Fonterra Co-operative Group Limited · NZX:FCG
Fonterra Co-operative — Fonterra Shareholders' Fund — Shareholder Meeting (November 2022)
36 slides from Fonterra Co-operative's shareholder meeting presentation, Nov 14, 2022
Slide 1: Fonterra Shareholders' Fund 2022 Annual Meeting
Fonterra Shareholders’ Fund 2022 Annual Meeting 14 November 2022
Slide 2: Chair, FSF Management Company
Chair FSF Management Company
Slide 3: Shareholder & Proxyholder Q&A Participation
Shareholder & Proxyholder Q&A Participation Written Questions: • Questions may be submitted ahead of the meeting • If you have a question to submit during the live meeting, please select the Q&A tab on the right half of your screen at anytime • Type your question into the field and press submit • Yo
Slide 4: Shareholder & Proxyholder Voting
Shareholder & Proxyholder Voting • Once the voting has been opened, the resolutions and voting options will allow voting • To vote, simply click on the Vote tab, and select your voting direction from the options shown on the screen • You can vote for all resolutions at once or by each resolution • Y
Slide 5: Agenda and presenters
John Shewan John Shewan Peter McBride Chris Rowe John Shewan Carlie Eve, Alastair Hercus John Shewan John Shewan 5
Slide 6: Board of directors
John Shewan Kim Ellis Mary-Jane Daly Donna Smit Andy Macfarlane Chair Peter McBride Miles Hurrell Chris Rowe Simon Till Andrew Cordner 6
Slide 7: Year in review
• Fonterra delivered a strong financial result, driven by its Ingredients portfolio ¹ • Good progress on key drivers of Fonterra’s strategy, focusing on New Zealand milk, sustainability, and dairy innovation and science ¹ • Increased working capital has driven higher debt levels but will improve as
Slide 8: FSF unit price performance
Capital Interim Annual $5.00 structure vote Results Results • Down 8.4%, from $3.71 to $3.40 $4.00 (1 August 2021 – 17 March 2022) $3.00 • Down 8.4%, from $3.71 to $3.40 (1 August 2021 – 22 September 2022) $2.00 $1.00 Aug 21 Oct 21 Dec 21 Feb 22 Apr 22 Jun 22 Aug 22 Oct 22 FSF NZX50 Index Note: NZX5
Slide 9: Register composition
• Small increase in retail and institution holdings • Majority of register held in New Zealand, with offshore holdings stable 2022 2022 2021 2021 72% 88% Retail New Zealand 71% 88% 15% 8% Institution Australia 14% 8% Farmer 8% 2% United States Shareholder 9% 2% Private 5% 2% Wealth Other Management
Slide 10: Fund key statistics
Units on Issue¹: no change Fund Market Capitalisation¹: $93m Fonterra Market Capitalisation¹: $1.1b Fund Size¹,²: no change Unit Price 12-month High/Low³: (11 Nov 21) / (10 May 22) 1. At 11 November 2022, relative to 11 November 2021. 2. Fonterra Shareholders’ Fund units on issue as a percentage of
Slide 11: Chair, Fonterra Co-operative Group
Chair Fonterra Co-operative Group
Slide 12: Financial performance and forecast
FY20 FY21 FY22 Actual Actual Forecast Improved performance Milk Price per kgMS ($) $7.14 $7.54 Normalised EBIT ($m) $879m $952m $875-$975m Earnings per share (CPS) 24c 34c 25-40c Return on capital 6.6% 6.6% 6.5-7.0% Financial position Capital investment ($m) $525m $608m $650m Debt to EBITDA ratio 3.
Slide 13: Flexible Shareholding on track
Flexible Shareholding on track ES Dairy for life Measurement statement issued confirming new minimum Expect legislation to progress through Select Committee this Market making Implement as arrangements and soon as possible transitional buy Government is supportive year back in place shareholding
Slide 14: Capital return and dividend aspiration
Increase dividends to Aspiration to be EBIT increase Return on capital from FY21 cents per share in sustainability moving more milk to per annum in higher value products R&D for mix of investment in further growth and return to Intended to be distributed to shareholders after asset sales shareholder
Slide 15: Acting Chief Financial Officer
Acting Chief Financial Officer Fonterra Co-operative Group
Slide 16: Milk price, dividend and profit after tax
Farmgate Milk Price Reported profit after tax Normalised profit after tax Dividend 16
Slide 17: Financial results summary
million 2021 2022 %A Sales volume (‘000 MT) 4,102 3,924 (4)% Revenue ($) 21,124 23,425 11% Cost of goods sold ($) (18,010) (20,085) (12)% Gross profit ($) 3,114 3,340 7% Gross margin (%) 14.7% 14.3% Operating expenses ($) (2,242) (2,397) — (7)% Other? ($) 80 48 (40)% Normalised EBIT ($) 952 991 4% N
Slide 18: Working capital, return on capital and leverage
& Working Capital Return on Capital Dairy forlife 95.7 6.2% 6.6% 6.6% 6.8% 827 828 «848 90.6 5.6% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Working Capital Days Return on Capital (%) Net Debt Leverage 6.6 4.6 43 6.0 5.2 5.3 43 50% 50% 44% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Gea
Slide 19: Results by region and channel
Greater China Asia Pacific Volume (‘000 MT) 1,370 1,355 1,029 3,754 y % n/c $13% w4% EBIT contribution EES Ingredients $192m $442m $282m $916m & $168m 4 $231m 4} $152m 9 $551m GF Foodservice $(13)m $(4)m $155m $138m B $92m Ssi9m ¥ $120m ¥$231m i’) Consumer $58m $89m $(5)m $142m § $144m ¥ $21m ¥ $3m
Slide 20: Capital return and dividend aspiration
Increase dividends to Aspiration to be EBIT increase Return on capital from FY21 cents per share in sustainability moving more milk to per annum in higher value products R&D for mix of investment in further growth and return to Intended to be distributed to shareholders after asset sales shareholder
Slide 21: Milk solids mix
% of milk solids % of milk solids GDT Core Active Living Foodservice Consumer Asia Pacific AMENA Greater China 2021 2022 2021 2022 21
Slide 22: 2022/23 forecast milk price and earnings
2022/23 Forecast Farmgate Milk Price Forecast Earnings per kgMS per share Midpoint of per kgMS 22
Slide 23: Questions
eS) Questions
Slide 24: Resolutions and Voting
Resolutions and Voting
Slide 25: Resolution: Election of Carlie Eve
Resolution I Election of Carlie Eve
Slide 26: Election of Carlie Eve as director
To elect Carlie Eve, who stands for election, as a director of the Manager of the Fund 26
Slide 27: Resolution: Election of Alastair Hercus
Resolution 2 Election of Alastair Hercus
Slide 28: Election of Alastair Hercus as director
To elect Alastair Hercus, who stands for election, as a director of the Manager of the Fund 28
Slide 29: Proxy voting results
FOR AGAINST DISCRETIONARY FOR AGAINST DISCRETIONARY As at 10am Saturday 12 November 2022 29
Slide 30: Shareholder & Proxyholder Voting
Shareholder & Proxyholder Voting • Once the voting has been opened, the resolutions and voting options will allow voting • To vote, simply click on the Vote tab, and select your voting direction from the options shown on the screen • You can vote for all resolutions at once or by each resolution • Y
Slide 31: Voting by ballot
• In respect of the resolutions, please tick the “for”, “against” or “abstain” box. • Once you have completed your voting, please place your vote in a ballot box. • Please raise your hand if you require a pen. • Results will be announced to the NZX and ASX as soon as they are available. 31
Slide 32: Fonterra Shareholders' Fund 2022 Annual Meeting
Fonterra Shareholders’ Fund 2022 Annual Meeting 14 November 2022
Slide 33: General Business
General Business
Slide 34: Retiring Director: Kim Ellis
Kim Ellis Retiring Director
Slide 35: Retiring Director: John Shewan
John Shewan Retiring Director
Slide 36: Meeting closed
meeting closed
Fonterra Shareholders' Fund — Shareholder Meeting (November 2022) on 6ix