Fonterra delivers strong FY26 performance

Fonterra Co-operative Group Limited

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 31/07/2026
Previous Reporting Period 12 months to 31/07/2025
Currency NZD
Amount (000s) Percentage change
Revenue from continuing operations $25,398,000 6%
Total Revenue $27,432,000 4%
Net profit from continuing operations $1,346,000 33%
Total net profit $2,608,000 142%
Final Dividend
Amount per Quoted Equity Security $0.3300
Imputed amount per Quoted Equity Security $0.1283
Record Date 01/10/2026
Dividend Payment Date 15/10/2026
Current period Prior comparable period
Net tangible assets per Quoted Equity
Security
$3.38 $4.10
A brief explanation of any of the figures
above necessary to enable the figures to be
understood
Total net profit includes the Mainland Group divestment benefits.
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 24/09/2026
Audited financial statements accompany this announcement.

---

24 September 2026

Fonterra delivers strong FY26 performance


• Total cash returns to shareholders
1
: $19.6 billion
• FY26 total cash dividends, fully imputed: 73 cents per share, up from 57 cents
• 2025/26 final Farmgate Milk Price: $9.69 per kgMS
• 2025/26 final Organic Milk Price: $14.13 per kgMS
• Total Group:
o Operating profit: $3.4 billion, up 97.6% on prior year, including a $1.2 billion Mainland
divestment benefit
o Profit after tax: $2.6 billion, up 142%
• Underlying business
2
:
o Operating profit: $1.8 billion, up 23.6% on prior year
o Earnings of 71 cents per share, up 17 cents
o Return on capital: 14.2%, up from 11.7%
• FY27 forecast underlying earnings range: 65-85 cents per share
• 2026/27 forecast Farmgate Milk Price: $9.50 per kgMS, with a range of $8.50 - $10.50 per
kgMS
• 2026/27 forecast Organic Milk Price: $14.30 per kgMS, with a range of $13.30 -
$15.30 per kgMS

Fonterra Co-operative Group Ltd has today reported its FY26 annual results, delivering $27 billion
in revenue and nearly $20 billion in cash returns to New Zealand farmer owners and unit holders.

The final Farmgate Milk Price for the 2025/26 season was $9.69 per kgMS. The Co-op also
declared a final fully imputed dividend of 33 cents per share, bringing fully imputed total dividends
for the year to 73 cents per share. This includes the 24 cent interim dividend and 16 cent special
Mainland dividend paid in April.

Fonterra Chairman Peter McBride says the Co-operative has continued building momentum and
delivered at the top end of its performance expectations.

“Consistency is important to farmers and our shareholders. We’re proud of the collective effort
that’s delivered another strong result, at the top end of our earnings guidance. The team hasn’t
missed a beat despite the Mainland divestment process and the significant change that followed.

1
Total cash payments to shareholders includes milk payments over the 2025/26 season for Fonterra farmers, ordinary
and special cash dividends declared and the Mainland capital return during FY26.

2
Underlying performance is Fonterra’s continuing operations represented as if the Mainland transaction had occurred
for the full period to provide a comparative of Fonterra’s continuing operations and align with the Pro forma historical
financial information disclosed in the Notice of Special Meeting 2025 (29 September 2025).

Fonterra Co-operative Group
Page 2

Richard’s transition into the CEO role has been seamless and it’s exciting to see the energy his
team is putting into building off this strong position."

Fonterra CEO Richard Allen says the Co-operative’s disciplined approach to strategic execution
has once again generated strong results.

“FY26 was a year of delivery. Our teams collected, processed and shipped near record volumes of
milk, allocated products for the highest possible returns, and reliably delivered them to our
customers right around the world.

“Despite some challenging conditions, including weather events and geopolitical volatility, we
leveraged our full supply chain network and logistics partnerships to keep milk moving, achieving
record shipping volumes and materially improving our delivery performance,” says Mr Allen.

Performance

Total Group reported operating profit was $3.4 billion, up from $1.7 billion last year, including the
Mainland divestment benefit of $1.2 billion. Reported profit after tax was $2.6 billion.

“One year ago, we set a target for earnings to return to FY25 levels within three years if the
Consumer and associated businesses were divested,” says Mr Allen.

“I’m pleased to share that our team’s focused execution of strategy in FY26 has got us to that
target already, with underlying operating profit for our continuing business of $1.8 billion and profit
after tax of $1.2 billion, equivalent to 71 cents per share.”

The Co-operative’s return on capital was 14.2%, above our target range of 10-12% and showing
the value of our focused business-to-business (B2B) strategy.

“Our Ingredients business delivered $1,293 million in operating profit, supported by strong global
protein demand, favourable pricing and product mix decisions. In Foodservice, we achieved $547
million in operating profit, which was driven largely by volume and pricing growth across all product
categories and markets,” says Mr Allen.

Strategy

Mr Allen says Fonterra’s strategy to create value for farmers through disciplined capital choices,
operational efficiencies, innovation and a customer focus is delivering results, and will continue to
guide its new era as a B2B Co-op.

“Our foundations are in our New Zealand milk supply, and as we move forward as a B2B Co-op,
we’ll stay focused on making our farmer offering as competitive as possible. This includes helping
farmers with practical tools and services to make compliance easier and targeted support for the
next generation of Co-op farm owners.

“This year, we also confirmed the planned expansion of our organic milk business into the South
Island and are continuing with our recruitment drive for more organic farmers across the country to
meet growing demand, off the back of a record organic milk price of $14.13 per kgMS.

"Our New Zealand milk is complemented by our high value, off-shore whey protein sourcing, which
in FY26 continued to deliver outstanding returns to the portfolio.

“Our priorities in FY26 were to complete the Mainland Group sale, unlock new manufacturing
capacity, and continue with our Enterprise Resource Planning (ERP) software roll-out. I’m pleased
to report that we have executed on all of these this year.

“Following approval from our farmer shareholders, we completed the sale of Mainland Group in
March and have been working to ensure a smooth separation of the two businesses.

Fonterra Co-operative Group
Page 3

“We progressed our capital investment programme and invested $1 billion in essential
sustainability and growth projects.

“And finally, our ERP system replacement is on track and on budget, with five sites now live and
two more planned for later this year.

“These priorities will continue into 2027 as we maintain our focus on investing for growth,
operational efficiency and digital transformation.

“This year, we also continued with our sustainability efforts and made progress on a programme of
long-term energy resilience projects across multiple sites to improve energy security, reduce gas
usage and support our emissions targets and future processing growth.

"Today, we are announcing the Co-op will invest an incremental $1 billion over the next three years
in the South Island to accelerate and expand our protein manufacturing network and improve our
environmental performance, including our impact on water and emissions.

"These projects position the Co-op to respond to changes in how people want to consume dairy,
with a growing focus on sustainably produced, protein-rich and nutrient-dense foods. They are
critical to our future value growth and improve our optionality, increase our capacity and, as a
result, strengthen returns for farmers and shareholders over the long term.

"Using the capital retained from the Mainland Group divestment, alongside our strong cashflow,
this additional investment will help us move more milk from whole milk powder and commodities
into high-value products, strengthen partnerships with existing customers, and pursue new
opportunities as demand for advanced proteins continues to grow.

"Once operational in 2029, the investment is expected to create around 50 - 60 permanent roles,
as well as supporting local businesses involved across the construction projects."

Over the next three years, Fonterra expects total capital investment to be approximately $1.3-1.6
billion per annum.

Outlook

“Looking ahead, we’re planning for another season of strong milk supply. However, we are also
well prepared for an El Niño weather pattern should this eventuate,” says Mr Allen.

The Co-operative is forecasting milk collections for the 2026/27 season to be just above 1.6 billion
kgMS, and a Farmgate Milk Price of $9.50 per kgMS with a range of $8.50 - $10.50 per kgMS.

The 2026/27 Organic Milk Price forecast is $14.30 per kgMS within a range of $13.30 - $15.30 per
kgMS.

Having reached the target for earnings to return to FY25 levels, Fonterra will no longer report on
that target and will revert to its prior practice of forecasting earnings for the relevant financial year.

Accordingly, the Co-operative’s forecast earnings range for FY27 is 65-85 cents per share. This
improving outlook reflects continued delivery from our B2B businesses, as they continue to grow
high-value demand across our markets. Geopolitical volatility remains and with only two months
complete, previous seasons tell us that things can always change.

“This year, we’ve delivered a strong set of results, executed on our priorities and positioned the
Co-op for a new phase of value growth as a global B2B dairy ingredients provider,” says Mr Allen.

“The sale of Mainland Group was a significant step forward. Now, as we head into an increasingly
changing world, our farmers’ quality, grass-fed milk, combined with our flexible assets, reliable
supply chain and deep customer and market presence will help us deliver growth into the long-
term.

Fonterra Co-operative Group
Page 4


"We're building on our strong foundations, focused on making Fonterra’s products the world’s most
sought-after source of nutrition and fostering an enduring Co-op for generations.”

ENDS

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

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

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


For further information contact:

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

---

Fonterra Co-operative Group
FY26 Annual Results

Contents
FY26 Highlights3-6
Strategic Performance7-15
Dairy Market Environment16-20
FY26 Business Performance21-34
FY27 Outlook 35-38
Appendix: Supplementary Information39-52
2

Total Payout
$10.42
57c
Ordinary Cash Dividend
16c
Mainland Special Dividend
$9.69
Milk Price
•Total cash distributions for a fully shared up farmer
shareholder of $12.42
•Total Payout of $10.42
•Capital Return of $2.00
•Record milk volumes collected and processed; highest
second half shipments in a decade
•Total Group operating profit of $3.4b, including the
Mainland Group divestment benefit of $1.2b
•Excluding Mainland, underlying operating profit of $1.8b,
up from $1.5b, due to higher milk collections and margins
•Underlying profit after tax of $1.2b, equivalent to 71c per
share¹, up on 54c the prior year
•Capital investment of $1b in higher-value portfolio capacity
and a resilient operations network
•Adjusted net debt reduced $967m to $1.7b reflecting
strong cash flows and Mainland sale proceeds retained to
support resilience and growth
•Excluding Mainland, underlying return on capital of 14.2%,
up from 11.7%
FY26, delivering results
Total Payout
$10.42
Capital Return
$2.00
$12.42
Total
Cash Distribution
3
1.EPS presented is profit attributable to equity holders of the Co-operative
Note: Definitions of Mainland divestment benefit, underlying performance, earnings per
share and return on capital outlined on Slide 4.

Strong performance delivering value for shareholders
Mainland
Divestment Benefit¹
$1.2b
Underlying
Earnings per Share
4
71cents
 from 54c
Underlying
Return on Capital
5
14.2%
 from 11.7%
Capital Return
$3.2b
4
Underlying
Operating Profit
2,3
$1.8b
 from 1.5b
Total Group
Profit after Tax
$2.6b
 from 1.1b
1.The Mainland Divestment Benefit of $1,160m is the benefit to the Group after consideration of all related costs and benefits. The gain on sale disclosed in the Financial Statements of $1,250m is net of incremental costs that are directly attributable to
the sale, as required under Accounting standards.
2.Underlying performance is Fonterra’s continuing operations represented as if the Mainland trade terms had applied for the full period to provide a comparative of Fonterra’s continuing operations and align with the pro forma historical financial
information disclosed in the Notice of Special Meeting 2025 (29 September 2025). This representation is applied to operating profit, profit after tax, EPS and return on capital.
3.FY25 underlying earnings have been restated to account for finalisation of trade terms and transaction perimeter relating to the Mainland divestment.
4.EPS presented is profit attributable to equity holders of the Co-operative.
5.Return on capital calculated as Total Group normalised EBIT including finance income on long-term advances less a notional tax charge, divided by 13-month rolling average capital employed.

16
20
50
55
57
57
22
28
6.8%
12.4%
11.3%
11.7%
14.2%
FY22FY23FY24FY25FY26
35
80
71
54
71
17
16
1.0
2.2
1.5
1.7
3.4
FY22FY23FY24FY25FY26
5.3
3.2
2.62.6
1.7
42%
29%
24%24%
21%
FY22FY23FY24FY25FY26
9.30
8.22
7.83
10.16
9.69
9.50
8.72
8.38
10.73
10.42
FY22FY23FY24FY25FY26
Creating value through sustained performance
Operating Profit and EPSNet debt and Gearing
Underlying business EPS (cents)
Reported operating profit ($b)
Gearing Ratio
Adjusted net debt ($b)
Total Dividend and ROC
Total Payout ($)
Milk PriceCash dividend (cents)
DividendSpecial dividend (cents)
Underlying return on capital
1
5
Mainland EPS (cents)
71
87
Imputation credits (cents)
Includes Soprole
$0.35b gain on sale
Includes Mainland
$1.16b Benefit
1. FY22 to FY24 return on capital shown on a Total Group basis.

6
B2B performance delivering earnings growth
•At the end of FY25, the Co-op set a target to return to
pre-divestment operating profit of $1.7 billion within 3 years,
this was achieved ahead of plan in FY26.
•The Co-op had stronger than anticipated earnings growth
due to
–Favourable product portfolio performance, ahead of
planned structural benefits
–Increased milk volumes
•The Co-op remains focused on the structural gains it outlined
at the end of FY25
–Unlock higher value product capacity
–Cost reduction, including ERP completion
•Having achieved the FY25 target to return to pre-divestment
operating profit ahead of plan, the Co-op will no longer report
against this measure and will revert to forecasting earnings for
the relevant year.
Achieved target to return to FY25
pre-divestment operating profit
ahead of plan
1. Total Group reported operating profit, Excluding Mainland section is underlying operating profit.
1.0
1.9
1.5
1.7
1.5
1.8
2.2
FY22FY23FY24FY25FY25FY26
Operating Profit¹
(NZD billion)
Excluding Mainland
Includes Soprole
$0.35b gain on sale

Strategic performance
Content to be addedExplanation of Content
Question to consider

Our Strategy

9
Fonterra
Management Team
•Richard Allen appointed Chief Executive,
April 2026.
•Shift to a market-led model, with single-point
accountability per market for Foodservice and
Ingredients.
•Growth and Strategy function established to
connect strategy across the Co-op.
•New structure lets the Co-op move faster in
market, with more capability closer to
customers.
•Management Team changes, effective 15
June 2026:
•Elisa Giusti
Chief Growth and Strategy Officer
•Effective 3 August 2026:
•Teh-han Chow
CEO Greater China
(Ingredients and Foodservice in
Greater China)
•Gaby Amade
President Global Markets
(Ingredients and Foodservice globally
outside of Greater China)
Richard
Allen
Chief Executive
Officer
Andrew
Murray
Chief Financial
Officer
Anna
Palairet
Chief Operating
Officer
Kate
Daly
Managing Director,
People and Culture
Matt
Bolger
Managing Director,
Co-operative Affairs
Teh-han
Chow
CEO
Greater China
Gaby
Amade
President
Global Markets
Elisa
Giusti
Chief Growth and
Strategy Officer

10
Unleash our
Ingredients engine
Next era
of growth driven
by complementary
market-led strategies
While our channel strategies
remain, portfolio priorities,
investments and accountability will
be market-led in our next growth era
•Market-led structure will enable the Co-
op to move faster in market and work
closer with our customers.
•Complementary channels to maximise
value from every milk component.
•Ingredients accelerating high-value
protein, Foodservice expansion of
milk fats.
•Innovation and capital investments to
focus on customer needs and highest
value products.
Keep momentum
in Foodservice
Deepen our position as a world-leading
provider of sophisticated dairy
ingredients, to grow both the Farmgate
Milk Price and earnings.
Expand our successful Foodservice
business in and beyond China to
grow earnings.
•Deeper partnerships with customers who
value our unique offering.
•From manufacturing through to pricing
and sales, optimising as one, to unlock
value.
•Integrating physical and financial
portfolios to unlock new sources of value.
•Invest growth capital in new capacity to
increase milk allocated to high-value
ingredients.
•Invest in innovation to develop advanced
ingredient products and solutions.
•Maintain our leadership position in China
and expand our footprint into new cities.
•Selectively accelerate Foodservice growth
in markets outside China, with a
capital-light approach.
•Continue to invest in local application
centers to tailor our products to
customer needs.
•Deliver new product innovations to
maintain and grow market share.
•Invest growth capital in new capacity to
increase milk allocated to Foodservice.

11
FY27 priorities focused on value growth
•Full Mainland operational separation by end of FY27.
•Deliver operating cost savings through a more focused
operating model.
•Drive plant productivity and reliability to support milk
price, earnings and resilience.
Operational Efficiency
•Completion of announced:
‒Studholme | $75m | Advanced protein hub
Complete and nearing commercial production
‒Edendale | $150m | UHT cream expansion
On track for completion in 2026
‒Clandeboye| $75m | Butter line
Build started January 2026
‒Edgecumbe | $35m | Pastry butter expansion
Announced March 2026
•Incremental $1b to accelerate protein network in
South Island
Investing for Growth
•ERP remains on budget and on track for completion in
late 2028
•Expanding digital maintenance capability to improve
manufacturing performance
•Selective deployment of AI
Digital Transformation
Driving value through operational efficiency, growth investments and strengthening digital capability

Accelerating capability to turn more of your milk into higher-value products
$1.3 – $1.6b of capital invested annually over FY27 – FY29
~$1b phased over 3yrs
Expand South Island advanced
protein network
$100-300m / annum
Cleaner energy and wastewater
~$600m / annum
Keeping our sites safe
and resilient
Sustaining
Assets
0x1x2x
3x
0.7x
(Target range 30 – 40%)
0%10%20%30%40%
Energy
& Wastewater
~$335m committed
Studholme completed, rest comes
online in FY27
Growth Assets
Remain comfortably inside Co-op’s Board approved policy settings
Gearing
21%
FY26FY29 modelled impact of announced programme
Debt / EBITDA
(less than 3.0x)
What we have committed
South Island
network
What we intend to deliver over next 3 years
12

Expansion of South Island protein manufacturing network
Every growth project competes for your capital
How we decide
1
Protect the core first
Safe, reliable sites, a strong balance sheet,
dividends in line with policy
2
Growth projects compete
Each must earn its place on through-cycle
returns, not the latest cycle
3
Value back to you
Stronger returns for farmer shareholders
over the long term
What we are building in the South Island
~$1b
over three years
2029
fully operational
50 - 60
permanent roles
Why invest in the South Island manufacturing network
13
•Follows milk growth
–Acceleration to support South Island resilience as network nears capacity at peak
•Moves milk up the value chain
–Further tensions Milk Price as we shift milk into value-add protein
•Deepens customer relationships
–Strengthens partnerships through increased advanced protein capability
•Improves Co-op’s sustainability position
–Better environmental performance, including our impact on water and emissions

Sustainability: Emissions reductions support continued access to customers
worth about one-third of Fonterra’s FY26 revenue
Scope 1 & 2 emissions target performance
(Absolute scope 1 & 2 emissions vs FY18 base year)
-17.3%
-20.2%
-28.7%
-50.4%
•Scope 1 & 2 emissions (primarily from manufacturing) have reduced year on year
despite increased milk processed
On-farm emissions intensity target performance
(Scope 1 & 3 FLAG emissions from dairy per tonne of fat and protein corrected milk
vs FY18 base year)
-5.0%
-6.2%-6.2%
-30.0%
•On-farm emissions intensity held constant year on year, while milk volumes increased
Focused on:
•Carbon removals
•Novel technology
•Improved on-farm efficiency
Focused on transitioning from
coal & gas to renewable energy
14
FY24FY25FY26FY30
target
FY24FY25FY26FY30
target

15
$10,000
$20,000
$30,000
FY22FY23FY24FY25FY26
WPC80Casein
Growing nutrition demand is supporting strong protein prices
(USD/MT)
•Demand from healthy ageing, active lifestyles and specialised nutrition is expanding
the global market for high-value dairy proteins.
•Through NZMP, we combine New Zealand’s grass-fed dairy advantage with
advanced protein capability and deep customer partnerships to capture this growth.
How we are positioning Ingredients to capture the opportunity
•Expand our higher-value protein portfolio
‒Grow functional and specialised dairy proteins for healthy ageing, active
lifestyles and specialised nutrition.
•Focus investment and capability towards the highest-value opportunities
‒Use customer insights, targeted partnerships and NZMP’s market presence
to prioritise the most attractive customers, markets and applications.
•Invest to capture more value from milk
‒The new Studholme protein hub, together with our European protein
capability, increases the Co-op’s capacity to meet growing demand for high-
value functional dairy proteins.
Ingredients
NZMP connects New Zealand's grass-fed dairy
advantage with growing global demand for nutrition
solutions
341
360
336
364
379
FY22FY23FY24FY25FY26
Growing cheese and protein production increases the Co-op’s capacity
to capture value
Fonterra cheese and protein production
(million kgMS)

Foodservice operating profit by region (%)
421
444
447
460
486
FY22FY23FY24FY25FY26
16
AFP’s proven China model is driving growth across Asia
Fonterra cream production
(million kgMS)
•AFP's proven China model is being replicated across key Asian markets, driving growth
beyond Greater China.
•Southeast Asia’s contribution to Foodservice operating profit has increased from 9% to
23% since 2023, demonstrating successful expansion across the region.
How we are positioning Foodservice to capture the opportunity
•Strengthen our position in China
‒Deepen customer partnerships through insights, innovation and chef-led
application expertise.
•Extend our successful model across Southeast Asia
‒Apply proven customer solutions and capabilities developed in China to local
market opportunities.
•Invest in cream capability to support value growth
‒Expand UHT cream capability, including through the new Edendale plant, to
meet growing customer demand and direct more milk into high-value
Foodservice products.
Foodservice
Through Anchor Food Professionals, we combine New
Zealand dairy expertise, chef-led application capabilities,
trusted customer relationships and locally tailored
solutions to help customers grow.
Growing cream production increases the Co-op’s capacity to support
higher-value growth
91%
85%
81%
77%
9%
15%
19%
23%
FY23FY24FY25FY26
Greater ChinaSoutheast Asia

Dairy market environment
Content to be addedExplanation of Content
Question to consider

ProductionImports
EUROPE
3-month2.3% 
12-month4.6% 
US
3-month3.9% 
12-month4.5% 
NZ
3-month4.3% 
12-month4.5% 
MEA
3-month35.2% 
12-month17.8% 
ASIA (ex China)
3-month1.4% 
12-month2.5% 
LATAM
3-month0.3% 
12-month3.4% 
CHINA
3-month7.8% 
12-month3.7% 
18
Strong global supply, prices supported by mixed
demand strength
Global supply
•Milk supply has increased, supported by favourable
weather, better farm economics and the absence of
animal-health challenges.
•Production growth may moderate as European weather
pressures, tighter margins and potential El Niño impacts
increase downside risks to milk supply.
•Commodity prices remain relatively supported despite
higher milk production, indicating that additional supply
continues to find demand.
•China's domestic milk production has stopped growing
as low farmgate prices push smaller farms to reduce
herds or exit.
Global demand
•Import demand remains resilient overall, although
regional performance continues to be mixed.
•China’s domestic dairy consumption remains soft,
keeping import demand for milk powders subdued, while
foodservice-led growth continues to support demand for
cheese and butter.
•Middle East and Africa import volumes are materially
lower, driven by reduced powder purchases, though
Fonterra has maintained continuity of supply to
customers through the region.

Farmgate Milk Price
2023/242024/252025/262026/27
Forecast
$7.83$10.16$9.69$9.50
-1.0
-
1.0
2.0
3.0
4.0
Dairy markets remain supportive despite increasing global milk production
$4,000
$4,400
$2,600
$3,200
$3,500
$3,200
$3,200
$3,900
June 24
June 25
June 23June 26
$3,550
19
GDT WMP Price (USD/MT)
Cumulative Milk Supply Change (kgMS, billion)

20
Growth in Fonterra milk collections
and market share maintained
Milk Collections
•Fonterra's milk collections kept growing in the 2025/26 season, with 1,571m kgMS
collected, up by 4.1% on a year earlier and the highest level in more than a decade.
•Favourable weather drove most of that growth, with mild conditions supporting late-
season production.
•Production per farm increased to 194,000 kgMS, helped by better productivity and a
larger average farm size.
Strongest Farmer Offering
•A resilient Co-op with competitive returns and growing milk supply
•FY26 cash distributions of $19.6b, and maintained resilient balance sheet
•Milk supply market share stable
‒2026: net gain vs competition
‒2027: net gain vs competition and land use change
•Over 130 first time farm owners joined the Co-op at the beginning of the 2027 Season
1,478
1,480
1,471
1,509
1,571
166
170
176
183
194
FY22FY23FY24FY25FY26
79%79%
78%78%78%
Fonterra milk collections and market share
kgMS collected (million)
Average kgMS collections per farm (thousand)
Market share

21
Drivers of the Farmgate Milk Price
10.16
0.05 (0.65)
0.20 (0.07)
9.69
2025 Final
FGMP
VolumeProduct
Prices
Foreign
Exchange
Net Costs2026 Final
FGMP
Farmgate Milk Price (FGMP)
($ per kgMS)
Revenue
•Higher milk collections, up 4.1%, increased the volume of product available for
sale, improved asset utilisation and spread fixed costs across a larger milk pool.
•Weighted average USD shipment prices for reference products declined 3.7%,
reflecting lower prices for WMP, butter and AMF.
Foreign exchange
•A lower average hedge rate, from NZD/USD 0.5988 in 2025 Season to NZD/USD
0.5895 in the 2026 Season, increased NZD returns from USD sales.
Costs
•Inflationary pressure on milk collection, energy, packaging and labour was partly
offset by improved operating leverage from higher milk volumes.
•The price of lactose, an input cost to the Milk Price, also increased 25%
season-on-season.
FY26 Farmgate Milk Price (FGMP) of $9.69 per kgMS was lower than the prior season,
reflecting softer reference product prices as global milk supply recovered across major
exporting regions.
FY25 and FY26 monthly milk prices
($ per kgMS)
($ per kgMS)
$6
$8
$10
$12
JunJulAugSeptOctNovDecJanFebMarAprMay
2024/25 Season2025/26 Season
Higher milk cost at
start of season
driven by demand for
WMP
2024/25 season
monthly milk prices
average to $10.16, the
Farmgate Milk Price
2025/26 season
monthly milk prices
average to $9.69, the
Farmgate Milk Price

FY26 Business Performance
Content to be addedExplanation of Content
Question to consider

FY25 to FY26 Underlying operating profit
($ million)
Earnings growth from stronger margins and higher collections
23
32
46
126
(9)14
104
38
1,489
1,840
FY25
Operating Profit
Core OperationsVolumeMarginOperating ExpensesVolumeMarginOperating ExpensesFY26
Operating Profit
Due to improved pricing of UHT cream and cream
cheese. Lower operating expenses from rationalising
Greater China consumer business
Driven by higher protein prices and higher
sales volumes of casein and cheese
Ingredients
in-market performance
$163m 
Foodservice
in-market performance
$156m 

54c EPS71c EPS
914
45
398(92)
(83)
1,182
FY25
Profit after Tax
Volume &
Product mix
MarginOperating expenses
& Other
Net finance costs
& Tax
FY26
Profit after Tax
Earnings growth from stronger margins and higher collections
24
FY25 to FY26 Underlying profit after tax
($ million)
Net finance costs improved $18m,
due to lower debt. Tax expense
$101m higher on increased earnings.
Stronger margin driven by improved
pricing in non-reference products
Increased allocation to
higher value products
Operating expenses up $59m, due to higher IT costs and
inflationary pressure. ‘Other’ decreased $33m as a favourable
one-off item in FY25 Other income was not repeated.
Note: For the year ended 31 July. 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.

25
IngredientsFoodserviceTotal
External sales volume
(million kgMS)
1,362
3.3% 
240
2.1% 
1,602
3.1% 
Underlying operating profit (excludes Mainland)
Core
Operations
$
206m
$78m 
$
135m
$110m 
$
341m
$32m 
In-market
$
1,087m
$163m 
$
412m
$156m 
$
1,499m
$319m 
Total
$
1,293m
$85m 
$
547m
$266m 
$
1,840m
$351m 
Return on Capital
13.5%
From 12.8% 
16.3%
From 8.5% 
14.2%
From 11.7% 
Strong in-market performance underpinning higher return on capital

547
102
340
159
82
78
91
483
120
361
175
83
77
93
491
127
348
160
99
69
95
497
118
361
180
98
65
103
508
123
384
188
103
75
103
Whole Milk PowderSkim Milk PowderCream
(Butter and AMF)
CheeseCream (other)CaseinOther Proteins
Whole Milk Powder:
•Higher milk solids allocation driven by increased milk supply in 2026, with proportion of total milk solids
below the prior year, in line with strategic decisions to allocate milk solids into higher value products
Cream:
•Butter demand across Greater China, Europe and the United Kingdom supporting an increase in
allocation of milk solids into the cream portfolio, both Reference and Non-Reference
•Higher relative returns from butter over AMF supported the prioritisation of milk solids into butter
production
Cheese
•Record cheese volumes manufactured in FY26, with early contracting helping to secure demand
ahead of increased US export availability from recent capacity investments
•Additional cheese enabled increased supply of high-value proteins.
Proteins
•Strong demand for protein ingredients continued to support Fonterra's higher-value portfolio.
•Casein remained a valuable contributor, supported by demand across nutrition applications
Breakdown of milk solids allocated to product groups
Reference ProductsNon-Reference Products
NZ milk solids manufactured (kgMS millions)
For 12 months to 31 July
% milk solids manufactured
1. Changes in table present total NZ manufactured milk solids and does not align to charts which exclude Butter Milk Powder, and other smaller Non-Reference commodity groups
2223242526222324252622232425262223242526222324252622232425262223242526
7.1%
8.4%
9.0%
8.1%
8.2%
38.5%
34.0%
34.7%
34.2%
33.6%
23.9%
25.5%
24.6%
24.9%
25.4%
11.2%
12.3%
11.3%
12.4%12.4%
5.7%
5.8%
7.0%
6.8%
6.8%
5.5%
5.5%
4.9%
4.5%
4.9%
6.4%
6.5%
6.7%
7.1%
6.8%
Change in kgMS millions
1
TotalReferenceNon-Reference
 62 39 23
26

253
502
426
27
224
412
414
243
14.5%14.5%
13.2%
6.6%
13.4%
11.6%
13.1%
11.0%
-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
Q1Q2Q3Q4Q1Q2Q3Q4
Operating profit ($ million)Gross margin (%)
1,208(78)
46
126(9)
1,293
FY25
Operating
Profit
Core
Operations
VolumeMarginOperating
expenses &
Other
FY26
Operating
Profit
Key performance drivers
Underlying operating profit ($ million)
In-market performance
Quarterly performance
1

FY26
27
Ingredients: Strong global demand for protein driving in-market performance
•Ingredients operating profit increased $85m due to:
–lower attribution from Core Operations reflecting higher cost of protein being
expensed through FY26 relative to prior year
–strong in-market performance, recovering the higher protein costs, driven by
volume growth and higher sales prices achieved
–The Co-op’s European protein business complemented the New Zealand
sourced portfolio and contributed $67m to the uplift in earnings
•The impact of costs associated with upgrading our ERP system are in the Core
Operations allocation, in FY26 this was $135m compared to $123m in FY25.
•The Co-op’s FY26 H2 shipped volumes were the highest in a decade, with Q3 and
Q4 Ingredients sales volumes totalling 1.4m MT, up 8% or 104,000 MT.
•FY25 Q4 impacted by the seasonal milk curve, narrowing margins and increased
operating expenses for the quarter.
1. FY25 performance has been restated to account for finalisation of trade terms and transaction perimeter relating to the
Mainland divestment
FY25

60
97
56
68
65
231
135
116
16.1%
18.7%
16.5%
21.7%
15.8%
28.3%
23.3%
25.8%
0.0%
5.0%
10. 0%
15. 0%
20. 0%
25. 0%
30. 0%
0
100
200
300
400
500
600
700
800
900
1000
Q1Q2Q3Q4Q1Q2Q3Q4
Operating profit ($ million)Gross margin (%)
281
110
14
104
38547
FY25
Operating
Profit
Core
Operations
VolumeMarginOperating
expenses &
Other
FY26
Operating
Profit
Key performance drivers
Underlying operating profit ($ million)
1
In-market performance
Quarterly performance
1

FY26
28
Foodservice earnings growth driven by margin expansion
•One-off costs in FY25 of $67m to exit a product line were not repeated and
favourable foreign exchange conditions also supported margins.
•Foodservice operating profit increased $266m due to:
–higher attribution from Core Operations reflecting easing in milk costs expensed
–sustained strong product margins, particularly UHT cream and cream cheese
–operating costs were lower, reflecting rationalising of the residual Consumer
business in Greater China
–Sales volumes were moderately higher, as growth was partially offset by the
rationalising of remaining Consumer products
1. FY25 and FY26 performance has been restated to account for finalisation of trade terms, transaction perimeter and
included business units relating to the Mainland divestment
FY25

Core Operations manufacturing cash costs
($/kgMS)
2.70
2.91
2.76
2.77
2.78
2.30
2.63
2.58
2.66
FY22FY23FY24FY25FY26
Inflation adjustedActual
Operating expense and Core Operations manufacturing cash costs
Cash operating expenses
($/kgMS)
1.37
1.44
1.45
1.46
1.30
1.17
1.30
1.36
1.40
1.03
1.001.00
FY22FY23FY24FY25FY26
Inflation adjustedActualActual excluding ERP build & Mainland Group
29
•Manufacturing costs were level in real terms in FY26, balancing cost pressure from
higher lactose and freight costs with efficiency gains from higher
manufacturing throughput.
•Sustained productivity improvement and energy efficiency remain a focus in
strengthening the competitiveness and resilience of the Co-op’s manufacturing
cost base.
•Cash operating expenses per kgMS improved following the Mainland divestment
•Investment in the Co-op’s ERP platform accelerated in FY26, with the project
accounting for $0.08/kgMS of costs.
•Excluding Mainland and the ERP platform costs, cash operating expenses remain in
line with prior year supported by higher milk volumes
Higher milk collections and a more focused Co-op create opportunities for further efficiency gains

New Zealand manufacturing performance
30
94.5%
95.3%
95.8%
95.7%
96.0%
FY22FY23FY24FY25FY26
0.36%
0.26%
0.46%
0.41%
0.48%
FY22FY23FY24FY25FY26
Cost of Quality
Made Right First Time
Operational resilience supported higher milk volumes, with further opportunity to reduce the cost of quality
% of Revenue
30
Milk Utilisation
1.48
1.48
1.47
1.51
1.57
96.5%
96.3%
96.7%
96.6%
96.6%
FY22FY23FY24FY25FY26
Milk collected (kgMS billion)
% of milk utilised
•The Co-op maintained a high milk utilisation rate while
managing higher milk volumes.
•Continued focus on production efficiency and
reliability drove continued improvements in products
being made to specification first time.
•Higher volumes and the production of more complex
products resulted in an increase cost of
quality failures.
•Supplementary feed impacts were higher, with the
Co-op focused on working with farmers to reduce
these impacts.
% of product made right first time

1,262
315(601)
413
565
3,993(310)
5,637
FY25
Free Cash Flow
EarningsTaxes PaidSuppliers payableTrade and other
working capital
DivestmentsCapex and otherFY26
Free Cash Flow
FY25 to FY26 Free Cash Flow
($ million)
Movements In Cash Flow
31
Proceeds from
divestments including
$4,047m from Mainland
Higher earnings and
gain on sale resulting
in additional tax paid
Higher capital investment in
resilience, efficiency
and growth
Favourable position due to
lower milk price and advance
rate reduction
High milk volumes
increased trade
receivables

489
561
499
580
693
53
47
56
167
253
30
79
106
128
89
572
687
661
875
1,035
FY22FY23FY24FY25FY26
Other capital invested
Growth capital expenditure
Sustaining Capital Expenditure
Capital invested¹
Full financial year figures ($ million)
32
281
333
291
317
407
54
51
54
71
5
78
85
40
104
165
76
92
114
88
116
489
561
499
580
693
20222023202420252026
Other operationsDecarbonisation & Energy Security
WastewaterNZ operations
Breakdown of sustaining capital expenditure
Full financial year figures ($ million)
•Capital invested increased to $1b, as the Co-op invested to support future growth,
energy security and supporting the long-term reliability and resilience of assets.
•FY26 elevated investment levels are expected to continue over FY27 – FY29.
•Growth capital expenditure included expanding Ingredients and Foodservice
production capability, with investment in the Edendale UHT cream expansion and
Clandeboye butter plant.
•Sustaining investment included the Whareroa cool storage expansion to support
supply chain resilience.
•Energy investment to electrify plants and reduce emissions progressed at Whareroa
and Edendale.
Investing in value-led growth, sustainability and reliable operations
$1b invested in FY26, with $1.3 – $1.6b of capital invested annually over FY27 – FY29
1.Capital Invested excluding Mainland Group

•Adjusted net debt reduced $967m from $2.6b
to $1.7b,
driven by:
‒Conclusion of the Mainland divestment
with 0.8b of proceeds retained
‒Stronger earnings and a higher suppliers
payable balance, which together have
supported dividend payments and higher
capital expenditure
•Gearing ratio decreased reflecting:
‒Lower net debt and an increase in retained
earnings
‒Lower balance sheet equity following
divestment of Mainland
•Adjusted net debt/EBITDA down due to strong
underlying earnings and repayment of debt.
•S&P Global credit rating retained at A- with
stable outlook.
Lower debt and gearing strengthen financial capacity
33
5.3
3.2
2.62.6
1.7
FY22FY23FY24FY25FY26
42.4
28.8
24.0
23.9
20.8
FY22FY23FY24FY25FY26
Working capital days
98
91
89
89
84
FY22FY23FY24FY25FY26
Gearing ratio (%)
Net debt/EBITDA
Adjusted net debt ($ billion)
3.2
1.3
1.2
1.1
0.7
FY22FY23FY24FY25FY26

($ million)20252026
Average capital employed
6,9257,044
Net operating profit after tax
888952
Return on capital (%)
12.8%13.5%
Ingredients
13.5%
 from 12.8%
Foodservice
16.3%
 from 8.5%
Return on capital by channel
Average capital employed
2,4222,443
Net operating profit after tax
205399
Return on capital (%)
8.5%16.3%
34
Underlying Return on Capital
¹

1.Underlying performance is Fonterra’s continuing operations represented as if the Mainland trade terms had applied for the full period to provide a comparative of Fonterra’s continuing operations and align with the pro forma historical financial
information disclosed in the Notice of Special Meeting 2025 (29 September 2025). FY25 performance has been restated to account for finalisation of trade terms and transaction perimeter relating to the Mainland divestment
For the 12 months ended 31 July
NZD million
20252026
Operating profit1,4891,840
Finance income on long-term advances811
Notional tax charge(404)(500)
Net operating profit after tax1,0931,351
Capital employed at 31 July8,0208,075
Impact of seasonal capital employed1,3271,412
Average capital employed9,3479,487
Return on capital11.7%14.2%
•Return on capital increased to 14.2%, above last year and exceeding the target
range of 10% – 12%.
•The change relative to previous period reflects:
−$351m higher operating profit due to high volumes and margins;
−$140m increase in average capital employed due to higher milk volumes
and capital investment, offset by higher supplier payables.
•Ingredients return on capital increased due higher volume and margins. Capital
employed increased due to higher inventory reflecting increased milk collections.
•Material increase in Foodservice return on capital driven by operating profit growth and
stable capital employed.

836
1,587
1,348 1,348
1,593
12,356
12,774
11,904
12,348
11,679
FY22FY23FY24FY25FY26
Total Group net operating profit after tax ($m)Average capital employed ($m)
Return on capital
6.8%
12.4%
11.3%
10.9%
13.6%
Total Group return on capital
For 12-month period to 31 July
35
Total Group Return on Capital
•FY26 Total Group return on capital of 13.6%, above the 5-year average and
exceeding the FY26 target range of 10%-12%.
•The Co-op continues to show steady improvement in return on capital
through earnings growth, portfolio optimisation and disciplined capital
management.
•Capital employed includes Mainland through to completion of the divestment
in March 2026.
•Mainland divestment benefits not included in FY26 operating profit.

Note: Notional tax rate in FY25 and FY26 is 27%, prior years use 16.1%

FY27 Outlook
Content to be addedExplanation of Content
Question to consider

2026/27 Season
Forecast Farmgate Milk Price
2027 Full Year
Forecast earnings range
FY27 Outlook
$8.50 – $10.50
per kgMS
65 – 85
cents per share
The forecast range reflects:
•Continued favourable price relativities, with reversion toward longer-run
averages expected through the financial year
•Stronger contracting and hedging positions than prior seasons for non-
reference products
•Higher H1 milk volumes compared to prior year, with second-half supply
subject to El Niño drought risk
•Delivery of productivity initiatives across cost of goods sold and operating
expenses, against ongoing geopolitical and supply chain uncertainty
37
The forecast range reflects:
•Contracted volumes are currently at relatively low levels, creating a
broader range of possible outcomes, contract uptake is tracking to
expectations and remains consistent with prior seasons.
•Milk volume growth, current forecast collections slightly over 1.6b kgMS,
end of season potentially impacted by El Niño drought risk
•Demand remains resilient, markets absorbing incremental supply with
recent improvements in global prices, particularly WMP and SMP

38
Organic milk programme positioned
for long-term growth
2026/27 Season
Forecast Organic Milk Price
$13.30 – $15.30
per kgMS
Overview
•102 certified organic farms supplying 11 million kgMS, with additional farms
currently in conversion
•Organic milk supply has doubled since 2020, averaging 15% annual growth
between 2020 and 2025
South Island expansion
•Recruitment underway in the lower South Island, aligned with
manufacturing capability
•Organic production planned from FY29, subject to securing sufficient milk supply
Sales forecast and demand
•FY27 forecast sales volumes up 7.5% on FY26
•Demand remains supported by consumer interest in health, wellness and
sustainability, while signs of supply recovery are emerging in the US

Supplementary Information
Content to be addedExplanation of Content
Question to consider

For the 12 months ended
31 July
Total Group
Continuing operationsDiscontinued operations
NZD million20252026∆%20252026∆%20252026∆%
Sales volume ('000 MT)3,4883,413(2)%2,9333,0243%555389(30)%
Sales volume (million kgMS)1,6201,6602%1,5541,6023%6658(12)%
Revenue26,45027,4324%24,05225,3986%2,3982,034(15)%
Cost of goods sold(22,259)(23,025)(3)%(20,797)(21,619)(4)%(1,462)(1,406)4%
Gross profit 4,1914,4075%3,2553,77916%936628(33)%
Gross margin (%)15.8%16.1%13.5%14.9%39.0%30.9%
Operating expenses(2,587)(2,348)9%(1,802)(1,861)(3)%(785)(487)38%
Other
1
1281,363965%11380(29)%151,283nm
Operating profit1,7323,42298%1,5661,99828%1661,424nm
Net finance costs(186)(166)11%(184)(166)10%(2)0100%
Tax expense(467)(648)(39)%(369)(486)(32)%(98)(162)(65)%
Profit after tax
2
1,0792,608142%1,0131,34633%661,262nm
Earnings per share (cents)
65160
146%618135%479nm
Normalisations
3
106(1,160)-(156)(178)(14)%262(982)-
Normalised profit after tax
3
1,1851,44822%8571,16836%328280(15)%
Normalised EPS (cents)
718723%517139%2016(20)%
Total Group performance
1.Comprises other operating income, (inclusive of the share of profit of equity accounted investees), gain on sale of Mainland and foreign exchange gains/(losses)
2.Includes amounts attributable to non-controlling interests
3.Total Group Normalisations of $(1,160)m relating to the Mainland Group Divestment Benefit
Note: Comparisons restated for consistency.
40

For the 12 months ended 31 July
2025
2026
NZD million
Fonterra
reported
continuing
operations
Pro Forma
Adjustments
Fonterra
Underlying
1
Fonterra
reported
continuing
operations
Pro Forma
Adjustments
Fonterra
Underlying
1
Revenuefrom sale of goods24,052 (77)23,975
25,398
(158)25,240
Cost of goods sold
(20,797)- (20,797)
(21,619)
- (21,619)
Gross profit3,255 (77) 3,178 3,779 (158)
3,621
Operating expenses(1,802)- (1,802)(1,861)- (1,861)
Other
2
113 - 113
80
- 80
Operating profit (EBIT)1,566 (77)1,489 1,998 (158)1,840
Net finance costs(184)- (184)(166)- (166)
Profit before tax1,382 (77)1,305 1,832 (158)1,674
Tax expense(369)(22) (391)(486)(6) (492)
Profit after tax1,013 (99)914 1,346 (164)1,182
Earnings per share (cents)61548171
Continuing operations pro forma Statement of P&L
Pro forma, i.e. underlying, results have been compiled by extracting the results of Continuing operations and making pro forma adjustments to:
•remove the effects of Fonterra’s transfer pricing arrangements related to Mainland Group that ceased post divestment; and
•recognise the impact of the Raw Milk Supply, Global Supply, and Distribution Agreements
41
1.Underlying performance is Fonterra’s continuing operations represented as if the Mainland trade terms had applied for the full period to provide a comparative of Fonterra’s continuing operations and align with the pro forma historical financial
information disclosed in the Notice of Special Meeting 2025 (29 September 2025). This representation is applied to operating profit, profit after tax, EPS and return on capital.
2.Comprises other operating income (inclusive of the share of profit of equity accounted investees) and foreign exchange gains/(losses)
Note: Figures as shown in table may not align to the total figure calculation based on numbers in the table due to rounding, comparative information includes re-presentations for consistency with the current period.

End-to-end Channel performance
1.Underlying performance is Fonterra’s continuing operations represented as if the Mainland trade terms had applied for
the full period to provide a comparative of Fonterra’s continuing operations and align with the pro forma historical
financial information disclosed in the Notice of Special Meeting 2025 (29 September 2025).
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.Comprises other operating income (inclusive of the share of profit of equity accounted investees) and foreign
exchange gains/(losses)
4.Includes corporate costs of $638m in FY26 (FY25: $637m). Allocation between Ingredients and Foodservice of $473m
and $165m (FY25: $470m and $167m), respectively
For the 12 months ended 31 July
Underlying Operations¹IngredientsFoodservice
NZD million
20252026∆%
²
2025202620252026
Sales volume ('000 MT)2,9333,0243%2,3752,463558561
Sales volume (million kgMS)1,5541,6023%1,3191,362235240
Revenue23,97525,2405%19,31320,3374,6624,903
Cost of goods sold(20,797)(21,619)(4)%(16,984)(17,861)(3,813)(3,758)
Gross profit 3,1783,62114%2,3292,4768491,145
Operating expenses(1,802)(1,861)(3)%(1,215)(1,251)(587)(610)
Other
3
11380(29)%94681912
Operating profit
4
1,4891,84024%1,2081,293281547
Gross margin13.3%14.3%12.1%12.2%18.2%23.4%
Operating profit margin6.2%7.3%6.3%6.4%6.0%11.2%
42

20252026Change
Sales Volume (‘000 MT)
Reference Products1,7011,7734%
Non-Reference Products9569782%
Revenue (NZD)
Reference Products ($ billion) 12.713.34%
Non-Reference products ($ billion) 7.68.410%
Reference Products ($ per MT) 7,4917,4960%
Non-Reference products ($ per MT) 7,9748,5758%
Cost of Milk (NZD)
Reference Products ($ billion) (10.0)(9.1)9%
Non-Reference Products ($ billion) (4.4)(3.9)13%
Reference Products ($ per MT)(5,861)(5,123)13%
Non-Reference Products ($ per MT)(4,653)(3,970)15%
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 channel and excludes bulk liquid milk. Bulk liquid milk for 2026 was 75,000 MT of kgMS equivalent (for the comparative period it was 74,000 MT of kgMS equivalent).
43

2,500
3,500
4,500
5,500
6,500
Impact of price relativities smoothed by financial trading portfolio
Fonterra Revenue Reference and Non-Reference
Price Relativities
(USD/MT)
FY24FY25FY26
Non-Reference Product shipment price
Reference Product shipment price
•Revenue price relativities widened over FY26. Compared to the same time last year, the average price for the Non-Reference
portfolio increased USD 242 per MT or 5%, compared with the Reference portfolio, which decreased USD 104 per MT or 2%.
•The developing financial trading portfolio moderated the earnings impact of physical price relativities. In FY25, hedging benefited
earnings as relativities narrowed; in FY26, hedging reduced the upside captured as relativities widened.
H1H2FY25
Average Non-Reference price
4,3264,6644,504
Average Reference price
4,1294,5904,360
Price difference
19774144
H1H2FY26
Average Non-Reference price
4,7274,7644,746
Average Reference price
4,3964,1354,256
Price difference
331629490
44
Note: Reference shipment prices presented are ‘Milk Price Informing’ prices only, a subset of the Reference portfolio

Mainland Group divestment benefit
45
1.Trade and other receivables of $367m, less trade and other payables of $147m
2.Includes the reclassification of foreign currency translation reserves in respect of net investment hedges ($30m)
NZD Million2026
Sale proceeds4,457
Post completion adjustments receivable160
Total Proceeds4,617
Stand-alone replicated information technology(147)
Proceeds attributed to the divestment4,470
Net assets disposed of(3,598)
Intercompany balances recognised as external balances upon sale
1
220
Directly attributable transaction costs(123)
Reclassification of foreign currency translation reserves
2
281
Gain on Sale1,250
Transaction, separation and tax-related costs(131)
Other accounting adjustments41
Net Mainland divestment benefit1,160

FY26 Integrated Scorecard
as at 31 July 2026
Key MetricsFY24 ActualFY25 ActualFY26 ScorecardFY26
People
Serious harm¹13655
Quality of post-Health, Safety and Wellbeing incident actions0.410.390.600.64
Culture Measure 79818078
Nature
GHGemissionsreduction (Scope1,2)²(17.3)%(20.2)%(27.0)%(28.7)%
Additional percentage of New Zealand supplying Farms achieving Emissions Excellence³–(2.2)%6%6.6%
Relationships
Share of NewZealand milk collected for the season to 31 May78.1%77.8%78%77.6%
Delivered in full, on time (DIFOT, at time of arrival)66.1%73.7%77%78.6%
Financial / Assets
& Infrastructure
Cash operating expenses per kgMS (real)⁴1.131.121.081.08
Core Operations manufacturing cash costs per kgMS (real)⁵2.762.772.652.78
Return on capital⁶ 12.4%11.7%10%-12%14.2%
Farmgate Milk Price ($)$7.83$10.16$9.00-$11.00$9.69
Alignment Rights
FCG Share Price (volume weighted average price)
Dividends paid⁷
$2.66
$0.55
$4.70
$0.57
Not Available
$5.52
$0.73
On-farm profitability ($ per hectare)⁸$2,845$4,849Not AvailableNot Available
46
1.Includes Contractors.
2.Relative to the FY18 base year, restated to exclude Mainland Group. Comparative periods reflect a minor restatement
relating to the Heerenveen site
3.FY26 result reflects additional 535 farms, including 319 reducing emissions footprint, above the target of additional 490
farms with minimum of 270 reducing footprint.
4.Continuing operations, based on New Zealand milk solids collected, FY26 base year.
5.Based on New Zealand milk solids collected. Excludes the cost of milk. FY26 base year.
6.Results are on an underlying continuing operations basis to reflect comparable operating performance before and after the
Mainland Group divestment.
7.For the period 1 October to 30 September. As an indication, FY26 is the 12-month VWAP to 10 September 2026, and
FY26 Dividends.
8.DairyNZ Economic Survey 2024-2025 (Owner-Operator). 2026 expected to be published in June 2027.

47
Key MetricsFY25FY26FY27 Scorecard
People
Serious harm¹655
Quality of post-Health, Safety and Wellbeing incident actions0.390.640.65
Culture Measure 817879
Nature
GHG emissions reduction (Scope 1,2)²(20.2)%(28.7)%(33.2)%
Percentage of supplier base achieving Emissions Excellence–84.6%85%
Relationships
Share of NewZealand milk collected for the season to 31 May77.8%77.6%78%
Delivered in full, on time (DIFOT, at time of arrival)
3
74.4%78.4%80%
Financial / Assets
&Infrastructure
Cash operating expenses per kgMS (real)
4
1.141.101.03
Core Operations manufacturing cash costs per kgMS (real)
4,5
2.702.612.51
Return on capital
6
11.7%14.2%10%-12%
Farmgate Milk Price ($)$10.16$9.69$8.50-$10.50
Alignment RightsFCG Share Price (volume weighted average price)
7
Dividends Paid
$4.70
$0.57
$5.52
$0.73Not Available
On-farm profitability ($ per hectare)
8
$4,849Not AvailableNot Available
Speaker Notes Document
Speaker: Ronald
1.Includes Contractors.
2.Relative to the FY18 base year.
3.DIFOT comparatives have been restated to include New Zealand domestic orders, aligning the measure with the
expanded FY27 methodology, and resulting in a slightly lower FY26 outcome than previously reported on an export-
only basis.
4.Based on New Zealand milk solids collected across the financial year. Comparatives restated to FY27 base year.
5.Excludes the cost of milk and internally-generated lactose.
6.Prior year comparatives are on an underlying continuing operations basis to reflect comparable operating performance
before and after the Mainland Group divestment.
7.For the period 1 October to 30 September. As an indication, FY26 is the 12-month VWAP to 10 September 2026, and
FY26 Dividends.
8.DairyNZ Economic Survey 2024-2025 (Owner-Operator). 2026 expected to be published in June 2027.
FY27 Integrated Scorecard
for the year ended 31 July 2027

Data sources
Dairy Production and Imports
•12-month production
−New Zealand (Sep 2025 – Aug 2026 compared to Sep 2024 – Aug 2025), DCANZ, USDA
−EU, US (Aug 2025 – Jul 2026 compared to Aug 2024 – Jul 2025), Eurostat, USDA
•3-month production
−New Zealand (Jun 2026 – Aug 2026 compared to Jun 2025 – Aug 2025), DCANZ
−EU, US (May 2026 – Jul 2026 compared to May 2025 – Jul 2025), Eurostat, USDA
•12-month imports
−Asia (excl. China), LATAM, Middle East & Africa (Jul 2025 – Jun 2026 compared to Jul 2024 – Jun 2025), S&P Global
−China (Aug 2025 – Jul 2026 compared to Aug 2024 – Jul 2025), S&P Global
•3-month imports
−Asia (excl. China), LATAM, Middle East & Africa (Apr 2026 – Jun 2026 compared to Apr 2025 – Jun 2025), S&P Global
−China (May 2026 – Jul 2026 compared to May 2025 – Jul 2025), S&P Global
48

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.
49
Non-GAAP Measures
Attributable to equity holders of the Co-operative
is used to indicate that a measure or sub-total excludes amounts
attributable to non-controlling interests
Average capital employed
is a 13-month rolling average of capital employed
Bulk liquids
means bulk raw milk that has not been processed and bulk
separated cream
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
Capital invested
is capital expenditure plus right-of-use asset (e.g. leases)
additions and business acquisitions, including equity
contributions, long-term advances, and other investments
Cash operating expenses per kgMS
is continuing operations operating expenses, less non-cash
costs (depreciation, amortisation and impairments). Shown by
kilogram of New Zealand and Australia milk solids collected
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
Core Operations manufacturing cash costs per kgMS
is the logistics costs, variable and fixed costs of the COO business
unit less non-cash costs (depreciation, amortisation and
impairment) shown by kilogram of New Zealand milk solids
collected. Excludes milk, ocean freight and farm costs.
Debt to EBITDA
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
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
Gearing ratio (%)
is adjusted net debt divided by total capital. Total capital is equity
excluding hedge reserves, plus adjusted net debt
Glossary

Glossary
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
Net debt
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
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. Normalisation
adjustments are set out in the Non-GAAP Measures section.
Normalised is used to indicate that a measure or sub-total has
been adjusted for the impacts of normalisation adjustments. E.g.,
‘Normalised EBIT’
Operating profit (EBIT)
Is profit before finance costs and tax.
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’
Trade working capital
is total trade and associate receivables plus inventories, less trade
and associate payables and accruals. It excludes amounts owing
to suppliers and employee entitlements and includes trade
working capital classified as held for sale
Working capital days
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
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
alongside our business solutions under the Anchor Food
Professionals brand
50

Important Cautions and Disclaimer
51
Forward looking statements
This presentation contains certain forward-looking statements. There are risks (both known and unknown), uncertainties, assumptions and other important factors that could cause the
actual conduct, market conditions, results, performance or achievements of Fonterra to be materially different from the future conduct, market conditions, results, performance or
achievements expressed or implied by the forward looking statements, or that could cause future conduct to be materially different from historical conduct. Deviations as to future conduct,
market conditions, results, performance and achievements are both normal and to be expected.
Forward looking statements generally may be identified by the use of forward looking words such as ‘target’, ‘targeting’, ‘aim’, ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘forecast’,
‘foresee’, ‘future’, ‘intend’, ‘likely’, ‘may’, ‘planned’, ‘potential’, ‘should’, or other similar words.
Any estimates or projections as to events that may occur in the future (including EBITDAF, revenue, profit, underlying profit, dividends, margin, expenses, earnings, assets, liabilities and
performance) are based upon the best judgement of Fonterra from the information available as of the date of this presentation. A number of factors could cause actual results or
performance to vary materially from the estimates or projections. No person (including Fonterra and its directors, officers, employees and advisers) gives or makes any representation,
warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this presentation will actually occur or, except to the extent
(if any) required by applicable law or any applicable Listing Rules, assumes any obligation to provide any additional information or update these forward looking statements for events or
circumstances that occur subsequent to the date of this presentation. No reliance should be placed on any forward looking statements.
Non-NZ 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.
Not financial advice
This presentation does not take into account the individual investment objectives, financial situation or needs of any shareholder. Shareholders must make their own decisions and seek
their own advice in this regard. The information contained in this presentation does not constitute, and should not be taken as constituting, financial advice, financial product advice,
investment advice, tax advice or legal advice. In particular, this presentation does not constitute a recommendation or offer to buy or sell securities in Fonterra or the Fonterra
Shareholders’ Fund.

---

Annual Report 2026
Pūrongo-ā-tau Te Mātāpuna

Front cover: Hopkins family farm, Manawatū-Whanganui
About this report
This Annual Report covers the activities of
Fonterra Co-operative Group Limited for
Financial Year 2026 (FY26), commencing
1 August 2025 and ending 31 July 2026.
It provides an overview of our Co-operative’s
performance during the year and how we create
value for farmer shareholders.
Our Annual Report includes our Sustainability Reporting,
Corporate Governance Statement, audited Financial
Statements and our Group Climate Statements.
In addition to the Annual Report, we have also released our
Milk Price Statement and Modern Slavery Statement.
More information about Fonterra and our previous years’
performance can be found here: www.fonterra.com

Contents
Annual Review4
About us4
Chair Letter6
CEO Letter8
Our Strategy10
Financial Overview12
Our Progress16
Sustainability Reporting37
Approach38
Material Topics45
Data Consolidation67
Governance Disclosures69
Our Board70
Our Management Team71
Corporate Governance
Statement72
Remuneration Report87
Directors’ Disclosures100
Statutory Information103
Financial Statements107
Independent Auditor’s Report108
Financial Statements112
Notes to the
Financial Statements119
Group Climate Statements164
Introduction165
Governance166
Strategy170
Risk Management 187
Metrics and Targets189
GCS Appendices200
Appendices216
Non-GAAP Measures217
Financial Historical Summary222
GRI Assurance Statement225
GRI Content Index227
Sustainability
Reporting Appendix230
GHG Limited
Assurance Report243
GCS Index247
Glossary251
Directory255
Bridgeman family, Taranaki

About Fonterra
A proudly farmer-owned Co-operative, Fonterra
brings together more than 8,000 farming families,
global scale, deep dairy expertise and innovation
to connect our farmers’ milk with customers and
consumers in over 100 countries around the world.
For generations, New Zealand farmers have produced some of the
world’s highest-quality, most nutritious milk. We have a pasture-
based farming system made possible by the goodness that comes
from New Zealand’s abundant sunshine and rain.
The world around us is becoming more complex and volatile.
Customer needs are shifting, consumer preferences are evolving,
and geopolitical and economic uncertainty is reshaping global
markets. Now more than ever, our customers and farmers need
trusted partners who deliver consistently, understand what
matters to them most, and can turn uncertainty and volatility
into opportunity and value.
Our role is clear – perform for our farmers, customers and
people. Performance comes from staying close to market, and
disciplined strategic focus on where we create the greatest value.
By deepening customer partnerships, investing in innovation
and making deliberate choices about the products, markets and
applications we serve, we honour the work of our farming families
and create more value for our customers in our pursuit to deliver
the perfect bucket of milk.
Our vision is simply to create the world’s most valued dairy.
Hopkins farm, Taranaki
4
Fonterra Annual Report 2026
Annual ReviewFinancial StatementsSustainability ReportingGovernance DisclosuresGroup Climate StatementsAppendicesContents
Chair LetterCEO LetterOur StrategyFinancial OverviewOur ProgressAbout Us

Fonterra’s operations
Fonterra is a global dairy provider
powered by our home base of
New Zealand milk and operations.
We supply more than 100 markets,
have 31 offices around the world,
and partner with global customers
who value our unique offering.
1 Permanent FTE employees only.
2 Figures have been rounded.
The data shown on this page reflects Fonterra’s
business as of 31 July 2026.
Employees (FTE)
1
11,472
Revenue (NZD)
2
~2 5 b
Europe
Employees (FTE)
125
Manufacturing sites
1
China
Employees (FTE)
457
North Asia
Employees (FTE)
98
Americas
Employees (FTE)
95
New Zealand
Employees (FTE)
10,306
Manufacturing sites
22
$2b
$1b
Rest of AMENA
Employees (FTE)
36
$1b
$3b
$2b
$7b
Asia Pacific
Employees (FTE)
355
$9b
5
Fonterra Annual Report 2026
Annual ReviewFinancial StatementsSustainability ReportingGovernance DisclosuresGroup Climate StatementsAppendicesContents
Chair LetterCEO LetterOur StrategyFinancial OverviewOur ProgressAbout Us

Chair Letter
Consistency in the
face of uncertainty
Kia ora farmers and shareholders,
Consistency in the face of global uncertainty is
important to farmers and our shareholders. We’re proud
of the collective effort that’s delivered another strong set
of financial results, at the top end of our expectations.
It’s been another year of volatility and uncertainty for our
global markets. The outbreak of conflict in Iran and the
Strait of Hormuz added to an already complex geopolitical
environment. In addition to the humanitarian crisis in the
region, the conflict has seen fuel shortages in parts of Asia
and had rippling effects across global economies.
In FY26, our underlying earnings per share were 71 cents,
up from 54 cents in FY25, and above our earnings guidance
range of 60–70 cents.
That headline result is an excellent start to our new era as
a B2B Co-op. It’s driven by improvements in both our high-
value Ingredients and Foodservice businesses.
On an end-to-end basis our Ingredients business delivered
$1,293 million in operating profit, up 7.0% on last year,
supported by strong global protein demand, favourable
pricing and product mix decisions. In Foodservice, we
achieved $547 million in operating profit, up 94.7% on last
year, driven largely by volume and pricing growth across all
product categories and markets.
Other performance highlights were our underlying return
on capital for both Ingredients (13.5%) and Foodservice
(16.3%), and our 36.9% reduction in net debt, which
benefited from the partial retention of proceeds from the
sale of Mainland Group.
These are strong numbers in the context of our lower risk
business post-divestment. In short, our risk is down and
returns are up.
Having reached the target for earnings to return to FY25
levels, Fonterra will no longer report on that target and will
revert to its prior practice of forecasting earnings for the
relevant financial year.
Peter McBride
Chair
“We’re proud of the collective
effort that’s delivered
another strong set of financial
results, at the top end of our
expectations.”
6
Fonterra Annual Report 2026
Annual ReviewFinancial StatementsSustainability ReportingGovernance DisclosuresGroup Climate StatementsAppendicesContents
About UsCEO LetterOur StrategyFinancial OverviewOur ProgressChair Letter

At the same time, in response to a 4% increase in global
milk supply, Global Dairy Trade prices did soften during
the season and that led to a final Farmgate Milk Price
for the 2025/26 season of $9.69 per kgMS, down from
$10.16 the season prior.
Overall, the Co-op has continued to generate significant
value for farmer shareholders through a combination
of earnings, distributions and the completion of the
Mainland transaction. While Fonterra Co-operative Group
(FCG) shares closed at $4.25 on 31 July 2026 (financial
year end), compared with $4.61 immediately before
consultation on flexible shareholding began (May 2021),
the cash distributed over the period more than offsets the
reduction in the share price. Together, the closing share
value and cash distributions ($2.50 of Capital Returns
and $2.37 in dividends) represent $9.12 per share of
value, almost twice the opening share price. This equates
to a total shareholder return of approximately 98%,
or approximately 14% per annum.
Completing the sale of the Mainland Group in March was
a major milestone in the history of our Co-op. We thank the
more than 88% of voting farmer shareholders who voted
in support of divestment. The resulting change within
the business should not be underestimated. Richard’s
leadership team has driven a concerted effort to remove
complexity from every corner of the Co-op and put farmers
and customers back at the centre of decision-making.
Farmers have a choice in processors, so we’re focused
on making our offering as compelling as possible. That
includes making the Co-op easier to deal with and giving
farmers personalised support, tools and new options.
We have expanded our regional teams to provide farmers
with support from their dedicated Co-op Business Partner.
We made adjustments to the Co-operative Difference,
designed to save farmers time by reducing duplication.
The Co-op also continues to help the next generation
of farmers into farm ownership.
In December 2025, Fonterra introduced a new option for
farmers sharing up to their minimum shareholding level,
giving them more flexibility in how they do this within the
six-year transition period. We also launched an enhanced
support package for first-time farm owners joining the
Co-op in the 2026/27 season to help set them up for
success during those first few years on farm.
While we’ve held our own and maintained a stable 78%
share of New Zealand milk this past year, competition
is increasing in key regions. There’s also an opportunity
for future growth, especially in the south, off the back
of new conversions.
Looking out to the year ahead we can expect volatility
and uncertainty in our key markets to continue. There’s
also potential for further extreme weather events,
including here at home. The Co-op is monitoring the
potential for an El Niño weather pattern which would put
pressure on New Zealand milk supply, bringing into play
our flexible manufacturing footprint and the strategic
decisions the team makes each day around our product
mix and what Richard refers to as “creating the perfect
bucket of milk.”
Richard’s transition into the CEO role has been seamless
and it’s exciting to see the energy his team is putting into
building on this strong position. We all value consistency
of performance and disciplined use of our capital.
Under Richard’s leadership, our Co-op has fresh energy
and renewed ambition.
Peter
FY26 full year dividend, fully imputed
73 cents
per share
Return on capital
13.6%
up from 10.9%
Total cash distribution
$19.6b
in total cash returns to shareholders
1
1 Includes Farmgate Milk Price, dividends and capital returns.
Milk payments calculated across the 2025/26 season.
7
Fonterra Annual Report 2026
Annual ReviewFinancial StatementsSustainability ReportingGovernance DisclosuresGroup Climate StatementsAppendicesContents
About UsCEO LetterOur StrategyFinancial OverviewOur ProgressChair Letter

CEO Letter
FY26 was a year that
demonstrated the
strength and importance
of our Co-op
To our shareholders,
This year, sunshine, rain, our farmers and their cows
produced around $25 billion of export earnings for
New Zealand. Delivering $19.6 billion back to our
farmers, unit holders and ultimately New Zealand
while also providing some of the best, most sustainable
food and nutrition to millions around the world.
Through 12 months of continued global volatility, our
farmers, customers and people worked together to deliver
strong results, complete significant strategic milestones
and position Fonterra for its next phase of growth.
This year, we completed the divestment of Mainland Group
and returned capital to shareholders and unit holders,
while continuing to deliver strong performance through
our Ingredients and Foodservice businesses, achieving our
goal of returning earnings back to pre-divestment levels
two years ahead of plan. Having reached our target for
earnings to return to FY25 levels, we will no longer report
on that target, and will revert to our prior practice of
forecasting earnings for the relevant financial year.
Our final Farmgate Milk Price for the 2025/26 season was
$9.69 per kgMS. We also announced a fully imputed final
dividend of 33 cents, increasing total dividends for the
year to 73 cents, having already paid a 24 cent interim
dividend and a 16 cent special Mainland dividend.
Total Group reported operating profit was $3.4 billion,
up from $1.7 billion last year, which includes a Mainland
divestment benefit of $1.2 billion. Our reported profit
after tax was $2.6 billion.
Richard Allen
Chief Executive Officer
8
Fonterra Annual Report 2026
Annual ReviewFinancial StatementsSustainability ReportingGovernance DisclosuresGroup Climate StatementsAppendicesContents
About UsChair LetterOur StrategyFinancial OverviewOur ProgressCEO Letter

What matters most is what this means for our farmer
owners. Our job is straightforward – collect the milk they
produce and make decisions every single day across the
Co-op to generate the greatest possible value for it.
FY26 showed the strength of this business.
Milk collections in New Zealand were up just over 4% to
1,571 million kgMS, making FY26 our third-highest year
for milk production and the strongest in more than a
decade. This reflected favourable growing conditions,
but also the ongoing productivity gains our farmers
are achieving.
We benefited from particularly strong milk growth in the
South Island – a combination of strong farmer retention,
winning milk back from the competition and new dairy
conversions. Our organic milk programme continues
to build momentum, demonstrated by our confirmed
expansion into the South Island and a record FY26
organic milk price.
Supporting our farmers remains central to our strategy.
In FY26, we expanded our price risk management services
and saw strong uptake from farmers. We also began a
review and simplification of our Co-operative Difference
programme, so it remains fit for purpose in supporting
value creation with our customers.
I’m proud of how our team has performed in what I would
describe as challenging market conditions. Strong milk
supply came alongside ongoing volatility in global markets,
costs, demand and geopolitics. Despite this, we ensured
our customers’ needs were met - collecting, processing
and shipping record volumes this year.
During the year, we also continued to invest in the
capabilities that will support future value creation.
Our advanced protein hub at Studholme is now finished,
and product trials are starting soon on our UHT cream
plant at Edendale. We’re also making good progress on
our new butter line at Clandeboye and pastry butter
sheet capacity expansion at Edgecumbe.
In FY26, we made changes to the Fonterra Management
Team to support accelerated delivery of our strategy. In
an increasingly volatile world, it’s critical we’re even closer
to customers and markets, and our new structure enables
clear functional accountability for performance.
As we look ahead, our strategy remains focused on our
high-value Ingredients and Foodservice businesses –
to enable this we need the right assets, products and
capabilities to meet demand in areas where our products
create the most value.
Global dairy consumption is changing. Consumers around
the world want sustainably produced, protein-rich and
nutrient dense food. Our decision to invest an incremental
$1 billion over the next three years across our South Island
manufacturing network will help position our Co-op for
this future. This investment accelerates and expands
our protein manufacturing network while improving our
environmental performance across water and emissions.
Our current forecast Farmgate Milk Price is $9.50 per
kgMS, and our forecast earnings range is 65 to 85 cents
per share. This improving outlook reflects continued
delivery from our B2B businesses, as they continue to
grow high-value demand across our markets. Geopolitical
volatility remains and with only two months complete,
previous seasons tell us that things can always change.
Through our clear and focused strategy, strong balance
sheet, deep customer and market presence and an
increasingly agile manufacturing footprint, I’m confident
in the Co-op’s ability to create opportunity from volatility.
For me, put simply, our job is to get up every day and look
for ways to create the perfect bucket of milk. It means
making the right choices across the Co-op, from the milk
we collect, to the products we make, to the customers and
innovation we invest in. We put our customers and farmers
at the heart of what we do and are innovation-led and
farmer-focused.
When I look across Fonterra, I see a Co-op with real
momentum and significant opportunity. We produce dairy
in one of the most natural and efficient systems in the
world. Sunshine, rain and great farmers. We have deep
customer partnerships, a strong asset base and talented
teams across New Zealand and around the world. FY26
has given us a strong platform. FY27 will undoubtedly
ask more of us, and as a team we’re up for it.
Thank you to our farmers for the trust you place in your
Co-op, to our customers and partners around the world,
and to our people for the work you do every day. Together,
we are building a stronger, more focused Fonterra, one
that can continue to create the world’s most valued dairy.
Richard
“Our customers and
farmers are at the heart
of what we do.”
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Our Strategy
Our Purpose
Our Co-operative, empowering people, to create goodness
for generations. You, me, us together. Tātou, tātou.
The source of the world’s most valued dairy
Our Vision
Our Choices
Build on our
sustainability
position
Deliver
strongest
farmer offering
Keep
momentum in
Foodservice
Unleash our
Ingredients
engine
Invest in
operations for
the future
Innovate to
drive our
advantage
Outcomes
Stable balance
sheet
Strong shareholder
returns
Enduring
Co-op
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Deliver the
strongest farmer
offering
Invest in
operations for
the future
Unleash our
Ingredients
engine
Build on our
sustainability
position
Keep
momentum
in Foodservice
Innovate to
drive our
advantage
Progress on strategy
–Collected 1,571 million kgMS,
up 4.1% on prior year.
–Confirmed planned expansion
of Organic programme into the
South Island.
–Provided new tools and offerings
to support farmers.
–Introduced new share up
alternative.
–Achieved record shipping volumes
this year.
–Began or progressed a range of
investments designed to support
flexibility, growth or resilience
across our operations.
–Supplied high-quality ingredients to
customers in 100 countries.
–Completed new advanced protein
hub at Studholme, which will add
further capacity for higher-value
functional dairy proteins.
–Reviewed our sustainability
strategy and confirmed climate,
nature and animal wellbeing as key
focus areas.
–Launched Carbon Removals
programme for farmers.
–Strengthened our customer
proposition through product
innovation, our network of
application centres and distributor
partnership kitchens.
–Invested in additional capacity
at Edendale, Clandeboye and
Edgecumbe to support flexibility
and growth.
–Began to reshape our approach
to innovation in order to focus
on areas where we can make the
greatest difference.
–Launched Anchor Essence Cream
in China and won a Best Innovation
Award at Bakery China.
More on page 16
More on page 28
More on page 20
More on page 32
More on page 24
More on page 36
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Financial Overview
1 Underlying performance is Fonterra’s continuing operations represented as if the Mainland transaction had occurred for the full period to provide a comparative of Fonterra’s
continuing operations and align with the Pro forma historical financial information disclosed in the Notice of Special Meeting 2025 (29 September 2025).
2 Total payout calculated on the basis of a supplying shareholder at 100% of their share standard.
Total Group Reported
Underlying Performance
1
Distributions
Profit after tax
$1,182m
From $914m
Operating profit
$1,840m
From $1,489m
Farmgate Milk Price
$9.69
From $10.16 / kgMS
Capital return per share
$2.00
Total dividends per share
73c
From 57c
Total cash distribution
$12.42
Total payout
2
$10.42
From $10.73 / kgMS
Earnings per share
71c
From 54c
Return on capital
14.2%
From 11.7%
Operating profit
$3,422m
From $1,732m
Gain on sale of Mainland
$1,250m
Profit after tax
$2,608m
From $1,079m
Earnings per share
160c
From 65c
+=+=
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Total Group reported financial performance
Total Group profit after tax increased to $2,608 million,
up from $1,079 million the prior year. This included the
Mainland Group divestment gain on sale of $1,250 million.
The reported profit equates to earnings of 160 cents
per share.
Across the Co-op’s three reportable segments
on a continuing operations basis:
–Ingredients operating profit was $1,067 million,
up $222 million or 26%.
–Foodservice operating profit was $412 million,
up $156 million or 61%.
–Core Operations operating profit of $341 million,
up $32 million or 10%.
The strong earnings performance enabled the Co-op
to increase cash returns to shareholders and continue
strengthening the balance sheet. The Board declared
a fully imputed final dividend of 33 cents per share,
to be paid on 15 October 2026.
Higher milk collections, sustained
momentum across Ingredients and
Foodservice, and completion of the
Mainland divestment enabled the
Co-operative to generate $19.6 billion
in cash payments to shareholders.
Together the Farmgate Milk Price and dividend delivered
a total payout of $10.42 per kgMS, with total cash
distributions of $12.42 per kgMS including the capital
return
1
.
Cash payments to shareholders comprised:
–2025/26 Farmgate Milk Price of $9.69 per kgMS,
equating to $15.2 billion in payments to farmers.
–cash dividend payments of 73 cents per share, including
a 16 cent special dividend in relation to the Mainland
divestment, equating to $1.2 billion returned to
shareholders.
–a capital return of $2.00 per share from the Mainland
divestment, returning $3.2 billion to shareholders.
1 For a supplying farmer at 100% of their share standard.
Maunsell family farm, Auckland
“This year, we’ve delivered strong end-to-end value for
farmers through our high-performing Ingredients and
Foodservice businesses. By staying focused on strategy,
we’re building an agile Co-op recognised for reliable returns,
economically profitable growth and balance sheet resilience.”
Andrew Murray, Chief Financial Officer
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Underlying performance
The following section is presented as if the Mainland trade
terms had applied for the full financial period to provide a
comparative of Fonterra’s continuing operations and align
with the pro forma historical information disclosed in the
Notice of Special Meeting Booklet released to the NZX on
29 September 2025. This approach shows the performance
of the Co-op as it operates now, a focused, global business-
to-business dairy nutrition Co-operative.
The Co-op achieved its target to return earnings to pre-
divestment levels within three years following the sale of
Mainland and associated businesses, with FY26 operating
profit of $1,840 million, an increase of $351 million on the
prior year.
Having reached the target, Fonterra will no longer report
on that target and will revert to its prior practice of
forecasting earnings for the relevant financial year.
As well as the reportable segments, the Co-op assesses
performance through its end-to-end Ingredients and
Foodservice channels. This management view includes the
relevant contribution from Core Operations and provides
greater insight into the performance of the Co-op’s
strategic channels.
On this end-to-end channel basis:
–Ingredients channel operating profit was up $85 million
to $1,293 million. The increase reflected higher sales
volumes and prices, as well as increased solids allocated
to higher value protein products. Refer to the Unleash
our Ingredients engine section of this report for further
information.
–Foodservice channel operating profit increased by
$266 million to $547 million, supported by higher
volumes, favourable margins and lower input costs due
to softer milk-fat prices. Refer to the Keep momentum
in Foodservice section of this report for further
information.
External
sales volume
(million kgMS)
1,362
3.3%
240
2.1%
1,602
3.1%
Core
Operations
$206m
$78m
$135m
$110m
$341m
$32m
In-market
$1,087m
$163m
$412m
$156m
$1,499m
$319m
Tot al
$1,293m
$85m
$547m
$266m
$1,840m
$351m
Return on
capital
13.5%
From 12.8%
16.3%
From 8.5%
14.2%
From 11.7%
Underlying operating profit (excludes Mainland)
1
IngredientsFoodserviceTot al
Stronger in-market performance underpinning higher return on capital
1 Underlying performance is Fonterra’s continuing operations represented as if the Mainland transaction had occurred for the full period to provide a comparative of
Fonterra’s continuing operations and align with the Pro forma historical financial information disclosed in the Notice of Special Meeting 2025 (29 September 2025).
The net impact on total normalised segment operating profit is $20m (31 July 2025:$79m).
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In an inflationary global environment, operating expenses
increased below the rate of inflation to $1,861 million, up
$59 million. Key operational spend included investing in
Fonterra’s technology platform, higher milk volumes and
costs relating to realigning to a more focused B2B Co-op.
An enduring Co-op
Higher operating profit, together with the Co-op’s
focused capital base, increased underlying return on
capital to 14.2%, from 11.7% in the prior year. This was
the highest return on capital recorded by the Co-op since
its formation.
1
Capital invested for the period increased to $1.0 billion
as the Co-op invested in growing processing capability
of higher-value products, providing long-term energy
security, and supporting a reliable, high-performing asset
base. Refer to Invest in operations for the future for
further information.
Adjusted net debt reduced $1.0 billion to $1.7 billion
reflecting strong cash flows and Mainland sale proceeds
retained to support future resilience and growth
investments. The Co-op’s balance sheet remains in a
position of strength, with net debt to EBITDA ratio of
0.7x and gearing reducing to 20.8%, from 23.9% in the
prior year.
1 Highest return on capital since Fonterra commenced reporting this
metric in FY07, calculation methodologies have changed over this period.
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Deliver the strongest
farmer offering
We’re focused on making our offering
as competitive as we can through the
value we deliver to Co-op farmers.
Total cash returns
$19.6b
up 21%
Milk collections
1,571m kgMS
up 4.1%
Final Farmgate Milk Price
$9.69per kgMS
down from $10.16 per kgMS
Bridgeman family farm, Taranaki
We know farmers have a choice in
processors, so we’re focused on making
our farmer offering as competitive as
possible. This includes maximising the
returns we deliver to Co-op farmers and
providing industry-leading tools and
support that are tailored to their needs.
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FoodserviceOperationsSustainabilityInnovationIngredientsOn-farm

20262025202420232022
79%79%
78%78%78%
16
6
170
1
76
18
3
194
1,478
1,480
1,471
1,509
1,571
KgMS collected (million)Average collections per farm
(thousand kgMS)
Milk collection market share
Co-op’s supply trend
2026202520242023202220212020
1,516
1,539
1,478
1,481
1,471
1,509
1,571
642
631
612618
874
908
866
862
639
653
685
832
856
886
North IslandSouth Island
Total
For the 2025/26 season, Fonterra
generated a record $19.6 billion in cash
distributions for farmers, comprised of a
$9.69 per kgMS Farmgate Milk Price, 73c in
ordinary and special dividends and a capital
return of $2.00 per share following the
divestment of the consumer division.
Continued milk growth
The 2025/26 season began favourably, with our
Co-op attracting more milk from competing
processors than it lost.
Milk collections continued to grow during the 2025/26
season, with 1,571 million kgMS collected, up 4.1%
on the prior year and the highest level in more than
10 years. The growth was largely driven by favourable
weather conditions and was further supported by
productivity improvements and the return of farmers
from competing processors.
Co-op milk collections
Fonterra’s market share remained at 78% at the end of
the 2025/26 season. Momentum in the South Island is
building with more than 20 recently converted farms in
the region joining the Co-op for 2026/27. Our local teams
work to support those thinking about converting to dairy,
helping them get set up for supply to a high standard.
Organic expansion confirmed
In May 2026, the Co-op confirmed its Organic
Programme will expand into the South Island.
The plan is to be able to process organic milk in the
South Island from the 2028/29 season, allowing
time for more converting farmers to achieve organic
certification by then.
The final Organic Milk Price for 2025/26 was
$14.13 per kgMS, and the Co-op continues to recruit
organic farmers in both the North and South Islands
to help meet growing demand.
“Organic farming works
– reducing stress,
boosting profitability,
and making sense for
our business and land.”
Michael Ashton
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On-farm

Enhanced tools and support
Fonterra’s support for farmers continues to
evolve with new tools and offerings. This includes
tailored advice to boost productivity, reducing
on-farm input costs through our Farm Source retail
offerings and managing milk price risk through a
variety of hedging services.
There’s a focus on saving farmers time and
enhancing on-farm decision-making where
possible, including through data sharing solutions
with industry partners and recent adjustments to
the Co-operative Difference announced in May
2026 to reduce duplication.
Also in May, the Co-op confirmed it was expanding
its regional teams and evolving how they work,
with the aim of providing farmers with personalised
support from their dedicated Co-op Business
Partner, a role designed to serve as farmers’
primary, consistent point of contact.
The Co-op also continues to help the next
generation of farmers into farm ownership.
In December 2025, Fonterra introduced a new
option for farmers sharing up to their minimum
shareholding level, giving them more flexibility
in how they do this within the six-year transition
period. In addition, Fonterra launched an enhanced
support package for first-time farm owners joining
the Co-op in the 2026/27 season to help set them
up for success during those first few years on farm.
Co-operative Difference achievement
levels continue to rise
In the 2025/26 season, 94% of Fonterra farmers
achieved the Co-operative Difference - a 3% increase
on the 2024/25 season.
We congratulate all farmers who have achieved one
of the three stages during the 2025/26 season.
–Te Pūtake (The start) 74 farmers, down from 1,383
–Te Puku (The centre) 6,483 farmers, up from 5,179
–Te Tihi (The peak) 1,091 farmers, up from 908
View the Co-operative Difference Honour Roll full list
View numbers related to customer-funded incentives.
View the Co-operative Difference Honour Roll full list.
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First Farm Award winners supported
into farm ownership
The Fonterra & ASB First Farm Award returned
in 2026 for the second year. The award aims to
remove barriers to farm ownership by offering
financial backing, mentorship and industry support.
2025 winners Braden & Brigitte Barnes recently
took the leap into farm ownership, purchasing
their first farm in Canterbury.
“Backing the next
generation of farmers is
one of the most important
ways we can help secure
the future of New Zealand
dairy and strengthen our
rural communities.”
Anne Douglas, Group Director Farm Source
“We’ve got a place now
that’s home. It’s nice to
have that security and have
a base for our family.”
Braden Barnes
Oct 2025
Received approval for consumer
divestment from Fonterra farmers
Oct 2025
Launched Carbon Removals Tool
for farmers
Nov 2025
Posted third season results for
Net Zero Pilot Dairy Farm
Dec 2025
Introduced new share up
alternative
Feb 2026
Fully allocated customer funding
for 2025/26 on-farm solutions
Mar 2026
Commenced new season of Price
Risk Management services
May 2026
Confirmed planned expansion
of Organic programme into the
South Island
May 2026
Simplified Co-operative Difference
for 2026/27 and kicked off broader
review of the programme
Jun 2026
Launched new support package
for first-time farm owners joining
our Co-op
Jul 2026
Confirmed 94% of farmers
achieved Co-operative Difference
Delivering on strategy
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On-farm

Unleash our Ingredients engine
Ingredients underlying operating profit
$1,293m
up 7.0%
Sales volumes
1,362m kgMS
up 3.3%
Ingredients underlying return on capital
13.5%
up from 12.8%
Our Ingredients business plays a valuable
role in our Co-op, connecting New Zealand
farmers’ milk with customers and consumers
around the world, supporting both the
Farmgate Milk Price and earnings.
Deepen our position as a world-leading provider
of high-value dairy ingredients, to grow both the
Farmgate Milk Price and earnings.
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Through our brand NZMP™, we supply
high-quality ingredients to customers in
100 countries, with our ingredients used by
some of the world’s most famous food and
nutrition brands. This includes applications
spanning the full life cycle, from infant care
to healthy growing, living and ageing.
Earnings uplift driven by stronger
in-market performance
Ingredients operating profit increased $85 million
to $1,293 million, while return on capital increased
to 13.5% from 12.8%.
Strong global demand supported higher sales prices
for protein products, while higher sales volumes also
contributed to the result. These benefits more than
offset higher input costs and a modest increase in
operating expenses.
Our Ingredients sales volumes were particularly strong
in the second half. Combined third and fourth quarter
Ingredients shipments were the highest in a decade,
increasing by 104,000 metric tonnes, or 8%, compared
with the prior year.
Creating more value from milk
During FY26, we continued to optimise milk allocation
across our Ingredients portfolio, balancing customer
demand, relative product returns and the value of
each milk component.
Increased cheese and protein production lifted the amount
of milk solids allocated to these product groups to 379
million kgMS, from 364 million kgMS in FY25, as the Co-op
responded to demand across nutrition applications.
Record cheese volumes were manufactured during the
year. Producing additional cheese also increased the supply
of valuable protein co-products, allowing the Co-op to
capture value across more components of farmers’ milk.
Our protein capabilities in New Zealand, Europe and
the USA worked together to serve growing customer
demand. This broader production network, supported by
deep customer relationships and NZMP’s global market
presence, enabled the Co-op to respond to opportunities
across markets and applications.
A resilient global Ingredients business
Performance was broad-based across the Ingredients
business. European results benefited from strong demand
and pricing for protein and higher volumes across products
including milk protein concentrate, casein, butter and
organics. In the Americas, performance was broadly
stable, with the business recovering tariff-related costs.
Volumes across Asia increased, while the long-term supply
agreement established through the Mainland divestment
supported performance in Oceania.
This performance was achieved against continued
geopolitical and trade volatility. The scale of our global
customer network, flexibility across products and markets,
and disciplined approach to portfolio choices enabled
the Co-op to respond to changing conditions while
supporting both the Farmgate Milk Price and earnings
for shareholders.
20262025202420232022
341
360
336
364
379
Growing cheese and protein production increases
the Co-op’s capacity to capture value
Fonterra cheese and protein production (million kgMS)
Note: Includes casein, cheese, other proteins and other items.
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Positioning Ingredients for future growth
Demand from healthy ageing, active lifestyles and
specialised nutrition continues to support opportunities
for functional and specialised dairy proteins. Through
NZMP, we combine New Zealand’s grass-fed dairy
advantage with advanced protein capability and long-
standing customer relationships to participate in these
growing nutrition applications.
We are focused on:
–deepening partnerships with customers who value our
dairy expertise and ingredient capabilities;
–using customer insights and market presence to
prioritise the most attractive products, applications
and markets;
–integrating manufacturing, portfolio management,
pricing and sales decisions to maximise the value of
each milk component;
–investing in innovation to develop advanced ingredient
products and solutions; and
–investing in production capacity where we see sustained
customer demand and attractive returns.
To support our next phase and shift to a market-led model,
in June 2026 we appointed Teh-han Chow as CEO Greater
China, Gaby Amade as President Global Markets and Elisa
Giusti as Chief Growth and Strategy Officer.
Our FY26 results demonstrate the benefits of taking
a deliberate approach to value creation. Led by our
strategy, we continue to refine how we allocate milk solids,
prioritise opportunities and support our highest-returning
product portfolios.
Digital enablement with myNZMP Link
We continue to explore ways to expand our digital
services to improve efficiencies for both ourselves
and our customers.
myNZMP Link is a digital sales platform that
complements our traditional sales channels, making
it easier for customers to access NZMP ingredients.
The platform provides fast, flexible digital ordering
experiences, complementing and enhancing our
relationships with customers by providing them
with better insights and clearer market signals.
This is one example of how we are using digital
innovation to strengthen customer engagement
and commercial performance, strengthening the
pipeline of higher-value products and applications,
and creating more value from our farmers’ milk.
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Nov 2025
Showcased NZMP at China
International Import Expo (CIIE)
Nov 2025
Launched myNZMP Link for
New Zealand customers
Feb 2026
Celebrated one year of myNZMP
Link, with more than 10,000MT
traded through the platform
Apr 2026
Recognised Mainland Group as
NZMP’s largest customer
May 2026
Reached product validation for
advanced proteins at Studholme
Jun 2026
Hosted more than 160 farmers at
Organics Conference
Jun 2026
Won 12 medals for NZMP at the
International Cheese & Dairy Awards
Delivering on strategy
“Our strongest results came where customer demand,
capability and strategy intersected. By focusing on the
right customers, the right products and the right markets,
we’re creating stronger value for both customers and
farmer shareholders.”
Gaby Amade, President Global Markets
Capturing growing demand for protein
Demand for functional and specialised dairy
proteins continues to grow across applications
supporting healthy ageing, active lifestyles and
specialised nutrition.
During FY26, strong customer demand and pricing
for protein supported Ingredients earnings.
Our New Zealand, European and USA protein
capabilities allow us to serve customers across
a broader range of products, markets and
applications. Our new advanced protein hub at
Studholme will add further capacity for higher-value
functional dairy proteins, supporting our ability
to respond to customer demand and create more
value from farmers’ milk.
Growing nutrition demand is supporting strong protein prices
(USD/MT)
20262025202420232022
WPC80
Casein
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Keep momentum
in Foodservice
Expand our successful Foodservice business
in and beyond China to grow earnings.
Foodservice underlying operating profit
$547m
up 95%
Foodservice underlying return on capital
16.3%
up from 8.5%
Our Foodservice business continues to be a
high-value channel for our Co-op, combining
New Zealand dairy expertise, chef-led
application capability and close customer
partnerships to support growth across
Greater China and Southeast Asia.
Sales volume
240m kgMS
up 2.1%
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OperationsOn-farmSustainabilityInnovationIngredientsFoodservice

Through Anchor Food Professionals
TM
, we
work with foodservice customers to develop
products and applications tailored to local
tastes, formats and operating requirements.
This customer-led approach, together with
our trusted dairy credentials and in-market
capability, supports value creation for
customers and farmer shareholders.
Strong margin and earnings growth
Foodservice operating profit increased $266 million
to $547 million, while return on capital increased to
16.3% from 8.5%.
The increase was driven primarily by stronger margins,
reflecting sustained pricing across key products,
particularly UHT cream and cream cheese, together
with lower input costs. Sales volumes were moderately
higher, while operating costs were managed following
the rationalisation of the residual Consumer business
in Greater China.
The result also benefited from the non-repeat of
$67 million of one-off costs associated with exiting a
product line in FY25 and favourable foreign exchange
conditions. Stronger earnings, combined with a stable
capital base, supported the increase in return on capital.
Building on our position in Greater China
Greater China remains the largest contributor to
Foodservice operating profit and an important
centre of customer insight, product application
and commercial capability.
Our teams work closely with customers to understand
their operations and develop dairy solutions suited
to local consumer preferences. This includes chef-led
demonstrations, application support and products
designed to deliver consistent performance in
foodservice environments.
During FY26, we continued to strengthen our customer
proposition through product innovation, our network of
application centres and distributor partnership kitchens.
These capabilities help customers respond to changing
consumer preferences and support deeper, longer-term
commercial relationships.
Foodservice bakery
“We have achieved strong results again this year
and accelerated our expansion throughout China
and Southeast Asia. Our in-market, chef-led sales
approach, quality products and grass-fed credentials
continue to help us deliver for our customers,
shareholders and other stakeholders.”
Teh-han Chow, CEO Greater China
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Cream continues to deliver
Since its launch in 2024, Anchor Easy Bakery
cream has continued to perform in Greater China,
outstripping sales targets and achieving strong
volume growth year on year. FY26 is no exception,
with the product’s reliable performance and
competitive price point helping it perform strongly
again with our mass-market customers.
In FY26, we expanded Anchor Easy Bakery 1 litre
cream sales into Thailand, Indonesia, Vietnam and
Mexico, with more markets planned for FY27. Larger
formats are also driving growth, particularly with our
large-scale bakery manufacturing customers, where
they have made strong contributions to our channel
segment performance this year.
Foodservice bakery, Singapore
Positioning Foodservice for continued growth
We remain focused on:
–strengthening our position in Greater China through
deeper customer partnerships, product innovation
and chef-led application expertise;
–selectively expanding across Southeast Asia by applying
proven capabilities to local market opportunities;
–investing in local application capability to tailor products
to customer needs;
–developing products and formats that help customers
improve performance and respond to consumer
preferences; and
–investing in cream and milk-fat capability where we see
sustained customer demand and attractive returns.
Investing to support higher-value growth
Growing cream production increases our Co-op’s capacity
to support higher-value Foodservice growth. Fonterra
cream production increased to 486 million kgMS in FY26,
from 460 million kgMS in FY25.
During FY26, construction progressed on our $150 million
UHT cream expansion at Edendale. Once complete, the
plant is expected to provide more than 50 million litres
of annual UHT cream capacity, with the potential for
further expansion.
The Co-op is also investing in butter capability through
expansions at Clandeboye and Edgecumbe. These
investments provide additional flexibility and capacity
to respond to customer demand across Foodservice
applications. Further information is provided in the
Invest in operations for the future section of this report.
421
444447
460
486
20262025202420232022
Growing cream production increases capacity to support
higher-value growth
Fonterra cream production (million kgMS)
Foodservice bakery
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Aug 2025
Launched lactic butter sheets
in Singapore
Nov 2025
Launched Anchor Easy Bakery
Cream in Southeast Asia
Nov 2025
Revealed GrassFed FernMark logo
at China International Import Expo
Mar 2026
Won six recognitions at NZ
Champions of Cheese Awards
Mar 2026
Hosted Business Connect in NZ,
with global employees hearing direct
from farmers and innovation teams
Apr 2026
Opened two distributor partnership
kitchens (Fujian/Jiangxi and Xi’A n)
May 2026
Launched Anchor Essence Whipping
Cream at Bakery China
Jun 2026
Opened distributor partnership
kitchen (Hebei Shijiazhuang)
Jun 2026
Won nine awards at International
Cheese & Dairy Awards
Jul 2026
Opened upgraded Fonterra
Application Centre in Chengdu
Delivering on strategy
2026202520242023
Greater ChinaSoutheast Asia
91%
85%
81%
77%
23%
19%
15%
9%
Anchor Food Professionals’ proven China model
is driving growth across Asia
Foodservice operating profit by region (%)
Southeast Asia’s contribution to Foodservice operating
profit increased from 9% in FY23 to 23% in FY26,
demonstrating the growing contribution from the region.
Customer focus drives growth in
Southeast Asia
In FY26, we continued to build on our hyper-local,
customer-focused sales approach to expand across
Southeast Asia.
Every day, our network of in-market teams and
chefs in the Philippines, Vietnam, Thailand,
Singapore, Malaysia and Indonesia work closely
with customers to develop dairy solutions that
meet unique consumer preferences, seasonal
demands and emerging food trends. Being on
the ground means we collaborate as partners,
building trusted relationships for the long-term
and unlocking growth. This is a proven approach
that continues to deliver results year on year.
Chef-led applications, innovation, a relentless focus
on the customer and our quality, grass-fed dairy
credentials will help us maintain this momentum
into FY27.
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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.
Reported operating earnings
$341m
up $32m from FY25
Capital Invested
$1,035m
up $160m from FY25
Our manufacturing operations and supply
chain are at the heart of our Co-op,
collecting and processing our farmers’ milk
into quality products and delivering them
to customers around the world.
Whareroa site, Taranaki
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2.30
2.63
2.58
2.66
2.78
20262025202420232022
1.17
1.30
1.36
1.03
1.47
1.00
1.31
1.00
Manufacturing cost per kgMS
Cash opex per kgMS
Cash opex (excluding ERP and Mainland)
The financial performance of Core
Operations improved year-on-year,
delivering operating earnings of $341 million,
up $32 million from FY25. Higher milk
volumes supported an increase in gross
profit, offsetting the impact of elevated
energy and freight costs.
Throughout FY26, we successfully navigated disruption
across Middle East shipping routes while maintaining
continuity of supply for customers. By leveraging
the strength of our global supply chain network and
collaborating closely with logistics partners and customers,
we adapted to changing conditions and continued to
deliver products to market, achieving record shipping
volumes this year.
This year also saw the highest milk volumes in a decade.
In response, we drew on our flexible asset network to
optimise product mix and scale production to meet
demand, achieving record production for products such as
UHT cream, butter and mozzarella. The Co-op maintained
a high level of milk utilisation, with almost 97% of supplied
milk being processed into product. Product made right first
time also strengthened to 96% as we continued to focus on
efficiency and reliability.
Food safety and quality remain central to how we run
our operations. Building on Fonterra’s established milk
traceability, this year we connected our trace records with
process and quality data to show how milk age and quality
risk accumulate along the full journey from farm to finished
product, giving our teams earlier sight of emerging risk and
better information to act on.
We remained focused on manufacturing productivity,
while managing higher input costs in an inflationary
environment. Cash manufacturing costs per kgMS
increased from $2.66 to $2.78 per kgMS, reflecting
higher lactose and freight costs. The impact of these
cost pressures was partly offset by efficiencies from
processing higher milk volumes, with cash manufacturing
costs broadly maintained in real terms. Our consistent
financial performance has enabled us to continue to
invest to grow value, improve sustainability and maintain
operational resilience.
Cash expenses ($/kgMS)
Full financial year figures
Edendale site, Southland
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20262025202420232022
572
30
53
489
687
79
47
561
661
106
56
499
875
128
167
580
1,035
89
253
693
Other capital invested
Sustaining capital expenditure
Growth capital expenditure
Capital investment through FY26 reached $1.0 billion, with
sustaining capital expenditure of $693 million and growth
capital expenditure of $253 million.
Key investments underway include:
–Studholme protein: Our $75m investment into an
advanced protein hub at Studholme was completed
on time and on budget. We have concluded product
validation and are nearing full-scale commercial
production.
–Edendale UHT cream: The new $150m UHT cream plant
is nearing completion and plant commissioning is well
advanced.
–Clandeboye butter: In October 2025, we announced a
$75m butter expansion at our Clandeboye site. This build
is tracking well, and we expect commissioning to begin
in 2027.
–Edgecumbe pastry butter sheets: In March 2026, we
began site works on a $35m pastry butter sheet line
expansion at Edgecumbe. This is progressing to target
and we expect first products off the line next year.
–Wai Māhea wastewater treatment plant (Hautapu):
This $120m facility is now fully operational and meeting
its new consent conditions.
Capital invested ($ million)
Full financial year figures
Energy resilience for the future
We continue to pursue various energy resilience
projects across our manufacturing sites. These
projects boost energy security, reduce our
reliance on fossil fuels and support our Co-op’s
scope 1 and 2 emissions reduction targets, while
also underpinning future processing growth.
Clandeboye
–Conversion of two coal boilers to wood pellets
complete.
–Estimated annual emissions savings of ~155,000
tonnes of CO
2
e.
Whareroa
–Installation of two new electrode boilers
complete.
–Estimated annual emissions savings of ~68,500
tonnes of CO
2
e.
Edgecumbe
–Installation of one new electrode boiler complete.
–Estimated annual emissions savings of ~26,000
tonnes of CO
2
e.
Waitoa
–Installation and commissioning complete for two
new resistive element boilers.
–Estimated annual emissions savings of ~14,725
tonnes of CO
2
e.
Edendale
–Installation underway of two new electrode
boilers. Commissioning expected in mid-2027.
–Estimated annual emissions savings of ~72,800
tonnes of CO
2
e.
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Aug 2025
Completed renewable energy
conversion at Clandeboye
Aug 2025
Commissioned Hautapu wastewater
treatment plant
Nov 2025
Deployed ERP at first site
Dec 2025
Deployed ERP at second site
Jan 2026
Commenced butter expansion build
at Clandeboye
Feb 2026
Deployed ERP at third site
Mar 2026
Commenced construction at
Edgecumbe for pastry butter sheets
May 2026
Achieved highest Q3 shipment
volumes in a decade
May 2026
Reached product validation for
advanced proteins at Studholme
Jun 2026
Won NZ Workplace Health & Safety
Award for Clandeboye biomass project
Jun 2026
Won Safeguard NZ Safety
Collaboration Award – Fonterra
Te Awamutu and KiwiRail
Jul 2026
Achieved highest Q4 shipment
volumes in five years
Jul 2026
Began commissioning Edendale UHT
cream plant build
Delivering on strategy
Enterprise Resource Planning (ERP)
transformation
Our ERP transformation remains a key part of our
work to simplify and strengthen the systems that
support our Co-op. The programme is progressing
to plan, with five sites now live and two more
planned for later this calendar year.
Momentum is continuing across both manufacturing
and markets as the team prepares for the next
phase of go-lives in FY27. The programme remains
on budget and on track for completion in late 2028.
Once complete, the transformation is expected to
strengthen and simplify core processes and deliver
modern systems capable of improved functionality.
“The strength of Fonterra’s operations lies in our people,
our assets and our ability to reliably connect our farmers’
precious New Zealand milk with customers around the
world. Throughout the year, our teams demonstrated
resilience, adaptability and disciplined execution, maintaining
a strong focus on safety, quality and customer centricity
while continuing to improve the efficiency and performance
of our operations.”
Anna Palairet, Chief Operating Officer
Waitoa site, Waikato
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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.
Sustainability remains an important
driver of long-term value and resilience
for our Co-operative.
We reviewed our sustainability strategy
in FY26, considering the areas that
matter most to our farmers, customers
and business. The review reaffirmed the
importance of sustainability to our Co-op
and confirmed climate, nature and animal
wellbeing as key focus areas.
Chris, Southland
6.2%
Reduction in scope 1 and 3 Forest, Land and Agriculture (FLAG)
GHG emissions intensity from dairy from a FY18 base year
28.7%
Reduction in absolute scope 1 and 2
GHG emissions from a FY18 base year
32
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Climate action and progress
In September 2026, we launched the Fonterra Sustainability
Roadmap, which sets out the actions we are taking
across our value chain to deliver against our sustainability
strategy. Building on our previous Climate Roadmap, it
covers animal wellbeing and nature as well as climate and
provides customers and other stakeholders with a clear
view of our sustainability priorities and progress.
Reducing emissions remains a key component of our
climate action plan, while strengthening resilience
and adapting to a changing climate is an increasingly
important focus for us as the impacts of climate change
continue to be felt across our value chain.
Progress on reducing on-farm emissions intensity is
an important part of delivering our climate ambition.
Our target is to reduce on-farm emissions intensity from
dairy by 30% by FY30, from a FY18 baseline. In addition
to the on-farm target, we have a target to reduce absolute
Scope 1 and 2 emissions by 50.4% by FY30, also from
a FY18 baseline.
In FY26 we achieved:
–A 6.2% reduction in scope 1 and 3 FLAG GHG emissions
intensity from dairy from a FY18 base year.
–A 28.7% reduction in absolute scope 1 and 2 GHG
emissions from a FY18 base year.
We continue to make progress towards reducing our
reliance on coal and transitioning to renewable energy
solutions across our manufacturing network. During FY26,
two new electrode boilers became operational at Whareroa
and are expected to reduce the site’s annual emissions
by around 68,500 tonnes of CO
2
e.
We have also completed the installation of an electrode
boiler at our Edgecumbe site, which we expect will reduce
annual emissions by around 26,000 tonnes of CO
2
e. Refer
to the Invest in operations for future section of this report
for more information.
Carbon Removals Programme launched
In October 2025, we launched our Carbon Removals
Programme. The programme uses satellite imagery
and remote sensing technology to estimate carbon
removals from trees and other woody vegetation.
This allows us to provide a more complete picture
of a farm’s emissions profile, recognising the
contribution of on-farm planting and supporting
comprehensive emissions reporting.
In FY26, farmer uptake has been strong, reflecting
interest in recognising carbon removals and
the role they can play in reducing on-farm
emissions intensity.
Supporting sustainable farming
We work alongside our farmers to provide practical
insights, tools and support that help build resilient
and sustainable farming businesses. Now in
its sixth year, the annual Farm Insights Report
provides a personalised view of farm performance,
helping farmers make informed decisions to
improve efficiency.
All farms supplying our Co-op in New Zealand
are now required to have a Farm Environment
Plan in place. These plans provide comprehensive
information and recommendations for improvement,
including around soil health, water quality, emissions
reductions and biodiversity.
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“Our sustainability
strategy is focused on
creating long-term value
and resilience. As climate-
related impacts become
more pronounced,
strengthening our ability
to adapt is critical to
supporting our farmers,
meeting customer
expectations and
positioning our Co-op
for future success.”
Matt Bolger, Managing Director,
Co-operative Affairs
Sustainable value
We continue to create sustainable value by connecting
customer demand with on-farm sustainability
outcomes. Our Customer Incentives initiative, funded
through separate agreements with Mars and Nestlé,
is designed to help farmers improve emissions
efficiency while strengthening farm performance.
An on-farm solutions programme reimbursed
eligible farmers up to $1,500 per farm for tools
and services including animal performance testing,
pasture optimisation apps and on-farm planting.
The programme attracted over 7,000 applications
across two funding rounds, with the full funding
allocation taken up. In addition, more than 550 farms
are eligible, pending verification, for a customer-funded
emissions incentive payment of between 10 and
25 cents per kgMS during the 2025/26 season. Both
initiatives will continue in 2026/27 for eligible farmers.
Aug 2025
Completed renewable energy
conversion at Clandeboye
Oct 2025
Launched Carbon Removals Tool
for farmers
Received independent assurance
of key regenerative agriculture data
Oct 2025
New resistive element boiler
commissioned at Waitoa
Nov 2025
Another resistive element boiler
commissioned at Waitoa
Jan 2026
Initiated eDNA pilot to grow
understanding of biodiversity
in Canterbury and Waikato
May 2026
Launched first Anchor Food
Professionals product with
FernMark Grass Fed logo
Jun 2026
Commissioned a heat recovery
project to reduce natural gas use
at Heerenveen
Jul 2026
Supported around 5,000 farmers
to adopt efficiency tools and
technology through On-Farm
Solutions funding

Delivering on strategy
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Doing Good Together
Over 8 million
breakfasts served
to students in
more than 1,500
schools through the
KickStart Breakfast
programme.
As a foundation partner
of Rural Support Trust,
Fonterra has continued
to support initiatives
that strengthen rural
wellbeing and resilience.
For example, we were
proud to back the Willie
Apiata wellbeing tour
which brought over
1,100 people to
8 regional events.
Over 11 million
dairy serves donated
to families in need
through New Zealand
Food Network &
Meet the Need.
Over $600K donated
in dairy donations and
grants, enabling 500
community groups to
deliver local projects
and initiatives that
strengthen food
security and help
build resilient, thriving
communities across
New Zealand.
Through the
partnership with
Trees for Survival, we
supported over 650
students to plant over
15,000 native plants
along 3,183 metres
of waterways.
Through the
Co-op’s volunteering
programme, our
people contributed
more than 2,500
hours to support
Fonterra’s community
partners, helping
deliver positive
outcomes for
communities.
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