Fonterra Co-operative Group Limited · NZX:FCG
Fonterra Co-operative — H1 FY26 Earnings Presentation
41 slides from Fonterra Co-operative's earnings presentation, Mar 22, 2026
Slide 1: Fonterra Co-operative Group 2026 Interim Results
Fonterra Co-operative Group 2026 Interim Results
Slide 2: Our Strategy
Our Strategy WV oe Ose aur Co-operative, empowering people, to create goodness for generations. You, me, us together. Tatou, tatou. OUR VISION ; The source of the world’s most valued dairy Weg OUR CHOICES Deli aaa Unleash our Keep Invest in Build on our Innovate to f 3 Ingredients momentum in operat
Slide 3: FY26 Interim Results Highlights
FY26 Interim Results Highlights • Responding to strong milk flows and optimising product mix supports: • Milk Price range of $9.40-$10.00 per kgMS, midpoint $9.70 per kgMS • Increased FY26 continuing operations earnings range from 45-65 cents to 50-65 cents • Fully imputed interim dividend of 40 cen
Slide 4: Progress on FY26 Priorities
Progress on FY26 Priorities Operational Discipline Investing for Growth ERP Rollout • Challenging season due to weather events • Studholme | $75M | • Help future-proof the Co-op's critical processes and and processing record volumes at some plants systems, leading to reduced cash costs Advanced prot
Slide 5: Results at a glance
Results at a glance Interim Dividend Operating Profit Profit after Tax Return on Capital 24 cents $1,231m $750m 11.2 % from 22c from 1,107m from 729m from 10.4% Special Earnings per Share Normalised Mainland Dividend (EPS) EPS 16 cents 45 cents 51 cents from 44c from 47c Note: For the si
Slide 6: Performing well while progressing significant change
Performing well while progressing significant change Total Payout ($) Operating Profit and EPS Net debt and Gearing Dividend and ROC Milk Price Reported operating profit ($b) Interim Net debt ($b) Interim Dividend (cents) Milk Price Forecast Normalised EPS (cents) Full Year Net debt ($b) Special Mai
Slide 7: Supply growth continues; prices supported by selective demand
Supply growth continues; prices supported by EUROPE CHINA selective demand 3-month 4.2% 3-month 2.6% US 12-month 1.7% 12-month 2.2% 3-month 4.0% 12-month 2.8% • Southeast Asia demand remains resilient, with consistent buying reflecting underlying consumption support • Middle East and Afr
Slide 8: Recent milk price resilience in spite of strong supply
Recent milk price resilience in spite of strong supply YoY Milk Supply Change (%) GDT WMP Prices 5.0% $4,400 4.0% $4,000 $3,900 3.0% $3,500 $3,750 $3,200 2.0% $3,200 $3,200 1.0% $2,600 0.0% -1.0% -2.0% June 23 June 24 June 25 Farmgate Milk Price 2023/24 2024/25 2025/26 $7.83 $10.16 $9.70 Forecast No
Slide 9: FY26 H1 earnings ahead of prior year, despite higher value of milk in first half
FY26 H1 earnings ahead of prior year, despite higher value of milk in first half FY25 and FY26 monthly milk prices ($ per kgMS) FY25 FY26 • The average cost of milk was materially higher in the 2024/25 season monthly milk first half of FY26 relative to FY25 $12 Higher milk cost at start of prices av
Slide 10: Milk component costs impacting FY26 channel performance
Milk component costs impacting FY26 channel performance Protein based products Fat based products Revenue ($/kgMS) Revenue ($/kgMS) Cost ($/kgMS) Cost ($/kgMS) 18 18 +7% +9% 16 16 14 14 12 12 10 10 N/C 8 8 6 6 4 +42% 4 2 2 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY24 FY25 FY2
Slide 11: Strong underlying performance, supported by Mainland upside
Strong underlying performance, supported by Mainland upside FY25 H1 to FY26 H1 normalised profit after tax ($ million) Supported by higher volumes, inventory revaluations and Includes one-off tax easing input costs Driven by Foodservice impacts associated with margin growth exiting a product line 71
Slide 12: Strong channel performance delivering sustainable return on capital
Strong channel performance delivering sustainable return on capital Ingredients Foodservice Total External sales volume 625 141 766 (million kgMS) 1.2% 3.7% 0.4% Operating Profit contribution from remaining operations (excluding Mainland) Core $47m $174m $221m Operations $245m $199m $46m
Slide 13: Deliver strongest farmer offering
Deliver strongest farmer offering Strong increase in milk collections Fonterra supplier base and milk collections Strategy in action: Full season figures 1,565 • Net gains from competitors last season 1,509 1,478 1,480 • Targeted growth in South Island 1,471 • organic milk expansion • high engagemen
Slide 14: Cheese underpinning Advanced & Specialty volume growth
Cheese underpinning Advanced & Specialty volume growth Advanced & Specialty subset Cheese Casein Other Proteins STRATEGY IN ACTION: 22.6% 24.0% 22.6% 23.3% 22.2% UK Cheese – FTA Driven Growth • Cheese volume growth a stand-out during the first half 229 222 • UK-NZ FTA – gold standard agreement; remo
Slide 15: Momentum in Foodservice
Momentum in Foodservice Foodservice Greater China Southeast Asia STRATEGY IN ACTION: 12.6% 13.0% 10.3% 11.3% Anchor Easy bakery cream – expands to Southeast Asia 9.8% • Anchor Easy Bakery cream is successful in China, overdelivering on forecasts 97 100 88 74 76 • Taking that success and learnings an
Slide 16: New Zealand manufacturing performance
New Zealand manufacturing performance Operational resilience sustaining performance as higher milk volumes are converted into a higher-value product Full year figures Milk Utilisation Made Right First Time Cost of Quality 96.7% 96.6% 0.45% 0.41% 96.5% 96.3% 96.5% 0.37% 96.0% 0.26% 1.57 95.8% 95.7% 9
Slide 17: Full year forecast efficiency metrics
Full year forecast efficiency metrics When the Co-operative released its strategy in September 2024, it published key business drivers with targets for FY26 and FY27, including efficiency metrics - cash operating expenses of $1.12 per kgMS (post Mainland divestment level) and New Zealand manufacturi
Slide 18: Invest in operations for the future
Invest in operations for the future Capital invested Breakdown of essential capital expenditure Full financial year figures ($ million) ~1,000 980 Full financial year figures ($ million) 930 10% 635 ~$650m 621 20% 128 747 534 60 558 55 15% 720 25% 79 167 45 92 59 88 20% 617 106 20% 47 76 30 56 85 11
Slide 19: FY26 Outlook
FY26 Outlook 2025/26 Season 2026 Full Year Forecast Farmgate Milk Price Forecast earnings range¹ $9.40-$10.00 50-65 per kgMS cents per share The forecast range reflects: The forecast range reflects: • well contracted sales book • First half pro forma continuing operations earnings of 35c, and foreca
Slide 20: Additional Financial Information
Additional Financial Information
Slide 21: Explanation of historical pro forma financials
Explanation of historical pro forma financials This section shows historical pro forma financial information for Fonterra and Mainland Group, as if the transaction had already happened. The purpose is to help understand the estimated financial impact of the transaction on Fonterra’s past financial p
Slide 22: Total Group historical pro forma Statement of P&L
Total Group historical pro forma Statement of P&L For the six months ended 31 January 2025 2026 Mainland Mainland Fonterra Fonterra Pro Forma Fonterra Fonterra Pro Forma Group Group NZD million Total Group historical Pro Group Total Group historical Pro Group historical Pro historical Pro reported F
Slide 23: Continuing operations historical pro forma Statement of P&L
Continuing operations historical pro forma Statement of P&L Compiled by extracting the results of Continuing operations. Pro forma adjustments have been made to: • remove the effects of Fonterra’s existing transfer pricing arrangements related to Mainland Group that will cease post divestment; and •
Slide 24: Total Group performance
Total Group performance For the six months ended 31 January Total Group Continuing operations Discontinued operations NZD million 2025 2026 ∆% 2025 2026 ∆% 2025 2026 ∆% Sales volume ('000 MT) 1,723 1,727 0% 1,472 1,455 (1)% 251 272 8% Sales volume (million kgMS) 789 799 1% 769 766 (0)% 20 33 65% Rev
Slide 25: End-to-end Channel performance
End-to-end Channel performance For the six months ended 31 January Total Pro Forma Continuing Operations Ingredients Foodservice NZD million 2025 2026 ∆%¹ 2025 2026 2025 2026 Sales volume ('000 MT) 1,472 1,455 (1)% 1,159 1,137 313 318 Sales volume (million kgMS) 769 766 (0)% 633 625 136 141 Revenue
Slide 26: Breakdown of milk solids allocated to product groups
Breakdown of milk solids allocated to product groups NZ milk solids manufactured (kgMS millions) For six months ended 31 January Whole Milk Powder: • Robust long term demand growing organically at improved price levels across Middle East and Africa, Change in kgMS millions1 Southeast Asia and China
Slide 27: Ingredients: Improved functional protein margins in-market
Ingredients: Improved functional protein margins in-market Key performance drivers Quarterly performance Operating profit ($ million) FY26 H1 In-market performance 14.8% 14.2% 13.4% 11.2% 12.0% 740 (245) 1000 8.3% 20.0% 900 10.0% 82 (7) 560 800 0.0% (10) 700 -10.0% 485 600 -20.0% 500 442 423 -30.0%
Slide 28: Impact of price relativities smoothed by financial trading portfolio
Impact of price relativities smoothed by financial trading portfolio Fonterra Revenue Reference and Non-Reference Q1 Q2 H1 Q1 Q2 H1 Price Relativities Average Non-Reference price 4,398 4,534 4,473 Average Non-Reference price 4,914 4,846 4,877 (USD/MT) Average Reference price 3,924 3,821 3,852 Averag
Slide 29: New Zealand-sourced Ingredients' product mix
New Zealand-sourced Ingredients’ product mix For the six months ended 31 January 2025 2026 Change Sales Volume (‘000 MT) • Revenue growth reflects a product mix shift into higher-value Reference Products 844 823 (2)% Non-Reference products, which drove a larger absolute increase in revenue less cost
Slide 30: Foodservice: End-to-end margin growth as input costs ease
Foodservice: End-to-end margin growth as input costs ease Key performance drivers Quarterly performance Operating profit ($ million) FY26 H1 1000 21.1% 25.2% 40.0% 900 14.9% 18.6% 14.1% 16.2% In-market performance 800 20.0% 700 0.0% 600 500 -20.0% 199 - (6) 7 372 400 220 -40.0% 172 300 200 114 152 1
Slide 31: Resilience of the balance sheet reflected in key metrics and 'A band' credit rating
Resilience of the balance sheet reflected in key metrics and ‘A band’ credit rating Net debt ($ billion) Gearing ratio (%) 47.3 44.1 43.3 5.6 5.8 5.5 42.4 39.4 5.3 4.9 38.5 34.6 36.5 • Net debt reduced $0.5b from $5.45b to $4.93b, 4.2 28.8 driven by: 3.2 24.0 23.9 2.6 2.6 • Stronger earnings and a h
Slide 32: Free cash flow remains a key focus
Free cash flow remains a key focus Five-year trend Movements in free cash flow ($ million) ($ million) (30) (397) (849) 416 (103) 533 (1,544) (1,544) 33 (354) (2,069) (2,069) FY25 H1 Earnings Taxes Paid Trade Owing to Capex and FY26 H1 FY22 H1 FY23 H1 FY24 H1 FY25 H1 FY26 H1 free cash Working Suppli
Slide 33: Return on capital
Return on capital For the 12 months ended 31 January 2025 2026 NZD million Total Group normalised operating profit 1,721 1,960 • Return on capital of 11.2%, above last year and tracking to be within FY26 target range of 10 – 12% Finance income on long-term advances 14 8 • The change relative to prev
Slide 34: Return on capital trend and channel performance
Return on capital trend and channel performance Total Group return on capital Pro forma return on capital by channel1 For 12-month period to 31 January 13.4% 10.4% 11.2% 8.6% 6.1% Ingredients ($ million) 2025 2026 Average capital employed 6,811 7,254 12,146 13,005 12,303 12,159 12,845 11.0% 2 Net op
Slide 35: Appendix
Appendix
Slide 36: FY26 Integrated Scorecard
FY26 Integrated Scorecard as at 31 January 2026 Key Metrics FY24 Actual FY25 Actual FY26 Scorecard FY26 YTD People Serious harm¹ 16 6 5 1 Quality of post-Health, Safety and Wellbeing incident actions 0.41 0.4 0.6 0.51 Culture Measure 79 81 80 79 Nature GHG emissions reduction (Scope 1,2)² (18.5)% (2
Slide 37: Data sources
Data sources Dairy Production and Imports • 12-month production − Australia, New Zealand, US (Feb 2024 – Jan 2025 compared to Feb 2025 – Jan 2026) Dairy Australia, DCANZ, USDA − EU (Feb 2024 – Jan 2025 compared to Feb 2025 – Jan 2026), Eurostat • 3-month production − Australia, New Zealand, US (Nov
Slide 38: Non-GAAP Measures Glossary
Non-GAAP Measures 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 underlying performance of the busines
Slide 39: Glossary
Glossary Greater China Normalisation adjustments Trade working capital represents the Ingredients, Foodservice and Consumer means adjustments made for certain transactions that meet the is total trade and associate receivables plus inventories, less channels in Greater China requirements of the Grou
Slide 40: Important Cautions and Disclaimer
Important Cautions and Disclaimer Forward looking statements This presentation contains certain forward-looking statements. There are risks (both known and unknown), uncertainties, assumptions and other important factors that could cause the actual conduct, market conditions, results, performance or
Slide 41: Dairy for life
Dairy for life
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