Synlait Annual Meeting 2019

WELCOME TO SYNLAIT’S
ANNUAL MEETING
Wednesday 27 November 2019

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ADDRESS FROM CHAIR
Graeme Milne ONZM

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TODAY’S AGENDA
• Chair address
• CEO address
• Resolutions
• Other business
• Refreshments with Synlait team
Rakaia Gorge, Canterbury, New Zealand

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YOUR BOARD
Dr. John Penno
Board appointed director
Graeme Milne ONZM
Independent director, Chair
Min Ben
Bright Dairy appointed director
Bill Roest
Independent director
Qikai (Albert) Lu
Bright Dairy appointed director
Sam Knowles
Independent director
Hon. Ruth Richardson
Bright Dairy appointed director
Sihang Yang
Bright Dairy appointed director

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SYNLAIT’S YEAR IN REVIEW
Mt Hutt, Canterbury, New Zealand

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DELIVERING RESULTS
Summary of Synlait’s financial results for the 12 months ended 31 July 2019:
• Revenue exceeded $1 billion for the first time, increasing 17% to $1,024.3 million
• Net profit increased 10% to $82.2 million
• Operating cashflow increased 39% to $136.7 million
• Sales volumes increased 21,087 MT or 16% to 149,709 MT*
• Consumer packaged infant formula sales continue to grow, up 21% to 42,907 MT
• Average milk price of $6.58 per kgMS for the 2018/2019 season, made up of a base
milk price of $6.40 and an additional $0.18 in incentive payments
• FY20 guidance remains unchanged as communicated in FY19 annual result
* Excluding fresh milk and specialty ingredients
Advanced Liquid Dairy Packaging Facility, Synlait Dunsandel

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INVESTING IN OUR FUTURE
$260 million infant
capable manufacturing
facility in Pokeno
commissioned.
Welcomed 56 farms
and 77 employees
$134 million advanced
liquid dairy packaging
facility at Dunsandel
designed, built and
commissioned within
18 months
$18.9 million expansion
to Dunsandel’s
lactoferrin facility
completed on time
and budget, doubling
manufacturing capacity
Talbot Forest Cheese
acquisition completed
on 1 August 2019
Dairyworks acquisition
announced in October
2019, subject to
Overseas Investment
Office approval
$32 million investment
to build Dry Store 4
announced in
September 2019

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DOING MILK DIFFERENTLY
FOR A HEALTHIER WORLD

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Synlait, Dunsandel

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ADDRESS FROM CEO
Leon Clement

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TODAY YOU WILL
HEAR ABOUT...
• Our refreshed purpose, ambition
and strategy
• Our progress to date
• Challenges we are working on and
how we are approaching them
Mt Hutt, Canterbury, New Zealand

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CLARIFYING SYNLAIT’S
DIRECTION
Heart, Head and Hands

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WE CONTINUE TO DELIVER ON OUR GROWTH STRATEGY
FOR A HEALTHIER
WORLD
OUR ENABLING STRATEGY
Foodservice
STRATEGY PROGRESSED
FY19
FY20
• Advanced liquid dairy packaging
facility completed, servicing
inaugural customer
• Talbot Forest Cheese acquired
• Dairyworks acquisition announced,
subject to OIO approval
• The a2 Milk Company™ contract
extended, effective August 2020
• Focus on refining product portfolio
and in-market models
• 21% growth in consumer
packaged infant formula sales
• Awaiting registration of
China brands
• Lactoferrin capacity doubled,
operating in favourable
environment
• Natural extension
• Market is large and growing, with
strong demand for New Zealand
provenance in Asia
• Optimise milk solids as we create
a value stream from surplus fat
DELIVERY ON TRACKSTRATEGY DEVELOPING
Everyday
Dairy
Sports
Nutrition
Net Positive for
the Planet
Build a Healthier
Synlait
World Class
Value Chain
Infant
Nutrition
FoodserviceNext Big
Thing
DOING MILK
DIFFERENTLY
OUR GROWTH STRATEGY

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INFANT NUTRITION
We continue to invest for the future
• We are focused our partnership with The a2 Milk Company
TM
. The contract extension
announced last week:
• reinforces our long-term partnership with The a2 Milk Company
TM
and reaffirms that
infant nutrition is a core focus for both companies;
• gives us the license to keep creating value as we invest in our future; building
capacity and capability in this highly regulated and competitive industry; and
• supports our respective growth stories.
• We continue to explore complementary customer, product and market opportunities
• We have developed a highly valuable specialised ingredients business with lactoferrin
• We acknowledge that to win in our chosen markets, and with our chosen customers, we
will need to remain agile and be able to respond

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EVERYDAY DAIRY
We are delivering on the opportunities
in front of us – and chasing new ones
Liquid milk
• We have developed a strong partnership with Foodstuffs South Island and continue
to see opportunities which will support our growth story
• We will do this by:
• leveraging our modern value chain, competitive milk pools and 21st century
milk proposition; and
• exploring new channels, consumer trends and segments.
Cheese
• Our Talbot Forest Cheese and Dairyworks acquisitions will help to:
• optimise our supply chain;
• accelerate the delivery of our Everyday Dairy growth strategy; and
• complement our existing product categories.
Other ingredients for success
• Our teams are exploring other customer, category brand and route to market options
• Following a period of acquisition we will look to extract synergies and leverage the
capacity and capability we have built
Advanced Liquid Dairy Packaging Facility, Synlait Dunsandel

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WE ARE DELIVERING ON OUR ENABLING STRATEGY TOO
DOING MILK
DIFFERENTLY
OUR GROWTH STRATEGY
FOR A HEALTHIER
WORLD
OUR ENABLING STRATEGY
Everyday
Dairy
Sports
Nutrition
Net Positive for
the Planet
Build a Healthier
Synlait
World Class
Value Chain
Infant
Nutrition
Foodservice
FY19
FY20
• Published Greenhouse Gas
(GHG) inventory
• Workplan towards 2028 climate
and water targets established
• Commissioned New Zealand’s first
large scale electrode boiler
• Released Sustainability at
Synlait, an update on our
strategy and progress to date
• Secured New Zealand’s first
ESG linked loan
• Rt Hon Jacinda Ardern to open
Whakapuāwai, more than 1,000
trees planted in FY20
• Considering retail bond to diversify
funding and provide capital
structure flexibility
• Construction of Dry Store 4 underway,
creating significant supply chain
efficiencies at Dunsandel
• Development of SynQ - at Synlait we are
embedding an ‘everyone owns quality’
culture
• Focus on enabling growth enabling
systems
• Injury rate reduced 28%
• Launched programme to live our
purpose: Whakapuāwai
• Launched Tāwariwari and Mātua
policies
• Full reset of growth enabling
processes and systems underway
• Built three world class facilities
• IWS generating impressive efficiencies
and capacity increases
• Opened new China office to resource
sales and regulatory capabilities
• 43 new Lead With Pride™ farms certified
Next Big
Thing

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NET POSITIVE FOR
THE PLANET
This represents the stand we are taking
for the planet
Our aim is to have a net positive impact on the planet and reimagine
all aspects of our business for a low-emissions future. We want to be
instrumental in agriculture’s response to climate change, eliminate
water degradation, implement the circular economy, and lead
stewardship for animals, biodiversity and soil
OUR FY20 PROGRESS
• Beginning to deliver against the sustainability targets launched in June 2018
• Secured New Zealand’s first environmental, social and governance (ESG) linked loan
in September
• Released the Sustainability at Synlait Report last week, representing our first step in
sharing our plans and progress as we work to implement our environmental and social
strategies throughout our value chain
• Testing and exploring a range of exciting initiatives that improve energy and water use,
reduce waste and improve GHG emissions
Sustainability at Synlait Report released in November 2019

_
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BUILD A HEALTHIER
SYNLAIT
This is about strengthening our company
Our aim is to build systems that support our people, making sure
that we are all safe and establishing a culture of kotahitanga or unity,
strengthening our capabilities and continuing to manage our risks
OUR FY20 PROGRESS
• Focus on delivering and implementing growth enabling systems to ensure Synlait’s
processes are set up to support future growth. For example, ERP replacement
project underway
• Ongoing focus on culture and capability. We continue to build and invest in the capability
required to win. To attract the right people, we are creating a modern and flexible working
environment, which enables us to keep talent. Examples include the launch of our:
• Tāwariwari policy, which encourages workplace flexibility
• Mātua (parental leave) policy, which tops up government-paid leave to a full salary for
22 weeks. We’ll also contribute up to 20 hours child care per week until the government
child care subsidy kicks in
• Committed to our community through Whakapuāwai. We will bring people together to
restore taonga (lost treasures) and reconnect with Papatūānuku (mother nature). With
trees at the centre of this programme we want to improve water quality, boost habitat for
biodiversity and create sources of food on our farmers’ and community land
WHAKAPUAWAI
WELCOME TO A PLACE OF
RESTORATION AND REGENERATION
- FOR ECOSYSTEM AND HUMAN
SPIRIT TO DEVELOP AND THRIVE.

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WORLD CLASS VALUE
CHAIN
This is what creates value for our
customers
Our aim is to ensure we have healthier farming practices, safe food
and market access, manufacturing excellence, build a sustainable
supply chain, and transparency. Our teams are doing great work in this
space because we are constantly asking ourselves: how can we think
differently and make things better?
OUR FY20 PROGRESS
• Construction of Dry Store 4 underway, creating significant supply chain efficiencies
• Integrated Work Systems (IWS) programme continues to enable increased production.
Programmes underway in safety, quality, reliability, people and finance. By the end of
FY20 initial improvement tools will be in place in all areas, helping to enable significance
efficiency changes for our customers
• Development and implementation of SynQ, Synlait approach to quality focusing on content,
tools and embedding an ‘everyone owns quality’ culture
• Collaborating with like-minded industry players, academics, customers and farm suppliers to
investigate new and improved farming models, which will create value, and take us closer to
a healthier world
Palletiser in Dry Store 1, Synlait Dunsandel

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HOW WE ARE FRONT FOOTING OUR CHALLENGES
Challenges presented at our FY19 results and how we are approaching them
CHALLENGESAPPROACH
Uncertainly remains regarding land at Synlait Pokeno • Supreme Court hearing set for April 2020
• Maintain discussions with all parties
Uncertainty remains regarding SAMR registrations awaiting site audit, for Akara
and Pure Canterbury, timing unknown
• Continue to support The a2 Milk Company’s™ growth in China
• Developing new customer, product and market combinations
Performance of the advanced liquid dairy packaging facility at Dunsandel fell
short of expectations due to initial commissioning challenges, incurring a $3.5
million loss. Working to stabilise performance and bring it back in line with
expectations
• Performance of fresh milk stabilised
• Focus on UHT commissioning – still expecting initial sales late FY20
Customer pipeline remains strong, but significant new, announceable and
material agreements are yet to materialise
• Recognise we have significant capacity to fill following commissioning of
advanced liquid dairy packaging facility at Dunsandel and infant-capable
manufacturing facility in Pokeno
• Teams remain focused on developing new opportunities with existing and
new customers
Evolving regulatory environment in our industry is expected to create on farm
challenges (e.g. National Policy Statement for Freshwater Management and
Zero Carbon Bill) Synlait’s proactive approach to sustainable farming practices
means we are well positioned to respond to any regulatory changes
• Synlait’s milk supply and sustainability teams actively working together on
the creation and rollout of sustainability programmes
• Complements work being done to formalise our government relations
strategy to support the industry on key issues

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RESOLUTIONS
Mt Hutt, Canterbury, New Zealand

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ORDINARY RESOLUTION 1
To consider and, if thought fit, pass the following
resolution as an ordinary resolution:
That the board be authorised to determine the
auditors’ fees and expenses for the 2020 financial year

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ORDINARY RESOLUTION 2
To consider and, if thought fit, pass the following
resolution as an ordinary resolution:
That Sam Knowles be re-elected as a director

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ORDINARY RESOLUTION 3
To consider and, if thought fit, pass the following
resolution as an ordinary resolution:
That the annual fee for each director be $88,900, except for the annual fee
of the Chair of the Audit and Risk Committee which will be $104,150, the
fee of the Chair of the People Environment and Governance Committee
which will be $100,900 and the fee of the Chair of the Board, which will be
$178,000. All increases apply from 1 April 2020

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SPECIAL RESOLUTION: RESOLUTION 4
To consider and, if thought fit, pass the following
as a special resolution:
That Synlait Milk Limited’s Constitution be amended, with effect from the
close of the annual meeting, as described in the Explanatory Note in the
Notice of Meeting and set out in detail in the marked up constitution which
may be viewed at: www.synlait.com/investors

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OTHER BUSINESS

Mt Hutt, Canterbury, New Zealand
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THANK YOU
PLEASE JOIN THE SYNLAIT TEAM FOR
REFRESHMENTS

Mt Hutt, Canterbury, New Zealand
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INVESTORS
Hannah Lynch
Corporate Affairs Manager
+64 21 252 8990
hannah.lynch@Synlait.com
MEDIA
Linda Chalmers
Senior Communications Advisor – External
+64 21 951 347
linda.chalmers@synlait.com