Diageo Africa Conference

East Africa
15 October 2013

In East Africa, Diageo operates through its subsidiary

East African Breweries Limited
Institutional and
retail investors

Diageo
50.03%*

49.97%*

54%*

Kenya

Uganda

Tanzania

EABLi

KBL 100%*

UBL 98%*

SBL 51%*

EABLi 100%*

UDV 46%*

IDV 100%*

EAML 100%*
CGI 100%*
* shareholding
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Our beer and spirits portfolio covers the spectrum of

consumer price points
Premium beer

RTDs

Mainstream beer

Emerging beer

Reserve

Premium spirits

Mainstream spirits

Emerging spirits

Tanzania

We are well positioned in the market with a good supply

network

Plant capacities

Kenya
Uganda
Tanzania

EU
c.7m
c.2m
c.1m

Location of EABL production sites

4

By our analysis, we have a 44% share of the formal

East Africa beverage alcohol market
Share of formal alcohol net sales by country 2012

% share of
country net sales

Key
EABL
SABMiller
Heineken
Keroche
Parambot

100%
90%
80%
70%

60%
50%
40%
30%
20%

10%
0%
Kenya
Source: EABL internal analysis based on market data

Tanzania

Uganda

Rwanda S Sudan
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All of which has enabled us to build a strong market

presence, as demonstrated by our scale in Kenya
Consumer spend on products of selected multinationals in Kenya (m)
700
600
500
400
300
200

100
0
EABL

Coca Cola

BAT

Colgate

P&G

GSK

Unilever

Delmonte

Source: AC Nielsen Retail Audit Data May 2013

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Economic prospects across East Africa are highly

promising
East Africa
Combined population of 139m
in 2010 rising to 237m in 2030

16%

Historical and projected GDP growth for selected

countries in East Africa

14%
12%

2m new consumers reach legal

purchasing age every year
East African Community (EAC)
trading bloc to enhance
regional and economic
integration

10%
8%
6%
4%
2%
0%

GDP growth expected to be

boosted by recent energy finds

2012

2013

2014

2015

2016

2017

Uganda

Tanzania

Burundi

Kenya

Rwanda

World Economy

Source: Economic Intelligence Unit, August 2013 Forecasts; EABL Strategy forecasts; UN Development Programme

Key trends are favourable

Demographics

Urbanisation

Tatu city artist

impression
Emerging consumers

Premiumisation

We believe underlying market growth for East Africa

beverage alcohol could be +12% CAGR
Beverage alcohol net sales
2013-2017

Segment growth
2013-2017
Emerging spirits
Mainstream spirits
Premium spirits
Reserve spirits
RTD
Emerging beer
Mainstream beer
Premium beer

2013

2017

Key: CAGR rates

5-10%
10-20%
20%+

Source: Internal estimates

EABLs key growth drivers

Brand marketing
Innovation

Supply chain
Route to consumer
Local raw materials sourcing
Developing our talent
Our reputation
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Our brand equity scores reflect the impact of our marketing

investment and show the opportunities we still have
Brand commitment scores 2013

% Adorers & Adopters

80%

Kenya

Uganda

Tanzania

70%
60%
50%
40%
30%
20%

10%
0%

Source: TNS-RMS Brand Tracking Studies

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Our marketing on Tusker has created a strong regional

brand

12

The success of Senator demonstrates how EABL has

worked with government in a partnership approach

13

We have upweighted our focus behind our exceptional

spirits portfolio

14

We have a track record of innovating to meet new

consumer motivations

15

We are rolling out Jebel Gold to target the emerging

consumer through our Senator distribution network

16

We make significant investments in our supply chain

17

We are investing in route to consumer initiatives

F13 highlights
Getting to the right places
Direct sales force headcount
increased by 20%
Direct outlet coverage increased
by 30%

Doing the right job

88% of our distributors in Kenya
have signed up to M-PESA
Distributor Cashless Solution

With the right skills

Partners for Growth

In the most efficient way

Intouch handheld solution
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We have made good progress with our local raw

materials sourcing programme
F13 highlights
26,000 local partners across
the value chain
Two new varieties of high
yielding barley seed
launched

10,000 metric tonnes of

sorghum sourced in Kenya

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Investing in our people continues to be a priority

F13 highlights

108 employees on Diageo

Africa accelerated
development programmes
Best Place to Work
award for EABL Kenya
Employees in
development roles in
Australia, Indonesia,
Singapore, USA, UK and
across Africa

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Investing in our communities continues to be a priority

F13 highlights
1 million people impacted
by our Water of Life
initiatives
200 students sponsored
through University
Total tax contribution of
over 300m

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All of which has resulted in a strong performance track

record
East Africa market historical financial performance
10 Year
CAGR

5 Year
CAGR

3 Year
CAGR

Net sales

15%

14%

15%

Gross profit

10%

12%

12%

Operating profit

11%

8%

10%

70
60

KES billions

50
40
30
20
10

F04 F05 F06 F07 F08 F09 F10 F11 F12 F13
Source: EABL annual reports
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Summary
We are well positioned to benefit from the growing consumer
economies in East Africa:
Proven business model with a strong brand portfolio
Track record of strong performance

We have a clear strategy to invest for future growth:

Brand marketing
Innovation
Supply chain
Route to consumer
Local raw materials sourcing
Developing our talent
Our reputation

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Cautionary statement regarding forward-looking statements

This presentation contains certain forward-looking statements relating to the plans and
objectives of Diageo. These forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts. Forward-looking statements often use words
such as anticipate, seek, target, expect, estimate, intend, plan, goal, believe, hope,
aims, continue, will, may, should, would, could, or other words of similar meaning.
These statements are based on assumptions and assessments made by Diageo in light of
their experience and their perception of historical trends, current conditions, future
developments and other factors they believe appropriate. By their nature, forward-looking
statements involve risk and uncertainty, because they relate to events and depend on
circumstances that will occur in the future and circumstances could cause actual results and
developments to differ materially from those expressed in or implied by such forward-looking
statements. Although it is believed that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such expectations will prove to
have been correct and you are therefore cautioned not to place undue reliance on these
forward-looking statements which speak only as at the date of this presentation.

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