Fonterra 2025 Annual Meeting Materials

FONTERRA ANNUAL MEETING
11 DECEMBER 2025
CHAIR’S ADDRESS

Shortly I will ask Miles to take us through a brief summary of our financial performance.
Before we hear from Miles, let me start today by saying a sincere thank you to all of the
farmers out there for your engagement and support over, not just this past year, but the past
3-5 years.

We know we’ve asked for a lot of your time as we’ve reviewed our capital structure and the
divestment of some significant assets.

Thank you for taking the time to consider the economic rationale behind these divestment
decisions we have made together, for attending meetings, and for putting forward your
individual perspectives. Robust challenge and constructive feedback have always been part
of what makes this Co-op special. We get better outcomes as a result.

Finally, thank you for trusting the judgment of the people on the stage beside me, who are
entrusted to guide the Co-op’s strategic direction on your behalf.

2025 was a milestone year for our Co-op.

The team was proud to put up another year of consistent strong financial performance,
where we met our commitments to farmers and shareholders. Back-to-back years of
a combined strong milk price and a respectable dividend is something that often eluded us in
the past.

Our final Farmgate Milk Price of $10.16 per kgMS exceeded opening expectations and our
topline earnings performance of 71 cents per share was near the top end of our guidance
range.

The Co-op delivered a return on capital of 10.9%, also largely consistent with last year and
in line with the target average range of 10-12%.

Overall, Fonterra delivered $16.2 billion in total cash returns to shareholders, up more than
30% on last year.

I want to extend my thanks to Miles, his leadership team and all staff globally for their
performance over the past 12 months.

At the same time, Fonterra has made considerable progress on strategy, announcing
significant investments in our Foodservice capacity, supply chain network, and new
partnerships with two major customers that acknowledge farmers’ efforts to reduce on-farm
emissions through financial incentives.

I’d also like to acknowledge the efforts of our Farm Source team for winning
and retaining milk supply in an incredibly competitive domestic market. Excluding land-use
change, the Co-op experienced a small but symbolic net increase in our market share.

One of the clear strengths of our Co-operative is that as farmer owners we have a direct say
in key decisions that impact the future of Fonterra. It was great to see just over 80%
participation in the vote to divest the Co-op’s global Consumer and associated businesses,
Mainland Group, to Lactalis for $4.22 billion. Combined with the 88.47% of the total farmer

votes cast in support of the recommendation, this represents a strong mandate from
farmers.

We’re continuing to work away in the background to secure the last regulatory approvals and
to separate the Mainland Group business from Fonterra.

Some of the regulatory approvals required have been obtained, including approval from the
Overseas Investment Office in New Zealand, which Lactalis confirmed they
received last week. Other regulatory approvals are still pending.

Subject to these steps being achieved, we still expect the transaction to complete in the first
half of the 2026 calendar year, and we are still targeting a tax-free capital return of $2 per
share to shareholders and unit holders once the sale is complete.

The process for the capital return is complex, but similar to the way we handled the capital
return following the divestment of Soprole in 2023. The process involves a share buyback,
cancellation and subdivision by way of a Court-approved scheme of arrangement. It is
designed to ensure that no shareholder’s compliance with Fonterra’s minimum shareholding
requirements or their voting entitlement is affected by the capital return.

The capital return requires approval by at least 75% of the votes cast on the resolution at
a Special Meeting, which we are planning for the 19
th
of February next year.

A record date for the capital return has not yet been set, but it will be close to the time
payment is made. We will share the record date when it is confirmed.

The divestment of Mainland Group is our last significant asset sale and signals the end of
our structural changes to focus and re-shape the Co-op toward our comparative
advantages.

What this means is a more capital-efficient Co-op with the ability to invest further in up-
stream value add opportunities in our speciality ingredients and foodservice businesses.

The foundational work is underway. You see that with the manufacturing and supply
chain investments announced this year. They have us well positioned to service the demand
that our sales teams are driving in-market.

What you can expect from us in 2026 and the years that follow can be boiled-down into two
things:

1. A continued focus on getting the basics right. In particular we will be working hard on
tighter cost management, reducing our cost of quality and improving our
manufacturing efficiency.

2. And second, a renewed focus on sustainable growth and new opportunities in our
ingredients and foodservice businesses. You will see the Co-op continuing to invest
further up the value chain. Those investments will be within regional New Zealand,
where our contribution to local communities will remain significant.

With the Co-op’s foundations well set and our risk appetite better aligned to an
intergenerational farming business, it’s time to put more energy into going after these
growth opportunities.

ENDS

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FONTERRA ANNUAL MEETING
11 DECEMBER 2025
CEO’S ADDRESS

Thank you, Peter. And thank you to those who have travelled to be with us here in person and
greetings to those joining us online.
Today I’ll cover your Co-op’s performance for FY25 and then our plans for the years ahead as
we implement our strategy.
Looking first at FY25, I’m pleased to say we maintained the momentum in our performance
that we’ve built over the last few years.
As Peter has shared, we ended the 2024/25 season with a final Farmgate Milk Price of $10.16
per kgMS.
I’ll touch on our current season forecast shortly, which I acknowledge has stepped back from
the $10.00 opening price we started the season with. And our full year dividend was 57 cents
per share, fully imputed.
Looking more closely at the drivers, our operating profit increased 13% to 1.7 billion dollars.
And reported profit after tax was 1.1 billion dollars, equivalent to earnings per share of 65
cents. When excluding the costs associated with the Consumer divestment, our normalised
earnings per share were 71 cents.
That strong operating profit generated significant cash, allowing us to pay dividends at the
upper end of our policy range. This performance was driven by a lift in all parts of our business.
Ingredients had improved margins and product mix, and Foodservice saw volume growth in
UHT cream, butter and mozzarella.
In FY25 we allocated 76% of your milk solids to the Ingredients channel. Around 55% of those
solids informed the Milk Price, which receives an average regulated return of around 5%.The
other 45% of solids in that channel have been allocated to Advanced and Specialty Ingredients
products. These products generate a much higher return on capital - around 19% in FY25.
We allocated 16% of your milk solids to the Foodservice channel, which delivered a return on
capital of 12%.
The remaining 8% of your solids were allocated to the Consumer channel, which delivered a
9% return on capital in FY25. This was above the Consumer channel’s historical average
return.
Ultimately, this is the rationale for divesting Mainland Group. We can return capital to you and
earn you a better return for your milk and invested capital.
As you’re aware, during FY25, we pursued a dual-track divestment process for Mainland
Group. This culminated in a proposal to sell the business to Lactalis for $4.22 billion.
Shareholders voted in October to approve the divestment, giving us a strong mandate to
progress with our strategy to be a global B2B dairy provider.
I’m excited by the potential the divestment unlocks for our Co-op. We will still have global
reach and scale, operating in more than 100 markets including North America, Greater China,
Europe and Asia.
Our Ingredients brand NZMP and Foodservice brand Anchor Food Professionals are both
world leading. They are recognised by customers for their New Zealand provenance and as
the source of high-quality, innovative products.
We maintain a significant presence here in New Zealand, with 24 manufacturing sites, a
network of Farm Source retail stores, and our Fonterra offices.

We’re positioning the Co-op to deliver further value through our global Foodservice and
Ingredients businesses. To support this, we’re continuing to invest in new manufacturing
capacity to meet growing demand for our high-value products.
During FY25, we started construction on an advanced protein hub at Studholme and new UHT
cream capacity at Edendale. Products from these sites are expected to come online in the
2026 calendar year.
Looking ahead, we have plans to invest up to 1 billion dollars in further projects to grow value
and drive operational efficiencies. We announced in October a $75 million investment in
expanding butter capacity at Clandeboye. I look forward to sharing details of further projects
as they are confirmed.
We know that we can deliver greater value for farmers through focused execution of our
strategy. Our strategy is designed to drive a performance lift in our Ingredients and
Foodservice businesses.
In September this year we shared information on the financial shape of the Co-op post-
divestment, including targets out to FY28. The strength of our strategy gives us the confidence
to target earnings being back to FY25 levels by FY28, offsetting the Mainland Group
divestment.
We are also targeting a return on capital at the upper end of our 10-12% target, which is above
the level the Co-op delivers today. Essentially, post-divestment we will be a more focused
business, with a lower cost base, delivering a better return to farmer shareholders.
Looking at the year ahead, our forecast Farmgate Milk Price for the 2025/26 season is $9.00
- $10.00 per kgMS, with a midpoint of $9.50. While this is a reduction on our earlier forecast
midpoint of $10.00 per kgMS, it remains in the middle of the $8.00 - $11.00 forecast range we
opened the season with.
As shared, an increase in global milk production has put downward pressure on global
commodity prices. Here in New Zealand, milk production is up. At the same time, milk
production is up in the US, Latin America and Europe, meaning global supply is now
outstripping global demand. Despite that, we’re continuing to see good demand for our
products from customers who value our unique offering.
Our forecast earnings for FY26 are 45-65 cents per share for continuing operations.
At all times, our priority is maximising returns for farmer shareholders through both the
Farmgate Milk Price and earnings. We do this by building strong relationships with customers,
utilising price risk management tools when we face volatility, and optimising our product mix
towards higher value products.
We are firmly focused on strategic delivery in FY26 and meeting the commitments we’ve made
to farmer shareholders.
Thank you.

ENDS

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Fonterra Co-operative Group
Annual Meeting 2025
10.30am on Thursday, 11 December 2025
Christchurch Town Hall (Limes Room), Christchurch, Canterbury and Online

Agenda
Welcome
Chair’s Review
Chief Executive Officer’s Address

Agenda
Resolution 1:
Ratification of, and approval of changes to, the
remuneration of Directors
Resolution 2:
Approval of changes to the remuneration of Co-
operative Councillors
Resolution 3:
Approval of changes to the remuneration of
members of the Directors’ Remuneration
Committee
Resolution 4:
Appointment of KPMG as auditor and authorisation
of the Directors to fix the auditor’s remuneration
Resolution 5:
Approval of amendments to the Constitution
relating to Fonterra’s move to the NZX Main Board

Agenda
Co-operative Council Report – John Stevenson, Council Chair
Resolution 6:
Approval of the Co-operative Council programme
and budget
Voting Paper Collection
General Business
Closing

Peter McBride
Chair’s Review

A milestone year for our Co-op
Total cash returns to
shareholders
$16,200m
 30% on last year
Farmgate Milk Price
$10.16
 from $7.83
Return on capital
10.9%
 from 9.9% tax adjusted
 from 11.3% unadjusted
Normalised
earnings per share
71cents
 from 58c tax adjusted
no change adjusted

Divestment update
•88.47% of total farmer votes cast in support of the
recommendation to divest (more than 80%
participation by kgMS)
•Lactalis has received approval from the Overseas
Investment Office in New Zealand
7
Purchase Price
$4.22b
Targeted Tax-Free Capital Return
$2.00per share
Shareholder Vote
19 Feb
Recent progress:
•The capital return requires approval by at least 75% of
the votes cast on the resolution at a Special Meeting,
planned for19Febnext year.
•A record date for the capital return has not yet been set.
We will share the record date when it is confirmed.
•Continuing work to secure last regulatory approvals and
to separate Mainland Group from Fonterra.
What’s next?

6.6%
6.8%
12.4%
11.3%
10.9%
11.6%
12.0%
2021202220232024202520252028
Target
12.5%
13.2%
13.6%
8
Return on Capital
Excluding Mainland
Impact of tax change
A more efficient use of capital
•FY25 return on capital
of 10.9%
•above 5-year average
•within long-term
target range
•Tax change impact was 1.6
percentage points in FY25
•Targeting upper end of
10-12% strategic target range

CEO’s Address
Miles Hurrell

Results at a glance
Reported
profit after tax
$1,079m
 from 1,128m
Reported
operating profit
$1,732m
 from 1,527m
Return on capital
10.9%
Dividend
57cents imputed
 from 55c unimputed
10
Normalised
earnings per share
71cents
Farmgate Milk Price
$10.16
 from $7.83
Reported
earnings per share
65cents
 from 67c
 from 9.9% tax adjusted
 from 11.3% unadjusted
 from 58c tax adjusted
no change unadjusted

46%
47%
44%
43%
33%
33%
34%
33%
13%13%
14%
16%
8%
7%
8%
8%
2022202320242025
Milk PriceAdvanced & SpecialtyFoodserviceConsumer
11
Channel performance
5%
5%
5%
5%
15%
32%
16%
19%
6%
16%
20%
12%
(0%)
(4%)
7%
9%
Channel allocation of milk solids
79%
80%
78%
76%
•Ingredients generates the Farmgate
Milk Price and, alongside
Foodservice, contributes majority of
Co-op’s earnings
•Divestment of Mainland will allow
Fonterra to focus on what it does
best – being a B2B provider of dairy
to the world
•Farmers’ capital invested into the
consumer business, comes at the
expense of options for our
Ingredients and Foodservice
businesses
Return on Capital
Advanced & Specialty
Foodservice
Consumer
Milk Price
Ingredients

12
A significant and diverse B2B presence globally post divestment
China
EMPLOYEES (FTE)
620
Rest of
Asia Pacific
EMPLOYEES (FTE)
320
New Zealand
EMPLOYEES (FTE)
10,620
MANUFACTURING SITES
24
Americas
EMPLOYEES (FTE)
100
Markets we export toRevenue
Employees
~11,850
Revenue (NZD)
~24b
$7
billion
$3
billion
$3
billion
$3
billion
Rest of AMENA
EMPLOYEES (FTE)
40
Europe
EMPLOYEES (FTE)
150
MANUFACTURING SITES
1
$1
billion
$7
billion

13
Investing to support strategy
Whareroa expansion
FIRST STAGE COMPLETED
•8 new cool stores increasing
storage capacity by 5,000 MT,
enabling storage of up to 26,000
MT of cheese
Early 2026
Edendale expansion
COMPLETED
•$150m investment in new UHT plant
•Unlocking up to 20m kgMS additional UHT
cream processing capacity
FY26 includes a strong pipeline of investments continuing to unlock capacity for higher margin products
Studholme expansion
COMPLETED
•$75m investment into
high-value proteins
MayAugust
Whareroa expansion
FINAL STAGE COMPLETED
20262027
Clandeboye expansion
BEGINS
•$75 million in expanding
butter production capacity
Clandeboye expansion
COMPLETED
Milkfat processing expansion
BEGINS
•Adding value to milkfat through butter
and cream cheese investments
•Pastry butter sheet capacity expansion
to support Foodservice growth

OUTCOMES
TARGETS&POLICYSETTINGSFY19-24AVERAGE
Strong
Shareholder
returns
Stable
balancesheet
Enduring
Co-op
10-12%
8.2%
Returnoncapital
1
60-80%
62%
Dividendpolicy
Capitalinvestment
requirements
$660m
Emissionsreduction
by2030
2
AbsoluteScope1&2 Energy
& IndustrialGHG emissions
Scope1andScope3FLAGGHG
emissions intensity from dairy
3
50.4%
30.0%
Gearingratio
30-40%
38%
DebttoEBITDA
< 3x
~$1+billionperannum
inEssential,Sustainability,Growth
2.7x
GuidedbyResourceAllocationFramework
Capitaldistributions
1.AverageReturnonCapitalFY24-30
2.FromanFY18baseyear
3.Forest, Land and Agricultural emissions pertonneoffat-and-protein-correctedmilk
Delivering on strategy targets

FY26 Outlook & Priorities
FY26 Priorities
•Completing Mainland Group divestment and
capital return to shareholders and unit holders
•New manufacturing capacity
•Edendale UHT cream and Studholme
proteins completed
•Clandeboye butter expansion begins
•Go-live of the new ERP system at first sites
* Continuing operations
15
Forecast Farmgate Milk Price
$9.00-$10.00
per kgMS
FY26 forecast earnings¹
45-65
cents per share
1. Earnings forecast is for continuing operations
FY26 Outlook
•Global supply up, with stronger milk flows in New
Zealand, Europe and North and South America
•Increased forecast milk collections for the season
to 1,545 million kgMS
•Near term demand mixed in China, remains strong
for high-fat products but softer for milk powders

Fonterra Co-operative Group
Annual Meeting 2025

Resolution 1
Ratification of, and approval of changes
to, the remuneration of Directors

Resolution 2
Approval of changes to the remuneration
of Co-operative Councillors

Resolution 3
Approval of changes to the remuneration of
members of the Directors’ Remuneration
Committee

Resolution 4
Appointment of KPMG as auditor and
authorisation of the Directors to fix the
auditor’s remuneration

Resolution 5
Approval of amendments to the
Constitution relating to Fonterra’s move to
the NZX Main Board

Chair, Fonterra Co-operative Council
John Stevenson

Resolution 6
Approval of the Co-operative Council
programme and budget

Voting Paper
Collection

General
Business

This is where
image / video
of presenter appears
Annual Meeting 2025 has now closed. Thank you.
Fonterra Co-operative Group