Fonterra Co-operative Group Limited · NZX:FCG
Fonterra Co-operative — Fonterra Shareholders' Fund — Shareholder Meeting (November 2023)
38 slides from Fonterra Co-operative's shareholder meeting presentation, Nov 13, 2023
Slide 1: Fonterra Shareholders' Fund 2023 Annual Meeting
Fonterra Shareholders’ Fund - 2023 Annual Meeting 13 November 2023
Slide 2: Welcome and Introduction
FSF Chair Welcome and Introduction 2
Slide 3: Unit holder & Proxyholder Q&A Participation
Unit holder & 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: Unit holder & Proxyholder Voting
Unit holder & Proxyholder Voting • Once the voting has been opened, the resolution 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 • Your vote has been cast when the tick appears • To change your vote
Slide 5: Meeting agenda
Welcome and FSF Fonterra Fonterra Questions Resolution to General Introduction Management Chair’s Chief re-elect Business Company address Executive MJ Daly Chair’s Officer’s address address 5
Slide 6: Board and management
MJ Daly Carlie Eve Alastair Hercus John Nicholls Andy Macfarlane Chair Peter McBride Miles Hurrell Simon Till Selena Robb Jackie Floyd 6
Slide 7: Chair's address
FSF Chair FSF Management Company Chair’s address 7
Slide 8: FSF year highlights and capital return
• Strong financial result driven by Fonterra’s protein and cheese portfolios ¹ • Capital return of $804 million was paid to Fonterra shareholders and unit holders ¹ • Total cash distribution of $1.00 per unit • 50 cents from dividends • 50 cents from capital return ² • Flexible Shareholding capital
Slide 9: Total Shareholder Return
• • NZX50 FCG FSF 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% Nov 22 Dec 22 Jan 23 Jan 23 Feb 23 Mar 23 Apr 23 May 23 May 23 Jun 23 Jul 23 Aug 23 Aug 23 Sep 23 Oct 23 Nov 23 Note: Total Shareholder Return (TSR) is calculated from value weighted average traded prices for the period 14 November 202
Slide 10: Unit holder register composition
• • 2021 2022 2023 71% 71% 70% 2021 2022 2023 88% 88% 88% 15%15%16% 9% 9% 7% 8% 8% 7% 5% 5% 7% 2% 2% 4% 2% 2% 1% Private Wealth Farmer Institution Retail Other United States Australia New Zealand Management Shareholder Note: Register data is as at 31 October. 10
Slide 11: Fund key statistics
Units on Issue¹ no change Fund Market Capitalisation¹ $12m Fonterra Market Capitalisation¹ $0.6b Fund Size¹,² no change Unit Price 12-month High/Low³ (14 Aug 23) / (10 May 23) 1. At 10 November 2023, relative to 11 November 2022. 2. Fonterra Shareholders’ Fund units on issue as a percentage of Fonte
Slide 12: Fonterra Chair's address
Fonterra Chair Fonterra Chair’s address 12
Slide 13: Financial performance 2019-2023
6.0 5.2 5.3 4.3 from 6.8% from $583m 3.2 2019 2020 2021 2022 2023 from $0.20 from $9.30
Slide 14: Flexible Shareholding
• Discretionary shares have increased from 15% to 72% under Flexible Shareholding • Increased alignment between FSF unit holders and farmers in FCG FSF FCG Discretionary FCG Compliance 14
Slide 15: Board size reduction
© FONTERRA 15 Board size reduced from 11 to 9 • Current Board operating well. Changes are future Directors focused • Smaller groups usually encourage: Farmer Elected Directors • Dissenting views • More meaningful sharing of perspectives • Faster, robust decision making Appointed Directors • 6:3 comp
Slide 16: Outlook for 2024
Outlook for 2024 ___. Forecast 2023/24 season | ~~ Farmgate Milk Price $6.50-$8.00 per kgMS
Slide 17: Chief Executive Officer's address
Fonterra CEO Fonterra Chief Executive Officer’s address 17
Slide 18: Year results highlights
from $9.30 from $0.20 from 6.8% from $583m from 36c 3.7% 4.3%
Slide 19: Gearing ratio and debt to EBITDA
6.0 5.2 5.3 4.3 3.2 2019 2020 2021 2022 2023 4.3x 3.3x 2.7x 3.2x 1.3x 50% 44% 42% 39% 29% 2019 2020 2021 2022 2023 Gearing Ratio (%) Debt to EBITDA (x)
Slide 20: Milk price and long-term aspiration
© FONTERRA ($/kgMS) 3.00 2.50 2.00 1.50 1.00 0.50 0.00 2004 2007 2010 2013 2016 2019 2022 2025 2028 ($/kgMS) 10.00 9.00 Inflation Adjusted 8.00 Long-term Aspiration 7.00 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Slide 21: Capital allocation framework
Collect and Process Milk Sustaining Capital Ingredients Foodservice Consumer Debt Dividends Capital Returns Growth Capital Innovation Share Buybacks Strong Balance Sheet Total Shareholder Returns Farm Profitability
Slide 22: Farmgate milk price forecast
6,000 2021/22 Season 2022/23 Season 2023/24 Season 5,000 $9.30 Forecast $8.22 4,000 USD/MT 3,000 per kgMS 2,000 1,000 May-21 May-22 May-23 Feb-24 The range reflects: Reference product shipment price • Ongoing reduced demand for Average reference product shipment price for the season whole milk powde
Slide 23: Earnings outlook FY24
6,000 FY23 FY24 5,000 USD/MT 4,000 3,000 per share 2,000 Jul-22 Jan-23 Jul-23 Feb-24 The range reflects: Non-Reference Product shipment price Reference Product Shipment price • Favourable Ingredients margins Non-Reference Product contract shipment price continue but lower than FY23 Reference Product
Slide 24: A recap of our strategic priorities
A recap of our strategic priorities oor Focus on New Be a leader in Be a leader in dairy Zealand milk sustainability innovation and science
Slide 25: Key drivers of our on-farm emissions approach
os) Key drivers of our on-farm emissions approach our Access tomarkets Access to Increasedlegal Our strategic choice and: customers future funding and reporting to lead in obligations sustainability
Slide 26: New target related to on-farm emissions
We have set a new target related to on-farm emissions *per tonne of Fat and Protein Corrected Milk
Slide 27: On-farm emissions reduction by 2030
Reduction in on-farm emissions per tonne of Fat and Protein Corrected Milk (FPCM) by 2030 from a 2018 baseline Supporting farmers to Scaled up and Carbon removals from Historical land-use continue to adopt best commercially viable existing and new change conversions practice farming novel technologi
Slide 28: Progress against on-farm actions target
We’ve already made progress against the on-farm actions portion of our target Progress assessed against Emissions/kgMS incl. Organic soil and Land Use Change Progressive target achieved 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Target Reduction Single year on-farm (cumulative)
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Slide 31: Resolution
Resolutionl:” — ——— Re-election of Mary- A ae Daly
Slide 32: Re-election of Mary-Jane Daly
To re-elect Mary-Jane Daly who retires by rotation and stands for re-election as a director of the Manager of the Fund 3232
Slide 33: Proxy voting results
FOR AGAINST DISCRETIONARY As at 9am Saturday 11 November 2023 3333
Slide 34: Unit holder & Proxyholder Voting
Unit holder & Proxyholder Voting • Once the voting has been opened, the resolution 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 • Your vote has been cast when the tick appears • To change your vote
Slide 35: Voting instructions
• In respect of the resolution, 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. 35
Slide 36: Fonterra Shareholders' Fund 2023 Annual Meeting
Fonterra Shareholders’ Fund - 2023 Annual Meeting 13 November 2023
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Slide 38: Thank you, meeting closed
Thank you, meeting closed
Fonterra Shareholders' Fund — Shareholder Meeting (November 2023) on 6ix