The British spirits group Diageo, owner of well-known brands such as Johnnie Walker, Guinness, or Baileys, closed its fiscal year 2026 with a net profit attributable of 1.737 billion dollars (1.505 billion euros), which represents a decrease of 26.2% compared to the previous year, according to the company, which has launched a cost-cutting program of 1.000 billion dollars (866 million euros).
Diageo's annual result incorporates a negative impact from exceptional items of 2.527 billion dollars (2.189 billion euros), including 908 million dollars (786 million euros) linked to the already announced restructuring plan, above the 1.369 billion dollars (1.186 billion euros) of extraordinary charges recorded in the previous year.
The group's net sales fell by 3% year-on-year, to 19.643 billion dollars (17.014 billion euros), while net debt at the end of the year stood at 20.482 billion dollars (17.741 billion euros), 6.3% less than a year earlier.
By geographical areas, revenues in North America reached 7.249 billion dollars (6.279 billion euros), 9% below the previous year; in Europe they increased by 5.7%, to 5.097 billion dollars (4.415 billion euros); in Asia Pacific they fell by 8.3%, to 3.333 billion dollars (2.887 billion euros); and in Africa they dropped by 10.5%, to 1.642 billion dollars (1.422 billion euros). In contrast, in Latin America and the Caribbean they increased by 17%, to 2.160 billion dollars (1.871 billion euros).
"We are pleased with our progress in Latin America and the Caribbean, Europe, and Africa. We are focused on regaining our competitiveness in North America and are analyzing the consequences of government policy in the Chinese spirits sector," commented Dave Lewis, CEO of Diageo.
Cost-saving and restructuring plan
Coinciding with the celebration of its Capital Markets Day, Diageo has detailed that it expects to achieve cost savings of nearly 1.000 billion dollars over the next three years through changes in its operating model and improvements in the supply chain.
According to their estimates, the redesign of the operating framework will allow for a cut of around 850 million dollars (736 million euros), with about 40% of that amount materializing in fiscal year 27, while the supply chain initiatives would contribute about 150 million dollars (130 million euros) additional.
The restructuring expenses associated with both programs will amount to about 1.200 million dollars (1.039 million euros), of which approximately 1.100 million dollars are linked to the redesign of the operating framework and about 100 million dollars to additional adjustments in the supply chain.
In this regard, Diageo has explained that of the 908 million dollars charged as exceptional items in fiscal year 2026, about 752 million dollars (651 million euros) correspond to the implementation of the new operating framework and about 156 million dollars (135 million euros) to measures to enhance the agility of the supply chain and the "Accelerate" program.
Looking ahead to the current fiscal year, the multinational projects that organic net sales will remain virtually stable, with a mid-single-digit decline in North America, and anticipates an organic increase in operating profit of between low and mid-single digits. It also estimates that in fiscal year 27 it will generate free cash flow of about 2.000 million dollars (1.732 million euros).
In the medium term, Diageo envisions for the period from fiscal year 27 to 29 a compound annual growth rate of low single digits in organic net sales, with progressive acceleration, while organic operating profit would advance at a mid-single-digit pace, reflecting the effect of cost savings.
Additionally, the company expects "attractive growth" in earnings per share, exceeding that of organic operating profit, excluding the impact of currencies, and is confident in generating a cumulative free cash flow of about 8.000 million dollars (6.929 million euros) over three years, after approximately 850 million dollars (736 million euros) in exceptional cash outflows, mainly related to the transformation of the operating framework.
"This new strategy, executed with a new operational model, more agile, competitive, and profitable, gives us the confidence that we can return Diageo to a business that consistently generates value for shareholders," said Dave Lewis, who emphasized that "there is still much work ahead," especially in North America, where improving the business's performance remains a key priority.
On the stock market, Diageo's shares rose by as much as 11.3% this Thursday on the London exchange, although as the session progressed, they moderated the increase to around 7%.