Fonterra Co-operative Group Limited · NZX:FCG
Fonterra Co-operative — Fonterra — Q1 2024 Earnings Presentation
19 slides from Fonterra Co-operative's earnings presentation, Dec 7, 2023
Slide 1: Fonterra FY24 Quarter One Business Update
Fonterra FY24 Quarter One Business Update 7 December 2023
Slide 2: Upgraded forecasts: milk price and earnings per share
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 2 ¹ ² ² from $214m from 13c from 13c midpoint up 25 cents midpoint up 5 cents
Slide 3: Upgraded FY24 farmgate milk price and earnings forecasts
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 3 • Upgraded FY24 farmgate milk price and full year earnings forecasts • Farmgate Milk Price: demand improving from key importing regions and well contracted sales book • Earnings range: reflects continued improved performance of Foodservice and Consumer m
Slide 4: Cumulative contracted volume
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 4 Cumulative contracted volume Metric tonnes (000’s) 500 250 Jun Jul Aug Sep Oct Nov Jun Jul Aug Sep Oct Nov Jun Jul Aug Sep Oct Nov 2021 2022 2023
Slide 5: Reference Product shipment price
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 5 Reference Product shipment price 3 Favourable price relativities compared to prior year Non-Reference Product shipment price 3 due to a 23% decline in Reference prices relative to a 12% decline in Non-Reference 6,000 5,000 4,000 3,000 Q1 FY22 Q1 FY23 Q1
Slide 6: Continuing operations' drivers
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 6 Continuing operations’ drivers Impacted by the sale of Improved due to increased DPA Brazil gross margins in all three channels: Ingredients, 28 (70) 229 (16) Foodservice and Consumer 392 (46) 346 24 cents EPS 20 cents EPS 214 (2) 212 9 13 cents 13 cents
Slide 7: Volume and gross margin by channel
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 7 Volume (000' MT) 29.4% 28.8% Gross margin 23.9% 16.2% 14.4% 13.9% 431 415 134 146 162 174 FY23 FY24 FY23 FY24 FY23 FY24
Slide 8: Farmgate milk price forecast and Reference Product price
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 8 2023/24 2021/22 Season 2022/23 Season 6,000 Season Forecast per kgMS 5,000 $9.30 USD/MT 4,000 Lifted and narrowed range reflects: $8.22 • strengthening demand from key importing regions for Reference Commodity Products 3,000 • well contracted sales book
Slide 9: Earnings forecast and shipment prices
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 9 6 Q1 FY22 FY23 FY24 6,000 per share USD/MT 5,000 4,000 Increased earnings range reflects: ma 3,000 • well contracted sales book, locking in higher margins for the first half of the year 2,000 • improved Foodservice and Consumer margins , during first hal
Slide 10: Footnotes
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 10 1. FY24 Q1 includes $23 million attributable to non-controlling interests. Prior year comparative was $5 million 2. Excludes amounts attributable to non-controlling interests 3. Source: Fonterra Free Alongside Ship (FAS) prices of the New Zealand Ingred
Slide 11: Appendix
Slide 12: Continuing operations financial results
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024BUSINESS UPDATE 2024 12 12 • Gross margin up across all three channels ∆1 • Foodservice and Consumer channels achieved higher Sales volume (‘000 MT) 727 735 1% sales prices. Foodservice also benefitted from lower input costs Revenue 5,325 4,972 (7)% • Ingre
Slide 13: Five-year financial trends
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 13 5.8 1,130 831 832 875 5.1 801 794 944 4.2 4.2 4.4 785 746 661 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 536 346 581 630 553 560 513 368 214 266 235 149 190 121 116 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2020 2
Slide 14: Cash flow and debt trends
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 14 418 (749) (648) (589) (918) (1,247) 608 214 368 250 61 134 178 190 116 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Note: Total Group figures are for the three months ended 31 October. This includes continuing and discontin
Slide 15: Season to date milk collections June – October
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 15 • Season to date collections June – October 90 were 489.4 million kgMS, 0.7% behind 2021/22 last season 80 2022/23 • The decrease in collections is due to lower 70 2023/24 collections in the North Island partially offset by improved collections in the S
Slide 16: Glossary
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 16 Represents the channel of branded consumer products, such as powders, Is profit before net finance costs and tax yoghurts, milk, butter, and cheese. Means the average price paid by Fonterra for each kilogram of milk solids means operations of the Group
Slide 17: Glossary (continued)
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 17 Represents the channel comprising bulk and specialty dairy products such refers to the difference in the weighted average price (in USD) between the as milk powders, dairy fats, cheese and proteins manufactured in New Co-op’s Reference Product portfolio
Slide 18: Forward-looking statements disclaimer
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 18 This presentation may contain forward-looking statements, financial targets and ambitions (“Forward Statements”), each of which is based on a range of assumptions. None of the Forward Statements is intended as a forecast, estimate or projection of the o
Slide 19: Non-GAAP measures
© FONTERRA QUARTER ONE BUSINESS UPDATE 2024 19 Fonterra uses several non-GAAP measures when discussing financial performance. Non-GAAP measures are not defined or specified by NZ IFRS. Management believes that these measures provide useful information as they provide valuable insight on the underlyi