F04 Half Year Results Analyst Slides Dec 2003

1

Annual General Meeting Trevor OHoy, President
CEO 25 October 2004
2
Introduction and structure

• Business and competitive environment
• Fosters premium beverages model
• Superior financial returns

3
Critical success factors

• Strong brand equity
• Premium products
• Multi-beverage solutions
• Consumer insights
• Market access / customer focus

4
Critical success factors

• Strong brand equity
• Premium products
• Multi-beverage solutions
• Consumer insights
• Market access / customer focus

5
Premium wine market share is growing
Off-Premise Sales Of Still Wine By Price Segment
2003 ( volume)
USA
Australia
UK
gt 7
gt14
gt20
2.5
2.9
3.4
6.6
3.0
5.3
10-14
5-7
8.8
4.1
7.7
11.4
6.4
12-20
13.5
7-10
13.7
4-5
16.9
16.8
22.5
8-12
31.7
28.1
3-7
41.1
38.6
3-4
38.6
43.7
lt8
51.8
57.6
lt 3
lt3
37.7
33.0
33.2
19.5
1998
2003
1998
2003
1998
2003
Bottled Popular and Premium
Super Premium and Above
Entry Level
Source Euromonitor
6
Premium beer market share is also growing
Australia Market Volume
5.7
7.3
Premium Light Mid Strength Regular
Source Industry data and Fosters estimates
7
Critical success factors

• Strong brand equity
• Premium products
• Multi-beverage solutions
• Consumer insights
• Market access / customer focus

8
Consumer repertoire expanding
Consumption today Percent
Beer
Consumption across repertoire beer, wine,
spirits and RTD Percent
11.0
2.6
17.4
11.8
Wine
Spirits
16.4
1.6
7.5
3.2
4.1
4.5
3.2
3.8
2.9
2001
2004
2008F
RTD
Figures are for Australian consumption Excl
udes Cider and Liqueurs Source Roy Morgan
Single Source July 2000March 2001, April
2003March 2004
9
Critical success factors

• Strong brand equity
• Premium products
• Multi-beverage solution
• Consumer insights
• Market access / customer focus

10
Consumer insights
Roy Morgan Value Segments

•  

Innovators / Early Adopters
Early Mass
Late Mass
Laggards
Product Entry / Market Penetration
Old Consumers
New Consumers
Time
Informed, Active
Uninformed, Passive
11
Critical success factors

• Strong brand equity
• Premium products
• Multi-beverage solution
• Consumer insights
• Market access / customer focus

12
Fosters premium branded beverage model

• Premium branded multi-beverage company
• Dominant Australian beer producer (CUB)
• Global scale in premium wine (BBWE)
• Number 7 international beer brand (Fosters Lager)

13
Consumer insights and innovation
Innovation is about Creating New Value by
implementing Insight-Based Ideas and in the
process, Doing different things or Doing things
differently
14
Fosters premium branded beverage model

• Premium branded multi-beverage company
• Dominant Australian beer producer (CUB)
• Global scale in premium wine (BBWE)
• Number 7 international beer brand (Fosters
  Lager)
• Distribution strength
• CUB 22,000 customers across Australia
• BBWE Pre-eminent premium / luxury portfolio in
  North America

15
Fosters premium branded beverage model

• Premium branded multi-beverage company
• Dominant Australian beer producer (CUB)
• Global scale in premium wine (BBWE)
• Number 7 international beer brand (Fosters
  Lager)
• Distribution strength
• CUB 22,000 customers across Australia
• BBWE Pre-eminent premium / luxury portfolio in
  North America
• Diversification benefits across products, markets
  and sources of production

16
Fosters premium branded beverage model

• Premium branded multi-beverage company
• Dominant Australian beer producer (CUB)
• Global scale in premium wine (BBWE)
• Number 7 international beer brand (Fosters
  Lager)
• Distribution strength
• CUB 22,000 customers across Australia
• BBWE Pre-eminent premium / luxury portfolio in
  North America
• Diversification benefits across products, markets
  and sources of production
• Balance sheet strength flexibility

17
Fosters business priorities
We want to be the leading premium branded
beverage company that inspires enjoyment,
responsibly around the world
Become the premium branded multi-beverage
powerhouse in Asia Pacific
Become the leading premium wine company globally
Maximise the value of the Fosters brand within a
global beer strategy
3 strategies
6 ways of working
18
CUB a multi-beverage powerhouse in Asia Pacific

• Continued evolution of multi-beverages model
• Maintain and build portfolio of must stock and
  well known brands
• Focus on low cost / flexible production
• Focus on product development / innovation
• Leverage distribution strength across total
  portfolio
• Deliver sustainable earnings growth (6-8)

19
BBWE global premium wine

• Leverage strong foundations in premium wine
• Strengthen financial performance
• Deliver wine trade review initiatives
• Revenue growth
• Core brand investment, secondary brand
  development
• New product development / innovation
• Supply chain efficiencies
• Alignment of future supply and demand

20
BBWE wine trade review update
Revenue growth initiatives

• Advertising Beringer, Wolf Blass, Yellowglen,
  Saltram, Annies Lane
• Sparkling White Zinfandel launch, 4x187ml Blush
  packaging
• Saltram re-packaging, Eye Spy brand sub-launch,
  Andrew Garret repositioning
• Shadowood, Eighth Maker

21
BBWE wine trade review update

• Supply / demand alignment
• Distributor inventories largely complete at
  year end
• Bulk wine disposal progressing well
• Vineyard disposals exploring sales of
  non-strategic vineyards in NA and AP, encouraging
  buyer interest in AP winery / packaging sites
• Future supply alignment on track
• Organisational enhancements
• MD Asia Pacific
• Finance Director Asia Pacific
• BBWE NA Director of Innovation
• BBWE NA SVP Sales Marketing
• Strategic Supply Chain Director
• Global Procurement Director

22
BBWE outlook
Tough market conditions to prevail, but stronger
platform to deliver improved performance

• Vintage 2004 in Nth America impact on supply
  projections, bulk wine prices
• Double digit EBITAS growth from FY06
• Moderate EBITAS growth expectations in FY05

23
Wine sector still highly fragmented
Top 10 Players Cumulative Market Share ()
45
23
11
Global, Volume based
Source Goldman Sachs JBWere
24
Wine Clubs and Services

• Solid strategic fit within BBWE
• Dedicated management focus
• Comprehensive business improvement program
• Focus on improving performance within 1-2 years

25
FBI maximise value from the Fosters brand
Continue to build Fosters brand globally

• 7th largest international beer brand 100
  million cases
• Total beer volumes (owned licensed) 102m cases
• Relatively small financial contribution (F04
  EBITA A44m)
• Perception of Fosters brand bigger than reality
• Project Angel stronger focus on rational
  elements of brand Product, Presentation,
  Environment, Endorsement

26
Lensworth sale process

• Progress towards pure beverages company
• Divestment process underway
• Significant interest
• Completion by end of fiscal 2005

27
Business execution

• Operate as one organisation
• Utilise intellectual capital across beverage
  categories
• Scale and operational efficiencies
• Increase effectiveness / speed to market
• Consumer insights driven
• Investment in brands / innovation
• Capital and financial rigour
• Strong focus on financial outcomes

28
Top quartile performance

• Based on Total Shareholder Returns
• Dividends and capital appreciation
• Peer group comprises
• ASX top 20 (excluding resource sector companies)
• Top 20 consumer staple and consumer discretionary
  sector companies
• Top 10 global beverage companies

29
Group financial targets

• Sustainable earnings growth
• Target gt10 normalised EPS growth (from FY06)
• Cash flow generation
• Target gt75 of EBITDA
• High margin structure (mid 20)
• Balance sheet strength and flexibility
• Maintain Baa1 / BBB ratings
• Improving returns on capital employed

30