UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
25 February 2026
Commission File Number: 001-10691
DIAGEO plc
(Translation
of registrant’s name into English)
16 Great Marlborough Street, London, United Kingdom, W1F 7HS
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F X
Form
40-F
This announcement contains inside information
Interim results
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Six months ended 31 December 2025
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25 February 2026
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Reported results
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Adjusted results(1)
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F26 H1
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vs F25 H1
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F26 H1
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vs F25 H1
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Net sales
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$10,460m
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(4.0)%
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Organic net sales movement
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$(295)m
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(2.8)%(2)
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Operating profit
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$3,116m
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(1.2)%
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Operating profit before exceptional items
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$3,256m
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(2.8)%(2)
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Operating profit margin
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29.8%
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85bps
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Operating profit margin before exceptional items
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31.1%
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1bps(2)
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Net profit
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$2,110m
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1.7%
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Basic earnings per share
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89.7c
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3.0%
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Basic earnings per share before exceptional items
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95.3c
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(2.5)%
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Net cash flow from operating activities
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$2,123m
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$(202)m
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Free cash flow
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$1,532m
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$(164)m
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Growth in Europe,
LAC and Africa offset by weakness in North America and
China
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Reported
net sales of $10.5 billion declined 4.0% due to organic net sales
decline and the negative impact of disposals.
●
Organic
net sales declined 2.8%, driven by organic volume down 0.9% and
negative price/mix of 1.9%. Strong organic net sales growth in
Europe, Latin America and Caribbean (LAC) and Africa was more than
offset by softer performance in North America given pressure on
disposable income impacting US Spirits, and the adverse impact of
Chinese white spirits (CWS) in Asia Pacific.
●
Negative
price/mix primarily as a result of adverse mix due to US Spirits
performance and weaker results in CWS.
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Excluding
CWS, organic net sales for the group would have been c.2% higher;
with volume down c.0.5% and price/mix broadly flat.
Operating profit decline mainly from adverse mix and tariffs,
partially offset by efficiencies in A&P investment
●
Reported
operating profit declined 1.2% due to organic operating profit
decline and lower exceptional operating charges. Reported operating
profit margin grew 85bps, primarily due to the positive impact of
disposals.
●
Organic
operating profit declined by 2.8%; organic operating profit margin
was broadly flat, mainly due to adverse market mix and tariff costs
offset by lower marketing investment given
efficiencies.
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EPS
pre-exceptionals was 95.3 cents, down 2.5%.
Continued focus on cash flow and increased commitment to reduce
leverage and increase financial flexibility, dividend
rebased
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Net
cash flow from operating activities decreased by $202 million to
$2.1 billion. Free cash flow decreased by $164 million to $1.5
billion.
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Net
debt as at 31 December 2025 was $21.7 billion.
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In December 2025, Diageo announced an agreement to
sell its shareholding in East African Breweries plc and its
shareholding in the Kenyan spirits business, to Asahi Group
Holdings, Ltd. Estimated net proceeds after tax and transaction
costs of $2.3 billion imply a 17x EBITDA multiple. This is expected
to complete in H2 calendar year 2026 and to reduce net debt to
adjusted EBITDA(3)
by c.0.25x.
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Ongoing
strategic review by United Spirits Limited (USL) of ownership of
Royal Challengers Bengaluru (RCB) cricket team well
advanced.
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Declared
interim dividend of 20 cents. Committed to growing shareholder
distributions over time and targeting a 30-50% payout policy going
forward, with a minimum floor set for the dividend of 50 cents per
annum.
Accelerate savings progressing well, fiscal 26 guidance
updated
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Cost
savings programme progressing well with c.50% Accelerate savings
now expected in fiscal 26; savings in the first half driven by
supply chain agility and related cost savings, A&P efficiencies
and overhead savings.
●
For
fiscal 26, given further weakness through the first half in the US
we have updated both organic net sales and operating profit growth
guidance. We have reiterated free cash flow guidance of $3
billion.
Sir Dave Lewis, Chief Executive Officer commented:
Our performance in the first half of fiscal 26 was mixed. Strong
performance in Europe, LAC and Africa, was offset by a weakening
performance in NAM and continued weakness in Chinese white spirits
in APAC. US Spirits performance reflected pressure on disposable
income, and competitive pressure from more affordable alternatives
addressing a more stretched consumer wallet.
Only several weeks in I can already see significant opportunities
for Diageo to act more decisively to enhance its competitiveness
and broaden the portfolio offering leading to higher growth. As we
refine our new strategy to deliver stronger shareholder value, the
immediate priorities for the team are clear:
– Build competitive category strategies, winning with
relevant brands
– Customer, customer, customer
– Redesign of the Diageo operating framework to drive
sustainable returns
To
deliver on these opportunities, we need to create more financial
flexibility. Accordingly, the Board has taken the difficult
decision to reduce the dividend to a more appropriate level which
will accelerate the strengthening of our balance sheet. We are
confident that this is the right action which will ensure that
Diageo can reinforce its position as the leading international
spirits business and drive stronger shareholder value over the
coming years.
I am encouraged by the depth of the passion and pride that our
people have for our brands across the business. This will be
invaluable given the significant work ahead.
(1)
See
pages 36-43 for an explanation and reconciliation of non-GAAP
measures.
(2)
Represents
organic movement.
(3)
Leverage
ratio calculated using adjusted net debt which is the equivalent to
adjusted net borrowings (net borrowings plus post-employment
benefit liabilities before tax).
See
pages 36-43 for an explanation and reconciliation of non-GAAP
measures, including organic net sales, organic marketing
investment, organic operating profit, free cash flow, EPS before
exceptional items, adjusted net debt, adjusted EBITDA and tax rate
before exceptional items. Unless otherwise stated, movements in
results are for the six months ended 31 December 2025 compared
to the six months ended 31 December 2024.
Outlook
Outlook for fiscal 26
Organic net sales we have
updated guidance for fiscal 26 and now expect organic net sales
down 2-3% given further weakness in the US. This also includes the
impact of Chinese white spirits.
Organic operating profit growth we now expect this to be flat to up
low-single-digit. This reflects the revised net sales guidance due
to the US, as well as Chinese white spirits and the impact of
tariffs (as detailed on page 6). This also includes savings from
the Accelerate programme.
Taxation - we expect the tax
rate before exceptional items for fiscal 26 to be c.25% (fiscal 25:
24.9%).
Effective interest rate - we
expect the effective interest rate for fiscal 26 to be c.4.0%
(fiscal 25: 4.1%).
Capital expenditure - we expect
capex at the lower end of the range of $1.2-1.3 billion (fiscal 25:
$1.5 billion).
Free cash flow - we continue to
expect free cash flow of $3 billion (fiscal 25: $2.7 billion). This
includes exceptional cash costs related to the Accelerate
programme. This does not include c.$100 million one-off impact
which is expected to be included in working capital at the end of
fiscal 26 related to inventory build ahead of the implementation of
the group SAP S/4 HANA ERP system in early fiscal
27.
Dividend
Dividend policy revision
The Board of Diageo has decided to reduce the dividend to a more
appropriate level to accelerate the strengthening of the balance
sheet and create more financial flexibility. This will also ensure
that decisions made are taken for the long-term best interests of
the company. The Board is targeting a 30-50% payout policy going
forward which will enable Diageo to balance investment in the
business with attractive shareholder returns through dividends and
where appropriate share buybacks. The Board has also set a minimum
floor for the dividend of 50 cents per annum.
Dividend timetable
The interim dividend of 20 cents per share (fiscal 25 H1 –
40.50 cents per share) will be paid to holders of ordinary shares
and US ADRs on register as of 17 April 2026. The ex-dividend date
is 16 April 2026 for holders of ordinary shares and 17 April 2026
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 8 May 2026. The dividend per share in
pence to be paid to ordinary shareholders will be announced on 21
May 2026 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 interim
dividend will be paid to both holders of ordinary shares and US
ADRs on 4 June 2026. A dividend reinvestment plan is available to
holders of ordinary shares in respect of the final dividend and the
plan notice date is 8 May 2026.
To view the interim results document in full, please paste the
following URL into the address bar of your browser:
http://www.rns-pdf.londonstockexchange.com/rns/2513U_1-2026-2-24.pdf
In accordance with DTR 6.3.5(1A), the interim results document has
been submitted to the National Storage Mechanism in full unedited
text and will shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Randall Ingber, General Counsel & Company Secretary, is
responsible for arranging the release of this announcement on
behalf of Diageo.
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Presentation for analysts and shareholders
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Pre-recorded audio webcast and presentation slides
At
07:05 (UK time) on Wednesday 25 February 2026, Sir Dave Lewis,
Chief Executive Officer and Nik Jhangiani, Chief Financial Officer
will present Diageo’s interim results as a pre-recorded audio
webcast. This will be available to view at
https://www.diageo.com/en/investors/results-reports-and-events/2026-interim-results.
The presentation slides and script will also be available to
download.
Live Q&A conference call
Sir
Dave Lewis and Nik Jhangiani will be hosting a Q&A conference
call on Wednesday 25 February 2026 at 09:30 (UK time).
For
analysts and shareholders wishing to ask questions, please use the
dial-in details below which will have a Q&A
facility.
Please
dial in 15 minutes ahead of the scheduled start time to register
before the call begins.
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From
the UK:
From
the UK (free call):
From
the USA:
From
the USA (free call):
Passcode:
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+44
(0)20 3936 2999
0800
358 1035
+1
646 233 4753
+1
855 979 6654
522042
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Transcript and audio recording
Following
the Q&A conference call, a transcript and audio recording will
be available from the link below:
https://www.diageo.com/en/investors/results-reports-and-events/2026-interim-results
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Calendar for future events
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6 May 2026
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Q3 F26 Trading Update
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6 August 2026
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Preliminary results for year ending
30 June 2026
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5 November 2026
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Q1 F27 Trading Update and AGM
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Enquiries
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Investors:
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Sonya Ghobrial +44 (0)7392 784784
Andy Ryan +44 (0)7803 854842
Grace Murphy +44 (0)7514 726167
investor.relations@diageo.com
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Media:
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Rebecca Perry +44 (0)7590 809101
Clare Cavana +44 (0)7751 742072
press@diageo.com
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Diageo plc LEI:
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213800ZVIELEA55JMJ32
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About Diageo
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Diageo is a global leader in beverage alcohol with an outstanding
collection of brands across spirits and beer categories. These
brands include Johnnie Walker, Crown Royal, J&B and Buchanan's
whiskies, Smirnoff and Ketel One vodkas, Captain Morgan,
Baileys, Don Julio, Tanqueray and Guinness.
Diageo is a global company, and our products are sold in nearly 180
countries around the world. The company is listed on both the
London Stock Exchange (DGE) and the New York Stock Exchange (DEO).
For more information about Diageo, our people, our brands, and
performance, visit us at www.diageo.com. Visit Diageo's global
responsible drinking resource, www.DRINKiQ.com for information,
initiatives, and ways to share best practice.
Celebrating life, every day, everywhere.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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Diageo plc
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(Registrant)
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Date:
25 February 2026
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By:___/s/
James Edmunds
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James Edmunds
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Deputy Company Secretary
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EXHIBIT INDEX
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EXHIBIT NUMBER
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EXHIBIT
DESCRIPTION
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99.1
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Diageo Interim Results
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