I wanted to get this out as quickly as possible so there is not much comment; mainly excerpts from the Annual report and press releases. I won't make any comments at this time.

Highlights of the Report

“One year on from the completion of the Southcorp acquisition, Foster’s is a fundamentally different company.

We are successfully integrating Southcorp, realising synergies and re-engineering global supply to be more flexible, responsive and low cost. I’m happy to report that the Southcorp integration is now largely complete and synergy capture is ahead of plan. We’ve integrated sales and related support functions, rationalised production infrastructure and overheads, and developed a strong pipeline of initiatives to grow wine revenues.

For the second consecutive year, normalised earnings per share grew more than 14%, and we expanded EBIT margins in all of our businesses except Wine Clubs and Services. Group margins were up 180 basis points to 22.6%. Pro Forma3 Group margins expanded 370 basis points. Significantly, the Southcorp acquisition was neutral to earnings in its first full year. We’ve continued to narrow our focus on premium drinks, realising significant value from under-performing or non-strategic assets, from breweries in Asia to wineries in the Hunter Valley.
 

Today we took that a step further, announcing our intention to dispose of our Wine Clubs and Wine Services businesses; further reinforcing our focus on core businesses."

Normalised earnings per share up 14.8% to 31.0 cents with the impact of the Southcorp acquisition neutral in its first full year.
• More than $1 billion realised from the sale of the Foster’s brand in Europe and India and divestment of our Asian brewing businesses.

Wine Trade EBIT increased 81.8% to $431 million. Pro Forma wine trade EBIT increased 31.1% with synergy realisation and growth in the Americas and Continental Europe partially offset by a competitive trading environment in Australia and the United Kingdom.
• Southcorp integration synergies of $61 million were realised and synergies now expected to reach approximately $165 million by 2008.
 

The Future
 

After 2-years of transformation, Foster’s has emerged as a fundamentally different company – a focused drinks company that is consumer led, and customer driven.
With the acquisition and integration of Southcorp, Foster’s has complemented its brand presence in a growth category – premium wine – and strengthened the Group’s ability to grow revenue, expand margins, generate cash flows, and drive efficiencies.

Wine revenue is expected to improve in fiscal 2007 as benefits from the route to market integration activities undertaken in 2006 are realised and a range of product innovation is brought to market, including the initiatives surrounding the Rosemount and Lindemans brands announced today.

Foster’s has further developed its global consumer and customer insights capability with the establishment of the global wine marketing team in the first half and the regional insights teams now in place in the Americas and Europe to complement the Australian I-Nova team. Following the business reorganisation announced in July, the Foster’s global marketing team will be responsible for driving marketing and brand strategy for all global brands, and work with regional marketing teams to define local execution priorities.

Major wine consumer and customer studies have been completed in each region, identifying clearly differentiated positioning for each global and regional priority brand, based on consumer occasions and preferences. Insights have played a key role in identifying and targeting the customer and consumer needs and occasions that are reflected in the development of recently released and forthcoming wine new product initiatives, including the re-launch of Rosemount, the release of the Lindemans Country of Origin range, and the Wolf Blass PET packaging initiatives announced today.

Additional refinement is continuing with the formation of a specialist luxury on-premise sales team, the Estates Wine Group, to complement the existing Beringer Estates and Limestone Estates sales teams.

The Global Wine Marketing and regional insights teams have completed detailed reviews of the Rosemount and Lindemans brands and new initiatives are now being brought to market including:
• The global re-launch of Rosemount with fresh wine styles, a simplified brand architecture, innovative packaging and comprehensive brand investment program.
• The launch of the Lindemans Winemakers Reserve range in the UK and the Country of Origin range with wines from Chile, New Zealand and South Africa.
• The launch of Yellow and Pink in the Americas and Europe.
 

Wine Clubs and Services

Foster’s today announced its intention to divest the Wine Clubs and Services businesses and has appointed external advisors to commence the sale process. Over the last two years Foster’s has reviewed the future role of the Wine Clubs and Services businesses in a focused consumer led, customer driven drinks company. The review considered numerous options but concluded that the portfolio of businesses had greater value potential under different ownership.

As a result of this review Foster’s has already divested several smaller Wine Services assets including the Australian packaging materials distribution and cooperage businesses.

Overall Wine Trade

Wine Trade Pro Forma volume growth was 1.9% and constant currency revenue growth was 1.4%. Pro Forma EBIT increased 31.1% as initial supply efficiency benefits and Southcorp integration synergies were realised. Pro Forma volume of Foster’s five global wine brands, increased 0.5% and constant currency revenue growth was 1.3%. Beringer, Wolf Blass and Penfolds performed strongly and while globally Lindemans volumes were modestly below last year, the brand has returned to growth in the Americas and Europe Middle East and Africa (EMEA). Rosemount volumes declined 23% ahead of the brand’s global re-launch, and excluding Rosemount, Pro Forma volume increased 4.8% and revenue increased 3.4%. Over 60% of the global decline in Rosemount occurred in the Europe where the former Southcorp brands, and Rosemount in particular, were negatively affected by the loss of promotional slots with a number of major retailers. New trading arrangements are now in place for the expanded portfolio with all major UK retailers and promotional arrangements now in place for the next fiscal year.

INNOVATIVE ‘DIAMOND’ BOTTLE LEADS ROSEMOUNT REVITALISATION
 

Foster’s Group Limited (Foster’s) today unveiled a major re-positioning and marketing program for one of its five global flagship wine brands, Rosemount.

A uniquely shaped bottle has been created, based on Rosemount’s iconic diamond-shape label, which will remain as a mark recognisable to consumers the world over. This new bottle features a diamond base which tapers upwards to a traditional, round shouldered bottle. The unique, prism-like like effect maintains traditional wine cues, while introducing something totally unique for the wine category. This innovative bottle has standout appeal and invites wine buyers to look at, touch and try the Rosemount family of wines.
 

Six ‘easy drinking’ ranges

Rosemount’s revitalisation is also founded on a return to the easy-drinking, fruit-driven style for which the brand became famous. The introduction of screw cap across the entire new vintage supports the commitment to freshness and quality. Senior Winemakers Charles Whish and Matthew Koch have produced a stunning family of wines – vibrant, bright and exceptional in quality – best enjoyed in their youth.

The new brand architecture of six distinct tiers will also make selection easier for the trade and consumers. Each tier has its own philosophy and consumer proposition. Rosemount Diamond Label is at the heart of the Rosemount range and a great introduction to the brand.

Rosemount Global Brand Director Simon Marton said:
"We have also taken a long look at the quality and style of the wines and made improvements wherever possible. With the global roll-out of the rejuvenated  Consumers will be able to buy Rosemount wines in Australia and the UK from November and in other markets early in calendar 2007. The new Rosemount stands out among our five global wine brands as the only one with modern, sophisticated positioning, complementing the more traditional brands in our portfolio. In this financial year, our business focus is squarely on growing distribution and trade performance levels for the Rosemount brand while supporting it in all markets with increased marketing and promotional investment,” Mr Marton added.

LINDEMANS LAUNCHES NEW ‘COUNTRY OF ORIGIN’ RANGE

Foster’s Group Limited (Foster’s) today launched a new country-of-origin range for the Lindemans brand. This unique multi-region approach marks a major step forward in the evolution of Lindemans as a global wine brand.

The country-of-origin range will initially comprise wines from South Africa to be distributed in North America in October this year. This will be followed by South African and Chilean wines destined for the European market. Created through close associations with leading local winemakers from each country, the wines will showcase local wine characteristics while adhering to Lindemans’ strict quality standards.
 

Lindemans Global Brand Director Oliver Horn said the range was developed following extensive consumer research across key global markets.
“We identified a great opportunity to open up new growth areas for the Lindemans brand. Consumers are interested in experimenting with wines from new places but they want a reliable choice from a known and trusted producer,” Mr Horn said. The research also revealed that the Lindemans brand was seen as a truly international brand – not Australian-specific – by consumers in the European and North American markets.  Together with our distributors and retailers, we can develop a strong wine offering from multiple countries. Our commitment to quality will ensure that each wine remains true to its original style. We will invest in the Lindemans brand to further build on its already high awareness in specific markets,” Mr Horn said.
 

"Foster’s global supply chain allows us to respond quickly and efficiently to emerging consumer trends in wine. Using global consumer insights and demand forecasts we can produce Lindemans wine sourced from other regions, as well as distributing the country-of-origin range in new markets,” he added.