BNPP Exane View We noted that Diageo is extremely confident on the delivery of its Accelerate cost savings (which have been pulled forward to 40% of the total in FY26). Given that consensus profit cuts are likely to be fairly limited, the c.-6% share price reaction feels quite harsh. However, Diageo is a top-line stock and with US spirits value depletions declining c.-7% in Q1, the US market context at the super-premium end of tequila becoming more challenging and Don Julio still facing high comps in the US in FY26, we did not come away with the sense that organic sales visibility is much higher than when the FY26 guidance was issued in August. All said, we would be surprised to see stock drift any further than the current -6% move today. Highlights: QandA . US: a lot of moving parts in the US, there was some tariff pre-buy and stock ahead of OND. In North America had net sales and bit ahead of depletions which is typical this time of year. Depletions growth in Q1 was c.-7% (c.-2.5% below sell-in). Seeing weakening depletions overall in part driven by Tequila. Depletions vs. sell-in is not managed on quarterly basis look to align for H1 and FY. Don''t expect significant impact on reversal in Q2 as some of the pull-forward unwound within Q1 and lot depends on strength of the holiday season. Not guiding to depletion growth for Q2. . Commercial execution: where Diageo has feet on the street, Diageo sees stronger performance than some of the control accounts. . US Tequila: knew that going into this year there was going to be an issue with the comps given the strength of Don Julio last year. Seeing competitive pressure and potentially some switching out of tequila and into RTD and use of tequila as a chaser. The share moderation of DJ in Q1 was about 75% driven by comps (May-2025 was when small sizes were launched and the peak was in September) and there was the big ramp up in share of Reposado. The category itself was growing c.10% in 2023; c.6% in 2024...