Fonterra Co-operative Group Limited · NZX:FCG
Fonterra Co-operative — Corporate Update (December 2013)
8 slides from Fonterra Co-operative's corporate update, Dec 11, 2013
Slide 1: Global Outlook, Farmgate Milk Price Forecast, A Year in Review
FONTERRA: - Global Outlook - Farmgate Milk Price Forecast - A Year in Review 11 December 2013 © FONTERRA CO-OPERATIVE GROUP LIMITED © Fonterra Co-operative Group Ltd. 1 © Fonterra Co-operative Group Ltd. 1
Slide 2: Contents
Contents 1. The global dairy market 2. How we set the Farmgate Milk Price 3. The widening price gap between milk powders and other dairy products 4. Managing our product mix 5. Continuing to invest in our strategy 6. Building a stronger Co-operative © Fonterra Co-operative Group Ltd. 2 © Fonterra Co
Slide 3: The global dairy market is changing
The global dairy market is changing Tight supply and strong Record global demand for dairy prices milk powder Extraordinary events are having both a positive and negative impact on Fonterra © Fonterra Co-operative Group Ltd. 3 © Fonterra Co-operative Group Ltd. 3
Slide 4: Fonterra processes milk into a variety of 'streams'
Fonterra processes milk into a variety of ‘streams’ Main Products By-products Butter Whole Milk WMP stream Powder (WMP) Anhydrous Milk Fat 70% (AMF) Skim Milk SMP stream The main Powder (SMP) Buttermilk Powder (BMP) products and their by-products Cheese Whey Protein Cheese stream are referred to as
Slide 5: How we set the Farmgate Milk Price
How we set the Farmgate Milk Price POWDER 70% 30% OTHER PRODUCTS PRODUCTS (Cheese, Casein etc.) Used to calculate Farmgate Milk Price as per Milk Price Manual The Farmgate Milk Price is applied to all products $9.00 © Fonterra Co-operative Group Ltd. 5 © Fonterra Co-operative Group Ltd. 5
Slide 6: The prices have widened between milk powder and other dairy products
The prices have widened between milk powder and other dairy products US$ per MT 5,500 5,000 $800 million impact 4,500 4,000 3,500 3,000 Whole Milk Powder Cheese 2,500 Jan 2012 Jan 2013 Dec 2013 © Fonterra Co-operative Group Ltd. 6 © Fonterra Co-operative Group Ltd. 6
Slide 7: Continuing to invest in our strategy
Continuing to invest in our strategy 1 World-class manufacturing ‘Turning the Wheel’ plants in New Zealand Consumer DIRA Milk 2 Global Foodservice GDT (price 3 UHT and infant formula Foodservice discovery) in China 4 Strong consumer brands Paediatrics GDT “surge” in Asia and Latin America 5 Australi
Slide 8: A big year for the Co-operative
A big year for the Co-operative DCD FOODSERVICE EXPANSION WORST DROUGHT IN 70 YEARS RECORD MILK WORLD’S WPC80 FLOWS LARGEST PRECAUTIONARY MILK RECALL DRYER INFANT ANCHOR PAHIATUA FORMULA UHT LAUNCHED IN CHINA IN CHINA © Fonterra Co-operative Group Ltd. 8 © Fonterra Co-operative Group Ltd. 8
Fonterra Co-operative Group — Corporate Update (December 2013) on 6ix