Synlait FY20 result published

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2020

Synlait Pokeno, Waikato
Review of financial performance 03
Financial and performance metrics 13
Milk price 14
Financial statements 15
Director’s responsibility statement 15
Income statement 16
Statement of comprehensive income 17
Statement of changes in equity 18
Statement of financial position 19
Statement of cash flows 20
Notes to the financial statements 21
Performance 25
01 Revenue recognition and segment information 26
02 Expenses 28
03 Reconciliation of profit after income tax to net cash inflow from
operating activities 29
Working Capital 30
04 Trade and other receivables 31
05 Inventories 35
06 Trade and other payables 36
Long Term Assets 37
07 Property, plant and equipment 38
08 Intangible assets 41
09 Leases 45
Debt and Equity 47
10 Finance income and expenses 48
11 Loans and borrowings 49
12 Share capital 51
13 Share based payments 52
14 Reserves and retained earnings 54
Financial Risk Management 55
15 Financial risk management 56
16 Financial instruments 63
Other 68
17 Income tax 69
18 Business combinations 73
19 Other investments 77
20 Related party transactions 79
21 Contingencies 82
22 Commitments 83
23 Events occurring after the reporting period 84
24 Other accounting policies 84
Auditors report 85
Directory 91
CONTENTS
PAGE 01 & 02ANNUAL FINANCIAL STATEMENTS 2020

REVIEW OF FINANCIAL PERFORMANCE
The Group has continued to execute on its strategy of growing both our Nutritional (infant and lactoferrin) and Everyday
Dairy businesses which is reflected through revenues exceeding $1 billion for the second time in FY20 with revenues
of $1,302.0 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 13% to $171.4 million
demonstrating the strength of our infant and lactoferrin businesses. Reported after tax earnings were a profit of $75.2
million, a 9% decrease reflecting investments in new facilities and acquisitions over the past two years to achieve
growth ambitions as well as increased overhead expenditure in areas of the business that support future growth
opportunities aligned to our strategy.
Average reference commodity prices increased steadily in the first half of the 2019/20 milk season until February.
Reference commodity prices fell steadily from February through May as global uncertainty driven by COVID-19 impacted
commodities. The average reference basket price in the 2019/20 season increased to $3,128, a 4% increase vs the
2018/19 season. This increase, as well as a lower FX rate, are the key contributors to the $0.65 increase in the average
base milk price paid to our suppliers in 2019/20, which moved from $6.40 to $7.05 per kgMS.
Gross profit performance
Sales
Our total gross profit per MT of $1,359 is 7% higher than last year’s $1,268 per MT. A direct result of the favourable sales
product mix in FY20. Continued investment in people to support key growth projects, higher Lead With Pride™ supplier
engagement costs, and the full impact of depreciation from the completion of the investment program in prior years
tempering the upside. Over time, as we grow into our capacity, we will see a positive incremental impact on gross profit
and increased ROCE with fixed costs per MT at its highest immediately after the completion of a new facility.
Consumer packaged gross profit improved $24 per MT, generated from higher utilisation of our consumer packaging
facilities in Dunsandel and Auckland.
Lactoferrin margin per MT has materially increased over FY19 due to a favourable market pricing environment.
Lactoferrin production volume also increased following the facility upgrades which were completed in November 2019
(up 26%), and overall contributed $28 million of gross profit in FY20 (FY19: $13 million).
Everyday Dairy
The Everyday Dairy category represents the acquisition of Talbot Forest Cheese and Dairyworks, along with the
Advanced Dairy Liquid Packaging Facility at Dunsandel. Gross Profit from this area is net $0.4 million, a result reflecting
some initial commissioning challenges in the Advanced Dairy Liquid Packaging Facility at Dunsandel and low fixed
overhead recoveries as we move from commissioning phase to a focus on increasing utilisation. Dairyworks and Talbot
Forest Cheese are tracking to expectations generating Gross Profit of $2.6 million combined in FY20. In FY21 we will
focus on integrating Dairyworks and Talbot Forest Cheese and leverage synergies with the core Synlait business.
We received 76.8 million kilograms of milk solids (kgMS) from our contracted suppliers, 12.4 million kgMS more than FY19
to support the Pokeno facility. We also sold (net) 6.0 million kgMS over the season of which 1.4 million kgMS was cream
sold from the Pokeno facility, resulting in an overall 7% or 4.4 million kgMS increase in milk processed in FY20. Again, this
was enabled by the investments and implementation of the IWS programme as mentioned above – the IWS programme
increased facility production capacities validating the investment management has made into this programme.
Sales (metric tonnes)FY20FY19Growth %
Ingredients101,222106,802(5)%
Consumer packaged powders49,18042,90715%
Lactoferrin302146%
Total150,432149,7300.5%
OVERVIEW
FINANCIAL PERFORMANCE
Sales
Revenue in FY20 at $1,302.0 million is $277.7 million or 27% higher than FY19 ($1,024.3 million), with total sales volume
of 150,432 MT (excluding Everyday Dairy, which is discussed in a separate section below) in line with FY19 but product
mix significantly moving from commodities to higher value canned infant formula.
This revenue growth was driven by a 15% increase in high value canned infant formula sales, and a 46% increase in
lactoferrin sales volumes. The uplift in higher value product sales was enabled by the investments made in prior years
as well as from manufacturing efficiencies which have delivered through our Integrated Work Systems (IWS) programme.
PAGE 03 & 04ANNUAL FINANCIAL STATEMENTS 2020

Milk price
Raw milk remains Synlait’s most significant component of our cost of goods sold. Our final average base milk price
for the 2019/20 season is $7.05 per kgMS, compared to our 2018/19 average base milk price of $6.40 per kgMS. In
addition, we paid out $0.25 per kgMS in incentive and premium payments through a2, Lead With Pride
TM
, Grassfed and
winter milk payments, increasing the average total milk payment to $7.30 per kgMS compared with $6.58 per kgMS in
2018/19. Premiums and incentive payments are higher in 2019/20 predominantly through an increase in our winter milk
payments. This resulted in our contracted suppliers receiving a total of $19.3 million in additional value-added
premiums in the 2019/20 season, compared to $11.5 million in 2018/19.
Overhead expenditure
Overhead expenses for FY20 at $80.9 million were up $18.7 million from $62.1 million in FY19. Notable increases
in these overhead costs include overhead expenditure from acquired subsidiaries ($4.6 million), depreciation
($4.0 million), employee costs ($4.4 million) and multi-site distribution ($1.4 million).
As previously signalled, increases in overhead expenditure reflect continued investment to help run the new facilities
that we are bringing on-line and enter new categories.
The impact of COVID-19 on expenditure is not evident in the year-on-year comparison. However, there was a reduction
in training, entertainment, travel and consulting costs totalling $2.5 million across the business. This is partially offset by
higher cleaning costs of $0.3 million and additional warehouse space costs of $0.2 million to mitigate against the risk of
export channels slowing down.
The $12.0 million increase in net financing costs is due to an increase in interest-bearing debt as a result of continued
capital expenditure and lower capitalised interest.
Gross interest on term debt increased by $5.8 million to $15.2 million in FY20 with higher average interest-bearing debt
year-on-year as a result of the acquisition of subsidiaries and continued capital expenditure across both years, with
lower interest rates providing some offset. Capitalised interest decreased by $5.4m to $2.1m in FY20 with Synlait Pokeno
commissioned in early FY20 and the Advanced Dairy Liquid Packaging Facility at Dunsandel commissioned in FY19.
Net financing costs
Net financing costs at $21.4 million increased 127% over FY19’s $9.4 million.
$ millionFY20FY19
Profit before tax$101.9$115.1
Add back: net finance cost$21.4$9.4
EBIT$123.3$124.5
Add back: depreciation and amortisation$48.1$27.6
EBITDA$171.4$152.1
FY20FY19Va r.
Gross term debt interest(15.2)(9.4)(5.8)
Less capitalised interest2.17.5(5.4)
Net term funding interest(13.1)(1.9)(11.2)
Working capital funding interest(6.2)(6.9)0.7
Interest received0.11.2(1.1)
Loss on derecognition of financial assets(1.7)(1.8)0.1
Net short-term funding interest(7.8)(7.5)(0.3)
Interest on lease liabilities (0.5)0.0(0.5)
Net finance costs(21.4)(9.4)(12.0)
Powders and CreamConsumer Packaged
Infant Formula
LactoferrinTotal Powders
FY20
Sales Volume (MT)101,22249,18030150,432
Gross Profit ($M)134.440.528.4203.3
Gross Profit / MT1,327824943,0741,359
FY19
Sales Volume (MT)106,80242,90721149,730
Gross Profit ($M)142.234.313.3189.8
Gross Profit / MT1,331800646,0991,268
% Change
Sales Volume (MT)(5%)15%46%0%
Gross Profit ($M)(6%)18%113%7%
Gross Profit / MT0%3%46%7%
Gross profit by category EBITDA
Earnings before interest, tax, depreciation and amortisation (EBITDA), at $171.4 million, grew strongly demonstrating the
strength of our infant nutritional and lactoferrin businesses. The 13% increase on the FY19 result of $152.1 million was
driven by increased sales volumes and a favourable product mix.
PAGE 05 & 06ANNUAL FINANCIAL STATEMENTS 2020

Raw materials increased to $71.3 million (FY19: $40.1 million). Tonnage of raw materials increased to 13,614 (FY19: 11,307
MT). Higher raw materials balances reflect the acquisition of subsidiaries inventories, which, due to the nature of their
operations, are weighted towards holding higher volumes of raw material to enable cheese aging. Work in progress in
FY20 of $11.6m (FY19: nil) predominantly relates to bulk cheese manufactured at Talbot Forest Cheese that is awaiting
further manufacturing.
Finished goods inventory has increased to $186.5 million (FY19: $124.7 million). Tonnage of finished goods has
increased to 32,109 MT (FY19: 23,318 MT). The increase relates to a larger holding of our core infant nutritional products
and finished goods inventory held by Dairyworks and Talbot Forest Cheese.
Inventories were reviewed for impairment, resulting in a stock impairment provision totalling $2.0 million relating to
finished goods ($1.8 million) and raw materials ($0.2 million) (FY19: $0.3 million all relating to finished goods). This
increase primarily relates to production in late May which did not pass our stringent quality standards. Impaired finished
goods were written down to net realisable value.
In addition, we have an onerous contracts provision of $0.3 million (FY19: $0.5 million); the reduction from prior year is
due to product mix and a declining cost to manufacture.
Property, plant and equipment
Property, plant and equipment at $965.1 million, increased $119.9 million from FY19 at $845.2 million. The year-on-year
increase is a consequence of total capital expenditure of $129.4 million, acquisitions through business combinations of
$34.3 million, less depreciation of $40.0 million, impairment of $3.2 million, and net disposals of $0.6 million. The capital
expenditure of $129.4 million primarily relates to our growth initiative projects with $93.9 million of total spend in FY20.
FINANCIAL POSITION
Overview
In FY20 the Group continued to invest for the future, completing the construction of assets and acquisition of
businesses to allow us to successfully implement our strategy.
Our reported net profit after tax of $75.2 million, plus the movement in reserves, has increased total equity to $606.5
million at 31 July 2020 from $492.4 million.
Trade and other receivables
At $63.1 million, Group trade and other receivables have increased by $1.2 million on FY19 ($61.9 million). Synlait’s
trade and other receivables have decreased significantly year on year to $36.1m (FY19: $61.9m) driven by an increased
balance of receivables assigned as at 31 July 2020 (FY20: $131.3, FY19: $109.0). The differential is the trade and other
receivables of the subsidiaries acquired during FY20 (Dairyworks and Talbot Forest Cheese).
FY20FY19
$ millionMT$ millionMT
Synlait Milk Limited216.140,787*164.834,625*
Dairyworks Limited40.14,889*--
Synlait Foods (Talbot Forest) Limited13.21,766--
Working capital funding interest has decreased by $0.7 million due to lower interest rates, partly offset by higher
working capital requirements in FY20 than in FY19. Those working capital requirements being Synlait’s continued
growth; inventory build of infant nutritional products to ensure customer demand is able to be met, to protect against
COVID-19 supply chain disruption, and to ensure optimal utilisation of our plant through peak milk collection; together
with the additional working capital requirements of Dairyworks and Talbot Forest Cheese, which were acquired in FY20.
Loss on derecognition of financial assets is the financing cost associated with our receivables financing programme. It
has decreased slightly with lower interest rates offset by increased utilisation of these facilities.
Further, the Group adopted NZ IFRS 16 effective from 1 August 2019, resulting in $0.5m interest on lease liabilities for
FY20 (FY19: nil).
Foreign Exchange
The management of foreign exchange exposure is one of the key risks of the business with many product sales being
to overseas markets creating a primarily United States Dollar (USD) exposure risk. Our foreign exchange policy seeks to
achieve the lowest annual average New Zealand Dollar (NZD)/USD exchange rate for the year. In FY20 we achieved a
net annual average NZD/USD exchange rate of 0.6651 (FY19: 0.6792).
Earnings per share and return on capital employed
Our reported basic and diluted earnings per share (EPS) for FY20 was 41.95 cents and 41.85 cents respectively, against
45.89 cents and 45.77 cents in FY19. The dilutive shares are basic EPS adjusted for contingently issuable shares in
accordance with the Employee Share Scheme. The Group also generated a pre-tax return on average capital employed
of 12.6% in FY20 compared with 18.3% in FY19.
Inventories
Our inventory holdings increased to $269.4 million (FY19: $164.8 million). $53.3 million of this increase relates to the
inventory holdings of subsidiaries acquired during the year. The balance of the increase at Synlait is largely due to
increased holdings of canned and bulk infant nutritional products to ensure customer demand is able to be met, to
protect against potential Covid-19 supply chain disruption (increased safety stock), and to ensure optimal utilisation of
our plant through peak milk collection in FY21.
* inventory not measured in metric tonnes is excluded as not material to our volumes.
PAGE 07 & 08ANNUAL FINANCIAL STATEMENTS 2020

In February 2020, we commissioned our new North Island nutritional spray drier and related assets located in Pokeno.
The construction of the nutritional spray dryer was budgeted to cost $258.3 million (excluding the cost of the land). Total
spend on the project in FY20 was $64.1 million (FY19: $181.1 million, FY18: $12.7 million) for total spend to date of $257.9
million (excluding land).
During FY20 we also commissioned the capacity upgrade of our milk separation plant. Total spend in FY20 was $7.4
million (FY19: $6.5m) for total project spend of $13.9 million. In the year we also ramped up construction of our new
dry storage facility. Total spend on the project in FY20 was $18.7 million (FY19: $0.9 million, FY18: $0.2 million) for total
spend to date of $19.8 million.
Operational capital expenditure increased to $35.5 million from $18.5 million in FY19. The increase in expenditure
was attributable to the upgrades at Talbot Forest Cheese ($4.7 million) and Dairyworks ($1.9 million), acquisition of
replacement lactoferrin resin ($3.6 million), the fitout of the Christchurch office and upgrades to Dunsandel office
building ($3.2 million), the upgrade of the Wetmix kitchen ($1.2 million), and Blended Steam Supply project ($1.2 million).
The higher level of operational capital expenditure reflects the significant growth of the Group and its asset base over
FY19 and FY20.
Acquisitions of Talbot Forest Cheese and Dairyworks
On 1 August 2019 the Group completed the purchase of Talbot Forest Cheese when Synlait Foods (Talbot Forest)
Limited formally acquired Talbot Forest Cheese’s Temuka assets and operations. Total consideration paid was $38.3
million. Brands of $1.7 million were acquired and $16.1 million of goodwill arose on acquisition.
On 1 April 2020 the Group completed the acquisition of 100% of the shares of Dairyworks for a purchase price of $112
million on a debt-free basis with the equity price being locked in with an effective date of 30 September 2019. After
effective date adjustments for debt, working capital, and leakage – consideration of $63.6m was transferred to the
vendors on 1 April 2020. Brands of $15.8 million were acquired and $43.4 million of goodwill arose on acquisition.
Trade and other payables
Trade and other payables at $238.8 million is up $22.8 million on last year’s balance of $216.0 million. This variance is
due to the trade and other payables balances of Dairyworks and Talbot Forest Cheese at 31 July 2020.
Cash spent on investing activities of $225.0 million (FY19: $337.4 million) during the financial period, offset by cash
from operating activities of $105.5 million (FY19: $136.6 million), resulted in a free cash outflow of $119.5 million from
operating and investing activities. This together with cash outflows from interest and financing fees paid of $26.4 million
(FY19: $18.1 million), repayment of lease liabilities $4.2m, and Dairyworks loans and borrowings of $43.2 acquired on
acquisition account for the movement in net debt*. Operating cash flows are discussed further below.
With Net Debt* of $527.0 million, our gearing (Net Debt* / Net Debt* + Equity) is 46.5% (FY19: 40.4%) and our leverage
(Net Debt* / EBITDA) is 3.08x (FY19: 2.19x).
$ millionFY20FY19
Current debt$102.8$99.6
Term debt (carry amount)$426.8$249.5
Transaction costs $3.2$0.5
Cash on hand($5.9)($16.0)
Total Net Debt (excluding lease liabilities) $527.0$333.6
Contingent liability
The Group has included a contingent liability note in the annual financial statements relating to the Pokeno land
covenant issue. There are a range of possible outcomes in this dispute meaning the Group is not able to reliably
estimate a potential liability, if any. For further information please refer to the Contingent Liability note in the financial
statements, page 82.
Total net debt
Total net debt (excluding lease liabilities) at year end, including both current and term debt facilities less cash on hand,
was $527.0 million, an increase of $193.4 million over the FY19 balance of $333.6 million.
* Net debt excluding lease liabilities
PAGE 09 & 10ANNUAL FINANCIAL STATEMENTS 2020

Funding facilities and covenants
At reporting date, the Group had in place four syndicated bank facilities with ANZ and BNZ:
1. Working Capital Facility – reviewed annually in September with a year-end facility limit of NZD $320.0 million.
This is a dual currency (NZD & USD) facility.
2. Revolving Credit Facility A – maturing 1 October 2021 with a fixed facility limit of $150 million.
3. Revolving Credit Facility B – maturing 1 August 2023 with a fixed facility limit of $50 million.
4. Revolving Credit Facility C – maturing 1 August 2023 with a fixed facility limit of $50 million.
In addition to banking facilities, the company has on issue a $180.0m unsecured, subordinated, fixed rate bond maturing
17 December 2024.
Subsequent to reporting date, we have entered into an additional Revolving Credit Facility of $100m commencing 1
October 2020, stepping down to $70m on 1 January 2021 and maturing 1 May 2021. We have also reduced the working
capital facility of $320m down to $250m and extended the revolving credit facility A to mature on 1 October 2021.
We have five bank covenants in place within our syndicated bank facility agreement. These are:
1. Interest cover ratio - EBITDA to interest expense of no less than 3.00x based on full year forecast result
(FY20: 8.01x).
2. Minimum shareholders’ funds – must exceed $295.5 million (FY20: $469.9 million).
3. Working capital ratio – must exceed 1.50x (FY20: 3.40x).
4. Leverage ratio – no more than 4.0x (FY20: 3.19x).
5. Senior leverage ratio - no more than 3.0x (FY20: 2.14x).
The company was compliant with our bank covenants at all times during the financial period.
Note that the covenants are calculated in accordance with our banking facilities agreement and include adjusting items
that are not presented in the financial statements.
Angela Dixon
Chief Financial Officer
Derivatives
As at 31 July 2020 we held USD$525.5 million (net) in foreign exchange contracts as detailed in note 15 of the annual
financial statements. These have been placed across a 24-month future period, in accordance with our Treasury Policy.
Given the recent appreciation in the NZD/USD exchange rate, we have mark to market unrealised gains associated with
these contracts at year-end of $17.5 million after tax, a movement of $38.5 after tax year-on-year. As our foreign exchange
contracts fully hedge against future USD receipts and payments, this unrealised gain is recognised in other reserves in
equity rather than through the income statement. The impact of these foreign exchange contracts will play out in the
periods in which they mature, and they will form part of our annual average NZD/USD exchange rate in those periods.
We also have in place a nominal balance of $57.3 million of interest rate swap agreements at year-end (FY19: $79.5
million) at various weighted average interest rates, generating an unrealised mark to market loss of $4.9 million after
tax, a movement of $0.2m after tax year-on-year, with swap agreements unwinding partly offset by lower interest rates.
We continue to use dairy commodity derivatives to support the management of the risk of movement in dairy
commodity prices. Dairy commodity derivatives with a nominal balance of NZD $12.0 million were in place at year end
(FY19: NZD $5.3 million).
Year-on-year there was a $38.8 million movement in the cash flow hedge reserve from ($26.1) million in FY19 to
$12.6 million in FY20. The cash flow hedge reserve relates to derivatives and the year-on-year movement is primarily
explained by the movement in fair value of foreign exchange contacts as detailed above.
Operating cash flows
Operating cash flows at $105.5 million are down $30.9 million on FY19 ($136.6 million). The primary reason for this
decrease was due to an unfavourable movement in working capital year-on-year with an increase in infant formula
product on hand and additional working capital requirements of Dairyworks and Talbot Forest Cheese.
PAGE 11 & 12ANNUAL FINANCIAL STATEMENTS 2020

FINANCIAL AND PERFORMANCE METRICSMILK PRICE
2016/172017/182018/192019/20
kgMS collected 63,249,602 63,616,077 63,438,694 76,550,913
Average fat %4.904.864.914.90
Average protein %3.923.893.923.98
Average lactose %5.064.994.994.99
Volume of components collected (kg)
Fat 35,123,275 35,289,377 35,270,506 42,252,084
Protein 28,126,327 28,327,076 28,168,188 34,298,829
Lactose 36,292,742 36,221,310 35,894,766 42,977,611
Component value
1
Fat $4.70$6.97$7.36$8.44
Protein$6.56$4.63$4.18$4.20
Lactose$1.87$2.03$1.53$1.67
Component value ratio
Fat 1111
Protein1.3970.6640.5670.497
Lactose0.3980.2910.2080.198
Total $ paid per component
Fat $164,998,609$245,903,402$259,645,339$356,688,641
Protein$184,528,391$131,063,290$117,657,713$143,911,349
Lactose$67,823,876$73,377,129$54,987,988$71,818,527
Volume charge($27,732,308)($27,289,173)($26,283,402)($32,746,784)
Average base milk price
2
$6.16$6.65$6.40$7.05
Total incentive payment$8,908,367$8,127,045$11,530,895$19,249,791
Average incentive payment per kgMS
3
$0.14$0.13$0.18$0.25
Total average Synlait payment per kgMS
4
$6.30$6.78$6.58$7.30
Key financial metrics
1
Currency as stated (in millions)FY2016FY2017FY2018FY2019FY2020
Income statement
Revenue 546.9 759.0 879.0 1,024.3 1,302.0
Gross profit 102.1 112.1 166.5 186.3 203.7
EBITDA
2
83.7 88.8 138.6 152.1 171.4
EBIT
2
62.9 67.6 113.1 124.5 123.3
NPAT 35.7 39.5 74.6 82.2 75.2
Revenue (USD per MT)
3
3,316 3,659 4,815 4,602 5,181
Gross profit per MT (NZD)
3
877 792 1,294 1,268 1,359
EBIT per MT sold (NZD)
3
540 478 879 855 858
Net cash from / (used in) operating activities 104.4 115.2 98.4 136.7 105.5
Balance sheet
Net operating assets
4
455.2 423.5 493.3 633.9 1,043.3
Return on net operating assets16.2%15.4%24.7%22.1%14.7%
Net return on capital employed (pre-tax)14.5%14.8%22.7%18.3%12.6%
Debt / debt + equity (excl derivatives)48.7%18.7%20.9%39.2%47.1%
Net debt / EBITDA
6
2.5 0.9 0.8 2.2 3.1
Earnings per share 23.50 22.82 41.60 45.89 41.95
Average FX conversion rate (NZD:USD) 0.7058 0.6814 0.7047 0.6792 0.6651
Base milk price 3.91 6.16 6.65 6.40 7.05
Total milk price (kgMS)
5
4.02 6.30 6.78 6.58 7.30
Key operational metrics
Sales (MT)
Powders and cream 100,393 122,606 93,042 106,802 101,222
Consumer packaged Infant Formula 15,999 18,776 35,580 42,907 49,180
Lactoferrin 10 11 16 21 30
Total sales (MT)
3
116,402 141,393 128,637 149,730 150,432
Production (net production)
Powders and cream 104,703 115,991 102,833 103,131 107,098
Consumer packaged Infant Formula 16,043 19,403 36,651 43,168 50,918
Lactoferrin 8 12 12 23 29
Total production (MT)
3
120,754 135,407 139,496 146,322 158,045
Milk purchases ('000 kg MS)
Milk purchased from contracted supply 54,125 63,255 63,639 64,189 76,875
Milk purchased from other suppliers 3,573 1,700 (2,853) 1,877 (6,079)
Total milk purchases ('000 kg MS) 57,698 64,954 60,785 66,066 70,796
This table shows how Synlait take the milk supplied by our contracted farmer suppliers, value the milk components,
and make a pay-out via the average base milk price.
The 2019/20 milk price had not been fully paid out at the time the annual report was released. Figures represent what
has been paid and is accrued to be paid.
It also highlights the incentive payments made to our farmer suppliers in addition to the average base milk price.
This information represents payments made in the milk season which runs 1 June to 31 May as opposed to Synlait’s financial year.
For the recently completed 2019/2020 milk season we paid out an average base milk price of $7.05 with an average
additional incentive payment of $0.25 per kgMS.
1
Rounded to two decimal places
2
Amount paid for components + volume charge / kgMS collected = base milk price
3
Includes incentives and winter incentive payments
4
Base milk price + average incentive payment
1
The group uses several non-GAAP measures when discussing financial performance. Management believes these measures provide
useful insight on the performance of the business, to analyse trends and to assist stakeholders in making informed decisions.
2
EBIT is calculated by excluding financing costs and income tax, with EBITDA also excluding depreciation & amortisation accordingly.
A reconciliation of EBIT and EBITDA is provided in the Review of Financial Performance on page 06.
3
Synlait Milk Limited only and fresh milk is excluded in FY20 and FY19 (part year in FY19)
4
Net operating assets includes current assets, PPE and intangible assets. It excludes capital work in progress, derivatives, goodwill,
trade payables and tax liabilities.
5
Total milk price for Synlait Milk suppliers on standard milk supply contract, includes value and seasonal premiums. This is a milk
season reflective payment that runs June 1st – May 31st.
6
Net debt calculation excludes lease liabilities, for banking covenant purposes lease liabilities are included.

PAGE 13 & 14ANNUAL FINANCIAL STATEMENTS 2020

The Directors are pleased to present the financial statements for Synlait Milk Limited and its subsidiaries, Synlait Milk Finance
Limited, The New Zealand Dairy Company Limited, Eighty Nine Richard Pearse Drive Limited, Synlait Business Consulting
(Shanghai) Limited, Synlait Foods (Talbot Forest) Limited, Dairyworks Limited and Dairyworks (Australia) Pty Limited (together
“the Group”) as set out on pages 15 to 84 for the year ended 31 July 2020.
The Directors are responsible for ensuring that the financial statements present fairly the financial position of the Group
as at 31 July 2020 and the financial performance and cash flows for the year ended on that date.
The Directors consider that the financial statements of the Group have been prepared using appropriate accounting policies,
consistently applied and supported by reasonable judgements and estimates and that all relevant financial reporting and
accounting standards have been followed.
The Directors believe that proper accounting records have been kept which enable, with reasonable accuracy, the
determination of the financial position of the Group and facilitate compliance of the financial statements with the
Financial Markets Conduct Act 2013.
For and on behalf of the Board.
Graeme Milne
Chair
25 September 2020
Willem Jan (Bill) Roest
Independent Director
25 September 2020
DIRECTORS’ RESPONSIBILITY STATEMENT
20202019
Notes$’000$’000
Revenue11,302,0251,024,305
Cost of sales2(1,098,292)(837,976)
Gross profit203,733186,329
Other income1404898
Share of profit/(loss) from associates1933(580)
Sales and distribution expenses2(32,318)(26,836)
Administrative and operating expenses2(48,561)(35,303)
Earnings before net finance costs and income tax123,291124,508
Finance expenses10(19,777)(8,819)
Finance income101341,232
Loss on derecognition of financial assets10,4(1,747)(1,842)
Net finance costs10(21,390)(9,429)
Profit before income tax101,901115,079
Income tax expense17(26,693)(32,840)
Net profit after tax for the period75,20882,239
Earnings per share
Basic earnings per share (cents)1241.9545.89
Diluted earnings per share (cents)1241.8545.77
INCOME STATEMENT
For the year ended 31 July 2020
FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS 2020
The accompanying notes form part of and are to be read in conjunction with these financial statements.
PAGE 15 & 16

20202019
Notes$’000$’000
Profit for the period75,20882,239
Items that may be reclassified subsequently to profit and loss
Effective portion of changes in fair value of cash flow hedges1553,882(21,323)
Exchange differences on translation of foreign operations(12)-
Income tax on other comprehensive income17(15,087)5,971
Total items that may be reclassified subsequently to profit and loss38,783(15,352)
Other comprehensive income for the year, net of tax38,783(15,352)
Total comprehensive income for the year113,99166,887
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 July 2020
Share
Capital
Employee
Benefits
Reserve
Cash Flow
Hedge
Reserve
Foreign
Currency
Translation
Reserve
Retained
Earnings
Total
Equity
GroupNotes$’000$’000$’000$’000$’000$’000
Equity as at 1 August 2018268,074930(10,796)-166,536424,744
Profit or loss for the year----82,23982,239
Other comprehensive income
Effective portion of changes in fair value of cash flow hedges--(21,410)--(21,410)
Movement in time value hedge reserve--87--87
Income tax on other comprehensive income--5,971--5,971
Total other comprehensive income--(15,352)--(15,352)
Employee benefits reserve13,14,17-728---728
Total contributions by and distributions to owners-728---728
Equity as at 31 July 2019268,0741,658(26,148)-248,775492,359
Profit or loss for the year----75,20875,208
Other comprehensive income
Effective portion of changes in fair value of cash flow hedges--53,882--53,882
Exchange differences on translation of foreign operations---(12)-(12)
Income tax on other comprehensive income--(15,087)--(15,087)
Total other comprehensive income--38,795(12)-38,783
Employee benefits reserve13,14,17470(336)---134
Total contributions by and distributions to owners470(336) - --134
Equity as at 31 July 2020268,5441,32212,647 (12)323,983606,484
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 July 2020
PAGE 17 & 18ANNUAL FINANCIAL STATEMENTS 2020
The accompanying notes form part of and are to be read in conjunction with these financial statements.The accompanying notes form part of and are to be read in conjunction with these financial statements.

STATEMENT OF FINANCIAL POSITION
As at 31 July 2020
STATEMENT OF CASH FLOWS
For the year ended 31 July 2020
20202019
Notes$’000$’000
(restated)
ASSETS
Current assets
Cash and cash equivalents5,88716,007
Trade and other receivables463,05761,933
Intangible assets84,2303,686
Goods and services tax refundable6,3983,689
Income accruals and prepayments12,4049,554
Inventories5269,384164,849
Derivative financial instruments15,1622,5302,358
Other current assets2,50020,500
Total current assets386,390282,576
Non-current assets
Property, plant and equipment7965,104845,202
Intangible assets842,50316,428
Goodwill8,1865,5456,026
Other investments19143110
Derivative financial instruments15,1614,08445
Right-of-use assets918,497-
Total non-current assets1,105,876867,811
Total assets1,492,2661,150,387
LIABILITIES
Current liabilities
Loans and borrowings11102,83799,626
Trade and other payables6238,770216,020
Current tax liabilities24,56129,220
Derivative financial instruments15,1614,14827,960
Lease liabilities94,422-
Total current liabilities384,738372,826
Non-current liabilities
Loans and borrowings11426,754249,482
Deferred tax liabilities1754,64725,034
Derivative financial instruments15,164,80510,686
Lease liabilities914,838-
Total non-current liabilities501,044285,202
Total liabilities885,782658,028
Equity
Share capital12268,544268,074
Reserves1413,957(24,490)
Retained earnings14323,983248,775
Total equity attributable to equity holders of the Group606,484492,359
Total liabilities and equity1,492,2661,150,387
20202019
Notes$’000$’000
Cash flows from operating activities
Cash receipts from customers1,316,0761,025,168
Cash paid for milk purchased(545,792)(461,369)
Cash paid to other creditors and employees(635,402)(403,420)
Net movement in goods and services tax(2,709)2,846
Income tax payments(26,633)(26,670)
Net cash inflow from operating activities3105,540136,555
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired18(72,927)(18,000)
Interest received1341,232
Purchase of property, plant and equipment(139,212)(309,314)
Proceeds from sale of property, plant and equipment242(147)
Purchase of intangible assets(13,262)(11,127)
Net cash outflow from investing activities(225,025)(337,356)
Cash flows from financing activities
Proceeds from the issuance of subordinated bonds11180,000-
Transaction costs paid on issue of subordinated bonds(3,370)-
(Repayment)/drawdown of borrowings18(43,224)152,300
Net movement in working capital facility3,21150,305
Interest paid(23,048)(18,069)
Repayment of lease liabilities(4,185)-
Net cash inflow from financing activities109,384184,536
Net decrease in cash and cash equivalents(10,101)(16,265)
Cash and cash equivalents at the beginning of the financial year16,00732,129
Effects of exchange rate changes on cash and cash equivalents(19)143
Cash and cash equivalents at end of year5,88716,007
PAGE 19 & 20ANNUAL FINANCIAL STATEMENTS 2020
The accompanying notes form part of and are to be read in conjunction with these financial statements.The accompanying notes form part of and are to be read in conjunction with these financial statements.
Comparative numbers for goodwill and deferred tax have been restated due to a prior period error. Refer to Note 18 for further detail.

The consolidated financial statements (“financial statements”) presented are those of the Group, including Synlait Milk
Limited and its subsidiaries Synlait Milk Finance Limited, The New Zealand Dairy Company Limited, Eighty Nine Richard
Pearse Drive Limited, Synlait Business Consulting (Shanghai) Limited, Synlait Foods (Talbot Forest) Limited, Dairyworks
Limited and Dairyworks (Australia) Pty Limited.
Synlait Milk Limited is primarily involved in the manufacture and sale of dairy products.
The parent company, Synlait Milk Limited, is a profit oriented entity, domiciled in New Zealand, registered under the
Companies Act 1993 and listed on the New Zealand Stock Exchange and the Australian Securities Exchange. Synlait
Milk Limited is a FMC reporting entity under the Financial Market Conducts Act 2013 and its financial statements comply
with that Act.
REPORTING ENTITY
The financial statements of the Group have been prepared in accordance with Generally Accepted Accounting
Practice. They comply with New Zealand equivalents to International Financial Reporting Standards (‘NZ IFRS’) and
other applicable Financial Reporting Standards, as applicable for profit oriented entities. The consolidated financial
statements also comply with International Financial Reporting Standards (‘IFRS’).
Certain comparative figures have been reclassified during the year for consistency with the current year presentation.
These classifications had no effect on the reported results of operations.
The financial statements were authorised for issue by the directors on 25 September 2020.
Basis of measurement
These financial statements have been prepared on the historical cost basis except for certain items as identified in
specific accounting policies.
Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The financial statements are presented in New
Zealand Dollars ($), which is the Company’s functional currency and are rounded to the nearest thousand ($000).
Transactions and balances
Transactions in foreign currencies are translated to the functional currency at the exchange rates at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to
the functional currency at the exchange rate at that date.
BASIS OF PREPARATION
In March 2020, the World Health Organisation declared the outbreak of COVID-19 as a pandemic. The Group’s operations
were deemed an essential service and therefore continued throughout the various New Zealand Government COVID-19
alert levels. The Group’s primary focus in responding to the pandemic has been to protect the safety of its staff and to
implement appropriate controls around its production facilities. Access restrictions were put in place at all facilities,
including staff working from home where possible, additional cleaning and security provisions were also put in place on site
and other social distancing measures were adopted.
The COVID-19 pandemic has resulted in an increase in uncertainty in both global and local markets. Management assessed
the impact of COVID-19 on all aspects of the balance sheet, in particular the carrying value of receivables and inventory,
impairment of assets such as goodwill, and any impact from currency volatility during this period on the Group’s portfolio of
derivatives. Management has determined that there has been a modest impact on the balance sheet and the performance of
the Group in FY20.
The Group has continued to assess the impact of any changes to New Zealand Government COVID-19 alert levels which
have occurred subsequent to balance date and up to the date of the approval of the financial statements. The Group
has considered the impact of these changes and they are not expected to have a material impact on either the Group’s
operations or its financial statements.
COVID-19
The Group’s financial statements consolidate the financial statements of Synlait Milk Limited and its subsidiaries, accounted
for using the acquisition method, and the results of its associates, accounted for using the equity method. Intercompany
transactions and balances between group companies are eliminated upon consolidation.
BASIS OF CONSOLIDATION
Use of accounting estimates and judgements
The preparation of these financial statements in conformity with NZ IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates and assumptions.
Estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods affected.
Key sources of estimation uncertainty and key judgements relate to derecognition of financial assets, the assessment of
impairment of inventory and property plant and equipment, and the identification and valuation of goodwill and any other
indefinite life intangible assets. The individual notes in the financial statements provide additional information.
NOTES TO THE FINANCIAL STATEMENTS
PAGE 21 & 22ANNUAL FINANCIAL STATEMENTS 2020

SIGNIFICANT ACCOUNTING POLICIES
Standards, amendments and interpretations to existing standards that are not yet effective
There are no standards that are not yet effective and expected to have a material impact on the entity in the current or
future reporting periods and on foreseeable future transactions.
Changes in accounting policies
During the period the Group adopted the following new standards;
NZ IFRS 16 ‘Leases’ (effective 1 August 2019)
Effective 1 August 2019, the Group has adopted NZ IFRS 16, which supersedes NZ IAS 17 Leases (NZ IAS 17) and related
interpretations. Under NZ IAS 17, leases were previously classified as either operating or financing for lessees based on
an assessment of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the
underlying asset to the Group. As the Group’s leases were previously classified as operating, straight-line operating lease
expense was recognised over the lease term in the comparative period.
NZ IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees, with a right-of-use asset (“ROU
asset”) representing the Group’s right to use the underlying asset, and a lease obligation representing its obligation to make
lease payments. Amortisation expense for ROU assets and interest expense for lease obligations replaces the straight-line
operating lease expense recognised under NZ IAS 17.
The Group has applied NZ IFRS 16 using the modified retrospective approach, under which the initial ROU asset is
measured at an amount equal to the lease liability resulting in no impact to retained earnings at 1 August 2019. Short-term
and low-value recognition exemptions were applied, as well as practical expedients allowing for the use of hindsight to
assess the lease term for contracts with extension options and the exclusion of leases with a term of less than one year
remaining at the transition date. The Group also utilised the practical expedient which allowed for all existing contracts which
were previously identified as leases to be treated as leases under NZ IFRS 16. NZ IFRS 16 was not applied to contracts which
were not previously treated as leases under NZ IAS 17 as at transition date.
The impact of transition is outlined under Note 9, with changes in accounting policies outlined below:
Lease definition
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains,
a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
An identified asset may be implicitly or explicitly specified in a contract, but must be physically distinct, and must not have
the ability for substitution by a lessor. The Company has the right to control an identified asset if it obtains substantially all
of its economic benefits and either pre-determines, or directs how and for what purpose the asset is used.
Measurement of right-of-use assets and lease obligations
On initial application, the Group elected to record ROU assets equal to the corresponding present value of the
remaining lease liability. Subsequent additions were measured at the initial amount of the lease obligation adjusted for
any lease payments made at, or before, the commencement date, plus any initial direct costs incurred, less any lease
incentives received.
The ROU asset is subsequently depreciated on a straight-line basis over the shorter of the term of the lease, or the
useful life of the asset determined on the same basis as the Group’s property, plant and equipment. The ROU asset is
periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease obligation.
The lease obligation is initially measured at the present value of lease payments remaining at the lease commencement
date, discounted using the Group’s incremental borrowing rate. Lease payments included in the measurement of the
lease obligation, when applicable, may comprise fixed payments, variable payments that depend on an index or rate,
amounts expected to be payable under a residual value guarantee and the exercise price under a purchase, extension or
termination option that the Group is reasonably certain to exercise.
The lease obligation is subsequently measured at amortised cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the
Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes
its assessment of whether it will exercise a purchase, extension or termination option. When the lease obligation is
remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset.
Recognition exemptions
The Group has elected not to recognise ROU assets and lease obligations for short-term leases that have a lease
term of twelve months or less or for leases of low-value assets. Payments associated with these leases are recognised
as an operating expense on a straight-line basis over the lease term within costs and expenses in the consolidated
Income Statement. The Group has also elected to apply a single discount rate to portfolios of leases with reasonably
similar characteristics.
Accounting policies, accounting estimates and judgements that summarise the measurement basis used and are
relevant to the understanding of the financial statements are provided throughout the accompanying notes and are
designated by a shaded area.
The accounting policies adopted have been applied consistently throughout the periods presented in these financial
statements, except for the change in accounting policy relating to the adoption of NZ IFRS 16.
PAGE 23 & 24ANNUAL FINANCIAL STATEMENTS 2020

This section covers the Group’s financial performance and includes the
following notes:
01 Revenue recognition and segment information 26
02 Expenses 28
03 Reconciliation of profit after income tax to net cash inflow
from operating activities 29
PERFORMANCE01. REVENUE RECOGNITION AND SEGMENT INFORMATION
Sales of goods
The Group manufactures and sells a range of milk powder, milk powder related products, liquid milk, cheese and
butter to customers. Revenue from contracts with customers is recognised when the control of the goods has been
transferred to customers, being at the point when the goods are delivered. Delivery of goods is completed (i.e. the
performance obligation is fulfilled) when the goods have been delivered pursuant to the terms of the specific contract
agreed with the customer and the risks associated with ownership have been transferred to the customer.
Revenue is measured according to the contracted price agreed with customers, which represents fair value of
the consideration received or receivable, net of returns, discounts and allowances. Revenue is only recognised
to the extent that it is highly probable that a significant reversal will not occur. The payment terms vary
depending on the individual contracts. No deemed financing components are present as there are no
significant timing differences between the payment terms and revenue recognition.
Description of segments
The Group operates in one industry, being the manufacture and sale of milk powder, milk powder related
products, liquid milk, cheese and butter. The Board makes resource allocation decisions based on expected cash
flows and results of the Group’s operations as a whole and the Group therefore has one segment.
20202019
$’000$’000
Dairy products1,302,0251,024,305
Other sundry income404898
Total income1,302,4291,025,203
PAGE 25 & 26ANNUAL FINANCIAL STATEMENTS 2020

As a result of the recent acquisitions of both Synlait Foods (Talbot Forest) Limited and Dairyworks Limited, Management
is currently reviewing the way in which it internally reports on the business activities of the Group and this may result in
changes to how activities are reported to the Chief Operating Decision Maker in the future. Any changes made may
have a corresponding impact on segment results reported in the financial statements.
Revenues of approximately 64% (2019: 66%) are derived from the top three external customers. The proportion of sales
revenue by geographical area is summarised below:
20202019
China*5%8%
Rest of Asia19%24%
Middle East and Africa8%7%
New Zealand43%34%
Australia22%24%
Rest of World3%3%
Total100%100%
02. EXPENSES
20202019
$’000$’000
The following items of expenditure are included in cost of sales
Depreciation and amortisation38,85124,289
Employee benefit expense78,74848,711
KiwiSaver contributions1,6561,166
Export freight11,1049,524
Rent and storage2,471874
Increase/(decrease) in inventory provision1,702(1,805)
Decrease in onerous contract provision(156)(809)
The following items of expenditure are included in sales and distribution
Depreciation and amortisation5,9361,625
Employee benefit expense13,13710,195
KiwiSaver contributions376252
Rent and storage1,2843,637
The following items of expenditure are included in administrative and operating
Depreciation and amortisation3,2731,725
Employee benefit expense21,46717,986
KiwiSaver contributions618480
Information services5,1183,502
Directors fees802752
Share based payments expense523644
Impairment of intangible assets1,561123
Consultancy3,2682,768
Strategic Initiatives1,362162
Deloitte services included in administrative and operating expenses
Statutory audit fee276185
Half year accounts review5745
Other assurance services13077
Taxation compliance5369
516376
The year on year increase in some expenditure categories is in part due to the acquisition of Dairyworks Limited and Synlait Foods
(Talbot Forest) Limited. These two subsidiaries contributed $1.4m to sales and distribution expenditure and $3.7m to administrative and
operating expenditure since 1 August 2019. Refer to Note 18 for further detail on both acquisitions.
* The Group operates in one principal geographical area being New Zealand. Although the Group sells to many different countries,
it is understood that a significant proportion of both infant nutritional and ingredients sales are ultimately consumed in China.
PAGE 27 & 28ANNUAL FINANCIAL STATEMENTS 2020

03. RECONCILIATION OF PROFIT AFTER INCOME TAX
TO NET CASH INFLOW FROM OPERATING ACTIVITIES
20202019
$’000$’000
Profit for the year75,20882,239
Non-cash and non-operating items
Depreciation and amortisation of non-current assets43,11227,639
Depreciation of right-of-use assets4,948-
Loss on sale of property, plant and equipment355147
Impairment of property, plant and equipment and intangible assets4,761123
Impairment recovery on property, plant and equipment(2,958)-
Share of (gain)/loss from associate(33)580
Non-cash share based payments expense523644
Interest costs classified as financing cash flow19,7778,819
Interest received classified as investing cash flow(134)(1,232)
Loss on derecognition of financial assets1,7471,842
Deferred tax9,2914,341
(Gain)/loss on derivative financial instruments(23)22
Unrealised foreign exchange losses/(gains)6(143)
Movements in working capital
Decrease/(increase) in trade and other receivables1,833(14,788)
(Increase) in prepayments(2,850)(5,214)
(Increase) in inventories(104,533)(19,444)
(Increase)/decrease in goods and services tax refundable(2,709)2,846
Increase in trade and other payables34,67346,306
(Decrease)/increase in current tax liabilities(4,659)1,828
Working capital items acquired27,205-
Net cash inflow from operating activities105,540136,555
WORKING CAPITAL
The working capital section gives information about the short term assets and
liabilities of the Group. This section includes the following notes:
04 Trade and other receivables 31
05 Inventories 35
06 Trade and other payables 36
PAGE 29 & 30ANNUAL FINANCIAL STATEMENTS 2020

04. TRADE AND OTHER RECEIVABLES
Trade receivables are amounts due from customers for merchandise sold or services performed in
the ordinary course of business. If collection is expected in one year or less they are classified as current assets. If
not, they are classified as non-current assets.
Impairment
The Group recognises a loss allowance for expected credit losses (“ECL”) on trade and other receivables. The Group
measures the provision for ECL using the simplified approach to measuring ECL which uses a lifetime expected loss
allowance for all trade receivables. The Group’s credit loss model requires the Group to account for expected credit
losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since
initial recognition of the financial assets. Therefore, it is no longer necessary for a credit event to have occurred
before credit losses are recognised.
The model is based on the Group’s historical credit loss experience, adjusted for factors that are specific to the
debtors, general economic conditions and an assessment of both the current as well as the forecast direction of
conditions at the reporting date.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected
life of a financial instrument. The expected credit loss is estimated as the difference between all contractual cash
flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to
receive, discounted at the original effective interest rate.
The Group writes off a financial asset when there is information indicating that the debtor is in such severe financial
difficulty and there is no reasonable and realistic prospect of recovery.
Furthermore, other impairment losses on an individual basis are determined by an evaluation of the exposures on an
instrument by instrument basis. All individual instruments that are considered significant are subject to this approach.
Credit Risk Management
The Group activities expose it to credit risk which refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. Trade and other receivables are potentially subject
to credit risk. The Group performs credit evaluations on trade customers. The Group continuously monitors the
credit quality of its major receivables and does not anticipate non-performance of those customers, nor has
there been historical non-performance of these customers. The Group also maintains strict controls for any credit
reviews such as credit increases.
The receivables assignment processes ensure that the Group’s trade receivables are materially managed in an
efficient and effective basis.
The carrying amount of financial assets recorded in the financial statements represents the Group’s maximum
exposure to credit risk.
Included in trade receivables are debtors which are past due at balance date, as payment was not received within 30
days, and for which no provision has been made as there has not been a significant change in credit quality and the
amounts are still considered fully recoverable. No collateral is held over these balances and trade credit insurance
cover was not obtained in respect of these receivables. Interest is not charged on overdue debtors.
In the past six financial years, the Group has not written off any bad debts, although it has recognised provisions
for debts when collection was considered doubtful. The historical analysis of bad debts on a customer basis
assists in the determination of any increases in credit risk since initial recognition. There are no significant
credit risk concentrations as at 31 July 2020. Three customers represent 70% of the overdue receivables. There
were no other forward looking indicators to indicate increases in credit risk. Refer to the basis of preparation section
of the accounts for further detail on the impact of COVID-19 on receivables.
For cash and cash equivalents the Group has determined that all bank balances have low credit risk at each
reporting period as they are held by reputable international banking institutions.
The Group has not changed its overall strategy regarding the management of risk from 2019.
20202019
$’000$’000
Trade receivables56,48458,076
Provision for doubtful and impaired receivables(977)(395)
Net trade receivables55,50757,681
Other receivables7,5504,252
Total receivables63,05761,933
PAGE 31 & 32ANNUAL FINANCIAL STATEMENTS 2020

04. TRADE AND OTHER RECEIVABLES (CONTINUED)
20202019
$’000$’000
Overdue by
0 to 30 days5,9506,021
30 to 60 days54960
Over 60 days2,725 1,044
Total overdue trade receivables9,224 7,125
(a) Impaired receivables
As at 31 July 2020, trade receivables of $9.2m were overdue (2019: $7.1m). These relate to a number of independent
customers for whom there is no recent history of default. The majority has since been collected but $3.9m remains
unpaid which is expected to be collected in the 2021 financial year. The aging analysis of these overdue trade
receivables is as follows:
(b) Allowance for bad and doubtful receivables
The Group has recognised a loss of $0.4m in relation to unrecoverable trade receivables during the year (2019: $0.3m).
This relates to debtors that are overdue by more than 60 days. The Group has also recognised a loss of $0.1m for
estimated receivables impairment under NZ IFRS 9 Financial Instruments (2019: $0.1m).
(c) Trade and other receivables
Accounts receivable are amounts incurred in the normal course of business.
Receivables denominated in currencies other than the functional currency comprise NZ$38.5m (2019: $52.6m) of USD
and AUD denominated trade receivables.
(d) Derecognised financial assets
The Group has derecognised trade receivables that have been sold to two banks under the terms of receivables
purchase agreements entered into during January 2015 and January 2016. The Group routinely assess the terms
of the agreements and has determined that substantially all the risks and rewards have been transferred
to the banks. Receivables selected for assignment are with customers with strong credit ratings and good
payment histories. This minimises the risk (and therefore consequences) of late payment or default, as well as
resulting in little volatility in the present value of future cash flows in relation to assigned receivables under the
various scenarios detailed in the terms of the two agreements. An evaluation of external evidence of credit risk
has also been performed for each customer. The Group has assigned $131.3m of receivables as at 31 July 2020
(2019: $109.0m).
The Group has assessed its continuing involvement in the assigned receivables and determined that the
fair value of continuing involvement is immaterial. The Group reassesses the facility for qualification for
derecognition at each reporting date, when the terms of the facility are amended, and assesses each new
customer at the initial assignment of a receivable. No new customers were assigned during the period.
If the Group’s customers defaulted on all trade receivables that have been derecognised at balance date, the Group
would be required to pay a late payment charge of $5,351 per day (2019: $9,003) for each day that these receivables
remain overdue, assuming that market conditions remain unchanged from reporting date. The likelihood that debtors
will fall overdue or remain overdue for a long period of time is small, given the strong credit ratings and good payment
histories of the customers whose receivables have been selected for assignment.
The loss for the period of $1.7m (2019: $1.8m) arising from derecognition of assigned receivables is the discount paid to
the banks for acquiring these receivables.
PAGE 33 & 34ANNUAL FINANCIAL STATEMENTS 2020

05. INVENTORIES
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and where
applicable, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being
allocated on the basis of normal operating capacity. Cost is determined on a weighted average basis and in the
case of manufactured goods, includes direct materials, labour and production overheads. Net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated
costs necessary to make the sale.
Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous
contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits expected to be received under it.
Key management judgement is applied in assessing inventory impairment, and therefore net realisable value
of inventory. Impairment is tested in three ways, stock provision, onerous contracts provision, and inventory
impairment. The stock provision considers the condition of inventory and therefore requires a high level of
management judgement, whereas the onerous contracts and impairment calculations are largely formulaic.
The stock provision tests for the physical impairment of both raw materials and finished goods. Physical impairment
can be for a variety of reasons, including damage, expiry, or obsolescence. Management judgement is required as
often indicators of impairment can be removed through further investigation or rework meaning that no write-down
to net realisable value is required. Management consider historical rework process results and future rework plans
in making that judgement.
Estimates are required in relation to net realisable value, which is the estimated selling price in the ordinary course
of business, less the estimated costs of completion and selling expenses. Net realisable value is determined
by reference to historic achieved market prices, future contracted sales and global dairy trade auction results.
Reviewing the net realisable values is carried out by management on a monthly basis, using their judgement in
determining expected future proceeds based on current indicators of the condition of inventory.
A key management estimation in determining inventory cost is the Monthly Milk Price which is derived from a
forecast milk price for the year. The Monthly Milk Price forms a key component of the product cost through the year.
20202019
$’000$’000
Raw materials at cost71,30540,058
Work in progress at cost11,573-
Finished goods at cost178,336118,090
Finished goods at net realisable value8,1706,701
Total inventories269,384164,849
Raw material inventories at $71.3m (13,614 MT) have increased (2019: $40.1m, 11,307 MT), primarily due to the acquisitions
of subsidiaries. The tonnage has increased at a slower rate than the value as Synlait Milk Limited holds less raw materials
by volume but comparatively more high-value infant additives.
Finished goods have increased to $186.5m (32,109 MT) (2019: $124.8m, 23,318 MT). The increase relates to inventory held
by subsidiaries and an increased holding of our core infant formula products. Finished goods held at net realisable value
have increased as a result of our acquisitions of subsidiaries.
The cost of inventories recognised as an expense during the year was $1,098.3m (2019: $838.0m). The cost of inventories
recognised as an expense includes $10.9m (2019: $7.4m) in respect of write downs of inventory to net realisable value.
The total inventory provision as at reporting date was $2.0m, of which $1.8m related to finished goods and $0.2m to raw
materials (2019: $0.3m, all related to finished goods). The increase primarily relates to production in late May which did not
pass our stringent quality standards.
In addition, the total onerous contracts provision as at reporting date was $0.3m (2019: $0.5m).
06. TRADE AND OTHER PAYABLES
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or
less otherwise they are presented as non-current liabilities.
Trade and other payables are recognised initially at fair value plus any directly attributable transaction costs and
are subsequently measured at amortised cost using the effective interest method. Payables that are settled within
a short duration are not discounted.
20202019
$’000$’000
Trade payables106,94282,122
Accrued expenses118,853126,690
Employee entitlements12,8097,208
Other payables166 -
Total trade and other payables238,770 216,020
Payables denominated in currencies other than the functional currency comprise NZ$11.9m (2019: $0.5m) of USD, EUR and AUD
denominated trade payables and accruals.
PAGE 35 & 36ANNUAL FINANCIAL STATEMENTS 2020

LONG TERM ASSETS
The assets section provides information about the long term investments made
by the Group to operate the business and generate returns to shareholders.
This section includes the following notes:
07 Property, plant and equipment 38
08 Intangible assets 41
09 Leases 45
07. PROPERTY, PLANT AND EQUIPMENT
Recognition and measurement
Property, plant and equipment are initially measured at cost less accumulated depreciation.
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a
working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on
which they are located.
When a self-constructed asset meets the definition of a qualifying asset under NZ IAS 23 Borrowing Costs, borrowing
costs directly attributable to the construction of the asset are capitalised until such a time as the asset is substantially
ready for its intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
When major components of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items of property, plant and equipment.
Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the
item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost
can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised
in profit or loss as incurred.
Depreciation
Depreciation of property, plant and equipment is recognised in profit or loss on a straight line basis over the estimated
useful lives of each part of an item of property, plant and equipment. Land is not depreciated.
Capital work in progress is not depreciated. The total cost of this work is transferred to the relevant asset category on
the completion of the project and then depreciated.
Estimation and judgement is also required in the selection and application of useful lives. It is management’s best
estimate that the useful lives adopted adequately reflect the flow of resources and the economic benefits required and
derived in the use and servicing of property, plant, and equipment.
The estimated useful lives for the current and comparative periods are as follows:
Buildings 10 - 50 years
Plant and equipment 3 - 35 years
Fixtures and fittings 2 - 25 years
Depreciation methods, useful lives and residual values are reassessed at each reporting date.
PAGE 37 & 38ANNUAL FINANCIAL STATEMENTS 2020

Impairment
Estimation and judgement is required in the impairment of property, plant, and equipment. The Group estimates or
exercises judgement in assessing indicators of impairment, forecasting future cash flows and determining other key
assumptions used for assessing fair values (less costs of disposal) or value in use.
LandBuildingsPlant
and
Equipment
Fixtures and
Fittings
Capital
Work in
Progress
Total
$’000$’000$’000$’000$’000$’000
Cost
Balance as at 1 August 20187,457136,711419,8499,55780,675654,249
Additions27,500---306,100333,600
Reclassification/transfer-46,45795,6104,499(146,566)-
Disposals-(127)(2,251)(1,283)-(3,661)
Balance as at 31 July 201934,957183,041513,20812,773240,209984,188
Additions----129,381129,381
Additions through business combinations (note 18)1,3504,61026,0602,02123334,274
Reclassification/transfer458103,202185,44111,213(300,314)-
Impairment--(1,050)-(2,301)(3,351)
Disposals-(75)(2,777)(746)-(3,598)
Balance as at 31 July 202036,765290,776720,88225,26267,2081,140,893
Accumulated depreciation
Balance as at 1 August 2018-18,36092,8475,373-116,580
Depreciation (note 2)-4,23620,0601,403-25,699
Disposals-(44)(1,964)(1,283)-(3,291)
Balance as at 31 July 2019-22,552110,9435,493-138,988
Depreciation (note 2)-6,90929,8693,177-39,955
Impairment--(151)--(151)
Disposals-(33)(2,300)(668)-(3,001)
Balance as at 31 July 2020-29,426138,3638,000-175,789
Carrying amounts
As at 31 July 201934,957160,489402,2657,282240,209845,202
As at 31 July 202036,765261,350582,52117,26067,208965,104
07. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
(a) Impairment
During the period, property, plant, and equipment have been examined for impairment. A $3.2m (2019: $nil) impairment
charge has been recognised to reflect the write-down of select assets to the higher of their fair value less costs of
disposal (FVLCOD) and value-in-use. Of the $3.2m impairment charge, $3.0m related to the write-down of blending and
canning over-cap equipment determined to not be fit for purpose due to engineering and design deficiencies and $0.2m
related to other projects which were assessed as being unlikely to provide future economic benefit. Compensation
for impairment of $3.0m has been recognised in profit and loss on the basis that the Group is contractually entitled to
compensation relating to the write-down of the blending and canning over-cap equipment which was determined to not
be fit for purpose. FVLCOD and value-in-use was determined to be $nil for all assets determined to be impaired.
(b) Capital work in progress
Assets under construction includes capital expenditure projects, until they are commissioned and transferred to property,
plant and equipment. Capital work in progress of $67.2m is significantly lower than 2019 ($240.2m) due to the completion
of Synlait Pokeno and resulting transfer from work in progress to fixed assets.
(c) Capitalised borrowing costs
During the year, the Group has capitalised borrowing costs amounting to $2.1m (2019: $7.5m) on qualifying assets.
Interest has been capitalised at the rate at which borrowing has been specifically drawn to fund the qualifying asset.
In the year, borrowing costs were capitalised for Synlait Pokeno and the Dry Store 4, enterprise resource planning
system, and separator capacity upgrade projects. Borrowing costs continue to be capitalised for the Dry Store 4 and
enterprise resource planning system upgrade projects.
PAGE 39 & 40ANNUAL FINANCIAL STATEMENTS 2020

08. INTANGIBLE ASSETS
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the cost of the acquisition over the
net of the fair values of the assets and liabilities of the subsidiaries acquired. Goodwill is tested for impairment
annually and is carried at cost as established at the date of acquisition of the subsidiary, less accumulated
impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to cash-generating units (CGU) that are expected to
benefit from the business combination in which the goodwill arose. The recoverable amount of CGUs is the higher
of fair value less costs to sell and value in use. If this recoverable amount is less than the carrying amount of the
CGU an impairment loss is recognised immediately in the profit and loss, and it is not subsequently reversed.
Brands
Purchased brands have been assessed as indefinite life intangible assets, after considering factors such as the
expected use of the assets, the period of legal control, the typical product life cycle of these assets, the industry in
which the assets are operating, and the level of maintenance expenditure required. Purchased brands are initially
recognised at fair value if acquired as part of a business combination, and are tested for impairment annually,
or more frequently if there are any indicators of impairment, on the same basis as goodwill.
Patents, trademarks and other rights
Separately acquired patents and trademarks are shown at historical cost. Patents and trademarks have a finite
useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight line
method to allocate the cost of patents and trademarks over their estimated useful lives of 10 years.
Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the
specific software. These costs are amortised on a straight line basis over their estimated useful lives of 3 to 10 years.
Costs associated with maintaining computer software programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique software
products controlled by the Group are recognised as intangible assets.
New Zealand Units (NZU)
New Zealand Units are purchased to offset carbon emissions under the New Zealand Emissions Trading Scheme.
The units are measured at cost.
Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether
there is any indication of impairment.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its recoverable amount.
A CGU is the smallest identifiable asset group that generates cash flows that are largely independent from other
assets and groups.
Impairment losses recognised in respect of CGU’s are allocated first to reduce the carrying amount of any goodwill
allocated to the units and then to reduce the carrying amount of any other assets in the unit (or group of units) on a
pro rata basis.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses are recognised in profit or loss.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that
the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss has been recognised. An impairment loss in relation to
goodwill is not reversed.
PAGE 41 & 42ANNUAL FINANCIAL STATEMENTS 2020

08. INTANGIBLE ASSETS (CONTINUED)
GoodwillBrandsPatents,
Trademarks
and Other
Intangibles
Computer
Software
Intangibles
in Progress
New
Zealand
Units
Total
$’000$’000$’000$’000$’000$’000$’000
Year ended 31 July 2019
Opening net book amount (restated)6,026-3524,5323,2002,96717,077
Additions--4973,1707,1175,76516,549
Development costs recognised as an asset----(3,667)-(3,667)
Amortisation charge (note 2)--(131)(1,809)--(1,940)
Asset disposals/surrendered----(123)(1,756)(1,879)
Closing net book value (restated)6,026-7185,8936,5276,97626,140
Year ended 31 July 2019
Current-----3,6863,686
Non-current6,026-7185,8936,5273,29022,454
Closing net book value (restated)6,026-7185,8936,5276,97626,140
Year ended 31 July 2020
Opening net book value6,026-7185,8936,5276,97626,140
Additions--9085,23411,3284,13821,608
Acquisition through business combination (note 18)59,51917,545107263160-77,594
Development costs recognised as an asset--2515(6,183)-(6,143)
Impairment (note 2)----(1,561)-(1,561)
Amortisation charge (note 2)--(344)(2,813)--(3,157)
Asset disposals/surrendered-----(2,203)(2,203)
Closing net book value65,54517,5451,4148,59210,2718,911112,278
Year ended 31 July 2020
Current-----4,2304,230
Non-current65,54517,5451,4148,59210,2714,681108,048
Closing net book value65,54517,5451,4148,59210,2718,911112,278
Intangibles in progress of $10.3m at balance date is predominantly constituted of project to date spend on systems and
process development.
The opening goodwill balance for the year ended 31 July 2019 has been restated to correct an immaterial prior period error
which was identified during the current year. Please refer to Note 18 for further detail.
*This range includes a 30% decrease in Talbot Forest branded FY21 sales, reflecting a conservative downside resulting from the recent
voluntary recall of Talbot Forest branded cheese from customers throughout New Zealand. Refer to Note 18 for further information on
the brand assets acquired.
(a) Impairment tests for indefinite life intangibles
As at 31 July 2020 management has determined that there is no impairment of any CGU containing goodwill.
For the purposes of goodwill impairment testing, goodwill has been allocated to two CGU groups; the Auckland
blending and canning CGU and consumer foods CGU. The recoverable amounts of the CGU’s have been determined
based on value in use.
The value-in-use calculation uses five year future cash flows based on Board approved business plans, due diligence
performed as part of the acquisition, and managements past experience. Based on projected future cash flows,
management has determined that the recoverable amount of the CGU’s exceeds the combined carrying values and
therefore goodwill is not impaired. The business plans were modelled using the following key assumptions:
20202019
Annual revenue growth rates(0.6%) - 7.9%0.0%
Allowance for increase in expenses1.9% - 4.0%2.5%
Pre-tax discount rate10.7% - 15.2%11.8%
Terminal growth rate0.0% - 2.0% 0.0%
20202019
Annual revenue growth rates(30.0%)* - 7.9%0.0%
Allowance for increase in expenses1.9% - 4.0%2.5%
Royalty rate25.0%0.0%
Post-tax discount rate8.5% - 11.2%8.5%
Terminal growth rate0.0% - 2.0% 0.0%
Indefinite life intangibles, which is comprised entirely of brands, has been calculated using the relief from royalty method.
The impairment testing was modelled using the following key assumptions:
Management has carried out a sensitivity analysis and believe that any reasonably possible change in the key assumptions
would not cause the book value of any of the CGU’s, or groups of CGU’s, to exceed their recoverable amount.
PAGE 43 & 44ANNUAL FINANCIAL STATEMENTS 2020

09. LEASES
The Group’s leased assets include buildings and plant and equipment. Effective 1 August 2019, the Group adopted
NZ IFRS 16 as outlined in the significant accounting policies section, recognising ROU assets and lease obligations of
$7.2m. The following table reconciles the Group’s lease commitments disclosed in the consolidated financial statements
as at 1 August 2019, to the lease obligations recognised on initial application of NZ IFRS 16:
Lease commitments, 31 July 20198,902
Recognition exemptions for short-term and low-value leases(2,444)
Discounted using the incremental borrowing rate at 1 August 2019(683)
Lease remeasurements1,417
Lease obligations recognised at 1 August 20197,192
Lease obligations were measured at the present value of remaining lease payments at the transition date, discounted at
the Group’s incremental borrowing rate. The Group’s weighted average rate applied at 1 August 2019 was 3.49%.
BuildingsPlant and
Equipment
Total
$’000$’000$’000
RIGHT-OF-USE ASSETS
Cost
Balance as at 1 August 20196,7264667,192
Additions and acquisitions6,497606,557
Acquisitions through business combinations (note 18)8,9927089,700
Foreign exchange differences(9)-(9)
Balance as at 31 July 202022,2061,23423,440
Depreciation
Balance as at 1 August 2019---
Depreciation4,7022464,948
Foreign exchange differences(5)-(5)
Balance as at 31 July 20204,6972464,943
Carrying amounts
Balance as at 1 August 20196,7264667,192
Balance as at 31 July 202017,51098718,497
Total
$’000
LEASE OBLIGATIONS
Contractual, undiscounted cash flows associated with the Group’s lease obligations are as follows:
Within one year5,061
Between one and five years15,015
Beyond five years2,443
Total undiscounted lease obligations22,519
Discounted lease obligations recognised on the Company’s consolidated balance sheet are as follows:
Current4,422
Non-current14,838
Total discounted lease obligations19,260
Interest expense on lease obligations for the year ended 31 July 2020 was $0.45m and is included in finance expense. Operating lease
expenses relating to short-term and low-value leases not included in the measurement of lease obligations for the year ended 31 July
2020 were $1.4m.
PAGE 45 & 46ANNUAL FINANCIAL STATEMENTS 2020

DEBT AND EQUITY
The debt and equity section gives information about the Group’s capital
structure and financing costs related to this structure. This section includes the
following notes:
10 Finance income and expenses 48
11 Loans and borrowings 49
12 Share capital 51
13 Share based payments 52
14 Reserves and retained earnings 54
10. FINANCE INCOME AND EXPENSES
Interest income is recognised using the effective interest method. When a loan or receivable is impaired,
the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted
at the original effective interest rate of the instrument, and continues unwinding the discount as interest income.
Interest income on impaired loans and receivables is recognised using the original effective interest rate.
Interest expense on borrowings, bank and facility fees and transaction costs are recognised in the income
statement over the period of the borrowings, using the effective interest rate method, unless such costs relate
to funding capital work in progress. Interest expense on lease obligations are also recognised in the income
statement in accordance with NZ IFRS 16, which was adopted by the Group during the period. Refer to Note 9 and
Changes in accounting policies for further detail.
20202019
$’000$’000
Interest income on loans and deposits1341,232
Total finance income1341,232
Interest and facility fees(21,414)(16,345)
Capitalised borrowing cost2,0897,526
Interest on leases(452)-
Total finance costs(19,777)(8,819)
Loss on derecognition of financial assets(1,747)(1,842)
Net finance costs(21,390)(9,429)
PAGE 47 & 48ANNUAL FINANCIAL STATEMENTS 2020

11. LOANS AND BORROWINGS
Interest bearing liabilities are recognised initially at fair value, net of transaction costs incurred. Interest bearing liabilities
are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the
redemption value is recognised in the profit and loss component of the statement of comprehensive income over the
period of the borrowings using the effective interest method.
20202019
Drawn Facility
Amount
Transaction
Costs
Carrying
Amount
Drawn Facility
Amount
Transaction
Costs
Carrying
Amount
$’000$’000$’000$’000$’000$’000
Working capital facility NZD68,910-68,91047,240-47,240
Working capital facility USD33,927-33,92752,386-52,386
Current liabilities102,837-102,83799,626-99,626
Retail bonds180,000(2,987)177,013---
Revolving credit facility250,000(259)249,741250,000(518)249,482
Non-current liabilities430,000(3,246)426,754250,000(518)249,482
(a) Terms of loans and borrowings
The revolving credit facility and working capital facility within the Group are secured under the terms of the General Security
Deed dated 26 June 2013, by which all present and future property is secured to the ANZ Bank and Bank of New Zealand.
The Group facilities include:
• A secured revolving credit facility (Facility A) of $150m maturing on 1 August 2021.
• A secured revolving credit facility (Facility B) of $50m maturing 1 August 2023.
• A secured revolving credit facility (Facility C) of $50m maturing 1 August 2023.
• A secured working capital facility of NZD $320m maturing on 30 September 2020.
The Group recently finalised an additional revolving credit facility of $100m commencing 1 October 2020, stepping down
to $70m on 1 January 2021 and maturing 1 May 2021. It also reduced the working capital facility of $320m to $250m and
extended it for a period of twelve months and extended revolving credit facility A to 1 October 2021.
The Group is subject to capital requirements imposed by its bank through covenants agreed as part of the lending facility
arrangements. The Group has met all externally imposed capital requirements for the twelve months ended 31 July 2020
and 31 July 2019.
Retail Bonds
Borrowings under the retail bond programme are supported by a Master Trust Deed and supplemented by the Series
Supplement entered into between the Group and the New Zealand Guardian Trust Company Limited. The retail bonds are
unsecured and unsubordinated. At 31 July 2020, the retail bonds had a fair value of $187.7m, based on NZDX valuation.
Nominal Interest
Rate %
Financial Year of
Maturity
Carrying
Amount 2020
Carrying Amount
2019
Secured revolving credit facility (Facility A, B & C) - ANZ/BNZ1.48 %2021, 2023250,000250,000
Secured working capital facility - ANZ/BNZ - USD1.26 %202033,92752,386
Secured working capital facility - ANZ/BNZ - NZD1.50 %202068,91047,240
Subordinated retail bonds3.83 %2025180,000-
The nominal interest rate is calculated by adding the BKBM rate for NZD facilities, US LIBOR rate for USD facilities and
the applicable margin rate. It excludes line fees and swap costs. Nominal interest rate for the subordinated retail bonds
excludes transaction costs.
PAGE 49 & 50ANNUAL FINANCIAL STATEMENTS 2020

12. SHARE CAPITAL
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a
deduction from the proceeds.
During the reporting period, 83,880 new ordinary shares were granted to participants of the Group’s Long Term Incentive
scheme as a result of share options that were granted under the scheme vesting and being converted to ordinary shares
(2019: nil). These shares were issued to the participants at no cost. Refer to Note 13 for further information.
2020 Shares2019 Shares20202019
$’000$’000
(a) Share capital
Ordinary shares
On issue at beginning of period179,223,028179,223,028268,074268,074
Issue of share capital under employee share plans83,880-470-
On issue at end of period179,306,908179,223,028268,544268,074
(b) Ordinary shares
All issued shares are fully paid and have no par value. Ordinary shares are entitled to one vote per share at meetings of
Synlait Milk Limited. All ordinary shares rank equally with regard to Synlait Milk Limited’s residual assets.
(c) Capital risk management
The Group’s capital includes share capital, retained earnings and reserves.
The Group’s policy is to maintain a sound capital base so as to maintain investor and creditor confidence and to sustain
future development of the business. The impact of the level of capital on shareholders’ return is also recognised and
the Group recognises the need to maintain a balance between the higher returns that might be possible with greater
gearing and the advantages and security afforded by a sound capital position.
The Group is subject to various security ratios within the bank facilities agreement.
The Group’s policies in respect of capital management and allocation are reviewed by the Board of Directors.
(d) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to shareholders by the weighted average number of shares outstanding during the period. Diluted
EPS is determined by adjusting the profit or loss attributable to shareholders and the number of shares outstanding to include
the effects of all potential dilutive shares.
Basic EPS for the 2020 financial period was 41.95 cents (2019: 45.89). Diluted EPS for the 2020 financial period was 41.85 cents
(2019: 45.77).
13. SHARE BASED PAYMENTS
(a) LTI share scheme
Under the LTI share scheme, participants receive Performance Share Rights (“PSRs”) which can be converted into
Ordinary Shares in Synlait Milk Limited in three financial years’ time provided performance hurdles have been
met during the assessment period (the date of award of the PSRs plus three financial years). The number of PSRs
granted to participants is set at one quarter of their base salary divided by Synlait Milk Limited’s share price on the
date of the award of the PSRs.
The PSRs consist of 50% Total Shareholder Return Rights (“TSR Rights”) and 50% Earnings Per Share Rights (“EPS
Rights”). The vesting for both TSR Rights and EPS Rights is determined in accordance with progressive vesting scales.
Synlait Milk Limited’s TSR must be greater than or equal to the 50th percentile of the constituents of the TSR Peer
Group over the assessment period for 50% of the TSR Rights to vest, scaled so that 100% of the TSR Rights vest
if Synlait Milk Limited’s TSR equals or exceeds the 75th percentile of the TSR Peer Group over the assessment
period. The TSR Peer Group is determined as at the date of award of the PSRs.
If Synlait Milk Limited’s EPS over the assessment period equals a Board approved EPS target, 50% of the EPS
Rights vest, scaled so that 100% of the EPS Rights vest if Synlait Milk Limited’s EPS over the assessment period
equals the Board approved EPS target plus 10%.
For either performance hurdle to be met, Synlait Milk Limited’s TSR must be positive over the assessment period.
No exercise price is payable upon exercise of a PSR, Synlait Milk Limited’s ordinary shares being delivered to a
participant for nil consideration. The LTI share scheme is an annual scheme with PSRs granted to Board approved
participants each year, noting however that the annual award is assessed over a three year period.
None of the above shares are held by the Group or its subsidiaries.
PAGE 51 & 52ANNUAL FINANCIAL STATEMENTS 2020

The table below sets out the movement in LTI share scheme PSR’s during the year:
20202019
Outstanding 1 August472,934506,839
Granted during the year148,005134,582
Forfeited during the year(202,079)(168,487)
Exercised during the year(83,880)-
Total334,980 472,934
2020 PSRs2019 PSRs
Risk free rate0.83 %1.97 %
Volatility37.70 %35.84 %
Share price at entitlement date9.7910.81
Share price at grant date9.1 88.66
Total value of options granted at grant date ($000’s)783559
20202019
$’000$’000
Expenses for equity settled share based payment transactions523 644
During the period, 83,880 new ordinary shares were granted to participants of the LTI scheme. See Note 12 for further detail.
The fair value of the PSRs awarded at grant date has been determined by an independent third party valuer, using a Monte
Carlo simulation to model the total share return for Synlait and the TSR peer group. The fair value of the PSRs awarded,
along with key assumptions, are listed below:
The estimated value of the PSRs is amortised over the vesting period from grant date.
(b) Expenses arising from share based payment transactions
Total expenses arising from share based payment transactions recognised during the period as part of employee benefit
expense were as follows:
14. RESERVES AND RETAINED EARNINGS
(a) Retained earnings
Movements in retained earnings were as follows:
Group
20202019
$’000$’000
Balance 1 August248,775166,536
Net profit for the year75,20882,239
Balance 31 July323,983 248,775
(b) Nature and purpose of reserves
(i) Cash flow hedge reserve
The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair value hedging
instruments and the cost of cash flow hedging instruments. Cash flow hedging instruments relate transactions that have
not yet occurred.
(ii) Employee benefits reserve
The current year movement in the employee benefits reserve of ($0.3m) is comprised of the cumulative share based
payment expense for share options not yet vested of $0.5m (2019: $0.6m), vesting of rights during the period of ($0.5m)
(2019: $nil) and the related movement in deferred tax asset of ($0.3m) (2019: $0.1m)
(c) Dividends
No dividends were declared by the Group during the year.
PAGE 53 & 54ANNUAL FINANCIAL STATEMENTS 2020

FINANCIAL RISK
MANAGEMENT
The financial risk management section presents information about the Group’s
financial risk exposures and the financial instruments used to mitigate this. This
section includes the following notes:
15 Financial risk management 56
16 Financial instruments 63
15. FINANCIAL RISK MANAGEMENT
The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate risk,
foreign exchange rate risk, and commodity price risk including forward exchange contracts, interest rate swaps
and commodity derivative contracts.
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk
and commodity price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial
performance. The Group uses derivative financial instruments to hedge certain risk exposures.
On 1 April 2020, the Group completed the acquisition of 100% of the shares of Dairyworks Limited (“Dairyworks”). See
Note 18 for further details. The acquisition has introduced additional financial risks similar to the financial risks of the
Group. Dairyworks currently has its own separate treasury policy from the Group’s policy with the need for its own risk
management parameters to reflect the business and markets that it operates in. Any deviation in Dairyworks’ policy
from the Group is made explicit in the notes below.
Market risk
Foreign exchange risk
The Group is exposed to foreign currency risk on its sales, which are predominantly denominated in US dollars.
The Group is also exposed to foreign currency risk on the purchase of raw materials for production and capital
equipment purchases from overseas. The Group enters into derivative arrangements in the ordinary course of
business to manage foreign currency risk. These instruments include forward exchange contracts, option collars and
vanilla options. These instruments enable the Group to mitigate the risk the variable exchange rates present to future
cash flows for sales receipts or purchases by fixing or limiting the exchange rate at which these cash receipts or
payments are exchanged into NZ dollars.
In relation to foreign exchange contracts are entered into based on forecast cash receipts or payments, variability
in the expected timing or amounts of future cash flows can lead to ineffective hedging. To mitigate the risk of
ineffectiveness the Group’s policy is to hedge a decreasing proportion of the risk exposure the further into the
future the exposure exists given the increasing uncertainty of cash flows. Additionally the Group’s policy is that the
proportion of risk exposure to be hedged changes on a monthly basis in response to the movement in market rates.
As at 31 July 2020, the Group has hedged 62% of its exposure to foreign exchange risk on sales, and 23% of its
exposure to foreign exchange risk on payables, over the following 2 years.
In addition to the above exposure, Dairyworks had entered USD $2.8m of foreign exchange contracts for confirmed
purchase of raw materials for production payable within several months of reporting date.
PAGE 55 & 56ANNUAL FINANCIAL STATEMENTS 2020

Interest rate risk
Interest rate risk is the risk that the value of the Group’s assets and liabilities will fluctuate due to changes in market
interest rates. The Group is exposed to interest rate risk primarily through its bank overdrafts and borrowings.
The Group manages its interest rate risk by using interest rate swaps to convert a portion of its floating rate debt to
fixed interest rates in relation to the benchmark interest rate element. As interest rate swaps are entered into based on
forecast debt levels, variability in future cash flows and debt levels can lead to ineffective hedging. To mitigate the risk
of ineffectiveness the Group’s policy is to hedge a decreasing proportion of the risk exposure the further into the future
the exposure exists given the increasing uncertainty of cash flows.
The Group has a Board approved treasury policy that sets the parameters to the extent of the cover taken. The policy
requires the Group to hedge 30% to 80% of its exposure to interest rate risk that matures within 3 years, 20% to 60% of
the risk that matures between 3 and 5 years, and 0% to 40% of the risk that matures between 5 and 10 years.
Commodity Price Risk
Dairy commodity price risk is the risk of volatility in profit and loss from the movement in dairy commodity prices to
which the Group may be exposed. Volatility in global dairy commodity prices can have an adverse impact on the
Groups earnings and milk price by eroding selling prices and increasing input costs.
The Group primarily manages its dairy commodity price risk by:
• Determining the most appropriate mix of products to manufacture based on the milk supply curve and global
demand for dairy products;
• Governing the length and terms of sales contracts so that sales revenue is reflective of current market prices
and is, where appropriate, linked to Global Dairy Trade (GDT) prices; and
• Using commodity derivative contracts to manage sales price volatility caused by fluctuations in GDT prices.
The Group has a Board approved treasury policy that sets the parameters under which commodity cover is to be
taken, including permitted derivative types and volume limits.
Credit risk
The Group’s exposure to credit risk is mainly influenced by its customer base and banking counterparties.
Management has a credit policy in place under which each new customer is rigorously analysed for credit
worthiness. Investments and derivatives are only entered into with reputable financial banks.
The carrying amount of financial assets represents the Group’s maximum credit exposure. The Group also retains
all the late payment risk in the derecognition of financial assets, as described in note 4.
Synlait Milk Limited guarantees all facilities held by Synlait Milk Finance Limited.
Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual obligations as they fall due. The Group
evaluates its liquidity requirements on an ongoing basis and uses a variety of facilities to manage liquidity risk.
The Group has negotiated banking facilities sufficient to meet its medium term facility requirements.
The Group has internal limits in place in order to reduce exposure to liquidity risk, as well as having committed lines
of credit. It is the Group’s policy to provide credit and liquidity enhancements only to wholly owned subsidiaries.
15. FINANCIAL RISK MANAGEMENT (CONTINUED)
Market risk
(i) Foreign exchange risk
The Group’s exposure to foreign currency risk at the reporting date was as follows:
20202019
USDAUDEURRMBUSDAUDEURRMB
$’000$’000$’000$’000$’000$’000$’000$’000
Trade receivables23,0393,479--34,46236-18
Trade payables(7,142)(605)(243)-(363)-(11)-
Working capital facility(22,487)---(34,300)---
PAGE 57 & 58ANNUAL FINANCIAL STATEMENTS 2020

20202019
Weighted Average
Interest Rate
Nominal
Balance
Weighted Average
Interest Rate
Nominal
Balance
%$’000%$’000
Less than 1 year4.26 %57,2504.23 %79,500
1 to 2 years4.36 %40,0004.26 %57,250
2 to 3 years4.36 %40,0004.36 %40,000
3 to 4 years4.20 %30,0004.36 %40,000
4 to 5 years3.54 %15,0004.20 %30,000
5 to 6 years3.56 %10,0003.54 %15,000
6 to 7 years-%-3.56 %10,000
Post-tax impact on the
income statement
Post-tax impact on cash
flow hedge reserve (equity)
2020201920202019
$’000$’000$’000$’000
Interest rates
100 basis point increase in interest rate(2,879)(2,185)1,2521,764
100 basis point decrease in interest rate2,8792,185(1,303)(1,843)
Foreign exchange rates
5% increase in exchange rate--27,12723,985
5% decrease in exchange rate--(29,966)(26,504)
(ii) Interest rate risk
As at the reporting date, the Group had the following interest rate swap contracts outstanding:
The above balances include forward start swap contracts for various periods and do not necessarily reflect the current active
contracts held at any one point in time.
In managing interest rate risks, the Group aims to reduce the impact of short term fluctuations on the Group’s earnings.
Over the longer term, however, changes in interest rates will have an impact on profit.
(iv) Commodity derivatives
During the reporting period the Group entered into a small number of commodity derivative contracts to further support
the Group’s existing financial risk management strategy. The movement in the fair value of the commodity derivatives is
included within the cash flow hedge reserve.
Liquidity risk
The total repayments and associated maturity of financial liabilities as at balance date is reported below.
Less than
12 months
Between
1 and 2 years
Between
2 and 5 years
Over
5 years
Total
$’000$’000$’000$’000$’000
At 31 July 2020
Working capital facility102,837---102,837
Trade and other payables238,770---238,770
Loans and borrowings-149,790276,964-426,754
Derivative financial instruments14,1488352,7821,18818,953
Lease liabilities4,4223,2068,1063,52519,260
Total360,177153,831287,8524,713806,574
At 31 July 2019
Working capital facility99,626---99,626
Trade and other payables216,020---216,020
Loans and borrowings-149,58099,902-249,482
Derivative financial instruments27,9606,5693,20191638,647
Total343,606156,149103,103916603,775
15. FINANCIAL RISK MANAGEMENT (CONTINUED)
20202019
Weighted Average
Exchange Rate
Nominal
Balance
Weighted Average
Exchange Rate
Nominal
Balance
USD$’000USD$’000
Exports
Less than 1 year0.6478379,5000.6895353,150
1 to 2 years0.6318192,0500.6765160,600
Imports
Less than 1 year0.6368(46,021)0.6752(42,467)
The Group’s exposure to foreign currency in the period ended 31 July 2020 is limited to its sales of dairy products,
purchases of raw materials for production, capital equipment purchases and USD working capital facility. As at the
reporting date, the Group had the following foreign exchange derivative instruments outstanding in respect of future
sales and purchases transactions:
(iii) Sensitivity analysis
The following table summarises the sensitivity of the Group’s profit and equity to interest rate risk and foreign exchange risk.
The sensitivity analysis below has been determined based on the mark to market impact on financial instruments of
changing interest and foreign exchange rates at balance date. The analysis is prepared assuming the amount of the
financial instrument outstanding at the balance sheet date was outstanding for the whole year, and by adjusting one
input whilst keeping the others constant.
PAGE 59 & 60ANNUAL FINANCIAL STATEMENTS 2020

Hedging instruments used
in cash flow hedges
Nominal
Amount
Carrying AmountHedge Accounted
Amounts in Cash
Flow Reserve
Total Cash Flow
Hedge Reserve
AssetsLiabilities Intrinsic Value
$’000NZD$’000NZD$’000NZD$’000NZD’000
31 July 2020
Foreign exchange risk
Foreign exchange contracts (USD)528,33736,41912,07824,34124,341
Interest rate risk
Interest rate swaps57,250-6,777(6,777)(6,777)
Commodity price risk
Dairy commodity futures (NZD)12,016195---
Total36,61418,85517,56417,564
At 31 July 2019
Foreign exchange risk
Foreign exchange contracts (USD)471,2832,32031,531(29,211)(29,211)
Interest rate risk
Interest rate swaps79,500-7,116(7,116)(7,116)
Commodity price risk
Dairy commodity futures (NZD)5,30783--8
Total2,40338,647(36,327)(36,319)
Cash flow hedges
The Group enters into cash flow hedges of highly probable forecast transactions and firm commitments, as described in
accounting policy section of this note.
The above table does not include USD $2.8m foreign exchange contracts held by Dairyworks as it has not elected to cash flow hedge.
Hedging instruments are located within the derivative financial instruments line items in the statement of financial position, classified as
assets or liabilities, current or non-current.
15. FINANCIAL RISK MANAGEMENT (CONTINUED)
20202019
Effects of Cash Flow
Hedges on Statement of
Comprehensive Income
Hedging Gains/(losses)
Recognised in Other
Comprehensive Income
Hedge Ineffectiveness
Recognised in Profit
or Loss
Hedging Gains/(losses)
Recognised in Other
Comprehensive Income
Hedge Ineffectiveness
Recognised in Profit
or Loss
$’000$’000$’000$’000
Foreign exchange risk
Forward exchange contracts53,551-(19,703)-
Foreign currency collars--154-
Interest rate risk
Interest rate swaps339-(1,578)-
Commodity price risk
Dairy commodity futures (NZD)(8)(299)(196)-
Total53,882(299)(21,323)-
Impact to reserves in equity
The impact of the Group’s hedge accounting policies on the reserves in equity is presented in the table below:
20202019
Hedge Reserves$’000$’000
Opening balance(26,148)(10,796)
Movements attributable to cashflow hedges:
Change in value of effective derivative hedging instruments16,841(29,589)
Reclassifications to the income statement as hedged transactions occurred37,0418,266
Tax (credit)/expense(15,087) 5,971
Total movement38,795(15,352)
Closing balance12,647 (26,148)
PAGE 61 & 62ANNUAL FINANCIAL STATEMENTS 2020

16. FINANCIAL INSTRUMENTS
Classification
The Group classifies its financial assets in three categories: at amortised cost, at fair value through other
comprehensive income and at fair value through profit or loss. The classification of financial assets depends on the
business model within which the financial asset is held and its contractual cash flow characteristics.
The Group classifies its financial liabilities in two categories: at amortised cost and at fair value through profit or loss.
(i) Financial instruments at amortised cost
Financial assets are classified as measured at amortised cost if the Group’s intention is to hold the financial
assets for collecting cash flows and the contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest.
The Group currently classifies its cash and cash equivalents, restricted cash equivalents, accounts receivable and
other receivables as financial assets measured at amortised cost.
Financial liabilities are classified as measured at amortised cost using the effective interest method, with the
exception of those classified at fair value.
The Group currently classifies its accounts payable, accrued liabilities (excluding derivatives) and term debt as
financial liabilities measured at amortised cost.
(ii) Financial instruments at fair value through other comprehensive income (“FVOCI”)
The Group has elected to designate certain investments in equity instruments that are not held for trading as FVOCI
at initial recognition and to present gains and losses in other comprehensive income. Dividends earned from such
investments are recognised in profit or loss.
(iii) Financial instruments at fair value through profit or loss (“FVPL”)
Financial assets that do not meet the criteria for classification as measured at either amortised cost or FVOCI
are classified as FVPL.
Derivative financial instruments that are not in an effective hedge relationship are classified as FVPL.
Recognition and measurement
The Group recognises a financial asset or a financial liability when it becomes a party to the contractual provisions
of the instrument.
Regular purchases and sales of financial assets are recognised on the trade date – the date on which the Group
commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all
financial assets not classified at fair value through profit or loss. Financial assets carried at fair value through profit or
loss are initially recognised at fair value, and transaction costs are expensed in the profit and loss component of the
statement of comprehensive income.
Where financial assets are subsequently measured at amortised cost, interest revenue, credit losses and
foreign exchange gains or losses are recognised in profit or loss. On derecognition, any gain or loss is
recognised in profit or loss. Financial liabilities subsequently measured at amortised cost are measured using
the effective interest method.
Where investments in equity instruments are designated as FVOCI, fair value gains and losses are recognised in other
comprehensive income. Dividends earned from such investments are recognised in profit or loss.
Where financial assets are subsequently measured at FVPL, all gains and losses are recognised in profit or loss.
A key management judgement is the assessment that substantially all the risks and rewards of ownership have been
transferred in the derecognition of financial assets.
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or
have been transferred and the Group has transferred substantially all risks and rewards of ownership.
Financial liabilities are derecognised when the contractual obligations are discharged, cancelled or expired.
Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
As the Group’s financial instruments, with the exception of retail bonds, are not traded in active markets their fair value
is determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are based
on market conditions existing at each balance date.
All financial instruments held at fair value are included in level 2 of the valuation hierarchy as defined in NZ IFRS 13, with
the exception of the retail bonds, which are included in level 1. The retail bonds are listed instruments on the NZDX and
the Group is satisfied there is sufficient trading in these instruments to qualify as an active market.
PAGE 63 & 64ANNUAL FINANCIAL STATEMENTS 2020

The fair value of foreign currency forward contracts is determined using forward exchange rates at balance date.
The fair value of foreign exchange option agreements is determined using forward exchange rates at balance date.
The fair value of interest rate swaps is determined using forward interest rates as at reporting date. The fair value of
commodity derivatives is determined using NZX settlement prices.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there
is a current legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis
or realise the asset and settle the liability simultaneously. There are master netting agreements in place for derivative
financial instruments held, however these instruments have not been offset in the statement of financial position as they
do not currently meet the criteria for offset.
Impairment of financial assets
The Group has adopted the expected credit loss (“ECL”) model. For further detail please refer to Note 4.
The Group assesses whether there is evidence that a financial asset or group of financial assets is impaired,
with the exception of assets that are fair valued through profit or loss. A financial asset or a group of financial
assets can be impaired and the impairment losses are recognised in accordance with IFRS 9. The Group continues
to assess if historical and future objective evidence of impairment exists after the initial recognition of the asset.
Derivative financial instruments - hedge accounting
The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate risk,
foreign exchange rate risk, and commodity price risk including forward exchange contracts, interest rate swaps, and
commodity derivative contracts.
Derivatives are initially recognised at fair value at the date the derivative contact is entered into and are
subsequently remeasured to fair value at each reporting date. For derivatives measured at fair value, the gain
or loss that results from changes in fair value of the derivative is recognised in earnings immediately, unless the
derivative is designated and effective as a hedging instrument. Hedges of highly probable forecast transactions or
hedges of foreign currency risk of firm commitments are designated as cash flow hedges by the Group, with the
exception for Dairyworks.
The full fair value of a hedging derivative is classified as a current asset or liability when the remaining term of the
hedged item is 12 months or less from balance date, or when cash flows arising from the hedged item will occur
within 12 months or less from balance date. The full fair value of a hedging derivative is classified as a non-current
asset or liability when the remaining maturity of the hedged item is more than 12 months and no cash flows will occur
within 12 months of balance date.
16. FINANCIAL INSTRUMENTS (CONTINUED)
(i) Hedge accounting
The Group designates certain hedging instruments in respect of foreign currency risk and interest rate risk as cash
flow hedges. Hedges of risk on firm commitments and highly probably transactions are accounted for as cash flow
hedges.
At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument
and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge
transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether
the hedging instrument that is used in a hedging relationship is highly effective in offsetting changes in fair values
or cash flows of the hedged item.
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges are recognised in other comprehensive income and accumulated as a separate component of equity
in the hedging reserve. The gain or loss relating to the ineffective portion and reclassification adjustments are
recognised immediately in profit or loss, included in revenue for foreign exchange instruments and commodity
price derivatives, and finance costs for interest rate swaps.
Amounts recognised in the hedging reserve are classified from equity to profit or loss (as a reclassification
adjustment) in the periods when the hedged item is recognised in profit or loss, in the same line as the recognised
hedged item.
Hedge accounting is discontinued when the Group revokes the hedging relationships, the hedging instrument
expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss
recognised in the hedging reserve at that time remains in equity and is recognised when the forecast transaction is
ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative
gain or loss that was recognised in the hedging reserve is immediately recorded in profit or loss.
The Group separates the intrinsic value and time value of vanilla option and collar contracts, designating only the
intrinsic value as the hedging instrument. The time value, including any gains or losses, is recognised in other
comprehensive income until the hedged transaction occurs and is recognised in profit or loss.
(iii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting are recognised immediately in the income statement.
PAGE 65 & 66ANNUAL FINANCIAL STATEMENTS 2020

At Amortised CostAt Fair Value Through
Other Comprehensive
Income
At Fair Value Through
Profit or Loss
Total
Financial assets$’000$’000$’000$’000
At 31 July 2020
Cash and cash equivalents5,887--5,887
Derivative financial instruments--36,61436,614
Trade and other receivables63,057--63,057
Instruments in equity-143-143
Total68,94414336,614105,701
At 31 July 2019
Cash and cash equivalents16,007--16,007
Derivative financial instruments--2,4032,403
Trade and other receivables61,933--61,933
Instruments in equity-110-110
Total77,9401102,40380,453
At Amortised CostAt Fair Value Through
Profit or Loss
Total
Financial liabilities$’000$’000$’000
At 31 July 2020
Derivative financial instruments-18,95318,953
Working capital facility102,837-102,837
Trade and other payables238,770-238,770
Borrowings426,754-426,754
Total768,36118,953787,314
At 31 July 2019
Derivative financial instruments-38,64738,647
Working capital facility99,626-99,626
Trade and other payables216,020-216,020
Borrowings249,482-249,482
Total565,12838,647603,775
(a) Financial instruments by category
All derivative financial instruments are designated in effective hedge relationships, with exception for derivative financial
instruments held by Dairyworks.
For instruments held at amortised cost, carrying amount is considered a reasonable approximation for fair value, with exception to
the Retail Bond.
16. FINANCIAL INSTRUMENTS (CONTINUED)OTHER
This section contains additional information regarding the performance of the
group during the financial year. This section includes the following notes:
17 Income tax 69
18 Business combinations 73
19 Other investments 77
20 Related party transactions 79
21 Contingencies 82
22 Commitments 83
23 Events occurring after the reporting period 84
24 Other accounting policies 84
PAGE 67 & 68ANNUAL FINANCIAL STATEMENTS 2020

17. INCOME TAX
The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss
component of the statement of comprehensive income, except to the extent that it relates to items recognised
in either other comprehensive income or directly in equity. In these cases, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
New Zealand tax consolidated group
Synlait Milk Limited and its wholly-owned New Zealand controlled entity, Synlait Milk Finance Limited, form a tax
consolidated group. The New Zealand Dairy Company Limited, Eighty Nine Richard Pearse Drive Limited, Synlait
Foods (Talbot Forest) Limited and Dairyworks Limited are not members of the tax consolidated group.
20202019
$’000$’000
(a) Income tax expense
Current tax expense
Current tax on profits for the year(21,614)(29,220)
Current tax on prior period adjustments4,212721
Total(17,402)(28,499)
Deferred tax expense
Temporary differences(7,070)(3,433)
Changes in tax rates and laws2,229-
Prior year adjustments(4,473)(925)
Tax losses to carry forward2317
Total deferred tax(9,291)(4,341)
Income tax expense(26,693)(32,840)
(b) Reconciliation of effective tax rate
Profit before income tax101,901115,079
Income tax using the Group’s domestic tax rate - 28%(28,532)(32,222)
Non-deductible costs(889)(533)
Total(29,421)(32,755)
Prior year adjustments(261)(85)
Deferred tax credit relating to changes in tax rates and laws2,229-
Research and development tax credit779-
Other tax effects for reconciliation between accounting profit and tax expense(19)-
Total2,728(85)
Income tax expense(26,693)(32,840)
20202019
$’000$’000
(c) Imputation credits
Imputation credits available directly and indirectly to the shareholders of the Group98,00983,219
As part of the New Zealand Government’s COVID-19: Economic Response Package, depreciation deductions will be
reintroduced for new and existing industrial and commercial buildings from the 2020/21 tax year. The Group have determined
that, as a result of this legislative change, the tax base of certain assets has increased, reducing a taxable temporary
difference (deferred tax liability) previously recognised. The impact of these changes has resulted in a reduction in deferred
tax liabilities and a reduction in tax expense of $2.2m.
PAGE 69 & 70ANNUAL FINANCIAL STATEMENTS 2020

17. INCOME TAX (CONTINUED)
(d) Income tax recognised in other comprehensive income
The tax (charge)/credit relating to components of other comprehensive income is as follows:
(e) Deferred taxation
The balance comprises temporary differences attributable to:
Before TaxTax (Expense)/BenefitAfter Tax
$’000$’000$’000
31 July 2020
Cash flow hedges53,882(15,087)38,795
Other comprehensive income subject to tax53,882(15,087)38,795
31 July 2019
Cash flow hedges(21,323)5,971(15,352)
Other comprehensive income subject to tax(21,323)5,971(15,352)
20202019
$’000$’000
(restated)
Assets
Derivatives-10,170
Tax losses carried forward23112
Other items2,7932,128
Total deferred tax assets2,81612,410
Liabilities
Property, plant and equipment(47,632)(37,444)
Derivatives(4,918)-
Intangible assets(4,913)-
Total deferred tax liabilities(57,463)(37,444)
Total deferred tax(54,647)(25,034)
Balance
1 Aug 2018
Recognised
in Profit or
Loss
Recognised
in Other
Comprehensive
Income
Recognised
Directly in
Equity
Recognised
from a
Business
Combination
Prior Year
Adjustment
Balance 31
July 2019

Movements - Group
$’000
(restated)
$’000$’000$’000$’000$’000$’000
Property, plant and equipment(32,528)(4,165)---(751)(37,444)
Derivatives4,199-5,971---10,170
Other items1,287603-84-1552,128
Tax losses carried forward295(178)---(5)112
Total(26,747)(3,740)5,97184-(602)(25,034)
Balance
1 Aug 2019
Recognised
in Profit or
Loss
Recognised
in Other
Comprehensive
Income
Recognised
Directly in
Equity
Recognised
from a
Business
Combination
Prior Year
Adjustment
Balance 31
July 2020

Movements - Group
$’000 $’000$’000$’000$’000$’000$’000
Property, plant and equipment(37,444)(5,921)--227(4,495)(47,633)
Derivatives10,170-(15,087)---(4,918)
Other items2,1281,080-(389)(160)1342,793
Tax losses carried forward11223---(112)23
Intangible assets----(4,912)-(4,912)
Total(25,034)(4,818)(15,087)(389)(4,845)(4,473)(54,647)
The opening deferred tax balance relating to Plant, Property and Equipment for the year ended 31 July 2019 has been restated to
correct an immaterial prior period error which was identified during the current year. Please refer to Note 18 for further detail.
PAGE 71 & 72ANNUAL FINANCIAL STATEMENTS 2020

18. BUSINESS COMBINATIONS
Acquisitions of businesses are accounted for using the acquisition method. The cost of the acquisition is
measured at fair value, which is calculated as the sum of the assets given, liabilities incurred or assumed, and
equity instruments issued by the Group, at acquisition date, in exchange for control of the acquiree. Acquisition
related costs are recognised in profit or loss as incurred. The results of subsidiaries acquired or disposed of
during the year are included in the Consolidated Income Statement from the date of acquisition or up to the date
of disposal as appropriate.
(a) Talbot Forest Cheese Limited
On 1 August 2019, the Group completed the acquisition of selected assets and liabilities of Talbot Forest Cheese Ltd (“TFC”)
for total consideration of $38.3m, including inventory. The acquirer was a newly incorporated company, Synlait Foods (Talbot
Forest) Limited. On the acquisition date, the Group paid $18.8m. Of the remaining consideration payable, $18.1m was applied
against an intercompany loan owed by the vendor to the Group and the remaining $1.4m was paid over the course of FY20
upon completion of pre-completion works and plant acceptance tests. The acquisition has been accounted for in accordance
with IFRS 3, Business Combinations.
The acquisition of TFC includes a cheese manufacturing plant located in Temuka, New Zealand, capable of
manufacturing a variety of cheese products with an annual production capacity of 12,000MT, along with a consumer
cheese brand. The acquisition excludes the Talbot Forest Cheese artisan factory in Geraldine, New Zealand.
The following summarises the consideration paid for TFC and amounts of assets acquired and liabilities assumed
recognised at the acquisition date:
August 1, 2019
$’000
Current Assets
Inventory2,520
Non-current Assets
Property, plant and equipment12,745
Land and buildings5,960
Brand1,700
Non-current Liabilities
Deferred Tax(708)
Total identifiable net assets at fair value22,217
Goodwill arising on acquisition16,132
Total consideration38,349
Less: Debt and accrued interest payable owed to the Group extinguished upon acquisition(18,077)
Net cash outflow on acquisition20,272
The land, buildings, plant and equipment, inventory, and brand have been recognised at acquisition date fair values
based on third party valuations. Goodwill arose in the acquisition of the business operations of TFC because the cost of
acquisition reflected the benefit of future cash flows above the current fair market value of the assets acquired, and the
synergies and future market benefits expected to be obtained from the cheese manufacturing plant and related brand.
Acquisition costs of $0.1m and $0.3m have been recognised in the income statements for the years ended 31 July 2020
and 31 July 2019, respectively.
Impact of the acquisition on the results of the Group
From the date of acquisition, TFC has contributed $11.5m to revenue and a loss of ($4.7m) to net profit after tax. Had the
combination not taken place, revenue of the Group from continuing operations would have been $1,290.5m, and the net
profit from continuing operations for the Group would have been $79.9m.
(b) Dairyworks Limited
On 1 April 2020, the Group completed the acquisition of 100% of the shares of Dairyworks Ltd. (“Dairyworks”). The
purchase price of Dairyworks was $112 million on the basis of a debt and cash-free business. The acquisition was priced
using a locked box mechanism whereby the equity price of Dairyworks was determined or “locked-in” based on an
effective date balance sheet of 30 September 2019.
Debt, working capital, and other purchase price adjustments, based on the 30 September 2019 locked box adjustments
resulted in final consideration of $63.6m being transferred to the vendors of Dairyworks. Immediately following
acquisition, the Group repaid $43.0m of outstanding debt and accrued interest which was assumed as part of the
acquisition, utilising existing banking facilities.
Dairyworks’ operations are located in Christchurch, New Zealand. It specialises in the processing, packaging, and
marketing of dairy products including cheese, butter, ice cream, and milk powder through it’s four brands Alpine, Rolling
Meadow, Dairyworks, and Deep South. Dairyworks is one of the largest sellers of everyday dairy products in the New
Zealand consumer market.
The acquisition has been accounted for in accordance with IFRS 3, Business Combinations. The following summarises
the consideration paid for Dairyworks and fair values of assets acquired and liabilities assumed recognised at the
acquisition date.
PAGE 73 & 74ANNUAL FINANCIAL STATEMENTS 2020

18. BUSINESS COMBINATIONS (CONTINUED)
August 1, 2020
$’000
Current Assets
Cash and cash equivalents10,932
Trade receivables26,508
Inventory31,474
Other current assets413
Non-current Assets
Intangible assets530
Deferred tax assets472
Capital work in progress233
Property, plant and equipment15,336
Right-of-use assets9,700
Brands15,845
Current Liabilities
Trade and other payables(29,137)
Current tax liabilities(4,573)
Loans and borrowings(43,224)
Lease liability - current(1,399)
Non-current Liabilities
Deferred tax liabilities attributable to fair value differentials(4,609)
Lease liability - non-current(8,301)
Total identifiable net assets at fair value20,200
Goodwill arising on acquisition43,387
Total consideration63,587
Purchase price112,000
Less: Effective date adjustment for working capital and net debt(40,441)
Less: Interim period and other adjustments(7,972)
Total consideration transferred63,587
Less: Cash and cash equivalents acquired(10,932)
Net cash outflow on acquisition52,655
The land, buildings, plant and equipment, inventory, and brands have been recognised at acquisition date fair values
based on third party valuations. Right of use assets have been recognised at acquisition date present values of
remaining lease payments.
The acquisition gave rise to brand assets for the Rolling Meadow, Alpine, Dairyworks, and Deep South brands. The
brands were valued using the relief from royalty method. Key assumptions used in the valuation of the brand assets
were: notional royalty rate (25.0%), annual revenue growth rate (2.0% to 5.2%), post-tax discount rate (13.5%), and
terminal growth rate (2.0%).
This error has had no impact on either the earnings per share or diluted earning per share of the Group in any of the reporting
periods affected.
2017201820192020
Balance sheet (extract)$’000$’000$’000$’000
Goodwill2,3832,3832,3832,383
Deferred tax liabilities(2,383)(2,383)(2,383)(2,383)
Increase/(decrease) to net assets----
Goodwill arose in the acquisition of the business operations of Dairyworks because the cost of acquisition reflected the
benefit of future cash flows above the current fair market value of the assets acquired, and the synergies and future
market benefits expected to be obtained from Dairyworks’ operations and related brands.
Acquisition costs of $0.8m and $0.1m have been recognised in the income statements for the years ended 31 July 2020
and 31 July 2019, respectively.
Impact of the acquisition on the results of the Group
From the date of acquisition, Dairyworks has contributed $81.5m to revenue and $2.5m to net profit after tax. Had the
combination not taken place, revenue of the Group from continuing operations would have been $1,220.5m, and the net profit
from continuing operations for the Group would have been $72.7m. Had the acquisition occurred on 1 August 2019, revenue of
the Group would have been $1,465.8m and net profit would have been $79.0m.
During FY20 the Group began to leverage synergies between Synlait Foods (Talbot Forest) Limited and Dairyworks by
establishing an integrated cheese value chain. For the purposes of goodwill impairment testing, the Group has treated Synlait
Foods (Talbot Forest) Limited and Dairyworks as a single consumer food service cash generating unit. See Note 8 for further
detail on goodwill and impairment testing.
(c) Prior Period Error
During the year, an immaterial prior period error was identified in relation to the recognition of the acquisition of Eighty-
Nine Richard Pearse Drive Limited (see Note 17 in the Group financial statements for the year ended 31 July 2017 for further
information on the acquisition).
As part of the acquisition, a building was acquired which was non-depreciable for tax purposes as it had an estimated useful
life of 50 years or greater (building cost of $8.5m). A deferred tax liability was not recognised on the building in accordance
with NZ IAS 12 Income Taxes and NZ IFRS 3 Business Combinations as the initial recognition exemption was incorrectly
applied. Had a deferred tax liability been recognised, goodwill recognised on the acquisition would have increased by $2.4m.
The Group has elected to correct the error in the current period to ensure accuracy of these balances going forward. Each of
the affected financial statement line items for the prior periods have been restated as follows
PAGE 75 & 76ANNUAL FINANCIAL STATEMENTS 2020

19. OTHER INVESTMENTS
Investments in associates
Associates are those entities in which the Group, either directly or indirectly, holds a significant but not a controlling
interest, and has significant influence. Investments in associates are accounted for using the equity method and are
measured in the statement of financial position at cost plus post acquisition changes in the Group’s share of net assets.
Goodwill relating to associates is included in the carrying amount of the investment. Dividends reduce the carrying
value of the investment.
Associates
In January 2015, the Group acquired 25% of the shares of Sichuan New Hope Nutritionals, an infant formula company
registered in China. This company owns and markets the “Akara” and “E-Akara” infant formula brands in the Chinese
market, which are exclusively manufactured by Synlait Milk Limited.
The investment is not individually significant to the Group. The Group’s share of this equity accounted investment is as follows:
The carrying value of the investment in New Hope Nutritionals at balance date:
20202019
$’000$’000
Equity securities110110
Investment in associates33-
Total other investments143110
Synlait Milk Limited held, either directly or indirectly, interests in the following entities at the end of the reporting period:
Equity Holding

Name of entity
Country of
Incorporation
Class of
Shares
2020
%
2019
%
Synlait Milk Finance Limited (Subsidiary)New ZealandOrdinary100100
The New Zealand Dairy Company Limited (Subsidiary)New ZealandOrdinary100100
Eighty Nine Richard Pearse Drive Limited (Subsidiary)New ZealandOrdinary100100
Sichuan New Hope Nutritional Foods Co. Ltd (Associate)ChinaOrdinary2525
Synlait Business Consulting (Shanghai) Limited (Subsidiary)ChinaOrdinary100100
Synlait Foods (Talbot Forest) Limited (Subsidiary)New ZealandOrdinary100-
Dairyworks Limited (Subsidiary)New ZealandOrdinary100-
Dairyworks (Australia) Pty Limited (Subsidiary)AustraliaOrdinary100 -
20202019
$’000$’000
Gain/(loss) from continuing operations33 (580)
Total33 (580)
20202019
$’000$’000
Opening balance-580
Share of gains/(losses)33(580)
Total33-
PAGE 77 & 78ANNUAL FINANCIAL STATEMENTS 2020

20. RELATED PARTY TRANSACTIONS
Parent entity
Bright Dairy Holding Limited hold 39.02% of the shares issued by Synlait Milk Limited (2019: 39.04%). Bright Dairy Holding
Limited is a subsidiary of Bright Food (Group) Co. Limited, a State Owned Enterprise domiciled in the Peoples’ Republic of China.
Other related entities
In June 2013, a subsidiary of Synlait Milk Limited, Synlait Milk Finance Limited, was set up primarily for holding all
banking facilities for the Group and related interest rate swaps. Funds are loaned to Synlait Milk Limited and interest is
charged at market rates.
In January 2015, the Group acquired 25% of the shares of Sichuan New Hope Nutritionals, an infant formula company
registered in China. This company owns and markets the “Akara” and “E-Akara” infant formula brands in the Chinese
market, which are exclusively manufactured by Synlait Milk Limited. New Hope Innovation (Hong Kong) Trading
Company Limited is a related entity of Sichuan New Hope Nutritionals and is engaged in the import and export of dairy
foods. Main products include whole milk powder, skim milk powder and whey powder. The company is the Hong Kong
operations of the Chinese New Hope Dairy group, New Hope Dairy.
In May 2017 Synlait Milk Limited acquired 100% of the share capital of The New Zealand Dairy Company Limited and
Eighty Nine Richard Pearse Drive Limited. The New Zealand Dairy Company Limited was constructing a blending and
canning plant in Auckland, which was subsequently sold to Synlait Milk Limited. The New Zealand Dairy Company
Limited is now a non-trading entity. Eighty Nine Richard Pearse Drive Limited owns the land and buildings at which the
Auckland blending and canning plant was constructed. Eighty Nine Richard Pearse Drive Limited leased its land and
buildings to The New Zealand Dairy Company Limited, and now leases them to Synlait Milk Limited.
In May 2019, Synlait Business Consulting (Shanghai) Limited was incorporated. The wholly owned foreign entity started
operations from 1 August 2019 and the principal activity of the entity is to provide services to assist Synlait to market
products in China.
In August 2019, the Group acquired selected assets and liabilities of Talbot Forest Cheese Limited. The acquirer was a
newly incorporated company, Synlait Foods (Talbot Forest) Limited. Synlait Foods (Talbot Forest) Limited manufactures a
variety of cheese products. Synlait Milk Limited supplies various dairy products to Synlait Foods (Talbot Forest) Limited,
most notably raw milk.
In April 2020, Synlait Milk Limited acquired 100% of the share capital in Dairyworks Limited. Dairyworks Limited
specialises in the processing, packaging, and marketing of dairy products, including cheese, butter, ice cream and milk
powder. Synlait Foods (Talbot Forest) Limited supplies manufactured cheese products to Dairyworks Limited. Dairyworks
Limited owns an Australian subsidiary, Dairyworks (Australia) Pty Limited.
Refer to Note 18 for further information on the acquisitions of both Synlait Foods (Talbot Forest) Limited and Dairyworks
Limited which occurred in the year ended 31 July 2020
Key management and personnel compensation
Other than their salaries and bonus incentives, there are no other benefits paid or due to directors and executive
officers as at 31 July 2020. The total short-term benefits paid to the key management and personnel is set out below.
20202019
$’000$’000
Short term benefits6,3985,773
Share based payments expenses (note 13)523644
PAGE 79 & 80ANNUAL FINANCIAL STATEMENTS 2020

20. RELATED PARTY TRANSACTIONS (CONTINUED)21. CONTINGENCIES
(c) Outstanding balances
The following balances are outstanding at the reporting date in relation to transactions with related parties other than key
management personnel:
20202019
$’000$’000
Purchase of goods and services
Bright Dairy and Food Co Ltd - Directors fees259196
Sale of goods and services
Bright Dairy and Food Co Ltd - Sale of milk powder products4,0746,464
Bright Dairy and Food Co Ltd - Reimbursement of costs-(91)
New Hope Innovation (Hong Kong) Trading Company Limited - Sale of milk powder products1,773-
(b) Transactions with other related parties
20202019
$’000$’000
Current receivables (sales of goods and services)
Bright Dairy and Food Co Ltd - Sale of milk powder products-1
Bright Dairy and Food Co Ltd - Reimbursement of costs(492)(233)
Sichuan New Hope Nutritionals Ltd - Sale of milk powder products(71)(72)
Sichuan New Hope Nutritionals Ltd - Other costs292296
The Group is currently involved in a dispute regarding restrictive covenants attached to land it purchased in Pokeno.
In February 2018, the Group announced the conditional purchase of 28 hectares of land in Pokeno to establish its
second nutritional powder manufacturing site. The land was subject to restrictive covenants limiting the development
of the land that the vendor was required to remove. The vendor applied to the High Court to have the restrictive
covenants removed.
In November 2018, the High Court removed the restrictive covenants. The High Court also declined to award
compensation to the covenant holder on the basis that they would not suffer any loss due to the extinguishment of the
covenants as they were of little practical value. The Group took legal title to the land following the High Court’s decision.
The covenant holder appealed to the Court of Appeal which in May 2019 overturned the High Court’s decision.
In June 2019, the Group filed an application for leave to appeal to the Supreme Court to have the Court of Appeal’s
decision overturned. The Supreme Court held an oral hearing on 21 October 2019 where leave to appeal was granted.
The appeal was heard by the Supreme Court on 3 and 4 June 2020 and the Group is yet to receive the Court’s ruling.
There are a range of possible outcomes for the Group including a negotiated settlement between the parties. Given the
range of possible outcomes the Group is not able to reliably estimate any potential liability.
No other significant contingent liabilities are outstanding at balance date (2019: $nil).
(a) Other transactions with key management personnel or entities related to them
Information on transactions with key management personnel or entities related to them, other than compensation,
are set out below.
(i) Loans to directors
There were no loans to directors issued during the period ended 31 July 2020 (2019: $nil).
(ii) Other transactions and balances
Directors of Synlait Milk Limited control 3.0% of the voting shares of the company at balance date (2019: 3.0%)
PAGE 81 & 82ANNUAL FINANCIAL STATEMENTS 2020

22. COMMITMENTS
23. EVENTS OCCURRING AFTER THE REPORTING PERIOD
(a) Capital commitments
Capital expenditure contracted for at the end of the reporting period but not yet incurred is as follows:
On 3 August 2020, Synlait Milk Limited incorporated a new subsidiary, Synlait Milk (Dunsandel Farms) Limited. The newly
incorporated entity acquired two farms adjacent to the Group’s Dunsandel facility for $25.7m on the same day. The Group
received Overseas Investment Office approval to acquire the land on 24 February 2020.
There were no further events occurring subsequent to balance date which require adjustment to or disclosure in the
financial statements.
(b) Operating lease commitments – group as lessee
The above balances have been committed in relation to future expenditure on capital projects. Amounts already spent
have been included as work in progress. There are no commitments to note for Synlait Foods (Talbot Forest) Limited and
Dairyworks Limited.
20202019
$’000$’000
Pokeno processing plant10,26449,455
Liquid dairy packaging facility1,18816,916
Separator capacity upgrade4195,820
Dry Store 414,1002,523
Pokeno Waste Water Initiative571-
Dunsandel farms (note 23) 25,700-
Total52,24274,714
Leases
The Group leases certain buildings, plant and equipment. Operating leases are where the lessor, rather than the
Group, has effectively retained the substantial risk and benefit of ownership of a leased item. Operating lease
payments are included in the determination of profit or loss in equal instalments over the period of the lease.
Lease incentives received are recognised on a straight line basis over the lease period. From 1 August 2019, this
policy only applies to short term and low value leases.
20202019
$’000$’000
Less than one year1673,468
Between one and five years1424,897
Greater than five years-537
Total309 8,902
The operating leases relate to the leasing of warehouse and office space, vehicles and printers. All terms are reviewed on a regular
basis. All leases are subject to potential renewal.
24. OTHER ACCOUNTING POLICIES
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, call deposits and cash held on trust by Tax Management New
Zealand Ltd.
Goods and Services Tax (GST)
The profit and loss components of the statement of comprehensive income have been prepared so that all components
are stated exclusive of GST. All items in the financial position are stated net of GST, with the exception of receivables
and payables, which include GST invoiced.
PAGE 83 & 84ANNUAL FINANCIAL STATEMENTS 2020

Opinion
We have audited the consolidated financial statements of Synlait Milk Limited and its subsidiaries (the ‘Group’), which
comprise the consolidated statement of financial position as at 31 July 2020, and the consolidated income statement,
statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then
ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 15 to 84, present fairly, in all material
respects, the consolidated financial position of the Group as at 31 July 2020, and its consolidated financial performance
and cash flows for the year then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (‘NZ IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and International Standards on
Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Consolidated Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the Company in accordance with Professional and Ethical Standard 1 International Code of Ethics
for Assurance Practitioners (including International Independence Standards) (New Zealand) issued by the New Zealand
Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants’ International
Code of Ethics for Professional Accountants (including International Independence Standards), and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
Other than in our capacity as auditor and the provision of other assurance and taxation compliance services, we
have no relationship with or interests in the Company or any of its subsidiaries. These services have not impaired our
independence as auditor of the Company and Group.
Audit materiality
We consider materiality primarily in terms of the magnitude of misstatement in the financial statements of the Group that
in our judgement would make it probable that the economic decisions of a reasonably knowledgeable person would be
changed or influenced (the ‘quantitative’ materiality). In addition, we also assess whether other matters that come to our
attention during the audit would in our judgement change or influence the decisions of such a person (the ‘qualitative’
materiality). We use materiality both in planning the scope of our audit work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be $5,150,000.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
INDEPENDENT AUDITOR’S REPORT TO THE
SHAREHOLDERS OF SYNLAIT MILK LIMITED
KEY AUDIT MATTERHOW OUR AUDIT ADDRESSED
THE KEY AUDIT MATTER
Pōkeno Land Legal Dispute
In February 2018 the Group announced the conditional
purchase of 28 hectares of land in Pōkeno to establish
its second nutritional powder manufacturing site.
In November 2018, the High Court removed the
covenants which would have hindered development of
the land. The Group took legal title to the land following
the High Court’s decision.
In May 2019 the Court of Appeal overturned the High
Court decision to remove the covenants.
In June 2019 leave was filed to appeal to the Supreme
Court with an oral hearing occurring in October and the
hearing taking place in June 2020.
The Group continues to be involved in legal
proceedings and as at the date of this report there has
been no ruling made by the Supreme Court.
The disclosure about and explanations of the legal
dispute are contained in note 21 of the notes to the
consolidated financial statements.
We have included the Pōkeno legal dispute as a
key audit matter due to the level of judgement and
uncertainty in relation to the legal dispute and the range
of possible outcomes.
We have evaluated the appropriateness of the
accounting treatment, the assessment of the potential
outcomes of the proceedings and the accounting
presentation of the legal dispute by performing the
following procedures:
• Reading the High Court and Court of Appeal
judgements relating to the legal dispute;
• Discussing the matters with the Group’s senior
management including internal legal counsel;
• Obtaining and assessing the contents of a legal
confirmation letter from the external counsel who
are advising the Group on this matter; and
• Challenging management’s assessment of
the potential outcomes of proceedings and
the appropriateness of treating the legal dispute
as a contingent liability in accordance with NZ
IAS 37 Provisions, Contingent Liabilities and
Contingent Assets.
We have found that the legal dispute has been
appropriately disclosed as a contingent liability
within note 21 to the notes to the consolidated
financial statements.
PAGE 85 & 86ANNUAL FINANCIAL STATEMENTS 2020

KEY AUDIT MATTERHOW OUR AUDIT ADDRESSED
THE KEY AUDIT MATTER
Acquisition Accounting
As detailed in note 18(b), Synlait Milk Limited acquired
100% of Dairyworks Limited (“Dairyworks”) for a total
consideration of NZD $112m on 1 April 2020. The
acquisition resulted in the recognition of indefinite life
intangible assets comprising brands of $15.8m and
$43.4m of goodwill.
New Zealand accounting standards require the
purchaser to identify the assets and liabilities acquired
in a business combination, including identifiable
intangible assets, and to measure them at fair value at
the date of acquisition.
The Dairyworks brands has been valued using the relief
from royalty method. The key assumptions applied in
the model were:
• revenue growth rates;
• post-tax discount rate;
• royalty rate; and
• terminal growth rate.
We included the identification and valuation of
intangible assets arising from the Dairyworks acquisition
as a key audit matter because the Group’s acquisitions
are considered a key area of interest for investors and
because of the size of this acquisition and the level of
intangible assets. There is also significant judgement
involved in identifying the intangible assets acquired
and determining the appropriate methodology and key
assumptions to calculate their fair value.
We have evaluated the appropriateness of the
accounting treatment for the intangible assets arising
from the acquisition of Dairyworks, by performing the
following procedures:
• Obtaining the sale and purchase agreement and
related documents to corroborate the assets and
liabilities acquired, focusing on the identification
and measurement of intangible assets;
• utilising our knowledge to assess the Group’s
identification of intangible assets and consider what
is represented by residual goodwill;
• comparing the forecast sales used in the valuation of
the Dairyworks brands to approved forecasts; and
• challenging the reliability of the revenue growth
rates by comparing the forecasts underlying the
growth rates to historical forecasts and actual
results of the underlying business.
We used our internal valuation specialists to assess the
appropriateness of the nature and valuation of the intangible
assets identified by the Group. This assessment included:
• evaluating the appropriateness of the valuation
methodology and testing the mechanics of the model;
• evaluating the post-tax discount rate applied in the
model through comparison to the cost of capital for
the business and to external market data;
• and comparing the Group’s assumed royalty rate to
market data for similar intangible assets.
We have found that the identification and valuation
of intangible assets arising from the Dairyworks
acquisition have been appropriately accounted for in
the consolidated financial statements.
Other information
The directors are responsible on behalf of the Group for the other information. The other information comprises the
information in the Annual Report that accompanies the consolidated financial statements and the audit report. The
Annual Report is expected to be made available to us after the date of this auditor’s report.
Our opinion on the consolidated financial statements does not cover the other information and we will not express any
form of assurance conclusion thereon.
Our responsibility is to read the other information identified above when it becomes available and consider whether the
other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.
When we read the other information in the Annual Report, if we conclude that there is a material misstatement therein,
we are required to communicate the matter to the directors and consider further appropriate actions.
Directors’ responsibilities for the consolidated financial statements
The directors are responsible on behalf of the Group for the preparation and fair presentation of the consolidated
financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the directors determine is
necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf of the Group for assessing
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs and ISAs (NZ) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these consolidated financial statements.
PAGE 87 & 88ANNUAL FINANCIAL STATEMENTS 2020

Andrew Dick, Partner
for Deloitte Limited
Auckland, New Zealand
25 September 2020
A further description of our responsibilities for the audit of the consolidated financial statements is located on the
External Reporting Board’s website at: https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-
responsibilities/audit-report-1
This description forms part of our auditor’s report.
Restriction on use
This report is made solely to the Company’s shareholders, as a body. Our audit has been undertaken so that we might
state to the Company’s shareholders those matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than
the Company’s shareholders as a body, for our audit work, for this report, or for the opinions we have formed.
PAGE 89 & 90ANNUAL FINANCIAL STATEMENTS 2020

DIRECTORY
Registered and head office
1028 Heslerton Road
Rakaia, RD13
New Zealand
Contact us
+64 3 373 3000
info@synlait.com
synlait.com
You can also follow us on Facebook and LinkedIn
Share register
Computershare Investor Services Limited
Private Bag 92119
Auckland 1142
Level 2
159 Hurstmere Rd
Takapuna
Auckland 0622
0800 467 335
+64 9 488 8777
enquiry@computershare.co.nz
Auditor
Deloitte Limited
80 Queen Street
Auckland 1010
New Zealand
+64 9 303 0700
nzinfo@deloitte.co.nz
Synlait’s commitment to elevating
people and planet to the same level
as profit was recognised in June
2020 when it became part of the
B Corp™ community.
B Corp™ is a community of leaders
driving a global movement of people
using business as a force for good.
Certified B Corporations™ consider
the impact of their decisions on
their workers, customers, suppliers,
community, and the environment.
This movement resonates strongly
with Synlait’s purpose of Doing Milk
Differently For A Healthier World.
Learn more about what being a
B Corp™ means for our people,
our community, and our customers
at: synlait.com/bcorp
PAGE 91 & 92

---

SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION
For the 12 months ended 31 July 2020

STRONG FINANCIAL
RESULT DELIVERED
• Synlait remains a solid and highly
profitable business despite COVID-19
• EBITDA grew strongly
demonstrating the strength of our
infant and lactoferrin businesses
• NPAT reduced reflecting
investments in new facilities and
acquisitions over the past two
years to create new opportunities
for growth
• We continue to balance people and
planet with profit
27%
REVENUE
$
1.3B
13%
EBITDA
$
171.4M
9%
GROSS PROFIT
$
203.7M
9%
N PAT
$
75.2M
15%
CONSUMER-PACKAGED INFANT
FORMULA SALES
49,180MT
46%
LACTOFERRIN SALES
30MT
*All comparisons in this document are to the 12 months to 31 July 2019 (FY19) unless stated otherwise 
PAGE 02SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

FINANCIAL
PERFORMANCE
Angela Dixon 
Chief Financial Officer 
Synlait Dunsandel
PAGE 03SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

D1 approaches full utilisationD2 on-line (Sept 2011)D2 approaches full utilisationD3 on-line (Sept 2015)D3 approaches full utilisationSynlait Pokeno

on-line (Sept 2019)
RESULTS AT
A GLANCE
Stronger second half performance resulted in FY20:
• Total EBITDA of $171.4 million up 13%
• Total revenue of $1.3 billion up 27% 
• Total gross profit of $203.7 million up 9%
• NPAT of $75.2 million, down 9%, reflecting higher depreciation,
and financing costs
• Core business performance offset by new facilities coming
online. This impacted short-term ROCE, but the trend is consistent
with previous investment phases
• Operating asset base up $409.4 million
Synlait is well positioned to grow earnings off our
current asset base.
200
160
180
120
140
80
100
40
60
20
83.7
FY16FY17FY18FY19FY20
88.8
138.6
152.1
171.4
EBITDA
$ millions
1,200
800
1,000
400
600
200
FY09FY13FY17FY10FY14FY18FY11FY15FY19FY12FY16FY20
Return On Capital Employed
$ millions
Net operating assets $mROCE %
24%
12%
20%
16%
8%
4%
0%
PAGE 04SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

REVENUE MOMENTUM
CONTINUES
Total revenue up 27% to $1.3 billion
• Consumer-packaged infant formula sales volumes up 15% to 49,180 MT
• Lactoferrin sales volumes up 46% to 30MT as capacity increased
• Commodity sales down as production focused on high margin products
• Fresh milk and cream sales up 266% as facility completed first full year. During COVID-19
lockdown fresh milk sales and cream sales increased 13%
• Dairyworks and Talbot Forest Cheese revenue contributed $93 million to our overall growth*
FY21 and beyond:
• Dairyworks and Talbot Forest Cheese expected to deliver revenues of approximately
$250+ million going forward
Synlait is building a sustainable, diverse and recurring revenue base from
multiple customers, sites, markets and categories.
759
1,400
1,200
800
1,000
400
600
200
547
FY16FY17FY18FY19FY20
879
1,024
1,302
Revenue
PowdersLiquid Milks and CreamsSubsidiaries
$ millions
160
120
140
80
100
40
60
20
16
116
FY16FY17FY18FY19FY20
142
129
150150
93
107
101
36
43
49
Powder Sales Volumes
CommoditiesConsumer-packaged infant formula
100
kMT
123
19
*Dairyworks Limited acquired on 1 April 2020, revenue contribution is four months. Talbot Forest Cheese acquired on 1 August 2019,
revenue contribution is 12 months.
PAGE 05SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

WE ARE GROWING
INTO OUR CAPACITY 
• Total powders production up 8% to 158,045 MT
• Consumer-packaged infant formula production up 18%
• Lactoferrin facilities approaching full capacity with 33MT of gross
production, focus now on optimisation
• Talbot Forest Cheese production was 2,466 MT, strategy pivoted
to focus on integration with Dairyworks  
• Synlait Pokeno increased overall infant capability by 50%. Growing
into this will have a positive incremental impact on gross profit and
increase ROCE through improved asset utilisation rates, efficiency
and overhead recovery rates
FY09FY13FY17FY10FY14FY18FY11FY15FY19FY12FY16FY20
Powder Production Capacity Utilisation
IWS improves
facility efficiency
CommoditiesCapacityInfant
D1 approaches full utilisation
D2 on-line (Sept 2011)
D2 approaches full utilisation
D3 on-line (Sept 2015)
D3 approaches full utilisationSynlait Pokeno

on-line (Sept 2019)
PAGE 06SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

GENERAL
OPERATING COSTS
SG&A costs increased to $80.9 million (FY19: $62.1 million) driven by:
• Depreciation $4.0 million
• Subsidiaries operating costs $4.6 million
Remaining $10.2 million (16% increase) reflects:
• Additional employees $4.4 million as we resource management of new capacity
and ERP project
• General operational costs $4.4 million including technology and office upgrades
• One-off distribution costs (Synlait Dunsandel to Synlait Auckland) $1.4 million
COVID-19 related impacts include:
• Annual leave balances up $1.5 million due to lockdown restrictions
• Savings from reduced travel, training and consulting fees ($2.5 million), offset by
higher cleaning and warehousing costs ($0.5 million)
FY21 and beyond:
• Cost base stabilised
• Focus on simplifying structures and systems
90
80
70
60
50
10
20
30
40
FY19EmployeesDistributionGeneral
Operational
Costs
DepreciationSubsidiariesFY20
SG&A Bridge
$ millions
62.1
4.4
1.4
4.4
4.0
4.6
80.9
908%
80
7%
70
6%
60
5%
50
4%
10
20
30
40
3%
2%
1%
FY16FY17FY18FY19FY20
44.6
54.2
62.1
76.3
SG&A Costs
38.6
$ millions
Synlait SG&ASubsidiaries SG&ASG&A/Revenue %
4.6
PAGE 07SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

INVENTORY
Inventory up 63% to $269.4 million, driven by:
• Dairyworks and Talbot Forest Cheese acquisitions added $53
million of inventory
• Production of infant formula base powder to support sales
growth during the year. Total inventory/revenue ratio increased
from 16.1% to 17.9% after adjusting for acquisitions
• $14.5 million of this growth in infant formula base powder was
produced to support higher demand signaled by customers
at the start of the calendar year. This was later impacted by
COVID-19 sales demand in Q3 and Q4
• Maximised infant-based powders on the shoulder of the milk
season to ensure optimisation of assets during milk peak in FY21
30060,000
25050,000
20040,000
15030,000
10020,000
5010,000
FY16FY17FY18FY19FY20
83
145
165
216
Total Inventories
74
$ millions
SynlaitSubsidiariesSales Volume - Consumer-Packaged Infant Formula
53
MT
300
250
200
150
0
50
100
FY19
Inventory
SubsidiariesSales GrowthCustomer
Demand
Changes
Optimisation
of assets
FY20
Inventory
Inventory Bridge$ millions
164.8
53.3
27.5
14.5
9.3269.4
PAGE 08SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

OPERATING CASH FLOW
REMAINS STRONG  
115
140
105
35
70
104
FY16FY17FY18FY19FY20
98
137
127
Operating Cash Flow*
$ millions
(60.2)
(400)
(100)
(300)
(200)
(40.9)
FY16FY17FY18FY19FY20
(119.4)
(337.4)
(225.0)
Investing Cash Flow
$ millions
• Underlying operating cash flows increased to $127 million excluding
subsidiaries
• Further cashflow impact holding higher inventory levels as result of
COVID-19 customer demand changes in Q4 of $14.5 million
• Annual average operating cash flow of $116 million over the last five
years has enabled strong investment in capacity
• Investing cashflows will continue to reduce as capex returns to
normal levels
*excludes Diaryworks and Talbot Forest Cheese
PAGE 09SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

INVESTING FOR
THE FUTURE
213
83
527
6004.0x
450
3.0x
300
2.0x
150
1.0x
FY16FY17FY18FY19FY20
Net Debt
$ millions
Net DebtNet Debt/EBITDA
115
334
700
600
500
400
100
200
300
FY19 Net
Debt
Investments
in PPE
Subsidiaries
Acquired
Operating
Cashflow
Net InterestOtherFY20 Net
Debt
FY20 Net Debt Bridge
334
139
116
(106)
26
18
527
$ millions
• Significant growth projects of $573 million completed in FY20 included Synlait
Pokeno, the Advanced Dairy Liquid Packaging Facility, and the acquisitions of
Dairyworks and Talbot Forest Cheese
• Diversification of funding sources was achieved during FY20 with the issue of
$180 million of subordinated bonds and two ESG-linked loans of $50 million
each, providing margin benefits
• Total net debt increased $193.3 million during the year while interest and bank
fees paid in the year increased to $23.0 million from $18.0 million in FY19
• FY20 total debt leverage ratio has increased to 3.1x
• Our banking syndicate continued to provide strong support for Synlait. The facilities
have been revised with the working capital facility rolled over for another year. An
additional term debt facility of $100 million has been put in place, stepping down to
$70 million on 1 January 2021 and then remainder fully maturing on 1 May 2021
• While our business plan for the year ahead is fully funded, in the current
COVID-19 environment we recognise the need to assess our balance sheet and
capital management options, while we focus on cash management and strong
maintenance capex governance
PAGE 10SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

OPERATIONAL
ACHIEVEMENTS
Leon Clement
Chief Executive Officer 
Milk reception bay, Synlait Dunsandel
PAGE 11SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

ACHIEVEMENTS
AT A GLANCE 
CORE INFANT BUSINESS
CONTINUES TO PERFORM 
NEW MULTINATIONAL CUSTOMER
OPPORTUNITY BEING FINALISED
SYNLAIT POKENO
COMMISSIONED 
DAIRYWORKS AND TALBOT
FOREST CHEESE ACQUIRED 
B CORP™ 
CERTIFIED 
MANAGING THROUGH
COVID-19 WELL 
ENGAGEMENT AT
RECORD LEVELS 
MANUFACTURING
EXCELLENCE CONTINUES
INVESTMENT IN THE
PLANET REMAINS A FOCUS
PAGE 12SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

OUR INFANT NUTRITION BUSINESS CONTINUES TO PERFORM,
SUPPORTED BY OUR CORNERSTONE CUSTOMER AND SHAREHOLDER
Overall performance
• Sales of consumer-packaged infant formula up 15% to 49,180 MT
• COVID-19 impacted second half demand as consumer and channel
dynamics behaviour changed. Synlait demonstrated resilience and
agility maintaining supply chain continuity
• Product procurement proven to be extremely robust during COVID-19
with no raw material disruptions
How we enable The a2 Milk Company’s growth
aspirations:
• Home to New Zealand’s largest a1 protein-free milk pool
• Operate a highly integrated infant formula manufacturing facility
• Hold the State Administration For Market Regulation – China (SAMR)
registration for the a2 Platinum range. We are working collaboratively
with The a2 Milk Company on re-registration
• Exclusive infant formula supply agreement for China, New Zealand
and Australia in place to July 2025 (at the earliest)*
• Continued focus on product development and innovation
• Dedicated account management, regulatory affairs, and supply
chain services
*Exclusive volume limit currently well above Synlait’s near term demand forecasts
PAGE 13SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

OUR SAMR RENEWAL PROCESS IS PROGRESSING 
This Is Essential To Maintaining China Market Access For Infant Formula
Market dynamicsRegulatory environment
Our registrations:
What makes us unique:
Monitoring And Maintaining
Synlait Dunsandel has a SAMR
registration for the a2 Platinum range
Synlait Dunsandel, Pokeno and
Auckland hold GACC registrations
Navigating this is core to Synlait’s value proposition and service.
Guobiao (GB) revision to all
in-market recipes 
SAMR registration required
for in-market sales
No SAMR registrations
granted in Southern 
Hemisphere since June 2018
Integrated infant formula
manufacturing facility 
Quality and technical capabilities
Differentiated milk pool
Regulatory Affairs support in China
and New Zealand
Government Affairs strategy
End-to-end traceability
Sustainable value chain
Focus on research, development
and innovation
Declining birth rates
Premiumisation
CBEC/Daigou dynamic
Greater consumer trust
in domestic players
Geopolitical impact
Market Access Achieved
Synlait’s highly integrated infant formula manufacturing organisation meets the high standards required in China, the world’s largest infant nutrition market
FarmDryerBlending and canningRegistrationsTestingPackagingLogisticsCustomerConsumer
PAGE 14SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

SYNLAIT POKENO COMMISSIONED; WELL
PLACED FOR NEW CUSTOMER OPPORTUNITY
Establishment Phase (FY20 / FY21):
• Second integrated processing capability established in North Island (Synlait Auckland
and Synlait Pokeno) creates further supply chain efficiencies and site diversification
• Awaiting Supreme Court judgment
• North Island milk pool established; 13% of total supply
• Fully commissioned in February 2020; on time and on budget
• GACC (general dairy) registration received
• First milk processed in September 2019, 15,247MT of ingredient and infant base
powders produced
• Highly capable and engaged team in place
Transition Phase (FY22 +):
• Focus on transitioning to a higher margin product mix and utilisation rates
• Finalising a long-term supply agreement with a new, multinational customer
• Expected to have a positive impact on earnings from FY23
• This will improve Synlait Pokeno’s utilisation, leverage existing operational expertise
and diversify earnings
We are off setting short-term costs as Synlait Pokeno builds towards full operation, with a gradual transition to a higher
margin product mix and increased utilisation rates through efficiency programmes and production optimisation.
PAGE 15SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

20% REDUCTION IN
CHANGEOVER POWDER
DESPITE PROCESSING MORE
COMPLEX POWDERS
SIGNIFICANT CONVERSION
COST IMPROVEMENTS
18% REDUCTION IN
DOWNTIME ACROSS
ALL FACILITIES
DRYER PROCESSING MILK
MORE THAN 14% FASTER, WHILE
LIFTING QUALITY AND YIELD
THIRD BLENDING AND
CANNING LINE AVOIDED DUE
TO EFFICIENCY SAVINGS
Our World Class Facilities Mean We Can Keep Extracting Value
Integrated Work Systems programme delivered
significant efficiencies over the last three years:
MANUFACTURING
EXCELLENCE
PAGE 16SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

EXPANDING THE SYNLAIT NETWORK
Value Drivers For Dairyworks And Talbot Forest Cheese
1. Business and supply chain synergies 
• Talbot Forest Cheese undertaking all primary production and Dairyworks all secondary production
• Duplication of secondary processing capabilities removed, consolidated into Dairyworks
• Opportunities to improve through the introduction of manufacturing excellence programmes
(small automation and line upgrade projects)
• Ability to leverage Synlait’s scale in procurement and other capabilities
2. Market and category expansion
• Growing Australian presence in cheese and butter
• Exploring snacking cheese in China
• Rejuvenation of Talbot Forest brand and specialty cheese expansion
• Convenience new product development successful with finishing butters launch exceeding forecast and
high-protein filling yoghurt to launch next month
3. Sustainable earnings stream
• Dairyworks performance since acquisition met expectations
• Talbot Forest Cheese performance below expectations due to maintenance upgrade, precautionary and
voluntary listeria product recall and strategic pivot to focus on integration with Dairyworks
Underlying view has not changed. On track to deliver sustainable earnings stream of approx $15 to $20
million EBITDA emerging in next two years as growth momentum and synergies realised.
PAGE 17SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020 PAGE 17

BUILD A HEALTHIER
SYNLAIT 
Our Investment In People Is Strengthening Our Company
SAFETY
• TRIFR improved significantly: 8.1 (FY19: 13.7) 
DIVERSITY AND TALENT RETENTION
• Representation of women in leadership
38% (FY19: 37%)
• Parental leave policy improved retention,
100% return rate
ENGAGEMENT
• Record engagement continued. Ratio of
engaged to actively disengaged: 5.2:1
(FY19: 3.6:1)
WHAKAPUĀWAI
• COVID-19 impacted planting programme:
12,000 trees planted. FY21 target 80,000
PAGE 18SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

SYNLAIT JOINS
B CORP
TM
COMMUNITY
Our Investment In The Planet Remains A Focus
• Synlait’s mission is to be a catalyst for change
• Being a Certified B Corporation
TM
commits us to
balancing purpose and profit 
• This creates a new benchmark for our company,
our customers and our community
• Consumers have shifting expectations on
caring for people and planet – we must respond
• For shareholders interested in Synlait’s
environmental and social impact, a standalone
sustainability report will be released in
November. This will review progress against our
sustainability objectives and targets
PAGE 19SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020 PAGE 19

ADDRESSING OUR
STRATEGIC RISKS
Warehouse, Synlait Pokeno
PAGE 20SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

HOW WE ARE ADDRESSING
OUR STRATEGIC RISKS
RISKAPPROACH
COVID-19 Proven ability to meet customer demand and supply challenges
Single consumer-packaged formula customer New, multinational customer opportunity being finalised
Single site Synlait Pokeno commissioned
Geographic and category diversification Dairyworks and new customer opportunity will generate category and market diversification
Capacity utilisationRemains a strong focus
Chinese regulatory changes SAMR license holder; renewal process progressing 
On and off farm environmental impactsWell positioned with Lead With Pride
TM
 and long-term sustainability targets
Supreme Court outcome Remain comfortable with legal position 
Balance sheet leverage Investment phase nearing completion and FY20 leverage ratio of 3.19x below covenant (4.0)
PAGE 21SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

COVID-19
We Are Well Placed To Keep Responding
•Proven ability to maintain operational
and supply chain continuity
•New Zealand’s reputation as a trusted
source of safe, high quality nutrition
reinforced by country’s response
•Progress made to diversify Synlait,
reducing risk in an uncertain world
•Team moved with pace and innovation
to ensure we were well prepared.
We continue to adjust operations as the
situation changes  
PAGE 22SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

OUTLOOK
Synlait Dunsandel
PAGE 23SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

Construction of Dry Store 4 at Synlait
Dunsandel, photo taken mid-June 2020
FY21 FOCUS
FY21 is a year to focus and set ourselves up for
the next phase of earnings growth off current
facilities. Focused on:
1
2
3
Embedding New And Existing Customer
Partnerships
Simplifying And Standardising Structures
And Systems
Optimising Assets And Creating Value
Off Recent Investments
PAGE 24SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

CYCLICAL ROCE
PROFILE
Building In Front Of The Demand Curve
• Synlait’s 4th major investment cycle is nearing completion, with
$573 million invested in organic growth projects and acquisitions
over last 24 months
• Business model is to build capacity ‘in front of the demand curve’
resulting in saw-tooth ROCE
1
profile
• ROCE expansion driven by: 
• Improving asset utilisation rates, efficiency and overhead
recovery rates
• Increasing product mix weighting to higher margin products
• Embedding acquisitions and realising synergies 
• More milk recruited in South Island to ensure all assets remain
well-balanced and optimised
1
Return on capital employed (ROCE): EBIT / average capital employed
1,20024%
800
12%
1,000
20%
16%
400
600
8%
200
4%
0%
FY09FY13FY17FY10FY14FY18FY11FY15FY19FY12FY16FY20
Return On Capital Employed
$ millions
Net operating assets $mROCE %
94
97
82
187
267
312
323
455
424
493
634
1,043
D1 approaches full utilisationD2 on-line (Sept 2011)D2 approaches full utilisationD3 on-line (Sept 2015)D3 approaches full utilisationSynlait Pokeno

on-line (Sept 2019)
PAGE 25SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

FY21 GUIDANCE 
•There continues to be significant global uncertainty regarding COVID-19.
•While Synlait h
as proven its ability to maintain operational continuity over recent months, in terms of demand for the products it manufactures, it expects:
•Consumer-packaged infant formula volumes to be similar year-on-year, with lower demand in the first half of FY21 due to higher than normal stock levels in the supply
chain. Synlait expects a return to growth in the second half of FY21 once stocks have cleared.
•Strong underlying EBITDA and operating cash flows to continue, with growth delivered from a full year of Dairyworks earnings and the integration of Talbot Forest
Cheese.
•No disruption to
manufacturing or demand for its ingredient and lactoferrin business.
•This guidance is subject to the unpredictable effects of COVID-19, with consumer behaviour, channel dynamics and supply chain disruptions all subject to change.
•This is offset by the carrying costs of investing in Synlait Pokeno and Synlait Dunsandel’s Advanced Dairy Liquid Packaging facility. Earnings from these investments are
expected to be delivered in FY22 and beyond.
•As disclosed toda
y, Synlait is in the process of finalising a long-term supply agreement with a new, multinational customer for packaged products which is expected to
h
ave a positive impact on earnings from FY23.
•Against this, we are targeting a similar, or slight improvement on, our FY20 NPAT result.
•A further update will be provided at Synlait’s half year result in March 2021.
PAGE 26SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

Milk reception bay, Synlait Dunsandel
TODAY’S
TAKEAWAYS
•Synlait is in good shape and has come through
COVID-19 well
•Strong financial result delivered:
•Revenue up 27% to $1.3 billion
•Earnings before interest, taxes, depreciation,
and amortisation (EBITDA) up 13% to $171.4 million
•Positive operating cash flows of $127.2 million
(excluding subsidiaries)
•Net Profit After Tax (NPAT) of $75.2 million
•Synlait is coming to the end of an investment
phase and is well placed to drive earnings growth
in future years with new acquisitions and customer
opportunities ahead
PAGE 27SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

Synlait Pokeno
APPENDIX
PAGE 28SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

THE CHINA INFANT NUTRITION
LANDSCAPE IS HIGHLY REGULATED
International companies that wish to sell
infant formula in China need to obtain
registration for both the factory and the
product (recipe)
Overarching general legislation is covered by
the Food Safety Law, more detailed guidance
is given by the (GB-)regulations
Factory Registration – GACC
• All infant formula manufacturing plants need to be
registered with the General Administration of
Customs of the Peoples’ Republic of China (GACC)
to ensure compliance with infant formula and
manufacturing standards
• In New Zealand, the Ministry For Primary Industries (MPI)
has ‘delegated authority’ with GACC usually accepting
MPI endorsed applications
• A general dairy GACC application takes approximately 4
to 6 months
• A GACC infant formula application takes approximately
12 months
Product Registration – SAMR
• All infant formula products sold in China have required brand and recipe
registration with SAMR since 1 January 2018
• No SAMR registrations have been granted in the Southern Hemisphere since
June 2018
• Factories are allowed 3 brand slots and 3 recipes per brand slot (stage 1, 2, 3)
• Registration requires an extensive technical dossier that is subjected to technical
review by SAMR – the 3 brands should have materially different recipes
The technical registration process is explained below.
It assumes that a dryer and blending and canning line is at one facility and recipe
development is complete.
Step 1 Prepare the technical dossier. This includes full shelf life validation and
therefore takes a minimum of 2 - 2.5 years to complete, assuming an
experienced team and excluding initial recipe development and trials
Step 2 Technical dossier approved by SAMR (6 to 12 months)
Step 3 SAMR on-site audit (uncertain)
Steps 2 and 3 can be complete within 2 year timeframe but this is highly influenced by
the prevailing political relationships with the country of origin
• Synlait has infant formula GACC approval for Synlait
Dunsandel and Synlait Auckland
• Akara and Pure Canterbury brands at step 3
Synlait Registrations
PAGE 29SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

BANKING FACILITIES,
COVENANTS AND BOND ISSUE
As at 31 July 2020 Synlait had four syndicated bank facilities in place
with ANZ and BNZ:
1. Working capital facility (multi-currency) – facility limit of $320 million, reviewed annually
2. Revolving credit facility (Facility A) – facility limit of $150 million maturing 1 August 2021
3. Revolving credit facility (Facility B) – facility limit of $50 million maturing 1 August 2023
4. Revolving credit facility (Facility C) – facility limit of $50 million maturing 1 August 2023
The syndicated bank loan facilities agreement was updated on 25 September 2020,
effective by 30 September:
• Working capital facility was renewed to 30 September 2021 – limit reduced from $320
million to $250 million
• Revolving credit facility (Facility A) maturity extended to 1 October 2021
• Revolving credit facility D added with a maturity date of 1 May 2021 – limit $100 million
to 31 December 2020, $70 million to 1 May 2021
• Minimum shareholders funds covenant increased to $400 million
Bond issue
• Listed NZ$180 million of unsecured, subordinated, five year bonds listed on the NZX
Debt Market in December 2019
We have five key covenants in place with our syndicated banks:
1. Interest cover ratio – EBITDA to interest expense of no less than 3.00x based on full
year forecast result
2. Minimum shareholders’ funds – no less than $295.5 million
3. Working capital ratio – inventory and debtors to working capital facility outstanding of no
less than 1.5:1
4. Leverage ratio – total debt to EBITDA is no greater than 4.0x
5. Senior leverage ratio – total debt excluding Subordinate Bond to EBITDA is no greater
than 3.0x
We complied with these bank covenants at all times during FY20. 
PAGE 30SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

BANKING FACILITIES,
COVENANTS AND BOND ISSUE
DescriptionCalculationCovenantFY20
Shareholders’ fundsTotal shareholders’ funds
(excluding FX derivatives and intangibles)
No less than $295.5 million$470 million
Working capital ratioLiquid assets / working capital facility drawnNo less than 1.5x 3.40x
Interest cover ratioEBITDA / total interestNo less than 3.0x 8.01x
Leverage ratioTotal debt* / EBITDANo greater than 4.0x 3.19x
Senior leverage ratio Total debt excluding subordinated bond / EBITDANo greater than 3.0x 2.14x
* Includes lease liabilities
PAGE 31SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

GROSS PROFIT
PERFORMANCE
Uplift in gross profit due to: 
• Favorable product mix (consumer-packaged infant formula and lactoferrin) 
• Lactoferrin – combination of high spot prices and additional production capacity
220
165
110
55
FY17FY18FY19FY20
Gross Profit
H1H2
44.6
85.2
85.9
82.9
67.5
81.3
100.4
120.8
112.1
166.5
186.3
203.7
Powders And Creams Consumer Packaged Infant FormulaLactoferrinTotal Powders
FY20
Sales Volume (MT)101,22249,18030150,432
Gross Profit ($M)134.440.528.4203.3
Gross Profit / MT1,327824943,0741,359
FY19
Sales Volume (MT)106,80242,90721149,730
Gross Profit ($M)142.234.313.3189.8
Gross Profit / MT1,331800646,0991,268
% Change
Sales Volume (MT)(5%)15%46%0%
Gross Profit ($M)(6%)18%113%7%
Gross Profit / MT0%3%46%7%
$ millions
PAGE 32SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

MILK PRICEMILK POOL
• Total average milk payment of $7.30 per kgMS
• Average base milk price for 2019/20 season is $7.05 
• Average incentive payment paid per kgMS for the season was 25 cents
(FY19: 18 cents) made up of incentives and winter milk payments
• Forecast base milk price for the 2020/21 season increased from $6.00
to $6.40 per kgMS
• North Island farmer suppliers responsible for 13% of total milk supply or 55 farms
• South Island milk pool continues to grow, additional 9.7 million kgMS or 22 farms
procured for FY21. Total farms 221
• Lead With Pride programme growing: 151 farms now certified (North Island: 17
and South Island: 134)
$8.00
$6.00
$4.00
$2.00
$0.14
2016/172017/182018/192019/20
$6.65
$6.40
$0.13
$0.18
Milk Payments To Farmer Suppliers
Average Base Milk PriceIncentives
$6.16
$7.05
$0.25
FY09FY13FY17FY10FY14FY18FY11FY15FY19FY12FY16FY20
Synlait Milk Procurement
30090
250
80
200
70
150
60
100
50
50
40
30
20
10
No. of farmskgMS (millions)
South Island
kgMS
No. of South
Island Farms
No. of North
Island Farms
North Island
kgMS
PAGE 33SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

SUPREME COURT: NO NEWS YET 
A Judgment Can Take Up To Six Months
The Supreme Court of New Zealand heard
the case in June 2020. There are a range
of possible outcomes, including:
Supreme Court judgment released
Judgment in favour of SynlaitJudgment not in favour of Synlait
Court of Appeal Decision upheld
• No Damages
• No covenant modification
• Reasonable settlement or court
outcome (via High Court)
Option 1
• Covenant removed
• Damages awarded / not awarded
Option 2
• Covenant modified
• Damages awarded / not awarded
PAGE 34SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

DISCLAIMER
This presentation is intended to constitute a summary of certain
information about the Synlait Group (“Synlait”) or in connection with
its full year 2020 financial results. It should be read in conjunction with,
and subject to, the explanations and views in documents previously
released to the market by Synlait.
This presentation is not an offer or an invitation, recommendation or
inducement to acquire, buy, sell or hold Synlait’s shares or any other
financial products and is not a product disclosure statement, prospectus
or other offering document, under New Zealand law or any other law.
This presentation is provided for information purposes only.
The information contained in this presentation is not intended to be relied
upon as advice to investors and does not take into account the investment
objectives, financial situation or needs of any particular investor. Investors
should assess their own individual financial circumstances and should
consult with their own legal, tax, business and/or financial advisers or
consultants before making any investment decision.
Any forward looking statements and projections in this presentation
are provided as a general guide only based on management’s current
expectations and assumptions and should not be relied upon as an
indication or guarantee of future performance. Forward looking statements
and projections involve known and unknown risks, uncertainties,
assumptions and other important factors, many of which are beyond
the control of Synlait and which are subject to change without notice.
Actual results, performance or achievements may differ materially from
those expressed or implied in this presentation. No person is under any
obligation to update this presentation at any time after its release except
as required by law and the NZX Listing Rules, or the ASX Listing Rules.
Any forward looking statements in this presentation are unaudited and
may include non-GAAP financial measures and information. Not all
of the financial information (including any non-GAAP information) will
have been prepared in accordance with, nor is it intended to comply
with: (i) the financial or other reporting requirements of any regulatory
body or any applicable legislation; or (ii) the accounting principles or
standards generally accepted in New Zealand or any other jurisdiction,
or with International Financial Reporting Standards. Some figures may
be rounded and so actual calculation of the figures may differ from the
figures in this presentation. Some of the information in this presentation
is based on non-GAAP financial information, which does not have a
standardised meaning prescribed by GAAP and therefore may not be
comparable to similar financial information presented by other entities.
Non-GAAP financial information in this presentation has not been
audited or reviewed.
Any past performance information in this presentation is given for
illustration purposes only and is not indicative of future performance
and no guarantee of future returns is implied or given.
While all reasonable care has been taken in relation to the preparation of
this presentation, to the maximum extent permitted by law, no representation
or warranty, expressed or implied, is made as to the accuracy, adequacy,
reliability, completeness or reasonableness of any statements, estimates
or opinions or other information contained in this presentation, any of
which may change without notice. To the maximum extent permitted by law,
Synlait, its subsidiaries, and their respective directors, officers, employees,
contractors, agents, advisors and affiliates disclaim and will have no liability
or responsibility (including, without limitation, liability for negligence) for
any direct or indirect loss or damage which may be suffered by any person
through use of or reliance on anything contained in, or omitted from,
this presentation.
All values are expressed in New Zealand currency unless otherwise stated.
All intellectual property, proprietary and other rights and interests in this
presentation are owned by Synlait.
PAGE 35SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

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
Synlait Dunsandel
SYNLAIT MILK FULL YEAR INVESTOR PRESENTATION 2020

---

Synlait Milk Limited · 1028 Heslerton Road, RD13 Rakaia, Canterbury, New Zealand · +643 373 3000 · www.synlait.com

NZX: SML
ASX: SM1


28 September 2020

Synlait FY20 result published

Synlait Milk Limited (Synlait) today published its financial result for the 12 months ended 31 July 2020.
1


• Revenue up 27% to $1.3 billion
• Earnings before interest, taxes, depreciation, and amortization (EBITDA) up 13% to $171.4 million
• Net Profit After Tax (NPAT) down 9.0% to $75.2 million
• Consumer-packaged infant formula sales up 15% to 49,180 MT
• Lactoferrin sales up 46% to 30 MT

Synlait Chair Graeme Milne commented: “Synlait’s financial performance was resilient when viewed
against the backdrop of COVID-19. The company remains solid and highly profitable with EBITDA growing
strongly demonstrating the strength of our core infant and lactoferrin businesses.”

“Our NPAT performance did reduce reflecting investments made in new facilities and acquisitions over the
past two years to achieve our growth ambitions. We are however well positioned to grow earnings off our
current asset base.”

Synlait CEO Leon Clement commented: “Synlait is focused on building a sustainable, diverse and recurring
earnings base that comes from multiple customers, sites, markets and categories.”

“We are achieving this while balancing the needs of people, planet and profit in our decisions, and
responding to changing customer demand against the backdrop of COVID-19. Our strategy to create a
strong, diverse company, is more relevant than ever given the uncertain world ahead. Our team delivered
a strong result in an exceptional year.”

FY21 guidance

• There continues to be significant global uncertainty regarding COVID-19.

• While Synlait has proven its ability to maintain operational continuity over recent months, in terms
of demand for the products it manufactures, it expects:

• Consumer-packaged infant formula volumes to be similar year-on-year, with lower
demand in the first half of FY21 due to higher than normal stock levels in the supply chain.
Synlait expects a return to growth in the second half of FY21 once stocks have cleared.

• Strong underlying EBITDA and operating cash flows to continue, with growth delivered
from a full year of Dairyworks earnings and the integration of Talbot Forest Cheese.

• No disruption to manufacturing or demand for its ingredient and lactoferrin business.


1
Comparisons are to the 12 months to 31 July 2019 (FY19) unless stated otherwise. As an ASX foreign exempt issuer, Synlait must
comply with the NZX Listing Rules (other than as waived by the NZX) and we are exempt from complying with most of the ASX Listing
Rules as set out in ASX Rule 1.15.

Synlait Milk Limited · 1028 Heslerton Road, RD13 Rakaia, Canterbury, New Zealand · +643 373 3000 · www.synlait.com

• This guidance is subject to the unpredictable effects of COVID-19, with consumer behaviour,
channel dynamics and supply chain disruptions all subject to change.

• This is offset by the carrying costs of investing in Synlait Pokeno and Synlait Dunsandel’s
Advanced Dairy Liquid Packaging facility. Earnings from these investments are expected to be
delivered in FY22 and beyond.

• As disclosed today, Synlait is in the process of finalising a long-term supply agreement with a new,
multinational customer for packaged products which is expected to have a positive impact on
earnings from FY23.

• Against this, we are targeting a similar, or slight improvement on, our FY20 NPAT result.

• A further update will be provided at Synlait’s half year result in March 2021.

Final 2019/20 milk price announced

The total final average payment for the 2019/20 season is $7.30 per kgMS. This is made up of a base milk
price of $7.05 and an average additional incentive payment of 25 cents per kgMS, up from 18 cents per
kgMS last season.

Synlait has increased its 2020/21 season base milk price forecast to $6.40 per kgMS, previously $6.00.
While it is still early in the season, and commodity prices remain volatile, this reflects growing confidence
in the season ahead. Foreign exchange rates remain relatively low supporting a higher milk price. As
always, commodity prices through the next few peak months will be critical to this season’s milk price.

For more information about Synlait visit www.synlait.com or contact:

Media
Linda Chalmers
Senior Communications Advisor – External
P: +64 21 951 347
E: linda.chalmers@synlait.com


Investors
Hannah Lynch
Corporate Affairs Manager
P: +64 21 252 8990
E: hannah.lynch@synlait.com

---

Synlait Milk Ltd · 1028 Heslerton Road, RD13 Rakaia, Canterbury, New Zealand · +643 373 3000 · www.synlait.com

28 September 2020

SYNLAIT FY20 RESULT PUBLISHED

Kia ora Synlait shareholders

Synlait Milk Limited (Synlait) today published its financial result for the 12 months ended 31 July 2020.

Key financial highlights included:

• Revenue up 27% to $1.3 billion
• Earnings before interest, taxes, depreciation, and amortization (EBITDA) up 13% to $171.4 million
• Net Profit After Tax (NPAT) down 9.0% to $75.2 million
• Consumer-packaged infant formula sales up 15% to 49,180 MT
• Lactoferrin sales up 46% to 30 MT

Synlait Chair Graeme Milne commented: “Synlait’s financial performance was resilient when viewed
against the backdrop of COVID-19. The company remains solid and highly profitable with EBITDA growing
strongly demonstrating the strength of our core infant and lactoferrin businesses.”

“Our NPAT performance did reduce reflecting investments made in new facilities and acquisitions over the
past two years to achieve our growth ambitions. We are however well positioned to grow earnings off our
current asset base.”

Synlait CEO Leon Clement commented: “Synlait is focused on building a sustainable, diverse and recurring
earnings base that comes from multiple customers, sites, markets and categories.”

“We are achieving this while balancing the needs of people, planet and profit in our decisions, and
responding to changing customer demand against the backdrop of COVID-19. Our strategy to create a
strong, diverse company, is more relevant than ever given the uncertain world ahead. Our team delivered
a strong result in an exceptional year.”

FY21 guidance

• There continues to be significant global uncertainty regarding COVID-19.

• While Synlait has proven its ability to maintain operational continuity over recent months, in terms
of demand for the products it manufactures, it expects:

• Consumer-packaged infant formula volumes to be similar year-on-year, with lower
demand in the first half of FY21 due to higher than normal stock levels in the supply chain.
Synlait expects a return to growth in the second half of FY21 once stocks have cleared.

• Strong underlying EBITDA and operating cash flows to continue, with growth delivered
from a full year of Dairyworks earnings and the integration of Talbot Forest Cheese.

• No disruption to manufacturing or demand for its ingredient and lactoferrin business.

• This guidance is subject to the unpredictable effects of COVID-19, with consumer behaviour,
channel dynamics and supply chain disruptions all subject to change.

Synlait Milk Ltd · 1028 Heslerton Road, RD13 Rakaia, Canterbury, New Zealand · +643 373 3000 · www.synlait.com
• This is offset by the carrying costs of investing in Synlait Pokeno and Synlait Dunsandel’s
Advanced Dairy Liquid Packaging facility. Earnings from these investments are expected to be
delivered in FY22 and beyond.

• As disclosed today, Synlait is in the process of finalising a long-term supply agreement with a new,
multinational customer for packaged products which is expected to have a positive impact on
earnings from FY23.

• Against this, we are targeting a similar, or slight improvement on, our FY20 NPAT result.

• A further update will be provided at Synlait’s half year result in March 2021.

More information

Synlait released the following materials today. Please click on the hyperlinks below to access this
information:

• Synlait Financial Statements to 31 July 2020
• Synlait Full Year Results 2020 Investor Presentation
• Synlait Full Year Results 2020 Media Release

On behalf of the Synlait team, thank you for your commitment as a valued shareholder, as we keep
Doing
Milk Differently For A Healthier World.

---

Results announcement
28 September 2020



Results for announcement to the market
Name of issuer Synlait Milk Limited (SML)
Reporting Period 12 months to 31 July 2020
Previous Reporting Period 12 months to 31 July 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$1,302,025 27%
Total revenue $1,302,025 27%
Net profit/(loss) from
continuing operations
$75,208 -9%
Total net profit/(loss) $75,208 -9%
Interim/Final Dividend
Amount per Quoted Equity
Security
Not proposing to pay dividends.
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$2.76 $2.60
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer to the following accompanying documents:
• FY20 Annual Report / Financial Statements
• FY20 Investor Presentation
Authority for this announcement
Name of person authorised
to make this announcement
Graeme Milne, Synlait Chair
Contact person for this
announcement
Hannah Lynch, Synlait Corporate Affairs Manager
Contact phone number +64 21 252 8990
Contact email address hannah.lynch@synlait.com
Date of release through MAP 28/09/2020

Audited financial statements accompany this announcement.

=== IR PAGE TRANSCRIPT: FY20 Result Conference Call Transcript 28 September 2020 ===

TRANSCRIPTION
Company: Synlait Milk
Date: Wednesday, 28 September 2020
Time: 11:00am NZDT
Duration: 55:05
Reservation Number: 10007351

[START OF TRANSCRIPT]
Operator: Thank you for standing by and welcome to the Synlait full year 2020 results
conference call. All participants are in a listen-only mode. There'll be a presentation
followed by a question and answer session. If you wish to ask a question, you will
need to press the star key followed by the number one on your telephone keypad. I
would now like to hand the conference over to Mr. Leon Clement, CEO. Please go
ahead.
Leon Clement: Well, a very good morning to everybody and welcome to the Synlait Milk full year and
Vista call for the 12 months in the 31st of July 2020. I'm joined here today by our
relatively new chief financial officer, Angela Dixon, and our head of corporate affairs
and investor relations Hannah Lynch. Great to connect with you all again. I know
many of you are dialling in from across the Tasman and Australia, as well as around
New Zealand. So thanks for everybody for joining the call today. Just in terms of flow,
I'm going to provide a high-level update on the overall result and the achievements to
date. I'll then hand over to Angela who will step us through the financials in more
detail. And then I'll come back with a summary of our achievements and the outlook
statement. We should leave some time for Q and A.
I understand many of you may want to get on a call in about an hour's time with
regards to announcement from A2, so we will make sure that we finish on time to
allow that to happen. Right, so today there's somebody who's announcing a solid and
highly profitable result. Given the surrounding uncertainty and instability from COVID-
19. Revenue is up 27% to 1.3 billion. EBITDA has also grown 13%, reflective of the
strong, consumer packaged, infant formula sales grown 15% to around 49,000 metric
tonnes. We've also had a very strong contribution from our elective fair run business
with sales there growing 46% to 30 metric tonnes. Our impact has reduced this year
to $75.2 million down 9% from FY19. And this reflects some of the additional
investments that we've made into new facilities and acquisitions, over the past two
years, to create new opportunities for growth.
I think it's really important that investors and the market understand this dynamic, as
we started to create and diversify new opportunities for the organisation with some
Vistas and setting up new capacity and capability to create those opportunities. And

what we're carrying this year is the impacts of additional depreciation, additional
borrowing and operating costs. And whilst that's hard to specifically quantify, we do
estimate that the impacts, versus last year, is between 20 to $25 million at an impact
level and this year's result. So I hope that provides some context for why both
EBITDA is crying, but input is showing a decline.
Also, really proud of the contribution that we're making from a people and planet
perspective. It's really important to somebody that we continue to milk differently for a
healthier world and balance people and planet with profit, especially when we're
facing onto some of these uncertain times with COVID-19. So without further ado, I'll
hand over to Angela. Angela has been with us for just on three months now. She's
brought a lot of great energy to the organisation. She was joking before the call that
she's a simple country girl from down South. That she's definitely much more than
that. She comes off a stellar career with Auckland airport, IAG and most recently
public trust. So I'll hand over to Angela who's, in a very quick time, got a hit around
these numbers. So Angela, over to you.
Angela Dixon: Thanks Leon. Good morning, everyone. This is my test results announcement to
Synlait. As Leon just mentioned this, I've just passed my three months Mac. But I did
manage to get a good look at this result, as I was here for the last six weeks of it. So
on to the numbers.
So slide four, the results of the glance. As a result of a strong second half, EBITDA is
up from 10% to 171 million. And you can see from the graph at the top right, that the
momentum has been growing over the last five years, particularly in the last three.
Total revenue is up 27% to 1.3 billion. And I'll speak to this more on the next slide.
And as Leon mentioned, the input is 75.2 million, which is down 9%, driven by the
depreciation and finance costs. Appreciation year on year has increased from 27
million to 48. As the build progressed then finances increased 127 million, from nine
million to 21 million. At least interest was capitalised this year compared to previous
years and more of it was used to complete out our build programme. The last graph
on this page tipped out our investment journey and shows a significant uplift in the
year of net as it was 409 million. This is a significant investment for the company.
And as a result, we expected a lower return on capital employed, as we're at the
conclusion of the investment phase, with the earning phase ahead of us.
Now turning to the next page, on page five, revenue momentum. As the revenue
momentum continues, the graph on the top right shows that it has been building year
on year with powder demand. This growth has been further uplifted this year with
Dairywicks and Talbot Forest Cheese and a full year of our new liquid milk revenue.
Most encouraging lift this year has increased 46% to 30 metric tonnes. Infant
volumes continue to grow up 15% or approximately 6,000 metric tonnes from last
year. And this has helped improve our mix and our business towards the higher value
products. Interestingly, we saw a big increase in liquid milk and cream sales during
COVID lockdown this year. But FY21 and beyond, revenue is expected to grow
further through the acquisitions of Talbot Forest and Dairywicks revenues, adding

approximately another 250 million revenue. But Synlait continues to build sustainable
and reoccurring revenues.
Now moving to page six. So here, I'm just going to talk a little bit more about growing
into our capacity. Total powder production was up 8% year on year. And our
consumer packaged infant formula was up 18%. And with our elective fair on, we're
now coming into full capacity and the focus will be on optimization. The rest to the
right shows that the key build phases and FY11, FY16 and how the capacity was
filled up in the years following. We have now almost completed our investment phase
for FY20. And the revenues will grow as the customers are added through as our
Vistas location strategy in the next coming years.
Page seven, note that presentation is complete without a cost slide. So I'll just step
you through our cost increases for the year because there have been some. FGNA
costs are up in the year for a number of reasons. Firstly, our depreciation increased,
reflecting the completion of the refit of the Dem sandal and Christchurch offices and
the cafe. 46 million was absorbed from the new acquisition of Dairywicks and Talbot
Forest Cheese. That leaves us with a 16% increase, which is driven by new
employees to run this new capacity as it comes online and resourcing our ERP
project, SAP, which is now in full gear. Senior operating costs will reflect higher IT
costs due to a greater investment in cyber controls, and higher software costs to
ensure the connectivity that we needed to be successful during lockdown. And office
upgrades, including our new China office.
One of the distribution costs of 1.4 million reflect optimising the Pocono as it came
online. Private shares impacted us slightly. Annual leave increased as staff focused
on servicing our customers. And also savings were enjoyed around travel training
and conferences. We did, however, have more costs relating to cleaning and
warehousing to support the export effort. Looking forward, our cost base is stable.
The graph on the bottom right shows that the FGNA costs, as a percentage of
revenue, has been flat year on year. And we will continue to focus on this ensuring
we get the process and system improvements we need, as we mature our business.
Page eight, inventory. Probably a really relevant story this year. Our inventory has
increased significantly at 63%, but there's some really good reasons for this.
Dairywick and Talbot Forest inventory came onto our balance sheet and that reflects
53 million. Production of infant formula powder was made to meet growth demand
that we saw through the year. And that added a further 27.5 million. And you can see
this growth on the bottom graph on the right hand side and how inventories have
always tracked growth.
Measure to understand whether that growth is appropriate, is their total revenue
inventory to revenue ratio. And that's showing that it's slightly higher than this growth.
And this can be explained with the 14 and a half million of extra infant based formula
that we are holding, it related to COVID. At the start of the year, we had strong
signals of demand, but this was later revised in Q3 and four as the demand was
more uncertain. This has left us holding extra infant based formula then what we

would have if, perhaps, COVID had not happened. Lastly, we're always maximising
our milk curves and we produced infant formula on the shoulders of the season to
allow us to fully optimise the higher milk peak in FY21 when we make the most of our
ingredients.
Page nine, operating cashflow remains strong. Underlying cashflow is 127 million
excluding our new acquisitions, Dairywicks and Talbot Forest. Operating cashflow
was further impacted by the 14 and a half million of additional COVID stock that we
have been holding. So the underlying is stronger than that. In contrast, our
investment cash flows are now significantly declining now that we're at the end of the
investment cycles. And the investment cash flows will reduce to previous
maintenance levels going forward, that you can see on the graph, on the bottom
right. After we've absorbed the last of our growth CapEx, [inaudible 00:11:27] and our
SAP projects and early in the first half of FY21.
And lastly, our balance sheet, investing for the future. Protono, the liquid plant,
Dairywicks, Talbot Forest are now all in the suite of assets to help diversify our risks
and revenues. We have further diversified our debt to help accommodate this growth.
As you will know, we released the retail bond of 180 million, pre-Christmas, in two
ESG linked loans, which are delivering cost effective margins thanks to a strong
sustainability performance. Total debt has increased 193 million. In contrast, interest
in bank fees only rose from 18 million to 23 million in the year, reflecting lower based
interest costs.
The outcome of this is that our leverage ratio is now at 3.1 times. It is under our four
times cabinet cap and all our cabinets have been met in the year. Our banking
syndicates continue to strongly support Synlait. With our recent facilities revised to
roll over our working capital facility of 250 million for another year and advance to a
further hundred million reducing to 70 million in January 2001, maturing in May to
help with our seasonal cash flow and the first task outlook on customer demand. Our
business plan for the year here is fully funded, but given COVID and the worldwide
impact, this feasible continue to review our capital management and balance sheet.
And in the short term, we will manage and focus carefully on cash and maintenance
and ensuring maintenance CapEx is minimised. Thank you everyone. That's it for me
and I will pass it to Leon.
Leon Clement: Thanks, Angela. I'm picking up at page 12, for those of you following along with the
presentation. And there's just a summary of the achievements at a glance, but I'll
walk you through it more detailed from here. But really no Synlai presentation is
complete without some commentary on our core up for business. And it's really
performed well this year for us. Many of you know, based on the keynotes to support
additional capacity and capability as a large part of our strategic growth programme.
That's in its establishment phase as we move to starting to transition it into higher
product mix and driving returns for the organisation. We've got a new multinational
customer opportunity