, consumer trends amid

ongoing macroeconomic challenges, market conditions and the

competitive landscape.

The ESG measures in the DLTIP for fiscal 26 have been reshaped to

ensure they remain focused on the key parts of our 'Spirit of Progress'

action plan, ensuring Diageo continues 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);

% of owned and TPO sites replenishing more water than they use (in

water stressed areas); and

reach of Diageo positive drinking education programmes and

partnerships (measured in millions of people).

In setting ESG targets, the Committee took account of the material

progress made to date across the various measures versus the 'Spirit of

Progress' 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 2025. This averaging period, which is in

line with Diageo's standard practice, helps to smooth out volatility in

share price.

It is intended that a DLTIP award to the equivalent of 480% of base

salary will be made to Nik Jhangiani in 2025, 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 award for Nik Jhangiani

to be made in 2025.

---

| | |
|:---|:---|
| **Grant value (% salary)** | **Interim Chief Executive** |
| **Grant value (% salary)** | **Performance share** <br>**equivalents (1 share: 3** <br>**options)**<br>|
| Performance shares | 360% |
| Share options | 120% |
| **Total** | **480%** |

---

---

| | |
|:---|:---|
| 134 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REMUNERATION REPORT continued

**Performance conditions for long-term incentive awards to be made in the year ending 30 June 2026**<sup>(1)</sup>

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Performance shares** | **Performance shares** | **Performance shares** | **Performance shares** | **Performance shares** | **Performance shares** | **Performance shares** | **Share options** | **Share options** | **Share options** |
|  |  |  |  | **Environmental, social &** <br>**governance (ESG)** | **Environmental, social &** <br>**governance (ESG)** | **Environmental, social &** <br>**governance (ESG)** |  |  |  |  |
|  | Organic net <br>sales <br>(CAGR)<br>| Organic profit <br>before <br>exceptional <br>items and tax <br>(CAGR)<br>| Adjusted <br>return on <br>invested <br>capital (ROIC) <br><sup>(2)</sup><br>| Greenhouse <br>gas <br>reduction<br>| Water <br>replenishme<br>nt<br>| Positive <br>drinking<br>| Vesting <br>schedule<br>| Relative Total <br>Shareholder Return<br>| Cumulative free <br>cash flow ($m)<br>| Vesting <br>schedule<br>|
| Weighting (% total) | 28.3% | 28.3% | 28.3% | 5% | 5% | 5% |  | 50.0% | 50.0% |  |
| Maximum | 4.5% | 9.1% | 130bps | 15.8% | 85% | 10.0m | 100% | 4<sup>th</sup> and above | $10400 | 100% |
| Midpoint | 3.0% | 6.1% | 80bps | 12.2% | 80% | 8.1m | 60% | – | $9000 | 60% |
| Threshold | 1.5% | 3.1% | 30bps | 8.6% | 76% | 6.3m | 20% | 10<sup>th</sup> | $7600 | 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 133.

(2) New for fiscal 26, adjusted return on invested capital is calculated based on the cumulative basis points improvement over the F26-F28 performance period, measured each fiscal year.

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 are categorised as a 'qualifying

third-party indemnity' for the purposes of the Companies Act 2006 and

continue to be in place at 30 June 2025 on an ongoing basis.

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 13August 2025 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 6 November 2025. Terms defined in this

Directors' Remuneration Report are used solely herein.

---

| | |
|:---|:---|
| 135 | **Diageo** Form 20-F 2025 |

---

DIRECTORS' REPORT

Directors' report

The Directors present the Directors' report and audited consolidated

financial statements for the year ended 30 June 2025.

**Company status**

Diageo plc is a public limited liability company incorporated and

domiciled 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 pages 206-211.

**Directors**

The Directors of the company who currently serve are shown in the

section 'Board of Directors' on pages 78 and 79, and the names of

additional and former Directors who served during the year are listed

on page 77. In accordance with the UK Corporate Governance Code, all

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 2025 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.

**Related party transactions**

Transactions with related parties are disclosed in note 21 to the

consolidated financial statements.

**Major shareholders**

At 30 June 2025, 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 <br>ordinary shares<br>| Percentage <br>of issued <br>ordinary <br>share <br>(excluding <br>treasury <br>shares)<br>| Date of notification <br>of interest<br>|
| BlackRock Investment <br>Management (UK) Limited <br>(indirect holding)<sup>(1)</sup><br>| 147296928 | 5.89% | 3 December <br>2009<br>|
| Capital Research and <br>Management Company <br>(indirect holding)<br>| 124653096 | 4.99% | 28 April 2009 |
| Massachusetts Financial <br>Services Company <br>(indirect holding)<sup>(2)</sup><br>| 111560606 | 4.99% | 29 February <br>2024<br>|

---

(1)On 25 January 2024, BlackRock Inc. filed an Amendment to Schedule 13G with the SEC,

reporting that as of 25 January 2024, 192,713,107 ordinary shares representing 8.62% of

the issued ordinary share capital were beneficially owned by BlackRock Inc. and its

subsidiaries (including BlackRock Investment Management (UK) Limited).

(2)On 31 March 2025, Massachusetts Financial Services Company filed an Amendment to

Schedule 13G with the SEC, reporting that as of 31 March 2025, 110,110,419 ordinary

shares representing 4.95% of the issued ordinary share capital were beneficially owned by

Massachusetts Financial Services Company and its subsidiaries.

The company has not been notified of any other substantial interests in

its securities since 30 June 2025. 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 4 August 2025, 311,655,585 ordinary

shares, including those held through American Depositary Shares

(ADSs), were held by approximately 2,360 holders (including American

Depositary Receipt (ADR) holders) with registered addresses in the

United States, representing approximately 14.01% of the outstanding

ordinary shares (excluding treasury shares). At such date, 77,830,083

ADSs were held by 2,023 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

---

| | |
|:---|:---|
| 136 | **Diageo** Form 20-F 2025 |

---

---

| | | | |
|:---|:---|:---|:---|
| [STRATEGIC](#i2a439a8f411e49deb31670665dbd0981_43)<br>[REPORT](#i2a439a8f411e49deb31670665dbd0981_43)<br>| [GOVERNANCE](#i2a439a8f411e49deb31670665dbd0981_337)<br>[Report](#i2a439a8f411e49deb31670665dbd0981_337)<br>| [FINANCIAL](#i2a439a8f411e49deb31670665dbd0981_469)<br>[STATEMENTS](#i2a439a8f411e49deb31670665dbd0981_469)<br>| [ADDITIONAL](#i2a439a8f411e49deb31670665dbd0981_721)<br>[INFORMATI](#i2a439a8f411e49deb31670665dbd0981_721)<br>[ON](#i2a439a8f411e49deb31670665dbd0981_721)<br>|

---

DIRECTORS' REPORT continued

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 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 $3.36 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

4August 2025. 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 (f) 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.

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,

---

| | |
|:---|:---|
| 137 | **Diageo** Form 20-F 2025 |

---

(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,

theremuneration 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 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).

---

| | |
|:---|:---|
| 138 | **Diageo** Form 20-F 2025 |

---

---

| | | | |
|:---|:---|:---|:---|
| [STRATEGIC](#i2a439a8f411e49deb31670665dbd0981_43)<br>[REPORT](#i2a439a8f411e49deb31670665dbd0981_43)<br>| [GOVERNANCE](#i2a439a8f411e49deb31670665dbd0981_337)<br>[Report](#i2a439a8f411e49deb31670665dbd0981_337)<br>| [FINANCIAL](#i2a439a8f411e49deb31670665dbd0981_469)<br>[STATEMENTS](#i2a439a8f411e49deb31670665dbd0981_469)<br>| [ADDITIONAL](#i2a439a8f411e49deb31670665dbd0981_721)<br>[INFORMATI](#i2a439a8f411e49deb31670665dbd0981_721)<br>[ON](#i2a439a8f411e49deb31670665dbd0981_721)<br>|

---

DIRECTORS' REPORT continued

**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** <br>**Rule 6.6.1)**<br>| **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 <br>financial statements - note 21 Related party transactions<br>|
| Dividends | Group financial review; Consolidated financial statements - Other <br>additional information<br>|
| Engagement with employees | Corporate governance report - Workforce engagement statement; Our <br>people and culture<br>|
| Engagement with suppliers, customers and others | Corporate governance report - Stakeholder engagement |
| Financial risk management | Consolidated financial statements - note 16 Financial instruments and risk <br>management<br>|
| Future developments | Chair's statement; Chief Executive's statement; Investment case; Market <br>dynamics; Our Growth Ambition; Our strategy<br>|
| Greenhouse gas emissions | Pioneer grain-to-glass sustainability |
| Interest capitalised | Not applicable |
| Non-pre-emptive issues of equity for cash (including in respect of <br>major unlisted subsidiaries)<br>| 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 <br>financial statements - note 4 Operating costs<br>|
| Review of the business and principal risks and uncertainties | Chief Executive's statement; Our principal risks and risk management; <br>Pioneer grain-to-glass sustainability; Business review<br>|
| 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 2025 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 by its order by

Randall Ingber, the Company Secretary, on 13 August 2025.

---

| | |
|:---|:---|
| 139 | **Diageo** Form 20-F 2025 |

---

Financial statements

---

| | |
|:---|:---|
| **Contents** |  |
| Report of Independent Registered Public Accounting Firm | [140](#i2a439a8f411e49deb31670665dbd0981_475) |
| **Primary statements** |  |
| Consolidated income statement | [148](#i2a439a8f411e49deb31670665dbd0981_478) |
| Consolidated statement of comprehensive income | [149](#i2a439a8f411e49deb31670665dbd0981_481) |
| Consolidated balance sheet | [150](#i2a439a8f411e49deb31670665dbd0981_484) |
| Consolidated statement of changes in equity | [151](#i2a439a8f411e49deb31670665dbd0981_487) |
| Consolidated statement of cash flows | [152](#i2a439a8f411e49deb31670665dbd0981_490) |
| **Accounting information and policies** |  |
| 1. Accounting information and policies | [153](#i2a439a8f411e49deb31670665dbd0981_499) |
| **Results for the year** |  |
| 2. Segmental information | [155](#i2a439a8f411e49deb31670665dbd0981_505) |
| 3. Exceptional items | [158](#i2a439a8f411e49deb31670665dbd0981_514) |
| 4. Operating cost | [160](#i2a439a8f411e49deb31670665dbd0981_517) |
| 5. Finance income and charges | [161](#i2a439a8f411e49deb31670665dbd0981_535) |
| 6. Investments in associates and joint ventures | [162](#i2a439a8f411e49deb31670665dbd0981_538) |
| 7. Taxation | [163](#i2a439a8f411e49deb31670665dbd0981_541) |
| **Operating assets and liabilities** |  |
| 8. Acquisition and sale of businesses and brands and <br>purchase of non-controlling interests<br>| [166](#i2a439a8f411e49deb31670665dbd0981_547) |
| 9. Intangible assets | [170](#i2a439a8f411e49deb31670665dbd0981_559) |
| 10. Property, plant and equipment | [174](#i2a439a8f411e49deb31670665dbd0981_565) |
| 11. Biological assets | [175](#i2a439a8f411e49deb31670665dbd0981_571) |
| 12. Leases | [175](#i2a439a8f411e49deb31670665dbd0981_571) |
| 13. Other investments | [176](#i2a439a8f411e49deb31670665dbd0981_574) |
| 14. Post-employment benefits | [176](#i2a439a8f411e49deb31670665dbd0981_577) |
| 15. Working capital | [181](#i2a439a8f411e49deb31670665dbd0981_583) |
| **Risk management and capital structure** |  |
| 16. Financial instruments and risk management | [184](#i2a439a8f411e49deb31670665dbd0981_598) |
| 17. Net borrowings | [192](#i2a439a8f411e49deb31670665dbd0981_631) |
| 18. Equity | [193](#i2a439a8f411e49deb31670665dbd0981_634) |
| **Other financial statement disclosures** |  |
| 19. Contingent liabilities and legal proceedings | [197](#i2a439a8f411e49deb31670665dbd0981_652) |
| 20. Commitments | [199](#i2a439a8f411e49deb31670665dbd0981_655) |
| 21. Related party transactions | [199](#i2a439a8f411e49deb31670665dbd0981_655) |
| 22. Principal group companies | [200](#i2a439a8f411e49deb31670665dbd0981_664) |

---

---

| | |
|:---|:---|
| 140 | **Diageo** Form 20-F 2025 |

---

**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

2025 and 30 June 2024, 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 2025, 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 2025, 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 2025 and 30 June 2024, and the results of its operations and its cash flows for each of the three years in

the period ended 30 June 2025 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 2025, 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.

---

| | |
|:---|:---|
| 141 | **Diageo** Form 20-F 2025 |

---

**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 unauthorized 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.

**Critical Audit Matters**

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial

statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or

disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or

complex judgements. 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 matter below, providing a separate opinion on the

critical audit matter or on the accounts or disclosures to which it relates.

*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 $906 million with no provision in respect to these issues. As disclosed by

management, the Company has a large number of ongoing tax cases in Brazil and may be subject to further future tax assessments in

this jurisdiction based on the same or similar matters. 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. 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 judgements made by management in determining the likelihood and amount of a

settlement outcome; (ii) a high degree of auditor judgement, subjectivity and effort in performing procedures and evaluating audit

evidence related to the assessment of the probability and amount of an expected settlement; and (iii) the audit effort involved the use

of professionals with specialised skill and knowledge.

---

| | |
|:---|:---|
| 142 | **Diageo** Form 20-F 2025 |

---

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 likelihood and

amount of settlement outcomes 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 of the possible exposure; (iii) evaluating management's assessment of the ongoing tax cases in Brazil and probability

of settlement including inspecting opinions 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

14 August 2025

We have served as the Company's auditor since 2015.

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FINANCIAL STATEMENTS

Consolidated income statement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | **Year ended 30** <br>**June 2025**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year ended <br>30 June 2024<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year ended <br>30 June 2023<br>|
|  | Notes | **$ million** | $ million | $ million |
| **Sales** | 2 | **27964** | 27891 | 28270 |
| Excise duties | 4 | **(7719)** | (7622) | (7715) |
| **Net sales** | 2 | **20245** | 20269 | 20555 |
| Cost of sales | 4 | **(8072)** | (8071) | (8289) |
| **Gross profit** |  | **12173** | 12198 | 12266 |
| Marketing | 4 | **(3662)** | (3691) | (3663) |
| Other operating items | 4 | **(4176)** | (2506) | (3056) |
| **Operating profit** |  | **4335** | 6001 | 5547 |
| Non-operating items | 3 | **(220)** | (70) | 364 |
| Finance income | 5 | **480** | 400 | 409 |
| Finance charges | 5 | **(1251)** | (1285) | (1121) |
| Share of after tax results of associates and joint ventures | 6 | **193** | 414 | 443 |
| **Profit before taxation** |  | **3537** | 5460 | 5642 |
| Taxation | 7 | **(999)** | (1294) | (1163) |
| **Profit for the year** |  | **2538** | 4166 | 4479 |
| **Attributable to:** |  |  |  |  |
| Equity shareholders of the parent company  |  | **2354** | 3870 | 4445 |
| Non-controlling interests |  | **184** | 296 | 34 |
|  |  | **2538** | 4166 | 4479 |
| **Weighted average number of shares** |  | **million** | million | million |
| Shares in issue excluding own shares |  | **2222** | 2234 | 2264 |
| Dilutive potential ordinary shares |  | **6** | 5 | 7 |
|  |  | **2228** | 2239 | 2271 |
|  |  | **cents** | cents | cents |
| **Basic earnings per share** |  | **105.9** | 173.2 | 196.3 |
| **Diluted earnings per share** |  | **105.7** | 172.8 | 195.7 |

---

The accompanying notes are an integral part of these consolidated financial statements.

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| | |
|:---|:---|
| 149 | **Diageo** Form 20-F 2025 |

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Consolidated statement of comprehensive income

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | **Year ended** <br>**30 June 2025**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year ended <br>30 June 2024<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year ended <br>30 June 2023<br>|
|  | Notes | **$ million** | $ million | $ million |
| **Other comprehensive income** |  |  |  |  |
| **Items that will not be recycled subsequently to the income statement** |  |  |  |  |
| Net remeasurement of post-employment benefit plans |  |  |  |  |
| Group | 14 | **(13)** | (76) | (771) |
| Associates and joint ventures |  | **4** | 1 | 16 |
| Tax on post-employment benefit plans |  | **7** | 14 | 193 |
| Changes in the fair value of equity investments |  | **—** | (1) | (5) |
|  |  | **(2)** | (62) | (567) |
| **Items that may be recycled subsequently to the income statement** |  |  |  |  |
| Exchange differences on translation of foreign operations |  |  |  |  |
| Group |  | **633** | (516) | (906) |
| Associates and joint ventures | 6 | **489** | (64) | 132 |
| Non-controlling interests |  | **(4)** | (21) | (100) |
| Net investment hedges |  | **(845)** | (70) | 499 |
| Exchange loss recycled to the income statement |  |  |  |  |
| On disposal of foreign operations | 8 | **179** | 26 | 15 |
| On step acquisitions |  | **—** |  | 2 |
| Tax on exchange differences – group |  | **10** | 11 | 2 |
| Effective portion of changes in fair value of cash flow hedges |  |  |  |  |
| Hedge of foreign currency debt of the group |  | **161** | (58) | 7 |
| Transaction exposure hedging of the group |  | **144** | 61 | 328 |
| Hedges by associates and joint ventures |  | **13** | (3) | 29 |
| Commodity price risk hedging of the group |  | **(20)** | 13 | (67) |
| Recycled to income statement – hedge of foreign currency debt of the group |  | **(230)** | 152 | 65 |
| Recycled to income statement – transaction exposure hedging of the group |  | **(68)** | (266) | (16) |
| Recycled to income statement – commodity price risk hedging of the group |  | **19** | 9 | (39) |
| Cost of hedging |  | **101** | (51) |  |
| Recycled to income statement – cost of hedging |  | **(26)** | (27) |  |
| Tax on effective portion of changes in fair value of cash flow hedges |  | **(15)** | 16 | (46) |
| Hyperinflation adjustments |  | **362** | 503 | 229 |
| Tax on hyperinflation adjustments |  | **(98)** | (138) | (49) |
|  |  | **805** | (423) | 85 |
| **Other comprehensive income/(loss) net of tax for the year** |  | **803** | (485) | (482) |
| **Profit for the year** |  | **2538** | 4166 | 4479 |
| **Total comprehensive income for the year** |  | **3341** | 3681 | 3997 |
| **Attributable to:** |  |  |  |  |
| Equity shareholders of the parent company  |  | **3158** | 3404 | 4063 |
| Non-controlling interests | 18 | **183** | 277 | (66) |
| **Total comprehensive income for the year** |  | **3341** | 3681 | 3997 |

---

The accompanying notes are an integral part of these consolidated financial statements.

---

| | |
|:---|:---|
| 150 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

Consolidated balance sheet

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | **30 June 2025** | **30 June 2025** | 30 June 2024 | 30 June 2024 |
|  | Notes | **$ million** | **$ million** | $ million | $ million |
| **Non-current assets** |  |  |  |  |  |
| Intangible assets | 9 | **14776** |  | 14814 |  |
| Property, plant and equipment | 10 | **9528** |  | 8509 |  |
| Biological assets | 11 | **176** |  | 199 |  |
| Investments in associates and joint ventures | 6 | **5334** |  | 5032 |  |
| Other investments | 13 | **39** |  | 94 |  |
| Other receivables | 15 | **38** |  | 38 |  |
| Other financial assets | 16 | **623** |  | 373 |  |
| Deferred tax assets | 7 | **150** |  | 143 |  |
| Post-employment benefit assets | 14 | **1161** |  | 1146 |  |
|  |  |  | **31825** |  | 30348 |
| **Current assets** |  |  |  |  |  |
| Inventories | 15 | **10658** |  | 9720 |  |
| Trade and other receivables | 15 | **3504** |  | 3487 |  |
| Corporate tax receivables | 7 | **354** |  | 304 |  |
| Assets held for sale | 8 | **257** |  | 130 |  |
| Other financial assets | 16 | **524** |  | 355 |  |
| Cash and cash equivalents | 17 | **2200** |  | 1130 |  |
|  |  |  | **17497** |  | 15126 |
| **Total assets** |  |  | **49322** |  | 45474 |
| **Current liabilities** |  |  |  |  |  |
| Borrowings and bank overdrafts | 17 | **(2928)** |  | (2885) |  |
| Other financial liabilities | 16 | **(278)** |  | (348) |  |
| Trade and other payables | 15 | **(6952)** |  | (6354) |  |
| Liabilities held for sale | 8 | **(193)** |  | (48) |  |
| Corporate tax payables | 7 | **(138)** |  | (136) |  |
| Provisions | 15 | **(223)** |  | (97) |  |
|  |  |  | **(10712)** |  | (9868) |
| **Non-current liabilities** |  |  |  |  |  |
| Borrowings | 17 | **(20820)** |  | (18616) |  |
| Other financial liabilities | 16 | **(751)** |  | (940) |  |
| Other payables | 15 | **(192)** |  | (304) |  |
| Provisions | 15 | **(316)** |  | (300) |  |
| Deferred tax liabilities | 7 | **(2944)** |  | (2947) |  |
| Post-employment benefit liabilities | 14 | **(409)** |  | (429) |  |
|  |  |  | **(25432)** |  | (23536) |
| **Total liabilities** |  |  | **(36144)** |  | (33404) |
| **Net assets** |  |  | **13178** |  | 12070 |
| **Equity** |  |  |  |  |  |
| Share capital | 18 | **887** |  | 887 |  |
| Share premium |  | **1703** |  | 1703 |  |
| Other reserves |  | **454** |  | (91) |  |
| Retained earnings |  | **8046** |  | 7533 |  |
| **Equity attributable to equity shareholders of the parent company** |  |  | **11090** |  | 10032 |
| **Non-controlling interests** | 18 |  | **2088** |  | 2038 |
| **Total equity** |  |  | **13178** |  | 12070 |

---

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

13 August 2025 and were signed on its behalf by Nik Jhangiani, Executive Director.

---

| | |
|:---|:---|
| 151 | **Diageo** Form 20-F 2025 |

---

Consolidated statement of changes in equity

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | **Other reserves** | **Other reserves** | **Retained earnings/(deficit)** | **Retained earnings/(deficit)** | **Retained earnings/(deficit)** |  |  |  |
|  | Notes | Share<br>capital<br>$million<br>| Share <br>premium<br>$ million<br>| Capital <br>redemption <br>reserve<br>$ million<br>| Hedging <br>and <br>exchange <br>reserve<br>$ million<br>| Own <br>shares<br>$ million<br>| Other <br>retained <br>earnings<br>$ million<br>| Total<br>$ million<br>| Equity <br>attributable to <br>parent <br>company <br>shareholders<br>$ million<br>| Non- <br>controlling <br>interests<br>$ million<br>| Total <br>equity<br>$ million<br>|
| **At 30 June 2022** |  | 875 | 1635 | 3896 | (3238) | (2223) | 8490 | 6267 | 9435 | 2076 | 11511 |
| Retranslation impact of opening balances<sup>(1)</sup> |  | 36 | 68 | 162 | (173) | (93) |  | (93) |  |  |  |
| Profit for the year |  |  |  |  |  |  | 4445 | 4445 | 4445 | 34 | 4479 |
| Other comprehensive income/(loss) |  |  |  |  | 5 |  | (387) | (387) | (382) | (100) | (482) |
| **Total comprehensive income/(loss) for the year** |  |  |  |  | 5 |  | 4058 | 4058 | 4063 | (66) | 3997 |
| Employee share schemes |  |  |  |  |  | 30 | 29 | 59 | 59 |  | 59 |
| Share-based incentive plans | 18 |  |  |  |  |  | 58 | 58 | 58 |  | 58 |
| Share-based incentive plans in respect of <br>associates<br>|  |  |  |  |  |  | 6 | 6 | 6 |  | 6 |
| Tax on share-based incentive plans |  |  |  |  |  |  | 7 | 7 | 7 |  | 7 |
| Share-based payments and purchase of own <br>shares in respect of subsidiaries<br>|  |  |  |  |  |  | 4 | 4 | 4 | 2 | 6 |
| Purchase of non-controlling interests | 8 |  |  |  |  |  | (136) | (136) | (136) | (42) | (178) |
| Associates' transactions with non-controlling <br>interests<br>|  |  |  |  |  |  | (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 |  |  | (1543) | (1543) | (1543) |  | (1543) |
| Dividends | 18 |  |  |  |  |  | (2071) | (2071) | (2071) | (117) | (2188) |
| **At 30 June 2023** |  | 898 | 1703 | 4071 | (3406) | (2286) | 8876 | 6590 | 9856 | 1853 | 11709 |
| Adjustment to 2023 closing equity in respect of <br>hyperinflation in Ghana<br>|  |  |  |  |  |  | 41 | 41 | 41 | 10 | 51 |
| **Adjusted opening balance** |  | 898 | 1703 | 4071 | (3406) | (2286) | 8917 | 6631 | 9897 | 1863 | 11760 |
| Profit for the year |  |  |  |  |  |  | 3870 | 3870 | 3870 | 296 | 4166 |
| Other comprehensive (loss)/income |  |  |  |  | (767) |  | 301 | 301 | (466) | (19) | (485) |
| **Total comprehensive (loss)/income for the year** |  |  |  |  | (767) |  | 4171 | 4171 | 3404 | 277 | 3681 |
| Employee share schemes |  |  |  |  |  | 36 | 12 | 48 | 48 |  | 48 |
| Share-based incentive plans | 18 |  |  |  |  |  | 43 | 43 | 43 |  | 43 |
| Share-based incentive plans in respect of <br>associates<br>|  |  |  |  |  |  | 5 | 5 | 5 |  | 5 |
| Share-based payments and purchase of own <br>shares in respect of subsidiaries<br>|  |  |  |  |  |  | (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) |
| Dividends | 18 |  |  |  |  |  | (2243) | (2243) | (2243) | (121) | (2364) |
| **At 30 June 2024** |  | **887** | **1703** | **4082** | **(4173)** | **(2250)** | **9783** | **7533** | **10032** | **2038** | **12070** |
| Profit for the year |  | **—** | **—** | **—** | **—** | **—** | **2354** | **2354** | **2354** | **184** | **2538** |
| Other comprehensive income/(loss) |  | **—** | **—** | **—** | **545** | **—** | **259** | **259** | **804** | **(1)** | **803** |
| **Total comprehensive income for the year** |  | **—** | **—** | **—** | **545** | **—** | **2613** | **2613** | **3158** | **183** | **3341** |
| Employee share schemes |  | **—** | **—** | **—** | **—** | **22** | **11** | **33** | **33** | **—** | **33** |
| Share-based incentive plans | 18 | **—** | **—** | **—** | **—** | **—** | **59** | **59** | **59** | **—** | **59** |
| Share-based incentive plans in respect of <br>associates<br>|  | **—** | **—** | **—** | **—** | **—** | **4** | **4** | **4** | **—** | **4** |
| Tax on share-based incentive plans |  | **—** | **—** | **—** | **—** | **—** | **3** | **3** | **3** | **—** | **3** |
| Share-based payments and purchase of own <br>shares in respect of subsidiaries<br>|  | **—** | **—** | **—** | **—** | **—** | **(4)** | **(4)** | **(4)** | **(2)** | **(6)** |
| Change in non-controlling interests from sale of <br>business<br>| 8 | **—** | **—** | **—** | **—** | **—** | **—** | **—** | **—** | **9** | **9** |
| Purchase of non-controlling interests |  | **—** | **—** | **—** | **—** | **—** | **(7)** | **(7)** | **(7)** | **—** | **(7)** |
| Change in fair value of put option |  | **—** | **—** | **—** | **—** | **—** | **89** | **89** | **89** | **—** | **89** |
| Reversal of share buyback transaction cost |  | **—** | **—** | **—** | **—** | **—** | **21** | **21** | **21** | **—** | **21** |
| Dividends | 18 | **—** | **—** | **—** | **—** | **—** | **(2298)** | **(2298)** | **(2298)** | **(140)** | **(2438)** |
| **At 30 June 2025** |  | **887** | **1703** | **4082** | **(3628)** | **(2228)** | **10274** | **8046** | **11090** | **2088** | **13178** |

---

The accompanying notes are an integral part of these consolidated financial statements.

(1) Includes foreign translation differences arising from the retranslation of reserves due to the change in the group's presentation currency.

---

| | |
|:---|:---|
| 152 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

Consolidated statement of cash flows

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **Year ended 30 June 2025** | **Year ended 30 June 2025** | Year ended 30 June 2024 | Year ended 30 June 2024 | Year ended 30 June 2023 | Year ended 30 June 2023 |
|  | Notes | **$ million** | **$ million** | $ million | $ million | $ million | $ million |
| **Cash flows from operating activities** |  |  |  |  |  |  |  |
| Profit for the year |  | **2538** |  | 4166 |  | 4479 |  |
| Taxation |  | **999** |  | 1294 |  | 1163 |  |
| Share of after tax results of associates and joint ventures |  | **(193)** |  | (414) |  | (443) |  |
| Net finance charges |  | **771** |  | 885 |  | 712 |  |
| Non-operating items |  | **220** |  | 70 |  | (364) |  |
| **Operating profit** |  |  | **4335** |  | 6001 |  | 5547 |
| Increase in inventories |  | **(470)** |  | (156) |  | (810) |  |
| (Increase)/decrease in trade and other receivables |  | **(49)** |  | (66) |  | 142 |  |
| Increase/(decrease) in trade and other payables and <br>provisions<br>|  | **442** |  | (546) |  | (746) |  |
| **Net increase in working capital** |  |  | **(77)** |  | (768) |  | (1414) |
| Depreciation, amortisation and impairment |  | **1718** |  | 493 |  | 1297 |  |
| Dividends received |  | **175** |  | 269 |  | 271 |  |
| Post-employment payments less amounts included in <br>operating profit<br>|  | **22** |  | (18) |  | (31) |  |
| Other items |  | **37** |  | 88 |  | 74 |  |
|  |  |  | **1952** |  | 832 |  | 1611 |
| **Cash generated from operations** |  |  | **6210** |  | 6065 |  | 5744 |
| Interest received |  | **181** |  | 156 |  | 157 |  |
| Interest paid |  | **(980)** |  | (1017) |  | (822) |  |
| Taxation paid |  | **(1114)** |  | (1099) |  | (1443) |  |
|  |  |  | **(1913)** |  | (1960) |  | (2108) |
| **Net cash inflow from operating activities** |  |  | **4297** |  | 4105 |  | 3636 |
| **Cash flows from investing activities** |  |  |  |  |  |  |  |
| Disposal of property, plant and equipment and computer <br>software<br>|  | **63** |  | 14 |  | 16 |  |
| Purchase of property, plant and equipment and computer <br>software<br>|  | **(1612)** |  | (1510) |  | (1417) |  |
| Movements in loans, other investments and other financial <br>assets<br>|  | **(195)** |  | (47) |  | (68) |  |
| Sale of businesses and brands | 8 | **143** |  | 87 |  | 559 |  |
| Acquisition of subsidiaries | 8 | **(35)** |  | (6) |  | (404) |  |
| Investments in associates and joint ventures | 8 | **(84)** |  | (133) |  | (112) |  |
| **Net cash outflow from investing activities** |  |  | **(1720)** |  | (1595) |  | (1426) |
| **Cash flows from financing activities** |  |  |  |  |  |  |  |
| Share buyback programme | 18 | **—** |  | (987) |  | (1673) |  |
| Net sale of own shares for share schemes |  | **15** |  | 21 |  | 36 |  |
| Net sale/(purchase) of treasury shares in respect of <br>subsidiaries<br>|  | **8** |  | (10) |  |  |  |
| Dividends paid to non-controlling interests |  | **(138)** |  | (117) |  | (117) |  |
| Proceeds from bonds | 17 | **3943** |  | 2225 |  | 2537 |  |
| Repayment of bonds | 17 | **(2416)** |  | (1667) |  | (1650) |  |
| Purchase of shares of non-controlling interests | 8 | **(9)** |  | (223) |  | (178) |  |
| Cash inflow from other borrowings |  | **83** |  | 387 |  | 521 |  |
| Cash outflow from other borrowings |  | **(712)** |  | (493) |  | (452) |  |
| Equity dividends paid |  | **(2298)** |  | (2242) |  | (2065) |  |
| Unclaimed dividends and share forfeiture |  | **30** |  |  |  |  |  |
| **Net cash outflow from financing activities** |  |  | **(1494)** |  | (3106) |  | (3041) |
| **Net increase/(decrease) in net cash and cash equivalents** | 17 |  | **1083** |  | (596) |  | (831) |
| Exchange differences |  |  | **(35)** |  | (33) |  | (76) |
| Reclassification to assets and liabilities held for sale |  |  | **21** |  | (30) |  |  |
| Net cash and cash equivalents at beginning of the year |  |  | **1109** |  | 1768 |  | 2675 |
| **Net cash and cash equivalents at end of the year** |  |  | **2178** |  | 1109 |  | 1768 |
| **Net cash and cash equivalents consist of:** |  |  |  |  |  |  |  |
| Cash and cash equivalents | 17 |  | **2200** |  | 1130 |  | 1813 |
| Bank overdrafts | 17 |  | **(22)** |  | (21) |  | (45) |
|  |  |  | **2178** |  | 1109 |  | 1768 |

---

The accompanying notes are an integral part of these consolidated financial statements.

---

| | |
|:---|:---|
| 153 | **Diageo** Form 20-F 2025 |

---

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<sup>®</sup> 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 reflect

severe but plausible downside scenarios taking into consideration the

group's principal risks. In the base case scenario, management included

assumptions to deliver positive operating leverage, with organic profit

growth ahead of organic net sales growth. In light of the ongoing

geopolitical 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

geopolitical 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 marketing spend and investment in

maturing stock, as well as a temporary suspension or reduction in

dividend to shareholders in the next 12 months, or drawdowns on

committed facilities. Having considered the outcome of these

assessments, the Directors are comfortable that the group (and

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.

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.

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.

The principal foreign exchange rates used in the translation of financial

statements for the three years ended 30 June 2025, expressed in

sterling and euros per $1, were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | 2024 | 2023 |
| **Sterling** |  |  |  |
| Income statement and cash flows<sup>(1)</sup> | **0.77** | 0.80 | 0.83 |
| Assets and liabilities<sup>(2)</sup> | **0.73** | 0.79 | 0.79 |
| **Euro** |  |  |  |
| Income statement and cash flows<sup>(1)</sup> | **0.92** | 0.93 | 0.96 |
| Assets and liabilities<sup>(2)</sup> | **0.85** | 0.93 | 0.93 |

---

(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.

---

| | |
|:---|:---|
| 154 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**(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 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 <u>[163](#i2a439a8f411e49deb31670665dbd0981_541)</u>and<u>[197](#i2a439a8f411e49deb31670665dbd0981_652)</u>.

• 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 – pages<u>[163](#i2a439a8f411e49deb31670665dbd0981_541)</u> and

<u>[170](#i2a439a8f411e49deb31670665dbd0981_559)</u>.

• 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<u>[176](#i2a439a8f411e49deb31670665dbd0981_577)</u>.

• 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<u>[197](#i2a439a8f411e49deb31670665dbd0981_652)</u>.

**(f) Hyperinflationary accounting**

The group applied hyperinflationary accounting for its operations in

Türkiye, 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 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 theyear ended 30 June 2025

was 35%(2024 – 72%; 2023 – 38%) in Türkiye and 16%(2024 – 23%) in

Ghana. The inflation rate used by the group for 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

2025 was 171% (2024 – 77%; 2023 – 382%) in Venezuela.

During the year ended 30 June 2024, 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 and 30 June 2025 show the results of the

Venezuelan operation consolidated at the official closing exchange rate

of the period.

**(g) New accounting standards and interpretations**

The following accounting standards and amendments to standards,

issued by the IASB including those endorsed by the UK, were adopted

by the group from 1 July 2024 with no material impact on the group's

consolidated results, financial position or disclosures:

• Amendments to IAS 1 – Classification of Liabilities and Non-current

Liabilities with Covenants

• Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback

The group has adopted amendments to IAS 7 and IFRS 7 –

Supplier Finance Arrangements and presents the relevant

transactions accordingly.

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 21 – Lack of exchangeability (effective from the

year ending 30 June 2026)

• Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification

and Measurement of Financial Instruments (effective from the year

ending 30 June 2027)

The impact assessment of IFRS 18 – Presentation and disclosure of

financial statements, which will become effective in the consolidated

group financial statements from the year ending 30 June 2028 – subject

to UK endorsement – is in progress.

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 greenhouse gas emission

targets for Diageo's direct operations (Scope 1 and 2) for 2030 have

been considered as part of the assessment of estimates and

judgements in preparing the group's consolidated financial statements.

We integrate climate risk into our enterprise risk management

processes, within our principal risk factors. This is an integral part of

our strategic and business continuity planning.

The climate change scenario analyses performed in 2025 – conducted in

line with TCFD recommendations (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) 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.

---

| | |
|:---|:---|
| 155 | **Diageo** Form 20-F 2025 |

---

Results for the year

**Introduction**

This section explains the results and performance of the group for the three years ended 30 June 2025. 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 <br>includes excise and other duties which the group pays as principal but excludes duties and taxes collected on behalf of third parties, such as <br>value added tax. Sales are recognised as or when performance obligations are satisfied by transferring control of a good or service to the <br>customer, which is determined by considering, among other factors, the delivery terms agreed with customers. For the sale of goods, the <br>transfer of control occurs when the significant risks and rewards of ownership are passed to the customer. Based on the shipping terms <br>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 <br>is subsequent to the dispatch of goods, the time between dispatch and receipt by the customer is generally less than five days. The group <br>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 <br>significant reversal will not occur. Therefore, sales are stated net of expected price discounts, allowances for customer loyalty and certain <br>promotional activities and similar items. Generally, payment of the transaction price is due within credit terms that are consistent with <br>industry practices, with no element of financing.<br>|
| **Net sales** are sales less excise duties. Diageo incurs excise duties throughout the world. In the majority of countries, excise duties are <br>effectively a production tax which becomes payable when the product is removed from bonded premises and is not directly related to the <br>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 <br>customer and where a customer fails to pay for products received the group cannot reclaim the excise duty. The group therefore recognises <br>excise duty, unless it regards itself as an agent of the regulatory authorities, as a cost to the group.<br>|
| **Advertising costs**, point of sale materials and sponsorship payments are charged to marketing in operating profit when the company has a <br>right of access to the goods or services acquired.<br>|
| **Exceptional items** are those that in management's judgement need to be disclosed separately. Such items are included in the income statement <br>caption to which they relate, and form part of the segmental reporting. Management believes that separate disclosure of exceptional items and the <br>classification between operating and non-operating further helps investors to understand the performance of the group.<br>Changes in estimates and reversals in relation to items previously recognised as exceptional are presented consistently as exceptional in the <br>current year.<br>|

---

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. 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.

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.

Executive Committee makes decisions based on the analysis of several financial data sets including organic and IFRS reported data. There has been

a change in how the Executive Committee looks at performance given the foreign exchange volatility experienced, using actual foreign exchange

rates for current and comparative periods which is consistent with IFRS reported results. Accordingly, the segmental analysis below is presented

based on IFRS reported figures. Supply Chain and Procurement (SC&P), 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, is considered a

key intersegmental operation instead of a separate operating segment.

---

| | |
|:---|:---|
| 156 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**(a) Segmental information for the consolidated income statement** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **North** <br>**America**<br>| **Europe**  | **Asia**<br>**Pacific**<br>| **Latin America** <br>**and Caribbean**<br>| **Africa** | **Corporate** <br>**and other** <br>| **Total** |
| **2025** | **$ million** | **$ million** | **$ million** | **$ million** | **$ million** | **$ million** | **$ million** |
| **Sales** | **8636** | **8037** | **6082** | **2390** | **2684** | **135** | **27964** |
| **Net sales** | **7973** | **4821** | **3635** | **1847** | **1834** | **135** | **20245** |
| **Cost of sales** | **(2734)** | **(1866)** | **(1581)** | **(704)** | **(1077)** | **(35)** | **(7997)** |
| **Gross profit** | **5239** | **2955** | **2054** | **1143** | **757** | **100** | **12248** |
| **Marketing** | **(1616)** | **(898)** | **(630)** | **(304)** | **(192)** | **(22)** | **(3662)** |
| **Other operating items** | **(570)** | **(755)** | **(494)** | **(311)** | **(282)** | **(470)** | **(2882)** |
| **Operating profit/(loss) before exceptional items** | **3053** | **1302** | **930** | **528** | **283** | **(392)** | **5704** |
| Exceptional operating items<sup>(1)</sup> |  |  |  |  |  |  | **(1369)** |
| **Operating profit/(loss)** |  |  |  |  |  |  | **4335** |
| Non-operating items |  |  |  |  |  |  | **(220)** |
| Net finance charges |  |  |  |  |  |  | **(771)** |
| Share of after tax results of associates and joint ventures |  |  |  |  |  |  | **193** |
| **Profit before taxation** |  |  |  |  |  |  | **3537** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | North America | Europe  | Asia<br>Pacific<br>| Latin America <br>and Caribbean<br>| Africa | Corporate<br>and other<br>| Total |
| 2024 | $ million | $ million | $ million | $ million | $ million | $ million | $ million |
| **Sales** | 8514 | 8024 | 6320 | 2432 | 2478 | 123 | 27891 |
| **Net sales** | 7908 | 4804 | 3817 | 1839 | 1778 | 123 | 20269 |
| **Cost of sales** | (2559) | (1890) | (1606) | (728) | (1195) | (36) | (8014) |
| **Gross profit** | 5349 | 2914 | 2211 | 1111 | 583 | 87 | 12255 |
| **Marketing** | (1627) | (873) | (651) | (306) | (205) | (29) | (3691) |
| **Other operating items** | (486) | (662) | (497) | (303) | (247) | (424) | (2619) |
| **Operating profit/(loss) before exceptional items** | 3236 | 1379 | 1063 | 502 | 131 | (366) | 5945 |
| Exceptional operating items<sup>(1)</sup> |  |  |  |  |  |  | 56 |
| **Operating profit/(loss)** |  |  |  |  |  |  | 6001 |
| Non-operating items |  |  |  |  |  |  | (70) |
| Net finance charges |  |  |  |  |  |  | (885) |
| Share of after tax results of associates and joint ventures |  |  |  |  |  |  | 414 |
| **Profit before taxation** |  |  |  |  |  |  | 5460 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | North America | Europe  | Asia<br>Pacific<br>| Latin America <br>and Caribbean<br>| Africa | Corporate<br>and other<br>| Total |
| 2023 | $ million | $ million | $ million | $ million | $ million | $ million | $ million |
| **Sales** | 8859 | 7245 | 6484 | 2714 | 2864 | 104 | 28270 |
| **Net sales** | 8109 | 4303 | 3841 | 2159 | 2039 | 104 | 20555 |
| **Cost of sales** | (2810) | (1652) | (1588) | (800) | (1320) | (39) | (8209) |
| **Gross profit** | 5299 | 2651 | 2253 | 1359 | 719 | 65 | 12346 |
| **Marketing** | (1631) | (765) | (655) | (355) | (235) | (22) | (3663) |
| **Other operating items** | (446) | (574) | (494) | (221) | (195) | (440) | (2370) |
| **Operating profit/(loss) before exceptional items** | 3222 | 1312 | 1104 | 783 | 289 | (397) | 6313 |
| Exceptional operating items<sup>(1)</sup> |  |  |  |  |  |  | (766) |
| **Operating profit/(loss)** |  |  |  |  |  |  | 5547 |
| Non-operating items |  |  |  |  |  |  | 364 |
| Net finance charges |  |  |  |  |  |  | (712) |
| Share of after tax results of associates and joint ventures |  |  |  |  |  |  | 443 |
| **Profit before taxation** |  |  |  |  |  |  | 5642 |

---

(1) For definition and details of exceptional items, see pages 158-160.

(i) The group's net finance charges are managed centrally and are not attributable to individual operating segments.

(ii) Approximately 38% of annual net sales occurred in the last four months of calendar year 2024.

---

| | |
|:---|:---|
| 157 | **Diageo** Form 20-F 2025 |

---

**(b) Other segmental information**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **North**<br>**America**<br>**$ million**<br>| **Europe** <br>**$ million**<br>| **Asia**<br>**Pacific**<br>**$ million**<br>| **Latin America** <br>**and Caribbean**<br>**$ million**<br>| **Africa**<br>**$ million**<br>| **Corporate**<br>**and other**<sup>(1)</sup><br>**$ million**<br>| **Total** <br>**operating** <br>**segments**<br>**$ million**<br>|
| **2025** |  |  |  |  |  |  |  |
| Purchase of property, plant and equipment and computer software | **435** | **423** | **79** | **5** | **88** | **582** | **1612** |
| Depreciation and intangible asset amortisation | **(186)** | **(272)** | **(135)** | **(38)** | **(101)** | **(16)** | **(748)** |
| Exceptional accelerated depreciation and impairment of tangible <br>assets<br>| **(66)** | **(96)** | **(9)** | **(3)** | **—** | **—** | **(174)** |
| Exceptional impairment of intangible assets | **(365)** | **(51)** | **—** | **—** | **—** | **—** | **(416)** |
| Exceptional impairment of associates and joint ventures | **(215)** | **(142)** | **(23)** | **—** | **—** | **—** | **(380)** |
| **2024** |  |  |  |  |  |  |  |
| Purchase of property, plant and equipment and computer software | 305 | 338 | 154 | 6 | 83 | 624 | 1510 |
| Depreciation and intangible asset amortisation | (161) | (265) | (111) | (33) | (94) | (13) | (677) |
| Underlying impairment |  |  |  | (1) |  |  | (1) |
| Exceptional accelerated depreciation and impairment of tangible <br>assets<br>| (33) | (5) | (8) |  |  |  | (46) |
| Exceptional impairment of intangible assets | (54) | (96) | 379 |  |  |  | 229 |
| **2023** |  |  |  |  |  |  |  |
| Purchase of property, plant and equipment and computer software | 236 | 252 | 198 | 146 | 152 | 433 | 1417 |
| Depreciation and intangible asset amortisation | (141) | (204) | (93) | (45) | (102) | (12) | (597) |
| Exceptional accelerated depreciation and impairment of tangible <br>assets<br>| (63) | 3 | (27) |  |  |  | (87) |
| Exceptional impairment of intangible assets | (36) | (31) | (546) |  |  |  | (613) |

---

(1) Purchase of property, plant and equipment and computer software in respect of SC&P are included in the Corporate and other operating segment.

**(c) Category and geographical analysis**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Category analysis** | **Category analysis** | **Category analysis** | **Category analysis** | **Category analysis** | **Geographic analysis** | **Geographic analysis** | **Geographic analysis** | **Geographic analysis** | **Geographic analysis** |
|  | **Spirits**<br>**$ million**<br>| **Beer**<br>**$ million**<br>| **Ready-to-**<br>**drink**<br>**$ million**<br>| **Other**<br>**$ million**<br>| **Total**<br>**$ million**<br>| **United** <br>**States**<br>**$ million**<br>| **India**<br>**$ million**<br>| **Great** <br>**Britain**<br>**$ million**<br>| **Rest of** <br>**World**<br>**$ million**<br>| **Total**<br>**$ million**<br>|
| **2025** |  |  |  |  |  |  |  |  |  |  |
| Sales<sup>(1)</sup> | **22166** | **4493** | **989** | **316** | **27964** | **8138** | **3233** | **2989** | **13604** | **27964** |
| Non-current assets<sup>(2), (3)</sup> |  |  |  |  |  | **7467** | **2173** | **4505** | **15758** | **29903** |
| **2024** |  |  |  |  |  |  |  |  |  |  |
| Sales<sup>(1)</sup> | 22406 | 4107 | 949 | 429 | 27891 | 8041 | 3247 | 2849 | 13754 | 27891 |
| Non-current assets<sup>(2), (3)</sup> |  |  |  |  |  | 7642 | 2207 | 3969 | 14868 | 28686 |
| **2023** |  |  |  |  |  |  |  |  |  |  |
| Sales<sup>(1)</sup> | 22855 | 4026 | 1079 | 310 | 28270 | 8366 | 3301 | 2565 | 14038 | 28270 |
| Non-current assets<sup>(2), (3)</sup> |  |  |  |  |  | 7328 | 2265 | 3665 | 14118 | 27376 |

---

(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.

---

| | |
|:---|:---|
| 158 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**3. Exceptional items**

---

| |
|:---|
| **Accounting policies**  |
| Exceptional items are those that in management's judgement <br>need to be disclosed separately. Such items are included in the <br>income statement caption to which they relate, and form part of <br>the segmental reporting included in note 2. Management <br>believes that separate disclosure of exceptional items and the <br>classification between operating and non-operating further helps <br>investors to understand the performance of the group.<br>Changes in estimates and reversals in relation to items <br>previously recognised as exceptional are presented consistently <br>as exceptional in the current year.<br>|
| **Operating items**  |
| Exceptional operating items are those that are unusual or non-<br>recurring in nature, considered to be of a size that could distort <br>the performance and are part of the operating activities of the <br>group, such as one-off global restructuring programmes which <br>can be multi-year, impairment of intangible assets and fixed <br>assets, indirect tax settlements, property disposals and changes <br>in post-employment plans. <br>|
| **Non-operating items**  |
| Gains and losses on the sale or directly attributable to a <br>prospective sale of businesses, brands or distribution rights, step <br>up gains and losses that arise when an investment becomes an <br>associate or an associate becomes a subsidiary and unusual non-<br>recurring items, that are considered to be of a size that could <br>distort performance and not in respect of the production, <br>marketing and distribution of premium drinks, are disclosed as <br>exceptional non-operating items below operating profit in the <br>income statement. <br>|
| **Exceptional finance income/charge** |
| Exceptional finance incomes/charges are those that are unusual <br>or non-recurring in nature, considered to be of a size that could <br>distort the performance and are part of the financing activity of <br>the group.<br>|
| **Taxation items**  |
| Exceptional current and deferred tax items comprise unusual or <br>non-recurring items, that are considered to be of a size that <br>could distort performance. Examples include direct tax <br>provisions and settlements in respect of prior years and the <br>remeasurement of deferred tax assets and liabilities following <br>tax rate changes. <br>|

---

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| **Exceptional operating items** |  |  |  |
| Impairment (charge)/income and other <br>related charges (1)<br>| **(910)** | 224 | (613) |
| Restructuring programme (2) | **(225)** | (61) | (121) |
| Distribution model change in France (3) | **(145)** |  |  |
| Various dispute and litigation matters (4) | **(51)** | (107) |  |
| USVI cover-over (5) | **(38)** |  |  |
| Distribution termination fee (6) | **—** |  | (55) |
| Winding down Russian operations (7) | **—** |  | 23 |
|  | **(1369)** | 56 | (766) |
| **Non-operating items** |  |  |  |
| Sale of businesses and brands |  |  |  |
| Guinness Nigeria PLC (8) | **(125)** | (6) |  |
| Guinness Ghana Breweries PLC <br>prospective sale (9)<br>| **(114)** |  |  |
| Pampero brand (10) | **53** |  |  |
| Santa Vittoria prospective sale (11) | **(29)** |  |  |
| Cacique brand (12) | **(20)** |  |  |
| Safari brand (13) | **15** |  |  |
| Cîroc LLC (14) | **(11)** |  |  |
| Guinness Cameroun S.A. (15) | **(8)** | (10) | 343 |
| MHD France joint operation (16) | **(5)** |  |  |
| Windsor business (17) | **4** | (58) |  |
| Seychelles Breweries Limited <br>prospective sale (18)<br>| **(4)** |  |  |
| Step acquisitions |  |  |  |
| Ritual (19) | **25** |  |  |
| Nao Spirits (20) | **(1)** |  |  |
| Other (21) | **—** | 4 | 21 |
|  | **(220)** | (70) | 364 |
| **Exceptional finance income** |  |  |  |
| Borrowing costs capitalised (22) | **58** |  |  |
| **Exceptional items before taxation** | **(1531)** | (14) | (402) |
| Tax on exceptional items (note 7(b)) | **214** | (24) | 226 |
| **Total exceptional items** | **(1317)** | (38) | (176) |
| Attributable to: |  |  |  |
| Equity shareholders of the parent <br>company<br>| **(1294)** | (142) | (3) |
| Non-controlling interests | **(23)** | 104 | (173) |
| **Total exceptional items** | **(1317)** | (38) | (176) |

---

(1) In the year ended 30 June 2025, an impairment charge and other

related charges of $458 million in respect of Diageo's investment in

various Distill Ventures businesses, an impairment charge of

$231 million in respect of the Aviation American Gin brand and tangible

fixed assets, $170 million in respect of various other US brands,

tangible fixed assets and inventory and $51 million in respect of the

Bell's whisky brand were recognised in exceptional operating items.

For further information, see note 9(d), note 6 and note 13.

In the year ended 30 June 2024, a net gain of$224 millionwas

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 millionin 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.

---

| | |
|:---|:---|
| 159 | **Diageo** Form 20-F 2025 |

---

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).

(2) In the year ended 30 June 2025, an exceptional charge of$225

million was accounted for in respect of the Accelerate programme,

that includes the supply chain agility programme (2024 – $61 million).

The Accelerate programme was announced in May 2025 and is a three-

yearprogramme aiming to create a more agile global operating model

with cash delivery, cost savings and deleveraging targets. The

implementation costs of the programme 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 in

respect of the restructuring programmes for the year ended 30 June

2025 was primarily in respect of impairment of property, plant and

equipment, severance costs and accelerated depreciation, being

incremental depreciation of assets in the period directly attributable

to the programme in North America and Europe. In the year ended 30

June 2025, cash expenditure in respect of restructuring was $38 million

(2024 – $26 million), partially offset by $35 millionproceeds from

selling a plant in North America.

(3) On 23 July 2024, Diageo announced the completion of the

transformation of its distribution model in France as the company

agreed with LVMH to exit from their joint operation and to terminate

the existing distribution agreements for Diageo brands. In the year

ended 30 June 2025, an exceptional operating charge of $145 million

was accounted for in respect of the transformation, mainly in relation

to termination fee paid to LVMH.

(4) In the year ended 30 June 2025, $51 million(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.

(5) Diageo receives cover-over income in relation to its rum production

in the US Virgin Islands. The cover-over is based on a permanent

standard rate and an additional extender rate. A recent law made the

extender rate permanent from January 2026 but no retrospective

approval was granted for the period after 31 December 2021. As a

result, Diageo reversed accrued income of $38 millionin respect of

prior years as exceptional operating item in the year ended 30 June

2025. (6) 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 was paid.

(7) In the year ended 30 June 2023, Diageo released unutilised

provisions of $23 million in respect of winding down its operations

in Russia.

(8) On 30 September 2024, Diageo completed the sale of its

shareholding in Guinness Nigeria PLC to Tolaram. The transaction

resulted in a loss of$125 million, including cumulative translation

losses of $175 million recycled to the income statement in the year

ended 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 and other costs directly attributable to the prospective

sale of the business.

(9) On 28 January 2025, Diageo announced the agreement to sell

Guinness Ghana Breweries PLC, its brewery in Ghana to the Castel

Group and a non-operating charge of $114 million attributable to the

prospective sale was recognised in the year ended 30 June 2025.

(10) In the year ended 30 June 2025, an exceptional gain of $53 million

was accounted for in relation to the disposal of the Pampero brand to

Gruppo Montenegro.

(11) On 24 June 2025, Diageo announced the sale of Diageo Operations

Italy S.p.A., inclusive of the Santa Vittoria production facility, to

NewPrinces S.p.A. and a non-operating charge of $29 million

attributable to the prospective sale was recognised in the year ended

30 June 2025.

(12) On 23 January 2025, Diageo announced the sale of the Cacique

brand to Bardinet S.A. The transaction resulted in a loss of $20 million.

(13) In the year ended 30 June 2025, an exceptional gain of $15 million

was recorded in relation to the disposal of the Safari brand to

Casa Redondo.

(14) In the year ended 30 June 2025, Diageo and Main Street Advisors,

Inc. (MSA) announced that they entered into a strategic contractual

arrangement, where Diageo contributed its ownership in Cîroc LLC,

owner of the Cîroc IP and distribution right for North America, while

MSA contributed Lobos LLC, owner of the Lobos 1707 premium tequila

brand, into the newly formed structure. As a result, Diageo lost the

control over Cîroc LLC and accounted for its investment in Cîroc LLC

and Lobos LLC as associates. The transaction resulted in$11 million

non-operating exceptional loss.

(15) 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 millionrecycled to the income statement. In the

year ended 30 June 2025,$8 million (2024 – $10 million) charges

directly attributable to the disposal have been accounted for.

(16) In the year ended 30 June 2025, an exceptional loss of $5 million

was recorded in relation to the disposal of Diageo's share in the France

joint operation.

(17) 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 2025, $4 million gain was accounted for driven

by the reversal of accrued charges.

(18) In the year ended 30 June 2025, $4 million transaction costs

were incurred in respect of the prospective disposal of Seychelles

Breweries Limited.

(19) On 24 September 2024, Diageo acquired the part of the entire

issued share capital of Ritual Beverage Company LLC (owner of the

Ritual Zero Proof non-alcoholic spirits brand), that it did not already

own. As a result of Ritual Zero Proof becoming a subsidiary of the

group in the year ended 30 June 2025, a gain of $25 millionarose,

being the difference between the book value of the associate prior to

the transaction and its fair value.

(20) On 19 June 2025, United Spirits Limited acquired a controlling

shareholding in Nao Spirits. Step up loss of $1 millionwas accounted

for as non-operating exceptional item. The fair values of assets and

liabilities acquired are provisional and will be finalised in the year

ending 30 June 2026.

(21) 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$21 million, mainly driven by

the sale of its Archers brand.

(22) In the year ended 30 June 2025, the group capitalised borrowing

costs of $58 millionin respect of purchases of property, plant,

equipment and computer software in the prior years.

For further information on acquisition and sale of businesses and

brands, see notes 8(a) and 8(b).

Cash payments and receipts included in net cash inflow from operating

activities in respect of exceptional items were as follows:

---

| | |
|:---|:---|
| 160 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Distribution termination fee | **(48)** | (55) |  |
| Litigation | **(44)** | (88) |  |
| Restructuring programme | **(38)** | (26) | (14) |
| Thalidomide (note 15(d)) | **(19)** | (17) | (16) |
| Distill Ventures exits | **(12)** |  |  |
| Winding down Russian operations | **—** | (2) | (16) |
| **Total cash payments** | **(161)** | (188) | (46) |

---

**4. Operating costs**

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Excise duties | **7719** | 7622 | 7715 |
| Cost of sales | **8072** | 8071 | 8289 |
| Marketing | **3662** | 3691 | 3663 |
| Other operating items | **4176** | 2506 | 3056 |
|  | **23629** | 21890 | 22723 |
| **Comprising:** |  |  |  |
| Excise duties |  |  |  |
| India | **1797** | 1845 | 1950 |
| Great Britain | **1513** | 1463 | 1314 |
| United States | **798** | 738 | 825 |
| Other | **3611** | 3576 | 3626 |
| Increase in inventories | **(470)** | (112) | (615) |
| Raw materials and consumables | **5119** | 4892 | 5197 |
| Marketing | **3662** | 3691 | 3663 |
| Other external charges<sup>(1)</sup> | **3428** | 3002 | 3301 |
| Staff costs | **2488** | 2314 | 2197 |
| Depreciation, amortisation and <br>impairment<br>| **1718** | 493 | 1297 |
| Gains on disposal of properties | **(37)** | 1 | (4) |
| Net foreign exchange losses | **21** | 8 | 12 |
| Other operating income  | **(19)** | (21) | (40) |
|  | **23629** | 21890 | 22723 |

---

(1)Other external charges mainly include distribution and warehousing cost, utilities, other

personnel costs not included in staff costs, other professional costs, system/IT costs,

facilities costs, maintenance and repairs and low value or short-term lease rental costs.

**(a) Other external charges** 

Other external charges include research and development expenditure

in respect of new drinks products and package design of $74 million

(2024–$69 million; 2023 – $63 million) and maintenance and repairs of

$179 million (2024 – $171 million; 2023 – $171 million).

**(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:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Audit of these financial statements<sup>(1)</sup> | **9.7** | 7.7 | 9.1 |
| Audit of financial statements of <br>subsidiaries<br>| **7.0** | 8.2 | 6.8 |
| **Total audit fees** | **16.7** | 15.9 | 15.9 |
| Audit related assurance services<sup>(2)</sup> | **0.9** | 0.4 | 0.4 |
| Other assurance services<sup>(3)</sup> | **1.2** | 1.7 | 1.4 |
|  | **18.8** | 18.0 | 17.7 |

---

(1)For the year ended 30 June 2025, in respect of reporting under section 404 of the US

Sarbanes-Oxley Act is reported on the line of 'Audit of these financial statements'. The

presentation of 'Audit of these financial statements' line for the years ended 30 June 2024

and 2023 has been aligned to 'Audit of these financial statements' line for the year ended

30 June 2025.

(2)Audit related assurance services are in respect of the interim review and other audit-

related services over financial information.

(3)Other assurance services comprise the aggregate fees for assurance and related services

that are not reported under 'total audit fees'.

(i) Under SEC regulations, the auditors' fees of$18.8 million (2024 - $18.0 million, 2023 -

$17.7 million) is required to be presented as follows: audit fee of $18.0 million (2024 -

$17.0 million, 2023 - $16.8 million) and other audit related fee of $0.8 million (2024 - $1.0

million, 2023 - $0.9 million).

Audit services provided by firms other than PwC for the year ended 30

June 2025 were$0.5 million (2024 – $0.1 million; 2023 – $0.1 million).

Further PwC fees for audit services in respect of post-employment

plans were $0.6 million for the year ended 30 June 2025 (2024 – $0.4

million; 2023 – $0.3 million).

**(c) Staff costs and average number of employees** 

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| **Aggregate remuneration** |  |  |  |
| Wages and salaries | **2108** | 1984 | 1858 |
| Share-based incentive plans | **59** | 43 | 58 |
| Employer's social security | **165** | 146 | 138 |
| Employer's pension |  |  |  |
| Defined benefit plans | **79** | 72 | 80 |
| Defined contribution plans | **70** | 62 | 53 |
| Other post-employment plans | **7** | 7 | 10 |
|  | **2488** | 2314 | 2197 |

---

The average number of employees on a full-time equivalent basis

(excluding employees of associates and joint ventures) was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | 2024 | 2023 |
| North America | **2,986** | 2,869 | 2,884 |
| Europe | **3,024** | 2,932 | 2,789 |
| Asia Pacific | **6,224** | 6,588 | 6,856 |
| Latin America and Caribbean | **1,597** | 1,650 | 1,495 |
| Africa | **2,848** | 3,290 | 3,526 |
| SC&P | **7,134** | 6,977 | 6,934 |
| Corporate and other | **6,047** | 6,061 | 5,753 |
|  | **29,860** | 30,367 | 30,237 |

---

At 30 June 2025, on a full-time equivalent basis, the group had 29,632

(2024 – 30,092; 2023 – 30,269) employees. The average number of

employees of the group, including part-time employees, for the year

was 30,232 (2024 – 30,839; 2023 – 30,419).

---

| | |
|:---|:---|
| 161 | **Diageo** Form 20-F 2025 |

---

**(d) Exceptional operating items** 

Included in the table above are exceptional operating items as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| **2024**<br>**$ million**<br>| **2023**<br>**$ million**<br>|
| Depreciation, amortisation and <br>impairment<br>|  |  |  |
| Brand, goodwill, investments in <br>associates and other investments <br>impairment charges/(income)<br>| **796** | (231) | 613 |
| Tangible asset impairment and <br>accelerated depreciation<br>| **174** | 46 | 87 |
| Staff costs | **84** | 2 | 11 |
| Other external charges | **342** | 127 | 75 |
| Other operating income | **(27)** |  | (20) |
| **Total exceptional operating items (note** <br>**3)**<br>| **1369** | (56) | 766 |
| Cost of sales | **75** | 57 | 80 |
| Other operating expenses/(income) | **1294** | (113) | 686 |

---

**5. Finance income and charges**

---

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

---

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Interest income | **203** | 179 | 193 |
| Fair value gain on financial <br>instruments<br>| **170** | 100 | 124 |
| **Total interest income**<sup>(1)</sup> | **373** | 279 | 317 |
| Interest charge on bonds, commercial <br>paper, bank loans and overdrafts<br>| **(775)** | (665) | (563) |
| Interest charge on finance leases | **(32)** | (23) | (19) |
| Borrowing costs capitalised | **46** |  |  |
| Borrowing costs capitalised - <br>exceptional item<sup>(2)</sup><br>| **58** |  |  |
| Other interest charges | **(270)** | (396) | (325) |
| Fair value loss on financial <br>instruments<br>| **(172)** | (101) | (123) |
| **Total interest charges**<sup>(1)</sup> | **(1145)** | (1185) | (1030) |
| **Net interest charges** | **(772)** | (906) | (713) |
| Net finance income in respect of <br>post-employment plans in surplus <br>(note 14)<br>| **54** | 57 | 71 |
| Monetary gain on hyperinflation in <br>various economies (note 1(f))<br>| **39** | 49 | 13 |
| Interest income in respect of direct <br>and indirect tax<br>| **7** | 15 | 8 |
| Change in financial liability — Zacapa <br>(Level 3)<br>| **7** |  |  |
| **Total other finance income** | **107** | 121 | 92 |
| Net finance charge in respect of post-<br>employment plans in deficit (note 14)<br>| **(19)** | (20) | (18) |
| Monetary loss on hyperinflation in <br>various economies (note 1(f))<br>| **—** | (8) | (3) |
| Interest charge in respect of direct <br>and indirect tax<br>| **(51)** | (27) | (29) |
| Unwinding of discounts | **(22)** | (23) | (15) |
| Change in financial liability — Zacapa <br>(Level 3)<br>| **—** |  | (10) |
| Other finance charges | **(14)** | (22) | (16) |
| **Total other finance charges** | **(106)** | (100) | (91) |
| **Net other finance charges** | **1** | 21 | 1 |

---

(1)Includes $101 million interest income and $854 million interest charge in respect of

financial assets and liabilities that are not measured at fair value through income

statement (2024 – $59 million income and $765 million charge; 2023 – $98 million income

and $628 million charge).

(2)Cumulative impact of prior years' unrecognised borrowing costs reclassified to qualifying

assets.

---

| | |
|:---|:---|
| 162 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**6. Investments in associates and joint ventures**

---

| |
|:---|
| **Accounting policies** |
| An associate is an undertaking in which the group has a long-term <br>equity interest and over which it has the power to exercise <br>significant influence. A joint venture is a joint arrangement whereby <br>the parties that have joint control of the arrangement have rights to <br>the net assets of the arrangement. The group's interest in the net <br>assets of associates and joint ventures is reported in investments in <br>the consolidated balance sheet and its interest in their results (net <br>of tax) is included in the consolidated income statement below the <br>group's operating profit. Associates and joint ventures are initially <br>recorded at cost including transaction costs, and the group's share of <br>post acquisition changes in the investee's reserves are recognised <br>under the equity method. Investments in associates and joint <br>ventures acquired prior to 1 July 1998 comprise the cost of shares <br>less goodwill written off to reserves that has not been reinstated, <br>plus the group's share of post acquisition reserves. Investments in <br>associates and joint ventures are reviewed for impairment whenever <br>events or circumstances indicate that the carrying amount may not <br>be recoverable. The impairment review compares the net carrying <br>value with the recoverable amount, where the recoverable amount <br>is the higher of the value in use calculated as the present value of <br>the group's share of the associate's future cash flows and its fair <br>value less costs of disposal.<br>|

---

Diageo's principal associate is Moët Hennessy of which Diageo owns

34%through two legal entities; Moët Hennessy, SAS and Moët Hennessy

International. 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, principally covering distribution of Diageo's

Scotch whisky and gin premium brands and Moët Hennessy's

champagne and cognac premium brands. Diageo has 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.

Joint distribution agreements had also been established in France, but

Diageo terminated the existing distribution agreements in place for

France of all remaining Diageo brands effective from 1 January 2025.

(a) An analysis of the movement in the group's investments in

associates and joint ventures is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Moët**<br>**Hennessy**<br>**$ million**<br>| **Others**<br>**$ million**<br>| **Total**<br>**$ million**<br>|
| **Cost less provisions** |  |  |  |
| At 30 June 2023 | 4484 | 341 | 4825 |
| 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 <br>comprehensive income and equity<br>| 3 |  | 3 |
| Impairment charged during the year |  | (11) | (11) |
| **At 30 June 2024** | **4608** | **424** | **5032** |
| Exchange differences | **470** | **19** | **489** |
| Additions | **—** | **109** | **109** |
| Share of profit/(loss) after tax | **219** | **(26)** | **193** |
| Step acquisition | **—** | **(30)** | **(30)** |
| Dividends | **(169)** | **(6)** | **(175)** |
| Share of movements in other <br>comprehensive income and equity<br>| **21** | **—** | **21** |
| Impairment charged during the year | **—** | **(308)** | **(308)** |
| Transfer from other investments | **—** | **3** | **3** |
| **At 30 June 2025** | **5149** | **185** | **5334** |

---

(i)Investment in associates includes loans given to and preference shares invested in associates of $37

million (2024 – $298 million).

Following a strategic review in March 2025, Diageo decided it would no

longer be bringing any new brands into the Distill Ventures programme

and exit several businesses, resulting in an impairment charge of $308

million in exceptional operating items in the year ended 30 June 2025.

(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 =€0.92 (2024 – $1 = €0.93; 2023 – $1 = €0.96).

Income statement information for the three years ended 30 June 2025

and balance sheet information as at 30 June 2025 and 30 June 2024 of

Moët Hennessy are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Sales | **6100** | 6691 | 7204 |
| Profit for the year | **644** | 1299 | 1339 |
| Total comprehensive income | **716** | 1219 | 1393 |

---

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Non-current assets | **9673** | 8772 |
| Current assets | **13496** | 12025 |
| Total assets | **23169** | 20797 |
| Non-current liabilities | **(2931)** | (2732) |
| Current liabilities | **(4881)** | (4285) |
| Total liabilities | **(7812)** | (7017) |
| **Net assets** | **15357** | 13780 |

---

(i) Including acquisition fair value adjustments principally in respect of

Moët Hennessy's brands and translated at $1 = €0.85 (2024 – $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.

---

| | |
|:---|:---|
| 163 | **Diageo** Form 20-F 2025 |

---

**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 <br>accounting and tax treatments, and due to items that are never taxable or tax deductible. Tax treatments are not recognised unless it is <br>probable that a tax authority will accept the treatment. Once considered to be probable, tax treatments are reviewed each year to assess <br>whether a provision should be taken against full recognition of the treatment on the basis of potential settlement through negotiation and/or <br>litigation with the relevant tax authorities. Tax provisions are included in current liabilities. Penalties and interest on tax liabilities are <br>included in operating profit and finance charges, respectively.<br>Full provision for deferred tax is made for temporary differences between the carrying value of assets and liabilities for financial reporting <br>purposes and their value for tax purposes, except for deferred tax provision arising on goodwill from business combinations. The amount of <br>deferred tax reflects the expected recoverable amount and is based on the expected manner of recovery or settlement of the carrying <br>amount of assets and liabilities, using the basis of taxation enacted or substantively enacted by the balance sheet date. Deferred tax assets <br>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 <br>respect of any future remittance of earnings of foreign subsidiaries where the group is able to control the remittance of earnings and it is <br>probable that such earnings will not be remitted in the foreseeable future, or where no liability would arise on the remittance.<br>|
| **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 <br>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 <br>often complex and can take several years to resolve; current tax balances are based on such estimations. Tax provisions are based on <br>management's judgement and interpretation of country specific tax law and the likelihood of settlement. However, the actual tax liabilities <br>could differ from the provision and in such event the group would be required to make an adjustment in a subsequent period which could <br>have a material impact on the group's profit for the year.<br>The evaluation of deferred tax asset recoverability requires estimates to be made regarding the availability of future taxable income. For <br>brands with an indefinite life, management's intention is to recover the book value through a potential sale in the future, and therefore the <br>deferred tax on the brand value is generally recognised using the appropriate country capital gains tax rate. To the extent brands with an <br>indefinite life have been impaired, management considers this to be an indication of recovery through use and in such a case deferred tax on <br>the brand value is recognised using the appropriate country corporate income tax rate.<br>|

---

**(a) Analysis of taxation charge for the year**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **United Kingdom** | **United Kingdom** | **United Kingdom** | **Rest of world** | **Rest of world** | **Rest of world** | **Total** | **Total** | **Total** |
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>| **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>| **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| **Current tax** |  |  |  |  |  |  |  |  |  |
| Current year | **157** | 134 | 192 | **987** | 983 | 1056 | **1144** | 1117 | 1248 |
| Adjustments in respect of prior years | **(22)** | (7) | 41 | **(19)** | (4) | (46) | **(41)** | (11) | (5) |
|  | **135** | 127 | 233 | **968** | 979 | 1010 | **1103** | 1106 | 1243 |
| **Deferred tax** |  |  |  |  |  |  |  |  |  |
| Origination and reversal of temporary differences | **41** | 39 | 36 | **(164)** | 113 | (93) | **(123)** | 152 | (57) |
| Changes in tax rates | **—** |  |  | **4** | (18) | 13 | **4** | (18) | 13 |
| Adjustments in respect of prior years | **8** | 16 | 7 | **7** | 38 | (43) | **15** | 54 | (36) |
|  | **49** | 55 | 43 | **(153)** | 133 | (123) | **(104)** | 188 | (80) |
| **Taxation on profit** | **184** | 182 | 276 | **815** | 1112 | 887 | **999** | 1294 | 1163 |

---

**(b) Exceptional tax charges/(credits)**

The taxation charge includes the following exceptional items:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Brand, goodwill and other assets impairment<sup>(1)</sup> | **(138)** | 63 | (154) |
| Restructuring programme<sup>(2)</sup> | **(46)** | (15) | (27) |
| Distribution model change in France<sup>(3)</sup> | **(36)** |  |  |
| Various dispute and litigation matters<sup>(4)</sup> | **(12)** | (23) |  |
| Disposal of businesses and brands<sup>(5)</sup> | **3** | (1) | 37 |
| Borrowing costs capitalised<sup>(6)</sup> | **15** |  |  |
| US guarantee fee claim<sup>(7)</sup> | **—** |  | (68) |
| Distribution termination fee | **—** |  | (14) |
|  | **(214)** | 24 | (226) |

---

---

| | |
|:---|:---|
| 164 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

(1) In the year ended 30 June 2025,impairment charges recognised within exceptional operating items resulted in exceptional tax credits of$30 million in respect of Distill Ventures, $55 million in

respect of the Aviation American Gin brand and tangible fixed assets,$40 million in respect of various US brands, tangible fixed assets and inventory and$13 millionin respect of the Bell's whisky

brand.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, partially offset by an

exceptional tax credit of$19 millionin respect of the impairment of the Chase brand and the related tangible fixed assets and an exceptional tax credit of$13 millionon brand impairments in the

US ready-to-drink portfolio. In the year ended 30 June 2023,an exceptional tax credit of $154 millionwas recognised mainly in respect of the impairment of the McDowell's brand.

(2) In the year ended 30 June 2025, an exceptional tax credit of $46 million was recognised in respect of restructuring programmes.

(3)In the year ended 30 June 2025, an exceptional tax credit of$36 millionwas recognised in respect of the transformation of the distribution model in France as the company agreed with LVMH to

exit from their joint operation and to terminate the existing distribution agreements for Diageo brands.

(4)In the year ended 30 June 2025,an exceptional tax credit of$12 millionwas recognised in respect of various dispute and litigation matters in North America and Europe, including certain costs

and expenses associated therewith.In the year ended 30 June 2024, an exceptional tax credit of $23 millionwas recorded in relation to various dispute and litigation matters in North America,

including certain costs and expenses associated therewith.

(5)In the year ended 30 June 2023, the exceptional net tax charge of$37 million mainly comprised a tax charge of $52 million in respect of the sale of Guinness Cameroun S.A., partially offset by a

tax credit of$11 millionin respect of the sale of certain USL businesses.

(6)In the year ended 30 June 2025, an exceptional tax charge of$15 million was recognised in relation to the capitalisation of borrowing costs on the purchase of property, plant, equipment and

computer software in the prior year.

(7)In the year ended 30 June 2023, an exceptional tax credit of$68 millionwas 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**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| **2025%**<br>| 2024<br>$ million<br>| 2024%<br>| 2023<br>$ million<br>| 2023%<br>|
| Profit before taxation | **3537** |  | 5460 |  | 5642 |  |
| Share of after tax results of associates and joint ventures | **193** |  | 414 |  | 443 |  |
| Profit before taxation excluding share of after tax results of associates <br>and joint ventures<br>| **3344** |  | 5046 |  | 5199 |  |
| Notional charge at UK corporation tax rate | **836** | **25.0** | 1262 | 25.0 | 1066 | 20.5 |
| Differences in overseas tax rates | **(45)** | **(1.3)** | (86) | (1.7) | 116 | 2.3 |
| Non-taxable gain on disposals of businesses | **(28)** | **(0.7)** |  |  |  |  |
| Disposal of businesses and brands | **54** | **1.6** | 17 | 0.3 | (42) | (0.8) |
| Other items not chargeable | **(69)** | **(2.1)** | (72) | (1.4) | (76) | (1.5) |
| Impairment | **105** | **3.1** | 6 | 0.1 | (8) | (0.2) |
| Other items not deductible | **105** | **3.1** | 70 | 1.4 | 85 | 1.6 |
| Irrecoverable withholding taxes | **60** | **1.8** | 55 | 1.1 | 46 | 0.9 |
| Movement in provision in respect of uncertain tax positions<sup>(1)</sup> | **18** | **0.5** | 6 | 0.1 | 34 | 0.7 |
| Changes in tax rates | **4** | **0.1** | (18) | (0.4) | 13 | 0.3 |
| Adjustments in respect of prior years<sup>(2)</sup> | **(41)** | **(1.2)** | 54 | 1.1 | (71) | (1.4) |
| **Taxation on profit / Reported tax rate**<sup>(3)</sup> | **999** | **29.9** | 1294 | 25.6 | 1163 | 22.4 |
| **Tax rate before exceptional items**<sup>(3)</sup> | **—** | **24.9** |  | 25.1 |  | 24.8 |

---

(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 millionin respect of the deductibility of fees paid to Diageo plc for

guaranteeing externally issued debt of its US group entities.

(3) Definitions of reported tax rate and tax rate before exceptional items have been revised to exclude the share of after tax results of associates and joint ventures from profit before taxation, as

this represents post-tax profit, hence is considered as a non-essential factor of the calculation. The presentation of the reported tax rate and the tax rate before exceptional items for the

years ended 30 June 2023 and 30 June 2024 has been aligned to the new definition.

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.

Significant ongoing changes in the international tax environment and an increase in global tax audit activity mean 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 2025, ongoing audits that are provided for individually are not expected to result in a material tax liability. The current tax asset of $354

million (30 June 2024 – $304 million) and tax liability of $138 million (30 June 2024 – $136 million) include $217 million (30 June 2024 – $209 million)

of provisions for tax uncertainties.

The cash tax paid in theyear ended 30 June 2025 amounts to $1,114 million (30 June 2024 – $1,099 million) and is $11 million higher than the

current tax charge (30 June 2024 – $7 million lower). This arises as a result of timing differences between the accrual of income taxes, the

movement in the provision for uncertain tax positions, the actual payment of cash and refund of the deposit payments.

In December 2021, the OECD released a framework for Pillar Two Model Rules which introduced 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

applies to Diageo from the financialyear ended 30 June 2025. 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.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 Model Rules.A current tax expense of

$7 millionas a result of the Pillar Two Model Rules has been included in the total tax charge for theyear ended 30 June 2025.

**(d) Deferred tax assets and liabilities**

Deferred tax recognised in the consolidated balance sheet comprise the following net deferred tax (liabilities)/assets:

---

| | |
|:---|:---|
| 165 | **Diageo** Form 20-F 2025 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Property, plant** <br>**and equipment**<br>**$ million**<br>| **Intangible**<br>**assets**<br>**$ million**<br>| **Post-**<br>**employment** <br>**plans**<br>**$ million**<br>| **Tax losses**<br>**$ million**<br>| **Other** <br>**temporary**<br>**differences**<sup>(1)</sup><br>**$ million**<br>| **Total**<br>**$ million**<br>|
| **At 30 June 2023** | (585) | (2313) | (141) | 62 | 404 | (2573) |
| Exchange differences | 9 | 35 |  | (10) | (13) | 21 |
| Recognised in income statement | (79) | (132) | (6) | 28 | (17) | (206) |
| Recognised in other comprehensive income 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 income <br>and equity<br>| (4) | (20) |  |  | (3) | (27) |
| Acquisition<sup>(2)</sup> |  | 53 |  |  |  | 53 |
| Transfer from assets held for sale | 2 | 4 |  | (16) | (8) | (18) |
| Sale of businesses |  | 38 |  |  | (1) | 37 |
| **At 30 June 2024** | **(688)** | **(2395)** | **(142)** | **64** | **357** | **(2804)** |
| Exchange differences | **(31)** | **23** | **(1)** | **3** | **(5)** | **(11)** |
| Recognised in income statement | **(92)** | **78** | **1** | **(10)** | **131** | **108** |
| Recognised in other comprehensive income and equity | **(20)** | **(67)** | **3** | **—** | **(38)** | **(122)** |
| Tax rate change – recognised in income statement | **(2)** | **(2)** | **—** | **—** | **—** | **(4)** |
| Transfer to assets held for sale | **40** | **1** | **(1)** | **—** | **(1)** | **39** |
| **At 30 June 2025** | **(793)** | **(2362)** | **(140)** | **57** | **444** | **(2794)** |

---

(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 theyear ended 30 June 2024a deferred tax asset of$53 millionwas recognised in relation to the purchase of shares of DeLeon Holdco LLC.

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:

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Deferred tax assets | **150** | 143 |
| Deferred tax liabilities | **(2944)** | (2947) |
|  | **(2794)** | (2804) |

---

Deferred tax assets of $150 million include $76 million (2024 – $98

million) arising in jurisdictions with prior year taxable losses. The

majority of the asset is in respect of Brazil, Germany and Colombia. 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. The majority

of deferred tax assets can be carried forward indefinitely. From the

total recognised tax losses of $57 million, it is expected that $8 million

will be utilised in the year ending 30 June 2026.

**(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 $741 million (2024 –

$724 million).

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Capital losses – indefinite | **125** | 123 |
| Trading losses – indefinite | **42** | 31 |
| Trading and capital losses – expiry dates up to <br>2035<br>| **26** | 33 |
|  | **193** | 187 |

---

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 $23.6 billion (2024 – $26.3 billion).

---

| | |
|:---|:---|
| 166 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

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 <br>the results of associates and joint ventures. The results of subsidiaries acquired or sold are included in the income statement from, or up to, <br>the date that control passes. <br>Business combinations are accounted for using the acquisition method. Identifiable assets, liabilities and contingent liabilities acquired are <br>measured at fair value at acquisition date. The consideration payable is measured at fair value and includes the fair value of any contingent <br>consideration. Among other factors, the group considers the nature of, and compensation for the selling shareholders' continuing <br>employment to determine if any contingent payments are for post-combination employee services, which are excluded from consideration. <br>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, <br>are attributed to the net assets, including identifiable intangible assets and contingent liabilities acquired. Directly attributable acquisition <br>costs in respect of subsidiary companies acquired are recognised in other external charges as incurred. <br>The non-controlling interests on the date of acquisition can be measured either at the fair value or at the non-controlling shareholder's <br>proportion of the net fair value of the identifiable assets assumed. This choice is made separately for each acquisition. <br>Where the group has issued a put option over shares held by a non-controlling interest, the group derecognises the non-controlling interests <br>and instead recognises a contingent deferred consideration liability for the estimated amount likely to be paid to the non-controlling interest <br>on the exercise of those options. Movements in the estimated liability in respect of put options are recognised in retained earnings. <br>Transactions with non-controlling interests are recorded directly in retained earnings. <br>For all entities in which the company directly or indirectly owns equity, a judgement is made to determine whether it controls and therefore <br>should fully consolidate the investee. An assessment is carried out to determine whether the group has the exposure or rights to the variable <br>returns of the investee and has the ability to affect those returns through its power over the investee. To establish control, an analysis is <br>carried out of the substantive and protective rights that the group and the other investors hold. This assessment is dependent on the <br>activities and purpose of the investee and the rights of the other shareholders, such as which party controls the board, executive committee <br>and material policies of the investee. Determining whether the rights that the group holds are substantive, requires management judgement. <br>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 <br>organised group of vote holders, this may be an indicator of de facto control. An assessment is needed to determine all the factors relevant <br>to the relationship with the investee to ascertain whether control has been established and whether the investee should be consolidated as a <br>subsidiary. Where voting power and returns from an investment are split equally between two entities then the arrangement is accounted for <br>as a joint venture. <br>On an acquisition, fair values are attributed to the assets and liabilities acquired. This may involve material judgement to determine these values. <br>|

---

---

| | |
|:---|:---|
| 167 | **Diageo** Form 20-F 2025 |

---

**(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 2025

were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Net assets acquired and consideration** | | | |
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Brands and other intangibles | **66** |  | 402 |
| Property, plant and equipment | **1** |  | 28 |
| Inventories | **4** |  | 31 |
| Other working capital | **1** |  | (2) |
| Deferred tax | **—** |  | (85) |
| Borrowings | **(3)** |  |  |
| Cash | **2** |  |  |
| **Fair value of assets and liabilities** | **71** |  | 374 |
| Goodwill arising on acquisition | **46** |  | 109 |
| Step acquisitions | **(54)** |  | (13) |
| **Consideration payable** | **63** |  | 470 |
| Satisfied by: |  |  |  |
| Cash consideration paid | **(29)** |  | (373) |
| Contingent consideration payable | **(12)** |  | (92) |
| Deferred consideration payable | **(22)** |  | (5) |
|  | **(63)** |  | (470) |

---

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 2025were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Consideration** | **Consideration** | **Consideration** |
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Acquisitions in the year - subsidiaries |  |  |  |
| Cash consideration paid | **(29)** |  | (373) |
| Cash acquired | **2** |  |  |
| Prior year acquisitions - subsidiaries |  |  |  |
| Other consideration | **(8)** | (6) | (31) |
| Investments in associates |  |  |  |
| Cash consideration paid - increase <br>in ownership interest<br>| **(2)** | (5) | (20) |
| Capital injection<sup>(1)</sup> | **(82)** | (128) | (92) |
| **Net cash outflow on acquisition of** <br>**businesses**<br>| **(119)** | (139) | (516) |
| Purchase of shares of non-controlling <br>interests<br>| **(9)** | (223) | (178) |
| **Total net cash outflow** | **(128)** | (362) | (694) |

---

(1) Additional investments in a number of Distill Ventures associates

**Acquisitions in the year**

On 24 September 2024, Diageo acquired the part of the entire issued

share capital of Ritual Beverage Company LLC (owner of Ritual Zero

Proof non-alcoholic spirits brand), that it did not already own.

On 19 June 2025, Diageo announced that it acquired a controlling stake

in Nao Spirits & Beverages Private Limited.

**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.

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.

**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. The transaction was completed 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.

---

| | |
|:---|:---|
| 168 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**(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 2025 were as

follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Guinness** <br>**Nigeria PLC** <br>**$ million**<br>| **Other**<br>**$ million**<br>| **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| **Sale consideration** |  |  |  |  |  |
| Cash received | **64** | **121** | **185** | 116 | 604 |
| Cash disposed of | **—** | **(11)** | **(11)** | (20) | (16) |
| Transaction and other directly attributable costs paid | **(11)** | **(20)** | **(31)** | (9) | (29) |
| **Net cash received** | **53** | **90** | **143** | 87 | 559 |
| Deferred consideration receivable | **—** | **4** | **4** | 32 |  |
| Investment in associates received | **—** | **25** | **25** |  |  |
| Transaction costs payable and other directly attributable items | **(14)** | **(40)** | **(54)** | (24) | (7) |
|  | **39** | **79** | **118** | 95 | 552 |
| **Net (assets)/liabilities disposed of** |  |  |  |  |  |
| Brands | **—** | **(83)** | **(83)** | (167) |  |
| Other non-current assets | **—** | **—** | **—** | (3) | (132) |
| Assets and liabilities held for sale | **20** | **—** | **20** |  | (87) |
| Inventories | **—** | **(13)** | **(13)** | (11) | (35) |
| Other working capital | **—** | **(1)** | **(1)** | 3 | 85 |
| Other borrowings | **—** | **—** | **—** |  | 2 |
| Corporate tax | **—** | **—** | **—** | 2 | (4) |
| Deferred tax | **—** | **—** | **—** | 37 | 6 |
| Post-employment benefit liabilities | **—** | **—** | **—** |  | 5 |
|  | **20** | **(97)** | **(77)** | (139) | (160) |
| **Less non-controlling interest** | **(9)** | **—** | **(9)** |  |  |
| Impairment charge recognised for prospective sale of Guinness Ghana | **—** | **(97)** | **(97)** |  | (3) |
| Exchange recycled from other comprehensive income | **(175)** | **(4)** | **(179)** | (26) | (15) |
| **(Loss)/gain on disposal before taxation** | **(125)** | **(119)** | **(244)** | (70) | 374 |
| Taxation | **(1)** | **(2)** | **(3)** | 1 | (37) |
| **(Loss)/gain on disposal after taxation** | **(126)** | **(121)** | **(247)** | (69) | 337 |

---

On 30 September 2024, Diageo completed the sale of its shareholding in Guinness Nigeria PLC to N-Seven Nigeria Ltd., part of the Tolaram group.

The aggregate consideration for the disposal was $64 million, the disposed net liabilities of $20 million mainly included trade and other payables

and property, plant and equipment. The transaction resulted in a non-operating exceptional loss before tax of $125 million, including cumulative

translation losses in the amount of $175 million recycled to the income statement. The disposed Nigeria operations contributed net sales of

$65 million (2024 – $296 million; 2023 – $504 million), operating loss of $10 million (2024– $60 million; 2023– $14 million) in the year ended 30 June

2025. On 24 June 2025, Diageo announced the sale of Diageo Operations Italy S.p.A., inclusive of the Santa Vittoria production facility, to NewPrinces

S.p.A. and a non-operating charge of $29 million attributable to the prospective sale was recognised in the year ended 30 June 2025.

On 28 January 2025, Diageo announced the agreement to sell Guinness Ghana Breweries PLC, its brewery in Ghana to the Castel Group and a non-

operating charge of $114 million attributable to the prospective sale was recognised in the year ended 30 June 2025.

On 23 January 2025, Diageo sold the Cacique brand and related inventory to Bardinet S.A., a Spanish spirits company for a consideration of

$68 million which resulted in a non-operating exceptional charge before tax of $20 million.

On 15 October 2024, Diageo sold the Pampero brand and related inventory to Gruppo Montenegro, a leading Italian company in the premium spirits

and food sectors, for a consideration of $57 million which resulted in a non-operating exceptional gain before tax of $53 million.

On 19 September 2024, Diageo sold the Safari brand to Casa Redondo, a Portuguese beverage-alcohol company for a consideration of $16 million

which resulted in a non-operating exceptional gain before tax of $15 million.

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.

---

| | |
|:---|:---|
| 169 | **Diageo** Form 20-F 2025 |

---

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, and operating

profit of $33 millionin 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, and

operating profit of $6 millionin the year ended 30 June 2023.

In the year ended 30 June 2023,ZAR 74 million ($4 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**

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Intangible assets | **1** |  |
| Property, plant and equipment | **146** | 52 |
| Deferred tax assets | **—** | 18 |
| Inventories  | **50** | 20 |
| Trade and other receivables | **40** | 10 |
| Corporate tax receivables | **2** |  |
| Cash | **18** | 30 |
| **Assets held for sale**  | **257** | 130 |
| Trade and other payables | **(137)** | (44) |
| Corporate tax payables | **—** | (1) |
| Provisions | **—** | (3) |
| Deferred tax liabilities | **(40)** |  |
| Bank overdrafts | **(4)** |  |
| Loans and leases | **(5)** |  |
| Post-employment benefit liabilities | **(7)** |  |
| **Liabilities held for sale** | **(193)** | (48) |
| **Total** | **64** | 82 |

---

On 24 June 2025, Diageo announced the sale of Diageo Operations Italy S.p.A., inclusive of the Santa Vittoria production facility, to NewPrinces

S.p.A., a leading Italian company in the food and drink industry. The sale was considered to be highly probable on 30 June 2025 and it is expected

to be completed in the six months ending 31 December 2025. The impacted assets and liabilities were classified as held for sale on 30 June 2025.

On 1 July 2025, Diageo completed the sale of its shareholding in Seychelles Breweries Limited, its brewery in Seychelles to Phoenix Beverages for

approximately $80 million. The sale was considered to be highly probable on 30 June 2025 and accordingly the impacted assets and liabilities were

classified as held for sale.

On 3 July 2025, Diageo completed the sale of its shareholding in Guinness Ghana Breweries PLC, its brewery in Ghana to Castel Group for

approximately $81 million. The impacted assets and liabilities were classified as held for sale on 30 June 2025, measured at fair value less cost

of disposal as the lower of cost and fair value less cost of disposal, resulting in an impairment charge of $97 million. On 30 June 2025, cumulative

translation losses and hyperinflationary adjustments recognised in reserves were a loss of $70 million, which will be recycled to the income

statement at the completion of the transaction.

Assets and liabilities held for sale at 30 June 2024 included Guinness Nigeria PLC. 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. On 30 September 2024, Diageo completed the sale.

Accordingly, the assets and liabilities attributable to the business were derecognised from held for sale.

---

| | |
|:---|:---|
| 170 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**9. Intangible assets**

---

| |
|:---|
| **Accounting policies** |
| Acquired intangible assets are held on the consolidated balance sheet at cost less accumulated amortisation and impairment losses. Acquired <br>brands and other intangible assets are initially recognised at fair value if they are controlled through contractual or other legal rights, or are <br>separable from the rest of the business, and the fair value can be reliably measured. Where these assets are regarded as having indefinite <br>useful economic lives, they are not amortised.<br>Goodwill represents the excess of the aggregate of the consideration transferred, the value of any non-controlling interests and the fair <br>value of any previously held equity interest in the subsidiary acquired over the fair value of the identifiable net assets. Goodwill arising on <br>acquisitions prior to 1 July 1998 was eliminated against reserves, and this goodwill has not been reinstated. Goodwill arising subsequent to 1 <br>July 1998 has been capitalised.<br>A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash<br>inflows from other assets or groups of assets. That is the base of the impairment review.<br>Amortisation and impairment of intangible assets is based on their useful economic lives and they are amortised on a straight-line basis and <br>reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. Goodwill and <br>intangible assets that are regarded as having indefinite useful economic lives are not amortised and are reviewed for impairment at least <br>annually or when there is an indication that the assets may be impaired. Impairment reviews compare the net carrying value with the <br>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 <br>value exceeds the recoverable amount, an impairment charge is recognised. Amortisation and any impairment write downs are charged to <br>other operating expenses in the income statement.It is reviewed at each reporting date whether there is any indication that an impairment <br>loss recognised in prior periods for an asset other than goodwill either no longer exists or has decreased. Reversal of impairment loss is <br>considered if the recoverable amount of the assets is constantly and significantly above the carrying value over an extended period. The <br>increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss shall not exceed the carrying <br>amount that would have been determined (net of amortisation) had no impairment loss been recognised for the asset in prior years. Any <br>reversal of impairment loss is charged against the same income statement line on which the initial impairment was recorded.<br>Computer software is amortised on a straight-line basis to estimated residual value over its expected useful life. Residual values and useful <br>lives are reviewed each year. Subject to these reviews, the estimated useful lives are up to eight years. <br>|
| **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.<br>Impairment reviews are carried out to ensure that intangible assets, including brands, are not carried at above their recoverable amounts. <br>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 <br>tests are dependent on management's estimates in respect of the forecasting of future cash flows, the discount rates applicable to the <br>future cash flows and what expected growth rates are reasonable. Judgement is required in determining the cash-generating units. Such <br>estimates and judgements are subject to change as a result of changing economic conditions and actual cash flows may differ from forecasts.<br>|
| **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 <br>assessment. The climate change scenario analyses performed in 2025 – conducted in line with TCFD recommendations ('Transition <br>Scenario' (RCP 2.6), a 'Moderate Warming' Scenario (RCP 4.5) and a 'Severe Warming Scenario (RCP 8.5)) – identified no material financial <br>impact to the current year impairment assessments.<br>|

---

---

| | |
|:---|:---|
| 171 | **Diageo** Form 20-F 2025 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Brands**<br>**$ million**<br>| **Goodwill**<br>**$ million**<br>| **Other**<br>**intangibles**<br>**$ million**<br>| **Computer**<br>**software**<br>**$ million**<br>| **Total**<br>**$ million**<br>|
| **Cost** |  |  |  |  |  |
| At 30 June 2023 | 11692 | 3621 | 2040 | 1072 | 18425 |
| 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** | **11106** | **3682** | **2011** | **1225** | **18024** |
| Hyperinflation adjustment | **144** | **107** | **—** | **—** | **251** |
| Exchange differences | **33** | **(73)** | **8** | **75** | **43** |
| Additions | **66** | **46** | **—** | **191** | **303** |
| Disposals | **(220)** | **—** | **(33)** | **(350)** | **(603)** |
| Reclassification to assets held for sale | **—** | **(5)** | **—** | **(1)** | **(6)** |
| **At 30 June 2025** | **11129** | **3757** | **1986** | **1140** | **18012** |
| **Amortisation and impairment** |  |  |  |  |  |
| At 30 June 2023 | 2217 | 814 | 128 | 760 | 3919 |
| 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** | **1464** | **822** | **102** | **822** | **3210** |
| Exchange differences | **5** | **(14)** | **6** | **38** | **35** |
| Amortisation for the year | **—** | **—** | **20** | **74** | **94** |
| Impairment | **416** | **—** | **—** | **—** | **416** |
| Disposals | **(137)** | **—** | **(33)** | **(349)** | **(519)** |
| **At 30 June 2025** | **1748** | **808** | **95** | **585** | **3236** |
| **Carrying amount** |  |  |  |  |  |
| **At 30 June 2025** | **9381** | **2949** | **1891** | **555** | **14776** |
| At 30 June 2024 | 9642 | 2860 | 1909 | 403 | 14814 |
| At 30 June 2023 | 9475 | 2807 | 1912 | 312 | 14506 |

---

---

| | |
|:---|:---|
| 172 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**(a) Brands**

The principal acquired brands, all of which are regarded as having

indefinite useful economic lives, are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | Principal markets | **2025**<br> **$ million**<br>| 2024<br>$ million<br>|
| Crown Royal whisky | United States | **1464** | 1464 |
| Captain Morgan rum | Global | **1201** | 1201 |
| Johnnie Walker whisky | Global | **856** | 790 |
| Smirnoff vodka | Global | **824** | 824 |
| Shui Jing Fang Chinese <br>white spirit<br>| Greater <br>China<br>| **698** | 689 |
| Casamigos tequila | United States | **604** | 604 |
| Yenì raki | Türkiye | **477** | 426 |
| Don Papa rum | Europe | **388** | 353 |
| McDowell's No.1 whisky, <br>rum and brandy<br>| India | **371** | 382 |
| Don Julio tequila | United States | **270** | 277 |
| Seagram's 7 Crown <br>whiskey<br>| United States | **223** | 223 |
| Signature whisky | India | **213** | 219 |
| Zacapa rum | Global | **191** | 191 |
| Black Dog whisky | India | **180** | 186 |
| Antiquity whisky | India | **176** | 182 |
| Gordon's gin | Europe | **163** | 150 |
| Other brands |  | **1082** | 1481 |
|  |  | **9381** | 9642 |

---

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:

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| North America | **1002** | 968 |
| Europe |  |  |
| Türkiye | **414** | 370 |
| Asia Pacific |  |  |
| Greater China | **160** | 158 |
| India | **827** | 838 |
| Latin America and Caribbean |  |  |
| Mexico | **185** | 189 |
| Other cash-generating units | **361** | 337 |
|  | **2949** | 2860 |

---

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.

**(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 2025 was $1,800 million (2024 – $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 years 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 years 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 years 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.

---

| | |
|:---|:---|
| 173 | **Diageo** Form 20-F 2025 |

---

**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:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | 2024 | 2024 |
|  | **Pre-tax** <br>**discount** <br>**rate%**<br>| **Terminal** <br>**growth rate%**<br>| Pre-tax <br>discount rate%<br>| Terminal <br>growth rate%<br>|
| North America |  |  |  |  |
| United States | **10** | **2** | 9 | 2 |
| Europe  |  |  |  |  |
| United Kingdom | **11** | **3** | 9 | 2 |
| Türkiye | **27** | **14** | 27 | 14 |
| Asia Pacific |  |  |  |  |
| India | **13** | **4** | 12 | 3 |
| Greater China | **9** | **2** | 10 | 2 |
| Latin America and <br>Caribbean<br>|  |  |  |  |
| Mexico | **13** | **3** | 13 | 3 |

---

In the year ended 30 June 2025, an impairment charge of $231 million

in respect of the Aviation American Gin brand and tangible fixed assets

was recognised in exceptional operating items. The charge is mainly

driven by the moderation in forecasted cash flow assumptions due to

softening category outlook and 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 impairment reduced the deferred tax liability by

$55 million. The recoverable amount is$51 million.

In the year ended 30 June 2025, an impairment charge of $170 million

in respect of various US brands, tangible fixed assets and inventory was

recognised in exceptional operating items. The charge is mainly driven

by the reduction in forecasted cash flow assumptions due to softening

category outlook and 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

impairment reduced the deferred tax liability by$40 million. The

recoverable amount is $47 million.

In the year ended 30 June 2025, an impairment charge of $51 millionin

respect of the Bell's whisky brand was recognised in exceptional

operating items. The charge is mainly driven by changes in portfolio

prioritisation across Bell's key markets. 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

$141 million.

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 millionof which $104 million was attributable to the non-

controlling interest.

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 based on their value

in use. 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 millionin

respect of certain brands in the US ready to drink portfolio was

recognised in exceptional operating items, based on their value in use.

The brand impairment reduced the deferred tax liability by

$13 million.

**(e) Sensitivity to change in key assumptions** 

Impairment testing for the year ended 30 June 2025 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 2025 and the impairment charge that would be required if the assumptions in the calculation of

their value in use were changed:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | **Increase in discount rate** | **Increase in discount rate** | **Decrease in terminal growth rate** | **Decrease in terminal growth rate** | **Decrease in cash flows** | **Decrease in cash flows** |
|  | **Carrying value of** <br>**CGU**<br>**$ million**<br>| **Headroom**<br>**$ million**<br>| **Reasonably** <br>**possible change**<br>| **Potential** <br>**impairment** <br>**charge**<br>**$ million**<br>| **Reasonably** <br>**possible change**<br>| **Potential** <br>**impairment** <br>**charge**<br>**$ million**<br>| **Reasonably** <br>**possible change**<br>| **Potential** <br>**impairment** <br>**charge**<br>**$ million**<br>|
| Aviation American Gin | 51 |  | 1ppt | (37) | 1ppt | (36) | 10% | (41) |

---

In the year ended 30 June 2024, Aviation American Gin was disclosed as sensitive to a reasonably possible change of 8ppt decrease in annual growth

rate in the five years forecast period of 2025-2030.

![177.jpg](deo-20250630_g195.jpg)

---

| | |
|:---|:---|
| 174 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**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 <br>over the unexpired period of the lease. Other property, plant and equipment are depreciated on a straight-line basis to estimated residual <br>values over their expected useful lives, and these values and lives are reviewed each year. Subject to these reviews, the estimated useful <br>lives fall within the following ranges: buildings – 10 to 50 years; casks and containers within plant and equipment – 15 to 50 years; other plant <br>and equipment – 5 to 40 years; fixtures and fittings – 5 to 10 years; and returnable bottles, kegs and crates – 5 to 30 years.<br>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 <br>above their recoverable amounts.<br>|

---

---

| |
|:---|
| **Government grants** |
| Government grants are not recognised until there is reasonable assurance that the group will comply with the conditions pursuant to which <br>they have been granted and that the grants will be received. Government grants in respect of property, plant and equipment are deducted <br>from the asset that they relate to, reducing the depreciation expense charged to the income statement.<br>|

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Land and**<br>**buildings**<br>**$ million**<br>| **Plant and**<br>**equipment**<br>**$ million**<br>| **Fixtures and**<br>**fittings**<br>**$ million**<br>| **Returnable** <br>**bottles, kegs and** <br>**crates**<br>**$ million**<br>| **Under**<br>**construction**<br>**$ million**<br>| **Total**<br>**$ million**<br>|
| **Cost** |  |  |  |  |  |  |
| **At 30 June 2023** | 3350 | 6449 | 164 | 521 | 1571 | 12055 |
| 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 | 1546 |
| 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** | **3617** | **7158** | **177** | **514** | **1563** | **13029** |
| Hyperinflation adjustment  | **33** | **38** | **1** | **6** | **4** | **82** |
| Exchange differences | **162** | **354** | **30** | **42** | **40** | **628** |
| Acquisitions | **—** | **—** | **—** | **—** | **1** | **1** |
| Additions | **160** | **388** | **19** | **38** | **977** | **1582** |
| Borrowing costs capitalised | **16** | **22** | **—** | **—** | **56** | **94** |
| Disposals | **(93)** | **(222)** | **(16)** | **(43)** | **(36)** | **(410)** |
| Transfers | **367** | **415** | **11** | **(7)** | **(786)** | **—** |
| Reclassification to assets held for sale | **(40)** | **(211)** | **(1)** | **(76)** | **(8)** | **(336)** |
| **At 30 June 2025** | **4222** | **7942** | **221** | **474** | **1811** | **14670** |
| **Accumulated depreciation** |  |  |  |  |  |  |
| **At 30 June 2023** | 986 | 2946 | 96 | 289 |  | 4317 |
| 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** | **1098** | **3037** | **105** | **280** | **—** | **4520** |
| Exchange differences | **90** | **119** | **19** | **23** | **—** | **251** |
| Depreciation charge for the year | **180** | **408** | **24** | **42** | **—** | **654** |
| Exceptional accelerated depreciation and impairment | **34** | **115** | **3** | **—** | **—** | **152** |
| Disposals | **(73)** | **(212)** | **(15)** | **(40)** | **—** | **(340)** |
| Reclassification to assets held for sale | **(8)** | **(59)** | **(1)** | **(27)** | **—** | **(95)** |
| **At 30 June 2025** | **1321** | **3408** | **135** | **278** | **—** | **5142** |
| **Carrying amount** |  |  |  |  |  |  |
| **At 30 June 2025** | **2901** | **4534** | **86** | **196** | **1811** | **9528** |
| At 30 June 2024 | 2519 | 4121 | 72 | 234 | 1563 | 8509 |
| At 30 June 2023 | 2364 | 3503 | 68 | 232 | 1571 | 7738 |

---

The net book value of land and buildings comprises freeholds of $2,340 million (2024 – $1,970 million), long leaseholds of $2 million (2024 –

$3 million) and short leaseholds of $559 million (2024 – $546 million). Depreciation was not charged on $216 million (2024 – $182 million) of land.

Property, plant and equipment is net of a government grant of $185 million (2024 – $185 million) received in prior years in respect of the

construction of a rum distillery in the US Virgin Islands.

---

| | |
|:---|:---|
| 175 | **Diageo** Form 20-F 2025 |

---

**11. Biological assets**

---

| |
|:---|
| **Accounting policies** |
| Biological assets held by the group consist of agave (Agave Azul <br>Tequilana Weber) plants. The harvested plants are used during <br>the production of tequila. The maturity cycle of agave ranges <br>between six and eight years; based on this, biological assets are <br>classified as mature and immature. Mature biological assets are <br>measured at fair value less costs to sell on initial recognition and <br>at the end of each reporting period based on the present value of <br>future cash flows discounted at an appropriate rate for Mexico <br>(income approach as per IFRS 13). Immature biological assets are <br>plants that have not reached the point of maturity because their <br>sugar content yield and weight is not enough to be harvested and <br>there is no active market for such plants; consequently the <br>company accounts for these assets by applying fair valuation <br>using the cost approach (replacement cost). <br>|

---

**Changes in biological assets were as follows:**

---

| | |
|:---|:---|
|  | **Biological**<br>**assets**<br>**$ million**<br>|
| **Fair value** |  |
| At 30 June 2023 | 197 |
| Exchange differences | (13) |
| Transferred to inventories | (23) |
| Fair value change | (17) |
| Farming cost capitalised | 55 |
| **At 30 June 2024** | **199** |
| Exchange differences | **(7)** |
| Transferred to inventories | **(69)** |
| Fair value change | **11** |
| Farming cost capitalised | **42** |
| **At 30 June 2025** | **176** |

---

At 30 June 2025, the number of agave plants was approximately

25 million (2024 – 32 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 <br>balance sheet as right-of-use assets as part of property, plant <br>and equipment, and depreciated on a straight-line basis with the <br>charge recognised in cost of sales or in other operating items <br>depending on the nature of the costs. The liability, recognised as <br>part of net borrowings, is measured at a discounted value and <br>any interest is charged to finance charges.<br>The group recognises services associated with a lease as other <br>operating expenses. Payments associated with leases where the <br>value of the asset when it is new is lower than $5,000 (leases of <br>low value assets) and leases with a lease term of 12 months or <br>less (short-term leases) are recognised as other operating <br>expenses. A judgement in calculating the lease liability at initial <br>recognition includes determining the lease term where extension <br>or termination options exist. In such instances, any economic <br>incentive to retain or end a lease are considered and extension <br>periods are only included when it is considered reasonably <br>certain that an option to extend a lease will be exercised.<br>|

---

**(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** <br>**buildings**<br> **$ million**<br>| **Plant and** <br>**equipment**<br> **$ million**<br>| **Total**<br>**$ million**<br>|
| At 30 June 2023 | 426 | 237 | 663 |
| Exchange differences | (6) | (3) | (9) |
| Additions | 106 | 60 | 166 |
| Disposals | (11) | (2) | (13) |
| Depreciation | (71) | (50) | (121) |
| **At 30 June 2024** | **444** | **242** | **686** |
| Exchange differences | **12** | **11** | **23** |
| Additions | **73** | **83** | **156** |
| Reclassification within property, <br>plant and equipment<br>| **—** | **(79)** | **(79)** |
| Reclassification to assets held <br>for sale<br>| **(1)** | **(4)** | **(5)** |
| Depreciation | **(74)** | **(52)** | **(126)** |
| **At 30 June 2025** | **454** | **201** | **655** |

---

**(b) Lease liabilities**

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Current lease liabilities | **(112)** | (95) |
| Non-current lease liabilities | **(541)** | (509) |
|  | **(653)** | (604) |

---

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

$211 million(2024 –$262 million).

---

| | |
|:---|:---|
| 176 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**(c) Amounts recognised in the consolidated income** 

**statement**

In the year ended 30 June 2025, other external charges (within other

operating items) included$43 million (2024 – $70 million) in respect

of leases of low value assets and short-term leases and $23 million

(2024 – $8 million) in respect of variable lease payments. See 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 2025 was

$212 million (2024 –$209 million).

**13. Other investments**

---

| |
|:---|
| **Accounting policies** |
| **Other investments** are equity investments that are not <br>classified as investments in associates or joint arrangements nor <br>investments in subsidiaries. They are included in non-current <br>assets. Subsequent to initial measurement, other investments <br>are stated at fair value. Gains and losses arising from the <br>changes in fair value are recognised in the income statement or <br>in other comprehensive income. Accumulated gains and losses <br>included in other comprehensive income are not recycled to the <br>income statement. Dividends from other investments are <br>recognised in the consolidated income statement.<br>**Loans receivable** are non-derivative financial assets that are not <br>classified as equity investments. They are subsequently <br>measured either at amortised cost using the effective interest <br>method less allowance for impairment or at fair value with gains <br>and losses arising from changes in fair value recognised in the <br>income statement or in other comprehensive income that are <br>recycled to the income statement on the de-recognition of the <br>asset. Allowances for expected credit losses are made based on <br>the risk of non-payment taking into account ageing, previous <br>experience, economic conditions and forward-looking data. Such <br>allowances are measured as either 12-months expected credit <br>losses or lifetime expected credit losses depending on changes in <br>the credit quality of the counterparty.<br>|

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Loans**<br>**$** <br>**million**<br>| **Other** <br>**investment**<br>**s**<br>**$ million**<br>| **Total**<br>**$** <br>**million**<br>|
| **Cost less allowances or fair value** |  |  |  |
| At 30 June 2023 | 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 <br>year<br>| 14 | (3) | 11 |
| **At 30 June 2024** | **63** | **31** | **94** |
| Exchange differences | **1** | **2** | **3** |
| Additions | **11** | **6** | **17** |
| Repayments and disposals | **(6)** | **—** | **(6)** |
| Capitalised interest | **5** | **—** | **5** |
| Impairment charged during the year | **(63)** | **(9)** | **(72)** |
| Provision movement | **1** | **—** | **1** |
| Transfer to associates/fair value <br>adjustment<br>| **(1)** | **(2)** | **(3)** |
| **At 30 June 2025** | **11** | **28** | **39** |

---

Following a strategic review in March 2025, Diageo decided it would no

longer be bringing any new brands into the Distill Ventures programme

and exit several businesses, resulting in an impairment charge of

$72 million in exceptional operating expenses for the year ended

30June 2025. At 30 June 2025, loans comprise $11 million (2024 – $6

million; 2023 – $7 million) of loans to customers and other third parties,

after allowances of $137 million (2024 – $138 million; 2023 – $152

million), and $nil (2024 – $57 million; 2023 – $36 million) of loans to

associates.

**14. Post-employment benefits** 

---

| |
|:---|
| **Accounting policies** |
| The group's principal post-employment funds are defined <br>benefit plans. In addition, the group has defined contribution <br>plans, unfunded post-employment medical benefit liabilities and <br>other unfunded defined benefit post-employment liabilities. For <br>post-employment plans other than defined contribution plans, <br>the amount charged to operating profit is the cost of accruing <br>pension benefits promised to employees over the year, plus any <br>changes arising on benefits granted to members by the group <br>during the year. Net finance charges comprise the net deficit/<br>surplus on the plans at the beginning of the year, adjusted for <br>cash flows in the year, multiplied by the discount rate for plan <br>liabilities. The differences between the fair value of the plans' <br>assets and the present value of the plans' liabilities are <br>disclosed as an asset or liability on the consolidated balance <br>sheet. Any differences due to changes in assumptions or <br>experience are recognised in other comprehensive income. The <br>amount of any pension fund asset recognised on the balance <br>sheet is limited to any future refunds from the plan or the <br>present value of reductions in future contributions to the plan.<br>Contributions payable by the group in respect of defined <br>contribution plans are charged to operating profit as incurred.<br>|
| **Critical accounting estimates and judgements**  |
| Application of IAS 19 requires the exercise of estimates and <br>judgement in relation to various assumptions.<br>Diageo determines the assumptions on a country-by-country <br>basis in conjunction with its actuaries. Estimates are required in <br>respect of uncertain future events, including the life expectancy <br>of members of the plans, salary and pension increases, future <br>inflation rates, discount rates and employee and pensioner <br>demographics. The application of different assumptions could <br>have a significant effect on the amounts reflected in the income <br>statement, other comprehensive income and the balance sheet. <br>There may be interdependencies between the assumptions.<br>Where there is an accounting surplus on a defined benefit plan, <br>management judgement is necessary to determine whether the <br>group can obtain economic benefits through a refund of the <br>surplus or by reducing future contributions to the plan.<br>|

---

**(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.

---

| | |
|:---|:---|
| 177 | **Diageo** Form 20-F 2025 |

---

The most recent funding valuations of the significant defined benefit

plans were carried out as follows:

---

| | |
|:---|:---|
| **Principal plans** | **Date of valuation** |
| United Kingdom<sup>(1)</sup> | 1 April 2024 |
| Ireland<sup>(2)</sup> | 31 December 2021 |
| United States | 1 January 2024 |

---

(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.

(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 latest valuation as at 31 December 2024 is currently underway and

will be finalised during the course of the next financial year.

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.

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 2025 are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Current service cost and <br>administrative expenses<br>| **(88)** | (82) | (91) |
| Past service gains/(losses) – ordinary <br>activities<br>| **2** | 3 | (1) |
| Gains on curtailments and settlements | **—** |  | 2 |
| Charge to operating profit | **(86)** | (79) | (90) |
| Net finance income in respect of post-<br>employment plans<br>| **35** | 37 | 53 |
| **Charge before taxation**<sup>(1)</sup> | **(51)** | (42) | (37) |
| Actual returns less amounts included <br>in finance income<br>| **(460)** | (168) | (1722) |
| Experience (losses)/gains | **(139)** | 24 | (273) |
| Changes in financial assumptions | **495** | 20 | 1150 |
| Changes in demographic assumptions | **92** | 43 | 65 |
| Other comprehensive loss | **(12)** | (81) | (780) |
| Changes in the surplus restriction | **(1)** | 5 | 9 |
| **Total other comprehensive loss** | **(13)** | (76) | (771) |

---

(1)The income/(charge) before taxation is in respect of the following countries:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| United Kingdom | **2** | 5 | 19 |
| Ireland | **1** | 3 | 1 |
| United States | **(41)** | (35) | (38) |
| Other | **(13)** | (15) | (19) |
|  | **(51)** | (42) | (37) |

---

In addition to the charge in respect of defined benefit post-

employment plans, contributions to the group's defined contribution

plans were $70 million (2024 – $62 million; 2023 – $53 million).

The movements in the plan assets and liabilities for the two years

ended 30 June 2025 are set out below:

---

| | | | |
|:---|:---|:---|:---|
|  | **Plan** <br>**assets**<br>**$ million**<br>| **Plan** <br>**liabilities**<br>**$ million**<br>| **Net** <br>**surplus**<br>**$ million**<br>|
| **At 30 June 2023** | 8624 | (7876) | 748 |
| Exchange differences | (5) | 4 | (1) |
| Income/(charge) before taxation | 383 | (425) | (42) |
| Other comprehensive (loss)/income<sup>(1)</sup> | (168) | 87 | (81) |
| Contributions by the group | 97 |  | 97 |
| Settlements | (43) | 43 |  |
| Employee contributions | 2 | (2) |  |
| Benefits paid | (473) | 473 |  |
| **At 30 June 2024** | **8417** | **(7696)** | **721** |
| Exchange differences | **633** | **(608)** | **25** |
| Disposal of businesses | **—** | **3** | **3** |
| Reclassification to liabilities held for <br>sale<br>| **—** | **7** | **7** |
| Income/(charge) before taxation | **381** | **(432)** | **(51)** |
| Other comprehensive loss<sup>(1)</sup> | **(460)** | **448** | **(12)** |
| Contributions by the group | **64** | **—** | **64** |
| Employee contributions | **2** | **(2)** | **—** |
| Benefits paid | **(504)** | **504** | **—** |
| **At 30 June 2025** | **8533** | **(7776)** | **757** |

---

(1)Excludes surplus restriction.

The plan assets and liabilities by type of post-employment benefit and

country are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | 2024 | 2024 |
|  | **Plan** <br>**assets**<br>**$ million**<br>| **Plan** <br>**liabilities**<br>**$ million**<br>| Plan <br>assets<br>$ million<br>| Plan <br>liabilities<br>$ million<br>|
| Pensions |  |  |  |  |
| United Kingdom | **5640** | **(5083)** | 5654 | (5028) |
| Ireland | **2057** | **(1599)** | 1954 | (1595) |
| United States | **595** | **(562)** | 569 | (534) |
| Other | **215** | **(230)** | 216 | (241) |
| Post-employment medical | **3** | **(266)** | 3 | (266) |
| Other post-employment | **23** | **(36)** | 21 | (32) |
|  | **8533** | **(7776)** | 8417 | (7696) |

---

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | 2024 | 2024 |
|  | **Non-**<br>**current**<br> **assets**<sup>(1)</sup><br>**$ million**<br>| **Non-**<br>**current** <br>**liabilities**<br>**$ million**<br>| Non-<br>current <br>assets<sup>(1)</sup><br>$ million<br>| Non-<br>current <br>liabilities <br>$ million<br>|
| Funded plans | **1161** | **(146)** | 1146 | (152) |
| Unfunded plans | **—** | **(263)** |  | (277) |
|  | **1161** | **(409)** | 1146 | (429) |

---

(1)Includes surplus restriction of $5 million (2024 – $4 million).

---

| | |
|:---|:---|
| 178 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

The disclosures have been prepared in accordance with IFRIC 14 IAS 19.

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

2025, the DPS had a net surplus of $608 million (2024 – $689 million;

2023 – $742 million) and the GIGPS had a net surplus of $417 million

(2024 – $332 million; 2023 –$328 million) and other schemes in a

surplus totalled $136 million (2024 – $125 million; 2023 – $140 million).

The DPS and GIGPS surpluses have 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** | **United Kingdom** | **United Kingdom** | **Ireland** | **Ireland** | **Ireland** | **United States**<sup>(1)</sup> | **United States**<sup>(1)</sup> | **United States**<sup>(1)</sup> |
|  | **2025%**<br>| 2024%<br>| 2023%<br>| **2025%**<br>| 2024%<br>| 2023%<br>| **2025%**<br>| 2024%<br>| 2023%<br>|
| Rate of general increase in salaries<sup>(2)</sup> | **3.3** | 3.6 | 3.7 | **3.4** | 3.7 | 3.9 | **—** |  |  |
| Rate of increase to pensions in payment | **2.5** | 2.8 | 2.9 | **2.0** | 2.2 | 2.3 | **—** |  |  |
| Rate of increase to deferred pensions | **2.3** | 2.6 | 2.7 | **2.0** | 2.2 | 2.4 | **—** |  |  |
| Discount rate for plan liabilities | **5.6** | 5.1 | 5.2 | **3.8** | 3.6 | 3.6 | **5.2** | 5.3 | 4.9 |
| Inflation – CPI | **2.3** | 2.6 | 2.7 | **2.0** | 2.3 | 2.5 | **2.3** | 2.3 | 2.2 |
| Inflation – RPI | **2.8** | 3.1 | 3.2 | **—** |  |  | **—** |  |  |

---

(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 the 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**<sup>(1)</sup> | **United Kingdom**<sup>(1)</sup> | **United Kingdom**<sup>(1)</sup> | **Ireland**<sup>(2)</sup> | **Ireland**<sup>(2)</sup> | **Ireland**<sup>(2)</sup> | **United States** | **United States** | **United States** |
|  | **2025**<br>**Age**<br>| 2024<br>Age<br>| 2023<br>Age<br>| **2025**<br>**Age**<br>| 2024<br>Age<br>| 2023<br>Age<br>| **2025**<br>**Age**<br>| 2024<br>Age<br>| 2023<br>Age<br>|
| **Retiring currently at age 65** |  |  |  |  |  |  |  |  |  |
| Male | **86.7** | 86.8 | 86.8 | **86.9** | 87.2 | 87.2 | **85.8** | 85.7 | 85.6 |
| Female | **88.3** | 88.4 | 88.4 | **89.6** | 89.7 | 89.6 | **87.5** | 87.4 | 87.2 |
| **Currently aged 45, retiring at age 65** |  |  |  |  |  |  |  |  |  |
| Male | **87.5** | 88.1 | 88.1 | **88.2** | 88.8 | 88.8 | **87.3** | 87.2 | 87.1 |
| Female | **90.0** | 90.5 | 90.4 | **91.0** | 91.4 | 91.3 | **88.9** | 88.9 | 88.7 |

---

(1)Based on the CMI's S4 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 S4 mortality tables with scaling factors based on the experience of the plan, with suitable future improvements.

For the significant assumptions, the following sensitivity analysis estimates the potential impacts on the consolidated income statement for the year

ending 30 June 2026 and on the plan liabilities at 30 June 2025:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **United Kingdom** | **United Kingdom** | **United Kingdom** | **Ireland** | **Ireland** | **Ireland** | **United States** | **United States** | **United States** |
| **Benefit/(cost)** | Operating<br>profit<br>$ million<br>| Profit after<br>taxation<br>$ million<br>| **Plan** <br>**liabilities**<sup>(1)</sup><br>**$ million**<br>| Operating<br>profit<br>$ million<br>| Profit after<br>taxation<br>$ million<br>| **Plan** <br>**liabilities**<sup>(1)</sup><br>**$ million**<br>| Operating<br>profit<br>$ million<br>| Profit after<br>taxation<br>$ million<br>| **Plan** <br>**liabilities**<sup>(1)</sup><br>**$ million**<br>|
| Effect of 0.5% increase in discount rate | 2 | 15 | **256** |  | 6 | **95** | 2 | 2 | **28** |
| Effect of 0.5% decrease in discount rate | (2) | (13) | **(282)** | (1) | (5) | **(105)** | (2) | (2) | **(31)** |
| Effect of 0.5% increase in inflation | (2) | (7) | **(154)** |  | (2) | **(61)** | (1) | (1) | **(10)** |
| Effect of 0.5% decrease in inflation | 2 | 9 | **181** |  | 3 | **66** | 1 | 1 | **9** |
| Effect of one year increase in life expectancy |  | (7) | **(186)** |  | (2) | **(66)** |  | (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).

---

| | |
|:---|:---|
| 179 | **Diageo** Form 20-F 2025 |

---

**(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 rate or inflation risks. Under the UK Scheme, a significant amount of the repos are less than three months

in duration. At 30 June 2025, approximately 96% and 100%(2024 – 95% and 100%) 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 2025, approximately 93%and 109%(2024 – 90% 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.

An analysis of the fair value of the plan assets is as follows:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2025** | **2025** | **2025** | **2025** | **2025** | **2025** | **2025** |
|  | **United Kingdom**<br>**$ million** | **United Kingdom**<br>**$ million** | **Ireland**<br>**$ million** | **Ireland**<br>**$ million** | **United States and other**<br>**$ million** | **United States and other**<br>**$ million** | **Total**<br>**$ million** | **Total**<br>**$ million** | **Total**<br>**$ million** |
|  | **Quoted** | **Unquoted** | **Quoted** | **Unquoted** | **Quoted** | **Unquoted** | **Quoted** | **Unquoted** | **Total** |
| Equities<sup>(1)</sup> | **—** | **961** | **—** | **366** | **89** | **137** | **89** | **1464** | **1553** |
| Bonds |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed-interest government | **224** | **22** | **—** | **80** | **56** | **8** | **280** | **110** | **390** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inflation-linked government | **1447** | **618** | **—** | **117** | **—** | **1** | **1447** | **736** | **2183** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment grade corporate | **—** | **846** | **—** | **667** | **19** | **427** | **19** | **1940** | **1959** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-investment grade | **5** | **640** | **2** | **375** | **—** | **49** | **7** | **1064** | **1071** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan securities | **18** | **315** | **—** | **116** | **—** | **—** | **18** | **431** | **449** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liability Driven Investment (LDI) | **—** | **—** | **—** | **130** | **—** | **—** | **—** | **130** | **130** |
| Property - unquoted | **—** | **595** | **—** | **58** | **—** | **—** | **—** | **653** | **653** |
| Hedge funds | **—** | **—** | **—** | **—** | **—** | **10** | **—** | **10** | **10** |
| Interest rate and inflation swaps | **1** | **(264)** | **11** | **20** | **—** | **—** | **12** | **(244)** | **(232)** |
| Cash and other | **49** | **163** | **18** | **97** | **—** | **40** | **67** | **300** | **367** |
| Total bid value of assets | **1744** | **3896** | **31** | **2026** | **164** | **672** | **1939** | **6594** | **8533** |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2024 | 2024 | 2024 | 2024 | 2024 | 2024 | 2024 | 2024 | 2024 |
|  | United Kingdom<br>$ million | United Kingdom<br>$ million | Ireland<br>$ million | Ireland<br>$ million | United States and other<br>$ million | United States and other<br>$ million | Total<br>$ million | Total<br>$ million | Total<br>$ million |
|  | Quoted | Unquoted | Quoted | Unquoted | Quoted | Unquoted | Quoted | Unquoted | Total |
| Equities<sup>(1)</sup> | 1 | 1121 |  | 330 | 80 | 129 | 81 | 1580 | 1661 |
| Bonds |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed-interest government | 943 | 25 |  | 60 | 62 | 10 | 1005 | 95 | 1100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inflation-linked government | 2112 | 495 |  | 111 |  | 2 | 2112 | 608 | 2720 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment grade corporate |  | 503 |  | 623 | 21 | 311 | 21 | 1437 | 1458 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-investment grade | 4 | 448 | 5 | 346 |  | 146 | 9 | 940 | 949 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan securities |  | 421 |  | 107 |  |  |  | 528 | 528 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liability Driven Investment (LDI) |  |  |  | 124 |  |  |  | 124 | 124 |
| Property - unquoted |  | 551 |  | 54 |  | 1 |  | 606 | 606 |
| Hedge funds |  |  |  |  |  | 6 |  | 6 | 6 |
| Interest rate and inflation swaps |  | (1126) | 36 | 65 |  |  | 36 | (1061) | (1025) |
| Cash and other | 20 | 136 | 28 | 65 |  | 41 | 48 | 242 | 290 |
| Total bid value of assets | 3080 | 2574 | 69 | 1885 | 163 | 646 | 3312 | 5105 | 8417 |

---

(1) In Equities limited partnerships are included which invest primarily in loan securities.

(i) 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.

(ii) For the year ended 30 June 2025 the analyses of asset categories above includes $1,431 million (2024 - $1,626 million) in the United Kingdom, $1,147 million (2024 - $1,060 million) in Ireland and

$598 million (2024 - $572 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 2026 are estimated to be approximately

$45 million.

---

| | |
|:---|:---|
| 180 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**(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 2025 held inventory with a book value of $926

million (2024 – $819 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 2025 and 30 June 2024.

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 ($589 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 triennial actuarial valuation as at 31 December 2024 is currently underway and will be finalised during the year ending 30 June 2026. The last

valuation of the Guinness Ireland Group Pension Scheme at 31 December 2021 showed that 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 2025 and 30 June 2024.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 three 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** | **Valuation date** | **Valuation date** | **Valuation date** | **Valuation date** | **Valuation date** |
|  | **31 December 2024** | **31 December 2024** | **31 December 2027** | **31 December 2027** | **31 December 2030** | **31 December 2030** |
|  | **€ million** | **$ million** | **€ million** | **$ million** | **€ million** | **$ million** |
| Maximum conditional contribution | 35 | 41 | 39 | 46 | 39 | 46 |

---

**(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:

---

| |
|:---|
| **Maturity analysis of benefits expected to be paid** |
| Within one year |
| Between 1 to 5 years |
| Between 6 to 15 years |
| Between 16 to 25 years |
| Beyond 25 years |
| Total |
| Average duration of the defined benefit obligation |

---

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.

---

| | |
|:---|:---|
| 181 | **Diageo** Form 20-F 2025 |

---

**15. Working capital**

---

| |
|:---|
| **Accounting policies** |
| **Inventories** are stated at the lower of cost and net realisable <br>value. Cost includes raw materials, direct labour and expenses, <br>an appropriate proportion of production and other overheads, <br>but not borrowing costs. All maturing inventories and raw <br>materials are classified as current assets, as they are expected <br>to be realised in the normal operating cycle which can be a <br>period of several years.<br>|
| **Trade and other receivables** are initially recognised at fair <br>value less transaction costs and subsequently carried at <br>amortised cost less any allowance for discounts and doubtful <br>debts. Trade receivables arise from contracts with customers, <br>and are recognised when performance obligations are satisfied, <br>and the consideration due is unconditional as only the passage of <br>time is required before the payment is received. Allowance <br>losses are calculated by reviewing lifetime expected credit <br>losses using historic and forward-looking data on credit risk.<br>|
| **Trade and other payables** are initially recognised at fair value <br>including transaction costs and subsequently carried at <br>amortised costs. Contingent considerations recognised in <br>business combinations are subsequently measured at fair value <br>through income statement. The group evaluates supplier <br>arrangements against a number of indicators to assess if the <br>liability has the characteristics of a trade payable or should be <br>classified as borrowings. This assessment considers the <br>commercial purpose of the facility, whether payment terms are <br>similar to customary payment terms, whether the group is <br>legally discharged from its obligation towards suppliers before <br>the end of the original payment term, and the group's <br>involvement in agreeing terms between banks and suppliers.<br>|
| **Provisions** are liabilities of uncertain timing or amount. <br>A provision is recognised if, as a result of a past event, the group <br>has a present legal or constructive obligation that can be <br>estimated reliably, and it is probable that an outflow of <br>economic benefits will be required to settle the obligation. <br>Provisions are calculated on a discounted basis. The carrying <br>amounts of provisions are reviewed at each balance sheet date <br>and adjusted to reflect the current best estimate.<br>|

---

**(a) Inventories** 

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Raw materials and consumables | **604** | 639 |
| Work in progress | **131** | 118 |
| Maturing inventories | **8677** | 7832 |
| Finished goods and goods for resale | **1246** | 1131 |
|  | **10658** | 9720 |

---

Maturing inventories include whisk(e)y, rum, tequila and Chinese white

spirits. The following amounts of inventories can be utilised only after

more than one year:

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Raw materials and consumables | **50** | 19 |
| Maturing inventories | **6942** | 5885 |
|  | **6992** | 5904 |

---

Inventories are disclosed net of provisions for obsolescence, an analysis

of which is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Balance at beginning of the year | **124** | 128 | 113 |
| Exchange differences | **(6)** | (3) | (27) |
| Income statement charge | **89** | 51 | 66 |
| Utilised | **(27)** | (47) | (23) |
| Sale of businesses | **—** | (5) | (1) |
| **Balance at the end of the year** | **180** | 124 | 128 |

---

**(b) Trade and other receivables** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | 2024 | 2024 |
|  | **Current**<br>**assets**<br>**$ million**<br>| **Non-**<br>**current**<br>**assets**<br>**$ million**<br>| Current<br>assets<br>$ million<br>| Non-current<br>assets<br>$ million<br>|
| Trade receivables | **2789** | **—** | 2674 |  |
| Interest receivable | **19** | **—** | 31 |  |
| VAT recoverable and other <br>prepaid taxes<br>| **242** | **17** | 227 | 17 |
| Other receivables | **283** | **18** | 240 | 14 |
| Prepayments | **133** | **3** | 274 | 7 |
| Accrued income | **38** | **—** | 41 |  |
|  | **3504** | **38** | 3487 | 38 |

---

At 30 June 2025, approximately 19%, 14% and 16% of the group's trade

receivables of $2,789 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:

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Not overdue | **2633** | 2490 |
| Overdue 1 – 30 days | **41** | 43 |
| Overdue 31 – 60 days | **10** | 31 |
| Overdue 61 – 90 days | **10** | 27 |
| Overdue 91 – 180 days | **7** | 71 |
| Overdue more than 180 days | **88** | 12 |
|  | **2789** | 2674 |

---

Balances overdue more than 180 days on 30 June 2025 are primarily

due from institutional customers in certain countries with low credit

risk.

Trade and other receivables are disclosed net of expected credit loss

allowance for doubtful debts, an analysis of which is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Balance at beginning of the year | **95** | 112 | 143 |
| Exchange differences | **1** | (3) | (10) |
| Income statement charge/(release) | **27** | 8 | (4) |
| Utilised | **(24)** | (22) | (17) |
| **Balance at the end of the year** | **99** | 95 | 112 |

---

---

| | |
|:---|:---|
| 182 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**(c) Trade and other payables** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | 2024 | 2024 |
|  | **Current** <br>**liabilities**<br>**$ million**<br>| **Non-current** <br>**liabilities**<br>**$ million**<br>| Current <br>liabilities<br>$ million<br>| Non-current <br>liabilities<br>$ million<br>|
| Trade payables | **3123** | **—** | 3071 |  |
| Interest payable | **415** | **—** | 358 |  |
| Tax and social security excluding income tax | **690** | **—** | 724 |  |
| Other payables | **705** | **192** | 499 | 304 |
| Accruals | **1852** | **—** | 1564 |  |
| Deferred income | **82** | **—** | 84 |  |
| Dividend payable | **61** | **—** | 31 |  |
| Dividend payable to non-controlling interests | **24** | **—** | 23 |  |
|  | **6952** | **192** | 6354 | 304 |

---

Interest payable at 30 June 2025 includes interest on non-derivative financial instruments of $352 million (2024 – $291 million). Accruals at 30 June

2025 include $839 million (2024 – $764 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

$84 million (2024 – $92 million). Non-current liabilities include the net present value of contingent consideration in respect of prior acquisitions of

$107 million(2024–$231 million). For further information on contingent consideration, see 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.

---

| | | |
|:---|:---|:---|
|  | **2025** | 2024 |
|  | **Current** <br>**liabilities**<br>**$ million**<br>| Current <br>liabilities<br>$ million<br>|
| Carrying amount that has been subject to SCF and presented in trade and other payables | **1006** | 894 |
| — of which suppliers have received payment from finance provider<sup>(1)</sup> | **644** |  |

---

(1)The group applied transitional relief available under Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7 and has not provided comparative information in the first year of adoption.

Range of payment due dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2025** |
|  | **Minimum Days** <br>**after invoice** <br>**date**<sup>(1)</sup><br>| **Maximum Days** <br>**after invoice** <br>**date**<sup>(1)</sup><br>|
| Trade and other payables subject to SCF arrangements | **0** | **150** |
| Comparable trade and other payables that are not part of the arrangements<sup>(2)</sup> | **0** | **150** |

---

(1)Suppliers are subject to various payment due dates depending on the jurisdiction and standard practices. The group's payment terms commence from the invoice date. However, for certain

categories of external suppliers and in alignment with industry standards, payment terms begin from the date a valid invoice is received. In Greater China, the range of payment due dates are

between 0-240 days, which is in line with local market practice.

(2)Comparable trade payables are payables outside of SCFs that fall within the same jurisdiction or business line as payables that form part of SCFs.

---

| | |
|:---|:---|
| 183 | **Diageo** Form 20-F 2025 |

---

**(d) Provisions** 

---

| | | | |
|:---|:---|:---|:---|
|  | Thalidomide<br>$ million<br>| Other<br>$ million<br>| Total<br>$ million<br>|
| **At 30 June 2023** | 212 | 244 | 456 |
| Exchange differences |  | (3) | (3) |
| Income statement charge |  | 61 | 61 |
| Utilised | (17) | (103) | (120) |
| Transfers from other payables |  | (5) | (5) |
| Unwinding of discounts | 6 | 2 | 8 |
| **At 30 June 2024** | 201 | 196 | 397 |
| Exchange differences | **2** | **(1)** | **1** |
| Income statement charge | **15** | **169** | **184** |
| Utilised | **(19)** | **(36)** | **(55)** |
| Transfers from other payables | **—** | **1** | **1** |
| Unwinding of discounts | **6** | **5** | **11** |
| **At 30 June 2025** | **205** | **334** | **539** |
| Current liabilities | **19** | **204** | **223** |
| Non-current liabilities | **186** | **130** | **316** |
|  | **205** | **334** | **539** |

---

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 items in other provisions at 30 June 2025 is $53 million (2024 – $54 million) in respect of deferred employee compensation plans which

will be utilised when employees leave the group and$55 million (2024 – $nil) in respect of the Accelerate programme.

---

| | |
|:---|:---|
| 184 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

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 <br>costs. For those financial assets that are not subsequently held at fair value, the group assesses whether there is evidence of impairment at <br>each balance sheet date.<br>The group classifies its financial assets and liabilities into the following categories: financial assets and liabilities at amortised cost, financial <br>assets and liabilities at fair value through income statement and financial assets at fair value through other comprehensive income.<br>The accounting policies for other investments and loans are described in note 13, for trade and other receivables and payables in note 15 and <br>for cash and cash equivalents in note 17.<br>Financial assets and liabilities at fair value through income statement include derivative assets and liabilities. Where financial assets or <br>liabilities are eligible to be carried at either amortised cost or fair value through other comprehensive income, the group does not apply the <br>fair value option.<br>Derivative financial instruments are carried at fair value using a discounted cash flow model based on market data applied consistently for <br>similar types of instruments. Gains and losses on derivatives that do not qualify for hedge accounting treatment are taken to the income <br>statement as they arise. <br>Other financial liabilities are carried at amortised cost unless they are part of a fair value hedge relationship when the amortised cost of the <br>financial liabilities is adjusted with the fair value change attributable to the risk being hedged from the inception of the hedge relationship. <br>The difference between the initial carrying amount of the financial liabilities and their redemption value is recognised in the income <br>statement over the contractual terms using the effective interest rate method. Financial liabilities in respect of the Zacapa acquisition are <br>recognised at fair value.<br>|
| **Hedge accounting**  |
| The group designates and documents certain derivatives as hedging instruments against changes in fair value of recognised assets and <br>liabilities (fair value hedges), commodity price risk of highly probable forecast transactions, as well as the cash flow risk from changes in <br>exchange or interest rates (cash flow hedges) and hedges of net investments in foreign operations (net investment hedges). Derivative <br>instruments designated in hedge relationship are included in other financial assets and liabilities on the consolidated balance sheet. The <br>effectiveness of such hedges is assessed at inception and at least on a quarterly basis, using prospective testing. Methods used for testing <br>effectiveness include critical terms, regression analysis and hypothetical derivative models. <br>**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 <br>exposed. Changes in the fair value of the derivatives are recognised in the income statement, along with any changes in the relevant fair <br>value of the underlying hedged asset or liability. If such a hedge relationship no longer meets hedge accounting criteria, fair value <br>movements on the derivative continue to be taken to the income statement while any fair value adjustments made to the underlying hedged <br>item to that date are amortised through the income statement over its remaining life using the effective interest rate method.<br>**Cash flow hedges** are used to hedge the foreign currency risk of highly probable future foreign currency cash flows, the commodity price risk <br>of highly probable future transactions, as well as the cash flow risk from changes in exchange or interest rates. The effective portion of the <br>gain or loss on the hedges is recognised in other comprehensive income, while any ineffective part is recognised in the income statement. <br>Amounts recorded in other comprehensive income are recycled to the income statement in the same period in which the underlying foreign <br>currency, commodity or interest exposure affects the income statement. When a hedge relationship no longer meets the criteria for hedge <br>accounting, any cumulative gain or loss existing in equity is either transferred to the income statement or amortised over its remaining life <br>using the effective interest rate method.<br>**Net investment hedges** utilise either foreign currency borrowings or derivatives as hedging instruments. Foreign exchange differences arising <br>on translation of net investments are recorded in other comprehensive income and included in the exchange reserve. Liabilities used as <br>hedging instruments are revalued at closing exchange rates and the resulting gains or losses are also recognised in other comprehensive <br>income to the extent that they are effective, with any ineffectiveness taken to the income statement. Foreign currency derivative contracts <br>hedging net investments are carried at fair value. Effective fair value movements are recognised in other comprehensive income, with any <br>ineffectiveness taken to the income statement. Cost of hedging model is applied in case of cross-currency interest rate swaps in net <br>investment hedges. The fair value changes attributable to the spot component of the hedging instruments are designated to offset foreign <br>exchange differences of net investments and therefore taken to net investment hedge reserve. The fair value changes attributable to the <br>forward component of the hedging instruments (including currency basis) are taken to the cost of hedging reserve and amortised to the <br>consolidated income statement.<br>|

---

---

| | |
|:---|:---|
| 185 | **Diageo** Form 20-F 2025 |

---

The group's funding, liquidity and exposure to foreign currency,

interest rate 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 2025 and 30 June 2024, 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 2025, 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-yearperiod with a95% probability confidence

level.

At 30 June 2025, foreign currency borrowings (euro, sterling) and

financial derivatives (Chinese yuan, euro, Canadian Dollar) designated

in net investment hedge relationships amounted to $9,561 million bonds

and $2,255 million derivatives (2024 – $8,109 million bonds and $3,198

million derivatives).

**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 net of translational

foreign currency risk on major currency pair exposures up to 36 months,

targeting 75% operating profit level net exposure 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.

**(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, the current group's policy is

to maintain fixed rate borrowings within a band of 70% 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:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | 2024 | 2024 |
|  | **$ million** | **%** | $ million | % |
| Fixed rate | **19051** | **87** | 16174 | 77 |
| Floating rate<sup>(1)</sup> | **2289** | **11** | 4384 | 21 |
| Impact of financial <br>derivatives and fair value <br>adjustments<br>| **(139)** | **(1)** | (145) | (1) |
| Lease liabilities | **653** | **3** | 604 | 3 |
| **Net borrowings** | **21854** | **100** | 21017 | 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** | **Average monthly net borrowings** | **Average monthly net borrowings** | **Effective interest rate** | **Effective interest rate** | **Effective interest rate** |
| **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>| **2025%**<br>| 2024%<br>| 2023%<br>|
| **21540** | 21034 | 18362 | **4.1** | 4.3 | 3.9 |

---

(i)For this calculation, net interest charge includes interest capitalised

and 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 36 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

as actual gains or losses 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.

---

| | |
|:---|:---|
| 186 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Impact on income**<br> **statement** <br>**gain/(loss)** | **Impact on income**<br> **statement** <br>**gain/(loss)** | **Impact on consolidated** <br>**comprehensive income** <br>**gain/(loss)**<sup>(1) (2)</sup> | **Impact on consolidated** <br>**comprehensive income** <br>**gain/(loss)**<sup>(1) (2)</sup> |
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| 0.5% decrease in interest <br>rates<br>| **30** | 22 | **38** | 43 |
| 0.5% increase in interest <br>rates<br>| **(29)** | (22) | **(37)** | (42) |
| 10% weakening of US dollar | **(46)** | (39) | **(1049)** | (974) |
| 10% strengthening of US <br>dollar<br>| **37** | 33 | **867** | 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.

**(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 $6,543 million (2024 – $5,221

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 settled net. 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** <br>**amount**<br>**$ million**<br>| **Right of** <br>**asset offset**<br>**$ million**<br>| **Right of** <br>**liability** <br>**offset**<br>**$ million**<br>| **Net amount**<br>**$ million**<br>|
| **2025** |  |  |  |  |
| Derivative financial assets | **733** | **(147)** | **(72)** | **514** |
| Derivative financial <br>liabilities<br>| **(275)** | **147** | **72** | **(56)** |
| 2024 |  |  |  |  |
| Derivative financial assets | 483 | (184) | (139) | 160 |
| Derivative financial <br>liabilities<br>| (486) | 184 | 139 | (163) |

---

**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 2025, the

collateral held under these agreements amounted to $nil (2024 – $14

million liability).

**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.

**(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.

---

| | |
|:---|:---|
| 187 | **Diageo** Form 20-F 2025 |

---

**Contractual cash flows** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Due within** <br>**1 year**<br>**$ million**<br>| **Due between**<br>**1 and 3 years** <br>**$ million**<br>| **Due between**<br>**3 and 5 years** <br>**$ million**<br>| **Due after**<br>**5 years**<br>**$ million**<br>| **Total**<br>**$ million**<br>| **Carrying**<br>**amount at**<br>**balance**<br>**sheet date**<br>**$ million**<br>|
| **2025** |  |  |  |  |  |  |
| Borrowings<sup>(1)</sup> | **(2938)** | **(4709)** | **(4331)** | **(12078)** | **(24056)** | **(23748)** |
| Interest on borrowings<sup>(1)(2)</sup> | **(935)** | **(1261)** | **(1061)** | **(2320)** | **(5577)** | **(352)** |
| Lease capital repayments | **(112)** | **(163)** | **(112)** | **(266)** | **(653)** | **(653)** |
| Lease future interest payments | **(25)** | **(35)** | **(24)** | **(40)** | **(124)** | **—** |
| Trade and other financial liabilities<sup>(3)</sup> | **(5912)** | **(165)** | **(16)** | **(23)** | **(6116)** | **(6039)** |
| **Non-derivative financial liabilities** | **(9922)** | **(6333)** | **(5544)** | **(14727)** | **(36526)** | **(30792)** |
| Cross currency swaps (gross) |  |  |  |  |  |  |
| Receivable | **171** | **909** | **1097** | **4960** | **7137** |  |
| Payable | **(164)** | **(918)** | **(1063)** | **(4446)** | **(6591)** |  |
| FX forwards (gross) |  |  |  |  |  |  |
| Receivable | **7537** | **763** | **—** | **—** | **8300** |  |
| Payable | **(7441)** | **(693)** | **—** | **—** | **(8134)** |  |
| Other derivative instruments (net) | **(90)** | **(84)** | **(65)** | **(11)** | **(250)** |  |
| **Derivative instruments**<sup>(2)</sup> | **13** | **(23)** | **(31)** | **503** | **462** | **438** |
| **2024** |  |  |  |  |  |  |
| Borrowings<sup>(1)</sup> | (2902) | (4991) | (4259) | (9812) | (21964) | (21501) |
| Interest on borrowings<sup>(1)(2)</sup> | (791) | (1043) | (789) | (1866) | (4489) | (291) |
| Lease capital repayments | (95) | (148) | (95) | (266) | (604) | (604) |
| Lease future interest payments | (19) | (30) | (22) | (44) | (115) |  |
| Trade and other financial liabilities<sup>(3)</sup> | (5316) | (280) | (217) | (5) | (5818) | (5619) |
| **Non-derivative financial liabilities** | (9123) | (6492) | (5382) | (11993) | (32990) | (28015) |
| Cross currency swaps (gross) |  |  |  |  |  |  |
| Receivable | 128 | 549 | 1249 | 3666 | 5592 |  |
| Payable | (126) | (549) | (1303) | (3341) | (5319) |  |
| FX forwards (gross) |  |  |  |  |  |  |
| Receivable | 7164 | 1141 |  |  | 8305 |  |
| Payable | (7042) | (1135) |  |  | (8177) |  |
| Other derivative instruments (net) | (161) | (145) | (76) | (33) | (415) |  |
| **Derivative instruments**<sup>(2)</sup> | (37) | (139) | (130) | 292 | (14) | (23) |

---

(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 payables 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.

The group had available undrawn committed bank facilities as follows:

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Expiring within one year | **1040** | 625 |
| Expiring between one and two years | **—** | 1040 |
| Expiring after two years | **2460** | 1585 |
|  | **3500** | 3250 |

---

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 the years presented.

---

| | |
|:---|:---|
| 188 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**(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 2025, an amount of

$101 million (30 June 2024 – $198 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 2025, because it is unknown when or if ILG will exercise

the option, the liability is measured as if the exercise date is the last

day of the next financial year considering forecast future performance.

The put option is not sensitive to reasonably possible changes in

assumptions. If the option was to be exercised as at 30 June 2027, the

fair value of the liability would increase by approximately $5 million.

Included in other financial liabilities, contingent considerations on

acquisition of businesses represent the present value of payments up to

$137 million (2024 – $273 million) which are expected to be paid over

the next three years.

Contingent considerations linked to certain volume targets at 30 June

2025 were $35 million (2024 – $153 million), mainly in respect of the

Ritual Zero Proof and Meczal Unión acquisitions.Contingent

considerations linked to certain financial performance targets at 30

June 2025 were $90 million (2024 – $92 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 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 2025.

The group's financial assets and liabilities measured at fair value are

categorised as follows:

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Derivative assets | **733** | 497 |
| Derivative liabilities | **(275)** | (486) |
| **Valuation techniques based on observable market input (Level 2)** | **458** | 11 |
| Financial assets - other | **75** | 333 |
| Financial liabilities - other | **(226)** | (443) |
| **Valuation techniques based on unobservable market input (Level 3)** | **(151)** | (110) |

---

In the year ended 30 June 2025, the decrease in financial assets - other of $258 million is mainly attributable to the impairment of investments.

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**<br>**financial** <br>**liability**<br>| **Contingent** <br>**consideration** <br>**recognised on** <br>**acquisition of** <br>**businesses**<br>| Zacapa <br>financial <br>liability<br>| Contingent <br>consideration <br>recognised on <br>acquisition of <br>businesses<br>|
|  | **2025**<br>**$ million**<br>| **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2024<br>$ million<br>|
| At the beginning of the year | **(198)** | **(245)** | (274) | (391) |
| Net gains included in the income statement | **7** | **133** |  | 145 |
| Net losses included in exchange in other comprehensive income | **—** | **(8)** |  |  |
| Net gains included in retained earnings | **89** | **—** | 73 |  |
| Acquisitions | **—** | **(12)** |  |  |
| Settlement of liabilities | **1** | **7** | 3 | 1 |
| **At the end of the year** | **(101)** | **(125)** | (198) | (245) |

---

---

| | |
|:---|:---|
| 189 | **Diageo** Form 20-F 2025 |

---

**(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 changes in hedged balance sheet positions, group net investment positions, or

subsequent changes in the forecast transactions as a result of differences in timing, cash flows or values 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.

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 relationshipsby the main risk categories are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Notional** <br>**amounts** <br>**$ million**<br>| **Maturity** | **Range of hedged rates** |
| **2025** |  |  |  |
| **Net investment hedges** |  |  |  |
| Derivatives in net investment hedges of foreign <br>operations<br>| **2255** | **August 2025 - October 2027** | **euro 0.84 - 0.85**<br>**Canadian dollar 1.29 - 1.48**<br>**Chinese yuan 6.93 - 7.29**<br>|
| Foreign currency borrowings in net investment hedges  | **9561** | **May 2026 - August 2044** | **sterling 0.75 - 0.82**<br>**euro 0.86 - 0.94**<br>|
| **Cash flow hedges** |  |  |  |
| Derivatives in cash flow hedge (foreign currency debt) | **2873** | **September 2028 - June 2034** | **euro 0.89 - 0.90** |
| Derivatives in cash flow hedge (foreign currency risk)<sup>(1)</sup> | **1586** | **September 2025 - January** <br>**2028**<br>| **sterling 0.74 - 0.81**<br>**Mexican peso 17.73 - 23.69**<br>|
| Derivatives in cash flow hedge (commodity price risk)<sup>(1)</sup> | **275** | **July 2025 - June 2027** | **Aluminium: 2,426.00 - 2,693.50 USD/**<br>**Mt**<br>**Natural Gas: 0.74 - 1.38 GBP/therm**<br>|
| **Fair value hedges** |  |  |  |
| Derivatives in fair value hedge (interest rate risk)<sup>(2)</sup> | **4229** | **September 2025 - April 2035** | **EURIBOR 1.93 - 1.94%**<br>**SOFR 0.27 - 1.61%**<br>|
| **2024** |  |  |  |
| **Net investment hedges** |  |  |  |
| Derivatives in net investment hedges of foreign <br>operations<br>| 3198 | September 2024 - April 2043 | sterling 0.53 - 0.78<br>euro 0.91 - 0.93<br>Chinese yuan 6.93 - 7.29<br>|
| Foreign currency borrowings in net investment hedges | 8109 | September 2024 - June 2038 | sterling 0.76 - 0.82<br>euro 0.89 - 0.94<br>|
| **Cash flow hedges** |  |  |  |
| Derivatives in cash flow hedge (foreign currency debt) | 2747 | September 2028 - June 2034 | euro 0.89 - 0.90 |
| Derivatives in cash flow hedge (foreign currency risk)<sup>(1)</sup> | 1855 | September 2024 - <br>December 2025<br>| sterling 0.78 - 0.94<br>euro 0.87 - 0.93<br>Mexican peso 17.73 - 20.57<br>|
| Derivatives in cash flow hedge (commodity price risk)<sup>(1)</sup> | 207 | July 2024 - September 2025 | Feed Wheat: 177.50 - 206.00 USD/Bu<br>Natural Gas: 0.86 - 1.40 USD/therm<br>|
| **Fair value hedges** |  |  |  |
| Derivatives in fair value hedge (interest rate risk)<sup>(2)</sup> | 4044 | April 2025 - April 2030 | EURIBOR 1.93 - 1.94%<br>SOFR 0.27 - 1.61%<br>|

---

(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.

(2) In case of derivatives in fair value hedges, the range of the floating interest rates of the derivatives are presented.

For cross currency swaps used in cash flow hedges to manage currency risk, 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 are expected to offset those on the cross currency swaps in the income

statement in each of the years.

In respect of cash flow hedging instruments, a gain of $298 million (2024 – $13 milliongain; 2023 – $297 milliongain) was recognised in other

comprehensive income due to changes in fair value. A gain of $68 million was transferred out of other comprehensive income to other operating

expenses and a gain of $230 million to other finance charges, respectively, (2024 – a gain of $266 million and a loss of $152 million; 2023 – a gain of

$16 million and a loss of $65 million) to offset the foreign exchange impact on the underlying transactions. A loss of $19 million (2024 – $9 million

loss, 2023 – $39 milliongain) was transferred out of other comprehensive income to operating profit in relation to commodity hedges. For cash flow

hedges in respect of foreign currency debt, the notional amount of hedged items recognised in the consolidated balance sheet equals the notional

value of the hedging instruments at 30 June 2025 and are included within borrowings. The notional amount for cash flow hedges of foreign currency

debt at 30 June 2025 was $2,873 million (2024 – $2,747 million).

---

| | |
|:---|:---|
| 190 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

In respect of derivatives in net investment hedges, a loss of $77 million was recognised in other comprehensive income due to changes in fair value.

The total cost of hedging during the year ended30 June 2025 was $101 million, a gain of $26 million was transferred out of other comprehensive

income to other finance charges.

For cash flow hedges of forecast transactions at 30 June 2025, based on year end interest and exchange rates, againto the income statement of

$67 million in the year ending 30 June 2026 and a gain of $29 million in the year ending 30 June 2027 is expected to be recognised.

The amount relating to the hedges of foreign currency borrowings that are no longer applicable at 30 June 2025 is $114 million (2024 – $24 million).

The amortisation of fair value of financial derivatives at 30 June 2025 was $5 million gain (2024 – $3 million) in the income statement. There was no

significant ineffectiveness on net investment and cash flow hedges during the years ended 30 June 2025 and 2024.

From the total exchange reserve of $3,333 million (2024 – $2,488 million), $2,665 million (2024 – $2,470 million) is attributable to net investment

hedges for which hedge accounting no longer applies.

The $4,229 million (2024 – $4,044 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 2025 and the carrying amount of hedged items is 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**<br> **of the year**<br>**$ million**<br>| **Consolidated** <br>**income**<br> **statement**<br>**$ million**<br>| **Consolidated** <br>**statement of** <br>**comprehensive** <br>**income**<br>**$ million**<br>| **Other**<sup>(2)</sup><br>**$ million**<br>| **At the end**<br>**of the year**<br>**$ million**<br>|
| **2025** |  |  |  |  |  |
| **Net investment hedges**<sup>(1)</sup> |  |  |  |  |  |
| Derivatives in net investment hedges of foreign operations | **367** | **44** | **(2)** | **(426)** | **(17)** |
| Foreign currency borrowings in net investment hedges  | **(8109)** | **—** | **(768)** | **(684)** | **(9561)** |
| **Cash flow hedges**<sup>(1)</sup> |  |  |  |  |  |
| Derivatives in cash flow hedge (foreign currency debt) | **(32)** | **230** | **(69)** | **56** | **185** |
| Derivatives in cash flow hedge (foreign currency risk) | **27** | **54** | **76** | **(54)** | **103** |
| Derivatives in cash flow hedge (commodity price risk) | **(9)** | **(19)** | **(1)** | **21** | **(8)** |
| **Fair value hedges**<sup>(1)</sup> |  |  |  |  |  |
| Derivatives in fair value hedge (interest rate risk) | **(376)** | **166** | **—** | **—** | **(210)** |
| Fair value hedge hedged item | **368** | **(163)** | **—** | **—** | **205** |
| Instruments in fair value hedge relationship | **(8)** | **3** | **—** | **—** | **(5)** |
| **2024** |  |  |  |  |  |
| **Net investment hedges**<sup>(1)</sup> |  |  |  |  |  |
| Derivatives in net investment hedges of foreign operations |  | 22 | (66) | 411 | 367 |
| Foreign currency borrowings in net investment hedges | (12584) |  | (82) | 4557 | (8109) |
| **Cash flow hedges**<sup>(1)</sup> |  |  |  |  |  |
| 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**<sup>(1)</sup> |  |  |  |  |  |
| 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) |

---

(1)There was no significant ineffectiveness on net investment, cash flow and fair value hedges during the years ended 30 June 2025 and 2024, accordingly the fair value movement of the hedged

items was materially similar and offsetting 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 hedges and reclassification of hedging instruments

between hedge portfolios and de-designation of hedging instruments.

---

| | |
|:---|:---|
| 191 | **Diageo** Form 20-F 2025 |

---

**(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**<br>**through** <br>**income**<br>**statement**<br>**$ million**<br>| **Assets and** <br>**liabilities at** <br>**amortised** <br>**cost**<br>**$ million**<br>| **Not** <br>**categorised**<br>**as a financial**<br>**instrument**<br>**$ million**<br>| **Total**<br>**$ million**<br>| **Current**<br>**$ million**<br>| **Non-current**<br>**$ million**<br>|
| **2025** |  |  |  |  |  |  |
| Other investments and loans<sup>(1)</sup> | **75** | **1** | **—** | **76** | **—** | **76** |
| Trade and other receivables | **—** | **3120** | **422** | **3542** | **3504** | **38** |
| Cash and cash equivalents | **—** | **2200** | **—** | **2200** | **2200** | **—** |
| Derivatives in cash flow hedge (foreign currency debt) | **185** | **—** | **—** | **185** | **—** | **185** |
| Derivatives in cash flow hedge (foreign currency risk) | **110** | **—** | **—** | **110** | **71** | **39** |
| Derivatives in cash flow hedge (commodity price risk) | **3** | **—** | **—** | **3** | **1** | **2** |
| Derivatives in net investment hedge | **5** | **—** | **—** | **5** | **5** | **—** |
| Trading derivatives (cross currency swaps) | **388** | **—** | **—** | **388** | **—** | **388** |
| Other instruments | **455** | **—** | **—** | **455** | **447** | **8** |
| Leases | **—** | **1** | **—** | **1** | **—** | **1** |
| Total other financial assets | **1146** | **1** | **—** | **1147** | **524** | **623** |
| **Total financial assets** | **1221** | **5322** | **422** | **6965** | **6228** | **737** |
| Borrowings<sup>(2)</sup> | **—** | **(23748)** | **—** | **(23748)** | **(2928)** | **(20820)** |
| Trade and other payables | **(125)** | **(5979)** | **(1040)** | **(7144)** | **(6952)** | **(192)** |
| Derivatives in fair value hedge (interest rate risk) | **(210)** | **—** | **—** | **(210)** | **(8)** | **(202)** |
| Derivatives in cash flow hedge (foreign currency risk) | **(7)** | **—** | **—** | **(7)** | **(7)** | **—** |
| Derivatives in cash flow hedge (commodity price risk) | **(11)** | **—** | **—** | **(11)** | **(11)** | **—** |
| Derivatives in net investment hedge | **(22)** | **—** | **—** | **(22)** | **(14)** | **(8)** |
| Other instruments | **(126)** | **—** | **—** | **(126)** | **(126)** | **—** |
| Leases | **—** | **(653)** | **—** | **(653)** | **(112)** | **(541)** |
| Total other financial liabilities | **(376)** | **(653)** | **—** | **(1029)** | **(278)** | **(751)** |
| **Total financial liabilities** | **(501)** | **(30380)** | **(1040)** | **(31921)** | **(10158)** | **(21763)** |
| **Total net financial assets/(liabilities)** | **720** | **(25058)** | **(618)** | **(24956)** | **(3930)** | **(21026)** |
| **2024** |  |  |  |  |  |  |
| Other investments and loans<sup>(1)</sup> | 333 | 59 |  | 392 |  | 392 |
| Trade and other receivables |  | 2971 | 554 | 3525 | 3487 | 38 |
| Cash and cash equivalents |  | 1130 |  | 1130 | 1130 |  |
| 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** | 1061 | 4160 | 554 | 5775 | 4972 | 803 |
| Borrowings<sup>(2)</sup> |  | (21501) |  | (21501) | (2885) | (18616) |
| Trade and other payables | (245) | (5373) | (1040) | (6658) | (6354) | (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) |  | (1288) | (348) | (940) |
| **Total financial liabilities** | (929) | (27478) | (1040) | (29447) | (9587) | (19860) |
| **Total net financial assets/(liabilities)** | 132 | (23318) | (486) | (23672) | (4615) | (19057) |

---

(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 2025 and 30 June 2024, the carrying values of cash and cash equivalents, other financial assets and liabilities approximate fair values. At

30 June 2025, the fair value of borrowings, based on unadjusted quoted market data, was $23,197 million (2024 – $20,663 million).

---

| | |
|:---|:---|
| 192 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**(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 2025, the adjusted net borrowings of $22,263 million (2024 –

$21,446 million) to adjusted EBITDA ratio was 3.4 (2024 – 3.0) times.

For this calculation, net borrowings are adjusted by post-employment

benefit liabilities before tax of $409 million (2024 – $429 million) whilst

adjusted EBITDA of $6,645 million (2024 – $7,037 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 maximise its return of capital to shareholders each

year. The decision in respect of the dividend is made with reference to

the dividend policy for the respective period that includes current

performance trends, including sales, profit after tax and cash

generation. Diageo aims for 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 2025, dividend cover

was 1.6 times (2024 - 1.7 times). The group will keep future returns of

capital, including dividends, under review 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 of 62.98 cents

per share (2024 – 62.98 cents per share) will be paid to holders of

ordinary shares and US ADRs on register as of 17 October 2025. The ex-

dividend date is 16 October 2025 for holders of ordinary shares and

17 October 2025 for holders of US ADRs. Holders of ordinary shares will

receive their dividends in sterling unless they elect to receive their

dividends in US dollars by 7 November 2025. The dividend per share in

pence to be paid to ordinary shareholders will be announced on

20 November 2025 and will be determined by the actual foreign

exchange rates achieved by Diageo buying forward contracts for sterling

currency, entered into during the three trading days preceding the

sterling equivalent announcement of the final dividend. The final

dividend, once approved by shareholders, will be paid to both holders

of ordinary shares and US ADRs on 4 December 2025. A dividend

reinvestment plan is available to holders of ordinary shares in respect of

the final dividend and the plan notice date is 7 November 2025.

**17. Net borrowings**

---

| |
|:---|
| **Accounting policies**  |
| **Borrowings** are initially recognised at fair value net of <br>transaction costs and are subsequently reported at amortised <br>cost. Certain bonds are designated in fair value hedge <br>relationship. In these cases, the amortised cost is adjusted for <br>the fair value of the risk being hedged, with changes in value <br>recognised in the income statement. The fair value adjustment is <br>calculated using a discounted cash flow technique based on <br>unadjusted market data. <br>**Bank overdrafts** form an integral part of the group's cash <br>management and are included as a component of net cash and <br>cash equivalents in the consolidated statement of cash flows. <br>**Cash and cash equivalents** comprise cash in hand and deposits <br>which are readily convertible to known amounts of cash and <br>which are subject to insignificant risk of changes in value and <br>have an original maturity of three months or less, including <br>money market deposits, commercial paper and investments. <br>**Net borrowings** are defined as gross borrowings (short-term <br>borrowings and long-term borrowings plus lease liabilities plus <br>interest rate hedging instruments, cross currency interest rate <br>swaps and foreign currency forwards and swaps used to manage <br>borrowings) less cash and cash equivalents. <br>|

---

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Bank overdrafts | **22** | 21 |
| Commercial paper | **—** | 479 |
| Bank and other loans | **83** | 76 |
| Credit support obligations | **—** | 14 |
| $600 million2.125% bonds due 2024<sup>(2)</sup> | **—** | 600 |
| €500 million1.750% bonds due 2024 | **—** | 535 |
| €600 million1.000% bonds due 2025 | **—** | 641 |
| €500 million3.500% bonds due 2025 | **—** | 534 |
| $500 million5.200% bonds due 2025<sup>(2)</sup> | **500** |  |
| $750 million1.375% bonds due 2025<sup>(2)</sup> | **750** |  |
| €850 million2.375% bonds due 2026 | **995** |  |
| €500 million floating bonds due 2026 | **586** |  |
| Fair value adjustment to borrowings | **(8)** | (15) |
| **Borrowings due within one year** | **2928** | 2885 |
| $500 million5.200% bonds due 2025<sup>(2)</sup> | **—** | 499 |
| $750 million1.375% bonds due 2025<sup>(2)</sup> | **—** | 749 |
| €850 million2.375% bonds due 2026 | **—** | 908 |
| €500 million floating bonds due 2026 | **—** | 535 |
| £500 million1.750% bonds due 2026 | **683** | 630 |
| $800 million5.375% bonds due 2026<sup>(2)</sup> | **799** | 797 |
| €750 million1.875% bonds due 2027 | **878** | 800 |
| €500 million1.500% bonds due 2027 | **586** | 534 |
| $750 million5.300% bonds due 2027<sup>(2)</sup> | **749** | 748 |
| $500 million3.875% bonds due 2028<sup>(2)</sup> | **499** | 498 |
| £300 million2.375% bonds due 2028 | **409** | 377 |
| €700 million0.125% bonds due 2028 | **818** | 746 |
| £300 million2.875% bonds due 2029 | **410** | 377 |
| €750 million1.500% bonds due 2029 | **878** | 801 |
| $1,000 million2.375% bonds due 2029<sup>(2)</sup> | **994** | 993 |
| $1,000 million2.000% bonds due 2030<sup>(2)</sup> | **996** | 995 |
| $750 million5.125% bonds due 2030<sup>(1)</sup> | **748** |  |
| €700 million3.125% bonds due 2031 | **821** |  |
| €300 million3.125% bonds due 2031 | **353** |  |

---

---

| | |
|:---|:---|
| 193 | **Diageo** Form 20-F 2025 |

---

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| €1,000 million2.500% bonds due 2032 | **1168** | 1066 |
| $750 million2.125% bonds due 2032<sup>(2)</sup> | **745** | 744 |
| £400 million1.250% bonds due 2033 | **543** | 500 |
| $750 million5.500% bonds due 2033<sup>(2)</sup> | **745** | 744 |
| $900 million5.625% bonds due 2033<sup>(2)</sup> | **895** | 894 |
| €900 million1.875% bonds due 2034 | **1049** | 957 |
| $400 million7.450% bonds due 2035<sup>(1)</sup> | **400** | 400 |
| €700 million3.375% bonds due 2035 | **814** |  |
| $750 million5.625% bonds due 2035<sup>(1)</sup> | **743** |  |
| $600 million5.875% bonds due 2036<sup>(2)</sup> | **595** | 594 |
| £600 million2.750% bonds due 2038 | **816** | 752 |
| $500 million4.250% bonds due 2042<sup>(1)</sup> | **495** | 495 |
| $500 million3.875% bonds due 2043<sup>(2)</sup> | **492** | 492 |
| €500 million3.750% bonds due 2044 | **578** |  |
| Bank and other loans | **318** | 344 |
| Fair value adjustment to borrowings | **(197)** | (353) |
| **Borrowings due after one year** | **20820** | 18616 |
| **Total borrowings before leases and derivative** <br>**financial instruments**<br>| **23748** | 21501 |
| Fair value of cross currency interest rate swaps | **(559)** | (323) |
| Fair value of foreign currency swaps and <br>forwards<br>| **2** | (11) |
| Fair value of interest rate hedging instruments | **210** | 376 |
| Lease liabilities | **653** | 604 |
| **Gross borrowings** | **24054** | 22147 |
| Less: Cash and cash equivalents | **(2200)** | (1130) |
| **Net borrowings** | **21854** | 21017 |

---

(1)SEC-registered debt issued on an unsecured basis by Diageo Investment Corporation, a

100% owned 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

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 $103 million (2024 – $95 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:

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| Within one year | **2928** | 2885 |
| Between one and three years | **4662** | 4873 |
| Between three and five years | **4159** | 4222 |
| Beyond five years | **11999** | 9521 |
|  | **23748** | 21501 |

---

During the year, the following bonds were issued and repaid:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| **Issued** |  |  |  |
| € denominated | **2452** | 535 | 548 |
| $ denominated | **1491** | 1690 | 1989 |
| **Repaid** |  |  |  |
| € denominated | **(1816)** | (1167) |  |
| $ denominated | **(600)** | (500) | (1650) |
|  | **1527** | 558 | 887 |

---

**(a) Reconciliation of movement in net borrowings**

---

| | | |
|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>|
| At beginning of the year | **21017** | 19582 |
| Net (increase)/decrease in cash and cash <br>equivalents before exchange<br>| **(1083)** | 596 |
| Net increase in bonds and other borrowings | **898** | 453 |
| **Net (decrease)/increase in net borrowings from** <br>**cash flows**<br>| **(185)** | 1049 |
| Exchange differences on net borrowings | **921** | 199 |
| Other non-cash items<sup>(1)</sup> | **101** | 187 |
| **Net borrowings at the end of the year** | **21854** | 21017 |

---

(1) In the year ended 30 June 2025, other non-cash items are principally in respect of fair

value losses on borrowings of $182 million and an increase in lease liabilities of

$147 million partially offset by gains on cross currency interest rate swaps and interest

rate swaps of $183 million and reclassification from assets held for sale of $45 million.

In the year ended 30 June 2024, other non-cash items are principally in respect of fair

value losses on borrowings of $116 million and an increase in lease liabilities of

$152 million partially offset by gains of cross currency interest rate swaps and interest rate

swaps of $111 million and reclassification of cash to assets held for sale of

$30 million.

**(b) Analysis of gross borrowings by currency**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | 2024 | 2024 |
|  | **Cash and** <br>**cash** <br>**equivalents**<br>**$ million**<br>| **Gross** <br>**borrowings**<sup>(1)</sup><br>**$ million**<br>| Cash and <br>cash<br>equivalents<br>$ million<br>| Gross<br>borrowings<sup>(1)</sup><br>$ million<br>|
| US dollar | **1430** | **(11395)** | 130 | (9590) |
| Euro<sup>(2)</sup> | **23** | **(6164)** | 59 | (5820) |
| Sterling | **39** | **(4408)** | 29 | (4767) |
| Canadian dollar<sup>(3)</sup> | **19** | **(1049)** | 33 | (81) |
| Kenyan shilling | **58** | **(233)** | 55 | (295) |
| Indian rupee | **179** | **(71)** | 170 | (57) |
| Mexican peso | **2** | **415** | 34 | (261) |
| Chinese yuan | **145** | **(924)** | 258 | (964) |
| Other | **305** | **(225)** | 362 | (312) |
| **Total** | **2200** | **(24054)** | 1130 | (22147) |

---

(1)Includes foreign currency forwards and swaps and leases.

(2)Includes $15 million (euro) cash and cash equivalents in cash-pooling arrangements (2024 –

$11 million (euro).

(3)Net investment hedge in Canadian dollar at 30 June 2025.

---

| | |
|:---|:---|
| 194 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**18. Equity**

---

| |
|:---|
| **Accounting policies** |
| **Own shares** represent shares and share options of Diageo plc <br>that are held in treasury or by employee share trusts for the <br>purpose of fulfilling obligations in respect of various employee <br>share plans or were acquired as part of a share buyback <br>programme. Own shares are treated as a deduction from equity <br>until the shares are cancelled, reissued or disposed of and when <br>vest are transferred from own shares to retained earnings at <br>their weighted average cost.<br>|
| **Share-based payments** include share awards and options <br>granted to directors and employees. The fair value of equity <br>settled share options and share grants is initially measured at <br>grant date based on Monte Carlo and Black Scholes models and is <br>charged to the income statement over the vesting period. For <br>equity settled shares, the credit is included in retained earnings.<br>|
| **Dividends** are recognised in the financial statements in the year <br>in which they are approved. <br>|

---

**(a) Allotted and fully paid share capital – ordinary shares** 

**of 28**<sup>101</sup>**⁄108** **pence each** 

---

| | | |
|:---|:---|:---|
|  | **Number**<br>**of shares**<br>**million**<br>| **Nominal**<br>**value**<br>**$ million**<br>|
| **At 30 June 2023** | 2460 | 898 |
| Shares cancelled | (28) | (11) |
| **At 30 June 2024** | **2432** | **887** |
| Shares cancelled |  |  |
| **At 30 June 2025** | **2432** | **887** |

---

**(b) Hedging and exchange reserve**

---

| | | | |
|:---|:---|:---|:---|
|  | **Hedging**<br>**reserve**<br>**$ million**<br>| **Exchange**<br>**reserve**<br>**$ million**<br>| **Total**<br>**$ million**<br>|
| **At 30 June 2022** | 32 | (3270) | (3238) |
| Retranslation impact of opening <br>balances<sup>(1)</sup><br>|  | (173) | (173) |
| Other comprehensive income/(loss) | 261 | (256) | 5 |
| **At 30 June 2023** | 293 | (3699) | (3406) |
| Other comprehensive loss | (154) | (613) | (767) |
| **At 30 June 2024** | **139** | **(4312)** | **(4173)** |
| Other comprehensive income | **79** | **466** | **545** |
| **At 30 June 2025** | **218** | **(3846)** | **(3628)** |

---

(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, a deficit of $3 million (2024 – $78

million) represents the cost of hedging arising from cross currency

interest rate swaps in net investment hedges.

**(c) Own shares** 

**Movements in own shares** 

---

| | | |
|:---|:---|:---|
|  | **Number**<br>**of shares**<br>**million**<br>| **Purchase**<br>**considerati**<br>**on**<br>**$ million**<br>|
| **At 30 June 2022** | 219 | 2223 |
| Retranslation impact of opening balances<sup>(1)</sup> |  | 93 |
| Share trust arrangements | (1) | (15) |
| Shares used to satisfy options | (2) | (15) |
| Shares purchased – share buyback programme | 38 | 1673 |
| Shares cancelled | (38) | (1673) |
| **At 30 June 2023** | 216 | 2286 |
| 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** | **2250** |
| Share trust arrangements | **(1)** | **(14)** |
| Shares used to satisfy options | **(1)** | **(8)** |
| **At 30 June 2025** | **210** | **2228** |

---

(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 2025, the employee share trusts owned 3 million of ordinary

shares in Diageo plc at a cost of $62 million and market value of

$73 million (2024 – 3 million shares at a cost of $66 million, market

value $97 million; 2023 – 3 million shares at a cost of $66 million,

market value $127 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 26 September 2024 to

purchase a maximum of 222,316,603ordinary shares at a minimum

price of 28<sup>101/108</sup>pence and a maximum price of the higher of (a) 105%

of the average market value of the company's ordinary shares 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 15 months from the passing of this

resolution, if earlier.

During the year ended 30 June 2024, the group purchased 28 million

ordinary shares (2023 – 38 million), representing approximately 1.1% of

the issued ordinary share capital (2023 – 1.5%) 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) under the share buyback programme. The shares

purchased under the share buyback programmes were cancelled.

---

| | |
|:---|:---|
| 195 | **Diageo** Form 20-F 2025 |

---

**(d) Dividends** 

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| **Amounts recognised as distributions** <br>**to equity shareholders in the year**<br>|  |  |  |
| Final dividend for the year ended 30 <br>June 2024 62.98 cents per share <br>(2023 – 59.98 cents; 2022 – 52.71<br>cents)<br>| **1399** | 1349 | 1200 |
| Interim dividend for the year ended <br>30 June 2025 40.50 cents per share <br>(2024 – 40.50 cents; 2023 – 38.57<br>cents)<br>| **899** | 894 | 871 |
|  | **2298** | 2243 | 2071 |

---

A final dividend of $1,399 million (62.98 cents per share; 2024 –62.98

cents per share) was recommended by the Board of Directors on

4 August 2025 for approval by shareholders at the Annual General

Meeting scheduled to be held on 6 November 2025 bringing the

recommended full year dividend to 103.48 cents per share for the year

ended 30 June 2025. 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.

**(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 36.35% 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:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2025** | 2024 | 2023 |
|  | **USL**<br>**$ million**<br>| **Other**<br>**$ million**<br>| **Total**<br>**$ million**<br>| Total<br>$ million<br>| Total<br>$ million<br>|
| **Income statement** |  |  |  |  |  |
| Sales | **3201** | **3238** | **6439** | 6224 | 6409 |
| Net sales | **1405** | **2463** | **3868** | 3718 | 3767 |
| Profit for the year<sup>(1)</sup> | **181** | **347** | **528** | 777 | 80 |
| Other comprehensive loss<sup>(2)</sup> | **(50)** | **(241)** | **(291)** | (16) | (172) |
| Total comprehensive income/(loss) | **131** | **106** | **237** | 761 | (92) |
| Attributable to non-controlling interests | **56** | **127** | **183** | 277 | (66) |
| **Balance sheet** |  |  |  |  |  |
| Non-current assets<sup>(3)</sup> | **1300** | **4229** | **5529** | 5741 | 5354 |
| Current assets | **1304** | **1437** | **2741** | 2545 | 2316 |
| Non-current liabilities | **(199)** | **(1450)** | **(1649)** | (1774) | (1656) |
| Current liabilities | **(565)** | **(1038)** | **(1603)** | (1738) | (1788) |
| Net assets | **1840** | **3178** | **5018** | 4774 | 4226 |
| Attributable to non-controlling interests | **791** | **1297** | **2088** | 2038 | 1853 |
| **Cash flow** |  |  |  |  |  |
| Net cash inflow from operating activities | **278** | **330** | **608** | 693 | 604 |
| Net cash outflow from investing activities | **(185)** | **(120)** | **(305)** | (211) | (236) |
| Net cash outflow from financing activities | **(77)** | **(317)** | **(394)** | (456) | (170) |
| Net increase/(decrease) in cash and cash equivalents | **16** | **(107)** | **(91)** | 26 | 198 |
| Exchange differences | **(4)** | **14** | **10** | (33) | (111) |
| Dividends payable to non-controlling interests | **(32)** | **(108)** | **(140)** | (121) | (117) |

---

(1) Profit for the year includes exceptional operating items attributable to non-controlling interests.

(2) Other comprehensive loss 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 2025 was $1,800 million (2024 – $1,800

million; 2023 – $1,800 million).

(i) On 30 September 2024, Diageo completed the sale of its 58.02% shareholding in Guinness Nigeria PLC to N-Seven Nigeria Ltd., part of the Tolaram group.

(ii) On 28 January 2025, Diageo announced the sale of its 80.4% shareholding in Guinness Ghana Breweries PLC to Castel Group.

(iii) On 02 April 2025, Diageo announced the sale of its 54.4% shareholding in Seychelles Breweries Limited to Phoenix Beverages.

---

| | |
|:---|:---|
| 196 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

**(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 2025 is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**$ million**<br>| 2024<br>$ million<br>| 2023<br>$ million<br>|
| Executive share award plans | **48** | 34 | 49 |
| Executive share option plans | **9** | 7 | 4 |
| Savings plans | **2** | 2 | 5 |
|  | **59** | 43 | 58 |

---

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. 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 2023 and 2024) 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; and 3) environmental, social and

governance (ESG) priorities, weighted 40%, 40% and 20% of the

maximum respectively. 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 against a

relevant 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 and

disclosed within the relevant Directors' Remuneration Report. 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 in the UK and Republic of Ireland (ROI) and in the form of savings-

related share purchase plan in the US. Employees participating in these

plans agree to make regular monthly savings to buy options over Diageo

shares or American Depositary Receipts (ADRs) at a discounted price.

There are other share incentive plans available for all employees

within the group, including the UK Share Incentive Plan, the ROI

Profitshare Plan and the One World Share Incentive Plan introduced in

the year ended 30 June 2025.

For the three years ended 30 June 2025, the calculation of the fair

value of executive share awards used the Monte Carlo and Black

Scholes pricing model and the following assumptions:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | 2024 | 2023 |
| Risk free interest rate | **3.9%** | 4.7% | 3.1% |
| Expected life of the awards | **33 months** | 33 months | 35 months |
| Dividend yield | **3.4%** | 2.6% | 2.0% |
| Weighted average share price | **2426 p** | 3118 p | 3758 p |
| Weighted average fair value of <br>awards granted in the year<sup>(1)</sup><br>| **1814 c** | 1757 c | 2318 c |
| Number of awards granted in <br>the year<br>| **3.4 million** | 2.1 million | 1.7 million |
| Fair value of all awards granted <br>in the year<br>| **$61 million** | $36 million | $40 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 2025 were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>**million**<br>| 2024<br>million<br>| 2023<br>million<br>|
| Number of awards outstanding at 1 July | **4.8** | 4.9 | 5.2 |
| Granted | **3.4** | 2.1 | 1.7 |
| Awarded | **(1.3)** | (1.8) | (1.1) |
| Forfeited | **(0.9)** | (0.4) | (0.9) |
| Number of awards outstanding at 30 June | **6.0** | 4.8 | 4.9 |

---

The exercise price of share options outstanding at 30 June 2025 was in

the range of 1709 pence – 3763 pence (2024 – 1709 pence – 3854 pence;

2023 – 1709 pence – 3864 pence).

At 30 June 2025, 4.6 million (2024 – 3.3 million, 2023 – 2.5 million share

options were exercisable at a weighted average exercise price of 2512

pence (2024 – 2639 pence, 2023 – 2443 pence. Weighted average

remaining contractual life of share options was 6 years at 30 June 2025

(2024 – 6 years, 2023 – 5 years).

---

| | |
|:---|:---|
| 197 | **Diageo** Form 20-F 2025 |

---

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.

**19. Contingent liabilities and legal proceedings**

---

| |
|:---|
| **Accounting policies**  |
| Provision is made for the anticipated settlement costs of legal or <br>other disputes against the group where it is considered to be <br>probable that a liability exists and a reliable estimate can be <br>made of the likely outcome. Where it is possible that a <br>settlement may be reached or it is not possible to make a <br>reliable estimate of the estimated financial effect, appropriate <br>disclosure is made but no provision created. <br>|
| **Critical accounting judgements and estimates**  |
| Judgement is necessary in assessing the likelihood that a claim <br>will succeed, or a liability will arise, and an estimate to quantify <br>the possible range of any settlement. Due to the inherent <br>uncertainty in this evaluation process, actual losses may be <br>different from the liability originally estimated. The group may <br>be involved in legal proceedings in respect of which it is not <br>possible to make a reliable estimate of any expected <br>settlement. In such cases, appropriate disclosure is provided but <br>no provision is made and no contingent liability is quantified. <br>|

---

**(a) Guarantees and related matters** 

As of 30 June 2025, 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 2012as 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 2025, 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 beforethe 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.

**(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 thefive 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.

---

| | |
|:---|:---|
| 198 | **Diageo** Form 20-F 2025 |

---

FINANCIAL STATEMENTS continued

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 twoinstalment 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, including actively taking steps to retain the right to

enforcement against Watson in Mauritius.

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 against orders made in the course of

the bankruptcy proceedings) was heard in February 2025, and on 9 April

2025 the English High Court issued a judgement denying Dr Mallya's

appeal and granting the appeal of the bank consortium. Dr Mallya is

currently pursuing an application for annulment of the bankruptcy

orders, which is scheduled to be heard on 13 October 2025. In light of

ongoing proceedings in relation to the bankruptcy orders, the trial of

Diageo's claim, which was scheduled to take place in March 2025, has

been deferred and is currently awaiting rescheduling.

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.

**(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. As 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.

While SEBI has filed an appeal against SAT's order before the Supreme

Court of India, the next date for a substantive hearing is yet to be fixed.

There can be no certainty as to the outcome or the timeframe within

which such appeal will 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 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 millionremains 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 interpretation. In the

---

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|:---|:---|
| 199 | **Diageo** Form 20-F 2025 |

---

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), their 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 values. While not all of

these cases are individually significant, the current aggregate known

possible exposure from tax assessment values is up to approximately

$906 million for Brazil and up to approximately $90 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 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 January 2025 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 at30 June 2025 is $120 million (corporate tax payments of

$108 million and indirect tax payments of $12 million).

**(g) 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.

**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 $550 million (2024 – $783 million; 2023 – $755 million).

**(b) Other commitments**

The future minimum lease rentals payable in the year ended 30 June

2025 for short-term leases and leases of low-value assets are estimated

at $19 million(2024 – $23 million; 2023 – $45 million). The total future

cash outflows for leases that had not yet commenced, and not

recognised as lease liabilities at 30 June 2025, are estimated at

$1 million (2024 – $3 million; 2023 –$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 drink products but also include the

provision of management services.

Transactions and balances with associates and joint ventures are set

out in the table below:

---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | 2024 | 2023 |
|  | **$ million** | $ million | $ million |
| **Income statement items** |  |  |  |
| Sales | **10** | 14 | 13 |
| Purchases | **65** | 73 | 16 |
| **Balance sheet items** |  |  |  |
| Group payables | **2** | 2 | 3 |
| Group receivables | **1** | 2 | 2 |
| Loans receivable | **37** | 355 | 254 |
| **Cash flow items** |  |  |  |
| Loans and equity contributions, net | **84** | 134 | 112 |

---

Reduction in loans receivable in the year ended 30 June 2025 was

primarily due to Diageo's decision to exit several Distill Ventures

businesses.

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

'Executive Committee'.

---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | 2024 | 2023 |
|  | **$ million** | $ million | $ million |
| Salaries and short-term employee <br>benefits<br>| **14** | 12 | 13 |
| Annual incentive plan | **8** | 4 | 7 |
| Non-Executive Directors' fees | **2** | 2 | 2 |
| Share-based payments<sup>(1)</sup> | **17** | 7 | 14 |
| Post-employment benefits | **2** | 2 | 2 |
|  | **43** | 27 | 38 |

---

(1) Time-apportioned fair value of unvested options and share awards.

Non-Executive Directors do not receive share-based payments or post-

employment benefits.

There were no transactions with these related parties during the year

ended 30 June 2025 on terms other than those that prevail in arm's

length transactions.

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FINANCIAL STATEMENTS continued

**(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 $0.2 million (2024 – $0.1

million; 2023 – $0.2 million).

**(e) Directors' remuneration** 

---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | 2024 | 2023 |
|  | **$ million** | $ million | $ million |
| Salaries and short-term employee <br>benefits<br>| **4** | 4 | 3 |
| Annual incentive plan | **3** | 1 | 2 |
| Non-Executive Directors' fees | **2** | 2 | 2 |
| Shares vesting<sup>(1)</sup> | **4** | 18 | 5 |
| Post-employment benefits | **—** |  | 1 |
|  | **13** | 25 | 13 |

---

(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** <br>**incorporation**<br>| **Country of operation** | **Percentage** <br>**of equity** <br>**owned**<sup>(1)</sup><br>| **Business description** |
| **Subsidiaries** |  |  |  |  |
| Diageo Ireland Unlimited <br>Company<br>| 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 <br>States<br>| Worldwide | 100% | Production, importing, marketing and distribution of premium <br>drinks<br>|
| United Spirits Limited<sup>(2)</sup> | India | India | 55.88% | Production, importing, marketing and distribution of premium <br>drinks<br>|
| Diageo Capital plc<sup>(3)</sup> | Scotland | United Kingdom | 100% | Financing company for the group |
| Diageo Capital B.V.<sup>(3)</sup> | Netherlands | Netherlands | 100% | Financing company for the group |
| Diageo Finance plc<sup>(3)</sup> | England | United Kingdom | 100% | Financing company for the group |
| Diageo Investment Corporation | United <br>States<br>| 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<sup>(4)</sup> | France | Worldwide | 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) Diageo's principal associate is Moët Hennessy of which Diageo owns 34% through two legal entities; Moët Hennessy, SAS and Moët Hennessy International.

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UNAUDITED FINANCIAL INFORMATION

Unaudited financial information

**1. 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 free cash flow, forecast effective interest rate,

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

2024 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

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-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.

Exceptional operating items are those that are unusual or non-

recurring in nature, considered to be of a size that could distort

performance 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 unusual non-recurring items,

that are considered to be of a size that could distort performance and

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 finance incomes/charges are those that are unusual or

non-recurring in nature, considered to be of a size that could distort

the performance and are part of the financing activity of the group.

Exceptional current and deferred tax items comprise unusual or non-

recurring items, that are considered to be of a size that could distort

performance. 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.

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|:---|:---|
| 214 | **Diageo** Form 20-F 2025 |

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UNAUDITED FINANCIAL INFORMATION continued

**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 2025 were as follows:** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **North America**<br>**million**<br>| **Europe**<br>**million**<br>| **Asia**<br>**Pacific**<br>**million**<br>| **Latin America**<br>**and Caribbean**<br>**million**<br>| **Africa**<br>**million**<br>| **Corporate**<br>**million**<br>| **Total**<br>**million**<br>|
| **Volume (equivalent units)** |  |  |  |  |  |  |  |
| Year ended 30 June 2024 reported | 50.1 | 51.3 | 74.9 | 22.1 | 32.1 |  | 230.5 |
| Disposals<sup>(2)</sup> | (0.8) | (0.5) | (0.2) | (0.1) | (5.4) |  | (7.0) |
| Year ended 30 June 2024 adjusted | 49.3 | 50.8 | 74.7 | 22.0 | 26.7 |  | 223.5 |
| **Organic movement** | **(0.4)** | **(2.2)** | **2.9** | **0.7** | **1.0** | **—** | **2.0** |
| **Acquisitions and disposals**<sup>(2)</sup> | **0.6** | **0.3** | **0.1** | **0.2** | **3.4** | **—** | **4.6** |
| **Year ended 30 June 2025 reported** | **49.5** | **48.9** | **77.7** | **22.9** | **31.1** | **—** | **230.1** |
| **Organic movement %** | **(1)** | **(4)** | **4** | **3** | **4** | **—** | **1** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **North America**<br>**$ million**<br>| **Europe**<br>**$ million**<br>| **Asia**<br>**Pacific**<br>**$ million**<br>| **Latin America**<br>**and Caribbean**<br>**$ million**<br>| **Africa**<br>**$ million**<br>| **Corporate**<br>**$ million**<br>| **Total**<br>**$ million**<br>|
| **Sales** |  |  |  |  |  |  |  |
| Year ended 30 June 2024 reported | 8514 | 8024 | 6320 | 2432 | 2478 | 123 | 27891 |
| Exchange |  | (284) | (17) |  | 2 |  | (299) |
| Disposals<sup>(2)</sup> | (162) | (62) | (31) | (6) | (290) |  | (551) |
| Hyperinflation |  | (255) |  | (30) | (19) |  | (304) |
| Year ended 30 June 2024 adjusted | 8352 | 7423 | 6272 | 2396 | 2171 | 123 | 26737 |
| **Organic movement** | **180** | **135** | **(125)** | **183** | **187** | **10** | **570** |
| **Acquisitions and disposals**<sup>(2)</sup> | **116** | **25** | **4** | **8** | **134** | **—** | **287** |
| **Exchange** | **(12)** | **189** | **(69)** | **(269)** | **175** | **2** | **16** |
| **Hyperinflation** | **—** | **265** | **—** | **72** | **17** | **—** | **354** |
| **Year ended 30 June 2025 reported** | **8636** | **8037** | **6082** | **2390** | **2684** | **135** | **27964** |
| **Organic movement %** | **2** | **2** | **(2)** | **8** | **9** | **8** | **2** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **North America**<br>**$ million**<br>| **Europe**<br>**$ million**<br>| **Asia**<br>**Pacific**<br>**$ million**<br>| **Latin America**<br>**and Caribbean**<br>**$ million**<br>| **Africa**<br>**$ million**<br>| **Corporate**<br>**$ million**<br>| **Total**<br>**$ million**<br>|
| **Net sales** |  |  |  |  |  |  |  |
| Year ended 30 June 2024 reported | 7908 | 4804 | 3817 | 1839 | 1778 | 123 | 20269 |
| Exchange |  | (112) | (17) | 4 | 4 |  | (121) |
| Reclassification<sup>(1)</sup> |  |  |  |  | (67) |  | (67) |
| Disposals<sup>(2)</sup> | (146) | (41) | (25) | (6) | (276) |  | (494) |
| Hyperinflation |  | (105) |  | (27) | (17) |  | (149) |
| Year ended 30 June 2024 adjusted | 7762 | 4546 | 3775 | 1810 | 1422 | 123 | 19438 |
| **Organic movement** | **116** | **15** | **(120)** | **167** | **150** | **10** | **338** |
| **Acquisitions and disposals**<sup>(2)</sup> | **105** | **17** | **4** | **9** | **130** | **—** | **265** |
| **Exchange** | **(10)** | **100** | **(24)** | **(183)** | **117** | **2** | **2** |
| **Hyperinflation** | **—** | **143** | **—** | **44** | **15** | **—** | **202** |
| **Year ended 30 June 2025 reported** | **7973** | **4821** | **3635** | **1847** | **1834** | **135** | **20245** |
| **Organic movement %** | **1** | **—** | **(3)** | **9** | **11** | **8** | **2** |

---

---

| | |
|:---|:---|
| 215 | **Diageo** Form 20-F 2025 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **North America**<br>**$ million**<br>| **Europe**<br>**$ million**<br>| **Asia**<br>**Pacific**<br>**$ million**<br>| **Latin America**<br>**and Caribbean**<br>**$ million**<br>| **Africa**<br>**$ million**<br>| **Corporate**<br>**$ million**<br>| **Total**<br>**$ million**<br>|
| **Marketing** |  |  |  |  |  |  |  |
| Year ended 30 June 2024 reported | 1627 | 873 | 651 | 306 | 205 | 29 | 3691 |
| Exchange | 1 | (5) | 2 | (5) | (2) | (1) | (10) |
| Disposals<sup>(2)</sup> | (56) | (5) | (5) |  | (22) |  | (88) |
| Hyperinflation |  | (13) |  | (1) | (1) |  | (15) |
| Year ended 30 June 2024 adjusted | 1572 | 850 | 648 | 300 | 180 | 28 | 3578 |
| **Organic movement** | **(10)** | **16** | **(16)** | **26** | **(8)** | **(6)** | **2** |
| **Acquisitions and disposals**<sup>(2)</sup> | **55** | **—** | **—** | **—** | **9** | **—** | **64** |
| **Exchange** | **(1)** | **16** | **(2)** | **(30)** | **10** | **—** | **(7)** |
| **Hyperinflation** | **—** | **16** | **—** | **8** | **1** | **—** | **25** |
| **Year ended 30 June 2025 reported** | **1616** | **898** | **630** | **304** | **192** | **22** | **3662** |
| **Organic movement %** | **(1)** | **2** | **(2)** | **9** | **(4)** | **(21)** | **—** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **North America**<br>**$ million**<br>| **Europe**<br>**$ million**<br>| **Asia**<br>**Pacific**<br>**$ million**<br>| **Latin America**<br>**and Caribbean**<br>**$ million**<br>| **Africa**<br>**$ million**<br>| **Corporate**<br>**$ million**<br>| **Total**<br>**$ million**<br>|
| **Operating profit before exceptional items** |  |  |  |  |  |  |  |
| Year ended 30 June 2024 reported | 3236 | 1379 | 1063 | 502 | 131 | (366) | 5945 |
| Exchange<sup>(3)</sup> | (244) | (74) | (7) | 10 | 70 | 13 | (232) |
| Fair value remeasurement of contingent <br>considerations, equity option and earn-out <br>arrangements<br>| (128) | (28) |  |  |  |  | (156) |
| Fair value remeasurement of biological assets |  |  |  | 17 |  |  | 17 |
| Disposals<sup>(2)</sup> | (30) | (17) | (8) | (6) | 3 |  | (58) |
| Hyperinflation |  | 44 |  | 14 | 9 |  | 67 |
| Year ended 30 June 2024 adjusted | 2834 | 1304 | 1048 | 537 | 213 | (353) | 5583 |
| **Organic movement** | **9** | **(32)** | **(115)** | **63** | **59** | **(22)** | **(38)** |
| **Acquisitions and disposals**<sup>(2)</sup> | **(10)** | **7** | **1** | **(1)** | **34** | **—** | **31** |
| **Fair value remeasurement of contingent** <br>**considerations, equity option and earn-out** <br>**arrangements**<br>| **125** | **14** | **—** | **—** | **—** | **—** | **139** |
| **Fair value remeasurement of biological assets** | **—** | **—** | **—** | **13** | **—** | **—** | **13** |
| **Exchange**<sup>(3)</sup> | **95** | **40** | **(4)** | **(71)** | **(11)** | **(17)** | **32** |
| **Hyperinflation** | **—** | **(31)** | **—** | **(13)** | **(12)** | **—** | **(56)** |
| **Year ended 30 June 2025 reported** | **3053** | **1302** | **930** | **528** | **283** | **(392)** | **5704** |
| **Organic movement %** | **—** | **(2)** | **(11)** | **12** | **28** | **(6)** | **(1)** |
| **Organic operating margin %**<sup>(4)</sup> |  |  |  |  |  |  |  |
| **Year ended 30 June 2025** | **36.1** | **27.9** | **25.5** | **30.3** | **17.3** | **n/a** | **28.0** |
| Year ended 30 June 2024 | 36.5 | 28.7 | 27.8 | 29.7 | 15.0 | n/a | 28.7 |
| **Organic operating margin movement (bps)** | **(42)** | **(80)** | **(223)** | **68** | **232** | **n/a** | **(68)** |

---

(1) $67 million reclassification between net sales and cost of goods sold to accurately reflect the impact of a route-to-market change in Africa.

(2) Acquisitions and disposals that had an effect on organic volume, sales, net sales, marketing and operating profit growth in the year ended 30 June 2025, are detailed on page 216.

(3) The impact of movements in exchange rates on reported figures for operating profit was principally due to the weakening of the Mexican peso, the Turkish lira and the Brazilian real, partially

offset by the strengthening of the sterling against the US dollar.

(4) 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 33.

(ii) Percentages and margin movements are calculated on rounded figures.

---

| | |
|:---|:---|
| 216 | **Diageo** Form 20-F 2025 |

---

UNAUDITED FINANCIAL INFORMATION continued

In theyear ended 30 June 2025, the acquisitions and disposals that affected volume, sales, net sales, marketing and operating profit were as

follows, as per footnote (2) on the previous page:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Volume**<br>**EU million**<br>| **Sales**<br>**$ million**<br>| **Net sales**<br>**$ million**<br>| **Marketing**<br>**$ million**<br>| **Operating**<br>**profit**<br>**$ million**<br>|
| **Year ended 30 June 2024** |  |  |  |  |  |
| **Disposals** |  |  |  |  |  |
| Guinness Nigeria PLC | (5.4) | (290) | (276) | (22) | 3 |
| Cîroc | (0.8) | (161) | (145) | (56) | (29) |
| Cacique | (0.3) | (32) | (23) | (2) | (12) |
| Pampero brand | (0.3) | (35) | (23) | (3) | (11) |
| Windsor business | (0.1) | (28) | (23) | (5) | (7) |
| Safari brand | (0.1) | (5) | (4) |  | (2) |
|  | (7.0) | (551) | (494) | (88) | (58) |
| **Acquisitions and disposals** | **(7.0)** | **(551)** | **(494)** | **(88)** | **(58)** |
| **Year ended 30 June 2025** |  |  |  |  |  |
| **Acquisitions** |  |  |  |  |  |
| Ritual Beverage Company LLC | **0.1** | **15** | **15** | **12** | **(19)** |
|  | **0.1** | **15** | **15** | **12** | **(19)** |
| **Disposals** |  |  |  |  |  |
| Guinness Nigeria PLC | **3.4** | **134** | **130** | **9** | **34** |
| Cîroc | **0.5** | **101** | **90** | **43** | **9** |
| Cacique | **0.1** | **18** | **13** | **—** | **5** |
| Pampero brand | **0.4** | **14** | **12** | **—** | **1** |
| Windsor business | **0.1** | **4** | **4** | **—** | **1** |
| Safari brand | **—** | **1** | **1** | **—** | **—** |
|  | **4.5** | **272** | **250** | **52** | **50** |
| **Acquisitions and disposals** | **4.6** | **287** | **265** | **64** | **31** |

---

**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 2025and 30 June 2024 are set out in the table below:

---

| | | |
|:---|:---|:---|
|  | **2025** | 2024 |
|  | **$ million** | $ million |
| Profit attributable to equity shareholders of the parent company | **2354** | 3870 |
| Exceptional operating and non-operating items | **1589** | 14 |
| Exceptional finance income | **(58)** |  |
| Exceptional tax items and tax in respect of exceptional operating and non-operating items and finance income | **(214)** | 24 |
| Exceptional items attributable to non-controlling interests | **(23)** | 104 |
| Profit attributable to equity shareholders of the parent company before exceptional items | **3648** | 4012 |
| **Weighted average number of shares** | **million** | million |
| Shares in issue excluding own shares | **2222** | 2234 |
| Dilutive potential ordinary shares | **6** | 5 |
| **Diluted shares in issue excluding own shares** | **2228** | 2239 |
|  | **cents** | cents |
| **Basic earnings per share before exceptional items** | **164.2** | 179.6 |
| **Diluted earnings per share before exceptional items** | **163.7** | 179.2 |

---

---

| | |
|:---|:---|
| 217 | **Diageo** Form 20-F 2025 |

---

**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.

Free cash flow reconciliations for the years ended 30 June 2025 and 30 June 2024 are set out in the table below:

---

| | | |
|:---|:---|:---|
|  | **2025** | 2024 |
|  | **$ million** | $ million |
| Net cash inflow from operating activities | **4297** | 4105 |
| Disposal of property, plant and equipment and computer software | **63** | 14 |
| Purchase of property, plant and equipment and computer software | **(1612)** | (1510) |
| **Free cash flow** | **2748** | 2609 |

---

---

| | |
|:---|:---|
| 218 | **Diageo** Form 20-F 2025 |

---

UNAUDITED FINANCIAL INFORMATION continued

**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 IAS 29 hyperinflation adjustment. 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 2025 and 30 June 2024 were as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | 2024 |
|  | **$ million** | $ million |
| Profit for the year | **2538** | 4166 |
| Taxation | **999** | 1294 |
| Share of after tax results of associates and joint ventures | **(193)** | (414) |
| Net finance charges | **771** | 885 |
| Non-operating items | **220** | 70 |
| Operating profit | **4335** | 6001 |
| Exceptional operating items | **1369** | (56) |
| Fair value remeasurements | **(150)** | (141) |
| Depreciation, amortisation and impairment<sup>(1)</sup> | **748** | 678 |
| Hyperinflation adjustment | **35** | 6 |
| Retranslation to budgeted exchange rates | **(40)** | 248 |
|  | **6297** | 6736 |
| Cash generated from operations | **6210** | 6065 |
| Net exceptional cash paid<sup>(2)</sup> | **107** | 185 |
| Post-employment payments less amounts included in operating profit<sup>(1)</sup> | **(22)** | 18 |
| Net movement in maturing inventories<sup>(3)</sup> | **368** | 577 |
| Provision movement | **(25)** | 29 |
| Dividends received | **(175)** | (269) |
| Other items<sup>(1)</sup> | **(45)** | (88) |
| Hyperinflation adjustment | **22** | (23) |
| Retranslation to budgeted exchange rates | **(17)** | 216 |
|  | **6423** | 6710 |
| **Operating cash conversion** | **102.0%** | **99.6%** |

---

(1)Excluding exceptional items.

(2)Exceptional cash payments in cash flow for distribution model change in France was $48 million (2024 – $nil), for various litigation matters were $44 million

(2024 – $102 million), and for restructuring programmes were $15 million (2024 – $26 million). For the year ended 30 June 2024 exceptional cash payments for distribution termination fee was

$55 million and for winding down our Russian operations was $2 million.

(3)Excluding non-cash movements such as exchange and the impact of acquisitions and disposals

**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 after applying the tax rate before exceptional items, plus share of tax results of associates and joint ventures

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.

---

| | |
|:---|:---|
| 219 | **Diageo** Form 20-F 2025 |

---

Calculations for the return on average invested capital for the years ended 30 June 2025 and 30 June 2024 are set out in the table below:

---

| | | |
|:---|:---|:---|
|  | **2025** | 2024 |
|  | **$ million** | $ million |
| Operating profit | **4335** | 6001 |
| Exceptional operating items | **1369** | (56) |
| Profit before exceptional operating items attributable to non-controlling interests | **(207)** | (192) |
| Tax at the tax rate before exceptional items of 24.9% (2024 – 23.2%)<sup>(1)</sup> | **(1420)** | (1475) |
| Share of after tax results of associates and joint ventures | **193** | 414 |
|  | **4270** | 4692 |
| Average net assets (excluding net post-employment benefit assets/liabilities) | **12006** | 11270 |
| Average non-controlling interests | **(2082)** | (1941) |
| Average net borrowings | **21182** | 20361 |
| Average invested capital | **31106** | 29690 |
| **Return on average invested capital** | **13.7%** | **15.8%** |

---

(1)Definition of tax rate before exceptional items has been aligned to ETR definition change to exclude share of after tax results of associates and joint ventures from profit before taxation. The

presentation of return on average invested capital for the year 30 June 2024 has not been amended as the impact is not material.

**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 ended30 June 2025 and 30 June 2024are set out in the table

below:

---

| | | |
|:---|:---|:---|
|  | **2025** | 2024 |
|  | **$ million** | $ million |
| Borrowings due within one year | **2928** | 2885 |
| Borrowings due after one year | **20820** | 18616 |
| Fair value of foreign currency derivatives and interest rate hedging instruments | **(347)** | 42 |
| Lease liabilities | **653** | 604 |
| Less: Cash and cash equivalents | **(2200)** | (1130) |
| **Net borrowings** | **21854** | 21017 |
| Post-employment benefit liabilities before tax | **409** | 429 |
| **Adjusted net borrowings** | **22263** | 21446 |
| Profit for the year | **2538** | 4166 |
| Taxation | **999** | 1294 |
| Net finance charges | **771** | 885 |
| Depreciation, amortisation and impairment (excluding exceptional accelerated depreciation and impairment) | **748** | 678 |
| Exceptional accelerated depreciation and impairment | **970** | (185) |
| **EBITDA** | **6026** | 6838 |
| Exceptional operating items (excluding accelerated depreciation and impairment) | **399** | 129 |
| Non-operating items | **220** | 70 |
| **Adjusted EBITDA** | **6645** | 7037 |
| **Adjusted net borrowings to adjusted EBITDA** | **3.4** | 3.0 |

---

---

| | |
|:---|:---|
| 220 | **Diageo** Form 20-F 2025 |

---

UNAUDITED FINANCIAL INFORMATION continued

**Tax rate before exceptional items** 

In the year ended 30 June 2025, Diageo changed the definition of the reported tax rate and the tax rate before exceptional items to exclude the

share of after-tax results of associates and joint ventures from profit before tax, as this represents post-tax profit, hence is considered as a non-

essential factor of the calculation. The presentation of the tax rate after exceptional items and the tax rate before exceptional items for the year

ended 30 June 2024 has been aligned to this new definition.

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 share of after-tax results of associates and joint ventures and 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 2025 and 30 June 2024 are set out

in the table below:

---

| | | |
|:---|:---|:---|
|  | **2025** | 2024 |
|  | **$ million** | $ million |
| Taxation on profit (a) | **999** | 1294 |
| Tax in respect of exceptional items | **214** | (24) |
| **Tax before exceptional items (b)** | **1213** | 1270 |
| Profit before taxation (c) | **3537** | 5460 |
| Share of after tax results of associates and joint ventures | **193** | 414 |
| Profit excluding share of after tax results of associates and joint ventures (d) | **3344** | 5046 |
| Exceptional finance income | **(58)** |  |
| Exceptional non-operating items | **220** | 70 |
| Exceptional operating items | **1369** | (56) |
| **Profit before taxation and exceptional items excluding share of after tax results of associates and joint** <br>**ventures (e)**<br>| **4875** | 5060 |
| Tax rate after exceptional items (a/d) | **29.9%** | 25.6% |
| **Tax rate before exceptional items (b/e)** | **24.9%** | 25.1% |

---

**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 Guinness 0.0 and 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.

---

| | |
|:---|:---|
| 221 | **Diageo** Form 20-F 2025 |

---

**THIS PAGE IS INTENTIONALLY LEFT BLANK**

---

| | |
|:---|:---|
| 222 | **Diageo** Form 20-F 2025 |

---

UNAUDITED FINANCIAL INFORMATION continued

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 26

outlook, Diageo's medium-term guidance, Diageo's Accelerate

programme, future Total Beverage Alcohol market share ambitions, the

impact of tariffs and any other statements relating to Diageo's

performance for the year ending 30 June 2026 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 are a number of factors that could cause actual results

and developments to differ materially from those expressed or implied

by these forward-looking statements, including factors that are outside

Diageo's control, 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 conflicts 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, lower or

non-alcoholic products or THC and hemp-based THC beverages,

increased use of GLP-1 medications, 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 in relation to expansion in emerging

markets, acquisitions, investments in joint ventures, productivity

initiatives or inventory forecasting; (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 betweendata

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

2025. 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 2025.

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.

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Other additional<br>information<br>

**Spirits and investments**

Spirits are produced in distilleries located worldwide. The group owns

31 Scotch whisky distilleries in Scotland, two whisky distilleries in

Canada, five in the United States and one in China. Diageo produces

Smirnoff internationally. Ketel One vodka is a Joint Venture product,

distributed by Diageo from the manufacturing base of the Nolet Group

in the Netherlands. Cîroc grape-based vodka liquids are purchased from

Maison Villevert in France and packed both at Diageo Operations Italy

S.p.A. and Maison Villevert. On 24 June 2025, Diageo announced the

sale of Diageo Operations Italy S.p.A., inclusive of the Santa Vittoria

production facility, to NewPrinces S.p.A., a leading Italian company in

the food and drink industry. Gin distilleries are in Scotland

(Cameronbridge) and in Canada (Valleyfield). 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, Australia and Guatemala and is blended and bottled in the

United States, Canada, Italy, United Kingdom and Guatemala. Tequila

is produced in Mexico, raki in Türkiye, Chinese white spirits are

produced in Chengdu, in the Sichuan province of China and cachaça in

Ceará State in Brazil.

The breakdown of the group's maturing inventory is as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | 2024 |
| **Category** | **$ million** | $ million |
| Whisk(e)y | **7232** | 6290 |
| &nbsp;&nbsp;&nbsp;&nbsp;– From this attributable to scotch | **5659** | 4862 |
| Other | **1445** | 1542 |
| **Total maturing inventory** | **8677** | 7832 |

---

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.

Work continues to expand our warehousing facilities at Midtown in

Clackmannanshire. Additional land has also been secured at the nearby

Garvel Farm site, which will allow warehouse capacity expansion to

continue once Midtown is complete. Alongside the new warehouses

being built, there is also investment in state-of-the-art automation of

warehousing.

In North America, plans were announced to open a new manufacturing and

warehousing facility in Montgomery, Alabama. The 360,000 square foot

facility will have a multi-million case annual production capacity for

Diageo's leading beverage alcohol brands. This site will enhance the

company's North America supply chain operations and support future

growth for the company's export business.

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 our facilities to meet the

growing demand in tequila. Furthermore, during fiscal 25, we

commissioned operations at one of two new distilleries as part of the

capacity expansion plan. Additionally, in fiscal 25 we continued to

build the second new distillery at La Barca, which is planned to

become operational in fiscal 26.

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 64 million equivalent units (LE) in fiscal 25 of Indian-

Made Foreign Liquor (IMFL) and imported liquors. USL has a significant

market presence across India and operates nine 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).

In China, the Eryuan malt whisky distillery fully opened in 2024. It will

develop the highest quality China single origin whisky, placing China

firmly on the global whisky producer's map.

**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 25, Diageo owned

breweries in several African countries: Kenya, Ghana, Tanzania, Uganda

and the Seychelles. On 1 July 2025, Diageo completed the sale of its 54.4%

shareholding in Seychelles Breweries Limited to Phoenix Beverages, a

subsidiary of Mauritius-based IBL Group. The transaction builds on Diageo's

partnership with Phoenix Beverages as a partner in the Indian Ocean

region. On 3 July 2025, Diageo completed the sale of its 80.4%

shareholding in Guinness Ghana Breweries PLC to Castel Group, building

on its relationship with Castel as a partner in Africa. For more information

see note 8 to the consolidated 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 in bulk to the Belfast

facility in Northern Ireland for canning and in bulk to the Runcorn

facility in Great Britain 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. In October 2024, Diageo announced

plans to invest an additional €30 million to cater for continued demand

for Guinness 0.0. This new investment will double the fiscal 23

capacity.

The £41 million ($52 million) investment to expand and optimise

capacity at our beer 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 2025.

The Diageo Beer Category Third-Party Operations Team provide

technical services to facilitate the delivery of over 7 million hectolitres

of beer and ready-to-drink products supplied through over 50 partner

breweries and beverage packaging facilities worldwide. A shift towards

an asset-light strategy in Africa and the associated divestments,

including the sales of Seychelles Breweries Limited and Guinness Ghana

Breweries plc, has driven a significant pivot to third-party production

and distribution.

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The Beer Category Third-Party Operations team's focus is on

maintaining secure supply solutions through partners while 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

continued geopolitical tensions, weather patterns 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 is

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 investment 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**

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.

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OTHER ADDITIONAL INFORMATION continued

**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, administer

and enforce 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 charges duty based on

alcohol by volume (rather than by product type). Administrative

changes to support this system became effective from 1 February 2025.

Rates of UK alcohol duty were increased in line with inflation, also

effective from 1 February 2025. This remains a new regime which

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.

**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.

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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

financialinstitutions, 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 applies to persons who are treated as resident

in the United Kingdom for the purposes of UK tax law but not those to

whom special rules relating to residence apply (including qualifying

new residents, temporary non-residents or those to whom 'split year'

treatment applies).

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.

A nil rate of income tax will apply to the first £500 of taxable dividend

income received by an individual shareholder in the 2025/2026 tax

year (the Nil Rate Amount), regardless of what tax rate would

otherwise apply to that dividend income.

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.

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OTHER ADDITIONAL INFORMATION continued

**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. 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 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 wouldbe 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

special 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.

---

| | |
|:---|:---|
| 231 | **Diageo** Form 20-F 2025 |

---

**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.

Effective from 6 April 2025, UK inheritance tax is charged based on long-

term residence (and not domicile). Particularly in view of this reform,

UK inheritance tax and its interaction with the Convention is complex.

Any person who is in doubt about the application of UK inheritance tax

in relation to their ordinary shares or ADSs, or the effect of the

Convention, should consult appropriately qualified tax advisers.

**UK stamp duty and stamp duty reserve tax**

No stamp duty or stamp duty reserve tax (SDRT) will arise upon the

deposit of an underlying ordinary share with the Depositary if that

deposit is effected by (a) the issue of that share or (b) a transfer of

that share in the course of (i) capital-raising arrangements or (ii)

qualifying listing arrangements. Otherwise, stamp duty or SDRT applies

at the higher rate of 1.5% of the amount or value of the consideration

payable or, in certain circumstances, the value of the ordinary shares

(rounded up to the nearest multiple of £5 in the case of stamp duty).

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.

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

the ordinary shares being acquired are transferred direct to the

Depositary's nominee, the only charge will generally be the higher

charge of 1.5%, 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 less. 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.

**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.

---

| | |
|:---|:---|
| 232 | **Diageo** Form 20-F 2025 |

---

Additional information <br>for shareholders<br>

**Annual General Meeting (AGM)**

The AGM will be held at Convene 133 Houndsditch, London, EC3A 7DB

on 6 November 2025 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 https://www.sec.gov.

**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/consumers/share-

bond-and-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 https://www.diageoregistrars.com/welcome.

**Dividend payments**

**Direct payment into bank account**

UK shareholders: The Company normally pays dividends twice each

year and have taken the decision that these will only be made directly

to shareholder's bank or building society. This is a more secure method

of payment and avoids delays or cheques being lost. Shareholders can

register for an online account at https://www.diageoregistrars.com/

welcome or call the Registrar on +44 (0)371 277 1010\* to request the

relevant application form. For shareholders outside the UK, MUFG

Corporate Markets (a trading name of MUFG Pension & Market Services

and a member of MUFG, a global financial group) 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 Share

Portal at https://www.diageoregistrars.com/welcome or call +44

(0)371 277 1010.\*

**Dividend Reinvestment Plan**

A Dividend Reinvestment Plan is offered by the Registrar, MUFG

Corporate Markets 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, MUFG Corporate Markets on +44

(0)371 277 1010\* to request the relevant application form.

**Dividend currency election**

Holders of ordinary shares will 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

https://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 228-231 for details

relating to the taxation of dividend payments.

**Useful contacts**

**The Registrar/Shareholder queries**

MUFG Corporate Markets acts as the company's registrar and can be

contacted as follows:

By email: Diageo@cm.mpms.mufg.com

By telephone: +44 (0) 371 277 1010\*

In writing: Registrars – MUFG Corporate Markets, 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**

Randall Ingber

The.cosec@diageo.com

**Investor Relations**

investor.relations@diageo.com

---

| | |
|:---|:---|
| 233 | **Diageo** Form 20-F 2025 |

---

**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 2025 and 30 June 2024.

---

| | | |
|:---|:---|:---|
|  | **30 June 2025**<br>**$ million** | **30 June 2024**<br>**$ million** |
| Expiring within one year | **1040** | 625 |
| Expiring between one and two years | **—** | 1040 |
| Expiring after two years | **2460** | 1585 |
|  | **3500** | 3250 |

---

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 the

years presented.

---

| | |
|:---|:---|
| 234 | **Diageo** Form 20-F 2025 |

---

**2. Analysis of cash flows**

The table below sets forth the group's cash flows for the year ended 30 June 2025 and 30 June 2024.

---

| | | |
|:---|:---|:---|
|  | **30 June 2025**<br>**$ million** | **30 June 2024**<br>**$ million** |
| Net cash inflow from operating activities | **4297** | 4105 |
| Net cash outflow from investing activities | **(1720)** | (1595) |
| Net cash outflow from financing activities | **(1494)** | (3106) |
| **Net increase/(decrease) in net cash and cash equivalents** | **1083** | (596) |
| Exchange difference | **(35)** | (33) |
| Reclassification to assets and liabilities held for sale | **21** | (30) |
| Net cash and cash equivalents at beginning of the year | **1109** | 1768 |
| **Net cash and cash equivalents at end of the year** | **2178** | 1109 |

---

Net cash inflow from operating activities in fiscal 25 was $4,297 million (2024 – $4,105 million), an increase of $192 million

compared to fiscal 24, primarily driven by a favourable $691 million year-on-year movement in working capital outflows, partially

offset by a $1,666 million decline in operating profit including an increase in depreciation, amortisation and impairment of $1,225

million.

Net cash outflow from investing activities in fiscal 25 was $1,720 million (2024 – $1,595 million), a net increase in outflow of $125

million compared to fiscal 24, primarily driven by an unfavourable movement of $148 million in loans, other investments and other

financial assets and an increase of $53 million in net cash expenditure for property, plant and equipment and computer software,

partially offset by an increase of $56 million in net consideration received in respect of sale of businesses.

Net cash outflow from financing activities in fiscal 25 was $1,494 million (2024 –$3,106 million), a net decrease in outflow of

$1,612 million compared to fiscal 24. This change was driven by an increase in net inflow in relation to bond issuances and

repayments from $558 million to $1,527 million and the decreased level of share buyback programme related cash outflows from

$987 million to $nil, offset by net increase in outflow in respect of other borrowings from $106 million to $629 million.

The operating, investing and financing activities described above resulted in an increase in net cash and cash equivalents of $1,069

million, from $1,109 million at 30 June 2024 to $2,178 million at 30 June 2025 (2024 – decrease of $659 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 2025 and 30 June 2024.

---

| | |
|:---|:---|
| 235 | **Diageo** Form 20-F 2025 |

---

---

| | | |
|:---|:---|:---|
|  | **30 June 2025**<br>**$ million** | **30 June 2024**<br>**$ million** |
| Overdrafts | **(22)** | (21) |
| Other borrowings due within one year | **(2906)** | (2864) |
| Borrowings due within one year | **(2928)** | (2885) |
| Borrowings due between one and three years | **(4662)** | (4873) |
| Borrowings due between three and five years | **(4159)** | (4222) |
| Borrowings due after five years | **(11999)** | (9521) |
| Fair value of foreign currency forwards and swaps | **557** | 334 |
| Fair value of interest rate hedging instruments | **(210)** | (376) |
| Lease liabilities | **(653)** | (604) |
| **Gross borrowings** | **(24054)** | (22147) |
| Offset by: |  |  |
| Cash and cash equivalents | **2200** | 1130 |
| **Net borrowings** | **(21854)** | (21017) |

---

The table below sets forth the percentage of the group's gross borrowings and cash and cash equivalents by currency as at 30 June

2025. ---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Total**<br>**$ million** | **US dollar %**<br> | **Sterling %**<br> | **Euro %**<br> | **Indian** <br>**rupee %**<br> | **Chinese** <br>**yuan %**<br> | **Other %**<br> |
| Gross borrowings | **(24054)** | 47% | 18% | 26% | —% | 4% | 5% |
| Cash and cash equivalents | **2200** | 65% | 2% | 1% | 8% | 7% | 17% |

---

Based on average monthly net borrowings and net interest charge, the effective interest rate for the year ended 30 June 2025 was

4.1%. 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.

In the year ended 30 June 2025, the group issued bonds of €2,200 million ($2,452 million – net of discount and fee) consisting of

€700 million ($780 million – net of discount and fee) 3.125% fixed rate notes due 2031, €300 million ($346 million - including

issuance premium) 3.125% fixed rate notes due 2031, €700 million ($776 million – net of discount and fee) 3.375% fixed rate notes

due 2035, €500 million ($550 million – net of discount and fee) 3.75% fixed rate notes due 2044, $750 million ($748 million – net of

discount and fee) 5.125% fixed rate notes due 2030, $750 million ($743 million – net of discount and fee) 5.625% fixed rate notes

due 2035 and repaid bonds of $600 million and €1,600 million ($1,816 million). 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 million5.375%fixed rate notes due 2026,

$900 million5.625%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 €1,100 million ($1,167 million).

The principal components of the $837 million increase in net borrowings from 30 June 2024 to 30 June 2025 were mainly the $2,748

million of free cash flow, partially offset by $2,298 million equity dividends and $479 million repayment of commercial papers.

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 and

risk management' in the consolidated financial statements.

---

| | |
|:---|:---|
| 236 | **Diageo** Form 20-F 2025 |

---

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 2025 the adjusted net borrowings of $22,263 million (2024 –

$21,446 million) to adjusted EBITDA ratio was 3.4 (2024 – 3.0 times). For this calculation, net borrowings are adjusted by post-

employment benefit liabilities before tax of $409 million (2024 – $429 million) whilst adjusted EBITDA of $6,645 million (2024 –

$7,037 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 219 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.

b) The following bonds were issued and repaid:

---

| | | |
|:---|:---|:---|
|  | **30 June 2025**<br>**$ million** | **30 June 2024**<br>**$ million** |
| **Issued** |  |  |
| € denominated | **2452** | 535 |
| $ denominated | **1491** | 1690 |
| **Repaid** |  |  |
| € denominated | **(1816)** | (1167) |
| $ denominated | **(600)** | (500) |
|  | **1527** | 558 |

---

---

| | |
|:---|:---|
| 237 | **Diageo** Form 20-F 2025 |

---

**4. Contractual obligations and other commitments**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Payments due by period** | **Payments due by period** | **Payments due by period** | **Payments due by period** | **Payments due by period** |
| <br>**As at 30 June 2025** | **Less than**<br>**1 year**<br>**$ million**<br>| **1-3 years**<br>**$ million**<br>| **3-5 years**<br>**$ million**<br>| **More than**<br>**5 years**<br>**$ million**<br>| **Total**<br>**$ million**<br>|
| Long-term debt obligations | 2916 | 4709 | 4331 | 12078 | **24034** |
| Interest obligations | 935 | 1261 | 1061 | 2320 | **5577** |
| Purchase obligations | 2736 | 975 | 427 | 30 | **4168** |
| Commitments for short-term leases and leases of low-value <br>assets<br>| 13 | 5 | 1 |  | **19** |
| Provisions and other non-current payables | 233 | 266 | 68 | 175 | **742** |
| Lease obligations | 137 | 198 | 136 | 306 | **777** |
| Capital commitments | 544 | 3 | 3 |  | **550** |
| Other financial liabilities | 101 |  |  |  | **101** |
| **Total** | **7615** | **7417** | **6027** | **14909** | **35968** |

---

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. 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 $138 millionand deferred tax liabilities of$2,944 millionare not included in the table above, as the ultimate

timing of settlement cannot be reasonably estimated.

Management believes 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.

**5. Capital repayments**

Authorisation was given by shareholders on 26 September 2024 to purchase a maximum of 222,316,603ordinary shares at a

minimum price of 28<sup>101/108</sup>pence and a maximum price of the higher of (a) 105%of the average market value of the company's

ordinary shares 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 15 months from the passing of this resolution, if earlier.

During the year ended 30 June 2024, the group purchased 28 million ordinary shares (2023 – 38 million), representing approximately

1.1% of the issued ordinary share capital (2023 – 1.5%) 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) 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.

---

| | |
|:---|:---|
| 238 | **Diageo** Form 20-F 2025 |

---

**Exhibits**

---

| | |
|:---|:---|
| 1.1 | <u>[Articles of Association of Diageo plc (incorporated by reference to Exhibit 1.1 to the Annual Report on Form 20-F (File](https://www.sec.gov/Archives/edgar/data/835403/000083540324000029/articlesofassociationofd.htm)</u><br><u>[No. 001-10691) filed with the Securities and Exchange Commission on 1 August 2024).](https://www.sec.gov/Archives/edgar/data/835403/000083540324000029/articlesofassociationofd.htm)</u><br>|
| 2.1 | Indenture, dated as of 3 August 1998, among Diageo Capital plc, Diageo plc and The Bank of New York Mellon <br>(incorporated by reference to Exhibit 4.1 to the Registration Statement on Form F-1 (File No. 333-8874) filed with the <br>Securities and Exchange Commission on 24 July 1998 (pages 365 to 504 of paper filing)).(i)<br>|
| 2.2 | Indenture, dated as of 1 June 1999, among Diageo Investment Corporation, Diageo plc and The Bank of New York <br>Mellon (incorporated by reference to Exhibit 2.2 to the Annual Report on Form 20-F (File No. 001-10691) filed with <br>the Securities and Exchange Commission on 15 November 2001 (pages 241 to 317 of paper filing)).(i)<br>|
| 2.3 | <u>[Indenture, dated as of 8 December 2003, among Diageo Finance B.V., Diageo plc and The Bank of New York Mellon](https://www.sec.gov/Archives/edgar/data/835403/000115697303001845/u46910exv1.txt)</u><br><u>[(incorporated by reference to Exhibit 1 to the Report on Form 6-K (File No. 001-10691) filed with the Securities and](https://www.sec.gov/Archives/edgar/data/835403/000115697303001845/u46910exv1.txt)</u><br><u>[Exchange Commission on 9 December 2003).(i)](https://www.sec.gov/Archives/edgar/data/835403/000115697303001845/u46910exv1.txt)</u><br>|
| 2.4 | <u>[Description of Securities registered under Section 12 of the Exchange Act](#i2a439a8f411e49deb31670665dbd0981_730)</u> |
| 4.1 | <u>[Service Agreement, dated 3 May 2024, between Diageo plc and Nik Jhangiani.](a41diageo_serviceagreeme.htm)</u> |
| 4.2 | <u>[Service Agreement, dated 18 July 2025, between Diageo plc and Nik Jhangiani.](a42diageo_njxinterimceoa.htm)</u> |
| 4.3 | <u>[Form of Service Agreement for Diageo plc's executives in the United Kingdom, dated as of 1 July 2006 (incorporated](https://www.sec.gov/Archives/edgar/data/835403/000110465907069356/a07-20765_1ex4d7.htm)</u><br><u>[by reference to Exhibit 4.7 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and](https://www.sec.gov/Archives/edgar/data/835403/000110465907069356/a07-20765_1ex4d7.htm)</u><br><u>[Exchange Commission on 17 September 2007).](https://www.sec.gov/Archives/edgar/data/835403/000110465907069356/a07-20765_1ex4d7.htm)</u><br>|
| 4.4 | <u>[Form of Service Agreement for Diageo plc's executives in the United States, dated as of 1 July 2006 (incorporated by](https://www.sec.gov/Archives/edgar/data/835403/000110465907069356/a07-20765_1ex4d8.htm)</u><br><u>[reference to Exhibit 4.8 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and](https://www.sec.gov/Archives/edgar/data/835403/000110465907069356/a07-20765_1ex4d8.htm)</u><br><u>[Exchange Commission on 17 September 2007).](https://www.sec.gov/Archives/edgar/data/835403/000110465907069356/a07-20765_1ex4d8.htm)</u><br>|
| 4.5 | <u>[Form of Service Agreement for Diageo plc's executives in the United Kingdom, in use as of July 2015 (incorporated by](https://www.sec.gov/Archives/edgar/data/835403/000119312515285837/d91995dex46.htm)</u><br><u>[reference to Exhibit 4.6 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and](https://www.sec.gov/Archives/edgar/data/835403/000119312515285837/d91995dex46.htm)</u><br><u>[Exchange Commission on 11 August 2015).](https://www.sec.gov/Archives/edgar/data/835403/000119312515285837/d91995dex46.htm)</u><br>|
| 4.6 | <u>[Form of Service Agreement for Diageo plc's executives in the United States, in use as of July 2015 (incorporated by](https://www.sec.gov/Archives/edgar/data/835403/000119312515285837/d91995dex47.htm)</u><br><u>[reference to Exhibit 4.7 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and](https://www.sec.gov/Archives/edgar/data/835403/000119312515285837/d91995dex47.htm)</u><br><u>[Exchange Commission on 11 August 2015).](https://www.sec.gov/Archives/edgar/data/835403/000119312515285837/d91995dex47.htm)</u><br>|
| 4.7 | <u>[Diageo 2010 Sharesave Plan, dated 14 October 2010 (incorporated by reference to Exhibit 4.2 to the Registration](https://www.sec.gov/Archives/edgar/data/835403/000110465910052298/a10-19112_1ex4d2.htm)</u><br><u>[Statement on Form S-8 (File No. 333-169934) filed with the Securities and Exchange Commission on 14 October](https://www.sec.gov/Archives/edgar/data/835403/000110465910052298/a10-19112_1ex4d2.htm)</u><br><u>[2010).](https://www.sec.gov/Archives/edgar/data/835403/000110465910052298/a10-19112_1ex4d2.htm)</u><br>|
| 4.8 | <u>[Diageo 2001 Share Incentive Plan, dated 14 October 2010 (incorporated by reference to Exhibit 4.3 to the Registration](https://www.sec.gov/Archives/edgar/data/835403/000110465910052298/a10-19112_1ex4d3.htm)</u><br><u>[Statement on Form S-8 (File No. 333-169934) filed with the Securities and Exchange Commission on 14 October](https://www.sec.gov/Archives/edgar/data/835403/000110465910052298/a10-19112_1ex4d3.htm)</u><br><u>[2010).](https://www.sec.gov/Archives/edgar/data/835403/000110465910052298/a10-19112_1ex4d3.htm)</u><br>|
| 4.9 | <u>[Diageo plc 2009 Executive Long Term Incentive Plan, dated 14 October 2009 (incorporated by reference to Exhibit 4.2](https://www.sec.gov/Archives/edgar/data/835403/000104746909008953/a2194905zex-4_2.htm)</u><br><u>[to the Registration Statement on Form S-8 (File No. 333-162490) filed with the Securities and Exchange Commission](https://www.sec.gov/Archives/edgar/data/835403/000104746909008953/a2194905zex-4_2.htm)</u><br><u>[on 15 September 2009).](https://www.sec.gov/Archives/edgar/data/835403/000104746909008953/a2194905zex-4_2.htm)</u><br>|
| 4.10 | <u>[Diageo plc Associated Companies Share Option Plan, dated as of 26 August 2008 (incorporated by reference to Exhibit](https://www.sec.gov/Archives/edgar/data/835403/000104746908010060/a2187809zex-4_9.htm)</u><br><u>[4.9 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 15](https://www.sec.gov/Archives/edgar/data/835403/000104746908010060/a2187809zex-4_9.htm)</u><br><u>[September 2008).](https://www.sec.gov/Archives/edgar/data/835403/000104746908010060/a2187809zex-4_9.htm)</u><br>|
| 4.11 | <u>[Addendum to Form of Service Agreement for Diageo plc's executives in the United States (incorporated by reference to](http://www.sec.gov/Archives/edgar/data/835403/000104746908010060/a2187809zex-4_16.htm)</u><br><u>[Exhibit 4.16 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange](http://www.sec.gov/Archives/edgar/data/835403/000104746908010060/a2187809zex-4_16.htm)</u><br><u>[Commission on 15 September 2008).](http://www.sec.gov/Archives/edgar/data/835403/000104746908010060/a2187809zex-4_16.htm)</u><br>|
| 4.12 | <u>[Diageo plc Associated Companies Share Incentive Plan, dated as of 23 August 2011 (incorporated by reference to](https://www.sec.gov/Archives/edgar/data/835403/000104746912008673/a2210788zex-4_22.htm)</u><br><u>[Exhibit 4.22 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange](https://www.sec.gov/Archives/edgar/data/835403/000104746912008673/a2210788zex-4_22.htm)</u><br><u>[Commission on 5 September 2012).](https://www.sec.gov/Archives/edgar/data/835403/000104746912008673/a2210788zex-4_22.htm)</u><br>|
| 4.13 | <u>[Diageo plc Long Term Incentive Plan, dated as of 18 September 2014 (incorporated by reference to Exhibit 99.1 to the](https://www.sec.gov/Archives/edgar/data/835403/000119312515285650/d57965dex991.htm)</u><br><u>[Registration Statement on Form S-8 (File No. 333-206290) filed with the Securities and Exchange Commission on 11](https://www.sec.gov/Archives/edgar/data/835403/000119312515285650/d57965dex991.htm)</u><br><u>[August 2015).](https://www.sec.gov/Archives/edgar/data/835403/000119312515285650/d57965dex991.htm)</u><br>|
| 4.14 | <u>[Letter of Agreement, dated 24 January 2025, between Diageo plc and Sir John Manzoni.](a414chairengagementlette.htm)</u> |

---

---

| | |
|:---|:---|
| 239 | **Diageo** Form 20-F 2025 |

---

---

| | |
|:---|:---|
| 4.15 | <u>[Diageo plc Share Value Plan, dated as of 20 September 2017 (incorporated by reference to Exhibit 99.1 to the](https://www.sec.gov/Archives/edgar/data/835403/000119312518048254/d494728dex991.htm)</u><br><u>[Registration Statement on Form S-8 (File No. 333-223071) filed with the Securities and Exchange Commission on 16](https://www.sec.gov/Archives/edgar/data/835403/000119312518048254/d494728dex991.htm)</u><br><u>[February 2018).](https://www.sec.gov/Archives/edgar/data/835403/000119312518048254/d494728dex991.htm)</u><br>|
| 4.16 | <u>[Diageo One World Share Incentive Plan, dated 16 December 2024 (incorporated by reference to Exhibit 4.3 to the](https://www.sec.gov/Archives/edgar/data/835403/000101905625000164/0001019056-25-000164-index.htm)</u><br><u>[Registration Statement on Form S-8 (File No. 333-286502) filed with the Securities and Exchange Commission on 11](https://www.sec.gov/Archives/edgar/data/835403/000101905625000164/0001019056-25-000164-index.htm)</u><br><u>[April 2025).](https://www.sec.gov/Archives/edgar/data/835403/000101905625000164/0001019056-25-000164-index.htm)</u><br>|
| 6.1 | <u>[Description of earnings per share (included in the section 'Reported measures' on page \[38\] of this Annual Report on](#i2a439a8f411e49deb31670665dbd0981_73)</u><br><u>[Form 20-F).](#i2a439a8f411e49deb31670665dbd0981_73)</u><br>|
| 8.1 | <u>[Principal group companies (included in note 22 to the consolidated financial statements on page \[309\] of this Annual](#i2a439a8f411e49deb31670665dbd0981_604)</u><br><u>[Report on Form 20-F).](#i2a439a8f411e49deb31670665dbd0981_604)</u><br>|
| 11.1 | <u>[Diageo plc Dealing in Securities Code](a111dealinginsecurities.htm)</u> |
| 12.1 | <u>[Certification of Nik Jhangiani filed pursuant to 17 CFR 240.13a-14(a).](#i2a439a8f411e49deb31670665dbd0981_814)</u> |
| 12.2 | <u>[Certification of Nik Jhangiani filed pursuant to 17 CFR 240.13a-14(a).](#i2a439a8f411e49deb31670665dbd0981_817)</u> |
| 13.1 | <u>[Certification of Nik Jhangiani furnished pursuant to 17 CFR 240.13a-14(b) and 18 U.S.C. 1350(a) and (b).](#i2a439a8f411e49deb31670665dbd0981_820)</u> |
| 13.2 | <u>[Certification of Nik Jhangiani furnished pursuant to 17 CFR 240.13a-14(b) and 18 U.S.C. 1350(a) and (b).](#i2a439a8f411e49deb31670665dbd0981_823)</u> |
| 15.1 | <u>[Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.](#i2a439a8f411e49deb31670665dbd0981_826)</u> |
| 15.2 | <u>[Diageo plc Annual Report 2025 (incorporated by reference to Exhibit 99 to the report on Form 6-K (File No.](https://www.sec.gov/Archives/edgar/data/835403/000083540325000017/0000835403-25-000017-index.htm)</u><br><u>[001-10691) filed with the Securities and Exchange Commission on 14 August 2025).](https://www.sec.gov/Archives/edgar/data/835403/000083540325000017/0000835403-25-000017-index.htm)</u><br>|
| 97.1 | <u>[Diageo Group NYSE Compensation Recovery Policy](a971diageogroupnysecompe.htm)</u> |
| 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.

---

| | |
|:---|:---|
| 240 | **Diageo** Form 20-F 2025 |

---

**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/ Nik Jhangiani |
| Name: Nik Jhangiani |
| *Title: Chief Financial Officer* |
| 14 August 2025 |

---

---

| | |
|:---|:---|
| 241 | **Diageo** Form 20-F 2025 |

---

**Glossary of terms and US equivalents**

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 <br>Diageo plc ordinary shares of 28<sup>101/108</sup> pence each<br>|
| 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 <br>servings. A serving comprises 33ml of spirits, 165ml of wine, or 330ml of ready to drink or <br>beer. To convert volume of products other than spirits to equivalent units: beer in hectolitres <br>divide by 0.9, wine in nine-litre cases divide by five, ready to drink in nine-litre cases divide <br>by 10, and certain pre-mixed products classified as ready to drink in nine-litre cases divide <br>by five.<br>|
| Euro, €, ¢ | Euro currency |
| Exceptional items | Items that, in management's judgement, need to be disclosed separately by virtue of their <br>size or nature<br>|
| Excise duty | Tax charged by a sovereign territory on the production, manufacture, sale or distribution of <br>selected goods (including imported goods) within that territory. It is generally based on the <br>quantity or alcohol content of goods, rather than their value, and is typically applied to <br>alcohol products and fuels.<br>|
| Finance lease | Capital lease |
| Financial year | Fiscal year |
| Free cash flow | Net cash flow from operating activities aggregated with net purchase and disposal of <br>property, plant and equipment and computer software and with movements in loans<br>|
| 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 <br>UK (UK-adopted International Accounting Standards) and IFRSs, as issued by the <br>International Accounting Standards Board (IASB), including interpretations issued by the <br>IFRS Interpretations Committee<br>|
| Impact Databank, IWSR, IRI, <br>Beverage Information Group and <br>Plato Logic<br>| Information source companies that research the beverage alcohol industry and are <br>independent from industry participants<br>|
| 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 <br>purposes by the Federal Reserve Bank of New York<br>|
| Operating profit | Net operating income |
| Organic movement | At level foreign exchange rates and after adjusting for exceptional items, acquisitions and <br>disposals for continuing operations<br>|
| Own shares | Treasury stock |
| Pound sterling, sterling, £, pence, p | UK currency |

---

---

| | |
|:---|:---|
| 242 | **Diageo** Form 20-F 2025 |

---

---

| | |
|:---|:---|
| **Glossary of terms and US equivalents (continued)** | **Glossary of terms and US equivalents (continued)** |
| **Term used in UK annual report** | **US equivalent or definition** |
| Price/mix | Price/mix is the number of percentage points by which the organic movement in net sales <br>exceeds the organic movement in volume. The difference arises because of changes in the <br>composition of sales between higher and lower priced variants/markets or as price changes <br>are implemented.<br>|
| Profit | Earnings |
| 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-<br>mix cans in some markets, and progressive adult beverages in the United States and certain <br>markets supplied by the United States.<br>|
| 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 |

---

---

| | |
|:---|:---|
| 243 | **Diageo** Form 20-F 2025 |

---

**Exhibit 2.4**

**DESCRIPTION OF SECURITIES**

**REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT**

As of 30 June 2025 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** <br>**registered**<br>|
| American Depositary Shares | DEO | New York Stock Exchange |
| Ordinary shares of 28<sup>101</sup>/108 pence each |  | New York Stock Exchange<sup>(i)</sup> |

---

(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 2025.

**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 2025, as Exhibit 1.1.

**General**

As at 30 June 2025 there were 2,432,425,127 ordinary shares of 28<sup>101</sup>/108 pence each in issue with a nominal value of $886,821,858.

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:

• 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

---

| | |
|:---|:---|
| 244 | **Diageo** Form 20-F 2025 |

---

• 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

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.

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| 245 | **Diageo** Form 20-F 2025 |

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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.

**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.

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| 246 | **Diageo** Form 20-F 2025 |

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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 26, 2024, Diageo's shareholders gave it authority to repurchase up to 222,316,603 of its ordinary shares subject to

additional conditions. The minimum price which must be paid for such shares is 28<sup>101</sup>/108 pence and the maximum price of the higher

of (a) 105% of the average market value of the company's ordinary shares 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.

**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 ADR holder described in this section. You should consult with your broker or financial institution to find out what those

procedures are.

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| 247 | **Diageo** Form 20-F 2025 |

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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.

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.

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| 248 | **Diageo** Form 20-F 2025 |

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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.

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.

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| 249 | **Diageo** Form 20-F 2025 |

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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

• 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.

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| 250 | **Diageo** Form 20-F 2025 |

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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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| 251 | **Diageo** Form 20-F 2025 |

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**Exhibit 12.1**

I, Nik Jhangiani, 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. I am 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. 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: 14 August 2025

/s/ Nik Jhangiani

Name: Nik Jhangiani

Title: Interim Chief Executive

(Principal Executive Officer)

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| 252 | **Diageo** Form 20-F 2025 |

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**Exhibit 12.2**

I, Nik Jhangiani, 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. I am 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. 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: 14 August 2025

/s/ Nik Jhangiani

Name: Nik Jhangiani

Title: Chief Financial Officer

(Principal Financial Officer)

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|:---|:---|
| 253 | **Diageo** Form 20-F 2025 |

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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 2025 (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: 14 August 2025

/s/ Nik Jhangiani

Name: Nik Jhangiani

Title: Interim 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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| | |
|:---|:---|
| 254 | **Diageo** Form 20-F 2025 |

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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 2025 (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: 14 August 2025

/s/ Nik Jhangiani

Name: Nik Jhangiani

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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|:---|:---|
| 255 | **Diageo** Form 20-F 2025 |

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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. 333-286502,

333-153481, 333-162490, 333-169934, 333-182315, 333-206290 and 333-223071) of our report dated 14 August 2025 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

14 August 2025

## Exhibit 4.1

![](a41diageo_serviceagreeme001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;Confidential Service Agreement (1) Diageo plc (2) Nik Jhangiani Dated May 2024 DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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Confidential i Contents 1. Definitions and interpretation ....................................................................................................... 1 2. Appointment ................................................................................................................................ 1 3. Work permits and warranty ......................................................................................................... 1 4. Duration of the Employment ........................................................................................................ 1 5. Scope of the Employment ........................................................................................................... 3 6. Hours of work .............................................................................................................................. 6 7. Place of work ............................................................................................................................... 6 8. Remuneration .............................................................................................................................. 7 9. Expenses ..................................................................................................................................... 9 10. Holidays and other paid leave ..................................................................................................... 9 11. Sickness benefits .......................................................................................................................10 12. Pension ......................................................................................................................................11 13. Other Benefits ............................................................................................................................11 14. Restrictions during the Employment ..........................................................................................13 15. Confidentiality and reputation ....................................................................................................14 16. Inventions and other intellectual property..................................................................................15 17. Termination ................................................................................................................................16 18. Training ......................................................................................................................................18 19. Restrictive covenants ................................................................................................................18 20. Disciplinary and grievance procedures .....................................................................................22 21. Data Protection ..........................................................................................................................23 22. Power of Attorney ......................................................................................................................23 23. Notices .......................................................................................................................................23 24. Former contracts of employment ...............................................................................................23 25. Choice of law and submission to jurisdiction .............................................................................24 26. Changes to the terms of employment .......................................................................................24 27. Variation ....................................................................................................................................24 28. Counterparts ..............................................................................................................................24 29. General ......................................................................................................................................24 Schedule 1 ..............................................................................................................................................26 Schedule 2 ..............................................................................................................................................29 Schedule 3 ..............................................................................................................................................31 Schedule 4 ..............................................................................................................................................43 DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id1e-ntial 70-40337364 Confidential This Deed is made on May 2024 Between (1) Diageo plc (registered in England and Wales under number 23307) whose registered office is at 16 Great Marlborough Street, London, W1F 7HS (the "Company"); and (2) Nik Jhangiani of (the "Executive"). It is agreed as follows: 1. Definitions and interpretation 1.1 This Agreement means this agreement and any schedules to this agreement which form part of and are incorporated into this agreement. 1.2 The definitions and rules of interpretation in Schedule 1 apply to this agreement. 2. Appointment 2.1 The Company shall appoint the Executive and the Executive agrees to act as Chief Financial Officer of the Company with effect from the Commencement Date or in such other capacity (appropriate to the Executive's skills, experience and qualifications) of an equivalent status as the Company and/or Board from time to time reasonably directs on the terms of this Agreement. 2.2 The Executive may be required to act as a director of the Company and other Group Companies (either executive or non-executive) as the Company and/or Board reasonably requires from time to time. The Company and/or Board reserves the right on giving written notice to the Executive to terminate any office or directorship immediately at any time and upon receipt of that notice the Executive will immediately resign from that office or directorship. Any resignation that is effected under this clause 2.2 not amount to a breach of this Agreement by the Company. 3. Work permits and warranty 3.1 The Executive warrants that they are legally entitled to work in the United Kingdom and will throughout the Employment continue to hold a valid United Kingdom work permit if appropriate. The Executive warrants that they will notify the Company in advance of any possible change to their immigration status, as soon as they become aware of any circumstances that might give rise to such change. Should the Company discover that the Executive does not have permission to live and work in the United Kingdom or if any such permission is revoked, the Company reserves the right to terminate the Employment immediately and without notice or pay in lieu of notice and without referring cedure. 3.2 The Executive warrants that they are not subject to any restrictions which prevent them from holding office as a director. The Executive will notify the Company immediately if this position changes during their Employment. 4. Duration of the Employment 4.1 Continuous Employment will commence on 11 September 2024 Commencement Date . There is no other employment that counts towards the period of continuous employment. 4.2 Duration Subject to the provisions of clauses 3 and 17, the Employment shall continue unless and until terminated at any time by: a) notice of termination of the Employment; or DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id2e-ntial 70-40337364 Confidential b) the Executive, who of termination of the Employment. 4.3 Payment in lieu of notice a) The Company shall be entitled, at its sole discretion, to terminate the Employment immediately at any time by giving the Executive notice in writing. In these circumstances, subject to the terms of clause 4.3b), the Company will subsequently make a payment to the Executive in lieu of notice, calculated in accordance with the provisions of clauses 4.3 and 4.4 (the payment in lieu of notice being referred to as a "Notice Payment"). b) For the avoidance of doubt, the Company is not obliged to make a Notice Payment. If the Company shall decide not to make a Notice Payment, the Executive shall not be entitled to enforce that payment as a contractual debt nor as liquidated damages. c) The Notice Payment will be paid less all deductions that are required or permitted by law to be made including in respect of income tax, national insurance contributions and any sums due to the Company or any Group Company. d) Subject to the terms of clause 4.4, the Notice Payment will consist of a sum equivalent to the Salary which the Executive would have received in respect of any notice period outstanding on the Termination Date and the cost to the Company of providing contractual benefits (excluding any benefits under clause 8.3) in respect of that period. For the avoidance of doubt, any Notice Payment shall not include any payment in respect of: (i) any bonus or commission payments or share of profit or other variable remuneration that might otherwise have been paid or awarded to the Executive during the period for which the Notice Payment is made; or (ii) any holiday entitlement that would otherwise have accrued during the period for which the Notice Payment is made. e) The Notice Payment is in full and final settlement of all and any rights and claims that the Executive may have against the Company arising out of the termination of employment (including both contractual and statutory employment claims). The Executive agrees to waive, release and discharge any and all such rights and claims and acknowledges that it is a condition to payment of the Notice Payment that the Executive will execute a settlement agreement (and any other documents reasonably required by the Company) in a form reasonably acceptable to the Company in order to give effect to the release and waiver in this clause 4.3(e). f) If the Company has elected to make a Notice Payment and subsequently discovers either before or after the payment (or any instalment of it) that the Executive has committed a repudiatory breach of contract, the Company shall be entitled to withhold the Notice Payment (or any outstanding instalment of it) and the Executive agrees they will have no entitlement to the Notice Payment in these circumstances and the Company reserves the right to demand the immediate repayment of any sum which has already been paid to the Executive which formed part or all of the Notice Payment. 4.4 Payment in instalments a) The Company may, at its sole discretion and subject to the terms of clause 4.4(b), pay the Notice Payment as follows: (i) 50 % of the Notice Payment will be made within 28 days after the Termination Date; and (ii) the remainder of the Notice Payment will be paid in equal monthly instalments over a period of six months (the "Instalment Period"), or such shorter period as the Company may determine in its discretion, the first instalment payable on the day that is 6 months after the Termination Date. b) If the Executive commences alternative employment before the end of the Instalment Period then the gross instalments of Notice Payment payable after the commencement date of such alternative employment may, , be reduced (including to zero) benefits and incentives) payable or accruing in respect of the alternative employment in the period from the start of that employment until the end of Instalment Period. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id3e-ntial 70-40337364 Confidential c) If the Executive obtains alternative employment that is to commence before the end of the Instalment Period they will immediately advise the Company of that fact and of their gross monthly salary, benefits and incentive arrangements from that employment. If the Executive fails to comply with this obligation, then from the date the Executive commences alternative employment, the Executive shall have no further entitlement to any payment of Notice Payment. 4.5 representations and warranties The Executive represents and warrants that they: a) are not bound by or subject to any court order, agreement, arrangement or undertaking (whether express or implied, verbal or written, and including any post termination restrictions or confidentiality agreement entered into with a previous employer) that in any way restricts or prohibits the Executive from entering into this Agreement or from performing any of their duties under it; b) have not been suspended, disciplined or terminated (other than by reason of redundancy) by any employer; nor c) a party to any litigation brought by a third party in the capacity as a director or employee. 4.6 Probationary period The Employment is not subject to a probationary period. 5. Scope of the Employment 5.1 Duties The Executive agrees to carry out those duties which attach to this appointment together with any other duties which are assigned to the Executive by the Company and/or Board from time to time. During the Employment the Executive shall: a) properly perform their duties and exercise their powers to the standard reasonably required by the Company and/or Board, such duties and exercise of such powers in relation to the them by the Company and/or Board including where those duties require the Executive to work for any Group Company (by means of secondment or otherwise); b) unless prevented by ill-health, devote the whole of their working time, attention and skill to the discharge of their duties under this Agreement; c) in the discharge of those duties and the exercise of those powers observe and comply with all lawful resolutions, regulations and directions from time to time made by, or under the authority of, the Company and/or Board and promptly upon request, give a full account to the Company and/or Board or a person duly authorised by the Company and/or Board, in writing if requested, of all matters with which they are involved (and such a request may include update and the finances and affairs of the Group); d) faithfully and diligently perform their duties and at all times use their best endeavours to promote and protect the interests of the Group; e) comply with, implement and observe all relevant policies, procedures, rules and/or requirements (whether formal or informal) of the Company and/or Group (as amended from time to time); f) ensure that they do not act in any way that creates a conflict of interest between them or any other person and the Company or any Group Company (or do anything that could give the appearance of any such conflict of interest); DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id4e-ntial 70-40337364 Confidential g) observe any restrictions or limitations which may from time to time be imposed on the Executive by the Company and/or Board; h) comply with their duties under part 10 of the Companies Act 2006 (or any replacement legislation or guidance); i) comply with the articles of association (as amended from time to time) of any Group Company of which they are a director and comply with all statutory, fiduciary and common law duties that apply to them from time to time and do all such things as are necessary to ensure compliance with the UK Corporate Governance Code and/or any other relevant guidance or code of practice in place from time to time; j) do, or refrain from doing, such things as are necessary or expedient to ensure compliance by the Executive, the Company and/or any Group Company with applicable law and regulation and all regulatory authorities relevant to the Company and/or any Group Company; k) refrain from doing anything which would cause them to be disqualified from acting as a director; l) promptly disclose to the Board full details of any wrongdoing (or proposed or alleged wrongdoing) by the Executive or any other director or employee of the Company and/or any Group Company where such wrongdoing adversely impacts or could adversely impact the interests or reputation of the Company and/or any Group Company; m) not incur on behalf of the Company or any Group Company any capital expenditure in excess of such sum as may be authorised from time to time by resolution of the Board; n) not enter into on behalf of the Company or any Group Company any commitment, contract or arrangement which is otherwise than in the normal course of the Company's or the relevant Group Company's business or is outside the scope of their normal duties or authorisations or is of an unusual or onerous or long-term nature; o) not engage any person on terms which vary from those established from time to time by resolution of the Board; p) travel to such places (within or outside the United Kingdom) as the Company and/or Board may from time to time reasonably require; q) at all times comply with any policies of the Company or any relevant Group Company relating to anti-bribery and corruption, tax evasion and/or gifts and hospitality and shall not instruct, authorise or condone, expressly or impliedly, any corrupt activity or engage in any form of facilitating tax evasion, whether under UK law or under the law of any foreign country. The Executive shall promptly report any breach or suspected breach of these policies, using the Company's or any relevant Group Company's whistleblowing procedures for this purpose. The Executive shall cooperate fully with the Company or any relevant Group Company in its or their investigation of any suspected bribery, corruption or tax evasion of which they become aware and, in accordance with any existing or revised Company policy, they shall take reasonable preventative measures to stop bribery, corruption or tax evasion for which the Company or any Group Company may be liable. r) comply and procure that their spouse or civil partner and dependent children comply with all applicable laws, regulations, rules, guidance and/or codes of conduct, issued and/or amended from time to time by any relevant regulatory or legislative body, together with any policy of the Company as amended from time to time in force in relation to: (i) dealings in shares, debentures or other securities of the Company or any Group Company; (ii) any unpublished price sensitive information affecting the securities of any other company; (iii) any form of market abuse as defined by the relevant rules, guidance, legislation or code of practice; and DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id5e-ntial 70-40337364 Confidential (iv) any other form of prohibited behaviour that is relevant to the Company or any Group Company that applies from time to time. 5.2 The Executive will comply with any of the Company's rules, plans, policies, standards and procedures (the "Policies") in force from time to time also provide particulars of leave the Executive may be entitled to take (paid or otherwise and subject to the terms set out from time to time) in addition to their contractual entitlement under this Agreement. These Policies do not form part of this Agreement and the Company may replace, amend or withdraw these at any time. To the extent that there is any conflict between the terms of this Agreement and the Policies, this Agreement will prevail. 5.3 Alternative duties The Company and/or Board shall be entitled at any time to require the Executive to perform duties not only for the Company but also for any Group Company including, if so required and without additional remuneration, acting as a director and/or representative of any Group Company. The Company and/or Board may at its discretion remove or procure the removal of the Executive from any directorship to which they are appointed under this clause. The Company and/or Board may at their reasonable discretion transfer this Agreement or second the Executive to any Group Company at any time. 5.4 Non-executive positions The Executive shall be entitled to take up one non-executive appointment provided the discharge of their duties under this Agreement is not impaired as a result of the non-executive appointment and provided the appointment is approved by the Board in writing in advance. 5.5 Right to suspend duties and powers a) During any notice period (whether notice is given by the Executive or the Company), or if the Executive purports to terminate their Employment in breach of this Agreement, the Company and powers on terms it considers expedient or to require them to perform only such duties, specific projects or tasks as are assigned to them expressly by the Company and/or Board (including the duties of another position of equivalent status) in any case for such period or the Company and/or Board in their absolute discretion deems necessary (such period or periods being "Garden Leave"). b) The Company may, at its sole discretion, require that during Garden Leave the Executive shall not: (i) enter or attend the premises of the Company or any Group Company; (ii) retain or seek to obtain access to electronic systems or devices owned or operated by the Company or any other group Company; (iii) contact, deal with or have any communication with (or attempt to contact, deal with or have communication with) any customer or prospective customer or supplier of the Company or any Group Company in relation to the business of the Company or any Group Company; (iv) contact, deal with or have any communication with (or attempt to contact, deal with or have communication with) any employee, officer, director, agent, consultant, distributor, shareholder, adviser or other business contact of the Company or any Group Company in relation to the business of the Company or any Group Company; (v) remain or become involved in any aspect of the business of the Company or any Group Company except as required by such companies; or (vi) work either on their own account or on behalf of any other person. c) During Garden Leave, the Executive will: DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id6e-ntial 70-40337364 Confidential (i) continue to receive their Salary and benefits but will not accrue any bonus, commission or share of profit or other variable remuneration; (ii) remain an employee of the Company and be bound by the terms and conditions of this Agreement (including any implied duties of good faith and fidelity); (iii) disclose to the Board any attempted contact (other than purely social contact) with any person with whom the Executive has been required not to have any contact pursuant to clause 5.5(b); (iv) take any accrued and unused holiday during any period of Garden Leave subject to reasonable notice to the Company; (v) except for any periods of holiday taken under this Agreement, the Executive will remain readily contactable and available to work for the Company and/or any Group Company. d) Any action taken under clause 5.5 will not be a breach of this Agreement and the Executive will not have any claim against the Company and/or any Group Company in respect of such action. 5.6 Joint appointments The Company and/or Board shall be at liberty to appoint any other person or persons to act jointly with the Executive in any position to which they may be assigned from time to time. 5.7 Group policies The Group has implemented a Code of Business Conduct and a number of Global and Local Policies all of which the Executive is obliged to read, understand and comply with at all times during the Information Management and Security Policy (as amended or replaced from time to time) which indicate that the Company or any relevant Group Company may from time to time monitor the Executive's use of its communication systems, including computer systems, telephones and social media platforms or any other electronic application which are being used to represent the Company/Group. The Executive acknowledges that the Company/Group has a legitimate interest in carrying out this monitoring and has no expectation of privacy when using any Group IT system. 6. Hours of work 6.1 The normal business hours of the Company are 9.00 am to 5.00 pm, Monday to Friday. However, the Executive shall be required to work such hours as are necessary to fulfil their duties under this Agreement. No payment will be made for any additional hours worked by the Executive and no time off in lieu will be given for such additional hours. 6.2 The Executive recognises that on account of their autonomous decision taking powers, the duration of their working time is not measured or predetermined and therefore they fall within the exemption set out in Regulation 20 of the Working Time Regulations 1998 (the "Regulations") and is thereby excluded from such Regulations as are referred to in Regulation 20. Notwithstanding the understanding of the parties that the Executive is an employee in respect of whom Regulation 20 applies, the Executive agrees that, if the understanding of the parties is incorrect, they hereby opt out of the 48 hour week limit in Regulation 4, and that if they wish to withdraw that opt-out, they will 7. Place of work 7.1 The Executive's place of work will initially be the Company's offices at 16 Great Marlborough Street, London, but the Company and/or Board may, acting reasonably, require the Executive to work at any other location for such periods as the Company and/or Board may from time to time require. 7.2 There is no current requirement for the Executive to work outside the United Kingdom for any consecutive period of one month or more. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id7e-ntial 70-40337364 Confidential 8. Remuneration 8.1 Salary a) The Company shall pay to the Executive the Salary at the rate of £900,000 per annum, on or about the last working day of each calendar month by credit transfer to their bank account payable by equal monthly instalments in arrears. b) The Salary shall be inclusive of any fees to which the Executive may be entitled as a director of the Company or any Group Company. c) Payment of the Salary to the Executive shall be made either by the Company or by a Group Company and, if by more than one company, in such proportions as the Board may from time to time think fit. d) All payments described in this Agreement are gross amounts. All payments and benefits described in this Agreement will be subject to deductions of appropriate taxes and national insurance contributions before payment is made to the Executive. 8.2 Salary review The rate of Salary will normally be reviewed annually on 1 October with the first such review expected to be in October 2025. The Company is not obliged to increase the Salary at any review. Any increase which is awarded will be awarded effective from the date specified by the Company/Board. The Executive's salary will not be reviewed where notice has been given to terminate the Employment (whether by the Company or by the Executive). 8.3 Incentive Plans a) In addition to their Salary, the Executive may be asked to participate in the Diageo Long Term Incentive Plan ("DLTIP"), the Diageo Annual Incentive Plan (AIP) and the Diageo DBSP , or any other incentive plan as may be adopted by the Company/Group from time to time, subject always to the rules of these plans as determined by the Company from time to time. b) Company/Group. If the Company/Group shall make a payment or grant an award under such plan and/or scheme in any one year, this shall not give rise to a contractual entitlement to a payment or award in future years. The Executive must comply with any relevant minimum shareholding requirement (based on their salary and length of service) and/or post- PESR , which will be notified to them from time to time. The Company (or any relevant Group Company) may take appropriate steps to ensure that the Executive complies with any such policy (including but not limited to removing or changing participation in any incentive plan or scheme). c) Any shares awarded under the DLTIP will be subject to the right of forfeiture during either (i) the applicable Retention Period, as defined in the DLTIP (if any); or (ii) if there is no applicable Retention Period, the period of 24 months beginning on the date that the beneficial ownership of the shares is transferred to the Executive. d) In compliance with the PESR as at the date of this Agreement, the Executive agrees that on or within 30 days of the date of this Agreement they will execute the Post-Employment Share Retention Deed set out in Schedule 2 of this Agreement and, if the PESR applicable to them changes from time to time, will execute any further documents required in order to ensure compliance with the PESR. e) In connection with the grant of an award and/or participation under the AIP, DBSP, DLTIP and/or any other incentive plan as may be adopted by the Company/Group from time to time, the rules of the relevant scheme (as amended from time to time) will always apply. These rules give the Company the ability to take all necessary actions to ensure that any such plan is lawful, complies with any relevant regulatory matters and is in the interests of the business. This includes, but is not limited to, ensuring that the relevant tax is paid, that malus and clawback can be applied as appropriate and that appropriate action is taken when the DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id8e-ntial 70-40337364 Confidential Executive leaves the Company. These rules give the Company the power to take action unilaterally. f) In connection with the grant of an award and/or participation under the AIP, DBSP, DLTIP or any other incentive plan as may be adopted by the Company/Group from time to time, the Executive confirms that they have read, understands and agrees to comply with the Group's Malus and Clawback Policy and the Diageo Group NYSE Compensation Recovery Policy, as in place from time to time. A copy of the Group's Malus and Clawback Policy and the Diageo Group NYSE Compensation Recovery Policy applying at the date of this Agreement is set out in Schedule 3 of this Agreement (for reference only). g) In the event that the Employment is terminated, subject to clause 8.4, the Executive may be considered (at the sole discretion of the Company) for a bonus in line with the applicable Rules of the AIP and the Global AIP Policy as varied from time to time. h) The Executive will also be eligible to participate in the Diageo 2001 Share Incentive Plan and the Diageo UK 2020 Sharesave Plan, for so long as and on such terms as such plans are operated by the Company/Group and subject always to their respective rules as amended from time to time. 8.4 Remuneration Governance a) All payments, incentives and/or benefits payable to or which the Executive receives or participates in under this Agreement; under the AIP, DBSP, DLTIP and/or any other incentive plan as may be adopted by the Company/Group from time to time; or otherwise (in whatever form and including for the avoidance of doubt, on the termination of this Agreement) are subject to and conditional upon: (i) the terms of applicable law, regulation and governance codes that regulate or govern executive pay from time to time; (ii) the terms of the Malus and Clawback Policy and the Diageo Group NYSE Compensation Recovery Policy, along with such other policies in relation to malus or clawback as may be adopted by the Company/Group, in each case in place and as amended from time to time; (iii) any remuneration policy in place from time to time; and (iv) to the extent required by applicable law, the consent of the shareholders of the Company (and provided that the Company will not be obliged to seek the approval of the shareholders for any payment that would otherwise require such consent) (together "Remuneration Governance"). The Executive hereby consents to the Company right to amend, reduce, hold back, defer, claw back and alter the structure of any payments, awards and benefits payable or relevant to the Executive in order to comply with Remuneration Governance. 8.5 Deductions a) For the purposes of sections 13 to 16 of the ERA, the Executive hereby consents to the deduction from the Salary (or from any other sum due from the Company or any Group Company to the Executive which falls within the definition of "Wages" in section 27 of the ERA) of any sums owing by the Executive to the Company or to any Group Company at any time and they also agree to make payment to the Company or any Group Company of any sums owed by them to the Company or any Group Company upon demand by the Company at any time. This clause is without prejudice to the right of the Company and any Group Company to recover any sums or balance of sums owed by the Executive to the Company or any Group Company by legal proceedings. For the avoidance of doubt, the Company shall be entitled to deduct any sums paid to the Executive (whether by way of any signing on bonus or any other award or payment made to the Executive from time to time, including under the AIP, DBSP, DLTIP and/or any other incentive plan as may be adopted by the Company/Group from time to time) in respect of which the claw back of any such sums or awards paid was set out in the offer letter or any other document in which such an award or payment was set out, the rules of any incentive plan pursuant to which the award or payment DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id9e-ntial 70-40337364 Confidential was made, any remuneration policy or malus and clawback policy (including the Malus and Clawback Policy and the Diageo Group NYSE Compensation Recovery Policy) operated by the Company/Group from time to time and/or this Agreement. b) If, at any time during the Employment or after the termination of Employment, the Executive is found to have breached any of the terms of this Agreement or the Executive's duties to the Company during the Employment such that the Company would have been entitled to terminate the Employment without notice or payment in lieu of notice, the Company shall be entitled to recover any payments made under clause 8 and/or to cease making further payments under clause 8 with immediate effect. Any such payments already made shall be recoverable from the Executive as a debt. 9. Expenses 9.1 Reimbursement The Company shall reimburse the Executive in respect of all reasonable expenses wholly, exclusively and necessarily incurred by them in the proper performance of their duties, subject to them providing such receipts or other appropriate evidence as the Company may require and in compliance with the Company's Travel and Expenses Policy (as amended from time to time). 9.2 Company credit card The Executive will be issued with a company credit card on condition that they comply with all relevant Company or Group policies (as amended from time to time) in respect of such a card. This should 10. Holidays and other paid leave 10.1 The Executive shall be entitled, in addition to all Bank and Public holidays normally observed in England, to 28 days paid holiday in each holiday year (being the period from 1 January to 31 December) together with such additional holidays as may be acquired by the Executive under the Diageo Flexible Benefits Programme. 10.2 In the respective holiday years in which the Employment commences or terminates, the Executive's entitlement to holiday shall accrue on a pro rata basis for each completed calendar month of service during the relevant year. 10.3 If, on the termination of the Employment, the Executive has exceeded their accrued holiday entitlement, the value of such excess, calculated by reference to clause 10.2 and the Salary, may be deducted by the Company from any sums due to them. If the Executive has any unused holiday entitlement, the Company shall at its discretion either require the Executive to take such unused holiday during any notice period or make a payment to them in lieu of it (calculated in accordance with this clause 10.3), provided always that if the Employment is terminated pursuant to clause 17.1 then any payment in lieu statutory entitlement under the Regulations. For these purposes, salary in respect of one day's holiday entitlement shall be calculated as 1/260 of Salary. 10.4 Holiday entitlement for one holiday year cannot be carried forward from one year to the next and failure to take holiday entitlement in the appropriate holiday year will lead to forfeiture of any accrued holiday not taken without any right to payment in lieu of it provided always that any days of holiday not taken at the Company's written request in one year may be carried forward to the next year. 10.5 Subject to the Executive satisfying the statutory eligibil applicable rules in force from time to time, they may be eligible to take other paid leave during the Employment, including: (i) (ii) DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id10e- 70-40337364 Confidential Full details of such leave and pay during any such leave are available from the intranet. 11. Sickness benefits 11.1 Certification If the Executive is absent from their duties as a result of sickness or injury they should ensure that they follow the relevant Company policy or procedure in relation to certification. The Executive will keep the Company up to date regarding their sickness or injury on request and provide the Company with such certifications or other information regarding the sickness or injury as the Company requires. 11.2 Sick pay a) Subject to clause 17, and the Executive complying with clause 11.1, the Company shall continue to pay the Salary for the first 26 weeks absence on medical grounds in any one continuous period of absence (or two or more linked periods as determined by the Social Security Contributions and Benefits Act 1992, as amended from time to time), provided that the Executive shall from time to time if required: (i) supply the Company with medical certificates covering any period of sickness or incapacity exceeding 6 days (including weekends); and (ii) undergo at the Company's expense, by a doctor appointed by the Company, any medical examination and the Executive hereby expressly consents, by signing a copy of this contract, such doctor to disclose to, and discuss with the Company and its medical advisers, the results of such examinations. b) Payment in respect of any other or further period of absence shall be entirely at the c) Any payment to the Executive pursuant to clause 11.2a) and 11.2b) shall be subject to set off by the Company in respect of any Statutory Sick Pay and any Social Security Sickness Benefit or other benefits to which the Executive may be entitled. d) Subject to clause 11.2b), when all sick pay entitlement pursuant to clause 11.2a) has been exhausted, no further salary will be payable by the Company to the Executive until the Executive has returned to active service of the Company. e) Save where the Company/the Board determine in their absolute discretion otherwise, no sick pay, except for any statutory sick pay, will be payable for a period where: (i) the Executive is subject to any investigation or process relating to their conduct or performance and which could result in the imposition of a warning, dismissal or other sanction (including any performance measure); or (ii) the Executive refuses on request to obtain a medical report from their GP or any other person responsible for their clinical care and/or to attend a medical examination by the Company's appointed doctor and provide their medical records to that doctor. 11.3 Absence caused by third party negligence respect of which damages are or may be recoverable, then all sums paid by the Company during the period of the absence shall constitute loans to the Executive who shall: a) notify the Company immediately of all the relevant circumstances and of any claim, compromise, settlement or judgment made or awarded in connection with it; b) give to the Company such information concerning the above matters as the Company may reasonably require; and c) if the Company so requires, refund to the Company any amount received by them from any such third party less any costs borne by the Executive in connection to the recovery of such DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id11e- 70-40337364 Confidential damages provided that the refund shall be no more than the amount which they have recovered in respect of remuneration. 12. Pension 12.1 The Company will comply with its duty under the Pensions Act 2008 to automatically enrol the Executive into a pension arrangement. Details of the current pension arrangement used for automatic enrolment purposes can be found on the website, www.mydiageopension.com. 12.2 Membership of the pension arrangement is in accordance with its terms and conditions (including any future amendments to those terms and conditions). In accordance with the terms of the pension arrangement, the Company reserves the right to amend or terminate the pension arrangement at any time. 12.3 Alternatively, if the Executive decides to opt-out of the pension arrangement, the Executive will receive a savings allowance of 14% of pensionable pay (which is in lieu of the pension contributions the Company would have otherwise paid to the pension arrangement on their behalf). This amount is subje and/or in order to comply with Remuneration Governance. The savings allowance will be paid monthly along with salary, and tax and national insurance will be deducted at the appropriate rate. The savings allowance will not be payable during any period in which the Executive is a member of the pension arrangement. Therefore, if the Executive is receiving the savings allowance, but is subsequently re-enrolled to the pension arrangement (as required by legislation) and chooses not to opt-out again but rather to build up benefits under that arrangement, the savings allowance will cease to be payable to them. 13. Other Benefits 13.1 Insurance Schemes During the Employment the Executive shall: a) participate in such personal accident insurance at such level as the Company shall (in its absolute discretion and subject to clause 13.2(b)) from time to time maintain for the benefit of the Executive; and b) be provided with life insurance cover, (clauses 13.1a) and 13.1b) are each a "Scheme" and together the "Schemes"). 13.2 Conditions relating to insurance coverage Clause 13.1 will be subject in each case to the following terms and conditions: a) their eligibility in force from time to time and the rules, terms and conditions of the relevant Scheme in force from time to time; b) the Company reserves the right in its sole and absolute discretion to terminate the and/or their e Schemes, substitute a new scheme for an existing Scheme and/or alter the level or type of benefits available under any Schemes; c) if the provider of one of the Schemes (e.g. an insurance company or pensions provider) refuses for any reason (whether under its own interpretation of the rules, terms and conditions of the relevant insurance policy or otherwise) to accept a claim and/or provide the relevant benefit(s) to the Executive (or their family) under the applicable Scheme, the Company shall not be liable to provide (or compensate the Executive for the loss of) such benefit(s) nor shall it be obliged to take action against the provider to enforce any rights under the Scheme; d) the fact that the termination of the Employment under clauses 4.2 and 17 may result in the Executive and/or their family ceasing to be eligible to receive or continue to receive benefits ent. The Executive agrees that they will have no entitlement to compensation or otherwise from the DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id12e- 70-40337364 Confidential Company and/or any Group Company for the loss of any such entitlements and/or benefits; and e) their terms and conditions of employment as may from time to time be required by the Company. 13.3 Flexible Benefits Programme a) During the Employment, the Executive will participate in the Diageo Flexible Benefits Programme. This comprises a Flexible Allowance which will be reviewed from time to time. With this allowance, the Executive may receive a combination of benefits which are offered, as varied and subject to any relevant rules in place from time to time. b) The Flexible Benefits Programme allows the Executive to influence the mix and level of benefits the Executive receives from the Company/Group, within certain specified limits. Whilst the Company will take the Executive's preferences into account, the ultimate decision as to the package of benefits received by the Executive and as to the availability of any cash supplement is entirely at the Company's/Group's discretion. The Company will offer the Executive a total package which the Executive may choose to accept. The offer may be revised from time to time but shall not be reviewed more frequently than once a year. 13.4 Medical examination In accordance with Company/Group policy on medical examinations, as amended from time to time, the Executive will be entitled to an annual medical examination and test by a medical practitioner nominated by the Company. In addition, the Company may also require the Executive at any time to submit to a medical examination with such frequency as is reasonable to ensure the Executive is capable of performing or continuing to perform their duties. The Executive will permit the results of such a medical examination to be disclosed to the Company and/or any relevant Group Company and expressly consents to the release and discussion of such results by signing a copy of this Agreement. 13.5 Product allowance The Executive will be provided with a taxable product allowance, the level of which will be notified to the Executive by the Company from time to time. If the Executive is employed for part of a full calendar year, they will receive a pro-rated allowance. 13.6 Professional subscription fees The Company shall pay on the Executive's behalf the annual subscription fees for one professional body relevant to the Employment. 13.7 Home to work travel allowance The Executive will be provided with a travel allowance of £10,000 per annum, subject to the deduction of tax and National Insurance contributions payable in equal monthly instalments in payments under the Pension arrangement or otherwise. 13.8 D&O Insurance The E expense officers insurance policy as is in place from time to time for the directors of the Company and any relevant Group Company. 13.9 General terms All benefits provided under this clause 13 are subject to the rules of any applicable schemes from time to time in force. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id13e- 70-40337364 Confidential 14. Restrictions during the Employment 14.1 Disclosure of other interests The Executive shall disclose to the Company and/or Board any interest of their own (or that of their spouse or partner, or of any child of theirs or of their partner under eighteen years of age): a) in any trade, business or occupation whatsoever which is in any way similar to any of those in which the Company or any Group Company is involved; and b) in any trade, business or occupation carried on by any supplier or customer of the Company or any Group Company whether or not such trade, business or occupation is conducted for profit or gain. 14.2 Restrictions on other activities and interests of the Executive a) During the Employment the Executive shall not at any time, without the prior written consent of the Board, either alone or jointly with any other person, carry on or be directly or indirectly employed, engaged, concerned or interested in (whether for profit or otherwise) any business, prospective business, trade, venture, organisation, profession, occupation or undertaking other than a Group Company. Nothing contained in this clause shall preclude the Executive from being a Minority Holder unless the holding is in a company that is a direct business competitor of the Company or any Group Company (including, but not limited to, the companies listed in Schedule 4) in which case, the Executive shall obtain the prior consent of the Board to the acquisition or variation of such holding. b) If the Executive, with appropriate consent, accepts any other appointment they must keep the Company accurately informed of the amount of time they spend working under that appointment. 14.3 Transactions with the Company Subject to any regulations issued by the Company/Group, the Executive shall not be entitled to receive or obtain directly or indirectly any discount, rebate, commission or any other form of gift or gratuity (any of these referred to as a "Gratuity") as a result of the Employment or any sale or purchase of goods or services effected or other business transacted (whether or not by them) by or on behalf of the Company or any Group Company and if they (or any person in which they are interested) obtain any Gratuity they shall account to the Company/Group Company for the amount received by them (or a due proportion of the amount received by the person having regard to the extent of their interest therein). 14.4 Dealing in Securities The Executive shall comply with every rule of law (including but not limited to: the insider dealing provisions contained in Part V of the Criminal Justice Act 1993; the Listing Rules issued by the Financial Conduct Authority; the Market Abuse Regulation (596/2014) as it applies in the United Kingdom from time to time as retained, amended, extended, re-enacted or otherwise given effect on or after 11 pm on 31 December 2020; and in the USA, Section 10(b) of the US Exchange Act 1934 as amended) applying to transactions in securities and any interest in securities by directors of listed companies, certain employees and persons connected with them and every regulation of the Company for the time being in force in relation to dealings in shares or other securities of the Company or any Group Company (including but not limited to the Diageo Dealing in Securities Code (Code)). Under the Code, the persons to whom notice should be given and from whom acknowledgement must be received before the Executive may deal in securities shall be the Company Secretary or Deputy Company Secretary of the Company from time to time or such other person as shall be notified to the Executive. The Executive also acknowledges that under the provisions of the Code the Executive must seek to ensure compliance with the Code by "persons closely associated" ("PCA") with the Executive (as defined in the Code) including, without limitation, the Executive's spouse or partner and dependent children, and by investment managers es to procure that dealings by or on behalf of such persons are in compliance with the Code. The Executive must comply with any additional or replacement legislation, code of practice, guidance and/or rules that may apply from time to time. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id14e- 70-40337364 Confidential 14.5 Compliance with the code on Corporate Governance The Executive shall comply, to the extent that the Company and/or Board considers appropriate for a company the size of the Company/Group, with the provisions of "The UK Corporate Governance Code" a corporate governance code issued by the Financial Reporting Council (as amended or replaced from time to time or any other relevant code issued by any other regulatory or similar body). 15. Confidentiality and reputation 15.1 The protection of the Group reputation and safeguarding its assets and information are critical parts of the Diageo Code of Business Conduct that applies to all employees of the Company (both during employment and, at times, after the employment has ended). 15.2 There are several key areas that the Executive must consider and they must always act in /Group's rules (as amended from time to time). None of these rules however are intended to prevent disclosure by the Executive of information: a) for the purpose of making a protected disclosure within the meaning of Part IVA of the Employment Rights Act 1996 (Protected Disclosures), provided that the disclosure is made in accordance with the provisions of that Act; b) for the purpose of reporting, in the public interest, misconduct, or a serious breach of regulatory requirements, to a regulator; or c) for the purpose of reporting a criminal offence or suspected criminal offence to the police or other law enforcement agency and/or co-operating with a criminal investigation or prosecution. 15.3 Without prejudice to the common law duties which the Executive owes to the Company and any other persons (including any Group Companies) the Executive agrees that they shall not during the Employment (except in the proper performance of their duties or for the purpose of obtaining legal, accountancy or pension advice or with the express written consent of the Board) or at any time (without limit) after the termination of the Employment except in compliance with an order of a competent court, the HMRC or any regulatory authority: a) divulge or communicate, or cause to be divulged or communicated, Confidential Information to any person, company, business entity or other organisation; b) use Confidential Information for their own purposes or for any purposes other than those of the Company or any Group Company; or c) through any failure to exercise due care and diligence permit or cause any unauthorised disclosure of any Confidential Information. 15.4 indirectly publish any opinion, fact or material or deliver any lecture or address or participate in the making of any film, radio broadcast or television transmission or communicate with any representative of the media or any third party relating to in relation to: a) the business or affairs of the Company or any Group Company or of any of their officers, employees, customers, clients, suppliers, distributors, agents or shareholders; or b) the development or exploitation of any Intellectual Property Rights, Inventions, Works or Confidential Information. 15.5 The Executive shall not at any time during any period when they are required to cease the performance of their duties under clauses 5.5, or 20.3 or after the Termination Date make any damaging public statement in relation to the Company or any Group Company or any of their officers or employees. The Company shall not at any time during any period when the Executive is required to cease the performance of their duties under clauses 5.4, or 20.3 or after the Termination Date make any public statement in relation to the Executive unless required to do so by law, by relevant regulators or where it is reasonably in the Company's business interests to do so. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id16e- 70-40337364 Confidential a) hold all Intellectual Property Rights on trust for the Company or any of the Group Companies until any rights to such Intellectual Property Rights have been fully and absolutely vested in the Company and/or any Group Companies in accordance with clause 16; b) assign to the Company or any Group Company with full title guarantee by way of present and future assignment all copyright, design rights and other proprietary intellectual property rights (if any) for their full terms throughout the world in respect of the Works. 16.4 The Executive shall at the request and expense of the Company or such Group Company as the Company may direct: a) apply or join with the Company or such Group Company in applying for patent or other protection or registration in the United Kingdom and in any other part of the world for any Intellectual Property Rights; and b) execute all instruments and do all things necessary for vesting all Intellectual Property Rights and all right, title and interest to and in them absolutely, with full title guarantee and as sole beneficial owner, in the Company or such Group Company or in such other person as the Company may specify. 16.5 The Executive irrevocably and unconditionally waives all rights under Chapter IV of Part I Copyright Designs and Patents Act 1988 in connection with their authorship of any existing or future copyright work in the course of the Employment, in whatever part of the world such rights may be enforceable including, without limitation: a) the right conferred by section 77 of that Act to be identified as the author of any such work; and b) the right conferred by section 80 of that Act not to have any such work subjected to derogatory treatment. 16.6 The Executive irrevocably appoints the Company to be their Attorney in their name and on their behalf to execute any such instrument or do any such thing and generally to use their name for the purpose of giving to the Company the full benefits of this clause 16. 16.7 Nothing in this clause 16 shall be construed as restricting the rights of the Executive or the Company under sections 39 to 43 Patents Act 1977. 17. Termination 17.1 Termination events a) Notwithstanding any other provisions of this Agreement, in any of the following circumstances the Company may terminate the Employment summarily by serving written notice on the Executive to that effect. In such event the Executive shall not be entitled to any further payment from the Company except such sums as shall have accrued due at the date of service of such notice. The circumstances are if the Executive: (i) is guilty of any gross misconduct or gross incompetence; (ii) commits any serious breach of this Agreement or of the Diageo Code of Business Conduct, or any wilful neglect or unreasonable refusal to discharge their duties provided that if such breach is capable of remedy, they shall have failed to remedy it within such reasonable period as is specified in a written notice from the Company pointing out the breach and requiring it to be remedied; (iii) repeats or continues any breach of this Agreement or of the Diageo Code of Business Conduct; (iv) is guilty of any fraud, dishonesty or conduct tending to bring the Executive, the Company or any Group Company into disrepute; (v) through their acts or omissions (whether at or outside work and whether directly or through any medium (including social media)) adversely prejudices or is likely in the DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id17e- 70-40337364 Confidential reasonable opinion of the Company and/or Board to prejudice adversely the interests or reputation of the Group; (vi) fails to comply with any lawful order or direction given to them by the Board or any person authorised by the Board to give such instruction; (vii) has materially damaged the interests of the Company through their actions or failure to act; (viii) commits any act of bankruptcy or takes advantage of any statute for the time being in force offering relief for insolvent debtors; (ix) becomes of unsound mind; (x) is convicted of any criminal offence (other than minor offences under the Road Traffic Acts or the Road Safety Acts for which a fine or non-custodial penalty is imposed) whether in connection with the Employment or not; (xi) is expelled, suspended or subject to any serious disciplinary action by any relevant professional body or fails to comply with any relevant laws, regulations, rules or codes of practice; (xii) fails to comply with any Group and/or local policies or laws relating to bribery or anti- corruption; (xiii) has an order made against them disqualifying them from acting as a company director or is found to have committed any serious disciplinary offence by any professional or other body, which undermines the confidence of the Board in their continued employment with the Company; (xiv) fails or ceases to meet the requirements of any regulatory body whose consent is required to enable the Executive to undertake all or any of their duties under this Agreement or the Executive is guilty of a serious breach of the rules and regulations of such regulatory body; (xv) resigns other than at the request of the Company or otherwise ceases to be or becomes prohibited by law from being a director of the Company, otherwise than at the Company's request; (xvi) is guilty of a breach of the requirements, rules or regulations as amended from time to time of the UK Listing Authority, the London Stock Exchange plc, the FCA, the Market Abuse Regulation (596/2014/EU) and any directly applicable regulation made under that Regulation or any regulatory authorities relevant to the Company or any Group Company or any code of practice, policy or procedures manual issued by the Company (as amended from time to time) relating to dealing in the securities of the Company or any Group Company, including the Code; or (xvii) ceases to be legally entitled to work in the United Kingdom in the role in which the Executive is employed. Any delay by the Company in exercising such right of termination shall not constitute a waiver of it. The proper exercise by the Company of its right of termination under this clause is without prejudice to any other rights or remedies which it or any Group Company may have or be entitled to exercise against the Executive. b) If at any time the Executive is unable to perform their duties properly because of ill health accident or otherwise for a period or periods totalling at least 9 months, or becomes incapable by reason of mental disorder of managing and administering their property and affairs, then the Company may in its absolute discretion terminate the Employment by giving them not less than three months' written notice to that effect provided that if at any time during the currency of such a notice the Executive shall provide a medical certificate satisfactory to the Board to the effect that they have fully recovered their physical and/or mental health and that no recurrence of illness or incapacity can reasonably be anticipated, the Company shall withdraw the notice unless, by that date, a replacement for the Executive has been appointed. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id18e- 70-40337364 Confidential 17.2 Events on Termination On the termination of the Employment or upon the Company having exercised its rights under clause 4.3 or Clause 5.5 or if requested to do so by the Company in circumstances where the Executive has been prevented from performing their duties through long term sickness (for a period of 9 months), the Executive shall: a) at the request of the Company resign from office as a director of the Company and all offices held by them in any Group Company without compensation and shall transfer to the Company without payment or as the Company may direct any qualifying shares held by them as nominee for the Company; and b) immediately deliver to the Company all materials within the scope of clause 15.8, any Company car, mobile telephone or other Company equipment in their possession and all keys, credit cards, and other property of or relating to the business of the Company or of any Group Company which may be in their possession or under their power or control but excluding, in the event that the Company exercises its rights under clause5.5, any Company car, mobile telephone or other Company equipment provided to the Executive for their benefit during the Employment and the Executive irrevocably authorises the Company to appoint any person in their name and on their behalf to sign any documents and do any things necessary or requisite to give effect to their obligations under this clause 17.2. 17.3 Reconstruction If the Employment shall be terminated for the purpose of reorganisation, reconstruction or amalgamation for whatever reason and the Executive is offered employment as Chief Financial Officer with any concern or undertaking resulting from such reorganisation, reconstruction or amalgamation on terms and conditions which as a whole are no less favourable to any material extent than the terms of this Agreement, then they shall have no claim against the Company or any Group Company in respect of the termination of the Employment. 17.4 No public statement The Executive shall not at any time during any period when they are required to cease the performance of their duties under clauses 5.5 or 20.3 or after the Termination Date make any public statement in relation to the Company or any Group Company or any of their officers or employees. The Executive shall not without the Company s consent after the termination of the Employment represent themselves as being employed by or connected with the Company or any Group Company. 17.5 No claim for loss of incentives or benefits On the termination of the Employment (howsoever arising, including lawfully or unlawfully), the Executive shall not be entitled to any compensation or payment for the loss of any incentives or benefits granted under clause 8.3 or any benefit which could have been derived from them, whether the compensation or payment is claimed by way of a payment in lieu of notice, damages for wrongful dismissal, breach of contract or loss of office, or compensation for unfair dismissal, or on any other basis. 18. Training 18.1 There is no mandatory training relating to the Executive s Employment which the Executive is required to pay for. 18.2 The Executive is expected to engage in the Company s training programme and other training opportunities provided to the Executive. Details of the training offered by the Company to employees at the Company and how to participate is available on the intranet or on request. 19. Restrictive covenants 19.1 Since the Executive is likely to obtain Confidential Information in the course of the Employment and personal knowledge of and influence over suppliers, customers, clients and employees of the Company and Group Companies, the Executive hereby agrees with the Company that in addition to the other terms of this Agreement and without prejudice to the other restrictions imposed upon them DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id19e- 70-40337364 Confidential by law, they will be bound by the covenants and undertakings contained in clauses 19.2 to 19.7 (inclusive). In this clause 19, the definitions in Schedule 1 apply. 19.2 The Executive confirms that, neither during the Employment nor during the Restricted Period, without the prior written consent of the Company/Board they will not: a) in any Capacity so as to compete with the Company in the Restricted Area: (i) solicit business from, canvas, induce or entice away (or endeavour, procure, assist or facilitate the solicitation, canvassing, inducement or enticement away of) any Customer or Prospective Customer in respect of Restricted Goods and Products or Restricted Services; (ii) solicit, canvass, induce or entice (or endeavour, procure, assist or facilitate the solicitation, canvassing, inducement or enticement of) a Customer to reduce or vary the terms upon which it deals with the Company and/or any Group Company or otherwise cause the value of the Company and/or any Group Company's arrangement with the Customer to be diminished; (iii) solicit, canvass, induce or entice (or endeavour, procure, assist or facilitate the solicitation, canvassing, inducement or enticement of) a Prospective Customer to reduce or vary the prospective terms upon which it may deal with the Company and/or any Group Company or otherwise cause the prospective value of the Company and/or any Group Company's prospective arrangement with the Prospective Customer to be diminished; (iv) accept orders from, act for or have any business dealings with, any Customer or Prospective Customer in respect of Restricted Goods and Products or Restricted Services; b) be employed, engaged or concerned in any Capacity in any business or person which is involved in the business of researching into, developing, manufacturing, distributing, selling, supplying or otherwise dealing with Restricted Goods and Products or Restricted Services to the extent that the Executive's activities for or on behalf of such business or person shall be: (i) in competition with the Company or any Group Company within the Restricted Area; and/or (ii) preparing to compete with the Company and/or Group Company within the Restricted Area; and/or (iii) likely to result in the intentional or unintentional disclosure or use of Confidential Information by the Executive in order for them to properly discharge their duties to or further their interest in that business or venture. c) hold any Interest in any business or person which is: (i) in competition with the Company or any Group Company within the Restricted Area; and/or (ii) preparing to compete with the Company or any Group Company within the Restricted Area; and/or (iii) likely to result in the intentional or unintentional disclosure or use of Confidential Information by the Executive in order for them to properly discharge their duties to or further their interest in that business or venture. d) in any Capacity: (i) solicit, canvass, induce or entice (or endeavour, procure, assist or facilitate the solicitation, canvassing, inducement or enticement of) any person who, on the Termination Date, was a Restricted Employee (and with whom the Executive had material dealings during the Relevant Period) to cease working for or providing DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id20e- 70-40337364 Confidential services to the Company, whether or not any such person would thereby commit a breach of contract; (ii) solicit, canvass, induce or entice (or endeavour, procure, assist or facilitate the solicitation, canvassing, inducement or enticement of) any Restricted Employee to renegotiate their terms of employment or engagement with the Company; (iii) offer (or endeavour, procure, assist or facilitate the offering of) any employment and/or engagement to any Restricted Employee in the business of researching into, developing, manufacturing, distributing, selling, supplying or otherwise dealing with Restricted Goods and Products or Restricted Services if that business is, or seeks to be, in competition with the Company; e) in any Capacity: (i) solicit, canvass, induce or entice (or endeavour, procure, assist or facilitate the solicitation, canvassing, inducement or enticement of): (A) the supply of any goods or services from any Supplier away from the Company; (B) any Supplier to cease to deal with the Company or reduce or alter the terms or quantity of supply to the Company or otherwise cause the value of the Company's arrangement with the Supplier to be diminished; (ii) deal with or accept the supply of any goods or services from any Supplier, where such supply is likely to be the detriment of the Company. 19.3 Application of non-compete restriction For the purposes of Clauses 19.2b) and 19.2c), "business" or "person" shall include, but shall not be limited to, the non-exhaustive list of companies and persons in Schedule 3 of this Agreement and any holding company or subsidiary company of those companies/persons. Schedule 3 is provided for guidance only on the Group's competitors as at the date of this Agreement and the Company reserves the right to notify the Executive of amendments to the non-exhaustive list in Schedule 3 (at any time, including on termination) to ensure it remains up to date. 19.4 Team moves If, at any time during the two year period prior to the Termination Date, two or more Restricted Employees leave the employment of the Company and/or any Group Company and take up employment or engagement with the same person, where such person is also in the business of researching into, developing, manufacturing, distributing, selling, supplying or otherwise dealing with Restricted Goods and Products or Restricted Services: (a) in competition with the Company within the Restricted Area; and/or (b) preparing to compete with the Company within the Restricted Area, the Executive shall not, at any time during the 12 months following the last date on which such Restricted Employee was employed and/or engaged by the Company and/or any Group Company, be employed or engaged in any way with that person to the extent any of the Executive's activities for such person will likely be in competition with, or preparing to compete, with the Company within the Restricted Area. 19.5 Application of restrictive covenants to other Group Companies Clause 19 shall also apply as though references to the "Company" include references to each Group Company in relation to which the Executive has in the course of the Employment or by reason of rendering services to or holding office in such Group Company: a) acquired knowledge of its products, services, trade secrets or Confidential Information; or b) had personal dealings with its Customers or Prospective Customers; or DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id21e- 70-40337364 Confidential c) supervised directly or indirectly employees having personal dealings with its Customers or Prospective Customers. The obligations undertaken by the Executive pursuant to this clause 19 shall, with respect to each Group Company, constitute a separate and distinct covenant and the invalidity or unenforceability of any such covenant shall not affect the validity or enforceability of the covenants in favour of any other Group Company. 19.6 Effect of Garden Leave on the Restricted Period clause 5.5 after notice of termination of the Employment has been given, the aggregate of the period of Garden Leave and the Restricted Period shall not exceed twelve months. If the aggregate of the two periods would exceed twelve months, the Restricted Period shall be reduced accordingly by a period equal to the period the Executive spent on Garden Leave. 19.7 Further Undertakings The Executive hereby undertakes to the Company that they will not at any time: a) during the Employment or after the Termination Date engage in any trade or business or be associated with any person engaged in any trade or business using any trading names used by the Company or any Group Company including the name(s) or incorporating the word(s) "Diageo"; or b) after the Termination Date represent or otherwise indicate any continuing association or connection with the Company or any Group Company or, for the purpose of carrying on or retaining any business which is damaging or materially against the interests of the Company/Group, represent or otherwise indicate any past association with the Company or any Group Company. 19.8 Severance a) The restrictions in this clause 19 (on which the Executive has had the opportunity to take independent advice, as the Executive hereby acknowledges) are separate and severable restrictions and are considered by the parties to be reasonable in all the circumstances. It is agreed that if any such restrictions, by themselves, or taken together, shall be adjudged to go beyond what is reasonable in all the circumstances for the protection of the legitimate interests of the Company or a Group Company but would be adjudged reasonable if some part of it were deleted, the relevant restriction or restrictions shall apply with such deletion(s) as may be necessary to make it or them valid and enforceable. b) The Executive acknowledges that because of the nature of their duties and the particular responsibilities arising as a result of such duties they have or will have knowledge of Confidential Information and has/will have developed relationships with and have knowledge of and influence over the Company's and Group Companies' customers and staff and is therefore in a position to harm the goodwill and interests of the Company and any Group Companies (the "Interests") if they were to make use of such Confidential Information or knowledge or influence for their own purposes or the purposes of another. Accordingly, having regard to the above and having taken independent legal advice, the Executive acknowledges that the provisions of this clause are fair, reasonable and necessary to protect the Interests. Whilst the provisions of this clause 19 have been framed with a view to legitimate expectations of the future development of the business, it is acknowledged by the Executive that the business may change over time and as a result it may become necessary to amend the provisions of this clause 19 in order to ensure that the Interests remain adequately protected. The Executive, therefore, agrees that the Company shall be entitled to amend the provisions of clause 19 in accordance with this clause 19(b) in order to protect the Interests. c) The Executive agrees that the restrictions in clause 19 shall also apply to their use of any social networking sites and/or professional networking sites, regardless of whether such accounts are held by the Executive personally, or held by them in the course of their Employment and/or engagement with the Company and/or Group Company or otherwise held by the Executive in any other capacity for any other reason. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id22e- 70-40337364 Confidential d) The Executive acknowledges and agrees that they shall be obliged to draw the provisions of this clause 19 to the attention of any third party who may at any time before or after the termination of the Employment offer to employ or engage the Executive in any capacity and for whom or with whom the Executive intends to work during the Restricted Period. The Executive further agrees that they shall immediately notify the Company of the offer of a position and identity of such person. e) The Executive undertakes that if any person at any time seeks to induce them to breach the provisions in this Agreement, during their employment with the Company and/or before the expiry of the Restricted Period, they will immediately disclose full details of such information to the Company. f) The Executive has given the undertakings in this Clause 19 to the Company as trustee for itself and each Group Company in respect of whom the Executive may be concerned during the Employment. The Executive agrees that each such Group Company may enforce the benefit of each such undertaking. The Executive shall, at the request and cost of the Company, enter into a direct agreement or undertaking with any Group Company to which the Executive provides services whereby they will accept restrictions corresponding to the restrictions in this clause (or such of them as may be appropriate in the circumstances) as the Company may require in the circumstances. g) The Executive agrees that if the Company transfers all or any part of its business to a third party (the "Transferee"), the restrictions contained in this clause 19 shall, with effect from the date that the Executive becomes an employee of the Transferee, apply to the Executive as if: (i) references to the Company include the Transferee and references to any Group Company include any Group Company of the Transferee; (ii) references to Customers, Prospective Customers, Restricted Employees and Suppliers of the Company include the Transferee, and references to any Group Companies were construed to include group companies of the Transferee, and the Executive will, if so required, enter into an agreement with the Transferee containing post termination restrictions corresponding to those restrictions in this Clause 19. 20. Disciplinary and grievance procedures 20.1 If the Executive wishes to obtain redress of any grievance relating to the Employment or is dissatisfied with any reprimand, suspension or other disciplinary step taken by the Company, they may apply in writing to the CEO, setting out the nature and details of any such grievance or dissatisfaction. Should the Executive wish to appeal against any grievance decision, they should submit their appeal in writing to the Chair (or such other member of the Executive Committee as is designated by the Company) whose decision shall be final. The provisions of this clause shall not apply in any event, to any action taken by the Company under clause 17.1(a), Clause 5.5 or clause 4.3. 20.2 Any disciplinary matters affecting the Executive may be dealt with in accordance with the Diageo disciplinary policy (as amended from time to time). Copies of the disciplinary policy can be found on the intranet. However, given the Executive's seniority any policy may be departed from or adapted to take account of the relevant circumstances. Should the Executive wish to appeal against any disciplinary action, they should submit their appeal in writing to the Chair (or such other member of the Executive Committee as is designated by the Company) whose decision on such appeal shall be final. 20.3 The Company can, in its absolute discretion, suspend the Executive from work for as long as it deems necessary to carry out a proper investigation and to hold any appropriate disciplinary and/or appeal hearings, in order to investigate any claim or allegation which the Company considers could constitute serious misconduct, where relationships have broken down, where the Company has any grounds to consider that the Company's property or responsibilities to other parties are at risk and/or where the Company considers that the Executive's continued presence at the Company or Group's premises could hinder an investigation. 20.4 The provisions of clause 5.5b) above apply during any period of suspension. In addition, the Executive shall ensure that the Company knows where they will be and how they can be contacted during each working day. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id23e- 70-40337364 Confidential 20.5 The provisions of clauses 20.1 and 20.2 20.6 The outcome of any investigation and/or disciplinary process will be taken into account when deciding if a bonus, commission or share of profit should be paid or accrued. 21. Data Protection 21.1 The Executive shall at all times during the Employment with the Company act in accordance with the General Data Protection Regulation 2016/679 (the "GDPR") and all applicable regulations, domestic legislation and any successor legislation and regulatory guidance relating to the protection of personal data (together the "Data Protection Legislation"). 21.2 The Executive shall comply with the Data Privacy Global Policy, the Europe Data Protection Policy, any other local data privacy policy, the Information Management and Security Global Policy, the Information Handling Standard and any other policy, standard, guideline or code of practice introduced by the Company from time to time to comply with the Data Protection Legislation. If the Executive fails to comply with any such policies, disciplinary action may be taken against them. 21.3 The Executive shall provide the Company with all Personal Data relating to them when it is necessary or reasonably required for the proper performance of this Agreement, for legal requirements or as otherwise set out from time to time in the list of legitimate interests under the Europe Data Protection Policy or any other local data privacy policy as amended from time to time. 22. Power of Attorney The Executive irrevocably appoints the Company (or a person nominated by the Company) to be their attorney in their name and on their behalf to execute documents, use their name and do all things which are necessary or desirable for us to obtain for itself or its nominee the full benefit of clauses 16 and 17.2. 23. Notices 23.1 Any notice or other document to be given under this Agreement shall be in writing in the English language and may be given personally to the Executive or to their Manager or to the Secretary of the Company (as the case may be) or may be sent by first class post or other fast postal service or by email to, in the case of the Company, its registered office for the time being and in the case of the Executive either to their address shown on the face of this Agreement or to their last known place of residence. 23.2 Any such notice shall (unless the contrary is proved) be deemed served when in the ordinary course of the means of transmission it would first be received by the addressee in normal business hours. In the case of first class post, this shall be deemed to be no later than two working days after posting. In proving such service it shall be sufficient to prove, where appropriate, that the notice was addressed properly and posted, or that the email was dispatched to the correct email address. 24. Former contracts of employment 24.1 This Agreement and the documents referred to in it together with the offer letter dated 3 May 2024, constitute the entire agreement and understanding of the parties. However, where there is any inconsistency between the offer letter and this Agreement the terms of this Agreement shall prevail. 24.2 This Agreement shall be in substitution for any previous contracts, whether by way of letters of appointment, agreements or arrangements, whether written, oral or implied, relating to the employment of the Executive, which shall be deemed to have been terminated by mutual consent as from the Commencement Date and the Executive acknowledges that they have no outstanding claims of any kind against the Company or any Group Company in respect of any such contract. 24.3 For the avoidance of doubt, this clause shall not affect benefits which have already accrued to the Executive prior to the date hereof under any pre-existing scheme or arrangement by virtue of which they were entitled to benefits. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id24e- 70-40337364 Confidential 25. Choice of law and submission to jurisdiction 25.1 This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales. 25.2 Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims). 26. Changes to the terms of employment 26.1 The Company reserves the right to make reasonable changes to any of the terms of the Executive's Employment. The Executive will be notified in writing of any changes as soon as possible and in any event within one month of the change. 27. Variation No purported variation of this Agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives). 28. Counterparts 28.1 This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all the counterparts shall together constitute the one Agreement. 28.2 Transmission of an executed counterpart of this Agreement by email (in PDF, JPEG or other agreed format) will take effect as delivery of an executed counterpart of this Agreement. If either method of delivery is adopted, without prejudice to the validity of the agreement made by it, each party will provide the others with the original of their counterpart as soon as reasonably possible . 28.3 No counterpart will be effective until each party has executed and delivered at least one counterpart. 29. General 29.1 The expiration or termination of this Agreement shall not prejudice any claim which either party may have against the other in respect of any pre-existing breach of or contravention of or non-compliance with any provision of this Agreement nor shall it prejudice the coming into force or the continuance in force of any provision of this Agreement which is expressly or by implication intended to or has the effect of coming into or continuing in force on or after such expiration or termination. 29.2 No failure or delay by the Company in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise by the Company of any right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege. 29.3 There are no collective agreements directly affecting the Executive's employment. 29.4 This Agreement constitutes the written statement of the terms of employment of the Executive provided in compliance with Part I of the ERA. 29.5 A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement but this does not affect any right or remedy of a third party which exists or is available apart from that Act. Executed as a Deed by the parties on the date which first appears in this Deed. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id25e- 70-40337364 Confidential Executed as a deed by Diageo plc acting by Debra Crew, a director: -------------------------------------------------- In the presence of: Signature of Witness: -------------------------------------------------- Name: Louise Prashad Address: Occupation: Chief HR Officer, Diageo Executed as a deed by Nik Jhangiani : -------------------------------------------------- In the presence of: Signature of Witness: -------------------------------------------------- Name: Kiran R Jhangiani Address: Occupation: DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id26e- 70-40337364 Confidential Schedule 1 Definitions and interpretation 1. Definitions 1.1. In the Agreement to which this Schedule is attached, unless the context otherwise requires: "Agreement" means this service agreement and any schedules to this agreement which form part of and are incorporated into this agreement between the Company and the Executive. "Board" means the board of directors for the time being of Diageo PLC, any authorised director or any committee of directors for the time being. "Capacity" means the Executive directly or indirectly, acting alone or jointly, with or on behalf of any other person, holding any position (whether employed or engaged) or otherwise providing any services (including but not limited to as a director, officer, employee, worker, consultant, contractor, adviser, partner, principal, agent or volunteer) and whether for the Executive's own benefit or that of any other person. "Chair" means the Chair of the Board. "CEO" means the Chief Executive Officer of Diageo PLC from time to time. "Confidential Information" means any trade secrets or other information which is confidential, commercially sensitive and is not in the public domain relating to or belong to the Company and/or any Group Company including but not limited to: a) Lists or details of suppliers or potential suppliers and their terms of business, lists or details of customers or potential customers and their requirements, the prices charged to and terms of business with customers or the arrangements made with any customer or supplier; b) Information relating to the business methods, corporate plans, management systems, finances, new business opportunities, research and development projects, marketing plans and sales forecasts, financial information, results and forecasts (save to the extent that these are included in published audited accounts), any proposals relating to the acquisition or disposal of a company or business or any part thereof or to any proposed expansion or contraction of activities, marketing or sales of any past, present or future product or service; c) Details of employees and officers and of the remuneration and other benefits paid to them; d) Trade secrets, information relating to research activities, inventions, secret processes, designs, know-how, discoveries, technical specifications, formulae and product lines and other technical information relating to the creation, production or supply of any past, present or future product or service of the Company and/or any Group Company; e) Any information which is treated as confidential or which the Executive is told or ought reasonably to know is confidential and any information which has been given to the Company or any Group Company in confidence by customers, suppliers or other persons; and f) Any information in respect of which the Company and/or any Group Company owes an obligation of confidentiality to any third party. "Customer" means any person to which the Company distributed, sold or supplied Restricted Goods and Products or Restricted Services during the Relevant Period and with which, during that period either the Executive, or any employee under the direct or indirect supervision of the Executive, had material dealings in the course of the Employment, but always excluding any division, branch or office of such person with which the Executive and/or any such employee had no dealings during that period. "Employment" means the Executive's employment under this Agreement. "ERA" means the Employment Rights Act 1996 as amended. "Group" means the Company and the Group Companies. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id27e- 70-40337364 Confidential "Group Company" means any company which is for the time being a subsidiary or holding company of the Company and any subsidiary of any such holding company and for the purposes of this Agreement the terms subsidiary and holding company shall have the meanings ascribed to them by section 1159 Companies Act 2006 or in any subordinate legislation made under the Companies Act 2006 (and Group Companies shall be interpreted accordingly). "Intellectual Property" means all patents, registered designs, trade-marks and service marks (whether registered or not and including any applications for the foregoing), copyrights, design rights, semiconductor topography rights, database rights and all other intellectual property and similar proprietary rights subsisting in any part of the world (whether or not capable of registration) and including (without limitation and whether patentable or not) all such rights in materials, works, prototypes, inventions, know how, process, improvement, discoveries, techniques, computer programs, source codes, data, technical, commercial or confidential information, trading, business or brand names, goodwill, rights in get-up, rights to sue for passing off or unfair competition, rights in domain names and URLs, rights to preserve the confidentiality of information (including know-how and trade secrets), the style of presentation of the goods or services or any improvement of any of the foregoing and any other intellectual property rights, in each case whether registered or unregistered and including all applications (or rights to apply for and be granted), renewals or extensions of, and rights to claim priority from, such rights and all similar or equivalent rights or forms of protection which may now or in the future subsist in any part of the world. "Interest" means: 1. the direct or indirect provision of any financial assistance; and/or 2. the direct or indirect control or ownership (whether jointly or alone) of any shares (or any voting rights attached to them) or debentures); save for the ownership, for passive investment purposes only, of not more than 5% of the issued ordinary shares of any person. "Manager" means the CEO, or such other person as the Company or Board may from time to time nominate and notify to the Executive. "Minority Holder" means a person who either solely or jointly holds (directly or through nominees) any shares or loan capital in any company whose shares are listed or dealt in on a recognised investment exchange (as that term is defined by section 285 Financial Services and Markets Act 2000 ("FSMA"), an overseas investment exchange (as defined in s313 FSMA), or a relevant market (as defined in article 37 FSMA 2000 (Financial Promotion) Order 2005) provided that such holding their children and/or their capital of the class concerned for the time being issued. "Prospective Customer" means any person with which the Company had discussions during the Relevant Period regarding the possible distribution, sale or supply of Restricted Goods and Products or Restricted Services and with which during such period the Executive, or any employee who was under the direct or indirect supervision of the Executive, had material dealings in the course of the Employment, but always excluding any division, branch or office of that person with which the Executive and/or any such employee had no dealings during that period. "Relevant Period" means: (i) where the Employment is continuing, the period of the Employment; and (ii) where the Employment has terminated, the period of 12 months immediately preceding the Termination Date. "Remuneration Committee" means the Remuneration Committee of the Board from time to time. "Restricted Area" means the territories in which the Company and/or any Group Company operated at any time during the Relevant Period. "Restricted Employee" means any person who was a director, employee or consultant of the Company or any Group Company or any joint venture between the Company (or any Group Company) and a third party at any time within the Relevant Period who by reason of that position and in particular either (i) their seniority (level 3 or above) and expertise or (ii) knowledge of Confidential Information or knowledge of or influence over the customers or contacts of the Company DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id28e- 70-40337364 Confidential is likely to cause damage to the Company if they were to leave the employment of the Company and become employed by a competitor of the Company. "Restricted Period" means the period commencing on the Termination Date and, subject to the terms of clause 19.6, continuing for 12 months. "Restricted Goods and Products" means any products, equipment or machinery researched into, developed, manufactured, supplied, marketed, distributed or sold by the Company and with which the duties of the Executive were materially concerned or for which they were responsible during the Relevant Period, or any products, equipment or machinery of the same type or materially similar to those products, equipment or machinery. "Restricted Services" means any services researched into, developed or supplied by the Company and with which the duties of the Executive were materially concerned or for which they were responsible during the Relevant Period, or any services of the same type or materially similar to those services. "Salary" means the salary referred to in clause 8.1. "Supplier" means any supplier, agent, distributor or other person who, during the Relevant Period was in the habit of dealing with the Company and with which, during that period, the Executive, or any employee under the direct or indirect supervision of the Executive, had material dealings in the course of the Employment. "Termination Date" means the date of the termination of the Employment. 2. Interpretation 2.1. The headings to the clauses are for convenience only and shall not affect the construction or interpretation of this Agreement. 2.2. In the Agreement, unless the context otherwise requires: a) words in the singular include the plural and vice versa and words in one gender include any other gender; b) a reference to a statute or statutory provision includes: (i) any subordinate legislation (as defined in s21(1) Interpretation Act 1978) made under it; and (ii) any statute or statutory provision which modifies, consolidates, re-enacts or supersedes it. c) a reference to: (i) a "person" includes any individual, firm, body corporate, business, venture, association, partnership or government department (whether or not having a separate legal personality, and whether or not acting for profit); (ii) clauses and schedules are to clauses and schedules of this Agreement and references to sub-clauses and paragraphs are references to sub-clauses and paragraphs of the clause or schedule in which they appear; and (iii) 'indemnify' and 'indemnifying' any person against any circumstances include indemnifying and keeping them harmless from all actions, claims and proceedings from time to time made against them and all loss or damage and all payments (including fines, penalties and interest, costs or expenses) made or incurred by that person as a consequence of or which would not have arisen but for that circumstance. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id29e- 70-40337364 Confidential Schedule 2 Post-Employment Share Retention Deed Nik Jhangiani of hereby acknowledges and agrees as follows: In relation to the number of ordinary shares in Diageo plc ("Diageo" and the "Shares") and/or American Depositary Shares in Diageo ("ADS") of which I am the legal or beneficial holder as at the date that my employment with Diageo or any company in the Diageo group terminates ("Termination Date") that I received through any share incentive plan operated by Diageo from time to time (which, for the avoidance of doubt, excludes any Shares and/or ADS purchased by me or my connected persons outside of any Diageo share incentive plan): 1. I will not assign, transfer, charge or otherwise dispose of Shares or ADSs or any interest in them: (a) equal in market value1 to 500% of my base salary as at the Termination Date until the end of a two-year period following the Termination Date; in accordance with the Diageo post-employment shareholding policy ("Policy") as amended from time to time, except (i) with the prior written consent of Diageo's Remuneration Committee or (ii) to the extent that the number of Shares or ADSs exceeds the number required to be held under the Policy ("Post-Employment Shareholding Obligation"). 2. If I breach my Post-Employment Shareholding Obligation, I understand that Diageo reserves the right to take action against me which may include: (a) requiring me to revoke any assignment, transfer or charge; (b) requiring me to acquire Shares or ADS in place of any Shares or ADS of which I have disposed; (c) applying malus against any unvested awards that I may hold under Diageo's share incentive plans; and/or (d) taking such other action as Diageo decides is necessary or desirable to ensure compliance with my Post-Employment Shareholding Obligation. 3. The Shares and ADS may be held on my behalf by a nominee determined by Diageo or, if Diageo allows, in my own name during the period of my Post-Employment Shareholding Obligation. 4. I will take any actions or enter into documentation requested by Diageo in order to satisfy my Post-Employment Shareholding Obligation and to ensure Diageo's compliance with the post- employment shareholding requirements of the UK Corporate Governance Code 2018, as amended from time to time or any other law, regulation or regulatory guidance. 1 Note: "Market value" for these purposes will be the closing mid-market price of a Share on the London Stock Exchange Daily Official List or the closing price of an ADS on the New York Stock Exchange on the Termination Date or, if that date is not a day when the relevant exchange is open for business, the next trading day. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id30e- 70-40337364 Confidential 5. I will keep the content and existence of this Deed confidential as between me and Diageo and shall not disclose any information about this Deed, except with the prior written consent of Diageo or as required by law. 6. This Deed shall be governed by English law and the courts of England and Wales shall have exclusive jurisdiction over any dispute relating to this Deed. 7. No third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Deed. Dated: -------------------------------------------------- Executed as a deed by Nik Jhangiani : -------------------------------------------------- In the presence of: Signature of Witness: -------------------------------------------------- Name: Kiran R Jhangiani Address: Occupation: DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id31e- 70-40337364 Confidential Schedule 3 DIAGEO GROUP MALUS AND CLAWBACK POLICY Approved by the Remuneration Committee: 2nd December 2020 Amended by approval of the Remuneration Committee: 18th October 2023 1 PURPOSE 1.1 The purpose of this policy is to set out the principles of malus adjustment and clawback applicable to all employees of Diageo (the "Company") and any of its subsidiaries (the "Group"). 1.2 The Board of the Company (the "Board") has adopted this policy (the "Malus and Clawback Policy") with a view to align the interests of employees with the long-term interests of the Group and its shareholders, to promote effective risk management, and to encourage appropriate conduct and culture. This is in accordance with the requirements of the Financial Reporting Council's UK Corporate Governance Code and investment guidelines such as the Investment Association's Principles of Remuneration, as amended from time to time, as well as such other legal or regulatory requirements relating to the recovery or cancellation of remuneration to which the Group may be subject from time to time. 1.3 individuals, prior to vesting. Clawback allows the Group to recover all or part of any vested or paid variable remuneration from an individual, in certain circumstances. 1.4 Any decision regarding the application of malus or clawback under the Malus and Clawback Policy shall be taken by the Remuneration Committee (the "RemCo (in relation to members of the executive committee) or the Routine Business Committee (for all other Employees), or in each case by any person or group of persons duly authorised as a delegate thereof for such purpose (such committee or duly authorised delegate being the Appropriate Committee 1.5 The Malus and Clawback Policy may be amended from time to time by the RemCo at its discretion. Employees will be made aware of any significant amendments and how this may impact their remuneration. 2 SCOPE AND APPLICABILITY 2.1 The Malus and Clawback Policy applies to current and former executive directors of the Company and current and former Group employees (each an "Employee"). 2.2 The Malus and Clawback Policy applies to any remuneration granted or to be granted to an Employee under the Annual Incentive Plan ("AIP"), the Diageo 2014 Long Term Incentive Plan and the Diageo 2023 Long Term Incentive Plan DLTIP the Diageo Deferred Bonus Share DBSP Awards 2.3 The Malus and Clawback Policy will apply to all Employees and this will be notified to Employees through any means determined by the RemCo and, where applicable, asking Employees to agree to the terms when accepting an Award or via a clause in their employment contract. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id32e- 70-40337364 Confidential 2.4 The Malus and Clawback Policy will continue to apply to an Employee following any termination of their employment. 2.5 This Malus and Clawback Policy applies in addition to the Diageo Group NYSE Compensation Recovery Policy, which applies to certain senior employees of the Group as set out in that policy. 3 MALUS AND CLAWBACK CIRCUMSTANCES 3.1 The Appropriate Committee shall be entitled, at its absolute discretion, to apply: 3.1.1 malus to any unvested Award (or any part of any unvested Award); and/or 3.1.2 clawback to any vested Award (or any part of any vested Award) at any time in the first year after an AIP Award is paid or at any time in the two years after a DLTIP Clawback Period Clawback will not apply to DBSP Awards. 3.2 Malus and clawback can be applied where the Appropriate Committee determines that in its opinion: (a) results announced for any financial year before vesting have subsequently appeared materially financially inaccurate or misleading as determined by the Appropriate Committee; (b) there has been a failure of risk management which has resulted in a material financial loss for the business unit or profit centre in which the Employee worked; (c) any error or a material misstatement has resulted in an overpayment to Employees, whether in the form of Awards, assessment of Employee performance, the herwise; (d) an Employee has left employment in circumstances in which the Award has not lapsed and facts have emerged which, if known at the time, would have caused the Award to lapse on leaving or have caused any discretion under any terms governing the Award to have been exercised differently; (e) the Employee is subject to any disciplinary action or regulatory investigation or the Appropriate Committee considers that their conduct, or performance has been in breach of: (i) the Employee's employment contract, (ii) any laws, rules or codes of conduct applicable to the Employee; or (iii) the standards reasonably expected of a person in their position. (f) any team, business area, member of the Group or profit centre in which the Employee works has been the subject of any regulatory investigation or has been in breach of any laws, rules or codes of conduct applicable to it or the standards reasonably expected of it; (g) in relation to malus only, the underlying financial health of the Group or any member of the Group or any business unit has significantly deteriorated such that there are severe DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id33e- 70-40337364 Confidential (h) material reputational damage has been caused to the Group or any member of the Group for which the Participant is accountable and which could have been reasonably avoided or mitigated or the Employee's conduct is materially adverse to the interests of the Company; and/or (i) it is appropriate to apply malus or clawback as a result of any other matter which, in the reasonable opinion of the Appropriate Committee is required to be considered to comply with prevailing legal and / or regulatory requirements, and malus and/or clawback shall be applied to any extent necessary to give effect to any required reimbursement, cancellation or recovery pursuant to the Diageo Group NYSE Compensation Recovery Policy. 4 MALUS APPLICATION 4.1 Where malus is to apply to an Award, the Appropriate Committee can decide: 4.1.1 the number of shares or cash amount subject to any Award will be reduced; and 4.1.2 whether: (a) the Award will lapse; (b) some or all of any shares held as part of an Award will be forfeited; (c) vesting of the Award or the end of any retention period will be delayed; (d) additional conditions will be imposed on the vesting of the Award or the end of the retention period; and/or (e) any Award, bonus or other benefit which might have been granted or paid to the Employee in any later year will be reduced or not awarded. For the avoidance of doubt, where there is a delay, there may (or may not) be an adjustment or further adjustment under this rule following completion of any action, investigation or procedure to take any action it deems appropriate. 4.2 The Appropriate Committee may exercise its discretion irrespective of whether any applicable performance conditions attached to the Awards have been satisfied. 5 CLAWBACK APPLICATION 5.1 Where clawback is to apply to an Award, the Appropriate Committee: (a) can decide the number of shares or cash amount subject to the clawback; and (b) can (i) require repayment, in cash or shares, of the Award on such terms and over such period as determined by the Appropriate Committee; (ii) deduct from any payment to be made to the Employee such amount as is required for the clawback to be satisfied in part or full; and/or (iii) forfeit the Award to the extent it remains outstanding (including subject to a retention period (or similar), if applicable). 5.2 The Appropriate Committee may exercise its discretion irrespective of whether any applicable performance conditions attached to the Awards have been satisfied. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id34e- 70-40337364 Confidential 5.3 Clawback will normally be applied in respect of any gross amounts received by an Employee but the Appropriate Committee has discretion to determine that the net of tax and social security amount should be subject to clawback. 5.4 If an Employee obtains any repayment, offset or rebate (or similar) of any taxes, social security amounts or similar as a result of clawback being applied, the Employee must account to the appropriate member of the Group for those amounts unless the Appropriate Committee determined otherwise. 5.5 The Group may lapse any Award (whether vested or unvested) to any extent required to give effect to the application of any application of clawback under this Malus and Clawback Policy and/or any repayment or recovery under any other policies or terms that are applicable from time to time (including the Diageo Group NYSE Compensation Recovery Policy). 6 DECISION MAKING 6.1 Misconduct and other trigger events can take years to come to light. For the avoidance of doubt, malus and clawback may be applied in respect of any Awards (or part of any Award) at any time, even where the Award does not relate to performance for the year in which the trigger event occurred or came to light. Where malus and clawback are applied to Awards before the full impact of the trigger event is known, subsequent action may also be taken to ensure the final outcome in respect of an Award fully reflects the impact of the event. 6.2 Without limiting the determining whether and to what extent to apply malus and/or clawback, the Appropriate Committee may consider: (a) the Employee's proximity to the matter in question; (b) the Employee's level of responsibility and accountability, contributing to the circumstances. Direct culpability will be the most serious; (c) the Employee's supervisory or managerial responsibility for a culpable team member; (d) any other circumstances pointing to control weakness, poor performance, misbehaviour or miscount; (e) the cost of fines or other action against the Group; (f) direct and indirect financial loss(es) attributable to the relevant failure; (g) reputational damage to the Group; (h) the impact on the Group's relationship with its stakeholders, including shareholders, customers, team members, creditors and counterparties; and/or (i) any other criteria the Appropriate Committee considers relevant. 6.3 As appropriate, the Appropriate Committee will consult with different departments within the Group, including Finance, HR and Reward to obtain information relevant to the circumstances of malus and clawback being considered. To the extent possible, the Employee will be invited to provide representation in writing, within such period as set by the Appropriate Committee, to be considered in the determination. 6.4 To the extent possible, at the conclusion of the procedure, an Employee to whom malus or clawback may be applied will be informed of the Appropriate Committee's decision and will be provided with a summary of the reasons for that decision. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id35e- 70-40337364 Confidential 7 OTHER RECOVERY RIGHTS 7.1 Any right of recovery or similar under this Malus and Clawback Policy applies in addition to (and without limiting and without prejudice to) any other remedies and/or rights to reduce, cancel or recover any elements of compensation (or similar) that may be available to any member of the Group pursuant to any remuneration policy (including any further malus and clawback policies) operated by any member of the Group, the terms of any incentive plans or awards operated by any member of the Group, any employment agreement and/or any other terms and conditions appliable to any Executive, in each case from time to time in force, and/or pursuant to any other legal remedies available to any member of the Group. Recovery (or similar) may be applied pursuant to both this Malus and Clawback Policy and any such other policies, terms or similar in respect of the same award of compensation, provided that there shall be no duplication of recovery. 7.2 In the event that malus and/or clawback is to be applied pursuant to this Malus and Clawback Policy to give effect to any required reimbursement, cancellation or recovery as required pursuant to the Diageo Group NYSE Compensation Recovery Policy, then malus and/or clawback shall be applied in accordance with the Diageo Group NYSE Compensation Recovery Policy (the terms of which shall, for such purpose, take precedence to the terms of this Malus and Clawback Policy). 8 DISCLOSURE 8.1 To the extent required by any applicable laws or regulations, the Company shall disclose the application of malus or clawback and the circumstances in the annual report of the Company for the relevant year and otherwise pursuant to any other annual reporting it is obligated to prepare. 9 ADMINISTRATION AND OPERATION 9.1 Each of the RemCo and the Routine Business Committee has, in respect of the application of this Malus and Clawback Policy to those Employees within their ambit as set out in clause 1.4, the exclusive power and authority to: (i) administer this Malus and Clawback Policy, including, without limitation, the right and power to interpret the provisions of this Malus and Clawback Policy; and (ii) delegate any power or discretion under this Malus and Clawback Policy to such person or persons as it may determine (and in which case this Malus and Clawback Policy shall apply accordingly). 9.2 The Appropriate Committee shall have power to make all determinations deemed necessary or advisable in applying this Malus and Clawback Policy (which in every case shall be made at the relevant decision absolute discretion, without this being limited by references in certain clauses but not others to a discretion being absolute). 9.3 Any action, interpretation or determination taken or made by the Appropriate Committee pursuant to this Malus and Clawback Policy will be final, conclusive and binding. 10 GENERAL 10.1 Any provision in this Malus and Clawback Policy can apply even if the Employee was not responsible for the event in question or if it took place before the grant and/or vesting of any Award that is subject to malus and/or clawback. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id36e- 70-40337364 Confidential 10.2 Malus and clawback can be applied in different ways for different Employees in relation to the same or different events. 10.3 An Employee will not be entitled to any compensation in respect of any application of Malus and/or Clawback. 10.4 The terms of this Malus and Clawback Policy shall apply regardless of any agreement, undertaking or suggestion (or similar), whether or not contractual, that any Award shall not be subject to malus or clawback. 10.5 The invalidity or unenforceability of any provision of this Malus and Clawback Policy shall not affect the validity or enforceability of any other provision. 10.6 References in this Malus and Clawback Policy to the phrase (or similar) shall not limit or prejudice the generality of the following words (without this being limited by such references in some clauses but not others). DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id37e- 70-40337364 Confidential APPENDIX: DIAGEO GROUP NYSE COMPENSATION RECOVERY POLICY AS APPLICABLE TO EXECUTIVE COMMITTEE MEMBERS1 Approved by the Remuneration Committee: 18th October 2023 1 PURPOSE 1.1 The purpose of this policy is to set out the basis for the mandatory recovery of erroneously awarded Incentive-Based Compensation (as defined below) from the Executives (as defined Company Group an accounting restatement. 1.2 RemCo Board Recovery Policy Section which was mandated by Rule 10D-1 of the Securities Exchange Act of 1934. 1.3 The Recovery Policy may be amended from time to time by the RemCo pursuant to any laws, regulations or rules of any stock exchange or other applicable regulatory authority Applicable Rules significant amendments and how this may impact their remuneration. 2 APPLICABILITY 2.1 The Recovery Policy applies to current and former members of the executive committee of the Company (or its equivalent from time to time), as well as any other person(s) (if any) as the Company may determine also constitute "executive officers" as defined in Section 303A.14(e) of Executive 2.2 Compensation shall be subject to recovery pursuant to this Recovery Policy where: (i) the RemCo determines that such compensation constitutes Incentive-Based Compensation; and (ii) the compensation was Received by an Executive: 2.2.1 After beginning their services as an Executive; 2.2.2 Who served as an Executive at any time during the performance period for that Incentive-Based Compensation; 2.2.3 While the Company has a class of securities listed on the NYSE or another national securities exchange or a national securities association in the United States; and 2.2.4 During the Recovery Period (as defined below), provided that this Recovery Policy shall only apply to compensation Received (as defined below) on or after 2 October Effective Date 2.3 The Recovery Policy will continue to apply to an Executive following any termination of their employment. 1 This Recovery Policy also applies to any other person(s) if any as the Company may determine also constitute "executive officers" as defined in Section 303A.14(e) of the NYSE Listed Company Manual. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id38e- 70-40337364 Confidential 2.4 The Recovery Policy will be notified to Executives through any means determined by the RemCo and, where applicable, requiring Executives to agree to the terms when accepting Incentive-Based Compensation or via a clause in their employment contract. 3 RECOVERY OF ERRONEOUSLY AWARDED INCENTIVE-BASED COMPENSATION 3.1 In the event that the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under Applicable Rules, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the Recoverable Event 2 the Group shall recover the amount of Incentive-Based Compensation Received by an Executive in the Recovery Period (as defined below) that exceeds the amount of Incentive-Based Compensation that otherwise would have been received had it been determined based on the restated amounts, computed without regard to any taxes paid Recoverable Amount Whether any relevant noncompliance is material for the purposes of this Recovery Policy shall be determined by the RemCo, which shall be permitted to rely on any decision in this respect of the Board or any other authorised committee thereof (including without limitation the audit committee of the Board). 3.2 The Recovery Period shall mean the period of three full fiscal years preceding the Restatement Date (as defined below) and any transition period that results from a change 3. 3.3 For Incentive-Based Compensation based on share price or total shareholder return, where the amount of erroneously awarded compensation is not subject to mathematical recalculation directly from the information in an accounting restatement, the Recoverable the accounting restatement on the share price or total shareholder return upon which the Incentive-Based Compensation was received.4 3.4 Following a Recoverable Event, the RemCo shall: 3.4.1 Determine the Recoverable Amount. 3.4.2 To the extent the Recoverable Amount has been Received by an Executive, instruct the Company to recover the full Recoverable Amount in accordance with paragraph 3.5 below. 2 The following do not constitute an accounting restatement for purposes of the Recovery Policy: (i) the correction of an error in the current period consolidated financial statements (commonly referred to as an out-of-period adjustment) when the error is immaterial to the previously issued consolidated financial statements and the correction of the error is also immaterial to the current period; (ii) the retrospective application of a change in accounting policy; (iii) a retrospective revision of reportable ion due to a discontinued operation; (v) the retrospective application of a change in reporting entity, such as from a reorganization of entities under common control; and (vi) a retrospective revision for a share split, reverse share split, share dividend or other changes in capital structure. 3 A transition period between the last day of the previous financial year end and the first day of its new financial year that comprises a period of nine to 12 months will be deemed a full financial year, and as such will count as one of the relevant three financial years (rather than be in addition to them). 4 In addition, the RemCo will maintain documentation of the determination of that reasonable estimate and provide such documentation to the NYSE. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id39e- 70-40337364 Confidential 3.4.3 To the extent the Recoverable Amount has not been Received, but is otherwise owed to an Executive, cancel the right of the Executive to receive the Recoverable Amount. 3.5 Any Recoverable Amount may be recovered by all legal means available, including by requiring the Executive to repay such amount to the Company or any other member of the Group; by requiring any compensation owing by the Company or any member of the Group to the Executive (including any salary or any unvested or unexercised remuneration) to be immediately withheld, forfeited and/or irrevocably cancelled to compensate for the Recoverable Amount or any unrecovered portion thereof; and/or by any other means or taking any other actions against the Executive which the RemCo may deem necessary or advisable to recover the Recoverable Amount. 3.6 Recoupment of the Recoverable Amount under this Recovery Policy will be initiated by the Company as soon as practicable following the written request of the RemCo. 3.7 All amounts recoverable or payable by an Executive to the Company pursuant to this Recovery Policy shall be payable to the Company (or as the Company directs), and shall be payable on demand. 3.8 For purposes of this Recovery Policy: 3.8.1 Incentive-Based Compensation means any compensation that is determined by the RemCo, to be granted, earned, or vested based wholly or in part5 upon the attainment of a Financial Reporting Measure (as defined below) Incentive-Based Compensation -equity incentive plan awards earned based wholly or in part on satisfying a Financial Reporting Measure performance goal; (ii) bonuses paid determined based wholly or in part on satisfying a Financial Reporting Measure performance goal; (iii) other cash awards based wholly or in part on satisfying a Financial Reporting Measure performance goal; (iv) restricted shares, restricted share units, performance share units, stock options and stock appreciation rights that are granted or become vested based wholly or in part on satisfying a Financial Reporting Measure performance goal; and (v) proceeds received upon the sale of shares acquired through an incentive plan that were granted or vested based wholly or in part on satisfying a Financial Reporting Measure performance goal. Incentive- Based Compensation includes compensation Received by Executives under the Annual Incentive Plan AIP and the Diageo 2014 Long Term Incentive Plan and/or DLTIP remuneration structures operated by the Company from time to time under which awards are wholly or in part based upon the attainment of a Financial Reporting Measure. 3.8.2 Incentive-Based Compensation shall not include: (i) an Executive 6 (ii) bonuses paid solely at the discretion of the RemCo or the Board that are not paid performance goal; (iii) bonuses paid solely upon satisfying one or more subjective standards (e.g. demonstrated leadership) and/or completion of a specified 5 Where Incentive-Based Compensation is based only in part on the achievement of a Financial Reporting Measure performance goal, RemCo shall first determine the portion of the original Incentive-Based Compensation based on or derived from the Financial Reporting Measure that was restated. RemCo shall then recalculate the affected portion based on the Financial Reporting Measure as restated. 6 To the extent that an Executive receives a salary increase earned wholly or in part based on the attainment of a financial reporting measure performance goal, such a salary increase is subject to recovery. DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id40e- 70-40337364 Confidential employment period); (iv) non-equity incentive plan awards earned solely upon satisfying one or more strategic measures (e.g., consummating a merger or divestiture), or operational measures (e.g., completion of a project, increase in market share); and (v) equity awards for which the grant is not contingent upon achieving any Financial Reporting Measure performance goal and vesting is contingent solely upon completion of a specified employment period and/or attaining one or more nonfinancial reporting measures. 3.8.3 Financial Reporting Measure presented in accordance with the accounting principles used to prepare the financial statements, and any measure derived wholly or in part from such measure, including non-IFRS financial measures (as well as other measures, metrics and ratios that are non-IFRS measures). The term Financial Reporting Measure includes stock price and total shareholder return. Financial Reporting Measures may be 3.8.4 Received -Based Compensation, the time when the Financial Reporting Measure specified in the Incentive-Based Remuneration award is attained, even if the payment or grant occurs after the end of the financial period in which the award is attained. In the case of awards subject to multiple conditions, not all conditions must be satisfied for the Incentive-Based Remuneration to be deemed received. The RemCo shall have the discretion to determine when the Incentive-Based Remuneration was Received, and such determination need not be uniform across the type of Incentive-Based Compensation or for all Executives. 3.8.5 Restatement Date a Restatement, which is the earlier of: (i) the date on which the Board or a committee of the Board concludes, or reasonably should have concluded, that the Company is required to prepare an accounting restatement due to the material non-compliance of the Company with any financial reporting requirement under Applicable Rules; or (ii) the date a court, regulator or other legal authorised body directs the Company to prepare an accounting restatement. 4 IMPRACTICABILITY EXCEPTION TO RECOVERY OBLIGATION 4.1 Notwithstanding the provisions of Section 3 of this Recovery Policy, the Group shall recover the Recoverable Amount except only that the RemCo may (but shall not be obliged to) determine that it will not apply recovery pursuant to this Recovery Policy to the extent that the RemCo determines, in its sole discretion, that pursuit of the recovery would be impracticable. 4.2 The RemCo may determine that a recovery is impracticable only if: 4.2.1 Following a reasonable attempt to recover the Recoverable Amount, the RemCo determines that in its opinion the direct expense that would need to be paid to a third party to assist in enforcing this Recovery Policy would exceed the Recoverable Amount; or 4.2.2 If applicable, the RemCo determines that in its opinion the recovery would jeopardise the qualified status of a U.S. tax-qualified retirement plan. 4.3 In determining whether a recovery would be impracticable due to costs in accordance with 4.2.1 above, the only criteria that the RemCo may consider is whether the direct costs, such DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id41e- 70-40337364 Confidential as reasonable legal expense and consulting fees, amongst others, paid to a third party to assist in enforcing recovery would exceed the Recoverable Amount. Indirect costs, such as reputational concerns or the effect on hiring of new Executives, amongst others, may not be considered when determining whether recovery is impracticable. 5 INDEMNIFICATION AND INSURANCE 5.1 The Group is prohibited from indemnifying any Executive against the loss of erroneously awarded compensation as set forth in this Recovery Policy. If an Executive purchases a third-party insurance policy to fund potential recovery obligations, the Company is prohibited from paying or reimbursing the Executive for premiums for such an insurance policy. 6 OTHER RECOVERY RIGHTS 6.1 Any right of recovery under this Recovery Policy applies in addition to (and without limiting) any other remedies and/or rights to reduce, cancel or recover any elements of compensation (or similar) that may be available to any member of the Group pursuant to any remuneration policy (including any further malus and clawback policies) operated by any member of the Group, the terms of any incentive plans or awards operated by any member of the Group, any employment agreement and/or any other terms and conditions applicable to any Executive, in each case from time to time in force, and/or pursuant to any other legal remedies available to any member of the Group. Recovery (or similar) may be applied pursuant to both this Recovery Policy and any such other policies, terms or similar in respect of the same award of compensation, provided that there shall be no duplication of recovery. 7 DISCLOSURE 7.1 In the event of any Recoverable Event, the Company shall, to the extent required by Applicable Rules, disclose the recovery amounts and circumstances, including any required details of amounts subject to recovery that remain outstanding, for the relevant fiscal year in its annual report on Form 20-F and otherwise pursuant to any other annual reporting it is obligated to prepare. In addition, this Recovery Policy shall be filed as an exhibit to the -F. 8 ADMINISTRATION AND OPERATION 8.1 The RemCo has the exclusive power and authority to: (i) administer this Recovery Policy, including, without limitation, the right and power to interpret the provisions of this Recovery Policy; (ii) make all determinations deemed necessary or advisable in applying this without this being limited by references in certain clauses but not others to a discretion being absolute), including, without limitation, determinations as to: (a) what constitutes Incentive-Based Compensation, a Recoverable Amount or other compensation; (b) when a Recoverable Event has occurred; and (c) whether a recovery is impracticable; and (iii) delegate any power or discretion under this Recovery Policy to such person or persons as it may determine (and in which case this Recovery Policy shall be apply accordingly). 8.2 Any action, interpretation or determination taken or made by the RemCo pursuant to this Recovery Policy will be final, conclusive and binding. 9 GENERAL 9.1 Any provision in this Recovery Policy can apply even if the Executive was not responsible DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id42e- 70-40337364 Confidential for the event in question or if it took place before the grant and/or vesting of any compensation which is subject to recovery. 9.2 Recovery can be applied in different ways for different Executives in relation to the same or different events. 9.3 An Executive will not be entitled to any compensation in respect of any application of this Recovery Policy. 9.4 The terms of this Recovery Policy shall apply regardless of any agreement, undertaking or suggestion (or similar), whether or not contractual, that any compensation shall not be subject to recovery. 9.5 The invalidity or unenforceability of any provision of this Recovery Policy shall not affect the validity or enforceability of any other provision. 9.6 prejudice the generality of the following words (without this being limited by such references in some clauses but not others). DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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24741-5-315-v0.7 \* Conf-id43e- 70-40337364 Confidential Schedule 4 Non-exhaustive list of entities/groups that Diageo considers a purposes of Clauses 19.2(b) and 19.2(c) as at the date of this Agreement. Anheuser Busch InBev SA Asahi - Asahi Group Holdings, Ltd Bacardi Limited Becle S.A.B de C.V. Boston Beer The Boston Beer Company, Inc Brown Forman Inc. Carlsberg A/S C&C Group Plc. Constellation Brands Davide Campari-Milano N.V. Edrington International Brands Limited Gallo - E. & J. Gallo Winery Heineken NV Kirin Kirin Holdings Company, Ltd Moët Hennessy Molson Coors Beverage Company Pernod Ricard SA Rémy Cointreau S.A. Sazerac - Sazerac Company, Inc Suntory Global Spirits, inc William Grant & Sons Limited DocuSign Envelope ID: 572D10AF-80F6-4AD6-8B05-96B42744F63C

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## Exhibit 4.2

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## Exhibit 4.14

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## Exhibit 11.1

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G L O B A L S T A N D A R D U P D A T E D J U L Y 2 0 2 4 Dealing in Securities Code

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Embedding a culture that encourages people to raise concerns Introduction 3 Clearance procedures and policies for all Restricted Persons 4 Additional provisions for PDMRs only 6 Defined terms 7 Information to be included in a clearance to Deal application 11 Information to be included in a notification of a Notifiable Transaction 12

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• ensure that the directors and certain employees of Diageo plc ("Diageo" or the "Company") and its subsidiaries (A) do not abuse, and do not place themselves under suspicion of abusing, Material Non-public Information in particular by committing (i) the civil offence of market abuse through engaging or attempting to engage in insider dealing (as defined in article 8 of MAR), or by recommending or inducing another person to do so (each of which is prohibited by article 14(a) and (b) of MAR); or (ii) the criminal offence of insider dealing under Part V of the Criminal Justice Act 1993 and (B) comply with all relevant legal and regulatory requirements under MAR and the US Exchange Act; • protect the reputation of the Company and its directors and employees for integrity, and hence to maintain market confidence and fair and orderly markets in the Company's securities; and • ensure PDMRs and their PCAs comply with article 19 of MAR and ensure the Company has in place adequate procedures, systems and controls to enable it to comply with its obligations under article 19 of MAR. It is also part of the steps taken by the Company to enable its directors to understand their responsibilities and obligations as directors (as required by Premium Listing Principle 1) and to help ensure the Company acts with integrity towards the holders and potential holders of its premium listed securities (as required by Premium Listing Principle 2). Introduction The purpose of this Dealing in Securities Code (the "Code") is to: The Code contains the Dealing clearance procedures and certain additional obligations which must be observed by the Company's PDMRs and those employees who have been told that the Code applies to them (typically because they have been included on the Company's insider list or on a project list) (together, "Restricted Persons"). This will include those directors and employees of the Group companies who, because of their office or employment or involvement in a particular transaction or business situation, have access to Material Non-public Information and are required to be included on the insider lists maintained by the Company, save where those directors and employees are subject to an equivalent dealing in securities code and MAR does not apply. This means that there will be certain times when such persons cannot Deal in Diageo Securities, including those periods set out in section 3. Notwithstanding any other provision of the Code, and even if you have been given Clearance to Deal, you must not Deal in Diageo Securities, or recommend or encourage anyone else to do so, at a time when you have Material Non-public Information. Failure by any person who is subject to the Code to observe and comply with its requirements may result in disciplinary action including, where appropriate, dismissal. Depending on the circumstances, such non-compliance may also constitute a civil and/or criminal offence. A person who is subject to the Code and wishing to Deal in Diageo Securities should therefore also consider existing statutory provisions, including the insider dealing provisions contained in Part V of the Criminal Justice Act 1993 and, in the US, Section 10(b) of the US Exchange Act and rules promulgated thereunder as well as related anti-fraud and enforcement provisions of the US Federal and State Securities laws. Nothing in the Code sanctions a breach of any relevant legal or regulatory requirements. The Code was adopted by Diageo with effect from 3 July 2016 in response to the EU Market Abuse Regulation taking effect from the same date and was revised on 29 April 2021 and on 24 June 2024 in order to maintain accuracy and applicability. Schedule 1 sets out the meaning of capitalised words used in the Code. The Company Secretary has been authorised by the board of Diageo to make appropriate arrangements for the administration and enforcement of the Code and the Routine Business Committee has been authorised to make amendments to the Code in order to reflect administrative or legal requirements (including revised guidance in respect of, or amendments or additions to, MAR), or for improved clarity of the text. Dealing in Securities Code 3

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Part A Clearance procedures and policies for all Restricted Persons 1. Clearance to Deal 1.1 Except in the circumstances specified below, you must not Deal for yourself or for anyone else, directly or indirectly, in Diageo Securities without obtaining clearance from the Company in advance. 1.2 Applications for clearance to Deal must be made in writing (which includes via email) to your Code Manager. Such applications should include all the information set out in Schedule 2. In the event that an application does not contain all the information required by Schedule 2, your Code Manager will liaise with you to request any missing information. 1.3 You must not submit an application for clearance to Deal if you are in possession of Material Non- public Information. If you become aware that you are or may be in possession of Material Non- public Information after you submit an application, you must inform your Code Manager as soon as possible and you must refrain from Dealing (even if you have been given clearance). 1.4 You will receive a response in writing (which includes via email) to your application, normally within two business days and in any event within five business days of your application). (A) if you are given clearance, you must Deal as soon as possible and in any event within two business days of receiving clearance, in each case unless you are notified at any time before you Deal that clearance has been withdrawn; and (B) if you are refused permission to Deal, you must not proceed with the Dealing, and you must keep the refusal confidential and not discuss it with any other person. The Company will not normally give you reasons if you are refused permission to Deal. 1.5 Clearance to Deal may be given subject to conditions. Where this is the case, you must observe those conditions when Dealing. 1.6 In certain circumstances, the Company may give a blanket clearance for Dealings that relate to a specified event or arrangement – for example, if the Company is making an option grant or share award to a particular group of employees, or shares will become receivable on vesting under a long- term incentive plan. If such a blanket clearance is relevant to you, you will be notified of it and you will not need to apply for clearance for any specific Dealing that is covered by the blanket clearance. 1.7 You must not enter into, amend or cancel a Trading Plan or an Investment Programme under which Diageo Securities may be purchased or sold unless clearance has been given to do so. Once you have set up a Trading Plan or Investment Programme, you do not need to obtain clearance for any Dealings executed under it; but clearance must be sought for any subsequent Dealing in Diageo Securities that you have acquired pursuant to the Trading Plan or Investment Programme – for example, if you have acquired Diageo shares under an SAYE scheme or dividend reinvestment plan and you wish to sell some of them. You must not direct that your 401(k) Savings Plan ("Plan") contributions which involve regular contributions to the Plan by standing order or direct deposit be invested in the Plan's Diageo Investment Fund option (the "ADS Fund") (or cancel, increase or decrease your contributions to the ADS Fund or make transfers into or out of the ADS Fund) unless clearance has been given to do so. 1.8 Different clearance procedures will apply where a Dealing is being carried out by Diageo in relation to an employee share plan (e.g. if Diageo is making an option grant or share award to you, or shares are receivable on vesting under a long-term incentive plan). You will be notified separately of any arrangements for clearance if this applies to you. Holders of awards or options under the Group share schemes that are subject to performance criteria cannot seek clearance to Deal until they have received confirmation that the criteria have been met. 1.9 If you act as the trustee of a trust, you should speak to the Code Manager about your obligations in respect of any Dealing in Diageo Securities carried out by or on behalf of the trustee(s) of that trust. 1.10 If you have appointed an Investment Manager, you must seek clearance for any Dealing in Diageo Securities to be executed by the Investment Manager unless they have complete discretion over investment decisions they make on your behalf. 1.11 But you do not need to seek clearance for: (A) a transaction in units or shares in a Collective Investment Fund which holds, or might hold, Diageo Securities, unless Diageo Securities make up more than 20% of the Collective Investment Fund's portfolio; or (B) a transaction in Diageo Securities that is conducted by the manager of a Collective Investment Fund in which you have invested. Dealing in Securities Code 4

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Part A Clearance procedures and policies for all Restricted Persons (Cont.) 4. Dealing in other circumstances You must not advise, recommend or encourage any third party to Deal or not to Deal in Diageo Securities or the publicly traded or quoted securities of any other company in relation to which you might possess Material Non-public Information, even if you will not profit from such Dealing. 5. Disclosure of Material Non-public Information 5.1 You must not "tip" or disclose Material Non-public Information concerning any Group company, or any other public company, to any person (including other employees, family members, friends, analysts, individual investors, and members of the investment community or news media) unless properly required to do so as part of your employment by or regular duties for a Group company. 5.2 All enquiries from outsiders regarding Material Non-public Information should be referred to your Code Manager. 2. Further guidance If you are uncertain as to whether or not a particular transaction requires clearance, you must obtain guidance from the Code Manager before carrying out that transaction. 3. Circumstances for refusal 3.1 PDMRs will not ordinarily be given clearance to Deal in Diageo Securities: (A) during any period when there exists any matter which constitutes Material Non- public Information (even if you personally are not privy to that Material Non-public Information); (B) during a Closed Period; or (C) where the Dealing appears to be for the purpose of Short Swing Trading. 3.2 Other Restricted Persons will not ordinarily be given clearance to Deal in Diageo Securities if the Company believes they are aware of a matter that involves Material Non-public Information, or that could subsequently involve Material Non-public Information, or during a Closed Period. 3.3 You will be notified by your Code Manager when a Closed Period is beginning and ending. Dealing in Securities Code 5

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Part B Additional provisions for PDMRs only 6. Dealing by Investment Managers and PCAs 6.1 You should ask your Investment Managers (whether or not discretionary) not to Deal in Diageo Securities on your behalf during Closed Periods and not to engage in Short Swing Trading of Diageo Securities. 6.2 You should ask your PCAs not to Deal (whether directly or through an investment manager) in Diageo Securities during Closed Periods and not to engage (whether directly or through an Investment Manager) in Short Swing Trading of Diageo Securities. 6.3 You must provide the Company with a list of your PCAs and notify the Company of any changes that need to be made to that list from time to time. 7. Reporting of Notifiable Transactions 7.1 You must notify the Company in writing (which includes via email) of every Notifiable Transaction in Diageo Securities conducted for your account. Such notifications should include all the information set out in Schedule 3 and should be sent to your Code Manager as soon as practicable and in any event within one business day of the transaction date. In the event that an application does not contain all the information required by Schedule 3, your Code Manager will liaise with you to request any missing information. Within two business days of receiving such a notification, the Company will in turn announce details of the transaction to the stock market via a Regulatory Information Service (RIS). 7.2 You must also notify the FCA in writing of every Notifiable Transaction in Diageo Securities conducted for your account. Notifications should be made within three business days of the transaction date. A copy of the form for notifying the FCA is available on the FCA's website. It is Company practice that your Code Manager will submit such notifications on your behalf, provided that you ask them to do so within one business day of the transaction date and provide them with all the information they need in order to make a submission. 7.3 You should ensure that your Investment Managers (whether discretionary or not) notify you of any Notifiable Transactions conducted on your behalf promptly so as to allow you to notify the Company within the time frame stipulated in paragraph 7.1 above. 7.5 If you are uncertain as to whether or not a particular transaction constitutes a Notifiable Transaction, you should consult your Code Manager. Dealing in Securities Code 6

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Schedule 1 Defined terms "Closed Period" means any of the following: "Code Manager" means: the person charged with responsibility for application of the Code. "Collective Investment Fund" means: (i) a scheme managed by a professional investment manager in which capital put in by investors is pooled and invested in a portfolio of assets for the benefit of such investors collectively, such as an investment trust, unit trust, exchange-traded fund (ETF), open-ended investment company (OEIC), or alternative investment fund (AIF) in which, in each case, the relevant Restricted Person or PCA cannot determine or influence the investment strategy or transactions carried out by the manager of the fund; or (ii) financial instruments that provide exposure to a portfolio of assets, such as a tracker fund, where the relevant Restricted Person or PCA cannot determine or influence the composition of the portfolio. (A) the period of 30 calendar days before the release of the preliminary announcement of the Company's annual results or, where no such announcement is released, the period of 30 calendar days before the release (or publication) of the Company's annual financial report; (B) the period from the end of the relevant financial period up to the release of the Company's half-yearly financial report or, if longer, the period of 30 calendar days before such release; (C) the period of 30 calendar days before the release of each of the Company's first quarter report and third quarter report; (D) the day on which (i) the preliminary announcement of the Company's annual results is released or (ii) the relevant Company report is published (provided that a Closed Period shall not apply on the date of publication of the Company's annual financial report unless no preliminary announcement of the Company's annual results in respect of the same financial year has previously been released); and) (E) any other period designated by the Company Secretary and notified to Restricted Persons. "Dealing" (together with corresponding terms such as "Deal", "Deals" and "Dealt") means any type of transaction in Diageo Securities, including: (A) purchasing or subscribing for Diageo Securities; (B) selling or donating Diageo Securities; (C) acquiring or disposing of rights to obtain Diageo Securities (such as put or call options and warrants to subscribe); (D) exercising options over Diageo Securities (including the exercise of any options granted by Diageo to a Restricted Person under executive share option schemes or plans and executive phantom share option schemes or plans); (E) receiving Diageo Securities under share plans; (F) entering into, amending or terminating any agreement in relation to Diageo Securities (such as a Trading Plan); (G) a transaction in Diageo Securities carried out by an Investment Manager of a Restricted Person (but see paragraph 1.10 above); (H) entering into, amending or closing out a derivative referenced to Diageo Securities (including cash- settled transactions, credit default swaps, equity swaps and contracts for difference); (I) borrowing, lending or short selling Diageo Securities; and (J) pledging Diageo Securities or otherwise using them as security for a loan or other obligation (although a pledge, or a similar security interest, of Diageo Securities in connection with the depositing of Diageo Securities in a custody account is not "Dealing", unless and until such pledge or other security interest is designated to secure a specific credit facility). Dealing in Securities Code 7

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Schedule 1 Defined terms (Cont.) "Diageo Securities" means: any publicly traded or quoted shares or debt instruments of Diageo (or of any of Diageo's subsidiaries or subsidiary undertakings, other than Excluded Subsidiaries1) or derivatives or other financial instruments linked to any of them, including options and phantom options, ordinary and preference shares, American Depositary Shares, notes, loan stocks or debentures, partnership shares or options or warrants to subscribe for such securities, which have been listed on the official list of the UK Listing Authority or the New York Stock Exchange or admitted to dealing on, or have their prices quoted on or under the rules of, any other regulated market or are otherwise available for purchase by the public or any unlisted or unquoted securities of Diageo (or of any of Diageo's subsidiaries of subsidiary undertakings) which are convertible into such securities. "Excluded Subsidiary" means: any of Diageo's subsidiaries or subsidiary undertakings which are not subject to the provisions of the Market Abuse Regulation and in respect of whose securities Diageo has in place a securities dealing code; "FCA" means: the UK Financial Conduct Authority; "Group" means: any one or more of Diageo and its subsidiaries, subsidiary undertakings or associated companies. "Investment Manager" means: a person who is appointed by a Restricted Person or PCA to manage investments on their behalf or for their benefit. It does not include the manager of a Collective Investment Fund in which a Restricted Person or PCA invests. 1Advice should always be sought before reliance is placed on this exception. "Investment Programme" means: a share acquisition scheme relating only to the Company's shares under which: (A) shares are purchased by a Restricted Person pursuant to a regular standing order or direct debit or by regular deduction from the person's salary or director's fees; (B) shares are acquired by a Restricted Person by way of a standing election to re-invest dividends or other distributions received; or (C) shares are acquired as part payment of a Restricted Person's remuneration or director's fees, and under which, in each case, the Restricted Person does not control any Dealings made pursuant to the scheme. "Market Abuse Regulation" or "MAR" means: the UK version of EU Market Abuse Regulation (EU) No 596/2014 (the "EU Market Abuse Regulation"), which came into effect on 1 January 2021 when the EU Market Abuse Regulation was incorporated into UK domestic law by the European Union (Withdrawal) Act 2018, with certain modifications. "Material Non-public Information" means information which: (A) relates to Diageo or any Diageo Securities, which is not publicly available, which is likely to have a significant effect on the price of Diageo Securities and which a reasonable investor would be likely to use as part of the basis of his or her investment decision; or (B) has not been widely disseminated to the public and could be considered to significantly alter the 'total mix' of information available to a reasonable investor in determining whether to buy, sell or hold Diageo Securities. Dealing in Securities Code 8

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Schedule 1 Defined terms (Cont.) "Notifiable Transaction" means: any transaction relating to Diageo Securities conducted for the account of a PDMR or PCA, whether the transaction was conducted by the PDMR or PCA or on his or her behalf by a third party and regardless of whether or not the PDMR or PCA had control over the transaction. This captures every transaction which changes a PDMR's or PCA's holding of Diageo Securities, even if the transaction does not require clearance under the Code. It includes: (A) purchasing or selling Diageo Securities; (B) making a gift, and receiving a gift or inheritance, of Diageo Securities; (C) receiving a grant of options or a share award of Diageo Securities; (D) exercising an option to acquire Diageo Securities; (E) executing a transaction under a Trading Plan or Investment Programme; (F) acquiring or disposing of rights to obtain Diageo Securities (including put and call options and warrants to subscribe); (G) pledging Diageo Securities or otherwise using Diageo Securities as security for a loan or other obligation; (H) carrying out a "bed and breakfast" transaction in Diageo Securities; (I) transferring Diageo Securities to a spouse, civil partner or child; (J) converting a financial instrument into Diageo Securities, even if the conversion is automatic; (K) entering into, amending or closing out a derivative referenced to Diageo Securities (including cash-settled transactions, credit default swaps, equity swaps and contracts for difference); and (L) borrowing, lending and short selling Diageo Securities. It also includes: (M) a transaction in Diageo Securities that is carried out by an Investment Manager or other third party on behalf of a PDMR, including where discretion is exercised by such Investment Manager or third party; 1Advice should always be sought before reliance is placed on this exception. (N) a transaction in shares or units of a Collective Investment Fund that itself owns a portfolio of assets that include Diageo Securities, but only if Diageo Securities make up more than 20% of the Collective Investment Fund's portfolio; and (O) a transaction in Diageo Securities under a life insurance policy but only if (i) the policyholder is a PDMR or PCA; (ii) investment risk is borne by the policyholder; and (iii) the policyholder has the power or discretion to make investment decisions regarding specific instruments in that life insurance policy or to execute transactions regarding specific instruments for that life insurance policy. "PCA" means: a "person closely associated" with a PDMR, being: (A) the spouse or civil partner of a PDMR; (B) a PDMR's child or stepchild under the age of 18 years who is unmarried and does not have a civil partner; (C) a relative who has shared the same household as the PDMR for at least one year on the date of the relevant Dealing; or (D) a legal person, trust or partnership, (i) the managerial responsibilities of which are discharged by a PDMR (or by a PCA referred to in paragraphs (A), (B), or (C) of this definition), (ii) which is directly or indirectly controlled by such a person, (iii) which is set up for the benefit of such a person, or (iv) which has economic interests which are substantially equivalent to those of such a person. For the purposes of (i), a PDMR or PCA will be deemed to be discharging the managerial responsibilities of a legal person, trust or partnership if they take part in or influence any decisions to Deal in Diageo Securities. Dealing in Securities Code 9

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Schedule 1 Defined terms (Cont.) "PDMR" means: a person discharging managerial responsibilities in respect of the Company, being either: (A) a director of the Company; (B) a member of the executive committee of the Company; or (C) any other employee who has been told that they are a PDMR. "Restricted Person" means: (A) a PDMR; or (B) any other person who has been told by the Company that the Code applies to them. "Short Swing Trading" means: Dealing in a way that attempts to take advantage of short- to medium-term price movements in a Diageo Security. For example, selling Diageo Securities that were acquired less than a year previously will usually be considered to be Short Swing Trading. "Trading Plan" means: a written plan entered into by a Restricted Person or PCA and an independent third party that sets out a strategy for the acquisition and/or disposal of Diageo Securities by the Restricted Person or PCA, and: (A) specifies the amount of Diageo Securities to be Dealt in and the price at which and the date on which the Diageo Securities are to be Dealt in; (B) includes a method (including a written formula, algorithm or computer program) for determining the amount of Diageo Securities to be Dealt in and the price at which and the date on which the Diageo Securities are to be Dealt in; or (C) both: (i) gives discretion to that independent third party to make trading decisions about the amount of Diageo Securities to be Dealt in and the price at which and the date on which the Diageo Securities are to be Dealt in; and (ii) does not permit the Restricted Person to exercise any subsequent influence over how, when, or whether to Deal in Diageo Securities; provided, in addition, that the independent third party who, pursuant to such plan, does exercise such influence must not be aware of any Material Non- public Information when doing so. "US Exchange Act" means: means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. Dealing in Securities Code 10

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Schedule 2 Information to be included in a clearance to Deal application As explained in paragraph 1.2 above, any application for clearance to Deal under the Code must contain the following information. 1. Applicant's Name 2. Proposed Dealing a) Description of the securities [e.g. a share, a debt instrument, a derivative or a financial instrument linked to a share or debt instrument.] b) Number of securities [If actual number is not known, provide a maximum amount (e.g. "up to 100 shares" or "up to £1,000 of shares").] c) Nature of the dealing [Description of the transaction type (e.g. acquisition; disposal; subscription; option exercise; settling a contract for difference; entry into, or amendment or cancellation of, an Investment Programme or Trading Plan).] [Please include all other relevant details which might reasonably assist the person considering your application for clearance (e.g. transfer will be for no consideration).] Dealing in Securities Code 11

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Schedule 3 Information to be included in a notification of a Notifiable Transaction As explained in paragraph 7.1 above, any notification of a Notifiable Transaction under the Code must contain the following information. 1. Details of PDMR / person closely associated with them ("PCA") a) Name [Include first name(s) and last name(s).] [If the PCA is a legal person, state its full name including legal form as provided for in the register where it is incorporated, if applicable.] b) Position / status [For PDMR, state job title e.g. CEO, CFO.] [For PCAs, state that the notification concerns a PCA and the name and position of the relevant PDMR.] c) Initial notification / amendment [Please indicate if this is an initial notification or an amendment to a prior notification. If this is an amendment, please explain the previous error which this amendment has corrected.] 2. Details of the transaction(s) a) Description of the financial instrument [State the nature of the instrument e.g. a share, a debt instrument, a derivative or a financial instrument linked to a share or debt instrument.] b) Nature of the transaction [Description of the transaction type e.g. acquisition, disposal, subscription, contract for difference, etc.] [Please indicate whether the transaction is linked to the exercise of a share option programme and, if so, the name of the relevant share option programme.] [If the transaction was conducted pursuant to an Investment Programme or a Trading Plan, please indicate that fact and provide the date on which the relevant Investment Programme or Trading Plan was entered into.] c) Price(s) and volume(s) [Where more than one transaction of the same nature (purchase, disposal, etc.) of the same financial instrument are executed on the same day and at the same place of transaction, prices and volumes of these transactions should be separately identified. Do not aggregate or net off transactions.] [In each case, please specify the currency and the metric for quantity.] c) Aggregated information • Aggregated volume • Price [Please aggregate the volumes of multiple transactions when these transactions: • relate to the same financial instrument; • are of the same nature; • are executed on the same day; and • are executed at the same place of transaction.] [Please state the metric for quantity.] [Please provide: • in the case of a single transaction, the price of the single transaction; and • in the case where the volumes of multiple transactions are aggregated, the weighted average price of the aggregated transactions.] [Please state the currency.] e) Date of the transaction [Date of the particular day of execution of the notified transaction, using the date format: YYYY-MM-DD and please specify the time zone.] f) Place of the transaction [Please name the trading venue where the transaction was executed. If the transaction was not executed on any trading venue, please state 'outside a trading venue'.] Dealing in Securities Code 12

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## Exhibit 97.1

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A50533063/7.0/09 Oct 2023 7 APPENDIX: DIAGEO GROUP NYSE COMPENSATION RECOVERY POLICY – AS APPLICABLE TO EXECUTIVE COMMITTEE MEMBERS1 Approved by the Remuneration Committee: 18th October 2023 1 PURPOSE 1.1 The purpose of this policy is to set out the basis for the mandatory recovery of erroneously awarded Incentive-Based Compensation (as defined below) from the Executives (as defined below) of Diageo (the "Company") and any of its subsidiaries (the "Group") in the event of an accounting restatement. 1.2 The Remuneration Committee (the "RemCo") of the board of the Company (the "Board") has adopted this policy (the "Recovery Policy") in accordance with the requirements of Section 303A.14 of the New York Stock Exchange's ("NYSE's") Listed Company Manual, which was mandated by Rule 10D-1 of the Securities Exchange Act of 1934. 1.3 The Recovery Policy may be amended from time to time by the RemCo pursuant to any laws, regulations or rules of any stock exchange or other applicable regulatory authority applicable to the Company ("Applicable Rules"). Executives will be made aware of any significant amendments and how this may impact their remuneration. 2 APPLICABILITY 2.1 The Recovery Policy applies to current and former members of the executive committee of the Company (or its equivalent from time to time), as well as any other person(s) (if any) as the Company may determine also constitute "executive officers" as defined in Section 303A.14(e) of the NYSE Listed Company Manual (each an "Executive"). 2.2 Compensation shall be subject to recovery pursuant to this Recovery Policy where: (i) the RemCo determines that such compensation constitutes Incentive-Based Compensation; and (ii) the compensation was Received by an Executive: 2.2.1 After beginning their services as an Executive; 2.2.2 Who served as an Executive at any time during the performance period for that Incentive-Based Compensation; 2.2.3 While the Company has a class of securities listed on the NYSE or another national securities exchange or a national securities association in the United States; and 2.2.4 During the Recovery Period (as defined below), provided that this Recovery Policy shall only apply to compensation Received (as defined below) on or after 2 October 2023 (the "Effective Date"). 2.3 The Recovery Policy will continue to apply to an Executive following any termination of their employment. 1 This Recovery Policy also applies to any other person(s) if any as the Company may determine also constitute "executive officers" as defined in Section 303A.14(e) of the NYSE Listed Company Manual.

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A50533063/7.0/09 Oct 2023 8 2.4 The Recovery Policy will be notified to Executives through any means determined by the RemCo and, where applicable, requiring Executives to agree to the terms when accepting Incentive-Based Compensation or via a clause in their employment contract. 3 RECOVERY OF ERRONEOUSLY AWARDED INCENTIVE-BASED COMPENSATION 3.1 In the event that the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under Applicable Rules, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period ("Recoverable Event"),2 the Group shall recover the amount of Incentive-Based Compensation Received by an Executive in the Recovery Period (as defined below) that exceeds the amount of Incentive-Based Compensation that otherwise would have been received had it been determined based on the restated amounts, computed without regard to any taxes paid ("Recoverable Amount"). Whether any relevant noncompliance is material for the purposes of this Recovery Policy shall be determined by the RemCo, which shall be permitted to rely on any decision in this respect of the Board or any other authorised committee thereof (including without limitation the audit committee of the Board). 3.2 The Recovery Period shall mean the period of three full fiscal years preceding the Restatement Date (as defined below) and any transition period that results from a change in the Company's financial year within or immediately following such period3. 3.3 For Incentive-Based Compensation based on share price or total shareholder return, where the amount of erroneously awarded compensation is not subject to mathematical recalculation directly from the information in an accounting restatement, the Recoverable Amount will be determined by the RemCo, based on the RemCo's estimate of the effect of the accounting restatement on the share price or total shareholder return upon which the Incentive-Based Compensation was received.4 3.4 Following a Recoverable Event, the RemCo shall: 3.4.1 Determine the Recoverable Amount. 3.4.2 To the extent the Recoverable Amount has been Received by an Executive, instruct the Company to recover the full Recoverable Amount in accordance with paragraph 3.5 below. 2 The following do not constitute an accounting restatement for purposes of the Recovery Policy: (i) the correction of an error in the current period consolidated financial statements (commonly referred to as an out-of-period adjustment) when the error is immaterial to the previously issued consolidated financial statements and the correction of the error is also immaterial to the current period; (ii) the retrospective application of a change in accounting policy; (iii) a retrospective revision of reportable segment information due to a change in the structure of the Group's internal organization; (iv) a retrospective reclassification due to a discontinued operation; (v) the retrospective application of a change in reporting entity, such as from a reorganization of entities under common control; and (vi) a retrospective revision for a share split, reverse share split, share dividend or other changes in capital structure. 3 A transition period between the last day of the Company's previous financial year end and the first day of its new financial year that comprises a period of nine to 12 months will be deemed a full financial year, and as such will count as one of the relevant three financial years (rather than be in addition to them). 4 In addition, the RemCo will maintain documentation of the determination of that reasonable estimate and provide such documentation to the NYSE.

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A50533063/7.0/09 Oct 2023 9 3.4.3 To the extent the Recoverable Amount has not been Received, but is otherwise owed to an Executive, cancel the right of the Executive to receive the Recoverable Amount. 3.5 Any Recoverable Amount may be recovered by all legal means available, including by requiring the Executive to repay such amount to the Company or any other member of the Group; by requiring any compensation owing by the Company or any member of the Group to the Executive (including any salary or any unvested or unexercised remuneration) to be immediately withheld, forfeited and/or irrevocably cancelled to compensate for the Recoverable Amount or any unrecovered portion thereof; and/or by any other means or taking any other actions against the Executive which the RemCo may deem necessary or advisable to recover the Recoverable Amount. 3.6 Recoupment of the Recoverable Amount under this Recovery Policy will be initiated by the Company as soon as practicable following the written request of the RemCo. 3.7 All amounts recoverable or payable by an Executive to the Company pursuant to this Recovery Policy shall be payable to the Company (or as the Company directs), and shall be payable on demand. 3.8 For purposes of this Recovery Policy: 3.8.1 "Incentive-Based Compensation" means any compensation that is determined by the RemCo, to be granted, earned, or vested based wholly or in part5 upon the attainment of a Financial Reporting Measure (as defined below) ("Incentive-Based Compensation"). This includes, but is not limited to: (i) non-equity incentive plan awards earned based wholly or in part on satisfying a Financial Reporting Measure performance goal; (ii) bonuses paid from a "bonus pool", the size of which is determined based wholly or in part on satisfying a Financial Reporting Measure performance goal; (iii) other cash awards based wholly or in part on satisfying a Financial Reporting Measure performance goal; (iv) restricted shares, restricted share units, performance share units, stock options and stock appreciation rights that are granted or become vested based wholly or in part on satisfying a Financial Reporting Measure performance goal; and (v) proceeds received upon the sale of shares acquired through an incentive plan that were granted or vested based wholly or in part on satisfying a Financial Reporting Measure performance goal. Incentive- Based Compensation includes compensation Received by Executives under the Annual Incentive Plan ("AIP") and the Diageo 2014 Long Term Incentive Plan and/or the Diageo 2023 Long Term Incentive Plan ("DLTIP") or any other variable remuneration structures operated by the Company from time to time under which awards are wholly or in part based upon the attainment of a Financial Reporting Measure. 3.8.2 Incentive-Based Compensation shall not include: (i) an Executive's salary;6 (ii) bonuses paid solely at the discretion of the RemCo or the Board that are not paid from a "bonus pool" that is determined by satisfying a Financial Reporting Measure performance goal; (iii) bonuses paid solely upon satisfying one or more subjective standards (e.g. demonstrated leadership) and/or completion of a specified 5 Where Incentive-Based Compensation is based only in part on the achievement of a Financial Reporting Measure performance goal, RemCo shall first determine the portion of the original Incentive-Based Compensation based on or derived from the Financial Reporting Measure that was restated. RemCo shall then recalculate the affected portion based on the Financial Reporting Measure as restated. 6 To the extent that an Executive receives a salary increase earned wholly or in part based on the attainment of a financial reporting measure performance goal, such a salary increase is subject to recovery.

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A50533063/7.0/09 Oct 2023 10 employment period); (iv) non-equity incentive plan awards earned solely upon satisfying one or more strategic measures (e.g., consummating a merger or divestiture), or operational measures (e.g., completion of a project, increase in market share); and (v) equity awards for which the grant is not contingent upon achieving any Financial Reporting Measure performance goal and vesting is contingent solely upon completion of a specified employment period and/or attaining one or more nonfinancial reporting measures. 3.8.3 "Financial Reporting Measure" means any measure that is determined and presented in accordance with the accounting principles used to prepare the Group's financial statements, and any measure derived wholly or in part from such measure, including non-IFRS financial measures (as well as other measures, metrics and ratios that are non-IFRS measures). The term Financial Reporting Measure includes stock price and total shareholder return. Financial Reporting Measures may be presented outside the Company's financial statements. 3.8.4 "Received" means, with respect to any Incentive-Based Compensation, the time when the Financial Reporting Measure specified in the Incentive-Based Remuneration award is attained, even if the payment or grant occurs after the end of the financial period in which the award is attained. In the case of awards subject to multiple conditions, not all conditions must be satisfied for the Incentive-Based Remuneration to be deemed received. The RemCo shall have the discretion to determine when the Incentive-Based Remuneration was Received, and such determination need not be uniform across the type of Incentive-Based Compensation or for all Executives. 3.8.5 "Restatement Date" means the date on which the Company is required to prepare a Restatement, which is the earlier of: (i) the date on which the Board or a committee of the Board concludes, or reasonably should have concluded, that the Company is required to prepare an accounting restatement due to the material non-compliance of the Company with any financial reporting requirement under Applicable Rules; or (ii) the date a court, regulator or other legal authorised body directs the Company to prepare an accounting restatement. 4 IMPRACTICABILITY EXCEPTION TO RECOVERY OBLIGATION 4.1 Notwithstanding the provisions of Section 3 of this Recovery Policy, the Group shall recover the Recoverable Amount except only that the RemCo may (but shall not be obliged to) determine that it will not apply recovery pursuant to this Recovery Policy to the extent that the RemCo determines, in its sole discretion, that pursuit of the recovery would be impracticable. 4.2 The RemCo may determine that a recovery is impracticable only if: 4.2.1 Following a reasonable attempt to recover the Recoverable Amount, the RemCo determines that in its opinion the direct expense that would need to be paid to a third

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A50533063/7.0/09 Oct 2023 11 party to assist in enforcing this Recovery Policy would exceed the Recoverable Amount; or 4.2.2 If applicable, the RemCo determines that in its opinion the recovery would jeopardise the qualified status of a U.S. tax-qualified retirement plan. 4.3 In determining whether a recovery would be impracticable due to costs in accordance with 4.2.1 above, the only criteria that the RemCo may consider is whether the direct costs, such as reasonable legal expense and consulting fees, amongst others, paid to a third party to assist in enforcing recovery would exceed the Recoverable Amount. Indirect costs, such as reputational concerns or the effect on hiring of new Executives, amongst others, may not be considered when determining whether recovery is impracticable. 5 INDEMNIFICATION AND INSURANCE 5.1 The Group is prohibited from indemnifying any Executive against the loss of erroneously awarded compensation as set forth in this Recovery Policy. If an Executive purchases a third-party insurance policy to fund potential recovery obligations, the Company is prohibited from paying or reimbursing the Executive for premiums for such an insurance policy. 6 OTHER RECOVERY RIGHTS 6.1 Any right of recovery under this Recovery Policy applies in addition to (and without limiting) any other remedies and/or rights to reduce, cancel or recover any elements of compensation (or similar) that may be available to any member of the Group pursuant to any remuneration policy (including any further malus and clawback policies) operated by any member of the Group, the terms of any incentive plans or awards operated by any member of the Group, any employment agreement and/or any other terms and conditions applicable to any Executive, in each case from time to time in force, and/or pursuant to any other legal remedies available to any member of the Group. Recovery (or similar) may be applied pursuant to both this Recovery Policy and any such other policies, terms or similar in respect of the same award of compensation, provided that there shall be no duplication of recovery. 7 DISCLOSURE 7.1 In the event of any Recoverable Event, the Company shall, to the extent required by Applicable Rules, disclose the recovery amounts and circumstances, including any required details of amounts subject to recovery that remain outstanding, for the relevant fiscal year in its annual report on Form 20-F and otherwise pursuant to any other annual reporting it is obligated to prepare. In addition, this Recovery Policy shall be filed as an exhibit to the Company's annual report on Form 20-F. 8 ADMINISTRATION AND OPERATION 8.1 The RemCo has the exclusive power and authority to: (i) administer this Recovery Policy, including, without limitation, the right and power to interpret the provisions of this Recovery Policy; (ii) make all determinations deemed necessary or advisable in applying this Recovery Policy (which in every case shall be made at the RemCo's absolute discretion, without this being limited by references in certain clauses but not others to a discretion being absolute), including, without limitation, determinations as to: (a) what constitutes Incentive-Based Compensation, a Recoverable Amount or other compensation; (b) when a Recoverable Event has occurred; and (c) whether a recovery is impracticable; and (iii) delegate any power

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A50533063/7.0/09 Oct 2023 12 or discretion under this Recovery Policy to such person or persons as it may determine (and in which case this Recovery Policy shall be apply accordingly). 8.2 Any action, interpretation or determination taken or made by the RemCo pursuant to this Recovery Policy will be final, conclusive and binding. 9 GENERAL 9.1 Any provision in this Recovery Policy can apply even if the Executive was not responsible for the event in question or if it took place before the grant and/or vesting of any compensation which is subject to recovery. 9.2 Recovery can be applied in different ways for different Executives in relation to the same or different events. 9.3 An Executive will not be entitled to any compensation in respect of any application of this Recovery Policy. 9.4 The terms of this Recovery Policy shall apply regardless of any agreement, undertaking or suggestion (or similar), whether or not contractual, that any compensation shall not be subject to recovery. 9.5 The invalidity or unenforceability of any provision of this Recovery Policy shall not affect the validity or enforceability of any other provision. 9.6 References in this Recovery Policy to the phrase "including" (or similar) shall not limit or prejudice the generality of the following words (without this being limited by such references in some clauses but not others).

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