Rob originally joined the former Lion Nathan Board in 2002 as a Non-Executive Director, before being appointed Lion Nathan CEO in October 2004 and Lion CEO upon the Company’s formation in October 2009.

Rob Murray said: “Stepping down as CEO was a difficult decision to make, however it was the right time for me personally and for Lion.  While my role has changed my passion for Lion has not. This is a fantastic business with great people and great brands and I feel privileged to continue my involvement by returning to the Lion Board as a Non-Executive Director.”

Sir Rod Eddington said: “Rob has made a significant contribution to building Lion into the market leading business it is today. His expertise will be a valuable asset to the Board and enable a smooth transition as we welcome Stuart Irvine as CEO from 3 January 2013.”

 #Ends

Notes to editors

 Rob Murray

Rob Murray was appointed Chief Executive Officer of Lion in October 2009, following Kirin Holdings Company Limited’s successful acquisition of the remaining shares in Lion Nathan. Rob held the role of Chief Executive Officer Lion Nathan since 1 October 2004, having been appointed to the Board in September 2002. Rob was formerly Chief Executive Officer of Nestle Oceania having also worked for Procter and Gamble and Spillers Petfoods.

 Sir Rod Eddington

Sir Rod Eddington joined Lion’s board as a Non-Executive Director in March 2011. Rod has a wealth of experience from a range of executive roles (including CEO roles at Cathay Pacific, Ansett Airlines and British Airways) and non-executive roles (including Rio Tinto, News Corporation, China Light & Power and John Swire & Sons). He is also currently Chair of JP Morgan (Australia and New Zealand) and Infrastructure Australia. 

3 August 2012: Lion today announced its trading update for the half ended 31 March 2012 in conjunction with Kirin Holdings’ half year announcement.

Lion CEO Rob Murray said: “Like all businesses in the retail and consumer goods markets we are dealing with some very cautious consumers, who are saving up to five times the historical average and entertaining more at home.  

“A highly competitive retail market and deep discounting on select private label products is squeezing margins for branded players as volume shifts from branded to private label products and from the higher-margin non-grocery channel to grocery.

“In this environment Lion’s clear, long-term strategy of investing in its people, high-potential brands and manufacturing assets is more critical than ever. The only Australian manufacturers who will survive and thrive in the emerging marketplace will be those who innovate and differentiate their brands and who take tough decisions to deliver production, manufacturing and distribution efficiency.”

Despite the declining beer market, Lion’s Australian beer business delivered a standout performance during the half, continuing its positive momentum and emerging as Australia’s largest brewer.

“Our pre-existing portfolio grew volume and value share in a declining market as a consequence of Lion’s focussed long-term investment in marketing and innovation. The rise of our market-leading mid-strength beer XXXX GOLD to the number one beer brand in the country is evidence of this – and not only a positive commercial development but also a positive shift in our drinking culture more broadly,” continued Rob.

“The outlook for our Australian beer business is positive, with a number of international brand owners choosing to partner with Lion in this market, and our proposed acquisition of Little World Beverages presenting a further growth opportunity in the flourishing craft market.”

Beer, Spirits & Wine

Lion’s Beer, Spirits & Wine divisions in Australia and New Zealand increased revenues 1.7 percent to $1,197.8 million and delivered operating earnings before interest and tax (EBIT) of $337.3 million, an increase of 9.2 percent.

Australia

Lion’s Beer, Spirits & Wine division in Australia saw volumes increase 3.4 percent, leading to a 4 percent revenue increase to $929.1 million.

Lion saw volume share growth in every state off the back of strong performances from its core trademarks. XXXX GOLD grew volume and value share off a large base, as did Lion’s strong suite of contemporary brands Hahn Super Dry, Tooheys Extra Dry and XXXX Summer Bright Lager[1]. Lion’s James Squires trademark continued to drive growth in the craft market, posting volume and value growth over 50 percent[2].

During the half Lion announced the addition of Corona Extra to its international premium portfolio, however Lion’s first shipments were not received until April and are therefore not included in the H1 result. Since the conclusion of the half Lion has also welcomed Stella Artois and Belgian specialities Leffe, Hoegaarden and Belle-Vue Kriek to its portfolio, and from November will add Guinness and Kilkenny – rounding out its international premium portfolio to six of the top 10 brands in the market.

New Zealand 

Lion’s Beer, Spirits & Wine division in New Zealand saw volumes decrease 3.7 percent, leading to a 7.2 percent revenue decrease to NZ$350.1 million.

The decline was driven by falling beer volumes as a result of the overall market contraction and a highly competitive market, and exacerbated by a poor summer season.

Despite these challenges the Mac’s craft range maintained its strong pace of growth supported by pack extensions, and Beck’s enjoyed substantial growth off the back of broad-based sales and marketing activity. New product launches in cider strengthened Lion’s leadership of the category, while its successful spirits marketing platform, The Mix, continues to add incremental spirits volume. In wine, strong volume and revenue growth were fuelled by Lindauer, Corbans, and Saints brands acquired in November 2010, together with continued strong performance of Wither Hills.

Dairy & Drinks

Lion’s Dairy & Drinks division saw revenue decline 8.9 percent to $1,316.5 million and delivered operating earnings before interest and tax (EBIT) of $49.8 million, a decrease of 27.1 percent. While volumes were impacted by the loss of private label contracts, fresh dairy range deletions and the overall category decline in juice, the major impact on profitability was the ongoing decline of branded white milk sales and the transfer of volume from non-grocery channels to grocery as a result of $1 a litre private label pricing.  

While Lion remains concerned about the long-term implications of this aggressive pricing, it continues to focus on differentiation and innovation within a focussed portfolio of high-potential brands. Since the conclusion of the half Lion launched permeate free white milk across its Dairy Farmers and Pura brands, in response to the consumer trend towards less processed foods. New product innovation and a revitalised marketing campaign in its Yoplait yoghurt range has shown strong consumer uptake and moved the fresh dairy category into growth[3].

Lion’s invigorated marketing campaign for Australian Grown bucked the trend in the declining juice market to deliver volume and value growth, while Dare continued its standout performance in dairy beverages, growing value four times ahead of the category in both the grocery and petrol and convenience channels[4].

For further information, please contact:

Media                                                                Analysts

Leela Sutton                                                        Peta Joyce

External Relations Director                                   Stakeholder Communications & Relations Manager

61 2 9290 6645 / 0402 260 540                             61 2 9320 2254 / 0400 015 605

About Lion

Lion brings together great household brand names including Tooheys, Dairy Farmers, XXXX, PURA, Hahn, Berri, Speight’s, King Island Dairy, Boag’s, Yoplait, Wither Hills and COON. We believe business success comes from investing in our people and brands and by constructively engaging our stakeholders. Lion employs over 7,000 people across Australia and New Zealand and delivers revenues in excess of AU$5 billion.

In addition to direct employment, we make a significant contribution to the Australian and New Zealand economies. We are one of the region’s largest purchasers of agricultural goods and an integral component of the retail, hospitality and tourism industries. Our products accompany life’s sociable moments, whether it’s a family meal or good times at the pub with friends. Dairy, juice, soy and the responsible enjoyment of alcohol beverages are all part of a healthy lifestyle for many people and we aim to maximise the community wellbeing arising from the enjoyment of our products while playing a leading role in helping the community minimise misuse.

www.lionco.com

 Lion continues to pursue its strategy of investing in its people and a focussed portfolio of high potential brands to drive sustainable results in the long term.

 Like most companies across retail, grocery and other consumer goods sectors, Lion continued to experience tough market conditions during the first quarter of 2012. Volume and revenue declines were driven by continued low consumer confidence along with poor summer weather, the loss of private label contracts and deep retailer discounting on white milk.

 Lion CEO Rob Murray said: “Ongoing cautiousness amongst consumers, combined with particularly poor summer weather in both Australia and New Zealand, continued to impact the beverage market. In our Diary & Drinks business the ongoing deep discounting on private label white milk continues to impact branded milk sales and the profitability of our white milk business.

 “Despite these tough conditions our Beer, Spirits & Wine business in Australia performed well, with volume and revenue growth in a declining market.”

 Beer, Spirits & Wine 

Australia
Subdued consumer spending and exceptionally poor summer weather continued to impact the total beer market, with first quarter volumes declining 4.1 percent versus the previous year[1]. Despite this challenging environment Lion’s Beer, Spirits & Wine Australia division saw first quarter volumes increase 6.7 percent versus the previous year, resulting in a year-to-date (YTD) revenue increase of 6.3 percent to $502.5 million.

 Lion continued its program of innovation to drive value growth and widen the footprint of its portfolio. Benefiting from two new flavour variants Australia’s number two cider trademark, Tooheys 5 Seeds, continued to experience strong growth, while the country’s number one craft trademark, James Squire, saw first quarter volumes grow over 65 percent versus the previous year[2].  

 Lion’s core trademarks also performed well with XXXX, Hahn and James Boag in growth. Australia’s second largest beer, XXXX GOLD, also posted an impressive performance – growing volume and value share off a large base[3].

Since the conclusion of the quarter Lion welcomed to its portfolio Australia’s largest premium beer, Corona Extra, as well as Stella Artois, and Belgian specialties Hoegaarden, Leffe and Belle-Vue Kriek.

 New Zealand
 Lion’s Beer, Spirits & Wine division in New Zealand saw volumes decline 2.5 percent versus the previous year, resulting in a revenue decline of 5.7 percent to $203.5 million.   
While Lion’s wine, cider, spirits and RTD portfolios experienced strong growth during the quarter, Lion’s core brewing business was impacted by the overall beer market decline of 5.1 percent – driven by low consumer confidence and poor summer weather.

While challenging market conditions persisted, Lion’s Mac’s craft range capitalised on the flourishing craft segment, with pack extensions driving volume growth of 10.1 percent, while Steinlager Classic saw volume growth off the back of a successful Rugby World Cup campaign. New innovations also continued to grow volumes for trademarks across the portfolio, including new flavour variants in the Isaac’s Cider and Mac’s non-alcoholic RTD ranges.

 Dairy & Drinks
 As previously communicated, conditions in both the dairy and juice sectors remain very difficult for farmers and processors alike. Lion’s Dairy & Drinks business is still a long way from achieving an acceptable return on invested capital and continues to face significant margin pressures in both dairy and juice.

 The Dairy & Drinks division delivered a revenue decline of 7.5 percent to $675.2 million, driven by the loss of private label contracts and a decline in branded milk sales as a result of deep discounting on private label milk. Continued white milk discounting activity has seen a transfer of sales volumes from higher margin branded products into private label and from the non-grocery channel to grocery, and continues to impact profitability. Ambient juice category volumes also continued to decline, while input costs increased significantly.

Despite these challenging conditions, dairy beverages continued to perform well, with Dare increasing value share 26 percent versus the previous year and cementing the number one position in the category[4]. Specialty cheese brands South Cape, Tasmanian Heritage and King Island also posted strong value growth, while Berri Australian Grown delivered value growth and increased market share[5] through improved Australian fruit supply and a new marketing campaign communicating the origins of its Australian fruit.   

 For further information, please contact:

Media                                                                 Analysts

Leela Sutton, External Relations Director               Peta Joyce, Stakeholder Communications & Relations Manager

0402 260 540                                                      61 2 9320 2254 / 0400 015 605

 About Lion 
Lion brings together great household brand names including Tooheys, Dairy Farmers, XXXX, PURA, Hahn, Berri, Speight’s, King Island Dairy, Boag’s, Yoplait, Wither Hills and COON. We believe business success comes from investing in our people and brands and by constructively engaging our stakeholders. Lion employs over 7,000 people across Australia and New Zealand and delivers revenues in excess of AU$5 billion. In addition to direct employment, we make a significant contribution to the Australian and New Zealand economies. We are one of the region’s largest purchasers of agricultural goods and an integral component of the retail, hospitality and tourism industries. 

Our products accompany life’s sociable moments, whether it’s a family meal or good times at the pub with friends. Dairy, juice, soy and the responsible enjoyment of alcohol beverages are all part of a healthy lifestyle for many people and we aim to maximise the community wellbeing arising from the enjoyment of our products while playing a leading role in helping the community minimise misuse.

Following the initial release of Labelling Logic, Lion announced it would voluntarily adopt consumer health messages that support responsible drinking choices, including during pregnancy. Lion and other major producers have since collaborated to adopt consumer health messages developed by DrinkWise Australia. These messages will be supported by DrinkWise education initiatives.

Lion launched the labels in July on its biggest brand, XXXX GOLD, and will continue to introduce the labels to all its brands – with more than half its beer portfolio by volume already complete.

#Ends

For further information please contact:

Leela Sutton

External Relations Director – Lion

02 9290 6645 / 0402 260 540

Lion today announced its trading update for the half ended 31 March 2011 in conjunction with Kirin Holdings’ half year announcement.

Lion continues to pursue its strategy of investing in its people and a focussed portfolio of high potential brands to drive sustainable results in the long term. Business integration is progressing to plan, with the business uniting under one trading name, Lion, since the conclusion of the half.

The former Lion Nathan Australia and Lion Nathan Wine divisions are now referred to as Lion – Beer, Spirits & Wine Australia. The former Lion Nathan New Zealand becomes Lion – Beer, Spirits & Wine New Zealand and the former National Foods Business will be referred to as Lion – Dairy & Drinks. In most cases the company will simply be known as Lion unless a distinction needs to be made between business units.

Like most companies across retail, grocery and other consumer goods sectors, Lion experienced tough market conditions during the half.

Given the footprint of the Lion business, in particular its strength in Eastern Australia and the South Island of New Zealand, and the timing of Lion’s financial year, the six months reflected in this release rank as the most challenging market conditions in the Company’s recent history. Lion saw revenue declines across its Australian businesses driven by poor weather, weak consumer demand, natural disasters and deep retailer discounting on white milk and equally challenging circumstances in New Zealand.

Lion CEO Rob Murray said: “Low consumer confidence, fuelled by sustained economic uncertainty and rising cost of living pressures, continues to impact spending in both Australia and New Zealand. These softer trading conditions have been compounded by natural disasters in Lion’s key markets, including the February earthquake in Christchurch, the coldest and wettest East Coast spring and summer for decades, and the March quarter was further affected by the timing of Easter in April instead of March.

“Since the end of the half, Lion’s Australian beer business has recovered market share, returning to its long term trend.”

Beer, Spirits and Wine

Lion’s beer, spirits and wine divisions in Australia and New Zealand delivered operating earnings before interest and tax (EBIT) of $308.9 million, a decrease of 10.8%[1]. For the period, revenue declined 6.3% to $1.178 billion.

Australia

Reflective of an overall decline in the beer market Lion’s beer, spirits and wine division in Australia saw volumes reduce 10.3% leading to an 8.3% revenue decline to $824.2 million. This was in part due to the timing of Easter in April instead of March. 

Having grown volume share each year since 2006[2], Lion saw some contraction in the half due to significant pricing activity on key competitor brands and the Company’s high share in Queensland and New South Wales, with both markets suffering declines following the floods. The company estimates the contraction of the Queensland market, driven by the impact of the floods, reduced Lion’s share of the national market during the half by approximately 0.5 of a share point.

Despite this, Lion remained focussed on managing its business for the long term with a focus on driving a sustainable balance between volume, pricing and mix.

The business also conducted a recall in the lead up to Christmas 2010 on select batches of key brand Boag’s due to a bottle design fault. While significant effort was made to minimise the impact on supply, there was a one-time volume impact in the half. Key brands in the Boags portfolio, James Boag’s Premium and Boag’s Draught, have since recovered strongly.

New innovations XXXX Summer Bright Lager, Hahn Super Dry 3.5, Tooheys Extra Dry 5 Seeds and Australia’s leading craft beer trademark James Squire continued their impressive growth. XXXX Summer Bright Lager remained the biggest contributor to volume growth[3] of any brand in the country, doubling volumes year on year.  

Wine

The wine industry remained challenging, with the strong Australian dollar continuing to undermine returns from key export markets and an oversupply of grapes maintaining downward pressure on pricing in domestic and international markets. Despite this, wine saw only moderate volume and revenue declines in the half. Wine is a very small part of Lion and the Australian business remains focussed on executing its targeted premium wine strategy.

New Zealand

Overall Lion’s beer, spirits and wine volumes in New Zealand remained stable and revenues increased 4.4% to NZ$356.6 million, assisted by the first time inclusion of wine brands acquired from Pernod Ricard, in particular the Lindauer trademark.

Challenging market conditions persisted due to the weak New Zealand economy and ongoing cautiousness among consumers. This was intensified by the devastating Christchurch earthquake in February 2011, which also impacted Lion’s operational facilities, causing the closure of Lion’s Christchurch brewing operations.

The half saw a decline in Lion’s beer volumes of 5.2%, driven by an overall decline in the beer market and the timing of Easter in April instead of March. Spirits and RTD volumes experienced a smaller decline of 2.1%, while cider experienced strong growth off a small base, with Lion achieving category leadership. As indicated above, wine volumes increased significantly.

Dairy and Drinks

As previously communicated, conditions in both the dairy and juice sectors remain very difficult for farmers and processors alike.

Lion has quality dairy and drinks brands that require investment to reach their full potential and remains committed to patient investment in its core strategic assets – its people, brands and production assets – to deliver sustainable growth over the long term.

Lion’s dairy and drinks business is still a long way from achieving an acceptable return on invested capital and continues to face significant margin pressures in both dairy and juice.

The dairy and drinks division delivered operating earnings before interest and tax (EBIT) of $68.3 million, a decline of 43.2%[4]. Revenue declined 9.4% to $1.4 billion, driven by the loss of key private label contracts and a decrease in export sales due to the impact of the strong Australian dollar.

Lion’s white milk volumes declined 10.9%, largely driven by the private label contract losses, however this was compounded as deep discounting saw consumers switch from branded products to private label and from convenience stores to grocery – diluting the profit pool available to all players in the supply chain.

Despite these conditions in white milk, Lion’s branded dairy beverages performed well, driven by the launch of Dare in West Australia and Victoria, while Yoplait and Farmer’s Union drove an increase in yoghurt sales.

Lion also announced the results of a review of its cheese manufacturing assets during the half, which included a $132 million investment into its cheese manufacturing site in Tasmania.

Outlook

Despite the tough trading conditions experienced in the first half, Lion remains committed to its strategy of patient investment in its core strategic assets to drive sustainable growth in the long term.

Tough conditions have persisted across all Lion’s key markets; however the Company expects the beer market to return to historical trends when the current cyclical consumer pressures moderate.

Since March, Lion’s Australian beer market share returned quickly to long-term trend after a moderation of the significant competitor pricing behaviour seen in the first half [5]. While the market volume contraction continues, over the last quarter Lion volume declines have been at a slower rate than the market.

The classic full-strength beer segment in Australia is in long term decline, however Lion’s portfolio is well positioned to capitalise on key market trends such as wellbeing, premiumisation and the growth of consumer repertoires, with consumers on average now choosing between more than seven different beer brands.

Lion markets the leading craft beer trademark in James Squire and the leading mid and light alcohol products in XXXX Gold and Hahn Premium Light.

Lion’s two new low-carb market entrants, Hahn Super Dry 3.5 and XXXX Summer Bright Lager, are both performing well and Lion achieved leadership in the full-strength low-carb segment for the first time during the half.

Despite the difficult trading conditions, premiumisation continues to drive positive mix in the marketplace. Innovation through contemporary mainstream brands like XXXX Summer Bright Lager and Hahn Super Dry is growing new, value enhancing market segments.

Considering the recall during the half’s key selling period, the Boags portfolio performed well and Lion believes it has significant further growth potential.

Lion’s beer, spirits and wine division in New Zealand is recovering from the Christchurch earthquake, with the business announcing a $43 million investment across three sites in New Zealand to compensate for lost production at its damaged Canterbury Brewery, located in the Christchurch CBD[6].

Lion’s dairy and drinks business faces significant challenges in delivering sustainable returns, with continued input cost and margin pressures. The business remains focussed on investment in innovation and its high potential brands, to drive differentiation and value in the market for the benefit of all stakeholders.  

For further information, please contact:

Media                                                                  

James Tait                                                          
Corporate Affairs Director                           
61 2 9320 2236                                                  
0400 304 147

Analysts

Peta Joyce                         

Stakeholder Communications & Relations Manager                                        

61 2 9320 2254                                  

0400 015 605

About Lion

Lion brings together great household brand names including Tooheys, Dairy Farmers, XXXX, PURA, Hahn, Berri, Speight’s, King Island Dairy, Boag’s, Yoplait, Wither Hills and COON.

We believe business success comes from investing in our people and brands and by constructively engaging our stakeholders. Lion employs close to 8,000 people across Australia and New Zealand and delivers revenues in excess of AU$5 billion.

In addition to direct employment, we make a significant contribution to the Australian and New Zealand economies. We are one of the region’s largest purchasers of agricultural goods and an integral component of the retail, hospitality and tourism industries.

Our products accompany life’s sociable moments, whether it’s a family meal or good times at the pub with friends. Dairy, juice, soy and the responsible enjoyment of alcohol beverages are all part of a healthy lifestyle for many people and we aim to maximise the community wellbeing arising from the enjoyment of our products while playing a leading role in helping the community minimise misuse.

^[1]Excluding corporate costs

[2] Neilson MAT to 31 March each year from 2006-7 to 2009-10

[3] AC Nielsen Aus ScanTrack, Total Packaged, MAT to 31/03/2011

[4] Prior year performance restated due to change in year ends, to allow year on year comparison.

^[5] AC Nielsen ScanTrack, Package Beer Performance, June 2011

[6] This includes building a warehouse and distribution centre at the Canterbury Brewery site, an upgrade to Speight’s Brewery in Dunedin to increase capacity, and investment in The Pride in Auckland to enable the brewing of specialty beers.

Lion has adopted all three DrinkWise consumer information messages, which will be rotated on an ongoing basis throughout its beer, cider and wine portfolios, as well as through the spirits portfolio of joint-venture partner Bacardi Lion. These include:

• It’s safest not to drink while pregnant
• Kids and alcohol don’t mix
• Is your drinking harming yourself or others?

The messages will sit alongside the DrinkWise ‘Get the Facts’ logo, to encourage consumers to visit the DrinkWise website for more detailed information.

DrinkWise will support the labels through a point-of-sale (POS) campaign, with educational materials provided to consumers in outlets where alcohol is purchased, and through the existing DrinkWise website, which provides information to consumers to help them make informed decisions on their alcohol consumption.

Messages will start appearing immediately, and will continue to roll out as product labels are updated over the next two to three years. Lion launched the labels on its biggest brand, XXXX GOLD, and expects to complete more than 80 percent of its beer and cider portfolio by the end of 2012. Lion-owned wine brands will also commence introducing the labels within 2012, with varietals continuing to be updated as relabelled. 

James Brindley, Lion Beer, Spirits and Wine Australia Managing Director, said the labels will complement DrinkWise Australia’s educational campaigns by placing messages that encourage responsible drinking choices directly into the hands of consumers.

“Lion is a founding member of DrinkWise Australia and has long supported its efforts to challenge the Australian drinking culture through national information and education campaigns.

“We believe this initiative will expand these campaigns from television, online and print directly to the consumer, and by uniting the industry behind a common scheme, it will ensure consistency in message and increased consumer exposure across a much broader range of brands and product types.”

For more information on the initiative please visit the DrinkWise website at www.drinkwise.org.au.

#Ends 

For further information please contact:

Leela Sutton, Corporate Affairs Manager

02 9290 6645 / leela.sutton@lnnf.com