Fonterra announces 2025/26 Farmgate Milk Price, Q3 earnings

29 May 2025

Fonterra announces 2025/26 Farmgate Milk Price, Q3 earnings

• Normalised
1
profit after tax: NZ $1,158 million, up 11%
• Normalised continuing earnings per share: 70 cents per share, up 13%
• Return on capital: 11% down from 11.9%
• FY25 full year forecast earnings range: 65-75 cents per share
• 2024/25 season forecast Farmgate Milk Price: $10.00 per kgMS
• 2025/26 season opening forecast Farmgate Milk Price: $10.00 per kgMS

Fonterra Co-operative Group Ltd today provided its Q3 business update, announcing strong profit
after tax of $1,158 million, up $119 million on this time last year.

As a result of these strong earnings, the Co-op narrowed its year-end earnings range to 65-75
cents per share, at the upper end of the guidance provided in March of 55-75 cents per share.

At the same time, Fonterra announced an opening forecast Farmgate Milk Price for the 2025/26
season of $10.00 per kgMS, driven by stable near-term market demand.

CEO Miles Hurrell says Fonterra is committed to delivering strong shareholder returns through
both earnings and the Farmgate Milk Price.

“We’ve delivered strong shareholder returns through FY25, including a 22-cent interim dividend,
and as we get closer to the end of the year, we are focused on maintaining this momentum.

“Our forecast Farmgate Milk Price for the current season is driven by strong demand for our milk
price reference products and our range is unchanged at $9.70-$10.30 with a midpoint of $10.00
per kgMS. We’re also pleased to tighten our year-end forecast earnings within the existing range,
given the strength of our third quarter performance,” says Mr Hurrell.

2025/26 season opening Farmgate Milk Price

“Looking at the season ahead, we expect this demand to continue for now, but we acknowledge
the ongoing geopolitical uncertainty and the potential for a wider series of outcomes across the
season.

Therefore, our opening forecast Farmgate Milk Price for the 2025/26 season of $10.00 per kgMS
sits within a wide forecast range of $8.00-$11.00 per kgMS.

1
Normalised profit after tax excludes $77 million of costs associated with the divestment of the Consumer channel
integrated businesses in Australia and Sri Lanka

Fonterra Co-operative Group
Page 2

For the current season, the milk price of $10.00 per kgMS equates to around $15 billion into the
New Zealand economy. The majority of this flows into regional New Zealand where it plays a
strong role helping to sustain local communities.

Business performance

Fonterra’s focus on optimising its product mix has driven a Q3 normalised profit after tax of $1,158
million, equivalent to 70 cents per share, with operating profit of $1,740 million, up $267 million on
last year.

“This result reflects the scale and ongoing strength of our Ingredients channel, and volume growth
in our Foodservice and Consumer channels with each channel increasing its third quarter
performance compared to the same period last year.

“Our rolling 12-months Return on Capital is 11%, which is above our previous target for FY25 and
within our long-term target range of 10-12%,” says Mr Hurrell.

“Our full year forecast earnings range of 65-75 cents per share assumes flat earnings in Q4 of
FY25 due to the seasonality of our milk collections, the higher input prices for our Consumer and
Foodservice businesses, ongoing investment in our ERP system and an increase in costs
associated with shaping the Co-op post divestment to execute our strategy.

“We are heading into year end with a strong balance sheet and full year debt metrics on track to be
below the Co-op’s target range,” says Mr Hurrell.

Strategic delivery

Miles Hurrell says a priority for Fonterra this year has been the implementation of its strategy,
which deepens the Co-op’s focus on its high-performing Ingredients and Foodservice businesses.

“Last year, we announced a step-change in our strategic direction, including a decision to divest
our global Consumer and associated businesses.

“This step was grounded in an understanding of how we best create value for farmer shareholders
and ultimately for New Zealand.

“We have been thoroughly testing the terms and value of both a trade sale and initial public
offering (IPO) as divestment options. This work is on track as planned and we will seek farmer
shareholder approval to divest through a vote in due course.

“Given the confidence we have in our strategy, we have strong conviction that a divestment is the
right choice for the Co-op and its owners.

“Our financial results show we have an impressive business as a global B2B dairy player, powered
by our home-base of New Zealand milk and operations.

“If we divest our Consumer business, we will still be a Co-op with global reach and scale, and a
diverse product mix sold to customers in more than 100 countries.

“By focusing on our core strengths and the sales channels that deliver the highest returns, we have
the confidence to target an average Return on Capital of 10-12%, which is above our 5-year
average. This is alongside paying farmers the highest sustainable Farmgate Milk Price, which we
are always committed to,” says Mr Hurrell.

Fonterra continues to target a significant capital return to shareholders and unit holders following
divestment.

ENDS

Fonterra Co-operative Group
Page 3


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

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

Non-GAAP measures are not subject to audit unless they are included in Fonterra’s audited annual financial statements.

For further information contact:

Fonterra Communications
24-hour media line
Phone: +64 21 507 072

---

Fonterra Co-operative Group
2025 Third Quarter Business Update

Content
Results overview & outlook3-8
Channel performance9-13
Appendix14-23

2025 Third Quarter Business Update
Operating profit
$1,740m
 from 1,473m
3
Earnings per share
70c
 from 62c
Return on capital
11.0%
 from 11.9%
•Maintained current 2024/25 season forecast Farmgate Milk Price range of $9.70 – $10.30 per kgMS
•Profit after tax is $1,081m, up $108m or 11%, due to higher operating profit partially offset by an increase in tax expense
•Excluding consumer divestment costs of $77m, normalised profit after tax is $1,158m, equivalent to 70 cents per share
–Ingredients normalised operating profit up $276m to $1,017m, due to higher margins on New Zealand milk and
improved performance in Australia
–Foodservice Q3 operating profit up 52% on Q3 last year due to strong sales volumes. Overall, YTD sales volume
growth of 9% and normalised operating profit of $396m, $55m down on prior year’s record performance
–Strong performance in Consumer with 6% volume growth and normalised operating profit of $319m, up $71m or
29% on the prior period
•Balance sheet remains strong with full year debt metrics on track to be below target range
•Return on Capital for 12-months to 30 April of 11.0% compared to 11.9% prior period. Lower return reflects a 1.7
percentage point impact from increasing notional tax rate from 16.1% to 27.0%
•Narrowed FY25 normalised earnings range to 65 – 75 cents per share, at the upper end of the guidance provided in March
of 55 – 75 cents
•Announced opening 2025/26 season forecast Farmgate Milk Price range of $8.00 – $11.00 per kgMS
3
Profit after tax
$1,158m
 from 1,039m
Key metrics
1
1. Normalised Total Group

973
401,013
334
(65)
23(155)
1,150(69)
1,081
FY24
Total Group
profit after tax
Normalisations
and
discontinued
operations
FY24
Normalised
continuing
operations
profit after tax
Gross
profit
Operating
expenses
OtherNet finance
costs and tax
FY25
Normalised
continuing
operations
profit after tax
Normalisations
and
discontinued
operations
FY25
Total Group
profit after tax
Higher profit after tax driven by improved operating performance
Note: Profit after tax presented in the graph includes profit attributable to non-controlling interests. EPS presented is for profit attributable to equity holders of the Co-operative
1.Fonterra has exhausted its NZ tax losses and NZ tax expenses will generate imputation credits from FY25 onwards. As part of the change, dividends on supply backed shares are no longer treated as a business expense by Fonterra
FY24 YTD Q3 to FY25 YTD Q3 profit after tax
($ million)
61c EPS
•$140m increase in tax expense, of which $59m is
attributable to the change in tax treatment¹
58c EPS
70c EPS
66c EPS
•Reflects $40m loss
on sale of DPA Brazil
in October 2023
•Higher Ingredients gross margins
•Sales volume growth in Foodservice
and Consumer
•$77m of Consumer
divestment costs
normalised
4
•Reflects $87m in upgrading ERP
system

1,440(37)
352(39)
74(100)
(29)
42
3
261,732
FY24
Operating profit
VolumeMarginOperating
expenses
and other
VolumeMarginOperating
expenses
and other
VolumeMarginOperating
expenses
and other
FY25
Operating profit
Ingredients
$276m 
Foodservice
$55m 
Consumer
$71m 
Operating profit driven by Ingredients margin growth
Channel performance drivers
net $292m 
FY24 YTD Q3 to FY25 YTD Q3 operating profit¹
($ million)
5
1. Figures presented are for continuing operations on a normalised basis. Consumer divestment costs pre-tax of $79m are normalised

($ million)202320242025
Average capital employed
7,5417,8357,639
Net operating profit after tax
1,292761837
Return on Capital (%)
17.1%9.7%11.0%
1,531
1,441
1,368
13,055
12,123
12,399
202320242025
Total Group net operating profit after tax ($m)Average capital employed ($m)
Return on Capital
11.7%
11.9%
11.0%
Return on Capital
Note: Figures presented are on a 12-month basis to 30 April and include impairments
1.Net operating profit after tax is on a normalised continuing operations basis
•Return on capital of 11.0% tracking to be above the FY25 target range of
8 – 10%
•Notional tax rate increased from 16.1% to 27.0%, increasing the tax charge
by $204m and a 1.7 percentage points adverse impact on return on capital
Ingredients
11.0%
 from 9.7%
Foodservice
13.3%
 from 23.8%
Consumer
8.8%
 from 8.0%
Return on Capital by channel
1
Total Group Return on Capital
Average capital employed
1,6161,9072,276
Net operating profit after tax
216455303
Return on Capital (%)
13.3%23.8%13.3%
Average capital employed
3,2922,2882,485
Net operating profit after tax
(71)182220
Return on Capital (%)
(2.1)%8.0%8.8%
For 12-month period to 30 April
6
1

Forecast Farmgate Milk Prices
$10.00 per kgMS
Current season
2024/25 Forecast Farmgate Milk Price
Maintained range of $9.70 - $10.30 per kgMS reflecting:
•heightened market volatility due to current geopolitical tension
•well contracted sales book
7
New season
2025/26 Forecast Farmgate Milk Price
Opening range of $8.00 - $11.00 per kgMS reflects:
•current strong demand for milk price reference products
•minimal new season production contracted, as is normal at the start of a new season
•heightened market volatility due to current geopolitical tension and potential for a wider
range of outcomes across the season
$10.00 per kgMS

FY25 earnings outlook
65 – 75 cents
FY25 forecast normalised earnings range
Narrowed range and lift in midpoint to 70c earnings per share reflects:
•Q4 in-market channel performance forecast to be up on prior year Q4, but fully offset by Core
Operations due to seasonality of milk curve and impact of narrowed price relativities
•ongoing investment in ERP system and an increase in costs associated with shaping the Co-op post
divestment to execute strategy
•normalised earnings range excludes year to date Consumer divestment costs of $77m, or 5 cents
per share
•the Fonterra Board considers, among other factors, the nature of the underlying earnings and
whether it is appropriate to include any costs associated with asset sales incurred in the financial
year when declaring a dividend. The Board will do this when considering a full year dividend for FY25
8

Channel
performance

Channel performance
10
1.Percentages as shown in table may not align to the calculation of percentages based on numbers in the table
due to rounding of figures
2.Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss of equity
accounted investees
3.Includes corporate costs for Total, Ingredients, Foodservice and Consumer of $432m, $297m, $87m and $48m
($256m, $164m, $42m and $50m for the comparative period), respectively
For the nine months ended 30 April
Total continuing operationsIngredientsFoodserviceConsumer
NZD million20242025∆%
1
202420252024202520242025
Sales volume ('000 MT)
2,618
2,6400.8%
1,684
1,660
428
455
506
525
Sales volume (million kgMS)
1,219
1,2200.1%
921
898
176
192
122
129
Revenue
17,002
19,69915.9%
11,138
12,986
3,088
3,644
2,776
3,069
Cost of goods sold
(13,947)
(16,310)(16.9)%
(9,614)
(11,147)
(2,303)
(2,885)
(2,030)
(2,278)
Gross profit
3,055
3,38910.9%
1,524
1,839
785
759
746
791
Operating expenses
(1,692)
(1,757)(3.8)%
(833)
(881)
(347)
(375)
(512)
(501)
Other
2
77
10029.9%
50
59
13
12
14
29
Operating profit
3
1,440
1,73220.3%
741
1,017
451
396
248
319
Gross margin
18.0%
17.2%
13.70%
14.2%
25.4%
20.8%
26.9%
25.8%
Operating profit margin
8.5%
8.8%
6.70%
7.8%
14.6%
10.9%
8.9%
10.4%

Ingredients contributing to stronger milk price and earnings
Key performance drivers
Operating profit ($ million)
Within the regions
Quarterly performance
251
216
274
157
225
471
321
16.2%
11.9%
13.7%
11.3%
16.0%
14.8%
14.2%
-80.0%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10. 0%
20. 0%
0
100
200
300
400
500
600
700
800
900
1000
FY24 Q1FY24 Q2FY24 Q3FY24 Q4FY25 Q1FY25 Q2FY25 Q3
Operating profit ($ million)Gross margin (%)
FY25 YTD Q3
•Ingredients operating profit up $276m, due to:
–higher attribution from Core Operations reflecting favourable margin hedging in the
Non-Reference portfolio and milk expense phasing in New Zealand
–favourable in-market margins in Australia having a stable milk price against higher
global commodity prices and strong protein prices in Europe
–partially offset by lower sales volumes as more milk solids allocated to higher
margin Foodservice and Consumer channels in-line with Fonterra’s strategy
•Q3 operating profit up 17% on Q3 last year due to stronger pricing and higher sales
volumes in the cheese and milk protein concentrate portfolios
Note: For the nine months ended 30 April. Prepared on a normalised continuing operations basis
11
741
194(20)
99
31,017
FY24
operating
profit
Core
Operations
VolumeMarginOperating
expenses and
other
FY25
operating
profit

FY25 YTD Q3
Within the regions
451
32
65(128)
(24)
396
FY24
operating
profit
Core
Operations
VolumeMarginOperating
expenses and
other
FY25
operating
profit
Volume growth in Foodservice continues
Key performance drivers
Operating profit ($ million)
Quarterly performance
12
•Foodservice operating profit down $55m, due to:
–lower in-market margins year on year, reflecting pressure from rising input costs,
particularly within Greater China’s UHT cream portfolio
partially offset by:
–sales volume growth of 9%, mainly from continued strong demand in Greater China
for UHT cream, butter and IQF mozzarella
–improved attribution from Core Operations reflecting steady price adjustments
offsetting higher input costs
•Q3 operating profit improved on both Q1 and Q2, as steady in-market pricing adjustments
offset higher input costs
•Robust demand in key markets supporting improved pricing and volume growth
208
134
109
12
94
136
166
29.4%
23.3%
23.5%
16.0%
18.0%
21.0%
20.8%
-80.0%
-60.0%
-40.0%
-20.0%
0.0%
20. 0%
40. 0%
0
100
200
300
400
500
600
700
800
900
1000
FY24 Q1FY24 Q2FY24 Q3FY24 Q4FY25 Q1FY25 Q2FY25 Q3
Operating profit ($ million)Gross margin (%)
Note: For the nine months ended 30 April. Prepared on a normalised continuing operations basis

FY25 YTD Q3
Within the regions
248
20
50(27)
28319
FY24
operating
profit
Core
Operations
VolumeMarginOperating
expenses and
other
FY25
operating
profit
Strong Consumer performance with sales growth and higher earnings
Key performance drivers
Operating profit ($ million)
Quarterly performance
13
116
61
72
(50)
77
96
146
28.8%
25.2%
26.5%
18.5%
22.9%
27.0%
25.8%
-70.0%
-50.0%
-30.0%
-10.0%
10. 0%
30. 0%
-100
0
100
200
300
400
500
600
FY24 Q1FY24 Q2FY24 Q3FY24 Q4FY25 Q1FY25 Q2FY25 Q3
Operating profit ($ million)Gross margin (%)
•Consumer operating profit up $71m, due to:
–volume growth of 6%, with higher South Asia packaged milk powders and UHT milk
volumes in Greater China
–improved attribution from Core Operations reflecting steady price adjustments
offsetting higher input costs
–lower operating expenses, comparative period incurred additional costs in Q3
relating to refocusing the business
–partially offset by lower in-market margins reflecting higher input costs and change
in product mix as customers switch to value focused options
•Q3 operating profit up 103% on Q3 last year due to higher sales volumes and in-market
pricing, despite competitive conditions, offsetting rising input costs
Note: For the nine months ended 30 April. Prepared on a normalised continuing operations basis

Appendix

Core
Operations
Global
Markets
Ingredients
Global Markets
Consumer &
Foodservice
Greater
China
Total
External sales volume (million kgMS)
541
2% 
306
6% 
373
10% 
1,220
-% 
Operating profit contribution from continuing operations
Ingredients
$
398m
$194m 
$
391m
$19m 
$
98m
$72m 
$
130m
$29m 
$
1,017m
$276m 
Foodservice
$
47m
$32m 
$
21m
$14m 
$
96m
$10m 
$
232m
$91m 
$
396m
$55m 
Consumer
$
19m
$20m 
$
27m
$10m 
$
274m
$58m 
$
(1)m
$17m 
$
319m
$71m 
Total¹
$
464m
$246m 
$
439m
$5m 
$
468m
$120m 
$
361m
$79m 
$
1,732m
$292m 
Diversified across markets and products
Operating profit performance by reporting segment and channel
For the nine months ended 30 April
15
116
61
72
(50)
77
96
146
-100
0
100
200
300
400
500
Operating profit by quarter
FY24
FY25
Q1Q2Q3Q4Q1Q2
251
216
274
157
225
471
321
0
50
100
150
200
250
300
350
400
450
500
208
134
109
12
94
136
166
0
50
100
150
200
250
300
350
400
450
500
Note: Prepared on a normalised continuing operations basis
1. Includes corporate costs for Core Operations, Global Markets Ingredients, Global Markets Consumer & Foodservice and Greater China of $214m, $75m, $70m and $73m ($119m, $39m, $55m and $41m for the comparative period), respectively
Q3

For the nine months ended
30 April
Total Group
Continuing operationsDiscontinued operations
NZD million20242025∆%20242025∆%20242025∆%
Sales volume ('000 MT)2,6772,640(1.4)%2,6182,6400.8%59--
Sales volume (million kgMS)1,2191,2200.1%1,2191,2200.1%0--
Revenue17,17419,69914.7%17,00219,69915.9%172--
Cost of goods sold(14,053)(16,310)(16.1)%(13,947)(16,310)(16.9)%(106)--
Gross profit 3,1213,3898.6%3,0553,38910.9%66--
Gross margin (%)18.2%17.2%18.0%17.2%38.4%-
Operating expenses(1,725)(1,757)(1.9)%(1,692)(1,757)(3.8)%(33)--
Other
1
7710840.3%7710029.9%08 -
Operating profit1,4731,74018.1%1,4401,73220.3%338 (75.8)%
Net finance costs(131)(139)(6.1)%(124)(139)(12.1)%(7)- -
Tax expense(303)(443)(46.2)%(303)(443)(46.2)%0- -
Normalised profit after tax
2
1,0391,15811.5%1,0131,15013.5%268 (69.2)%
Earnings per share (cents)627012.9%617014.8%1
-
-
Normalisations
3
(66)(77)(16.7)%0(77)-(66)
-
-
Profit after tax
2
9731,08111.1%1,0131,0735.9%(40)
8
-
Normalised EPS (cents)
4
586613.8%61668.2%(3)
-
-
Total Group performance
16
1.Comprises of other operating income, net foreign exchange gains and share of profit or loss of equity accounted
investees
2.Includes amounts attributable to non-controlling interests
3.Normalisations comprises of $(66)m in relation to the sale of DPA Brazil and $(77) for Consumer divestment costs
4.EPS presented is for profit attributable to equity holders of the Co-operative

Global Markets Ingredients end-to-end performance
17
1.Global Markets Ingredients performance is prepared on a normalised continuing operations basis and includes
sales to other segments
2.Percentages as shown in table may not align to the calculation of percentages based on numbers in the table
due to rounding of figures
3.Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss of equity
accounted investees
4.Includes corporate costs for Total, Ingredients, Foodservice and Consumer of $172m, $163m, $6m and $3m
($97m, $91m, $3m and $3m for the comparative period), respectively
For the nine months ended 30 April
Total Global Markets Ingredients
1
IngredientsFoodserviceConsumer
NZD million20242025∆%
2
202420252024202520242025
Sales volume ('000 MT)979970(0.9)%92790841491113
Sales volume (million kgMS)554541(2.5)%527509202478
Revenue7,1688,31616.0%6,7667,757288431114128
Cost of goods sold(6,036)(7,029)(16.5)%(5,700)(6,537)(246)(385)(90)(107)
Gross profit 1,1321,28713.7%1,0661,22042462421
Operating expenses(561)(580)(3.4)%(527)(549)(26)(24)(8)(7)
Other
3
405025.0%34441155
Operating profit
4
61175723.9%57371517232119
Gross margin15.8%15.5%15.8%15.7%14.6%10.7%21.1%16.4%
Operating profit margin8.5%9.1%8.5%9.2%5.9%5.3%18.4%14.8%

Global Markets Consumer and Foodservice end-to-end performance
18
For the nine months ended 30 April
Total Global Markets
Consumer & Foodservice
1
IngredientsFoodserviceConsumer
NZD million20242025∆%
2
202420252024202520242025
Sales volume ('000 MT)919885(3.7)%318276163164438445
Sales volume (million kgMS)325306(5.7)%1711465052104109
Revenue5,2615,6597.6%1,8682,0091,0301,0652,3632,585
Cost of goods sold(4,242)(4,503)(6.2)%(1,756)(1,784)(765)(821)(1,721)(1,898)
Gross profit 1,0191,15613.4%112225265244642687
Operating expenses(708)(696)1.7%(135)(137)(154)(156)(419)(403)
Other
3
29316.9%114105822
Operating profit
4
34049144.4%(12)9212193231306
Gross margin19.4%20.4%6.0%11.2%25.7%22.9%27.2%26.6%
Operating profit margin6.5%8.7%(0.6)%4.6%11.7%8.7%9.8%11.8%
1.Global Markets Consumer and Foodservice performance is prepared on a normalised continuing operations
basis and includes sales to other segments
2.Percentages as shown in table may not align to the calculation of percentages based on numbers in the table
due to rounding of figures
3.Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss of equity
accounted investees
4.Includes corporate costs for Total, Ingredients, Foodservice and Consumer of $117m, $48m, $29m and $40m
($79m, $27m, $10m and $42m for the comparative period), respectively

Greater China end-to-end performance
19
For the nine months ended 30 April
Total Greater China
1
IngredientsFoodserviceConsumer
NZD million20242025∆%
2
202420252024202520242025
Sales volume ('000 MT)7207859.0%4394762242425767
Sales volume (million kgMS)3393739.8%2232431051171113
Revenue
4,573
5,72425.2%
2,504
3,220
1,770
2,148
299
356
Cost of goods sold
(3,669)
(4,778)(30.2)%
(2,158)
(2,826)
(1,292)
(1,679)
(219)
(273)
Gross profit
904
9464.6%
346
394
478
469
80
83
Operating expenses
(423)
(481)(13.7)%
(171)
(195)
(167)
(195)
(85)
(91)
Other
3
8
19137.5%
5
11
2
6
1
2
Operating profit
4
489
484(1.0)%
180
210
313
280
(4)
(6)
Gross margin
19.8%
16.5%
13.8%
12.2%
27.0%
21.8%
26.8%
23.3%
Operating profit margin
10.7%
8.5%
7.2%
6.5%
17.7%
13.0%
(1.3)%
(1.7)%
1.Greater China performance is prepared on a continuing operations basis and includes sales to other segments
2.Percentages as shown in table may not align to the calculation of percentages based on numbers in the table
due to rounding of figures
3.Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss of equity
accounted investees
4.Includes corporate costs for Total, Ingredients, Foodservice and Consumer of $143m, $86m, $52m and $5m
($80m, $46m, $29m and $5m for the comparative period), respectively

20242025Change
Sales Volume (‘000 MT)
Reference Products
1,341 1,306
(2.6)%
Non-Reference Products
657 699
6.4%
Revenue (NZD)
Reference Products ($ billion)
7.5 9.2
22.3%
Non-Reference products ($ billion)
4.6 5.3
14.8%
Reference Products ($ per MT)
5,591 7,020
25.6%
Non-Reference products ($ per MT)
7,031 7,591
8.0%
Cost of Milk (NZD)
Reference Products ($ billion)
(5.5)(7.2)
(30.4)%
Non-Reference Products ($ billion)
(2.3)(2.9)
(25.1)%
Reference Products ($ per MT)
(4,135)(5,534)
(33.8)%
Non-Reference Products ($ per MT)
(3,559)(4,189)
(17.7)%
New Zealand-sourced Ingredients’ product mix
Note: Percentages as shown in table may not align to the calculation of percentages based on numbers in the table due to rounding of figures
Table includes Ingredients’ products that are on-sold to the Foodservice and Consumer channels and excludes bulk liquid milk. Bulk liquid milk for 2025 was 56,000 MT of kgMS equivalent (for the comparative period it was 53,000 MT of kgMS
equivalent). Milk solids used in the Reference Products sold were 728m kgMS and 345m kgMS in the Non-Reference Products (for the comparative period 739m kgMS in Reference Products and 334m kgMS in Non-Reference Products)
20

FY25 Integrated Scorecard
as at 30 April 2025
Key MetricsFY23 ActualFY24 ActualFY25 ScorecardFY25 YTD
PeopleSerious harm¹1816122
Percentage of Health, Safety and Wellbeing priority actions fully completed by duedate76%77%95%96%
Culture Measure79798181
NatureGHG emissions (Scope 1,2)²(14.1)%(18.5)%(21.1)%(21.2)%
Absolute water reduction across manufacturing sites (15% by FY30)²(6.7)%(12.4)%(13.1)%(16.7)%
RelationshipsShare of New Zealand milk collected for the season to 31 May79.0%78.1%78.0%78.1%³
Delivered in full, on time (DIFOT, ex-New Zealand)53.2%70.8%80.0%79.9%
Financial / Assets
& Infrastructure
Cash operating expenses per kgMS (real)⁴1.371.361.461.44
Core Operations manufacturing cash costs per kgMS (real)⁵2.782.642.652.65
Return on capital (FY)12.4%11.3%8%-10%Ahead
Farmgate Milk Price ($)$8.22$7.83$7.75-$9.25$9.70-$10.30⁶
Alignment RightsTotal shareholder return
(12-month Volume Weighted Average Price of FCG share plus dividend)⁷
$2.38
$1.00
$2.66
$0.55
3.82
TBC
On-farm profitability ($ per hectare)⁸3,017Not AvailableNot Available
1.A broader definition, which also includes Contractors, has been adopted for FY25 resulting in an increased
number of injuries captured under the revised definition
2.Relative to FY18 Baseline. Scope 1&2 including energy and industrial emissions from farms under our
operationalcontrol
3.Colour-code based on full season forecast
4.Based on New Zealand and Australia milk solids. FY25 excludes divestment related costs. Restated using FY25
as the base year
5.Based on New Zealand milk solids collected. Excludes the cost of milk. Restated using FY25 as the base year
6.Latest Forecast Farmgate Milk Price announced 20 March 2025 with midpoint of $10.00
7.Value Weighted Average Price (VWAP) for the period 1 October to 30 September. FY25 YTD is 12-month VWAP to
30April 2025
8.DairyNZ Economic Survey 2022-2023 (Owner-Operator). Publication of 2024 survey expected in July 2025
21

Fonterra uses several non-GAAP measures when discussing financial performance. Non-GAAP measures are not defined or specified by NZ IFRS.
Management believes that these measures provide useful information as they provide valuable insight on the underlying performance of the business. They may be used internally to evaluate the underlying
performance of business units and to analyse trends. These measures are not uniformly defined or utilised by all companies. Accordingly, these measures may not be comparable with similarly titled measures
used by other companies. Non-GAAP financial measures should not be viewed in isolation nor considered as a substitute for measures reported in accordance with NZ IFRS. Non-GAAP measures are not subject
to audit unless they are included in Fonterra’s audited annual financial statements.
Please refer to the Glossary for definitions of non-GAAP measures referred to by Fonterra.
22
Non-GAAP Measures
Capital employed
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
Consumer
is the channel of branded consumer products, such as powders,
yoghurts, milk, butter and cheese
Continuing operations
means operations of the Group that are not discontinued
operations
Core Operations
represents core operating functions including New Zealand milk
collection and processing operations and assets, supply chain,
Fonterra Farm Source retail stores, and the physical and
financial commodity portfolio management function
Discontinued operations
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
coordinated plan to dispose of, a separate major line of business
or geographical area of operations, or is a subsidiary acquired
exclusively with a view to resale
Eliminations
represents eliminations of inter-business unit sales
Global Markets Consumer & Foodservice
represents the Ingredients, Foodservice and Consumer channels
in the Middle East and Africa, Oceania, South and South-East
Asia regions
Global Markets Ingredients
represents the Ingredients, Foodservice and Consumer channels
in the Middle East and Africa, Oceania, South and South-East
Asia regions
Greater China
represents the Ingredients, Foodservice and Consumer channels
in Greater China
Ingredients
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
Non-Reference Products
means all NZ milk solids processed by Core Operations, except
for Reference Commodity Products
Normalisation adjustments
means adjustments made for certain transactions that meet the
requirements of the Group’s Normalisation Policy. These
transactions are typically unusual in size and nature.
Normalisation adjustments are made to assist users in forming a
view of the underlying performance of the business.
Price relativities
refers to the difference in the weighted average price (in USD)
between the Reference Product portfolio and Non-Reference
Product portfolio. The difference between these two weighted
average prices is a key driver of the Ingredients’ gross margin
Reference Products
are the five commodity groups used to calculate the Farmgate
Milk Price, being Whole Milk Powder (WMP) and Skim Milk
Powder (SMP), and their by-products Butter, Anhydrous Milk Fat
(AMF) and Buttermilk Powder (BMP)
Total Group
is used to indicate that a measure or sub-total comprises
continuing operations, discontinued operations and non-
controlling interests. E.g., ‘Total Group operating profit’
Foodservice
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
Glossary

---

Our
strategy

How we create end-to-end value for farmers
DAIRY
MARKET
STABILITY
ON-FARM
RISK
FARMGATE
MILK PRICE
SHAREHOLDER
RETURNS
Enabling the maximum sustainable
Farmgate Milk Price through efficient
collection and processing of milk
Providing stability to
New Zealand dairy industry
De-risking farm assets and earnings
Providing additional returns from earnings
through dividends and capital distributions

A strategy fit for the future
Our context is changing so we’re changing too
Where we’re heading
Defining features of the future
• Nationalism and protectionism
• Game-changing tech
• Asia and China at scale, aging populations
• Global climate commitments
• Capital costs high
Implications for NZ dairy
• Geopolitical instability, trade advantages
• Competition for milk higher
• Sustainability imperative
• Farming more expensive, capital costs high
• Opportunities from volatility
The world we’ve come from
Defining features of the past
• Global co-operation and trade
• Rise of Asia and China
• Energy abundance
• Cheap capital
Fonterra set up to benefit
• Co-op with scope and scale
• Trade agreements, Asia adjacent
• NZ dairy comparative advantage
• Consolidation and growth

OUR PURPOSE
OUR VISION
The source of the world’s most valued dairy
OUR CHOICES
OUTCOMES
Strong
Shareholder returns
Stable
balance sheet
Enduring
Co-op
Our Co-operative, empowering people, to create goodness
for generations. You, me, us together. Tātou, tātou.
Deliver
strongest
farmer
offering
Unleash our
Ingredients
engine
Keep
momentum in
Foodservice
Invest in
operations for
the future
Build on our
sustainability
position
Innovate to
drive our
advantage

A clear plan to deliver outcomes for shareholders
Unleash our
Ingredients engine
Deepen our position as
a world-leading provider
of sophisticated dairy
ingredients, to grow both
the Farmgate Milk Price
and earnings.
Deliver strongest
farmer offering
Work alongside farmers
to help drive on-farm
productivity and
profitability.
Build on our
sustainability
position
Further improve the
Co-op’s sustainability
credentials, as we work
towards our ambition to
be net zero by 2050.
Invest in operations
for the future
An efficient
manufacturing and
supply chain network
that allows us to
flexibly allocate milk to
the highest returning
product and sales
channel.
Innovate to drive
our advantage
Use science and
technology to solve the
Co-op’s challenges and
build on our competitive
advantages.
Keep momentum
in Foodservice
Expand our successful
Foodservice business in
and beyond China
to grow earnings.

NORTH ISLAND
18
SOUTH ISLAND
6
A more focused Co-op, with global B2B reach
Fonterra
More than
8,000
farmer shareholders
~16,000
employees
29
offices globally
24
manufacturing sites in NZ
2
manufacturing sites offshore
1
R&D facility
6
application centres
~16
billion litres of milk
Exporting to over
100
countries

Offices
Manufacturing sites
R&D facility
Major trade routes
Example applications
Numbers are based on FY24 full year actuals.
Foodservice
50+ products
Ingredients
100+ products
NETHERLANDS
Heerenveen
SAUDI ARABIA
Damman

AUSTRALIA
8
NEW ZEALAND
3
SRI LANKA
Biyagama
MALAYSIA
2
INDONESIA
Cikarang
Takanini, Auckland
Bridge St, Eltham
Makomako Rd, Palmerston North
Cobden
Stanhope
Darnum
Spreyton
Wynward
Tullamarine 1 & 2
Campbellfield
Bayswater
In scope for divestment
~4,000 employees
17
offices globally
3
manufacturing sites in NZ
12
manufacturing sites offshore
~1.4
billion litres of milk
20+
countries where product is sold
Offices
Manufacturing
sites
Consumer
20+ Brands
Numbers are based on FY24 full year actuals.
™
Global Consumer brands and integrated businesses
*
*Consumer brands plus integrated businesses includes Fonterra’s global consumer business & brands (excluding Greater China) and components of its business-to-business Foodservice and Ingredients
channels (and associated manufacturing assets) in Australia (Consumer, Foodservice & Ingredients), New Zealand (Consumer & Foodservice), Sri Lanka (Consumer & Foodservice), and export regions of the
Pacific Islands & Caribbean which operate through Oceania FBNZ (Consumer, Foodservice & Ingredients).
Dairymas
Susumas

Next steps
Currently testing both a trade sale and initial
public offering (IPO) as divestment options.
Following this, we will seek shareholder approval
to divest through a vote.
We continue to target a significant capital return
to shareholders and unit holders following
divestment.
Fonterra would continue to supply raw milk and
ingredients to the Consumer business through a
supply agreement.
Why divest
Our Ingredients and Foodservice
businesses generate both
the Farmgate Milk Price and
earnings.
We estimate an acceptable
return on capital (ROC) for dairy
farmers would be around 10%.
Our high-performing Ingredients
and Foodservice businesses
deliver ROCs above this, while
our Consumer business does
not.
Focusing on our Ingredients and
Foodservice businesses would
allow us to be more efficient and
grow returns for farmers.
Why divest our Consumer and integrated businesses

A strong Co-op, creating value
OUR OUTCOMES
OUTCOMES
TARGETS & POLICY SETTINGSFY19-24 AVERAGE
Strong
Shareholder
returns
Stable
balance
sheet
Enduring

Co-op
10-12%
8.2%
Return on capital
1
60-80%
62%
Dividend policy
~$1+ billion per annum
in Essential, Sustainability, Growth
Capital investment
requirements
$660m
Emissions reduction
by 2030
2
Absolute Scope 1 & 2
GHG emissions
Scope 1 and Scope 3 FLAG GHG
emissions from dairy
3
50.4%
30.0%
Gearing ratio
30-40%
38%
Debt to EBITDA
2-3X
2.7X
Guided by Resource Allocation Framework
Capital distributions
1
Average Return on Capital FY24-30
2
From an FY18 base year
3
per tonne of fat-and-protein-corrected milk

Thank You