H1 FY25 results – 4 February We update our Diageo model reflecting FX and recent market updates. While there are some bright spots (e.g. Guinness in UK & Ireland, US Spirits market share), overall Spirits demand in the bulk of DGE’s geographies remains subdued. We cut our FY25 EPS by 3% (-7% yoy to $1.67) and by 6% for FY26 (+4% yoy to $1.74). For FY25, we now model +2.3% organic sales and +0.6% organic EBIT, stepping up to c.4% growth respectively in FY26, albeit with still limited visibility. H1 drivers – full details on page 3 For H1, many of the trends seen in H2 FY24 (-0.7% organic sales, organic EBIT margin -88bp) are likely to have persisted given a still flattish US end-market, persistent China weakness, a soft Q1 in India (albeit temporary) and weak macro in Latin America and Europe (despite Guinness buoyancy). For H1, we model +1.1% organic sales growth, with North America -0.9%, Europe +2.5% and APAC -1.2%. Given investment phasing, we expect organic margin -80bp to 30.3% driving organic EBIT -1.5% to $3,256m and adj EPS -9.6% to $0.98. H1 unlikely to be a major catalyst DGE shares were -11% in 2024 vs. Europe Beverages -16% and now trades on 18.4x cal.25 P/E and 14x EV/EBITDA, a modest premium to peers. While we expect some perspectives from new CFO Nik Jhangiani at the results, it is likely too early, and the external environment too volatile, for DGE to provide a formal mid-term financial outlook to the market. Amongst myriad issues, the potential for import tariffs from the incoming US Administration is likely a persistent over-hang on the name (US accounts for >45% group EBIT with c.25% of US sales from Mexican Tequila, c.20% from Canadian Whisky and c.25% from Europe).