Fonterra announces Annual Results and long-term strategy

Fonterra Co-operative Group Limited


Fonterra Co-operative Group Page 1

Results for Announcement to the Market
Results for announcement to the market
Name of issuer
Fonterra Co-operative Group Limited
Reporting Period 12 months to 31 July 2021
Previous Reporting Period 12 months to 31 July 2020
Currency NZD

Amount (m’s) Percentage change
Revenue from continuing operations $20,565 1%
Total Revenue $21,124 1%
Net profit/(loss) from continuing operations $532 (34%)
Total net profit/(loss) $599 (9%)
Final Dividend
Amount per Quoted Equity Security $0.15
Imputed amount per Quoted Equity Security Not Applicable
Record Date 30/09/2021
Dividend Payment Date 15/10/2021
Current period Prior comparable period
Net tangible assets per Quoted Equity
Security
$2.87 $2.77
A brief explanation of any of the figures
above necessary to enable the figures to be
understood
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 23/09/2021
Audited financial statements accompany this announcement.

---

23 September 2021

Fonterra completes reset, announces annual results and long-term growth plan out to 2030

Annual Results Summary
• Total pay-out for 2020/21 season: $7.74 per kgMS
o Final 2020/21 Farmgate Milk Price: $7.54 per kgMS
o 2020/21 dividend: 20 cents per share, comprised of 5 cent interim dividend and 15 cent
final dividend
• Reported Profit After Tax: $599 million, down $60 million*
• Normalised Profit After Tax: $588 million, up $190 million
#

• Total Group normalised EBIT: $952 million, up $73 million
#

• Net debt
1
: $3.8 billion, down $872 million
• Debt to EBITDA ratio: 2.7x improved from 3.3x
• Full year normalised earnings per share: 34 cents

* 2020 financial year included the gain from the divestments of DFE Pharma and foodspring®

#
Normalised numbers reflect the underlying performance of the business.

Fonterra Co-operative Group Limited today announced a strong set of results for the 2021 financial year,
reflected in a final Farmgate Milk Price of $7.54, normalised earnings per share of 34 cents and a final
dividend of 15 cents, taking the total dividend for the year to 20 cents per share. The results come as
Fonterra moves through its business reset and into a new phase of growing the value of its business.
CEO Miles Hurrell says the last three years have been about resetting the business. “We’ve stuck to our
strategy of maximising the value of our New Zealand milk, moved to a customer-led operating model and
strengthened our balance sheet.
“The results and total pay-out we’ve announced today show what we can achieve when we focus on quality
execution and an aligned Co-op.
“I want to thank our farmer owners and employees for their hard work and commitment over the last few
years that has got us to this position. Together, we’ve shored up foundations and done this despite the
challenges of operating in a COVID-19 world.

1
Net debt excludes amounts attributable to disposal groups held for sale.

Fonterra Co-operative Group
Page 2

“Although the higher milk price and tightening margins put pressure on earnings in the final quarter, this is
a strong overall business performance, allowing us to deliver $11.6 billion to the New Zealand economy
through the total pay-out to farmers.
“The work we’ve done as part of the 2019 strategic reset means we’re well placed to take advantage of
favourable industry dynamics. Growing global demand for dairy coupled with constrained supply has
resulted in high prices for our milk. Our resilient supply chain has allowed us to get products to market and
the healthy demand for our farmers’ New Zealand milk has seen a record shipping year for the Co-op.
“We’ve continued to reshape our business and the sales of our joint venture farms and wholly-owned
farming hubs in China. Our continued focus is to get our New Zealand milk to the world.”
Total Group normalised EBIT, which reflects underlying business performance, was up 8% to $952 million,
with Total Group normalised operating expenditure down 3% to $2.2 billion.
Mr Hurrell says a focus on financial discipline has paid off. “Net debt is down by $872 million to $3.8 billion,
cashflow has improved again and at 2.7x, we are now within our long-term target Debt/EBITDA ratio.
“We are pleased with our $599 million reported profit after tax. While down on last year, the 2020 financial
year benefited significantly from the divestments of DFE Pharma and foodspring®. Normalised profit after
tax grew by $190 million to $588 million, driven by improved earnings and lower interest expense.
“Our sales book is well balanced across the regions and a number of our markets have performed well. In
Asia Pacific, significant improvements in our Foodservice and Consumer channels have pushed normalised
EBIT up 28% to $305 million. We’ve expanded our Foodservice footprint in the region and are seeing the
benefits of that.
“Here – like in many of our markets – COVID-19 has changed consumer behaviour, with people choosing
to cook at home. That’s really benefited our consumer brands and supported upward momentum in our
Consumer channel performance, particularly in New Zealand and Australia.
“Greater China continues to be an important market for us, with normalised EBIT up 10% to $403 million.
This speaks to the strength of our Foodservice channel, China’s dynamic economy and its love for dairy.
“Africa, Middle East, Europe, North Asia, Americas’ (AMENA) normalised EBIT was down 28% to $336
million, reflecting our strategy of redirecting product into higher-margin markets. However, we have seen
improvements in our Foodservice and Consumer channels within the region, including a turnaround for our
Chilean business.
“Our total dividend for the year is 20 cents per share, which includes an interim dividend of 5 cents per
share and a final dividend of 15 cents per share. Three cents of the 15 cents per share reflects the reversal
of previous impairment of our China Farms. For a 100% share backed farm, this means a total pay-out of
$7.74 per kgMS.”
Mr Hurrell says that progress isn’t limited to the Co-op’s financial performance. “I’m proud of our efforts to
reduce our environmental impact. New Zealand dairy has the lowest carbon footprint in the world, but we
also know we need to do much more.
“This year, we reduced our carbon emissions from coal by more than 11%, as Te Awamutu completed its
first season using renewable wood pellets. We also recently announced our Stirling site will move to
renewable energy from August next year. Our farmer owners are also doing their bit, with record numbers
achieving the top level of our Co-operative Difference framework and 53% of supplying farms now having
a Farm Environment Plan. That’s good for the environment and it’s also what our customers expect.”
Looking to the current season, Fonterra has announced a 2021/22 earnings guidance range of 25-40 cents
per share and has also reaffirmed its 2021/22 forecast Farmgate Milk Price range of $7.25 - $8.75 per
kgMS, with a midpoint of $8 per kgMS.

Fonterra Co-operative Group
Page 3

Mr Hurrell says the strong milk price is likely to continue. “A high milk price is good for farmers and good for
the New Zealand economy. However, this does have the potential to squeeze our sales margins and impact
earnings.”
Mr Hurrell says the impact of COVID-19 continues to be felt, particularly across the supply chain. “We expect
competitive tension in the global shipping market to continue this financial year. We have largely been able
to mitigate this thanks to the strength of our Kotahi partnership which has allowed us to keep our product
moving through the supply chain.”
Long-term strategy
Fonterra is now turning its mind to the next phase of its strategy, as it completes its reset and focuses on
value growth. Mr Hurrell says as the Co-op looks out to 2030, the fundamentals of dairy – in particular, New
Zealand dairy – look strong.
“Put simply, the world wants what we’ve got – sustainably produced, high-quality, nutritious milk. This
comes at a time when we see total milk supply in New Zealand as likely to decline, and flat at best.
“On one hand, this requires the right capital structure to help ensure we don’t lose the benefits of what
generations of farmers have built – a New Zealand dairy co-operative of scale.
“But on the other hand, it gives us more options to be selective about what we do with our Co-op’s
milk. In doing so, we can increase the value we generate for farmers and New Zealand over the next
decade.
“To make this happen we have made three strategic choices – continue to focus on New Zealand milk, be
a leader in sustainability and be a leader in dairy innovation and science.”
Refine our asset portfolio to focus on New Zealand milk
Fonterra believes it has an opportunity to differentiate New Zealand milk further on the world stage, with the
aim of getting more value from the Co-op’s milk.
Mr Hurrell says this requires Fonterra to focus its capital and people on enhancing New Zealand milk and
for these reasons the Co-op has reviewed the ownership of its two other milk pools – in Australia and Chile.
“Soprole is a leading Chilean dairy brand, and Prolesur is a subsidiary of Soprole focused on sourcing milk
and manufacturing products in Southern Chile. The operations do not require any New Zealand-sourced
milk or expertise, and in this context, we are starting the process to divest our integrated investment in Chile.
“Fonterra Australia is on strategy for the Co-op and remains an important export market for our New Zealand
milk, especially for Foodservice products and advanced ingredients. We are considering the most
appropriate ownership structure for this business, one option is an IPO, with the intention that we retain
a significant stake.
“We see both these moves as critical to enabling greater focus on our New Zealand milk and, importantly,
allowing us to free up capital, much of which is intended to be returned to shareholders.”
Invest in sustainability and dairy innovation and science
Mr Hurrell says to strengthen the value proposition of its New Zealand milk, the Co-op will increase
investment in sustainability and R&D.
“New Zealand has the unique position of being the lowest carbon producing dairy nation on the planet and
when you combine this with our pasture-based model, animal welfare standards and scale efficiency,
we have something that can’t be replicated.

Fonterra Co-operative Group
Page 4

“But we can’t slow down now. Customers want to know where their food comes from and the environmental
impact it leaves, and a farmer’s livelihood relies on a stable climate and healthy ecosystems.
“This is why we have an aspiration for our Co-op to be Net Zero carbon by 2050. Over the next decade we
intend to invest around $1 billion in reducing carbon emissions and improving water efficiency and treatment
at our manufacturing sites.
“We also know that to maintain our relative carbon footprint advantage against the northern
hemisphere farming system we must solve the methane challenge.
“We are aiming to increase our current total annual R&D investment by over 50% to around $160 million
per annum in 2030, with about $60 million per annum specifically targeted at growth in Active Living, as
we continue to look for solutions for the methane challenge and develop new innovative products to
support our value growth plans.
“Our investment in sustainability initiatives across our supply chain, will support our investment in our brands
to showcase our New Zealand sustainable nutrition story. This will put us in a position to further grow our
Foodservice and Consumer channels across our markets in the Asia Pacific region and gain more
value through our Ingredients channel by helping customers meet their own sustainability goals.
“As we move more milk into Foodservice and Consumer, we will direct less through our Ingredients
channel and aim to shift more towards higher value ingredients such as in our Active Living business. This
will see us focus more of our Ingredients business on solutions for physical, patient, digestive and mental
wellness plus immunity where we can make the most of our expertise in dairy innovation,” says Mr Hurrell.
Future growth opportunity – nutrition science solutions
Mr Hurrell says the Co-op’s focus on value creation also opens up choices for investing in new, high
value growth opportunities in future.
“We have an ambition to play more boldly in nutrition science solutions, which underpins a $500 billion slice
of the global health and wellness category.
“We have set up a dedicated team to explore what the future of Nutrition Science Solutions looks likes for
our Co-op, and over the next year we’ll narrow down and prioritise the areas where we can build a
competitive advantage,” says Mr Hurrell.
2030 financial targets
2

“Our focus on New Zealand milk, sustainability, and innovation and science will see us shift every aspect of
our business to create more value. In doing so we aim to continue to improve our financial performance
and, as a result, strengthen our ability to repeatedly generate cash and create value for our
shareholders and New Zealand,” says Mr Hurrell.
There are four key value targets we’re aiming to achieve by FY30:
1. An average Farmgate Milk Price range for the decade of $6.50-$7.50 per kgMS
2. A 40-50% increase in operating profit from FY21 and, with the reduced interest from having less
debt, this should translate into an approximately 75% increase in earnings, giving us the ability to
steadily increase dividends to around 40-45 cents per share by FY30
3. A Group Return on Capital of 9-10%, up from 6.6% in FY21

2
The figures under this heading are targets that we are aiming to achieve only. They should not be taken as forecasts or as a
guarantee of returns to shareholders. They are subject to successfully completing a number of business initiatives and a number of
assumptions each of which could materially affect the actual outcomes. The key assumptions and risks relating to these targets are
set out in the booklet titled Our Plans to 2030. Please refer to the further detail at the end of this announcement.

Fonterra Co-operative Group
Page 5

4. Through planned divestments and improved earnings, an intended return of about $1 billion to
shareholders by FY24, and around $2 billion of additional capital available for a mix of
investment in further growth and return to shareholders. This is in addition to the approximately $2
billion expected to be invested in sustainability and moving milk into higher value products.
“We have an incredible natural product made on the pastures of New Zealand farms, a business supported
by a talented and committed team, and an exciting opportunity to create value. It’s up to us as a Co-op
to work together, make the necessary changes and ensure we’re creating goodness for generations,” says
Mr Hurrell.

ENDS




Non-GAAP measures
Fonterra uses several non-GAAP measures when discussing financial performance. These measures include normalised profit
after tax, normalised EBIT, EBIT, normalised earnings per share, normalisation adjustments and total Group measures. Total Group
measures present the combined financial performance of the Group’s continuing and discontinued operations. Non-GAAP financial
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 are used internally to evaluate the underlying performance of business units and to analyse
trends.
These measures are not uniformly defined or utilised by all companies. Accordingly, these measures may not be comparable with
similarly titled measures used by other companies. Non-GAAP financial measures should not be viewed in isolation nor considered
as a substitute for measures reported in accordance with NZ IFRS. Non-GAAP measures are not subject to audit unless they are
included in Fonterra’s audited Financial Statements.
Please refer to the Non-GAAP Measures section in Fonterra’s 2021 Annual Review for further information about non-GAAP
measures used by Fonterra, including reconciliations back to NZ IFRS measures. Definitions of non-GAAP measures used by
Fonterra can be found in the Glossary.
Further detail of key assumptions, risks and uncertainties
This announcement refers to, and provides a high-level summary of, matters that are described in more detail in the booklet titled
Our Plans to 2030. That booklet should be read in full. The booklet also identifies relevant assumptions, known and unknown
risks, uncertainties and other important factors that could materially affect the actual outcomes achieved by Fonterra.
Any forward-looking statements, financial targets and ambitions (“Forward Statements”) in this announcement or the booklet are
based on a range of assumptions, including the assumptions noted in the Appendix of the booklet. None of the Forward Statements
is intended as a forecast, estimate or projection of the outcome that will, or is likely to, eventuate. They should not be taken as
forecasts or a guarantee of returns to shareholders. The Forward Statements were prepared by Fonterra and have not been audited
or independently reviewed.


For further information contact:

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

---

23 September 2021
1

¹
²
1.Attributable to equity holders of the Co-operative, excludes non-controlling interest
2.Economic net interest-bearing debt (ENIBD) gearing ratio, refer to Glossary for definition
2

Monthly Milk Price 2019/2020 Season
Monthly Milk Price 2020/2021 Season
Source: GlobalDairyTrade
1.The shipment price is a weighted average price of GDT contracts struck 1 to 5 months prior to the agreed shipment month. Shipment month is the month in which the sale would be deemed for financial reporting purposes to have been
completed, and will normally be the month in which the sale is invoiced and the product is shipped
•Strong demand for dairy lifted monthly milk price
above $9.00 towards the end of the 2020/21 Season
•The average of the monthly milk prices are
equivalent to $7.14 and $7.54for 2019/20 and the
2020/21 seasons, respectively
•Favourableand stable price relativities in the
first half; strongincrease in reference product prices in
second half narrowed earnings margins
•Earnings profile weighted to the first half with 25 cents
per share, and 9 cents in the second half
FY21 H1
FY21 H2
6.00
9.00
(NZ$)
AugNovFebMay
JunSepDecMar
7.50
3,000
4,000
(US$/MT)
Monthly Milk PricesPrice Relativities
3
GDT Cheddar shipment price¹ (non-reference)
GDT WMP shipment price¹ (reference)

90.9%
91.4%
91.9%
94.0%
95.0%
20172018201920202021
$100m
$95m
$90m
$58m
$58m
20172018201920202021
•Consistent improvement in
manufacturing performance since
2017 has meant $35 million less in
rework costs
•$42 million improvement over
5 years through a quality
improvement programme
•Maintained utilisation(yield) of milk
solids, while increasing complexity of
product mix. Improvement of $18m
for 2021 compared to 2017
96.2%96.2%
96.4%96.4%96.4%
20172018201920202021
4
Note: Metrics are for the year ended 31 July

Record shipment year, 2.59 million
tonnes shipped from New Zealand,
despite pandemic disruptions
More than 50 other exporters shared
the benefit of our Kotahi partnership
Team effort and innovation with
partners to manage a 350% increase
in rework of orders driven by ongoing
supply chain disruptions
On aper tonne basis, our
non-shipping supply chain costs are
13% lower than 2015
5

Reduced carbon
emissionsfrom coal use
by more than 11%, with
Te Awamutu moving to
renewable wood pellets
Over half of supplying
farms in New Zealand
now have Farm
Environment Plans,
up from 34% at the
beginning of the year
Water usage at sites
in water-constrained
regions up slightly
this year, but still
more than 2% lower
than FY18 baseline
24% reduction in
solid waste to landfill,
well ahead of target for
the year
6

Female
representation in
senior leadership up to
32%, from 29%, but
short of our target
Supported our
communities,
including donating
800+ tonnesof product
to food banks in New
Zealand, Australia and
Chile
Increased our
employee engagement
score, with significantly
more teams now in the
top quartile
Supported the
wellbeing of
our global workforce,
who continue to
be affected by
COVID-19 lockdowns
7

Completed sale of
two wholly-owned
China Farming hubs
Completed sale of
Agrigatejoint venture
Completed sell down of
Beingmateholding
DPA Brazil and Hangu
China Farm sale
process continues
Acquired Dairy
Country in Australia
Completed sale
of China Farms
joint venture
Completed sale of
Agrifeedsjoint venture
8

⁶
¹
¹²
³
⁵
⁴
1.Total Group figures for the year ended 31 July 2021. This includes Continuing and Discontinued Operations, and
includes amounts attributable to non-controlling interests
2.Normalised profit after tax includes $11million of normalised adjustments resulting from a $(49) million loss in
relation to Beingmate, a $55 million impact from the gain on sale and impairment reversal on our China Farms, a
$40 million gain on sale on our China Farms joint venture and a $(35) million impairment on DPA Brazil
3.Attributable to equity holders of the Co-operative, excludes non-controlling interest
4.For the year ended 31 July 2020 debt to EBITDA was 3.3x. This was reported as 3.4x in 2020. Previously, adjusted
net debt included a further cash adjustment for 25% of cash and cash equivalents held by the parent
5.Economic net interest-bearing debt (ENIBD) gearing ratio, refer to Glossary for definition
6.For the 2021 Financial Year the notional tax charge was set to 16.1% (2020 Financial Year: 8.4%). The 2021 return
on capital would be 7.2% if calculated with the prior year notional tax charge. In 2021 the methodology to calculate
return on capital was updated to align the definition of debt with the net debt used in the debt to EBITDA ratio and
exclude hedge reserves from total equity. The prior years have been restated for consistency with current period
9

1.Total Group figures for the year ended 31 July. This includes Continuing and Discontinued Operations
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.New Zealand Farmgate Milk Price
4.Consists of other operating income, net foreign exchange gains/(losses) and share of equity accounted investees
5.Normalised EBIT includes $7 million of normalised adjustments resulting from a $(49) million loss in relation to
Beingmate, a $55 million impact from the gain on sale and impairment reversal on our China Farms, a $40 million
gain on sale on our China Farms joint venture and a $(39) million impairment on DPA Brazil
6.Normalised profit after tax includes $11million of normalised adjustments resulting from a $(49) million loss in
relation to Beingmate, a $55 million impact from the gain on sale and impairment reversal on our China Farms, a
$40 million gain on sale on our China Farms joint venture and a $(35) million impairment on DPA Brazil
7.Attributable to equity holders of the Co-operative, excludes non-controlling interest
•Achieved a gross margin of 14.7%, while increasing
milk payments to New Zealand farmers year on year
•Gross margin of 17.4% in first half, second half significantly
impacted by rising milk price with margin reduced to 12.4%
•Gross profit reduced $94 million, due to lower margins
across all the regions in the fourth quarter
•‘Other’ up $86 million, due to higher other operating income
and non-recurrence of adverse one-off items
•Normalisedprofit after tax improved $190 million, or 48%,
due to improved earnings and lower interest expense
¹
∆²
³
⁴
⁵
⁶
⁷
10

¹
¹²
Q1Q2Q3Q4Q1Q2Q3Q4
Note: Figures are for the year ended 31 July 2021. Comparative information has been restated for consistency with the currentperiod, and FY21 quarterly breakdown has been restated for increased accuracy of attribution
1.Prepared on a normalised Continuing Operations basis. Normalised EBIT contributions sum to $1,044 million, and does not aligntoreported Continuing Operations due to excluding unallocated costs and eliminations
2.Inclusive of Group Operations’ EBIT attribution
11

¹
-
100
200
300
400
500
600
700
Note: Figures are for the year ended 31 July and prepared on a normalised Continuing Operations basis. Comparative information has been restated for consistency with current period attribution
1. Eliminations and unallocated costs
12

5.6
6.2
5.7
4.7
3.8
20172018201920202021
Net Debt ($ billion)
¹
,
²
²
,
³
⁴
8.0%
6.2%
5.6%
6.6%
6.6%
20172018201920202021
Return on Capital (%)
75.1
82.7
82.8
84.8
90.6
20172018201920202021
Working Capital Days
•Net debt and leverage down due to divestments
and improved earnings from operations
•Both leverage metrics –Debt to EBITDA²and
gearing ratio²–are now within our long-term
targets of 2.5-3.0x and 30-40%
•Working capital days up due to higher milk price
and average inventory held
•Return on capital⁴unchanged, with increased
earnings offset by increase in notional tax rate
44%48%49%41%36%
3.8
4.64.3
3.3
2.7
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
20172018201920202021
Gearing Ratio (%)
Debt to EBITDA (x)
13
Note: Refer to Glossary for definitions of measures
1.Net debt excludes amounts attributable to disposal groups held for sale
2.Going forward, we will change the way we measure net debt so that the net debt included in the gearing ratio and debt to EBITDA
will be on the same basis. This aligns with certain credit rating agency methodology. Under the new methodology net debt for the
2021 Financial Year would be $4.3bn and (adjusted net debt) gearing ratio would be 38.5%
3.Prior years’ debt to EBITDA have been restated for consistency with current period. Previously,
adjusted net debt included a further cash adjustment for 25% of cash and cash equivalents held
by the parent
4.For the 2021 Financial Year the notional tax charge was set to 16.1% (2020 Financial Year:
8.4%). The 2021 return on capital would be 7.2% if calculated with the prior year notional tax
charge. In 2021 the methodology to calculate return on capital was updated to align the definition
of debt with the net debt used in the debt to EBITDA ratio and exclude hedge reserves from total
equity. The prior years have been restated for consistency with current period

per kgMS
3,000
4,000
2020/2021
Season
2019/2020
Season
2021/2022
Season
Forecast
JunJun
•Maintaining the range reflects:
•Still early in the season with normal levels of
high uncontracted volume, product price and
FX volatility
•Ongoing uncertainty associated with
COVID-19
Jun
(US$/MT)
Weighted average Farmgate Milk Price for the season
14
GDT WMP shipment price¹
GDT WMP contracted shipment price²
Source: GlobalDairyTrade
1.The shipment price is a weighted average price of GDT contracts struck 1 to 5 months prior to the agreed shipment month. Shipment month is the month in which the sale would be deemed for financial reporting purposes to have been
completed, and will normally be the month in which the sale is invoiced and the product is shipped
2.The contracted shipment price is the weighted average shipment price of New Zealand WMP contracts won 1 –5 months prior on the GlobalDairyTradeplatform. These contracts are yet to be shipped or invoiced and the weighted average
price will change closer to the actual shipment date as new contracts are written

per share
Source: GlobalDairyTrade
1.The shipment price is a weighted average price of GDT contracts struck 1 to 5 months prior to the agreed shipment month. Shipment month is the month in which the sale would be deemed for financial reporting purposes to have been
completed, and will normally be the month in which the sale is invoiced and the product is shipped
2.The contracted shipment price is the weighted average shipment price of New Zealand WMP and Cheddar contracts won 1 –5 months prior on the GlobalDairyTradeplatform. These contracts are yet to be shipped or invoiced and the
weighted average price will change closer to the actual shipment date as new contracts are written
3,000
4,000
FY21 H2FY21 H1FY22 H1
Feb
Aug
•The range reflects:
•Uncertainty of Ingredient price relativity
changes through the season
•Early seasonrange of Forecast Farmgate Milk
Price, which could impact raw milk cost for
value-add business
•Ongoing uncertainty associated with
COVID-19in key markets
Aug
(US$/MT)
15
GDT WMP shipment price¹
GDT Cheddar shipment price¹
GDT WMP contracted shipment price²
GDT Cheddar contracted shipment price²

16

17
¹
2,335
2,496
2,282
2,323
2,242
20172018201920202021
Opex ($ million)
19.2
20.4
19.9
21.0
21.1
20172018201920202021
Revenue ($ billion)
1,155
902
812
879
952
20172018201920202021
EBIT ($ million)
1.Total Group figures for the year ended 31 July 2021. This includes Continuing and Discontinued Operations, and are on a normalised basis unless stated otherwise
2.2020 Financial Year Total Group normalised operating expenses has been re-presented from $2,268 million, due to impairments of intangible assets not included in the strategic review being reclassed from ‘other’ to operating expenses
4,180
4,123
4,152
4,069
4,102
20172018201920202021
Sales Volume ('000 MT)
²
1,526
1,505
1,523
1,517
1,539
20172018201920202021
NZ Milk Collection (million kgMS)
3,246
3,152
3,008
3,208
3,114
20172018201920202021
Gross Profit ($ million)

18
1.Total Group figures for the year ended 31 July 2021. This includes Continuing and Discontinued Operations, and
are on a normalised basis unless stated otherwise
2.Includes amounts attributable to non-controlling interests
3.Refer to Glossary for definition
4.Prior years’ debt to EBITDA have been restated for consistency with the current period. Previously, adjusted net
debt included a further cash adjustment for 25% of cash and cash equivalents held by the parent
³
670
600
1,095
1,828
1,417
20172018201920202021
Free Cash Flow ($ million)
²
792
407
275
398
588
20172018201920202021
Normalised NPAT ($ million)
²
745
(196)
(610)
659
599
20172018201920202021
Reported NPAT ($ million)
44.3%48.4%48.5%41.4%35.5%
3.8
4.6
4.3
3.3
2.7
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
20172018201920202021
ENIBD Gearing Ratio³ (%)
Debt to EBITDA⁴ (x)
³
851
861
600
419
545
20172018201920202021
Capex ($ million)
1,120
262
(17)
1,147
959
20172018201920202021
Reported EBIT ($ million)
¹

19
²
,
³
8.0%
6.2%
5.6%
6.6%
6.6%
20172018201920202021
Return on Capital (%)
75
8383
85
91
20172018201920202021
Working Capital Days
49
24
16
24
34
0.00
10.00
20.00
30.00
40.00
50.00
60.00
20172018201920202021
Normalised EPS (cents)
1.Total Group figures for the year ended 31 July 2021. This includes Continuing and Discontinued Operations, and are on a normalised basis unless stated otherwise
2.Refer to Glossary for definition
3.For the 2021 Financial Year the notional tax charge was set to 16.1% (2020 Financial Year: 8.4%). The 2021 return on capital would be 7.2% if calculated with the prior year notional tax charge. In 2021 the methodology to calculate return
on capital was updated to align the definition of debt with the net debt used in the debt to EBITDA ratio and exclude hedge reserves from total equity. The prior years have been restated for consistency with the current period
¹

20
•Fonterra’s NZ milk collections for the 2020/21
season reached 1,539 million kgMS, an
increase of 1.5% on last season’s collection
•Good start to the season was driven by
favourable mild conditions, supporting
pasture growth
•From October to January, increasingly dry
conditions and poor soil moisture levels
impacted peak collections
•A settled end to the summer, with a mix of
rainfall and warm weather, saw collections in
the North Island increase significantly from
February to May
SeasonTotal Milk Solids
(kgMS)
Peak Day
Milk
2018/191,523m(up 1%)85m litres
2019/201,517m (down 0.4%)83m litres
2020/211,539m (up 1.5%)
83m litres
Volume (m litres/day)
0
10
20
30
40
50
60
70
80
90
JunJulAugSepOctNovDecJanFebMarAprMay

21
2018201920202021
EssentialDiscretionaryOther Capital Invested
•Total capital invested comprised of $545 million
capital expenditure and $63 million of
other investments
•Capital expenditure increased $126 million to $545
million, largely due to projects delayed by COVID-19
in FY20 being completed this year
•Capital expenditure of $545 million comprised $466
million essential spend and $79 million
discretionary spend
•Discretionary capex increased $42 million
•Essential capex increased $84 million
•Other capital invested decreased from $106 millionto
$63 million
Note: Refer to Glossary for definition of capital invested and capital expenditure

22
¹
²
³
⁴
1.Includes EBIT and non-cash and non-operating adjustments made to EBIT to determine cash generated from operations
2.Capital expenditure presented in this table is different to capital expenditure on previous page primarily due to treatment
of livestock and accruals
3.Includes adjustment for disposal groups held for sale
4.Net debt excludes amounts attributable to disposal groups held for sale
•Freecash flow of $1.4 billion reflects strong operating
performance and assets sale proceeds:
•Net cash flows from operating activities of
$1.2 billion
•Net cash flows from investing activities of $0.2
billion, with proceeds from divestments of $0.8
billion, less capital invested of $0.6 billion
•The $1.4 billion of free cash flow was used to pay
interest of $0.3 billion, dividends of $0.2 billion with
the balance reducing net debt by $0.9 billion

23
•Receivable days are favourable due to improved
customer collection management and overdue
debtors have reduced
•Higher payables days due to increased capital
expenditure
•Inventory days are unfavourable due to:
•Higher than average inventory throughout the
year as a result of sales slippage due to port
congestion
•Impact of a higher milk price

24
¹
²
•Increase in normalised EBIT has been
offset by increase in notional tax rate used
to calculate after tax operating earnings
•Notional tax rate applied increased to
16.1% from 8.4% due to a change in our
dividend policy and realised tax rates
•Average capital employed was stable year
on year
1.For the 2021 Financial Year the notional tax charge was set to 16.1% (2020 Financial Year: 8.4%). The 2021 return on capital would be 7.2% if calculated with the prior year notional tax charge
2.Return on capital was reported as 6.7% in 2020. In 2021 the methodology to calculate return on capital was updated to align the definition of debt with the net debt used in thedebt to EBITDA ratio and exclude hedge reserves from total
equity. The prior years have been restated for consistency with the current period. Return on capital is Total Group normalised EBIT including finance income on long-term advances less a notional tax charge, divided by
average capital employed

25
²
1.Includes undrawn facilities and
commercialpaper. DCM is debt capital
markets
2.Excluding commercial paper
3.Drawn facilities relate to subsidiaries
4.Undrawn facilities includes $0.9bn stepped
down during the year, reinstated from 1 Sept
2021
5. WATM is weighted average term to maturity
Note: As at 31 July 2021 and excludes amounts
attributable to disposal groups held for sale
0.01.02.03.04.0
FY22
FY23
FY24
FY25
FY26
FY27
FY28
FY29
FY30
FY31
0.01.02.03.04.0
FY22
FY23
FY24
FY25
FY26
FY27
FY28
FY29
FY30
FY31
$ billion
WATM⁵ : 3.4 years
$ billion
WATM⁵ : 3.9 years
Undrawn
Facilities
4
$3.8bn
99%
Drawn Facilities
3
$0.03bn
1%
EUR/GBP
14%
AUD DCM
10%
CNY DCM
2%
NZD DCM
12%
USD DCM
15%
Bank
Facilities
47%
¹

26
1.Normalised basis. Does not align to FY21 Financial Statements, predominately due to additional categories
2.Impairments of intangible assets not included in the strategic review for the 2020 Financial Year ($55 million) have been reclassified from ‘other’ to administrative expenses category within Total Group operating expenses
¹
²
•Total Group normalised operating expenses decreased
$81 million
•$41 million decrease in Continuing Operations
•$40 million decrease in Discontinued Operations,
predominantly due to lower cost in DPA Brazil,
benefiting from a weaker local currency
•Unallocated costs decreased $18 million mainly due to a
reduction in provisions held at Group level
•Increased expenses in key categories to drive earnings
–selling and marketing, and research and development

27
¹
²
1.Refer to Glossary for definition
2.Normalised basis
•Unallocated costs are favourable $18 million
predominantly due to ‘Other’
•‘Other’ decreased $12 million, mainly due to a reduction in
provisions held at Group level

28
$ millions
Note: Figures are for the year ended 31 July. Doesnot add to Total Group as shown on a normalised Continuing Operations basis and excludes unallocated costs and eliminations. Comparative information has been restated for consistency
with the current period attribution
20202021
Gross profitEBIT
Gross profitEBITGross profitEBIT

29
$ millions20202021
Gross profitEBIT
Gross profitEBITGross profitEBIT
Note: Figures are for the year ended 31 July. Does not add to Total Group as shown on a normalised Continuing Operations basis and excludes unallocated costs and eliminations. Comparative information has been restated for consistency
with the current period attribution

Q1Q2Q3Q4
20202021
∆
¹
²
³
⁴
Includes EBIT attribution
from Group Operations⁵ ($)
-
Note: Figures are for the year ended 31 July and are on a normalised Continuing Operations basis. Comparative information has
been restated for consistency with the current period, and FY21 quarterly breakdown has been restated for increased accuracy
of cost allocations
1.Percentages as shown in table may not align to the calculation of percentages based on numbers in the table due to
rounding of figures
2.Includes sales to other segments
3.Consists of other operating income, net foreign exchange gains/(losses) and share of equity accounted investees
4.This includes EBIT attribution from Group Operations
5.This is included in Asia Pacific’s EBIT. Refer to Glossary for explanation of Group Operations
•EBIT of $305 million, up $66 million
•Strong performance in Consumer and Foodservice,
partially offset by a decline in Ingredients:
•Consumer increased gross margins
•Foodservice increased sales volume and improved
gross margins
•Ingredients margins adversely impacted by pricing
arrangements on bulk liquid milk contracts
•Operating expenses reduced to normal levels
•Lower EBIT attributed from Group Operations due to the
reduced margins in Ingredients
30

31
$ millions
Note: Figures are for the year ended 31 July. Does not add to Total Group as shown on a normalised Continuing Operations basis and excludes unallocated costs and eliminations.Comparative information has been restated for consistency
with the current periodattribution
20202021
Gross profitEBITGross profitEBIT
Gross profitEBIT

32
¹
∆
²
³
⁴
Note: Figures are for the year ended 31 July. This table was prepared exclusive of Group Operations attribution
1.Normalised basis
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.Includes sales to other segments
4.Consists of other operating incomeand net foreign exchange gains/(losses
•EBIT increased $20 million to $74 million, due to a strong
performance in theConsumer channel
•Lower sales volume due to optimising theportfolio to a
higher returning product mix and global shipping delays
•Gross profit increased due to strong margins in the
Consumer and Foodservice channel
•Ingredients channel was adversely impacted by high
Australian dollar, geo-political impacts and shipping delays
•Operating expenses up 6% due to increased investment
in brands

∆
¹
²
³
⁴
Includes EBIT attribution
from Group Operations⁵ ($)
-
Q1Q2Q3Q4
20202021
33
Note: Figures are for the year ended 31 July and are on a normalised Continuing Operations basis. Comparative
information has been restated for consistency with the current period, and FY21 quarterly breakdown has been restated
for increased accuracy of cost allocations
1.Percentages as shown in table may not align to the calculation of percentages based on numbers in the table due to
rounding of figures
2.Includes sales to other segments
3.Consists of other operating income, net foreign exchange gains/(losses) and share of equity accounted investees
4.This includes EBIT attribution from Group Operations
5.This is included in AMENA’s EBIT. Refer to Glossary for explanation of Group Operations
•Lower volumes in Ingredients as sales volume was
allocated to higher value markets
•Gross profit reduced due to lower sales volume and lower
gross margin in Ingredients channel, impacted by the lag
on the sale price on longer dated sales contracts
•Consumer gross margins and EBIT improved substantially
as a result of improvements in the Chilean business
•Lower EBIT attributed from Group Operations due to the
reduced margins in Ingredients
•Other reflected favourable FX revaluations
•EBIT of $336 million, down $129 million

34
$ millions
Note: Figures are for the year ended 31 July. Does not add to Total Group as shown on a normalised Continuing Operations basis and excludes unallocated costs and eliminations. Comparative information has been restated for consistency
with the current periodattribution
20202021
Gross profitEBIT
Gross profitEBIT
Gross profitEBIT

35
∆
¹
²
³
Note: Figures are normalised and are for the year ended 31 July. This table was prepared exclusive of Group
Operations attribution. Latin America includes Chile, Brazil and Venezuela but excludes DPA Brazil which is classified as
Discontinued Operations
1.Percentages as shown in table may not align to the calculation of percentages based on numbers in the table due to
rounding of figures
2.Includes sales to other segments
3.Consists of other operating income, net foreign exchange gains/(losses) and share of equity accounted investees
•EBIT up 79% to $75 million as a result of higher sales
volume and gross margins
•Sales volume increased, driven by new product
development and government stimulus in Chile
•Gross margin increased due to improved product mix and
pricing in our ChileanConsumer channel
•Operating expenses increased due to incurring additional
costs related to workforce safety in COVID-19 conditions

Q1Q2Q3Q4
20202021
∆
¹
²
³
⁴
Includes EBIT attribution
from Group Operations⁵ ($)
Note: Figures are for the year ended 31 July and are on a normalised Continuing Operations basis. Comparative
information has been restated for consistency with the current period, and FY21 quarterly breakdown has been restated
for increased accuracy of cost allocations
1.Percentages as shown in table may not align to the calculation of percentages based on numbers in the table due to
rounding of figures
2.Includes sales to other segments
3.Consists of other operating income, net foreign exchange gains/(losses) and share of equity accounted investees
4.This includes EBIT attribution from Group Operations
5.This is included in Greater China’s EBIT. Refer to Glossary for explanation of Group Operations
36
•EBIT increased $37 million to $403 million, driven by
higher sales volume and improved margin in the
Foodservice channel
•Foodservice gross margin increased from 22.3% to
24.7%, as it shifted product into higher value products
•Ingredients’ gross margin reduced, impacted by the lag on
the sale price on longer dated sales contracts
•Sales volumes increased across all three channels,
benefiting from the Chinese Government endorsing dairy
•Operating expenses increased $35 million, predominantly
to support the expansion of the Foodservice business

37
$ millions
Note: Figures are for the year ended 31 July. Does not add to Total Group as shown on a normalised Continuing Operations basis and excludes unallocated costs and eliminations. Comparative information has been restated for consistency
with the current periodattribution
20202021
Gross profitEBITGross profitEBIT
Gross profitEBIT

38
1.Excludes bulk liquid milk. Bulk liquids for the year ended 31 July 2021 was 72,000 MT of kgMSequivalent (the year end July 2020 was 69,000 MT of kgMSequivalent)
Note: Figures represent Fonterra-sourced New Zealand milk only. Reference products are products used in the calculation of the Farmgate Milk Price –WMP, SMP, BMP, Butter and AMF. Milk solids used in the products sold were
1,019million kgMSin reference and 442 million kgMSnon-reference (previous comparable period 1,023 million kgMSreference and 404 million non-reference)
¹
¹
•Shift in sales volume from reference products to
non-reference product reflects growing demand in
Foodservice and Consumer channels
•Average reference product price declined, despite
the Farmgate Milk Price increase, due to:
•Some longer dated sales contracts are not
included in the Farmgate Milk Price
•The sales prices in these sales contracts lag
the change in dairy prices
•Non-reference product price declined more than
reference product prices

GDT Cheddar shipment price¹ (non-reference)
GDT WMP shipment price¹ (reference)
FY20
FY21
AugFebAugFeb
3,000
4,000
(US$/MT)
Price Relativities
•Unfavourable Ingredients price relativities between
reference and non-reference products during the
second half of the year:
•Illustrated by the relative price movements of
WMP (reference product) and Cheddar
(non-reference product)
•Over the second half of the financial year WMP
prices increased 30%, whilst Cheddar prices
only increased 12%
•The narrowed price relativities adversely impacted
earnings in the second half of the year
Source: GlobalDairyTrade
1. The shipment price is a weighted average price of GDT contracts struck 1 to 5 months prior to the agreed shipment month. Shipment month is the month in which the sale would be deemed for financial reporting purposes to have been
completed, and will normally be the month in which the sale is invoiced and the product is shipped
39

40
Note:RefertoNote2intheFY21FinancialStatementsforfurtherdetails

41
¹
²
²
1.Includesamountattributabletonon-controllinginterests
2.AttributabletoequityholdersoftheCo-operative
¹
²
²

42
¹
¹
²
³
•Total dividend of 20 cents per share
•Interim dividend of 5 cents
•Final dividend of 15 cents
•3 cents of the 15 cents per share final dividend
reflects the addition of abnormal gains³
•Final dividend of 15 cents per share will be paid
on 15 October, with interim dividend of 5 cents per
share having been paid on 15 April
1.Attributable to equity holders of the Co-operative, excludes non-controlling interest
2.Represents net earnings as specified in the Dividend Policy and is calculated as reported profit after tax less abnormal gains
3.Includes the reversal of previous impairment of our China Farms

43
¹¹¹¹
³
²³
1.RefertoNote1aand2coftheFY21FinancialStatements
2.Consists of other operating income, net foreign exchange gains/(losses) and share of equity accounted investees
3.Impairments of intangible assets not included in the strategic review for the 2020 Financial Year ($55 million) have been reclassified from ‘other’ to administrative expenses category within Total Group operating expenses

44
¹
²
1.FiguresarepreparedonanormalisedContinuingOperationsbasis
2.Consistsofotheroperatingincome,netforeignexchangegains/(losses)andshareofequityaccountedinvestees

45
FY20FY21 SOIFY21
Total recordable injury frequency rate (TRIFR) per million work hours¹5.85.05.7
Female representation in senior leadership²29.1%
35.0%
32.4%
Employee engagement4.07≥4.11 (Top Quartile)4.09
Farmer sentiment (Net Promoter Score for Fonterra in New Zealand)331023
Number of farms with Farm Environment Plans (New Zealand)34%45%53%
Reduction in water used at sites in water-constrained regions versus FY18(3.1)%
(10)%
(2.3)%
Reduction in greenhouse gas emissions from manufacturing versus FY15(5.7)%(10)%(8.5)%⁴
Solid waste to landfill (kilotonnes)below FY2015.913.112.5
Fonterra % kgMS of New Zealand milk collected for the season ended 31May80%80%79%
New Zealand Farmgate Milk Price (per kgMS)$7.14$5.90-$6.90$7.54
Return on capital6.6%⁵6% to 7%6.6%
Debt/EBITDA3.3x⁵3.0-3.5x2.7x
Gearing Ratio⁶
41.4%36 to 40%35.5%
Normalised earnings per share24c20c to 35c34c
1.Part of zero harm philosophy which also includes target 0 serious harm/0 fatalities.
2.Senior leadership defined as Band 14+.
3.Employee engagement is measured through a company-wide survey.
4.Successful conversion of TeAwamutu to wood pellets, includes a negative impact of the New Zealand grid factor.
5.FY20 ROC and Debt/EBITDA were updated during FY21 and have been restated to align to FY21 Financial.
Statements. Previously these were 6.7% and 3.4xrespectively.
6.In July 2021the Board approved a new basis for calculating gearing ratio to align with the definition of debt used for
the debt to EBITDA ratio. Adjusted net debt gearing ratio is calculated as adjusted net debt divided by total capital.
This basis will be used to monitor the Group’s gearing in the future. FY21 gearing on this basis would be 38.5%.
The Board Statement of Intentions sets out the Board’s intentions for the performance and operations of Fonterra for
FY21. In accordance with the Constitution of Fonterra, Fonterra is required to provide a regular overview to the
Fonterra Co-operative Council of actual achievements, compared with the targets set by the Board. The table below
provides an update of Fonterra’s performance against these targets for the year ended 31 July 2021.

FY20FY21FY22 SOI
Total recordable injury frequency rate (TRIFR) per million work hours¹5.85.75.6
Female representation in senior leadership²29.1%32.4%35.8%
Employee engagement4.074.09Top Quartile³
Farmer sentiment (Net Promoter Score for Fonterra in New Zealand)332330
Number of farms with Farm Environment Plans (New Zealand)34%53%67%
Reduction in water used at sites in water-constrained regions versus FY18⁴(2.9)%(2.6)%(8.0)%
Reduction in greenhouse gas emissions from manufacturing versus FY18⁵(3.5)%(6.5)%(6.5)%
Fonterra % kgMSof New Zealand milk collected for the season ended 31May⁶80%79%79.3%
New Zealand Farmgate Milk Price (per kgMS)$7.14$7.54$7.25-$8.75⁶
Return on capital6.6%6.6%6.5% to 7.0%
Debt/EBITDA3.3x2.7x2.4x
Adjusted Net Debt Gearing Ratio⁸44.2%38.5%34.5%
Normalised earnings per share24c34c25c to 40c⁷
1.Part of zero harm philosophy which also includes target 0 serious harm/0 fatalities.
2.Senior leadership defined as Band 14+.
3.Under ongoing management review of the provider and means of determining engagement, measurement of this
metric may not be completed during the FY22 financial year.
4.Constrained regions data updated to reflect Brightwater replaced by Kauri. Other sites are Clandeboye, Darfield,
Edendale, Lichfield and Maungaturotoin New Zealand and Stanhope inAustralia.
5.FY22 flat reflecting improved efficiencies offset by increased volumes. Figures updated to reflect sale of China Farms
6.% of kgMScollected is only available on an annual basis.
7.As announced 23 September 2021.
8.In July 2021the Board approved a new basis for calculating gearing ratio to align with the definition of debt used for
the debt to EBITDA ratio. The adjusted net debt gearing ratio is calculated as adjusted net debt divided by
totalcapital.
In accordance with the Constitution of Fonterra, the Board Statement of Intentions sets
out the Board’s intentions for the performance and operations of Fonterra. The table
below outlines the targets for the year ended 31 July 2022.

47
Is economic net interest-bearing debt, excluding long-term advances, plus borrowings
attributable to disposal groups held for sale, less cash and cash equivalents
attributable to disposal groups held for sale, plus a cash adjustment for 25% of cash
and cash equivalents held by the Group’s subsidiaries (including cash and cash
equivalents attributable to disposal groups held for sale)
Is adjusted net debt divided by total capital. Total capital is equity excluding hedge
reserves, plus adjusted net debt. It includes net borrowings attributed to disposal
groups held for sale
Representsthe Ingredients, Foodservice and Consumer channels in New Zealand,
Australia, Pacific Islands, South East Asia and South Asia
Represents the Ingredients, Foodservice and Consumer channels in Africa, Middle
East, Europe, North Asia and Americas
Capital expenditure comprises purchases of property (less specific disposals where
there is an obligation to repurchase), plant and equipment and intangible assets
(excluding purchases of emissions units), net purchases of livestock, and includes
amounts relating to disposal groups held for sale.
Capital invested comprises capital expenditure plus right of use asset additions and
business acquisitions, plus equity contributions and long-term advances provided to,
and investments in, entities that are not controlled.
Represents the channel of branded consumer products, such as powders,
yoghurts, milk, butter, and cheese
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 and net foreign
exchange gains/losses
Is dividends (per share) divided by volume weighted average share price for
the period 1 August to 31 July
Is profit before net finance costs and tax
Is total borrowings, plus bank overdraft, less cash and cash equivalents and
long-term advances, adjusted for derivatives used to manage changes in
hedged risks on debt instruments. It excludes net borrowings amounts
attributed to disposal groups held for sale
Is economic net interest-bearing debt divided by total capital. Total capital is
equity excluding hedge reserves, plus economic net interest-bearing debt. It
excludes net borrowings attributed to disposal groups held for sale

48
Represents the channel comprising bulk and specialty dairy products such
as milk powders, dairy fats, cheese and proteins manufactured in New
Zealand, Australia, Europe and Latin America, or sourced through our global
network, and sold to food producers and distributors
Means kilograms of milk solids, the measure of the amount of fat and protein
in the milk supplied to Fonterra
Normalised earnings per share is calculated as normalised profit after tax
attributed to equity holders of the Co-operative divided by the weighted
average number of shares on issue for the period
Is Total Group normalised EBIT including finance income on long-term
advances less a notional tax charge, divided by average capital employed
New Zealand: A period of 12 months from 1 June to 31 May
Australia: A period of 12 months from 1 July to 30 June
China: A period of 12 months from 1 August to 31 July
Representscorporate costs including Co-operative Affairs and Group
Functions; and any other costs that are not directly associated to the
reporting segments; and eliminations of inter-segment transactions
Means the average price that Fonterra pays for milk supplied to it in New Zealand
for a season. The season refers to the 12-month milk season of 1 June to 31 May.
The Farmgate Milk Price is set by the Board, based on the recommendation of the
Milk Price Panel. In making that recommendation, the Panel provides assurance
to the Board that the Farmgate Milk Price has been calculated in accordance with
the Farmgate Milk Price Manual
Represents the channel selling to businesses that cater for out-of-home
consumption; restaurants, hotels, cafes, airports, catering companies etc. The
focus is on customers such as; bakeries, cafes, Italian restaurants, and global
quick-service restaurant chains. High performance dairy ingredients including
whipping creams, mozzarella, cream cheese and butter sheets, are sold in
alongside our business solutions under the Anchor Food Professionals brand
Is the total of net cash flows from operating activities and net cash flows from
investing activities
Represents the Ingredients, Foodservice and Consumer channels in Greater
China, and the Falcon China Farms JV
Comprisesfunctions under the Chief Operating Office (COO) including New
Zealand milk collection and processing operations and assets, supply chain,
Group IT, Sustainability and Innovation; Farm Source™ retail stores; and the
Central Portfolio Management function (CPM)

49
Disclaimer
Thispresentationmaycontainforward-lookingstatementsandprojections.Therecanbenocertaintyofoutcomein
relationtothematterstowhichtheforward-lookingstatementsandprojectionsrelate.Theseforward-looking
statementsandprojectionsinvolveknownandunknownrisks,uncertainties,assumptionsandotherimportantfactors
thatcouldcausetheactualoutcomestobemateriallydifferentfromtheeventsorresultsexpressedorimpliedbysuch
statementsandprojections.Thoserisks,uncertainties,assumptionsandotherimportantfactorsarenotallwithinthe
controlofFonterraCo-operativeGroupLimited(Fonterra)anditssubsidiaries(theFonterraGroup)andcannotbe
predictedbytheFonterraGroup.
Whileallreasonablecarehasbeentakeninthepreparationofthispresentation,noneofFonterraoranyofits
respectivesubsidiaries,affiliatesandassociatedcompanies(oranyoftheirrespectiveofficers,employeesoragents)
(RelevantPersons)makesanyrepresentation,assuranceorguaranteeastotheaccuracyorcompletenessofany
informationinthispresentationorlikelihoodoffulfilmentofanyforward-lookingstatementorprojectionorany
outcomesexpressedorimpliedinanyforward-lookingstatementorprojection.Theforward-lookingstatementsand
projectionsinthisreportreflectviewsheldonlyatthedateofthispresentation.
Statementsaboutpastperformancearenotnecessarilyindicativeoffutureperformance.
ExceptasrequiredbyapplicablelaworanyapplicableListingRules,theRelevantPersonsdisclaimanyobligationor
undertakingtoupdateanyinformationinthispresentation.
Thispresentationdoesnotconstituteinvestmentadvice,oraninducement,recommendationoroffertobuyorsellany
securitiesinFonterraortheFonterraShareholders’Fund.

50
Fonterra uses several non-GAAP measures when discussing financial performance. These measures include
normalised profit after tax, normalised EBIT, EBIT, normalised earnings per share, normalisation adjustments and total
Group measures. Total Group measures present the combined financial performance of the Group’s continuing and
discontinued operations. Non-GAAP financial 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 are used internally to evaluate the underlying performance of business
units and to analyse trends.
These measures are not uniformly defined or utilised by all companies. Accordingly, these measures may not be
comparable with similarly titled measures used by other companies. Non-GAAP financial measures should not be
viewed in isolation nor considered as a substitute for measures reported in accordance with NZ IFRS. Non-GAAP
measures are not subject to audit unless they are included in Fonterra’s audited Financial Statements.
Please refer to the Non-GAAP Measures section in Fonterra’s 2021 Annual Review for further information about non-
GAAP measures used by Fonterra, including reconciliations back to NZ IFRS measures. Definitions of non-GAAP
measures used by Fonterra can be found in the Glossary.

---

Confidential to Fonterra Co-operativeGroup
1
Our Strategy to
2030

2
This presentation may contain forward-looking statements, financial targets andambitions(“Forward Statements”), each of which is based on a range of
assumptions, including the assumptions noted in the Appendix of the booklet titled Our Path to 2030 ("Appendix").None of the Forward Statements is intended
as a forecast, estimate or projection of the outcome that will, or is likely to, eventuate.Theyshould not be takenas forecasts or a guarantee of returns to
shareholders.The Forward Statements were prepared by Fonterra and have not been audited or independently reviewed.
There can be no certainty of outcome in relation to the matters to which the Forward Statements relate.Our ability to achieve the outcomes described in the
Forward Statements is subject to a number of assumptions (as described in the Appendix), each of which couldcause the actual outcomes to be materially
different from the events or results expressed or implied by such Forward Statements.The key dependencies affecting those assumptions are also described in
the Appendix.
The Forward Statementsalsoinvolve known and unknown risks, uncertainties and other important factors that could cause the actual outcomes to be materially
different from the events or results expressed or implied by such Forward Statements.The key risks and uncertainties that have been taken into account in
preparing these materials are set out in the Appendix.Those risks, uncertainties, assumptions and other important factors are not all within the control of
Fonterra Co-operative Group Limited (“Fonterra”) and its subsidiaries (the “Fonterra Group”) and cannot be predicted by the Fonterra Group. The Forward
Statements in thispresentationreflect views held only at the date of the booklet titled Our Path to 2030.
While all reasonable care has been taken in the preparation of this presentation, none of Fonterra, the Fonterra Group,or any of their respective subsidiaries,
affiliates and associated companies (or any of their respective officers, employees or agents) (together“Relevant Persons”) makes any representationor gives
anyassurance or guarantee as to the accuracy or completeness of any information in thispresentationorthelikelihood of fulfilment of any Forward Statement or
any outcomes expressed or implied in any Forward Statement.Accordingly, to the maximum extent permitted by law, none of the Relevant Persons accepts any
liability whether direct or indirect, express orimplied, contractual, tortious, statutory or otherwise, in respect of any Forward Statements or for any loss,
howsoever arising, from the use of this presentation.
Statements about past performance are not necessarily indicative of future performance.
Except to the extent (if any) as required by applicable law or any applicable Listing Rules(including the Fonterra Shareholders’ Market Rules), the Relevant
Persons disclaim any obligation or undertaking to update any information in this presentation.
Thispresentationdoes not constitute investment adviceor opinions, or an inducement, recommendation or offer to buy or sell any securities in Fonterra or the
Fonterra Shareholders’ Fund.
Important cautions and disclaimer

The fundamentals of dairy are strong
3
The world’s population is
growing
1
The world's middle class is
growing - there will be more
people able to afford dairy and
wanting to consume it
1
400m
1100m
800m
2000201020202030
There will be more people
needingnutrition.
The world wants sustainably
produced, high-quality, nutritious milk.
Global market share of
retail drinking milk
products and alternatives
2
By retail value RSP (US$b)
0
50
100
150
200
250
Milk
Global demand for dairy is expected to
continue to increase by about 2% per annum
out to 2030
3
.
Alternatives
This comes at a time when we see milk supply in New Zealand as likely to decline, and flat at best.
NEXT 5 YEARS
NEXT 10 YEARS
NEXT 15 YEARS
1.3b
2.8b
3.7b
5.3b
1.Oxford Economics (www.oxfordeconomics.com) – Global Economics Databank, August 2021. Estimate based on earning 2X median household income.
2.Euromonitor International (
www.euromonitor.com) –Euromonitor Passport, August 2021.
3.IFCN Dairy Research Network (
www.ifcndairy.org) – IFCN Annual Dairy Sector Data with Long Term Outlook, September 2021.

To differentiate New Zealand milk, we have made
three strategic choices
4
Focus on New Zealand
milk
Be a leader in dairy
innovation and science
Be a leaderin
sustainability

Confidential to Fonterra Co-operativeGroup
5
Increase capital investment with
the aim to:
•Differentiate New Zealand milk
•Grow Foodservice and Active Living
•Further strengthen Consumer
Look to release capital from
milk pools outside NZ:
•Divest Chilean business
•Review ownership options for
Fonterra Australia
Continue to focus on New Zealand milk

Confidential to Fonterra Co-operativeGroup
6
~$1 billion
plannedinvestment in
sustainability by 2030
Showcase our
brands'New Zealand
sustainable nutrition
story
Support our aspiration
to be Net Zero carbon
by 2050
Be a leader in sustainability
Enhance menu of
provenance claims to
our customers

Confidential to Fonterra Co-operativeGroup
7
Track record of
innovation
•Probiotics for
digestion,immunity
and anxiety​
•Lipids for
stressmanagement
and cognition​
•Protein formuscle tone​
Nutrition Science
Solutions
•Dedicated team
narrowing down and
prioritising areas
where we can build a
competitive advantage
R&D
•Aim to invest ~50%
more in R&D by 2030
•Develop more
products toreach new
customers andtake
Active Living
opportunities
Be a leader in dairy innovation
and science

The value targets we are aiming to achieve by 2030
$6.50-$7.50
perkgMS
Average Farmgate
Milk Price range for the decade
40-50%
Increase in operating
profitfrom FY21
~9-10%
Group Return on Capital,
up from6.6% in FY21
Note: Thefigures on this slide are targets that we are aiming to achieve only. Theyshould not be taken as forecasts or as a guarantee of returns to shareholders.
Theyare subject tosuccessfully completing a number of business initiatives,andassumptions, each of which could materially affectthe actual outcomes.The key assumptions and risks relating to these targets
are set out in the Appendix of the booklet titledOur Path to 2030.Please also refer to the important cautionsand disclaimer at the beginning of this presentation.
~$1b
Intended to be distributed to
shareholders by FY24after
asset sales
~$2b
Available for investment in
a mix of further growth and
return to shareholders
~$1b
Invested in moving milk to
higher value products
~$1b
Invested in
sustainability
8

0
200
400
600
800
1,000
1,200
1,400
1,600
FY21FY24 targetFY27 targetFY30 target
EBIT (NZD Millions)
Food ServiceConsumerActive LivingCore IngredientsNew Business
9
We are
targeting a 40-
50% increase in
operating
profitfrom FY21
By 2030, we are aiming to improve operating profit
by putting more milk into higher value products
Note: The figures on this slide which relate to dates in the future are targets we are aiming to achieve only. They should not be taken as forecasts or as a guarantee of returns to shareholders.
The target years assume long-term average levels of price relativity and lag pricing impacts, and individual years are likely tovary from this assumption.Please refer to the important cautions and
disclaimer at the beginning of this presentation, and the key assumptions and risks set out in the Appendix of the booklet titled Our Path to 2030 for further detail.

0
200
400
600
800
1000
FY21FY22-24 Avg
Target
FY25-27 Avg
Target
FY28-30 Avg
Target
Capital Investment (NZD Millions)
EssentialSustainabilityExisting Business GrowthNew Business
10
We believe our strong
balance sheet supports
investment in a
sustainable future for
our Co-op.
We expect capital
investment to
increasefrom ~$600
million per annum to
~$980 million by2030.
We will need to significantly increase our Capital
Investment over the next decade
Note: The figures on this slide which relate to dates in the future are targets we are aiming to achieve only. They should not be taken as forecasts or as a guarantee of returns to shareholders.Please refer to
the important cautions and disclaimer at the beginning of this presentation and the key assumptions and risks set out in the Appendix of the booklet titledOur Path to 2030 for further detail.

11
39%31%31%33%
4.33.43.74.3
Gearing
1
Debt (NZD billion)
0.0
1.0
2.0
3.0
FY21FY24 targetFY27 targetFY30 target
Debt / EBITDA
We will continue to be financially disciplined,
maintaining a conservative balance sheet
1. Updated measure of debt to align with credit rating agency methodology.
Note: The figures on this slide which relate to dates in the future are targets we are aiming to achieve only. They should not be taken as forecasts or as a guarantee of returns to shareholders.Please refer to
the important cautions and disclaimer at the beginning of this presentation and the key assumptions and risks set out in the Appendix of the booklet titled Our Path to 2030 for further detail.

12
0
10
20
30
40
50
FY21FY24 targetFY27 targetFY30 target
Dividend (Cents per share)
By 2030 we are targeting a dividend of~40-45 cents
per share, up from 20 cents per share in FY21
Note: The figures on this slide which relate to dates in the future are targets we are aiming to achieve only. They should not be taken as forecasts or as a guarantee of returns to shareholders.Please refer to
the important cautions and disclaimer at the beginning of this presentation and the key assumptions and risks set out in the Appendix of the booklet titled Our Path to 2030 for further detail.

Confidential to Fonterra Co-operativeGroup
13
In summary
Clear plan with
deep respect for
capital
Exciting
opportunity
Progressive steps
over the next
decade
Opening up options
for the future and
value for
shareholders

APPENDIX
14

15
Our aspirational financial profile for the next decade
FY20
Actual
FY21
Actual
FY22
Forecast
FY24
Year 3Target
FY27
Year6 Target
FY30
Year9 Target
Improved performance
EBIT ($m)$879m$952m$875-$975m$1,025- $1,125m$1,150- $1,250m$1,325- $1,425m
Earnings per share (CPS)24c34c25-40c45-55c50-60c55-65c
Return on capital6.6%6.6%6.5-7.0%7.0-8.0%7.5-8.5%9.0-10.0%
Financial position
Capital investment ($m)$525m$608m$650m$980m$980m$980m
Debt toEBITDAratio3.3x2.7x2.4x**<2.5x<2.5x<2.5x
Gearing ratio*44%39%35%**<35%<35%<35%
Dividendto shareholders
Assumed Payout Ratio50%60%70%
Dividends (CPS)5c20c15-20c22-27c30-35c40-45c
* Updated measure of debt to align with credit rating agency methodology.
** Calculated using an EPS of 35 cents.
Note: The figures in this table which relate to dates in the future are targets we are aiming to achieve only. Theyshould not be taken as forecasts or as a guarantee of returns to shareholders.The
target years assume long-term average levels of price relativity and lag pricing impacts, and individual years are likely to vary from this assumption.Please refer to the important cautions and
disclaimer at the beginning of this document and the key assumptions and risks in the Appendixof the booklet titled Our Path to 2030for further detail.

---

Our Path
to 2030
Te H u a n u i
ki 2030

Kia ora
When I was asked by the Board to step into
the CEO role in 2018, it came with both an
element of trepidation and a great sense of
responsibility to do what’s right for our farmer
shareholders. I knew the next couple of years
were going to be tough as we went about
resetting the business.
To pen this letter three years on, having
completed our reset phase and knowing what
it means for our Co-op to have shored up our
foundations, is hugely satisfying. I feel proud
of what our team has achieved, and want to
thank you for giving me your support through
this period.
And this is just the beginning...
We know farming is an intergenerational
business and it is now the right time for us
to shift our focus to the future – and we
are excited to share with you our Co-op’s
long-term strategy.
We want to give you visibility of what our
next decade looks like so you can see how the
recommended capital structure changes enable
our strategy and the value we are aiming to
create for you.
As we look out to 2030, the fundamentals of
dairy – in particular, New Zealand dairy – look
strong. Put simply, the world wants what we’ve
got – sustainably produced, high-quality,
nutritious milk. This comes at a time when we
see total milk supply in New Zealand as likely
to decline, and flat at best.
On one hand, this requires the right capital
structure to help ensure we don’t lose the
benefits of what generations of farmers
have built – a New Zealand dairy co-operative
of scale.
But on the other hand, it gives us more options
to be selective about what we do with our Co-
op’s milk. In doing so, we can increase the value
we generate for farmers and New Zealand over
the next decade.
To make this happen we have made three
strategic choices – continue to focus on
New Zealand milk, be a leader in sustainability
and be a leader in dairy innovation and science.
We’ve heavily stress tested these choices and
know they are the right choices to give us a
competitive edge, mitigate risks and position us
to have a sustainable future well beyond 2030.
1. Focus on New Zealand milk
We believe New Zealand milk is the most
valuable milk in the world due to our grass-
fed farming model, which means our milk
has a carbon footprint one third the global
average for milk production. But we have
an opportunity to differentiate our Co-op’s
milk further in the global market and earn a
premium. This requires us to focus our capital
and our people on enhancing the natural
goodness of New Zealand milk.
To help make this happen, we are continuing
to refine our asset portfolio. We will invest in
some of our existing manufacturing sites and
businesses to ensure we have the capability
to grow our Foodservice channel, continue
momentum in our Consumer channel and move
towards higher value specialty products in our
Ingredients channel. Recently, we reviewed
the ownership of our two other milk pools – in
Australia and Chile.
We have begun considering the most
appropriate ownership structure for Fonterra
Australia, one option is an IPO, with the
intention that our Co-op retains a significant
stake. Fonterra Australia has transformed its
business over the last three years and now
operates efficiently with the leading dairy
brands in the Australian market. We believe
now is the time to bring in external capital to
take this business to the next level but given
the strong linkages to New Zealand-sourced
milk, maintaining a significant stake remains
a priority. As we continue this review and
our thinking becomes clearer, we will provide
regular updates.
Contents
This is just the
beginning...
MESSAGE FROM MILES1
OUR STRATEGY AND PLANS 4
THE FINANCIAL VALUE WE’RE AIMING TO CREATE6
THE NUTRITIONAL VALUE WE CREATE FOR PEOPLE10
THE WORLD WE OPERATE IN 12
OUR PLANS IN MORE DETAIL14
REIMAGINING MILK FOR FUTURE GROWTH:
NUTRITION SCIENCE SOLUTIONS
26
FOLLOW OUR PROGRESS TOWARDS 203028
APPENDIX: ASSUMPTIONS TO SUPPORT
THE FINANCIAL VALUE WE’RE AIMING TO CREATE
30
IMPORTANT CAUTIONS AND DISCLAIMER
This document may contain forward-looking
statements, financial targets and ambitions
(“Forward Statements”), each of which is
based on a range of assumptions, including the
assumptions noted in the Appendix. None of the
Forward Statements is intended as a forecast,
estimate or projection of the outcome that will,
or is likely to, eventuate. They should not be
taken as forecasts or a guarantee of returns to
shareholders. The Forward Statements were
prepared by Fonterra and have not been audited
or independently reviewed.
There can be no certainty of outcome in relation
to the matters to which the Forward Statements
relate. Our ability to achieve the outcomes
described in the Forward Statements is subject
to a number of assumptions (as described in the
Appendix), each of which could cause the actual
outcomes to be materially different from the
events or results expressed or implied by such
Forward Statements. The key dependencies
affecting those assumptions are also described
in the Appendix.
The Forward Statements also involve known
and unknown risks, uncertainties and other
important factors that could cause the actual
outcomes to be materially different from
the events or results expressed or implied
by such Forward Statements. The key risks
and uncertainties that have been taken into
account in preparing these materials are set
out in the Appendix. Those risks, uncertainties,
assumptions and other important factors are not
all within the control of Fonterra Co-operative
Group Limited (“Fonterra”) and its subsidiaries
(the “Fonterra Group”) and cannot be predicted
by the Fonterra Group. The Forward Statements
in this document reflect views held only at the
date of this document.
While all reasonable care has been taken in
the preparation of this document, none of
Fonterra, the Fonterra Group, or any of their
respective subsidiaries, affiliates and associated
companies (or any of their respective officers,
employees or agents) (together “Relevant
Persons”) makes any representation or gives
any assurance or guarantee as to the accuracy
or completeness of any information in this
document or the likelihood of fulfilment of
any Forward Statement or any outcomes
expressed or implied in any Forward Statement.
Accordingly, to the maximum extent permitted
by law, none of the Relevant Persons accepts
any liability whether direct or indirect, express
or implied, contractual, tortious, statutory or
otherwise, in respect of any Forward Statements
or for any loss, howsoever arising, from the use
of this document.
Statements about past performance are not
necessarily indicative of future performance.
Except to the extent (if any) as required
by applicable law or any applicable Listing
Rules (including the Fonterra Shareholders’
Market Rules), the Relevant Persons disclaim
any obligation or undertaking to update any
information in this document.
This document does not constitute investment
advice or opinions, or an inducement,
recommendation or offer to buy or sell
any securities in Fonterra or the Fonterra
Shareholders’ Fund.
1

We have also started a process to divest
our integrated Chilean investment (Soprole
and Prolesur). Soprole is a high performing
business with a strong market position,
including being one of the most recognisable
food and beverage brands in Chile, and Prolesur
is a subsidiary of Soprole focused on sourcing
milk and manufacturing in Southern Chile.
Chile is a complete stand-alone business that
does not require any New Zealand-sourced
milk or expertise and therefore is not the right
strategic fit for our Co-op as we look out to the
long term.
We see both these moves as critical to enabling
greater focus on our New Zealand milk and,
importantly, allowing us to free up capital,
much of which is intended to be returned
to shareholders.
2. Be a leader in
sustainability
We’re all striving for a better future than the
one we have today – and that’s particularly the
case when we look at the environment.
New Zealand has the unique position of being
the most carbon-efficient dairy nation on the
planet and when you combine this with our
pasture-based model, animal welfare standards
and scale efficiency, we have something that
can’t be replicated.
But we can’t slow down now. Customers and
consumers want to know where their food
comes from and the environmental impact it
leaves, which is why it’s important we continue
to support the hard work our farmer owners
have been doing to reduce the environmental
impact of their business. A farmer’s livelihood
depends on producing good quality milk
and that relies on a stable climate and
healthy ecosystems.
It’s for all these reasons, we aspire to be Net
Zero carbon by 2050 and intend to invest
around $1 billion in sustainability initiatives
over the next decade. Much of this will be
required to upgrade our core manufacturing
assets as we look to decarbonise our footprint
and improve water use and quality. We also
know that to maintain our relative carbon
footprint advantage against the northern
hemisphere farming system, we must solve the
methane challenge and will be doubling our
innovation efforts to look for solutions.
Doing so will allow us to invest in our brands
to showcase our New Zealand sustainable
nutrition story. This will put us in a position to
further grow our Foodservice and Consumer
channels across our markets in the Asia
Pacific region and gain more value through
our Ingredients channel by helping customers
meet their own sustainability goals.
3. Be leader in dairy innovation
and science
Our Co-op has a long and proud heritage of
dairy innovation, pioneering many world firsts
and, increasingly, new solutions which aim to
solve problems our customers face in their
operations and help people live healthier and
longer lives.
When we look to our markets, we know the
world’s population is growing and getting older.
Asia’s middle class is rapidly increasing – they
want more protein and more convenience in
their life. People are more aware than ever of
the links between nutrition and health, and
they are taking more interest in their immunity,
cognition and mental health.
Over the past decade we have developed a
world-class Foodservice channel in China. Any
dairy company globally can produce a product
to sell into this category. But we believe no one
can replicate our completely unique offering
– the combination of pasture-based taste
profile that is heavily sought after, our chef-led
go-to-market model, our manufacturing scale,
our innovation and our global reach. This sets
us apart from our competitors and gives us the
confidence to take this proven model to new
regions throughout Asia Pacific.
The next phase of the nutrition journey is
just being discovered. Food has evolved over
many years from a simple energy source
towards what consumers seek today – taste,
convenience and pleasure. We are now seeing
that some types of food, and in particular,
dairy, could help with the answer to many of
life’s current challenges – cognition, immunity
and even stress. This is why we will look
to understand more of this health and
wellness trend and where we can build a
competitive advantage.
The value we’re aiming to create
Our focus on New Zealand milk, sustainability,
and innovation and science will see us shift
every aspect of our business to create more
value. In doing so we aim to continue to
improve our financial performance and, as a
result, strengthen our ability to repeatedly
generate cash and create value for our
shareholders and New Zealand.
There are four key value targets we’re aiming to
achieve by FY30:
1. An average Farmgate Milk Price range for
the decade of $6.50-$7.50 per kgMS.
2. A 40-50% increase in operating profit
from FY21 and, with the reduced interest
from having less debt, this should translate
into an approximately 75% increase in
earnings, giving us the ability to steadily
increase dividends to around 40-45 cents
per share by FY30.
3. A Group Return on Capital of 9-10%, up
from 6.6% in 2021.
4. Through planned divestments and
improved earnings, an intended return of
about $1 billion to shareholders by FY24,
and around $2 billion of additional capital
available for a mix of investment in further
growth and return to shareholders. This is
in addition to the approximately $2 billion
expected to be invested in sustainability
and moving milk into higher value
products.
Our strategy and ability to achieve these
targets depend on a sustainable supply
of New Zealand milk and in turn a capital
structure that enables this. This is why the
changes to our capital structure that are being
recommended by your Board and Management
team are so important to our future.
We have an incredible raw material made on
the pastures of New Zealand farms, a business
supported by a talented and committed team
who want to do right by you and an exciting
opportunity to create value. It’s up to us as a
Co-op to work together, make the necessary
changes and ensure we’re creating goodness
for generations – you, me, us together,
tātou, tātou. 
Miles Hurrell
Chief Executive Officer
MESSAGE FROM MILES
3
2
OUR PATH TO 2030

Our strategy
and plans
OUR STRATEGY AND PLANS
Note: The figures in this section are targets
that we are aiming to achieve only. They should
not be taken as forecasts or as a guarantee of
returns to shareholders. They are subject to
successfully completing a number of business
initiatives, and assumptions, each of which could
materially affect the actual outcomes. The target
years assume long-term average levels of price
relativity and lag pricing impacts, and individual
years are likely to vary from this assumption.
The key assumptions and risks relating to these
targets are set out in the Appendix to the
booklet Our Path to 2030. Please also refer to
the important cautions and disclaimer at the
beginning of the booklet Our Path to 2030.
Average Farmgate Milk Price range for the decade
$6.50-$7.50
per kgMS
Operating Profit
40-50%
increase from FY21
Group ROC
~9-10%
~$1b
invested in
sustainability
~$1b
invested in moving
milk into higher value
products
~$1b
intended to be
distributed to
shareholders after
asset sale
~$2b
available for a mix of
investment in further
growth and return to
shareholders
~$160m
per annum invested in
R&D, up ~50% from FY21
Make progress towards 2050
aspiration to be
Net Zero Carbon
THE VALUE WE’RE AIMING TO CREATE BY 2030OUR PLANS
Sharpen portfolio
• Sell Chile business
• Explore ownership structure of
Fonterra Australia, one option
is an IPO
Continue our shift to
higher value
Focus on
NZ Milk
Develop our people capabilities for
a changing and technological world
Embed culture to drive
high performance
Prioritise innovation, IP,
simplification and digitisation
Create competitive advantage
through nutrition solutions
Extend further into health
and wellbeing
Be a leader in dairy
Innovation
& Science
Our Co-operative’s strategy
is to enhance people’s lives
through convenience, health
and wellbeing by unlocking
the goodness of NZ milk.
WE AIM TO
Prioritise the
Farmgate
Milk Price
Grow
Foodservice
Strengthen
Consumer
Move towards
higher value
products in
ingredients
Bring our NZ dairy story to life
Make the most of our operational
footprint and invest in
sustainability
Be a leader in
Sustainability
Support further on-farm change
to stay in front of customer
expectations
OUR PATH TO 2030
5
4
OUR PATH TO 2030

The financial value
we’re aiming to create
Over the next decade we aim to continue to
improve our financial performance, align our
asset portfolio to our strategy and look for
more capital-light ways of doing business.
Our plans are based on a target average
Farmgate Milk Price range of $6.50-7.50
per kgMS.
An improved performance will give us the
ability to increase dividends. It will allow us to
fund necessary investments which are critical
to our aspiration to be Net Zero carbon by
2050 and give us the manufacturing capability
to direct our Co-op’s milk into the highest
value products.
We are starting a divestment process for our
integrated investments in Chile (Soprole and
Prolesur) and are reviewing ownership options
for Fonterra Australia, one option is an IPO,
with the intention that the Co-op retains
a significant stake. Subject to successfully
completing these processes and achieving our
ongoing business targets, we intend to return
a significant portion of the net sale proceeds
from these transactions to our shareholders
by FY24. The combination of these
divestments and our targeted earnings
provides further capacity to return capital to
our shareholders and this is assumed to occur
from FY25 onwards.
Our focus on value creation also opens up
choices for investing in exciting new, high value
growth opportunities in nutrition science.
However, if we are not confident that we can
achieve a double-digit risk adjusted return on
capital, there would also be an option to return
further capital to shareholders.
Moving milk into the highest-returning
products will be key to unlocking our earnings
potential. We plan to increase milk solids in our
Foodservice channel by around 50% by FY30.
We will seek to achieve this by growing our
global Foodservice presence across Greater
China, South East Asia and the USA.
THE FINANCIAL VALUE WE’RE AIMING TO CREATE
Our aspirational financial profile for the next decade

FY20
Actual
FY21
Actual
FY22
Forecast
FY24
Year 3
Target
FY27
Year 6
Target
FY30
Year 9
Target
Improved performance

EBIT ($m) $879m $952m
$875-
$975m
$1,025-
$1,125m
$1,150-
$1,250m
$1,325-
$1,425m
Earnings per share (CPS) 24c 34c 25-40c 45-55c 50-60c 55-65c
Return on capital 6.6% 6.6% 6.5-7.0% 7.0-8.0% 7.5-8.5%
9.0-
10.0%
Financial position

Capital investment ($m)$525m $608m $650m $980m $980m $980m
Debt to EBITDA ratio 3.3x 2.7x 2.4x** <2.5x <2.5x <2.5x
Gearing ratio* 44% 39% 35%** <35% <35% <35%
Dividend to shareholders

Assumed Payout Ratio –––50% 60% 70%
Dividends (CPS) 5c 20c 15 -20 c 22-27c 30 -35c 40-45c
* Updated measure of debt to align with credit rating agency methodology.
** Calculated using an earnings per share of 35 cents.
By 2030, we are aiming for our EBIT
to increase by about 40-50% and our
net earnings to grow by more than
75% to around 60c per share.
Over the next four years we are aiming to
improve our margins in Consumer, using our
New Zealand provenance and sustainability
credentials to differentiate our brands. This
will be supported by our ability to realise
e-commerce opportunities.
We believe our ongoing focus on product
innovation in the Active Living portfolio
1
, which
includes advanced sports, active, healthy ageing
and medical nutrition ingredients, will help
continue improving margins. In addition, we will
look to invest about $1 billion in new growth
business opportunities, including nutrition science
opportunities to accelerate our growth in Active
Living and aim to deliver a total Group return on
investment of almost 10% over this period.
Average Farmgate
Milk Price range
for the next decade:
$6.50-$7.50 per kgMS
40-50% increase in
operating profit from
FY21
Increase dividends to
~40-45 cents cents
per share
Group Return on
Capital of ~9-10%
An intended return
of about ~$1 billion to
shareholders by FY24
~$2 billion of
additional capital
available for a mix of
investment in further
growth and return
to shareholders.
Given the constrained milk environment we
expect to be operating in and the growth we
are targeting for our Consumer, Foodservice
and Active Living channels, we expect to
reduce the amount of milk solids we direct to
our core Ingredients channel from 74% of our
portfolio in 2021 to about 64% in 2030.
We are targeting an EBIT improvement of
about 40-50% by 2030, taking into account the
proposed sale of our investment in Soprole and
potential ownership changes to our Australian
business over the next two years. In FY21,
Soprole contributed around 3 cents to our
earnings per share and Australia contributed
around 3 cents.
On an earnings per share basis, we expect to
see the benefit of reducing interest expense
through lower rates and debt levels.
2030 targets we are
aiming to achieve
Earnings per share
(Cents per share)
20
30
40
50
60
70
80
FY30 targetFY27 targetFY24 targetFY21
Note: The figures in this section which relate to dates in the future (including those in the table and graphs which follow)
are targets that we are aiming to achieve only. They should not be taken as forecasts or as a guarantee of returns to
shareholders. They are subject to successfully completing a number of business initiatives, and assumptions, each of
which could materially affect the actual outcomes. The target years assume long-term average levels of price relativity
and lag pricing impacts, and individual years are likely to vary from this assumption. The key assumptions and risks
relating to these targets are set out in the Appendix. Please also refer to the important cautions and disclaimer at the
beginning of this document.
1 Active Living is substantially the same as Speciality Ingredients as reported in our Business Performance Report 2021.
2 These channel EBIT amounts include the allocation of unallocated costs and the breakdown of Ingredients into core
Ingredients and Active Living. As a result, the EBIT splits will vary from those summarised in the Annual Review and Business
Performance Report.
EBIT
2
(NZD millions)
FoodserviceConsumer
Active LivingIngredientsNew Business
0
300
600
900
1200
1500
FY30 targetFY27 targetFY24 targetFY21
7
6
OUR PATH TO 2030

Our Co-op has invested significantly over the
last two decades and it is obviously important
we maintain our existing manufacturing sites
and business infrastructure in good working
condition. Doing this and making necessary
ongoing efficiency improvements, requires
about $550 million per year – this is what we
call essential capital.
Over the next decade we intend to significantly
increase our investment in sustainability
related activities throughout our supply chain
to both mitigate environmental risks and
continue to differentiate our New Zealand milk.
By FY30 we intend to invest around $1 billion in
reducing carbon emissions and improving water
efficiency and treatment at our manufacturing
sites. In doing so, we will be taking significant
steps towards our aspiration to be Net Zero
carbon by 2050.
Capital investment will also be needed
to support growth in our Consumer and
Foodservice channels and accelerate
the growth of our Active Living channel,
particularly in areas underpinned by nutrition
science capability. We will support this by
increasing our R&D and innovation budget.
We are aiming to increase our current total
annual R&D investment by over 50% to around
$160 million per annum in 2030, with about
$60 million per annum specifically targeted at
growth in Active Living.
In a constrained milk environment, we
expect to have enough capacity across our
manufacturing network to process all our
farmer owners’ milk and therefore no new
investment in processing capacity should be
required over the next decade. However, we
intend to invest in some of our manufacturing
sites so we can move more milk into higher
value products.
We expect that investing in a sustainable
future for our Co-op will require an increase
in capital investment from about $600
million per annum to about $980 million per
annum by 2030.
Capital investment
(NZD millions)
EssentialSustainability
Existing Business GrowthNew Business
0
200
400
600
800
1000
FY28-30 Avg targetFY25-27 Avg targetFY22-24 Avg targetFY21
By 2030 we are targeting a dividend of
around 40-45 cents per share, up from
20 cents per share in 2021.
In addition to dividends increasing in line with
improving earnings, we intend to return around
$1 billion of capital to our shareholders by
FY24 dependent on the proposed divestment
of Soprole and ownership changes to our
Australian business. Assuming we continue to
achieve our financial targets and we maintain a
positive outlook for our Co-op, we would have
the capacity to make further capital returns to
our shareholders and this is assumed to occur
from FY25.
We assume a payout ratio at the mid-point of
our dividend policy of 40-60% of Reported
Net Profit After Tax, excluding abnormal gains,
through to FY24. The payout ratio is assumed
to increase to the top end of the range in FY25
through to FY27. In FY28, based on achieving
our targets, we intend to increase the dividend
payout ratio to about 70%.
We will continue to be financially
disciplined, aiming to maintain a
conservative balance sheet.
Our focus on financial discipline over the last
couple of years has helped us strengthen our
balance sheet and this focus will continue. We
intend to maintain a strong balance sheet and
operate within our long-term leverage targets
– these are debt/EBITDA of between 2.5 and
3.0x and a gearing ratio of 30-40%. This will
give us the ability to deal with the volatilities
inherent with our business and take advantage
of opportunities as they arise. The expected
increasing level of debt after FY24 is enabled
by the growing earnings profile.
THE FINANCIAL VALUE WE’RE AIMING TO CREATE
Dividend
(Cents per share)
0
10
20
30
40
50
FY30 targetFY27 targetFY24 targetFY21
Debt/EBITDA*
0
1
2
3
4
FY30 targetFY27 targetFY24 targetFY21
Gearing 39% 31% 31% 33%
Debt 4.3 3.4 3.7 4.3
(NZD billion)
* Updated measure of debt to align with credit rating agency methodology
9
8
OUR PATH TO 2030

The nutritional
value we create
for people
THE NUTRITIONAL VALUE WE CREATE FOR PEOPLE
Global demand for
dairy is expected to
continue to increase
by about 2% per
annum out to 2030 –
that’s about 80% of
New Zealand’s entire
dairy production
every year
As a natural
product, dairy is an
important part of
the sustainable food
systems of the future
Given quality food
is one of the best
sources of nutrition,
we know there’s more
potential for dairy
Dairy is packed with nutrients which are easily
absorbed and help people lead a healthy life.
People around the world choose milk
as a staple in their diet, with dairy a
recommended part of healthy, balanced diets
for optimal health.
A glass of milk is a natural source of many of
the valuable nutrients people need. It is one of
the richest sources of readily available dietary
calcium and contributes many other essential
nutrients, including protein, phosphorus,
potassium, vitamin A, riboflavin (vitamin B2),
niacin (vitamin B3) and vitamin B12.
This unique combination of nutrients in
dairy plays an important role in growing and
maintaining healthy bones, immunity, the
functioning of your nervous system (including
your brain), helping to prevent tiredness,
maintaining healthy eyes, and so much more
through all life stages.
Given quality food is one of the best sources of
nutrition, we know there’s more potential for
dairy to play an even greater role in nourishing
the world’s population.
The bioavailability of the nutrients in milk
makes dairy’s nutritional value even more
powerful. Milk proteins are rich in specific
amino acids our bodies need but can’t
produce. We should not be surprised that the
composition of amino acids that mammals
require are the very same types found in milk,
a food designed by nature for this specific
purpose. This nutrient density means milk
is significantly superior for nutrition per
kilograms of emissions used when compared
with other proteins.
People need balanced diets which include a mix
of vegetables, fruit and proteins available in
convenient formats and plant-based products
play a role in meeting these needs. Despite
an ever-increasing array of alternatives, global
demand for dairy continues to increase by
about 2% per annum out to 2030 – that’s the
same as about 80% of New Zealand’s entire
dairy production every year.
As a natural product, dairy is an important
part of the sustainable food systems of the
future. Increasingly, consumers are aware of
the sustainability credentials of the products
they’re consuming.
With our sustainable, nutritious milk and our
dairy innovation and science expertise, we
believe we can play a unique role in meeting
these demands for customers and consumers
who value our New Zealand provenance.
A glass of milk is a natural
source of many of the valuable
nutrients people need.
10
OUR PATH TO 2030
11

THE WORLD WE OPERATE IN
The world
we operate in
Demand for alternative
proteins is growing – we
need to be open to them
being part of our portfolio.
2
When it comes to liquid ‘milk’ products,
dairy is expected to maintain significant
market share and we believe it will be dairy
businesses that can lead in sustainability
and innovation and science that take this
market share.
With continued population growth,
there will be a role for both dairy and
alternatives in feeding the world’s
population – they can be complementary.
Global market share of retail drinking milk products and alternatives
by retail value RSP (US$b)
MilkAlternatives
0
50
100
150
200
250
2030202920282027202620252024202320222021202020192018201720162015
90.8%
90.5%
90.4%
90.0%
90.0%
90.8%
90.1%
9.9%
89.9%
10.1%
89.7%
89.6%
89.4%
89.3%
89.1%
88.9%
88.8%
88.6%
11.4%
11.2%
11.1%
10.9%
10.7%
10.6%
10.4%
10.3%
9.2%
10%
10.0%
9.6%
9.5%
9.2%
The earth’s climate is
changing – more and
more, customers and trade
partners expect their food
to be produced in ways that
care for the environment
and helps them achieve their
sustainability targets.
Last year one of our customers
stopped doing business with 47 of
their suppliers because they did not
meet their sustainability standards
and couldn’t help them achieve
their future sustainability targets.
NEXT 5 YEARS
400m
NEXT 10 YEARS
800m
NEXT 15 YEARS
1100m
The world’s population is growing –
there will be more people needing nutrition.
1

1 Source: Oxford Economics (www.oxfordeconomics.com) – Global
Economics Databank, August 2021.
2. Source: Euromonitor International (www.euromonitor.
com) – Euromonitor Passport, August 2021.
13
12
OUR PATH TO 2030

As we put our choices into action, it’s
important our people have clarity on the path
to 2030. By aligning our people behind our Co-
op’s plans, we are best placed to perform and
meet our targets.
Our plans
in more detail
OUR PLANS IN MORE DETAIL
Our plans
Prioritise the Farmgate Milk Price.
Invest more in sustainability to do
what’s right for customers, the planet
and our Co-op.
Grow our Foodservice channel.
Continue momentum in our
Consumer channel.
Move our Ingredients channel
towards higher value products
and solutions.
Refine our portfolio of assets with a
focus on New Zealand.
Our choices shaping our
path to 2030
• Focus on New Zealand milk.
• Be a leader in sustainability.
• Be a leader in innovation and science.
Our people and our culture
Our business strategy directs where
we will focus. Our story, through our
brands, distinguishes us. But it is our
culture – our people – who will deliver,
to have us meet our purpose: our Co-
operative, empowering people to create
goodness for generations - you, me, us
together - tātou, tātou. 
Top of mind for us as we look out to
where we want to be in 2030 is how
we elevate and align our culture for
high performance. This means that in
addition to excelling in operational
excellence, we need to really understand
our customers and what keeps them
awake at night so we can help them
solve their problems through our
innovative solutions and products. This
will require a shift in our mindset and
culture.
Making this happen will transform
our Co-op for everyone. It will help
us attract and retain people who are
motivated by our purpose and increase
our people’s ability to bring their best to
enable our Co-op to deliver sustainable
high performance and help achieve
our targets.
Maintaining the highest sustainable Farmgate
Milk Price is critical to ensuring our farmer
owners and our Co-operative remain
financially viable.
On average, milk price payments represent
the vast majority of a dairy farmer’s revenue
and a strong milk price increases our Co-op’s
contribution to the New Zealand economy. We
believe that having a strong Co-operative is the
best way to maintain a sustainable milk price
for the benefit of all, and that our strategy will
support a sustainable milk price.
Our Co-operative’s manufacturing capabilities
enable us to convert our farmer owners’ milk
into products that meet the needs of global
consumers and customers. At the same time,
our skilled marketing and sales teams generate
demand for our dairy products, while our
resilient supply chain enables us to take our
milk to the world.
Through our strategy, our Co-operative
aims to further build the reputation of our
sustainable New Zealand dairy and generate
ongoing demand that, in turn, delivers a higher
milk price.
We are also able to harness the benefits of
scale in our Co-operative to help minimise
manufacturing costs and, in turn, increase milk
price. We have demonstrated improvements
in our manufacturing performance in recent
years, reducing our rework costs by $35 million
and quality related costs by $42 million in 2021
versus 2017. Meanwhile, we have maintained
utilisation of milk solids while increasing the
complexity of our product mix, helping to
drive an improvement of $18 million for 2021
compared to 2017.
These savings have been achieved through
focused effort by our people and the
application of innovative new technologies,
such as using artificial intelligence to
automatically identify product quality issues at
our Darfield plant. In many cases, the changes
we are making to improve the sustainability
of our manufacturing sites also deliver cost
savings. For example, achieving our target
to reduce operational emissions by 30% by
2030 could reduce our carbon costs in 2030 by
$71.4 million.
1
We will continue to prioritise
continuous improvement across our Co-
operative to support a sustainable milk price.
1. Assumes Fonterra’s emissions are 30% lower in 2030 than in 2018 (i.e., a reduction of 510,000 tonnes) and carbon costs $140/
tonne in 2030 (as forecast by the Climate Change Commission in “Ināia tonu nei: a low emissions future for Aotearoa”).
Prioritise the
Farmgate Milk Price
Milk price payments
represent the
vast majority of
an average dairy
farmer’s revenue
A strong
Co-operative
is the best way
to maintain the
highest sustainable
Farmgate Milk Price
for the benefit of all
Our scale helps
minimise operational
costs and in turn
increase milk price
We will continue to
prioritise continuous
improvement across
our Co-operative
to support the
highest sustainable
Farmgate Milk Price
15
14
OUR PATH TO 2030

We’re all striving for a better future,
especially when looking to the environment.
Customers and consumers are demanding
more information about the sustainability
credentials of their food and the impact it has
on the planet.
By increasing our activity across our supply
chain, we can be on a pathway to Net Zero
carbon by 2050. We intend to invest about
$1 billion in sustainability initiatives over the
next decade.
Operations
We’re targeting a reduction in emissions of
30% by 2030 at our manufacturing sites. We
expect to do this through a combination of
energy efficiency initiatives and switching fuels
at our nine manufacturing sites that still use
coal and ultimately stop using coal by 2037.
We are also going further and developing plans
to transition our manufacturing sites which use
natural gas to other more sustainable energy
sources such as biomass, biogas and electricity
from renewable sources.
Reducing our water use and improving our
water treatment will help improve water quality
around our sites.
We are assessing low emission energy options
for our milk collection fleet – including electric
and hydrogen powered tankers.
Invest more in
sustainability to do what’s
right for customers, the
planet and our Co-op
Targeting a
30% reduction
in emissions
by 2030 at our
manufacturing sites
Committing to stop
using coal by 2037
Aiming to reduce
water use and
improve water
treatment at our
manufacturing sites
The Co-operative
Difference brings
together our
customer insights
and what we know
about the world.
Farmers can use
this to guide what
needs to be done on
farm to help ensure
continued demand
for our products
On-farm and R&D solutions to
reduce methane emissions
The Co-operative Difference will continue
to bring our customers’ insights and what
we know about the world together to help
farmers understand what needs to be done on
farm. That means asking farmers to focus on
the environment, their animals, people and
community, and milk quality.
The biggest environmental gains will come from
finding ways to reduce our methane emissions.
We need to a find solutions to this challenge.
We don’t believe there will be one silver bullet
and that is why we have a number of innovation
projects underway to find solutions.
Support customers with
sustainability propositions
Our investment in sustainability enables us
to become an integral part of our customers’
future supply chains and intrinsically
linked to the success of their public
sustainability targets.
It sets us up to push further with our
development of sustainability brand claims
and positioning, so we can offer a greater
selection of sustainability attributes to
our customers.
Our R&D projects to find a
solution to reduce methane
and GHG emissions
1. With Royal DSM, a global science-
based company, we’re testing
whether DSM’s feed additive product
Bovaer®, which reduces methane
emissions from cows by over 30% in
non-pasture-based farming systems,
can do the same in New Zealand’s
pasture-based farming systems.
2. With MPI and DairyNZ, we’ve expanded
a promising trial with Nestlé to include
plantain in a cow’s diet to reduce
the amount of nitrogen produced,
reducing carbon emissions and
improving freshwater quality.
3. With Australian organisation Sea
Forest, we’re trying to understand
if we can reduce emissions by
incorporating seaweed in cows’ feed.
4. With AgResearch and the Pastoral
Greenhouse Gas Research
Consortium, we’re working to tap
into our large collection of dairy
cultures to create new fermentations
we’re calling Kowbucha, which could
inhibit the methanogens that create
methane in cows.
Our goals
OUR PLANS IN MORE DETAIL
17
16
OUR PATH TO 2030

Target to
increase milk
solids in our
Foodservice channel
by ~50% by 2030
Global trends
are supporting
the growth of
Foodservice
Innovation and new
products will be key
to growth
Make the most of
the growing demand
for out-of-home
consumption across
South East Asia
– particularly, in
Indonesia & Malaysia
Foodservice globally
is a $US2.3 trillion
industry
Foodservice globally is a US$2.3 trillion
industry and is everything we eat made out-of-
home – from restaurants, bakeries, quick-
service food chains, home-delivery, coffee
shops, and even hospitals.
Many of our Foodservice customers are
running multiple food outlets or chains across
countries or the world. Each of these is serving
our products to millions of people every day,
without the cost to us of expensive marketing
and promotional campaigns.
premium foods and our product innovation
will play a big role over the next decade.
In Greater China, we are continuing to build
on our successful Foodservice channel by
expanding into new cities.
In South East Asia, we are applying what
we’ve learned from our Greater China
business. This includes building the
capability of chefs through our chef
development programme. Across the region
dairy is seen as a premium food and it also has
a strong link to the growth in the consumption
of western foods. We are making the most
of this growing demand in the region and in
particular we are doubling down on Indonesia
and Malaysia where the evolution of bakeries
will see us expanding our reach into more
cities. We are also developing new products
that work well in recipes chefs can use in the
growing number of on-line bakery stores.
We believe innovation and new
products will be key to this growth, helping us
build relationships with up to 40,000 new
customers over the next five years, and up to
70,000 new customers in the next 10 years.
In other markets like the USA, tariff barriers
make it more difficult to maximise value
from our Foodservice channel. To open
more doors, we intend to partner with our
IP, like we have with one of America’s dairy
co-operatives, Land O’Lakes.
·
China
·
Vietnam
·
Malaysia
·
South East Asia
·
Australia
·
New Zealand
+ India
+ Japan
+ United States
+ European Union
+ emerging markets
·
key markets
Foodservice is a high value channel for our
product. As part of our plan to direct our
Co-op’s milk to the highest value product,
we are aiming to increase milk solids in our
Foodservice channel by approximately 50%
by 2030.
We aim to achieve this by growing our global
Foodservice presence across Greater China,
South East Asia and the USA.
This growth will be led by staying ahead of
global trends, and in particular, the increase
in the world’s middle class and cities which
lends itself to more people eating out. This
group enjoys experimenting with different
We want to collaborate more with like-minded
partners, leveraging our intellectual property
and skills, rather than only making significant
capital investments of our own.
With 65% of our customers preferring
digital over traditional, we will also
increasingly use technology to enhance
customer experience. It will help strengthen
the way we connect with our customers.
The world’s middle class is growing, in
particular in Asia – there will be more
people able to afford dairy and want to
consume it.
As the world’s middle class grows, cities
grow too and with urbanisation comes a
mentality of anything, anytime, anywhere.
People want food that can be consumed
quickly and without hassle, driving demand
for eating out-of-home and for convenient
snacks that can be consumed on the go.
Grow our
Foodservice
channel
Ambient creams opening
up new territories across
Greater China
As we grow our Foodservice channel,
we’ve launched a new ambient
cream which can be stored at up to
40 ̊C outside of a chiller. Our R&D 
experts designed this cream so
shops without fridges could use our
product. In doing so, we’ve opened
up new territories in Greater China
and are looking at new opportunities
in South East Asia.
OUR PLANS IN MORE DETAIL
2030202020102000
1.3B
2.8B
3.7B
5.3B
Global Middle Class (billion people)*
Estimate based on earning 2X median household income
ScaledValue
0
10
20
30
40
50
60
70
80
20502040203020202010200019901980
44.1
49.1
52.2
55.5
58.5
61.9
65.3
68.7
Percent
Share of World Population in Urban Areas (%)*
* Source: Oxford Economics (www.oxfordeconomics.com)
– Global Economics Databank, August 2021
* Source: Oxford Economics (www.oxfordeconomics.com)
– Global Economics Databank, August 2021
19
18
OUR PATH TO 2030

Continue
momentum in
Consumer
By 2030
sustainability will
be a key element
of value for our
Consumer brands
We believe Anlene is
positioned perfectly
to target the healthy
aging market
The Westernisation
of diets across Asia
means people right
across the region are
increasingly using
dairy in their cooking
and baking
By 2030, we expect
~30% of our total
sales revenue across
Asia Pacific will come
from e-commerce
Our Consumer channel represents $4 billion
of revenue for our Co-op and achieves some of
our highest gross margins.
The world’s population is getting older* – there will be more
people needing to maintain their mobility, strength and energy.
2020
0.5b aged 70+
2030
0.7b aged 70+
2040
0.9b aged 70+
Demand for convenience is driving a trend towards Western diets
across Asia. While dairy consumption remains low across Asia,
there is potential for significant growth when comparing per capita
consumption with countries like the EU.
Westernisation of Diets*
Dairy Consumption per Capita (kg pa)
Southeast AsiaChinaAggregate EU
0
50
100
150
200
250
300
350
20502040203020202010
Carbonzero milk giving
people a practical way of
supporting the environment
Simply Milk offers customers the
opportunity to purchase their
everyday milk knowing their choice
is making a difference to something
that’s really important to them. It has
been certified carbonzero through
the purchase of carbon credits from
Toitū Envirocare. The carbon credits 
go towards the regeneration of native
forest near Kaikōura in New Zealand, 
as well as renewable energy
programmes in overseas markets
where we sell our products.
To gain more value from this channel, we are
evolving our brands to make sustainability an
increasingly prominent proposition. By 2030
sustainability will be a key element of value for
most of our brands.
Anchor will lead the way in taking our
New Zealand sustainability and provenance
credentials to the world, with the strong
nutritional profile and great taste of our quality
dairy being a distinct advantage.
Across the globe our New Zealand provenance is
featured strongly in communication and on pack,
particularly in markets such as South East Asia
(SEA) where New Zealand is often perceived as a
marker for superior nutrition and purity.
We’re continuing to evolve this story, bringing
to life specific elements such as Grass Fed Cows,
and in our home market of New Zealand we
have recently launched a plant-based bottle, and
transitioned some of our specialty milks to be
certified carbonzero in the North Island.
We’re also leveraging our nutrition and science
expertise across our consumer brands, a position
typically utilised in our Ingredients channel.
As economies develop, the average life
expectancy of adults is steadily rising across
Asia. The amount of money invested by
consumers in looking after their health and
wellness is also increasing with more focus on
living longer, healthier lives.
We believe Anlene is positioned perfectly to
compete in this space. In 2020, we debuted
Anlene 5X, the most advanced clinically proven
Anlene formulation that provides five key
mobility related benefits targeting muscles,
joints, and bones. A recent study showed
2 glasses of Anlene Gold 5X, with regular
exercises, provided 2X the improvement in
flexibility, 3X the improvement in balance and
40% more improvement in muscle mass.
We kicked off the Anlene 5X product in
Malaysia, as it is the largest market for Fonterra
in SEA. Over the last year sales have increased
by 20% over the previous year and as a result
we are now moving to roll out Anlene 5X across
the rest of SEA – including markets such as
Indonesia, Vietnam, Philippines, Thailand
and Singapore.
The Westernisation of diets across Asia
means consumers right across the region are
increasingly using dairy in their cooking and
their baking. We see this as a big opportunity
for our Dairy Foods portfolio, which includes
Anchor, Mainland, Perfect Italiano and Chesdale
and our Consumer Powders such as Anchor and
Fernleaf have a role to play in making the dairy
nutrition more accessible.
With trends in Asia changing often, we are
also developing a programme of pilot brands
that will extend our portfolio beyond our core
brands. This is all about testing the market
and developing new solutions to open up
opportunities with the potential to generate
new revenue streams.
Our connection to consumers is enhanced
through our increased presence in e-commerce
to meet growing demand from digitally astute
consumers. With our sales in e-commerce
across South East Asia doubling in the last 12
months, we expect that by 2030 this channel will
represent approximately 30% of our total sales
revenue for the region.
We are also deepening our customer
partnerships with key international retailers
to export our premium consumer products,
including brands such as Mainland.
OUR PLANS IN MORE DETAIL
Milk consumption (in kg ME milk per capita)
* Source: IFCN Dairy Research Network (www.ifcndairy.org) – IFCN Annual Dairy Sector Data
with Long Term Outlook, September 2021
* Source: Oxford Economics (www.oxfordeconomics.com) – Global Economics
Databank, August 2021
21
20
OUR PATH TO 2030

Move our Ingredients
channel towards
higher value products
and solutions
Direct less
milk into the
Ingredients channel
But grow sales
of higher-value
ingredients and
solutions
Targeting physical,
patient, digestive and
mental wellness plus
immunity
Co-design with
customers value-
added products and
solutions
myNZMP a simple,
always-on, self-service
option for customers
to buy products, is
expected to become a
significant part of our
Ingredients channel
over the next decade
Driving value with Daesang
Our collaboration with South Korean
food manufacturer Daesang is an
early example of the potential of
customer collaboration. Daesang was
seeking to launch a range of protein
products for the medical nutrition
category, and saw the potential to
differentiate their products on the
basis of a connection to grass-fed,
natural dairy. We offered Daesang
a license agreement covering
formulation and processing IP, grass-
fed and pasture-raised claims, and
imagery and video assets telling our
unique New Zealand dairy story.
Through our NZMP brand we have one of
the broadest ranges of ingredients and
solutions in the industry – from high quality
base ingredients to highly advanced and
specialised ingredients.
As we move more milk into Foodservice and
Consumer, we will direct less milk through our
Ingredients channel. While we will continue to
manufacture Reference Commodity Products
which inform the Farmgate Milk Price, we
will focus our growth efforts on higher-value
ingredients and solutions targeting the areas of
physical, patient, digestive and mental wellness
plus immunity.
This may mean that we divert some product
away from GDT, but we will always seek to
ensure there is enough activity on GDT to set
a robust Farmgate Milk Price.
As is the case for our Foodservice and
Consumer channels, we see opportunities to
further differentiate our Ingredients channel
on provenance and sustainability. We will also
derive value from specific claims and from our
overall sustainability position.
Deepening our relationships with our
customers and offering new solutions and
service models will be key to achieving our
long-term ambitions.
As our product mix changes, so too will our
customer mix. We will continue to work with
our current customer base, but also expect to
work with new customers as we increase our
participation in the health and wellness market.
We will focus on partnering with customers to
co-design value-added products and solutions.
Our Co-operative brings deep expertise in dairy
science and sustainability, including significant
intellectual property. Through partnership, we
can help our customers bring new products to
market that in turn increase the value we create
from our farmer owners’ milk.
We are also developing a range of digital tools
and services that will offer our customers
new ways to engage with our Co-operative.
For example, myNZMP gives our Ingredients
customers a simple, always-on, self-service
option, and we expect it will become a
significant part of our Ingredients channel over
the next decade.
Protein expertise helping
people maintain muscle mass
for better quality life
Our protein enriched healthy ageing
products are designed to combat
malnutrition and muscle loss as we
grow older. These include fortified
protein beverages, powders and foods
providing easily digestible and high
protein solutions for the medical
nutrition and healthy ageing category.
Dairy lipids helping
improve people’s mood
Our Milk Phospholipids have been
clinically proven to help manage
the effects of stress while also
improving mood and focus.
The versatile ingredient can be
used in snack bars and ready-to-
mix beverages.
These complex lipids are typically
used in the infant nutrition space
as they play an important role in
brain development. We’re now
exploring their use in the e-gamer
category to improve cognitive
function and eye health.
OUR PLANS IN MORE DETAIL
23
22
OUR PATH TO 2030

Refine our portfolio of
assets with a focus on
New Zealand
We have an opportunity to differentiate our
New Zealand milk further on the world stage,
with the aim of getting more value from our
Co-op’s milk. This requires us to focus our
capital and our people on enhancing our
New Zealand milk.
For these reasons we are reviewing our
ownership of our two other milk pools – in
Australia and Chile.
Soprole is a leading Chilean dairy brand, and
Prolesur is a subsidiary of Soprole focused
on milk sourcing and primary and secondary
manufacturing in Southern Chile. The
operations do not require any New Zealand-
sourced milk or expertise and, in this context,
we are starting the process to divest our
integrated investment in Chile.
Fonterra Australia is on strategy for the
Co-op and remains an important export
market for our New Zealand milk, especially
for Foodservice products and advanced
ingredients. We are considering the most
appropriate ownership structure for this
business, one option is an IPO, with the
intention that we retain a significant stake.
By having access to ongoing external capital,
the Australian business can be unlocked to
deliver on its strategy and capture its full
potential. At the same time, ownership changes
such as an IPO could give our Co-op the
opportunity to take some capital out, while
retaining ownership in this important market.
We see both these moves as critical to enabling
greater focus on our New Zealand milk and,
importantly, allowing us to free up capital,
much of which is intended to be returned
to shareholders.
We need to focus our
people and capital on
our New Zealand milk
We are reviewing
the ownership of our
other milk pools - in
Australia and Chile
For Australia, we are
exploring ownership
changes – one
option is an IPO,
with the intention
that we retain a
significant stake
We are starting the
process to divest our
Chile investment
OUR PLANS IN MORE DETAIL
25
24
OUR PATH TO 2030

Reimagining milk
for future growth:
Nutrition science solutions
The way people manage their health and
wellness looks set to be revolutionised. As
scientists harness the power of big data,
biotechnology and genomics, they are building
a stronger understanding of human health
and wellbeing, connecting the dots between
cause and effect. This hints at a future in which
some diseases might be prevented or managed
through better nutrition and lifestyles.
Already, scientists understand how people’s
diets impact their body and behaviour and this
has given rise to a range of consumer solutions
targeting specific health and wellness needs.
These solutions are backed by nutrition science
and they underpin a $500 billion slice of the
global health and wellness category.
Some of our ingredients already play to these
kinds of solutions – including our own complex
lipids which help with cognition, proteins
which help with mobility and probiotics which
support immunity and digestion.
But we have an ambition to play more boldly in
this category, unlocking the growth potential
of our advanced specialty ingredients and
going further.
Imagine if there was technology that could
assess the health of your muscles every day in
just a few minutes and then tailor your exercise
and nutrition, in particular, how much protein
you should consume, to achieve the optimum
muscle health.
Similarly, imagine if there was a way of quickly
understanding your gut health and being
able to select the probiotic strains that your
gut needs.
Or even having snacks, which use specialty
dairy ingredients, delivered to your workplace
and tailored to your lifestyle, genetics and age,
helping you keep your energy levels high and
manage stress.
While these examples are not necessarily what
we will do, they paint an aspirational picture of
the potential for nutrition science solutions.
We know, based on global trends shaping the
world we operate in, that the opportunity
lies in adult nutrition. If we want to play more
boldly, it will also take focused resource,
including increasing our R&D, and some new
expertise to complement what we already have.
There is no doubt that partnerships will be key.
One of the big game changes for leaders in
the health and wellness category, is having
the ability or the ecosystem to build close
relationships with consumers. In many cases,
they’ve been built through technology and
data which empowers the consumer to take
control of a specific element of their health and
wellness and make choices about their nutrition
and lifestyle.
We have set up a dedicated team to explore
what the future of Nutrition Science Solutions
looks likes for our Co-op. Over the next year,
we’ll narrow down and prioritise the areas
where we can build a competitive advantage,
and understand what it would take to win.
REIMAGINING MILK FOR FUTURE GROWTH: NUTRITION SCIENCE SOLUTIONS
These solutions
are backed
by nutrition
science and
they underpin
a $500 billion
slice of the
global health
and wellness
category.
27
26
OUR PATH TO 2030

Follow our
progress
towards
2030
FOLLOW OUR PROGRESS TOWARDS 2030
The scale of Fonterra in New Zealand – nearly
9,000 farming families, our network of
manufacturing sites, global supply chain and
our presence in over 130 countries around the
world – makes it hard to remember that we’re
just tiny on the world stage.
At just 2% of the total global milk supply – it’s
a real case of kiwi farming families taking on
the world.
Over the next decade we will share regular
progress and stories on how we are going.
You will be able to track our performance
via our quarterly, interim and annual results
announcements.
And we also invite you to keep up to date with
stories from around the Co-op.
You can do this via:
• www.fonterra.com/ourstories
• My Co-op app, if you are a farmer
• MilkyWay, if you are an employee
Our Co-operative,
Empowering people
To create goodness for generations.
You, me, us together.
Tātou, tātou.
OUR PURPOSE
GOOD TOGETHER
TĀT O U , TĀT O U
29
28
OUR PATH TO 2030

Appendix
APPENDIX
This Appendix is intended to support analysis
and understanding of the aspirational financial
profile and targets in this booklet, and the key
risks associated with them.
The cautions and disclaimer set out on the
contents page of this booklet apply equally to
this Appendix.
Basis of Preparation of our
aspirational Financial Profile
We have prepared an aspirational financial
profile which sets targets for our future
performance on the basis of our strategy and
business plan being successfully implemented
(“Financial Profile”). 
Our Financial Profile is provided to 2030 and is
prepared using the assumptions set out below
and on the following basis:
• FY22-24: Uses our detailed three-year
budget and business plan.
• FY25-30:
– Earnings performance is modelled (i.e.
extrapolated) based on potential market
volume growth rates from FY25.
– The capital investment plan is supported
by our detailed long-term asset roadmap
– EBIT Margins, including Gross Margins
and Operating Expenditure levels as a
percentage of Revenue are extrapolated
from FY24 levels.
• Ranges have been provided to reflect the
inherent uncertainty when setting future
targets. The ranges are not intended to
incorporate all the potential volatility within
the business, in particular (but without
limitation) ingredients price relativities. No
attempt has been made to incorporate in
these ranges any impacts from potential
sensitivities, including declining or increasing
milk collection volumes, ingredients price
relativities, geo-political risks, currency
movements etc.
• The Financial Profile has been prepared by
Fonterra. It has not been subject to audit or
independent review. It sets out aspirational
targets only and should not be construed
as setting forecasts or giving a guarantee of
returns to shareholders.
Key Assumptions for our
Financial Profile
Assumptions relating to New Zealand Milk
• Our New Zealand milk collections have been
assumed at 1,525 million kgMS and held
constant through to FY30.
• There is a constant base Milk Price of $7.00
per kgMS, which reflects the average Milk
Price over FY19-21, except FY22 which
assumes $8.00 per kgMS.
Assumptions relating to Business Portfolio
The business portfolio comprises our
operations at the end of FY21 and assumes:
• those operations continue on the same
footing as at the end of FY21, without
material market, regulatory or other
changes; and
• the sale of our remaining China Farms
business and DPA Brazil in FY22, the
divestment of 100% of our Chilean
business and a reduction of 49% in
ownership of our Australian business in
FY24. For modelling purposes, we have
assumed these transactions occur at the
beginning of FY24, and that Australia
remains consolidated.
Assumptions relating to Capital
Investment
• Essential capital expenditure: Approximately
$550 million per year, with no additional
peak milk processing capacity given the
constant milk supply assumption.
• Sustainability investment: Capital
expenditure is incurred to meet published
greenhouse gas emissions and water targets,
with spend levels averaging $130 million per
year until FY30.
• Channel growth and new business
investment:
– To support channel growth and our
complementary dairy portfolio, capacity
in some key categories is expanded with
an approximate investment of $150
million per year.
– A further $1 billion is invested in a
portfolio of new business opportunities in
equal amounts (around $150 million per
year), with a return on capital of 5% in the
year following the investment and then
11% per year in subsequent years.
Assumptions relating to Capital
Management
• To support liquidity in the Fonterra
Shareholders’ Market (FSM) as farmers
transition to the proposed new capital
structure, up to $300 million is allowed for
on market share buy-backs or other tools. It
is assumed to be used in equal amounts in
FY22 and FY23 and to reduce shares on issue
by approximately 85 million in total.
• There is a capital return to shareholders
of $1 billion in FY24 dependent on the
successful divestment of our Chilean
business and reduction in ownership of
our Australian business, with additional
proceeds being used to reduce debt. There
are inherent uncertainties and risks in the
execution of such processes.
• Subject to not exceeding our long-term
target leverage metrics:
– Dividends have a pay-out dividend
to earnings ratio of 50% until FY24,
increasing to 60% in FY25 and 70%
by FY30.
– Under an ongoing capital management
programme, further capital is returned
to shareholders either as a pro rata
distribution or by way of share buy-backs.
This has been modelled as $150 million
per year, distributed as a pro rata capital
return from FY25 onwards.

Key assumptions and risks for
our aspirational financial profile
and targets
General Assumptions
• Global dairy consumption grows at 5-year
CAGR of 2.7% with a long term growth rate
of 1.7%.
• No inflation.
• Base interest rate (BKBM) increases from
0.4% in FY22 to 3% by FY30.
• Exchange rates stay at current levels.
• Tax reflects current tax rates.
• The tax expense reduces from 16% to 11%
as the dividend percentage increases, due
to the deductibility of dividend payments
on supply backed shares. The proportion of
supply backed shares stays the same as it
currently is to FY30.
Assumptions relating to Volatility
Price relativities and the impact of lag pricing
are modelled at long run historical average
levels for the period FY22-30. Individual
years are likely to differ materially upwards or
downwards from this assumption. The Group
Operations EBIT that includes this volatility
has been modelled assuming $80 million EBIT,
which is attributed to the regional segments.
The equivalent EBIT result in FY20 was $170
million and in FY21 was ($118 million).
31
30
OUR PATH TO 2030

Assumptions relating to Earnings Drivers
• Below is a summary of the key earnings drivers.
• These assume:
– An increase in milk solids in the Foodservice channel by 50% to
FY30. The key driver is China Foodservice with FY21-24 volume
growth rates of 10% (compared to 12.5% over FY19-21), with
EBIT margins at three-year average rates of 16%. The remaining
Foodservice growth is focused across South East Asia.
– From F21 to F24, margins in Consumer improve using our
New Zealand provenance and sustainability credentials and our
ability to realise e-commerce opportunities. APAC consumer EBIT
margins lifts by 2% (to 10%) by FY24. These EBIT margin levels are
maintained through to 2030.
– Active Living margins grow $52 million from FY21 to FY24, with
volume growth of 7% per year (including New Business) through to
FY30 as we continue to invest and support this area.
Actuals
Financial Profile
Assumption
EBIT Margin
1
FY19FY21FY24FY30
Consumer4%7%8%8%
Foodservice8%11%10%
10%
Active Living15%12%13%
13%
Core Ingredients2%1%1%2%
Total4%5%5%6%
– Innovation spend increases by 50% from $100 million in FY20 to
$160 million by FY30.
– Flat milk volumes with growth in the Consumer, Foodservice and
Active Living channels, and the amount of milk solids utilised by
Core Ingredients reducing from 74% in 2021 to 64% in FY30.
Actuals
Financial Profile
Assumption
Utilisation of
New Zealand
Solids
FY19FY20FY21FY24FY30
Consumer7%7%7%8%
9%
Foodservice8%8%9%
12%14%
Active Living10%10%10%
11%12%
Core Ingredients76%75%74%70%64%
Total100%100%100%100%100%
– Interest expense reduces (as debt levels and Fonterra interest rates
fall) by $100 million (pre-tax) from FY21 to FY24.
– Interest expense increases (as assumed interest rates rise and debt
levels increase from $3.4 billion to $4.3 billion within our long-term
target metrics) by $100 million (pre-tax) from FY24 to FY30.
Risks and uncertainties
Our aspirational financial profile and targets
extend to 2024, 2026 and 2030. There is
always going to be considerable uncertainty
over such long time horizons. These targets
and the assumptions underlying these targets
are subject to risk and uncertainties. The more
material risks and uncertainties which may
impact Fonterra’s performance relative to the
targets include:
• The risk that the sub-optimal execution of
strategic initiatives, innovation practices,
ineffective business partnering, or
deficient decision-making results in failure
to realise opportunity, leverage competitive
advantage, respond to shifts in consumption
trends and achieve strategic targets, leading
to value destruction.
• A material loss in milk supply as a result
of factors affecting Fonterra, its supplying
farmers, or the markets in which we operate,
such as a biosecurity (including animal
health) event, climatic or weather impacts,
regulatory change, change in land use,
failure of the capital structure changes to
achieve the desired effects, changes in dairy
farming input costs, or competitor activity
could result in sub-optimal asset utilisation
and excess capacity, and could generally
have a significant impact on Fonterra’s
ability to deliver on strategy and financial
performance.
• Dairy commodity prices are highly volatile
with substantial increases and decreases
occurring over a relatively short period.
The risk that dairy price volatility and
changes within global markets, including
economic volatility, geo-political instability,
foreign exchange and interest rates, are not
appropriately responded to or managed
could adversely impact business operations,
profitability, dividends, and milk price.
• Fonterra’s farmgate milk price in
New Zealand is calculated by assuming that
all the milk Fonterra collects is converted
into “Reference Commodity Products” 
(whole milk powder, skim milk powder,
anhydrous milk fat, butter, and buttermilk
powder). Fluctuations in the relative prices
of Reference Commodity Products and
Appendix
the other dairy products manufactured
and sold by Fonterra (such as cheese) could
therefore have a significant impact on
Fonterra’s earnings.
• Fonterra’s earnings may also be impacted by
changes made to the Farmgate Milk Price
Manual (including changes to the Reference
Commodity Products used to calculate
the Farmgate Milk Price), which Fonterra’s
Board considers appropriate based on the
milk price principles set out in Fonterra’s
constitution and obligations under the Dairy
Industry Restructuring Act 2001.
• The risk of food safety incidents (including
products being contaminated or tampered
with, in New Zealand or overseas), resulting
in Fonterra supplying unsafe food (or food
that is perceived to be unsafe) to customers
and consumers which may result in harm to
consumers and/or significant reputational
and commercial impacts and the risk that
Fonterra manufactures product that is of
sub-standard quality resulting in financial
loss and reputational damage.
• Geo-political and trade and market access
factors such as war, economic instability
or downturn, deflation or inflation, price
controls, political interference, and
foreign government action (including
trade embargoes and sanctions, tariffs,
subsidies, quotas, price controls, and other
non-tariff barriers) could impact the sale of
Fonterra products internationally, resulting
in adverse changes in international dairy
market dynamics and affect prices for
dairy products.
• The risk that leadership, organisational
culture, behaviour, and people
management practices, including
recruitment for and development
of capability and accountability, are
inadequate or insufficiently agile to adapt
to future working environments and to
execute strategy.
• The risk that failure to enact measures to
mitigate the impact (or perceived impact)
of Fonterra’s activities on the environment
and/or mitigate the effects of climate
change on Fonterra may result in impacts
on milk production, operations and sales,
increased costs associated with emissions
unit prices, a declining perception of
Fonterra and the premium character of
Fonterra’s products, the dairy industry and/
or adverse policy settings, including water
access, usage and quality, agricultural and
operational emissions, discharges to land
water and air and animal welfare.
• Changes in or the introduction of new
policies, legislation, taxation or regulation
or the way in which existing policies,
legislation, taxation or regulation is enforced
could adversely affect Fonterra.
• Changing conditions in global debt markets,
movements in financial instruments
including hedging, changes in the positions
adopted by credit ratings agencies
(including the treatment of effective
subordination of the Milk Price to Fonterra’s
debt and other obligations), or the terms on
which debt is provided to Fonterra.
• Litigation and disputes with third parties in
relation to Fonterra’s operations.
• The risk that Fonterra’s ability to maintain
and/or operate the assets within Fonterra’s
end-to-end supply chain is disrupted,
delayed, or reduced resulting in increased
production costs and other adverse
financial impacts.
• The risk that failure to maintain an
appropriate information technology
framework and to proactively safeguard
and manage Fonterra’s key IT systems and
the confidentiality, integrity, and availability
of Fonterra’s data against threats including
cyber-attacks, technology failures and other
threats, results in lost opportunities, major
business interruption, financial loss and/or
reputational damage.
• The COVID-19 pandemic could
affect Fonterra’s ability to operate its
manufacturing facilities or distribution
centres and could also disrupt Fonterra’s
supply chain and could impact the demand
for Fonterra’s product.
• The success and timing of an IPO or sale
process for investments could be impacted
by market, economic or other factors.
APPENDIX
2
(6)
62
(6)
17
51
7
1
3
4
6
34
FY21
Consumer
Foodservice
Active Living
Interest
and Other
Interest
and Other
Ingredients
FY30
Value-add
Growth
FY24
Divestments
Share buy back
insight
creative.co.nz
FONTERRA088
1 These channel EBIT margins include the allocation of unallocated costs and the breakdown of
Ingredients into Core Ingredients and Active Living. As a result, the EBIT splits will vary from
those summarised in the Annual Review and Business Performance Report.
33
32
OUR PATH TO 2030

fonterra.com

---

Annual Review
2021

COVER IMAGE:
Te Kaihou & Alan, Bay of Plenty
IMAGE:
Stu, Rebecca & Jessica, Taranaki
Collaboration, innovation and passion
was the cornerstone of our creation and
something we continue to value today. Our
milk creates goodness through nutritious
food with safe, quality ingredients that
are loved here in New Zealand and around
the world. We are committed to farming
in a way that regenerates the land and
the environment.
As we look ahead, with the next generation
in mind – one thing remains as true now,
as it did at our very first farmer meeting
in Otago back in 1871:
We’re good together.
Tātou, tātou.
We are forged from generations of farming
families, passionate about dairy.
FONTERRA ANNUAL REVIEW 2021

Rest of Asia
REVENUE ($ MILLION)
7,0 5 6 F Y 2 0 : 7, 49 7
EMPLOYEES (FTE)
2,253 FY20: 2,366
MANUFACTURING SITES
4
R AW MILK COLLECTED
(MILLION LITRES)
9 FY20: 11
Americas
REVENUE ($ MILLION)
2,597 FY20: 2,703
EMPLOYEES (FTE)
2,975 FY20: 3,049
MANUFACTURING SITES
5
R AW MILK COLLECTED
(MILLION LITRES)
587 FY20: 537
To t a l
REVENUE ($ MILLION)
20,565
1
FY20: 20,282
EMPLOYEES (FTE)
19,354 FY20: 20,278
MANUFACTURING SITES
48 FY20: 47
R AW MILK COLLECTED
(MILLION LITRES)
19,295 FY20: 19,130
Australia
REVENUE ($ MILLION)
1,699 FY20: 1,700
EMPLOYEES (FTE)
1,427 F Y20: 1,276
MANUFACTURING SITES
8 FY20: 6
R AW MILK COLLECTED
(MILLION LITRES)
1,368 FY20: 1,383
Rest of World
REVENUE ($ MILLION)
1,368 FY20: 1,581
EMPLOYEES (FTE)
212 FY20: 205
MANUFACTURING SITES
3
R AW MILK COLLECTED
(MILLION LITRES)
0
China
REVENUE ($ MILLION)
6,119 FY20: 5,196
EMPLOYEES (FTE)
606 FY20: 1,625
MANUFACTURING SITES
0
R AW MILK COLLECTED
(MILLION LITRES)
200 FY20: 298
New Zealand
REVENUE ($ MILLION)
1,726 FY20: 1,605
EMPLOYEES (FTE)
11,881 FY20: 11,757
MANUFACTURING SITES
28 FY20: 29
R AW MILK COLLECTED
(MILLION LITRES)
17, 131 FY20: 16,901
Welcome to our Annual Review. We know that there are a wide range of
people and organisations who are interested in our performance, so this
year we’ve made some changes to how we present our information. We
want to make it easier for all stakeholders to understand our business and
find the specific details they’re interested in.
This Annual Review is a concise summary of our environmental, social
and economic activities and performance. It’s supported by a suite
of supplementary reports where stakeholders can find more detailed
information most relevant to them. This represents another step on our
journey towards more integrated reporting.
We are a co-operative formed and owned by Aotearoa New Zealand
dairy farmers. Our rich history was founded on farming families working
together to share the natural goodness of dairy with the world.
We’re committed to producing dairy nutrition in a way that cares for people,
animals and the environment, and brings value to our communities. Our
range of dairy ingredients are sold under our NZMP™ brand and are found in
prominent food and nutrition brands around the world.
Under our Anchor™ Food Professionals brand, we create high-quality
products and innovative solutions for foodservice professionals in
over 50 countries.
1 This geographical breakdown of revenue is for continuing operations only rather than
total Group revenue, which was $21,124 million for FY21.
We also manufacture, market and distribute our own consumer products.
These include branded dairy products sold direct to consumers, such
as milk, milk powders, yoghurt, butter and cheese. Our three global
consumer brands are Anchor™, Anlene™ and Anmum™. Farm Source™
is the Co-op’s main farm-facing team, providing guidance and support
to farmers, including through a network of stores in New Zealand where
farmers can get their rural supplies and technical advice.
FONTERRA ANNUAL REVIEW 2021
About this report
About us