Fonterra Co-operative Group Limited · NZX:FCG
Fonterra Co-operative — Q1 FY2022 Earnings Presentation
14 slides from Fonterra Co-operative's earnings presentation, Dec 3, 2021
Slide 1: 2022 Quarter One Update
Fonterra 2022 Quarter One Update 3 December 2021 . Y ane \
Slide 2: Quarter one highlights
• Lifted and narrowed forecast Farmgate Milk Price range, with a midpoint of $8.70, from $8.40 • Lowered the top end of earnings guidance as margins tighten with increase in Farmgate Milk Price ¹ • Supply chain continuing to deliver for customers • Normalised EBIT of $190 million, with tighter margi
Slide 3: Strong demand and pricing conditions for New Zealand dairy
• Continued strong demand for New Zealand dairy and global supply growth has slowed Reference and non-reference • Operating under very different pricing conditions price relativities than this time last year (US$/MT) • Higher reference product prices has meant cost of 4,000 milk is significantly hig
Slide 4: Total Group financial results for the quarter
million¹ ² ∆³ Sales volume (‘000 MT) • Sales volume down, mainly impacted by lower milk production early in the season Revenue ($) • Sales prices in-market have increased to reflect higher input Cost of good sold ($) costs, but partially offset by weaker local currency Gross profit ($) • Gross profi
Slide 5: Innovation and customer highlights
• Nutifood launches 100% • Wetland filter allows • Vitakey partnership looks NZ grass-fed milk into Maungatūroto site to to further unlock the Vietnam, using our recycle water, reducing benefits of our sustainability credentials water use by up to 25% probiotic strains • Mainland cheese • Methane-bu
Slide 6: Farmgate Milk Price forecast range
2021/2022 2019/2020 2020/2021 Season Season Season (US$/MT) Forecast per kgMS 4,000 • Lifted and narrowed range: o Consistent strong demand for New Zealand 3,000 dairy and global supply growth has slowed o Range reflects ongoing uncertainties including supply chain congestion and Jun-19 Jun-20 Jun-2
Slide 7: Earnings guidance range
FY21 FY22 (US$/MT) per share 4,000 • Lowered the top end of range due to: 3,000 o Increased pressure on Foodservice and Consumer margins due to rising input costs o Price relativities improving in Q2 from Q1 but Aug Feb Aug Feb not strong enough to maintain top end of range GDT WMP shipment price¹ G
Slide 8: 8
8
Slide 9: Milk collections season to date
90 Volume (m litres/day) 80 • Season to date collection, June – October, was 510.9 million kgMS, 3.2% behind 70 last season 60 • Cold and wet spring with limited sunshine affecting pasture growth and collections early in 50 the season 40 • Full season forecast remains at 1,525 million kgMS, down 0.9
Slide 10: Five-year first quarter financial trends
4.4 746 758 805 783 831 832 801 4.0 3.9 4.2 4.2 660 641 661 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Sales Volume ('000 MT) Revenue ($ billion) Gross Profit ($ million) ¹ 636 656 250 552 523 190 513 178 72 (671) (648) (845) 21 (1,245) (1,168) 2018 2019 2020 2021 202
Slide 11: Board Statement of Intentions update
In accordance with the Constitution of Fonterra, the Board Statement of Intentions sets out the Board’s intentions for the performance and operations of Fonterra. The table below provides an update as at 31 October 2021, of Fonterra’s performance against these targets. FY21 FY22 Q1 YTD FY22 FY Targe
Slide 12: Glossary of terms and definitions
Is adjusted net debt divided by Total Group normalised earnings Is adjusted net debt divided by total capital. Total capital is before interest, tax, depreciation and amortisation (Total Group equity excluding hedge reserves, plus adjusted net debt. It normalised EBITDA) excluding share of profit/lo
Slide 13: 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 14: Non-GAAP measures
Fonterra uses several non-GAAP measures when discussing financial performance. These measures include normalised profit after tax, normalised EBIT, EBIT, normalised earnings per share, normalisation adjustments and total Group measures. Total Group measures present the combined financial performance
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