Fonterra Co-operative Group Limited · NZX:FCG
Fonterra Co-operative — Fonterra — FY2023 Earnings Presentation
71 slides from Fonterra Co-operative's earnings presentation, Sep 21, 2023
Slide 1: Annual Results 2023
Annual Results ¢ 2023, September 2023 4 y |
Slide 2: from 6.8% from $583m from 36c
© FONTERRA ANNUAL RESULTS 2023 2 ¹ from $0.20 from 6.8% from $583m from 36c from $9.30 3.7% 4.3%
Slide 3: 2022/23 results summary
© FONTERRA ANNUAL RESULTS 2023 3 • 2022/23 season Farmgate Milk Price of $8.22 per kgMS, impacted by reduced demand for powders in China • Profit after tax of $1,577 million up $994 million o excluding the net gain from divestments of $248 million, normalised profit after tax is $1,329 million, equi
Slide 4: © FONTERRA ANNUAL RESULTS 2023
© FONTERRA ANNUAL RESULTS 2023 4 0.7% 0.8% 11.2% 5.9% 13.2% 0.4% 0.1% 4.5%
Slide 5: Reference product shipment price
© FONTERRA ANNUAL RESULTS 2023 5 6,000 4,000 FY22 FY23 2,000 2017 2018 2019 2020 2021 2022 2023 Reference product shipment price 4 Non-reference product shipment price 4
Slide 6: Farmgate Milk Price bridge
© FONTERRA ANNUAL RESULTS 2023 6 9.30 (0.01) (1.92) 0.98 (0.13) 8.22 21/22 season Volume Prices Foreign Net costs 22/23 season Farmgate exchange Farmgate Milk Price Milk Price
Slide 7: Foreign exchange rates and hedging
© F O N T©E FONTERRA RRA ANNUAL RESULTS 2023 7 0.90 1.25 Spot rate 0.85 1.00 Realised rate 0.75 -5c 0.80 USD/NZD 0.50 Spot Rate 0.75 0.25 0.70 - 0.65 (0.25) (0.50) +5c 0.60 USD/NZD (0.75) Spot Rate 0.55 (1.00) 0.50 (1.25) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 May 22 Aug 22 Nov
Slide 8: Capital allocation
© FONTERRA ANNUAL RESULTS 2023 8 A primary allocation of capital is used to deliver a safe, sustainable, productive capacity of our processing assets while maintaining a surplus margin for our plant capacity. We allocate milk to the products and channels where we believe it will earn the highest ris
Slide 9: Milk allocation by product and channel
© F O N T©E FONTERRA RRA ANNUAL RESULTS 2023 9 1,400 1,400 1,200 1,200 1,000 1,000 800 800 600 600 400 400 200 200 - - Whole milk Skim milk Cream Cheese Other proteins Ingredients Foodservice Consumer powder powder 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
Slide 10: Risk appetite range
© FONTERRA ANNUAL RESULTS 2023 10 96.4% 96.4% 96.4% 96.5% 96.3% 95.0% 95.3% 94.0% 94.5% 91.9% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 $90m $72m $58m $58m $56m 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Risk appetite range
Slide 11: © FONTERRA ANNUAL RESULTS 2023
© FONTERRA ANNUAL RESULTS 2023 11
Slide 12: from 9.0% from 5.5% From 6.8%
© FONTERRA ANNUAL RESULTS 2023 12 from 9.0% from 5.5% from (0.4)% From 6.8%
Slide 13: Gearing ratio and debt to EBITDA
© F O N T©E FONTERRA RRA ANNUAL RESULTS 2023 13 4.3x 3.3x 3.2x 2.7x 6.0 5.2 5.3 1.3x 50% 4.3 44% 42% 39% 3.2 29% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Gearing Ratio (%) Debt to EBITDA (x) 98 S&P Global Ratings A- Stable outlook 92 91 83 85 Fitch Ratings A Stable outlook 2019 2020 2021 20
Slide 14: Long-term aspiration
© FONTERRA ANNUAL RESULTS 2023 14 © FONTERRA ($/kgMS) ($/kgMS) 3.00 10.00 2.50 9.50 2.00 9.00 1.50 8.50 1.00 8.00 0.50 7.50 0.00 7.00 2004 2007 2010 2013 2016 2019 2022 2025 2028 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Inflation Adjusted Long-term Aspiration
Slide 15: Source and cost of milk
© FONTERRA ANNUAL RESULTS 2023 15 © FONTERRA • To assist long-term discipline on our global overheads of • To assist long-term discipline on efficient New Zealand operations ~$2 billion • Directly monitors the cost base having regard to changing • Directly monitors the actual cash cost base having r
Slide 16: FY30 cost targets
© FONTERRA ANNUAL RESULTS 2023 16 © FONTERRA ($ billion) ($ billion) 0.6 (0.5) 0.4 (0.5) 4.0 4.1 2.1 2.0 FY23 Inflation Cost Out FY30 Target FY23 Inflation Cost Out FY30 Target
Slide 17: Profit per hectare and closing share price
© FONTERRA ANNUAL RESULTS 2023 17 3.76 3.82 3.20 2.85 2.73 4,150 3,195 2,750 2,154 2,063 2019 2020 2021 2022 2023 $0.00 $0.05 $0.20 $0.20 $1.00 Profit per hectare ($/Ha) Closing share price ($)10 Estimate11
Slide 18: FY24 Farmgate Milk Price forecast
© FONTERRA ANNUAL RESULTS 2023 18 6,000 2021/22 Season 2022/23 Season 2023/24 Season Forecast 5,000 per kgMS $9.30 4,000 $8.22 USD/MT 3,000 The range reflects: 2,000 • Demand for imported powders into China are soft, but early in the season 1,000 • Indications demand for New Zealand May-21 May-22 Ma
Slide 19: FY24 earnings guidance
© FONTERRA ANNUAL RESULTS 2023 19 FY23 FY24 6,000 per share USD/MT 5,000 4,000 The range reflects: 3,000 • Favourable Ingredients margins continue but lower than FY23 2,000 , Jul-22 Jan-23 Jul-23 Feb-24 • Lower milk costs assisting improved margins in Foodservice and Consumer Non-Reference Product s
Slide 20: Capital expenditure
© FONTERRA ANNUAL RESULTS 2023 20 © FONTERRA Other capital invested Growth capital expenditure 1,200 1,150 1,125 Sustaining Capital for Other Operations 1,050 1,050 Decarbonisation 950 950 Regulatory requirements including wastewater Sustaining Capital for NZ Operations 747 79 608 617 47 30 525 63 5
Slide 21: Board composition changes
© F O N T©E FONTERRA RRA ANNUAL RESULTS 2023 21 • Current Board operating well, but size can be rationalised. Changes are future focused • Smaller groups usually encourage: - Dissenting views - More meaningful sharing of perspectives - Faster, robust decision making Farmer Elected Appointed • 6:3 co
Slide 22: On-farm emissions
© FONTERRA ANNUAL RESULTS 2023 22 Animal Reproduction Efficiency Feed quality & Animal Health & type Nitrogen & Effluent Imported Management CO2: Feed, Fuel & Fertiliser Novel Technologies Carbon removals - vegetation Land use change
Slide 23: Footnotes
© FONTERRA ANNUAL RESULTS 2023 23 1. Per share backed kgMS 2. Excludes amounts attributable to non-controlling interests 3. Sources 12 month production: US (Jul 2022 to Jul 2023) USDA , NZ (Jul 2022 to Jul 2023) DCANZ, EU (Jul 2022 to Jul 2023) Eurostat, Australia (Jul 2022 to Jul 2023) Dairy Austra
Slide 24: Appendix
Appendix —— Taree | se
Slide 25: Milk price and dividend history
© FONTERRA ANNUAL RESULTS 2023 25 ¹ $9.50 $8.72 1,523 1,517 1,539 1,478 1,480 $7.74 $0.20 4,152 4,069 4,102 3,924 3,973 $7.19 $0.50 $6.35 $0.20 $0.05 $0.00 $6.35 $7.14 $7.54 $9.30 $8.22 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Milk Price Dividend 4,599 26.0 2,905 2,
Slide 26: Five-year financial summary
© FONTERRA ANNUAL RESULTS 2023 26 ¹ 2,218 1,881 1,147 1,577 959 976 879 952 991 812 (16) 659 599 583 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 (610) 2019 2020 2021 2022 2023 4.6x 4.3x 3.3x 3.2x 2.7x 724 747 608 617 1.3 525 79 50% 50% 1,329 124 30 44% 42% 63 39% 275 398 106 668 29% 588 591 60
Slide 27: Free cash flow and returns
© FONTERRA ANNUAL RESULTS 2023 27 ¹ 3,314 98 92 91 95 1,433 1,109 668 85 (621) 83 43 36 36 (35) 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 12.4% 80 6.6% 6.6% 6.8% 5.6% 34 35 24 16 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 1. Total Group figures for the year en
Slide 28: New Zealand milk collections
© FONTERRA ANNUAL RESULTS 2023 28 • Fonterra’s New Zealand milk collections for the 2022/23 season were 1,480 million 90 kgMS, up 0.1% on last season 80 2020/21 • Milk collections were impacted by a 2021/22 challenging start to the season in the North 70 2022/23 Island and an overall reduction in th
Slide 29: Total Group income statement
© FONTERRA ANNUAL RESULTS 2023 29 ∆1 • Gross profit improved $1,259 million mainly due to Sales volume (‘000 MT) 3,924 3,973 1.3% favourable margins in our Ingredients channel, particularly cheese and proteins Revenue 23,425 26,046 11.2% • Operating expenses are up $344 million mainly due to Cost of
Slide 30: Normalised profit after tax
© FONTERRA ANNUAL RESULTS 2023 30 583 1,577 Profit attributable to non-controlling interests 1 (40) Reported profit after tax attributable to equity holders of the Co-operative 584 1,537 36 95 591 1,329 Profit attributable to non-controlling interests (23) (40) Normalised profit after tax attributab
Slide 31: Continuing and discontinued operations
© FONTERRA ANNUAL RESULTS 2023 31 ¹ ¹ ¹ ¹ Sales volume (‘000 MT) 3,318 606 3,924 3,497 476 3,973 Revenue 21,901 1,524 23,425 24,580 1,466 26,046 Cost of goods sold (18,992) (1,093) (20,085) (20,399) (1,048) (21,447) Gross profit 2,909 431 3,340 4,181 418 4,599 Gross margin (%) 13.3% 28.3% 14.3% 17.0
Slide 32: Profit after tax bridge
© FONTERRA ANNUAL RESULTS 2023 32 • Increased mainly due to impairments of our New Zealand consumer business and Asia brands, of $121 million and $101 million, respectively, as well as the impact of inflationary pressures • Increased due to a $349 million (before tax) gain on $42 million sale of Sop
Slide 33: Normalisations
© FONTERRA ANNUAL RESULTS 2023 33 Other operating income 43 - 43 - 349 349 Other operating expenses (1) (57) (58) (12) - (12) Profit before net finance costs 42 (57) (15) (12) 349 337 and tax Net finance costs and tax - 7 7 - (89) (89) Profit after tax 42 (50) (8) (12) 260 248 Profit attributable to
Slide 34: Operating expenses by nature
© FONTERRA ANNUAL RESULTS 2023 34 • Total Group operating expenses are $2,799 million, up $344 million on the prior period Employee benefits expense 860 963 • Discontinued operations reduced $87 million due to the completion of the Soprole sale on 31 March 2023 Storage & distribution 241 263 • Conti
Slide 35: Operating expenses by function
© FONTERRA ANNUAL RESULTS 2023 35 Administrative expenses 790 871 Selling and marketing 614 653 1 Storage and distribution 476 526 Other operating expenses 185 446 Operating expenses from continuing 2,065 2,496 operations Operating expenses from discontinued 390 303 operations Total Group operating
Slide 36: Cash operating expenses efficiency metric
© FONTERRA ANNUAL RESULTS 2023 36 • New efficiency metric to assist long-term discipline on our overheads of ~$2 billion • Directly monitors the actual cash cost base having regard to changing milk volumes $1.39 $1.36 $1.34 $1.39 • Calculated as continuing operations operating expenses excluding dep
Slide 37: Dividend calculation
© FONTERRA ANNUAL RESULTS 2023 37 • Total dividend of 50 cents per share: – Interim dividend of 10 cents, Reported earnings¹ 36 95 – Final dividend of 40 cents Less: abnormal gains (2) (16) • Abnormal gains included the $260 million from selling Soprole Net earnings for dividend payment² 34 79 • The
Slide 38: Return on capital
© FONTERRA ANNUAL RESULTS 2023 38 Total Group normalised EBIT 991 1,881 • Return on capital increased from 6.8% to 12.4% due to an $890 million increase in normalised EBIT Finance income on long-term advances 7 11 – On a pre-tax basis, normalisations consist of $349 million related to the gain on sa
Slide 39: Cash flow and net debt
© FONTERRA ANNUAL RESULTS 2023 39 • Decrease in net debt of $2.1 billion reflecting strong Cash generated from operations¹ 1,494 2,311 earnings, reduction in working capital and divestment proceeds Net change in working capital (1,598) 871 • Free cash flow of $3.3 billion was $3.9 billion higher A.
Slide 40: Debt maturity profile
© FONTERRA ANNUAL RESULTS 2023 40 ¹ NZD DCM Maturity Profile Maturity Profile 3% Drawn Facilities Bank USD DCM $0.2bn FY24 FY24 Facilities 16% 4% 54% FY25 FY25 FY26 FY26 FY27 FY27 FY28 FY28 FY29 FY29 FY30 FY30 CNY DCM FY31 FY31 2% Undrawn Facilities AUD DCM 0.0 1.0 2.0 3.0 0.0 1.0 2.0 3.0 $3.9bn 9%
Slide 41: Segment allocation assumptions
© FONTERRA ANNUAL RESULTS 2023 The assumptions are: • Corporate costs, including Co-operative Affairs and other Group Functions, are allocated to the Global Markets, Greater China and Core Operations segments and within these segments by Ingredients, Foodservice and Consumer channels • The allocatio
Slide 42: Segment gross profit and profit after tax
© FONTERRA ANNUAL RESULTS 2023 42 2022 2023 $ million 2,651 1,681 1,164 241 578 749 70 733 781 (27) (164) 495 Gross Profit Profit after tax Gross Profit Profit after tax Gross Profit Profit after tax Note: Figures are for the year ended 31 July and are on a continuing operations basis. Comparative i
Slide 43: Global Markets results
© FONTERRA ANNUAL RESULTS 2023 43 ∆¹ • Higher sales volumes reflect Global Markets securing new contracts and tenders in both the Asia Pacific and Africa regions Sales volume (‘000 MT) 2,150 2,319 8% supporting the sell down of additional inventory held at 2022 financial year end Revenue 15,535 17,4
Slide 44: Reference and Non-Reference Products
© FONTERRA ANNUAL RESULTS 2023 44 • The average product price per metric tonne: – decreased 2% for Reference Products mainly due to lower WMP and AMF prices Reference Products 1,629 1,782 – increased 16% for Non-Reference Products mainly due to significant price increases across Non-Reference Produc
Slide 45: Foodservice results
© FONTERRA ANNUAL RESULTS 2023 45 ∆¹ • Higher sales volumes as a result of demand increasing in the second half of the year due to COVID-19 related restrictions lifting Sales volume (‘000 MT) 528 546 3% • Gross profit increased $254 million, or 51% mainly due to: Revenue 3,302 3,865 17% – favourable
Slide 46: Consumer results
© FONTERRA ANNUAL RESULTS 2023 46 ∆¹ • Lower sales volumes mainly due to Sri Lanka’s economic challenges impacting the ability to access US dollars in the first Sales volume (‘000 MT) 640 632 (1)% half of the financial year 3,064 3,299 8% • Gross profit improved $48 million due to cost of milk easin
Slide 47: Channel gross profit and profit after tax
© FONTERRA ANNUAL RESULTS 2023 47 2022 2023 $ million 1,836 1,629 1,542 308 385 273 284 736 40 572 631 716 Gross Profit Profit after tax Gross Profit Profit after tax Gross Profit Profit after tax Note: Figures are for the year ended 31 July and are on a continuing operations basis. Comparative info
Slide 48: Ingredients results
© FONTERRA ANNUAL RESULTS 2023 48 ∆¹ • Sales volumes up 9%, reflecting the sell down of additional inventory held at 2022 financial year end Sales volume (‘000 MT) 2,554 2,784 9% • Gross profit up $893 million reflecting favourable price relativities Revenue 16,987 19,142 13% between Reference and N
Slide 49: Ingredients gross profit and profit after tax
© FONTERRA ANNUAL RESULTS 2023 49 $ million 2022 2023 1,485 724 143 (19) 86 (84) (12) 31 58 (19) (18) 602 Gross Profit Profit after tax Gross Profit Profit after tax Gross Profit Profit after tax Note: Figures are for the year ended 31 July. Comparative information has been restated for consistency
Slide 50: Asset Health
© FONTERRA ANNUAL RESULTS 2023 50 • Asset Health measures the condition and reliability of our manufacturing assets on a scale of one to five. Five indicates the asset is in the best condition possible • Fonterra’s risk appetite range is 3 – 3.5 • From 2016 – 2020 we under-invested in 3.22 sustainin
Slide 51: Core Operations gross profit per kgMS
© FONTERRA ANNUAL RESULTS 2023 51 $9.85 • New efficiency metric to assist our long-term $9.42 $9.21 discipline on efficient New Zealand operations $8.83 • Directly monitors the cost base having regard $8.60 to changing milk volumes • Calculated at the gross profit level to maximise the value which c
Slide 52: Greater China results
© FONTERRA ANNUAL RESULTS 2023 52 ∆¹ • Sales volume increased due to new contracts and participating in tenders in the Asia Pacific and Africa regions Sales volume (‘000 MT) 2,344 2,575 10% • Gross profit up $294 million mainly due to higher sales volumes Revenue 15,374 18,401 20% and Foodservice in
Slide 53: Greater China gross profit and profit after tax
© FONTERRA ANNUAL RESULTS 2023 53 $ million 2022 2023 315 429 194 263 (3) 597 641 (4) (94) 932 50 751 Gross Profit Profit after tax Gross Profit Profit after tax Gross Profit Profit after tax Note: Figures are for the year ended 31 July. Comparative information has been restated and re-presented for
Slide 54: Australia results
© FONTERRA ANNUAL RESULTS 2023 54 ∆¹ • Flat milk collections despite a decline in the overall Australian milk pool Milk collections (kgMS) 106 106 - • Gross profit increased $11 million mainly due improved pricing in Sales volume (‘000 MT) 365 379 4% the Foodservice business Revenue 2,094 2,531 21%
Slide 55: Asia Pacific results
© FONTERRA ANNUAL RESULTS 2023 55 ∆¹ • Lower sales volumes, particularly WMP, due to softer demand Sales volume (‘000 MT) 1,028 978 (5)% • Gross profit increased $85 million mainly due to improved 6,869 7,072 3% Foodservice gross margins reflecting higher in-market product Revenue prices adjusting f
Slide 56: Segment gross profit and profit after tax
© FONTERRA ANNUAL RESULTS 2023 56 2022 2023 $ million 320 400 206 234 120 133 157 203 105 82 (4) (52) Gross Profit Profit after tax Gross Profit Profit after tax Gross Profit Profit after tax Note: Figures are for the year ended 31 July. Comparative information has been restated and re-presented for
Slide 57: Milk solids allocation by channel
© FONTERRA ANNUAL RESULTS 2023 57 • The higher allocation to GDT and Core Ingredients mainly reflects the sell down of Milk solids volume (kgMS millions) additional inventory held at 2022 year-end 50.9% 49.6% 2022 2023 • Active Living portfolio was impacted by lower 800 demand from the USA due to cu
Slide 58: Continuing operations by segment
© FONTERRA ANNUAL RESULTS 2023 58 Revenue 19,551 2,350 21,901 21,791 2,789 24,580 Cost of goods sold (16,986) (2,006) (18,992) (17,941) (2,458) (20,399) Gross profit 2,565 344 2,909 3,850 331 4,181 Gross margin (%) 13.1% 14.6% 13.3% 17.7% 11.9% 17.0% Operating expenses (1,808) (257) (2,065) (2,252)
Slide 59: Other segment results
© FONTERRA ANNUAL RESULTS 2023 59 ¹ Revenue 27 445 1,052 15 599 852 Cost of goods sold (31) (317) (745) (27) (405) (616) Gross profit (4) 128 307 (12) 194 236 Gross margin (%) (14.8)% 28.8% 29.2% (80.0)% 32.4% 27.7% Operating expenses (9) (161) (220) (12) (137) (154) Other² (1) (1) (9) (1) - 349 EBI
Slide 60: Sales volumes (000 MT)
© FONTERRA ANNUAL RESULTS 2023 60 (‘000 MT) Note: Prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period
Slide 61: Sales volume movements (000 MT)
© FONTERRA ANNUAL RESULTS 2023 61 (‘000 MT) 561 501 289 289 208 211 226 105 97 110 85 21 54 32 10 42 31 43 22 51 (55) (3) (82) (147) Note: Prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the curr
Slide 62: Lease expenses
© FONTERRA ANNUAL RESULTS 2023 62 Interest on lease liabilities 13 13 Variable lease payments not included in the 4 3 measurement of lease liabilities Expenses relating to short-term leases 10 12 Expenses relating to low value leases 10 6
Slide 63: Scorecard measures and targets
© FONTERRA ANNUAL RESULTS 2023 63 Serious harm 9 8 5 Gender diversity (Band 12+) 36.3% 37.6% 38.8% GHG emissions (Scope 1,2)¹ (6.6)% (11.2)% (10.6)% FEP adoption (New Zealand) 53% 71% 84% Water Improvement Plans in place – – 37.5% Share of New Zealand milk collected for the season to 31 May 79.0% 79
Slide 64: Scorecard results
© FONTERRA ANNUAL RESULTS 2023 64 Serious harm 8 5 Gender diversity (Band 12+) 37.6% 39.5% Culture Measure – 79 ¹ GHG emissions (Scope 1,2)² (11.2)% (14.1)% FEP adoption (New Zealand) 71% 85% Water Improvement Plans in place – 44.0% Share of New Zealand milk collected for the season to 31 May 79.1%
Slide 65: Glossary
© FONTERRA ANNUAL RESULTS 2023 65 represents ingredients & solutions sold to businesses who cater to is adjusted net debt less the cash adjustment (used in calculating adjusted consumers’ health and wellness needs. It addresses three dimensions of net debt), plus cash and cash equivalents held by su
Slide 66: Glossary
© FONTERRA ANNUAL RESULTS 2023 66 is the channel of branded consumer products, such as powders, yoghurts, is profit before net finance costs and tax. milk, butter and cheese. is profit after tax attributable to equity holders of the Co-operative divided by means operations of the Group that are not
Slide 67: Glossary
© FONTERRA ANNUAL RESULTS 2023 67 represents the channel selling to businesses that cater for out-of-home is gross profit divided by revenue from sale of goods. consumption; restaurants, hotels, cafés, airports, catering companies etc. The focus is on customers such as; bakeries, cafés, Italian rest
Slide 68: Glossary
© FONTERRA ANNUAL RESULTS 2023 68 is total trade and other receivables plus inventories, less trade and other Fonterra has three product channels, Ingredients, Foodservice payables. It excludes amounts owing to suppliers and employee and Consumer. entitlements. is profit after tax attributable to eq
Slide 69: Glossary
© FONTERRA ANNUAL RESULTS 2023 69 represents investments to maintain the capability of our existing assets from is calculated as 13-month rolling average working capital divided by revenue risk management, legislation/regulation commitments, business continuity from the sale of goods (excluding impa
Slide 70: Forward-looking statements
© FONTERRA ANNUAL RESULTS 2023 70 This presentation may contain forward-looking statements, financial targets and ambitions (“Forward Statements”), each of which is based on a range of assumptions, including (in the case of our 2030 strategy) the assumptions noted in the Appendix of the booklet titl
Slide 71: Non-GAAP measures
© FONTERRA ANNUAL RESULTS 2023 71 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 performanc