Hello, and welcome to Diageo's Greater China President's Call. For those of you who don't know me, my name is Sam Fischer, and I'm the President of Asia Pacific for Diageo. I also have responsibility for Diageo's travel retail business. However, the focus for today's presentation is Diageo's business in Greater China. China is an exciting market with fantastic growth potential. Today, I'll share my view on the market opportunities and outline our key strategic initiatives. Greater China has been a strategically important market for Diageo for more than a decade, and it is becoming a much more significant component of the Diageo group. Over the last five years, it has increased from 2% of Diageo's net sales to now 5%. However, we're still only at the beginning of a very exciting journey in China. It is a very attractive and profitable growth engine for Diageo, and I see this business growing to be 10% of Diageo's sales over time. Diageo has two distinct businesses in Greater China. The first is Shui Jing Fang, our Baijiu business, and we remain the only international spirits company to own a Baijiu business in China. The second is our international spirits and beer business that spans across mainland China, Taiwan, Hong Kong, and Macau. While the main focus of our international spirits business is Scotch, we also have other businesses in brands such as Baileys and Guinness. Together, Baijiu and Scotch make up over 80% of our business in China, and I'm going to focus today's presentation on these two categories. Greater China is the world's largest total beverage alcohol market. Excluding low and value price tiers, where we choose not to participate, the size of the market in China is $224 billion. This is almost 40% bigger than the next biggest market, the U.S., which is $162 billion on an equivalent basis. In recent years, growth rates in both TBA and international spirits in Greater China have been ahead of global rates. You can see from the chart on the right that a large part, approximately 70% of the TBA market is Baijiu. Although international spirits is just 3% share of TBA sales, the category is growing fast and there's lots to go after. In the near term, we're encouraged by the pace of the economic recovery in China in the wake of COVID-19. In the fourth quarter of 2020, China was the first economy to return to its pre-pandemic growth rate outlook. Longer term, the fundamentals are strong and consumer spend has been driven by positive macro trends, which are expected to continue through the current global volatility. Premiumization is a global trend, and we're strongly positioned in Greater China, just as we are in many other markets. Globally, China has the largest and fastest-growing super premium and above price segment. It makes up $81 billion of the retail sales value in China, compared to $18 billion in the U.S., nearly four times the size. Already a premium market, nearly all of the market growth since 2015 has come from premium plus price tiers. The size of the super premium and above price segment is forecast to increase its share of the TBA market by five percentage points over the next five years. A number of fundamental consumer trends are driving market growth and premiumization, and we expect these to continue. Consumption occasions are growing as the increasing social and economic power of women has led to a rise in the number of mixed gender and female-only occasions. Consumers are increasingly exhibiting an appreciation of craft and quality and are more discerning versus previous generations who were more overt in displaying their status. Living a healthier lifestyle polled as the top priority for affluent Chinese consumers in 2020, with millennials placing more emphasis on it than their parents' generation. There is also strong demand for China-specific and China-characterized products with greater ties to culture. We expect the demand for these products to grow even faster under the dual circulation policy as the government places greater focus on increasing domestic consumption. The new generation of Chinese millennials, estimated to be around 400 million, are well-educated, often with international exposure through travel or study abroad. They have a high level of disposable income and are willing to try new brands and products. An increase in urbanization as younger legal drinking age cohorts move to cities to find work will lead to continued growth of the modern on-trade and the rise of low tempo with food bistro occasions. This will support the growth of international spirits, which currently over-indexes in these occasions. China is the world's largest e-commerce market by far, with double-digit growth over the last three years. COVID has accelerated the importance of e-commerce, and there has been a clear shift in consumer purchase behavior. In a recent IWSR study, nearly half of respondents reported buying more alcoholic drinks online than they did last year. With favorable demographics, strong premiumization, and consumer trends, we remain excited about the medium and long-term opportunities for industry growth, which will benefit our business. Baijiu is the largest spirits category in the world, reaching $157 billion in 2019. As the national drink in China, it is typically consumed with food and at large social gatherings and banquets. Post the anti-extravagance regulations in 2013, the category recovered to grow at a compound annual growth rate of 17% between 2015 and 2019. Shui Jing Fang primarily participates in the super and ultra-premium price tier through its two core products, Wellbay and Number 8. This price tier has grown at a CAGR of 19% in the last four years. The category has also rebounded quickly post-COVID-19 and returned to previous dynamics and trends. Due to the strong premiumization trends in Baijiu and the fact that over half of the value of the market is still in the premium and below segments, we expect the super premium and above price tiers to continue to be the fastest growing segment, thus creating an exciting runway for growth. Moving now to look at the whisky market in China. You can see that in the last few years, whisky has been growing fast, and Scotch continues to be the largest component within the category. As status cues are changing, becoming less about what you show and more about what you know, we are seeing increasing interest in the Scotch category. This reflects Scotch's rich heritage, craft, and traditions, and we expect growth to accelerate. Scotch malts have grown at a CAGR of 26% in the past three years and have been the growth engine for the Scotch category. While the blended Scotch category in China has seen modest growth, our brands have been performing strongly. Led by Blue Label, our Johnnie Walker business grew at a CAGR of 26% in the three years to fiscal 2019, significantly ahead of the category growth for blended Scotch. Our ambition is to be the best performing, most trusted and respected international alcohol company in Greater China. The execution of our strategy is based on three core pillars. We will continue to premiumize in the Baijiu category. We will win with whisky by continuing to build powerful brands in super and ultra-premium plus Scotch, and we will hold our winning positions in Taiwan, and we will gain share of international super premium beer. Underpinning our strategy are a number of enablers which will support our participation choices. We are ensuring that we are a fit-for-purpose organization with best-in-class capabilities and tools and data that enable us to employ consumer insights that unlock new growth opportunities. Our business has strong foundations and has been resilient through the pandemic. We will continue to invest ahead, accelerate growth, and grow share of TBA. As you can see, our strategy is working. Our business in Greater China has grown significantly over the last five years at a CAGR of 15%. While COVID-19 had a significant impact on our performance in fiscal 2020, we have seen a strong recovery in the most recent six-month period. We are very confident in our ability to drive strong growth in China. This strategy and our unique positioning in both Baijiu and international spirits has driven growth ahead of our key competitor in recent years. As the only international spirits company with a Baijiu brand, we have a unique opportunity to play in the world's largest TBA category. Shui Jing Fang is a beautiful niche brand with a legacy that traces back more than 600 years. It ranks 11th in revenue amongst listed Baijiu companies and has been gaining share. The 28 provinces where Shui Jing Fang has distribution cover more than 98% of Baijiu consumption in China. We have expanded its geographical focus, distribution, and route to consumer, establishing Shui Jing Fang as a national brand with a presence in over 30,000 outlets. While Shui Jing Fang's growth was significantly impacted by COVID-19, the business rebounded strongly in the second half of calendar year 2020. It is a fast-growing business with a lot of potential and benefits from a strong management team and support from Diageo as a majority shareholder. Shui Jing Fang has an ambition to grow significantly ahead of the Baijiu category and win market share by focusing on four key growth drivers. First, winning share in the top tier core stores through strong sales execution, including international spirit style execution standards and customer relationships. Higher volume per outlet also reflects the stronger brand equity in core provinces. It is now focused on winning share in eight key markets through a broad range of marketing activations. Banqueting contributes to more than one-third of super and ultra-premium Baijiu occasions. Having been significantly impacted by COVID-19, these occasions have gradually returned to become a key battleground for Baijiu brands in these price tiers. Shui Jing Fang has doubled down investment in the occasion and has been winning share through strong customer partnerships and agility in execution. Growth will also be driven by innovation, adding new variants and driving premiumization. Ahead of Chinese New Year, Shui Jing Fang launched one liter gifting packs with graphics of lucky icons in Chinese culture, the dragon and the phoenix. It has also used innovation to enable its participation in the ultra-premium price tier through variants such as New Classic and Forest Green. Corporate purchase is another key super premium and ultra-premium occasion. In China, most corporates have had a good entertainment and gifting budget each year. Unlocking the corporate purchase opportunity creates significant commercial value as well as a platform to effectively reach the right target groups. Moving now to talk about the opportunity in international spirits. You can see from this slide that the penetration of international spirits is still relatively low, estimated to be only around 3% nationally. However, our studies show that penetration can be up to low double digits in major cities like Shanghai and Guangzhou. A 2020 Kantar study on usage and attitudes among 21 to 50-year-old spirits and wine drinkers showed the penetration rate of whisky is now higher than cognac in five major cities. The growth in e-commerce is helping to drive whisky penetration. Tmall National Shopper purchase data shows that the number of whisky purchases in 2020 was significantly ahead of cognac and was growing faster. While e-commerce is still skewed to the major cities in the East and the South, it is a critical channel for reaching other geographies, and we can expect this momentum to continue. The room to grow penetration in international spirits and the momentum within the whisky category creates an exciting opportunity for our business. Our focus in mainland China is on building the super de luxe and above Scotch whisky category. We have a proven strategy to grow our whisky business, focusing on three key areas. Building consumers' knowledge of the Scotch category and our brands is the foundation of building our whisky business and route to market in China. We are educating the consumer, reframing category perceptions, and creating a buzz around whisky. Since 2017, we have built 52 whisky spaces in partnership with key customers in Tier I and Tier II cities. In addition, we've executed 13 whisky summits to showcase the strength of our Scotch portfolio. There are now over 600 single malt bars in China with strong year-over-year growth. We have educated more than 15,000 customers, bartenders, and consumers over the past three years through our Diageo Whisky Academy and are now taking it into the digital space. Through these forums, we are educating our customers and consumers about the quality, provenance, and craft that differentiates whisky and our Scotch products from other international spirits. These steps have helped us position Scotch as a genuine discernment category. We are investing to build whisky power brands led by Johnnie Walker Blue and The Singleton. Through luxury brand mentoring, gifting programs, and disruptive brand events, Johnnie Walker Blue Label grew at a CAGR of 51% in the three years to fiscal 2019. The images that you can see here showcase our exciting new Depth of Blue campaign. We partnered with local influencer and renowned photographer and artist, Chen Man, to infuse the brand in local culture. We are also collaborating with local chefs who bring the depth and layered taste of Blue Label alive with amazing food pairings that are rooted in local culture. Within malts, The Singleton offers us a significant growth opportunity with its great liquid and unique and appealing package. The Singleton's taste profile was specially crafted to be preferable for the Chinese drinking palate. It is replicating the success among Chinese consumers that we have seen in the Taiwanese market and has one of the highest trial to conversion rates in the category. We are building The Singleton in a number of ways, including high-end mentoring and experiential events, gifting platforms, and banqueting and Chinese meal initiatives. All of these are strongly infused with PR and digital amplification. The Singleton is now the number one fastest growing major single malt brand in China, and our ambition is to be the number one single malt brand in this critical market. Innovation plays a critical role in delivering our ambition in China. Chinese consumers have unique tastes and needs, and there is great demand for products that have ties to local cultural elements. We have been leading in this space across many of our brands, and our recent innovations are built on local Chinese insights. This slide shows some examples of our China for China innovations. The special edition Johnnie Walker Blue Label Forbidden City anniversary bottle celebrates both the 600-year anniversary of the Forbidden City and the 200th year anniversary of Johnnie Walker Blue Label, and it sold out fast. We have launched The Singleton 21 Year Old and Singleton 25 Year Old mid-autumn festival and Chinese New Year pack. The Chinese New Year pack, created in collaboration with a modern calligraphy artist, denotes the five elements of good luck and fortune, symbolizing the regeneration of your luck for a fresh start in the new year. We also launched our Johnnie Walker 15 Year Old Sherry, a sweet and smooth tasting blended malt whisky, and The Singleton 53 Year Old, which is Diageo's oldest ever aged single malt. At over GBP 20,000 a bottle, all stock of The Singleton 53 Year Old sold out on pre-orders, demonstrating the strong demand for premium and unique innovations in this market. Greater China is world leading in digital capabilities and innovation. End-to-end digital excellence is critical in such a highly digitized and evolving market. We are expanding our e-commerce capability and execution to capture this increasingly important channel. We routinely digitize our marketing initiatives to drive scale and efficiency. A good example of where we have done this with great success is with our Diageo Whisky Academy. Having made courses available online, 30% of our new recruits were virtual participants in the first half of fiscal 2021. We have also digitized our core store program, giving our commercial team the means to virtually engage with over 300 core liquor stores nationwide. Through expansion into platforms like Tmall and Pinduoduo, we are strengthening our business to consumer position in e-commerce, and our investment and focus behind the e-commerce channel is delivering results. We have grown market share faster than our peers. Our recently launched digital CRM tools allow us to communicate directly with consumers, improving the quality of consumer insights and enhancing the quality of our decision- making. Our exclusive customer partnership with Tmall gives us access to rich consumer data so that we can execute targeted recruitment. Currently, East, Southeast, and South China make up around 90% of the international spirits value pool. The Guangdong and Fujian provinces that make up South China represent more than 70% of that value pool. For this reason, the South is the core battleground for our super de luxe whiskey, and we have strong coverage in all 30 cities in the South. The East region, with its vibrant on-trade culture, has been a trend leading hub for international spirits. This year, we expanded our presence to all key Tier I and Tier II cities in the East region, doubling our distribution. We have also been broadening our coverage within channels, primarily upweighting our presence in on-trade channels in the South. We have increased the number of our core store partners by 40% and established dedicated reserve teams to partner with the top high-end outlets. We continue to recruit Tier I and Tier II wholesalers, and our efforts to date have expanded wholesaler coverage by more than 30%. In addition to the three core territories, we are also building stronger route to market muscle in North China, West China, and Central China. International spirits penetration in these territories may be small now, but the headroom for growth is big given the population and size of the economy. In addition to these opportunities is Hainan, China's offshore duty-free island. It has recently increased the permitted spending level and now includes liquor, providing another driver for luxury spirits growth. Chinese consumers are the biggest luxury goods spenders globally and represent 40% of sales across all travel retail categories. The runway for growth is strong, with passengers projected to grow almost four times over the next five years, and Diageo will be well positioned to meet this consumer need. Doing business in the right way is embedded in Diageo's strategy and is a core part of our performance ambition. Diageo recently launched our highly ambitious 10-year sustainability action plan for the decade to 2030, which focuses on positive drinking, inclusion and diversity, and grain to glass sustainability. Diageo China was the first company to promote responsible drinking in China. We played an instrumental role in fostering a positive drinking culture by advocating for the adoption of a universal market code of conduct, founding the China Social Aspects Organization under the China Alcoholic Drinks Association and the Foreign Spirits Producers Association to support the reduction in alcohol-related harm. We are looking to partner with organizations like JD.com to reach millions of Chinese consumers with messages of moderation and responsible consumption. We will provide business and hospitality skills through our Learning for Life program. 50% of the training recipients will be female or from underrepresented groups, increasing employability and improving their livelihoods. We will bring best practice sustainability from grain to glass, focusing initially on increasing efficiencies in our supply chain and contributing towards our global goal to ensure that the business is using 100% recycled content in plastic packaging, and that 100% of Diageo's packaging will be widely recyclable by 2030. In summary, Greater China is an attractive market for Diageo as consumer trends of increased consumption occasions, growing penetration, and premiumization provide a huge runway for growth. We are the only international spirits player with a presence in Baijiu, international spirits, and beer. Our strategy has been working, and we have a clear roadmap to drive sustainable long-term growth with attractive margins. I am confident that we have the team of people inside Diageo China and Shui Jing Fang that have the commitment, the talent, and the energy to deliver sustainable and profitable growth for Diageo. Thank you.