Fonterra Co-operative Group Limited · NZX:FCG
Fonterra Co-operative — Non-Deal Roadshow (September 2021)
20 slides from Fonterra Co-operative's roadshow presentation, September 2021
Slide 1: September 2021
September 2021 Confidential to Fonterra Co-operative Group
Slide 2: Confidential to Fonterra Co-operative Group
Confidential to Fonterra Co-operative Group
Slide 3: If we don't provide flexibility, milk supply likely to decline
If we don't provide flexibility for farmer owners, -) Dairy for life we are likely to see our milk supply decline eee De nnneeccecc tcc cece nec enec nen > Significant and sustained i Flattening i We need to be expansion of dairy I 1 prepared for declining 1 NZ milk 2,200 u l ! l ! 2,000 ; = @NZ Mil
Slide 4: Fund size thresholds could be exceeded, and/or capital required for buy-backs
Fund size thresholds could be exceeded, and/or capital required for share or unit buy-backs $500m to $1.2b by FY30 More conservative risk settings, such as lower debt targets and dividend policies Milk Price could reduce by 6 to 13 cents / kgMS by FY30 May need to close between 12 and 18 plants with
Slide 5: Confidential to Fonterra Co-operative Group
Confidential to Fonterra Co-operative Group
Slide 6: Share minimum and maximum, and shareholding terms
• Share minimum - 33% of supply • Share maximum - 4x supply • Shares could not be exchanged into units in the Fund • Farmers set prices for shares in FSM • Sharemilkers, contract milkers and farm lessors associated with a supplying farmer • Existing farmer owners would have up to 15 seasons initiall
Slide 7: Confidential to Fonterra Co-operative Group
Confidential to Fonterra Co-operative Group
Slide 8: Note: The figures on this slide are targets that we are aiming to achieve
Note: The figures on this slide are targets that we are aiming to achieve only. They should not be taken as forecasts or as a guarantee of returns to shareholders. They are subject to successfully completing a number of business initiatives, and assumptions, each of which could materially affect the
Slide 9: Supporting a sustainable milk supply by providing farmers with capital flexibility
Supporting a sustainable milk supply by providing farmers with capital flexibility Protects farmer ownership and control by capping the Fund Maintains our financial sustainability by supporting efficiency, enabling our strategy, and protecting against uncertain and recurring risk to our balance shee
Slide 10: Market maker, liquidity support and regulated market features
• A 4x cap provides headroom for those wanting to sell • A market maker would provide buy and sell quotes for shares in the FSM within certain limits and timeframes so that there is a price available for shares to be traded • We would allocate up to $300 million to support liquidity if needed, as fa
Slide 11: Confidential to Fonterra Co-operative Group
Confidential to Fonterra Co-operative Group
Slide 12: Research into Co-operatives around the world
• • • • Problems to Farmer Director Review Further Solve & Survey Meetings Feedback & Consultation Principles Refine Preferred Research into Option Detailed Analysis Further Proceed with Co-operatives of options, trade- Development Preferred Option around the world offs, risk and of options (includi
Slide 13: Confidential to Fonterra Co-operative Group
Confidential to Fonterra Co-operative Group
Slide 14: Appendix
Appendix
Slide 15: Shareholders'
FONTERRA FARMERS PUBLIC INVESTORS holding shares holding units Flexible Shareholding Voting rights based No voting rights - from 33% of supply on supply - up to 4x supply backed by shares Farmer-only Fonterra Shareholders' Market Capped Fonterra For supplying farmer owners, Shareholders’ plus associ
Slide 16: kgMS (m)
500 450 400 350 300 kgMS (m) 250 200 150 100 50 0 Non-Fonterra Collections Source: NZ Milk Supply: Dairy NZ – New Zealand Dairy Statistics 2019-20, Summary of milk production statistics for the last 35 seasons. DCANZ NZ Collections.
Slide 17: Expected trading would support liquidity; up to $300m available
• It’s expected trading between farmer owners buying and selling would support sufficient liquidity, based on our understanding of the levels of trading prior to the temporary cap. • Features of the structure such as the Minimum and Maximum Holdings, the entry and exit timeframes and enabling associ
Slide 18: Existing suppliers and new suppliers timeline
15 10 Existing suppliers 5 New suppliers Sharemilkers, 3 contract milkers and farm lessors 21/22 22/23 23/24 24/25 25/26 26/27 Example assumes changes are approved in December
Slide 19: Potential Fund Size as at September 2021
Potential Fund Size as at September 2021 Confidential to Fonterra Co-operative Group 19
Slide 20: Thank You.
Thank You.
Fonterra Co-operative Group — Non-Deal Roadshow (September 2021) on 6ix