Fonterra Co-operative Group Limited/Announcement

Fonterra profit up 50% in FY23 Interim Results

Half Year Results15 March 2023FCGConsumer Staples

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Fonterra Co-operative Group Limited

Fonterra Co-operative Group Page 1

Results for Announcement to the Market
Results for announcement to the market
Name of issuer
Fonterra Co-operative Group Limited
Reporting Period 6 months to 31 January 2023
Previous Reporting Period 6 months to 31 January 2022
Currency NZD

Amount (000s) Percentage change
Revenue from continuing operations $12,333,000 22%
Total Revenue $13,249,000 23%
Net profit from continuing operations $544,000 55%
Total net profit $546,000 50%
Interim Dividend
Amount per Quoted Equity Security $0.10
Imputed amount per Quoted Equity Security Not Applicable
Record Date 23 March 2023
Dividend Payment Date 14 April 2023
Current period Prior comparable period
Net tangible assets per Quoted Equity
Security
$3.64 $2.72
A brief explanation of any of the figures
above necessary to enable the figures to be
understood
Please refer to the unaudited interim financial statements
for further explanation.
Authority for this announcement
Name of person authorised to make this
announcement
Anya Wicks
Contact person for this announcement Anya Wicks
Contact phone number (09) 374 9341
Contact email address anya.wicks@fonterra.com
Date of release through MAP 16 March 2023
Unaudited interim financial statements accompany this announcement.

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16 March 2023

Fonterra profit up 50% in FY23 Interim Results

• Profit After Tax: NZ$546 million, up 50%  
• Earnings per share: 33 cents per share  
• Interim Dividend: 10 cents per share  
• Return on Capital: 8.6%, up from 6.1% 
• Forecast milk collections: 1,465 million kgMS, down 1%   
• Forecast Farmgate Milk Price range: NZ$8.20 - $8.80 per kgMS  
• Proposed capital return: approximately 50 cents per share and unit 
• Upgraded full year forecast normalised earnings from 50-70 cents per share to 55-75 cents per share 

Fonterra Co-operative Group Ltd today released its 2023 Interim Results which show the Co-op has
delivered a half year Profit After Tax of $546 million, an earnings per share of 33 cents, and a decision to
pay an interim dividend of 10 cents per share alongside a forecast Farmgate Milk Price range of $8.20 -
$8.80 per kgMS. 

The Co-op also upgraded its full year forecast normalised earnings from 50-70 cents per share to 55-75
cents per share and announced a proposed tax free capital return to farmer owners and unit holders of
around 50 cents per share, subject to completion of the sale of its Chilean Soprole business.  

Fonterra CEO Miles Hurrell says the results for the first half of the year show the Co-op is performing well,
with profit up 50 per cent, against a backdrop of ongoing market volatility.  

“Our Co-op’s scale and diversification across channels and markets has enabled us to navigate through
disruption and make the most of favourable market conditions in a number of areas.  

“While milk powder prices have softened recently, impacting our forecast Farmgate Milk Price range,
protein prices have been high, and this is reflected in the lift in earnings we’re reporting today. 
 

“Our improved earnings and strong balance sheet have enabled us to pay an interim dividend of 10 cents
per share which is positive news for our farmer owners and unit holders. We also expect to be able to pay
a strong full year dividend, in addition to our proposed capital return. 

“The outlook for high quality sustainable New Zealand dairy remains positive. We have a clear strategy
and are well-positioned to take advantage of this demand,” says Mr Hurrell.  

Strong performance and sales  

The Co-op has delivered a Profit After Tax of $546 million, up $182 million compared to the same time last
year, and a Return on Capital for the last 12 months of 8.6%, up from 6.1% in the comparable period.  

“This lift in earnings is thanks to our Co-op’s scale and ability to move our farmer owners’ milk into
products and markets where we’re seeing favourable prices.  

Fonterra Co-operative Group
Page 2

“With whole milk powder prices down, we moved more milk into skim milk powder and cream products to
optimise our Farmgate Milk Price.  

“We also made the most of favourable margins in our cheese and protein portfolios, by moving a higher
proportion of current season milk into these products which has benefited our earnings. 

“Our ability to capture these higher margins is reflected in our Ingredients channel performance, with
normalised EBIT up $494 million, or 118%, on the same time last year to $911 million.
  

“Our Consumer and Foodservice channels benefited from improved in-market prices, with Foodservice
normalised EBIT up $81 million, or 95%, to $166 million. However, higher input costs and ongoing
pressure on margins have impacted overall Consumer channel performance.  

“Our domestic consumer business, Fonterra Brands New Zealand (FBNZ), has been under margin
pressure for some time and is not improving as fast as planned. Performance of our Asia consumer
brands has been impacted by weakening currency in the markets they operate, higher interest rates and a
declining economic environment in some South East Asian markets. 

“For these reasons, we have revised down the valuation of FBNZ by $92 million and our Asia consumer
brands Anlene, Chesdale and Anmum by $70 million. 

“As a result of market conditions and the impact of impairments, our overall Consumer channel normalised
EBIT is down $177 million to a loss of $94 million.  

“This year our reportable segments have been updated to reflect an organisational change to better
support our strategy. Group Operations is shown as a separate segment and the previous results of the
AMENA and Asia Pacific segments are now combined into the new Global Markets segment.  

“Group Operations represents the business activities that collect and process New Zealand milk through to
selling the products to our customer-facing regional business units, Global Markets and Greater China. 

“Group Operations normalised EBIT increased $412 million to $501 million, due to higher Ingredient
prices, in particular proteins and cheese, relative to the products portfolio that informs the Farmgate Milk
Price. 

“Looking at our customer-facing regional business units, Global Markets normalised EBIT was down 4% to
$267 million. Global Markets’ Ingredients channel in-market earnings increased by $145 million, mainly
due to higher sales volumes and improved pricing. However, this was offset by the impairments and
increased operating costs in its Consumer channel. 

“Greater China normalised EBIT decreased 1% to $215 million, with the Foodservice channel showing
resilience to market disruption from COVID-19. However, this was offset by the Consumer channel, which
included a proportion of the Anlene brand impairment. 

“We continue to exercise financial discipline with a focus on delivering returns, while managing higher
costs and ongoing market disruption. 

“Our Total Group normalised operating expenses are up from $1.1 billion to $1.4 billion due to the New
Zealand consumer business and Asia brands impairments, increased costs including inflation and foreign
exchange, and last year having a one-off favourable item.  

“Since year end we have improved our net debt and working capital position through improved earnings
and clearing the higher year-end inventory. 

“Severe storms and flooding across the North Island in January and February temporarily delayed some
product getting onto ships. We remain focussed on inventory management, which seasonally peaks
through February and March.  

Fonterra Co-operative Group
Page 3

“Our improved earnings and strong balance sheet put us in a position to pay an interim dividend of 10
cents per share,” says Mr Hurrell.  

Capital returns 

“We’re pleased to be providing an update on the proposed capital return to our farmer owners and unit
holders. 

“We have previously stated an intention to return around NZ$1 billion to shareholders by FY24, subject to
the outcome of reviews of our ownership of Fonterra Australia and our Chilean Soprole business. We have
subsequently made the decision to retain full ownership of Fonterra Australia. 

“Following completion of the sale of Soprole, we intend to reduce debt and return around 50 cents per
share and unit, which is approximately $800 million. 

“We are aiming for a record date for the proposed tax free capital return in late September 2023, with cash
to be received by our farmer owners and unit holders the following month.   

“Implementation of the capital return will require a Scheme of Arrangement to be voted on by
shareholders, and approval by the High Court, which is a common process for this type of transaction. 

“More information on this process will be provided to our farmer owners and unit holders in due course. 

“Fonterra remains committed to a strong balance sheet as well as an “A” band credit rating. 

“The sale of Soprole remains subject to satisfaction of conditions previously announced, including
commencement of an irrevocable public tender offer process in Chile for the outstanding shares in Soprole
not already owned by Fonterra,” says Mr Hurrell.  

Progress towards 2030 targets 

Mr Hurrell says Fonterra has continued to make strong progress towards its 2030 targets through our
strategic choices to focus on New Zealand milk, be a leader in sustainability and be a leader in dairy
innovation and science. 

Focus on New Zealand milk 

“A sustainable supply of New Zealand milk is fundamental to achieving our 2030 goals. Our new Flexible
Shareholding capital structure supports a sustainable milk supply and a stable balance sheet, while
protecting farmer ownership and control.  

“Fonterra has been working with the Government to make relevant changes to the Dairy Industry
Restructuring Act (DIRA) to support the new structure. These legislative changes were passed by
Parliament in November 2022 and the transition to our new capital structure will occur on 28 March
2023.” 

“As previously announced, Fonterra has allocated up to $300 million for a package of measures aimed at
supporting liquidity as farmers transition to Flexible Shareholding. This includes new market maker
arrangements that are designed to support liquidity over the long term.   

“We also recognise that during the transition phase, further liquidity support may be appropriate, and we
have approved an on-market share buyback that will commence on 28 March 2023 and is expected to
continue until 9 June 2023.  

“The Transitional Buyback will be structured in a way that gives the Co-operative capacity to buy back
shares throughout the entire 11-week period. This involves having capacity to buy shares in each week as
well as additional flexibility to accommodate different levels of liquidity across the period. Fonterra can buy
up to a maximum of 75 million co-operative shares as part of this buyback,” says Mr Hurrell.  

Be a leader in sustainability  

Fonterra Co-operative Group
Page 4

“Our Co-op is continuing to make sustainability improvements both on-farm and off-farm to retain our
competitive edge. 

“At last year’s Annual Meeting, we signalled to farmers that the Co-op will announce a target for our on-
farm (scope 3) emissions.  

“Having a target will help us secure and retain high value customers and enable the Co-op and our farmer
owners to meet regulatory requirements and access finance.  

“We acknowledge making change on-farm is not easy. Over the coming months, we will be talking with our
farmer owners about how collectively we’d achieve a target.    

“At the same time, we’re continuing to invest in R&D and new technologies to help reduce emissions on-
farm. We currently have 18 methane reduction projects underway and 30 active trials of potential
solutions.  

“This includes a new private-public partnership joint venture announced in November through which
Government and partners from across the food and fibre sectors will work together to reduce methane
emissions.  

“We’re also making progress in our work to transition our manufacturing sites out of coal by 2037. At our
Waitoa site we’re converting one of our boilers to wood biomass. Scheduled to be operating later this year,
the new boiler will reduce the site’s annual emissions by 48,000 tonnes of CO
2e
, the equivalent of taking
20,000 cars off New Zealand’s roads,” says Mr Hurrell.  

Be a leader in dairy innovation and science  

“We have portfolios of innovation projects underway to help achieve the value targets set out in our 2030
strategy.  

“These are in the areas of improving product performance, exploring science backed nutritional solutions,
transforming customer experience, and sustainable value change transformation.  

“Recent progress includes our partnership with PolyJoule, a Massachusetts Institute of Technology (MIT)
spin-off, to trial the world’s first industrial scale organic battery. It has been installed at our Waitoa
manufacturing site to improve energy security. 

“We’ve also established a new start-up company with Royal DSM to accelerate the development and
commercialisation of fermentation-derived proteins with dairy-like properties,” says Mr Hurrell. 

FY23 Outlook  

Fonterra has a forecast Farmgate Milk Price Range of $8.20 - $8.80 per kgMS and Mr Hurrell says the Co-
op will continue to watch changes in the market closely.  

“The outlook for dairy remains positive with high demand for New Zealand’s quality, sustainable dairy
nutrition, and global milk supply likely to continue be constrained. We’ll be out in May with our opening
forecast Farmgate Milk Price for the 2023/24 season.  

“We have full year forecast normalised earnings of 55 – 75 cents per share, with a mid point of 65 cents
per share,” says Mr Hurrell.  

“There are a number of risks we continue to watch, including the impact of recent weather events in New
Zealand on supply chain and milk production.  

“Our Co-op’s scale, diversity and strong balance sheet positions us well to manage these challenges and
we will continue to prioritise higher value products and channels to deliver sustainable returns for farmer
owners and unitholders.”     

Fonterra Co-operative Group
Page 5

ENDS

Non-GAAP financial information
Fonterra uses several non-GAAP measures when discussing financial performance. Non-GAAP measures
are not defined or specified by NZ IFRS.

Management believes that these measures provide useful information as they provide valuable insight on
the underlying performance of the business. They may be used internally to evaluate the underlying
performance of business units and to analyse trends. These measures are not uniformly defined or utilised
by all companies. Accordingly, these measures may not be comparable with similarly titled measures used
by other companies. Non-GAAP financial measures should not be viewed in isolation nor considered as a
substitute for measures reported in accordance with NZ IFRS. Non-GAAP measures are not subject to
audit unless they are included in Fonterra’s audited annual financial statements.

Please refer to the non-GAAP measures section in Fonterra’s 2023 Interim Report for reconciliation of NZ
IFRS to non-GAAP measures, and the Glossary for definitions of non-GAAP measures referred to by
Fonterra.

For further information contact:
Philippa Norman
Fonterra Communications
24-hour media line
Phone: +64 21 507 072

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Interim Report
2023

Our three strategic choices
are guiding everything we do...
Focus on New Zealand milk
We believe New Zealand milk is the most valuable
in the world. With demand for sustainable dairy
nutrition growing at a pace that will outstrip
supply, we are creating more value for our farmer
owners and unit holders by further differentiating
our milk in the global market.
Be a leader in sustainability
Globally, people want to know where their food
comes from and the impact it leaves. New Zealand
milk is amongst the most carbon-efficient in the
world, produced by a proven pasture-based model
and underpinned with strong animal wellbeing
standards. By leading in sustainability, we can
respond to changing demands from customers,
capital providers and regulators.
Be a leader in dairy
innovation and science

Our Co-op has a long and proud heritage of dairy
innovation. We are building on this expertise
by continuously developing new dairy nutrition
solutions and partnerships which help people live
healthier and longer lives.
Cover: Penelope, Blair, Joe & Billie, Norsewood
Piratheepan, Palmerston NorthAndrew & Henry, RakaiaIsabella & Henry, Rakaia
FONTERRA INTERIM REPORT 2023
02
CONTENTS

Message from our
Chair and CEO
Kia ora
We’ve had a strong first half to our financial year and the Co-op is
performing well against a backdrop of ongoing market volatility.
Our scale and diversification across channels and markets has enabled us
to navigate through disruption and make the most of favourable market
conditions in a number of areas.
We revised the forecast Farmgate Milk Price range down in February as
a reflection of reduced demand for whole milk powder, particularly from
Greater China, at a time of balanced global milk supply.
Recent increased buying behaviour from China is encouraging and it
gives us confidence to hold our current forecast.
Meanwhile, protein prices have been high, and this is reflected in our lift
in earnings. We’ve upgraded our full year forecast normalised earnings
from 50-70 cents per share to 55-75 cents per share.
Coupled with our strong balance sheet, we are pleased to be in the
position to pay an interim dividend of 10 cents per share. We also expect
to be able to pay a strong full year dividend, in addition to our proposed
capital return.
Capital Returns
We’re pleased to be providing an update on the proposed capital return
to our farmer owners and unit holders.
Miles Hurrell
– Chief Executive Officer
Peter McBride
– Chairman
As we transform our Co-op for tomorrow,
we continue to perform today
We have previously stated an intention to return around NZ$1 billion
to shareholders by FY24, subject to the outcome of reviews of our
ownership of Fonterra Australia and our Chilean Soprole business.
We have subsequently made the decision to retain full ownership
of Fonterra Australia.
Following completion of the sale of Soprole, we intend to return around
50 cents per share and unit, which is approximately $800 million.
We are aiming for a record date for the proposed tax free capital return
in late September 2023, with cash to be received by our farmer owners
and unit holders the following month.
Implementation of the capital return will require a Scheme of
Arrangement to be voted on by shareholders, and approval by the High
Court, which is a common process for this type of transaction.
More information on this process will be provided to our farmer owners
and unit holders in due course.
04
CONTENTS
FONTERRA INTERIM REPORT 2023
MESSAGE FROM OUR CHAIR AND CEO

Fonterra remains committed to a strong balance sheet as well as an “A”
band credit rating.
The sale of Soprole remains subject to satisfaction of conditions
previously announced, including commencement of an irrevocable public
tender offer process in Chile for the outstanding shares in Soprole not
already owned by Fonterra.
First half of FY23
The Co-op has delivered a Profit After Tax of NZ$546 million, up
$182 million compared to the same time last year, and a Return on Capital
for the last 12 months of 8.6%, up from 6.1% in the comparable period.
This lift in earnings is thanks to our Co-op’s scale and ability to move
our farmer owners’ milk into products and markets where we’re seeing
favourable prices.
With whole milk powder prices down, we moved more milk into skim
milk powder and cream products to optimise our Farmgate Milk Price.
We also made the most of favourable margins in our protein and cheese
portfolios, by moving a higher portion of current season milk into these
products which has benefited our earnings.
This has enabled us to maximise overall total returns to our farmer
owners and unit holders.
While our Ingredients channel (normalised EBIT up $494 million) is
performing well and our Foodservice channel (normalised EBIT up
$81 million) is showing resilience to market volatility with improved
in-market pricing, our Consumer channel (normalised EBIT down
$177 million) has felt the impact of higher input costs and ongoing
pressure on margins.
In particular, these market conditions have impacted our performance
expectations of our Asia consumer brands Anlene™, Chesdale™ and
Anmum™ and our domestic consumer business Fonterra Brands
New Zealand.
As a result, we impaired our Asia consumer brands by $70 million to
reflect the impact of weakening currency in the markets they operate,
higher interest rates and a declining economic environment in some
South East Asian markets, and Fonterra Brands New Zealand by
$92 million to reflect ongoing domestic margin pressure and a lower
than expected base for growth.
Despite these challenges, we continue to exercise financial discipline
with a focus on delivering returns, while managing higher costs and
ongoing market disruption.
We have made progress on improving our year-end net debt and working
capital position. We have had strong cash flows from higher earnings,
and the inventory held at the end of FY22 has been managed and cleared
as planned. Our strong balance sheet provides the strength to weather
volatile markets.
Severe storms and flooding across the North Island in January
and February impacted many farmers, in particular in Northland,
Coromandel, Gisborne and the Hawke’s Bay, and also delayed some
of our product getting onto ships, with road and port closures and
rail disruptions slowing down an already strained national network.
We are supporting impacted farmer owners with their recovery and have
donated product to local communities. We also remain focused on
minimising the impact on the business and we expect the supply chain
disruptions as a result of these weather conditions to be resolved.
Earnings per share
33 cents
per share
Forecast Farmgate Milk Price range
NZ$8.20-$8.80
per kgMS
Profit After Tax
NZ$546m
up 50%
Interim dividend
10 cents
per share
Return on Capital
8.6%
up from 6.1%
Our lift in earnings is
thanks to our Co-op’s
scale and ability to move
our farmer owners’
milk into products and
markets where we see
favourable prices.
Alan, Te Kaihou & Kiri, Bay of Plenty
05
CONTENTS
FONTERRA INTERIM REPORT 2023
MESSAGE FROM OUR CHAIR AND CEO

Outlook for remainder of FY23
We have a forecast Farmgate Milk Price range of $8.20 - $8.80 per kgMS
and full year forecast normalised earnings of 55-75 cents per share.
The outlook for dairy remains positive with strong demand for
New Zealand’s high quality and sustainable dairy and global milk supply
likely to continue to be constrained.
There are a number of risks we continue to watch, including the impact of
recent weather events in New Zealand on supply chain and milk production.
Cyclone Gabrielle and dry conditions in the South Island have already
impacted the Co-op’s full season expectations.
This is why in late February we revised our forecast milk collections for the
2022/23 season to 1,465 million kgMS, down from 1,480 million kgMS.
Our Co-op’s scale, diversity and strong balance sheet positions us
well to manage these challenges and we will continue to prioritise higher
value products and channels to deliver sustainable returns for farmer
owners and unitholders.
Progress towards 2030
We have continued to make strong progress towards our 2030 targets
through our strategic choices to focus on New Zealand milk, be a leader
in sustainability and be a leader in dairy innovation and science.
Performance is always our first priority, and with COVID-19 restrictions
now largely behind us, we are shifting our focus back to our global
markets and the future opportunities there.
Understanding the needs of our customers and the end consumer is
central to our strategy. We know that connecting what we do on-farm
with what global consumers want can create real value for our Co-op.
Our New Zealand provenance resonates with customers, but we
need to keep innovating to stay ahead of their changing requirements
and preferences.
We have portfolios of innovation projects underway to help achieve
the value targets set out in our 2030 strategy.
These are in the areas of improving product performance,
exploring science backed nutritional solutions, transforming
customer experience, and sustainable value change transformation.
Recent progress includes our partnership with PolyJoule, a
Massachusetts Institute of Technology (MIT) spin-off, to trial the world’s
first industrial scale organic battery. It has been installed at our Waitoa
manufacturing site to improve energy security.
The outlook for dairy
remains positive with
strong demand for
New Zealand’s high
quality and sustainable
dairy and global milk
supply likely to continue
to be constrained.
We’ve also established a new start-up company with Royal DSM
to accelerate the development and commercialisation of fermentation-
derived proteins with dairy-like properties.
It’s still early days, but these examples give you an idea of the initiatives
we are looking into as we work towards our ambition to be a leader in
dairy innovation and science.
Here at home, two key pieces of work for the remainder of the year are
the transition to our new Flexible Shareholding capital structure and our
on-farm emissions approach, both of which are enablers of value creation
for our Co-op.
Our new Flexible Shareholding capital structure is critical in helping
us maintain a sustainable New Zealand milk supply in an increasingly
competitive environment. Following recent legislative approvals, we are
transitioning to our new Flexible Shareholding capital structure from
28 March.
As part of our ambition to be a leader in sustainability, we are continuing
to make sustainability improvements both on-farm and off-farm to retain
our competitive edge.
We have signalled to our farmer owners the Co-op will announce a
target for on-farm (Scope 3) emissions. Having a target will help secure
high value customers, enable the Co-op and our farmer owners to meet
ongoing regulations as well as secure future finance.
We acknowledge making change on-farm is not easy, which is why we
currently have 18 methane reduction projects underway and 30 active
trials of potential solutions.
These activities support us in building a stronger Co-op for the future,
and we’ll be out talking about these topics over the coming months.
As we’ve said earlier, we’re well positioned to navigate the challenges
we’re currently seeing while also looking out to the needs of our
customers and consumers in the years ahead.
This long-term view determines the steps we need to take today
to ensure we continue to be a dairy provider of choice and strong Co-op
for generations to come.

Peter
Peter McBride Miles Hurrell
Chairman Chief Executive Officer
06
CONTENTS
FONTERRA INTERIM REPORT 2023
MESSAGE FROM OUR CHAIR AND CEO

As we transform our Co-op
for tomorrow, we continue to
perform today
Creating
goodness:
Our
progress
so far
Transitioning to our new capital structure
A sustainable supply of New Zealand milk is fundamental to achieving
our 2030 goals.
Having the right capital structure is an important part of this and that’s
why we are looking forward to moving to our new Flexible Shareholding
model in late March.
Flexible Shareholding makes it easier for new farmers to join the Co-op
and for existing farmers to remain, by allowing greater flexibility in the
level of investment required.
This supports Fonterra’s strategy by helping to maintain a sustainable
milk supply, protecting farmer ownership and control, and supporting
a stable balance sheet.
Flexible Shareholding received a strong farmer mandate back in
December 2021. Following that, Fonterra worked with the Government
to make relevant changes to the Dairy Industry Restructuring Act (DIRA)
to support the new structure. These were passed by Parliament in
November 2022.
With the legislative changes in place, and the Board satisfied that our
Co-operative is well prepared for the transition, the implementation date
for Flexible Shareholding has been set for Tuesday 28 March.
We have been working closely with our farmers to help them understand
what their options are under the new arrangements and we will continue
to do so.
Focus on
New Zealand milk
Lana & Kiri, Bay of Plenty
Isabella, Rakaia
07
CONTENTS
FONTERRA INTERIM REPORT 2023
OUR PROGRESS

Growing our Foodservice business
Anchor™ Food Professionals (AFP) struck a deal with Walmart in
January this year to supply more than 400 of its stores across China.
The products are a New Year cream cake, Basque cheesecake and
a Swiss roll in two flavours – coconut and chocolate.
It’s the first time our Foodservice business has partnered with
an international supermarket chain to provide ingredients and
solutions for baking products.
The signing of the agreement came shortly after China relaxed
its COVID-19 restrictions, indicating a return to normal for food
retailers across the country.
The Walmart deal is a result of our focus on developing innovative
products for our customers.
To support our Foodservice business in China, we upgraded
our local application centres in Shanghai and Beijing in 2022.
We have since launched four new products and more than 230
new product applications.
Chile and Brazil divestments
As part of our decision to focus on our New Zealand farmers’ milk, we’ve
made progress on the divestments of our operations in Chile and Brazil.
Chile
In November, we announced the sale of our Chilean Soprole business to
Gloria Foods – JORB S.A. (Gloria Foods). Soprole is a very good business
but does not rely on New Zealand milk or expertise.
The divestment comprises a number of transactions that result in
aggregate consideration of 591.07 billion Chilean Pesos (approximately
NZ$1 billion subject to closing transaction adjustments).
Gloria Foods is a consumer dairy market leader in Peru, with
operations in Bolivia, Puerto Rico, Argentina, Colombia and Uruguay.
Fonterra and Gloria Foods have a long-standing commercial relationship
in South America.
The divestment is subject to a number of conditions.
Brazil
In December, together with our joint venture partner Nestlé, we
agreed the sale of Dairy Partners Americas (DPA) Brazil to French dairy
company Lactalis for BRL 700m (approximately NZ$210m subject to
closing transaction adjustments). Fonterra’s 51% share of these sale
proceeds will be used to repay debt related to that business. Given the
asset has been held for sale since 2020 there will be little cash impact on
our earnings.
DPA Brazil had reached maturity as an investment for us, and the sale
allows us to prioritise our resources to the businesses that are core to
our strategy.
The deal is expected to be completed by mid-2023, subject to regulatory
authority approvals.
08
CONTENTS
FONTERRA INTERIM REPORT 2023
OUR PROGRESS

On-farm emissions (Scope 3)
At last year’s Annual Meeting we signalled to farmers the Co-op’s
intent to announce a target for our Scope 3 emissions – which are our
on-farm emissions.
Having a target will help us remain competitive, secure high value
customers, enable the Co-op and our farmer owners to meet ongoing
regulations as well as secure future finance.
We already have targets for Scope 1 and Scope 2 emissions, which are
primarily our emissions from our site and transport operations. These
targets are backed by science and use the same accreditation used by
many of our customers.
Scope 3 emissions are defined as indirect emissions occurring because
of the activities of an organisation but generated from sources not
owned or controlled by that organisation. In Fonterra’s case, 90% of
our Scope 3 emissions are those arising from the on-farm emissions of
supplying farms. For some of our largest customers the most significant
component of their Scope 3 emissions are those coming from Fonterra.
Over the coming months, we will be talking with farmers about the
opportunities, challenges and ideas on the Co-op’s role in helping to
navigate these changes.
Methane partnership
We’re investing in R&D and new technologies to help reduce emissions
on-farm. We currently have 18 methane reduction projects underway
and 30 active trials of potential solutions. We’re also partnering with
industry and Government to find solutions. Over the next four years
Fonterra will contribute up to $50 million in a public-private partnership
joint venture that’s working to find a solution to biogenic methane.
Formally launched at National Fieldays, the joint venture includes our
Co-op, the Government and partners from across the food and fibre
sector – ANZCO, Rabobank, Ravensdown, Silver Fern Farms and Synlait.
Together the partners will contribute around $35 million a year until
2025 with the Government matching this contribution, resulting in at
least $170 million invested over this time.
This will enable the Co-op to accelerate some of the methane mitigation
work it already has underway and look across the industry to see what
else we can do to provide the tools our farmers need to ensure the
enduring future of their businesses and that we meet our net zero
ambitions.
Fonterra + Nestlé
Fonterra is partnering with Nestlé to develop a New Zealand first – a
commercially viable net zero carbon emissions dairy farm.
Over five years, the farm, run by co-partner Dairy Trust Taranaki, will
examine all aspects of farm operations to reduce carbon with the aim
of cutting emissions by 30% by mid-2027 and a 10-year ambition of
reaching net zero carbon emissions.
Lessons learned and on-farm activities will be shared through open days
with farmers, who can then adopt the techniques and technologies most
appropriate for their farms.
The partnership also includes a greenhouse gas farmer support
programme. The multi-year project will see Fonterra farmers who are
part of the programme get additional support to implement changes
aimed at lowering their on-farm emissions, which could include solutions
such as improved management of feed and pasture and enhanced milk
production efficiency.
Be a leader in sustainability
Being a leader in sustainability is about building resilience in the
Co-operative to ensure we continue to meet our customers’ needs
now and into the future. This positions us for long-term success
from one generation to the next.
Andrew & Henry, Rakaia
09
CONTENTS
FONTERRA INTERIM REPORT 2023
OUR PROGRESS

Decarbonisation
The Co-operative continues to make progress in its work to get out of
coal at its manufacturing sites by 2037. The majority of this work will be
done by 2030 and it is expected by the end of the year only 6 out of 29
sites will be using coal.
Currently we have conversions to wood biomass underway at our Stirling
and Waitoa sites. Once complete the Stirling site will be our first site
running on 100% renewable thermal energy.
We have also entered a new strategic partnership with MAN Energy
Solutions to reduce CO
2
emissions in dairy production using climate-
friendly heat pump technology for steam generation.
The German based company is a world leading provider of engines and
turbomachinery solutions and together we will trial the design and
implementation of an industrial-scale heat pump technology to replace
non-renewable energy in raising steam.
More Farm Environment Plans
The Co-operative Difference is our way of connecting farmers with
customers to ensure our milk is backed by the sustainability credentials
consumers want.
Farm Environment Plans (FEP) are a key component in The Co-operative
Difference, helping farmers to assess how their farm is performing
relative to good practice, and providing practical actions to improve
their environmental performance and reduce risks. They also provide
assurance to our customers and support our sustainability claims.
Our farmer owners are making great progress, with 77% of Fonterra
farms having an FEP, to reach our strategic target of 100% by 2025.
This puts our farmers in a strong position to meet the upcoming
regulatory expectations with the introduction of freshwater farm plans
through the RMA framework later this year.
Expanding Farm Insight Reports
Farm Insights Reports give farmers information on milk quality,
sustainability and animal health as well as their performance under
The Co-operative Difference programme.
Following their introduction last year, we have continued to evolve and
enhance the use of farmers’ information to provide further benchmarks
and insights specific to their farm systems.
In addition to previous measures, this season the Insights Reports
included farm-level Scope 3 emissions (emissions not produced on the
farm) and nitrogen fertiliser conversion efficiency that enabled farmers
to benchmark performance with their 100 closest neighbours.
The reports highlight opportunities for improvement, and our field teams
utilise this information to work alongside our farmer owners to suggest
changes to help improve performance, reduce risks and potentially save
time and costs.
Harepaora & Lana, Bay of PlentyJonathan & Kevin, Te Awamutu
Himiona Farm, Bay of Plenty
10
CONTENTS
FONTERRA INTERIM REPORT 2023
OUR PROGRESS

Growing Active Living
As part of our long-term strategy, we set an aspiration to grow operating
profit by 40-50% from FY21 base by 2030.
One of the ways we will do this is by shifting more of our Ingredients
portfolio towards higher-value ingredients and solutions through our
Active Living business.
Our Active Living business addresses the three dimensions of wellbeing
(physical, mental and inner) and the health needs of a medical patient
right through to those taking a proactive approach to their health and
wellbeing.
The global health and wellness market is valued at US$66 billion, growing
at 6.1% per year. Medical Nutrition is valued at US$50 billion globally
and growing at 5% per year.
Fonterra is already well positioned to take a slice of these markets.
We have expertise in:
–Protein to help people maintain muscle mass for better quality of life
–Lipids that support mood management
–Probiotics to support immunity and digestion
Through our nutritionally dense and scientifically backed portfolio, we’re
able to claim our products have health benefits relating to muscle health
and sarcopenia (age related loss of muscle mass), mobility, malnutrition
(especially related to oncology & peri-operative care), immunity and
digestive health.
In addition to this, we see benefits emerging in skin health and mental
wellbeing, especially stress and mood. We are investing in clinical
research to build evidence to substantiate these benefits, collaborating
with industry partners such as commercial brands and universities
to accelerate progress. This research is enabling us to break into the
burgeoning areas of beauty ingestibles and nootropics, particularly
targeting the supplements category.
The USA is a key target market due to its interest in health and wellness
and its wealth of innovative companies at the forefront of this trend. We
are also focusing on Japan, China and South Korea with the team scoping
Indonesia, Thailand and Vietnam for future potential.
As part of our long-term strategy, we have ambitions to grow the margins
and value of our Active Living business, with good progress made
through FY23.
In September we launched our new wellbeing solution brand, Nutiani™,
which supports the ambitions outlined above, whilst also creating
flexibility for the business to go beyond traditional dairy.
For example, Nutiani™ has partnered with the Chinese customer Vital
Nova Health Group to launch new products via their Leli brand. These
use our clinically backed probiotics (Nutiani HN001TM and HN019 TM)
as their hero strains to target gut health
Be a leader in dairy
innovation and science
Piratheepan, Palmerston North
11
CONTENTS
FONTERRA INTERIM REPORT 2023
OUR PROGRESS

Doing good together with our people,
farmers and communities
Our People and
Communities
Flood relief in NZ and Australia
New Zealand
In response to the devastating flooding which hit the North Island of
New Zealand in January, our community team provided support to key
community groups on the front-line giving assistance to affected Kiwis.
We expedited our quarterly product donation of Anchor™ Milk Powder
to the NZ Food Network and sent extra product to key food banks,
maraes and community hubs in the region.
It was a collaborative effort between our senior leaders, community
partners, customer services, logistics and warehouse teams – to ensure
we could dispatch much needed dairy products to impacted families
immediately.
Altogether, the Co-op will be contributing over a million serves of dairy to
impacted communities. These items include butter, yoghurt, cheese and
a variety of UHT milks.
To support impacted farmers, Fonterra worked closely with local industry
bodies and representatives to coordinate support on the ground where
needed, as we always do when weather events like this affect our
shareholder farmers. Our local Farm Source™ teams proactively reached
out to farmers to check in, and also remind them that they can call our
24/7 Farmer Support Team to get any support they may need.
We also offered additional leave for our people whose homes were
impacted by flooding, as well as for employees who wanted to participate
in Fonterra-organised volunteer assistance.
Australia
Our farmer suppliers in Victoria, Australia were impacted by floods in
October, which cut power and damaged feed. Most farmers continued
milking despite the challenging conditions and our Farm Source™ team
were there, providing support even when their own properties had been
impacted or were at risk.
Post-event recovery, our Farm Source™ team worked closely with flood-
impacted farmers – providing advice and solutions, particularly with
regard to monitoring animal health, paddock management and securing
alternative feed sources.
Cyclone Gabrielle
In February, Cyclone Gabrielle hit communities across the North
Island hard, in particular Northland, Coromandel, Gisborne and the
Hawke’s Bay.
Many farms in these regions were impacted by flooding, road
closures and infrastructure damage which will take time to
recover from.
As part of our initial response, transport teams worked around the
clock to re-establish access so milk collections could resume.
Many farms remained without power for some time, and our
transport team helped coordinate moving generators from farms
that had power to others that did not.
Farmers across the Hawke’s Bay and Gisborne regions were among
the hardest hit, with some communities cut off and isolated.
Fonterra accessed these areas via helicopter to assess the damage,
understand farmers’ needs, and provide provisional supplies and
veterinary support.
To help provide ongoing support, we set up an easy way for our
farmers, employees and Farm Source™ customers to support
the Rural Support Trust or Hawke’s Bay Disaster Relief fund by
donating either cash or Farm Source™ Rewards Dollars through our
Farm Source stores.
Auckland Flood Donations – Fred Te Moananui
& Mose Vaiouga from the NZFN.
Our teams coordinated moving generators from
farms with power to others without.
12
CONTENTS
FONTERRA INTERIM REPORT 2023
OUR PEOPLE AND COMMUNITIES

Earthquake in Java
In Indonesia, a 5.6 magnitude earthquake shook its most populated
island Cianjur, West Java. Fonterra’s Indonesia team joined hands
with NGO Jabar Bergerak to contribute more than 6,000 products
including Anlene™, Anmum™ and Anchor™ Boneeto, to help the
local community meet their nutritional needs.
Nestlé Australia project
The past 12 months have been exceptionally challenging for people
in need. Demand for food relief has gone up as people face financial
pressures from COVID-19, recent floods as well as the Australian
bushfires last year.
Fonterra Australia has supported Nestlé and Foodbank to create
the first ever designed-for-Foodbank custom product – a MAGGI
Hearty One Pot Casserole base, which includes milk powder made
by Fonterra. Rolled out to Foodbanks across Australia and New
Zealand, there are more than 1.2 million serves being made to help
support people in need.
The Big Feed
Aotearoa’s first rural live-streamed telethon, The Big Feed, took
place in December. Organised by Meat the Need, the event
connected farmer produced donations with the Kiwi families who
needed them most over Christmas.
Group Director for Farm Source™ Anne Douglas joined Matt
Chisholm and Meat the Need founder Wayne Langford for part
of the 12-hour telethon. Anne encouraged our farming families to
get involved, pledging to match every donation made by Fonterra
farmers, up to the value of $20k.
The telethon aimed to raise 1 million ‘meals’ to fill food banks and
community organisations for an entire year. A total of 1.2 million
‘meals’ were raised by the end of the event.
Delivering Fonterra goodness to the Darfield
community
In the lead up to Christmas, around 25 employees from the Darfield
maintenance team packed 60 food boxes with items for an early
Christmas meal, as well as some extra non-perishable food items, which
they distributed into the community.
The behind the scenes team of The Big Feed, with Matt Chisholm
and Wayne Langford (co-hosts), supported by Meat the Need
Champions (volunteers).
The Big Feed telethon set.
Java earthquake relief.
The Darfield Maintenance & Hapori Programme teams packed
and delivered Christmas food boxes to elderly people living alone
in their community.
Fonterra supported the Kindness Collective’s Christmas Joy Store
by hosting a ‘Gifting Tree’ on-site at Fanshawe Street, Home
Straight and London Street, for staff to contribute unwrapped toys.
The KickStart Breakfast programme was a finalist in the
Sustainable Business Network Awards, in the category of
Outstanding Collaboration.
13
CONTENTS
FONTERRA INTERIM REPORT 2023
OUR PEOPLE AND COMMUNITIES

Profit
after tax

$
546
m
Global Markets
EBIT
3
$
267
m
from $279m
Greater China
EBIT
3
$
215
m
from $217m
Group Operations
EBIT
3
$
501
m
from $89m
Ingredients
EBIT
3
Foodservice
EBIT
3
Consumer
EBIT
3
$
911
m
$
166
m
$
(94)
m
from $ 417mfrom $85mfrom $83m
from $364m
Earnings
per share
33
c
from 22c
1 Total Group includes
continuing and
discontinued operations.
2 Refer to the Glossary
for definition.
3 Prepared on a normalised
continuing operations basis.
Comparative information
has been restated and re-
presented for consistency
with the current period.
4 Return on capital is calculated
for the 12-months ended
31 January.
Business
Performance
Dashboard
New Zealand season to date
milk collections
1,016
m
kgMS
from 1,033m
Interim
dividend
per share
10
c
from 5c
To t a l G r o u p
normalised EBIT
1
$
940
m
from $607m
Return on capital
2,4
8.6
%
from 6.1%
Free cash
flow
2
$
(30)
m
from $(849)m
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
14
CONTENTS

Our reported profit after tax is up 50%,
from $364 million to $546 million for the
first six months of the 2023 financial year,
and we have confirmed an interim dividend
of 10 cents per share.
Total Group Performance
Our performance for the first six months reflects favourable margins in
our Ingredients channel driven mainly by demand for protein and cheese
products across multiple markets at a time of constrained supply.
Our Foodservice channel earnings have also improved as our in-market
product prices adjust to reflect the higher cost of milk. However,
our Consumer channel earnings are down due to challenging market
conditions and recognising impairments of our New Zealand consumer
business and our Asia brands – Anlene™, Anmum™ and Chesdale™.
The global operating environment remains challenging with heightened
market volatility, inflationary pressures, higher interest rates, as well as
weather events impacting the global supply chain.
Our free cash flow for the first six months is more favourable relative to
the same time last year, reflecting increased earnings and the sell down
of additional inventory held at the end of the 2022 financial year.
Our increased earnings combined with the strength of our balance sheet
has enabled us to pay an interim dividend of 10 cents per share.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
15
CONTENTS

Our normalised profit after tax increased
68%, or $247 million, to $611 million,
driven by an increase in gross profit.
We have normalised $61 million of foreign exchange movements on
derivatives related to hedging sale proceeds from Soprole and $4 million
related to an impairment of our Hangu China farm.
Our Total Group gross profit increased
43%, or $691 million, due to:
–higher product prices in our Ingredients channel, particularly for
protein and cheese products
–increased sales volumes due to the sell down of additional inventory
held at 2022 financial year-end
The improvement in Total Group gross
profit was partially offset by an increase in
operating expenses, including:
–the impairment of our New Zealand consumer business and our
Asia brands (Anlene™, Anmum™ and Chesdale™), of $92 million
and $70 million, respectively. See page 39.
–inflationary pressure felt across the business
–impact of foreign exchange translation
Normalised Profit After Tax
1
HY23TaxFinance costsOther itemsOperating expensesGross profitHY22
364
691
611
(315)
(39)
(47)
(43)
1 Normalised profit after tax includes amounts attributable to non-controlling interests.
Increased due to favourable
margins, particularly for
protein and cheese products
Increased due to impairments of our
New Zealand consumer business and
Asia brands, of $90 million and $72 million,
respectively, as well as the impact
of inflationary pressures and foreign
exchange translation
Increased mainly
due to higher global
interest rates
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
16
CONTENTS

Total Group Normalised EBIT
1
($ million)Dividend Per Share (cents)
20232022202120202019
72
293
418
364
611

Normalised Profit After Tax
1,2
($ million)
Breakdown of Total Group Performance
FOR THE SIX MONTHS ENDED 31 JANUARY 202231 JANUARY 2023
NORMALISED BASIS
NZD MILLION
CONTINUING
OPERATIONS
1
DISCONTINUED
OPERATIONS
1
TOTAL GROUP
CONTINUING
OPERATIONS
1
DISCONTINUED
OPERATIONS
1
TOTAL GROUP
Sales volume ('000 MT) 1,6232981,9211,6992951,994
Revenue10,08571210,79712,33391613,249
Cost of goods sold(8,696)(494)(9,190)(10,287)(664)(10,951)
Gross profit1,3892181,6072,0462522,298
Gross margin (%)13.8%30.6%14.9%16.6%27. 5 %17. 3 %
Operating expenses(909)(153)(1,062)(1,200)(177)(1,377)
Other
2
63(1)6218119
Normalised EBIT5436460786476940
Normalisations
3
––––(82)(82)
EBIT54364607864(6)858
1 Refer to Note 1a and 2b of the 2023 Interim Financial Statements. Comparative information has been restated and re-presented for consistency with the current period.
2 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
3 Refer to the Non-GAAP Measures section.
1 Figures are for the six months ended 31 January.
2 Includes amounts attributable to non-controlling interests.
20232022202120202019
312
584
684
607
940

20232022202120202019
–
5
5
55
10
1515
2020

Interim
Final
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
17
CONTENTS

Consistent with our strategy to focus on our New Zealand milk,
we’ve made progress divesting our operations in Chile and Brazil.
In November 2022, we announced the agreement to sell Soprole to
Gloria Foods – JORB S.A – a consumer dairy market leader in Peru.
The divestment of Soprole comprises a number of transactions that
result in an aggregate consideration of 591.07 billion Chilean Pesos,
which translated to approximately NZ$1.055 billion in November.
The aggregate consideration, which includes the receipt of dividends
to 31 January 2023 from Soprole and the repayment of intercompany
debt owing to Fonterra, is now expected to be approximately
NZ$1.0 billion. Proceeds received by Fonterra at completion will be
subject to relevant adjustments. On 23 February 2023, we announced
that the sale had received approval from the competition authority in
Chile. Completion of the sale remains subject to satisfaction of other
conditions previously announced.
In December 2022, Fonterra and Nestlé agreed the sale of DPA Brazil
to French dairy company Lactalis for BRL 700 million, which translated
to approximately NZ$210 million in December, or NZ$212 million
at 31 January 2023 foreign exchange rates. The proceeds at completion
will be subject to closing transaction adjustments.
Fonterra’s 51% share of the DPA Brazil sale proceeds will be used to
repay debt related to that business and given the asset has been held
for sale since 2020 there will be little cash impact on our earnings.
The DPA Brazil deal is expected to be completed by mid-2023, subject
to regulatory authority approvals.
From 31 October 2022, due to the progress made on the divestment,
Soprole meets the conditions to be classified as held for sale and
the definition of a discontinued operation. In the prior period, our
discontinued operations comprised DPA Brazil and our Hangu China
farm. The comparative figures have been re-presented to include Soprole
as a discontinued operation.
Fonterra’s reportable segments are Group Operations and the two
customer-facing regional business units, Global Markets and Greater
China. Previously, the reportable segments were Asia Pacific; Africa,
Middle East, Europe, North Asia and Americas (AMENA); and Greater
China with the income statement of Group Operations attributed
between the three regional business units. The reportable segments
have been updated to reflect an organisational change to better support
our strategy, with the previous results of the AMENA and Asia Pacific
segments now combined into the new Global Markets segment and
Group Operations is shown as a separate segment.
Group Operations represents the business activities that collect and
process New Zealand milk through to selling the products to our
customer-facing regional business units, Global Markets and Greater
China. When products are sold from Group Operations to the regional
business units, the internal transfer prices used are largely determined by
market-based commodity reference prices (e.g., GDT and other external
benchmarks) and include charges, where appropriate, to reflect the
additional costs of producing non-commodity products.
The performance of Group Operations reflects the efficiency of our milk
collection, manufacturing and supply chain operations, our ability to
optimise our product mix, the impact of our price risk management tools
as well as a significant portion of our business’s volatility. This includes
the impact of price relativities between reference products that inform
the Farmgate Milk Price and non-reference products.
Our Greater China business unit includes the Ingredients, Foodservice
and Consumer channels in Greater China, and Global Markets includes
our Ingredients, Foodservice and Consumer channels outside of
Greater China.
The performance of the regional business units reflects the in-market
value added after purchasing the products from Group Operations at
the transfer price.
Kerry & Scott, Oxford
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
18
CONTENTS

The table to the left shows our reportable segments on a
normalised continuing operations basis. The sum of the individual
segment EBITs (or product channel EBITs) in the table totals
$983 million. After deducting unallocated costs and eliminations
of $119 million, this results in an EBIT from continuing operations
of $864 million.
For the first six months of 2023
financial year:
–Group Operations normalised EBIT increased $412 million
to $501 million, due to favourable margins in the Ingredients
channel. This was driven by higher pricing of the non-reference
product portfolio, particularly casein and caseinate in our
protein portfolio as well as cheese products, relative to
the reference products portfolio that informs the Farmgate
Milk Price
–Global Markets normalised EBIT decreased $12 million to
$267 million. Global Markets’ Ingredients channel in-market
earnings increased by $145 million mainly due to higher sales
volumes and improved pricing. However, this was offset
by impairments in Global Markets’ Consumer channel of
our New Zealand Consumer business and our Asia brands
(Anmum™, Anlene™ and Chesdale™), of $92 million and
$46 million, respectively. See page 39.
–Greater China normalised EBIT decreased $2 million to
$215 million. Greater China’s Foodservice channel in-market
earnings increased by $25 million as prices adjusted for the
higher cost of milk. However, this was offset by an impairment
in Greater China’s Consumer channel of $24 million to our
Anlene™ brand. See page 39.
EBIT contribution
(before unallocated costs
& eliminations)
Ingredients
External sales volume
(’000 MT)
Foodservice
Consumer
Totals
$
911
m
$494m
1,699
5%
$
166
m
$81m
$
(94)
m
$177m
To t a l
Greater
China
$
86
m
$3m
455
20%
$
151
m
$25m
$
(22)
m
$30m
$
215
m
$2m
Global
Markets
$
332
m
$145m
1,244
18%
$
21
m
$16m
$
(86)
m
$173m
$
267
m
$12m
Group
Operations
$
493
m
$346m
$
(6)
m
$40m
$
14
m
$26m
$
501
m
$412m
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
19
CONTENTS

Operating Expenses
1

FOR THE YEAR ENDED 31 JANUARY
NORMALISED BASIS
NZD MILLION20222023
Costs allocated to business units
Selling & marketing266292
Distribution & storage225253
Administration286308
Research & development4045
Other4846
Impairments –162
Total allocated operating expenses8651,106
Unallocated costs4494
Operating expenses from continuing operations9091,200
Operating expenses from discontinued operations153177
Total Group operating expenses1,0621,377
1 Comparative information has been restated and re-presented for consistency with the current period.
Operating expenses are up due to consumer brand impairments,
inflationary pressures, foreign exchange translation and the release
of a provision in the prior period.
We recognised an impairment of our New Zealand consumer
business and of our Asia brands (Anmum™, Anlene™ and Chesdale™),
of $92 million and $70 million, respectively. See page 39.
Inflationary pressures have been felt across the business in the majority
of the operating expense categories.
Relative to the comparable period the New Zealand dollar is weaker.
Therefore, the foreign exchange translation of offshore operating
expenses to New Zealand dollars contributes to the reported increase
in operating expenses.
Unallocated costs increased due to the prior period including the release
of a provision held at Group following a final judicial interpretation on
the application of the Holidays Act 2003 in New Zealand to certain
discretionary incentive payments.
Financial Discipline
Total Group normalised operating expenses are $1,377 million, up $315 million on the prior period.
Te Awamutu
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
20
CONTENTS

HY23PayablesInventoryReceivablesHY22
7.4
0.8
(0.1)
(0.2)
7.9
As at 31 January 2023, our working capital increased $0.5 billion
reflecting higher receivables due to higher product prices and sales
phasing, partially offset by:
–lower value of inventory due to both a reduction in volume and the
lower milk cost
–higher payables due to increased operating costs
These figures are before taking into account Suppliers Payable, the
amount owing to farmer suppliers. Suppliers Payable were $3.7 billion
as at 31 January 2023, reducing net working capital to $4.2 billion.
Working capital days have decreased by one day relative to the prior
year. The increase in the average working capital dollar amount has been
offset by higher product prices increasing the average daily sales value.
We remain committed to a strong balance sheet, providing resilience at a time of heightened global volatility and capacity to progress our strategy.
Net Working Capital as at 31 January ($ billion)Working Capital Days
1
as at 31 January
20232022202120202019
8686
92
97
96
1 Refer to the Glossary for definition. Working capital days are presented on a 12-month
rolling average basis. The prior periods have been re-presented for consistency with the
current period. Previously they were presented on a year-to-date basis.
Note: Includes amounts attributable to disposal groups held for sale.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
21
CONTENTS
Te Awamutu

Our free cash flow for the first six months is typically an outflow
reflecting the seasonal nature of the business.
For the six months ending 31 January 2023 free cash flow was a
$30 million outflow, which is $819 million favourable to last year
and reflects:
–increased cash earnings
–favourable working capital movements due to shipping the
additional inventory held at the 2022 financial year-end
Free Cash Flow
1
5-Year Trend ($ million)Movements in Free Cash Flow ($ million)
20232022202120202019
(782)
369
(632)
(849)
(30)

2023Capex
and other
Net working
capital
2
Earnings2022
(849)
223
670
(74)
(30)
Note: Figures are for the six months ended 31 January.
1 Refer to the Glossary for definition.
2 Includes amounts owing to suppliers.
Scott, Fortrose
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
22
CONTENTS

Our net debt has steadily decreased from 2019 to 2022 half year
through increased financial discipline and an integrated approach
to capital management. The key drivers have been proceeds from
divestments as we aligned our asset portfolio with our strategy, reduced
capital investments, and improved underlying operating performance.
The increase in year-end net debt last year was mainly due to the
decisions regarding sales phasing and the impact of shipping delays
that resulted in higher inventory at year-end, which has been sold in
the current financial year.
At 31 January 2023, our net debt increased by $0.2 billion relative to the
same time last year, due to higher working capital requirements, which
were largely offset by increased earnings.
Our total capital invested in the first six months of the 2023 financial
year was in line with our expectations and with our planned increase in
total capital invested for the full year.
The majority of our capital expenditure is weighted to the second half of
the year. This is due to the shape of the New Zealand milk supply curve
and allows the bulk of the work on the manufacturing and distribution
assets to be undertaken during the winter period.
We have increased our capital expenditure year-on-year to improve
factory water processing, respond to regulatory requirements, reduce
emissions and maintain the integrity and reliability across the network
of processing, distribution and technology assets.
Other capital invested increased due to the renewal of a lease on
consumer manufacturing assets.
Currently, our key capital projects include:
–the conversion of a coal boiler at our Waitoa site to a 30MW
biomass boiler that uses renewable wood biomass energy.
This is expected to be completed in the 2024 financial year
and reduce emissions by 48,000 tCO
2
-e per year. We also
expect to complete the conversion of a coal boiler at our
Stirling site to an 11MW biomass boiler this year which is
expected to reduce emissions by 18,500 tCO
2
-e per year
–responding to wastewater regulatory requirements at our
Tirau site by upgrading our river discharge process to align
with our resource consent
–progress on our annual truck and trailer replacement
and on-farm milk vat replacement programmes across
New Zealand to drive operating efficiencies
Net Debt
1
($ billion)Capital Invested
1
($ million)
20232022202120202019
316
122
438
112
63
175
147
112
316
37
184
180
15
195
245
85
330

Capital expenditureOther capital invested
1 Refer to the Glossary for definition.Note: Figures are for the six months ended 31 January.
20232022202120202019
7.6
6.0
6.4
5.2
6.1
4.3
5.6
5.3
5.8
Half yearFull year
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
23
CONTENTS

Fonterra’s reportable segments are Group
Operations and our two customer-facing
regional business units, Global Markets
and Greater China, as presented below.

Group Operations represents the business activities that collect and
process New Zealand milk through to selling products to our customer-
facing regional business units, Global Markets and Greater China. When
products are sold from Group Operations to the regional business units,
the internal transfer prices used are largely determined by market-based
commodity reference prices (e.g. GDT and other external benchmarks)
and include charges, where appropriate, to reflect the additional costs
of producing non-commodity products.
The performance of Group Operations reflects the efficiency of our milk
collection, manufacturing and supply chain operations, our ability to
optimise our product mix, the impact of our price risk management tools
as well as a significant portion of our business’s volatility, including the
impact of price relativities between reference products that inform the
Farmgate Milk Price and non-reference products.
Our Greater China business unit includes the Ingredients, Foodservice
and Consumer channels in Greater China, and our Global Markets
business unit includes our Ingredients, Foodservice and Consumer
channels outside of Greater China.
The performance of the regional business units reflects the in-market
value added after purchasing the products from Group Operations at
the transfer price.
Reportable Segments
Reportable Segments
1
FOR THE SIX MONTHS
ENDED 31 JANUARY GROUP OPERATIONSGLOBAL MARKETSGREATER CHINA
UNALLOCATED COSTS
AND ELIMINATIONSTOTAL
NORMALISED BASIS
NZD MILLION2022202320222023202220232022202320222023
Sales volume ('000 MT)
2
1,2641,3451,0751,272566455(1,282)(1,373)1,6231,699
Revenue7, 70 59,6916,5459,4243,4993,496( 7, 6 6 4)(10,278)10,08512,333
Cost of goods sold( 7, 3 6 3)(8,855)(5,831)(8,546)(3,154)(3,134)7, 65210,248(8,696)(10,287)
Gross profit 342836714878345362(12)(30)1,3892,046
Operating expenses(286)(336)(450)(624)(129)(146)(44)(94)(909)(1,200)
Other
3
33115131(1)1456318
EBIT89501279267217215(42)(119)543864
Gross margin4.4%8.6%10.9%9.3%9.9%10.4%13.8%16.6%
EBIT margin1.2%5.2%4.3%2.8%6.2%6.1%5.4%7. 0 %
1 Performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
2 Includes sales to other segments.
3 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
24
CONTENTS

Our previous reportable segments were Asia Pacific; Africa, Middle East,
Europe, North Asia and Americas (AMENA); and Greater China with the
income statement of Group Operations attributed between the three
regional business units.
In June 2022, we announced changes to our organisational structure to
better support our strategy, following the strategy refresh announced
in September 2021. Effective from 1 October 2022, our Asia Pacific and
AMENA business units were merged into a combined Global Markets
business unit. The reportable segments have been updated to reflect the
changes and include Group Operations as a reportable segment.
Additionally, from 31 October 2022, Soprole meets the conditions to be
classified as held for sale and the definition of a discontinued operation
and is excluded from the reportable segment figures. The comparative
information has been restated and re-presented to reflect the change
in the Group’s reportable segments.
The table to the right reflects the performance of our regional business
units, Global Markets and Greater China, with Group Operations
attributed between them. This presentation provides an end-to-end
view of performance for the two customer-facing regional business
units, consistent with how the segments were reported in the last
two financial years.
End-to-End Regional Business Unit Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY GLOBAL MARKETSGREATER CHINA
UNALLOCATED COSTS
AND ELIMINATIONSTOTAL
NORMALISED BASIS
NZD MILLION
20222023202220232022202320222023
Sales volume ('000 MT)1,0551,244568455 – –1,6231,699
Revenue6,6469,1063,4393,227––10,08512,333
Cost of goods sold(5,709)( 7, 62 3)(2,985)(2,641)(2)(23)(8,696)(10,287)
Gross profit 9371,483454586(2)(23)1,3892,046
Operating expenses(629)(858)(234)(243)(46)(99)(909)(1,200)
Other
2
422115(6)636318
EBIT
3
350646235337(42)(119)543864
Includes Group Operations attribution
4
7137918122––––
Gross margin14.1%16.3%13.2%18.2%––13.8%16.6%
EBIT margin5.3%7. 1%6.8%10.4%––5.4%7. 0 %
1 Performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
2 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
3 Includes Group Operations attribution.
4 This is included in Global Markets and Greater China’s EBIT.
HY23 EBITUnallocated and
eliminations
Greater ChinaGlobal MarketsGroup
Operations
HY22 EBIT
543
412
(12)
(2)
(77)
864
Within the region
1 Prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
EBIT Contribution by Segment
1
Normalised EBIT ($ million)
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
25
CONTENTS

Group Operations represents the business
activities from collecting and processing
New Zealand milk, through to selling
products to our customer-facing regional
business units, Global Markets and
Greater China.
It is comprised of three functions;
– Chief Operating Office (COO), which
includes New Zealand milk collection
and processing operations, supply chain,
Group IT, Safety and Food Safety
– Fonterra Farm Source™ retail stores
– Strategy and Optimisation (S&O). This
includes optimising the New Zealand
milk pool, product pricing support for
the regions, managing Fonterra’s dairy
and non-dairy price risk and providing
price risk management tools to both our
customers and farmers.
Our New Zealand milk collections from 1 June 2022 to 31 January 2023
were 1,016 million kgMS, down 1.6%, or 17 million kgMS on last season.
Challenging wet weather conditions throughout the North Island
combined with dry conditions in the South Island have reduced milk
production this season compared to the prior season. Our full season
forecast has been revised to 1,465 million kgMS, down from our previous
forecast of 1,480 million kgMS.
We use three key milk collection transport metrics to monitor the
efficiency of our milk transport – milk collection costs, timeliness
of collecting milk, and fuel efficiency of collecting milk.
The rise in global diesel prices has meant the cost of collecting milk
is tracking ahead of last year, despite the first six months of this year
benefiting from the New Zealand Government’s temporary Road User
Charges reduction scheme.
Late delivery of milk collection trucks from Australia has slightly elevated
maintenance and fuel costs on the older fleet. The higher fuel costs
have been offset by further improvements in fuel burn efficiency,
which continues to track favourably.
Our New Zealand milk collection team continues to use new technology
and processes to improve fleet size and efficiency. On-farm milk vat
monitoring technology continues to deliver efficiencies and has allowed
us to reduce our total New Zealand fleet size by ten tankers in the
2022/23 season, with further reductions planned next season.
Group Operations
kgMS (million/day)
JulAugSepOctNovDecJanFebMarAprMayJun
–
1
2
3
4
5
6
7
8
9
10
Milk Supply and Collection
Fonterra’s New Zealand Milk Production
SeasonMilk Solids Produced (full season)
2020/211,539m kgMS
2021/221,478m kgMS
2022/231,465m kgMS
1
1 Current full season forecast
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
26
CONTENTS

Manufacturing
Within our New Zealand manufacturing operations, we have optimised
our product mix by allocating a higher proportion of this season’s milk
solids to protein and cheese products and less to whole milk powder.
Milk utilisation (the proportion of milk solids made into products) has
been impacted by the shift to a more complex product mix as greater
processing losses occur, but on a net basis provide greater earnings
to the Co-operative and represent the greatest overall return for our
milk solids.
To continue to improve milk utilisation, as our product mix shifts to
more complex products, we are investing in optimising the composition
of these products. For example, at our Hautapu and Maungatoroto sites,
we have worked on stabilising the composition of rennet casein across
the season to ensure consistency of our final product as well as improve
product yield.
Our other two key manufacturing metrics, Cost of Quality and Product
made ‘right first time’ are both tracking favourably.
A key driver of our strategy and earnings growth is shifting our
New Zealand milk into higher margin products, particularly in
our Active Living portfolio and Foodservice channels.
This year, due to the sell down of the additional 2022 financial year
Core Ingredients inventory and in-market challenges, we are selling
a higher proportion of our milk solids through our Core Ingredients
channel and a lower proportion through our higher margin channels.
Our Active Living portfolio was impacted by lower demand from USA
resulting from customers’ current manufacturing constraints and high
in-market inventory.
Our Foodservice channel experienced softer volume demand from our
Greater China region.
Our Consumer channel experienced lower sales volume to Sri Lanka due
to the economic crisis limiting repatriation of USD currency.
On a regional basis, Global Markets sales teams secured new contracts
and tenders taking a higher proportion of milk solids, which offset the
softer demand in Greater China.
Sale of Product Channel
(% of milk solids)
Sale by Region
(% of milk solids)
71.5
74.7
5.6
4.8
14.5
13.4
8.4
7.1
HY22HY23
Core Ingredients
Ingredients
Active LivingFoodserviceConsumer
Greater ChinaGlobal Markets
61.5
70.6
38.5
29.4
HY22
HY23
Allocation of milk solids
We continue to focus on allocating milk into the products that generate
the best overall returns for Fonterra, our farmer owners and unit holders.
Neil & Adriana, Te Rapa
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
27
CONTENTS

Group Operations Performance
1
FOR THE SIX MONTHS
ENDED 31 JANUARY TOTALINGREDIENTSFOODSERVICECONSUMER
NORMALISED BASIS
NZD MILLION20222023CHANGE
2
20222023CHANGE
2
20222023CHANGE
2
20222023CHANGE
2
Sales volume ('000 MT)
3
1,264 1,345 6%963 1,049 9%199 171 (14)%102 125 23%
Revenue7, 70 5 9,691 26%6,238 7, 9 0 0 27%864 1,033 20%603 758 26%
Cost of goods sold( 7, 3 6 3) (8,855) (20)%(5,890) ( 7, 1 3 6 ) (21)%(875) (1,002) (15)%(598) (717) (20)%
Gross profit 342 836 144 %348 764 120%(11) 31 –5 41 720%
Operating expenses(286) (336) (17)%(225) (274) (22)%(41) (36) 12%(20) (26) (30)%
Other
4
33 1 (97)%24 3 (88)%6 (1) –3 (1) –
EBIT89 501 463%147 493 235%(46) (6) 87%(12) 14 –
Gross margin4.4%8.6%5.6%9.7%(1.3)%3.0%0.8%5.4%
EBIT margin1.2%5.2%2.4%6.2%(5.3%)(0.6)%(2.0)%1.8%
1 Group Operations performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Includes sales to other segments.
4 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
Group Operations performance
Group Operations revenue is derived from selling products to our
two in-market selling regions, Global Markets and Greater China.
When products are sold from Group Operations to our in-market
regions, the internal transfer prices are largely determined by market-
based reference prices (e.g. GDT and other external benchmarks) and
include charges, where appropriate, to reflect the additional specification
costs to make the product. The internal pricing is reviewed weekly for
Ingredients products and either monthly or quarterly for Consumer and
Foodservice products.
Global Supply Chain
Our global supply chain continues to be impacted in several areas
including port congestion, and weather events contributing to
landside supply chain issues. Shipping schedule integrity remains
below 40%, compared to a long-term average of 80%, with high
volumes of sales and shipping orders requiring rescheduling and
excessive manual intervention.
During the first half of 2023 financial year, we have leveraged our
strategic relationships with our logistics partners to secure additional
shipping capacity to sell down the additional inventory we held at the
2022 financial year-end. We expect the global supply chain environment
to remain challenging.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
28
CONTENTS

2017201820192020202120222023
Non-reference (cheese) product shipment price
1,3
Reference product shipment price
1,2
2,000
3,000
4,000
5,000
6,000
7,000
US$/MT
FY22
H1
FY23
H1
Group Operations EBIT was $501 million,
an increase of $412 million, or 463%, on the
prior comparable period.
A key driver of EBIT in Group Operations is the relative price difference
between product prices that inform the Farmgate Milk Price, referred to
as reference products, and the product prices of non-reference products.
The graph to the left illustrates these prices relativities. The graph uses
cheddar cheese as a proxy for non-reference products. Price relativities
for other proteins, such as casein and caseinates, have been even more
favourable than cheddar.
The favourable price relativities, particularly in our protein and cheese
portfolios, have driven the improved gross margin from 4.4% to 8.6%.
The increase in gross profit has been partially offset by higher operating
expenditure. Our supply chain costs have increased due to inflationary
pressures, supply chain disruption and incurring additional storage
costs due to the impact of holding higher inventory at the start of the
2023 financial year.
‘Other’ is down $32 million, to $1 million, reflecting foreign exchange
movements in our net receivables due to timing differences between
the processing and hedging of invoices.
Reference and Non-Reference Price Relativities
1 The shipment price is a weighted average price of GlobalDairyTrade contracts struck 1 to 5 months prior to the agreed shipment month. Shipment month is the month in which the sale
would be deemed for financial reporting purposes to have been completed, and will normally be the month in which the sale is invoiced and the product is shipped.
2 Reference product shipment price is represented by a weighted average of the whole milk powder, skim milk powder, anhydrous milk fat and butter prices achieved on GlobalDairyTrade.
3 Non-reference product shipment price is represented by the cheddar prices achieved on GlobalDairyTrade.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
29
CONTENTS

The performance of the regional business
units reflects the in-market value added
after purchasing the products from Group
Operations at the transfer price.
Global Markets
Our Global Markets business covers our sales regions outside of the
Greater China region, which includes Middle East, Africa, Europe, North
Asia, Americas, New Zealand, Australia, Pacific Islands, South East Asia
and South Asia.
Global Markets’ normalised EBIT decreased $12 million to $267 million.
Global Markets’ Ingredients channel earnings increased, mainly due
to higher sales volumes and improved product pricing. However, this
was offset by impairments of our New Zealand consumer business
and our Asia brands (Anmum™, Anlene™ and Chesdale™) which have
been recognised as an operating expense in the Consumer channel.
See page 39.
On an end-to-end basis (including Group Operations’ attribution), Global
Markets’ EBIT increased 85%, or $296 million to $646 million, driven by
Group Operations attribution, reflecting favourable price relativities in
the Ingredients channel, particularly in our protein and cheese portfolios.
Regional performance
Global Markets Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY TOTALINGREDIENTSFOODSERVICECONSUMER
NORMALISED BASIS
NZD MILLION20222023CHANGE
2
20222023CHANGE
2
20222023CHANGE
2
20222023CHANGE
2
Sales volume ('000 MT)
3
1,075 1,272 18%651 848 30%132 141 7%292 283 (3)%
Revenue6,545 9,424 44%4,498 6,960 55%696 941 35%1,351 1,523 13%
Cost of goods sold(5,831) (8,546) (47)%(4,179) (6,480) (55)%(605) (840) (39)%(1,047) (1,226) (17)%
Gross profit 714 878 23%319 480 50%91 101 11%304 297 (2)%
Operating expenses(450) (624) (39)%(144) (158) (10)%(87) (79) 9%(219) (387) (77)%
Other
4
15 13 (13)%12 10 (17)%1 (1) –2 4 100%
EBIT279 267 (4)%187 332 78%5 21 320%87 (86) –
Gross margin10.9%9.3% 7. 1%6.9% 13.1%10.7%22.5%19.5%
EBIT margin4.3%2.8% 4.2%4.8% 0.7%2.2%6.4%(5.6)%
1 Global Markets performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Includes sales to other segments.
4 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
30
CONTENTS

Global Markets – End-to-End Performance
1
FOR THE SIX MONTHS
ENDED 31 JANUARY TOTALINGREDIENTSFOODSERVICECONSUMER
NORMALISED BASIS
NZD MILLION20222023CHANGE
2
20222023CHANGE
2
20222023CHANGE
2
20222023CHANGE
2
Sales volume ('000 MT)1,055 1,244 18%635 827 30%130 137 5%290 280 (3)%
Revenue6,646 9,106 37%4,611 6 ,743 46%683 891 30%1,352 1,472 9%
Cost of goods sold(5,709) ( 7, 62 3) (34)%(4 , 074) (5,694) (40)%(595) (793) (33)%(1,040)(1,136) (9)%
Gross profit 937 1,483 58%537 1,049 95%8898 11%312 336 8%
Operating expenses(629) (858) (36)%(299) (370) (24)%(94) (87) 7%(236) (401) (70)%
Other
3
42 21 (50)%35 19 (46)%2 – (100)%5 2 (60)%
EBIT
4
350 646 85%273 698 156%(4) 11 –81 (63) –
EBIT attribution from
Group Operations
5
71379434%
Gross margin14.1%16.3%11.6%15.6%12.9%11.0%23.1%22.8%
EBIT margin5.3%7. 1%5.9%10.4%(0.6)%1.2%6.0%(4.3)%
1 Global Markets’ performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
4 Includes Group Operations attribution.
5 This is included in Global Markets’ EBIT.
Australia
Our Australia business is part of the Global Markets region.
Australia Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY
NORMALISED BASIS
NZD MILLION 20222023CHANGE
2
Milk collection (million kgMS)6866(2)%
Sales volume ('000 MT)
3
1721815%
Revenue9161,25337%
Cost of goods sold(779)(1,082)(39)%
Gross profit 13717125%
Operating expenses(79)(97)(23)%
Other
3
1––
EBIT 597425%
Gross margin15.0%13.6%
1 Australia’s performance is prepared on a continuing operations basis.
2 Percentages as shown in the table may not align to calculations of percentages based on
numbers in the table due to rounding of figures.
3 Consists of other operating income and net foreign exchange gains/(losses).
Fonterra’s milk collections in Australia are down 2% relative to the prior
season as a result of unseasonably wet spring conditions impacting peak
milk production.
Our Australian business’ normalised EBIT increased $15 million to
$74 million. The first half performance was driven by the Ingredients
channel’s ability to capture favourable global pricing, particularly
in cheese and proteins products, offsetting the rising cost of milk.
Robust demand continues to drive performance in the Consumer and
Foodservice channels, however, margins have been negatively impacted
due to our in-market price increases lagging the rising cost of milk.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
31
CONTENTS

Greater China
The Greater China business covers our Greater China sales region.
Greater China’s normalised EBIT decreased $2 million to $215 million.
Greater China’s Foodservice channel earnings increased as in-market
prices continue to adjust for the higher cost of milk. However, this was
offset by an impairment in Greater China’s Consumer channel of our
Anlene™ brand. See page 39.
On an end-to-end basis (including Group Operations attribution),
Greater China’s EBIT increased 43%, or $102 million to $337 million,
reflecting favourable price relativities in the Ingredients channel,
particularly in our protein and cheese portfolios.
Greater China Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY
NORMALISED BASIS
NZD MILLIONTOTALINGREDIENTSFOODSERVICECONSUMER
20222023CHANGE
2
20222023CHANGE
2
20222023CHANGE
2
20222023CHANGE
2
Sales volume ('000 MT)566 455 (20)%377 279 (26)%146 137 (6)%43 39 (9)%
Revenue3,499 3,496 –2,284 2,153 (6)%1,004 1,127 12%211 216 2%
Cost of goods sold(3,154) (3,134) 1%(2,181) (2,044) 6%(823) (923) (12)%(150) (167) (11)%
Gross profit 345 362 5%103 109 6%181 204 13%61 49 (20)%
Operating expenses(129) (146) (13)%(21) (22) (5)%(55) (53) 4%(53) (71) (34)%
Other
3
1 (1) –1 (1) –– – –– – –
EBIT

217 215 (1)%83 86 4%126 151 20%8 (22) –
Gross margin9.9%10.4% 4.5%5.1% 18.0%18.1% 28.9%22.7%
EBIT margin6.2%6.1%3.6%4.0%12.5%13.4%3.8%(10.2)%
1 Greater China performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
Greater China – End-to-End Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY
NORMALISED BASIS
NZD MILLIONTOTALINGREDIENTSFOODSERVICECONSUMER
20222023CHANGE
2
20222023CHANGE
2
20222023CHANGE
2
20222023CHANGE
2
Sales volume ('000 MT)568 455 (20)%378 279 (26)%146 137 (6)%44 39 (11)%
Revenue3,439 3,227 (6)%2,237 1,992 (11)%991 1,037 5%211 198 (6)%
Cost of goods sold(2,985) (2,641) 12%(2,014) (1,694) 16%(818) (800) 2%(153) (147) 4%
Gross profit 454 586 29%223 298 34%173 237 37%58 51 (12)%
Operating expenses(234) (243) (4)%(89) (82) 8%(89) (81) 9%(56) (80) (43)%
Other
3
15 (6) –10 (3) –5 (1) –– (2) –
EBIT
4
235 337 43%144 213 48%89 155 74%2 (31) –
EBIT attribution from
Group Operations
5
18122578%
Gross margin13.2%18.2%10.0%15.0%17. 5 %22.9%27. 5 %25.8%
EBIT margin6.8%10.4%6.4%10.7%9.0%14.9%0.9%(15.7)%
1 Greater China performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
4 Includes Group Operations attribution.
5 This is included in Greater China’s EBIT.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
32
CONTENTS

Ingredients
Our Ingredients channel EBIT increased
$494 million, or 118%, to $911 million, due
to continued favourable margins in our
protein and cheese portfolio, as well as
higher sales volumes.
Ingredients Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY TOTALGROUP OPERATIONSGLOBAL MARKETSGREATER CHINAELIMINATIONS
NORMALISED BASIS
NZD MILLION20222023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023
Sales volume ('000 MT)
3
1,013 1,106 9%963 1,049 9%651 848 30%377 279 (26)%(978) (1,070)
Revenue6,848 8,735 28%6,238 7, 9 0 0 27%4,498 6,960 55%2,284 2,153 (6)%(6,172) (8,278)
Cost of goods sold(6,088) ( 7, 3 8 8) (21)%(5,890) ( 7, 1 3 6 ) (21)%(4,179) (6,480) (55)%(2,181) (2,044) 6%6,162 8,272
Gross profit 760 1,347 77%348 764 120%319 480 50%103 109 6%(10) (6)
Operating expenses(388) (452) (16)%(225) (274) (22)%(144) (158) (10)%(21) (22) (5)%2 2
Other
4
45 16 (64)%24 3 (88)%12 10 (17)%1 (1) –8 4
EBIT417 911 118%147 493 235%187 332 78%83 86 4%––
Gross margin11.1%15.4%5.6%9.7%7. 1%6.9%4.5%5.1%
EBIT margin6.1%10.4%2.4%6.2%4.2%4.8%3.6%4.0%
1 Ingredients performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Includes sales to other segments.
4 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
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CONTENTS

The higher sales volumes reflect the sell down of additional inventory
held at 2022 financial year-end.
The Global Markets sales teams secured new contracts and tenders
in both the Asia Pacific and Africa regions to support the sell down
of additional inventory held at 2022 year-end and offset the softer
demand in the Greater China region. Additionally, sales volumes in
our cream portfolio to European customers increased as the price of
New Zealand cream products traded below European cream products.
Global Markets Ingredients sales volumes increased 30%, relative to the
comparable period.
Greater China’s sales volumes of Ingredients decreased relative to the
comparative period, due to demand for dairy products being impacted
by COVID-19. This resulted in local milk processors converting excess
liquid milk into whole milk powder (WMP), reducing the demand for
i m p o r t e d W M P.
Gross profit has increased in Group Operations and in both regions
mainly due to favourable margins in our protein and cheese portfolios.
HY23 EBITOperating
expenses
and other
MarginVolumeGroup
Operations
HY22 EBIT
417
346
41
126
(19)
911
Within the region
1 Ingredients performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
Ingredients: Key Performance Drivers
1
Normalised EBIT ($ million)
Increased margins in Group
Operations due to higher
product prices, particularly for
protein and cheese products
Higher sales volumes
reflect additional
inventory held at
FY22 year-end
Increased margins due to
higher in-market sales prices
FONTERRA INTERIM REPORT 2023
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CONTENTS

The average non-reference product sale price per metric tonne has
increased 31%, with significant price increases across most products
compared to the same period last year. Prices for casein, milk protein
concentrate (MPC) and whey protein concentrate (WPC) have all
increased over 40% as product price increases that occurred over the
last six months of the 2022 financial year have carried through into the
first six months of the 2023 financial year.
The milk cost allocated to our products is derived from the fat and
protein values within the Farmgate Milk Price. Within the reference
products that inform the Farmgate Milk Price, weakness in the WMP
price and the strength of butter and anhydrous milk fat (fat-based
products) prices has resulted in the protein based dairy components
getting a lower allocation of milk cost, relative to fat dairy components.
Therefore, while the cost of milk has gone up for all products, the rate of
the increase was less in our protein portfolio.
The price increases in protein products, such as casein, MPC, and
cheese, coupled with the lower increase in milk costs relative to
reference products, has meant higher margins for our non-reference
products. This is the main driver behind the increased EBIT derived from
our New Zealand milk.
In addition, our price risk management service offerings to our
customers and farmers provides them with increased certainty. This has
helped provide margin stability as milk costs decreased over the year.
Our casein portfolio gross margin growth has been supported by
improved pricing in rennet casein – an ingredient used in processed
cheese. Due to COVID-19 related regulations, the cost and complexity
to import cheese into China increased, and customers in China shifted
from imported processed cheese to locally manufactured processed
cheese, driving up the demand for rennet casein.
Our sales teams have also captured the improved margins of caseinate
and its precursor acid casein by continuing to deliver sales volume
growth for caseinate into beverages and non-dairy creamer applications
(i.e., substitutes for milk or cream) where caseinate is a preferred choice
as an emulsifier. Greater China, and to a lesser extent South East Asia,
has seen strong growth in the non-dairy creamer and beverage sector for
use of caseinate in products such as milk tea and coconut juice.
Our cheese portfolio has also contributed to the improved earnings
in our Ingredients channel. The price of cheese increased in the second
half of the 2022 financial year in response to constrained European milk
supply. As customers looked to secure volume due to the uncertainty
of European supply, our sales teams were able to use long contracts to
secure good pricing across additional volume.
Active Living Performance
FOR THE SIX MONTHS ENDED
31 JANUARY
NORMALISED BASIS
NZD MILLION 20222023CHANGE
1
Sales volume ('000 MT)5250(3)%
Revenue73787919%
1 Percentages as shown in the table may not align to calculations of percentages based on
numbers in the table due to rounding of figures.
Our Active Living portfolio is part of our Ingredients channel and
represents the ingredients and solutions sold to businesses who cater to
consumers’ health and wellness needs. It addresses three dimensions of
wellbeing (Physical, Mental and Inner), to meet the nutritional needs of
medical patients through to everyday people pursuing active lifestyles.
This portfolio includes proteins, specialty ingredients such as probiotics,
lactoferrin & lipids, and patented formulations.
Our Active Living sales volumes into Europe have improved due to strong
demand for our proteins. However, overall sales volumes are down due
to high in-market inventory in some markets, and lower demand from the
USA as a result of some customers’ current manufacturing constraints.
However, revenue has increased 19% relative to the comparable period
due to the Active Living channel benefiting from the increased pricing of
protein products.
New Zealand sourced Ingredients’ product mix
1
FOR THE SIX MONTHS ENDED
31 JANUARY 20222023CHANGE
2
Sales Volume (‘000 MT)
Reference products7938578%
Non-reference products 4154304%
Revenue
Reference products ($ billion) 4.75.619%
Non-reference products ($ billion) 2.63.535%
Reference products ($ per MT) 5,9166,58411%
Non-reference products ($ per MT) 6,2218,14631%
Cost of Milk
Reference products ($ billion) 3.74.316%
Non-reference products ($ billion) 1.71.86%
Reference products ($ per MT) 4,7025,0427%
Non-reference products ($ per MT) 4,1444,2563%
1 Table includes Ingredient products that are on-sold to the Foodservice and Consumer
channels and excludes bulk liquid milk. Bulk liquid milk for 2023 was 35,000 MT of kgMS
equivalent (for the comparative period it was 34,000 MT of kgMS equivalent). Milk solids
used in the reference products sold were 482 million kgMS and 220 million kgMS in the
non-reference products (for the comparative period 441 million kgMS in reference products
and 207 million kgMS in non-reference products).
2 Percentages as shown in the table may not align to calculations of percentages based on
numbers in the table due to rounding of figures.
A key driver of the favourable margins in our protein and cheese
portfolio is the relative price difference between product prices that
inform the Farmgate Milk Price, referred to as reference products,
and product prices of non-reference products.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
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CONTENTS

Foodservice
Foodservice Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY TOTALGROUP OPERATIONSGLOBAL MARKETSGREATER CHINAELIMINATIONS
NORMALISED BASIS
NZD MILLION20222023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023
Sales volume ('000 MT)
3
276 274 (1)%199 171 (14)%132 141 7%146 137 (6)%(201) (175)
Revenue1 , 674 1,928 15%864 1,033 20%696 941 35%1,004 1,127 12%(890) (1,173)
Cost of goods sold(1,413) (1,593) (13)%(875) (1,002) (15)%(605) (840) (39)%(823) (923) (12)%890 1,172
Gross profit 261 335 28%(11) 31 –91 101 11%181 204 13%– (1)
Operating expenses(183) (168) 8%(41) (36) 12%(87) (79) 9%(55) (53) 4%– –
Other
4
7 (1) –6 (1) –1 (1) –– – ––1
EBIT85 166 95%(46) (6) 87%5 21 320%126 151 20%– –
Gross margin15.6%17. 4%(1.3)%3.0%13.1%10.7%18.0%18.1%
EBIT margin5.1%8.6%(5.3)%(0.6)%0.7%2.2%12.5%13.4%
1 Foodservice performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Includes sales to other segments.
4 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
Our Foodservice channel EBIT increased
$81 million, or 95%, to $166 million, as our
in-market product prices continue to
adjust for the higher cost of milk.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
36
CONTENTS

HY23 EBITOperating
expenses
and other
MarginVolumeGroup
Operations
HY22 EBIT
85
40
—
33
8
166
Within the regions
1 Foodservice performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
Foodservice: Key Performance Drivers
1
Normalised EBIT ($ million)
Increased due to the benefit
of price relativities between
reference and non-reference
product prices
Increased due to in-market prices
adjusting for higher cost of milk
as well as a benefit from changes
to the NZ-China FTA
Foodservice channel gross profit improved $74 million, or 28%, driven by
both Group Operations and the regions.
As shown in the Key Performance Drivers bridge, the benefit of the
price relativity between reference and non-reference product prices
is captured in the Group Operations’ transfer price to our regional
business units.
The transfer price is largely derived from market-based reference prices
plus any additional specification costs to make the product.
In the Greater China region, our in-market product prices continue to
adjust to offset the higher cost of milk. This is reflected in the improved
gross profit despite lower sales volumes. Additionally, the Greater China
region has benefited from changes to the New Zealand-China Free Trade
Agreement, which took effect 1 January 2022.
Global Markets’ in-market sales prices have increased in the current
period relative to the comparative period, but the ability to fully adjust
prices for the higher cost of milk is limited due to competitor pricing.
The increase in gross profit has been predominately driven by sales
volumes growth and improved pricing in our Australian business.
The Global Markets sales team achieved volume growth in its Quick
Service Restaurant portfolio with existing customers and winning new
customers through a focus on customer relationships supported by price
risk management offerings.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
37
CONTENTS

Consumer
Consumer Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY TOTALGROUP OPERATIONSGLOBAL MARKETSGREATER CHINAELIMINATIONS
NORMALISED BASIS
NZD MILLION20222023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023
Sales volume ('000 MT)
3
334 319 (4)%102 125 23 %292 283 (3)%43 39 (9)%(103) (128)
Revenue1,563 1,670 7%603 758 26 %1,351 1,523 13%211 216 2 %(602) (827)
Cost of goods sold(1,193) (1,283) (8)%(598) (717) (20) %(1,047) (1,226) (17)%(150) (167) (11) %602 827
Gross profit 370 387 5%5 41 720 %304 297 (2)%61 49 (20) %– –
Operating expenses(292) (481) (65)%(20) (26) 30 %(219) (387) (77)%(53) (71) (34) %– 3
Other
4
5 –(100)%3 (1) –2 4 100%–––– (3)
EBIT83 (94) –(12) 14 –87 (86) –8 (22) –– –
Gross margin23.7 %23.2% 0.8%5.4% 22.5%19.5% 28.9%22.7%
EBIT margin5.3%(5.6)% (2.0) %1.8 % 6.4%(5.6)% 3.8%(10.2)%
1 Consumer performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Includes sales to other segments.
4 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
Our Consumer channel EBIT decreased
$177 million to a loss of $94 million
primarily due to impairments of
our domestic New Zealand consumer
business and our Asia brands.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
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CONTENTS

Consumer channel gross profit improved $17 million, or 5%, due to the
increase in non-reference product prices, particularly cheese, relative to
reference products that inform the cost of milk.
As shown in the Key Performance Drivers bridge, the benefit of the price
relativity between reference and non-reference product prices is captured
in the Group Operations’ transfer price to our regional business units.
The transfer price is largely derived from market-based reference prices
plus any additional specification costs to make the product.
Our regional in-market teams on-sell the product to our customers,
and focus on achieving price premiums in addition to the transfer price.
For the first six months of the 2023 financial year, our sales teams have
continued to adjust in-market prices, but not enough to offset the higher
cost of milk and lower sales volumes.
Operating expenses have increased predominately due to the recognition
of impairments of both our domestic New Zealand consumer business
and our Asia brands.
Our domestic consumer business has experienced challenging market
conditions, including higher input costs and inflationary pressures. The
New Zealand domestic dairy market is highly competitive, and this
has impacted the sales team’s ability to fully recover the higher input
costs through product price increases. Additionally, rising interest rates
have also put pressure on our New Zealand consumer business. This
has resulted in a $92 million goodwill impairment of the business, and
the carrying value of the business is now at $669 million.
We also recognised an impairment of $70 million on our Asia brands –
Anmum™ ($23 million), Anlene™ ($45 million) and Chesdale™ ($2 million),
due to a reduction in forecast sales growth for Anmum™ and Anlene™,
and changes in discount rates and foreign exchange rates to all three
brands, with the carrying value of these brands now at $272 million.
The impairments were recognised as operating expenses in both Global
Markets ($138 million) and Greater China ($24 million).
Our business in Sri Lanka was impacted by the country’s economic
challenges in the second half of the 2022 financial year. Despite the
ongoing challenging conditions, performance has improved year-on-
year, and for the first half of the 2023 financial year the business saw
improvements through the performance of the milk powder portfolio on
the back of product price increases. Our sales volumes into Sri Lanka are
down on last year as we limit sales volumes into the country while the
ability to access US dollars remains constrained.
HY23 EBITOperating
expenses
and other
MarginVolumeGroup
Operations
HY22 EBIT
(4)
(94)
83
26
(15)
(184)
Within the regions
1 Consumer performance is prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period.
Consumer: Key Performance Drivers
1
Normalised EBIT ($ million)
Increased due to the benefit
of price relativities between
reference and non-reference
product prices
Lower sales volume,
mainly in Sri Lanka
Unfavourable due to the impairments
of our New Zealand consumer business
and our Asia brands, of $92 million and
$70 million, respectively
FONTERRA INTERIM REPORT 2023
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CONTENTS

New Zealand Milk
New Zealand and Non-New Zealand Sourced Milk
1
FOR THE SIX MONTHS ENDED
31 JANUARY TOTALNEW ZEALAND MILKNON-NEW ZEALAND MILK
NORMALISED BASIS
NZD MILLION
20222023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
Sales volume ('000 MT)1,6231,6995%1,4061,4805%2172191%
Revenue10,08512,33322%9,00410,93921%1,0811,39429%
Cost of goods sold(8,696)(10,287)(18)%( 7, 761)(9,092)(17)%(935)(1,195)(28)%
Gross profit 1,3892,04647%1,2431,84749%14619936%
Operating expenses(909)(1,200)(32)%(832)(1,114)(34)%(77)(86)(12)%
Other
3
6318(71)%6114(77)%24100%
EBIT54386459%47274758%7111765%
Gross margin13.8%16.6%13.8%16.9%13.5%14.3%
EBIT margin5.4%7. 0 %5.2%6.8%6.6%8.4%
1 New Zealand and Non-New Zealand sourced milk is prepared on a continuing operations basis and includes unallocated costs. Comparative information has been restated and re-presented
for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
Billie, Norsewood
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
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CONTENTS

New Zealand Milk – Ingredients Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY TOTALGROUP OPERATIONSGLOBAL MARKETSGREATER CHINAELIMINATIONS
NORMALISED BASIS
NZD MILLION
20222023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023
Allocation of milk solids (% of kgMS)
4
77.1%79.5%
Sales volume ('000 MT)
3
9181,01210%9631,0499%56476636%369267(28)%(978)(1,070)
Revenue6,3188,06928%6,2387, 9 0 027%3,9996,36459%2,2532,083(8)%(6,172)(8,278)
Cost of goods sold(5,622)(6,860)(22)%(5,890)( 7, 1 3 6 )(21)%(3,742)(6,020)(61)%(2,152)(1,976)9%6,1628,272
Gross profit 6961,20974%348764120%25734434%1011076%(10)(6)
Operating expenses(358)(425)(19)%(225)(274)(22)%(114)(132)(16)%(21)(21)–22
Other
5
4312(72)%243(88)%106(40)%1(1)–84
EBIT381796109%147493235%15321842%81855%––
Gross margin11.0%15.0%5.6%9.7%6.4%5.4%4.5%5.1%
EBIT margin6.0%9.9%2.4%6.2%3.8%3.4%3.6%4.1%
1 Ingredients’ performance is prepared on a continuing operations basis. The performance of the three product channels does not equal to total New Zealand milk performance due to not including unallocated costs.
Comparative information has been restated and re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Includes sales to other segments.
4 Includes Core Ingredients allocation of 71.5% and 74.7% for 2022 and 2023, respectively. As well as Active Living of 5.6% and 4.8% for 2022 and 2023, respectively.
5 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
FONTERRA INTERIM REPORT 2023
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New Zealand Milk – Foodservice Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY TOTALGROUP OPERATIONSGLOBAL MARKETSGREATER CHINAELIMINATIONS
NORMALISED BASIS
NZD MILLION
20222023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023
Allocation of milk solids (% of kgMS)14.5%13.4%
Sales volume ('000 MT)
3
255248(3)%199171(14)%1151193%142133(6)%(201)(175)
Revenue1,5251,69311%8641,03320%56573330%9861,10012%(890)(1,173)
Cost of goods sold(1,278)(1,377)(8)%(875)(1,002)(15)%(492)(651)(32)%(801)(896)(12)%8901,172
Gross profit 24731628%(11)31–738212%18520410%–(1)
Operating expenses(172)(154)10%(41)(36)12%(76)(66)13%(55)(52)5%––
Other
4
7(1)–6(1)–1(1)–––––1
EBIT8216196%(46)(6)87%(2)15–13015217%––
Gross margin16.2%18.7%(1.3)%3.0%12.9%11.2%18.8%18.5%
EBIT margin5.4%9.5%(5.3)%(0.6)%(0.4)%2.0%13.2%13.8%
1 Foodservice performance is prepared on a continuing operations basis. The performance of the three product channels does not equal to total New Zealand milk performance due to not including unallocated costs.
Comparative information has been restated and re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Includes sales to other segments.
4 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
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CONTENTS

New Zealand Milk – Consumer Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY TOTALGROUP OPERATIONSGLOBAL MARKETSGREATER CHINAELIMINATIONS
NORMALISED BASIS
NZD MILLION
20222023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023
Allocation of milk solids (% of kgMS)8.4%7. 1%
Sales volume ('000 MT)
3
233220(6)%10212523%194186(4)%4037(8)%(103)(128)
NZD million
Revenue1,1611,1792%60375826%9551,0399%2052092%(602)(827)
Cost of goods sold(873)(851)3%(598)(717)(20)%(734)(799)(9)%(143)(162)(13)%602827
Gross profit 28832814%541720%2212409%6247(24)%––
Operating expenses(257)(437)(70)%(20)(26)(30)%(184)(342)(86)%(53)(72)(36)%–3
Other
4
5–(100)%3(1)–24100%––––(3)
EBIT36(109)–(12)14–39(98)–9(25)–––
Gross margin24.8%27. 8 %0.8%5.4%23.1%23.1%30.2%22.5%
EBIT margin3.1%(9.2)%(2.0)%1.8%4.1%(9.4)%4.4%(12.0)%
1 Consumer performance is prepared on a continuing operations basis. The performance of the three product channels does not equal to total New Zealand milk performance due to not including unallocated costs.
Comparative information has been restated and re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Includes sales to other segments.
4 Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
43
CONTENTS

Discontinued Operations
Discontinued Operations Performance
1
FOR THE SIX MONTHS ENDED 31 JANUARY TOTALHANGU CHINA FARMDPA BRAZILSOPROLE
NORMALISED BASIS
NZD MILLION20222023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
2022 2023 CHANGE
2
Sales volume ('000 MT)297295(1)%11–1041128%192182(5)%
Revenue71291629%1311(15)%19629148%50361422%
Cost of goods sold(494)(664)(34)%(15)(18)(20)%(136)(200)(47)%(343)(446)(30)%
Gross profit 21825216%(2)(7)(250)%609152%1601685%
Operating expenses(153)(177)(16)%(6)(1)83%(45)(62)(38)%(102)(114)(12)%
Other
3
(1)1––(1)–(1)–100%–2–
EBIT
4
647619%(8)(9)(13)%1429107%5856(3)%
Gross margin30.6%27. 5 %(15.4%)(63.6)%30.6%31.3%31.8%27.4%
1 Comparative information has been re-presented for consistency with the current period.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table due to rounding of figures.
3 Consists of other operating income and net foreign exchange gains/(losses).
4 Depreciation is not recognised in discontinued operations from the date at which the operations became held for sale.
Discontinued operations represent the
financial effect of business units that
are classified as held for sale and are
a separate major line of business or
geographical area of operations.
They are presented separately to
the Group’s continuing operations in
the income statement and excluded
from segment reporting within the
Financial Statements.
We have three discontinued operations that are
progressing through sale processes.
Hangu China Farm
For the first six months of the 2023 financial year, Hangu China farm’s
EBIT was relatively stable year-on-year, down $1 million. The lower price
of milk and higher feed costs were partially offset by favourable fair value
movements of livestock, recognised in operating expenses.
The sale process has been delayed due to market conditions related to
COVID-19, including the effect of lockdowns in China.
We continue to actively market the Hangu China farm and expect the
sale to be completed within one year.
Dairy Partners Americas (DPA) Brazil
For the first six months of the 2023 financial year, DPA Brazil’s EBIT
increased $15 million due to higher product prices and increased sales
volumes. This was partially offset by the higher cost of milk and operating
expenses, which have increased due to inflationary pressure and foreign
exchange translation.
In December 2022, Fonterra and Nestle agreed to sell DPA Brazil
to French dairy company Lactalis for BRL 700 million, which translated
to approximately NZ$210 million in December, or NZ$212 million at 31
January 2023 foreign exchange rates. The proceeds at completion will be
subject to closing transaction adjustments.
Our 51% share of these sale proceeds will be used to repay debt related
to that business and given the asset has been held for sale since 2020
there will be little cash impact on our earnings.
The deal is expected to be completed by mid-2023, subject to regulatory
authority approvals.
Soprole
For the first six months of the 2023 financial year, Soprole’s EBIT
decreased $2 million relative to the comparative period. The increases
in sales prices were offset by higher cost of goods sold and increased
operating expenses mainly due to inflationary pressures.
In November 2022, we announced the agreement to sell Soprole to
Gloria Foods – JORB S.A – a consumer dairy market leader in Peru. The
divestment of Soprole comprises a number of transactions that result
in an aggregate consideration of 591.07 billion Chilean Pesos, which
translated to approximately NZ$1.055 billion in November. The aggregate
consideration, which includes the receipt of dividends to 31 January 2023
from Soprole and the repayment of intercompany debt owing to Fonterra,
is now expected to be approximately NZ$1.0 billion. Proceeds received by
Fonterra at completion will be subject to relevant adjustments.
On 23 February 2023, we announced that the sale had received approval
from the competition authority in Chile. Completion of the sale remains
subject to satisfaction of other conditions previously announced.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
44
CONTENTS

Historical Summary
Total Group Overview (continuing and discontinued operations)
JAN 2019JAN 2020JAN 2021JAN 2022JAN 2023
Income Statement Measures
Sales volumes (‘000 MT)2,0752,0371,9961,9211,994
Normalised revenue ($ million)9,74510,4239,91510,79713,249
Normalised EBITDA ($ million)
1
5969071,0049211,253
Normalised EBIT ($ million)
1
312584684607940
Normalised profit after tax attributable to
equity holders of the Co-operative ($ million)
68283399348595
Reported earnings per share0.040.320.230.220.33
Normalised earnings per share0.040.180.250.220.37
Revenue Margin Analysis
EBITDA margin (%)
1
6.1%8.7%10.1%8.5%9.5%
EBIT margin (%)
1
3.2%5.6%6.9%5.6%7. 1%
Profit after tax margin (%)
1
0.7%2.7%4.0%3.2%4.5%
Cash Flow ($ million)
Operating cash flow(612)(124)(544)(617)276
Free cash flow
1
(782)369(632)(849)(30)
Net working capital
1
5,3966,1356,1887, 43 47, 9 0 0
Capital Measures
Equity excluding hedge reserve ($ million)6,6076,4926,8077, 0 937, 6 07
Net debt ($ million)
1
7, 61 16,1016,1085,6075,811
Gearing ratio (%)
1
53.5%49.8%47. 3 %4 4.1%43.3%
Capital expenditure ($ million)
1
316112147180245
Capital invested ($ million)
1
438175184195330

Group Operations
2,3,4

JAN 2021JAN 2022JAN 2023
Ingredients
Sales volume (‘000 MT)
5
1,0429631,049
Normalised revenue ($ million)5,4946,2387, 9 0 0
Normalised gross profit ($ million)286348764
Normalised gross margin (%)
1
5.2%5.6%9.7%
Normalised EBIT ($ million)102147493
Normalised EBIT margin (%)
1
1.9%2.4%6.2%
Foodservice
Sales volume (‘000 MT)
5
181199171
Normalised revenue ($ million)6638641,033
Normalised gross profit ($ million)51(11)31
Normalised gross margin (%)
1
7. 7 %(1.3)%3.0%
Normalised EBIT ($ million)17(46)(6)
Normalised EBIT margin (%)
1
2.6%(5.3)%(0.6)%
Consumer
Sales volume (‘000 MT)
5
131102125
Normalised revenue ($ million)600603758
Normalised gross profit ($ million)16541
Normalised gross margin (%)
1
2.7%0.8%5.4%
Normalised EBIT ($ million)(24)(12)14
Normalised EBIT margin (%)
1
(4.0)%(2.0)%1.8%
Total
Sales volume (‘000 MT)
5
1,3541,2641,345
Normalised revenue ($ million)6,7577, 70 59,691
Normalised gross profit ($ million)353342836
Normalised gross margin (%)
1
5.2%4.4%8.6%
Normalised EBIT ($ million)9589501
Normalised EBIT margin (%)
1
1.4%1.2%5.2%
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
45
CONTENTS

Global Markets
2,3,4,5

JAN 2021JAN 2022JAN 2023
Ingredients
Sales volume (‘000 MT)
5
684651848
Normalised revenue ($ million)3,7244,4986,960
Normalised gross profit ($ million)265319480
Normalised gross margin (%)
1
7. 1%7. 1%6.9%
Normalised EBIT ($ million)139187332
Normalised EBIT margin (%)
1
3.7%4.2%4.8%
Foodservice
Sales volume (‘000 MT)
5
99132 141
Normalised revenue ($ million)597696 941
Normalised gross profit ($ million)11891 101
Normalised gross margin (%)
1
19.8%13.1%10.7%
Normalised EBIT ($ million)555 21
Normalised EBIT margin (%)
1
9.2%0.7%2.2%
Consumer
Sales volume (‘000 MT)
5
330292 283
Normalised revenue ($ million)1,4191,351 1,523
Normalised gross profit ($ million)368304 297
Normalised gross margin (%)
1
25.9%22.5% 19.5%
Normalised EBIT ($ million)14087 (86)
Normalised EBIT margin (%)
1
9.9%6.4%(5.6)%
Total
Sales volume (‘000 MT)
5
1,1131,0751,272
Normalised revenue ($ million)5,74 06,5459,424
Normalised gross profit ($ million)751714878
Normalised gross margin (%)
1
13.1%10.9%9.3%
Normalised EBIT ($ million)334279267
Normalised EBIT margin (%)
1
5.8%4.3%2.8%
Global Market – Australia
2,3

JAN 2021JAN 2022JAN 2023
Total
Milk collection (millions kgMS)69 68 66
Sales volume (‘000 MT)174 172 181
Normalised revenue ($ million)899 916 1,253
Normalised gross profit ($ million)103 137 171
Normalised gross margin (%)
1
11.5%15.0%13.6%
Normalised EBIT ($ million)32 59 74
Normalised EBIT margin (%)
1
3.6%6.4%5.9%
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
46
CONTENTS

Greater China
2,3,4

JAN 2021JAN 2022JAN 2023
Ingredients
Sales volume (‘000 MT)399377279
Normalised revenue ($ million)1,8442,2842,153
Normalised gross profit ($ million)87103109
Normalised gross margin (%)
1
4.7%4.5%5.1%
Normalised EBIT ($ million)668386
Normalised EBIT margin (%)
1
3.6%3.6%4.0%
Foodservice
Sales volume (‘000 MT)148146137
Normalised revenue ($ million)9261,0041,127
Normalised gross profit ($ million)220181204
Normalised gross margin (%)
1
23.8%18.0%18.1%
Normalised EBIT ($ million)182126151
Normalised EBIT margin (%)
1
19.7%12.5%13.4%
Consumer
Sales volume (‘000 MT)464339
Normalised revenue ($ million)218211216
Normalised gross profit ($ million)746149
Normalised gross margin (%)
1
33.9%28.9%22.7%
Normalised EBIT ($ million)208(22)
Normalised EBIT margin (%)
1
9.2%3.8%(10.2)%
Total
Sales volume (‘000 MT)593566455
Normalised revenue ($ million)2,9883,4993,496
Normalised gross profit ($ million)381345362
Normalised gross margin (%)
1
12.8%9.9%10.4%
Normalised EBIT ($ million)268217215
Normalised EBIT margin (%)
1
9.0%6.2%6.1%
Product Channels
2,3,4

JAN 2021JAN 2022JAN 2023
Ingredients
Sales volume (‘000 MT)1,0881,0131,106
Normalised revenue ($ million)5,9856,8488,735
Normalised gross profit ($ million)6387601,347
Normalised gross margin (%)
1
10.7%11.1%15.4%
Normalised EBIT ($ million)306417911
Normalised EBIT margin (%)
1
5.1%6.1%10.4%
Foodservice
Sales volume (‘000 MT)247276 274
Normalised revenue ($ million)1,5371 , 674 1,928
Normalised gross profit ($ million)389261 335
Normalised gross margin (%)
1
25.3%15.6%17. 4%
Normalised EBIT ($ million)25485 166
Normalised EBIT margin (%)
1
16.5%5.1%8.6%
Consumer
Sales volume (‘000 MT)376334 319
Normalised revenue ($ million)1,6461,563 1,670
Normalised gross profit ($ million)458370 387
Normalised gross margin (%)
1
27. 8 %23.7%23.2%
Normalised EBIT ($ million)13683 (94)
Normalised EBIT margin (%)
1
8.3%5.3%(5.6)%
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
47
CONTENTS

New Zealand and Non-New Zealand Milk
2,3,4

JAN 2021JAN 2022JAN 2023
New Zealand Milk
Sales volume (‘000 MT)1,4801,4061,480
Normalised revenue ($ million)8,1449,00410,939
Normalised gross profit ($ million)1,3991,2431,847
Normalised gross margin (%)
1
17. 2 %13.8%16.9%
Normalised EBIT ($ million)582472747
Normalised EBIT margin (%)
1
7. 1 %5.2%6.8%
Non-New Zealand Milk
Sales volume (‘000 MT)214217219
Normalised revenue ($ million)9641,0811,394
Normalised gross profit ($ million)114146199
Normalised gross margin (%)
1
11.8%13.5 %14.3%
Normalised EBIT ($ million)3171117
Normalised EBIT margin (%)
1
3.2%6.6%8.4%
Total
Sales volume (‘000 MT)1,6941,6231,699
Normalised revenue ($ million)9,10810,08512,333
Normalised gross profit ($ million)1,5131,3892,046
Normalised gross margin (%)
1
16.6%13.8%16.6%
Normalised EBIT ($ million)613543864
Normalised EBIT margin (%)
1
6.7%5.4%7. 0 %
Discontinued Operations
2,6

JAN 2021JAN 2022JAN 2023
China Farms
Sales volume (‘000 MT)111 1
Normalised revenue ($ million)13513 11
Normalised gross profit ($ million)22(2) (7)
Normalised gross margin (%)
1
16.3%(15.4)%(63.6)%
Normalised EBIT ($ million)20(8) (9)
DPA Brazil
Sales volume (‘000 MT)110104 112
Normalised revenue ($ million)183196 291
Normalised gross profit ($ million)4960 91
Normalised gross margin (%)
1
26.8%30.6%31.3%
Normalised EBIT ($ million)1214 29
Soprole
Sales volume (‘000 MT)181192 182
Normalised revenue ($ million)489503 614
Normalised gross profit ($ million)138160 168
Normalised gross margin (%)
1
28.2%31.8%27.4%
Normalised EBIT ($ million)3958 56
Notes to the Historical Summary
1 Refer to the Glossary for definition.
2 Percentages as shown in the table may not align to calculations of percentages based on numbers in the table
due to rounding of figures.
3 Prepared on a continuing operations basis and includes normalisation adjustments.
4 Comparative information has been restated and re-presented for consistency with the current period.
5 Includes sales to other segments.
6 The China Farms business, DPA Brazil consumer and foodservice businesses and Soprole meet the definition
of a discontinued operation. The Group’s China Farms business comprises our wholly-owned Hangu China
farm and, up to the date of sale on 1 April 2021, its two-wholly owned farming hubs in Ying and Yutian.
FONTERRA INTERIM REPORT 2023
BUSINESS PERFORMANCE
48
CONTENTS

Contents
INCOME STATEMENT50
STATEMENT OF COMPREHENSIVE INCOME51
STATEMENT OF FINANCIAL POSITION52
STATEMENT OF CHANGES IN EQUITY53
CASH FLOW STATEMENT54
BASIS OF PREPARATION55
NOTES TO THE INTERIM FINANCIAL STATEMENTS56
INDEPENDENT REVIEW REPORT69
Interim
Financial Results
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
FONTERRA INTERIM REPORT 2023
INTERIM FINANCIAL RESULTS
49
CONTENTS
FONTERRA INTERIM REPORT 2023
INTERIM FINANCIAL RESULTS

Income Statement
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
NOTES
GROUP $ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
RE-PRESENTED
1
31 JUL 2022
AUDITED
RE-PRESENTED
1
Continuing operations
Revenue from sale of goods312,33310,08521,901
Cost of goods sold4(10,287)(8,696)(18,992)
Gross profit2,0461,3892,909
Other operating income2950141
Selling and marketing expenses(254)(247)(532)
Distribution expenses(211)(195)(404)
Administrative expenses(429)(333)(784)
Other operating expenses(325)(127)(394)
Share of profit of equity accounted investees8610
Profit before net finance costs and tax from
continuing operations864543946
Finance income12410
Finance costs(134)(94)(204)
Net finance costs(122)(90)(194)
Profit before tax from continuing
operations742453752
Tax exp ense(198)(101)(131)
Profit after tax from continuing operations544352621
Discontinued operations
Profit/(loss) after tax from discontinued
operations2212(38)
Profit after tax546364583
GROUP $ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
RE-PRESENTED
1
31 JUL 2022
AUDITED
RE-PRESENTED
1
Profit after tax is attributable to:
Profit attributable to equity holders of
the Co-operative530348584
Profit/(loss) attributable to non-controlling interests1616(1)
Profit after tax546364583
GROUP $
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
RE-PRESENTED
31 JUL 2022
AUDITED
RE-PRESENTED
Earnings per share:
Basic and diluted earnings per share from
continuing operations0.330.210.36
Basic and diluted earnings per share from
discontinued operations–0.01–
Basic and diluted earnings per share0.330.220.36
1 Comparative information has been re-presented for consistency with the current period. Refer to Note 12 Re-presentations for further details.
50
CONTENTS
FONTERRA INTERIM REPORT 2023
INTERIM FINANCIAL RESULTS

Statement of Comprehensive Income
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
GROUP $ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
RE-PRESENTED
31 JUL 2022
AUDITED
RE-PRESENTED
Profit after tax546364583
Items that may be reclassified subsequently to the Income Statement:
Cash flow hedges and other costs of hedging, net of tax668(366)(320)
Net investment hedges and translation of foreign operations, net of tax1689103
Foreign currency translation reserve gains transferred to the Income Statement–(1)(1)
Other movements in reserves4124
Total items that may be reclassified subsequently to the Income Statement688(266)(214)
Items that will not be reclassified subsequently to the Income Statement:
Net fair value gains/(losses) on investments in shares13(3)16
Foreign currency translation gains/(losses) attributable to non-controlling interests–4(8)
Other movements in reserves–616
Total items that will not be reclassified subsequently to the Income Statement13724
Total other comprehensive income/(expense)701(259)(190)
Total comprehensive income1,247105393
Total comprehensive income is attributable to:
Equity holders of the Co-operative 1,23179394
Non-controlling interests1626(1)
Total comprehensive income1,247105393
Total comprehensive income arises from:
Continuing operations
1
1,23394478
Discontinued operations
1
1411(85)
Total comprehensive income1,247105393
1 Comparative information has been re-presented for consistency with the current period. Refer to Note 12 Re-presentations for further details.
51
CONTENTS
FONTERRA INTERIM REPORT 2023
INTERIM FINANCIAL RESULTS

Statement of Financial Position
AS AT 31 JANUARY 2023
NOTES
GROUP $ MILLION
AS AT
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
31 JUL 2022
AUDITED
LIABILITIES
Current liabilities
Bank overdraft578431
Borrowings72,063596356
Trade and other payables 2,2132,2202,403
Owing to suppliers3,6934,0642,119
Tax payable102161107
Derivative financial instruments570729733
Provisions674570
Other current liabilities785871
Liabilities held for sale2972545628
Total current liabilities 9,8158,5026,518
Non-current liabilities
Borrowings73,4265,1524,900
Derivative financial instruments 65333313
Provisions578379
Deferred tax liabilities893050
Other non-current liabilities101515
Total non-current liabilities 3,6475,6135,357
Total liabilities13,46214,11511,875
Net assets7, 9 2 96,7016,906
EQUITY
Subscribed equity55,8825,8925,891
Retained earnings1,8991,4561,611
Foreign currency translation reserve(237)(267)(253)
Hedge reserves322(392)(346)
Other reserves471130
Total equity attributable to equity holders
of the Co-operative7, 9 1 36,7006,933
Non-controlling interests161(27)
Total equity7, 9 2 96,7016,906
NOTES
GROUP $ MILLION
AS AT
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
31 JUL 2022
AUDITED
ASSETS
Current assets
Cash and cash equivalents319479288
Trade and other receivables 2,8702,1832,482
Inventories6,8447, 2435,007
Intangible assets886478
Tax receivable525664
Derivative financial instruments 527229230
Other current assets 15793107
Assets held for sale21,289475473
Total current assets12,14610,8228,729
Non-current assets
Property, plant and equipment5,8825,9136,067
Right-of-use assets380446398
Equity accounted investments
12299113
Intangible assets1,9832,2502,216
Deferred tax assets178562551
Derivative financial instruments428466434
Long-term advances146161154
Other non-current assets 12697119
Total non-current assets9,2459,99410,052
Total assets21,39120,81618,781
The Board approved and authorised for issue these Interim Financial Statements on 15 March 2023.
For and on behalf of the Board:

PETER MCBRIDE BRUCE HASSALL
Chairman Director
52
CONTENTS
FONTERRA INTERIM REPORT 2023
INTERIM FINANCIAL RESULTS

Statement of Changes in Equity
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
GROUP $ MILLION
ATTRIBUTABLE TO EQUITY HOLDERS OF THE CO-OPERATIVE
NON-
CONTROLLING
INTERESTSTOTAL EQUITY
SUBSCRIBED
EQUITY
RETAINED
EARNINGS
FOREIGN
CURRENCY
TRANSLATION
RESERVEHEDGE RESERVESOTHER RESERVESTOTAL
As at 1 August 20225,8911,611(253)(346)306,933(27)6,906
Profit after tax–530–––53016546
Other comprehensive income––1666817701–701
Total comprehensive income–53016668171,231161,247
Transactions with equity holders in their capacity as equity holders:
Dividends paid to equity holders of the Co-operative (refer to Note 6)–(242)–––(242)–(242)
Equity instruments issued––––––4444
Share buyback (refer to Note 5)(9)––––(9)–(9)
Dividends paid to non-controlling interests––––––(17)(17)
As at 31 January 2023 (unaudited)5,8821,899(237)322477, 9 1 3167, 9 2 9
As at 1 August 20215,8921,350(355)(26)26,86366,869
Profit after tax–348–––34816364
Other comprehensive income/(expense)––88(366)9(269)10(259)
Total comprehensive income/(expense) –34888(366)97926105
Transactions with equity holders in their capacity as equity holders:
Dividends paid to equity holders of the Co-operative (refer to Note 6)–(242)–––(242)–(242)
Dividends paid to non-controlling interests––––––(31)(31)
As at 31 January 2022 (unaudited)5,8921,456(267)(392)116,70016,701
As at 1 August 20215,8921,350(355)(26)26,86366,869
Profit/(loss) after tax–584–––584(1)583
Other comprehensive income/(expense)––102(320)28(190)–(190)
Total comprehensive income/(expense)–584102(320)28394(1)393
Transactions with equity holders in their capacity as equity holders:
Dividends paid to equity holders of the Co-operative (refer to Note 6) –(323)–––(323)–(323)
Share buyback (refer to Note 5)(1)––––(1)–(1)
Dividends paid to non-controlling interests––––––(32)(32)
As at 31 July 2022 (audited)5,8911,611(253)(346)306,933(27)6,906
53
CONTENTS
FONTERRA INTERIM REPORT 2023
INTERIM FINANCIAL RESULTS

Cash Flow Statement
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
The Cash Flow Statement presents total Group cash flows from continuing and discontinued operations.
GROUP $ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
RE-PRESENTED
31 JUL 2022
AUDITED
RE-PRESENTED
Cash flows from operating activities
Profit before net finance costs and tax from
continuing operations864543946
(Loss)/profit before net finance costs and tax from
discontinued operations(6)6430
Total Group profit before net finance costs and tax858607976
Adjustments for:
– Depreciation and amortisation313314635
– Foreign exchange (gains)/losses(81)81309
– Gain on sale of Global Dairy Trade––(42)
– Brazil consumer and foodservice business impairment––57
– New Zealand consumer and foodservice
business impairment92––
– Asia brands impairment70–34
– Other (24)(1)(41)
Total adjustments370394952
(Increase)/decrease in working capital:
– Trade and other receivables(353)(308)(821)
– Inventories(2,118)(3,514)(1,222)
– Trade and other payables4847201
– Owing to suppliers1 , 5742,238293
– Other movements (56)(38)(49)
Total increase in working capital(905)(1,575)(1,598)
Net cash flows from operations323(574)330
Net taxes paid(47)(43)(137)
Net cash flows from operating activities276(617)193
Cash flows from investing activities
Cash was provided from:
– Proceeds from sale of businesses–126
– Proceeds from disposal of property, plant
and equipment2317
– Proceeds from sale of livestock112
GROUP $ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
RE-PRESENTED
31 JUL 2022
AUDITED
RE-PRESENTED
Cash was applied to:
– Acquisition of property, plant and equipment (256)(194)(480)
– Acquisition of livestock (including rearing costs)(1)(2)(4)
– Acquisition of intangible assets(42)(40)(72)
– Acquisition of investments(10)––
– Other cash outflows–(1)(6)
Net cash flows from investing activities(306)(232)(517)
Cash flows from financing activities
Cash was provided from:
– Proceeds from borrowings2,3462,5453,919
– Interest received18715
– Capital contribution from non-controlling interests44––
Cash was applied to:
– Interest paid(189)(155)(297)
– Repayment of borrowings(1,893)(1,866)(3,634)
– Dividends paid to equity holders of the Co-operative(242)(242)(323)
– Dividends paid to non-controlling interests(17)(31)(32)
– Share buyback(9)–(1)
Net cash flows from financing activities58258(353)
Net increase/(decrease) in cash28(591)(677)
Opening cash281982982
Effect of exchange rate changes(1)15(24)
Closing cash308406281
Reconciliation of closing cash to the
Statement of Financial Position
Cash and cash equivalents319479288
Bank overdraft(57)(84)(31)
Cash balances included in assets and liabilities
held for sale461124
Closing cash308406281
54
CONTENTS
FONTERRA INTERIM REPORT 2023
INTERIM FINANCIAL RESULTS

Basis of Preparation
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
a) General information
Fonterra Co-operative Group Limited (Fonterra, the Company or the Co-operative) is a multinational dairy
co-operative. Fonterra is primarily involved in the collection, manufacture and sale of milk and milk-derived
products through its Ingredients, Consumer and Foodservice channels.
Fonterra is incorporated and domiciled in New Zealand. Fonterra is registered under the Companies Act 1993
and the Co-operative Companies Act 1996, and is an FMC Reporting Entity under the Financial Markets Conduct
Act 2013. Fonterra is also required to comply with the Dairy Industry Restructuring Act 2001 (DIRA).
b) Basis of preparation
These Interim Financial Statements comprise Fonterra and its subsidiaries (together referred to as the Group)
and the Group’s interests in its equity accounted investments.
These unaudited Interim Financial Statements:
–comply with International Accounting Standard 34 Interim Financial Reporting;
–comply with New Zealand Equivalent to International Accounting Standard 34 Interim Financial Reporting;
–have been prepared in accordance with Generally Accepted Accounting Practice (GAAP) applicable to for-profit
entities;
–are presented in New Zealand dollars ($ or NZD), which is Fonterra’s functional currency, and rounded to the
nearest million, except where otherwise stated; and
–do not include all the information and disclosures required in the Annual Financial Statements, and should be
read in conjunction with the Group’s Financial Statements for the year ended 31 July 2022.
The Group’s operations are seasonal due to the profile of milk production in New Zealand. Milk production, and
therefore the Group’s milk collections and production volumes are higher in the New Zealand Spring (October
and November). Consequently, the amount owing to suppliers, inventory balances and borrowings are higher at
the 31 January interim reporting dates compared to the 31 July year-end reporting dates. This reflects the higher
cash outflows required to support the business operations in the first six months of the financial year. Due to the
seasonality of the Group’s operations additional comparative information has been presented in these Interim
Financial Statements.
Re-presentations
Discontinued operations
As at 31 January 2023 the Chilean Soprole business is classified as a disposal group held for sale and considered
to be a discontinued operation.
–Discontinued operations are presented in a single line item in the Income Statement in both the current and
comparative reporting periods. Comparative period information in the Income Statement has been re-presented to
reflect the classification of the Chilean Soprole business as a discontinued operation. Refer to Note 2 Divestments
and Note 12 Re-presentations for further information on this re-presentation.
–Assets of disposal groups held for sale are presented in a single line item within Current assets, and liabilities
of disposal groups held for sale are presented in a single line item within Current liabilities. Comparative period
information in the Statement of Financial Position has not been re-presented.
–The Statement of Changes in Equity and Cash Flow Statement have not been adjusted to separately present
discontinued operations.
Cash Flow Statement
Certain comparative period information has been re-presented for consistency with the current period.
Re-presentations have had no impact on the totals or sub-totals presented in the Cash Flow Statement.
c) Material accounting policies
The accounting policies applied in the preparation of these Interim Financial Statements are consistent with those
applied in the Group’s Financial Statements for the year ended 31 July 2022.
d) Significant judgements and estimates
In the process of applying the Group’s accounting policies and the application of accounting standards, a number
of judgements and estimates have been made. Sources of significant judgement and estimation uncertainty
in preparing these Interim Financial Statements were consistent with those disclosed in the Group’s Financial
Statements for the year ended 31 July 2022.
Market capitalisation
At 31 July 2022, the Group’s market capitalisation was below the carrying amount of net assets. At
31 January 2023 the share price has declined further and this remains an indicator of impairment. The Group has
maintained the view that the current share price does not provide an accurate reflection of the fair value of the
net assets, due to factors outlined in the Group’s Financial Statements for the year ended 31 July 2022.
The Group has undertaken an impairment test and obtained an updated independent valuation to determine the
recoverable amount of its net assets. The independent valuation was used to determine the Group’s recoverable
amount on a fair value less costs of disposal basis. The valuation uses a sustainable EBIT based on normalised
earnings in line with the Group’s long-term aspirations and an appropriate range of earnings multiples based on
benchmarking against peers.
The estimate of the recoverable amount exceeded the carrying amount and as such, no impairment has
been identified.
Forecast Farmgate Milk Price
The Farmgate Milk Price is the average price paid by Fonterra in a season, which is the 12 months ending 31 May,
for each kilogram of milk solids (kgMS) supplied by farmer shareholders under Fonterra’s standard terms of supply.
The Farmgate Milk Price for a season is finalised after the end of that milk season. Global dairy commodity prices
that inform the Farmgate Milk Price revenue are the most significant driver of the level of each season’s Farmgate
Milk Price.
Within the forecast Farmgate Milk Price, the majority of the milk sourced up until 31 January 2023 is contracted
for sale at hedged NZD/USD exchange rates. This means that the Farmgate Milk Price revenue that would be
earned from the milk sourced during the six months ended 31 January 2023 is largely known.
The full season forecast Farmgate Milk Price remains uncertain. This is because the Farmgate Milk Price revenue
that will be earned from milk supplied during the remainder of the milk season ending 31 May 2023 is impacted
by future global dairy commodity prices. Future global dairy commodity prices in USD are uncertain as they
are influenced by global supply and demand dynamics, and their conversion to NZD is uncertain because the
conversion of these USD selling prices to NZD depends on the NZD/USD exchange rate and associated hedging.
55
CONTENTS
FONTERRA INTERIM REPORT 2023
INTERIM FINANCIAL RESULTS

Notes to the Interim Financial Statements
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
NOTEFS PAGE
Performance
1 Segment reporting57
2 Divestments60
3 Revenue from sale of goods62
4 Cost of goods sold62
Debt and Equity
5 Subscribed equity instruments63
6 Dividends63
7 Borrowings64
Other
8 Intangible assets65
9 Contingent liabilities, provisions and commitments66
10 Fair value measurement66
11 Net tangible assets per quoted equity security68
12 Re-presentations68
56
CONTENTS
FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
Performance
1 SEGMENT REPORTING
Segment information provided in this note reflects the Group’s performance from continuing operations only.
The Chilean Soprole business, China Farms and Brazil consumer and foodservice businesses are considered
discontinued operations and have been excluded from the disclosures in this note. Please see Note 2 Divestments
for further details about the Group’s discontinued operations.
a) Reportable segments
Operating segments reflect the way financial information is regularly reviewed by the Fonterra Management Team
(FMT). The FMT is considered to be the Chief Operating Decision Maker (CODM). The FMT consists of the Group’s
Chief Executive Officer (CEO), Chief Financial Officer, Chief Operating Officer, the CEO Global Markets, the CEO
Greater China, the Chief Innovation and Brand Officer, the Managing Director Strategy and Optimisation, the
Managing Director People and Culture and the Managing Director Co-operative Affairs.
The measure of profit or loss used by the FMT to evaluate the underlying performance of operating segments is
normalised earnings before interest and tax (normalised EBIT).
On 23 June 2022 Fonterra announced changes to its organisational structure to better align with the long-term
aspirations of the Co-operative, following its strategy refresh announced in September 2021. Two new FMT roles
were created effective 1 August, the Chief Innovation and Brand Officer and the Managing Director Strategy
and Optimisation. In addition to this, effective from 1 October 2022 the Group’s Asia Pacific and Africa, Middle
East, Europe, North Asia and Americas (AMENA) business units were merged into a combined Global Markets
business unit.
The Group’s operating model and the way financial information is presented to the FMT has been updated to align
to this new organisational structure. This is now based around the two customer-facing regional business units,
Global Markets and Greater China, and Group Operations which comprises:
–the functions under the Chief Operating Office (COO) which includes New Zealand milk collection and processing
operations, supply chain, Group IT and sustainability;
–Strategy and Optimisation (S&O), which includes the Group’s Central Portfolio Management and Strategy functions;
and
–Fonterra Farm Source™ retail stores.
The operating model forms the basis for the Group’s operating segments.
The Group has identified its reportable segments based on a number of factors, including how the CODM makes
decisions about resource allocations and assesses performance. The Group has determined that its reportable
segments are Global Markets, Greater China and Group Operations. Comparative information within this note
has been restated to reflect the change in the Group’s reportable segments.
REPORTABLE SEGMENTSDESCRIPTION
Global MarketsRepresents the global Ingredients, Foodservice and Consumer channels outside of
Greater China.
Greater ChinaRepresents the Ingredients, Foodservice and Consumer channels in Greater China.
Group OperationsRepresents COO, S&O and Fonterra Farm Source™ retail stores.
The performance of large multinational customers are reported within the reportable segment that they are
managed by. This can differ from the geographical region of the destination of goods sold.
The performance of the Group’s reporting segments includes transactions between the regional business units
and Group Operations for the purchase and sale of goods, which are eliminated at the total Group level.
Innovation and Brand is attributed to the reportable segments and follows underlying business rules. Unallocated
costs represent corporate costs including Co-operative Affairs and other Group Functions.
Eliminations and unallocated costs are disclosed in aggregate, with substantially all of the revenue and cost of
goods sold balances being eliminations.
57
CONTENTS
FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
1 SEGMENT REPORTING (CONTINUED)
a) Reportable segments (continued)
GROUP $ MILLION
SIX MONTHS ENDED 31 JANUARY 2023 (UNAUDITED)
CONTINUING OPERATIONS
GLOBAL
MARKETS
GREATER
CHINA
GROUP
OPERATIONS
UNALLOCATED
COSTS AND
ELIMINATIONSTOTAL
Sales volume (metric tonnes,
thousands)1,2724551,345(1,373)1,699
Revenue from sale of goods9,4243,4969,691(10,278)12,333
Cost of goods sold(8,546)(3,134)(8,855)10,248(10,287)
Normalised gross profit/(loss)878362836(30)2,046
Operating expenses(624)(146)(336)(94)(1,200)
Other
1
13(1)1518
Normalised EBIT267215501(119)864
Profit/(loss) before net finance
costs and tax267215501(119)864
Other segment information:
–Inter-segment revenue1682210,088(10,278)–
–Depreciation and amortisation(67)(5)(220)(13)(305)
–Share of profit of equity
accounted investees6–118
1 Comprises other operating income, net foreign exchange gains/(losses) and share of profit/(loss) of equity accounted investees.
GROUP $ MILLION
SIX MONTHS ENDED 31 JANUARY 2022 (UNAUDITED AND RESTATED)
CONTINUING OPERATIONS
GLOBAL
MARKETS
GREATER
CHINA
GROUP
OPERATIONS
UNALLOCATED
COSTS AND
ELIMINATIONSTOTAL
Sales volume (metric tonnes,
thousands)1,0755661,264(1,282)1,623
Revenue from sale of goods6,5453,4997, 70 5(7,664)10,085
Cost of goods sold(5,831)(3,154)( 7, 3 6 3)7,652(8,696)
Normalised gross profit/(loss)714345342(12)1,389
Operating expenses(450)(129)(286)(44)(909)
Other
1
151331463
Normalised EBIT27921789(42)543
Profit/(loss) before net finance
costs and tax27921789(42)543
Other segment information:
–Inter-segment revenue10747, 55 3(7,664)–
–Depreciation and amortisation(66)(5)(216)(12)(299)
–Share of profit of equity
accounted investees5–1–6
1 Comprises other operating income, net foreign exchange gains/(losses) and share of profit/(loss) of equity accounted investees.
58
CONTENTS
FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
1 SEGMENT REPORTING (CONTINUED)
a) Reportable segments (continued)
GROUP $ MILLION
YEAR ENDED 31 JULY 2022 (UNAUDITED AND RESTATED)
CONTINUING OPERATIONS
GLOBAL
MARKETS
GREATER
CHINA
GROUP
OPERATIONS
UNALLOCATED
COSTS AND
ELIMINATIONSTOTAL
Sales volume (metric tonnes,
thousands)2,3441,0282,554(2,608)3,318
Revenue from sale of goods15,3856 , 87417,026(17, 3 8 4)21,901
Cost of goods sold(13,846)(6,242)(16,243)17, 339(18,992)
Normalised gross profit/(loss)1,539632783(45)2,909
Operating expenses(992)(266)(610)(196)(2,064)
Other
1
(34)1563659
Normalised EBIT513367229(205)904
Normalisation adjustments:
–Gain on sale of Global Dairy Trade–––4242
Profit/(loss) before net finance
costs and tax513367229(163)946
Other segment information:
–Inter-segment revenue257717, 1 2 0(17, 3 8 4)–
–Depreciation and amortisation(133)(10)(433)(26)(602)
–Share of profit of equity
accounted investees8–1110
1 Comprises other operating income, net foreign exchange gains/(losses) and share of profit/(loss) of equity accounted investees.
b) Geographical analysis of revenue
Revenue is analysed by geography on the basis of the destination of the goods sold. Geographical groupings in the
following table are not aligned with the Group’s reportable segments.
GEOGRAPHICAL
EXTERNAL REVENUE
GROUP $ MILLION
NEW
ZEALANDAUSTRALIACHINA
REST
OF ASIA AMERICAS
REST OF
WORLDTOTAL
Six months ended 31 January
2023 (unaudited)1,2911,0883,0264,6051,2391,08412,333
Six months ended
31 January 2022
(unaudited and re-presented)9917843,2303,45184978010,085
Year ended 31 July 2022
(audited and re-presented)2,1401,7266,2448,0161,9981,77721,901
c) Geographical analysis of non-current assets
Geographical groupings in the following table are not aligned with the Group’s reportable segments.
GEOGRAPHICAL
NON-CURRENT ASSETS
GROUP $ MILLION
NEW
ZEALANDAUSTRALIACHINA
REST
OF ASIA AMERICAS
REST OF
WORLDTOTAL
As at 31 January 2023
(unaudited)6,58198123738792378,639
As at 31 January 2022
(unaudited)6,535961158223842498,966
As at 31 July 2022 (audited)6,6031,026207993782419,067
RECONCILIATION OF GEOGRAPHICAL NON-CURRENT ASSETS
TO TOTAL NON-CURRENT ASSETS
GROUP $ MILLION
AS AT
31 JAN 2023
UNAUDITED
AS AT
31 JAN 2022
UNAUDITED
AS AT
31 JUL 2022
AUDITED
Geographical non-current assets 8,6398,9669,067
Deferred tax assets178562551
Derivative financial instruments 428466434
Total non-current assets9,2459,99410,052
59
CONTENTS
FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
2 DIVESTMENTS
This note provides information about the Group’s disposal groups held for sale and discontinued operations for
the six months ended 31 January 2023.
At 31 January 2023, the Hangu China farm and the Brazil consumer and foodservice business continued to meet
the definition of held for sale and are discontinued operations.
During the period, the Group’s divestment of the Chilean Soprole business has advanced to the point that the
business met the requirements to be classified as held for sale at 31 January 2023. The business also meets
the definition of a discontinued operation.
a) Disposal groups held for sale
The major classes of assets and liabilities held for sale are presented in the following table.
ASSETS AND LIABILITIES HELD FOR SALE
$ MILLION
AS AT 31 JAN 2023
UNAUDITED
AS AT 31 JAN 2022
UNAUDITED
AS AT 31 JUL 2022
AUDITED
Cash and cash equivalents461124
Trade receivables2044658
Inventory2793332
Property, plant and equipment2488179
Livestock212321
Intangible assets230127111
Other assets261154148
Total assets held for sale1,289475473
Borrowings481310333
Trade and other payables376146209
Provisions684142
Other liabilities474844
Total liabilities held for sale972545628
Net assets/(liabilities) held for sale317(70)(155)
Hangu China farm
As at 31 January 2023 the Hangu China farm continued to meet the requirements to be classified as held for sale
(31 January 2022 and 31 July 2022: held for sale).
The sale process has been delayed due to market conditions related to COVID-19, including the effect of
lockdowns in China. At 31 January 2023 the Group remains committed to the sale and the farm continues to be
actively marketed. The Group expects the sale to be completed within one year of the reporting date. The Group
reassessed the fair value less costs to sell of the Hangu China farm and recognised a write-down of $4 million
(31 January 2022 and 31 July 2022: nil).
The foreign currency translation reserve balance at 31 January 2023 attributable to the Hangu China farm was a
debit balance of $1 million (31 January 2022: debit balance of $4 million, 31 July 2022: debit balance of $3 million).
Brazil consumer and foodservice business
As at 31 January 2023 the Brazil consumer and foodservice business continued to meet the requirements to be
classified as held for sale (31 January 2022 and 31 July 2022: held for sale).
On 13 December 2022 the Group announced the sale of the Brazil consumer and foodservice business, subject
to a number of conditions including receipt of regulatory approvals from competition authorities.
In September 2022 the equity holders each contributed their proportionate share of $93 million to repay
borrowings of the business, which reduced the net liabilities held for sale.
The Group reassessed the fair value less costs to sell at 31 January 2023, and no adjustment has been recognised
(31 January 2022: nil, 31 July 2022: a write-down of $57 million ($50 million after tax)).
The foreign currency translation reserve balance at 31 January 2023 attributable to the Brazil consumer
and foodservice business was a debit balance of $67 million (31 January 2022: debit balance of $62 million,
31 July 2022: debit balance of $67 million).
Chilean Soprole business
During the period, the Group’s divestment of the Chilean Soprole business has advanced to the point that the
business meets the requirements to be classified as held for sale at 31 January 2023. The divestment of the
business also meets the definition of a discontinued operation as it is a separate major geographical area of
operation. The Group expects the sale to be completed within one year of the reporting date.
The divestment is comprised of a number of transactions that result in aggregate consideration of 591 billion
Chilean Pesos. The divestment is subject to a number of conditions, including receipt of regulatory approvals and
commencement of an irrevocable public tender offer process in Chile for the outstanding shares in Soprole not
already owned by the Group.
On classification as held for sale, the net assets are required to be measured at the lower of carrying value or
fair value less costs to sell. The fair value less costs to sell exceeds the carrying value and no adjustment has
been recognised.
The foreign currency translation reserve balance at 31 January 2023 attributable to the Chilean Soprole business
was a debit balance of $185 million, and the hedge reserve was a debit balance of $13 million.
60
CONTENTS
FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
2 DIVESTMENTS (CONTINUED)
b) Discontinued operations
The China Farms business, Brazil consumer and foodservice business and Chilean Soprole business all meet the
definition of a discontinued operation.
The summarised financial performance of the China Farms business, Brazil consumer and foodservice business,
and Chilean Soprole business, recognised in profit/(loss) after tax from discontinued operations in the Income
Statement, total comprehensive income/(expense) from discontinued operations, and net cash generated by the
discontinued operations, is presented in the following table.
DISCONTINUED OPERATIONS
$ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
RE-PRESENTED
1
31 JUL 2022
AUDITED
RE-PRESENTED
1
Revenue from sale of goods9167121,524
Cost of goods sold(664)(494)(1,093)
Gross profit252218431
Other operating expenses(258)(154)(344)
Brazil consumer and foodservice impairment––(57)
(Loss)/profit before net finance costs and tax(6)6430
Net finance costs(35)(13)(37)
(Loss)/profit before tax(41)51(7)
Tax credit/(expense)43(39)(31)
Profit/(loss) after tax from discontinued operations212(38)
Share of loss attributable to non-controlling interests–136
Profit/(loss) after tax attributable to equity holders213(2)
Cash flow hedges and other costs of hedging, net of tax(13)––
Movement in exchange differences on translation of
discontinued operations23(15)(55)
Foreign currency translation reserve gains transferred
to the Income Statement––(1)
Other reserve movements2149
Total comprehensive income/(expense) from
discontinued operations1411(85)
Net cash inflow/(outflow) from operating activities52(2)18
Net cash outflow from investing activities(12)(9)(24)
Net cash outflow from financing activities(137)(1)(6)
Net decrease in cash generated by the
discontinued operations(97)(12)(12)
1 Comparative information has been re-presented for consistency with the current period. Refer to Note 12 Re-presentations for further details.
61
CONTENTS
FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
3 REVENUE FROM SALE OF GOODS
External revenue is disaggregated by Ingredients, Foodservice and Consumer channels across the Group’s
reportable segments in the following table.
Group Operations includes external revenue together with adjustments to reflect that it acts as an agent for other
segments, and the volatility associated with the Group’s sales hedging activities.
GROUP $ MILLION
GLOBAL MARKETSGREATER CHINA
GROUP
OPERATIONSTOTAL
For the six months ended
31 January 2023 (unaudited)
Ingredients channel revenue6,8362,147(248)8,735
Foodservice channel revenue9141,111(97)1,928
Consumer channel revenue1,506216(52)1,670
Revenue from sale of goods9,2563, 474(397)12,333
For the six months
ended 31 January 2022
(unaudited and restated)
1
Ingredients channel revenue4,4172,2841476,848
Foodservice channel revenue6871,000(13) 1 , 674
Consumer channel revenue1,334211181,563
Revenue from sale of goods6,4383,49515210,085
For the year ended 31 July 2022
(audited and restated)
1
Ingredients channel revenue10,9404,648(53)15,535
Foodservice channel revenue1,5151,850(63)3,302
Consumer channel revenue2,673369223,064
Revenue from sale of goods15,1286,867(94)21,901
1 Comparative information has been restated and re-presented for consistency with the current period. Refer to Note 12 Re-presentations
for further details.
Revenue is disaggregated by geography on the basis of the destination of the goods sold in Note 1
Segment reporting.
4 COST OF GOODS SOLD
GROUP $ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
RE-PRESENTED
31 JUL 2022
AUDITED
RE-PRESENTED
Opening inventory5,0073,7663,766
Cost of milk:
–New Zealand-sourced8,3778,82913,722
–Non-New Zealand-sourced633459843
Other costs3,1142,8855,668
Closing inventory(6,844)( 7, 243)(5,007)
Total cost of goods sold10,2878,69618,992
Other costs include purchases of other products, raw materials, packaging, direct labour costs, depreciation and
other costs directly incurred to bring inventory to its final point of sale location.
During the period, the Group increased its provision for impairment of raw materials and finished goods by
$71 million (31 January 2022: $15 million, 31 July 2022: $26 million).
62
CONTENTS
FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
Debt and equity
5 SUBSCRIBED EQUITY INSTRUMENTS
a) Co-operative shares, including shares held within the Group
Co-operative shares may currently only be held by a shareholder supplying milk to Fonterra (farmer shareholder),
by former farmer shareholders for a reduction period after cessation of milk supply, or by Fonterra Farmer
Custodian Limited (the Custodian). Voting rights in Fonterra are dependent on milk supply supported by
Co-operative shares.
The rights attaching to Co-operative shares are set out in Fonterra’s Constitution, available in the
‘Our Co-operative/Governance and Management’ section of Fonterra’s website.
At 31 January 2023 there were 1,609,294,669 Co-operative shares on issue (31 January 2022: 1,613,357,879 shares,
31 July 2022: 1,612,825,585 shares).
During the six months ended 31 January 2023, Fonterra bought back 3,530,916 shares at a total cost of $9 million
(31 January 2022: no shares, 31 July 2022: 532,294 shares at a total cost of $1 million). The shares bought back
were cancelled on acquisition.
Co-operative shares can be traded between farmer shareholders on the Fonterra Shareholders’ Market
(a private market operated by NZX Limited).
At a Special Meeting held on 9 December 2021, Fonterra shareholders voted in favour of capital structure related
amendments to Fonterra’s Constitution that would give effect to the new Flexible Shareholding capital structure
(Flexible Shareholding). The legislative changes required to enable Flexible Shareholding have been approved
by Parliament and Fonterra has announced that Flexible Shareholding will be implemented in late March 2023.
Share compliance obligations will remain on hold for all shareholders holding a minimum of 1,000 shares and
exiting suppliers that are selling shares over three seasons in accordance with Fonterra’s Constitution, until at
least six months after Flexible Shareholding comes into effect. Fonterra has announced a Compliance Date of 1
December 2023 for the 2023/24 Season. The current cap on the Fund remains, so Fonterra shares are not able to
be exchanged into units in the Fund on a day-to-day basis. A capped Fund is a feature of Flexible Shareholding.
Information about the Group’s capital structure is available in the ‘Investors/Capital Structure’ section of
Fonterra’s website.
b) Units in the Fonterra Shareholders’ Fund (the Fund)
The Custodian holds legal title of Co-operative shares of which the Economic Rights have been sold to the Fund
on trust for the benefit of the Fund. As at 31 January 2023 107,410,984 Co-operative shares (31 January 2022:
107,417,322, 31 July 2022: 107,417,322) were legally owned by the Custodian, on trust for the benefit of the Fund.
During the six months ended 31 January 2023, the Fund issued no units (31 January 2022: no units, 31 July 2022:
no units) and redeemed 6,338 units (31 January 2022: 2,840 units, 31 July 2022: 2,840 units).
Under the capital structure related amendments to Fonterra’s Constitution the overall limit on the Fund size
reduces from 20% to 10%. The current cap on the Fund remains, so Fonterra shares are not able to be exchanged
into units in the Fund on a day-to-day basis. The Fonterra share buyback programme has not had a material impact
on the Fund size as a percentage of the total number of Fonterra shares on issue.
The rights attaching to units are set out in the Fonterra Shareholders’ Fund 2022 Annual Report, available in the
‘Investors/Fonterra Shareholders’ Fund’ section of Fonterra’s website.
6 DIVIDENDS
$ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
31 JUL 2022
AUDITED
DIVIDENDS
2022 Final dividend – 15 cents per share¹242––
2022 Interim dividend – 5 cents per share²––81
2021 Final dividend – 15 cents per share³–242242
1 Declared on 21 September 2022 and paid on 14 October 2022 to all Co-operative shares on issue at 29 September 2022. The Dividend
Reinvestment Plan did not apply to this dividend.
2 Declared on 16 March 2022 and paid on 14 April 2022 to all Co-operative shares on issue at 24 March 2022. The Dividend Reinvestment Plan did
not apply to this dividend.
3 Declared on 22 September 2021 and paid on 15 October 2021 to all Co-operative shares on issue at 30 September 2021. The Dividend
Reinvestment Plan did not apply to this dividend.
Dividend declared after the reporting period
On 15 March 2023, the Board declared an interim dividend of 10 cents per share, to be paid on 14 April 2023 to all
holders of Co-operative shares on issue at 23 March 2023.
The Dividend Reinvestment Plan does not apply to this dividend.
63
CONTENTS
FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
7 BORROWINGS
a) Total borrowings
GROUP $ MILLION
AS AT
31 JAN 2023
UNAUDITED
AS AT
31 JAN 2022
UNAUDITED
AS AT
31 JUL 2022
AUDITED
Total current borrowings2,063596356
Total non-current borrowings3,4265,1524,900
Total borrowings
1
5,4895,7485,256
1 Borrowings of $481 million attributable to disposal groups held for sale are not included in the table above (31 January 2022: $310 million,
31 July 2022: $333 million).
A breakdown of total borrowings is presented in the following table.
GROUP $ MILLION
AS AT
31 JAN 2023
UNAUDITED
AS AT
31 JAN 2022
UNAUDITED
AS AT
31 JUL 2022
AUDITED
Commercial paper52221598
Bank loans984963999
Lease liabilities408482438
Capital notes¹353535
NZX-listed bonds250250250
Medium-term notes3,2903,8033,436
Total borrowings²5,4895,7485,256
1 Capital notes are unsecured subordinated borrowings.
2 All borrowings other than lease liabilities and capital notes are both unsecured and unsubordinated.
b) Adjusted net debt
The Group uses adjusted net debt, a non-GAAP debt measure in monitoring its net debt position and in
calculating the Group’s debt to EBITDA ratio, gearing ratio, and return on capital.
Adjusted net debt is total borrowings, plus bank overdraft, less cash and cash equivalents, plus borrowings
attributable to disposal groups held for sale, less cash and cash equivalents attributable to disposal groups held
for sale, plus a cash adjustment for 25% of cash and cash equivalents held by the Group’s subsidiaries (including
cash and cash equivalents attributable to disposal groups held for sale), less derivatives used to manage changes
in hedged risks on debt instruments.
The Group believes that adjusted net debt provides useful information as it is aligned with how certain rating
agencies calculate the Group’s debt to EBITDA and gearing ratios.
GROUP $ MILLION
AS AT
31 JAN 2023
UNAUDITED
AS AT
31 JAN 2022
UNAUDITED
AS AT
31 JUL 2022
AUDITED
Total borrowings 5,4895,7485,256
Plus: Bank overdraft578431
Less: Cash and cash equivalents(319)(479)(288)
Plus: Borrowings attributable to disposal groups held
for sale481310333
Less: Cash and cash equivalents attributable to disposal
groups held for sale(46)(11)(24)
Plus: Cash adjustment for cash held by subsidiaries6812277
Less: Carrying value of derivatives used to manage
changes in hedged risks on debt instruments81(167)(46)
Adjusted net debt5,8115,6075,339
64
CONTENTS
FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
Other
8 INTANGIBLE ASSETS
At 31 January 2023 the Group assessed whether there were any indicators that its cash-generating units
(CGUs) with goodwill or indefinite life intangibles could be impaired. It was determined that indicators did exist
for the New Zealand consumer and foodservice CGU and the Anlene™, Anmum™ and Chesdale™ Asia brands
(no indicators identified at 31 January 2022).
The Group has tested these assets for impairment and recognised an impairment of $162 million within other
operating expenses in the Income Statement (31 January 2022: nil, 31 July 2022: $34 million).
a) New Zealand consumer and foodservice CGU
This CGU represents a business which sells dairy products in the consumer and foodservice channels,
in New Zealand and selected export markets.
At 31 July 2022, the recoverable amount of the business was determined on a value in use basis using a discounted
cash flow methodology, with the recoverable amount exceeding its carrying amount by $66 million. As presented
in the Group’s Financial Statements for the year ended 31 July 2022, it was determined a reasonably possible
change in certain key assumptions used to determine the value in use would result in an impairment.
During the period margins and volumes were lower than forecast and costs were higher than forecast, which
combined with an increase in the discount rate resulted in the value in use being below the carrying value of
the business.
The Group has obtained an external valuation to determine the fair value less costs of disposal of the business
under a market approach. The valuation uses a sustainable EBITDA based on expected future maintainable
earnings and an appropriate range of earnings multiples based on benchmarking against peers. This valuation
uses unobservable inputs, which would be categorised under Level 3 of the fair value hierarchy.
The fair value less costs of disposal is higher than the value in use at 31 January 2023 and has been used to
determine the recoverable amount of the business.
The recoverable amount of the business was assessed to be $669 million. This was lower than the carrying value
of the business, resulting in an impairment of goodwill of $92 million (31 January 2022: nil, 31 July 2022: nil)
recognised in the Group’s Global Markets reportable segment. Goodwill allocated to the CGU is $137 million as
at 31 January 2023 (31 January 2022: $229 million, 31 July 2022: $229 million).
If the business is unable to achieve the sustainable EBITDA used in the external valuation or the value of the
CGU’s net assets significantly increases, a further impairment may be possible.
b) Asia brands
Asia brands represent the Group’s trademarks and other intellectual property in territories outside of New
Zealand and Australia, relating to the Anchor™, Anmum™, Anlene™ and Chesdale™ brands.
The relief from royalty method is used to calculate the recoverable amounts of the brands. The relief from royalty
methodology is a value in use calculation which determines the recoverable amount by calculating the present
value of what a licensee would theoretically pay as a royalty to use the brands.
The key assumption used in the relief from royalty method is forecast sales growth. The value attributed to
this assumption is based on five-year cash flow forecasts, which utilise updated forecasts for the year ending
31 July 2023 and business plans approved by the Board, updated where applicable for the purposes of impairment
testing. Cash flows for years four and five have been prepared based on growth expectations for the brands.
The royalty rates applied in the calculation are determined based on comparable market data, and range from
3% to 7% (31 July 2022: 3% to 7%).
The carrying amount for the Anchor™, Anlene™ and Anmum™ brands and cash flow forecasts for each region are
in local currency and converted to NZD.
The total impairment recognised across the Asia brands is $70 million (31 January 2022: nil, 31 July 2022:
$34 million). Of this impairment, $46 million is attributed to the Global Markets reportable segment and
$24 million to the Greater China reportable segment (31 January 2022: nil, 31 July 2022: $33 million to the Asia
Pacific reportable segment (restated to be within Global Markets in Note 1 Segment reporting) and $1 million to
the Greater China reportable segment). Refer below for further information specific to each brand impaired.
Anlene™ brand
The recoverable amount of the Anlene™ brand was assessed to be $153 million. This was lower than the carrying
value of the brand, resulting in an impairment of $45 million (31 January 2022: nil, 31 July 2022: $22 million).
The impairment recognised is primarily due to a reduction in forecast sales growth for the brand, with changes in
discount rates and foreign exchange rates also contributing to the impairment recognised.
As the brand is sold across a number of markets, all with different characteristics, the range of post-tax discount
rates applied was 9.3% to 27.5% (31 July 2022: 9.2% to 31.5%). The range of pre-tax discount rates was 11.2% to
35.3% (31 July 2022: 11.1% to 41.4%).
The long-term growth rates applied range from 1.4% to 6.2% (31 July 2022: 1.6% to 7.4%).
Anmum™ brand
The recoverable amount of the Anmum™ brand was assessed to be $93 million. This was lower than the carrying
value of the brand, resulting in an impairment of $23 million (31 January 2022: nil, 31 July 2022: $11 million). The
impairment recognised is primarily due to a reduction in forecast sales growth for the brand in the Southeast Asia
region, with changes in discount rates and foreign exchange rates also contributing to the impairment recognised.
As the brand is sold across a number of markets, all with different characteristics, the range of post-tax discount
rates applied was 9.3% to 16.1% (31 July 2022: 9.2% to 15.8%). The range of pre-tax discount rates was 11.2% to
20.1% (31 July 2022: 11.1% to 19.8%).
The long-term growth rates applied range from 1.4% to 3.6% (31 July 2022: 1.6% to 3.8%).
Chesdale™ brand
The recoverable amount of the Chesdale™ brand was assessed to be $26 million. This was lower than the carrying
value of the brand, resulting in an impairment of $2 million (31 January 2022: nil, 31 July 2022: $1 million). The
impairment recognised was a result of changes in discount rates and foreign exchange rates.
As the brand is sold across a number of markets, all with different characteristics, the range of post-tax discount
rates applied was 9.3% to 25.1% (31 July 2022: 8.8% to 31.5%). The range of pre-tax discount rates was 11.2% to
33.0% (31 July 2022: 11.1% to 41.4%).
The long-term growth rates applied range from 1.4% to 3.6% (31 July 2022: 1.6% to 3.8%).
65
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FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
9 CONTINGENT LIABILITIES, PROVISIONS AND COMMITMENTS
In the normal course of business, the Group is exposed to claims and legal proceedings that may in some cases
result in costs.
In June 2020 a class action was filed in the Supreme Court of Victoria against Fonterra Australia Pty. Ltd.,
Fonterra Milk Australia Pty. Ltd., and Fonterra Brands (Australia) Pty. Ltd. (collectively, Fonterra Australia) by
Geoffrey and Lynden Iddles on behalf of farmers who supplied milk to Fonterra Australia during the 2015/2016
season. The class action relates to actions taken by Fonterra Australia in connection with its milk price in the
2015/2016 season including the manner in which Fonterra Australia set its opening milk price and forecast closing
milk price at the outset of that season, its communications with suppliers about the milk price throughout the
season and its reduction of the milk price in May 2016. The plaintiffs are alleging that Fonterra Australia breached
its contracts with suppliers, engaged in misleading and deceptive conduct and engaged in unconscionable
conduct in connection with these matters. In November 2022, Fonterra Australia reached an agreement to settle
these proceedings. The settlement, which is made without any admission of liability, is subject to Court approval.
The settlement sum of AUD25 million inclusive of interest and all costs was fully provided for in the year ended
31 July 2022.
At 31 January 2023 the Group was committed to future capital expenditure for:
GROUP $ MILLION
AS AT
31 JAN 2023
UNAUDITED
AS AT
31 JAN 2022
UNAUDITED
AS AT
31 JUL 2022
AUDITED
Buildings172620
Plant, vehicles and equipment169170192
Software11913
Total commitments197205225
10 FAIR VALUE MEASUREMENT
The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly
transaction between market participants at the measurement date.
The fair values of financial assets and liabilities are calculated by reference to quoted market prices where that
is possible. A market is regarded as active if quoted prices are readily and regularly available from an exchange,
dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly
occurring market transactions on an arm’s length basis.
If quoted market prices are not available, the methodology used to calculate the fair values of financial assets and
liabilities is to identify the expected cash flows under the terms of each specific contract and then discount these
values back to the present value. These models use as their basis independently sourced market data where it is
available and rely as little as possible on entity-specific estimates.
The calculation of the fair value of financial instruments reflects the impact of credit risk where applicable.
Specific valuation techniques used to value financial instruments include:
–the fair value of foreign exchange contracts is determined using observable currency exchange rates, option
volatilities and interest rate yield curves;
–the fair value of interest rate contracts is calculated as the present value of the estimated future cash flows
based on observable interest rate yield curves;
–the fair value of commodity contracts that are not exchange traded is determined by calculating the present
value of estimated future cash flows based on observable quoted prices for similar instruments;
–the fair value on the hedged risks of borrowings and long-term advances that are not exchange traded is
calculated as the present value of the estimated future cash flows based on observable currency exchange rates
and interest rate yield curves; and
–the fair value of net assets/(liabilities) held for sale is disclosed in Note 2 Divestments.
Fair value hierarchy
The fair value hierarchy described below is used to provide an indication of the level of estimation or judgement
required in determining fair value.
–Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
–Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
–Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during
which the change occurred.
66
CONTENTS
FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
10 FAIR VALUE MEASUREMENT (CONTINUED)
The fair value hierarchy for assets and liabilities measured at fair value are presented in the following table.
GROUP $ MILLION
LEVEL 1 AS ATLEVEL 2 AS ATLEVEL 3 AS AT
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
31 JUL 2022
AUDITED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
31 JUL 2022
AUDITED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
31 JUL 2022
AUDITED
Measured at fair value on a recurring basis
Derivative assets
–Commodity derivatives57214211347–––
–Foreign exchange derivatives–––5895064–––
–Interest rate derivatives¹–––306427382–––
Derivative liabilities
–Commodity derivatives(124)(17)(40)(6)(1)(3)–––
–Foreign exchange derivatives–––(254)(809)(760)–––
–Interest rate derivatives¹–––(251)(235)(243)–––
Emissions units held for trading363739––––––
Long-term advances––––––3––
Investments in shares242124181718532236
Measured at fair value on a non-recurring basis
Net liabilities held for sale––––––(65)(70)(155)
Fair value(7)255234405(547)(535)(9)(48)(119)
1 Includes cross-currency interest rate swaps.
The fair value hierarchy for each class of financial asset and liability where the carrying amount differs from the fair value is presented in the following table.
GROUP $ MILLION
FAIR VALUE
CARRYING AMOUNT AS ATLEVEL 1 AS ATLEVEL 2 AS AT
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
31 JUL 2022
AUDITED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
31 JUL 2022
AUDITED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
31 JUL 2022
AUDITED
Financial assets
Long-term advances143161154–––143172153
Financial liabilities
Borrowings
–NZX-listed bonds(250)(250)(250)(243)(253)(246)–––
–Capital notes(35)(35)(35)(33)(35)(34)–––
–Medium-term notes(3,290)(3,803)(3,436)–––(3,361)(3,919)(3,511)
67
CONTENTS
FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

Notes to the Interim Financial Statements (CONTINUED)
FOR THE SIX MONTHS ENDED 31 JANUARY 2023
11 NET TANGIBLE ASSETS PER QUOTED EQUITY SECURITY
Net tangible assets is calculated as net assets less intangible assets.
GROUP
AS AT
31 JAN 2023
UNAUDITED
AS AT
31 JAN 2022
UNAUDITED
AS AT
31 JUL 2022
AUDITED
Net tangible assets per security
$ per equity instrument on issue3.642.722.86
Equity instruments on issue (million)1,6091,6131,613
12 RE-PRESENTATIONS
The following table shows the financial effect on the Group’s Income Statement and Total comprehensive income from the re-presentation of the Chilean Soprole business from continuing operations into discontinued operations.
Discontinued operations presented below incorporates both the performance of the Chilean Soprole business (excluding intercompany interest) and revaluation of derivatives relating to the sale transaction.
$ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2022
CONTINUING
OPERATIONS
UNAUDITED
DISCONTINUED
OPERATIONS
31 JAN 2022
CONTINUING
OPERATIONS
RE-PRESENTED
31 JUL 2022
CONTINUING
OPERATIONS
AUDITED
DISCONTINUED
OPERATIONS
31 JUL 2022
CONTINUING
OPERATIONS
RE-PRESENTED
Revenue from sale of goods10,58850310,08522,9531,05221,901
Cost of goods sold(9,039)(343)(8,696)(19,737)( 745)(18,992)
Gross profit1,5491601,3893,2163072,909
Expenses and other items including finance costs(1,038)(102)(936)(2,386)(229)(2,157)
Profit before tax5115845383078752
Tax exp ense(140)(39)(101)(169)(38)(131)
Profit after tax3711935266140621
Total comprehensive income from continuing operations92(2)94461(17)478
68
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FONTERRA INTERIM REPORT 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS

To the shareholders of Fonterra Co-operative Group Limited
REPORT ON THE INTERIM FINANCIAL STATEMENTS
Conclusion
We have completed a review of the accompanying interim financial statements which comprise:
–the statement of financial position as at 31 January 2023;
–the income statement, statements of comprehensive income, changes in equity and cash flows for the
six month period then ended; and
–notes, including a summary of significant accounting policies and other explanatory information.
Based on our review, nothing has come to our attention that causes us to believe that the interim financial
statements on pages 50 to 68 do not:
i. present fairly, in all material respects the Group’s financial position as at 31 January 2023 and its financial
performance and cash flows for the six month period ended on that date; and
ii. comply with NZ IAS 34 Interim Financial Reporting (NZ IAS 34) and IAS 34 Interim Financial Reporting (IAS 34).
Basis for conclusion
A review of interim financial statements in accordance with NZ SRE 2410 Review of Financial Statements Performed
by the Independent Auditor of the Entity (“NZ SRE 2410”) is a limited assurance engagement. The auditor performs
procedures, consisting of making enquiries, primarily of persons responsible for financial and accounting matters,
and applying analytical and other review procedures.
As the auditor of Fonterra Co-operative Group Limited, NZ SRE 2410 requires that we comply with the
ethical requirements relevant to the audit of the annual financial statements.
Other than in our capacity as auditor, we have no relationship with, or interests in, the Group.
Use of this Independent Review Report
This report is made solely to the shareholders as a body. Our review work has been undertaken so that we might
state to the shareholders those matters we are required to state to them in the Independent Review 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 shareholders as a body for our review work, this report, or any of the opinions we have formed.
Responsibilities of the Directors for the interim financial statements
The Directors, on behalf of the company, are responsible for:
–the preparation and fair presentation of the interim financial statements in accordance with NZ IAS 34
and IAS 34;
–implementing necessary internal control to enable the preparation of interim financial statements that are
fairly presented and free from material misstatement, whether due to fraud or error; and
–assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless they either intend to liquidate or
to cease operations or have no realistic alternative but to do so.
Auditor’s Responsibilities for the review of the interim financial statements
Our responsibility is to express a conclusion on the interim financial statements based on our review. We
conducted our review in accordance with NZ SRE 2410. NZ SRE 2410 requires us to conclude whether anything
has come to our attention that causes us to believe that the interim financial statements are not prepared, in all
material respects, in accordance with NZ IAS 34 and IAS 34.
The procedures performed in a review are substantially less than those performed in an audit conducted in
accordance with International Standards on Auditing (New Zealand). Accordingly, we do not express an audit
opinion on these interim financial statements.
This description forms part of our Independent Review Report.
KPMG
Auckland
15 March 2023
Independent
Review Report
69
CONTENTS
FONTERRA INTERIM REPORT 2023
INDEPENDENT REVIEW REPORT

Fonterra uses several non-GAAP measures when discussing financial performance. Non-GAAP measures are
not defined or specified by NZ IFRS.
Management believes that these measures provide useful information as they provide valuable insight on the
underlying performance of the business. They may be used internally to evaluate the underlying performance
of business units and to analyse trends. These measures are not uniformly defined or utilised by all companies.
Accordingly, these measures may not be comparable with similarly titled measures used by other companies.
Non-GAAP financial measures should not be viewed in isolation nor considered as a substitute for measures
reported in accordance with NZ IFRS.
Non-GAAP measures are not subject to audit unless they are included in Fonterra’s audited annual financial
statements.
Please refer to the following tables for reconciliations of NZ IFRS to non-GAAP measures, and the Glossary for
definitions of non-GAAP measures referred to by Fonterra.
Reconciliation from profit after tax to total Group normalised EBITDA
GROUP $ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
RE-PRESENTED
1
31 JUL 2022
AUDITED
RE-PRESENTED
1
Profit after tax546364583
Net finance costs from continuing operations12290194
Net finance costs from discontinued operations351337
Tax expense from continuing operations198101131
Tax (credit)/expense from discontinued
operations(43)3931
Depreciation and amortisation from continuing
operations305299602
Depreciation and amortisation from
discontinued operations81533
Total Group EBITDA 1,1719211,611
Hangu China Farm impairment4––
Fair value movements on derivatives hedging
sale of Soprole78––
Gain on sale of Global Dairy Trade––(42)
Brazil consumer and foodservice business
impairment––57
Total normalisation adjustments82–15
Total Group normalised EBITDA1,2539211,626
Non-GA AP
Measures
1 Comparative information has been re-presented for consistency with the current period. Refer to Note 12 Re-presentations for further details.
70
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FONTERRA INTERIM REPORT 2023
NON-GAAP MEASURES

Non-GAAP Measures (CONTINUED)
Reconciliation from profit after tax to total Group normalised EBIT
GROUP $ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
RE-PRESENTED
1
31 JUL 2022
AUDITED
RE-PRESENTED
1

Profit after tax546364583
Net finance costs from continuing operations12290194
Net finance costs from discontinued operations351337
Tax expense from continuing operations198101131
Tax (credit)/expense from discontinued
operations(43)3931
Total Group EBIT858607976
Normalisation adjustments82–15
Total Group normalised EBIT940607991
Reconciliation from profit after tax to normalised profit after tax and normalised earnings per share
GROUP $ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2023
UNAUDITED
31 JAN 2022
UNAUDITED
RE-PRESENTED
1
31 JUL 2022
AUDITED
RE-PRESENTED
1
Profit after tax 546364583
Normalisation adjustments82–15
Normalisation adjustments to net finance costs7––
Tax on normalisation adjustments(24)–(7)
Normalised profit after tax611364591
(Profit)/loss attributable to non-controlling
interests(16)(16)1
Normalisation adjustments attributable to
non-controlling interests––(24)
Normalised profit after tax attributable to
equity holders of the Co-operative595348568
Weighted average number of Co-operative
shares (thousands of shares)1,612,2911,613,3581,613,353
Normalised earnings per share ($)0.370.220.35
1 Comparative information has been re-presented for consistency with the current period. Refer to the Notes to the Financial Statements section –
Note 12 Re-presentations for further details.
71
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FONTERRA INTERIM REPORT 2023
NON-GAAP MEASURES

TermsDefinitions
Active Livingrepresents ingredients and solutions sold to businesses who cater to
consumers’ health and wellness needs. It addresses three dimensions of
wellbeing (Physical, Mental, Inner), extending to meet the nutrition needs of
medical patients through to everyday people pursuing active lifestyles. This
portfolio includes proteins, specialty ingredients such as probiotics,
lactoferrin and lipids, and patented formulations.
Adjusted net debtis calculated as total borrowings, plus bank overdraft, less cash and cash
equivalents, plus a cash adjustment for 25% of cash and cash equivalents
held by the Group’s subsidiaries, adjusted for derivatives used to manage
changes in hedged risks on debt instruments. Amounts relating to disposal
groups held for sale are included in the calculation.
Aggregate minimum
shareholding requirement
means the total amount of shares required to be held by farmer shareholders
to meet the Share Standard.
Attributable to equity holders
of the Co-operative
is used to indicate that a measure or sub-total excludes amounts attributable
to non-controlling interests.
Average capital employedis a 13-month rolling average of capital employed.
Bulk liquidsmeans bulk raw milk that has not been processed and bulk separated cream.
Business growth capital
expenditure
covers investments to drive business expansion or improvement toward our
strategy, and generate incremental revenue.
Capital employedis adjusted net debt less the cash adjustment (used in calculating adjusted
net debt), plus cash and cash equivalents held by subsidiaries for working
capital purposes, plus equity excluding hedge reserves and net deferred
tax assets.
TermsDefinitions
Capital expenditurecomprises purchases of property (less specific disposals where there is
an obligation to repurchase), plant and equipment and intangible assets
(excluding purchases of emissions units), net purchases of livestock, and
includes amounts relating to disposal groups held for sale.
Capital investedcomprises capital expenditure plus right-of-use asset additions and business
acquisitions, including equity contributions, long-term advances, and
investments.
Consumerthe channel of branded consumer products, such as powders, yoghurts, milk,
butter and cheese.
Continuing operationsmeans operations of the Group that are not discontinued operations.
Custodianmeans the Fonterra Farmer Custodian, which is the legal holder of the shares
in respect of which economic rights are held for the Fund.
Debt to EBITDAis adjusted net debt divided by Total Group normalised earnings before
interest, tax, depreciation and amortisation (Total Group normalised
EBITDA) excluding share of profit/loss of equity accounted investees and net
foreign exchange gains/losses.
DIRAmeans the Dairy Industry Restructuring Act 2001, which authorised
Fonterra’s formation and regulates its activities, subsequent amendments to
the Act, and the Dairy Industry Restructuring (Raw Milk) Regulations 2012.
Discontinued operationsmeans a component of the Group that is classified as held for sale (or has
been sold) and represents, or is part of a single co-ordinated plan to dispose
of, a separate major line of business or geographical area of operations, or is
a subsidiary acquired exclusively with a view to resale.
Glossary
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FONTERRA INTERIM REPORT 2023
GLOSSARY

Glossary (CONTINUED)
TermsDefinitions
Dividend yieldis dividends (per share) divided by volume weighted average share price for
the period 1 August to 31 July.
Earnings before interest and
tax (EBIT)
is profit before net finance costs and tax.
Earnings before interest, tax,
depreciation and amortisation
(EBITDA)
is profit before net finance costs, tax, depreciation and amortisation.
Earnings per share (EPS)is profit after tax attributable to equity holders of the Co-operative divided
by the weighted average number of shares on issue for the period.
EBIT marginis EBIT divided by revenue from sale of goods.
EBITDA marginis EBITDA divided by revenue from sale of goods.
Economic rightsmeans the rights to receive dividends and other economic benefits derived
from a share, as well as other rights derived from owning a share.
Essential capital expenditurecovers investments to maintain the capability of our existing assets from
risk management, legislation/regulation commitments, business continuity
and capital replacement, as well as projects that drive the Co-operative
sustainability targets.
Farmgate Milk Pricemeans the average price paid by Fonterra for each kilogram of milk solids
(kgMS) supplied by Fonterra’s farmer shareholders under Fonterra’s standard
terms of supply. The season refers to the 12-month milk season of 1 June
to 31 May. The Farmgate Milk Price is set by the Board, based on the
recommendation of the Milk Price Panel. In making that recommendation,
the Panel provides assurance to the Board that the Farmgate Milk Price has
been calculated in accordance with the Farmgate Milk Price Manual.
Fonterra's average NZD/USD
conversion rate
is the rate that Fonterra has converted net United States Dollar receipts into
New Zealand Dollars including hedge cover in place.
Foodservicerepresents the channel selling to businesses that cater for out-of-home
consumption; restaurants, hotels, cafés, airports, catering companies etc.
The focus is on customers such as; bakeries, cafés, Italian restaurants, and
global quick-service restaurant chains. High performance dairy ingredients
including whipping creams, mozzarella, cream cheese and butter sheets,
are sold in alongside our business solutions under the Anchor™ Food
Professionals™ brand.
Free cash flowis the total of net cash flows from operating activities and net cash flows
from investing activities.
TermsDefinitions
Gearing ratio (adjusted net
debt)
is adjusted net debt divided by total capital. Total capital is equity excluding
hedge reserves, plus adjusted net debt.
Global accountsmeans large scale, multi-national/multi-region customers.
Global Dairy Trade (GDT)means the electronic auction platform that is used to sell commodity dairy
products.
Global Markets represents the Ingredients, Foodservice and Consumer channels outside of
Greater China.
Greater Chinarepresents the Ingredients, Foodservice and Consumer channels in
Greater China.
Gross marginis gross profit divided by revenue from sale of goods.
Group Operationscomprises core operating functions including New Zealand milk collection
and processing operations and assets, supply chain, Group IT and
sustainability; Fonterra Farm Source™ retail stores; and the Strategy and
Optimisation function.
Held for salean asset or disposal group is classified as held for sale if it is available for
immediate sale in its present condition and its sale is highly probable. A
disposal group is a group of assets and liabilities to be disposed of (by sale or
otherwise) in a single transaction.
Ingredientsrepresents the channel comprising bulk and specialty dairy products such as
milk powders, dairy fats, cheese and proteins manufactured in New Zealand,
Australia, Europe and Latin America, or sourced through our global network,
and sold to food producers and distributors.
kgMSmeans kilograms of milk solids, the measure of the amount of fat and protein
in the milk supplied to Fonterra.
Net debtmeans adjusted net debt.
Net tangible assets per securityis net tangible assets divided by the number of equity instruments on issue.
Net tangible assets is calculated as net assets less intangible assets.
Net working capitalis total trade and other receivables plus inventories, less trade and
other payables. It excludes amounts owing to suppliers and employee
entitlements. Includes amounts relating to disposal groups held for sale.
Non-reference productsmeans all dairy products, except for reference commodity products
manufactured in New Zealand.
Non-shareholding farmmeans a farm where the owning entity is not entitled to hold shares in the
Co-operative. As an example, farms supplying MyMilk.
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FONTERRA INTERIM REPORT 2023
GLOSSARY

TermsDefinitions
Normalisation adjustmentsmeans adjustments made for certain transactions that meet the
requirements of the Group’s Normalisation Policy. These transactions are
typically unusual in size and nature. Normalisation adjustments are made to
assist users in forming a view of the underlying performance of the business.
Normalisation adjustments are set out in the Non-GAAP Measures section.
Normalised is used to indicate that a measure or sub-total has been adjusted
for the impacts of normalisation adjustments. E.g. ‘Normalised EBIT’.
Product channelFonterra has three product channels, Ingredients, Foodservice
and Consumer.
Profit after tax marginis profit after tax attributable to equity holders of the Co-operative, divided
by revenue from sale of goods.
Reference commodity products
(also referred to as reference
products)
means the commodity products used to calculate the Farmgate Milk Price,
comprising whole milk powder, skim milk powder, butter milk powder,
anhydrous milk fat and butter.
Reportedis used to indicate a sub-total or total is reported in the Group’s Financial
Statements before normalisation adjustments. E.g. ‘Reported profit after tax’.
Retentionsmeans earnings per share, less dividend per share. Retentions are reported as
nil where Fonterra has reported a net loss after tax.
Return on capitalis Total Group normalised EBIT including finance income on long-term
advances less a notional tax charge, divided by average capital employed.
SeasonNew Zealand: A period of 12 months from 1 June to 31 May.
Australia: A period of 12 months from 1 July to 30 June.
Chile: A period of 12 months from 1 August to 31 July.
Shareholding farmmeans a farm where the owning entity of the farm has a minimum required
shareholding of at least 1,000 shares in the Co-operative. This includes farms
where the owning entity is in the process of sharing up on a Share Up Over
Time contract.
Share Standardmeans the number of shares a farmer shareholder is required from time to
time to hold as determined in accordance with the Constitution, currently
being one share for each kilogram of milk solids obtainable from milk
supplied (excluding milk supplied on contract supply) to Fonterra. For these
purposes, milk supplied is based on a three season rolling average of a farm’s
production.
TermsDefinitions
Total Groupis used to indicate that a measure or sub-total comprises continuing
operations, discontinued operations and non-controlling interests. E.g. ‘Total
Group EBIT’.
Total pay-outmeans the total cash payment per milk solid that is backed by a share, being
the sum of the Farmgate Milk Price per kgMS and the dividend per share.
Tradeable shares represents shares on issue that are in excess of Aggregate minimum
shareholding.
Unallocated costs and
eliminations
represents corporate costs including Co-operative Affairs and Group
Functions; and any other costs that are not directly associated to the
reporting segments; and eliminations of inter-segment transactions.
Vouchermeans a voucher provided to a farmer shareholder who transferred the
economic rights of a wet share to the Fund, and which can be used to count
towards a farmer shareholder's Share Standard.
WACCmeans weighted average cost of capital.
Weighted average share pricerepresents the average price Fonterra Co-operative Group Limited shares
traded at, weighted against the trading volume at each price over the
reporting period.
Working capital daysis calculated as 12-month rolling average working capital divided by revenue
from the sale of goods (excluding impact of derivative financial instruments)
multiplied by the number of days in the period. The working capital days
calculation excludes other receivables, prepayments, other payables and
includes working capital classified as held for sale.
Glossary (CONTINUED)
74
CONTENTS
FONTERRA INTERIM REPORT 2023
GLOSSARY

FONTERRA BOARD
OF DIRECTORS
Peter McBride
Clinton Dines
Brent Goldsack
Leonie Guiney
Bruce Hassall
Holly Kramer
Andy Macfarlane
John Nicholls
Cathy Quinn
Scott St John
Alison Watters
FONTERRA
MANAGEMENT TEAM
Miles Hurrell
Neil Beaumont
Teh-han Chow
Mike Cronin
Kate Daly
Komal Mistry-Mehta
Emma Parsons
Judith Swales
Fraser Whineray
REGISTERED OFFICE
Fonterra Co-operative
Group Limited
Private Bag 92032
Auckland 1142
New Zealand
109 Fanshawe Street
Auckland Central 1010
New Zealand
Phone +64 9 374 9000
AUDITOR
KPMG
18 Viaduct Harbour Avenue
Auckland 1010
New Zealand
FARMER SHAREHOLDER
AND SUPPLIER SERVICES
Freephone 0800 65 65 68
FONTERRA SHARES AND
FSF UNITS REGISTRY
Computershare Investor
Services Limited
Private Bag 92119
Auckland 1142
New Zealand
Level 2, 159 Hurstmere Road
Takapuna
Auckland 0622
New Zealand
CAPITAL NOTES
REGISTRY
Link Market Services Limited
PO Box 91976
Auckland 1142
New Zealand
Level 30, PwC Tower
15 Customs Street West
Auckland 1010
New Zealand
INVESTOR RELATIONS
ENQUIRIES
Phone +64 9 374 9000
investor.relations@fonterra.com
www.fonterra.com
Directory
75
CONTENTS
FONTERRA INTERIM REPORT 2023
DIRECTORY
insight
creative.co.nz
FONTERRA108

fonterra.com

---

•Profit after tax up $182 million, or 50%, to $546 million due to higher
margins in protein and cheese products
•Interim dividend of 10 cents per share, up from 5 cents per share
•Full year forecast normalisedearnings increased to 55-75 cents per share
•Intended capital return to shareholders and unit holders of 50 cents per
share in October following completion of the sale of Soprole
•Revised 2022/23 season forecast Farmgate Milk Price of $8.20 to$8.80 per
kgMSdue to softer demand for whole milk powder
•Transitioning to Flexible Shareholding capital structure on 28 March 2023
INTERIM RESULTS 20232©FONTERRA

©FONTERRA
from $(849)m
from 6.1%
from 5c
from 22c
from 1,033m
from $364m
1.Return on capital is calculated for the 12-months ended 31 January. Refer to Glossary for the definition
INTERIM RESULTS 20233©FONTERRA

©FONTERRAINTERIM RESULTS 2023
4
•Production from the four key regions isdown 0.4% and
imports from the other four regions are down 1.0%
•Lower milk production in New Zealand and Australia,
primarily due to adverse weather
•Decrease in China imports driven mainly by lower
imports of fluid milk products and whole milk powder
•Increase in Latin America, and Middle East and Africa
imports primarily due to increased cheese and skim
milk powder
Production
Imports
2
16.9%
2
0.2%
2
9.5%
2
6.1%
1
6.8%
1
3.0%
1
0.4%
1
0.2%
©FONTERRA
Source: Fonterra Global Dairy Update
1.12 month production. US, NZ (Feb 2022 to Jan 2023), EU (Dec 2021 to Nov
2022), AU (Jan 2022 to Dec 2022)
2.12 month imports. LATAM, Asia, Middle East & Africa (Dec 2021 to Nov
2022), China (Jan 2022 to Dec 2022)

©FONTERRAINTERIM RESULTS 20235
•Softening of whole milk powder prices, mainly due to
lower demand in China
•Higher prices for protein products, in particular
casein and caseinate, driven by strong demand
combined with constrained manufacturing capacity
Note: Whole milk powder, skim milk powder and cheddar prices are sourced from GlobalDairyTradeand casein prices are sourced from USDA
-
4,000
8,000
12,000
16,000
Whole milk powderSkim milk powderCheddarCasein
FY21FY22HY23

©FONTERRA
Source: GlobalDairyTrade
1.The shipment price is a weighted average price of GlobalDairyTradecontracts struck 1 to 5 months prior to the agreed shipment month. Shipment month is the month in which the sale would be deemedfor financial reporting
purposes to have been completed, and will normally be the month in which the sale is invoicedand the product is shipped
2.Reference product shipment price is represented by a weighted average of the whole milk powder, skim milk powder, anhydrous milkfat and butter prices achieved on GlobalDairyTrade
3.Non-reference product shipment price is represented by the cheddar prices achieved on GlobalDairyTrade. Non-reference includes other products such as casein and whey protein concentrate
INTERIM RESULTS 20236
US$/MT
1,3
1,2
FY23 H1FY22 H1
2,000
4,000
6,000
2017201820192020202120222023
Reference product shipment price
Non-reference (cheese) product shipment price

©FONTERRAINTERIM RESULTS 20237
•Lower milk collections for current season,
down 1.6% as at 31 January
•Produced less whole milk powder and
increased proportions in the higher returning
product streams
-
200
400
600
800
1,000
1,200
Whole milk powderSkim milk powderCreamCheeseOther proteins
20192020202120222023





1. Production for the first six months of the financial year

©FONTERRAINTERIM RESULTS 20238
•Severe storms and flooding across the
North Island in January and February
exacerbated national supply chain
constraints anddelayedsome product
getting onto ships
•We are working with ourstrategic partners,
Kotahi and Coda, to ship inventory and get
product to our global customers
•The installation of this biomass boileris
expected to reduce carbon emissions by
48,000 tonnesof CO
2
-e per year, equivalent
to taking 20,000 cars off the roads
•Completed automation of our Crawford
Street cool store distribution centreto
improve site efficiency, reduce energy
consumption, and enhance product integrity

©FONTERRAINTERIM RESULTS 20239
•Thetransition to our new capital structure will
occur on 28 March 2023
•We‘ve allocated up to $300 million for:
–a transitional buyback of shares
(operating from 28 March to 9 June)
–market maker arrangements
•We are progressing the sales of our
businesses in Chile and Brazil
–in February, we received approval from
the competition authority, Fiscalía
Nacional Económica(FNE) for the sale of
our Chile business
–Brazil sale expected to be completed in
mid-2023, subject to regulatory approval
•Last year we signalled to farmers that the
Co-op will set a target for our on-farm
(scope 3) emissions
•Over the coming months, we will be talking
with our farmer owners about what a target
will look like and how we’ll get there

©FONTERRAINTERIM RESULTS 202310
Record date intended to
be in late September, with
cash received
in October
Structured so there is no
change in the number of
shares or units held (or
voting rights)
Will apply equally to
shareholders and unit
holders
Intend to return around
50cents per share, which
is approximately
$800 million
Tax-free
return

©FONTERRA
INTERIM RESULTS 202311
from 14.9%
from $607mfrom $1.1b
from $10.8b
©FONTERRA
Note: Figures are Total Group. This includes continuing and discontinued operations

©FONTERRAINTERIM RESULTS 202312
•Higher sales volumes reflect sell down of additional FY22
year-end inventory
•Increased sales volumes in Global Markets while sales
volumes in Greater China are lower due to softer demand
•Gross margin and gross profit are up due to strong
product prices in our Ingredients channel, partially offset
by higher milk costs
•Operating expenses up, reflecting inflationary pressures, a
$92 million and $70 million impairment of our New Zealand
consumer business and our Asia brands, respectively and
foreign exchange translation
∆
Sales volume (‘000 MT)1,9211,994
4%
Revenue ($)10,79713,249
23%
Cost of goods sold ($)(9,190)(10,951)
(19)%
Gross profit ($)1,6072,298
43%
Gross margin (%)14.9%17.3%
Operating expenses ($)(1,062)(1,377)
(30)%
Other
1
($)6219
(69)%
Normalised EBIT ($)607940
55%
Net finance costs(103)(150)
(46)%
Tax expense(140)(179)
(28)%
Normalised profit after tax($)364611
68%
Normalisations
2
($)-(65)
-
Reported profit after tax($)364546
50%
Reported EPS (cents) 2233
50%
Note: Total Group figures. This includes continuing and discontinued operations and are on a normalised basis unless otherwise stated
1.Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees
2.Normalisationsinclude $61 million of fair value revaluations related to hedging sale proceeds from our Chile business, and $4 million relatedto an impairment of our HanguChina farm

©FONTERRA13
(‘000 MT)





(before unallocated costs & eliminations)
Note: Prepared on a normalised continuing operations basis. Normalised EBIT contributions in the above table sum to $983 million, and do not align to reported continuing operations of $864 million due to excluding $119 million of
unallocated costs and eliminations
INTERIM RESULTS 2023

©FONTERRA
(‘000 MT)





INTERIM RESULTS 202314
(before unallocated costs & eliminations)
Note: Prepared on a normalisedcontinuing operations basis. NormalisedEBIT contributions in the above table sum to $983 million, and do not align to reported continuing operations of $864 milliondue to excluding $119 million of
unallocated costs and eliminations
129
288
238
258
313
598
28
57
42
23
46
120
37
46
(46)
9
33
(127)

©FONTERRAINTERIM RESULTS 202315
1.Working capital days are presented on a 12-month rolling average
basis. The prior periods have been re-presented for consistency with
current period. Previously presented on a year-to-date basis
7.6
6.4
6.1
5.6
5.8
6.0
5.2
4.3
5.3
20192020202120222023
Half YearFull Year
•Net debt and gearing are typically higher at half
year due to the seasonal profile of working capital
•Net debt in-line with expectations with higher
earnings and unwind of higher FY22 year-end
inventory
•Gearing is favourableto the prior half year due to
strong earnings increasing equity
•Working capital days includes the impact of
higher inventory during FY22
53.5
49.8
47.3
44.1
43.3
49.5
44.2
38.5
42.4
20192020202120222023
Half YearFull Year
8686
92
97
96
20192020202120222023
S&P Global Ratings A-Stable outlook
Fitch RatingsAStable outlook

©FONTERRA
•Free cash flow for the first six months is typically an outflow reflecting the
seasonal nature of the business
INTERIM RESULTS 202316
(782)
369
(632)
(849)
(30)
2022EarningsNet
working
capital
1
Capex and
other
2023
•Improved free cash flow reflects higher earnings and improved working capital
due to the sell down of additional FY22 year-end inventory
20192020202120222023
1. Includes amounts owing to suppliers

©FONTERRAINTERIMRESULTS 202317
Cost allocated to segments
Selling & marketing 266292
Distribution & storage 225253
Administration286308
Research & development 4045
Other4846
Impairments-162
Total allocated operating expenses8651,106
Unallocated costs 4494
Operating expenses from continuing operations 9091,200
Operating expenses from discontinued operations 153177
Total Group operating expenses1,0621,377
•Total Group normalisedoperating expenses
increased $315 million due to:
–impairment of our New Zealand consumer
business and our Asia brands, for $92 million
and $70 million, respectively
–inflationary pressures and unfavourableforeign
exchange translation felt across the business
–increased distribution and storage costs mainly
due to higher levels of opening inventory
•Unallocated costs increased due to the prior period
including the release of a favourableprovision held
at Group level
Note: Prepared on a normalisedbasis

©FONTERRAINTERIM RESULTS 202318
The range reflects:
•softer demand for whole milk powder,
particularly from Greater China
•balanced milk supply with recent production
increases from US and EU, offset by lower
production in New Zealand and Australia
Source: GlobalDairyTrade. Data is up to GlobalDairyTradeevent 324 on 17 January 2023
1.The shipment price is a weighted average price of GlobalDairyTradecontracts struck 1 to 5 months prior to the agreed shipment month. Shipment month is the month in which the sale would be deemed for financial reporting
purposes to have been completed, and will normally be the month in which the sale is invoicedand the product is shipped
2.Reference product shipment price is represented by a weighted average of the whole milk powder, skim milk powder, anhydrous milk fat and butter prices
per kgMS
Jan-23
2022/23
Season Forecast
2021/22
Season
2020/21
Season
$7.54
$9.30
$8.50
Reference product shipment price
1,2
Average reference product shipment price for the season
2,000
3,000
4,000
5,000
May-20May-21May-22
USD/MT

©FONTERRAINTERIM RESULTS 202319
FY22 H2FY22 H1FY23 H1FY23 Q3
Source: GlobalDairyTrade. Data is up to GlobalDairyTradeevent 327 on 7 March 2023
1.The shipment price is a weighted average price of GlobalDairyTradecontracts struck 1 to 5 months prior to the agreed shipment month. Shipment month is the month in which the sale would be deemed for financial reporting
purposes to have been completed, and will normally be the month in which the sale is invoicedand the product is shipped
2.The contracted shipment price is the weighted average shipment price of GlobalDairyTradecontracts won 1 to 5 months prior on the GlobalDairyTradeplatform. These contracts are yet to be shipped or invoiced and the
weighted average price will change closer to the actual shipment date as new contracts are written
3.Reference product shipment price is represented by a weighted average of the whole milk powder, skim milk powder, anhydrous milk fatand butter prices achieved on GlobalDairyTrade
4.Non-reference product shipment price is represented by the cheddar prices achieved on GlobalDairyTrade
per share
Apr-23
The increased earnings range reflects:
•strong margins in protein and cheese portfolio
have continued longer than initially forecasted
•contract rate in line with expectations
•continued heightened market volatility
,
,
,
,
2,000
3,000
4,000
5,000
6,000
Jul-21Jan-22Jul-22Jan-23
Non-reference product shipment price¹ ⁴
Reference product shipment price¹ ³
Non-reference product contract shipment price² ⁴
Reference product contract shipment price² ³
USD/MT

©FONTERRA
1,232
1,092
1,055
1,062
1,377
20192020202120222023
($ million)
¹
INTERIM RESULTS 202321
1.Total Group figures for the six months ended 31 January. This includes continuing and discontinued operations, and are on a normalisedbasis unless otherwise stated
2,075
2,037
1,996
1,921
1,994
20192020202120222023
('000 MT)
9.7
10.4
9.9
10.8
13.2
20192020202120222023
($ billion)
1,489
1,668
1,722
1,607
2,298
20192020202120222023
($ million)
312
584
684
607
940
20192020202120222023
($ million)
312
806
657
607
858
20192020202120222023
($ million)

©FONTERRA
86 86
92
97
96
20192020202120222023
(Days)
53.5
49.8
47.3
44.1
43.3
20192020202120222023
(%)
¹
INTERIM RESULTS 202322
1.Total Group figures for the six months ended 31 January. This includes continuing and discontinued operations, and is on a normalised basis unless otherwise stated
2.Refer to the Glossary for definition
3.Working capital days are presented on a 12-month rolling average basis. The prior periods have been re-presented for consistency with current period. Previously presented on a year-to-date basis
72
293
418
364
611
20192020202120222023
($ million)
72
501
391
364
546
20192020202120222023
($ million)
438
175
184
195
330
20192020202120222023
($ million)
(782)
369
(632)
(849)
(30)
20192020202120222023
($ million)

©FONTERRAINTERIM RESULTS 202323
1.Current full season forecast
-
10
20
30
40
50
60
70
80
90
JunJulAugSepOctNovDecJanFebMarAprMay
2020/21
2021/22
2022/23
2020/21
1,539m (up 1.5%)83m litres
2021/221,478m (down 4.0%)
80m litres
2022/231,465m (down 0.9%)¹
78m litres
•Fonterra’s New Zealand milk collections for
the period 1 June to 31 January was 1,016
million kgMS, down 1.6% on last season
•Challenging wet weather conditions
throughout the North Island combined with a
reduction in the number of cows has
reduced peak production
•Milk volume began tracking above last
season in January
•The full season forecast was revised down
to 1,465 million kgMS from 1,480 million
kgMS due to the recent challenging
conditions

©FONTERRAINTERIM RESULTS 202324
364
691(315)
(43)
(47)
(39)
611
FY22Gross profitOperating expensesOther itemsFinance costsTaxFY23
•Increased due to
favourable margins,
particularly for protein
and cheese products
•Increased due to impairments of our New
Zealand consumer business and Asia brands, of
$90 million and $72 million, respectively, as well
as the impact of inflationary pressures and
foreign exchange translation
•Increased mainly due
to higher global
interest rates

©FONTERRAINTERIM RESULTS 202325
1.Refer to Note 1a and 2b of the FY23 Interim Financial Statements. Comparative information has been re-presented for consistency with the current period
2.Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees
¹¹¹¹
Revenue
10,085712 10,797 12,333 91613,249
Cost of goods sold
(8,696)(494)(9,190)(10,287)(664)(10,951)
Gross profit
1,389 218 1,607 2,406 252 2,298
Gross margin
13.8%30.6%14.9%16.6%27.5%17.3%
Operating expenses
(909)(153)(1,062)(1,200)(177)(1,377)
Other²
63 (1)62 181 19
Normalised EBIT
543 64 607 864 76 940
Normalisations
----(82)(82)
Reported EBIT
543 64 607 864 (6) 858

©FONTERRAINTERIM RESULTS 202326
Foreign exchange movements on derivatives
(78)-(78)
Impairment
-(4)(4)
EBIT
(78)(4)(82)
Net finance costs and tax
17-17
Profit after tax
(61)(4)(65)
Profit attributable to non-controlling interests
---
Profit after tax attributable to equity holders of
the Co-operative
(61)(4)(65)

©FONTERRA
1
INTERIM RESULTS 202327
2
Farmer services2122
Sustainability & community45
Fonterra Board & Co-operative Council33
Governance support 16
19
Group finance, property & support 2122
People & culture811
Other(29)12
Total4494
1.Refer to the Glossary for the definition
2.Normalised basis. Comparative information has been restated and re-presented for consistency with the current period
•Unallocated costs have increased $50 million mainly
due to a $41 million increasein ‘Other’ costs
•The increase in ‘Other’ costs was due to the prior period
including the release of a $44 million provision following
a final judicial interpretation on the application of the
Holidays Act 2003 in New Zealand relating to certain
discretionary incentive payments

©FONTERRAINTERIM RESULTS 202328
364546
Less: Profit attributable to non-controlling interests(16)(16)
Reported profit after tax attributable to equity holders of the Co-operative348530
2233
364611
Less: Profit attributable to non-controlling interests(16)(16)
Normalised profit after tax attributable to equity holders of the Co-operative348595
2237
1,613,3581,612,291

©FONTERRA
29
Total Group normalised EBIT8751,324
Finance income on long-term advances713
Notional tax charge(142)(215)
Total Group normalised EBIT plus finance income on
long-term advances less notional tax charge
740
1,122
Capital employed at 31 January12,25513,434
Impact of seasonal capital employed (114)(429)
Average capital employed 12,14113,005
Return on capital (%)6.1%8.6%
INTERIM RESULTS 2023
29

©FONTERRA
¹
1.As at31 January 2023 and excludes amounts attributable to disposal groups held for sale
2.Includes undrawn facilities and commercialpaper. DCM is debt capital markets
3.Excludes commercial paper
4.Weighted average term to maturity (WATM)
INTERIM RESULTS 202330
EUR/GBP
DCM 13%
AUD DCM
8%
CNY DCM
2%
NZD DCM
10%
USD DCM
13%
Bank
Facilities
54%
Undrawn
Facilities
$3.8bn
79%
Drawn Facilities
$1.0bn
21%
0.01.02.03.0
FY23
FY24
FY25
FY26
FY27
FY28
FY29
FY30
FY31
$ billion
WATM
4
: 2.4 years
Maturity Profile
0.01.02.03.0
FY23
FY24
FY25
FY26
FY27
FY28
FY29
FY30
FY31
$ billion
WATM
4
: 3.1 years
Maturity Profile

©FONTERRAINTERIM RESULTS 202331
Note: Figures are for the six months ended 31 January. Does not add to Total Group as shown on a normalisedcontinuing operations basis and excludes unallocated costs and eliminations. Comparative information has been restated
for consistency with the current period
760
417
1,347
911
Gross ProfitEBIT
20222023
261
85
335
166
Gross ProfitEBIT
370
83
387
(94)
Gross ProfitEBIT
$ million

©FONTERRAINTERIM RESULTS 2023
Note: Figures are for the six months ended 31 January and are on a normalisedcontinuing
operations basis. Comparative information has been restated and re-presented for consistency
with the current period.
1.Percentages as shown in table may not align to the calculation of percentages based on
numbers in the table due to rounding of figures
2.Consists of other operating income, net foreign exchange gains/(losses) and share profit
or loss on of equity accounted investees
∆¹
Sales volume (‘000 MT)1,013 1,106 9%
Revenue ($)
6,848 8,735 28%
Cost of goods sold(6,088) (7,388) (21)%
Gross profit ($)
760 1,347 77%
Gross margin (%)11.1%15.4%
Operating expenses ($)
(388) (452) (16)%
Other² ($)
45 16 (64)%
Normalised EBIT ($)417 911 118%
129
288
238
258
313
598
Q1Q2Q3Q4
2022
2023
•Higher sales volumes reflect the sell down of additional inventory
held at 2022 financial year-end
•Gross profit improved 77% due to continued favourable margins in
our protein and cheese portfolios, as well as higher sales volumes
•Operating expenses are up 16%, reflecting increased supply chain
costs due to additional inventory and inflationary pressures
32

©FONTERRAINTERIM RESULTS 2023
Note: Figures are for the six months ended 31 January and are on a normalisedcontinuing
operations basis. Comparative information has been restated and re-presented for consistency
with the current period.
1.Percentages as shown in table may not align to the calculation of percentages based on
numbers in the table due to rounding of figures
2.Consists of other operating income, net foreign exchange gains/(losses) and share profit
or loss on of equity accounted investees
∆¹
Sales volume (‘000 MT)
334 319 (4)%
Revenue ($)1,563 1,670 7%
Cost of goods sold
(1,193) (1,283) (8)%
Gross profit ($)370 387 5%
Gross margin (%)
23.7%23.2%
Operating expenses ($)
(292) (481) (65)%
Other² ($)5 -(100)%
Normalised EBIT ($)
83 (94) -
•Gross profit improved 5% due to non-reference price products,
particularly cheese, increasing relative to reference products that
informs the cost of milk
•Operating expenses increased mainly due to an impairment to our
New Zealand consumer business and our Asia brands (Anmum,
Anleneand Chesdale), of $90 million and $72 million, respectively
37
46
(46)
9
33
(127)
Q1Q2Q3Q4
2022
2023
34

©FONTERRAINTERIM RESULTS 202335
Note: Table includes Ingredient’s products that are on-sold to the Foodservice and Consumer channels and excludes bulk liquid milk. Bulk liquid milk for 2023 was 35,000MT of kgMSequivalent (for the comparative period it was
34,000 MT of kgMSequivalent). Milk solids used in the reference products sold were 482million kgMSand 220million kgMSin the non-reference products (for the comparative period 441 million kgMSin reference products and
207 million kgMSinnon-reference products)
•The average product price per metric
tonne increased:
–11% for reference products
–31% for non-reference products
•Cost of milk increased for reference products
and non-reference products by 16% and 6%,
respectively
–the difference between the cost of milk for
the reference and non-reference product
portfolios is due to their different fat and
protein compositions
•The price increases in protein products
coupled with the lower increase in milk costs
relative to reference products, has meant
higher margins for our non-reference portfolio
¹
Reference products793857
Non-reference products415430
¹
Reference products4.75,9165.66,584
Non-reference products2.66,2213.58,146
Reference products3.74,7024.35,042
Non-reference products1.74,1441.84,256

©FONTERRAINTERIM RESULTS 202336
342
89
836
501
Gross ProfitEBIT
20222023
714
279
878
267
Gross ProfitEBIT
345
217
362
215
Gross ProfitEBIT
1.Figures are for the six months ended 31 January. Does not add to total group as shown on a normalisedcontinuing operations basis and excludes unallocated costs and eliminations. Comparative information has been
restated and re-presented for consistency with the current period
$ million

©FONTERRAINTERIM RESULTS 2023
Note: Figures are for the six months ended 31 January and are on a normalisedcontinuing
operations basis. Comparative information has been restated and re-presented for consistency
with the current period.
1.Percentages as shown in table may not align to the calculation of percentages based on
numbers in the table due to rounding of figures
2.Includes sales to other segments
3.Consists of other operating income, net foreign exchange gains/(losses) and share profit
or loss on of equity accounted investees
∆¹
Sales volume² (‘000 MT)
1,264 1,345 6%
Revenue ($)
7,705 9,691 26%
Cost of goods sold
(7,363) (8,855) (20)%
Gross profit ($)
342 836 144%
Gross margin (%)
4.4%8.6%
Operating expenses ($)
(286) (336) (17)%
Other³ ($)
33 1 (97)%
Normalised EBIT ($)
89 501 463%
(16)
105
38
102
93
408
Q1Q2Q3Q4
2022
2023
•Higher sales volumes reflect the sell down of additional inventory
held at2022 financial year-end
•Gross profit up $494 million due to favourable price relativities
between reference and non-reference products, particularly in our
protein and cheese non-reference products
•Operating expenses up $50 million reflecting inflationary pressures,
supply chain disruption, and additional storage costs due to holding
higher inventory at the start of the 2023 financial year
•‘Other’ is down $32 million, to $1 million, reflecting unfavourable
foreign exchange movements in our net receivables due to timing
differences between the processing and hedging of invoices
37

©FONTERRAINTERIM RESULTS 202338
348
147
764
493
Gross ProfitEBIT
20222023
(11)
(46)
31
(6)
Gross ProfitEBIT
Note: Figures are for the six months ended 31 January. Does not add to Total Group as shown on a normalisedcontinuing operations basis and excludes unallocated costs and eliminations. Comparative information has been
restated for consistency with the current period
5
(12)
41
14
Gross ProfitEBIT
$ million

©FONTERRAINTERIM RESULTS 2023
Note: Figures are for the six months ended 31 January and are on a normalisedcontinuing
operations basis. Comparative information has been restated and re-presented for consistency
with the current period.
1.Percentages as shown in table may not align to the calculation of percentages based on
numbers in the table due to rounding of figures
2.Includes sales to other segments
3.Consists of other operating income, net foreign exchange gains/(losses) and share profit
or loss on of equity accounted investees
∆¹
Sales volume² (‘000 MT)
1,075
1,272
18%
Revenue ($)
6,545
9,424
44%
Cost of goods sold(5,831) (8,546) (47)%
Gross profit ($)
714
878
23%
Gross margin (%)
10.9%9.3%
Operating expenses ($)
(450)(624)(39)%
Other³ ($)
1513(13)%
Normalised EBIT ($)
279267(4)%
128
151
109
125
204
63
Q1Q2Q3Q4
2022
2023
•Higher sales volumes reflect the sell down of additional inventory
held at 2022 financial year-end
•Normalised EBIT down $12 million, due to:
–Consumer channel down $173 million, impacted by lower gross
margins and impairments of our New Zealand consumer business
and our Asia brands (Anmum, Anleneand Chesdale), partially
offset by;
–improved Ingredients channel EBIT, up $145 million, due to higher
sales volumes and improved product pricing
39

©FONTERRAINTERIM RESULTS 202340
319
187
480
332
Gross ProfitEBIT
20222023
91
5
101
21
Gross ProfitEBIT
Note: Figures are for the six months ended 31 January. Does not add to Total Group as shown on a normalisedcontinuing operations basis and excludes unallocated costs and eliminations. Comparative information has been
restated for consistency with the current period
304
87
297
(86)
Gross ProfitEBIT
$ million

©FONTERRAINTERIM RESULTS 202341
∆¹
Milk collections (kgMS)
6866(2)%
Sales volume (‘000 MT)
1721815%
Revenue ($)
9161,25337%
Cost of good sold ($)
(779)(1,082)(39)%
Gross profit ($)
13717125%
Gross margin (%)
15.0%13.6%
Operating expenses ($)
(79)(97)(23)%
Other²($)
1--
Normalised EBIT ($)
597425%
Note: Figures are for the six months ended 31 January and are on a normalisedcontinuing operations basis.
1.Percentages as shown in table may not align to the calculation of percentages based on numbers in the table due to rounding of figures
2.Consists of other operating income and net foreign exchange gains/(losses)
•Lower milk collections due to unseasonably wet spring
conditions impacting peak milk production
•Gross profit and EBIT increased due to:
–Ingredients channel ability to capture favourable global pricing,
particularly in cheese and proteins products, partially offset by;
–lower margins in the Consumer channel due to in-market
prices not adjusting at the same rate as the rising cost of milk

©FONTERRAINTERIM RESULTS 2023
Note: Figures are for the six months ended 31 January and are on a normalisedcontinuing
operations basis. Comparative information has been restated and re-presented for consistency
with the current period.
1.Percentages as shown in table may not align to the calculation of percentages based on
numbers in the table due to rounding of figures
2.Consists of other operating income, net foreign exchange gains/(losses) and share profit
or loss on of equity accounted investees
∆¹
Sales volume (‘000 MT)
566
455 (20)%
Revenue ($)
3,499
3,496 -
Cost of goods sold
(3,154) (3,134) 1%
Gross profit ($)
345
362
5%
Gross margin (%)
9.9%10.4%-
Operating expenses ($)
(129)(146)(13)%
Other² ($)
1(1) -
Normalised EBIT ($)
217215(1)%
82
135
87
63
95
120
Q1Q2Q3Q4
2022
2023
•Lower sales volumes, particularly WMP, due to softer demand
•Gross profit increased $17 million, mainly driven by improved
performance in the Foodservice channel, reflecting:
–in-market product prices adjusting for the higher cost of milk
–reduced tariffs from changes to the New Zealand-China Free
Trade Agreement, which took effect 1 January 2022
•Operating expenses increased due to an impairment in the
Consumer channel to our Anlenebrand
42

©FONTERRAINTERIM RESULTS 202343
103
83
109
86
Gross ProfitEBIT
20222023
181
126
204
151
Gross ProfitEBIT
61
8
49
(22)
Gross ProfitEBIT
Note: Figures are for the six months ended 31 January. Does not add to Total Group as shown on a normalisedcontinuing operations basis and excludes unallocated costs and eliminations. Comparative information has been
restated for consistency with the current period
$ million

©FONTERRAINTERIM RESULTS 202344
•The higher allocation to GDT and Core
Ingredients mainly reflects the sell down
of additional inventory held at
2022 year-end
•Less milk solids allocated to the:
•Active Living portfolio was impacted
by lower demand from USA due to
customers’ current manufacturing
constraintsandhigh
in-market inventory
•Foodservice channel due to softer
demand from Greater China
•Consumer channel mainly due to
lower sales volume into Sri Lanka as
the economic crisis limited repatriation
of USD currency
22.3%
49.2%
5.6%
14.5%
8.4%
24.2%
50.5%
4.8%
13.4%
7.1%
GDTCoreActive LivingFoodserviceConsumer
2022
2023
Ingredients
1
1.Around 6% of the total milk solids for the first six months of FY23 relate to the additional inventory at FY22 year-end and mainly comprised of GDT and Core Ingredients products

©FONTERRAINTERIM RESULTS 202345
1.Figures are for the six months ended 31 January and are prepared on a normalisedcontinuing operations basis. Comparative information has been restated for consistency with the current period
2.Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees
Revenue9,0041,08110,085
10,939 1,394 12,333
Cost of goods sold(7,761)(935)(8,696)
(9,092)(1,195)(10,287)
Gross profit1,2431461,389
1,847 1992,046
Gross margin13.8%13.5%13.8%
16.9%14.3%16.6%
Operating expenses(832)(77)(909)
(1,114)(86)(1,200)
Other²61263
14418
Normalised EBIT47271543
747117 864
Normalised EBIT margin5.2%6.6%5.4%
6.8%8.4%7.0%

©FONTERRAINTERIM RESULTS 202346
1.Normalised basis. Comparative information has been re-presented for consistency with the current period
2.Consists of other operating income and net foreign exchange gains/(losses).
¹
Revenue
1319650311291614
Cost of goods sold
(15)(136)(343)(18)(200)(446)
Gross profit
(2)60160(7)91168
Gross margin
(15.4)%30.6%31.8%(63.6)%31.3%27.4%
Operating expenses
(6)(45)(102)(1)(62)(114)
Other²
-(1)-(1)-2
Normalised EBIT
(8)1458(9)2956

©FONTERRA
Providing a safe, healthy and inclusive place to work.
Able to attract and retain the best talent in the world.
Continuously developing people’s skills for meaningful careers within
the ever-changing nature of work.
Leading the transition to net-zero GHG emissions for dairy nutrition.
Demonstrating that dairy can be a net-positive contributor to nature.
(Farmers, customers, NewZealand, consumer, governmentetc.)
Strong relationships with customers and consumers through the
provision of high-quality, innovative products and services and
sustainability credentials.
Processor of choice for farmers through competitive returns on their
investment and value-adding support and services.
Trusted relationships with stakeholders, playing our part for positive
social, environmental and economic outcomes that are recognised by
NewZealanders.
(What we know)
Leveraging our IP to deliver extra value for the Co-op.
(How we do dairy)
Operational assets are resilient and can efficiently deliver our most
valuable portfolio of products and services, with an ever-decreasing
environmentalfootprint.
(Our Performance)
Consistently attractive for farmers to be members of the Co-op, both
as suppliers and shareholders.
1.Relative to FY18 Baseline. Long-term will include Scope 3 but for now Scope 1&2 including farms
under our operational control.
2.12-month rolling share of collections.
3.Reflects EBIT fromConsumerand Foodservice, contributionfromActive Living. Excludes Brazil,
Australia and Chile.
INTERIM RESULTS 202347
Key MetricsFY21FY22FY23 ScorecardFY23 H1 YTD
Serious harm9853
Gender diversity
(Band 12+)
36.3%37.6%38.8%38.2%
GHG emissions
(Scope 1,2)¹
(6.6)%(11.2)%(10.6)%(14.1)%
FEP adoption
(New Zealand)
53%71%84%On track
Water Improvement Plans in place––37.5% (18 sites)37.5% (FYF)
Share of NewZealand milkcollected79.0%79.1%79.0%79.0%²
EBIT from NewZealand value-add
businesses ($ million)³
616307388On track
Cost of quality
(% of cost of goods sold)
0.45%0.44%0.35%0.32%
Return on capital6.6%6.8%7.0% to 7.5%Ahead⁴
Farmgate Milk Price$7.54$9.30$9.50$8.20-$8.80⁵
4.Reflects full year forecast position.
5.Latest announced Forecast Farmgate Milk Price range
with a mid-point of $8.50 per kgMS(24 February 2023).

©FONTERRAINTERIM RESULTS 202348
Represents ingredients & solutions sold to businesses who cater to
consumers’ health and wellness needs. It addresses three dimensions of
wellbeing (Physical, Mental, Inner), extending to meet the nutrition needs of
medical patients through to everyday people pursuing active lifestyles. This
portfolio includes proteins, specialty ingredients such as probiotics,
lactoferrin & lipids, and patented formulations
Capital expenditure comprises purchases of property (lessspecific disposals
where there is an obligation to repurchase), plant and equipment and
intangible assets (excluding purchases of emissions units), net purchases of
livestock, and includes amounts relating to disposal groups held for sale
For the relevant period comprises capital expenditure plus right-of-use asset
additions and business acquisitions, including equity contributions, long-term
advances, and investments
Represents the channel of branded consumer products, such as powders,
yoghurts, milk, butter, and cheese
Is adjusted net debt divided by Total Group normalisedearnings before
interest, tax, depreciation and amortisation(Total Group normalised
EBITDA) excluding share of profit/loss of equity accounted investees and
net foreign exchange gains/losses.
Is profit before net finance costs and tax
Meansthe average price paid by Fonterra for each kilogram of milk solids
(kgMS) supplied by Fonterra’s farmer shareholders under Fonterra’s
standard terms of supply. The season refers to the 12-month milk season of
1 June to 31 May. The Farmgate Milk Price is set by the Board, based on
the recommendation of the Milk Price Panel. In making that
recommendation, the Panel provides assurance to the Board that the
Farmgate Milk Price has been calculated in accordance with the Farmgate
Milk Price Manual
Represents the channel selling to businesses that cater for out-of-home
consumption; restaurants, hotels, cafés, airports, catering companies etc.
The focus is on customers such as; bakeries, cafés, Italian restaurants, and
global quick-service restaurant chains. High performance dairy ingredients
including whipping creams, mozzarella, cream cheese and butter sheets,
are sold in alongside our business solutions under the Anchor Food
Professionals brand
Is the total of net cash flows from operating activities and net cash flows
from investing activities

©FONTERRAINTERIM RESULTS 202349
Is adjusted net debt divided by total capital. Total capital is equity excluding
hedge reserves, plus adjusted net debt
Represents the Ingredients, Foodservice and Consumer channels outside of
Greater China
Represents the Ingredients, Foodservice and Consumer channels in Greater
China
Comprises core operating functions including New Zealand milk collection
and processing operations and assets, supply chain, Group IT and
Sustainability; Fonterra Farm Source™retail stores; and the Strategy and
Optimisation function
Represents the channel comprising bulk and specialty dairy products such
as milk powders, dairy fats, cheese and proteins manufactured in New
Zealand, Australia, Europe and Latin America, or sourced through our global
network, and sold to food producers and distributors
Means kilograms of milk solids, the measure of the amount of fat and
protein in the milk supplied to Fonterra
Is calculated as total borrowings, plus bank overdraft, less cash and cash
equivalents, plus a cash adjustment for 25% of cash and cash equivalents
held by the Group’s subsidiaries, adjusted for derivatives used to manage
changes in hedged risks on debt instruments. Amounts relating to disposal
groups held for sale are included in the calculation
Is calculated as normalised profit after tax attributed to equity holders of the
Co-operative divided by the weighted average number of shares on issue for
the period
Is Total Group normalisedEBIT including finance income on long-term
advances less a notional tax charge, divided by average capital employed.
New Zealand: A period of 12 months from 1 June to 31 May
Australia: A period of 12 months from 1 July to 30 June
Chile: A period of 12 months from 1 August to 31 July
Represents corporate costs including Co-operative Affairs and Group
Functions; and any other costs that are not directly associated to the
reporting segments; and eliminations of inter-segment transactions

©FONTERRAINTERIM RESULTS 202350
This presentation may contain forward-looking statements, financial targets and ambitions (“Forward Statements”), each of which is based on a range of
assumptions, including (in the case of our 2030 strategy) the assumptions noted in the Appendix of the booklet titled Our Path to 2030 which is available on our
website.None of the Forward Statements is intended as a forecast, estimate or projection of the outcome that will, or is likely to, eventuate.They should not be
taken as forecasts or a guarantee of returns to shareholders.
There can be no certainty of outcome in relation to the matters to which the Forward Statements relate. Our ability to achieve the outcomes described in the
Forward Statements is subject to a number of assumptions, each of which could cause the actual outcomes to be materially different from the events or results
expressed or implied by such Forward Statements.
The Forward Statements also involve known and unknown risks, uncertainties and other important factors that could cause the actual outcomes to be materially
different from the events or results expressed or implied by such Forward Statements.Those risks, uncertainties, assumptions and other important factors are not
all within the control of Fonterra Co-operative Group Limited (“Fonterra”) and its subsidiaries (the “Fonterra Group”) and cannot be predicted by the Fonterra Group.
The Forward Statements in this presentation reflect views held only at the date of this presentation.
While all reasonable care has been taken in the preparation of this presentation, none of Fonterra, the Fonterra Group, or any of their respective subsidiaries,
affiliates and associated companies (or any of their respective officers, employees or agents) (together “Relevant Persons”) makes any representation or gives any
assurance or guarantee as to the accuracy or completeness of any information in this presentation or the likelihood of fulfilment of any Forward Statement or any
outcomes expressed or implied in any Forward Statement.Accordingly, to the maximum extent permitted by law, none of the Relevant Persons accepts any liability
whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of any Forward Statements or for any loss, howsoever arising,
from the use of this presentation.
Statements about past performance are not necessarily indicative of future performance.
Except to the extent (if any) as required by applicable law or any applicable Listing Rules (including the Fonterra Shareholders’ Market Rules), the Relevant Persons
disclaim any obligation or undertaking to update any information in this presentation.
This presentation does not constitute investment advice or opinions, or an inducement, recommendation or offer to buy or sellany securities in Fonterra or the
Fonterra Shareholders’ Fund.

©FONTERRAINTERIM RESULTS 202351
Fonterra uses several non-GAAP measures when discussing financial performance. Non-GAAP measures are not defined or specified byNZ IFRS.
Management believes that these measures provide useful information as they provide valuable insight on the underlying performance of the business. They may be
used internally to evaluate the underlying performance of business units and to analyse trends. These measures are not uniformlydefined or utilisedby all
companies. Accordingly, these measures may not be comparable with similarly titled measures used by other companies. Non-GAAP financial measures should not
be viewed in isolation nor considered as a substitute for measures reported in accordance with NZ IFRS. Non-GAAP measures are not subject to audit unless they
are included in Fonterra’s audited annual financial statements.
Please refer to the non-GAAP measures section in Fonterra’s 2023 Interim Report for reconciliation of NZ IFRS to non-GAAP measures, and the Glossary for
definitions of non-GAAP measures referred to by Fonterra.

---

Interim Results
2023
16 March 2023

Agenda
Interim Results
Focus topic – Flexible Shareholding
Focus topic – On-farm Emissions
Q & A
Local Site update
©FONTERRA
INTERIM RESULTS 20232

Cyclone Gabrielle
Our Transport
teams in action
Supporting
Cut-Off Farms
The fundraising
power of the Co-op
Getting product
to impacted
Communities
©FONTERRA
INTERIM RESULTS 20233
For many of our farmers and communities in the North Island of New Zealand,
the impact of Cyclone Gabrielle has been significant and widespread.

2023 Interim Results
©FONTERRA
INTERIM RESULTS 20235
Free cash
flow
$
(30)
million
from $(849)m
2022/23 forecast
Farmgate Milk Price per kgMS
$
8.20-
$
8.80
Return
on capital
8.6
%
from 6.1%
Interim dividend
per share
10
c
from 5c
Earnings
per share
33
c
from 22c
NZ milk
collections (kgMS)
1,016m
from 1,033m
Profit
after tax
$
546
million
from $364m
©FONTERRA

Constrained milk
supply and
variable demand
•Global milk supply remains
constrained
•Key import markets are
experiencing variable demand
•Production from the four key
regions are down 0.4% and
imports from the other four
regions are down 1.0%
©FONTERRA
INTERIM RESULTS 20236
Production
Imports
China
16.9%
Asia (excl China)
0.2%
Latin
America
9.5%
Middle East
& Africa
6.1%
Australia
6.8%
New
Zealand
3.0%
US
0.4%
EU
0.2%

Favourable price relativities continue
©FONTERRA
INTERIM RESULTS 20237
FY22 H1FY23 H1
2,000
4,000
6,000
2017201820192020202120222023
Non-reference (cheese) product shipment priceReference product shipment price
US$/MT

Diversified across markets and products
Group OperationsGlobal MarketsGreater ChinaTotals
External sales volume
(‘000 MT)
1,244
18% 
455
20% 
1,699
5% 
EBIT contribution
(before unallocated costs &
eliminations)
EBIT by Quarter
Ingredients
$
493m
$346m 
$
332m
$145m 
$
86m
$3m 
$
911m
$494m 
Foodservice
$
(6)m
$40m 
$
21m
$16m 
$
151m
$25m 
$
166m
$81m 
Consumer
$
14m
$26m 
$
(86)m
$173m 
$
(22)m
$30m 
$
(94)m
$177m 
Total
$
501m
$412m 
$
267m
$12m 
$
215m
$2m 
©FONTERRA
INTERIM RESULTS 20238
37
46
(46)
9
33
(127)
129
288
238
258
313
598
28
57
42
23
46
120
FY22
FY23
Q1 Q2 Q3 Q4Q1 Q2

Change in product mix in response to the market
Fonterra New ZealandProduction (000’ MT)
0
200
400
600
800
1000
1200
Whole Milk PowderSkim Milk PowderCreamCheeseOther proteins
20192020202120222023





©FONTERRA
INTERIM RESULTS 20239

Balance sheet strength remains a key priority
Net Debt($ billion)
6.4
6.1
5.6
5.8
5.2
4.3
5.3
2020202120222023
Half YearFull Year
Gearing Ratio (%)
Working Capital Days
49.8
47.3
44.1
43.3
44.2
38.5
42.4
2020202120222023
Half YearFull Year
8686
92
97
96
20192020202120222023
©FONTERRA
INTERIM RESULTS 202310
Credit Rating
S&P Global Ratings A-Stable outlook
Fitch RatingsAStable outlook

Good progress on strategy
Focus on
New Zealand milk
Be a leader in
sustainability
Be a leader in dairy
innovation & science
Divestment
- Chile and Brazil
Flexible Shareholding
MAN Energy Solutions MOU
LaunchedNutiani
New customer partnerships
– nutrition & well-being
products
Farmer engagement
(scope 3) emissions
Methane research
partnerships
MAN Energy Solutions MOU
(
Memorandum of Understanding)
©FONTERRA
INTERIM RESULTS 202311

Proposed capital return on track
©FONTERRA
INTERIM RESULTS 2023
Record date
intended to be in
late September,
with cash received
in October
Structured so
there is no change
in the number of
shares or units
held (or voting
rights)
Will apply equally
to shareholders
and unit holders
Intend to return
around
50cents per share,
which is
approximately
$800 million
Tax-free
return

Supporting On-farm
Our scale creates
costs savings
Tools and advice to
help make on-farm
decisions
We’re collaborating
on solutions to
industry challenges
©FONTERRA
INTERIM RESULTS 202313
•Farm Source
Certainty campaign
•Product availability
•$10.8 million rewards earned
•Farm Insights Reports
•Farm Environment plans
(FEPs)- 77% of farms
•ZincCheck
•Nestle partnership
- Carbon Zero farm
•Kowbucha trials in the South
Island

Executive remuneration changes
Long-term incentives are linked to
on-farm profitability and share
value.
©FONTERRA
INTERIM RESULTS 202314
Short term incentives are linked to
progress against LTA.

Resilient and sustainable New Zealand Operations
Responded to severe
weather events
which disrupted
milk collections and
caused supply chain
congestion.
Completed
automation of our
Crawford Street cool
store distribution
centre.
Converting coal
boiler at our Waitoa
site
Local SiteUpdate
Site:
Speaker:
©FONTERRA
INTERIM RESULTS 202315

2,000
3,000
4,000
5,000
May-20May-21May-22
Jan-23
$7.54
$9.30
$8.50
Reference product shipment price
Average reference product shipment price for the season
Looking forward
2023 Forecast earnings per share
55-75
C
2022/23 Forecast Farmgate
Milk Price per kgMS
$
8.20-
$
8.80
Interim dividend (cents per share)
paid 14 April
10c
FY22 H2FY22 H1FY23 H1
FY23 Q3
Apr-23
Non-reference product shipment price
Reference product shipment price
Non-reference product contract shipment price
Reference product contract shipment price
©FONTERRA
INTERIM RESULTS 2023
2021/22 Season2020/21 Season
2022/23 Season
Forecast
2,000
3,000
4,000
5,000
6,000
Jul-21Jan-22Jul-22Jan-23
Reference Product Prices (USD/MT)
Reference and Non-reference Product Prices (USD/MT)

Preparations on track to transition
to our new capital structure
With the legislative changes in place, and the Board satisfied that
our Co-op is well prepared to transition, the implementation date
for Flexible Shareholding has been set for Tuesday 28 March
May
2021
Our capital structure
consultation began
September
2021
Flexible Shareholding
proposal put forward
November
2022
The necessary
legislative changes to
DIRA were passed
December
2021
Farmer Vote
Late March
2023
First Measurement
Statement
2022
2023
28 March 2023
Implementation
©FONTERRA
INTERIM RESULTS 202318

More types of
farmers can be
part of our Co-op
More types of
farmers can be
part of our Co-op
Entry and exit
provisions
extended
Greater flexibility
in shareholding
levels
A recap on the key features
of Flexible Shareholding
Why this is
important for us
Farmer
Ownership
Sustainable
Milk Supply
Financial
Sustainability
©FONTERRA
INTERIM RESULTS 202319

We’ve also allocated up to NZD300m for a
package of liquidity measures, including:
Supporting liquidity in
a farmer-only market
Greater flexibility in shareholding
levels with new Maximum Holding
and new Minimum Holding.
Shares continue to receive any
dividends and capital returns
declared by the Board.
Balancing flexibility
and Co-op alignment
©FONTERRA
INTERIM RESULTS 202320
Voting rights stay the same,
based on milk supply backed by
shares.
Market maker
arrangements
(long-term liquidity support)
A transitional buyback of
shares
(short-term liquidity support)
•Increased flexibility to trade shares
(increased maximum, decreased minimum)
•New types of shareholders
•Extended exit periods

Where to from here
For more info:
•Call us on 0800 65 65 68
•Talk to your Area Manager
•Or visit us online to learn more
about the structure and your
trading options
https://www.fonterra.com/nz/en/fl
exible-shareholding.html
©FONTERRA
INTERIM RESULTS 202321
Existing farmer shareholders
•There is nothing you need to do before implementation,
but if you’re interested in trading after we transition to
Flexible Shareholding then make sure you’re set up to do so.
Sharemilkers, contract milkers, farm lessors
•You may be eligible to hold shares under the new structure
as an Associated Shareholder and/or Secondary Shareholder.
•Application forms available online.
Farmer shareholders exiting the Co-op
•You may be able to transfer shares to a related party
(called Permitted Transferees under the new structure).
•Application forms available online.
As always, if you need any financial advice, talk to your
financial advisor, accountant, lawyer, or other professional.

What are emissions scopes
©FONTERRA
INTERIM RESULTS 202323
Fonterra
Scope 2
Scope 1
Scope 3
Customer
Scope 2
Scope 1
Scope 3
On-farm
Scope 2
Scope 1
Scope 3
As one company’s Scope 3 emissions are another
company’s Scope 1 emissions – it needs
collaboration in the supply chain for all parties to
reduce their emissions
Every business has
3 different emissions scopes;
•Scope 1 - Direct Emissions
•Scope 2 – Purchased Energy
•Scope 3 – Downstream emissions
from purchased goods

Access to markets
and customers
Access to
future funding
Key drivers of our on-farm emissions approach
Our strategic
choice to lead in
sustainability
Increased legal
and reporting
obligations
©FONTERRA
INTERIM RESULTS 202324

What we’ve been doing
Webinars What we’ve
been hearing
More than 40
meetings around
the country with
our team of
experts
More to come
©FONTERRA
INTERIM RESULTS 202326

---

Fonterra Co-operative Group Limited

Page 1

Distribution Notice
Section 1: Issuer information
Name of issuer
Fonterra Co-operative Group Limited
Financial product name/description Fonterra Co-operative Group Limited Shares
NZX ticker code FCG
ISIN (If unknown, check on NZX website) NZFCGE0001S7
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year Quarterly
Half Year X Special
DRP applies
Record date 23/03/2023
Ex-Date (one business day before the
Record Date)
22/03/2023
Payment date (and allotment date for DRP) 14/04/2023
Total monies associated with the
distribution
1

$160,929,467
Source of distribution (for example, retained
earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.10000000
Gross taxable amount
3
$0.10000000
Total cash distribution
4
$0.10000000
Excluded amount (applicable to listed PIEs) Not Applicable
Supplementary distribution amount Not Applicable

1
Based on the number of units on issue at the date of the form.
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of Resident
Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT. This should include
any excluded amounts, where applicable to listed PIEs.

Fonterra Co-operative Group
Page 2

Section 3: Imputation credits and Resident Withholding Tax
5

Is the distribution imputed Fully imputed
Partial imputation
No imputation
If fully or partially imputed, please state
imputation rate as % applied
6

Not Applicable
Imputation tax credits per financial product Not Applicable
Resident Withholding Tax per financial
product
0.03300000
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any) Not Applicable
Start date and end date for determining
market price for DRP
Not Applicable Not Applicable
Date strike price to be announced (if not
available at this time)
Not Applicable
Specify source of financial products to be
issued under DRP programme (new issue
or to be bought on market)
Not Applicable
DRP strike price per financial product Not Applicable
Last date to submit a participation notice for
this distribution in accordance with DRP
participation terms
Not Applicable
Section 5: Authority for this announcement
Name of person authorised to make this
announcement
Anya Wicks
Contact person for this announcement Anya Wicks
Contact phone number (09) 374 9341
Contact email address Anya.wicks@fonterra.com
Date of release through MAP 16/03/2023

5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is fully imputed the
imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute advice as to whether or not RWT
needs to be withheld.

6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.

Notice of interest affecting securities D&O Ongoing Disclosure Notice – L Guiney

Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.

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