Fonterra announces FY23 Annual Results

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 12 months to 31 July 2023
Previous Reporting Period 12 months to 31 July 2022
Currency NZD

Amount (000s) Percentage change
Revenue from continuing operations $24,580,000 12%
Total Revenue $26,046,000 11%
Net profit from continuing operations $1,241,000 100%
Total net profit $1,577,000 170%
Final Dividend
Amount per Quoted Equity Security $0.40
Imputed amount per Quoted Equity Security Not Applicable
Record Date 28 September 2023
Dividend Payment Date 13 October 2023
Current period Prior comparable period
Net tangible assets per Quoted Equity
Security
$3.82 $2.95
A brief explanation of any of the figures
above necessary to enable the figures to be
understood
The prior comparable period net tangible assets per
Quoted Equity Security has been re-presented following an
accounting policy change. Please refer to the audited
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 21/09/2023
Audited financial statements accompany this announcement.

---

21 September 2023

Fonterra announces FY23 Annual Results

• Full year reported earnings of 95 cents per share, up from 36 cents per share
• Reported profit after tax of $1.6 billion, up 170%
• Return on Capital of 12.4%, up from 6.8%
• Final 2022/23 season Farmgate Milk Price of $8.22 per kgMS
• Full year dividend of 50 cents per share, including interim dividend of 10 cents per share
• Additional tax free 50 cents per share capital return following divestment of Soprole
• Full year milk collections of 1,480 million kgMS
• Forecast 2023/34 season Farmgate Milk Price range of $6.00 - $7.50 per kgMS, with a midpoint of
$6.75
• Forecast 2023/24 earnings guidance range of 45-60 cents per share

Fonterra today announced its results for the financial year ending 31 July 2023, with full year reported
earnings of 95 cents per share, reported profit after tax of $1.6 billion and a final 2022/23 season
Farmgate Milk Price of $8.22 per kgMS.

Fonterra CEO Miles Hurrell says the Co-op has delivered strong earnings and made progress against key
strategic initiatives in FY23, however this has been against the backdrop of a Farmgate Milk Price that
has dropped across the season.

“Our 2022/23 season Farmgate Milk Price was impacted by reduced demand for whole milk powder from
key importing regions. As the financial year progressed, we saw Global Dairy Trade prices drop, with the
average whole milk powder price down 16% compared to last season.

“We recognise the impact the reduced Farmgate Milk Price has on farmers’ businesses and have utilised
our strong balance sheet to introduce a new Advance Rate Schedule guideline to assist on-farm cash
flow.

“However, we’re pleased to be announcing a strong full year dividend of 50 cents per share - comprising
an interim dividend of 10 cents per share and a final dividend of 40 cents per share.

“In addition, the Co-op returned tax free 50 cents per share to shareholders and unit holders in August,
following the divestment of Soprole, giving a final cash pay-out to farmers of $9.22 per share backed
kgMS.

“Our FY23 performance demonstrates that we are focusing on the right strategic priorities. This said, we
are aware that there are challenging conditions on the ground for many of our farmers,” says Mr Hurrell.

Fonterra Co-operative Group
Page 2


Performance

Fonterra’s reported profit after tax of $1,577 million was up $994 million. Excluding the net gain from
divestments of $248 million, normalised profit after tax was $1,329 million, up $738 million compared to
the same time last year. This includes the impact of impairments and is equivalent to 80 cents per share.

The Co-op also reported a Return on Capital for the last 12 months of 12.4%, up from 6.8% in the
comparable period.

“There were a number of key drivers that helped us deliver this result, including favourable margins in our
Ingredients channel, in particular the cheese and protein portfolios.

“We also saw improved performance in our Foodservice channel due to increased product pricing and
higher demand as Greater China’s lockdown restrictions started to ease from the start of calendar year
2023.

“Further, across the second half, the operating performance of our Consumer channel strengthened due
to improved pricing. However, we adjusted the long-term outlook for our Asia Brands and Fonterra Brands
New Zealand business, resulting in full year impairments of $101 million and $121 million respectively.

"We also recognised a gain on sale from our Chilean Soprole business of $260 million during the year.

“Looking at our reportable segments, Core Operations reported profit after tax increased $532 million to
$572 million, due to higher Ingredient margins.

“Global Markets’ reported profit after tax was up $77 million to $385 million, mainly due to higher sales
volumes and improved pricing. This was partially offset by the impairments in its Consumer channel.

“Greater China’s reported profit increased $11 million to $284 million, with the Foodservice channel
showing improved margins and resilience to market disruption from COVID-19. However, this was offset
by the Consumer channel, which included a proportion of the Asia brand impairment.

“On the supply side, full year milk collections ended the season at 1,480 million kgMS. This is in spite of
significant challenges that many farmers faced across New Zealand including rising input costs and
adverse weather events in the North Island early in calendar year 2023.

“In addition, Fonterra’s balance sheet metrics are better than target levels, even after adjusting for the
impact of providing for the payment of the Capital Return, with a gearing ratio of 28.8% and debt to
EBITDA of 1.3x.

“Our Total Group reported operating expenses were $2,799 million up from $2,455 million due in large
part to the impact of impairments, as well as increased costs from inflation and a one-off favourable item
of $44 million in the previous year,” says Mr Hurrell.

Strategy

Fonterra released its long-term strategy in September 2021 and since then has made good progress
towards its 2030 goals.

“Across FY23, we completed the divestment of China Farms and Soprole as part of our strategic choice to
focus on New Zealand milk.

Fonterra Co-operative Group
Page 3

“As we work towards our ambition to be a leader in sustainability, we have stepped up our emissions
reduction goal for the operational side of our business, introducing a target of a 50% absolute reduction in
Scope 1&2 emissions by 2030, from a 2018 baseline, an increase on our previous target of a 30%
reduction by 2030. We have held discussions with our farmers on why we need to introduce a Scope 3, or
on-farm emissions target, and plan to announce our target before the end of calendar year 2023.

“We’re also progressing work in our innovation portfolio, including establishing our joint venture with Royal
DSM, Vivici, which is exploring commercial opportunities in fermentation derived ingredients, and
launching our corporate ventures arm Nutrition Science Solution (NSS), which made its first strategic
investment in the form of a minority stake in Pendulum Inc, a biotech company specialising in metabolic
health.

“To assist us to hit our short and long-term goals, we are implementing a range of projects that will
streamline how we operate. To track our progress, we have introduced two new metrics. These are:

• Cash operating expenses per kgMS – targeting a 4% cash operating cost improvement per year
to support long-term discipline in our global overheads.
• Gross profit from Core Operations per kgMS – targeting a 2% New Zealand operational cash
cost improvement every year to support efficient New Zealand operations while remaining laser
focused on delivering value.

“We are also updating our long-term strategy and plan to share this early next year,” says Mr Hurrell.

FY24 Outlook 

Looking ahead, our forecast 2023/24 Farmgate Milk Price range of $6.00 - $7.50 per kgMS, with a
midpoint of $6.75, reflects reduced demand for whole milk powder from key importing regions.

“We are watching market dynamics closely and there are indications demand for New Zealand milk
powders will start to return from early 2024. Demand for other products, including Foodservice and our
value-added Ingredients, continues to be robust.

“Our FY24 forecast earnings range for continuing operations is 45-60 cents per share. While the
favourable price relativities we’ve experienced across FY23 have reduced from their peaks, we are
forecasting improved margins across our Consumer and Foodservice channels for FY24.

“We acknowledge that across the year, farmers will continue to feel the pressure from high input costs
and a reduced Farmgate Milk Price. We'll continue to do all that we can to support farmers through this
challenging period,” says Mr Hurrell.

ENDS

For further information contact:
Philippa Norman
Fonterra Communications
Phone: +64 21 507 072

---

September 2023

2
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
from $9.30
from $0.20
¹
from 6.8%
from $583m
from 36c
4.3%
3.7%

•2022/23 season Farmgate Milk Price of $8.22 per kgMS, impacted by reduced
demand for powders in China
•Profit after tax of $1,577 million up $994 million
oexcluding the net gain from divestments of $248 million, normalised profit after
tax is $1,329 million, equivalent to 80 cents per share
2
•Full year dividend of 50 cents per share
•Capital Return of 50 cents per share following divestment of Soprole
•Introduction of new Advance Rate Schedule guideline to assist on-farm cash flow
•Forecast 2023/24 season Farmgate Milk Price range of $6.00 -$7.50 per kgMS, with a
midpoint of $6.75, reflects ongoing volatility and reduced demand for powders
•FY24 earnings guidance range for continuing operations of 45 -60cents per share,
reflects lower Ingredients margins
3
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3

4
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
11.2%
5.9%
13.2%
0.1%
4.5%
0.4%
0.7%0.8%

2,000
4,000
6,000
2017201820192020202120222023
Reference product shipment priceNon-reference product shipment price
5
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
FY22FY23
44

21/22 season
Farmgate
Milk Price
22/23 season
Farmgate
Milk Price
Volume
PricesForeign
exchange
Net costs
9.30
8.22
(0.01)
(1.92)
0.98
(0.13)
6
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3

7
©FONTERRA
(1.25)
(1.00)
(0.75)
(0.50)
(0.25)
-
0.25
0.50
0.75
1.00
1.25
May 22Aug 22Nov 22Feb 23May 23
7
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
20122013201420152016201720182019202020212022
Spot rate
Realised rate
Unhedged
Hedged
-5c
USD/NZD
Spot Rate
+5c
USD/NZD
Spot Rate
2023

A primary allocation of capital is used to deliver asafe, sustainable, productive capacity
of our processing assets while maintaining a surplus margin for our plant capacity.
We allocate cash to our balance sheet, shareholders and businesses where we believe it
will earn the highest risk-adjusted returns.
Management is aligned to the delivery of value to our stakeholders through targets and
incentives.
We allocate milk to the products and channels where we believe it will earn the highest
risk-adjusted returns.
8
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3

9
©FONTERRA
-
200
400
600
800
1,000
1,200
1,400
Whole milk
powder
Skim milk
powder
CreamCheeseOther proteins
20192020202120222023
-
200
400
600
800
1,000
1,200
1,400
IngredientsFoodserviceConsumer
20192020202120222023
9
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3

96.4%96.4%96.4%
96.5%
96.3%
20192020202120222023
91.9%
94.0%
95.0%
94.5%
95.3%
20192020202120222023
$90m
$58m
$58m
$72m
$56m
2019202020212022202320192020202120222023


10
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3

Risk appetite range





11
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3

from 9.0%
from 5.5%from (0.4)%
From6.8%
12
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3

13
©FONTERRA
6.0
5.2
4.3
5.3
3.2
20192020202120222023
83
85
92
98
91
20192020202120222023
S&P Global Ratings A-Stable outlook
Fitch RatingsAStable outlook
50%
44%
39%
42%
29%
4.3x
3.3x
2.7x
3.2x
1.3x
20192020202120222023
Gearing Ratio (%)Debt to EBITDA (x)
13
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3

©FONTERRA
Inflation AdjustedLong-term Aspiration
7.00
7.50
8.00
8.50
9.00
9.50
10.00
2021202220232024202520262027202820292030
14
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
($/kgMS)($/kgMS)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
200420072010201320162019202220252028

©FONTERRA
•To assist long-term disciplineon our global overheads of
~$2 billion
•Directly monitors the actual cash cost base having regard to
changing milk volumes
•Calculated as Continuing Operations operating expenses
less depreciation, amortisation and impairments divided by
New Zealand milk solids collected
•Adjusted for inflation (using CPI) so underlying efficiency
gains/losses are transparent
•To assistlong-term discipline on efficientNew Zealand operations
•Directly monitors the cost base having regard to changing
milk volumes
•Calculated at the gross profit level to maximise the value which can
arise from higher costsas we move up the value chain
•Will be volatile year-on-year so the focus willbe on long-termtrend
with reporting to show underlying changes in costs, volume
and revenue
•Calculated as gross profit from Core Operations (excluding Farm
Source and cost of milk) divided by kgMS of Core Operations’ sales
•Adjusted for inflation (using subset of PPI) so underlying efficiency
gains/losses are transparent
15
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3

©FONTERRA
4.0
0.6(0.5)
4.1
FY23InflationCost OutFY30 Target
2.1
0.4 (0.5)
2.0
FY23InflationCost OutFY30 Target
16
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
($ billion)($ billion)

2,154
2,750
3,195
4,150
2,063
3.76
3.82
2.85
2.73
3.20
20192020202120222023
Profit per hectare ($/Ha)Closing share price ($)
$0.00$0.05$0.20$0.20$1.00
17
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
Estimate
10
11

The range reflects:
•Demand for imported powders into
China are soft, but early in the season
•Indications demand for New Zealand
powders will start to return early 2024
per kgMS
2023/24
Season Forecast
2021/22 Season
$9.30
$8.22
Reference product shipment price
Average reference product shipment price for the season
Reference product contract shipment price
USD/MT
2022/23 Season
Feb-24
18
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
1,000
2,000
3,000
4,000
5,000
6,000
May-21May-22May-23

FY23 FY24
per share
The range reflects:
•Favourable Ingredients margins
continue but lower than FY23
•Lower milk costs assisting improved
margins in Foodservice and Consumer
channels
,
USD/MT
Feb-24
19
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
2,000
3,000
4,000
5,000
6,000
Jul-22Jan-23Jul-23
Non-Reference Product shipment price
Reference Product Shipment price
Non-Reference Product contract shipment price
Reference Product contract shipment price

©FONTERRA
211
239
202
243
52
82
133
141
15
26
78
85
104
119
121
152
37
79
53
47
106
63
30
79
525
608
617
747
950
1,050
1,125
1,200
1,150
1,050
950
20202021202220232024202520262027202820292030
Other capital invested
Growth capital expenditure
Sustaining Capital for Other Operations
Decarbonisation
Regulatory requirements including wastewater
Sustaining Capital for NZ Operations
20
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3

21
©FONTERRA
21
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
Chairman still selected from
Farmer Elected Directors
Farmer Elected
Directors
Appointed
Directors
•Current Board operating well, but size can be rationalised.
Changes are future focused
•Smaller groups usually encourage:
-Dissenting views
-More meaningful sharing of perspectives
-Faster, robust decision making
•6:3 composition strikes a balance between a strong and
diverse level of perspectives, skills and experiences, and
manageable workloads.
•Strong farmer majority is maintained
•Changes to be voted on at the 2023 Annual Meeting and
would take effect after 2024 Annual Meeting

©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
Animal
Efficiency
Reproduction
& Animal
Health
Feed quality
& type
Nitrogen &
Effluent
Management
Imported
CO2: Feed,
Fuel &
Fertiliser
Novel
Technologies
Carbon
removals -
vegetation
Land use
change
22

23
©F O N T E R R A A N N U A L R E S U L T S 2 0 2 3
1.Per share backed kgMS
2.Excludes amounts attributable to non-controlling interests
3.Sources
12 month production:
US (Jul 2022 to Jul 2023) USDA , NZ (Jul 2022 to Jul 2023) DCANZ, EU(Jul 2022 to Jul 2023) Eurostat, Australia (Jul 2022 to Jul 2023) Dairy Australia
12 month imports:
LATAM, Asia, Middle East & Africa, China (Jul 2022 to Jul 2023) S&P Global
4.Source: Fonterra Free Alongside Ship (FAS) prices of the New Zealand Ingredients portfolio
5.Asset Health measures the reliability of Fonterra’s manufacturing assets on a scale of 1 –5. Five indicates the asset is in thebest condition possible. Fonterra’s
risk appetite range is 3 –3.5
6.Refer to the appendix for assumptions regarding allocations of Corporate Costs, Interest and Tax
7.2023 includes the amount for the capital return payable of $804 million in the calculation of Net Debt
8.Inventory has been restated to reflect the inclusion of emissions trading units which were previously held as intangible assets
9.Based on dividend payments and capital return attributed to the financial year
10.Closing price as at 31 July. Figures on the chart are prior to the 50 cent per share capital return
11.2023 Farm Profitability assumptions: Farm size flat from 2022, farm expense forecasted using CPI farm expenses index, kgMS per hectare output forecasted
using 1% increase from previous year and $8.22 Milk Price

24

©FONTERRA
¹
ANNUAL RESULTS 202325
1.Total Group figures for the year ended 31 July. Includes continuing and discontinued operations
2.Collections are for the season ended 31 May
3.Total cash return for 2023 is $9.22 per share backed kgMS. Includes 50 cents for the capital return from the sale
of Soprole
2,774
3,160
3,137
3,340
4,599
20192020202120222023
4,152
4,069
4,102
3,924
3,973
20192020202120222023
19.9
21.0
21.1
23.4
26.0
20192020202120222023
2,905
2,475
2,344
2,455
2,799
20192020202120222023
1,523
1,517
1,539
1,478
1,480
20192020202120222023
$6.35$7.14$7.54$9.30$8.22
$0.00
$0.05
$0.20
$0.20
$0.50
20192020202120222023
Milk PriceDividend
$6.35
$7.19
$7.74
$9.50
$8.72

©FONTERRA
¹
ANNUAL RESULTS 202326
1.Total Group figures for the year ended 31 July. Includes continuing and discontinued operations
2.Refer to the Glossary for definition
(16)
1,147
959
976
2,218
20192020202120222023
812
879
952
991
1,881
20192020202120222023
(610)
659
599
583
1,577
20192020202120222023
275
398
588 591
1,329
20192020202120222023
600
419
545
587
668
124
106
63
30
79
724
525
608
617
747
20192020202120222023
CapexOther
50%
50%
44%
39%
42%
29%
4.6x
4.3x
3.3x
2.7x
3.2x
1.3
201820192020202120222023
Gearing RatioDebt to EBITDA

©FONTERRA
5.6%
6.6%6.6%
6.8%
12.4%
20192020202120222023
¹
ANNUAL RESULTS 202327
1.Total Group figures for the year ended 31 July. Includes continuing and discontinued operations
2.Refer to the Glossary for definition
3.Comparative information has been re-presented for consistency with the current period
4.Attributable to equity holders of the Co-operative. Excludes non-controlling interests
668
1,433
1,109
(621)
3,314
20192020202120222023
83
85
92
98
91
20192020202120222023
(35)
43
36 36
95
20192020202120222023
16
24
34
35
80
20192020202120222023

©FONTERRAANNUAL RESULTS 202328
-
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
2022/231,480m (up 0.1%)
78m litres
•Fonterra’s New Zealand milk collections for
the 2022/23 season were 1,480 million
kgMS, up 0.1% on last season
•Milk collections were impacted by a
challenging start to the season in the North
Island and an overall reduction in the
number of cows
•Favourable weather conditions supported
strong milk supply at the end of the season
•Fonterra’s New Zealand market share of
milk solids collected is 79.0%

©FONTERRAANNUAL RESULTS 2023
Note: Figures are for the year ended 31 July. Includes continuing and discontinued operations
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.Comprises of other operating income, net foreign exchange gains/(losses) and share of profit or loss of equity
accounted investees
3.Includes amounts attributable to non-controlling interests
4.Prioryear normalisationswere $42 million gain on sale from GDT and $(50) million impairment on DPA Brazil
•Gross profit improved $1,259 million mainly due to
favourablemargins in our Ingredients channel,
particularly cheese and proteins
•Operating expenses are up $344 million mainly due to
inflation and the impact of impairments
•Other has increased $327 million and includes the gain
on sale of Soprole
•Tax expense increased $218 million due to higher EBIT
and capital gains tax on sale of Soprole
•Normalisationsinclude $260 million gain on sale of
Soprole, and $(12) million in relation to exiting our Hangu
China farm
29
∆
1
Sales volume (‘000 MT)3,9243,973
1.3%
Revenue23,425 26,046
11.2%
Cost of goods sold(20,085)(21,447)
(6.8)%
Gross profit3,3404,599
37.7%
Gross margin (%)14.3%17.7%
Operating expenses(2,455)(2,799)
(14.0)%
Other
2
91418
359.3%
EBIT 9762,218
127.3%
Net finance costs(231)(261)
(13.0)%
Tax expense(162)(380)
(134.6)%
Profit after tax
3
5831,577
170.5%
Normalisations
4
8(248)
-
Normalised profit after tax
3
5911,329
124.9%

©FONTERRAANNUAL RESULTS 202330
5831,577
Profit attributable to non-controlling interests1(40)
Reported profit after tax attributable to equity holders of the Co-operative5841,537
3695
5911,329
Profit attributable to non-controlling interests(23)(40)
Normalised profit after tax attributable to equity holders of the Co-operative5681,289
3580
1,613,3531,610,507

©FONTERRAANNUAL RESULTS 202331
1.Refer to Note 1a and 2c of the FY23 Financial Statements. Comparative information has been restated and
re-presented for consistency with the current period
2.Comprises of other operating income, net foreign exchange gains/(losses) and share of profit or loss of equity
accounted investees
3.Includes amounts attributable to non-controlling interests
4.Normalisations comprise of $260 million gain on sale of Soprole and $(12) million in relation to exiting our
HanguChina farm ($42 million gain on sale from GDT and $(50) million impairment on DPA Brazil from the
prior period)
¹¹¹¹
Sales volume (‘000 MT)
3,318 606 3,924
3,4974763,973
Revenue
21,901 1,524 23,425
24,5801,46626,046
Cost of goods sold
(18,992)(1,093)(20,085)
(20,399)(1,048)(21,447)
Gross profit
2,909 431 3,340
4,1814184,599
Gross margin (%)
13.3%28.3%14.3%
17.0%28.5%17.7%
Operating expenses
(2,065)(390)(2,455)
(2,496)(303)(2,799)
Other²
102 (11)91
70348418
EBIT
946 30 976
1,7554632,218
Net finance costs
(194)(37)(231)
(211)(50)(261)
Tax expense
(131)(31)(162)
(303)(77)(380)
Profit after tax
3
621 (38)583
1,2413361,577
Normalisations
4
(42)508-(248)(248)
Normalised profit after tax
3
579125911,241881,329

©FONTERRA
5831,259
(344)
307
20
(30)
(218)
1,577
(248)1,329
FY22
profit after tax
Gross profitOperating
expenses¹
Gain on
divestments
Other itemsFinance costsTaxFY23
profit after tax
NormalisationsFY23 normalised
profit after tax
ANNUAL RESULTS 202332
•Increased due to favourable
margins, particularly for
protein and cheese products
•Increased mainly due to impairments of our New
Zealand consumer business and Asia brands, of
$121 million and $101 million, respectively, as
well as the impact of inflationary pressures
•Increased due to higher EBIT
and capital gains tax on the
sale of Soprole
•Increased due to a $349 million (before tax)
gain on $42 million sale of Soprole. Prior
year included the gain on sale of GDT
•Includes $260 million
(after tax) gain on sale
of Soprole and $12
million loss on exit of
HanguChina farm
1.Includes $11 million net loss on sale related to HanguChina farm and sale of GDT

©FONTERRAANNUAL RESULTS 202333
Other operating income
43-43-349349
Other operating expenses
(1)(57)(58)(12)-(12)
Profit before net finance costs
and tax
42(57)(15)(12)349337
Net finance costs and tax
-77-(89)(89)
Profit after tax
42(50)(8)(12)260248
Profit attributable to non-controlling
interests
-2424---
Profit after tax attributable to equity
holders of the Co-operative
42(26)16(12)260248

©FONTERRAANNUAL RESULTS 202334
Employee benefits expense
860963
Storage & distribution
241263
Advertising & promotion
227219
Information technology
191205
Professional & management fees
149167
Depreciation & amortisation
173180
Impairments
44248
Other
180251
Operating expenses from continuing
operations
2,0652,496
Operating expenses from discontinued
operations
390303
Total Group operating expenses
2,4552,799
•Total Group operating expenses are $2,799 million, up $344 million
on the prior period
•Discontinued operations reduced $87 million due to the completion
of the Soprolesale on 31 March 2023
•Continuing operations increased $431 million, mainly due to:
–An increase in employee benefits expenses by $103 million
mainly due to inflationary pressures,
–An increasein professional and management fees by $18
million, mainly due to the implementation of the new Flexible
Shareholding capital structure and the capital return,
–impairments increasing $204 million, mainly due to impairments
of our New Zealand Consumer business and our Asia brands
for $121 million and $101 million, respectively, and,
–‘Other’ increasing $71 million, mainly due to higher travel and in
person engagement costs reflecting COVID-19 related
restrictions easing, and an increase in doubtful debts
Note: Comparative information has been re-presented for consistency with the current period

©FONTERRAANNUAL RESULTS 202335
Administrative expenses
790871
Selling and marketing
614653
Storage and distribution
1
476526
Other operating expenses
185446
Operating expenses from continuing
operations
2,0652,496
Operating expenses from discontinued
operations
390303
Total Group operating expenses
2,4552,799
1. Storage and distribution by function does not balance to storage and distribution by nature on the previous page due to employee benefits expense and professional management fees being allocated through the selling
and marketing and storage and distribution functions

©FONTERRAANNUAL RESULTS 202336
$1.16
$1.18
$1.26
$1.39$1.39
$1.36
$1.34
2020202120222023
ActualInflation Adjusted
•New efficiency metric to assist long-term
disciplineon our overheads of~$2 billion
•Directly monitors the actual cash cost base
having regard tochanging milk volumes
•Calculated as continuing operations operating
expensesexcluding depreciation,
amortisation and impairments divided byNew
Zealand milk solids collected
•Adjusted for inflation (using CPI) so
underlying efficiencygains/losses
are transparent
•Increase from $1.34 to $1.39 per kgMS
mainly reflects increased staff costs and
storage and distribution costs
Actual ($ million)
1,7631,8101,8582,064
Accumulative CPI¹
16.6%13.3%6.0%
Inflation adjusted ($ million)2,1142,0881,9762,064
New Zealand kgMS collected
1,5171,5391,4781,480
1.Consumer Price Index (CPI) source: Stats NZ

©FONTERRAANNUAL RESULTS 2023
1.Attributable to equity holders of the Co-operative, excludes non-controlling interest
2.Represents net earnings as specified in the Dividend Policy and is calculated as reported profit after tax less abnormal gains
37
Reported earnings¹
3695
Less: abnormal gains
(2)(16)
Net earnings for dividend payment²
3479
Dividend payment percentage (%)
59%63%
Total dividend
2050
Interim dividend
510
Final dividend
1540
•Total dividend of 50 cents per share:
–Interim dividend of 10 cents,
–Final dividend of 40 cents
•Abnormal gains included the $260 million from
selling Soprole
•The decision to pay slightly above dividend policy
payoutrange of 40-60% reflects the strengthened
balance sheet and our leverage metrics being well
within target levels

©FONTERRAANNUAL RESULTS 202338
•Return on capital increased from 6.8% to 12.4% due to an
$890 million increase in normalised EBIT
–On a pre-tax basis, normalisations consist of $349
million related to the gain on sale of Soproleand a
$12 million loss related to the disposal of Hangu
Farm in China
•Average capital employed is higher than the prior year
due to additional inventory carried forward from the prior
year
Total Group normalised EBIT
9911,881
Finance income on long-term advances
711
Notional tax charge
1
(161)(305)
Total Group normalised EBIT plus finance income
on long-term advances less notional tax charge
8371,587
Capital employed at year end
12,17911,121
Impact of seasonal capital employed
1771,653
Average capital employed
12,35612,774
Return on capital (%)
6.8%12.4%
1. Notional tax charge of 16.1%

©FONTERRAANNUAL RESULTS 2023
Cash generated from operations¹1,4942,311
Net change in working capital
(1,598)871
A. Net cash flows from operating activities
(104)3,182
Cash flows from investing activities
Divestments and asset sales26846
Capital expenditure and other(543)(714)
B. Net cash flows from investing activities
(517)132
Free cash flow (A+B)
(621)3,314
Dividends paid to equity holders of the
Co-operative
(323)(403)
Other financing cashflows(18)63
Capital return payable
-(804)
Other non-cash changes in net debt
(52)(38)
Decrease/(increase) in net debt²
(1,014)2,132
39
Note: Comparative information has been re-presented for consistency with the current period
1.Includes profit after tax and non-cash and non-operating adjustments made to profit after tax to determine cash generated from operations
2.Net debt includes amounts attributable to disposal groups held for sale
•Decrease in net debt of $2.1 billion reflecting strong
earnings, reduction in working capital and divestment
proceeds
•Free cash flow of $3.3 billion was $3.9 billion higher
than last year, which reflects:
–underlying cash flow from earnings increasing by
$0.8 billion,
–an improvement in working capital cash flows of
$2.5 billion,
–a $0.8 billion increase in net cash received from
divestments due to the sale of Soprole, partially
offset by,
–an increase in capital expenditure and other
investing cash flows of $0.2 billion

©FONTERRA
¹
1.As at 31 July 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)
ANNUAL RESULTS 202340
EUR/GBP
DCM 16%
AUD DCM
9%
CNY DCM
2%
NZD DCM
3%
USD DCM
16%
Bank
Facilities
54%
Undrawn
Facilities
$3.9bn
96%
Drawn Facilities
$0.2bn
4%
0.01.02.03.0
FY24
FY25
FY26
FY27
FY28
FY29
FY30
FY31
$ billion
WATM
4
: 3.4 years
Maturity Profile
0.01.02.03.0
FY24
FY25
FY26
FY27
FY28
FY29
FY30
FY31
$ billion
WATM
4
: 2.7 years
Maturity Profile

©FONTERRAANNUAL RESULTS 2023
The assumptions are:
•Corporate costs, including Co-operative Affairs and other Group Functions, are allocated to the Global Markets, Greater China and Core Operations segments
and within these segments by Ingredients, Foodservice and Consumer channels
•The allocation of corporate costs reflects an apportionment at an individual cost centrelevel. In consultation with each cost centreowner, costs are allocated
based on business activity and staffing resource required to support each channel and segment.
•Net finance costs allocated to the segments and channels consists of net finance costs directly attributable to each segment andchannel and net finance costs
incurred on behalf of the Group
•The net finance costs incurred on behalf of the Group are allocated to each segment and channel using the average capital employed by each segment and
channel. Australia is excluded from this allocation as this is based on actual recharges to Australia from Group
•The capital employed allocated to each segment reflects the underlying legal entities that operate in each segment and the working capital requirements
directly attributable
•Within each segment, capital employed is then allocated to either the Ingredients, Consumer or Foodservice channels based on thenature of the capital
employed (i.e., brands allocated to a channel based on the type of brand, or which legal entity a plant sits within) and workingcapital requirements
•Allocated to each channel and segment by applying an average onshore tax rate on New Zealand legal entities’ earnings and an average offshore tax rate on
offshore legal entities’ earnings with an aggregate average of approximately 20% across the Group

©FONTERRAANNUAL RESULTS 202342
1,681
578
2,651
1,164
Gross ProfitProfit after tax
20222023
495
70 749
241
Gross ProfitProfit after tax
$ million
Note: Figures are for the year ended 31 July and are on a continuing operations basis. Comparative information has been restatedfor consistency with the current period
733
(27)
781
(164)
Gross ProfitProfit after tax

©FONTERRAANNUAL RESULTS 2023
Note: Figures are for the year ended 31 July and are on a continuing 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.Comprises of other operating income, net foreign exchange gains/(losses) and share of profit or loss of
equity accounted investees
3.Includes Corporate Costs of $138 million for 2023 ($94 million for the comparative period)
∆¹
Sales volume (‘000 MT)
2,150 2,319 8%
Revenue
15,535 17,416 12%
Cost of goods sold
(13,854)(14,765)(7)%
Gross profit
1,681 2,651 58%
Gross margin (%)
10.8%15.2%
Operating expenses
(1,002)(1,121)(12)%
Other²
134 47 (65)%
EBIT
3
813 1,577 94%
Net finance costs and tax expense
(235)(413)(76)%
Profit after tax
578 1,164 101%
63
195
125
195
183
380
340
261
Q1Q2Q3Q4
2022
2023
•Higher sales volumes reflect Global Markets securing new
contracts and tenders in both the Asia Pacific and Africa regions
supportingthe sell down of additional inventory held at 2022
financial year end
•Gross profit improved $970 million mainly due to increased
margins in Core Operations, particularly in our casein
and cheese portfolios
•Operating expenses are up $119 million, reflecting increased
supply chain costs due to additional inventory and inflationary
pressures
•‘Other’ decreased $87 million mainly due to foreign exchange
movements in our net receivables as a result of timing differences
between the processing and hedging of invoices
43

©FONTERRAANNUAL RESULTS 202344
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 73,000 MT of kgMS equivalent (for the comparative period it was
68,000 MT of kgMS equivalent). Milk solids used in the Reference Products sold were 1,004 million kgMS and 442 million kgMS in the Non-Reference Products (for the comparative period 919 million kgMS in Reference Products
and 424 million kgMS in Non-Reference Products)
•The average product price per metric tonne:
–decreased 2% for Reference Products mainly
due to lower WMP and AMF prices
–increased 16% for Non-Reference Products
mainly due to significant price increases across
most products with casein, MPC and cheese all
increasing over 21% compared to the prior year
•Cost of milk decreased for Reference and Non-
Reference Products by 8% and 12%, 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 lower milk costs, has meant higher margins for
our Non-Reference portfolio
Reference Products1,6291,782
Non-Reference Products822883
Reference Products10.46,36111.16,257
Non-Reference Products5.76,9507.18,089
Reference Products8.35,0778.44,696
Non-Reference Products3.74,4933.53,974

©FONTERRAANNUAL RESULTS 2023
Note: Figures are for the year ended 31 July and are on a continuing 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.Comprises of other operating income, net foreign exchange gains/(losses) and share of profit or loss of
equity accounted investees
3.Includes Corporate Costs of $58 million for 2023 ($33 million for the comparative period)
∆¹
Sales volume (‘000 MT)
528 546 3%
Revenue
3,302 3,865 17%
Cost of goods sold
(2,807)(3,116)(11)%
Gross profit
495 749 51%
Gross margin (%)
15.0%19.4%
Operating expenses
(393)(418)(6)%
Other²
15 3 (80)%
EBIT
3
117 334 185%
Net finance costs and tax expense
(47)(93)(98)%
Profit after tax
70 241 244%
13
3717322
68
77
74
Q1Q2Q3Q4
2022
2023
45
•Higher sales volumes as a result of demand increasing in the
second half of the year due to COVID-19 related restrictions lifting
•Gross profit increased $254 million, or 51% mainly due to:
–favourableprice relativities between Reference and
Non-Reference Product prices,
–product prices in Greater China and Global Markets adjusting
for higher milk costs in the first quarter, benefitting the
remaining three quarters as the cost of milk declined, and,
–innovation in foodservice application products such as our
Anchor
TM
Food Professionals Easy Topping Cream and Aerosol
Cream in Greater China, expanding total market share

©FONTERRAANNUAL RESULTS 2023
Note: Figures are for the year ended 31 July and are on a continuing 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.Comprises of other operating income, net foreign exchange gains/(losses) and share of profit or loss of
equity accounted investees
3.Includes Corporate Costs of $64 million for 2023 ($30 million for the comparative period)
∆¹
Sales volume (‘000 MT)
640 632 (1)%
Revenue
3,064 3,299 8%
Cost of goods sold
(2,331)(2,518)(8)%
Gross profit
733 781 7%
Gross margin (%)
23.9%23.7%
Operating expenses
(670)(957)(43)%
Other²
(47)20 -
EBIT
3
16 (156)-
Net finance costs and tax expense
(43)(8)81%
Profit after tax
(27)(164)(507)%
19
25
(53)
(18)
7
(116)
32
(87)
Q1Q2Q3Q4
2022
2023
•Lower sales volumes mainly due to Sri Lanka’s economic
challenges impacting the ability to access US dollars in the first
half of the financial year
•Gross profit improved $48 million due to cost of milk easing over
the second half of the financial year, improving gross margins in
Core Operations and Global Markets
•Operating expenses increased $287 million mainly due to inflation
and recognisingimpairments of our New Zealand consumer
business and Asia brands of $121 million and $101 million,
respectively
•‘Other’ is favourable mainly due to the prior year including $80
million adverse revaluation of the Sri Lankan business payables
reflecting the devaluation of the rupee
46

©FONTERRAANNUAL RESULTS 202347
736 40
1,629
572
Gross ProfitProfit after tax
20222023
$ million
1,542
308
1,836
385
Gross ProfitProfit after tax
Note: Figures are for the year ended 31 July and are on a continuing operations basis. Comparative information has been restatedfor consistency with the current period
631
273
716
284
Gross ProfitProfit after tax

©FONTERRAANNUAL RESULTS 2023
Note: Figures are for the year ended 31 July and are on a continuing 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.Comprises of other operating income, net foreign exchange gains/(losses) and share of profit or loss of
equity accounted investees
3.Includes Corporate Costs of $148 million for 2023 ($72 million for the comparative period)
∆¹
Sales volume (‘000 MT)
2,554 2,784 9%
Revenue
16,987 19,142 13%
Cost of goods sold
(16,251)(17,513)(8)%
Gross profit
736 1,629 121%
Gross margin (%)
4.3%8.5%
Operating expenses
(691)(840)(22)%
Other²
110 17 (85)%
EBIT
3
155 806 420%
Net finance costs and tax expense
(115)(234)(103)%
Profit after tax
40 572 1,330%
(40)
49
(8)
39
29227183
133
Q1Q2Q3Q4
2022
2023
•Sales volumes up 9%, reflecting the sell down of additional
inventory held at 2022 financial year end
•Gross profit up $893 million reflecting favourableprice relativities
between Reference and Non-Reference Products, particularly in:
–the cheese portfolio, from growth in Foodservice mozzarella
–the proteins portfolio, from growth in rennet casein
•Operating expenses up $149 million reflecting inflationary
pressures, supply chain disruption, and additional storage costs due
to holding higher inventory at the start of the financial year
•‘Other’ is down $93 million, to $17 million, mainly reflecting
unfavourableforeign exchange movements in net receivables
48

©FONTERRAANNUAL RESULTS 202349
Note: Figures are for the year ended 31 July. Comparative information has been restated for consistency with the current period
724
143
1,485
602
Gross ProfitProfit after tax
20222023
(19)
(84)
86
(12)
Gross ProfitProfit after tax
31
(19)
58
(18)
Gross ProfitProfit after tax
$ million

©FONTERRA
•Asset Health measures the condition and
reliability of our manufacturing assets on a
scale of one to five. Five indicates the asset is
in the best condition possible
•Fonterra’s risk appetite range is 3 –3.5
•From 2016 –2020 we under-invested in
sustaining capital, leading to the downwards
trend of Asset Health
•Since 2021, capital has been allocated to
regaining asset condition and risk mitigation,
particularly in food safety and health & safety
•The 2023 Asset Health score does not yet
reflect the increase in spend as we catch up
from prior underspend
ANNUAL RESULTS 202350
3.22
3.19
3.17
3.13
3.11
20192020202120222023
Risk appetite range

©FONTERRA
$7.64
$7.52
$9.42
$9.21
$9.85
$8.60
$8.83
2020202120222023
ActualInflation Adjusted
ANNUAL RESULTS 202351
•New efficiency metric to assist our long-term
discipline on efficient New Zealand operations
•Directly monitors the cost base having regard
to changingmilk volumes
•Calculated at the gross profit level to
maximise the value which canarise from
higher costsas we move up the value chain
•Will be volatile year-on-year so the focus
willbe on long-termtrendwith reporting to
show underlying changes in costs, volume
and revenue
•Calculated as gross profit from Core
Operations (excluding FarmSource and cost
of milk) divided bykgMSof Core
Operations’ sales
•Adjusted for inflation (using subset of PPI) so
underlying efficiencygains/losses
are transparent
Actual ($ million)
11,16811,54813,26614,019
Accumulative PPI¹
22.4%12.6%(6.7)%
Inflation adjusted ($ million)14,39113,21312,43314,019
Core Operations’ sales (kgMS)
1,4611,5361,4081,523
1.Source: Stats NZ Producer Price Index (PPI),Industry Output Category –Dairy product manufacturing

©FONTERRAANNUAL RESULTS 2023
Note: Figures are for the year ended 31 July and are on a continuing 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.Comprises of other operating income, net foreign exchange gains/(losses) and share of profit or loss of
equity accounted investees
3.Includes Corporate Costs attributed of $72 million for 2023 ($67 million for the comparative period)
∆¹
Sales volume (‘000 MT)
2,344 2,575 10%
Revenue
15,374 18,401 20%
Cost of goods sold
(13,832)(16,565)(20)%
Gross profit
1,542 1,836 19%
Gross margin (%)
10.0%10.0%
Operating expenses
(1,081)(1,310)(21)%
Other²
(15) 53 -
EBIT
3
446 579 30%
Net finance costs and tax expense
(138)(194)(41)%
Profit after tax
308 385 25%
77
107
49
75
125
25
187
48
Q1Q2Q3Q4
2022
2023
•Sales volume increased due to new contracts and participating in
tenders in the Asia Pacific and Africa regions
•Gross profit up $294 million mainly due to higher sales volumes
and Foodservice in-market sales prices adjusting for higher cost
of goods
•Operating expenses increased $229 million mainly due to
recognising a $121 million and $55 million impairment of our New
Zealand consumer business and Asia brands, respectively
•‘Other’ is favourable mainly due to the prior year including $80
million adverse revaluation of the Sri Lankan business payables
reflecting the devaluation of the rupee
52

©FONTERRAANNUAL RESULTS 202353
Note: Figures are for the year ended 31 July. Comparative information has been restated and re-presented for consistency with the current period
751
315
932
429
Gross ProfitProfit after tax
20222023
194
(3)
263
50
Gross ProfitProfit after tax
597
(4)
641
(94)
Gross ProfitProfit after tax
$ million

©FONTERRAANNUAL RESULTS 2023
Note: Figures are for the year ended 31 July and are on a continuing 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, net foreign exchange gains/(losses)
∆¹
Milk collections (kgMS)
106106-
Sales volume (‘000 MT)
3653794%
Revenue
2,0942,53121%
Cost of goods sold
(1,811)(2,237)(24)%
Gross profit
2832944%
Gross margin (%)
13.5%11.6%
Operating expenses
(178)(219)(23)%
Other²
1--
EBIT
10675(29)%
Net finance costs and tax expense
(41)(52)(27)%
Profit after tax
6523(65)%
•Flat milk collections despite a decline in the overall Australian
milk pool
•Gross profit increased $11 million mainly due improved pricing in
the Foodservice business
•Operating expenses increased $41 million due to:
–inflationary pressures, and
–impact of the class action settlement agreement with Fonterra
Australia milk suppliers relating to milk price in the
2015/16 season
•EBIT decreased $31 million due to the improved gross profit being
offset by the increase in operating expenses
•Profit after tax decreased $42 million due to:
–lower EBIT, and
–interest rate increases on borrowings
54

©FONTERRAANNUAL RESULTS 2023
Note: Figures are for the year ended 31 July and are on a continuing operations basis. Comparative information
has been restated 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.Comprises of other operating income, net foreign exchange gains/(losses) and share of profit or loss of
equity accounted investees
3.Includes Corporate Costs attributed of $40 million for 2023 ($18 million for the comparative period)
∆¹
Sales volume (‘000 MT)
1,028 978 (5)%
Revenue
6,869 7,072 3%
Cost of goods sold
(6,238)(6,356)(2)%
Gross profit
631 716 13%
Gross margin (%)
9.2%10.1%
Operating expenses
(293)(346)(18)%
Other²
7 --
EBIT
3
345 370 7%
Net finance costs and tax expense
(72)(86)(19)%
Profit after tax
273 284 4%
58
101
48
66
58
80
79
67
Q1Q2Q3Q4
2022
2023
•Lower sales volumes, particularly WMP, due to softer demand
•Gross profit increased $85 million mainly due to improved
Foodservice gross margins reflecting higher in-market product
prices adjusting for increased input costs
•Operating expenses increased $53 million mainly due to an
impairment in the Consumer channel of our Asia brands
•EBIT increased $25 million due to increased gross profit, partially
offset by higher operating expenses
55

©FONTERRAANNUAL RESULTS 202356
Note: Figures are for the year ended 31 July. Comparative information has been restated and re-presented for consistency with the current period
206
120
234
133
Gross ProfitProfit after tax
20222023
320
157
400
203
Gross ProfitProfit after tax
105
(4)
82
(52)
Gross ProfitProfit after tax
$ million

©FONTERRAANNUAL RESULTS 202357
•The higher allocation to GDT and Core
Ingredients mainly reflects the sell down of
additional inventory held at 2022 year-end
•Active Living portfolio was impacted by lower
demand from the USA due to customer
manufacturing constraintsand high
in-market inventory
•Foodservice channel in line with last year with
demand increasing across major product
categories in the second half of the year due
to COVID-19 restrictions lifting relative to the
prior year
•Consumer channel down mainly due to lower
sales volume into Sri Lanka as the economic
crisis limited repatriation of USD currency
-
100
200
300
400
500
600
700
800
GDTCoreActive LivingFoodserviceConsumer
Millions
20222023
Ingredients
24.1%
24.4%
49.6%
50.9%
13.1%13.1%
5.5%
5.1%
7.7%
6.5%
Milk solids volume (kgMS millions)
% Milk solids sold

©FONTERRAANNUAL RESULTS 202358
1.Figures are for the year ended 31 July and are prepared on a continuing operations basis. Comparative information has been restated for consistency with the current period
2.Comprises of other operating income, net foreign exchange gains/(losses) and share of profit or loss of equity accounted investees
Revenue19,5512,35021,901
21,791
2,789
24,580
Cost of goods sold(16,986)(2,006)(18,992)
(17,941)
(2,458)
(20,399)
Gross profit2,5653442,909
3,850
331
4,181
Gross margin (%)13.1%14.6%13.3%
17.7%
11.9%
17.0%
Operating expenses(1,808)(257)(2,065)
(2,252)
(244)
(2,496)
Other²957102
69
1
70
EBIT85294946
1,667881,755
Net finance costs--(194)
-
-(211)
Tax expense--(131)
-
-(303)
Profit after tax56160621
1,203
381,241
Discontinued operations
profit after tax
-(38)(38)
-
336336

©FONTERRAANNUAL RESULTS 202359
1.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
274451,05215599852
Cost of goods sold
(31)(317)(745)(27)(405)(616)
Gross profit
(4)128307(12)194236
Gross margin (%)
(14.8)%28.8%29.2%(80.0)%32.4%27.7%
Operating expenses
(9)(161)(220)(12)(137)(154)
Other²
(1)(1)(9)(1)-349
EBIT
(14)(34)78(25)57431
Profit after tax
(14)(64)40(25)16345

©FONTERRAANNUAL RESULTS 202360
(‘000 MT)





Note: Prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency withthe current period

©FONTERRAANNUAL RESULTS 202361
(‘000 MT)





105
289
208
211
289
561
501
226
21
54
32
10
42
97
110
85
31
43
(55)
(3)
22
(147)
51
(82)
Note: Prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency withthe current period

©FONTERRAANNUAL RESULTS 202362
Interest on lease liabilities
1313
Variable lease payments not included in the
measurement of lease liabilities
43
Expenses relating to short-term leases
1012
Expenses relating to low value leases
106

©FONTERRAANNUAL RESULTS 2023
63
Serious harm985
Gender diversity (Band 12+)36.3%37.6%38.8%
GHG emissions (Scope 1,2)¹(6.6)%(11.2)%(10.6)%
FEP adoption (New Zealand)53%71%84%
Water Improvement Plans in place––37.5%
Share of NewZealand milk collected for the season to 31 May79.0%79.1%79.0%
EBIT from New Zealand value-add businesses ($ million)²616307388
Cost of quality (% of cost of golds sold)0.45%0.44%0.35%
Return on capital6.6%6.8%7.0% to 7.5%
Farmgate Milk Price ($)7.549.309.50
1.Relative to FY18 Baseline. Long-term will include Scope 3 but for now Scope 1&2 including farms under our operational control.
2.Reflects EBIT from Consumer and Foodservice, contribution from Active Living. Excludes Brazil, Australia and Chile.

©FONTERRAANNUAL RESULTS 2023
64
1.No target set for FY24. Next survey in September 2023
2.Relative to FY18 Baseline. Long-term will include Scope 3 but for now Scope 1&2 including farms under our
operationalcontrol
3.Excludes the cost of milk
4.Latest announced FY24 Forecast Farmgate Milk Price range is $6.00-$7.50 per kgMS, with a mid-point of
$6.75 per kgMS (18 Aug 2023)
5.FY23 dividend includes 50 cent per share capital return following the sale of Soprole
6.DairyNZEconomic Survey 2021-2022 (Owner-Operator). FY23 is a modelled forecast
Serious harm85
Gender diversity (Band 12+)37.6%39.5%
Culture Measure–79
¹
GHG emissions (Scope 1,2)²(11.2)%(14.1)%
FEP adoption (New Zealand)71%85%
Water Improvement Plans in place–44.0%
Share of NewZealand milk collected for the season to 31 May79.1%79.0%
Delivered in full, on time (DIFOT, ex-NewZealand)51.6%53.2%
Cash operating expenses per kgMS(real)1.341.39
Gross profit from Core operations per kgMS (real)³8.839.21
Return on capital6.8%12.4%
Farmgate Milk Price ($)9.308.22
⁴
Total shareholder return
(share price plus dividend)
$2.73
$0.20
$3.20
$1.00⁵
On-farm profitability ($ per hectare)⁶4,1502,063

©FONTERRAANNUAL RESULTS 202365
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.
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 used to indicate that a measure or sub-total excludes amounts attributable
to non-controlling interests.
is a 13-month rolling average of capital employed.
means bulk raw milk that has not been processed and bulk
separated cream.
is 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.
is 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.
is capital expenditure plus right of use asset (i.e. leases) additions and
business acquisitions, including equity contributions, long-term advances,
and investments.
is continuing operations operating expenses, less non-cash costs
(depreciation, amortisation, right of use asset costs, impairments). Shown
by kilogram of New Zealand milk solids collected.

©FONTERRAANNUAL RESULTS 202366
is profit before net finance costs and tax.
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.
is EBIT divided by revenue from sale of goods.
represents eliminations of inter-business unit sales.
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.
is the channel of branded consumer products, such as powders, yoghurts,
milk, butter and cheese.
means operations of the Group that are not discontinued operations.
represents 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.
is 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, net
foreign exchange gains/losses and any normalised EBITDA relating to
entities divested during the year.
means 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-ordinatedplan 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.

©FONTERRAANNUAL RESULTS 202367
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.
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.
is gross profit divided by revenue from sale of goods.
is Core Operations business unit gross profit excluding Farm Source and the
cost of New Zealand milk sold. Shown per kilogram of New Zealand milk
solids sold by Core Operations.
is investments to drive business expansion or improvement toward our
strategy and generate incremental revenue. This includes organic growth
(existing business projects) and inorganic growth (mergers and
acquisitions).
represents the channel comprising bulk and specialty dairy products such as
milk powders, dairy fats, cheese and proteins manufactured in New
Zealand, Australia and Europe, 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.
means adjusted net debt.

©FONTERRAANNUAL RESULTS 202368
is total trade and other receivables plus inventories, less trade and other
payables. It excludes amounts owing to suppliers and employee
entitlements.
means all NZ milk solids processed by Core Operations, except for
Reference Commodity Products.
means adjustments made for certain transactions that meet the
requirements of the Group’s NormalisationPolicy. These transactions are
typically unusual in size and nature. Normalisationadjustments are made to
assist users in forming a view of the underlying performance of the
business. Normalisationadjustments are set out in the Non-GAAP
Measures section. Normalisedis used to indicate that a measure or sub-
total has been adjusted for the impacts of normalisationadjustments. E.g.
‘NormalisedEBIT’.
refers to the difference in the weighted average price (in USD) between the
Co-op’s Reference Product portfolio and Non-reference Product portfolio.
The difference between these two weighted average prices is a key driver of
the Co-op’s gross margin.
Fonterra has three product channels, Ingredients, Foodservice
and Consumer.
is profit after tax attributable to equity holders of the Co-operative, divided by
revenue from sale of goods.
is commodity specifications of the five Reference Commodity Products
(RCPs) which are Whole Milk Powder (WMP) and Skim Milk Powder (SMP),
and their by-products Butter, Anhydrous Milk Fat (AMF) and Buttermilk
Powder (BMP). These commodity groups are included in the calculation of
the Farmgate Milk Price.
means for Fonterra it is Total Group normalised EBIT 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.

©FONTERRAANNUAL RESULTS 202369
represents 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.
is used to indicate that a measure or sub-total comprises continuing
operations, discontinued operations and non-controlling interests. E.g. ‘Total
Group EBIT’.
means the total cash payment per milk solid that is backed by a share,
being the sum of the Farmgate Milk Price per kgMSand the dividend per
share.
is the measure of share price movements and all economic distributions
(e.g. dividends, capital returns) over a specified period of time, divided by
the original investment amount. Expressed as an annualisedpercentage.
means weighted average cost of capital.
is calculated as 13-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.

©FONTERRAANNUAL RESULTS 202370
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.

©FONTERRAANNUAL RESULTS 202371
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 non-GAAP measures section in Fonterra’s 2023 Annual Review for reconciliation of NZ IFRS to non-GAAP measures, and the Glossary for
definitions of non-GAAP measures referred to by Fonterra.

---

AnnualResults
2023
September 2023

2
©FONTERRA ANNUAL RESULTS 2023
$8.22
CapitalReturn
$0.50
Farmgate
Milk Price
from $9.30
$0.50
Dividend
from $0.20
$9.22
Total
Cash
Return
from 6.8%
Key outcomes
Return on capital
12.4%
Profit after tax
$1.6b
from $583m
Earnings per share
95c
from 36c
Gross profit from Core
Operations per kgMS
$ 9.21
4.3%
Cash operating
expenses per kgMS
$1.39
3.7%

12-month change in key
production and import regions
3
Macro update
©FONTERRA ANNUAL RESULTS 2023
Production
Imports
Reduced demand
for reference
products from
key markets
China
11.2%
Asia
(excl China)
5.9%
Latin
America
13.2%
Middle East
& Africa
0.1%
Australia
4.5%
New
Zealand
0.4%
US
0.7%
EU
0.8%

2,000
4,000
6,000
2017201820192020202120222023
Reference product shipment priceNon-reference product shipment price
Higher price relativities continue
4
Macro update
©FONTERRA ANNUAL RESULTS 2023
FY22FY23
(US$/MT)

5
©FONTERRA
Continue to reduce allocation to whole milk powder
with modest increase in Foodservice channel sales
Fonterra New Zealand production (million kgMS)Sales by product channel (million kgMS)
-
200
400
600
800
1,000
1,200
1,400
Whole milk
powder
Skim milk
powder
CreamCheeseOther proteins
20192020202120222023
-
200
400
600
800
1,000
1,200
1,400
IngredientsFoodserviceConsumer
20192020202120222023
5
Competition for milk
©FONTERRA ANNUAL RESULTS 2023

Diversified across markets and products
Core
Operations
Global
Markets
Greater
China
Total
Ingredients
$
602m
$459m 
$
429m
$114m 
$
133m
$13m 
$
1,164m
$586m 
Foodservice
$
(12)m
$72m 
$
50m
$53m 
$
203m
$46m 
$
241m
$171m 
Consumer
$
(18)m
$1m 
$
(94)m
$90m 
$
(52)m
$48m 
$
(164)m
$137m 
Total
$
572m
$532m 
$
385m
$77m 
$
284m
$11m 
$
1,241m
$620m 
Profit after tax contribution from continuing operations
6
Outcomes for the shareholder
©FONTERRA ANNUAL RESULTS 2023

Ingredients return on capital reflects protein and
cheese performance
Ingredients
from 9.0%
16.4%
Foodservice
from 5.5%
15.7%
Consumer
from (0.4)%
(4.6)%
Total
From6.8%
12.4%
Return on capital
7
Outcomes for the shareholder
©FONTERRA ANNUAL RESULTS 2023

Lower prices key driver of change in 2023
Farmgate Milk Price
21/22 season
Farmgate
Milk Price
22/23 season
Farmgate
Milk Price
Volume
PricesForeign
exchange
Net costs
9.30
8.22
(0.01)
(1.92)
0.98
(0.13)
($/kgMS)
8
Macro update
©FONTERRA ANNUAL RESULTS 2023

9
©FONTERRA
(1.25)
(1.00)
(0.75)
(0.50)
(0.25)
-
0.25
0.50
0.75
1.00
1.25
May 22Aug 22Nov 22Feb 23May 23
Foreign Exchangehedging increases certainty in
forecast Milk Price throughout the season
9
Macro update
©FONTERRA ANNUAL RESULTS 2023
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
20122013201420152016201720182019202020212022
Spot rate
Realised rate
FX sensitivity on Milk Price forecast
NZD/USD
$/kgMS
Unhedged
Hedged
-5c
USD/NZD
Spot Rate
+5c
USD/NZD
Spot Rate
2023

Resource Allocation Framework introduced driving
disciplined allocation of resources for our stakeholders
Sustain safe, productive operations
Competition for cash
Outcomes for the Shareholder
Competition for milk
10
©FONTERRA ANNUAL RESULTS 2023
Sustaining CapitalCollect and Process Milk
Preliminary Cash Flow from Core Operations
IngredientsFoodserviceConsumer
Preliminary Cash Flow
DebtDividendsCapital Returns
Growth Capital
Innovation
Share Buybacks
Reported Cash Flow
Total Shareholder ReturnsFarm Profitability
Strong Balance Sheet

© FONTERRA
Two new efficiency metrics to assist
long-term aspirations
Cash operating expenses per kgMS– targeting a 4%
cash operating cost improvement everyyear
Fonterra aspires to safely and sustainablyremove~$1 billion from its cost base by 2030
Gross profit from Core Operations per kgMS – targeting a 2%
New Zealand operational cash cost improvement every year
Inflation AdjustedLong-term Aspiration
7.00
7.50
8.00
8.50
9.00
9.50
10.00
2021202220232024202520262027202820292030
11
Competition for cash
©FONTERRA ANNUAL RESULTS 2023
($/kgMS)($/kgMS)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
200420072010201320162019202220252028

Asset reliability remains a focus
Milk Utilisation Product Made Right First Time
Cost of Quality
96.4%96.4%96.4%
96.5%
96.3%
20192020202120222023
91.9%
94.0%
95.0%
94.5%
95.3%
20192020202120222023
$90m
$58m
$58m
$72m
$56m
20192020202120222023
Asset Health
20192020202120222023


12
Sustain safe productive operations
©FONTERRA ANNUAL RESULTS 2023

Risk appetite range

13
©FONTERRA
Balance sheet strengthened
Net debt($ billion)
6.0
5.2
4.3
5.3
3.2
20192020202120222023
Leverage
Working capital days
8
Credit rating
83
85
92
98
91
20192020202120222023
S&P Global Ratings A-Stable outlook
Fitch RatingsAStable outlook
50%
44%
39%
42%
29%
4.3x
3.3x
2.7x
3.2x
1.3x
20192020202120222023
Gearing Ratio (%)Debt to EBITDA (x)
13
Outcomes for the shareholder
©FONTERRA ANNUAL RESULTS 2023

Navigating challenges together
©FONTERRA ANNUAL RESULTS 2023
We have
introduced new
support roles
alongside the
tools and
services we
provide
We are
advocating for
better outcomes
for farmers and
the co-op
We are
collaborating
with others to
tackle industry
challenges
We are
leveraging our
scale to create
cost savings for
farmers through
Farm Source
retail
14
Supporting on-farm
We are
improving our
data and
verification
processes for
farmers

Maximisingsustainable milk
Working
alongside you
to get more
milk from
the same or
fewer inputs
It’s better for business
Your farm business and your Co-operative
It’s better for the environment
We can reduce our emissions footprint, improve
water quality and provide our animals with a good
quality of life
It’s better for our customers
And that helps us attract and retain customers
©FONTERRA ANNUAL RESULTS 2023
15
Supporting on-farm

2,154
2,750
3,195
4,150
2,063
3.76
3.82
2.85
2.73
3.20
20192020202120222023
Profit per hectare ($/Ha)Closing share price ($)
Farm profitability and share price
$0.00$0.05$0.20$0.20$1.00
16
Outcomes for the shareholder
©FONTERRA ANNUAL RESULTS 2023
Cash return
per share
Estimate

17
©FONTERRA
Review of our Co-op’s Board size and composition
17
Outcomes for the shareholder
©FONTERRA ANNUAL RESULTS 2023
Board size proposed to be
reduced from 11 to 9 Directors
Chairman still selected from
Farmer Elected Directors
Farmer Elected
Directors
6
Appointed
Directors
3
•Current Board operating well, but size can be rationalised.
Changes are future focused
•Smaller groups usually encourage:
-Dissenting views
-More meaningful sharing of perspectives
-Faster, robust decision making
•6:3 composition strikes a balance between a strong and
diverse level of perspectives, skills and experiences, and
manageable workloads.
•Strong farmer majority is maintained
•Changes to be voted on at the 2023 Annual Meeting and
would take effect after 2024 Annual Meeting

Forecast 2023/24 season Farmgate Milk Price
The range reflects:
•Demand for imported powders into
China are soft, but early in the season
•Indications demand for New Zealand
powders will start to return early 2024
$6.00-$7.50
per kgMS
2023/24
Season Forecast
2021/22 Season
$9.30
$8.22
Reference product shipment price
Average reference product shipment price for the season
Reference product contract shipment price
Forecast Farmgate Milk Price
USD/MT
Reference Product Prices
2022/23 Season
Feb-24
18
Outcomes for the shareholder
©FONTERRA ANNUAL RESULTS 2023
1,000
2,000
3,000
4,000
5,000
6,000
May-21May-22May-23

2024 earnings outlook
FY23 FY24
Continuing operations
forecast earnings
per share
45-60c
The range reflects:
•Favourable Ingredients margins
continue but lower than FY23
•Lower milk costs assisting improved
margins in Foodservice and Consumer
channels
,
USD/MT
Reference and Non-ReferenceProduct Prices
Feb-24
19
Outcomes for the shareholder
©FONTERRA ANNUAL RESULTS 2023
2,000
3,000
4,000
5,000
6,000
Jul-22Jan-23Jul-23
Non-Reference Product shipment price
Reference Product Shipment price
Non-Reference Product contract shipment price
Reference Product contract shipment price

Q&A Session

---

Fonterra Annual Review 2023Arotake-ā-tau Te Mātāpuna

Michael (& COVER), William, Chris,
Bethanne, Peter & Margaret,
Southland
Focus on New Zealand milk
We believe New Zealand milk is the most valuable milk
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 & 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.
Our three strategic choices
are guiding everything we do

Contents
About this report
Welcome to our Annual Review, which forms
part of our end-of-year reporting suite.
We know there are a wide range of stakeholders who are
interested in our Co-op. This report gives an integrated view of
our performance across financial and non-financial measures,
and our targets for the future. It is supported by a series of
supplementary reports where stakeholders can find more
detailed information most relevant to them.
This Annual Review provides a summary of our environmental,
social and economic activities and performance. It covers key
achievements and performance data, as well as the challenges
and opportunities we have faced across our Co-op over the last
12 months. It is a chance to reflect on our work, quantify our
impacts and look to the future.
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
Financial Statements.
Please refer to the Non-GAAP measures section for further information about non-
GAAP measures used by Fonterra, including reconciliations back to NZ IFRS measures.
Definitions of non-GAAP measures used by Fonterra can be found in the Glossary.
OVERVIEW03
About us 04
Letter from Chair of Board05
Letter from CEO08
Our purpose, values and goals10
How we create value 11
Creating value for stakeholders 12
Our year in review14
Doing Good Together15
BUSINESS PERFORMANCE 22
ON-FARM30
Honour roll36
OFF-FARM43
PRODUCTS & CUSTOMERS46
FONTERRA MANAGEMENT TEAM50
NON-GAAP MEASURES54
GLOSSARY56
DIRECTORY60
OUR REPORTS ARE AVAILABLE
FROM FONTERRA.COM/NZ/
EN/INVESTORS.HTML
OUR 2023 SUITE
OF REPORTS
Annual Review 2023
(Referenced as AR)
Financial Statements 2023
(Referenced as FS)
Business Performance
Report 2023
(Referenced as BP)
Sustainability Report 2023
(Referenced as SR)
Governance & Statutory
Disclosures 2023
(Referenced as G&S)
Modern Slavery Statement
2023
(Referenced as MS)
Farmgate Milk Price
Statement 2023
(Referenced as MP)

We’re a dairy co-operative, owned
and supplied by farming families
across Aotearoa, New Zealand.
Through the spirit of co-operation
and a can-do attitude, Fonterra’s
farmers, along with almost 18,000
employees around the world,
share the goodness of our milk
through innovative consumer,
foodservice and ingredient brands.
We believe that food and nutrition are essential to
sustain us today and for future generations to thrive.
This is why we take great care with every drop
of milk, from the beginning, through every step
of the way. It’s our dedication and care that enables
us to produce safe and high-quality food, and our
dairy know-how and innovation capability mean
we can do amazing things with our milk to enhance
people’s lives.
Our farmers farm naturally and because of this,
we are proud to have one of the lowest on-farm
carbon footprints in the world.
We want to be the most emissions efficient and
environmentally sustainable dairy co-op. To do this
we are reducing our footprint, restoring nature,
and adopting a regenerative mindset.
Our portfolio of well-known brands includes
Anchor, Anmum, Anlene, Nutiani, NZMP and
Farm Source.
New Zealand
Australia

China
Rest of Asia Pacific
Rest of World
About us
Revenue
($ Million)
24,580
FY22
1
: 21,901
6,192
2,239
2,518
4,619
9,012
28
8
4
Raw milk collected
(million litres)
17,803
FY22: 18,455
1,366
16,333
2

Employees
(FTE)
17,993
FY22: 19,608
12,149
672
1,534
1,829
1,809
1

FY22 has been re-presented due to the Soprole business being moved to held for sale and classified as discontinued operations (and subsequently sold).
2

Amount collected during FY23 (which differs to the 16,317 million litres collected during the 2022/23 season ended 31 May 2023).
Manufacturing
sites
45
FY22: 48
5
04

The team can be proud of delivering a reported profit after tax
of $1.58 billion, equivalent to 95 cents per share and up 170%
on last year.
We faced real challenges on-farm in New Zealand this year,
as extreme weather events took a toll on our communities. In
February, Cyclone Gabrielle hit the North Island with Northland,
Coromandel, the Hawke’s Bay and Gisborne among the hardest hit.
In the Hawke’s Bay and Gisborne some communities were cut
off and isolated. The Co-op accessed these areas via helicopter
to assess the damage, understand farmers’ needs and provide
provisional supplies and veterinary support. Many suffered
losses to their property, had to manage animal welfare issues
and support the wellbeing of their families and neighbours.
As a Co-op, we look after each other when it comes to natural
disasters like this. The Co-op helps farmers to manage these
types of risk through what is known as a Force Majeure event.
In accordance with the Terms of Supply, where farmers where we
had to instruct a farmer to dispose of milk or dry off, appropriate
compensation for these farmers was made.
Volatile milk price environment
For share aligned farmers this strong earnings performance is
helpful in the context of a declining Farmgate Milk Price.
Our final milk price for the 2022/23 season was $8.22 per kgMS
down from the high forecast midpoint of $9.50 in June 2022. The
reduction is due to lower than anticipated demand for imported
products, particularly from China, which contributed to the
Global Dairy Trade prices dropping, with the average whole milk
powder price down 16% compared to last season.
The impact would have been greater, if not for the team’s efforts
to utilize the scale of the Co-op and shift milk into the products
and places that were delivering the most value at the time.
Letter from
Chair of
Board
Peter McBride
– Chair
Kia ora,
Miles and the team have
delivered a third consecutive
year of strong performance
overall, despite facing into
difficult market conditions
in a number of regions.
Final Farmgate Milk Price
$8.22
per kgMS
05

Strong performance underpinned
by non-reference products
While on the one hand our milk price was negatively impacted
by market forces, on the other our earnings did benefit from
favourable market conditions, including strong margins in our
Ingredients channel, in particular the cheese and protein portfolios.
There are two other key performance metrics the Board is
particularly pleased with this year:
–Return on Capital for the last 12 months is 12.4%, up from
6.8% in the comparable period.
–We have also exceeded our performance target for the Co-op’s
balance sheet strength, with the gearing ratio at 28.8% and
debt to EBITDA at 1.3x, even after adjusting for the impact of
the Capital Return.
Full year dividend at the maximum end
of our policy
In acknowledgement of the declining milk price environment and
the impact that has on farmers, the Board has made the decision
to pay a final dividend slightly above our dividend policy.
We are pleased to deliver a strong full year dividend of 50 cents
per share and unit – comprising of an interim dividend of 10
cents per share and a final dividend of 40 cents per share.
This is in addition to the 50 cents per share capital return
paid to shareholders and unit holders in August, following the
divestment of Soprole.
This brings the total cash return for a fully share-backed farmer to
$9.22 per kgMS for the 2022/23 season.
Flexible shareholding
Our Flexible Shareholding capital structure has been in place
since late March. It’s generally working as expected and we are
comfortable with the liquidity in the market.
Following the transition to the Flexible Shareholding structure
Fonterra implemented market maker arrangements to support
liquidity in the Farmer Shareholders’ Market. We also have
the ability to buy back shares as part of our ongoing capital
management programme, where we see it as value accretive
to the Co-op.
Our share price has come down. This was anticipated and well-
signalled before shareholders voted to support the changes to
our capital structure. There has also been a share price impact as
a result of the recent capital return. Over time we expect that the
price will reflect the Co-op’s financial performance, and the value
farmers see in that. Ultimately farmers will determine the value
of the shares.
Flexible Shareholding is the right capital structure for our Co-op.
By making it easier for farmers to join or stay with the Co-op, it
will help us to maintain a sustainable milk supply.
The Board believes it is the
right time to review its size
& composition.
Reviewing our Board size and composition:
Since the Co-op’s formation it has been envisaged that the Board
size would be rationalised over time. With the Capital Structure
review, asset divestment programme and long-term strategy
development largely behind us, the Board believes it is the right
time to review its size and composition.
We have shared our initial thinking from that review, which we
are discussing with farmers and shareholders in advance of this
year’s Annual Meeting – at which we plan to seek endorsement
for the changes via a vote.
Having now been part of the Co-op’s Board for five years, the
last three as Chair, I’m confident that reducing the size of our
Board will improve the dynamics within the group, encouraging
greater participation from directors, and maintaining access to
the necessary skills and experience to govern the Co-op into
the future.
Our current thinking is to reduce the number of directors on
the Board from 11 down to nine. The balance between Farmer
Elected and Appointed Directors would be maintained, with a
composition of six Farmer Elected Directors and three Appointed
Directors. As is the case today, the Chairman would be one of
the Farmer Elected Directors.
06

Full year dividend
50c
per share and unit
Total cash return
$9.22
per share backed kgMS
Delivering our strategy
We remain confident in delivering our long-term strategic targets
and plan to provide shareholders and unit holders with a strategic
update in early 2024.
Prior to that we will be confirming our Scope 3 target, which
Miles and I signalled at last year’s Annual Meeting.
Being a leader in sustainability is a fundamental part of our
strategy. Introducing a Scope 3 target is a critical step for us
when we consider our global competitive landscape, international
market access, funding sources, and continued partnerships
with customers.
We need to set a target that is meaningful and brings us into line
with our international competitors – many of which have already
set targets.
We know that the rate of change farmers are being asked to live
with is already challenging. Good progress towards the target can
already be made using the tools and information available to us
today. The Co-op will support farmers to meet this target through
the sharing of best practice and innovation. Our methodology
will continue to evolve alongside the science that supports these
changes. We will work with you, not against you.
Outlook for the year ahead and beyond
Looking out to the end of the current season and new
financial year it is clear that we will face a challenging operating
environment – for our individual farming businesses and for
our Co-op.
We know that the 2023/24 forecast Farmgate Milk Price range is
below breakeven for many of our farmers. The Co-op is entirely
focused on performance and, as you will be on farm, reducing its
costs to offset the impact of inflation over the coming years.
Dairy is a long-term game and as an exporter, we need to
accept that we are impacted by demand and supply dynamics,
commodity prices and geopolitical events. The Co-op does its
best to try and smooth the edges and optimise value, but there
will always be volatility.
Right now, the Co-op is well-positioned to recover from this
part of the cycle. Our strong balance sheet gives us options to
consider how we create more value. It also benefits all farmers,
as we know that the banks assess our individual farming business
risks together with Fonterra’s balance sheet and performance
when considering their overall exposure to the sector.
Ultimately, strong performance is the best way we can support
our farmers through this difficult period. That remains our focus
for the year ahead.
Peter McBride
Chair of Board
We need to set a target that
is meaningful and brings us
into line with our international
competitors – many of which
have already set a target.
07

Strong earnings performance
FY23 was a volatile year for global economies and commodity
markets as the world continued to recover from COVID-19.
There was strong demand for protein products, in particular cheese
and caseinates, at the same time as demand for milk powders
softened. This resulted in historic high price relativities across the year.
We captured the high protein prices in our Ingredients channel,
and these have been a strong driver of our earnings performance
for the year.
To optimise our Farmgate Milk Price, we moved milk into higher
performing reference product categories, such as skim milk powder
and cream, where possible.
However, we were required to reduce the forecast Farmgate Milk
Price across the season as demand for whole milk powder from key
importing regions, in particular China, continued to soften.
We recognised the impact the reduced forecast Farmgate Milk
Price has on farm profitability, particularly at a time when farmers
are facing higher input costs, and utilised our strong balance sheet
to favourably adjust the Advance Rate Schedule, which meant that
we were able to get cash to farmers sooner.
Progress on strategy
Despite economic headwinds, we’ve made good progress on
strategic initiatives this year that will help to set us up for the future.
A sustainable supply of New Zealand milk is fundamental to
the future prosperity of the Co-op, so that we can maintain
efficient operations and continue to meet customer demand for
New Zealand milk at scale.
Our new Flexible Shareholding capital structure, which was
implemented in March, supports a sustainable milk supply and
stable balance sheet by making it easier for farmers to join and
remain with the Co-op.
Kia ora,
I’m proud to have led
a dedicated team who have
delivered a strong result for
your Co-op.
Our reported profit after tax is $1.6 billion, up 170% on last year,
and our return on capital is 12.4%, up from 6.8%.
This has put us in the position to pay a full year dividend of 50 cents
per share, including the interim dividend of 10 cents per share.
Throughout FY23 we also made progress on several key strategic
initiatives. We implemented our new Flexible Shareholding capital
structure, completed divestment of our China Farms business
and Chilean business, Soprole, and launched our new corporate
ventures arm, provisionally named Nutrition Science Solutions.
As a result of the successful divestment of Soprole, we were able to
return tax-free 50 cents per share to shareholders and unit holders.
These milestones were several years in the making and I’m proud
the team has delivered upon the commitments we made to our
shareholders.
I also acknowledge that these achievements have been against
a backdrop of a falling Farmgate Milk Price across the season.
We work hard every day to maximise total shareholder returns.
We ended the 2022/23 season with a final Farmgate Milk Price
of $8.22 per kgMS. When combined with our strong dividend and
capital return, our total cash return to farmer shareholders was
$9.22 per share backed kgMS.
Letter
from CEO
Miles Hurrell
– Chief Executive Officer
08

One of the benefits of being part of the Co-op is having access to
the advice and services provided through Farm Source.
The team is working alongside farmers to provide tools that
support more efficient farming businesses and help to meet the
changing needs of both regulators and our customers.
An important focus for the team right now is introducing a
Scope 3, or on-farm emissions intensity target, which we will
announce before the end of calendar year 2023.
Achieving the target will be a collective effort, with incremental
efficiency gains enabled by the tools made available by the Co-op
and wider industry partners.
We’ve made a strategic choice to be a leader in dairy innovation
and science, with innovation expected to play an important role
in achieving the target by reducing methane production on-farm.
We are working with partners to invest in potential solutions.
Looking to the future, our innovation portfolio of activity is also
exploring potential new revenue streams for the Co-op that utilise
either our milk or our expertise.
This year, we’ve established Vivici, our joint venture with Royal
DSM, which is exploring commercial opportunities in fermentation
derived ingredients.
These ingredients could be used to extend our farmers’ milk into
products, categories, and markets which we do not currently sell
into, as well as earn the Co-op a return on the commercialisation
of our IP.
We’ve also launched our corporate ventures arm, Nutrition Science
Solution (NSS), which made its first strategic investment in the
form of a minority stake in Pendulum Inc, a biotech company
specialising in metabolic health.
NSS is a long-term play for the Co-op, that will seek to partner with
and invest in global start-ups in the nutrition science category.
Driving efficiencies across the Co-op
When pursuing these opportunities, we’re assessing them against
other investment opportunities for our farmers’ capital.
Our new resource allocation framework demonstrates how we
think about delivering value. It shows how we aim to allocate
farmers’ milk to the products and channels where we believe it
will earn the highest risk-adjusted returns.
The priority use of the Co-op’s capital is maintaining safe,
productive operations. With any capital remaining, we assess
the opportunities available to us and use it either to pay down
debt, for dividends, capital returns, share buybacks, or for growth
opportunities including innovation.
It is as part of this approach to capital management that we
have allocated up to $50 million to an on-market share buyback
programme, which commenced in August 2023.
We’re also taking a close look at our operating expenses to assist
us to stay on track for our short and long-term financial targets.
We have announced a goal of reducing costs across the Co-op by
about $1 billion over the 7 years to 2030. This goal will help offset
higher inflation expectations and we intend to achieve it through
a range of projects that will streamline how we operate.
To track our progress, we have introduced two new efficiency
metrics which we’ll report against every six months.
These are:
1. Opex per kgMS – targeting a 4% cash operating cost
improvement per year to support long-term discipline in our
global overheads.
2. Gross profit per kgMS – targeting a 2% New Zealand cash
manufacturing cost improvement every year to support
efficient New Zealand operations while remaining laser
focused on delivering value.
Outlook for FY24 and beyond
Looking at FY24, ongoing reduced demand for whole milk powder
from key importing regions continues to impact the outlook for
our Farmgate Milk Price, with our 2023/24 forecast range currently
$6.00 - $7.50 per kgMS, with a midpoint of $6.75.
We are watching market dynamics closely and there are indications
demand for New Zealand milk powders will start to return from
early 2024. Demand for other products, including Foodservice and
our value-added Ingredients, continues to be robust.
The favourable price relativities that we’ve experienced across
FY23 have reduced from their peaks. But we are forecasting
improvement in our Consumer and Foodservice channels as our
markets capture improved margins.
As such, our FY24 forecast earnings range for continuing
operations is 45-60 cents per share.
We acknowledge that across the year, farmers will continue to feel
the pressure from high input costs and a reduced Farmgate Milk
Price. We’ll continue to do all that we can to assist farmers through
this challenging period.
Over the medium to long-term, the outlook for New Zealand dairy
remains positive. Demand for sustainable nutrition is continuing
to grow and by implementing our strategic plans we are well
positioned to meet this demand.
We’re also accelerating plans to extract more value from our
farmers milk by refining our innovation portfolio and investing
in new areas for growth.
I intend to provide an update on our long-term strategy early in
calendar year 2024, which will further detail our market context
and plans to 2030 and beyond.
Miles Hurrell
Chief Executive Officer
09

Our Purpose
Our Co-operative,
Empowering people,
To create goodness,
for generations.
You, me, us together,
Tātou, tātou
O u r Value s
Co-operative spirit
Do what’s right
Make it happen
Challenge
boundaries
Our Principles
Our principles are
aligned with the Māori
world view.
Manaakitanga
is the care we show for
others – it strengthens our
relationships and communities.
Kaitiakitanga
is how we care for our
environment today, tomorrow,
and for future generations.
Whanaungatanga
is our Co-operative spirit –
it sits at the heart of our values.
We’ve made
key strategic
choices

Focus on Aotearoa
New Zealand Milk

Be a leader in
dairy Innovation
& Science

Be a leader in
Sustainability
Key aspirations
for 2030
Operating Profit
40-50%
increase from FY21
Group ROC
~9-10%
Our purpose,
values & goals
50%
absolute reduction in
Scope 1&2 emissions by 2030,
from 2018 baseline
10

Applying innovation &
our ingenuity to make
& distribute nutrition
We connect farmers with
markets to maximise the
value from their milk
We source raw milk
from farmers
& to
consumers
for
foodservice
as
ingredients
Relationships
— With farmers, governments and regulators, unions,
employees, customers, iwi and communities
People & Culture
— Approximately 18,000 skilled and motivated employees
led by a board and management team with diverse skills
and experience
— 20,000+ dedicated farmers and farm workers
— Thousands more people in our supply chain
Nature
— 4 million milking cows grazing on 1.5 million hectares
of pastoral land
— Some fertiliser, irrigated water and supplementary animal nutrition
— Energy (27.5PJ) and freshwater (48.7 million cubic metres) for our
manufacturing sites
Assets & Infrastructure
— Our portfolio of property, plant and equipment including
right-of-use assets ($6,343 million total net book value)
— 500+ milk collection tankers
— 45 manufacturing sites
Intellectual Capital
— Our know-how, systems and intellectual property
— Our strong global brands
— 232 granted patents across 25 families of patents
The resources we rely on
Financial
— A strong financial base, capital from our farmer
shareholders, unit holders and debt ($12,774 million average
capital employed)
How we
create
value
11

Creating value for stakeholders
Farmers
We create value by
–Delivering a strong total payout (AR-22)
–Reliably collecting their perishable product and providing
efficient access to valuable international markets (AR-04)
–Adding value to their milk through innovation and a
flexible product portfolio (AR-46)
–Providing resilience to operating volatilities such as
price, energy, foreign exchange rates and ocean freight
(BP-34 & 29)
–Providing access to technology and services that help
meet regulatory requirements and continue to improve
farming practices (AR-32)
How we engage
–On an ongoing basis led by our locally based Farm
Source support teams across New Zealand
–At meetings and roadshows, and through our
formal governance processes
Customers & consumers
We create value by
–Delivering nutrition products that are high-quality,
low carbon and responsibly produced (SR-20)
–Providing access to nutrition products that include
healthier options and linked to sustainable credentials
(SR-22)
–Using responsible procurement to influence our
supply chain (SR-68)
–Responding quickly to changing needs and customer
demand for innovative new products and ingredients
(AR-48)
How we engage
–On an ongoing basis through our account
management teams
–By sharing information through programmes such as
EcoVadis, SEDEX and the CDP
–With our own direct consumers through our service
teams, email and social media, and consumer research
Employees
We create value by
–Providing a safe workplace (S R-17)
–Supporting health and wellbeing (S R-16)
–Providing good learning and development
opportunities (S R-1 2)
–Building an inclusive culture where everyone
contributes and feels supported (S R-1 1)
How we engage
–On an ongoing basis through our everyday
interactions, regular engagement surveys and
engagement with unions.
Kathryn,
Taranaki
Kiri & Te Kaihou,
Bay of Plenty
Lisa,
Canterbury
12

Society
We create value by
–Complying with regulatory requirements, including food
safety, marketing and environmental (SR-26)
–Reducing our environmental footprint including GHG
emissions, water consumption and waste (SR-27)
–Contributing to the development of policy and
responding to crises (A R-1 8)
–Collaborating with industry partners to achieve
international commitments Ref. (SR-59)
–Taking a responsible approach to tax (SR-66)
–Supporting international relations through our presence
in global markets (AR-47 & 48)
How we engage
–On an ongoing basis through our Government and
Stakeholders Affairs team
–Through formal consultation on important issues such
as climate change
–Through partnerships on initiatives such as Living Water
with the New Zealand Department of Conservation
Investors
We create value by
–Providing sustainable returns via dividends and
interest paid (AR-22)
–Reducing investment risk through transparency
and independent assessment (SR-67)
–Providing opportunities to invest in New Zealand
dairy nutrition through the Fonterra Shareholders’
Fund
How we engage
–On a regular basis through updates, formal
reporting and meetings coordinated by our
Capital Markets team
Local communities
We create value by
–Providing direct rural and urban employment (SR-83)
–Reducing our environmental footprint (SR-27)
–Supporting communities through natural disasters and crises
such as floods (A R-1 8)
–Providing access to nutrition through in-school nutrition and
food bank donations (A R-17)
–Strengthening and enhancing our relationships with tangata
whenua (S R-1 5)

How we engage
–With interested groups, such as NGOs, through collaboration
and consultation on specific topics
–On an ongoing basis with iwi around Aotearoa New Zealand
–Through public events, the media and our own social media
channels
–Through our Community programmes, such as Hapori,
Kickstart Breakfast, Feeding NZ Communities and
supporting the Rural Support Trust
Fonterra Application Centre,
Shenzhen
Annabelle & Rajiv,
Auckland
KickStart Breakfast
13

Our year in review
September
Announced 2021/22 season
final Farmgate Milk Price of
$9.30 per kgMS.
Launch new wellbeing solution
brand, Nutiani, targeting
medical and everyday
wellbeing nutrition markets.
We announce a partnership
with Rural Support Trust
(RST) to support rural
New Zealanders by improving
access to wellbeing and
resilience services for farming
families who are doing it
tough.
November
Fonterra announces sale of its
Chilean Soprole business to
Gloria Foods JORB S.A.
Neil Beaumont
appointed as
new Chief
Financial Officer.
Fonterra & Nestlé announce a
new partnership designed to
help reduce New Zealand’s on-
farm emissions, including a
New Zealand first – a drive to
develop a commercially viable
net zero carbon emissions
dairy farm.
January
Many co-operative farmers
and their whānau, our
employees and customers
across the North Island of
NZ are impacted by flooding
during the wettest month on
record. Fonterra supports
those impacted throughout
the coming months.
March
We complete the sale of
Chilean Soprole business
to Gloria Foods - JORB S.A.
(Gloria Foods).

Announce a Profit After Tax of
$546 million, up 50% on same
period last year, in our FY23
Interim Results.

May
Announced an opening
2023/24 season forecast
Farmgate Milk Price of
$7.25 to $8.75 per kgMS,
with a midpoint of $8.00.
Taranaki dairy farmer
Donna Cram is announced
as the 2023 Fonterra Dairy
Woman of the Year and we
welcome three new First
Foundation Scholars to the
Co-operative.
July
Announced an increase in our
Scope 1&2 emissions target,
along with a $790 million
investment, which includes up
to $90 million funding from
Government.

August
Fonterra and Royal DSM
establish new start-up
company, Vivici, to
accelerate development
and commercialisation of
fermentation-derived proteins
with dairy-like properties.
We take another step on
our low carbon transition
with our Waitoa site in the
Waikato planning to install a
30 megawatt wood biomass
boiler to replace a coal boiler.
We also announce the closure
of our small and ageing
Brightwater site near Nelson.
October
The Co-operative releases
its Sustainable Finance
Framework. This Framework
aligns Fonterra’s funding
strategy with its sustainability
ambitions and reflects the
evolving preferences of lenders
and debt investors
in this area.
December
Fonterra and Nestlé agree
to sell their Dairy Partners
Americas (DPA) Brazil joint
venture to French dairy
company Lactalis.
February
Fonterra and MAN Energy
Solutions (MAN ES) enter
a strategic partnership to
reduce CO
2
emissions in dairy
production using climate-
friendly heat pump technology
for steam generation.

April
We revise our 2022/23 season
forecast Farmgate Milk Price
range from
$8.20-$8.80 per kgMS
to $8.00-$8.60 per kgMS.
Announce the conversion of
coal boilers at our Hautapu
site to wood pellets and
installation of a heat pump
at Palmerston North.
June
Acting Chief
Operational
Officer
Anna Palairet
announced.
Launch of new nutrition
science venture arm to
incubate, scale and invest
in ventures in the area
of nutrition science. First
investment announced
with Pendulum.
2022
2023
14

Doing Good
To g e t h e r
Durham Farm,
Northland
15

As a co-op we know just how much
good can come from working together,
which is why we’re working with partners
right across the country to make a
meaningful impact. Our Doing Good
Together programme delivers across
three impact pillars to care for people,
the environment and our Co-op for
generations.
Our impact pillars
Putting good quality
nutrition in the hands of
those who need it most
Keeping our
communities strong
Protecting & regenerating
the environment
1
2
3
Fred and Ken,
NZ Food Network
16

$100K
Farm Source
Charitable
Giving raised
over $100K
13
million
Dairy serves donated to
communities in New Zealand
5.6
million
KickStart breakfasts
served in 1,400 schools
22,000 trees
Partnered with Trees for
Survival to support 22 schools
to nurture 22,000 trees
$980K
Donated to community
projects in regional
New Zealand
2,900 people
More than 2,900 people
attended 16 events with Rural
Support Trust on mental
health & wellbeing
$650K
Over $650K donated
to community projects
globally
17

In response to the devastating floods and Cyclone Gabrielle
that hit the North Island earlier this year, Fonterra along
with our strategic partners supported community groups
on the front-line giving assistance to affected Kiwis.
CEO of The New Zealand Food Network (NZFN),
Gavin Findlay, said that with the many people displaced
by the flooding, the donation of quality dairy products
went a long way.
Helping communities
respond to natural disasters
“ Once again, our great
partners at Fonterra are
helping us get food to where
it’s needed most. Fonterra’s
quick response to this
emergency shows their
commitment to doing good
together for the sake of our
communities and reinforces
the value of having them on
the NZFN team.”
Gavin Findlay,
CEO New Zealand Food Network
Along with the support we provided communities post the
cyclone, the team also volunteered in the Wairoa region and
got stuck in helping to clean up Tākitimu Marae. This was
followed by cleaning silt beneath houses for whānau that had
no insurance and could not occupy their houses until the silt
had been removed.
The combined Fonterra support was significant and the
Fonterra staff were incredibly proud to show up and offer
support during this time.
Fonterra Emergency Response Team
supporting the clean up at Tākitimu Marae
alongside Waikato Tainui in Wairoa
following Cyclone Gabrielle.
18

$40,000
Over $40k donated
through Farm Source
Charitable Giving to the
Hawke’s Bay disaster
relief trust
$15,000
Donated to NZ
Landcare Trust and
Trees That Count to
support remediation
of restoration projects
after the floods
Some of the ways we supported
the community through the
recent natural disasters:
$60,000
Donated to Community
Foundation flood relief
funds in Hawke’s Bay
and Auckland
1.3 million
Dairy serves to
Auckland, Tairāwhiti,
Hawke’s Bay and
Northland as part
of flooding and
cyclone response
Penelope, Blair, Joe & Billie,
Hawke’s Bay
19

The Big Feed called to action thousands
of farmers across the country to donate
some of what they produce. In one day,
the event aimed to raise 1 million ‘meals’.
The Big Feed and our continued commitment
to getting food where it’s needed the most
“ I’ve seen the faces of our
rangatahi light up with
excitement when they see
they have milk in their kai
boxes. Milk is a product that
our rangatahi know how to
confidently prepare. This is
so helpful as some don’t have
cooked meals to come home
to and must source meals
themselves. We are super
appreciative for the milk
that Fonterra has donated”.

Reconnect – Family Services, Manukau
In FY23 Feed Out successfully raised 1 million meals with
Fonterra and their farmers providing just under 430,000 milk
meals towards the cause. The Big Feed event will now occur
annually with a goal of raising 3 million meals on December
14th 2023.
With our partners New Zealand Food Network (NZFN)
and Feed Out, our Feeding New Zealand Communities
programme donated 13 million serves of dairy nutrition
in FY23. We will continue to increase our contribution of
more nutritious dairy goodness more frequently. In FY23
we’ve also had a strong focus on identifying surplus product
across the Fonterra network to donate to the NZFN. This
is complimented by our voluntary agreement to the Kai
Commitment, under which we’re working on a number
of food waste reduction strategies.
Our Hapori programme continues to be present in 10
New Zealand regions, with each regional committee offering
funding and donations of dairy products to local community
groups, schools and marae.
20

Fonterra formed a strategic partnership
with Rural Support Trust in August 2022.
The shared vision for the partnership is to support rural
New Zealanders by improving access to wellbeing and resilience
services for farming families who are doing it tough.
Phase one of the partnership was to gain insight into the value
Rural Support Trust brings and what future opportunities exist
for the Co-op to strengthen and collaborate on. Early insights
indicate we have formed the right community partnership to
support farmers.
As we move into FY24, phase two of the partnership involves
Fonterra supporting Rural Support Trust to thrive and embed
the three opportunities identified to improve overall experience:
1. Grow their operational capability
2. Promote the value they bring to communities
3. Grow their reach in the primary sector
Together with the Rural Support
Trust we have:
• Completed our insights work and identified three
opportunities for FY24.
• Provided funding for the Time Out Tour which supports
rural communities to start the conversation about mental
health – 4,000 people have attended 27 events since
2022 with ambassador Matt Chisholm.
• Donated over $50K to the trusts through our Farm Source
Charitable Giving programme.
• Featured Rural Support Trust in the Fonterra tent at Field
Days to provide rural communities further access.
• Employee Assistance Programme (EAP) available to all
Fonterra farmers, indefinitely.
Community
connection — Farming
Tana & Rosy,
Waikato
21

Profit after tax
$
1,577m
from $583m
Earnings per share
95c
from 36c
12.4%
Return on Capital
from 6.8%
Gross profit from Core Operations per kgMS
Cash operating expenses per kgMS
1. Per share backed kgMS
$
9.22
$
0.50
$
0.50
$8.22
Total Cash Return
1
Capital
Return
Farmgate Milk Price
Dividend
from 20c
from $9.30
Business
performance
$9.85
$7.64
$7.52
$8.60
$8.83
$9.42
$9.21
2023202220212020
Actual
Inflation Adjusted
$1.39
$1.36
$1.34
$1.16
$1.18
$1.26
$1.39
2023202220212020
Actual
Inflation Adjusted
22

In addition, the Co-operative returned
50 cents per share to shareholders
and unit holders in August following
the divestment of Soprole. This
resulted in a total cash return of
$9.22 per share backed kgMS for our
farmer owners.
Commodity product prices that inform the Farmgate Milk
Price (Reference Commodity Products) were down on
average 14.2% compared to the prior season and the main
reason for the $1.08 per kgMS decline in the Farmgate
Milk Price from $9.30 per kgMS last season.
Our profit after tax increased $994 million to $1,577
million. Excluding non-controlling interests this is equivalent
to 95 cents per share, up from 36 cents per share in the
prior period.
Excluding the net gain on divestments, our normalised
profit after tax is up $738 million to $1,329 million,
excluding non-controlling interests this is equivalent to
80 cents per share.
The Co-operative’s operating environment continues
to improve following the pandemic, and with the global
supply chain network stabilising and slowly returning to
normal, our inventory levels at year end have improved.
Our net debt is $3.2 billion, $2.1 billion lower due to
the improved inventory levels, increased earnings and
the sale of Soprole for aggregate proceeds of $1.3 billion
– of which $804 million was returned to shareholders and
unit holders on 18 August 2023.
Our increased earnings combined with the strength of our
balance sheet has put us in a position to pay a full year dividend
of 50 cents per share, comprising of 10 cents per share paid
at interim and a final dividend of 40 cents per share.
Our New Zealand milk collections increased 2 million
kgMS compared with the 2021/22 season due to higher
collections in the latter half of the season as a result
of more favourable weather which was conducive to
stronger pasture growth.
1. Refer to the Glossary for definition.
Litres and milk solids collected
For the year ended 31 July 2023,
our Co-op performed well. We
returned $8.22 on average for
every kilogram of milk solids
our farmer owners supplied us.
Combined with a dividend of
50 cents per share, this means a
total payout of $8.72 per kgMS.
Total Payout
1
10
20232022202120202019
Farmgate Milk PriceDividend
$6.35
$7.14
$7.54
$0.05
$0.20
$6.35
$7.19
$7.74
$9.30
$0.20
$9.50
$8.22
$0.50
$8.72

kgMS collected
(million)
Litres collected
(million)
20232022202120202019
1,5231,5171,539
1,4801,478
17,123
16,876
17,121
16,31716,404
23

Business performance
Profit After Tax
1
1. Includes amounts attributable to non-controlling interests.
2. Operating expenses includes $11 million net loss on sale related to Hangu China farm and the sale of GDT.
Our profit after tax increased
$994 million to $1,577 million.
FY23TAXFINANCE
COSTS
OTHER
ITEMS
GAIN ON
DIVESTMENTS
OPERATING
EXPENSES
2
GROSS
PROFIT
FY22
583
1,259(344)
(30)
307
20
(218)
1,577

Increased due to
favourable margins,
particularly for
protein and cheese
products
Increased due to a
$349 million (before tax)
gain on sale of Soprole.
The prior year included a
$42 million gain on sale
of GDT
Increased due
to higher EBIT
and capital gains
tax on the sale
of Soprole
Increased mainly due to
impairments of our
New Zealand consumer
business and our Asia
brands, of $121 million
and $101 million,
respectively, as well as the
impact of inflationary
pressures
24

Breakdown of Total Group Performance
FOR THE YEAR ENDED 31 JULY 202231 JULY 2023
NZD MILLION
CONTINUING
OPERATIONS
1
DISCONTINUED
OPERATIONS
1
TOTAL GROUP
CONTINUING
OPERATIONS
1
DISCONTINUED
OPERATIONS
1
TOTAL GROUP
Sales volume ('000 MT) 3,318 606 3,924 3,497 476 3,973
Revenue21,901 1,524 23,425 24,580 1,466 26,046
Cost of goods sold(18,992)(1,093)(20,085)(20,399)(1,048)(21,447)
Gross profit2,909 431 3,340 4,181 418 4,599
Gross margin (%)13.3%28.3%14.3%17. 0 %28.5%1 7. 7 %
Operating expenses(2,065)(390)(2,455)(2,496)(303)(2,799)
Other
2
102 (11) 91 70 348 418
EBIT 946 30 976 1,755 463 2,218
Net finance costs (194)(37)(231)(211)(50)(261)
Tax exp ense(131)(31)(162)(303)(77)(380)
Profit after tax 621 (38)583 1,241 336 1,577
1. Refer to Note 1a and 2c of the FY23 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.
We have normalised $260 million related to the gain on sale
from Soprole, and a $12 million loss relating to the disposal of
Hangu farm in China.
Consistent with our strategy to focus on our New Zealand milk,
we’ve made progress divesting our operations in Chile, Brazil
and China.
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 was completed on 31 March 2023. The
aggregate proceeds (including pre- settlement dividends) before
tax, hedging and transaction costs were $1.3 billion, of which
$804 million was returned to shareholders and unit holders on
18 August 2023.
In December 2022, Fonterra and Nestlé agreed the sale of DPA
Brazil to French dairy company Lactalis for BRL 700 million. 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 our share of debt held directly by
DPA Brazil.
Our normalised profit after tax
increased 125%, or $738 million,
to $1,329 million.
The sale is subject to several conditions including receipt of
regulatory approvals from competition authorities. The Brazilian
competition regulator released its first report on the proposed
sale in late July 2023. The parties are engaging with authorities to
understand and address the matters raised in relation to limited
parts of the business and expect the sale to be completed within
one year of balance date.
We also finalised our exit of China Farms, following the sale of
our Hangu China farm.
25