Hello, everyone, thank you for joining the Diageo F26 Interim Results call. My name is Lucy, and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. It is now my pleasure to hand over to your host, Sonya Ghobrial, Global Head of Investor Relations, to begin. Please go ahead. Thanks very much. Good morning, everyone. Welcome to Diageo's fiscal 26 interim results Q&A. I'm Sonya Ghobrial, Head of Investor Relations. I'm joined this morning by Sir Dave Lewis, Chief Executive Officer, and Nik Jhangiani, Chief Financial Officer. Firstly, thanks all for joining us on what I know is a busy day for results, with peers and some good friends reporting. Just a quick reminder for those on the call that in the discussions today, the company may make certain forward-looking statements, including those that refer to our estimates, plans, and expectations. Please refer to this morning's release and the company's U.K. and U.S. filings for more detail, including factors that could lead to actual results to materially differ from those expressed in or implied by any such forward-looking statements. Hopefully, you've all seen this morning's press release and presentation, both of which can be found on our website. For those listening, who'd like to ask a question, please use the dialing details included in today's press release. If I could ask if you could limit to one question per analyst, we can hopefully get around to everyone. First, let me hand over to Dave, though, for some opening remarks. Thank you, Sonya. Good morning, everyone. Thanks again for joining us. If I just take 2 minutes before we get straight into the questions. You've seen, obviously, the results from us today. As I say in the press release, we consider them to be mixed. Encouragement in Latin America, Europe, and Africa, offset by the weakness in Chinese white spirits and North America. In fairness to the team, the Chinese white spirits is not particularly in our direct control, but clearly, the North American position is. Against that background, we set out 3 immediate priorities, and you had a chance to see that in the presentation and obviously take some questions. We're also clear that we are working hard on a revisit to the strategy for Diageo. We will complete that in calendar Q2 with Diageo and then share it with you as soon as we can thereafter. I suppose the thing that I need to refer to is obviously the change in the dividend policy that's been announced today. From our perspective, this is about recognizing that we need to invest in the competitiveness of our business, and that's particularly around the portfolio. To allow us the space to invest in the capacity, particularly in Guinness, that we need to support that growth, but also in the capability improvement that I see as an opportunity in the business. With urgency, to rebuild the balance sheet. That's the reason that the board has revisited the dividend policy. I'm sure there'll be questions about it, but I thought I would give you a little bit of context before we open it up to you for questions. With that, over to you. We take the first question, please? Thanks. Absolutely. To ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. The first question today comes from Sanjeet Aujla of UBS. Your line is now open. Please go ahead. Good morning, Sir Dave, Nik, and Sonya. My question is, following the dividend cut announced today, do you think Diageo needs a short-term profit reset as we go into 2027 to execute your immediate priorities, or is there enough cost savings to help fund that? Sanjeet Aujla, thank you very much. Why don't I start, and then Nik can add. Look, we're not guiding into 2027, as you know. We've been clear about what the guidance for 2026 is. We're looking at a profitability which is flat with potential for a little bit of growth, and we're committed to the GBP 3 billion of cash that we'll generate this year. We'll revisit the strategy, as I've said. I suppose the thing that I would point to, Sanjeet Aujla, is that if the reason One of the reasons we gave the El Niño example is, we may have to invest in diluting a little, the percentage margin of our portfolio in order to get the competitiveness that we're looking for. Actually, the quantum of gross profit that's come back in that particular case has paid for that investment. I actually think there's opportunity within the portfolio to have some volume return on the investment. I also think there are opportunities inside Diageo for us to be more efficient. I just need a little bit more time for us to work through those, and we'll bring that to you in the strategy because we're not going to add guidance for 2027, as we said. Nik, I'll let you on. No, I think you said that the only thing I would add there is, as Dave said, some of these choices and decisions take time, and it's not necessarily a one-for-one in terms of how that might come through. As you look forward, the ability to look at the gross profit value pool and where we play continues to be you know, the big opportunity. Thanks. Next question, please. Thank you. Thank you. The next question comes from Simon Hales of Citi. Your line is now open. Please go ahead. Thank you. Morning, Dave, Nik, and Sonya. Sir Dave, I was struck by some of your comments around particularly what you're saying about redesigning the Diageo operating framework as it sounds like that's gonna drive, hopefully, faster innovation and some further efficiencies. I've got just a couple of sub-questions to that. I mean, given that you highlighted that need to step up on the innovation side, be more agile, particularly in the areas of RTDs, is that urgency something we might see show up over the next six months? Are there some, perhaps, new RTD launches already in the pipeline, for example? Secondly, on the cost side, you've clearly been able to deliver savings from the Accelerate program a bit more quickly in fiscal 2026 than originally expected. You're not specifically referencing Accelerate beyond 2026 as things stand, unless I missed it. I think you'll probably come back at the midyear and give us a bit more of a flavor on cost efficiencies from here. Mm-hmm. How should we think about the trade-off between reinvestment into the business, given that you're talking about differentiating competencies over the medium term, versus a drop-through to the bottom line of potential further savings? Got it. Simon, thank you very much indeed. Again, I'll kick off. Look, I think there is a significant opportunity for us to rethink how it is we, as Diageo, go to market. I think there are opportunities for us to be more competitive in the way we think about how we deploy, dare I say, all of our resources. That's something that we need to work through as a team. It's going to take us a little bit of time, but I'll share it with you as soon as I possibly can. I think Nick touched on one thing. One of the things that's come, Simon, as someone new to this particular industry, is there is some lead time between decision and being able to implement. The innovation plan for the 6 months in the balance of this year is pretty much set. There's gonna be, as a result of the presentations today, you shouldn't assume that there's gonna be any material change. Now, there's a very good activity plan for the balance of the year, but you shouldn't read that there's gonna be a change, particularly to that, as a result of what we said this morning. I think on the Accelerate program, Nik kicked this off before. I think the program is delivering. We talk about delivering 50% of the GBP 625 this year. In the first half, we've done 40 of that 50%. The progress, and we will carry on. What we will probably do, in fact, is we will roll in a full review of the operating framework that we'll share with you in 2027, and any continuing part of Accelerate will be consumed within that. That would be my point. I think the thing I would say, going back to the innovation, is if you look in, particularly in North America, which is obviously a focal point for reasons that were obvious in the statement, we've got FIFA in the second half of this year. The idea that we were to change any of the plans in the second half of the year just really isn't an opportunity for us. Again, I don't think you should read in that you're gonna see material changes in the, in the next six months as a result of the, the comments that I made this morning. Thank you. The next question comes from Andrea Pistacchi of Bank of America. Your line is now open. Please go ahead. Good, good morning, Dave, Nik, and Sonya, and thanks. Dave, you talk about needing to provide more affordability to consumers and investing in competitiveness of the business, and you said, I think that while you'll continue to invest in premium, you'll also explore opportunities which might involve some price repositioning. I'd like if you could please expand a bit more on this potential for price repositioning, particularly on the U.S. Would the, and maybe this is a bit more detail, a bit too detailed for now, but would the repositioning you have in mind be, as you're thinking of it, be quite specific and targeted by brand? I don't know, like, for example, Casamigos, or do you believe that a broader price adjustment may be required? Sort of connected to this, what gives you the confidence that price elasticities are high enough to get an adequate volume response? Do you see the risks of getting into a even more competitive sort of pricing environment? Thank you. Andrea, fantastic question. Let me try, and then Nik can add. Look, I think the way that I think about it, Andrea, is that we start from a place which is, let's consider all consumers and not just those which sit in the premium space. I don't want to take focus away from the premium. I just want to add the lens, which is there's a whole bunch of people at the moment who are not enjoying a brand from Diageo in our core categories, and that, I think, is an opportunity for us. It's interesting. If I give a different example to the ones I gave this morning, if I look at the market in Latin America, our portfolio across Latin America really only plays in the top 25%, 30% of the market, and therefore, there's an opportunity for us to think about that market below those price points. Now, if we do that and we do that well, that would be incremental to our business and therefore, not something that we should be anything but joined about. The critical thing for us is, as you say, that price repositioning, that very selective price repositioning that needs to be done will be done surgically. It will be done by brand, it will be done by pack size, it will be done by market, it will be done by channel. That's where I talked about that price pack architecture. This is where category management really comes to the fore. I think, again, go back to the MENA example, really very encouraged. You see it at play in that example. We launch yet more premium offerings, Bulleit is a really good example, but we slightly tweak the price positioning of, yes, Johnnie Walker, but very significantly with Vat 69, Black & White and J&B, we change those positions. That now doesn't dilute the percentage margin of those three brands in the portfolio, but it pays back. In that particular case, it's paid back by gross profit. The work that we need to do that will inform the strategy is some of that price elasticity that you referred to. Don't have all of that in every market as we speak, but we will have it before we finalize the strategy. It's gonna be a very targeted, very specific piece of work. We do think, I think from what we've seen so far, that there is a volume response to price repositioning if we get it right. That's the opportunity. What it does mean is you dilute a little bit the percentage profitability and look to gain quantum of gross profit as you make those changes. I don't know, Nick, you want to add anything to that? No, I think you've covered it. Okay. Thank you. Thank you. The next question is from Matthew Ford of BNP Paribas. Your line is now open. Please go ahead. Good morning, everyone. Thank you for the question. It appears in the presentation that you view the weakness in the U.S. spirits market as very much being principally driven by economic pressure on disposable income. I guess on the basis that economic pressure will eventually ease, as you think about building out your updated strategy, will it be based on the assumption that over the midterm, the U.S. spirits category will eventually return to its kind of pre-pandemic growth cadence? Thank you. Thank you, Jen. Look, I think, look, we'll share with you what assumptions we make about the U.S. economy as we write the strategy. We'll probably look at different scenarios as you would expect us to. You're right, we do see the economics and the disposable income as being one of the biggest downward pressures on the spirits category in North America. Jen, I think I've shared with you that my background and my experience leads me to a place where I think that having a portfolio of offerings is the right medium and long-term strategy to have. Sometimes the economy will be strong, sometimes it will be weak. It's important that we have a portfolio that is competitive and creates value for shareholders in both of those circumstances. The way we'll think about strategy is: How do we build out a portfolio that actually reflects and is effective in the prevailing economic conditions? We can make some calls about how they might change into the future, but I don't want the Diageo business to be something that has to rely on the economic temperature in order to be successful. That's gonna be the change in the strategy you see going forward. We've got a brilliant portfolio of premium, but we can add to that in a way which makes the portfolio significantly more resilient. We just need to do that in a way which creates value for shareholders. Thank you. The next question comes from Mitch Collett of Deutsche Bank. Your line is now open. Please go ahead. Thank you. Morning, Sir Dave, Nik, Sonya. A few times in the slides, you have the sort of focus on customer, customer. I guess I've been a customer of Diageo, Sir Dave, so I'm really interested in your thoughts on how Diageo can improve that customer execution, and ultimately, how that improved execution would better serve Diageo shareholders. Thank you. Mitch, thank you very much indeed. Can I just say, please, it's just Dave, all right? Sorry, I should have said that. It's definitely just Dave. Look, Mitch, I'll be very candid with you. I said I was asked a question when I first started, on my first day, by a lot of Diageo colleagues about what Tesco's view of Diageo was. People in the room here are smiling, going, I remember. The feedback I gave them, I don't mind sharing with you, is we always, as Tesco, we're in awe of the branded portfolio that Diageo had, all right? I'm saying that unashamedly. It was always what a fantastic portfolio. Some years, the innovation plan was super strong, some years lesser, but the brands were phenomenal. We always felt, though, that they didn't really engage with us in thinking about how we ran our business as Tesco, i.e., the category lens. And that actually, some of the things in terms of how they engaged operationally, processes were not best in class, right? That was the impression back at Tesco. I have to say, and I was candid with the team as I gave the global feedback, having now been inside Diageo for seven weeks, we have not invested in the customer relationship. We've not invested in the systems and the processes that would make it a professional operation. I gave you some of the customer service headlines for some of the key geographies, too, as a simple illustration of that. If I tell you that today, Diageo, across the world, enters 65% of its orders from its customers manually, gives you some idea about how far behind we are. As I say, an opportunity about how we might engage with our customers differently. I think there's a whole area of transactional engagement with customers that operationally we can and we should improve. That will do two things. That should, if we do it well, lower the cost of servicing our customers. It should also free up cash if we do it properly. The bigger opportunity for us is to think about categories. On trade, off trade, customers think through the lens of category, and the more that we can go to our customers and show that actually we're thinking about how it is we grow their categories, actually, that is a basis on which you can build real partnership. What I want us to do is I want us to start thinking about how we grow with our customers, rather than thinking about how we grow through our customers. Subtle difference, if we're able to do that, then that will yield more value to Diageo shareholders. I have to be honest, it's a change in mindset for the Diageo business, and that's why I'm calling it out for both an internal audience and indeed, an external one. Thank you. The next question comes from Laurence Whyatt of Barclays. Your line is now open. Please go ahead. Morning, Dave, Nick, Sonia. Thanks very much for the question. Just one on your strategic reviews and potential disposals. We sort of see you're progressing with the Royal Challengers in India and the Chinese spirits business. Can we assume then you're largely done with the sort of major, sort of slightly more substantial disposals? Of course, it was speculated last year around brands like Guinness. You've mentioned how you think Guinness is an excellent brand, but no real mention of Hennessy, and of course, that was speculated earlier last year. Wonder if you have any comments or reiterate the comments that were made earlier last year, that's absolutely not for sale? Thank you. Well, Laurence, thank you. Why don't I say something about the approach in general, and ask Nik to update you on where we are with the EABL and the review that's going on by the Indian business? Look, I think that we will never comment on speculation. One of the things that said very clearly is, I have no interest in selling brands below their value. I understand where this market is at this moment in time, and I understand the speculation is, and the way that we should delever our businesses through disposals. You've mentioned two speculative ones, but they're certainly not things that we have referenced. I want us as Diageo to be super clear. We're not gonna sell brands below fair value. If somebody were to approach us and make us an offer that we can't refuse for portfolio assets, which are not part of our strategy, then as sensible businesspeople, we will obviously listen and engage with that. What I want to be clear is we're not actively out in the marketplace hawking a whole series of what people have called inverted commas, tail brands, and nor are we active in a couple of things that you have speculated about. Just want to be clear about that. We're gonna strengthen the balance sheet through the actions that we've talked about, rather than looking to dispose of some of the assets that people speculate about. Nik, do you want to say something about what we are actually doing in this space? Yeah. This comes back to precisely what Dave has just said, and I think that's been our position from day one, that we are exiting certain non-core businesses. We never talked about brands. Obviously, when you now look at what we're doing, you've seen the announcement on EABL, and USL, alongside us, is doing a strategic review of RCB. Again, we don't need to own a cricket club, that's not core to our business, but important in terms of the brand and what we can do. That's in train and in progress. Won't speculate any further, and we'll update you in due course. Just on your comment on SGF, just to be clear, we have never talked about that. That's speculation, won't comment on that further. I will just reiterate on both Guinness and Moët Hennessy, we were very clear, we are not sellers, and that still stands as it is. The last thing I would say to Dave's point, there's a lot of tail brands that were exited, you know, pre and during my arrival here, and as Dave said, we've been clear, no fireside sale of any of these assets. More importantly, let the strategy first be laid out, and that will determine what we think about our brand and our portfolio going forward. Very well said. Thank you very much, Nick. Next question. Thank you. The next question is from Chris Pitcher of Rothschild & Co Redburn. Your line is now open. Please go ahead. Thank you, and good morning, all. Welcome, Dave. You're clearly impressed with Guinness, but you mentioned specifically that the brand has geographic constraints. Would you have sold the assets in Africa? Following on from that, the previous strategy was to free up capital from beer and make it an asset like business. Do you still agree with that? It does sound like you're looking to put more capital into the business to expand capacity. Does it need more people on the ground to sustain the current growth? Which markets do you see as most interesting, not just for growth in license volume, but growth profit? Thanks. Sorry, long question. Great. No, Chris, it's a great question, but you probably, if you didn't pick up in my previous life, the one thing I'm never gonna share on a call like this is what I might do in the future. Mm-hmm. I always consider those things to be competitively sensitive, so I'll decline to give you my rollout plans again, if you don't mind. Look, I think I'm very impressed with the brand. Really very impressed with the brand. I'm very impressed with the team and the way the team are thinking about the brand. I'm very impressed with some of the work that's thinking about different business models behind the brand, and you referenced one of them, which is a more asset-light way of thinking about how you can take Guinness into new markets. I look at the, I look at the locker as Guinness, and I see it as a very full locker with opportunity. However, we sit here today with capacity constraints. Capacity constraints on Guinness, and on Guinness 0.0. I've shown you some of the customer service levels, which are just not acceptable. I've shown you that actually 10 markets are 80% of the business. We do see opportunity for Guinness in a number of other markets. We can't even consider that until we sort out the capacity point. Now, in fairness, what the team have been doing historically is balancing how much we can invest in Guinness with some of the other investments in the portfolio, the usual stuff that management teams have to do. I don't want to, in any way, constrain the investment in Guinness capacity, given that we have a wealth of opportunities. Forgive me, Chris, I'm going to decline to tell you which markets and when, we might deploy that. I would just add, Chris, and you were present. You saw us at the Guinness mini event that we did- I did. we clearly laid out the opportunity, when you look across markets, even where we're present today, as Dave said. Some of that capacity will come on in half 2, Q4 in particular. Yeah. To Dave's point, with the growth that we're seeing, that's not gonna be enough, you know, for the next two or three years, and we need to continue leveraging on the growth opportunity and the gross profit dollars that brings in. Spot on. Okay. Thank you. Next question. Thank you. The next question comes from James Edwardes Jones of RBC. Your line is now open. Please go ahead. Thanks, Sonya. Hello, Dave. Timing, mid Q3 seems quite a long time to wait for you to update the market, particularly as you're kind of proposing, giving your proposals to the board in Q2. How are you using your time between now and then? James, I take the challenge. Look, I've gave some detail of what I've been doing in the first seven weeks. This week and next week are with investors, as you can imagine. I've then got a complete getting around, so there's still Africa and there's Asia for me to spend some time in. I just want to make sure that I've got the firmest of foundations in understanding the business we have today. There's then quite a lot of engagement with the exec around strategic options, choices, consequences that need to be fully explored and evaluated. A lot of work underway there. We need to then get ourselves as a team through that evaluation and those alternatives. We then need to engage with the board, and then depending how quickly that goes, obviously, I'll be in a position where we can share it with other stakeholders, and principally, obviously, the city. I'd rather. One thing I won't do, James, is rush. I don't think there's any benefit here in being quick and incomplete. I give it the challenge that when we come, I hope you're impressed with what we've done. I need to make sure that we do that properly, and that's properly, first, me understanding the business fully, then with the exec, really exploring the alternatives, and then bringing the board into those discussions so we can get ourselves to a place where we've done a proper job. As soon as all I'll say to you is, as soon as we've done that, we've agreed it, we'll find the right way of sharing it with you. I'll try to give you some broad timelines, but we'll firm those up as we go through, go through the calendar year. Thank you. The next question comes from Javier Gonzalez Lastra of Berenberg. Your line is now open. Please go ahead. Good morning, Nik and Dave, and Sonya. One question from me. On the U.S., I just wondered, how feasible is it for Diageo to reset prices or activate more mainstream brands in the portfolio without impacting margins in a major way? It's a really good question. It's, you know, the distribution routes in North America are particular. It needs to be planned. It goes a little bit to what Nick was saying earlier, which is it takes time to change the plan in North America. It takes time to change the plan in North America anyway. It particularly takes time when you've got an event like FIFA that's been built in with all customers for quite some time now. It is possible. You know, if you talk to Sally and the team, it is possible. We need to be thoughtful, mindful, and have a longer and medium-term position, and that's the work that's going on now. It goes back, Javier, to what I said earlier, which is that's why I don't think you should see any meaningful difference in the U.S. plan as a result of what I've said. That's why we're holding the guidance that we've given you on profit and cash for this year, but we're indicating that we're gonna have to invest in the North American business in 27 and on. That means how do we invest in the portfolio, but also in a way which enhances quantum of gross profit, even if it dilutes percentage margin. It's possible to do, just needs to be done carefully and thoughtfully and with some lead time. Nik, do you want to add in to that? No. Thank you. The next question comes from Trevor Stirling of Bernstein. Your line is now open. Please go ahead. Good morning, Dave, Nik, and Sonya. Dave, you've hinted at some of the softer aspects of the redesigning of Diageo operating framework, but if you took a broader picture, what's your assessment of Diageo's culture and how the culture of the organization needs to evolve? It's a great question, Trevor. Look, I have touched on it. I think. Look, there's first things first and foremost, the thing that strikes me, has struck me over the 7 years. 7 years, 7 years? 7 weeks. It hasn't felt that long, I promise, is the energy in the organization. Actually, coming in, given, you know, the difficulties in the last few years, my, one of the question was, what would the energy be like in the organization, especially given that there's a turnaround required? The energy levels are really very high, and that, I think, is a very big and very important positive. I think there's, there is quite a lot of feedback inside the team, that the way that we operate is not as clear and not as agile as it could be. People are being quite open to sharing some of that frustration. That's why I refer to it in the presentation in the way that I do. I think the bits of culture that I, you know, the two things that I would point to at this point, Trevor, would be, there's a question for us to think about: What are those differentiating competencies? What are the capabilities of the organization that either are there but need to be sharpened or indeed need to be brought to the business? I think we're there on the way we think about brand. We need to add that lens of category. It's not there in the way that we think. From a capability point of view, we need to add that. We need to add a greater priority and a different approach to our customers. I'm not seeing anything in the culture that makes me concerned about our ability to do that. If anything, I think the culture is thirsty for us to be a little bit more competitive, a little bit more external in the way that we go. It's a very collegiate culture, which is one of its great strengths. Maybe sometimes that makes us a little bit slower than we could be. How we inject some pace, so that's for me, and that's for the leadership team. I've not felt any resistance to that, Trevor. Look, when we get to the point where we share the strategy, I will share also a little bit more what we're doing in terms of the evolution of the culture inside Diageo as well. Thank you. The next question comes from Richard Withagen from Kepler Cheuvreux. Your line is now open. Please go ahead. Good morning, Dave, Nick, and Sonia. I want to go back to the U.S. Maybe can you please share your thoughts on the margin structure in the U.S. and how that stacks up to the potential growth of the portfolio and also resource allocation within the portfolio? Why don't I give you the general answer, Richard, and then I'll ask Nik to give you a bit more specific. Look, I think We've, you know, we use the example of our U.S. Spirits business and tequila to show how our portfolio is very well served at the premium end, but we're underrepresented in the volume parts of the market. That's an opportunity for us. That means that we will have to think about selective price repositioning, maybe, possibly, activating brands that we haven't activated for a while, and we're fortunate to have a portfolio of opportunities there. That, I think, is likely to have a, in 2027, a downward pressure in terms of the percentage margin of our portfolio in North America. Not in a place that I can guide you to that at this point in time, but I think if you want some direction of travel, it's an investment in the percentage margin of our business in North America. What we've got to work through is, what is the quantum of gross profit that comes from that price investment? Therefore, if we don't, you know, in the unlikely event that we don't happen to cover it all, how can we mitigate that from elsewhere? What we must do is make our portfolio competitive in North America, not just in one or two segments, but more broadly. That's how I think about it at a general level. Nik, I don't know if you want to say anything more specific to Richard. No, I think the only thing I would add. This is probably, again, an example, right, of what we can do. You know, we've talked about the fact that when we look at tequila, we've got an enviable portfolio, but it's been playing at the top end. In some ways, if you look at the brands and take Casamigos, it's actually been competing, like we've said, with Don Julio, right? There clearly is an opportunity to reposition that. Now, we can reposition that, to Dave's point, very smartly and surgically when we look at it across channels, facts, occasions, et cetera, and we'll continue to test that in the right way. One of the things, for instance, that we know, while we've done this in Florida, clearly, that's had a positive impact, right? Now there's more to do. One of the biggest issues we still deal with is the fact that Casamigos, for example, is in lockbox. Well, clearly, we know if it's in lockbox, that has an implication on consumers' propensity or shoppers' propensity to buy that. How do we work with our customers, back to Dave's point, around helping them grow and helping the category grow by putting it on the floor, right? At the right price point, right? To serve the right type of consumer and occasion that's coming in there. There's a lot more work that we need to do, and I'm just giving you that as one example, but there's other brands in the same thing, whether it's Sano, whether it's Apple, and et cetera. That's the work that we'll be going through. Mm-hmm. Thank you. Thank you. The next question comes from Sarah Simon of Morgan Stanley. Your line is now open. Please go ahead. Yes, morning, everybody. I just had one question around GLP-1. You've talked about a sort of pretty limited impact from that, which is sort of not surprising, because very sort of generically, there's not that many people on GLP-1s yet. Clearly, the price of GLP-1 is going down, they're going off patent, et cetera. It's not just gonna be a sort of U.S.-centric issue. Just interested in your thoughts on kind of, okay, GLP-1, maybe not so much impact up until now, but how are you thinking about preparing the portfolio for more GLP-1 in future? Thanks. No, thank you, Sarah. Obviously, clear, and, you know, we touched on it in the presentation, and I don't at all want to diminish it. It's something we need to understand, and we need to constantly evaluate, especially, as you say, as the price comes down, potentially the adoption increases. I suppose the interesting thing is, this is why it's important to think through the lens of spirits rather than TBA. What I've seen in the work, I'm trying to read just about everything that anybody writes on this particular subject for reasons that you can imagine. Attitude to spirits is really quite distinct and different. Dave, you've seen this, I think, was it Morning Consult? Yes. Yeah. Consult. Consult. Mm-hmm. Very interesting deep dive survey that came out, I believe, less than a week ago. Looking at 60, a sample size of around 60,000 GLP-1 users, so one of the bigger samples that we've seen. The attitudes towards different categories in there are really very interesting. What you see is that actually, the impact on spirits is really rather small. In fact, actually, as part of a new lifestyle user... I say that in inverted commas, this is the consumers who are using GLP-1 talking, not me. Actually, experimentation, socializing, actually engaging with other people increases as they change as a result of GLP-1s. All of those things actually are positive to wanting to explore the spirits category. I don't want at all to diminish it. I think it's something we will stay very cognizant of, but we'll look at it through the lens of spirits, particularly. And we'll think about that as we redefine our innovation approach going forward. I'm just sharing with people the evaluation as it sits today, Sarah. Thank you. The next question comes from Fintan Ryan of Goodbody. Your line is now open. Please go ahead. Good morning, Dave, Nik, Sonya. Two questions from me, please. Firstly, could you elaborate some of your thinking or the thinking at the board level around the change to the dividend payout ratio for this year and going forward? Appreciate that 30%-50% is a quite wide range and lower than the market had been anticipating, but, you know, your thoughts around how that should evolve in this, within the range this year and going forward. As well, just in terms of the free cash generation and some of the investments you're talking about in margins, particularly North America into next year, does the dividend cut imply you're less confident with the $3 billion free cash generation minimum from FY27 onwards? That was, I guess, that the business I've been talking to previously. Thank you. Why, well, why don't I start, and then I'll pass to Nick. I think, look, first and foremost, reconfirming the $3 billion this year, as we have done in the release. I think what we, you know, one of the conversations that the board has been, there's a very big timing question here. As we invest in making the portfolio more competitive, the first step is one which clearly dilutes the percentage margin. We've then got to see the volume come back. We've got quite a lot of work to do to see and do all the detail work around those elasticities. What we're saying is, we know the one thing that we can do is not invest in the competitive North American business, that's what the board has factored into its decision. At the same time, if I look at what the street is looking at in terms of CapEx, we think you're on the low side, not by a lot, but by some, because we want to invest in Guinness and the capabilities that I've talked about before. It's that combination of investments, needing investments selectively in North America and investing in a little bit more CapEx than you guys are currently, that basically says we need to create more space, as well as a desire to rebuild the balance sheet more quickly. That's what's driving the decision to revisit the dividend policy. When it comes to payout ratios, why don't I pass to you, Phil? Yeah. I think just building on Dave's point, stepping back and when we were sitting at, you know, the full year and the guidance that we provided on Accelerate, the first thing I would say, Dave, and my commitment to generating strong cash flows from this business is unchanged, okay? We're very aligned on that, so there's no issue there. Yeah. Right? The second thing I would say is, clearly, our view of the U.S. market and the U.S. spirits category was quite different. If you remember, we talked about the fact that we weren't expecting a further deterioration for where we were in fiscal 25. We weren't planning for a significant improvement either, but clearly, this has deteriorated at a much faster rate from an angle of the affordability, and our portfolio then, as a result, is not playing that, right? If we wanna give ourselves the space and the flexibility, hence the difficult discussion and decision that Dave talked about, that we've had together as a board around how do we do that? The best way to do that, to invest in the business, was to come out with a payout ratio, probably starting at the lower end of that, but allows us to build into what is clearly our focus, which is shareholder value creation. We all recognize that we wanna continue to return cash to shareholders. This gives us more flexibility to invest in the business and also find the appropriate forms of which we can return cash to shareholders. I'll stop there because I don't think there's anything more to say there. Totally agree. Thank you. The next question comes from Pierre Tegnér of Oddo BHF. Your line is now open. Please go ahead. Thank you, Sonia. Good morning, all. First, welcome back, Dave, and big thanks for the first thoughts you share. Very interesting. As a follow-up to the previous questions on the more frequency, and the need to raise the bar in term of category management. Do you think the spirit industry is embracing clearly a new big challenge of doing more frequency on a more speedy way, increasing velocity and asset rotation, which may be lower percentage margin? On a more global thinking, how much is it suggesting a big change of the future driver for cash generation and ROIC? I would mean a better balance between PNL and asset rotation on the medium term? Nice to talk to you again, Pierre, and as always, a very good and detailed question. I think there's two things. I think, and Nik, please add. I think there are a couple of things that I see.... Look, I deliberately gave a historic perspective. Actually, the spirits category, if you look over the last 15 years, is the most stable category I think I've ever come across in my consumer goods life. Right? When you look at how people engage with it, and you look at how it grows in line with GDP, it's remarkable. I've not seen anything at all, Pierre, that says to me at this point in time, there's a massive disruption in the way that people engage with spirits in the, in the immediate future. I haven't. I think what's happening is, the way people are choosing to engage with the category is changing, particularly for younger people. There's much more on the go, there's much more third spaces. They're making choices about where and how they choose to socialize that are different. Therefore, the invitation for a consumer goods business like ours is, how do we adjust our business so we can serve them where they want to be. I think that is real. I think we need to think carefully about that. I think, does that mean that some of the metrics and how we think about our portfolio and our asset base need to change? Yeah, in some cases, possibly, yes. Like, I look at RTDs, I look at that trend, and I perhaps see it ever so slightly differently than maybe historically people see it. You know, we look at it, if I may be so bold, I think Diageo historically would have looked at it and said, "Well, the percentage margin is too dilutive. Do we really want to play here?" I think I heard, before I joined, I heard Nick talk about this phenomenon a couple of times for Diageo. If you look at it through the lens of a cost to serve, you see a completely different mechanic, right? This is an RTD is a more expensive way for consumers to have a simple cocktail than it would be if they were able to buy a larger pack and make it themselves. It's also cheaper than it would be to buy the same drink in a pub, and therefore, given the out-of-pocket, they choose to go there, and they can take it where they want. Those things are changing, Pierre, and we need to change with it. Actually, when you look at the profitability of that serve, it can actually be accretive versus the large pack, and therefore, we might need to think about our metrics ever so slightly differently. 'Cause, look, I was taught very early in my career that you don't take percentages to the bank, you take cash to the bank. I'll be looking at total gross profit, and in parts of our portfolio, I think we might need to change the lens that we look at and how it is we think about shareholder return. I don't think that that is a precursor to a massive change in what I would consider to be the core spirits market. More to do, you'll see this come to life as we think about the strategy going forward. I don't think you'll see something which you and I would consider to be material, but I think you'll see some sharpness as to how we think about the portfolio and how it is we activate the portfolio in a way which generates return for our shareholders, in a way that we've not, we've not had in the business before. I'm not precursing a massive change in the spirits market, given the way your question started. Anything you want to add? No, sure. All good. Cool. We'll take one more. All right, Sonya, we'll take one more. Our last question today comes from Edward Mundy of Jefferies. Your line is now open. Please go ahead. Morning, Dave, Nik, and Sonya. I've got just one question which hopefully brings together all three priorities. Dave, the three parts. The first part is around your first priority, which is, you know, competitive category and brand repositioning work. Can you do this without increasing AMP? In other words, is the quantum EBIT that you would expect from this also higher? It's the first part. The second is on the customer piece, the shift from growing through your customers to growing with your customers. Does this cost money, or can you also do this through shifting around your enormous trade spend, GBP 3 billion bucket, and also a pretty big AMP ticket? The third part, which is back to the redesign of the operating framework, and if there is more investment, can all this be funded by this new, potential operating framework redesign? Ed, nice to hear you again. What a very clever way of getting three questions into one. I like that. Look, I think when it comes to category and brand, I think if you think about Diageo historically, you think about premium, you think the only way to grow a brand is AMP. Actually, when you think about category portfolios, there are very different ways of thinking about how you build brands. I don't think you should necessarily read category strategy and read an increase in AMP. I think actually, when you're looking at price points, which are different from premium, it's much more about investing in price on shelf and position as other things rather than AMP. No, I don't think a category brand, a more category-driven approach leads you to a place where you spend more on AMP. I think you have to be a little bit more dexterous about different support models for different brands and different price positions. I think when we talk about growing with our customers, the whole idea here is you're opening new value, right? We used to talk when I was a customer, which is, if the relationship with a supplier is at the size of the cake is constant or is getting smaller, all that happens is you argue over the divvying up of the cake. When you start growing with your customer, you make the cake bigger. It makes the conversation so much easier to have. That's why if you go back to the chart, I talk about growing our customers' category and gaining disproportionately from that growth. That's where we both grow together. Yeah, will it mean that we think differently about how we invest some of our money? Yes. Do I see some pockets of spend which actually are not working for our customers or ourselves, and we purpose? Yes, we have to work that through, but I'm not seeing that being more customer-focused is going to be more expensive for us. Actually, in terms of the back office, I can see ways of actually making it leaner, quicker, and dare I say, even more efficient than today. Look, I don't want to pre-trail the operating framework too much. I've said that there are opportunities for us to be more cost-effective. I think that's true. I think Nick had identified that with the Accelerate program. What the operating framework is designed to do, first and foremost is, how do we make Diageo a much more competitive organization than it is today? That's about capability, it's about speed, it's about agility. Yes, it's about cost, but I don't want it to just be about cost. I want to take 30,000 Diageo colleagues on a journey of how it is we make this business truly competitive again. That's the way that we'll think about it. Obviously, if there are opportunities to make it lower cost, we will take it. I'd like you to think about that as an enabler of competitiveness rather than a way of reducing costs to invest back in the business. Okay, look, ladies and gents, I'm getting the hand across the throat. That's the obviously the end of the time. Thank you very much for your questions. Thank you very much for investing the time in Diageo. I really do appreciate it. Clearly, this is the start of a journey for me and a new team. We're clear about what the immediate priorities are. We're confident about the medium and the long-term future. We've taken, with the board's support, some big decisions just recently. They give us the space to invest in the turnaround, that's important. The obvious is now on us to share with you the detail of that. Please bear with us. Give us a little bit of time to be able to rethink that, but we'll share it with you as soon as we have it. With that, I look forward to seeing, I think, some of you, if not most of you, this evening in the Diageo office. Thank you very much indeed. Have a good day. See you later. This concludes today's call. Thank you all for joining. You may now disconnect your lines.