1 9 November 2005

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Scottish Newcastle Tony Froggatt - CEO
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Running Order
A brief Overview
Emerging market opportunities
Winning in mature markets
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Scottish Newcastle 2004A major international
brewer
Drive value growth
Drive volume growth
Accounted for 50 of JV volumes
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Strategic framework
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Running Order
A brief Overview
Emerging market opportunities
Winning in mature markets
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Most efficient operations

• Manufacturing
• Product quality and efficient production
  footprint
• Distribution
• Effective use of assets and minimal cost route to
  market
• Procurement
• Leverage scale
• Technical RD
• Improvements in operational efficiency
• Support marketing innovation pipeline

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Best team

• Cultural change
• A consumer and brand lead business
• Pace and urgency
• Group wide functional directors
• Integration and working together
• People development
• International training programmes

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Building value through brands

• Focus on growth opportunities delivering best
  returns
• Rigorous analysis of brand/market combinations
• Innovation to expand share of alcoholic drink
  consumers and occasions
• Marketing Excellence Responsibility

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Developing Marketing Excellence

• New Leadership Team in place
• Upweighted Consumer Insight resource process
• Overhauled Innovation, adopting International
  best practice
• Implemented ROI - based resource allocation model
• Developed deep and broad SN Marketing
  Excellence program

Responsibility underpinning all we do
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Portfolio Plans by market reflect focused
investment
Implication Expand distribution and Trial.
Initial focus on personal discovery. Media at
threshold once scale justifies
Seed / Develop Growth Focus
Drive Growth Profit Focus
Implication Dominate distribution, expand
penetration, maintain media over key competitor
Harvest Short Term Profit Focus

Implication Dominate distribution within segment
/locality. POS / loyalty focus. Media at
threshold level if justified
Defend Long Term Profit Focus
Implication No media. Price to maximise profit
while maintaining share and distribution
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Increased brand focus Kronenbourg 1664 Earning
premium margins, the world over
Price premium
Sales growth since 02
France
40
7
25
10
UK
100
Launched end 04
Russia
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Improved dispense technology Fosters
Superchilled Winning share of consumption
occasions
Throughput Impact

• Objective and Strategy
• Maintain best in class mainstream brands by
  delivering enhanced refreshment

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• Halo effect to Fosters brand in off-trade
• 35,000 outlets in UK by end 05
• Significant integrated marketing campaign
• Sustains Fosters premium pricing in mainstream
  segment
• Font cost halved since launch
• Now Superchilled launched across Europe on a
  number of different brands

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6
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New brand launch Kronenbourg Blanc Attracting
new users and improving profit per outlet
Purchase Intent
Objective and Strategy Grow share of 25-35 year
olds who enjoy trying new beers, and are willing
to pay a premium for a really new offer.
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• Refreshing fruity imported white beer
• Super premium priced
• Makes speciality beer accessible to wide
  audience
• Condensation font
• Halo effect on Kronenbourg in both on and
  off-trade
• Opportunities across European business

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New drinking occasion Sagres Bohemia Expanding
beers share of alcoholic drink occasions
Alcoholic Drinks by occasion
Objective and Strategy Grow beer share of major
drinking occasion by launching a beer developed
to complement food

• Dark beer with full taste to compliment food
• Premium price
• 4 off-trade market share within 3 months of
  launch
• 40 on-trade penetration
• With food being tested in other markets

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Category development Strongbow Sirrus
Premiumising our cider portfolio
Objective and Strategy Increase consumption among
Strongbow users by delivering a premium cider
offer which can be confidently chosen when out
with friends

• A smooth cider best served over ice
• Launched August 2005
• Stocked on 10,000 on-trade outlets and all major
  grocers
• Capitalise on strong momentum of Strongbow brand
  (volume 10 H105)
• Elevate category perception with consumers

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Running Order
A brief Overview
Emerging market opportunities
Winning in mature markets
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Key objectives for emerging markets

• Investment must beat deal specific WACC by 5-7
  years
• Investment must be premised on the potential of
  becoming a strong player with scale
• It must be clear where SN can add value
• Entry to markets should be by JV with a strong
  local player with strong local management

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SN is active in 3 of the four most important
growth markets in the world

SNposition
Growth 2000 - 2010 (mhl)
CAGR 2000 - 2010 ()
of World Growth
Growth 2000 - 2010
5 1 n/a 1
China Russia Brazil India
147 39 20 7
5.2 6.0 2.1 8.3
41 11 5 2
1 2 3 4
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Source Plato Logic estimates
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BBHStrong volume growth in fast growing market

• Total beer volume growth of 14 to 18.9 mhl
• Russian market share of 36.3 up 4.1pts
• Robust price / mix - brand portfolio strength
  offsetting PET growth
• Strong cash flow supports dividend of 100m
• Revenue and cost opportunities by creating
  unified Russian business

H105 Results
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BBH Leadership in Russian Premium Sectors

• BBH gained share in premium segment
• Share of the segment in H105 37.9, up 4.5pts
• Baltika No7 drives growth in premium sector with
  29 volume increase in H105
• Improved position in the license segment
• Share of the segment in H105 16.1, up 2.8pts
• Advertising campaigns for two new licensed
  brands Fosters and Kronenbourg 1664

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ChinaA strong regional position

• Leading brewer in Region
• No 5 brewer in China
• 80 market share of Chongqing
• Partnership with Chinese govt
• Strong performance in 1H05
• High Net Sales growth inmid teens
• Funds in place to expand

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IndiaA great opportunity

• Population
• 1.1bn population growing at 1.4 per annum
• Favourable demographics - 600m people under 25
  years old
• Growing beer market
• 7.1 mhl and growing at 8 pa
• Accounting for 5 of alcohol sales
• Beer still low per capita consumption at lt1ltr/yr
  
• GDP growth at 6-8 per annum

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IndiaSNs position

• Joint Venture with VJM Group
• 37.5 in United Breweries (UB)
• Market leader with 48 share
• Main brand Kingfisher has 33 market share
• Volume growth in 1H05 14
• UBL Management team
• equal share of management andboard appointments

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Outlook SN will deliver sustained growth

• Organic growth 3-5 CAGR range
• West Europe growth 2-3 CAGR
• Strong brands getting stronger
• Premiumisation
• New products, new occasions, new distribution
• Emerging market growth in double digits
• BBH momentum
• Platforms in India and China

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Questions?