Management expects the drag on sales from the coronavirus outbreak to slowly recover from around April, with trends back to normal by June. It is possible that demand could stay weak for longer than this, if inventory levels remain high. On the positive side, the company had begun to see some improvement in underlying demand in China towards the end of calendar 2019 in the on-trade channel (which had been hit by government clampdowns earlier in the year). The US business (+4%) is resilient, though the vodka category is still under pressure and the evolution of US tariffs is unknown. Absolut sales were down c.5% in the US in H1, though Jameson, The Glenlivet and Tequila were strong. India has slowed to +5% from an average of 14% organic sales growth over the last 7 years. Flooding and a generally weaker macro led to weaker demand and downtrading. Management still expects to achieve double-digit growth longer term, but near-term growth will be slower than usual. Global Travel Retail -1% was affected by shipment phasing in the Americas and Brexit related stock levels in Europe. The underlying sell-out was good, but this channel will be especially impacted by the coronavirus in Q3. The Luxury brands grew just 5% in H1, a slowdown from the double-digit growth level over the last 2 years. Presumably, this segment has been affected by the phasing-driven slowdown in Global Travel Retail. Net debt/EBITDA has risen to 2.7x at the end of December 2019, from 2.3x at the end of June 2019. The increase is mainly due to M&A and share buybacks. We lower our target price to €156 (from €162) to reflect the cut in our estimates. We argue for a CY20E PE of 22x, the same as for Diageo. The DCF returns a fair value of €141. We move to Sell on valuation.