Fonterra
Annual Report 2021

Plain-text annual report

Annual Review 2021 COVER IMAGE: Te Kaihou & Alan, Bay of Plenty IMAGE: Stu, Rebecca & Jessica, Taranaki We are forged from generations of farming families, passionate about dairy. 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. FONTERRA ANNUAL REVIEW 2021 FONTERRA ANNUAL REVIEW 2021 About this report 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. About us 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. 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. China REVENUE ($ MILLION) 6,119 FY20: 5,196 EMPLOYEES (FTE) 606 FY20: 1,625 MANUFACTURING SITES 0 RAW MILK COLLECTED (MILLION LITRES) 200 FY20: 298 Australia REVENUE ($ MILLION) 1,699 FY20: 1,700 EMPLOYEES (FTE) 1,427 FY20: 1,276 MANUFACTURING SITES 8 FY20: 6 RAW 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 RAW MILK COLLECTED (MILLION LITRES) 0 1 This geographical breakdown of revenue is for continuing operations only rather than total Group revenue, which was $21,124 million for FY21. Americas REVENUE ($ MILLION) 2,597 FY20: 2,703 EMPLOYEES (FTE) 2,975 FY20: 3,049 MANUFACTURING SITES 5 RAW MILK COLLECTED (MILLION LITRES) 587 FY20: 537 Rest of Asia REVENUE ($ MILLION) 7,056 FY20: 7,497 EMPLOYEES (FTE) 2,253 FY20: 2,366 MANUFACTURING SITES 4 RAW MILK COLLECTED (MILLION LITRES) 9 FY20: 11 New Zealand REVENUE ($ MILLION) 1,726 FY20: 1,605 EMPLOYEES (FTE) 11,881 FY20: 11,757 MANUFACTURING SITES 28 FY20: 29 RAW MILK COLLECTED (MILLION LITRES) 17,131 FY20: 16,901 Total REVENUE ($ MILLION) 20,5651 FY20: 20,282 EMPLOYEES (FTE) 19,354 FY20: 20,278 MANUFACTURING SITES 48 FY20: 47 RAW MILK COLLECTED (MILLION LITRES) 19,295 FY20: 19,130 Our Review ABOUT THIS REPORT ABOUT US 04 05 Contents Waitoa Off Farm HEALTH, SAFETY AND WELLBEING OUR PEOPLE RESILIENT SUPPLY CHAINS CLIMATE CHANGE WATER PACKAGING Products & Customers INNOVATION RESPONDING TO CUSTOMER DEMAND FOOD SAFETY AND QUALITY PROVENANCE 38 38 39 40 40 40 44 45 45 46 Danielle & Emma, Auckland Stu, Rebecca & Jessica, Taranaki Te Kaihou & Alan, Bay of Plenty Overview LETTER FROM THE CHAIR LETTER FROM THE CEO HONOUR ROLL FOR ON-FARM EXCELLENCE OUR YEAR IN REVIEW OUR CONTEXT OUR APPROACH HOW WE CREATE VALUE CREATING VALUE FOR OUR STAKEHOLDERS OUR PROGRESS 08 10 12 18 20 22 24 26 28 Stu, Tania, Rebecca, & Jessica, Taranaki Business Performance GROUP OVERVIEW NON-GAAP MEASURES 50 56 On Farm THE CO-OPERATIVE DIFFERENCE EMISSIONS WATER QUALITY ANIMAL WELLBEING RESPONDING TO EXTREME WEATHER 32 32 34 34 34 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 in the Business Performance Report. FONTERRA ANNUAL REVIEW 2021 LETTER FROM THE CHAIR Reported profit after tax $599m down from $659m FY20 Final Farmgate Milk Price of $7.54 per kgMS Final dividend of 15 cents per share Peter McBride – Chairman We would also like to acknowledge Miles’ continued leadership. Miles took on the CEO role at an incredibly difficult time for our Co-operative and has not shied away from making some tough decisions. Over the past 12 months the Board has continued its work to realign Fonterra’s cultural and financial settings to better reflect an enduring farmers’ Co-operative. In recent years we have adjusted our dividend policy, debt targets, and risk appetite statement to be more conservative and strengthen our balance sheet. The Co-op’s rate of debt reduction is encouraging. Net debt is down $872 million this year to be $3.8 billion, bringing our gearing ratio down to 35.5%. That gives us options. A stronger balance sheet builds the business’s resilience against unexpected challenges – whether that be a global pandemic, geo-political tensions, or natural disasters. Just as importantly, it gives us a solid foundation from which we can now look to grow. Dear Farmers and Shareholders, 2021 continued to prove the value of a national co-operative of scale. Fonterra’s scale affords us a level of optionality that is unique in New Zealand dairy, enabling us to manage risk and uncertainty on behalf of our kiwi farming families. Miles and his team have done a great job of leveraging that strength to deliver a strong financial performance this year, given the difficult COVID-19 operating environment. We have benefited from our ability to move our milk between our markets, categories and products that deliver the most value. You see that reflected in our normalised EBIT contribution numbers for our regional segments, with Asia Pacific’s $305 million, up 28% on last year and Greater China at $403 million, up 10% on last year. This is balanced out by our Africa, Middles East, Europe, North Asia and Americas’ (AMENA) result of $336 million, down 28% on last year, as we sought to optimise value and respond to supply chain dynamics. Overall, our reported profit after tax was $599 million, down slightly from last year which benefited from the divestments of DFE Pharma and foodspring®. Our total group normalised EBIT, which is a better reflection of the underlying business performance, was up 8% to $952 million. We exceeded our opening forecast Farmgate Milk Price, finishing the season with a final milk price of $7.54 per kgMS. The milk price has now remained above $6.30 per kgMS for four consecutive seasons. We have benefited from our ability to move our milk between our markets, categories and products that deliver the most value. That growth will also look different to how our Co-op has operated in the past. In line with our more conservative approach to risk, we intend to approve capital allocation with more rigour, for a series of investments, rather than betting the farm on one or two big plays. Our normalised earnings per share were 34 cents, and the Board has approved 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. Combined with the five cent interim dividend paid in March, this brings the total dividend to 20 cents and means a total pay-out for a fully share-backed farmer of $7.74 per kgMS for the FY21 year. The Board would like to thank Fonterra’s people across all of our international markets. It has been an incredibly challenging period and we want to acknowledge your efforts to deliver for our farmer owners, despite the professional and personal challenges that COVID-19 creates. We are aiming to approve capital allocation out to 2030 in four main areas, targeting: – ~ $1 billion invested in sustainability. – ~ $1 billion invested in moving milk to higher value products. – ~ $1 billion intended to be distributed to shareholders after asset sales and dependent on improved earnings. – ~$2 billion available for investment in a mix of further growth – including opportunities for nutrition science – and return to shareholders. We believe innovation, research and development, and collaborations with strategic partners are critical to our strategy. Allocating funding and resources for those initiatives will be a priority for the Board. We intend 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. 08 LETTER FROM THE CHAIR The Co-op’s rate of debt reduction is encouraging. Net debt is down $872 million this year to be $3.8 billion, bringing our gearing ratio down to 35.5%. Moving to a new capital structure now, while we are in a strong financial position and have all options available to us, is our best course of action. The solution we are now proposing puts us in the best position to achieve all three of the outcomes the review has focused on: 1) Supporting a sustainable milk supply by providing farmers with capital flexibility. 2) Protecting farmer ownership and control by capping the Fund. 3) Maintaining financial sustainability of our Co-op by supporting our strategy, and protecting against uncertain and recurring risks to our balance sheet. We are confident that this proposed structure will support the sustainable supply of New Zealand milk that our long-term strategy relies on. Together, structure and strategy give our Co-op the potential to deliver the competitive returns that will continue to support our families’ livelihoods from this generation to the next. Looking ahead to FY22, the Board will continue to focus on building the Co-op’s resilience by driving operational performance, supporting value- enhancing investments and seeking a decision on changes to our capital structure, which is a key enabler of our strategy. Our future is bright, despite the challenges we all have in front of us right now. It’s a future in which our Co-op can prosper and deliver for the New Zealand farming families who supply and own it. Thank you for your continued support, Peter The Board is pleased to present Fonterra’s 2021 Suite of Reports. Fonterra’s Annual Report for the year ended 31 July 2021 comprises this Annual Review, the Financial Statements, Corporate Governance Statement and Statutory Information. The Annual Report was approved by the Board on 22 September 2021 and is signed on its behalf by: PETER MCBRIDE Chairman BRUCE HASSALL Director 09 These value targets are subject to successfully completing a number of business initiatives, and a number of assumptions, each of which could materially affect the actual outcomes. More details of our long-term strategy have been released alongside these results, as has a proposal to change our capital structure. We would like to thank our farmer owners for their contribution to these pieces of work and for approaching the capital structure conversation with open minds. Over the course of the year more than 5,000 of our farmer owners directly engaged with the capital structure review. We are a diverse group of people, all with a lot invested in our Co-op. It is not surprising that the views we heard were varied and heartfelt. We acknowledge the uncertainty that exists as we consider changes to our capital structure and the impact that is having on our farmers in different ways. The best way to give certainty is to have a robust discussion as a Co-op and get to a quality outcome. Our latest proposal has changed from what we put forward back in May, in response to this farmer feedback and further expert advice. Changing our Co-op’s capital structure is a critical decision and not something the Board has put forward lightly. Ultimately, it is our farmer owners who will make the final decision. The Board is united in its belief that change to capital structure is needed. Building resilience into our businessFONTERRA ANNUAL REVIEW 2021Miles Hurrell answers questions on the Co-op’s 2021 performance and what people can expect from the Co-op over the next decade. To make sure he was tackling the big, relevant questions, Miles asked employees from around the world what was on their minds. Here are their questions, and Miles’ answers. When you look back on the 2021 financial year, what do you feel most proud of? Has the Co-op hit its 2021 financial performance targets? I’m pleased to say we’ve hit all our financial targets. We achieved a return on capital of 6.6%, a debt to EBITDA ratio of 2.7x and a gearing ratio of 35.5%. Both our focus on financial discipline and our improved underlying business performance helped us achieve these targets. What’s driven the Co-op’s performance? Our underlying business performance, which can be seen in our Total Group normalised EBIT of $952 million, was up 8% on last year, and I would say this shows the good balance we have in our sales book. I couldn’t be prouder of how our team has worked together over the last few years, reset our business and strengthened our balance sheet. For our people to have achieved this at the same time as managing COVID-19 and all its flow on effects, at work and at home, is a testament to their commitment to do what’s right for our farmer owners. I would like to thank our employees for this, and our farmer owners for their loyalty and support. We achieved a significant improvement in our Asia Pacific Foodservice and Consumer channels, helping to deliver a normalised EBIT of $305 million, up 28%. We’ve expanded our Foodservice footprint in the region and are seeing the benefits of that. And 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. Africa, Middle East, Europe, North Asia and Americas (AMENA) normalised EBIT was down 28% to $336 million. While we delivered improvements in our AMENA Foodservice and Consumer channels and worked hard to chase value in the region, we could also see that more value could be achieved by redirecting product into other markets. We’re likely to see this again next year. How has the Co-op contributed to New Zealand in 2021? One of the big ways our Co-op contributes to New Zealand is through our total pay-out to farmers. With a final Farmgate Milk Price of $7.54 per kgMS, our Co-op contributed $11.6 billion to the New Zealand economy in the 2020/21 season with a total dividend of 20 cents per share. Total Group normalised EBIT $952m up 8% Miles Hurrell – Chief Executive Officer 10 LETTER FROM THE CHIEF EXECUTIVE OFFICER To make the most of the opportunity in front of us, we’ve made three strategic choices – focus on New Zealand milk, be a leader in sustainability and be a leader in dairy innovation and science. MILES HURRELL – CEO We’ve also reduced our environmental impact. This year our carbon emissions from coal were down by more than 11%, as Te Awamutu completed its first season using renewable wood pellets. Our farmer owners have also worked hard, with record numbers achieving the top level of The Co-operative Difference and 53% of supplying farms now having a Farm Environment Plan, which is well on the way to our target of 100% by 2025. What does the future look like for Fonterra? Dairy is a good business to be in. New Zealand dairy is an even better business to be in. Put quite simply, the world wants what we’ve got – sustainably produced, high-quality, nutritious milk from cared-for cows. But this demand also comes at a time when we see total New Zealand milk supply as likely to decline, and flat at best. On the 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 a huge opportunity to differentiate our New Zealand milk even further on the world stage. Ultimately, we see this as a chance to increase the value we generate for farmers and New Zealand over the next decade. What will it take to generate more value? To make the most of the opportunity in front of us, we’ve made three strategic choices – to continue focusing on New Zealand milk, be a leader in sustainability and be a leader in dairy innovation and science. New Zealand is the most carbon-efficient dairy nation on the planet. But we can’t slow down now. Customers want to know where their food comes from and the environmental impact it leaves, and our farmer owners’ livelihoods rely on a stable climate and health 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 are aiming to also increase our innovation budget by over 50% to around $160 million per annum in 2030, as we continue to look for solutions to reduce on-farm emissions and develop new innovative products to support our value growth plans. Through these plans we’ll move more milk into our Foodservice and Consumer channels and shift towards higher value products in our Ingredients channel. How do our milk pools in Australia and Chile fit with the focus on New Zealand milk? We need to focus our people and capital on differentiating our New Zealand milk on the world stage and for these reasons we’ve reviewed the ownership of our 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. I would like to take the opportunity to thank the Chilean team for their outstanding efforts in turning the business around. 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 Initial Public Offering (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. Are you looking at growing value outside of the Co-op’s core business? Our focus is on our core business and creating more value from it. But it’s also important we don’t miss out on future growth opportunities. Nutrition Science is a good example of one of these kinds of opportunities. It’s all about how people’s diets impact their body and behaviour and underpins a $500 billion slice of the global health and wellness category. It’s giving rise to a number of new solutions, including highly-personalised nutrition programmes which draw on personal analytics and data. We have an ambition to play in this area – so we have set up a dedicated team to explore what the future of Nutrition Science Solutions could look like for our Co-op. What are your priorities for 2022? Our Co-op is now in a strong position to kick into the next gear, which is all about our future value growth. Our priorities for 2022 are to: – Make the shift from a reset to value growth, which will require developing our people’s capability and our culture to deliver high performance. – Progress the work to divest our integrated Chilean business and process of deciding the most appropriate ownership model for Fonterra Australia. – Narrow down and prioritise the areas within Nutrition Science Solutions where we can build a competitive advantage. – Keep hitting our environment, people and business performance targets. 11 Q&A with our Chief Executive OfficerFONTERRA ANNUAL REVIEW 2021HONOUR ROLL FOR ON-FARM EXCELLENCE Honour Roll for On-farm Excellence Thank you to all our farmer owners who have worked hard in the 2020/21 season to provide safe, high-quality milk. In addition to the honour roll, we acknowledge the efforts of all our farmer owners for their commitment to on-farm excellence and producing the best possible milk. Legend Farming entities that achieved Grade Free for at least the last 10 seasons A & N Harvey Family Trust A Holten & N Brown Ashgrove Dairy Farms Limited B L & Estate R J Mohring Black & White Cow Company Limited C & H Mabey C J & K L Ladd C M & K M O'Donoghue Caskey Farms D C & V F Frew F A & R C M Smits Ltd Farmer Fred Ltd Farming Tee Jay Ltd Fowler Family Prosperity Trust G L & G F Bell Glen Eden Otago Ltd Golden Mile Farms Ltd Hillcrest at Fairfax Ltd J & LM Van Burgsteden J H & H R Smyth J L & M A Cooke K J & H Chalmers Ltd Kemra Farm Ltd Lizlyn Dairies Ltd Maken Milk Ltd Marua Partnership Miroc Limited Owhango Farms Limited P H S & P C Byford R & P Woods Farms Ltd R S & R D Gordon Rainbowcreek Farms Limited Schorn Trust Serendipity Trust Shawlink Ltd W J & J G Pile Family Trust Waicola Holdings Ltd Waituna Investments Ltd Whenuakura Farm Limited Willowfields Ltd Te Tihi Farming entities that achieved The Co-operative Difference Te Tihi (Level 3) 247 Farming Limited 3 G Dairies Limited 41 Degree South Limited 46 South Limited 5 M Trust 69 on Bedford Partnership 96South Limited 99 South Limited A & A Renes Limited A & J Mitchell Partnership A & L Francis Limited A & M de Klerk A F & R F Davison A G & B J Little A G & M F Bowden A H & B M Kuttel A H Baxter Limited A Holten & N Brown A J & G L Muller A J & K L Murdoch A J & N W Logie A J & P T Bryant A J Reid & A L Robinson A L & M B Jumawid Partnership A L & W A Mullan A M & H E Kusabs A M & K G Daines A Mackinnon & A L Aitchison A P & C Knibbs A P Griffith & J G James A R & M A McPherson A R & S Main A R Wards A T & J L Hughes Trust A T & L A Webber A W & D M Taft A W & L J Stuart A W & M White A W & S L Wardlaw A X Planteau de Maroussem A.F.B Group Limited A8 Enterprises Limited Aaron and Marcia Flay Partnership Aaron Gopperth Trust Abacus Dairy Limited Abbey Farm Partnership Abbott Trusts Partnership Aberavon Farm Limited ABH Trust ABR Family Trust Acacia Farms Limited ACDC Farming Limited Actus Limited AD & HA Foote Adam Boaz Addenbrooke Dairies Limited Adon No 1 & No 2 Trusts Adrian Govan Aerodrome Farm Limited AgCulture Limited Aghapy Ltd Aghern Holdings Limited AGVenture Farms Limited Ahipene Farming Ltd Ahol Trust Airlie Lodge (Orini) Ltd Airlie Lodge (Walton) Ltd Alanleigh Farms ALD Dairy Ltd Alderbrook Farms Limited Alley Farms Ltd Allison Family Farms Ltd Alpine Farms Ltd Altene Partnership Alton Pastures Limited Altra Partnership Altura Dairy AM Broomfield Amazon Limited Amber Park Family Trust Amberhay Limited Amco Farms Limited Amlee Farming Partnership Amtink Limited Amuri Dairying Limited Amuri Hallow Limited Amuriwai Limited Anderson Twin Rivers Limited Andrew White Anglesea Farming Limited Aniwhenua Farms Limited Annandale Farming Limited Annic Dairies Limited Anthony & Donna Allcock Partnership Anvo Ag Limited AP & SJ Watson & Son AP & TM Davis T/A Bushvalley Farm Aparima Farm Limited Partnership AQA Agriculture Arabeth Farms Limited Aramaunga Farms Limited Aranga Farms Limited Ararata Holdings Limited Arborland Farm Ltd Ardan View Farm Limited Ardmore Farm Trust Ardoyne Farm Dairies Ltd Arreton Farms Limited Arrie Holdings Ltd Arrow Dairy Ltd Arthur Farms Ltd Arusha Farming Ltd Ashdale Enterprises Ltd Ashgrove Dairy Farms Limited Ashleigh Lodge Ltd Ashmore Ltd Ashvale Jerseys Ltd Askeaton Farms Ltd Askin Berkett Partnership Askin Plains Dairy At Last Trust AUI Farms Avenel Agriculture Ltd Awa Rua Partnership Awaiti Trust Awanui Dairy Limited Ayrburn Dairy Ltd Azreel Farm Limited B & A Heritage Holdings Ltd B & C Anderton Limited B & C McIntosh Ltd B & D Dodunski B & G Park Ltd B & H Knoetze B & L Bailey Ltd B & L Jones Ltd B A & K R Woolhouse B A M & S M Rolls Partnership B A Virbickas & L M Presow B C & H J McLellan B D & C S Morrison B D & K M Sterritt B D & M R Gray Trust Partnership B D & N J Clark Trust B F Stuart & I B C Farms Ltd B H & L J Bourne B J & A L Stokes B J & D A Verryt Family Trust B J & J R Goodwin B J & M C Gut B J & S R Morell B L & D J Haylock B L & Estate R J Mohring B M & A M Thomas B M & J A Ahlers B M & J L Chick Family Trust B M & R J Riley B M & R M Sarten B P & P N Kennedy B R & D S Gillingham B R & S P Churstain B R C & S N Newport B W & C A McNeil B W & J E Blackmore BAA Family Trust Bailetresna Limited Balcombe Investments Balrath Partnership Balwinder Singh-Thandi Barcia Dairies Ltd Barmac Dairies Ltd Barmac Farms Ltd Barnscroft Dairy Ltd Barnsdale Farms 2014 Limited Barridge Farms Bartholomew Tulloch Ltd Base Two Holdings Limited Bashford-Nicholls Chartiable Trust Batchelor Farms Ltd Baucke Family Trust Bayly Dairies Ltd BD & JE Matthews Beardmore Family Trust No 2 Bebez Partnership Beckett Family Trust Beechbank Dairies Ltd Bel Group Limited - Cloverlea Bel Group Limited - Reigate Belco Farms Limited Bellamac Dairies Ltd Belrari Farm Ltd Belvedere Dairies LTD Belvue Downs Ltd Ben & Bev Verhoeven Trust Partnership Ben Callum Dairies Limited Berwick Holdings Ltd Bibberne Farms Ltd Bill Hedley Limited Birch-holme Holdings Ltd Bish-One Limited BJ & DM Ahlers BJ & TJ Bennett Ltd BJ Caird Ltd BL & MR Davies Partnership Blandyco Trusts Partnership Blomfield Dairying Ltd Bobcat Trust Bodiam Dairies Ltd Bonezco Farms Ltd Boswell Dairy Ltd Bowman Farm Limited BP & JA Walker Bradley Gore Trust Braeland Partnership Braemar Family Trust Brasen Trust Breadings Dairies Ltd Brenick Ltd Brensan Farm Limited Brent Wallace Ltd Brimar Trust Brittany Trust Partnership Brodean Farms Brohen Farms Limited Brookside Farms Brookside Holdings Limited Brown Kiwi Farms Limited Brownsville Farms Ltd Brydone Downs Ltd Brymac Farms Limited BS Farming Limited BTB Farms Ltd Bucman Trust Burnell Farms Ltd Burnside Farms Ltd Burtlea Limited Bushmills Trust Bushwood Farm Ltd C & B Sanson Family Trust C & D Padrutt Trust C & H Mabey C & L Shanks Ltd C & R Ashcroft Partnership C & T Dovey C A & L E Eggleston C D & M H Sax C D Jacobsen C D Will & A E Hunter C F & M T Muller C F E Limited C H Land Limited C Higgens C J & C J McKenzie Ltd C J & K L Ladd C J & S J Coll Family Trust C J & V K Taylor C L N Limited C M & K M O'Donoghue C P Ashby C Singh & Sons Ltd C T & W L Harper C W & D Shannon C W & J Redshaw C W & M Y Matthews Family Trust C&F Farms Limited Cairnbrock Dairies Ltd Cairra Farms Limited Caithness Dairy Limited Callura Dairies Limited Partnership Cameron Family Trusts Partners Campi Farms Ltd Canaan Dairy Limited Cantley Developments Ltd T/A Sunrise Properties Careyfarm Limited Carnarvon Farms Limited Carpe Diem Dairies Limited Cartref Farms Limited Cashmore Investments Limited Caskey Farms Causeway Trust Cavan Downs Trust Cave Hill Dairies Limited Cawte Investments Limited CB Farming Limited CBS Dairies Limited CD Garland & KC Sheely Ceylandia Dairies Limited CH Dairies Limited Charteris Family Trust Chiswick Farm Ltd Christensen Farms Ltd Clacher Family Trust Clapcott Farms Ltd Clarendon Farm Limited Partnership Clarke Farms (2016) Ltd Clarke Farms Partnership Clarknic Farms Clausen Farms Ltd Cleaver Farms Limited CLF Dairies Limited Clifden Farms Limited Cliff Donald Climie Road Farms Ltd Clover Bell Ltd Cloverdale Dairies Ltd Clyde Colin Bishop CM Farming Ltd CMC 2000 Limited CN Farms Ltd Cold Creek Ltd Colebrooke Farm Limited Coleditch Ltd Colson Family Trust Conifer Park Partnership Conlan Trust Copeland Farming 2012 Ltd Copeman Family Trust Copland Dairy Ltd Cordyline Farms Limited Cornerstone East Limited Cornik Farms Limited Corona Farms Ltd Cotlands Ltd Cotter Farming Ltd Cowland Ltd Cowley Ltd CPX Limited Craig Tretheway Ltd Cravan Farms Limited Crayfish Trust CRD Limited Creekside Pastures Ltd Crown Ridge Partnership Crowsnest Farming Limited Croydon Agri Ltd Culblair Limited Cutting Edge Dairies Limited CW Taunt & HM Baldock CYH Ltd D & D M Coupe Trust D & E J Pringle D & K & M Kavanagh D & K Miles Limited D & M Earl Ltd D & R Van Straalen Family Trust D & S Barnes Partnership D & S Farms D A & H J Little D A & S M Crawford D B & T A Wyber D C & C N Davison D C & V F Frew D D & D M Galletly D E & A M Jacobsen D G Farming D G Harker Family Trust & W A Harker Family Trust D H & A J Speirs Family Trust D H J & J J Hughes D I & B J Crawford D J & B J Quigley Farm Ltd D J & E A Turner D J & G M Hooper D J & S A McMillin D J Noble & K M Jones D J Wohlers Family Trust D L & P Wilson D L & S M Cochrane Ltd D M & D L Bourke D P & J H Roper Family Trusts Partnership D P & T G Schumacher D P & T M Stephens D R & E M Henman D R & G S Sawford D R & J B Wallace D R & J E Gilchrist D R & S K McKay D W & D L Leslie D W & K E Ellett D W & R A Gerring D White Dacre Milk Ltd Dacre Milk Partnership DAGCO Limited Dairy Glenn Farm Limited Dairy Trust Taranaki Inc Dairytrac Trust Daisy Dairying Ltd Dajo Trust Daker Ridge Trusts No.1 & No.2 Dalry Dairy Ltd Dammar Farms Ltd Danatava Holdings Ltd Dandarrigan Trusts Partnership Daniel & Tracey Ltd Daniel Cullen Family Trust Daniel Symons Danz Family Trust Partnership David & Lynley Ecclestone David Fraser Trust David Leng Davis 5 Limited Dayvco Ltd DD & MM Russell Dekker Dairies Ltd Delarbe Farm Ltd Denis J Crookenden & Bronwyn F Bax Dennis & Donna Gill Family Trust Dennley Farms Ltd Department of Corrections Des Landes Dairies Ltd DHT Farms Limited Diamond Family Trust Dickinson Farms Ltd DNR Farms Dogterom Farming Limited Dogterom Geddes Ltd Dogterom Thomson Limited Dogterom Thomson Ltd Donnelly Trust Doughty Higgens Ltd Dovers Run Limited DR Warren & RG Schov Dragon Fern Limited Drakes Hill Farming Ltd Draw Farming Ltd Drumblade Farm Limited Drumderg Farm Ltd Drumlea Farms Limited Partnership Dry Creek Dairy 2014 Limited Drylands Trust Drysdale Dairies Ltd Dugald McKenzie Family Trust Dunrobin Farm Partnership Dunsdale Dairies Ltd E A White Ltd E B & J L Day E C Briden & Sons Ltd E F Rose Farm E G & S H Overdevest & Alvin Simpson Trust P'ship E J & B Y Steiner Family Trust E J Bolt E J Ritchie E L & D J Brook E O'Brien E S Dairy 2008 Ltd E.K. & M.J. Chisnall Ltd East Chatton Farms Ltd Eastgate Farming Ltd Eastwick Farm Limited Edale Farms Ltd Edge Holdings Limited Eichler Holdings Ltd Elamar Trust Ellis-Lea Farms (2000) Ltd Emerald Acres Limited Est of A J Barton Estate J J Lambie Estate John Harold & Muriel Mary Watt Estate of A Edwards Estate of N R Dilks Estee Holdings Limited Esternwest Farms Limited Euan Reeve Ltd Evans Farm Trust Excel Farming Limited Eyretonlea Partnership F & P Dawson Limited F A & D N Ahlers F A & R C M Smits Ltd F L Clifton Farming Limited F W G & J P Stanbridge Fairhaven Farms Ltd Fairplace Farm Ltd Falcon Dairy Farm Ltd Falcon Farms Trust FAM Limited Far East (1914) Ltd Far South Farms Ltd Farm Partners Limited Farmbuild Milk Company Ltd Farmer Fred Ltd Farming Tee Jay Ltd Farnley Tyas (2018) Limited Fat Cow Dairies Ltd Faybo Limited Feek Family Trust Feenstra & Bouwmeester Trust Fergie Partners Ferguson Dairy Ltd Fermoy Holsteins Limited Ferngrove Farms Ltd Fernhill Farms Koru Ltd Fernley Farm Limited Fernrose Ltd Finch Contracting Limited Firdale Farms Limited HONOUR ROLL FOR ON-FARM EXCELLENCE FiveBrocks Limited Flaxwood South Fleming Family Trust Flints Bush Dairies Limited Flo New Zealand Limited Fonterra -Reporoa Farm Forest Hill Downs Limited Four Leaf Farms Limited Four Quarters Holdings Limited Fowler Family Prosperity Trust Fraser Farms Freely Farms Ltd Frisia Farm Trust Full Jandal Outdoors G & A Parker G & J Fladgate Limited G & K Kingston Family Trust G & K Mathis Ltd G & P R Rennie Ltd G & P Russenberger G A & J A Wright G A & J M Hall Ltd G A & V M Weir G A Knight G B & J S Coulter G C & A M Williamson G E Sutherland Trust G J & A M H Vincent G J & E L Pinny G J & H Hillier Ltd G J & J A M Crowhurst G J Farms Ltd G J Worthy G L & G F Bell G L & R L Burr G M & A J Gower G M & D M Tomsett G M & J M Zydenbos G N & D E Brown G P & D J Wolvers Family Trust G P & M E J Voogt G P & W M McDermott G P Flynn Ltd G R Campbell G S & J K Hickey Family Trusts Partnership G Sanders Limited G W & J A Hallett Family Trust Galloway Enterprises Ltd Garstein Ltd Gaskell Farming Ltd Gaskell Pastures Ltd Gelerosa Farms Trust Gema J Limited GG Partnership Ghuman Family Trust Gillett Farms Ltd Gilmore Farms Limited GJ & LM Ward Family Trust GJ Buhler Farms Trust GKW Farms Ltd Glasgarton Farm Ltd Glasha Farming Company Limited Glen Eden Otago Ltd Glendene Dairies Limited Glengairn Trust Glenmarie Dairies Ltd Glenn Ramel Glennevis Dairies Ltd Glenrowan Trust Glenspec Holdings Ltd Glynn Lea Farming Company Ltd GM & AM Woolley GN & LG Burgess Golden Mile Farms Ltd Goldpark Farming Limited Gopperth Farms Ltd Gordham Farms Limited Gordon Dale Farms (2006) Ltd Goreland Partnership Gorge Dairy Ltd Partnership GR & KM Scott Partnership & Nalder Holdings Ltd Grange Dairying Limited Granite Farms Ltd Grant and Rachel Phillips Grant Gargan Trust Grantlea Dairy Ltd Grantley Trust Grat Farms Ltd Green Pastures Dairy Ltd Green Sky Dairies Limited Greener Pasture Farms Limited Greg Dawson Gregory Farms Ltd Greta Anne Farm Ltd Groundwater Holdings Ltd Guy Partnership Guy Wong & Son Ltd Gwen-May Trust H & C Underwood H G & C K Meijer H J & A M Van Hout H J & C M Drent H Q Partnership H T & L D Winiata Haack Farming Hackett Ridge Farms Limited Hackthorne Dairy Company Ltd Hahn Trading Limited Hall & Co Limited Hamill Family Trust Hamilton & Keene Sharemilking Ltd Hamkee Dairies Limited Hammens Limited Hancock Farms Ltd Hancox Dairies Ltd Hanquin Partnerhsip Happy Cows Ltd Hard Road Dairies Hare Bros Ltd Hare Farming Partnership Harrick Limited Hartland Pastoral Limited Hartlands Livestock Limited Hartridge Family Partnership Harvest Friesians Ltd Hastings Farms Ltd Haunui Farming Limited FONTERRA ANNUAL REVIEW 20211312HONOUR ROLL FOR ON-FARM EXCELLENCE Te Tihi Continued... Haurere Farms Ltd HDJ & RJ Bernhard Hedgehope Grazing Limited Henry de Haas Family Trust Henton Holdings Ltd Highfield Farm Holdings Ltd Highflow Dairies Ltd Highpines Ltd Hillbrook Dairies Limited Hillcrest at Fairfax Ltd Hinemoa Dairying Ltd Hinewai Dairies Ltd Hitchcox Farming Ltd HK McKenzie & K List HLM Partnership HN & DM Sadler Hodder Farms Limited Hollands Farm Limited Holmridge Limited Homestead Dairies Ltd Hoofprint Dairies Limited Hopcroft Farms Ltd Hopkins Farming Group Limited HS & KM MacPhail Hua Mahi Ltd Hua Nui Ltd Hunter Farms Ltd Hurunui Ltd Partnership Hutchins Farming Ltd Hwitan Tune Holdings Ltd I & T Megaw Partnership I Bigham & B LeGros I D & J A Armstrong Family Trust Partnership I D & S D Read I F & C J Smith Ltd I G Haigh I H & D J Bryant I H Allison & L J Poki I J Oliver I J Sutherland Partnership I R & L G Diack I R & V E Wilcox I.Guy Ltd Ian & Joyce Noble Limited IM & RV Glenn Ltd Incline Farm Ltd Inglenook Farms Limited Intensive Agriculture Ltd Inveraray Dairy Ltd J & A Higgens Family Trust J & C Anderson J & C Gray Family Trust J & C Kennedy J & C Kuwilsky J & D Reynolds J & E Dairies Limited J & J Van Polanen Family Trust J & LM Van Burgsteden J & P S Malcolm J & R Ferguson Ltd J & T Leech Farms Partnership J A & S Atkinson J A Rhind J B & K A Lord J B & L M Suisted Limited J Buckley & D VanDenBeuken T/A Jaydee Partnership J C & C A Rossiter J C & N R Dickinson Ltd J C & V G Wells J Duncan Farming Ltd J E & A E Watson J E & D L Morell J E & S G Pike Family Trust J E A Gamperle J F & C G Herbert J F Pickett J H & H R Smyth J Haultain & K McCartin Partnership J J & K J Cossey J J & T A Hickman Family Trust Partnership J K & P C Webb J L Hooper & A L Robertson J M & K L Sneddon Partnership J M & L M North J M & R Reith J M and M A Conner Ltd J M Mellow J M Nyssen Family Trust J R Hooper & R A Candish J W & A M Steeghs J W & H M Wech J W & M J Osborne J W & T L McElligott JA & BE Turnwald Family Trust Jackel Trust Partnership Jacob Abbott Jacob Olsson James Brown James Lyttle Jamze Trust Jareem Trust Jascas Trust Jaska Farm Trust JAVAN Cream Company Ltd Jayland Partnership JC Beattie Trust JCDAF Dairy Farms Ltd JD & RD Wallace Limited Partnership Jersey Oaks Farm Ltd Jerzey Rock Farm Ltd JF & LM Le Fleming Family Trust Jimian Limited Jimnjo Farming Limited JJ & PM van der Meys JL & NA Wolff Partnership Johan Van Vliet John Finlayson Ltd Johnston Family Trust JOLO Grace Ltd Jomac Ltd Jomar Farm Ltd Jonathan Johnson & Rennie de Jong Partnership Jonbay Farm Ltd Jones Bros. Ltd JR & L M Stevenson Ltd JS & KJ Lorimer trading as Laurel Hill Farm JS Peek Ltd Juffermans Dairy Company Ltd Junior Turnbull Trust Jurisich Farms Ltd JW Pouls Limited K & A McKenzie Family Trust K & B Farms Ltd K & S Richards Limited K A & N J Riddington Ltd K B & M P Rusk K B Olesen & R J Stephens K C & D M Gooch K G Reeve K H & G J Manunui Ltd K J & A M Hull K J & H Chalmers Ltd K J & L J Reid K J & S R Crowley K R Inger K R Vollebregt K W & D M Blackstock K W & D R Lowe Family Trust K&M C Farms Limited Kahika Farming Limited Kahurangi Skies Limited Kaimore Farms Ltd Kairoa Dairies 2016 Ltd Kaitiaki Whenua Farming Limited Kaituna Dairies Ltd Kaiwhio Dairies Limited Partnership Kanadale Limited Kanuka Syndicate Ltd Kaponga Consultancy Ltd Kashmir Trust Kauri Hiwi Ltd Kauri Karaka Ltd Kauri Moor Farms Limited Kavanagh Trust Partnership Kaybert Limited KC Cows Ltd Keelinn Farms Limited Keitra Farms Limited Kemra Farm Ltd Kendall Farms Ltd Kereru Trust T/A Kereru Dairies Kernow Farms Limited Kerr Road Dairies Limited Kerr Road Dairies Ltd Keswick Farm Dairies Limited Kevin Fleming Ltd Keystone Dairies Limited Kiffs Agventures Limited Kilvarock Farming Company Ltd Kingsway Farms Limited Kinkora Farm Ltd Kintore Farm Ltd Kirk Farming Ltd Kirson Farms Ltd KJ&HL Uhlenberg(Waitui) Family Trust Partnership Klaus Farms Ltd KM & BM Muller Knightlands Ltd Knockinnon Farm Trust Knockrobin Family Trust Kohi Rose Ltd Koley Limited Partnership Koning Dairies Limited Koning Limited Konini Family Trust Kopuatai Farm Ltd Korimako Properties Limited Kowhai Bush Family Trust Kowhai Farms Partnership KP & SP Berge Partnership KRTH Limited KTAC Farms Limited Kuranui Farm Limited Kuriger Farms Kywaybre Farms Ltd L & A Verstappen L A Dairies Ltd L A Ruthe L J & S L Wallace L J Bleakley L J Hollyman L P & C L McClintock Limited L R & S M Williamson L Ross & A Parry L S & K A Phipps L.G. & J.M. Morris Limited Lacmor Dairies 2013 Limited Lakeside Farm (2010) Ltd Lallybroch Trust Laloma Trust Lamasen Holdings Limited Lance Annear Landcorp Farming Ltd Landseair Agriculture Ltd Lane Farming Company Ltd Langley Vale Trust Langman Family Trust Lanseair Limited Lassman Family Trust Partnership Lavender Dairies limited Lavoni Ltd Law Family Farms Ltd Lawson Lea Dairies Limited Le Emari Trust - Morven Le Emari Trust T/A Willowbridge Dairies Leawood Downs Ltd Legendairy Contracting Ltd Lenek Farms Limited Leona Green Lesdale Friesians Ltd Levett Farming Limited Lillburn Valley Dairies Ltd Limesprings Holdings Limited Lincoln University Lisdale Dairies Limited Lismore Dairy Limited Lister-Springvale Dairy Limited Livcon Farms Ltd Livestock Improvement Corporation Ltd Living Acts Limited Living Waters Dairy Ltd Lizlyn Dairies Ltd LJB Contracting Ltd Lobblinn Farms Ltd Loch Ness Farm Ltd Lochbuie Limited Lochiel Sharemilking Limited Lochlea Partnership Lock Farms Limited Lockinge Farms Ltd Longacre Properties Limited Longbrook Dairy Ltd Longview Dairy Farm Limited Lonmeck Dairy Limited LR and SJ Hammond Limited Ludell Limited Ludimac Dairying Ltd Lynbrook Farm Ltd Lynburn Dairy Ltd Lynwood Dairies Limited M & A Rolfe Partnership M & C Brophy Family Trust M & C Cook M & C Mogg Ltd M & C O'Grady Ltd M & D Padrutt Family Trust M & H Singh-Thandi M & J Seymour Family Trusts M & M E Hart M & R Arsilan Partnership M & S Douglas Family Trust M & S Noord Contracting Ltd M & T Dawson Partnership M A & S R Mitchell M C & J P Fisher M C & M Davey M C & N J Loe M C & P J McArley M C & T P Van Rooijen M C & V F McLennan Trust M C Dairying Ltd M Dudli Trust M E G & D A Polyblank Family Trust M F & D C Robinson Trust Partnership M G & S A Hughes M J & D R McFetridge M J & M Scarlett M J & T M Davies M J & T M Lord M J & T R Schumacher M J Adams Trust M J Morrison M J Robertson M K Farms Ltd M L & K I Clark Family Trust M M Brophy Family Trust M Nesbit & A Absalom M P & V M J Joyce Trusts P/Ship M R & K J Luke Ltd M S & M L Vickers M S Dobson M Singh & Estate of H Singh M Spain Limited M T & A J O'Connor M T & D H Simpson M T & K J Taylor M Y Williams Limited Maandonks Farm Limited Maandonks Pastoral Limited Macedonian Properties Limited Maceplace Family Trust Macken Farm Ltd Maco Dairying Ltd Mahakipawa Farms Ltd Mahoe Dairy Ltd Partnership Mahoe Trust MAK Dairies Ltd Maken Milk Ltd Manchester Dairy Limited Mangakiri Ltd Mangatoki Trusts T/A Willoughby Farms Mangawhiri Farms Ltd Manson Korowai Farms Ltd Manuka Downs Farm Limited Marchant Farms Trust Mark & Nerida Dodge Ltd Marua Partnership Mary Allen Farm Ltd Mason Farms Ltd Massey University Farms Matai Farms Ltd HONOUR ROLL FOR ON-FARM EXCELLENCE Matai Trust Matau Farm (2005) Ltd Mathew & Rose Gordon Mathieson@Rongomai Limited Matikas Dairies Limited Matricksen Ag Holdings Ltd Matthew Shearer Limited Matthews Family Trust Maunga Views Ltd Maungatua Dairies Ltd Maxlands Farms Limited Maxnco Farms Limited Maxwell Farms Limited Maybrooke Limited Mayfarm Ltd Maziwa Safi Farming Ltd MC Hodder Trust MC Holland Farming Ltd McAtee Miller Partnership McCallbraes Dairy Limited McCheesey Farming Limited McConnell Ag Ltd McCullough Family 2008 Ltd McFarlane Fields Limited McFetridge Farms Ltd McGillen Farming Limited McGre Farming Limited McIntosh Dairies Ltd McIntyre Williamson Partnership McKay Creek Farms Limited McKerchar Investments Ltd McKinnon Dairy Limited McKnight Family Trust McLachlan Farms Ltd McLean Farms Limited McNab Farms Limited MCS Farms Limited Medbury Farm Ltd Meinen Bros Ltd Mejeri Farms Ltd Melgan Ltd Melrose Dairy Ltd Melrose Limited Mendip Hills Ltd MERJ Investments Ltd Merrybent Ltd Merton Family Trust Meyer Dairies Ltd Micro Farms Ltd Mid Island Farms Ltd Midway Farm Limited Mikkelsen Farms Ltd Milestone Trust Milkwell Ltd Milky Whey Enterprises Ltd Mill Creek Farm Ltd Milldale Farm No 2 Limited Millridge Ltd Mills Road Estate Ltd Minus 1 Trust Miro Dairies (Otapiri) Ltd Miroc Limited Mitchell Brothers P'ship MJ & NS Bryant MJG Limited MKR Farms MNM Farming Limited Mokka Limited Molehill Farm Ltd Montland Limited Moo Juice Limited Moo2U Ltd Mooi Dairies Ltd Moolah (2014) Limited Moonlight Farms Trust Ltd Moor Farm 2008 Limited Moorlands Trust Partnership Moovin Aherd Ltd Moozie Ltd Morana Farms Ltd Morelands Pastoral Ltd Morlands Limited Morrison Farms Limited Mosa Farming Ltd Mountlea Trust MR & TJ Frost Ltd Mt Winchmore Farm Limited Mullford Trust Partnership Multyfarmin Ltd Murchison Farm Ltd Murphy Farms Limited Murrayfield Dairy Limited MW & KA Olsen Mycall Holdings Ltd N & M Paton N D & A J Rout N J & M Bleakley N J & W A Vollebregt N J Moffitt Trust N J N & T J Ormsby N K & K L Hammond N R & A H Berry N R & L A Fox Nadash Partners Natechar Limited Nathadia Ltd NB & LJ Crosbie Ltd Netherland Holdings Ltd Networth Agriculture Limited Newton Farms Limited Ngahape Valley Farm Ltd Ngai Tahu Farming Ngaroto Farm Limited Ngatitu Whanau Trust Nicholson O'Rourke Ltd Nichoshanks Investments Limited Nickell Farming Limited Nicole Kerr Nithesdale Ltd Nomad Services Ltd Norman Edwards and Kerry Mallett Northbrook Enterprises Ltd Now Or Never 2020 Limited NR Ensor Limited NS & HR Hickey Partnership NYMIC Dairies Limited NZ Rural Property Trust Nominees Ltd - Tatarepo NZSF Rural Holdings Ltd Oakura Farms Ltd Oberwil Farms Ltd O'Connor Dairies Limited O'Connor Rural Limited Oliver K Limited Onawhim Trust Ongaha Farms Ltd Oppertunity Farming Ltd Oraka Farms Limited Oreti Plains Agriculture Limited Orini Downs Station Limited Orongo Meadows Ltd Otanomomo Station Limited Otira Farm Ltd OTO Trust Oturoa Easton Ltd Owen & Robyn Ruddell Partnership Owhango Farms Limited Oxenford Trust P & G Mulholland P & H Connole P & J Dickson P & J Harrison Ltd P & S Bryan Limited P A & J M Schumacher Trust P A & K L Leslie P B & C A Sandford P B & D P White P B & E J Chick P C & R A Grey P Capes P D & S F Smith P D & S S Sharpe P D & S Wykes Family Trust P E & S P Crowe Family Trust P G & D M Dombroski P G O'Rorke Family Trust P H & W F Iorns P H J & M A Brown P H S & P C Byford P J & H J Horo P J & M E Gamble Family Trust P J & M L Cotter P Jones Family Trust P K Dairies Limited P L & M G Kuriger P L & R E Berryman P L & V J Nelson P M & K J Clinton Family Trust P Mannington P Mark & M Richards P N & D L Waite Family Trust P P & H J Huisman P R & R F Mossman P S & B K Rai P T & R D Williams Family Trust P T & R E Mander P T & S B Dale Trust P T Robinson P V Balck P W & N J Bavin Paddy's Pastures Ltd Paeroa South Trust Pahau Dairy Ltd Pahau Flats Dairy Limited Pakarau Heights Ltd Palmdale Farms Ltd Palmer Partnership Paretai Farms Ltd Parkhill Farms Ltd Pastoral Holdings Ltd Patrick Milking Ltd Patterson Farming Limited Patterson Rawson Trusts Partnership Paul Turner Farm Trust PB & GJ Fladgate Ltd PD Berry Peebles Siding Dairy Limited Peel View Ltd Penllyn Ltd Pen-Y-Ghent Dairies Limited Percy Farms Ltd Percy Pastures Limited Perks Farm Limited Peter Reeve PF & KM Weren Limited Philip Parry Contracting Ltd Pidgeon Pastures Ltd Pikowai Transport Ltd Pinedale Farm Ltd Pinefield & Sons Farm Limited Pinefields Ltd Pineridge Partnership Piriaka Farms Ltd - M & C Ferris Pirie Farms Limited Pirongia Limited PJ & AM Neame Ltd PKW Farms LP Placement Services Limited PN & DA Botica Limited Poc Ar Buille Limited Poharu 2020 Limited Pohuenui River Limited Pollock Dairies Limited Poplar Dairy Farm Limited Port Molyneux Dairies Limited Pourakino Valley Trust Praire Farm Ltd Pratt Bros 2000 Partnership Premier Dairies Limited Price Trusts Partnership Prima Farms Ltd Promise Farm Ltd Protein Producers Ltd Puka Farms Limited Pukerua Farm Ltd Puketaha Farming Enterprises Ltd Pukewera Station Ltd Pullington Investments Putaki Farms Trust Pynewood Farm Ltd QK Farming Limited Quirke Family Trust R & L Dunn Partnership R & L Farms Ltd R & L Johansen R & L Swafford R & M Hammond Trust R & P McIntosh Ltd R & S Gay Limited R & S Singh R A & F N Davidson R A & P E Adam R B Swney R C & K M Ormsby R F & C L Lansdaal Ltd R F Seebeck R G & C K Chubb R J & C A Stevenson R J & E F Shaw R J & J R Thomas R J & K E A Cameron R J Beckett R K T Suisted R L & F M Hurley R L & H J Colson Trust R L & S F Thompson R M & S A Grayling R N Van Der Fits Family Trust R P MacInnes Trust R S & R D Gordon R T & E A Brown Ltd R W & F W Muller Trust R W & M E Gore R W & M E Gore Family Trust R W & R D Kane R.L. Mathis Ltd RA & L Lash RA & NJ Johnstone Limited RA Gibbsons & EF Uerata Parnership Ra Kanohi Amuri Limited Rai Farm Limited Rakaia Incorporation Ltd Rakaia Island Limited Ramsay Dairies Limited Rangitata Dairies Ltd Pship T/A Longstream Farms Raukapuka Farm Ltd Raumati Farm Ltd Ravelston Farm Limited Reaymore Farming Limited Red Dragon Systems Limited Redwood Farm Trust Reed & Arden Farms Limited Reuver Limited Ribbonwood Dairy Farm Ltd Ribbonwood Dairy Ltd Rich & McCallum Limited Richview Limited Riddoch Farming Limited Ridgedale Limited Ridgeline Farm Limited Riley Glen Collinge Rimoo Farm Ltd Riorima Farm Ltd Rising Bars Ltd River Heights Limited River Run Trust Riverdown Farms Ltd Riverina Pohangina Ltd Riverside Dairy Farm Ltd Riverside Farms NZ Limited Riverside Sharemilking Ltd RJ & KB Smyth RJ Dairies 2018 Ltd RKBS Horne Ltd RM & JP Harrison Family Trusts Partnership Robert Gibson Trust - Totara Farm Robinson Muller Trust Partnership Rockburn Dairy Ltd Rockford Holdings 2015 Ltd Rockhaven Farm Partnership Rocky Point Enterprises Ltd Rodeo Farm Ltd Rodgerthat Dairies Ltd Rodney G & S J Joblin Rogers Family Trusts Partnership Rogers Farming Ltd Rolfe Farms Limited Rombouts Farm Ltd Rooney Farms Limited Rory Gibbs Rosam Ltd Rose Farm Ltd Roseneath Dairies Ltd Rossco Farming Ltd Roswin Farm Limited Roto Farms Ltd Rotongaro Downs Ltd Rout Dairies Limited Rowan J Frazer & Jenni Coates Rua Fox Limited Ruakiwi Dairies Limited Rubia Dairying Rubia Farm Limited Ruby Skye Limited Rukuhia Holdings Ltd Rusky Ltd Ruthe Farms Limited Ryan & Ashley Trim Ryan Burton Farming Ryan Sutherland Rydal Farm Trust Ryelands Farm Company Limited RYEM Partnership Rylock Farms Limited S & K Phillips S & M West S & R Bell Partnership S & R Pastoral Ltd S & S Iorns S B & A H Steverson S B & L Wenzlick S B & Y M Thompson S C & A N Charmley Ltd S C & P J Sanson S G & B L Thirkell S Huta & T Tawhiao Partnership S J & D L Smith S J & J L Fevre Trusts Partnership S J & L M Colson S J & M R Dravitzki S J Bruce Family Trust S J Cullen S M & J S Eichler S M Robinson FONTERRA ANNUAL REVIEW 20211415HONOUR ROLL FOR ON-FARM EXCELLENCE Te Tihi Continued... S Mostert & A Leahy S R & C J Baucke S W & F M Settle S.V. & M.L. Helms Sailing Away Family Trust Sandow Farming Ltd Sanson Farms Saunders Family Trust SB & AM Gold Limited Scarlett-Brown Partnership Schayes Enterprises Ltd Schorn Trust Schouten Dairies Ltd Scott Evans Sharemilking Limited Scott Mark & Rachel May Ireland Scotts Plateau Limited Serpentine Farms Limited Settler's Inn Trust Seven Mile Farms Limited Shady Farming Limited Shaftesbury Soup Holdings Ltd Shailer Trading Trust Shawlink Ltd Shearer Family Farms Ltd Sheenfield Farms Ltd Shepherd Dairy Farming Partnership Sherwood Farming Co Limited Sidewayz Farming Limited Silvacrest Farms Ltd Silverbank Enterprises Limited Sisley Farms Ltd SJ Pastures Limited SK Holdings (2017) Limited Skippers Dairy Smiling Dairies Limited Smit Dairies Ltd Smith & Calderwood Limited Smithetal Ltd Smithill Ltd Snow View Dairy Ltd Sole Farm Trust Sole Farms Ltd Solid Ground Agribusiness Ltd Somerset Dairy Farming Limited Somerset Trust Sounds Like Home Limited South Dairy Limited South Hilton Ltd Southern Meadows 2011 Ltd Southern Pastures (Manako Farm) Ltd Partnership Southern Pastures (Mauri Farm) Ltd Partnership Southern Pastures (Tatua Farm) Ltd Partnership Southern View Limited Southgate Farms Limited SP & KP Van Burgsteden Spark Brothers Ltd Spring Peak Ltd Springdale Farms Trust Springfield Partnership Ltd Springpark Farms 2008 Ltd Springsafe Ltd SS & CJ M Partnership Station Road Farms Ltd Stevenson S R & J A Trust Steward Dairy Ltd Stichbury Farms Limited Stone Country Dairies Ltd Stornaway Farm Ltd Stralough Ltd Streamline Limited Partnership Strowger Enterprises Limited Stumc Limited Sturgeon Family Trust Partnership Suffolk North Farm Trust Summerlands Limited Sursum Farms Ltd Sveka Farming Limited Swim Farms Ltd Sybton Farm Limited Partnership Syme Ag Ltd T & C Brown Limited T & J Managh T & V Rawlinson T and M Wrigley Ltd T E & K A Olson Partnership T E & V L Herbert T G & L J Goodhue T J & K K Rigter Ltd T J & L E Luond T M & H D Green T M Mcdowall T P Payton T S Curtis T Van Woerden & Estate of H Van Woerden T W H Edwards Tablelands Dairy Limited Taihoa Family Trust Taikatu Plains Limited Tainui Group Holdings Limited Tamatea Farms Ltd Tanks Road Dairy Ltd Tanner Dairies Trust Taradise Farm Taranga Town Supply Tatiara Ltd Tauhara North Farming & Co LP Tauhei Farms Ltd Tavuna Farm Limited Tawa Ridge Farms Ltd Tawanda Nhemachena Tayco Farm Limited Taylor Family Enterprises Ltd Taylor Farming Trust Te Awa Farms Limited Te Awa Land Co Limited Te Awa Pararahi Limited Te Ngawai Dairies Ltd Te Pohutukawa Farm Limited Te Puna Wai Dairy Farm Limited Te Repo Farms Limited Te Uku Farms Limited Te Waiu Ltd Te Whanake Enterprises Ltd Te Whanake Joint Venture Telesis Trust Tennant Farms Ltd Ternstone Ltd Terpstra Farming Limited Terrace Farm Holdings Limited Terrace Farms 2016 Limited Terrace Top Dairy Ltd Terrace View Partnership The Adare Company Limited The Aspins Ltd The Bush Trust The D & A Roberts Family Trust The Flavall Trust The Goble 2000 Trust The Harkaway Trust The Hendriks Family Trust The Herewahine Trust The Holding Barn Ltd The Len Day Family Trust The Ridges Limited The Taieri Dairy Company Ltd The Toms Joint Venture Tiger Hill Farm Ltd Tihiroa Dairies Ltd Partnership Tihiroa Farms Ltd Tiro Roa Ltd TJS Farms Limited TL & SL Taylor Ltd TN & GL Gray Ltd Toa Farms Ltd Todd Agri Ltd Todd Bavin Toey Farms Ltd Tokama Limited Tokerau A5 Incorporation Tokoroa Pastoral Ltd Tomara Dairies Ltd Toner Trading Ltd Torran Moor Ltd Totara Dale Farm Ltd Totara Grove Farms (2007) Ltd Townsend & Sons Ltd Trenberth Family Trust Trillo Farming Trinity Lands Limited Tripark Farms Limited Tronnoco Farming Co Ltd Tuck Dairy Limited Tui Company Limited Tui Glen Nikau Farm Limited Tuikonga Farms Ltd Tuki Tuki Awa Ltd Turnbull Family Trust Turney Farms Limited Turney Farms Ltd - 2 Turpin Dairies Limited Tussock Creek Dairies Limited Tussock Creek Farming Trust Tussocky Road Dairy Farm Limited Tyndale Family Trust Udderfield Ltd Udderly Excellent Farms Limited Udderly Harvey Udders and Us Ltd Umuwhawha Land Company Limited Underwood Enterprises Ltd Unity Farm Ltd Upper Balmoral Ltd Upson Downs Limited V & J Ralph Ltd V A & J J Nicholls V B Durham Farm Limited V E & D M Grant V J & C E Stevenson V M Beckett V P Farming Limited V Villiger and Estate of J Villiger Valley Road Farm Ltd Van De Pas Trading Ltd Van Der Salm Farming Limited Van Rossum Ltd Van Terover Farms Limited Van Tweeling Ltd Vanderweg Farming Ltd Vansco JV Limited Vaughan Ardern VBI Ltd Ventsha Farms Ltd Verdie Farms Ltd Vervet Holdings Limited T/A Taggart Dairy Vervet Holdings Ltd Voorend Agriculture Ltd Vos Farms Ltd W & C Candy Trust W & C Gibberd W & G Burke Ltd W & H Villiger Farm Ltd W & K Rolton W A & E J Beaumont W E & M L Gerring W G & L A Matthews W G & M D Orr W J & V M Donald W J A & L J West W J C & B Y Godfrey W M & K B Bolt W M & S R Fisher W R & D J Little W R & Z W Kite W S & K M Fleck W T J Waetford & H M Wallace Ptnshp W W Olsen W.E. & G.J. Bonnar Ltd Wacwac Farms Ltd Wade Industries Ltd Wagon Track Farm Limited Waiari Dairies Ltd Partnership Waihou Farming Trust Wai-iti Dairy Farm Ltd Waikato Dairy Limited Waikirikiri Farm Partners LP Waikorire Farms Ltd Waimacher Farms Ltd Waimanu Dairy Ltd Waimarama Farming Ltd Waimarie Holdings Ltd Waimeamea Holdings Wainono Dairy Ltd Waiotu Farms Ltd Waiparu Farm Ltd Waiparu Holdings Limited Wairio Farm Company Ltd Waitaki Partners Waitoru Farm Limited Waituna Investments Ltd Waiwhakaata Trust Waka Tropics Limited Wakapatu Dairy Farming Ltd Walker & McLean Partnership Walker Holdings Taupiri Ltd Wallace Corporation Ltd Wallace Johnstone Ltd Walter Gold Ltd Walters Holdings (2008) Ltd Washer & Co Ltd Watershed Ventures Ltd Waterstone Farm Limited Watford Trust Way Farming Ltd Waytemore Farms Ltd Webber Farm Ltd Wekanui Farming Ltd Wekanui Farming Ltd (No. 2) Wellpark Dairying Ltd Welsh Family Farms Limited Welvarrt Farming Company Ltd Wendon Dairies Ltd West Mains Farm Ltd Westhaven 2019 Limited Partnership Westmere Co (2007) Ltd Westmere Farm Ltd Westmere Holdings Westmorland Estate Ltd Westmorland Farms Ltd Westridge Farm Ltd Weta Farms Limited Wharepapa Trust Wheyland Farms Limited White Gold Ltd Whitecliff Jerseys Limited Whitefield Partnership Willans Holdings Ltd Willcox Farms Ltd Williamson Trust Partnership Willmor Pastures Ltd Willowbank Dairies Limited Willowbrook Farms Ltd Willowburn Farm 2007 Ltd Willowcreek Trust Willowfields Ltd Willowhaugh Enterprises Limited Willowview Limited Willowview Pastures Limited Wilriskit Limited Windwhistle Pastoral Ltd Winter Farms (2004) Ltd Wintersun Farming Ltd Wiremu Trusts Woldwide Five Ltd Woldwide Four Ltd Wolff Farms Ltd Wonderland Pastures Ltd Woodheys Farm Limited WTF Partners Wycombe Trust Wyllies Farm Partnership Wynyard Dairies Ltd Wynyard Family Trust Wynyard Limited Y.O.T. Farms Ltd Yalumba Farm Trust Yaxleys Yard Ltd Yeroc Farm Trust YTT Farms Ltd Zeeland Dairies Limited Zeldon View Limited Zenzele Farm Ltd Ziang Farm Ltd Zoetermeer Agriculture Ltd Zonneveld Farms Ltd Zug Farms Limited ― In another year impacted by COVID-19, we thank our farmer owners and our people around the world for their continued dedication and their remarkable achievements. He aha te mea nui o te ao? He tāngata, he tāngata, he tāngata. What is the most important thing in the world? It is people, it is people, it is people. 17 FONTERRA ANNUAL REVIEW 20211617OUR YEAR IN REVIEW Our year in review On-farm greenhouse gas (GHG) emission profiles are introduced, helping farmers identify opportunities for improvements on farm We announce a partnership with US dairy co-operative Land O’Lakes to expand the reach of our Foodservice products in the country Anchor™ launches New Zealand’s first plant-based milk bottle Peter McBride starts as Board Chair. He takes over from John Monaghan, who steps down from the Board after 11 years as a Director Cathy Quinn ONZM is elected to the Fonterra Board NZMP™ launches Milk Phospholipids into the global active lifestyle market. Naturally present in milk, these complex lipids are clinically proven to help manage the effects of stress Our Te Awamutu site moves away from coal, firing up on wood pellets We expand our involvement in KickStart Breakfast and the NZ Food Network Our first innovation application centre in China opens in Shanghai, dedicated to developing new ways of using our products We announce we’re developing Kowbucha™, a fermentation that could reduce methane in cows We confirm Teh- han Chow as CEO Greater China We announce we will stop using coal by 2037 NZMP™ launches carbonzero™ certified Organic Butter, the first product in a portfolio of carbonzero™ certified ingredients NZMP™ butter wins five gold medals and NZMP cream cheese wins three gold medals at the 2021 NZ Champion of the Cheese Awards We start a consultation process with our farmer-owners on potential options to change our capital structure We complete the sale of our wholly- owned China Farms, resulting in cash proceeds of $552 million Our Emergency Response Teams are mobilised to help farmers hit by flooding in Canterbury Global demand for cream cheese sees us bring on a full shift of new recruits at our Darfield site OUR YEAR IN REVIEW We complete the sale of our two joint venture farms in China, further underlining our strategy of prioritising New Zealand milk The Co-operative Difference payment of up to 10 cents per kgMS for farms that meet sustainability and value targets comes into effect We join with Dairy NZ, PGG Wrightson Seeds and the Government to get the Plantain Potency & Practice programme underway. The project seeks to substantially reduce nitrate leaching to freshwater NZMP™ picks up two awards for its world-class probiotic strains at the annual China Gut Conference We announce that our Stirling manufacturing site in Otago will make the switch from coal to renewable energy We team up with the Ministry of Health to offer all New Zealand employees COVID-19 vaccinations at our manufacturing sites and offices We launch our Anchor™ Wellness range in the Middle East MAY 2020 JULY 2020 AUGUST 2020 SEPTEMBER 2020 OCTOBER 2020 NOVEMBER 2020 DECEMBER 2020 FEBRUARY 2021 MARCH 2021 APRIL 2021 MAY 2021 JUNE 2021 JULY 2021 Farmgate Milk Price Farmgate Milk Price highpoint Farmgate Milk Price midpoint Farmgate Milk Price lowpoint We announce an opening forecast Farmgate Milk Price range for the 2020/21 season of $5.40 - $6.90 per kgMS, with a midpoint of $6.15 per kgMS We narrow our 2020/21 forecast Farmgate Milk Price range to $5.90 - $6.90 per KgMS, lifting the mid-point to $6.40 per kgMS $9.00 $8.00 $7.00 $6.00 18 We lift our 2020/21 forecast Farmgate Milk Price range to $6.30 - $7.30 per kgMS with a mid-point of $6.80 per kgMS We narrow our 2020/21 forecast Farmgate Milk Price range to $6.70-$7.30 per kgMS, with a midpoint of $7.00 per kgMS We lift our 2020/21 forecast Farmgate Milk Price range to $6.90-$7.50 per kgMS, with a midpoint of $7.20 per kgMS We lift our 2020/21 forecast Farmgate Milk Price range to $7.30 - $7.90 per kgMS, with a midpoint of $7.60 per kgMS We narrow the 2020/21 forecast Farmgate Milk Price range to $7.45 - $7.65 per kgMS, with a midpoint of $7.55 per kgMS We set the opening Farmgate Milk Price range for the 2021/22 season of $7.25-$8.75 per kgMS with a midpoint of $8 per kgMS Final 2021 Season Farmgate Milk Price $7.54 per kgMS 19 FONTERRA ANNUAL REVIEW 2021OUR CONTEXT Our context Despite the ongoing pandemic, we have continued to deliver. This is thanks to our employees, farmers, the resilience of our supply chain, our customer relationships and a strong global demand for dairy. Want Want Group was founded in Taiwan in 1962, and today operates in 61 countries and regions across Asia, Africa, North America, South America, Oceania and Europe. We’re known for our popular snack products – dairy products, beverages, rice crackers and candy. The success of these products could not be achieved without Fonterra’s high-quality dairy ingredients. We’ve worked with Fonterra for several years and we consider them to be one of our most important strategic partners. New Zealand enjoys unique advantages in its natural environment with high-quality cows that roam freely. This makes Fonterra’s ingredients irreplaceable to us. Its concept of grass fed, cared for cows, and milk that is sustainably sourced brings added value to customers. But it’s not just about the ingredients – we also appreciate the additional services Fonterra provides, such as technical expertise, market insights and brand collaboration. We’re seeing a growing demand for dairy products as disposable incomes increase. At the same time, people recognise the link between protein and immunity. Working with Fonterra, we recently launched a yoghurt with lactoferrin to tap into this trend. Want Want Group is always actively exploring new growth opportunities. We are currently looking at how other dairy ingredients like whey protein, milk protein concentrates, cheeses and new cheese powders can give us new value propositions. We look forward to working with Fonterra and using their advantage in dairy products to further our success.” – Yvonne Cao Yongmei, General Director of Manufacturing and R&D, Want Want 20 We’ve been farming for more than 30 years and have seen changes over that time. We are excited and positive about the future of dairy farming in New Zealand. People want New Zealand milk because they know it’s nutritious, produced from cows grazed on grass and has a great reputation. We’re really proud of that. The challenge for the future is to stay ahead of trends and to make sure that, as an industry, we’re farming sustainably. Being part of Fonterra is important to us because it is the whole business. It means our milk is picked up every day, processed and sold, doing the right thing for the customer and the farmer investor and maximising returns to farmers. We’re all in it together - from the farm, through the supply chain, to the customer. There’s a lot of work involved in compliance and things like the Farm Environment Plans are a really practical way that Fonterra helps us. We are part of the Fonterra community and connected to what’s happening in our Co-op. We’re delighted that two of our four sons are dairy farming independently and are also Fonterra suppliers. For dairy farming to thrive, Fonterra needs to keep leading the industry and being a co-operative that people are proud of and want to be part of.” – Jim & Mary Grayling, Ohaupo OUR CONTEXT I’ve been at Fonterra for nearly five years, and during this time I’ve been fortunate to have worked in various areas of the business. This has allowed me to expand my skillset and my network. Fonterra is full of opportunities and you can continue to develop if you show a willingness to step out of your comfort zone. Fonterra is more than just a workplace for me. It’s my second home and a place where I feel able to not only bring my whole self to work, but also make a difference. At the heart of our Co-op is a group of amazing and talented people. When I see our customers’ products on the supermarket shelf, I get a really clear sense of the contribution my wider team and I make to our Co-op’s strategy, knowing that I was able to play a small part in getting it there. At the end of the day, it’s our responsibility to create meaning out of what we do. For me, it’s being able to come into work knowing that I play an important role in creating goodness for generations through the supply of world-class ingredients. But I also get a sense of purpose through the mental health advocacy work I perform outside my day-to- day role, which Fonterra has encouraged and supported. We’re a global organisation and many of our colleagues continue to be affected by COVID-19 lockdowns. As a passionate advocate for mental health and as someone who has openly shared their own experiences with this, I’ve been incredibly proud and grateful for how Fonterra has demonstrated care by putting wellbeing at the forefront of its response to COVID-19. There is a real sense of compassion for what others are going through and a deeper appreciation for being together, regardless of where we are across the world.” – Michelle Ortega, Supply Planning Manager 21 FONTERRA ANNUAL REVIEW 2021OUR APPROACH Our approach A sustainable future for our Co-operative is core to our strategy – it’s how we create long-term value for future generations. OUR APPROACH Laura & Ben, Auckland Stephanie & Keeley, Auckland Farmer, Waikato Healthy People We’re working together to care for people and make a positive social impact He aha te mea nui o te ao? He tāngata, he tāngata, he tāngata. What is the most important thing in the world? It is people, it is people, it is people. Healthy Environment We’re working together to achieve a healthy environment for farming and society Healthy Business We’re working together to deliver a sustainable business Tiakina te whenua i tēnei rā, hei oranga tangata mō ngā rā e heke mai nei. Caring for the land today, so that the land cares for us tomorrow. Nā tō rourou, nā taku rourou ka ora ai te iwi. With your contribution and my contribution, we’ll all thrive together. Addressing public health challenges by improving the nutritional profile of our products and promoting healthy diets. Providing positive employment for our people by promoting a healthy and safe working environment and developing a diverse, skilled and agile workforce. Improving the health of our communities by doing business in the right way, sharing what we do best and playing our part to build resilient, sustainable communities. Improving the health and biodiversity of our land and waters by having a regenerative mindset, reducing the impacts of farming and manufacturing, and working in partnership with others. Leading the transition to a low-carbon future by investing in innovation and infrastructure to remove greenhouse gas emissions from our supply chain. Helping meet the growing nutritional demand through improvements in productivity and minimising waste from farm to consumer. Supporting healthy, sustainable livelihoods for our farmer owners by returning the most value from every drop of milk. Building a strong co-operative by ensuring our business, including investments, delivers long-term value. Meeting the changing needs of customers and consumers by leveraging our unique strengths and innovating to create sustainable value for them and us. Long-term contribution Long-term contribution Long-term contribution 22 23 FONTERRA ANNUAL REVIEW 2021HOW WE CREATE VALUE The resources we rely on (our inputs) OUR RELATIONSHIPS • With farmers, governments and regulators, unions, employees, customers, iwi and communities INTELLECTUAL CAPITAL • Our know-how, systems and intellectual property • Our strong global brands • 230 patents across 46 families of patents FINANCIAL CAPITAL • A strong financial base, capital from our farmer shareholders, unit holders and debt ($12,281 million average capital employed) ASSETS AND INFRASTRUCTURE • Our portfolio of property, plant and equipment including right of use assets ($6,465 million total net book value) PEOPLE AND CULTURE • 19,000+ skilled and motivated employees led by a board and management team with diverse skills and experience • 25,000+ dedicated farmers and farm workers • Thousands more people in our supply chain NATURAL ENVIRONMENT • 4.1 million milking cows grazing on 1.5 million hectares of pastoral land • Some fertiliser, irrigated water and supplementary animal nutrition • Energy (28.6PJ) and freshwater (50.8 million cubic metres) for our manufacturing sites We source raw milk from farmers We connect farmers with markets to maximise the value from their milk to make and distribute nutrition as ingredients for foodservice and to consumers HOW WE CREATE VALUE Our outputs (FY21) OUR RELATIONSHIPS • Farmer sentiment = 23 • Employee engagement = 4.09 • We exported to over 140 countries INTELLECTUAL CAPITAL • More than 95% of our manufacturing sites are certified to leading food safety standards • 6 new patents granted • 10 other applications filed FINANCIAL CAPITAL • Farmgate Milk Price $7.54 per kgMS • Total dividend $0.20 • Revenue $20,565 million1 • Normalised earnings per share $0.34 • Debt/EBITDA 2.7x • Return on capital 6.6% ASSETS AND INFRASTRUCTURE • We manufactured 4 million tonnes of finished goods • 500+ milk collection tankers • 48 manufacturing sites PEOPLE AND CULTURE • 2,269 wellbeing scorecards completed • 345,000+ hours of skills training in New Zealand NATURAL ENVIRONMENT • Our supplying farms emit 21.8 million tonnes CO2-e producing 19.3 billion litres of milk • Our manufacturing sites emit 2.0 million tonnes CO2-e and discharged 61 million cubic metres of water 1 This breakdown of revenue is for continuing operations only, rather than total Group revenue, which was $21,124 million for FY21. Guiding Principles: Manaakitanga is the care we show for others Whanaungatanga is how we connect with each other Kaitiakitanga is how we care for our environment 24 25 l s r e d o h e k a t s r u o r o f e u a v g n i t a e r C l Milk PowderHow we create valueFONTERRA ANNUAL REVIEW 2021 CREATING VALUE FOR OUR STAKEHOLDERS Creating value for our stakeholders WE CREATE VALUE BY • Delivering a strong total pay-out – Ref. AR-53 • Reliably collecting their perishable product and providing efficient access to valuable international markets – Ref. AR-39, AR-41 • Adding value to their milk through innovation and a flexible product portfolio – Ref. AR-44 • Providing resilience to operating volatilities such as price, energy, foreign exchange rates and ocean freight – Ref. BP-17 • Providing access to technology and services that help meet regulatory requirements and continues to improve farming practices – Ref. AR-32 HOW WE ENGAGE • At meetings and roadshows, and through our formal governance processes • On an ongoing basis led by our Area Managers and Sustainable Dairying Advisors or equivalent WE CREATE VALUE BY HOW WE ENGAGE • Delivering nutrition products that are high- • On an ongoing basis through our account quality, low carbon and responsibly produced – Ref. SP-12, SP-28, SP-43 • Providing access to nutrition products that include healthier options and linked to sustainability credentials – Ref. SP-9 • Using responsible procurement to influence our supply chain – Ref. SP-44 • Responding quickly to changing needs and customer demand for innovative new products and ingredients – Ref. AR-46 management teams • By sharing information through programmes such as SEDEX and the Carbon Disclosure Project (CDP) • With our own direct consumers through our service teams, email and social media, and consumer research Pei Luk & Claire, Auckland WE CREATE VALUE BY HOW WE ENGAGE • Providing a safe workplace – Ref. SP-14 • Supporting health and wellbeing – Ref. SP-14, SP-15 • On an ongoing basis through our everyday interactions, regular engagement surveys and engagement with unions • Providing good learning and development opportunities – Ref. SP-16 • Building an inclusive culture where everyone contributes and feels supported – Ref. SP-18 AR-XX = page in Annual Review BP-XX = page in Business Performance Report SP-XX = page in Sustainability Performance Report 26 CREATING VALUE FOR OUR STAKEHOLDERS WE CREATE VALUE BY • Complying with regulatory requirements, including food safety, milk price, marketing and environmental – Ref. SP-46 • Reducing our environmental footprint including GHG emissions, water consumption and solid waste to landfill – Ref. SP-22 • Contributing to the development of policy and responding to crises – Ref. AR-36 • Collaborating with industry partners to achieve international commitments – Ref. SP-28 • Taking a responsible approach to tax – Ref. SP-46 • Supporting international relations through our presence in global markets – Ref. AR-53 HOW WE ENGAGE • On an ongoing basis through our Government and Stakeholders Affairs team • Through formal consultation on important issues such as climate change • Through partnerships on initiatives such as Living Water with the New Zealand Department of Conservation WE CREATE VALUE BY HOW WE ENGAGE • Providing sustainable returns via earnings per share, dividends, and interest paid – Ref. SP-40 • On a regular basis through updates, formal reporting and meetings coordinated by our Capital Markets team • Reducing investment risk through transparency and independent assessment – Ref. SP-38 • Providing opportunities to invest in New Zealand dairy nutrition – Ref. BP-12 WE CREATE VALUE BY HOW WE ENGAGE • Providing direct and indirect, rural and urban • With interested groups such as NGOs employment – Ref. SP-40 • Lowering our environmental footprint – Ref. SP-22 • Supporting communities through natural disasters and crises such as floods – Ref. AR-36 • Providing access to nutrition through in- school nutrition and food bank donations – Ref. SP-20 • Strengthening and enhancing our relationships with tangata whenua – Ref. SP-18 through collaboration and consultation on specific topics • On an ongoing basis with iwi around Aotearoa New Zealand through our Matakahi – Māori business development team • Through public events, the media and our own social media channels 27 EmployeesSocietyInvestorsFarmersGovernments & regulatorsCustomers & consumersFONTERRA ANNUAL REVIEW 2021OUR PROGRESS CORE INDICATORS1 Healthy People TARGET2 FY19 FY20 FY21 (target in brackets) PERFORMANCE Total recordable injury frequency rate (TRIFR) per million work hours Less than 5 4.9 5.8 Employee engagement5 Female representation in senior leadership Farmer sentiment (Net Promoter Score for Fonterra)(NZ) World-class (Top quartile) 50% by 20226 >10 by 2030 4.005 2nd highest quartile 4.07 2nd highest quartile 28.6% -19 29.1% 33 Healthy Environment Farm Environment Plans (FEPs) (NZ) 100% by 2025 23% 34% 5.7 (5.0) 4.09 2nd highest quartile (Top quartile) 32.4% (35%) 23 (>10) 53% (45%) TARGET FY22 5.6 Top quartile 35.8% 30 67% Water reduction at manufacturing sites in water-constrained regions from FY18 baseline3 30% reduction by 2030 Reduction in absolute Scope 1 & 2 GHG emissions from FY18 baseline4 30% reduction by 2030 3.9% increase on FY18 2.9% reduction on FY18 1.7% reduction on FY18 3.5% reduction on FY18 2.6% reduction on FY18 (10%) 6.5% reduction on FY18 (8%) 8% reduction on FY18 6.5% reduction on FY18 Healthy Business Fonterra %kgMS of New Zealand milk collected for season ending 31 May New Zealand Farmgate Milk Price (per kgMS) Return on capital7 Debt/EBITDA ENIBD gearing ratio Adjusted net debt gearing ratio8 Normalised earnings per share7 1 All targets are global unless stated otherwise (e.g. NZ). 2 All targets are by the end of the year stated. 3 Sites in water-constrained regions updated to add Kauri and remove Brightwater where regional water availability is being significantly improved by the construction of a dam. 4 This target is now expressed as full Scope 1 and 2 emissions relative to FY18 baseline and this has been approved by the Science-Based Target Initiative. The China farms sold during FY21 have been excluded for all years so the underlying progress can be demonstrated. 5 Engagement results reported in the FY in which they were taken. 6 Our original timeline is unlikely to be achieved but we remain committed to the intent. 7 Target updated to reflect strategy to 2030. 8 In July 2021 the Board approved a new basis for calculating the Group’s gearing ratio to align with the definition of debt used for the debt to EBITDA ratio. This basis will be used to monitor the Group’s gearing in the future. The adjusted net debt gearing ratio is calculated as adjusted net debt divided by total capital. 28 – – 7% - 8% by end FY247 9% - 10% by end FY307 2.5x - 3.0x7 – 30%-40% 45c - 55c by end FY247 55c - 65c by end FY307 81% $6.35 5.6% 4.3x 48.5% – 16c 80% $7.14 6.6% 3.3x 41.4% 44.2% 24c – – 79% (80%) $7.54 ($5.90-$6.90) 6.6% (6% to 7%) 2.7x (3.0x to 3.5x) 35.5% 38.5% (36 to 40%) 34c (20c to 35c) 79% $7.25-$8.75 6.5% - 7.0% 2.4x – 34.5% 25c - 40c FY21 progress is evaluated against stated targets: Progressing well or target achieved Progressing but not as strongly as we’d like Not progressing well or original timeline significantly delayed OUR PROGRESS SEE PAGE SP-15 AR-39 SP-18 SP-26 SP-23 SP-30 BP-05 AR-50 AR-55 AR-55 AR-55 29 Our progressFONTERRA ANNUAL REVIEW 2021 ON FARM FONTERRA ANNUAL REVIEW 2021 On Farm We believe having a strong dairy co-operative makes a real difference to our farmer owners, and to the country. Stu, Tania, Rebecca, & Jessica, Taranaki Being an owner of our Co-operative gives farmers control of their destiny. It also gives them the confidence to invest and innovate in their own businesses because they have the certainty that we’ll always pick up their milk and we’re motivated to work hard to get them the best possible price for it. Our scale and diversity allow us to move our farmer owners’ milk into the most valuable products and markets. This helps mitigate some of the risk for farmers that comes when demand for certain products or markets softens. We’re also focused on working with farmers to ensure there is continued demand for their milk for generations to come and, in doing so, support them by sharing useful insights, tools and advice to help them reduce on- farm emissions and improve water quality. The value we create is returned to regional New Zealand with almost 50 cents of every dollar earned by a farmer spent in their local community. This helps sustain local communities and enhance their wellbeing. Final Farmgate Milk Price of $7.54 per kgMS Total dividend of 20 cents per share 53% of supplying farms in New Zealand now have Farm Environment Plans, up from 34% at the start of the year. Well on the way to achieving 100% by 2025 53% of supplying farms in New Zealand now have Animal Health Plans 3,246 farms achieved one of the recognition levels in our Co-operative Difference framework 31 ON FARM Our Co-op’s strategy is about prioritising New Zealand’s milk and making sure we’re sharing it with those who value its uniqueness. The Co-operative Difference Our Co-op’s strategy is about prioritising New Zealand’s milk and making sure we’re sharing it with those who value its uniqueness. The Co-operative Difference is part of this. It takes our customer insights and global consumer trends and brings them together to help farmers understand what needs to be done on farm to help ensure there is continued demand for our products. That means asking farmers to focus on five key areas – the Environment, Co-op & Prosperity, Animals, People & Community and Milk Quality. And The Co-operative Difference provides direction for priority improvements within each of these areas and longer-term guidance on likely requirements and trends. This gives farmers confidence to invest in the things that will add value to their milk. Our farmer owners’ progress is measured through three levels of achievement. Each level brings additional recognition. Since 1 June 2021, a farm can earn up to 10 cents per kgMS on top of the Farmgate Milk Price if they meet sustainability and value targets under The Co-operative Difference. Emissions This year an independent report from AgResearch, commissioned by DairyNZ, showed New Zealand dairy farms have the lowest carbon footprint per kgMS in the world. Our farmer owners have achieved this by harnessing New Zealand’s natural resources through their pasture-based farming. But we know biological emissions produced by cows are a major contributor to New Zealand’s overall emissions and we’re working to do whatever we can to find ways to reduce them. Until you understand where your emissions come from, it’s difficult to know where to start. So, this year we took a very practical step and gave all our farmer owners access to personalised Greenhouse Gas (GHG) emissions profiles for their farms. This was the first time such a tool has been introduced in New Zealand at scale. These reports are designed to provide useful insights for farmers to help identify opportunities for improvements on farm – providing indicators 32 such as the estimated level of biological methane and nitrous oxide emissions per hectare, and the amount of emissions per kgMS. However, achieving a significant reduction requires more than just on- farm changes. We need to find breakthroughs in reducing emissions from cows and that’s why we’ve teamed up with industry partners on a range of research and development projects. Initial results look promising. – With Royal DSM, a global science-based company, we’re testing if DSM’s feed additive product Bovaer®, which reduces methane emissions from cows by about 30% in non-pasture-based farming systems, can do the same in New Zealand’s pasture-based farming systems. – With MPI and DairyNZ, we’ve expanded a promising trial with Nestlé to see if including plantain in a cow’s diet can reduce the amount of nitrogen produced, reducing emissions and improving freshwater quality. – With Australian organisation Sea Forest, we’re trying to understand if we can reduce emissions by incorporating seaweed in cows’ feed. – We’re also exploring whether our expertise in dairy fermentation can be used to target methanogens, the microorganisms found in cows’ stomachs that produces methane. Every year we commission AgResearch to understand the full carbon life cycle of our milk-producing regions. This allows us to estimate our absolute GHG emissions related to farming and to identify opportunities for reduction. We report the findings one year in arrears due to the complexity of compiling and analysing the information. In New Zealand, our profile for the 2019/20 season shows a slight increase in the average carbon footprint on-farm, due in large part to a change in the composition of imported feed. ON FARM Dave & Gareth, Taranaki In order to produce safe, sustainable dairy products there are some things that we can never afford to compromise on. That's why we'll always: We call this “Our Core” – Meet the requirements of our regulators – Comply with all market access requirements overseas – Produce safe, high-quality milk – Look after our people, animals and the environment Once the Core foundations are met, our farmer owners can grow further through three levels of achievement. To make it simple, we use the analogy of a journey up the mountain to reach greater things. Each level brings additional recognition 1201 Te Tihi ACHIEVED LEVEL 3 “THE SUMMIT OF THE MOUNTAIN” FOR THE ENTIRE SEASON 1065 Te Puku “THE MID POINT” SIX MONTHS FARMERS ACHIEVED LEVEL 2 980 Te Pūtake FARMS ACHIEVED LEVEL 1 “THE START OF THE JOURNEY” THREE MONTHS 33 FONTERRA ANNUAL REVIEW 2021One of the special things about being part of a co-operative is that we’re there for each other when times are tough. We were also one of only 12 global food producers and manufacturers to be recognised for farm animal welfare leadership in the Business Benchmark on Farm Animal Welfare (BBFAW) and the only New Zealand organisation included in the line-up. Responding to extreme weather One of the special things about being part of a co-operative is that we’re there for each other when times are tough. We’ve seen that this year with COVID-19, but also with our Emergency Response Teams (ERTs) lending a hand when wild weather hits. In late May, parts of Canterbury experienced some of the worst flooding the region has seen in a century. A number of farmers faced significant stock, feed and equipment losses with debris spread right across their properties. Our Co-op’s local ERT members, as well as those from other parts of the country, arrived to pitch in on the worst-affected farms. Water quality Improving water quality is important to our Co-op. Farm Environment Plans (FEPs) are a key part of The Co-operative Difference and one of the main tools we offer farmers to help improve water quality. Compiled by our Sustainable Dairying Advisors, FEPs give a tailored overview of a farm soil health, water quality and freshwater biodiversity. They enable farmers to focus on the areas where they can make the biggest positive impact. FEPs help farmers take targeted actions, but we’re also looking to accelerate additional solutions. Working in partnership with the Department of Conservation, our Living Water programme is trialling tools that show dairying and freshwater can thrive together. In Waikato, Living Water is trialling floating wetlands as a way of improving freshwater quality. Early indications show that introducing floating wetlands to farm drains that flow into Lake Areare has reduced nitrogen and phosphorus entering the lake. With DairyNZ and PGG Wrightson Seeds, Fonterra is exploring how the use of plantain within pasture could reduce the amount of nitrogen produced by cows, improving freshwater quality. The Plantain Potency and Practice Programme, which is supported by Government funding, aims to reduce nitrate leaching on farm. Animal wellbeing Our farmer owners care for their animals and for many, their cows are part of the family. They know that healthy cows produce the high-quality, nutritious milk our customers want and 53% of our supplying farms now have Animal Health Plans in place. This year our Cared for Cows Standard achieved independent certification so we can give customers substantiated claims about the provenance of our milk. 34 ON FARM Pete Morgan & Ann Bouma Sticking together will always be stronger Ann and I are in our 21st year of owning our Pokuru farm which we have grown from 120 ha in 1999 when we bought it from Ann’s parents, to the current 265 ha. In that time, we’ve seen huge advances in benchmarking and performance modelling, streamlined accounting, farm record-keeping and communication tools. However, the fundamental drivers of the business - pasture first, good care of our animals and land, tight cost control and embracing the challenges and richness of farming life - are still the same. We think the premium our milk commands is linked to how much our consumers trust it. They care that we care; that our milk is nutritious and safe and that we love and look after our cows. We are part of a wider farming community that cares for each other and is working together to get better at managing our beautiful environment. Our approach is driven by some simple principles centred around feeding excellent pasture to well-cared-for cows to make high quality milk we can be proud of. To us, being sustainable addresses both the need to be resilient enough to sustain a strong business into the future and to do it in a way that takes into account the impact we have on our people, animals and environment. We need to take full responsibility for our impact on soil, water and in particular our emissions. Addressing these issues while producing a highly valued food the world wants is a good place to be. It was really special to have continuity during the COVID-19 lockdown, both for our farm business and personally for our family. It is a wonder that our milk got picked up, supply chains managed to keep our markets serviced under unimaginable disruption and we got paid while the world got fed. Communal agriculture has sustained people since societies first formed. Our Co-operative has always made sense to us; sticking together will always be stronger. It means we need to be involved and have a say in our direction. It’s not always easy to agree, but it’s a healthy test we are going the right way.” – Pete Morgan & Ann Bouma 35 FONTERRA ANNUAL REVIEW 2021OFF FARM FONTERRA ANNUAL REVIEW 2021 Off Farm From the tanker driver who collects the milk, to our cheese makers and packers and everyone in between, our people are focused on one thing – creating value from every single drop of milk we collect. And in another year disrupted by COVID-19, our people worked tirelessly to keep our supply chain running smoothly, meet customer demand and deliver for our farmer owners. More than ever we’re focused on the safety, health and wellbeing of our people and continuing our commitment to employee development, engagement and building an inclusive workforce. We’re closer to our goal of exiting coal by 2037 and made our biggest reduction in carbon emissions from coal in a single year. The boiler at our Te Awamutu site completed its first season firing on renewable wood pellets and in July, we announced our Stirling manufacturing site is next to go coal-free. Waitoa Employee engagement up, close to achieving our target of top quartile ZERO fatalities 28.1% increase in the hours of skills-related training Serious harm injuries and recordable injuries both down 32.4% female representation in senior leadership 6.5% reduction in our scope 1 & 2 greenhouse gas emissions since FY18 0.3% increase in water use at our manufacturing sites in water-constrained regions 37 Health, safety & wellbeing We want all our people to get home safe, every day. That’s why we put safety first and support the mental and physical wellbeing of our people. This year, our total recordable injury frequency rate has reduced slightly from last year, with the number of serious harm injuries also down. We also recorded zero fatalities. While these are encouraging trends, every event is one too many. Many of our global teams continue to be affected by ongoing lockdowns that have tested our usual ways of working. We have leaned into digital tools like Microsoft Teams, which have allowed us to stay connected and accelerate flexible working options. We have stepped up our wellbeing game. More than 5,000 people have taken part in a series of employee-led webinars that have turned the spotlight on mental health. And our ‘Better You’ app is just one of our increasing range of virtual wellbeing tools to support our people wherever they are in the world. We have expanded the reach of our Good Yarn workshops at manufacturing sites and offices across New Zealand. The workshops provide tools to help improve mental health and personal resilience along with practical ways of supporting those who may need it. We have also established a network of trained wellbeing staff who can provide assistance and where needed, help with access to professional support. Our people Building a culture of inclusion and connection enables us to deliver our purpose, empowering people to create goodness for generations – You, me, us together, Tātou, tātou. Last year, we appointed a new Head of Diversity and Inclusion and launched a Global Diversity and Inclusion network. One of our priorities is to retain a greater proportion of women and increase the number of experienced women hired. We made progress on female representation in senior leadership roles this year, which is up to 32.4%. Achieving greater gender diversity across our leadership teams remains a priority. Crawford Street Whareroa 38 OFF FARM It was the strength of Kotahi, our supply chain partnership with Silver Fern Farms, Maersk Line and the Port of Tauranga, that meant we were able to get our products to market and in record numbers, with 2.59 million metric tonnes shipped. We know people need to feel engaged and inspired to be at their best. We measure employee engagement using a Co-operative wide survey administered by Gallup. Despite the challenges of COVID-19, employee engagement was up this year, with more teams in the top quartile and almost achieving our target of top quartile overall. We’re focused on the development of our people, supporting leadership and emerging talent. In 2019, we signed the Aotearoa New Zealand Skills Pledge to help employees grow core skills. As part of the Pledge, we have committed to doubling on-the-job training and reskilling hours in New Zealand by 2025. Over the last 12 months, we’ve seen a 28.1% increase in the hours our New Zealand employees spent upskilling. We have several programmes in place to make this happen, including early-in-career offerings for apprentices, trainees and graduates, with training that results in independently recognised qualifications. Resilient supply chains Global supply chain disruptions have been ever-present since the emergence of COVID-19. At the onset of the pandemic, our China team provided updates on the developing situation. This helped us to react and adapt early, keeping our products moving through the supply chain. We really started to feel the pinch in September 2020, as government stimulus packages began to kick in and lockdowns prompted a surge in online shopping. This, combined with limited airfreight options and global port congestion, brought a perfect storm – just in time for our peak export period. Previous investment in digitising many processes and the resilience of our logistics team were very important. It was the strength of Kotahi, our supply chain partnership with Silver Fern Farms, Maersk Line and the Port of Tauranga, that meant we were able to get our products to market and in record quantities, with 2.59 million metric tonnes shipped. Our Kotahi partnership means freight is pooled with 50 other New Zealand exporters, minimising our exposure to events like COVID-19. 2.59 million metric tonnes shipped from New Zealand. 39 FONTERRA ANNUAL REVIEW 2021Packaging is needed to prevent food waste, so we like to make it easy for customers to recycle. In 2019, we established a Sustainable Packaging Programme to help us deliver our target of 100% reusable, recyclable or compostable packaging by 2025. We’ve worked with experts to assess local recycling infrastructures and standards and will influence improvements where possible. Packaging has also been a focus for our network of 66 Farm Source™ stores. The team has removed packaging altogether on about a third of its Country Mile range and replaced plastic with recyclable options where removal isn’t possible. In the last year, Farm Source™ has also introduced the 360 REPREVE® workwear range, made from recycled plastic bottles. Renewable wood pellets Climate change Packaging We are working to reduce our impact on the environment at every point across our supply chain. Our manufacturing activities account for about 9% of our reported GHG emissions, mostly from energy use. For our manufacturing operations, our approach is simple - use less and emit less. We will use less by continuing to improve our energy efficiency. Last year, we achieved our target of a 20% reduction in energy intensity from our 2003 baseline. We plan to convert our remaining nine coal-burning sites to renewable energy by 2037. The transition of our Te Awamutu site from coal to wood pellets this year has resulted in a significant reduction in the total quantity of coal we use. We recently announced that our Stirling site will join Te Awamutu in making the transition away from coal and, in August 2022, will become our first site where 100% of thermal energy is renewable. Elsewhere, we are transitioning a third of our light vehicle fleet to EVs and installing more charging stations at our sites. The recent roll out of Milk Vat Monitoring Systems on farms has created opportunities to optimise our tanker pick-up schedules and means we’ll have fewer tankers on the road from next year. Water Responsible use of water is important for our manufacturing sites, particularly those in water-constrained regions. Water use increased at these sites by 0.3% this year due to increased production, challenges commissioning new equipment and some other one-off events. We are still using 2.6% less water at these sites compared to 2018 and water-efficiency continued to improve at other sites. In many instances, we can use the treated water from our factories to help grow grass and other crops such as hemp. These crops can then be used to produce animal feed, creating a circular model for nutrient management. 40 Last year, we achieved our target of a 20% reduction in energy intensity. Cynthia Ferrer OFF FARM For the last 18 months, work and personal life have basically sat in the same space. Our homes have been our gyms, our schools, our everything. JASMIN MAGSAJO – MARKETING DIRECTOR, FONTERRA PHILIPPINES Our people: professional, dedicated, resilient and agile Prioritising the health of our team and allowing us to work from home is huge. Not all companies here have committed to that and I am truly grateful. It is a load off my mind not having to worry about my personal safety and that of my team on a daily basis. For the last 18 months, work and personal life have basically sat in the same space. Our homes have been our gyms, our schools, our everything. Lockdown has given me time to reflect on the things that really matter – my family and my belief in the power of teamwork. I have gotten through these challenging times with the help of people around me, my family and my teams within Fonterra whether here in the Philippines, regionally or globally. Everyone has been so supportive and strong for each other. It’s been really motivating to see how resilient our people have been. We work for a company and a category that’s very relevant for people and I know that we’re making a difference in people’s lives, their health and their wellbeing. So that keeps me motivated.” – Jasmin Magsajo, Marketing Director, Fonterra Philippines Jasmin Magsajo Here in the Philippines, we are experiencing a third wave of COVID-19 transmissions and the current case numbers far exceed the records from last year. Everyone in the team knows a family member, neighbour or friend who has been affected by the virus. Our people are dealing with this every day, so we need to make sure that they are well supported. For the most part, our people have been working from home since 16 March 2020. Our people are very professional, dedicated, resilient and agile. Amidst adversity, they have remained relentless in pursuit of their targets. They have adapted well and have put processes in place to meet the demands of the new normal. Despite the challenges over the last 18 months, our workforce has strongly demonstrated that we are ‘Good Together’ and we recently achieved the highest ever MySay engagement scores here in the Philippines.” – Cynthia Ferrer, HR Director Fonterra Philippines 41 FONTERRA ANNUAL REVIEW 2021PRODUCTS, CUSTOMERS & CONSUMERS FONTERRA ANNUAL REVIEW 2021 Products & Customers We believe there is so much goodness in milk that it’s a true superfood. Our farmer owners produce top quality milk that comes from grass-fed, cared for animals and as a result, New Zealand’s on-farm carbon footprint is among the lowest in the world. Studies show that there’s a world of difference between dairy products from pasture-raised, grass-fed cows like those in New Zealand and those from housed systems and fed grain-based diets. While our sustainability credentials create demand for our milk, we recognise that different customers are looking for different things from our products and ingredients. Our people are experts at unlocking the science of milk, but we believe we’ve only just scratched the surface. Tapping into our experience and IP, we’re delivering on the growing customer demand for products that harness the benefits of dairy in new and innovative ways. Having a presence in our global markets means we can respond quickly to customer demand, local dynamics and trends. Drawing on our rich heritage of innovation, we are using customer insights to bring new products and ingredients to market, unlocking increased value for customers and our farmer owners. Customer expectations around food transparency are also driving innovation. With restrictions on international travel, we’ve used live streaming as a way for customers to connect with our farmer-owners, food technologists and chefs. We are growing value for our Co-op by staying in-tune with customers and matching our dairy expertise with their evolving tastes. 84% portfolio compliant with endorsed guidelines 2 new ingredients launched to support mental wellness 6 new patents granted 7 the number of markets where consumers are able to track the provenance of a product using QR codes 43 For 94 years, our Research and Development Centre (FRDC) in Palmerston North has been at the cutting edge of dairy innovation. It is the home of spreadable butter, cheese lollipops and this year, ambient cream made from fresh milk. Innovation The FRDC is supported by Application Centres in a number of our major markets, connecting the best of Fonterra with our global customers. This year we revamped our Guangzhou Application Centre as we continue to grow our Foodservice business in Southern China. This allows us to work alongside customers to develop and test new products for the local market. Products already launched include a single-serve probiotic sachet which can be added to water and salty egg yolk ice cream. In the US, Fonterra has teamed up with dairy co-operative, Land O’Lakes, to open more doors for our Foodservice business. Our reputation for developing innovative dairy products, along with our commitment to food safety and quality, gives customers confidence to choose our products. Leveraging our intellectual property and skills is an approach we are looking to apply in other markets. Cheese Lollipops 44 PRODUCTS, CUSTOMERS & CONSUMERS Our strategy of focusing on New Zealand milk and growing its value through innovation means we’re well placed to respond to the global demand for products that help people lead healthier lives. This allows us to get value from every single drop of milk that we collect. Whey, once a low value by- product from cheesemaking, is now a valuable source of protein that can improve muscle strength and resilience in elderly people. We’re using this and other dairy ingredients to create a range of nutrition products for people recovering from disease and illness, and those who are looking for products that will help them live longer. Responding to customer demand COVID-19 has generated awareness about general health and products that support immunity. While dairy products are a good source of high- quality protein to help fight infections, those with probiotic bacteria offer an added boost. We recently launched NZMP™ Milk Phospholipids to support adult mental wellness. In the US, we recently expanded the application of our unique probiotic strains to include snack bars, ice cream, cheese and even chocolate. Our single-shot probiotic sachets give customers a quick and easy way of boosting immunity and we worked with Costa Coffee in China to launch a peach probiotics latte. Sports and lifestyle nutrition is also a growing market for us. While it’s traditionally been dominated by products for athletes or gym goers, the market has grown to include holistic wellbeing supplements. With customers looking for innovative dairy solutions, we see potential for growth in this space. We’ve also been using our know-how to add value to existing products. For our China customers, this includes two new ambient cream products which can be stored at up to 35˚C outside of a chiller without compromising quality. Food safety and quality We recently launched NZMP™ Milk Phospholipids to support adult mental wellness. These complex lipids are used in the infant nutrition space because they play an important role in brain development. They have also now 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. Our reputation is built on the trust of our customers which is why we are uncompromising in our approach to food safety and quality. This extends through every step of our supply chain – from farm to final product. Our Food Safety and Quality System ensures that wherever we are in the world, we have a clear, consistent framework to deliver safe, quality products and services. 45 FONTERRA ANNUAL REVIEW 2021Provenance Increasingly, customers want to know where their food comes from, how it is made, and its impact on the environment, animals and communities. The Co-operative Difference is our way of connecting farmers with customers and giving them guidance that ensures our milk is backed by the sustainability credentials customers want. Building on this, NZMP™ launched carbonzero™ Organic Butter, helping NZMP™’s customers achieve their own sustainability goals and capitalising on consumer demand for more sustainable products. Using our electronic traceability systems, we can track the origins of products we make in minutes. This is important for food safety New products are giving customers greater choice. Working in partnership with Foodstuffs North Island, we launched Simply Milk, the first carbonzero™ milk in the Southern Hemisphere, and one of just a handful in the world. A range of our Anchor™ specialty milks in New Zealand are now also carbonzero™. A range of our Anchor™ speciality milks in New Zealand are now also carbonzero™ 46 For us, Fonterra’s provenance story is really important. CHANG-WOO CHOI – CEO DAESANG reasons, but the technology also brings our customers closer to our farmer owners. For example, consumers can check a pack of Anmum™ is authentic and access additional information about its provenance, by scanning a QR code with their phone. We are also using QR codes on our new, plant- based milk bottle made from sugar cane. As well as giving customers a different packaging option, it also enables us to tell our supply chain story. Technology is helping us bridge the gap between farmers and customer in other ways. In the run-up to China’s annual Singles Day shopping bonanza on 11 November, our research and development partner BY-HEALTH hosted a livestream on two of China’s largest E-commerce platforms, directly connecting customers with one of our farming families. With the help of a translator, Waikato farmers Colm and Gaynor Tierney gave viewers a tour of their Ngāruawāhia farm and answered questions about dairy farming. A similar event hosted by Anmum™ attracted more than 10,000 customers for a live chat, taking viewers on a journey from the farm to Fonterra’s HQ. We’re also using Microsoft’s HoloLens technology to bring customers closer to our researchers and food technologists. The mixed reality smart glasses give customers the chance to virtually step into our labs where they can watch the manufacturing process in real time and ask questions. We’re also exploring how we can use this technology for virtual quality control testing. PRODUCTS, CUSTOMERS & CONSUMERS Chang-Woo Choi, CEO Daesang Flawless Ingredients Daesang is South Korea’s second largest FMCG with an annual turnover in 2020 of NZD$3.73 billion. We started working with Fonterra three years ago when we were developing premium medical and nutrition products for our local market. We’re seeing high demand for premium products in the Korean market and a trend for nutritional foods that support health. As the market grows with new products seemingly released daily, we needed a point of difference. We wanted a product that would support healthy ageing and specifically address muscle loss associated with old age. We also wanted to get our product to market quickly. For us, Fonterra’s provenance story is really important. That’s why we made it the hero of our premium dairy nutrition range – Grass-Fed Protein, a ready-to-mix powdered beverage. We know the dairy is high-quality and sustainably sourced but more than that, Fonterra brings technical expertise and marketing support on top of flawless ingredients. We launched our product on Lotte, a home shopping TV channel. It made US$1 million in 60 minutes, breaking TV sales records. We sold out of all 50,000 cans at a rate of around US$17,000 a minute. Earlier this year, we expanded the range to include a beverage format. We believe the market for dairy protein is in its infancy here in Korea and will continue to grow, not only in older demographics but also for millennials. Our Grass-Fed brand is important for us as consumers look for products that are different and innovative. That’s why we’ve partnered with Fonterra – we know their milk is high-quality and sustainably-sourced and they have the technical expertise to maximise the value from that.” 47 FONTERRA ANNUAL REVIEW 2021BUSINESS PERFORMANCE FONTERRA ANNUAL REVIEW 2021 BUSINESS PERFORMANCE Business Performance Danielle & Emma, Auckland Against the backdrop of COVID-19, market uncertainty and global supply chain disruption, we’ve built on last year’s performance to deliver another strong set of results for the 2021 Financial Year. This has been underpinned by a focus on getting our New Zealand milk into the products that generate the best overall returns to Fonterra and our farmer owners. FOR MORE DETAIL ON OUR BUSINESS PERFORMANCE FOR THE YEAR REFER TO OUR BUSINESS PERFORMANCE REPORT New Zealand milk solids collected 1,539 (million kgMS) Up from 1,517 Farmgate Milk Price of $7.54 per kgMS Up from $7.14 Total Dividend 20 cents per share Up from 5 cents Reported profit after tax $599m down from $659m Normalised profit after tax $588m up from $398m ENIBD gearing ratio 35.5% down from 41.4% 49 BUSINESS PERFORMANCE We collected 17,121 million litres of milk, which equates to 1,539 million kgMS. At $7.54 for every kilogram of milk solids, this means the Co-operative contributed $11.6 billion into the New Zealand economy in milk price payments alone. BUSINESS PERFORMANCE Our reported profit after tax of $599 million is $60 million lower than last year, with the 2020 Financial Year benefiting from larger gains from the sale of non-core assets. After removing the impact of these gains, our underlying performance has improved $190 million on last year, with normalised profit after tax of $588 million. The results have been driven by good growth in several areas, particularly in our Foodservice and Consumer channels within Asia Pacific and our Greater China Foodservice channel. We’ve also delivered on the first stage of our long-term strategy - embedding a new customer-led operating model and strengthening our balance sheet. This places us in a good position as we focus our energy on adding greater value to our business. Key metrics1 NZD Total number of New Zealand farms New Zealand milk solids collected (million kgMS)2 Total Pay-out Farmgate Milk Price (per kgMS) Dividend (per share) Return on capital3, 4 (%) Debt to EBITDA3, 5 ENIBD gearing ratio6 (%) Adjusted net debt gearing ratio3,7 (%) For the year ended 31 JULY 2020 31 JULY 2021 9,011 8,827 1,517 7.19 7.14 0.05 6.6% 3.3x 41.4% 44.2% 1,539 7.74 7.54 0.20 6.6% 2.7x 35.5% 38.5% 1. Refer to the Glossary in the Business Performance Report for definition of the metrics displayed in the table. 2. Based on the 12-month milk season of 1 June – 31 May. 3. Calculation of metric includes amounts relating to Continuing and Discontinued Operations. 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 adjusted 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. 5. 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. 6. Economic net interest-bearing debt gearing ratio. Excludes amounts attributed to disposal groups held for sale. 7. Going forward, we will change the way we measure net debt so that the net debt (adjusted 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. Total Pay-out1 $6.52 0.40 $6.79 0.10 $6.35 $7.19 0.05 $7.74 0.20 6.12 6.69 6.35 7.14 7.54 2017 2018 2019 2020 2021 Dividend Farmgate Milk Price 1. Refer to the Glossary in the Business Performance Report for definition. Milk Collection Litres and milk solids collected 17,051 16,932 17,123 16,876 17,121 On average, we returned $7.54 for every kilogram of milk solids our farmer owners supplied to us. Combined with an increased dividend of 20 cents per share, we have delivered a Total Pay-out of $7.74 per kgMS. 1,526 2017 1,505 2018 1,523 2019 1,517 2020 1,539 2021 Litres Collected (million) kgMS Collected (million) Fonterra milk collections (kgMS) for the season were up in New Zealand by 1.5%, reflecting the overall good growing conditions across New Zealand in the second half of the season. 50 51 FONTERRA ANNUAL REVIEW 2021BUSINESS PERFORMANCE Throughout the year we have remained focused on allocating milk into the products that generate the best overall returns to Fonterra and our farmer owners. Moving milk into the most profitable products The higher milk price does put pressure on our gross margin, and we saw this play out over the last half of the financial year, particularly in the final quarter. Our Total Group normalised gross margin in the first half of the year was 17.4% and this reduced to 12.4% in the second half, resulting in a final Total Group normalised gross margin of 14.7%. Normalised EBIT ($ million) 1,155 902 812 879 952 This has in turn impacted Total Group normalised gross profit which declined $94 million to $3.1 billion. Despite the higher milk price, EBIT is up, helped by lower operating expenses and an increase in ‘Other’. Throughout the year we have remained focused on allocating milk into the products that generate the best overall returns to Fonterra and our farmer owners. Total Group normalised EBIT, which reflects underlying business performance, was up 8% to $952 million. This comprised $896 million from our Continuing Operations and $56 million from Discontinued Operations – which are DPA Brazil and our China Farms. 2017 2018 2019 2020 2021 Breakdown of Total Group Performance FOR THE YEAR ENDED NORMALISED BASIS NZD MILLION Sales volume (‘000 MT) Revenue Cost of goods sold Gross profit Gross margin (%) Operating expenses2 Other2,3 Normalised EBIT Normalisations4 EBIT 31 JULY 2020 31 JULY 2021 CONTINUING OPERATIONS1 DISCONTINUED OPERATIONS1 TOTAL GROUP CONTINUING OPERATIONS1 DISCONTINUED OPERATIONS1 TOTAL GROUP 3,842 20,282 (17,236) 3,046 15.0% (2,194) (5) 847 435 1,282 227 693 (531) 162 23.4% (129) (1) 32 (167) (135) 4,069 20,975 (17,767) 3,208 15.3% (2,323) (6) 879 268 1,147 3,874 20,565 (17,581) 2,984 14.5% (2,153) 65 896 (9) 887 228 559 (429) 130 23.3% (89) 15 56 16 72 4,102 21,124 (18,010) 3,114 14.7% (2,242) 80 952 7 959 1. Refer to Note 1a and 2c of the FY21 Financial Statements. 2. Impairments of intangible assets not included in the strategic review for the 2020 Financial Year ($55 million) has been reclassified from other to operating expenses. 3. Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees. 4. Refer to the Non-GAAP section of the report. 52 On a continuing operations basis, our Consumer channel normalised EBIT increased 196% to $290 million and Foodservice channel normalised EBIT increased 51% to $369 million. The improved performance in the Consumer and Foodservice channels was partially offset by the tighter margins in our Ingredients channel, which had lower normalised EBIT of $385 million, down 47%. Asia Pacific AMENA Greater China Total VOLUME (‘000) MT1 1,386 1% 1,352 6% 1,176 15% 3,914 1% EBIT contribution1,2 INGREDIENTS FOODSERVICE CONSUMER TOTAL $44m 70% $79m 193% $182m 184% 305m 28% $211m 47% $15m - $110m 57% $336m 28% $130m 27% $275m 23% $(2)m 94% $403m 10% $385m 47% $369m 51% $290m 196% 1. Prepared on a normalised Continuing Operations basis. Normalised EBIT contributions sum to $1,044 million, and does not align to reported Continuing Operations due to excluding unallocated costs and eliminations. 2. Inclusive of Group Operations EBIT attribution. Looking at our continuing operations by region: – Asia Pacific normalised EBIT increased 28% to $305 million, due to significant improvements in our Foodservice and Consumer channels. The results here reflect the impact of COVID-19 on consumer behaviour. We’re seeing people cooking at home more regularly and choosing our consumer brands to do this. This has created good momentum for our Consumer business in Asia Pacific, particularly in New Zealand and Australia. – Greater China normalised EBIT increased 10% to $403 million. This has been driven primarily by the strength of our Foodservice channel, China’s continued economic recovery from the impact of COVID-19 and a strong in-country demand for our New Zealand dairy. – AMENA normalised EBIT was down 28% to $336 million, due to lower sales volumes and the impact of sale prices on longer-term contracts lagging increased milk costs. Lower sales volumes were a result of milk being allocated to Greater China and parts of Asia Pacific where demand was the strongest. However, we have seen improvements in our AMENA Foodservice and Consumer channels, including a turnaround for our Chilean business. 53 FONTERRA ANNUAL REVIEW 2021BUSINESS PERFORMANCE A focus on financial discipline Return on capital is unchanged We’ve continued to strengthen our balance sheet. The focus on financial discipline, alongside strong earnings and proceeds from divestments, has seen a reduction in our net debt and improved our key leverage metrics. Net Debt1 ($ billion) 6.2 5.6 5.7 Our average capital employed was stable year on year. The impact of divestments in the current and prior year reduced our average capital employed, but this was offset by the increase in average working capital in the current year. The increase in our normalised earnings has been offset by an increase in the notional tax rate applied to normalised EBIT. 4.7 Return on Capital1,2 (%) 3.8 8.0% 6.2% 5.6% 6.6% 6.6% 2017 2018 2019 2020 2021 1. Net debt excludes amounts attributed to disposal groups held for sale. Refer to Glossary in the Business Performance Report for definition. Net debt is down by $872 million to $3.8 billion. We are also within both of our long-term leverage targets, with a debt to EBITDA ratio of 2.7x, and gearing at 35.5%. Free cash flow for the year was $1.4 billion, reflecting the strong underlying business performance combined with the proceeds of asset sales. This comprises $1.2 billion from operating activities and $0.2 billion from investing activities. Of this, $0.8 billion comes from assets sales and divestments minus $0.6 billion of capital invested. The free cash flow of $1.4 billion has been used to pay interest of $0.3 billion, dividends of $0.2 billion (5 cents from last year’s final dividend and an interim dividend of 5 cents), and to repay $0.9 billion of debt. 2017 2018 2019 2020 2021 1. Refer to Glossary for definition in the Business Performance Report. 2. 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 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. Normalised Profit After Tax1 792 588 407 398 275 A focus on financial discipline has paid off, with a reduction in net debt and gearing levels. 2017 2018 2019 2020 2021 1. Includes amounts attributable to non-controlling interests. 55 Mira & Parehuia, Auckland Reported profit after tax is down $60m to $599 million. This reflects the significant benefit last financial year received from the divestments of DFE Pharma and foodspring™. After removing the impact of the gains from asset sales and other normalisations, our underlying performance has improved $190 million on last year, with normalised profit after tax of $588 million. The difference of $11 million between our normalised and reported profit this year is due to the sale of the Ying and Yutian China farming hubs, the Falcon China Farms joint venture, realised losses on the sale of Beingmate shares and a further impairment of the carrying value of DPA Brazil being included in our reported profit. 54 FONTERRA ANNUAL REVIEW 2021NON-GAAP MEASURES A reconciliation between profit after tax to normalised profit after tax is presented in the table below. Profit after tax Gain on sale of Ying and Yutian China farms China Farms (impairment reversal)/ impairment Gain on sale of Falcon China Farms JV Falcon China Farms JV impairment Income Statement impact of Beingmate investment Brazil consumer and foodservice business impairment Gain on sale and dividends received from DFE Pharma Gain on sale of Goodminton Other Total normalisation adjustments1 Tax on normalisation adjustments1 Normalised profit after tax $ MILLION 31 JULY 2020 31 JULY 2021 659 – 63 – 65 (50) 104 (427) (66) 43 (268) 7 398 599 (32) (23) (40) – 49 39 – – – (7) (4) 588 1 Normalisation adjustments are also detailed in Note 5 Earnings per share of Fonterra’s Financial Statements for the year ended 31 July 2021 A reconciliation between gross profit to Total Group normalised gross profit is presented in the table below. Gross profit from continuing operations Gross profit from discontinued operations China Farms (impairment reversal)/ impairment Other normalisation adjustments Total Group normalised gross profit $ MILLION 31 JULY 2020 31 JULY 2021 3,062 2,984 99 153 63 (16) 3,208 (23) – 3,114 Non-GAAP measures Fonterra uses several non-GAAP measures when discussing financial performance. Non-GAAP measures are not defined or specified by NZ IFRS. Management believes that these measures provide useful information as they provide valuable insight on the underlying performance of the business. They may be used internally to evaluate the underlying performance of business units and to analyse trends. These measures are not uniformly defined or utilised by all companies. Accordingly, these measures may not be comparable with similarly titled measures used by other companies. Non-GAAP financial measures should not be viewed in isolation nor considered as a substitute for measures reported in accordance with NZ IFRS. Information about non-GAAP measures used by Fonterra, including reconciliations back to NZ IFRS measures, can be found in Fonterra’s audited Financial Statements for the year ended 31 July 2021. Relevant note references are presented in the table on the right. Definitions of non-GAAP measures and other measures (such as free cash flow, total pay-out and working capital days) used by Fonterra can be found in the Glossary of the Business Performance Report. NON-GAAP MEASURE NOTE REFERENCE Non-GAAP profit measures Normalised earnings per share Normalised profit after tax attributable to equity holders of the Co-operative Normalised EBIT Total Group EBIT Total Group normalised EBIT Total Group EBITDA Total Group normalised EBITDA Normalised gross profit Non-GAAP debt measures Economic net interest-bearing debt (net debt) Adjusted net debt Other non-GAAP measures Debt to EBITDA Gearing ratio (economic net interest-bearing debt) Gearing ratio (adjusted net debt) Return on capital 5 5 1a) 11a) 11c) 11a) 11a) 1a) 9b) 9b) 11a) 11b) 11b) 11c) In addition to the non-GAAP measures set out in the table above, Fonterra uses normalised profit after tax and Total Group normalised gross profit. 56 NON-GAAP MEASURES 57 FONTERRA ANNUAL REVIEW 2021FONTERRA ANNUAL REVIEW 2021 Directory FONTERRA BOARD OF DIRECTORS Peter McBride Clinton Dines Brent Goldsack Leonie Guiney Bruce Hassall Holly Kramer Andrew Macfarlane John Nicholls Cathy Quinn Donna Smit Scott St John FONTERRA MANAGEMENT TEAM Miles Hurrell Marc Rivers Judith Swales Mike Cronin Fraser Whineray Kelvin Wickham Teh-han Chow Carly Robinson REGISTERED OFFICE Fonterra Co-operative Group Limited Private Bag 92032 Auckland 1142 New Zealand 109 Fanshawe Street Auckland Central 1010 New Zealand Phone +64 9 374 9000 Fax +64 9 374 9001 AUDITOR KPMG 18 Viaduct Harbour Avenue Auckland 1010 New Zealand FARMER SHAREHOLDER AND SUPPLIER SERVICES Freephone 0800 65 65 68 FONTERRA SHARES AND FSF UNITS REGISTRY Computershare Investor Services Limited Private Bag 92119 Auckland 1142 New Zealand Level 2, 159 Hurstmere Road Takapuna Auckland 0622 New Zealand CAPITAL NOTES REGISTRY Link Market Services Limited PO Box 91976 Auckland 1142 New Zealand Level 30, PwC Tower 15 Customs Street West Auckland 1010 New Zealand INVESTOR RELATIONS ENQUIRIES Phone +64 9 374 9000 investor.relations@fonterra.com www.fonterra.com R A _ 5 8 0 A R R E T N O F z n . o c . e v i t a e r c t h g i s n i Our 2021 Suite of ReportsFarmgate Milk Price Statement 2021Statutory Information2021Sustainability Performance Report 2021Financial Statements2021Business Performance Report 2021Corporate Governance Statement 2021Annual Review2021Our Annual Review is a concise summary of our environmental, social and economic activities and performance. It is 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.OUR REPORTS ARE AVAILABLE FROMFONTERRA.COM/NZ/EN/INVESTORS.HTML58 fonterra.com 

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