The alcoholic drinks group said that operating profit for the year to end June 30 was £2.003bn, down from £2.07bn the year before.
Diageo said that a slump in the ready-to-drink sector, which represents 6% of its volume and 10% of its net sales, had hit the group.
It revealed that volume and net sales in the sector had declined 3% and 5% respectively.
Diageo’s UK business was also hit by the decline, with ready-to-drink volumes of its Smirnoff vodka brand dropping 19%.
However, Diageo said that volume and net sales were up 1% and 2% respectively in the UK despite “a period of weakening economic and market conditions”.
It added that it had seen share gains in the UK for vodka, gin and cream liqueurs. Price increases in April and February for Smirnoff and Guinness lead to net sales growth of 8% and 4%, although Guinness volumes were down 1% for the year.