Lion Nathan is one of Australasia’s leading beverage companies encompassing strong positions in the production, marketing, sales and distribution of beer in Australia and New Zealand, as well as spirits and ready to drink (RTD) spirit products in New Zealand and a niche fine wine business in both countries. It has joint venture businesses with Heineken (beer) and Bacardi (white spirits) in Australia.

By way of summary:

• Lion Nathan has around 90 per cent of its assets in two core brewing businesses in Australia and New Zealand operating in attractively structured, highly profitable and defendable markets. It also has a small premium wine business.
• Over the last ten years Lion Nathan has consistently generated strong earnings and cash flows which enabled it to fund expansion in brewing in Australia and more recently into wine, spirits and RTDs, while at the same time building a sound balance sheet and cash coverage ratios.
• Management's strategic focus is to maximise the performance of the existing core businesses which involves enhancing the returns from the Australian and New Zealand beer businesses, optimising value in the fine wine business and seeking growth opportunities in spirits and RTD markets and international wine export markets.
• The key to stronger performance of the core business lies in driving improved performance of the Company's beer brand portfolio which is its most valuable asset. Lion Nathan is committed to increasing that value by investing in the brand equity of its existing core brands, developing a national focus for those core brands and encouraging consumers to ‘trade up’ to premium products.
• In Australia, which accounts for around 75 per cent of group assets and 80 per cent of operating profits, beer market share is stable at more than 44 per cent including its recently acquired Boags brands. In recent years, operating performance has been driven by a combination of factors including mix shift to higher margin premium and core brands, improved pricing and cost control. Lion Nathan’s strategy of growing its “Power” brands in Australia (Tooheys New, Tooheys Extra Dry, XXXX Gold and Bitter, Hahn Premium, Hahn Premium Light and Hahn Super Dry, James Squire brands, Becks and Heineken brands) is delivering earnings growth. The emphasis in recent years has been on value growth rather than volume growth. The Company has identified further growth opportunities in spirits and dark RTD spirits.
• In New Zealand, Lion Nathan is the country's leading brewer with market share of more than 50 per cent. New Zealand accounts for around 15 per cent of group assets and of operating profits. An extremely competitive trading environment, retail industry consolidation and legislative changes adversely impacted earnings in 2005. However, since then the Company has implemented a series of changes to its business structure, particularly in marketing and sales to ensure that it has the flexibility and capability to meet evolving market requirements and create a strong foundation for medium term growth. Importantly, it has implemented a ‘one business’ structure encompassing beer, spirits, RTDs and wine to enable it to leverage its full brand portfolio for future growth. Recent performance from the business indicates that the right strategies have been implemented.
• The Lion Nathan Wine Group (LNWG) represents a small proportion of the group's assets and earnings. Wine market conditions have been unfavourable in the last few years, particularly in Australia. However, with its niche federation model of unique wineries producing an outstanding selection of fine wines, an improving cost base, appropriately focused distribution systems, including the Fine Wine Partners business and a clear strategic focus on returns, the group is well positioned to deliver reasonable earnings growth from its existing asset base.
• Lion Nathan International (LNI) is the sales and marketing arm for Lion Nathan's beer business outside of the domestic Australian and New Zealand markets. LNI operates through a number of export and licence brewing agreements. LNI exports to more than 20 countries worldwide, with Steinlager being the lead Lion Nathan export brand.  LNI's operations report via the New Zealand business.
• In addition to the production, marketing, sales and distribution of beer, wine, spirits and RTDs in Australia and New Zealand, Lion Nathan is also involved in a number of related businesses in New Zealand. These include contract bottling, liquor retailing and malt extract production:

1. The Contract Bottling Company contract bottles products for the beverages industry.
2. Liquor King is a retail liquor outlet with 38 stores throughout NZ. Liquor King Online is New Zealand's largest on-line liquor outlet with over 2000 product offerings including beer, wine and spirits for delivery throughout the country.
3. Maltexo is a malt extract business which produces and exports several brands to a variety of markets around the world, including Asia, North America and Europe. Its products are predominantly supplied for craft or home brewing and in bulk form used in the food industry.

• Lion Nathan is committed to appropriate capital management. An integral part of this is the constant review of returns and investment options. Non-performing assets, such as the Company's China beer businesses and portfolio of Victorian hotels, have been divested in recent years and an active capital management program implemented.  The annual dividend payout ratio is currently set at 80 per cent of after-tax operating earnings.
• Capital management initiatives have been implemented to raise gearing to a level commensurate with the stability and certainty of cash flows while retaining the flexibility to make modest acquisitions. The capital management program is managed within the context of maintaining an investment-grade rating and maximising total return to shareholders.  
• Lion Nathan's Australian spirits and RTD strategy is well developed after an exhaustive scoping and assessment of a range of entry options to complement our existing investment through the Bacardi Lion joint venture. The initial focus has been on organic brand development which means that the company controls production, branding and marketing and has access to the full product margin with relatively low capital investment. The first brand in the Company’s spirits and RTD strategy was McKenna Bourbon, launched in August 2006.  This was followed by the acquisition of the Inner Circle rum brand and distillery in mid 2007.  Both brands are distributed nationally.
• The company's most recent major acquisition, Tasmanian brewer J Boag & Son was announced in late 2007 and settled in January 2008.  The Boag portfolio is led by mainstream brand Boag's Draught and high equity premium brand James Boag's Premium.  It also includes James Boag's Premium Light, Boag's St George and the recently launched Boag's Classic Blonde.
• The Boag acquisition offers strong strategic value to Lion Nathan.  Boag's has great brands and a reputation for brewing excellence and its market focus is highly complementary to Lion Nathan which will invest to grow the Boag business.