Growth strategy of Lion Nathan National FoodsGrowth strategy of Lion Nathan National Foods

7 June 2010Lion Nathan National Foods Pty Ltd

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ContentsContents

Overview of Lion Nathan National Foods

LNNF Marketing Strategy

Integration Progress

Appendix

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1 Refer to slide 62 Sourced from Kirin FY09 Results dated 10 February 2010. Before brand amortization and amortization of goodwill.

Group Oceania businessSales: 422.6bn yen EBIT: 50.3bn yen

Australia’s #1 dairy & juice company1

FY20092

Sales: 265.6bn yenEBIT: 11.6bn yen

National Foods/Dairy Farmers

Australasia’s #2 alcoholic beverages company1

FY20092

Sales: 157.0bn yenEBIT: 38.7bn yen

Lion Nathan

Launch of new holding company “LNNF”Launch of new holding company “LNNF”

Progressing the integrated beverages group strategy in Oceania.

Through 100% ownership of LN, Kirin established the region’s largest food and beverages business company, LNNF on 21 October, 2009.

3

Strong brand portfolio in Alcohol beveragesStrong brand portfolio in Alcohol beverages

Australia

Wine

NZ

RTD

LNNF is a leading alcohol beverages company in Australasia

4

Strong brand portfolio in Dairy and JuiceStrong brand portfolio in Dairy and Juice

Milk (White and Flavoured)

Juice

Dairy(Yoghurt and dairy deserts)

Cheese

LNNF is a leading Dairy and Juice company in Australia

5

Beer - New Zealand1Beer – Australia1

Market share

Source:1 AC Nielsen MAT September 20092 AC Nielsen Only white milk (exclude flavoured milk)3 AC Nielsen

Chilled Juice – Australia3Milk – Australia2

LNNF Position in Primary CategoriesLNNF Position in Primary Categories

LNNF has strong market positions in a range of key beverage categories

43%51%

63%54%

6

Alcohol Beverage Production FacilitiesAlcohol Beverage Production Facilities

Key Breweries

Wineries

Swan Brewery,Perth

Swan Brewery,Perth South Australian

Brewing Co,Adelaide

South AustralianBrewing Co,

Adelaide

Lion Breweries,Auckland

Lion Breweries,Auckland

Lion Breweries (Speight’s),Dunedin

Lion Breweries (Speight’s),Dunedin

Knappstein Winery,Clare Valley

Knappstein Winery,Clare Valley

Wither Hills,MarlboroughWither Hills,Marlborough

12

Petaluma Winery, Adelaide HillsSt Hallett Winery, Barossa ValleyMitchelton Winery, Central VictoriaStonier Winery, Mornington Peninsula

Petaluma Winery, Adelaide HillsSt Hallett Winery, Barossa ValleyMitchelton Winery, Central VictoriaStonier Winery, Mornington Peninsula

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Lion Breweries (Canterbury),Christchurch

Lion Breweries (Canterbury),Christchurch

Contact Bottling Co., AucklandContact Bottling Co., Auckland

Boag’s,Launceston

Boag’s,Launceston

Castlemaine Perkins,BrisbaneCastlemaine Perkins,Brisbane

Tooheys, SydneyTooheys, Sydney

3

4

34

LNNF has strong market positions in each region

Craft BreweriesSpirits/RTD

Malt Shovel, SydneyMalt Shovel, Sydney

Inner Circle Rum Distillery, BeenleighInner Circle Rum Distillery, Beenleigh

ArgyleOregon, USA

ArgyleOregon, USA

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Dairy and Juice Production FacilitiesDairy and Juice Production Facilities

National Foods

Crestmead (Milk)

Penrith (Milk)

Lenah Valley (Milk)

Cobden (Milk)

Vitasoy JV (Soy)

Chelsea Heights (Milk)

Salisbury (Milk)

Bentley(Milk and juice)

Lytton (Juice)

Leeton (Juice)

Burnie & Heidi Farm(Cheese)King Island (Cheese)

Smithfield (Juice)

Riverland (Juice)Murray Bridge (Dairy & Cheese)

Campbellfield (Cheese)

Morwell (Dairy)

Malanda (Milk)

Booval (Milk)

Hexham (Fresh Milk, condensed milk and desserts, cottage cheese and milk powder)

Canberra - JV with Bega (Milk and cream)

Wetherill Park (dairy, sour cream and bottle and carton UHT)

Simpson (Cheese)Allansford (Cheese)

Jervois (Cheese)

Other JV

Kings Meadow (Cheese)

Baulkham Hills (Perfection dairies)

LNNF has manufacturing footprints across all regions of Australia

0

100

200

300

400

500

600

700

800

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 F2010

Kirin acquiredits stake in LN

EBIT Performance in OceaniaEBIT Performance in Oceania

EBIT (before goodwill amortisation and significant items). LN: EBIT for years FY2009 - FY2010 are per KH FY09 Financial Results. EBIT for years 1999 – 2008 as per LN FY08 Annual Report ten year summary. EBIT for years 1997-1998 as per LN FY06 Annual Report ten year summary. NFL: EBIT for years FY2008 - F2010 are per KH FY 08 and 09 Financial Results.F2010 EBIT includes only 9 months due to the change in reporting period.

Sale of Pepsi licence (1999) Transfer of Head Quarters to

Sydney (2000) Acquisition of Montana (2000)

Disposal of China beer business

Fine Wine Partners joint venture established

Acquisition of J Boag & Son

Acquisitionof Petaluma

Acquisition of Banksia

Disposal of Montana

Acquisitionof Wither Hills

Entered RTD business

EBITA$m

Join Kirin Group (Dec. 2007)

Acquisition of DF (Dec. 2008)

Establish LNNF (Oct. 2009)

LN

NFL

Fully owned by KH

EBIT in Oceania has grown steadily

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ContentsContents

Overview of LNNF

LNNF Marketing Strategy

Integration Progress

Appendix

10

LNNF Mid-Term Business Strategy (MTBP)LNNF Mid-Term Business Strategy (MTBP)

Kirin Holdings (KH) is pursuing “qualitative expansion”.

LNNF is delivering Approx.25% of KH 2010-2012 MTBP’s operating income target

LNNF is one of the Key initiatives to achieve KH MTBP

Area Main operating companies Operating income increase (bn yen)

Contents

Japan KB, KBC, Mercian, KHK, KKF

41.3 1.Domestic growth through integrated beverages and pharmaceuticals business, etc

2.CCT cost synergies

Oceania LNNF 18.3 Australian growth including synergy effects, forex, and goodwill amortization as a consequence of 100% ownership of LN

Total 59.6

2012 quantitative guideline: Sales of over A$6.0bn, EBIT in excess of A$1.0bn

2010 quantitative target Sales:389.0(bn yen)* Operating income: 24.3 (bn yen)*

2010 quantitative target Sales:389.0(bn yen)* Operating income: 24.3 (bn yen)*

Alcohol beverages business Invest in our power brands, premiumisation and

innovation Cost efficiencies due to brewery investment

Dairy and Juice business Further progress in integration of NFL and DF Invest in key brands and Innovation

*After goodwill amortization

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Alcohol beverage marketing strategyAlcohol beverage marketing strategy

The beer category size remains stable

■There is a downward longer term trend in per capita consumption of beer across Australia, with population growth driving flat volumes

11Note: (1) Volume = Litres available for consumptionSource: ABS

1,738 1,712 1,717 1,702 1,711 1,724 1,735 1,746 1,714 1,693 1,700 1,691 1,673 1,677 1684

98.3 95.7 94.8 92.8 92.2 91.8 91.5 91.1 88.5 86.6 85.4 84.0 82.0 81.0 80.1

500

700

900

1,100

1,300

1,500

1,700

1,900

2,100

2,300

2,500

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2008-

20.0

40.0

60.0

80.0

100.0

120.0

Per capita consumption

Beer volume !Population growth offsetting

declining pcc

Australian Beer Consumption(1993-2006)

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Alcohol beverage marketing strategy – InnovationAlcohol beverage marketing strategy – Innovation

B eer Segm ent Share | TO TAL 5 STATE NLI(& DARWIN) - YEAR 2004 | TO TAL B EERUnits of M easure: Units = UNITS (000'S) | Volume = LITRES (000'S) | Value = $ (000'S) Beer Segment S hare | TOTAL 5 STATE NLI(& DARW IN) - MAT TO 30 /04 /2009 | TOTAL BEER

Units of Measure: Units = UNITS (000'S) | Volume = LITRES (000'S) | Value = $ (000'S)

The profile of the beer market has changed dramatically in recent years

Low Carb significant driver of category growth

Premium and Mid-Strength share gains

Source: AC Nielsen , May 2009

Innovation delivered our growth and developed new consumer

New products generated 10% of net sales revenue in 2009

SEGMENT DEFINITIONS:

Full-strength ≥4%Mid-strength ≥3% but <4%Light <3%Premium - Based on positioning

- Price ≥$40 / case- abv ≥5% and / or

differentiated2009200919991999

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Innovation – Low CarbInnovation – Low Carb

Low Carb + Mid-Strength

Low Carb + Clear bottled

Launched Apr, 2009

Leverage trademarkbrand reputation

Leverage trademarkbrand reputation

Premium Low Carb beer, Hahn Super Dry grew by 40.9%

Nation’s second largest beer, XXXX Gold grew by 6.2%

Launched Sep, 2009

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Innovation – CreativityInnovation – Creativity

Develop new consumers Develop new consumers The biggest cider in Australia??

New approach: multi media campaign, includes TV, music video, radio, digital, PR, print, documentary, and on-and-off-premise activity

Launched Aug, 2009 Launched Oct, 2009

Launched Preece‘Lighter in Alcohol’.

Low alcohol wines have experienced 60% growth YOY

Leverage Boag’spremium and pure image

Develop Steinlager’s image

1515

Invest on our site Invest on our site

New Sydney Bevchain warehouseNew Sydney Bevchain warehouse

New Boags BrewhouseNew Boags BrewhouseThe Pride (Auckland)The Pride (Auckland)

The Boag’s trademark grew volume by 19% in 2009.

New Boags Brewhouse has significantly expanded capacity to meet the growing consumer demand for Boags brand.

New Sydney Bevchain warehouse enables consolidation of a number of warehouse sites into one resulting in reduced costs and also capacity for growth.

The Pride establishes a lower cost platform by consolidating operations into one site, improved productivity and efficiencies.

First brew completed mid Sep, 2009. The full transition to the new facility expected slightly ahead of schedule in 2011.

Investment has been targeted to improve infrastructure resulting in improved safety, flexibility, and productivity.

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Dairy and Juice Marketing StrategyDairy and Juice Marketing Strategy

Growth DriversGrowth Drivers

Billion litres

*UHT: Ultra High Temperature

Reduced/Low Fat, Flavoured, and UHT milk are increasing

Australian Milk Consumption(1994-2009) *include Flavoured Milk

0

0.5

1

1.5

2

2.5

94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 0304- 04-05 05-06 06-07 07-08 08-09

UHTFlavouredReduced&Low FatRegular Whole

Reduced/Low Fat increased 3.9% during 2003-2009

Flavoured increased 3.4% during 2003-2009

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Innovation – CreativityInnovation – Creativity“New Milk”

Creates new category for consumers wanting the taste and goodness of full cream milk but only half the fat*. *Goodness of calcium and protein found in full cream milk

“Farmers Union Iced Coffee”

Launched new 750ml bottle

“Yoplait formé” brand re-launched and, launched “formé Satisfy”“formé Satisfy”

With no fat*, less than 1% added sugar, and only 85 – 93 calories per 170g tub. Additionally that is high in protein and fibre, and low GI to feel fuller for longer.

Educational signage at POP

POP tailored to key sales events

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ContentsContents

Overview of LNNF

LNNF Marketing strategy

Integration Progress

Appendix

19

Integration ProgressIntegration Progress

Focus on the Integration of NFL-DF, and NFL-LN

Invest to create strong business platform and strong brands

Manufacturing Platform Optimization

Integration Progress: NFL-DFIntegration Progress: NFL-DF

Site Category State Term Notes

Lidcombe Mik NSW - Requirement under DF acquisition undertakings

Sold to Parmalat

Clarence Garden

Milk SA - Requirement under DF acquisition undertakings

Sold to Parmalat

Schepparton Milk VIC - Closed March 2010

Hexham Milk, Dairy, Cheese

QLD End of 2010 Distribution center in Hexham in Nov 2009

Riverland Juice SA Mid July 2010 Production ceased 2 June 2010

Booval Milk QLD Fully integrated in early 2012 Consolidate into expanded Crestmead through $55 million investment

Crestmead expands to 250M litres

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Integration ProgressIntegration Progress

Best practice alignment Completed to align the corporate function and share best practice

Integration Progress: NFL-LNIntegration Progress: NFL-LN

P&C Aligned people processes and systems – creates consistent approach to talent management and succession planning

Held an associated conference for leaders

Held a large conference (more than 700 people) attended by LNA, LNZ, LNWine, NFL, and LNNF

Sales Utilisation of planning process & technology

-Education, Sales management, Customer contact, etc

Marketing Utilisation of planning process & technology

-Portfolio management, Brand building, Insights, Promotional effectiveness

Strategy & Finance

Utilisation of strategic thinking skills & strategy setting

-Financial insights, risks and opportunities management

Safety To expand safety program to 100% of company sites

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ContentsContents

Overview of LNNF

LNNF Marketing strategy

Integration Progress

Appendix

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Appendix – Oceania Alcohol MarketAppendix – Oceania Alcohol Market

Beer represents the majority of alcohol consumed in both Australia and New Zealand, followed by wine and ready-to-drink spirits

Australian Alcohol Market(2009)

Beer(70.2%)

Wine(15.2%)

RTD*s(11.1%)

Spirits(2.5%)

NZ Alcohol Market(2009)

Beer(63.6%)

Wine(28.3%)

RTD*s(6.4%)

Spirits(1.2%)

Cider(1.0%)

Cider(0.5%)

Note: “Ready-to-drink” = Pre-mixed spiritsSource: AC Nielsen

Total combined market value:US$10-15bn

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Appendix – Australian Beer Market 1Appendix – Australian Beer Market 1BY PACK TYPE | TOTAL BEER | TOTAL 5 STATE NLI(& DARWIN) - MAT TO 30/04/2009

Source : Nielsen Australia ScanTrack LiquorVolume Share and Growth by Pack Format(2008-09)

Most volume is sold in “stubbies” (single serve bottles), and this is increasing

Source: AC Nielsen, 2009

(330, 345 or 375mlbottle)

(375mlaluminium

can)

(250mlbottle)

(750ml bottle)

(Mostly 50L)

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Appendix – Australian Beer Market 2Appendix – Australian Beer Market 2

Source: AC Nielsen Scantrack Volume share, MAT 2009, 24 Case sales only

Under $34.99

$35-$39.99

$40-$44.99

$45-$49.99

$50-$54.99

$55-$59.99 Over $60

-Almost half of total beer volume is sold for A$40-$44.99 per case in Australia-The strongest growth is in step-up and premium brands (A$45-$49.99)-In the volume and growth segments, LNNF has strong brands

Step Up

Tooheys Extra Dry

Hahn Super Dry

Premium

Boags Premium

James Squire

Tooheys New, Boags Draught,

XXXX Summer Bright,

XXXX Gold

Hahn Super Dry 3.5

Australian Total Beer Market Share by Price Segment

Hahn Premium LightBudweiser

Heineken

Becks

Boags Pure

Kirin

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Appendix – Australian Dairy Market & Juice MarketAppendix – Australian Dairy Market & Juice Market

SMP/Butter25%

Other6%

Milk24%

Cheese33%

WMP12%

Australian Industry Product Mix 2008/09

Supermarket61%

Specialost retail12%

Food service27%

Freshlogic estimated share of retail spendingon food March Qtr 2010

68 68 68 67 66

32 32 32 33 34

2004 2005 2006 2007 2008

Australian 100% juice Ambient vs. Chilled

Ambient-1%

Chilled+2%

2.8

7.7

8

8

12.6

-1

NetarIce

d Tea

Squash

/Cord

ials

CSDs100%

Juice

Bottled W

ater

Average Consumer Price Increase 2006-2007

CPI 2.8%

Source: Dairy Australia Dairy 2010 Situation and Outlook

WMP=Whole milk powder SMP=Skim milk powder

Source: Estimated from The Soft Drinks Service Annual Report – Australia, Canadean, 2007

CSDs: Carbonated Soft Drinks

% Sales Volume% Increase

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