Fonterra updates on Q3, Milk Price and capital return

25 May 2023

Fonterra updates Farmgate Milk Price, FY23 earnings guidance, and brings forward capital return
payment date

Fonterra has today announced an opening 2023/24 season forecast Farmgate Milk Price of $7.25 to
$8.75 per kgMS, with a midpoint of $8.00 per kgMS, updated its current season forecast Farmgate Milk
Price, increased its full year earnings guidance, and brought forward the payment date of its proposed
capital return.

CEO Miles Hurrell says while the forecast Farmgate Milk Price for this season has been impacted by
reduced demand, the Co-op remains on track for a strong full year dividend.

Farmgate Milk Price

The reduced short-term demand, particularly from China, has had an impact on our 2022/23 forecast
Farmgate Milk Price.

“We’re well through the season now, with almost all of our milk contracted, giving us more certainty on
where we’ll end the season.

“Global Dairy Trade prices have not recovered to the levels required to hold the previous midpoint for this
season. For these reasons, we have narrowed the forecast range for the 2022/23 season from $8.00 -
$8.60 per kgMS to $8.10 - $8.30 per kgMS and reduced the midpoint from $8.30 per kgMS to $8.20 per
kgMS.

“The opening forecast Farmgate Milk Price for next season of $7.25 to $8.75 per kgMS, with a midpoint of
$8.00 per kgMS, reflects an expectation that China’s demand for whole milk powder will lift over the
medium-term.

“We expect demand to gradually strengthen over the course of FY24 as China’s economy continues to
recover from COVID-19.

“However, the timing and extent of this remains uncertain, with China’s in-market whole milk powder
stocks estimated to be above normal levels following increased domestic production. This is reflected in
our wide opening forecast range for the season.

"We recognise the pressure farmers are under and have designed a new Advance Rate guideline to get
cash to farmers earlier in the season.

Fonterra Co-operative Group
Page 2

“Our strong balance sheet allows us to make these changes and we will be using this new Advance Rate
guideline going forward, starting with the season about to commence” says Mr Hurrell.

Business performance

Fonterra has reported a profit after tax of $1,326 million, equivalent to 81 cents per share, for the third
quarter of FY23.

This is up $854 million on the same period last year and includes the gain on sale from Soprole of $260
million.

“Excluding the net gain from divestments, our normalised profit after tax improved on last year, up $606
million to $1,078 million, equivalent to 65 cents per share.

“This is due to strong performance in our Ingredients channel, with continued higher margins in our
cheese and protein portfolio, particularly casein and caseinate.

“These favourable price relatives have continued longer than expected, and we’re also seeing improved
performance coming through in our Foodservice and Consumer channels, in particular in Global
Markets.

“As a result, we have lifted our FY23 full year forecast normalised earnings to 65-80 cents per share from
55-75 cents per share and remain on track for a strong full year dividend.

“Total Group normalised operating expenses are up in part due to the impact of impairments reported in
our FY23 Interim Results in March, as well as ongoing inflationary pressures,” says Mr Hurrell.

Progress on strategy

In the third quarter of FY23, Fonterra continued to make progress on its long-term strategy.

“The Co-op has transitioned to its new Flexible Shareholding capital structure,” says Mr Hurrell.

“We have also completed the divestment of Soprole and finalised our exit of China Farms following the
sale of the last remaining farm.

“With the sale of Soprole now complete, we are bringing forward the payment date of our proposed capital
return of around 50 cents per share and unit, from October 2023 to August 2023.”

Implementation of the capital return, which is approximately $800 million, remains subject to a Scheme of
Arrangement being voted on by shareholders, and approval by the High Court, which is a common
process for this type of transaction.

“We’re also continuing to take steps towards our sustainability goals, and are expecting to announce a
scope 3, or on-farm emissions target, in the middle of this calendar year.

“Meetings are underway with farmers where we’re sharing more information on what a target will look like
and how we can collectively achieve it.

“It’s also pleasing to see the Centre for Climate Action Joint Venture, of which Fonterra is a shareholder,
is now operational.

“The JV has made its first investment, contributing $1.8 million to Ruminant BioTech, a New Zealand-
based start-up that is developing a slow-release, biodegradable, methane-inhibiting bolus,” says Mr
Hurrell.

ENDS

Non-GAAP financial information

Fonterra Co-operative Group
Page 3

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.


For further information contact:

Philippa Norman
Fonterra Communications
Phone: +64 21 507 072

---

©FONTERRA
•Current season forecast Farmgate Milk Price range narrowed and reduced
to $8.10 -$8.30 per kgMS
•Profit after tax is $1,326 million, up $854 million
–excluding the net gain from divestments of $248 million, normalised
profit after tax is $1,078 million, equivalent to 65 cents per share
–price relativities continue to be favourablecompared to average
historical levels
•Increased 2023 forecast normalisedearnings range to 65 –80 cents
per share
•Proposed capital return of approximately $800 million brought forward to
August 2023
•Announced opening 2023/24 season forecast Farmgate Milk Price range of
$7.25 –$8.75 per kgMS
THIRD QUARTER BUSINESS UPDATE 20232©FONTERRA

©FONTERRATHIRD QUARTER BUSINESS UPDATE 20233
•Transitional buyback of shares to continue
until 9 June 2023 to support liquidity during
the transition phase
•New market makers arrangement for
Fonterra Shareholders Market in place and
will continue over the long term
•The divestment of Soproleis complete. We
are bringing forward our proposed capital
returnof approximately $800 million to
farmers and unit holders from October to
August 2023
•Finalised the sale of the last remaining
China farm
•Meetings are underway with farmers on
what an emissions target will look like and
how we can collectively achieve it
•The JV has invested in Ruminant BioTech, a
start-up developing slow-release,
biodegradable, methane-inhabiting bolus

©FONTERRA
from (1,455)m
from 5.7%
from 28c
from 28c
from 1,408m
from $472m
THIRD QUARTER BUSINESS UPDATE 20234©FONTERRA

©FONTERRA
Source: GlobalDairyTrade. Data is up to GlobalDairyTradeevent 330 on 18 April 2023
THIRD QUARTER BUSINESS UPDATE 20235
US$/MT
3,5
3,4
FY23 YTD Q3FY22 YTD Q3
2,000
4,000
6,000
2017201820192020202120222023
Reference product shipment price
Non-reference (cheese) product shipment price

©FONTERRATHIRD QUARTER BUSINESS UPDATE 20236
∆
Sales volume (‘000 MT)2,9463,000
2%
Revenue ($)16,98219,737
16%
Cost of goods sold ($)(14,547)(16,147)
(11)%
Gross profit ($)2,4353,590
47%
Gross margin (%)14.3%18.2%
Operating expenses ($)(1,632)(2,004)
(23)%
Other
6
($)2258
164%
Normalised EBIT ($)8251,644
99%
Net finance costs(159)(220)
(38)%
Tax expense(194)(346)
(78)%
Normalised profit after tax($)4721,078
128%
Normalisations ($)-248
-
Reported profit after tax($)4721,326
181%
Reported EPS (cents) 2881
189%
•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
•Operating expenses are up due to the impact of
impairments recognisedat FY23 Interim, and ongoing
inflationary pressures
•Normalisationsare comprised of a $260 million gain on
sale of Soprole, and $(12) million in relation to exiting our
HanguChina farm

©FONTERRA7
(‘000 MT)





(before unallocated costs & eliminations)
Note: Prepared on a continuing operations basis. EBIT contributions in the above table sum to $1,715million, and do not align to reported continuing operations of $1,526million due to excluding $189million of unallocated costs
and eliminations
THIRD QUARTER BUSINESS UPDATE 2023

©FONTERRA
(‘000 MT)





THIRD QUARTER BUSINESS UPDATE 20238
(before unallocated costs & eliminations)
Note: Prepared on a continuing operations basis. EBIT contributions in the above table sum to $1,715million, and do not align to reported continuing operations of $1,526million due to excluding $189million of unallocated costs
and eliminations
129
288
238
258
313
598
530
28
57
42
23
46
120
131
37
46
(46)
9
33
(127)
71
Q1Q2Q3Q4Q1Q2Q3

©FONTERRATHIRD QUARTER BUSINESS UPDATE 20239
The range has narrowed and reduced, reflecting:
•95% of milk contracted for the season
increasing certainty
•GDT prices have not recovered to the levels
required to hold the previous midpoint
Source: GlobalDairyTrade. Data is up to GlobalDairyTradeevent 332 on 16 May 2023
per kgMS
2022/23
Season Forecast
2021/22
Season
2020/21
Season
$7.54
$9.30
$8.20
Reference product shipment price
3,4
Average reference product shipment price for the season
USD/MT
April-23
2,000
3,000
4,000
5,000
May-20May-21May-22

©FONTERRA
ma
THIRD QUARTER BUSINESS UPDATE 202310
FY22 Q4FY22 YTD Q3FY23 YTD Q3
Source: GlobalDairyTrade. Data is up to GlobalDairyTradeevent 332 on 16May 2023
per share
The increased earnings range reflects:
•ongoing strong margins in protein
and cheese portfolio
•recent margin improvement comingthrough
Foodservice and Consumer channel margins
,
,
,
,
USD/MT
FY23 Q4
2,000
3,000
4,000
5,000
6,000
Jul-21Jan-22Jul-22Jan-23Jul-23
Non-reference product shipment price³ ⁵
Reference product shipment price³ ⁴
Non-reference product contract shipment price⁵ ⁷
Reference product contract shipment price⁴ ⁷

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202311
per kgMS
•Midpoint of $8.00 per kgMSreflects:
–an expectation demand for whole milk powder, particularly from China, will
lift over the medium-term
–in the near-term, China’s import demand has been impacted by
its in-market whole milk powder levels, which are estimated to
be above normal
•The wide range reflects:
–the timing and extent of China’s recovery from COVID-19
–global outlook remains uncertain with inflationary pressures and risk of
recession continuing to influence markets
–continuedvolatility in financial and foreign exchange markets

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202312
1.Includes a $260 million gain on sale of Soprole, and $(12) million in relation to exiting our HanguChina farm
2.Normalisationsare comprised of a $260 million gain on sale of Soprole, and $(12) million in relation to exiting our HanguChina farm
3.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
4.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
5.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
6.Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees
7.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

13

©FONTERRA
1,813
1,665
1,590
1,632
2,004
20192020202120222023
($ million)
THIRD QUARTER BUSINESS UPDATE 202314
3,169
3,087
3,053
2,946
3,000
20192020202120222023
('000 MT)
14.9
16.0
15.5
17.0
19.7
20192020202120222023
($ billion)
2,229
2,472
2,499
2,435
3,590
20192020202120222023
($ million)
514
815
959
825
1,644
20192020202120222023
($ million)
378
1,057
975
825
1,989
20192020202120222023
($ million)

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202315
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 30 April was 1,405
million kgMS, down 0.2% on last season
•Challenging wet weather conditions
throughout the North Island, combined with a
reduction in the number of cows, impacted
peak production earlier in the season
•Recent weather has been conducive to
strong pasture growth with intermittent rain
and warmer temperatures, resulting in
stronger milk supply towards the end of
the season
•Fullseason forecast is 1,465 million kgMS

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202316
1.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
15,8761,10616,98218,4301,30719,737
Cost of goods sold
(13,773)(774)(14,547)(15,207)(940)(16,147)
Gross profit
2,1033322,4353,2233673,590
Gross margin
13.2%30.0%14.3%17.5%28.1%18.2%
Operating expenses
(1,398)(234)(1,632)(1,752)(252)(2,004)
Other²
23(1)2255358
Normalised EBIT
728978251,5261181,644
Normalisations
----345345
Reported EBIT
728978251,5264631,989

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202317
Gain/(loss) on sale
357(12)345
EBIT
357(12)345
Net finance costs and tax
(97)-(97)
Profit after tax
260(12)248
Profit attributable to non-controlling interests
---
Profit after tax attributable to equity holders of
the Co-operative
260(12)248

©FONTERRA
1,173
655
2,095
1,441
Gross ProfitEBIT
20222023
THIRD QUARTER BUSINESS UPDATE 202318
Note: 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
382
127
555
297
Gross ProfitEBIT
545
37
601
(23)
Gross ProfitEBIT
$ million

©FONTERRATHIRD QUARTER BUSINESS UPDATE 2023
Note: Figures 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 of
profit or loss on equity accounted investees
∆¹
Sales volume² (‘000 MT)
1,610 1,696 5%
Revenue ($)
11,146 13,067 17%
Cost of goods sold
(9,973)(10,972)(10)%
Gross profit ($)
1,173 2,095 79%
Gross margin (%)
10.5%16.0%
Operating expenses ($)
(596)(692)(16)%
Other³ ($)
78 38 (51)%
Normalised EBIT ($)
655 1,441 120%
129
288
238
258
313
598
530
Q1Q2Q3Q4
2022
2023
•Higher sales volumes reflect the sell down of additional inventory
held at2022 financial year-end
•Gross profit improved $922 milliondue to continuing favourable
margins in our protein and cheese portfolios, as well as higher
sales volumes
•Operating expenses up 16%reflectinginflationary pressuresand
supply chain disruption
•NormalisedEBIT increased $786 million, or 120%
19

©FONTERRATHIRD QUARTER BUSINESS UPDATE 2023
Note: Figures 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 of
profit or loss on equity accounted investees
∆¹
Sales volume² (‘000 MT)
395 411 4%
Revenue ($)
2,456 2,900 18%
Cost of goods sold
(2,074)(2,345)(13)%
Gross profit ($)
382 555 45%
Gross margin (%)
15.6%19.1%
Operating expenses ($)
(262)(259)1%
Other³ ($)
7 1 (86)%
Normalised EBIT ($)
127 297 134%
28
57
42
23
46
120131
Q1Q2Q3Q4
2022
2023
•Higher sales volumes reflect increased demand relative to prior
period as lockdown restrictions eased, particularly in Greater China
•Gross profit increased $173million mainly due to:
–the benefit of the price relativity between reference and non-
reference product prices
–higherproduct prices in Greater China adjusting for the higher
input costs plus reduced tariffs from changes to the New Zealand-
China Free Trade Agreement, which took effect 1 January 2022
•NormalisedEBIT increased $170 million, or 134%
20

©FONTERRATHIRD QUARTER BUSINESS UPDATE 2023
Note: Figures 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 of
profit or loss on equity accounted investees
∆¹
Sales volume² (‘000 MT)
486 473 (3)%
Revenue ($)
2,274 2,468 9%
Cost of goods sold
(1,729)(1,867)(8)%
Gross profit ($)
545 601 10%
Gross margin (%)
24.0%24.4%
Operating expenses ($)
(436)(637)(46)%
Other³ ($)
(72) 13 -
Normalised EBIT ($)
37 (23) -
37
46
(46)
9
33
(127)
71
Q1Q2Q3Q4
2022
2023
•Lower sales volumes driven by Sri Lanka, as sales volume was
limited while ability to access US dollars was constrained
•Gross profit improved $56 million due to non-reference price
products, particularly cheese, increasing relative to reference
products that inform the cost of milk
•Operating expenses increased $201 million due to the impact of
$162 million of impairments recognisedat FY23 Interim and
inflationary pressures
•‘Other’ is favourable mainly due to the prior year including $(81) million
adverse revaluation of the Sri Lankan business payables reflecting the
devaluation of the rupee
•NormalisedEBIT down $60 million
21

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202322
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 54,000 MT of kgMSequivalent (for the comparative period it was
51,000 MT of kgMSequivalent). Milk solids used in the reference products sold were737 million kgMSand328million kgMSin the non-reference products (for the comparative period 692million kgMSin reference products and
321 million kgMSin non-reference products)
•The average product price per metric
tonne increased:
–4% for reference products
–25% for non-reference products
•Cost of milk increased by 11% for reference
products and decreased by 5% for
non-reference products
–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 milk costs relative to
reference products, has meant higher margins
for our non-reference portfolio
¹
Reference products1,2431,314
Non-reference products642656
Reference products7.66,1058.46,375
Non-reference products4.26,5225.38,153
Reference products6.14,9027.25,464
Non-reference products2.84,3182.74,108

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202323
517
127
1,336
826
Gross ProfitEBIT
20222023
1,111
388
1,383
548
Gross ProfitEBIT
491
304
547
341
Gross ProfitEBIT
Note: Does not add to Total Groupas shown on a normalised continuing operations basis and excludes unallocated costs and eliminations. Comparative informationhas been restated and re-presented for consistency with the
current period
$ million

©FONTERRATHIRD QUARTER BUSINESS UPDATE 2023
Note: Figures 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 of
profit or loss on equity accounted investees
∆¹
Sales volume² (‘000 MT)
1,9692,0585%
Revenue ($)
12,48314,42316%
Cost of goods sold
(11,966)(13,087)(9)%
Gross profit ($)
5171,336158%
Gross margin (%)
4.1%9.3%
Operating expenses ($)
(438)(518)(18)%
Other³ ($)
488(83)%
Normalised EBIT ($)
127826550%
(16)
105
38
102
93
408
325
Q1Q2Q3Q4
2022
2023
•Higher sales volumes reflect the sell down of additional inventory
held at2022 financial year-end
•Gross profit up $819 million reflecting strong prices in our non-
reference products, particularly in protein and cheese, relative to
reference products
•Operating expenses up $80 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 $40 million, including unfavourable foreign exchange
movements in our net receivables due to timing differences between
the processing and hedging of invoices
•Normalised EBIT increased $699 million, or 550%
24

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202325
521
205
1,203
788
Gross ProfitEBIT
20222023
(18)
(66)
77
22
Gross ProfitEBIT
Note: 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
14
(12)
56
16
Gross ProfitEBIT
$ million

©FONTERRATHIRD QUARTER BUSINESS UPDATE 2023
Note: Figures 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 of
profit or loss on equity accounted investees
∆¹
Sales volume² (‘000 MT)
1,714
1,909
11%
Revenue ($)
10,757
13,976
30%
Cost of goods sold(9,646)(12,593)(31)%
Gross profit ($)
1,111
1,383
24%
Gross margin (%)
10.3%9.9%
Operating expenses ($)
(675)(875)(30)%
Other³ ($)
(48)40-
Normalised EBIT ($)
38854841%
128
151
109
125
204
63
281
Q1Q2Q3Q4
2022
2023
•Higher sales volumes, which includesthe sell down of additional
inventory held at2022 financial year-end
•Gross profit up $272 million, mainlydue to higher sales volumes and
improved product pricing in the Ingredients channel
•Operating expenses up $200 million, mainly due to impairments of our
New Zealand consumer business and Asia brands (Anmum, Anlene
and Chesdale) recognised at FY23 Interim
•‘Other’ is favourable mainly due to the prior year including $(81) million
adverse revaluation of the Sri Lankan business payables reflecting the
devaluation of the rupee
•Normalised EBIT increased $160 million, or 41%
26

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202327
512
326
739
521
Gross ProfitEBIT
20222023
147
19
171
46
Gross ProfitEBIT
Note: 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
452
43
473
(19)
Gross ProfitEBIT
$ million

©FONTERRATHIRD QUARTER BUSINESS UPDATE 2023
∆¹
Sales volume² (‘000 MT)
808
714(12)%
Revenue ($)
5,173
5,2742%
Cost of goods sold
(4,682)(4,727)(1)%
Gross profit ($)
491
547
11%
Gross margin (%)
9.5%
10.4%
Operating expenses ($)
(186)
(207)
(11)%
Other
3
($)
(1)
1
-
Normalised EBIT ($)
304
341
12%
82
135
87
63
95
120
126
Q1Q2Q3Q4
2022
2023
•Lower sales volumes, particularly WMP, due to softer demand
•Gross profit increased $56 million, mainly driven by improved
performance in the Foodservice channel, reflecting:
–in-market product prices adjusting for the higher input costs
–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 recognisedat FY23 Interim
•Normalised EBIT increased $37 million, or 12%
28
Note: Figures 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 of
profit or loss on equity accounted investees

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202329
154
124
165 132
Gross ProfitEBIT
20222023
255
174
309
229
Gross ProfitEBIT
Note: 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
82
6
73
(20)
Gross ProfitEBIT
$ million

©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.
THIRD QUARTER BUSINESS UPDATE 202330
Key MetricsFY21FY22FY23 ScorecardFY23 Q3 YTD
Serious harm9854
Gender diversity
(Band 12+)
36.3%37.6%38.8%38.3%
GHG emissions
(Scope 1,2)¹
(6.6)%(11.2)%(10.6)%(13.5)%
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%0.29%
Return on capital6.6%6.8%7.0% to 7.5%Ahead⁴
Farmgate Milk Price$7.54$9.30$9.50$8.10-$8.30⁵
4.Reflects full year forecast position.
5.Latest announced Forecast Farmgate Milk Price range
with a mid-point of $8.20 per kgMS(25 May 2023).

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202331
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
Means 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
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 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

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202332
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
Optimisationfunction
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 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. It
is calculated on a 12-month basis
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
Is used to indicate that a measure or sub-total comprises continuing,
discontinued operations and non-controlling interests. E.g.‘Total Group
EBIT’
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

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202333
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 ofassumptions, 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.

©FONTERRATHIRD QUARTER BUSINESS UPDATE 202334
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 analysetrends. These measures are not uniformly defined 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 Glossary for definitions of non-GAAP measures referred to by Fonterra.