Fonterra Co-operative Group Limited · NZX:FCG
Fonterra Co-operative — Corporate Update (November 2016)
13 slides from Fonterra Co-operative's corporate update, November 2016
Slide 1: Business Update – Our Potential
Business Update OUR POTENTIAL NOVEMBER 2016
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements and projections. There can be no certainty of outcome in relation to the matters to which the forward-looking statements and projections relate. These forward-looking statements and projections involve known and unknown risks, uncer
Slide 3: Our Co-Operative
Our Co-Operative Confidential to Fonterra Co-operative Group Page 3
Slide 4: Global dairy update – supply driven rebalancing
Global dairy update – supply driven rebalancing Supply EU Russia China Demand 12 months 12 months EU’s largest dairy production +3% export market imports +26% US Last 3 months Trade embargo remains Last 3 months (Jun, Jul, Aug) -2% (Jul, Aug, Sep) +11% 12 months production +1% Asia (excl China) Midd
Slide 5: Unprecedented decline in NZ supply
Unprecedented decline in NZ supply Weather-driven but outlook is for lower volume across season 100 Peak volumes 8% down on • Season forecast revised 90 2015/16 season to 1,460m kgMS down 7% on last season Volume (m litres/day) 80 – 5% decline season- 70 to-date 60 • Driven predominantly by higher r
Slide 6: Our Potential
Our Potential Confidential to Fonterra Co-operative Group Page 6
Slide 7: Delivering our strategy
Delivering our strategy Volume to higher Value at Velocity 1 Optimise NZ milk Consumer DIRA • GDT 2 Build and grow GDT – Rebalanced volumes in beyond our current consumer positions response to lower production Foodservice 3 Deliver • Ingredients on Foodservice potential – Lower collections 4 Q1 Grow
Slide 8: Doing what we said we will in FY17
Doing what we said we will in FY17 1 Optimise Optimisation & Price Achievement • Optimising for lower volumes NZ milk Fonterra story • Launched ‘Trusted Goodness’ 2 Build and grow beyond our current consumer positions Accelerate growth in our 8 strategic • Volumes and margins up on last year 3 Deliv
Slide 9: Our Performance
Our Performance Confidential to Fonterra Co-operative Group Page 9
Slide 10: FY17 Q1 performance summary
FY17 Q1 performance summary VOLUME (LME) REVENUE GROSS MARGIN OPEX CAPEX 4.9B $3.8B 21.9% $621M $116M 2.0% 5.9% FROM 22.6% 1.7% 55% Ingredients Consumer & Foodservice China Farms Volume 4.5B Volume 1.3B Volume 0.1B UP 2% UP 11% UP 62% Gross Margin 12% Gross Margin 31% Gross Margin1 -12% FROM 15% FRO
Slide 11: Ingredients – performance and outlook
Ingredients – performance and outlook Q1 performance FY outlook FY13 FY14 FY15 FY16 FY17 Gross Margin 6,000 5,000 14.9% 12.1% 4,000 USD (MT) 3,000 2,000 Cheddar 1,000 Positive stream Q1 FY16 Q1 FY17 WMP return closing 0 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 • Milk volumes lower but sales up due to sell
Slide 12: Consumer & Foodservice – 128M additional LME
Consumer & Foodservice – 128M additional LME Asia Greater China Volume Gross Margin Volume Gross Margin +10% +36% 271 377 414 33% 199 39% FROM 31% FROM 32% Q1 FY16 Q1 FY17 Q1 FY16 Q1 FY17 Oceania Latin America Volume Gross Margin Volume Gross Margin1 +1% +10% 184 466 469 24% FROM 19% 168 33% FROM 35
Slide 13: Continued momentum in 2017
Continued momentum in 2017 Forecast for 2016/17 • A forecast Farmgate Milk Price of $6.00 per kgMS reflects expected rebalancing – Reduced supply globally helping lift prices to more sustainable levels – Reflected in results of GDT auctions since September – Global short-term demand is stable – Volu
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