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Lion H1 Trading Update

Lion today announced its trading update for the half year ended 31 March 2016 in conjunction with Kirin Holdings’ half year announcement.

4 August 2016: Lion today announced its trading update for the half year ended 31 March 2016 in conjunction with Kirin Holdings’ half year announcement.

Amidst highly competitive market conditions, Lion’s underlying net sales revenue[1] decreased by 2.1%, with actual net sales revenue of $2,404 million across the group.  However, with a focus on higher value product categories and good cost management across all business units, the group has delivered a 2% increase in underlying group operating earnings[2] to realise $406.1 million for the half, with actual Lion group operating earnings[3] of $384 million. Lion remains on plan to deliver full-year earnings.

Lion CEO Stuart Irvine said: “The top-line sales numbers largely reflect our decision to exit the low margin everyday cheese category and the loss of private label milk contracts. Even so, consumer confidence remains fragile and we have seen market-wide volume declines in key categories.

“Lion continues to invest to reinvigorate the beer categories in both Australia and New Zealand through our Beer the Beautiful Truth initiative and to focus our Dairy and Drinks business on categories with the greatest potential to deliver sustainable returns, in line with our turnaround plan.

“While it’s still early days, Lion Asia Dairy has continued its solid start and we already enjoy category leading yoghurt brands in Singapore and Hong Kong.

“Our more recently formed Lion Global Markets business is also making inroads. We were excited to open our first Little Creatures hospitality venue in Hong Kong in July, tapping into the burgeoning craft beer scene in Asia.”

Beer, Spirits & Wine


While total volumes in Lion's Beer, Spirts & Wine business  in Australia declined 3.2%, continuing premiumisation and, in particular, a strong preference from Lion's market- leading craft portfolio softened the revenue impact.

James Squire 150 lashes, Little Creatures Pale Ale and James Squire Hop Thief all posted double digit growth[4].  At the same time, Lion continued to invest for future growth, acquiring Byron Bay Brewing Co. in April 2016, with plans well underway to refurbish the brand’s hospitality venue on the north coast of NSW.

As previously announced, Lion has agreed to terminate its Australian distribution agreement with AB Inbev following the global brewer’s acquisition of Lion’s major local competitor. The transfer of brands will occur on 1 October 2016. Lion retains a compelling blend of domestic and international brands, including via its joint venture with Heineken, and looks forward to investing behind these brands for future growth. 

New Zealand

In New Zealand total volumes in Lion’s Beer, Spirits & Wine business increased 2.5% whilst sales revenue increased by 5.7% driven by innovation in beer and wine and increased consumer demand for higher value premium products.

The tap beer market decline has eased and Lion’s volume share grew with the on-premise beer portfolio performing ahead of the market, helped along by a strengthening portfolio, less-than-full-strength beer innovation and investment in concept bars.

The pack beer market was broadly flat to last year during the half. However, there were standout performances in volume growth with Speights Mid Ale growing at over 120% year on year, Emerson’s growing close to 50%, Macs 27% and Corona over 20%. Lion has a strong innovation pipeline to further enhance its New Zealand beer portfolio.

Looking to the future, Lion looks forward to helping the newly acquired Panhead Custom Ales grow as a standalone business unit within the Lion family under the direction of brewery founder Mike Neilson and to the continued growth of Emerson’s following the opening of the new Dunedin Brewery this year. Lion has also recently acquired the distribution rights for Invivo wine, which will complement the existing wine portfolio. 

Dairy & Drinks

In Lion’s Dairy & Drinks business, the three-year turnaround program remains on track. After allowing for the strategic choice to sell the everyday cheese business in May 2015, total underlying volumes declined by 11% driven by the continual decline in modified white milks and the loss of the retail own brand contracts in Victoria.

Dare iced coffee remains in growth – growing at 6.8% vs YAGO in the grocery and convenience channel, ahead of the total market at 4.8%[5]. Big M benefited from increased promotional activity including a new television commercial and grew 12.2% in Victoria within the grocery and convenience channel – this was ahead of the total market result of 10.4% in the state[6].

Dairy Farmers Thick & Creamy yoghurt grew by 2.7%[7] in value across the first half and Yoplait Petit Miam grew by 4.3% on the back of the multi-buy activity in grocery[8].

In other brand highlights, Zooper Dooper water ice was boosted by strong summer promotional activity through its partnership with the Big Bash League, with the brand growing at 15.2% in value terms during the half[9].

Lion Dairy & Drinks remains focused on optimising the performance of its supply chain and manufacturing footprint to accelerate its business turnaround. During the half Lion announced an $87 million investment to transform its white milk and milk based beverages manufacturing footprint on the eastern seaboard. Lion also announced in January a $40 million investment over three years in its dairy manufacturing site in Bentley, Western Australia which will deliver a comprehensive modernisation of the site.

For further media information, please contact:

Leela Gantman

External Relations Director


+61 402 260 540


Annelise Cleary

External Relations Manager


+61 415 178 442



[1] Underlying net sales revenue removes the impact of the strategic choice to exit low margin categories

[2] Underlying group operating earnings exclude the impact of the strategic choice to exit low margin categories, significant foreign exchange movements and one time items

[3] Group operating earnings exclude one time items

[4] IRI MarketEdge Liquor, packaged beer YTD March 2016

[5] IRI (Grocery & Convenience AU), Sales $, 26 weeks to 27/3/16

[6] IRI (Grocery & Convenience VIC), Sales $, 26 weeks to 27/3/16

[7] Aztec Australia unweighted grocery dollar sales - 6 months to March ’16

[8] Aztec Australia unweighted grocery dollar sales - 6 months to March ’16

[9] Aztec Australia unweighted grocery dollar sales - 6 months to March ’16