Fonterra Co-operative Group Limited · NZX:FCG
Fonterra Co-operative — Corporate Update (July 2023)
18 slides from Fonterra Co-operative's corporate update, July 2023
Slide 1: Capital Structure
ae Capital giauetiice i; |
Slide 2: A recap on the fundamentals of our review
. . A recap on the fundamentals of our review A strong farmer-owned Co-operative is good for farmers and good for New Zealand. We have choices to make to protect our Co-op for generations to come. Financial Sustainability ns Sustainable Milk Supply Farmer Ownership = Dairy forlife
Slide 3: Director Meetings, Review Feedback and Further Consultation
• • Director Review Further Meetings Feedback & Consultation Refine Option(s) Proceed with Preferred Further Regional Option Meetings (if change is recommended, then we would aim to hold a shareholder vote at the Annual Meeting in December) 3
Slide 4: Director-led farmer meetings held across the country
Director-led farmer meetings held across the country farmer webinars with an average of around attendees at each of written responses received from farmers Over farmers have directly engaged through feedback channels to date 4
Slide 5: This is a tough conversation, but it's important we have it now
rom) Dairy for life This is a tough conversation, but it’s important e We thank farmers for approaching consultation we have it now with open minds, while managing uncertainty. As an intergenerational Co-op, it's important we ra have this conversation now. The Board maintains its belief that, in a f
Slide 6: Ongoing engagement with other stakeholders throughout consultation
r=) Dairy forlife Ongoing engagement with other stakeholders throughout consultation is also a key focus FONTERRA CO-OPERATIVE COUNCIL: We are working closely with the Council as C4 asounding board. The approval of at least 50% of Council members is required to implement capital structure changes to
Slide 7: A summary of farmer feedback
ro) Dairy for life Asummary of farmer feedback We’ve heard good levels of support for addressing the issues we have identified through our capital structure review. We’ve heard how much farmers value a strong Co-op and how important intergenerational succession is to them. N Many farmers have told u
Slide 8: The common themes
The common themes co) Dairy forlife The Board is focusing on the common themes that have come through. These have been grouped into three areas, with further details on the next slides. 1. Farmer-only market and share price impacts 2. Balancing flexibility and Co-op alignment 3. Managing transition
Slide 9: Farmer-only market and share price impacts
• There's a lot of discussion around the challenge of protecting farmer ownership and impacts on the share price. • There’s support for a market where the share price is ultimately determined by the Co-op's performance and farmers’ assessment of that. But there are also concerns about the share pric
Slide 10: Balancing flexibility and Co-op alignment
• We have heard support for the concept of giving all farmers some level of flexibility with their shareholding at any point of their farming career. • There are a range of views on how to strike the right balance between flexibility and ensuring farmers still maintain a strong capital commitment to
Slide 11: Managing transition
• We’ve heard a lot from farmers about the need to recognise the loyalty of Co-op members. • This has led to many conversations about the appropriate length of time we could allow farmers to share-down when they retire or leave the Co-op. Related to this, there has been feedback from some farmers th
Slide 12: Ideas and alternative proposals received from farmers
• We received ideas for multiple variations within the different options presented, including a number of alternative proposals provided as written submissions. • A huge amount of time and effort has gone into developing some of these proposals, and we really appreciate these ideas. • All the propos
Slide 13: Comparison of May proposal and updated proposal
Minimum shareholding requirement of 1 share per 4 Minimum shareholding requirement 1 share per 3 kgMS kgMS or 25% of supply or 33% of supply Maximum shareholding of 4 x supply Maximum shareholding of 4 x supply (no change from May) 5 years to enter 6 years to enter 5 years to exit 10 - 15 years for
Slide 14: Share Standard and Minimum Shareholding Requirement changes
• Share Standard and Minimum Shareholding Requirement: We are reconsidering the proposed reduction to the Share Standard. Instead, the Share Standard could stay at 1 share for every kgMS supplied, and the minimum shareholding requirement could be set at 33% of that Share Standard (or around 1 share
Slide 15: To create superior value for our customers and our Co-operative
• • To create superior value Unlock greater value from for our customers and our scale efficiency and our Co-operative focus on execution To do what is right for the long term good and meet consumer and community needs
Slide 16: We are aiming for a farmer vote before the end of the year
= We are aiming for a farmer vote Day frie before the end of the year We're committed to moving as quickly as we can through this review, while ensuring that all views are heard and considered so that we get a quality outcome. Our highest priority is to get it right. Over the next couple of months,
Slide 17: Problems to Solve & Principles timeline
Problems to Solve & Farmer Director Review Further Principles Survey Meetings Feedback & Consultation Refine Option(s) Research into Co-operatives Detailed Analysis Further Proceed with around the world of options, trade- Development Preferred Option offs, risk and of options Further Regional (if ch
Slide 18: Dairy for life
Famers) a Dairy for life
Fonterra Co-operative Group — Corporate Update (July 2023) on 6ix