Diageo plc

Worth knowing

• Profit looks boosted by one-off gains. Reported profit is 1.3× operating cash profit (EBITDA), lifted by income outside the core business.Reported profit is 1.3× operating cash profit, lifted by income outside the core business.

  Diageo's reported profit is 1.3× its operating cash profit (EBITDA), which is unusual: normally it's the other way round. Income outside the core business, such as interest on a large cash pile, gains on investments or asset sales, or tax items, has lifted net income, so its earnings-based valuation may look cheaper than the business alone justifies.Diageo's reported profit is 1.3× its operating cash profit, which is unusual: normally it's the other way round. Income outside the core business, such as interest on a large cash pile, gains on investments or asset sales, or tax items, has lifted net income, so its earnings-based valuation may look cheaper than the business alone justifies.

• Much more borrowing than peers. Debt is 2.0× equity vs a peer median of 0.4×.Debt is 2.0× equity vs peers 0.4×.

  Debt is 2.0× shareholders' equity, against a peer median of 0.4×, among the highest 10% of its peer group.Debt is 2.0× shareholders' equity, vs peers 0.4×, among the highest 10% of its peer group.

• Operating margin at a 5-year low. 11% in FY Jun 2026, the weakest of the last 5 years.

  Diageo's operating margin fell to 11% in FY Jun 2026, its lowest in the 5 years of filings we have.

• Sales growing faster than profits. Since FY Jun 2023: revenue −1.8%, operating profit −43%.

  Since FY Jun 2023, Diageo's revenue changed −1.8% while operating profit fell 43%: costs rose faster than sales.