Sales Presentation Final

Winning at the Moment of Choice Ron Anderson Chief Customer Officer 23 October 2009

Winning at the Moment of Choice With Consumers and Shoppers. . .

. . .and become an Indispensable Business Partner for our Customers 2

Our customer base and business model varies across the world On-trade

Off-trade

Third Party

Direct interaction with bars, clubs, restaurants

Direct interaction with grocery, independents etc

Distributors, Wholesalers

e.g. Western Europe Latam, Africa

e.g. Western Europe, Latam, Africa, Global Travel

e.g. US, Asia Pac, Caribbean, Eastern Europe

3

We started to increase our focus on the sales function 2 years ago • Chief Customer Officer • Global Customer Marketing • Diageo Way of Selling – Internal sales best practice and account management • Platform for Growth – Improving the capabilities of our Distributors

4

Behaviour has shifted due to the economic downturn

Consumers

Shoppers

Customers

Re-evaluating Spending

Looking for Value

Changing Strategies

5

Winning at the Moment of Choice

• Value share gains • Profitable growth for us and our customers • Respected among CPG peers. Best in the on-trade.

6

Delivering “Winning at the Moment of Choice”

Sales Execution

Customer Development and Service

Efficient Trade Investment

7

1. Sales Execution Sales Execution

Customer Development and Service

Efficient Trade Investment

Shopper Understanding and Insights

Tailored Off-Trade Activities

Great On Trade Experiences

8

We are now operational in 30+ markets representing over 2/3 of net sales

Sales Execution

Europe: GB, Ireland, Iberia, Northern & Southern Cluster, Russia & Eastern Europe

North America: USA

GTME

LatAm: Venezuela, Mexico, Brazil, Northern & Southern Cluster

Asia Pacific: Australia, India, Korea, Singapore Thailand Taiwan Vietnam Africa: Nigeria, South Africa 9

Ease of Shop & Category Navigation

Sales Execution

• Right Range • Right Space • Ease of Navigation

e.g. Russia Key Account: +24% spirits category growth +35% Diageo spirits growth ‘Making it easier to find, choose and buy the category’

1710

Ease of Shop & Category Navigation

Sales Execution

• Right Range • Right Space • Ease of Navigation

e.g. Russia Key Account: +24% spirits category growth +35% Diageo spirits growth ‘Making it easier to find, choose and buy the category’

1711

Ease of Shop & Category Navigation

Sales Execution

• Right Range • Right Space • Ease of Navigation

e.g. Russia Key Account: +24% spirits category growth +35% Diageo spirits growth ‘Making it easier to find, choose and buy the category’

1712

Category Promotions & Events

Summer Spirits Results

+12%

Whisky Festival +40%

Sales Execution

Simply Cocktails +11% 13

Shopper Interruptions Before

Sales Execution

After

Results: • Customer: +10% Single Malts Category Sales Growth • Diageo: +18% Single Malts Sales Growth • Scale: +300 Stores in 6 months

14

Store within Store

Brazil Perfect Store • 60% Category Growth • 100% Diageo Growth • 50% Retailer Margin Increase • 10 Months Retailer ROI

Sales Execution

15

Great On Trade Experiences Bartender Training in Australia

Sales Execution

Results • Customer: Better trained staff (perfect serve, product knowledge) • Diageo: +60% increase in 1st pour volume, +17% Reserve growth • Consumer: Better quality drink experience • Other: 1200 training sessions for 400 priority customers per year 16

2. Customer Development and Service Sales Execution

Customer Development and Service

Efficient Trade Investment

Key Account and Distributor Management

Customer Service

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Top retailers are clear on what it takes to win with them

Customer Management and Service 64%

Price and promotional activity

64% 52%

Supply chain efficiency and process improvement

60% 42%

Understanding the shopper

52% 56%

Greater strategic alignment and long-term joint business planning

44% 26%

Balance sheet KPIs such as cash flow and inventory

40% 22%

Sustainability

New product launches

20% 39% 12%

Suppliers, % Source: IGD Customer Engagement Survey 2009

Retailers, % 18

Improving Key Account Management and Distributor Capabilities

Customer Management and Service

Retail Trade (On and Off)

-

Account Management

Distributor Management

Distributors

Distributor Capability

Retail Trade (On and Off)

-

Standard of Excellence

Platform for Growth 19

Providing an End to End Customer Service Experience

Customer Management and Service

From

To

On Time in Full

On Shelf in Full

Warehouse

Store

Shelf

Adapting to a world with lower inventories 20

3. Efficient Trade Investment Sales Execution

Customer Development and Service

Efficient Trade Investment

Improved Trade Investment

Technology

Markets, DWS, Customer Marketing, Supply Chain, Finance

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Improving Returns from our Trade Investment

Efficient Trade Investment

Reduce

Increase

Investment only the customer sees

Investment the shopper / consumer sees

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Delivering “Winning at the Moment of Choice” At Scale Sales Execution

Scalability

Customer Development and Service

Shopper and Consumer Insights

Platform for Growth

Brand Range

Global Supply

Efficient Trade Investment

SAP

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Winning at the Moment of Choice Q&A Session at 3pm (UK time) – 23 October 2009 Please use the following dial-in numbers: UK – Toll free North America – Toll free France – Toll free Germany – Toll free Ireland – Toll free Italy – Toll free Netherlands – Toll free Spain – Toll free Switzerland – Toll free

0800 279 9640 1866 850 2201 0805 770 155 0800 673 8354 1800 944 322 800 088 737 0800 265 9175 800 099 797 0800 000 287

International – Toll

+44 (0)20 7784 1036

Please quote confirmation code: 2506354

For further information on Diageo, please visit the Investors section of: diageo.com The Investor Relations team can be contacted on: UK +44 (0)20 7927 4267 US +1 202 715 1110 or by email at: [email protected]

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Cautionary statement concerning forward-looking statements This document contains ‘forward-looking’ statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. In particular, forward-looking statements include all statements that express forecasts, expectations, plans, outlook and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability or cost of financing to Diageo, anticipated cost savings or synergies, the completion of Diageo's strategic transactions and the general economic conditions. By their nature, 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. These factors include, but are not limited to: • global economic downturn; • increased competitive product and pricing pressures and unanticipated actions by competitors that could impact Diageo’s market share, increase expenses and hinder growth potential; • the effects of business combinations, partnerships, acquisitions or disposals, existing or future, and the ability to realise expected synergies and/or costs savings; • Diageo’s ability to complete existing or future acquisitions and disposals; • legal and regulatory developments, including changes in regulations regarding consumption of, or advertising for, beverage alcohol, changes in tax law (including tax rates) or accounting standards, changes in taxation requirements, such as the impact of excise tax increases with respect to the business, and changes in environmental laws, health regulations and the laws governing pensions; • developments in litigation or any similar proceedings directed at the drinks and spirits industry generally or at Diageo in particular, or the impact of a product recall or product liability claim on Diageo’s profitability or reputation; • developments in the Colombian litigation, Turkish customs litigation or any similar proceedings • changes in consumer preferences and tastes, demographic trends or perception about health related issues, or contamination, counterfeiting or other circumstances which could harm the integrity or sales of Diageo’s brands; • changes in the cost of raw materials, labour and/or energy; • changes in economic conditions in countries and markets in which Diageo operates, including changes in levels of consumer spending and failure of customer, supplier and financial counterparties; • levels of marketing spend, promotional and innovation expenditure by Diageo and its competitors; • renewal of distribution or licence manufacturing rights on favourable terms when they expire; • termination of existing distribution or licence manufacturing rights on agency brands; • systems change programmes, existing or future, and the ability to derive expected benefits from such programmes, and systems failure that could lead to business disruption; • technological developments that may affect the distribution of products or impede Diageo’s ability to protect its intellectual property rights; and • changes in financial and equity markets, including significant interest rate and foreign currency exchange rate fluctuations and changes in the cost of capital, which may reduce or eliminate Diageo’s access to or increase the cost of financing or which may affect Diageo’s financial results. 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 above factors and the ‘risk factors’ contained in the preliminary results announcement made on 27 August 2009 and the Annual Report on Form 20-F for the year ended 30 June 2008 filed with the United States Securities and Exchange Commission (SEC). Any forward-looking statements made by or on behalf of Diageo speak only as of the date they are made. Diageo does not undertake to update forward-looking statements to reflect any changes in Diageo's expectations or any changes in events, conditions or circumstances on which any such statement is based. 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. 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