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Fonterra

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Employees 10,000+
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FY2023 Annual Report · Fonterra
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A

 
 
 
 
 
Michael (& COVER), William, Chris,  
Bethanne, Peter & Margaret,  
Southland

Our three strategic choices  
are guiding everything we do

Focus on New Zealand milk

Be a leader in sustainability

We believe New Zealand milk is the most valuable milk 
in the world. With demand for sustainable dairy nutrition 
growing at a pace that will outstrip supply, we are creating 
more value for our farmer owners and unit holders by further 
differentiating our milk in the global market.

Globally, people want to know where their food comes from 
and the impact it leaves. New Zealand milk is amongst the most 
carbon-efficient in the world, produced by a proven pasture-based 
model and underpinned with strong animal wellbeing standards. 
By leading in sustainability, we can respond to changing demands 
from customers, capital providers and regulators.

Be a leader in dairy 
innovation & science

Our Co-op has a long and proud heritage of dairy innovation. 
We are building on this expertise by continuously developing 
new dairy nutrition solutions and partnerships which help 
people live healthier and longer lives.

Contents

About this report 

Welcome to our Annual Review, which forms 
part of our end-of-year reporting suite.

We know there are a wide range of stakeholders who are 
interested in our Co-op. This report gives an integrated view of 
our performance across financial and non-financial measures, 
and our targets for the future. It is supported by a series of 
supplementary reports where stakeholders can find more 
detailed information most relevant to them.

This Annual Review provides a summary of our environmental, 
social and economic activities and performance. It covers key 
achievements and performance data, as well as the challenges 
and opportunities we have faced across our Co-op over the last 
12 months. It is a chance to reflect on our work, quantify our 
impacts and look to the future.

OVERVIEW

About us 

Letter from Chair of Board

Letter from CEO

Our purpose, values and goals

How we create value 

Creating value for stakeholders 

Our year in review

Doing Good Together

BUSINESS PERFORMANCE 

ON-FARM

Honour roll

OFF-FARM

PRODUCTS & CUSTOMERS

FONTERRA MANAGEMENT TEAM

NON-GAAP MEASURES

GLOSSARY

DIRECTORY

03

04

05

08

10

11

12

14

15

22

30

36

43

46

50

54

56

60

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

Management believes that these measures provide useful information as they 
provide valuable insight on the underlying performance of the business. They may 
be used internally to evaluate the underlying performance of business units and to 
analyse trends.

These measures are not uniformly defined or utilised by all companies. Accordingly, 
these measures may not be comparable with similarly titled measures used by other 
companies. Non-GAAP financial measures should not be viewed in isolation nor 
considered as a substitute for measures reported in accordance with NZ IFRS. Non-
GAAP measures are not subject to audit unless they are included in Fonterra’s audited 
Financial Statements.

Please refer to the Non-GAAP measures section 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.

OUR 2023 SUITE  
OF REPORTS

Annual Review 2023
(Referenced as AR) 

Financial Statements 2023
(Referenced as FS)

Business Performance 
Report 2023 
(Referenced as BP)

Sustainability Report 2023
(Referenced as SR) 

Governance & Statutory 
Disclosures 2023
(Referenced as G&S)

Modern Slavery Statement 
2023 
(Referenced as MS)

Farmgate Milk Price 
Statement 2023
(Referenced as MP)

OUR REPORTS ARE AVAILABLE 
FROM FONTERRA.COM/NZ/
EN/INVESTORS.HTML

04

About us 

We’re a dairy co-operative, owned 
and supplied by farming families 
across Aotearoa, New Zealand. 
Through the spirit of co-operation 
and a can-do attitude, Fonterra’s 
farmers, along with almost 18,000 
employees around the world, 
share the goodness of our milk 
through innovative consumer, 
foodservice and ingredient brands.

We believe that food and nutrition are essential to 
sustain us today and for future generations to thrive.

This is why we take great care with every drop 
of milk, from the beginning, through every step 
of the way. It’s our dedication and care that enables 
us to produce safe and high-quality food, and our 
dairy know-how and innovation capability mean 
we can do amazing things with our milk to enhance 
people’s lives.

Our farmers farm naturally and because of this, 
we are proud to have one of the lowest on-farm 
carbon footprints in the world.

We want to be the most emissions efficient and 
environmentally sustainable dairy co-op. To do this 
we are reducing our footprint, restoring nature, 
and adopting a regenerative mindset.

Our portfolio of well-known brands includes 
Anchor, Anmum, Anlene, Nutiani, NZMP and 
Farm Source.

9,012 

1,366 

Revenue  
($ Million)

24,580 

4,619 

6,192

FY221: 21,901

2,518  

2,239

Raw milk collected  
(million litres)

17,803 

FY22: 18,455

16,3332 

  New Zealand

  Australia

 China

  Rest of Asia Pacific

  Rest of World

4

8

5

Manufacturing 
sites

45 

FY22: 48

28

1,829 

1,809 

672

1,534  

Employees  
(FTE)

17,993 

FY22: 19,608

12,149

1  FY22 has been re-presented due to the Soprole business being moved to held for sale and classified as discontinued operations (and subsequently sold).
2  Amount collected during FY23 (which differs to the 16,317 million litres collected during the 2022/23 season ended 31 May 2023).

 
Letter from  
Chair of 
Board

Kia ora,  
Miles and the team have 
delivered a third consecutive 
year of strong performance 
overall, despite facing into 
difficult market conditions  
in a number of regions.

Final Farmgate Milk Price

$8.22per kgMS

Peter McBride 
– Chair

05

The team can be proud of delivering a reported profit after tax  
of $1.58 billion, equivalent to 95 cents per share and up 170% 
on last year. 

We faced real challenges on-farm in New Zealand this year, 
as extreme weather events took a toll on our communities. In 
February, Cyclone Gabrielle hit the North Island with Northland, 
Coromandel, the Hawke’s Bay and Gisborne among the hardest hit. 

In the Hawke’s Bay and Gisborne some communities were cut 
off and isolated. The Co-op accessed these areas via helicopter 
to assess the damage, understand farmers’ needs and provide 
provisional supplies and veterinary support. Many suffered 
losses to their property, had to manage animal welfare issues 
and support the wellbeing of their families and neighbours.

As a Co-op, we look after each other when it comes to natural 
disasters like this. The Co-op helps farmers to manage these 
types of risk through what is known as a Force Majeure event. 
In accordance with the Terms of Supply, where we had to instruct 
a farmer to dispose of milk or dry off, appropriate compensation 
for these farmers was made. 

Volatile milk price environment

For share aligned farmers this strong earnings performance is 
helpful in the context of a declining Farmgate Milk Price. 

Our final milk price for the 2022/23 season was $8.22 per kgMS 
down from the high forecast midpoint of $9.50 in June 2022. The 
reduction is due to lower than anticipated demand for imported 
products, particularly from China, which contributed to the 
Global Dairy Trade prices dropping, with the average whole milk 
powder price down 16% compared to last season.

The impact would have been greater, if not for the team’s efforts 
to utilize the scale of the Co-op and shift milk into the products 
and places that were delivering the most value at the time.

06

Reviewing our Board size and composition:

Since the Co-op’s formation it has been envisaged that the Board 
size would be rationalised over time. With the Capital Structure 
review, asset divestment programme and long-term strategy 
development largely behind us, the Board believes it is the right 
time to review its size and composition. 

We have shared our initial thinking from that review, which we 
are discussing with farmers and shareholders in advance of this 
year’s Annual Meeting – at which we plan to seek endorsement 
for the changes via a vote.

Having now been part of the Co-op’s Board for five years, the 
last three as Chair, I’m confident that reducing the size of our 
Board will improve the dynamics within the group, encouraging 
greater participation from directors, and maintaining access to 
the necessary skills and experience to govern the Co-op into 
the future.

Our current thinking is to reduce the number of directors on 
the Board from 11 down to nine. The balance between Farmer 
Elected and Appointed Directors would be maintained, with a 
composition of six Farmer Elected Directors and three Appointed 
Directors. As is the case today, the Chairman would be one of 
the Farmer Elected Directors. 

Strong performance underpinned 
by non-reference products

While on the one hand our milk price was negatively impacted 
by market forces, on the other our earnings did benefit from 
favourable market conditions, including strong margins in our 
Ingredients channel, in particular the cheese and protein portfolios. 

There are two other key performance metrics the Board is 
particularly pleased with this year:

 – Return on Capital for the last 12 months is 12.4%, up from 

6.8% in the comparable period.

 – We have also exceeded our performance target for the Co-op’s 
balance sheet strength, with the gearing ratio at 28.8% and 
debt to EBITDA at 1.3x, even after adjusting for the impact of 
the Capital Return.

Full year dividend at the maximum end 
of our policy

In acknowledgement of the declining milk price environment and 
the impact that has on farmers, the Board has made the decision 
to pay a final dividend slightly above our dividend policy.

We are pleased to deliver a strong full year dividend of 50 cents 
per share and unit – comprising of an interim dividend of 10 
cents per share and a final dividend of 40 cents per share. 

This is in addition to the 50 cents per share capital return 
paid to shareholders and unit holders in August, following the 
divestment of Soprole.

This brings the total cash return for a fully share-backed farmer to 
$9.22 per kgMS for the 2022/23 season.

The Board believes it is the 
right time to review its size  
& composition.

Flexible shareholding

Our Flexible Shareholding capital structure has been in place 
since late March. It’s generally working as expected and we are 
comfortable with the liquidity in the market. 

Following the transition to the Flexible Shareholding structure 
Fonterra implemented market maker arrangements to support 
liquidity in the Farmer Shareholders’ Market. We also have 
the ability to buy back shares as part of our ongoing capital 
management programme, where we see it as value accretive 
to the Co-op.

Our share price has come down. This was anticipated and well-
signalled before shareholders voted to support the changes to 
our capital structure. There has also been a share price impact as 
a result of the recent capital return. Over time we expect that the 
price will reflect the Co-op’s financial performance, and the value 
farmers see in that. Ultimately farmers will determine the value 
of the shares.

Flexible Shareholding is the right capital structure for our Co-op. 
By making it easier for farmers to join or stay with the Co-op, it 
will help us to maintain a sustainable milk supply. 

Delivering our strategy

Outlook for the year ahead and beyond

We remain confident in delivering our long-term strategic targets 
and plan to provide shareholders and unit holders with a strategic 
update in early 2024.

Prior to that we will be confirming our Scope 3 target, which 
Miles and I signalled at last year’s Annual Meeting. 

Being a leader in sustainability is a fundamental part of our 
strategy. Introducing a Scope 3 target is a critical step for us 
when we consider our global competitive landscape, international 
market access, funding sources, and continued partnerships 
with customers. 

We need to set a target that is meaningful and brings us into line 
with our international competitors – many of which have already 
set targets.

We know that the rate of change farmers are being asked to live 
with is already challenging. Good progress towards the target can 
already be made using the tools and information available to us 
today. The Co-op will support farmers to meet this target through 
the sharing of best practice and innovation. Our methodology 
will continue to evolve alongside the science that supports these 
changes. We will work with you, not against you.

Looking out to the end of the current season and new 
financial year it is clear that we will face a challenging operating 
environment – for our individual farming businesses and for 
our Co-op.

We know that the 2023/24 forecast Farmgate Milk Price range is 
below breakeven for many of our farmers. The Co-op is entirely 
focused on performance and, as you will be on farm, reducing its 
costs to offset the impact of inflation over the coming years.

Dairy is a long-term game and as an exporter, we need to 
accept that we are impacted by demand and supply dynamics, 
commodity prices and geopolitical events. The Co-op does its 
best to try and smooth the edges and optimise value, but there 
will always be volatility. 

Right now, the Co-op is well-positioned to recover from this 
part of the cycle. Our strong balance sheet gives us options to 
consider how we create more value. It also benefits all farmers, 
as we know that the banks assess our individual farming business 
risks together with Fonterra’s balance sheet and performance 
when considering their overall exposure to the sector.

Ultimately, strong performance is the best way we can support 
our farmers through this difficult period. That remains our focus 
for the year ahead.

We need to set a target that 
is meaningful and brings us 
into line with our international 
competitors – many of which 
have already set a target.

Peter McBride 
Chair of Board

07

Full year dividend

50c

per share and unit

Total cash return

$9.22

per share backed kgMS

08

Letter  
from CEO

Miles Hurrell 
– Chief Executive Officer

Kia ora, 
I’m proud to have led  
a dedicated team who have 
delivered a strong result for 
your Co-op. 

Our reported profit after tax is $1.6 billion, up 170% on last year, 
and our return on capital is 12.4%, up from 6.8%.

This has put us in the position to pay a full year dividend of 50 cents 
per share, including the interim dividend of 10 cents per share. 

Throughout FY23 we also made progress on several key strategic 
initiatives. We implemented our new Flexible Shareholding capital 
structure, completed divestment of our China Farms business 
and Chilean business, Soprole, and launched our new corporate 
ventures arm, provisionally named Nutrition Science Solutions. 

As a result of the successful divestment of Soprole, we were able to 
return tax-free 50 cents per share to shareholders and unit holders. 

These milestones were several years in the making and I’m proud 
the team has delivered upon the commitments we made to our 
shareholders. 

I also acknowledge that these achievements have been against 
a backdrop of a falling Farmgate Milk Price across the season. 

We work hard every day to maximise total shareholder returns. 
We ended the 2022/23 season with a final Farmgate Milk Price 
of $8.22 per kgMS. When combined with our strong dividend and 
capital return, our total cash return to farmer shareholders was 
$9.22 per share backed kgMS.

Strong earnings performance 

FY23 was a volatile year for global economies and commodity 
markets as the world continued to recover from COVID-19.

There was strong demand for protein products, in particular cheese 
and caseinates, at the same time as demand for milk powders 
softened. This resulted in historic high price relativities across the year.

We captured the high protein prices in our Ingredients channel, 
and these have been a strong driver of our earnings performance 
for the year. 

To optimise our Farmgate Milk Price, we moved milk into higher 
performing reference product categories, such as skim milk powder 
and cream, where possible. 

However, we were required to reduce the forecast Farmgate Milk 
Price across the season as demand for whole milk powder from key 
importing regions, in particular China, continued to soften.

We recognised the impact the reduced forecast Farmgate Milk 
Price has on farm profitability, particularly at a time when farmers 
are facing higher input costs, and utilised our strong balance sheet 
to favourably adjust the Advance Rate Schedule, which meant that 
we were able to get cash to farmers sooner. 

Progress on strategy

Despite economic headwinds, we’ve made good progress on 
strategic initiatives this year that will help to set us up for the future. 

A sustainable supply of New Zealand milk is fundamental to 
the future prosperity of the Co-op, so that we can maintain 
efficient operations and continue to meet customer demand for 
New Zealand milk at scale. 

Our new Flexible Shareholding capital structure, which was 
implemented in March, supports a sustainable milk supply and 
stable balance sheet by making it easier for farmers to join and 
remain with the Co-op. 

09

One of the benefits of being part of the Co-op is having access to 
the advice and services provided through Farm Source. 

The team is working alongside farmers to provide tools that 
support more efficient farming businesses and help to meet the 
changing needs of both regulators and our customers. 

An important focus for the team right now is introducing a 
Scope 3, or on-farm emissions intensity target, which we will 
announce before the end of calendar year 2023. 

Achieving the target will be a collective effort, with incremental 
efficiency gains enabled by the tools made available by the Co-op 
and wider industry partners. 

We’ve made a strategic choice to be a leader in dairy innovation 
and science, with innovation expected to play an important role 
in achieving the target by reducing methane production on-farm. 
We are working with partners to invest in potential solutions. 

Looking to the future, our innovation portfolio of activity is also 
exploring potential new revenue streams for the Co-op that utilise 
either our milk or our expertise. 

This year, we’ve established Vivici, our joint venture with Royal 
DSM, which is exploring commercial opportunities in fermentation 
derived ingredients. 

These ingredients could be used to extend our farmers’ milk into 
products, categories, and markets which we do not currently sell 
into, as well as earn the Co-op a return on the commercialisation 
of our IP.

We’ve also launched our corporate ventures arm, Nutrition Science 
Solution (NSS), which made its first strategic investment in the 
form of a minority stake in Pendulum Inc, a biotech company 
specialising in metabolic health. 

NSS is a long-term play for the Co-op, that will seek to partner with 
and invest in global start-ups in the nutrition science category.

Driving efficiencies across the Co-op

Outlook for FY24 and beyond 

When pursuing these opportunities, we’re assessing them against 
other investment opportunities for our farmers’ capital.

Our new resource allocation framework demonstrates how we 
think about delivering value. It shows how we aim to allocate 
farmers’ milk to the products and channels where we believe it 
will earn the highest risk-adjusted returns. 

The priority use of the Co-op’s capital is maintaining safe, 
productive operations. With any capital remaining, we assess 
the opportunities available to us and use it either to pay down 
debt, for dividends, capital returns, share buybacks, or for growth 
opportunities including innovation. 

It is as part of this approach to capital management that we 
have allocated up to $50 million to an on-market share buyback 
programme, which commenced in August 2023. 

We’re also taking a close look at our operating expenses to assist 
us to stay on track for our short and long-term financial targets. 

We have announced a goal of reducing costs across the Co-op by 
about $1 billion over the 7 years to 2030. This goal will help offset 
higher inflation expectations and we intend to achieve it through 
a range of projects that will streamline how we operate. 

To track our progress, we have introduced two new efficiency 
metrics which we’ll report against every six months. 

These are:

1.    Opex per kgMS – targeting a 4% cash operating cost 

improvement per year to support long-term discipline in our 
global overheads.

2.    Gross profit per kgMS – targeting a 2% New Zealand cash 
manufacturing cost improvement every year to support 
efficient New Zealand operations while remaining laser 
focused on delivering value.

Looking at FY24, ongoing reduced demand for whole milk powder 
from key importing regions continues to impact the outlook for 
our Farmgate Milk Price, with our 2023/24 forecast range currently 
$6.00 - $7.50 per kgMS, with a midpoint of $6.75.

We are watching market dynamics closely and there are indications 
demand for New Zealand milk powders will start to return from 
early 2024. Demand for other products, including Foodservice and 
our value-added Ingredients, continues to be robust.

The favourable price relativities that we’ve experienced across 
FY23 have reduced from their peaks. But we are forecasting 
improvement in our Consumer and Foodservice channels as our 
markets capture improved margins. 

As such, our FY24 forecast earnings range for continuing 
operations is 45-60 cents per share.

We acknowledge that across the year, farmers will continue to feel 
the pressure from high input costs and a reduced Farmgate Milk 
Price. We’ll continue to do all that we can to assist farmers through 
this challenging period.

Over the medium to long-term, the outlook for New Zealand dairy 
remains positive. Demand for sustainable nutrition is continuing 
to grow and by implementing our strategic plans we are well 
positioned to meet this demand.

We’re also accelerating plans to extract more value from our 
farmers milk by refining our innovation portfolio and investing 
in new areas for growth. 

I intend to provide an update on our long-term strategy early in 
calendar year 2024, which will further detail our market context 
and plans to 2030 and beyond. 

Miles Hurrell 
Chief Executive Officer

Our purpose,  
values & goals

Our Purpose

Our Values

Our Principles

Our Co-operative, 
Empowering people, 
To create goodness, 
for generations.

You, me, us together, 
Tātou, tātou

Co-operative spirit

Do what’s right

Make it happen

Challenge 
boundaries

Our principles are 
aligned with the Māori 
world view. 

Manaakitanga 
is the care we show for  
others – it strengthens our  
relationships and communities.

Kaitiakitanga 
is how we care for our 
environment today, tomorrow, 
and for future generations.

Whanaungatanga 
is our Co-operative spirit – 
it sits at the heart of our values.

10

We’ve made 
key strategic 
choices 

Key aspirations 
for 2030

Group ROC 

~9-10%

Operating Profit 

40-50% 

increase from FY21

50% 

absolute reduction in 
Scope 1&2 emissions by 2030, 
from 2018 baseline

Focus on Aotearoa 
New Zealand Milk 

Be a leader in  
dairy Innovation 
& Science 

Be a leader in 
Sustainability

  
 
 
 
The resources we rely on

People & Culture

—   Approximately 18,000 skilled and motivated employees  
led by a board and management team with diverse skills  
and experience

—   20,000+ dedicated farmers and farm workers

—   Thousands more people in our supply chain

Nature

—   4 million milking cows grazing on 1.5 million hectares  

of pastoral land

—   Some fertiliser, irrigated water and supplementary animal nutrition

—   Energy (27.5PJ) and freshwater (48.7 million cubic metres) for our 

manufacturing sites

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

—   232 granted patents across 25 families of patents 

Assets & Infrastructure
—   Our portfolio of property, plant and equipment including  
right-of-use assets ($6,343 million total net book value) 

—   500+ milk collection tankers 

—   45 manufacturing sites 

Financial

—   A strong financial base, capital from our farmer 

shareholders, unit holders and debt ($12,774 million average 
capital employed)

11

Applying innovation & 
our ingenuity to make 
& distribute nutrition

We source raw milk
from farmers  

How we  
create  
value 

as
ingredients

for
foodservice

& to
consumers  

We connect farmers with 
markets to maximise the 
value from their milk

12

Creating value for stakeholders 

Farmers

Customers & consumers

Employees

We create value by

 – Delivering a strong total payout (AR-22)

 – Reliably collecting their perishable product and providing 
efficient access to valuable international markets (AR-04)

 – Adding value to their milk through innovation and a 

flexible product portfolio (AR-46)

 – Providing resilience to operating volatilities such as 

price, energy, foreign exchange rates and ocean freight 
(BP-34 & 29)

 – Providing access to technology and services that help 

meet regulatory requirements and continue to improve 
farming practices (AR-32)

How we engage
 – On an ongoing basis led by our locally based Farm 

Source support teams across New Zealand

 – At meetings and roadshows, and through our  

formal governance processes

We create value by

 – Delivering nutrition products that are high-quality,  

low carbon and responsibly produced (SR-20)

 – Providing access to nutrition products that include 

healthier options and linked to sustainable credentials 
(SR-22)

 – Using responsible procurement to influence our  

supply chain (SR-68)

 – Responding quickly to changing needs and customer 
demand for innovative new products and ingredients 
(AR-48) 

How we engage
 – On an ongoing basis through our account  

management teams 

 – By sharing information through programmes such as 

EcoVadis, SEDEX and the CDP

 – With our own direct consumers through our service 

teams, email and social media, and consumer research

We create value by

 – Providing a safe workplace (SR-17) 

 – Supporting health and wellbeing (SR-16)

 – Providing good learning and development  

opportunities (SR-12) 

 – Building an inclusive culture where everyone  

contributes and feels supported (SR-11) 

How we engage
 – On an ongoing basis through our everyday  

interactions, regular engagement surveys and 
engagement with unions.

Kathryn, 
Taranaki

Kiri & Te Kaihou,  
Bay of Plenty

Lisa,  
Canterbury

13

Society

Investors

Local communities

We create value by

We create value by

We create value by

 – Complying with regulatory requirements, including food 

 – Providing sustainable returns via dividends and 

 – Providing direct rural and urban employment (SR-83)

safety, marketing and environmental (SR-26)

interest paid (AR-22)

 – Reducing our environmental footprint including GHG 

 – Reducing investment risk through transparency  

emissions, water consumption and waste (SR-27)

and independent assessment (SR-67)

 – Providing opportunities to invest in New Zealand 
dairy nutrition through the Fonterra Shareholders’ 
Fund 

How we engage
 – On a regular basis through updates, formal 
reporting and meetings coordinated by our  
Capital Markets team

 – Contributing to the development of policy and 

responding to crises (AR-18)

 – Collaborating with industry partners to achieve 

international commitments Ref. (SR-59)

 – Taking a responsible approach to tax (SR-66)

 – Supporting international relations through our presence 

in global markets (AR-47 & 48) 

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

 – Reducing our environmental footprint (SR-27)

 – Supporting communities through natural disasters and crises 

such as floods (AR-18)

 – Providing access to nutrition through in-school nutrition and 

food bank donations (AR-17)

 – Strengthening and enhancing our relationships with tangata 

whenua (SR-15) 

How we engage
 – With interested groups, such as NGOs, through collaboration 

and consultation on specific topics

 – On an ongoing basis with iwi around Aotearoa New Zealand

 – Through public events, the media and our own social media 

channels  

 – Through our Community programmes, such as Hapori, 
Kickstart Breakfast, Feeding NZ Communities and 
supporting the Rural Support Trust

Fonterra Application Centre, 
Shenzhen

Annabelle & Rajiv, 
Auckland

KickStart Breakfast

 
Our year in review

August

October

December

February

April

The Co-operative releases 
its Sustainable Finance 
Framework. This Framework 
aligns Fonterra’s funding 
strategy with its sustainability 
ambitions and reflects the 
evolving preferences of lenders 
and debt investors  
in this area.

Fonterra and Nestlé agree 
to sell their Dairy Partners 
Americas (DPA) Brazil joint 
venture to French dairy 
company Lactalis.

Fonterra and MAN Energy 
Solutions (MAN ES) enter 
a strategic partnership to 
reduce CO2 emissions in dairy 
production using climate-
friendly heat pump technology 
for steam generation. 

We revise our 2022/23 season 
forecast Farmgate Milk Price 
range from 
$8.20-$8.80 per kgMS 
to $8.00-$8.60 per kgMS.

Announce the conversion of 
coal boilers at our Hautapu 
site to wood pellets and 
installation of a heat pump  
at Palmerston North.

Fonterra and Royal DSM 
establish new start-up 
company, Vivici, to 
accelerate development 
and commercialisation of 
fermentation-derived proteins 
with dairy-like properties. 

We take another step on 
our low carbon transition 
with our Waitoa site in the 
Waikato planning to install a 
30 megawatt wood biomass 
boiler to replace a coal boiler. 
We also announce the closure 
of our small and ageing 
Brightwater site near Nelson.

14

June

Acting Chief  
Operational  
Officer  
Anna Palairet  
announced. 

Launch of new nutrition 
science venture arm to 
incubate, scale and invest 
in ventures in the area 
of nutrition science. First 
investment announced  
with Pendulum.

2022

2023

September

November

January

March

May

July

Announced 2021/22 season 
final Farmgate Milk Price of 
$9.30 per kgMS. 

Fonterra announces sale of its 
Chilean Soprole business to 
Gloria Foods JORB S.A. 

Launch new wellbeing solution 
brand, Nutiani, targeting 
medical and everyday 
wellbeing nutrition markets. 

Neil Beaumont 
appointed as  
new Chief  
Financial Officer.

Many co-operative farmers 
and their whānau, our 
employees and customers 
across the North Island of 
NZ are impacted by flooding 
during the wettest month on 
record. Fonterra supports 
those impacted throughout 
the coming months.

We announce a partnership 
with Rural Support Trust 
(RST) to support rural 
New Zealanders by improving 
access to wellbeing and 
resilience services for farming 
families who are doing it 
tough.

Fonterra & Nestlé announce a 
new partnership designed to 
help reduce New Zealand’s on-
farm emissions, including a 
New Zealand first – a drive to 
develop a commercially viable 
net zero carbon emissions 
dairy farm.

We complete the sale of 
Chilean Soprole business 
to Gloria Foods - JORB S.A. 
(Gloria Foods). 

Announced an opening 
2023/24 season forecast 
Farmgate Milk Price of  
$7.25 to $8.75 per kgMS,  
with a midpoint of $8.00. 

Announced an increase in our 
Scope 1&2 emissions target, 
along with a $790 million 
investment, which includes up 
to $90 million funding from 
Government. 

Announce a Profit After Tax of 
$546 million, up 50% on same 
period last year, in our FY23 
Interim Results.  

Taranaki dairy farmer  
Donna Cram is announced 
as the 2023 Fonterra Dairy 
Woman of the Year and we 
welcome three new First 
Foundation Scholars to the 
Co-operative.

 
 
 
 
15

Doing Good 
Together

Durham Farm,  
Northland

As a co-op we know just how much  
good can come from working together, 
which is why we’re working with partners 
right across the country to make a 
meaningful impact. Our Doing Good 
Together programme delivers across 
three impact pillars to care for people, 
the environment and our Co-op for 
generations.

Our impact pillars 

1

Putting good quality 
nutrition in the hands of 
those who need it most 

2

3

Keeping our  
communities strong 

Protecting & regenerating  
the environment

16

Fred and Ken,  
NZ Food Network

5.6 
million 

KickStart breakfasts  
served in 1,400 schools  

17

13 
million

Dairy serves donated to  
communities in New Zealand 

22,000 trees

$980K

Partnered with Trees for 
Survival to support 22 schools 
to nurture 22,000 trees 

Donated to community 
projects in regional 
New Zealand

$650K

$100K

Over $650K donated  
to community projects 
globally

Farm Source  
Charitable  
Giving raised  
over $100K  

2,900 people

More than 2,900 people 
attended 16 events with Rural 
Support Trust on mental 
health & wellbeing

Helping communities  
respond to natural disasters

In response to the devastating floods and Cyclone Gabrielle 
that hit the North Island earlier this year, Fonterra along 
with our strategic partners supported community groups 
on the front-line giving assistance to affected Kiwis.

CEO of The New Zealand Food Network (NZFN), 
Gavin Findlay, said that with the many people displaced 
by the flooding, the donation of quality dairy products 
went a long way.

Along with the support we provided communities post the 
cyclone, the team also volunteered in the Wairoa region and 
got stuck in helping to clean up Tākitimu Marae. This was 
followed by cleaning silt beneath houses for whānau that had 
no insurance and could not occupy their houses until the silt 
had been removed. 

The combined Fonterra support was significant and the 
Fonterra staff were incredibly proud to show up and offer 
support during this time.

Fonterra Emergency Response Team 
supporting the clean up at Tākitimu Marae 
alongside Waikato Tainui in Wairoa 
following Cyclone Gabrielle.

18

 “ Once again, our great 

partners at Fonterra are 
helping us get food to where 
it’s needed most. Fonterra’s 
quick response to this 
emergency shows their 
commitment to doing good 
together for the sake of our 
communities and reinforces 
the value of having them on 
the NZFN team.” 

Gavin Findlay,  
CEO New Zealand Food Network

Some of the ways we supported  
the community through the  
recent natural disasters: 

1.3 million

$60,000

Dairy serves to 
Auckland, Tairāwhiti, 
Hawke’s Bay and 
Northland as part  
of flooding and  
cyclone response

Donated to Community 
Foundation flood relief 
funds in Hawke’s Bay  
and Auckland 

$15,000

$40,000

Donated to NZ 
Landcare Trust and 
Trees That Count to 
support remediation 
of restoration projects 
after the floods 

Over $40k donated 
through Farm Source 
Charitable Giving to the 
Hawke’s Bay disaster  
relief trust

19

Penelope, Blair, Joe & Billie, 
Hawke’s Bay

The Big Feed and our continued commitment 
to getting food where it’s needed the most 

The Big Feed called to action thousands 
of farmers across the country to donate 
some of what they produce. In one day, 
the event aimed to raise 1 million ‘meals’.

In FY23 Feed Out successfully raised 1 million meals with 
Fonterra and their farmers providing just under 430,000 milk 
meals towards the cause. The Big Feed event will now occur 
annually with a goal of raising 3 million meals on December 
14th 2023. 

With our partners New Zealand Food Network (NZFN) 
and Feed Out, our Feeding New Zealand Communities 
programme donated 13 million serves of dairy nutrition 
in FY23. We will continue to increase our contribution of 
more nutritious dairy goodness more frequently. In FY23 
we’ve also had a strong focus on identifying surplus product 
across the Fonterra network to donate to the NZFN. This 
is complimented by our voluntary agreement to the Kai 
Commitment, under which we’re working on a number 
of food waste reduction strategies. 

Our Hapori programme continues to be present in 10 
New Zealand regions, with each regional committee offering 
funding and donations of dairy products to local community 
groups, schools and marae. 

20

“ I’ve seen the faces of our 
rangatahi light up with 
excitement when they see 
they have milk in their kai 
boxes. Milk is a product that 
our rangatahi know how to 
confidently prepare. This is 
so helpful as some don’t have 
cooked meals to come home 
to and must source meals 
themselves. We are super 
appreciative for the milk  
that Fonterra has donated”.  
 Reconnect – Family Services, Manukau

Community  
connection — Farming

Fonterra formed a strategic partnership 
with Rural Support Trust in August 2022.

The shared vision for the partnership is to support rural 
New Zealanders by improving access to wellbeing and resilience 
services for farming families who are doing it tough. 

Phase one of the partnership was to gain insight into the value 
Rural Support Trust brings and what future opportunities exist 
for the Co-op to strengthen and collaborate on. Early insights 
indicate we have formed the right community partnership to 
support farmers. 

As we move into FY24, phase two of the partnership involves 
Fonterra supporting Rural Support Trust to thrive and embed  
the three opportunities identified to improve overall experience: 

1. Grow their operational capability 

2. Promote the value they bring to communities 

3. Grow their reach in the primary sector 

Together with the Rural Support  
Trust we have:

•   Completed our insights work and identified three 

opportunities for FY24.  

•   Provided funding for the Time Out Tour which supports  

rural communities to start the conversation about mental 
health – 4,000 people have attended 27 events since  
2022 with ambassador Matt Chisholm.  

•   Donated over $50K to the trusts through our Farm Source 

Charitable Giving programme. 

•   Featured Rural Support Trust in the Fonterra tent at Field  

Days to provide rural communities further access. 

•   Employee Assistance Programme (EAP) available to all  

Fonterra farmers, indefinitely. 

21

Tana & Rosy,  
Waikato

Business 
performance

Gross profit from Core Operations per kgMS

$9.85

$7.64

2020

$8.60

$7.52

2021

$9.42

$8.83

$9.21

2022

2023

Actual

Inflation Adjusted

Cash operating expenses per kgMS

$1.39

$1.16

$1.36

$1.18

$1.34

$1.26

$1.39

2020

2021

2022

2023

Actual

Inflation Adjusted

Return on Capital

12.4%

from 6.8%

Profit after tax

$1,577m

from $583m

Earnings per share

95c

from 36c

$9.22

Total Cash Return1

$0.50 $0.50

Capital  
Return

Dividend
from 20c

$8.22

Farmgate Milk Price

from $9.30

22

1.  Per share backed kgMS

23

In addition, the Co-operative returned 
50 cents per share to shareholders 
and unit holders in August following 
the divestment of Soprole. This 
resulted in a total cash return of 
$9.22 per share backed kgMS for our 
farmer owners. 

Commodity product prices that inform the Farmgate Milk 
Price (Reference Commodity Products) were down on 
average 14.2% compared to the prior season and the main 
reason for the $1.08 per kgMS decline in the Farmgate 
Milk Price from $9.30 per kgMS last season.

Our profit after tax increased $994 million to $1,577 
million. Excluding non-controlling interests this is equivalent 
to 95 cents per share, up from 36 cents per share in the 
prior period. 

Excluding the net gain on divestments, our normalised 
profit after tax is up $738 million to $1,329 million, 
excluding non-controlling interests this is equivalent to 
80 cents per share. 

The Co-operative’s operating environment continues 
to improve following the pandemic, and with the global 
supply chain network stabilising and slowly returning to 
normal, our inventory levels at year end have improved. 

Our net debt is $3.2 billion, $2.1 billion lower due to 
the improved inventory levels, increased earnings and 
the sale of Soprole for aggregate proceeds of $1.3 billion 

– of which $804 million was returned to shareholders and 
unit holders on 18 August 2023.

Our increased earnings combined with the strength of our 
balance sheet has put us in a position to pay a full year dividend 
of 50 cents per share, comprising of 10 cents per share paid 
at interim and a final dividend of 40 cents per share. 

Our New Zealand milk collections increased 2 million 
kgMS compared with the 2021/22 season due to higher 
collections in the latter half of the season as a result 
of more favourable weather which was conducive to 
stronger pasture growth.

Litres and milk solids collected

17,123

16,876

17,121

16,404

16,317

1,523

2019

1,517

2020

1,539

2021

1,478

2022

1,480

2023

kgMS collected
(million)

Litres collected 
(million)

For the year ended 31 July 2023,  
our Co-op performed well. We 
returned $8.22 on average for 
every kilogram of milk solids 
our farmer owners supplied us. 
Combined with a dividend of 
50 cents per share, this means a 
total payout of $8.72 per kgMS. 

10

Total Payout1

$7.74
$0.20

$7.19

$0.05

$6.35

$7.14

$7.54

$6.35

$9.50
$0.20

$8.72

$0.50

$9.30

$8.22

2019

2020

2021

2022

2023

Farmgate Milk Price

Dividend

1.   Refer to the Glossary for definition.

 
Business performance

Our profit after tax increased 
$994 million to $1,577 million.  

Profit After Tax1

Increased due to 
favourable margins, 
particularly for 
protein and cheese 
products 

Increased mainly due to 
impairments of our 
New Zealand consumer 
business and our Asia 
brands, of $121 million 
and $101 million, 
respectively, as well as the 
impact of inflationary 
pressures

Increased due to a 
$349 million (before tax) 
gain on sale of Soprole. 
The prior year included a 
$42 million gain on sale 
of GDT

20

(30)

1,259

(344)

307

(218)

24

Increased due 
to higher EBIT 
and capital gains 
tax on the sale 
of Soprole

1,577

583

FY22

GROSS
PROFIT

OPERATING
EXPENSES2

GAIN ON
DIVESTMENTS

OTHER
ITEMS

FINANCE
COSTS

TAX

FY23

1.  Includes amounts attributable to non-controlling interests.
2.  Operating expenses includes $11 million net loss on sale related to Hangu China farm and the sale of GDT.

 
25

Our normalised profit after tax 
increased 125%, or $738 million,  
to $1,329 million.  

We have normalised $260 million related to the gain on sale 
from Soprole, and a $12 million loss relating to the disposal of 
Hangu farm in China.

Consistent with our strategy to focus on our New Zealand milk, 
we’ve made progress divesting our operations in Chile, Brazil 
and China. 

In November 2022, we announced the agreement to sell Soprole 
to Gloria Foods – JORB S.A – a consumer dairy market leader 
in Peru. The divestment was completed on 31 March 2023. The 
aggregate proceeds (including pre- settlement dividends) before 
tax, hedging and transaction costs were $1.3 billion, of which 
$804 million was returned to shareholders and unit holders on 
18 August 2023.

In December 2022, Fonterra and Nestlé agreed the sale of DPA 
Brazil to French dairy company Lactalis for BRL 700 million. The 
proceeds at completion will be subject to closing transaction 
adjustments. Fonterra’s 51% share of the DPA Brazil sale 
proceeds will be used to repay our share of debt held directly by 
DPA Brazil.

Breakdown of Total Group Performance

FOR THE YEAR ENDED 

31 JULY 2022

31 JULY 2023

NZD MILLION

Sales volume ('000 MT) 
Revenue
Cost of goods sold
Gross profit

Gross margin (%)
Operating expenses
Other2
EBIT
Net finance costs 
Tax expense
Profit after tax

CONTINUING 
OPERATIONS1

DISCONTINUED 
OPERATIONS1

TOTAL GROUP

CONTINUING 
OPERATIONS1

DISCONTINUED 
OPERATIONS1

TOTAL GROUP

3,318 
21,901 
(18,992)
2,909 

13.3%
(2,065)
 102 
 946 
(194)
(131)
 621 

606 
1,524 
(1,093)
 431 

28.3%
(390)
(11)
 30 
(37)
(31)
(38)

3,924 
23,425 
(20,085)
3,340 

14.3%
(2,455)
 91 
 976 
(231)
(162)
583 

3,497 
24,580 
(20,399)
4,181 

17.0%
(2,496)
 70 
1,755 
(211)
(303)
1,241 

476 
1,466 
(1,048)
 418 

28.5%
(303)
348 
 463 
(50)
(77)
336 

3,973 
26,046 
(21,447)
4,599 

17.7%
(2,799)
 418 
2,218 
(261)
(380)
1,577 

1. Refer to Note 1a and 2c of the FY23 Financial Statements. Comparative information has been re-presented for consistency with the current period. 
2. Consists of other operating income, net foreign exchange gains/(losses) and share of profit or loss on equity accounted investees. 

The sale is subject to several conditions including receipt of 
regulatory approvals from competition authorities. The Brazilian 
competition regulator released its first report on the proposed 
sale in late July 2023. The parties are engaging with authorities to 
understand and address the matters raised in relation to limited 

parts of the business and expect the sale to be completed within 
one year of balance date. 

We also finalised our exit of China Farms, following the sale of 
our Hangu China farm. 

26

Reportable 
Segments

Fonterra’s reportable 
segments are 
presented on a 
continuing operations 
basis and are Core 
Operations and the 
two customer-facing 
regional business 
units, Global Markets 
and Greater China as 
presented to the right.

Core Operations

Global Markets

Greater China

Total

External sales volume
(‘000 MT)

2,517 

10%  

980 

5%  

3,497 

5%  

Profit after tax contribution from continuing operations

Ingredients

Foodservice

Consumer

Total

$602m

$429m

$133m 

$1,164m 

$459m  

$114m  

$13m  

$586m  

$(12)m 

$72m  

$50m

$53m  

$203m

$241m 

$46m  

$171m  

$(18)m 

$(94)m 

$(52)m 

$(164)m 

$1m  

$90m  

$48m  

$137m  

$572m 

$385m 

$284m 

$1,241m 

$532m  

$77m  

$11m  

$620m  

Note: Figures are for the year ended 31 July 2023
Prepared on a continuing operations basis. Comparative information has been restated and re-presented for consistency with the current period. 
Financing Costs are allocated based on the average capital employed by each segment and channel. The effective tax rates applied are based on which country the entity, within a segment or channel, generates the income in.

 
27

Financial Discipline 

To assist our long-term discipline and focus 
on reducing operating expenses from 
continuing operations to around $2 billion, 
we have introduced a new efficiency metric 
of cash operating expenses per kgMS.

This metric monitors the actual cash cost base 
having regard to changing milk volumes, and 
adjusts for inflation so underlying efficiency 
gains/losses are transparent.

After removing the impact of inflation and 
non-cash costs, our operating expenses on a per 
kgMS basis increased from $1.34 to $1.39 per 
kgMS. The increase mainly reflects increased 
staff costs and storage and distribution costs. 

To assist our long-term discipline on efficient 
New Zealand operations we have introduced a 
new efficiency metric of gross profit from Core 
Operations per kgMS.

This metric monitors the cash cost base having 
regard to changing milk volumes, and adjusts for 
inflation so underlying efficiency gains/losses are 
transparent. The metric is calculated at a gross 
profit level to take into account the net result 
of maximising value generated from every milk 
solid, which can increase the cost base. 

After removing the impact of inflation and non-
cash costs, our gross profit from Core Operations 
on a kgMS basis improved from $8.83 to $9.21 
per kgMS. The increase reflects favourable 
price relativities.

Cash operating expenses per kgMS 

$1.39

$1.16

$1.36

$1.18

$1.34

$1.26

$1.39

2020

2021

2022

2023

Actual

Inflation Adjusted

Gross profit from Core  
Operations per kgMS

$9.85

$7.64

2020

$9.21

$9.42

$8.83

2022

2023

$8.60

$7.52

2021

Actual

Inflation Adjusted

 – Core Operations’ profit after tax was $572 million, an increase 
of $532 million on the prior comparable period. A key driver of 
Core Operations profit after tax is the relative price difference 
between product prices that inform the Farmgate Milk Price, 
referred to as Reference Products, and the product prices of 
Non-Reference Products.

 – Global Markets’ profit after tax increased $77 million to 

$385 million, mainly due to the Ingredients channel in-market 
profit after tax increasing by $114 million as a result of improved 
pricing and higher sales volumes. Performance also improved in 
the Foodservice channel as our in-market sales teams were able 
to adjust sales prices to compensate for higher input costs. This 
was partially offset by impairments in Global Markets’ Consumer 
channel of our New Zealand Consumer business and our Asia 
brands (Anmum™, Anlene™ and Chesdale™).

 – Greater China profit after tax increased $11 million to 
$284 million due to the Foodservice channel earnings 
increasing by $46 million, reflecting our in-market prices 
adjusting to higher input costs. However, this was partially 
offset by an impairment in Greater China’s Consumer channel 
of our Asia brands.

Looking at our business by product channel: 

 – Our Ingredients channel profit after tax increased $586 million, or 
101%, to $1,164 million, due to continued favourable margins in 
our protein and cheese portfolio, as well as higher sales volumes 
due to the sell down of additional inventory held at 2022 financial 
year-end.

 – Our Foodservice channel profit after tax increased $171 million, 

or 244%, to $241 million, due to improved gross margins 
combined with higher sales volumes.

 – Our Consumer channel profit after tax decreased $137 million to 
a loss of $164 million, mainly due to impairments of our domestic 
New Zealand Consumer business and our Asia brands.

28

Our Total Group free cash flow was $3.9 billion higher than last 
year at $3.3 billion, and is before the $804 million capital return 
payment to shareholders and unit holders. The increase reflects:

—  strong earnings performance resulting in underlying cash  

flow from earnings increasing by $0.8 billion,

—  an improvement in working capital cash flows of $2.5 billion 

over the year, and

—  an increase in net cash received from divestments of $0.8 billion, 

due to the sale of Soprole during the year, partially offset by an increase 
in capital expenditure and other investing cash flows of $0.2 billion.

The strong free cash performance supports the payment of the capital 
return of 50 cents per share and a 2023 full year dividend of 50 cents 
per share.

Cash Flows

Movements in Free Cash Flow ($ million)

2,469

(166)

815

3,314

(621)

2022

817

EARNINGS

NET WORKING
CAPITAL1

CAPEX & OTHER

DIVESTMENTS

2023

1.  Includes amounts owing to suppliers.

Free Cash Flow1 ($ million) 

1,433

1,109

668

2019

2020

2021

1.   Refer to the Glossary for definition.
Note: Comparative information has been re-presented for consistency with the current period.

(621)

2022

3,314

2023

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet

Return on Capital

29

Net debt has decreased by 
$2.1 billion reflecting higher 
earnings, a reduction in working 
capital and the divestment 
of Soprole. This enabled an 
increase in cash dividends paid 
during the year and the capital 
return paid in August 2023. 

The improvement in the Gearing 
Ratio from 42.4% to 28.8% 
reflects the lower level of debt 
coupled with the higher equity 
from our increased earnings.

Debt to EBITDA has improved 
from 3.2x to 1.3x due to lower 
net debt combined with higher 
earnings for the year. Non-
GAAP measures are not subject 
to audit unless they are included 
in Fonterra’s audited annual 
financial statements.

Net Debt1 ($ billion)

6.0

5.2

5.3

4.3

3.2

2019

2020

2021

2022

2023

1  Refer to the Glossary for definition. 

Leverage Metrics

4.3

49.5%

3.3

44.2%

3.2

2.7

38.5%

42.4%

1.3

28.8%

2019

2020

2021

2022

2023

Gearing Ratio1 (%)

Debt to EBITDA1 (x) 

1  Refer to the Glossary for definition. 

Total Group Return on Capital 
improved from 6.8% to 12.4%

Our improved return on capital was due to the increase 
in our normalised EBIT. We have normalised $349 million 
related to the gain on sale from Soprole, as well as 
normalising a $12 million loss related to the divestment 
of Hangu China farm. The impairments of $248 million, 
mainly recognised in our Consumer channel, have not 
been normalised.

The impact of the improved EBIT was partially offset by 
higher average levels of capital employed compared to the 
prior year. This was mainly driven by higher average working 
capital levels due to additional inventory carried forward 
from the prior year. 

Return on Capital

13,419

12,313

12,281

12,356

12,774

12.4%

5.6%

6.6%

6.6%

6.8%

812

879

952

991

1,881

2019

2020

2021

2022

2023

Total Group 
normalised EBIT1
($ million)

Average 
capital employed1
($ million)

Return on 
capital1 (%)

1  Refer to the Glossary for definition. 

 
 
 
 
On-farm

We seek to work with farmers to build the 
collective strength of our Co-operative. 
The aim is to deliver them maximum 
sustainable returns while bringing 
value to our customers, consumers 
and communities.

We believe Aotearoa New Zealand has the world’s best 
milk. Currently, our natural advantages, grass-fed 
approach and efficient farming methods combine to make 
our dairy farm emissions one third the global average.

The work we’re doing with farmers to reduce emissions 
on an intensity basis is an important part of keeping our 
Co-op resilient for the future, as we look to ensure there 
is continued demand for our farmers’ milk.

This includes supporting them with insights, tools and the 
most up-to-date advice, while also working to save them 
costs across our network of Farm Source stores.

We want farming in Aotearoa New Zealand to continue 
for generations to come, which is why we are committed 
to farming in a way that regenerates the environment.

The value we create by processing our farmers’ premium, 
sustainable milk into a range of products helps to sustain 
regional New Zealand, with almost 50 cents of every dollar 
earned by a farmer spent in their local community.

30

William,  
Southland

31

The Co-operative Difference is our 
framework for enabling our on-farm 
practices to support the delivery  
of our strategy to protect and grow  
the value of our sustainable, nutritious, 
New Zealand milk.

This is done by identifying and considering what we need to 
do today, what we need to be thinking about for tomorrow and 
what we need to consider in the longer term.

The Co-operative Difference is about getting ready for emerging 
issues that are either opportunities to create new value and/or 
risks to existing value. It provides farmers with the confidence to 
invest on farm at a pace that works for them and their business.

The framework is broken down into five performance areas – 
Environment, Animals, People & Community, Co-op & Prosperity 
and Milk.

Up to 10 cents of a farmer’s milk payment is influenced through 
fulfilling the key practices within each of these areas.

The Co-operative Difference has three levels of achievement:

 – Te Pūtake – achieving this first step is all about looking after 

people, animals, the environment and our Co-op. Farmers who 
meet the Te Pūtake requirements receive 7 cents per kgMS for 
all milk supplied during the season.

 – Te Puku – once Te Pūtake is achieved, the next step is Te Puku, 
which is all about milk quality. To achieve Te Puku, a farm must 
achieve milk quality excellence for at least 30 days during the 
season. Once this has been achieved, farmers receive 3 cents 
per kgMS for all milk supplied during the season that meets 
the milk quality excellence standard.

 – Te Tihi – once Te Puku is achieved, the next step is Te Tihi, 

which continues to focus on milk quality. To achieve Te Tihi, 
a farm must achieve milk quality excellence for at least 90% 
of days supplied in the season. Te Tihi is all about recognition 
of our leaders in the Co-operative and does not bring any 
additional financial recognition.

Farms that sustainably produce higher quality milk help to 
increase the value of all our milk. Getting the best returns 
for our farmers’ milk is determined by our ability to access 
opportunities, markets, and premium prices.

It is also important that the wider community values our role 
and our approach to farming, animal wellbeing and guardianship 
of the land, so that dairy farming is seen as an attractive and 
respected career choice for future generations. This means 
staying at the forefront of issues such as quality, safety and 
sustainability. That’s what The Co-operative Difference is 
all about.

Te Tihi -  
The summit of the mountain

718 up from 

638

Te Puku -  
The mid point

4,522

5,038 up from 
5,038

Te Pūtake -  
The start of the journey

William,  

Southland

1,383 up from 

1,155

Supporting farmers  
through Farm Source 

As the farmer-facing part of the Co-op, 
Farm Source plays an important role in 
getting alongside farmers to help them 
continue to lead the way in sustainable, 
efficient dairy farming.

The team is guided by what farmers have said they’re looking 
for from their Co-op, grouped into four key areas:

 – Co-operative leadership: including advocating on behalf of 
farmers and helping to foster a sense of connection and 
pride in the Co-op among farmers, our rural communities 
and the wider public.

 – My Co-operative and business: engaging with farmers in a 
way that suits their individual business needs so that they 
get the support they need, in a way that works for them.

 – Support to get better: working alongside farmers to further 
improve the efficiency and productivity of their farming 
businesses, including to meet on-farm standards and 
regulations of today and prepare for any that may be coming 
in the future so that we’re continuing to build resilience in 
the Co-op.

 – Products and solutions: providing products and solutions 

to help drive improvements, with a consistent and 
welcoming experience when farmers interact with the Farm 
Source team – whether in store or on farm – and offering 
competitive prices.

One of the top priorities for our Farm Source retail business is 
to reduce costs for farmers, including mitigating inflationary 
impacts as much as we can.

32

The team looks to leverage the Co-op’s purchasing power and 
partnerships to deliver products and services at competitive 
prices. A practical example is the partnership we announced with 
2degrees in November 2022, which offers farmers market leading 
rates on plans built to suit their telecommunication needs.

Farm Source offers a number of other market-leading offers – 
from up to 21 cents off a litre at Mobil for Fonterra suppliers, 
exclusive Power deals through Genesis, through to trade prices 
at Bunnings – and enables all Farm Source account holders to 
earn and redeem Farm Source Reward Dollars, contributing to 
further savings. We also play a critical role in helping to ensure 
farmers have a reliable supply of key farm inputs, as recently 
demonstrated when the country experienced supply shortages 
during COVID-19.

On top of the network of more than 60 stores across the country, 
Farm Source also brings market leading innovation like Allflex 
animal collars or Effluex to farmers. This is supported by industry-
leading tools and services that are delivered in a personalised 
way to farmers.

In July 2023 we confirmed changes to our Farm Source team 
aimed at improving how the Co-op supports farmers today and 
into the future. It followed a genuine consultation process, with 
the original proposal changing based on feedback from our 
people. We also took onboard views shared by farmers during 
this time.

The focus is on three key areas – improving our local support, 
improving our phone and digital tools to make things easier, and 
endeavouring to see that we are all doing everything we can to 
maintain, and grow, sustainable milk supply for the Co-op.

The new structure came into effect in August and we’ve been 
working to ensure farmers know how Farm Source has evolved 
and why.

Karlson,  
Bay of Plenty

33

Adjusting our Advance Rate

Reducing on-farm emissions

In May we announced that we would start the 2023/24 season 
with a new Advance Rate guideline. The key driver for this 
decision was to respond to the pressure farmers had been under, 
particularly in terms of cashflow.

The opening Advance Rate is now set at 75%, up from 65%, and 
steps up to 80% in March paid April, rather than May paid June. 
This helps gets cash to farmers sooner, and it is a change we were 
able to make due to our strong balance sheet.

Our intent is to use this new guideline for future seasons, starting 
with 2023/24.

When setting the Advance Rate, we balance getting farmers 
as much of their milk payment as early as possible, while also 
maintaining a strong balance sheet and having the necessary 
cashflow to operate day-to-day.

As a result of this approach, we will need to review our Farmgate 
Milk Price more frequently. As another way to get cash to farmers 
sooner, we announced in May 2023 that we were bringing forward 
the payment to shareholders of the capital return of 50 cents per 
share related to the sale of Soprole from October to August 2023.

Throughout the year, we’ve had conversations with our farmers 
about the need for Fonterra to introduce a Scope 3, or on-farm, 
emissions reduction target.

We held in person and online meetings across the country to 
hear farmers’ views. We also released a comprehensive on-farm 
emissions booklet in April which was designed to help with 
those conversations as well as being a practical how-to guide.

We initially indicated that we would announce the target in 
the middle of 2023. However, timing is important, and we 
acknowledge that farmers have been under a lot of pressure 
right now.

With this in mind, we decided to delay introducing a Scope 3 
target by a few months. We now expect to announce our target 
before the end of the calendar year.

There is no one solution to reducing on-farm emissions. It will 
require a combination of best farming practices as well as new 
technology and innovation to reduce methane, which is one 
of the biggest challenges the dairy industry faces, while also 
representing a significant opportunity for us. We’re investing in 
our own research and development as well as partnering with 
others to try and find breakthroughs that will further support 
farmers. Two examples are included on the next page.

Making it easier for farmers to join & stay 
with the Co-op

In March, we implemented our new Flexible Shareholding capital 
structure, which makes it easier for new farmers to join our Co-op 
and for existing farmers to remain, by allowing greater flexibility in 
the level of investment required.

We believe the changes help us make further progress on our 
strategy by supporting a sustainable milk supply and stable 
balance sheet, while also protecting farmer ownership and control.

Under the new structure, farmers can now hold up to 4x their milk 
supply in shares or a minimum of 33% of their supply.

In addition, exit provisions were extended and more types of 
farmers can be part of our Co-op. Sharemilkers, contract milkers 
and farm lessors can apply to become what we’ve termed 
Associated Shareholders and Secondary Shareholders. Meanwhile, 
ceased farmers are able to transfer shares to their relatives and 
related parties, who are known as Permitted Transferees.

Under the new structure, 
farmers can now hold up  
to 4x their milk supply in 
shares or a minimum of  
33% of their supply.

34

Exploring solutions 
to reduce methane

KowbuchaTM

AgriZeroNZ

One potential solution is our own 
development, KowbuchaTM. KowbuchaTM 
is probiotics derived from Fonterra’s 
large bacterial culture collection that 
are designed to reduce the methane 
produced by cows. 

KowbuchaTM has produced promising results with some 
trials showing up to a 20% reduction in methane without 
compromising productivity, but further work is needed to 
validate these effects.

As well as the potential to produce a methane reduction 
solution for use on farm, the KowbuchaTM venture could generate 
commercial returns for the Co-op. This is why we are creating a 
more formal structure around its potential commercialisation – 
starting with the appointment of a CEO in early July 2023.

Fonterra appointed Dr Ben Russell to lead the development 
of our KowbuchaTM business venture. He will focus on 
establishing the KowbuchaTM business through further 
development, validation, and commercialisation of Fonterra’s 
world-leading probiotic technology both within New Zealand 
and internationally.

We are also investing in partnership  
with other agricultural companies  
and Government.

AgriZeroNZ is an investment fund established between 
Government and major agribusiness companies to make sure 
New Zealand pasture-based farmers have equitable access to 
affordable and effective tools and technology to reduce their 
agricultural emissions, while maintaining efficiency, production 
and profitability. Fonterra will contribute up to $50 million 
over four years.

Since launching in February, AgriZeroNZ has announced 
investments of:

 – $4 million in a methane measurement facility 

that will be constructed at the Massey University 
dairy research farm in Palmerston North and will 
house 12 new cattle respiration chambers and 
associated infrastructure.

 – $1.8 million for a stake in Ruminant Biotech, a 

New Zealand-based start-up that is developing a 
slow-release, biodegradable methane-inhibiting 
bolus for livestock.

 – $2.5 million to support the continuation of research 
underway in New Zealand toward developing a 
methane vaccine and methane inhibitor for use  
in livestock.

35

Our industry  
leading farmers

Fonterra Dairy Woman  
of The Year Donna Cram 

Young Farmer  
of The Year Emma Poole

Dairy Industry Awards
Co-op farmers continued their strong history in 
the New Zealand Dairy Industry Awards, winning 
all three 2023 national titles at a gala dinner in 
Auckland in May.

Hayden and Bridget Goble from Taranaki won the 
2023 New Zealand Share Farmer of the Year title, 
Canterbury/North Otago’s Jack Symes became the 
2023 New Zealand Dairy Manager of the Year and 
Bill Hamilton from Northland was announced the 
2023 New Zealand Dairy Trainee of the Year.

Hayden and Bridget are 20% VO equity partners 
together with Bridget Mooney, Kevin Goble 
and Diane Goble on their 200ha, 565-cow New 
Plymouth property.

Jack is farm manager on Judy and Brian Symes’ 
160ha, 630-cow property at Southbridge and Bill 
is farm assistant on Richard and Sharon Booth’s 
395-cow, 174ha property at Titoki, employed by 
Andrew and Vicky Booth.

Taranaki farmer Donna Cram won the 2023 Fonterra 
Dairy Woman of the Year award.

Facilitated by Dairy Women’s Network, the award 
recognises an outstanding woman who has 
contributed to the dairy sector with passion, drive, 
innovation and leadership and no other award in  
New Zealand specifically celebrates the capability 
and success of women in the dairy industry.

Donna is a fourth-generation dairy farmer and 
influences locally and nationally through a large range 
of positions. She is well known within our Co-op and 
is an outstanding ambassador for the industry. Her 
leadership qualities, community engagement and 
commitment to sustainability represent some of the 
best attributes of Kiwi dairy farmers.

Along with the award Donna received a scholarship 
from Fonterra of up to $20,000 for an approved 
and personally chosen development programme, 
or professional/business coaching and/or learning 
experience.

Waikato/Bay of Plenty Young Farmer and Co-op 
supplier Emma Poole was “absolutely buzzing”  
after being named the 2023 FMG Young Farmer  
of the Year in early July.

Emma is the contest’s first-ever female champion 
and secured the win following three days of gruelling 
challenges against six other Grand Finalists. 
Contestants’ farming skills and general knowledge 
were put to the test with tasks that included repairing 
farm machinery, creating a hydroponic system and 
an intense race-style challenge with multiple tasks 
that saw points awarded for both skill and speed.

As Emma accepted the award, Tim Dangen, her 
brother, mentor and last year’s FMG Young Farmer 
of the Year was there to congratulate her as she said 
“we’ve finally knocked the grass ceiling off the roof”. 

 
36

Legend
Farming entities that achieved 
Grade Free for at least the last 10 seasons

Abacus Dairy Limited

Alton Pastures Limited

Milkwell Limited

MR & TJ Frost Ltd

Ashgrove Dairy Farms Limited

Owhango Farms Limited

Black & White  
Cow Company Limited

C E & D L Rogers

C J & C J McKenzie Limited

Caskey Farms

Farmer Fred Ltd

Fowler Family Prosperity Trust

Glen Eden Otago Ltd

Golden Mile Farms Limited

Hillcrest at Fairfax Ltd

J & LM Van Burgsteden

Kainui Peatlands Ltd

Kemra Farm Ltd

P H & W F Iorns

Pharlee Trust

R & S Singh

R S & R D Gordon

Rainbowcreek Farms Limited

S & S Iorns

Schorn Trust

T D & J A Rhind

The D & A Roberts Family Trust

W J & J G Pile Family Trust

Waiotu Farms Ltd

Whenuakura Farm Limited

Willcox Farms Ltd

Axtens Farm, 
Bay of Plenty

Honour roll for  
on-farm excellence

Thank you to all our farmers who have worked hard in 
the 2022/23 season to provide safe, high-quality milk.  
In addition to the honour roll, we acknowledge the 
efforts of all our farmers for their commitment to on-
farm excellence and producing the best possible milk.

Te Tihi
Farming entities that achieved  
The Co-operative Difference Te Tihi (Level 3)

A–C

46 South Limited

A T & J L Hughes Trust

4RJ Aguilar Dairy Limited

AAEJHM Family Trust

4Smiths Limited

99 South Limited

A & A Renes Limited

A & H Ahlers Limited

A & J Mitchell Partnership

A & M Lopes Limited

A & R Gibson Trusts 
Partnership
A B Lime Limited

A H Baxter Limited

A J & Est L R Arnet

A J & P T Bryant

A J & V A D McLellan

AAR Farming

Aaron and Marcia Flay 
Partnership
Aaron Brown

Aaron Gopperth Trust

AB Dairies Limited

Abbott Trusts Partnership

ABR Family Trust

ABR Farms Limited

ACG Enterprises Limited

ADDR Limited

Aerodrome Farm Limited

Aghern Holdings Limited

A J Porteous No. 2 Trust

Agromilk Limited

A L & S E Hunter Family Trust

AGVenture Farms Limited

A L & W A Mullan

Ahipaipa Farms Limited

A Mackinnon & A L Aitchison

Ahipene Farming Limited

A P Jones & J G Craw

Ahol Trust

Alley Farms Limited

B J & J R Goodwin

Birds Meadow Limited

Bullot Family Trust

Allison Family Farms Limited

B J & S R Morell

Biz-E Farming Limited

Burnell Farms Limited

37

Altura Dairy

Amtink Limited

B L & D J Haylock

B M & J M Durcan

Andrew Marshall Family Trust

B M & R M Sarten

BJ Caird Limited

BJ & TJ Bennett Limited

Burness Partnership

BJ & TM Verryt Limited

Burtlea Limited

Burton Farm Trust

Andrew Phipps

Aotearoa Kaitiaki Limited T/A 
Te Mania Farm
AP & TM Davis T/A  
Bushvalley Farm
AQA Agriculture

Aramaunga Farms Limited

Ardendale Farm Trust

Ardmore Farm Trust

Armer Farms (N I) Limited

Arrow Dairy Limited

Ashton Farming Limited

Ashvale Jerseys Limited

Aston Green Limited

AT Mills Partnership

Avon Downs Limited

B C & H J McLellan

B C McIntyre

B D & K M Sterritt

B D & M R Gray Trust 
Partnership
B D Hiestand Trust & V J 
Hiestand Trust
B F & R E Sanford Limited

B F & S J Gordon

B H & L J Bourne

B N & E L Simmons

B R & S P Churstain

B W & S J Phillips

B W E Binnie

BAA Family Trust

Bailetresna Limited

Bailey Partnership

Blandyco Trusts Partnership

Bushmills Trust

Blimar Dairies Limited

BLL Farm Trust

Bluegum Farms Ltd

BW Dairy Limited

Byrne Tribe Limited

C & A Dairies Limited

BM & GI Watson Limited

C & R Ashcroft Partnership

Bobcat Trust

Bolton Walker Limited

C & R M Moir

C A & E A Brown

Baldwin & Bourke Limited

Bonezco Farms Limited

C A Rowe

Barcia Dairies Limited

Bosbry Trust

C and J Piggott Limited

Barnscroft Dairy Limited

Braebid Limited

Barnsdale Farms 2014 Limited

Brasen Trust

Barridge Farms

Baucke Family Trust

Beckett Family Trust

Brats Farms Limited

Braylor Farms Limited

Brenick Limited

Beechbank Dairies Limited

Brittany Trust Partnership

Beith Farm Limited

Brohen Farms Limited

Belbrook Farming Limited

Brok Farming Limited

Belfield Dairies Limited

Brookdale Dairy Farm Limited

Bell Family Farms Limited

Brooklyn Dairy Farm Limited

Belmac Enterprises Limited

Broughshane Limited

Ben Callum Investments 
Limited
Benmore Downs Limited

Berry Dairy Farming Limited

Beyond The Gate Limited

BH Growth Limited

Bruski Farms 2001 Limited

Bryant Silviculture Limited

Brymac Farms Limited

BS Farming Limited

Bula Dairy Farming Limited

C D Farms

C G & J A Venn

C H Land Limited

C J & M D Blackwell Family 
Trust
C J & S J Coll Family Trust

C J & V K Taylor

C J Neustroski & P T Bucknell

C J Smyth & O R H Malone

C M Tanner

C P Baldwin & M A Bourke

C Porter & O Mitchell-Bettles

C.J. & N.A. Williams Limited

Caiseal Partnership

Calcium Dairies Limited

Calsi Farms Limited

Camaro Trust

Cambourn Farm Limited

Avery Partnership (Te Hawera)

Beckett Farm Limited

Brentworth Dairying Limited

Axtens Farm, 

Bay of Plenty

A S & G L Noble

Alderbrook Farms Limited

B J & D A Verryt Family Trust

Alkington Limited

Collingwood Farm Trust

D J & J A Veen

Delarbe Farm Limited

Ealing Dairies Limited

Fonterra -Te Rapa Farm

38

D J & L J McDrury

D J & N J Williams

D J Brook

D J Conlan

D J Wohlers Family Trust

D L & P Wilson

D M & C E L Turnbull

D M & D L Bourke

D M & J C Brogden

D M J & A J U Smith

D M J S Trust

D P & T M Stephens

D R & E M Henman

D R & J E Gilchrist

D R & L M Locke Ltd

D S & R R Carey

D W & M E Kidd

D.C Clark Limited

DA & ER Reid

Daisy Dairying Ltd

Dalmm Dairy Limited

Daniel & Tracey Limited

Te Tihi
C–G

Cameron McLellan

Cameron Richards Family Trust

Cantley Developments  
Limited No 1
Cantley Developments Ltd T/A 
Sunrise Properties
Caskey Farms

Cavafarm Trust

Ceamour Farms Limited

Ceylandia Dairies Limited

Chelu Limited

Childs Creek Limited

Chisnall Farms Limited

Churi Farms Partnership

Claremont Trusts Partnership

Clark & Everitt Partnership

Clarke Farms (2016) Ltd

Clarknic Farms

Clemcorp Ltd

Clover Bell Limited

Clutha Lea Ltd

CMP Dairies Limited

Colhaven Limited

Collingwood Dairy Limited

Collins & Murphy Farming 
Limited
Contra Trusts

Copeland Farming 2012 Ltd

Cordyline Farms Limited

Cornik Farms Limited

Corona Farms Ltd

Cotlands Ltd

Countrywise Limited

Cowley Ltd

CPX Limited

CQ Farming Limited

Craigower Farms Ltd

CRB Farming Limited

Creekside Pastures Ltd

Cressey Dairies Ltd

Crossipol Ltd

Croydon Agri Ltd

Croydon Dairy Limited

Cummings Family Trust

Cupsville Limited

Cutting Edge Dairies Limited

D & A Cooper Limited

D & D Alexander Trust

D & D M Coupe Trust

D & E Beckett Limited

D & M Earl Limited

D & T Farming Limited

D B & N L Hinz Partnership

D B & T A Wyber

D D & D M Galletly

Denis J Crookenden &  
Bronwyn F Bax
Dennley Farms Ltd

Des Conlan Trust

DG Farming Limited

Diamond Family Trust

Dillon & Co 2020 Limited

DJ & AJ Williams Ltd

DJAS Partnership

DNR Farms

Dobbie Farms Ltd

East Chatton Farms Limited

Friendly Cow Farms Limited

Ebbett Agri Partnership

Full Moon Farming

Edale Farms Ltd

G & L Farming Limited

Edge Holdings Limited

G & M Moore Partnership

Elamar Trust

G & P Russenberger

Est of M F Blake & M Blake

G & R Ward Family Trust

Estate E A Bonner

Estate John Harold & Muriel 
Mary Watt
Estate M J Abbott

Estate of T D & N M Miller

G & T Sloper Limited

G A & J M Hall Limited

G A & K T Lynch

G A & W A Knight

G A W & M C Van Rossum

G B & D G Hodges Trust

G Bearman & W Reid 
Partnership
G D & C J Alexander

Dogterom Farming Limited

Estee Holdings Limited

Donald Pearson Farm Ltd

Evans Partners Ltd

Doneve Agriculture Limited

Excel Farming Limited

Donnelly Trust

Eyretonlea Partnership

Double A Oaks Limited

F A & R C M Smits Ltd

G G Green Acres Limited

DPN Farming

Fairfax Stonehouse Farm Ltd

G G Ring

DR & PJ Hannah Ltd

Falcon Farms Trust

Draw Farming Limited

Farm Partners Limited

Farmer Fred Ltd

G I Norgate

G J & E L Pinny

G J Borst

Drought & Kalin Family Trusts 
Partnership
Drumderg Farm Ltd

Drumoak Trust

Farnley Tyas (2018) Limited

G K S Cows Limited

Faull Contracting Limited

Faybo Limited

G L & G F Bell

G L & R L Burr

Feenstra & Bouwmeester Trust

G M & J M Zydenbos

Fern Flat Limited

G P & D J Wolvers Family Trust

Fernley Farm Limited

G P S 2007 Ltd

Firdale Farms Limited

G R & K L Lovelock

Flaxwood Farm

Flaxwood South

G R & L M Heywood

G S & L J Rowe

Fleming Family Trust

Galloway Enterprises Ltd

Flo New Zealand Limited

Gambles Farm Ltd

Danz Farm Limited Partnership

Dryden Farming Limited

David & Corina Youle Trust

Drylands Trust

David & Lynley Ecclestone

Drysdale Holdings Ltd

David Leng

DB & MJ Kalma Ltd

DDB Dairy Enterprises Limited

Debnar Farms Limited

Deebury Pastoral Partnership

E A White Ltd

E C Briden & Sons Ltd

E J & A M Kiser

E L Mitchell

E O'Brien

E T De La Rue

Hitchcox Farming Ltd

J G Cochrane

Hoe-o-Tainui Farms Ltd

J H & H R Smyth

Jomar Farm Ltd

Joshua Lyon

Kelly Farming Limited

Kelvin Vickers Family Trust

39

Hogsback Limited

Hollands Farm Limited

J J & T A Hickman Family  
Trust Partnership
J J Bailey

J L & K S Gwerder Family Trust

JS & KJ Lorimer trading as 
Laurel Hill Farm
Juffermans Dairy Company Ltd

JP & DJ Hurley Partnership

Kemra Farm Ltd

Te Tihi
G–L

Greenhart Limited

Greg Dawson

Greg Low Limited

Gregory Farms Ltd

GST Investments Limited

Holmleigh Trust Partnership

Guthrie Farms Limited

Hororata Dairy Farm Limited

Guyon Farm Limited

Huntly Road Dairies Ltd

Gwen-May Trust

Hwitan Tune Holdings Ltd

Gavin Lozell Farming Limited

GB Dairies Partnership

GD & CJ Alexander Ltd

Gema J Limited

Geordie Farms Limited

Gibbs G Trust

Gillett Farms Ltd

GKW Farms Ltd

Gladvale Farms Limited

Glanton Holdings Limited

Glenarne Limited

Glenkerry Farm Limited

Glennevis Dairies Ltd

GM & AM Woolley

H E Argyle and Estate of L A 
Argyle
H J & A M Van Hout

H L & J E Wallace

H Q Partnership

H S Phillips

Hahn Trading Limited

Haket Trust

Hamilton & Keene 
Sharemilking Ltd
Hammens Limited

Hann Bros

Harakeke Dairy Ltd Partnership

Haswell Farm Limited

Haumako Farm Limited

Golden Mile Farms Limited

Haurere Farms Ltd

I G Haigh

I H & D J Bryant

I J & H E Mitchell

I J Sutherland Partnership

Ingram Farming (2003) Limited

Intensive Agriculture Ltd

Inveraray Dairy Limited

Ivy Plains Ltd

J & C Gray Family Trust

J & E Hansen

J & L Delgado

J & O Sergiychuk

J & P S Malcolm

J & R Ferguson Ltd

J & S Belton

Gordon Dale Farms (2006) Ltd

Heartland Holdings (2008) Ltd

J & S Nicholas Limited

GPN Holdings Ltd

Graejo Trust Partnership

Granite Farms Ltd

Grantley Trust

Green Pastures Dairy Ltd

Green Sky Dairies Limited

Greenan Farms Limited

Heavenly Moos Limited

Henderson Partnership Farm

Henmar Trust

Heywood Trust

Highland Downs Limited

Hill Biddles Limited

Hillcrest at Fairfax Ltd

J A & E Fraser

J A Rhind

J C Rossiter

J E & A E Watson

J E & D L Morell

J G & J M Wright

J G & L M Mills

J M Mellow

Jurassic Farms Ltd

J McKay & A Brown

K A & N J Riddington Ltd

J P & A M McEwan Ltd

K G Reeve

J S Dairy Limited

J Turner Limited

J W & A M Steeghs

J W & T L McElligott

K J & H A Dravitzki

K J & H Chalmers Ltd

K J & L M Goodwin

K J & S R Crowley

Jackson Partnership Ltd

K J Thompson & M Sataka

Jacob Abbott

Jacob Olsson

K R Vollebregt

K W & D J Hall

Jaeger Dairies Limited

K W & S H Smart Trust

James Lyttle

K W Laing

Janssen & Sons Limited

K&M C Farms Limited

Jareem Trust

Kahikatea Dairy Ltd

Kerr Road Dairies Limited

Kes Farming Limited

Kevin Fleming Ltd

Keystone Dairies Limited

Kiekie Farms Ltd

Kilfinan Farm Ltd

Kilkenny Farm Ltd

Kilkerran Farm Ltd

Killinchy Dairies Limited

Kinkora Farm Ltd

Kirson Farms Ltd

KJ&HL Uhlenberg(Waitui) 
Fam Tr. P'Ship
KM & BM Muller

Knapdale Farms Ltd

Kohi Partnership

Kohi Rose Ltd

Jareem Trust Partnership

Kainui Farms Limited

Kohinoor Farms Ltd

Jascas Trust

Jaska Farm Trust

Jaydee Farm Limited

JBHILLS Limited

JBT Farming Limited

JC Beattie Trust

JCB Farms Limited

Kaitiaki Whenua Farming 
Limited
Kaiwhio Dairies Limited 
Partnership
Kaja Limited

Kanuka Terrace Limited

Kapuka Investments Limited

Karl Robert Peace

JCDAF Dairy Farms Limited

Kavanagh Trust Partnership

Jersey Girl Ltd

Jerzey Rock Farm Ltd

JF & LM Le Fleming Family 
Trust

Keelinn Farms Limited

Keitra Farms Limited

Kelbretar Trusts Partnership

Koning Dairies Limited

Koroa Group Limited

Korotawa Limited

Kuklinski Family Trusts 
Partnership
Kuriger Farms

Kyle Farm (2005) Limited

Kywaybre Farms Ltd

L & M Wild River Limited

L B & S A Udy

L D & R M Barry

L E Hill

Te Tihi
L–O

L G & H R Miller

L H & K M Bonnar

L J Hodges

L M Farms

L P & C L McClintock Limited

L P & I Bylsma

L Ross & A Parry

L S & K A Phipps

L.J. Fleming & Co. Limited

LA Farms Limited

Lakeside Farm (2010) Ltd

Lamb Dairy Limited

Landcorp Farming Limited

Lavender Dairies limited

Lawson Farms

LB Dairies Limited

Le Emari Trust T/A 
Willowbridge Dairies
Le Prou Family Trust

Leona Green

Leondale Trust

Lepperton Farms 2021 Limited

Lethol Farms Ltd No.1

Lillburn Valley Dairies Ltd

Lisdale Dairies Limited

Little Mate 88 Farming 
Company Limited
Livcon Farms Ltd

Lizlyn Dairies Limited

Lobblinn Farms Limited

Lochbuie Limited

M F & D C Robinson Trust 
Partnership
M J & D R McFetridge

M J & M J Manley

M J Adams Trust

M J Robertson

M L & K I Clark Family Trust

M P & V M J Joyce Trusts P/Ship

M R & K J Luke Ltd

M S & P M Davey

M S Dobson

M T & J Torrie

Lochhead Holdings Limited

Maandonks Farm Limited

Lochiel Sharemilking Limited

Maandonks Pastoral Limited

Lochlea Partnership

Lockinge Farms Ltd

Macarm Farms Ltd

Macedonian Properties Limited

LR and SJ Hammond Limited

Macken Farm Ltd

Ludell Limited

MacWilliams Dairies Limited

Ludimac Dairying Ltd

Mahunga Farm Limited

Luscombe Partnership

Majestech Farms Limited

Lynbrook Farm Limited

Majuba Farms Ltd

Lynwood Dairies Limited

Maken Milk Ltd

M & A Bulanhagui Limited

Malandra Downs Limited

M & A Schrader Family Trust

Manaki Dairy Farms Limited

M & D Padrutt Family Trust

Mangakiri Ltd

M & G Askin Family Trust

Mangaroa Farms

M & M Kidd Partnership

Mangatoki Partnership

Legendairy Contracting Ltd

M A Watt Family Trust

Mangawhiri Farms Ltd

Legrayle Farm Limited

Lenek Farms Limited

Leningrad Farm Ltd

Lenssen Farming Partnership

M C & J P Fisher

M D Hammond

Mangin Dairying Ltd

Manuka Downs Farm Limited

M E Hunt & Son Ltd

Mardell Graham Limited

Mark & Nerida Dodge Ltd

Marshlie Partnership

Martindale Trust

Marua Partnership

Mary Rose Trust

Milk Drops Ltd

Milk Power Ltd

Milk Tap Limited

Milka Dairies Limited

Mattajude Family Trust

Milkin It 2020 Limited

Maude Peak Farm Trust

Mavora Farms Ltd

Maxlands Farms Limited

McBeth Dairy Ltd

McCheesey Farming Limited

McClan Ltd

McConnell Ag Ltd

McCoote Farms Limited

McCullough Family 2008 Ltd

McCullough Orakau Farm 
Trusts Partnership
McDonnell Farming Company 
(Ohau) Ltd
McDonnell Farming Limited

McKay Creek Farms Limited

McKinnon Dairy Limited

McSwag Limited

Mehroop Trading Limited

Melgan Ltd

Melrose Dairy Ltd

Merivale Partnership

Merrybent Limited

MG Farms Limited

Michael Clark Ltd

Michael Kiser

Mid Island Farms Limited

Miedema Farms Limited

Milestone Trust

Milky Whey Enterprises 
Limited
Milldale Farm No 2 Limited

Mills Road Estate Limited

Minus 1 Trust

Mish (2012) Ltd

MJ & CD Beattie

MJ Henderson Farming Limited

MJG Limited

MKJ Farms Limited

Mokka Limited

Molehill Farm Ltd

Monte Vista Farms

Moo Juice Limited

Moo2U Ltd

Mooi Dairies Ltd

Mooi Farms Ltd

MooJuice Dairies Limited

Moonlight Farms Trust Ltd

Moore Farming 2020 Limited

Morag Farm Limited

Morana Farms Limited

Morelands Pastoral Ltd

Moss Lane Limited

Mount View Trust

Mt Winchmore Farm Limited

Mullerwhero Farming Ltd

40

Murdoch Southern Farms Ltd

Murphy Farms Limited

N & J A Lodge

N & S Ganderton

N A & K M McColl

N G & B D Simmons

N K Burgoyne

Nadash Partners

Nellnate Partnership

Netherland Holdings Limited

Newera Dairies Limited

Newman & Clarke Limited

Newman & Clarke Limited No 2

Ngahape Valley Farm Ltd

Ngai Tahu Farming

Ngariki Trust

Ngatahi Trust

Ngatitu Whanau Trust

Nikorima Trust

Nilock & Camole Trusts

Nimbalkar Farms Limited

Nippyfarm Limited

NNL Dairying Limited - NO 2

Northland Agricultural 
Research Farm Incorporated
Nottingham Farms Limited

NZSF Canterbury Farms 
Limited - Lowry
NZSF Rural Holdings Ltd

O J & A J Williams

O'Connell Dairy Ltd

Old Kookaburra Farms Limited

One Arrow Ltd

P J & M E Gamble Family Trust

Pollock Dairies Limited

R W & H A Trotter

Riverside Dairying Limited

Rylock Farms Limited

41

Te Tihi
O–S

P Jones Family Trust

P L & R E Berryman

P M & K F Westenra

P R & R F Mossman

P S & H J Wilson

P T & E A Kelly

Pahau Dairy Ltd

Pomona Farming Limited

R W & K M Powell Trust

Riverside Sharemilking Limited

S & A Novo Limited

Ponga & Pukeko Farms Ltd

RA & L Lash

RJ & KB Smyth

S & A Wheeler Farms Limited

Port Molyneux Dairies Limited

RA Borst & MG Henderson

Robertson Allen Limited

S & G Chick

Pourakino Valley Trust

Radcliffe Rugby Road Limited

Robren Farms Ltd

S & R Pastoral Ltd

Premier Dairies Limited

Raelene Williams

Rockhaven Farm Partnership

S & S Iorns

Roger L Brook T/A Rosebrook

S B & Y M Thompson

Prima Farms Limited

PT & CA Shearer Family Trust

Opadadus Farming Ltd

Pahau Flats Dairy Limited

Pukerua Farm Ltd

Openside Farms Ltd

Oporo Farms Ltd

Oraka Farms Limited

O'Reilly Family Trust

Papakauri Farms Limited

Puketaria Limited

Paton Farms Limited

Pynewood Farm Limited

Paton Trading Company Ltd

Q F & H J Sherriff

Paton Trading Company Ltd

Quirke Family Trust

Orini Downs Station Limited

Patterson Farming Limited

QZL Farms Limited

Orongo Meadows Ltd

Orwell Dairies Limited

Oscar Farming Co Ltd

OSK Limited

Otira Farm Ltd

Owen & Robyn Ruddell 
Partnership
Owhango Farms Limited

P & D M Miedema

P & G Mulholland

P & S De Lange

P B & E J Chick

P D & S F Smith

Patterson Rawson Trusts 
Partnership
Paul Kay Family Trust

PB & CF Purdie Family Trust

Pebble River Farms Ltd

Pedestal Farms Limited

Perks Farm Limited

R & M King

R & P McIntosh Ltd

R A & K J Feaver

R B & G E Potter

R B & S M Grant Farming 
Limited
R G & C K Chubb

Peron Farming Limited

R G King Ltd

Peter Reeve

Pharlee Trust

Philmara Ltd

Pidgeon Pastures Ltd

Pindar Farms Limited

R H & G H Smith

R J Beckett

R L & F M Hurley

R L & S F Thompson

R N & D A Schmidt

R N & R C E Duncan Family 
Trust
R N Van Der Fits Family Trust

R P & C J Ballantine  
Family Trust

P G & M A Cashmere

Pine Bush Grazing Limited

P G O'Rorke Family Trust

Pineridge Partnership

P H & W F Iorns

P J & H M Butler

P J & K J Henderson

PKW Farms LP

Platinum Dairies Ltd

Poharu 2020 Limited

Rangitata Island Dairy Limited

Rollett Farms Ltd

Rakaia Incorporation (Pahau) 
Limited
Rangatira 8A17A5 Trust

Rangeview 2021 Limited

Rangitata Island Dairy 
Partnership Ltd
Rata Hill Farm

Red Fox Farms Limited

Redhawk Trust

Reesby Family Farms Limited

Regent Farms Limited

Retell Holdings Limited

Reuver Limited

Reynard Fields Limited

Rich Feet Limited

Richfield & Gee Ltd

Ridge View Dairies Limited

Ridgedale Limited

Ridgevale Dairy Limited

Riley Glen Collinge

Rimoo Farm Limited

Riverbend Farmlands Limited

Riverhill Farming Limited

Riverlands Ko-Torp Ltd

Riverlock Land and Property 
Limited

Rogers Family Trusts 
Partnership
Rolfe Farms Limited

Rollinson Farms Limited

Rombouts Farm Ltd

Rooney Farms Limited

Rooster Dairy Limited

Rose Fern Farms Ltd

Rosebrae Farm Limited

Rosevale Limited

Roslyn Plains Limited

Ross & Louise Fieten Family 
Trust
Rostov Dairies (NZ) Ltd

Rout Dairies Limited

Rowlands 2022 Limited 
Partnership
RP & KJ Willans Family Trust

S E & S A Nicholas  
Family Trusts
S G McKenzie

S J & D L Smith

S J & J L Fevre Trusts 
Partnership
S J Bruce Family Trust

S M & S A Field

S R & C J Baucke

S.V. & M.L. Helms

Sailing Away Family Trust

Sam Hunter & Amy Crofts 
Partnership
Sanddale Farm Ltd

Sandow Farming Limited

Sarnia Farms Limited

Sayer Severn Limited

Sayer Trust Partnership

SB & AM Gold Limited

Rua Fox Limited

Schorn Trust

Ruakiwi Dairies Limited

Schouten Dairies Ltd

Rubu Partnership

Ruthe Farms Limited

Rydal Farm Trust

Ryelands Farm Company 
Limited

Schouten Dairies Ltd

Scott Evans Sharemilking 
Limited
Scott Mark & Rachel May 
Ireland
SD & CB Farming Limited

Te Tihi
S–Z

Settler's Inn Trust

Steward Dairy Ltd

Stewartwood Limited

Stichbury Farms Limited

Stoked Enterprises Limited

Stolzenberg Farms Ltd

Stonebrook Dairy Farm Limited

Stonedale Farming Limited

Stoneleigh Park Limited

Stonylea Dairies Limited

Sfarmer Partnership Limited

Stornaway Farm Ltd

Shady Farming Limited

Streamline Limited Partnership

Shawlink Ltd

Sheenfield Farms Ltd

Shenandoah Trust

Siberia Farm Limited

Sidewayz Farming Limited

Simon Maxwell Limited

Sisley Farms Ltd

SJ Bond & DJ Phillips

Small Trading Ltd

Smit Dairies Limited

Sutherland Dairy Co Limited

Swim Farms Ltd

T H Davies Farming Limited

T K & H K Guthrie

T M & H D Green

T M Mcdowall

T R Bongers Trust

T S Curtis

Tablelands Dairy Limited

Taikatu Plains Limited

Smith Enterprises Limited

Tamac Farms Limited

Snaplulu Ltd

Snip Snap Farming

Sole Farms Ltd

South Hilton Ltd

Southern View Limited

Springdale Farms Trust

Tamatea Two Limited

Tamlaght Farm Partnership

Taranga Town Supply

Tata Dairy Ltd

Tayco Farm Limited

42

Tor View Ltd

W S & K M Fleck

Whitestone Dairies Limited

Te Puna Wai Dairy Farm 
Limited
Te Whanake Enterprises Ltd

Te Whanake Joint Venture

Torehape Sharemilking Co 
Limited
Torran Moor Ltd

W.A & H.R Simpson Farming 
Ltd
Wade Industries Ltd

Te Whenua O Matata Limited

Trenberth Family Trust

Waikatland

Telesis Trust

Ternstone Limited

Trinity Lands Limited

Waimak Dairies Limited

TRK Farm Limited

Waimarama Farming Ltd

Terrace Farms 2016 Limited

Tronnoco Farming Co Ltd

Waimate Fields Ltd

Terrace Top Dairy Ltd

True Blue Trusts

The D & A Roberts Family Trust

TS Dairies Limited

The Grange Ltd

Tuki Tuki Awa Ltd

Wainui Dairies

Waiongona Flats Ltd

Waiotu Farms Ltd

The Herewahine Trust

Turpin Dairies Limited

Wairakau Farm Trust

Wilcock Farming Limited

Willans Holdings Ltd

Willbound Farm Limited

Williamson Trust Partnership

Willowbrook Farms Ltd

Willowcreek Trust

Willowfields Limited

Willowhaugh Enterprises 
Limited
Willowview Pastures Limited

Wilmat Farms Limited

Wilson Produce Limited

The Isaac Conservation & 
Wildlife Trust (ICWT)
The White Gold Farm 2022 
Limited
Thornehayes Farm Ltd

Three Bells Ltd

Three Daughters (2018) 
Limited
Tiaki Farm Limited Partnership

Tiger Hill Farm Ltd

Tiroroa Farms Limited

Titipua Limited Partnership

TJ Gray & BA Johnston

TK & MG Wright

TL & SL Taylor Ltd

Tobruk Farms Ltd

Toggenburg Trust

Tussocky Road Dairy Farm 
Limited
Twin Creeks Partnership

Tyndale Family Trust

Tyndale Trust

Tyrone Trust P/Ship

Upper Balmoral Limited

Uruwhenua Farms Ltd

V & B Kalin Limited

V & J Ralph Ltd

V E & D M Grant

Vale Green Services Limited

Valley Views Southland Ltd

Van De Pas Trust

VDP Limited

Waitago Farms Ltd

Waitoru Farm Limited

Windsor Park Dairies Limited

Waituna Investments Ltd

Windy Hills Farms Ltd

Waiwira Holdings Ltd

Winter Farms (2004) Ltd

Walker Holdings Taupiri Ltd

Wiremu Trusts

Walsh Enterprises Limited

Withco Holdings Ltd

Watford Trust

Wattle Downs Limited

Webber Farm Limited

Wolff Farms Limited

Woodlaw Farm Ltd

Woodside Dairying Ltd

Webster Farming Limited

Woody's Charters Limited

Welsh Family Farms Limited

West Mains Farm Ltd

Westbrook Farming Company 
Limited
Western Heights Partnership

WP & KA Myers Family Trusts 
Partnership
Wynyard Dairies Ltd

Youngish Farming Partnership

Zagri Dairies Limited

Taylor Family Enterprises Ltd

Tokoroa Pastoral Ltd

Ventura Dairies Limited

Westridge Farm Limited

Zeldon View Limited

St Helena Farms Limited

Te Awa Pararahi Limited

St Helena Trust

Te Kiri Beers Limited

Steele & Sons Limited

Te Ngutu Land Holding Co Ltd

Stevenson S R & J A Trust

Tom Hargreaves Farms Ltd

W & C Gibberd

Whakahora Farm Ltd

Zoetermeer Agriculture Ltd

Tomclan Holdings Ltd

Tomco Limited

W A & D P McKenzie

Whakatupu Farming Limited

W R & D J Little

Wharepapa Trust

Ventsha Farms Limited

Westmere Co (2007) Ltd

Zeeland Dairies Limited

Fonterra Annual Review 2023

43
43

Off-farm

Off-farm

High inflation and global 
recessionary pressures have 
made this a volatile year. While 
our Co-op hasn’t been immune 
to these impacts, our earnings 
have benefited from our ability 
to capture favourable margins 
in our protein portfolio, while our 
Farmgate Milk Price has been 
impacted by reduced demand 
for powders.

44

We’ve made good progress on key strategic initiatives, including 
refining our asset portfolio, reducing our emissions, and growing 
our innovation portfolio.

Fonterra returns capital to shareholders

When we released our long term strategy in 2021, we committed 
to return capital to shareholders pending the outcome of the sale 
of our Chilean Soprole business. 

We are pleased to have completed divestment of the business 
in FY23, putting us in the position to return $804m, or 50 cents 
per share, to shareholders and unit holders.

On July 26, farmers voted in favour of the capital return with 
payment subsequently made on 18 August 2023.

As well as completing the divestment of Soprole, we completed 
the sale of our last remaining China Farm and agreed the sale of 
DPA Brazil, our joint venture with Nestlé, to Lactalis. 

Fonterra increases emissions  
reduction ambitions

Fonterra’s Scope 1&2 emissions largely come from our 
manufacturing operations and supply chain. Strengthening our 
emissions reduction target supports our ambition to be net zero 
by 2050.

Achieving our new emissions reduction target will require 
Fonterra to continue to undertake energy efficiency 
improvements and fuel switching to renewable energy source 
activities across our milk collection fleet and manufacturing sites, 
with a focus on the seven that use coal.

To do this, Fonterra is forecasting an investment of 
approximately $790 million, including a government 
contribution of up to $90 million through the Government 
Investment in Decarbonising Industry (GIDI) fund.

The decarbonisation plan will see Fonterra build on current and 
completed work at five of its manufacturing sites and explore 
multiple technologies to assist us selecting the most efficient 
transition to renewable energy across our manufacturing sites, 
while building resilience into our operations.

Accelerating these plans will help Fonterra continue to present 
customers with the world’s lowest carbon dairy at scale1. 
It will also contribute to New Zealand meeting its climate 
targets while delivering benefits across regional New Zealand, 
such as job opportunities in local communities, from our 
decarbonisation projects.

NZ’s largest cool distribution centre

November marked the completion of over two years of 
construction, installation and commissioning to create our 
first and only retro fitted automated distribution centre in 
New Zealand.

It is the largest automated Cool Distribution Centre (DC) in 
New Zealand, located in Hamilton.

The upgraded DC will improve site efficiency, reduce energy 
consumption, and reduce product and infrastructure damage 
through the automation of 40,000 pallet spaces, resulting in 
an expected savings of $4 million per year for the Co-op.

1  DairyNZ, February 2021: Mapping the carbon footprint of milk for dairy cows

45

Fonterra  
Te Awamutu

Decarbonising our 
operations 

Nutrition Science 
Solutions 

Stirling site running on renewable  
thermal energy

The Stirling wood biomass boiler fired up for the first time 
in April, marking the next step on the site’s transition to 
be totally reliant on renewable energy for its process heat. 
Changing to this boiler will reduce the annual carbon 
emissions forecast by 18,500 tonnes – the equivalent of 
taking approximately 7,700 cars off New Zealand’s roads.

Hautapu converting to wood biomass

The Co-operative will convert coal boilers at its Hautapu 
site to wood pellets. Once complete in early 2024 the 
Hautapu site will reduce our carbon emissions by a 
forecast 15,785 tonnes per annum - the equivalent of 
taking about 6,500 cars off New Zealand’s roads.

Waitoa installs new biomass boiler

The new Waitoa wood biomass boiler, due to be 
operational in November 2023, will reduce the site’s 
annual carbon emissions by approximately 48,000  
tonnes, the equivalent of taking approximately 20,000 
cars off New Zealand’s roads.

Fonterra launches nutrition science  
venture arm 

Fonterra has taken another step in implementing 
its strategy to be a leader in dairy innovation and 
science with the launch of a new nutrition sciences 
venture arm. 

The business – provisionally named Nutrition  
Science Solutions (NSS) – will operate as a 
standalone business within Fonterra with its  
own board and CEO. 

The NSS Board consists of two Independent 
Directors, William Fu-wei Liao (Chair) and Rodolphe 
Barrangou, and two Directors from the Fonterra 
Management Team, Mike Cronin and Komal  
Mistry-Mehta.

NSS will incubate and scale a portfolio of disruptive 
ventures by developing solutions that combine 
science, nutrition and technology to seek to make a 
real impact on human health. 

The first investment made through NSS was US$10 
million for a minority shareholding in San Francisco 
based Pendulum, a biotech company pioneering the  
next frontier of metabolic health through its 
microbiome-targeted products.

Products  
& customers 

We believe our New Zealand pasture-
based farming produces the best milk in 
the world, a testament to the care and 
attention our farmers give to their animals 
and the land. 

This high level of focus means that our on-farm carbon 
footprint is amongst the lowest in the world. As our 
customers and consumers become more interested in the 
provenance of their food, our sustainability credentials are 
more important than ever.

46

Ruby, Southland

47

We play an important part in the 
development of new dairy innovations, 
helping customers as they look to 
nutrition solutions to help them live  
longer and healthier lives. 

As the world changes, we change with it, adapting to the 
evolving needs and desires of our customers and consumers. 
Using our extensive dairy expertise, we are creating new value-
add products to cater to the changing tastes of consumers 
around the world. Through these innovations, we seek to 
maximise value for both our customers and farmer owners, 
while looking to utilise every single drop of milk. 

Innovating close to customers

Fonterra and DSM’s new venture: Vivici

In April, we launched Fonterra’s Shenzhen Application Center 
(FAC) focused on beverage innovation. 

With continued population growth, the world needs new 
nutritional and functional food options. 

Strategically located in the heart of the “New Capital of 
Beverages,” Shenzhen, it is our fifth FAC in China following 
Shanghai, Beijing, Chengdu, and Guangzhou.

China is a highly competitive beverage market, with consumers 
constantly seeking the next best drink. Last year, 1,434 new kinds 
of non-alcoholic beverages were launched in China by key tea 
and beverage brands.

Businesses must adapt quickly to market trends and continuously 
create novel products that typically combine traditional tea 
ingredients, dairy and fruit products.

The Shenzhen application centre provides a new platform to 
explore the diverse use of Fonterra products in beverages and 
provide innovative application solutions to meet the local needs 
of Chinese consumers.

A team of technical experts and experienced chefs are stationed 
at the centre and help to create an interactive, experiential 
space for customers, through product development seminars, 
demonstrations, and virtual live teachings.

In July, Prime Minister of New Zealand, Chris Hipkins, visited our 
application centre in Shanghai as part of his state visit to China. 
The Shanghai centre is the Co-op’s first, established in 2014.

Based on this vision, Vivici is a new startup company founded 
by DSM Venturing and Fonterra. 

It builds on a multi-year joint research development 
agreement of DSM and Fonterra which led to promising 
outcomes. 

Vivici obtained IP rights and exclusive commercial rights from 
Fonterra and DSM for developing and commercialisation of 
precision fermentation-derived proteins.

The startup combines DSM’s world-leading expertise in 
precision fermentation science and technology with Fonterra’s 
world-leading dairy science and technology.

Since it was launched in August 2022, Vivici has cemented its 
structure and defined its mission ‘to meet the world’s growing 
need for sustainable, nutritious and great tasting proteins.’ 

These new sources of protein will meet demand that is 
expected to double by 2050, driven by a growing and more 
affluent global population, demand which the planet is not 
expected to be able to meet through existing production. 
It provides potential opportunity for Fonterra to extend our 
farmers’ milk into products, categories and markets we’re 
not currently participating in.

Vivici will target broad food and beverage markets and plans 
to be open for customer collaboration later in 2023.

Fonterra Application Centre, 
Shenzhen

Ruby,  
Southland

48

Products & customers

Collaborating with customers to align  
on sustainability challenges

Fonterra and Mars benefit from shared values around innovation 
and sustainability which underpins our deepening global strategic 
partnership. Together, we ran a candy drop, where over 1,000 
of our tanker drivers delivered Mars chocolates to our farmers 
thanking them for the work they’re doing to improve on-farm 
sustainability practices.

At the end of 2022 we signed a Global Supply Agreement  
with Mars, where we will supply skim milk power, whole milk 
powder and anhydrous milk fat with Fonterra’s share of wallet 
scaling significantly through 2025. This deep partnering with  
our customers around shared innovation and climate goals is  
a powerful way forward for both of our businesses. 

Australia responds to consumer trends

Our Australian business is responding to consumer preferences 
for sustainable products.

The team launched a Mainland re-closeable snacking product, 
which keeps biscuits and cheese fresh in the fridge. 

This caters to the ever-growing in-home snacking market by 
providing 16 slices of cheese along with two options for crackers. 

This innovation means less waste and gives consumers more 
choice for their snacking budget. 

Premium Nutrition

Our innovation teams have launched numerous novel 
applications as we seek to extract maximum value out of NZ  
milk this year. Two examples are the Power Up high protein 
coffee milk solution and high protein yoghurts.

In the first example, Fonterra offers an Intellectual Property 
formulation, process know-how and ingredients package. 
This accelerates and de-risks our customers’ ability to launch 
a high protein coffee milk, in a UHT format, that is designed 
to remain stable during shelf life. This is challenging as the 
acidity from the coffee in a protein packed system can cause 
sedimentation over the long shelf life expected of a UHT 
product.

For high protein yoghurts, Fonterra has a range of ingredients 
that allow unrivalled protein enrichment and enable a wide 
range of textures, including drinking, spoonable and set; 
without compromising flavour and mouthfeel. This is a 
significant unlock and has proven difficult for competitors to 
replicate and further demonstrates the quality ingredients, 
application and processing knowledge held by the Co-op. 
So far, these yoghurt innovations have seen success in USA, 
Korea and Japan, to name a few.

49

Drysdale Farm,  
Hawkes Bay

Fonterra Management Team

50

Miles Hurrell 

Neil Beaumont

Judith Swales

Chief Executive Officer
Miles was appointed Chief Executive in 2018. He is responsible 
for leading the organisation, delivering strategy and financial 
performance, and engaging with our farmer owners, employees, 
customers and shareholders.

As Chief Executive, Miles has led the Co-operative through 
strategic reviews into a new growth phase focused on 
New Zealand’s pasture-based milk, dairy innovation and science 
and sustainability.

Previously, Miles held the role of Chief Operating Officer, Farm 
Source, with responsibility for farmer services and engagement, 
milk sourcing and the operation of New Zealand’s 70 Farm 
Source™ retail stores.

Miles has also held a number of leadership roles across the Co-
op, including Group Co-operative Affairs Director and General 
Manager Middle East, Africa, Russia and Eastern Europe where he 
led a period of sustained growth across the region. Earlier in his 
career, Miles worked as the General Manager of Global Sourcing, 
building relationships with many of our global partners of today.

Miles has completed management programmes at INSEAD 
(International Executive Development), London Business School 
(Finance), Kellogg’s NorthWestern University (Global Sales) and 
IMD Switzerland (Global Marketing).

Chief Financial Officer
Neil Beaumont joined Fonterra in 2023 and is responsible for the 
Co-operative’s finances, its financial portfolios, as well as mergers 
and acquisitions. He is a highly accomplished Chief Financial 
Officer with 25+ years of diverse and global finance leadership 
experience, having lived and worked in Canada, Australia, 
and Chile.

Most recently, Neil was Group CFRO of Canada’s largest 
investment fund – the Canadian Pension Plan Investment Board 
(CPPIB) – responsible for finance, risk, and strategic planning of 
this C$500B+ organisation.

Prior to that, he had a six-year career with Australian 
multinational resources company BHP, where he spent time 
in both Group Finance and as CFO for the Minerals Americas 
region.

Neil also spent over ten years as a Senior Partner with KPMG 
operating as Business Unit Leader for Canada’s Western region, 
with broad-reaching leadership across 13 offices and industry 
client responsibility across agriculture, resources, technology, 
and oil and gas.

He is a Chartered Professional Accountant and holds a Bachelor 
of Commerce degree from the University of Saskatchewan.

Chief Executive Officer, Global Markets
Judith Swales leads Fonterra’s Global Markets region. Responsible 
for our Consumer, Foodservice and Ingredients channels across 
the region, Judith and her team lead the global strategy to help 
bring the goodness of dairy to generations of customers and 
consumers.

Prior to this Judith was Fonterra’s CEO for Asia Pacific, and earlier 
led the Global Consumer and Foodservice business, and the 
Innovation and Transformation business unit. Judith joined the 
Co-operative originally in 2013 as Managing Director Australia 
and Fonterra Oceania.

The daughter of a milkman, Judith grew up helping her father 
on his daily milk run. She has extensive experience in senior 
management and business turnarounds. Before joining 
Fonterra, she was Managing Director of Heinz Australia, CEO 
and Managing Director of Goodyear Dunlop, Australia and 
New Zealand, and Managing Director of Angus and Robertson.

She currently serves as a Non-Executive Director for Super 
Retail Group and has served on the boards of Virgin Australia, 
DuluxGroup and Fosters.

Judith has a Bachelor of Science (Honours) in Microbiology and 
Virology and is a graduate member of the Australian Institute of 
Company Directors.

51

Teh-han Chow 

Kate Daly 

Mike Cronin

Chief Executive Officer, Greater China
Teh-han oversees the Co-op’s business in the Greater China region, 
including Ingredients, Foodservice and Consumer Brands. The 
region is one of the largest markets for Fonterra, accounting for 
roughly a third of the Co-op’s total business.

Prior to his appointment as Chief Executive Officer of the Greater 
China region in 2020, Teh-han was President of Fonterra’s 
ingredients business, NZMP, in Greater China, and South and 
East Asia.

Teh-han has over 20 years of experience in China across a variety 
of industries and functions, including marketing, public relations, 
advertising, sales, and management roles in food, agriculture, 
commodities, FMCG, luxury goods, and hospitality sectors.

Prior to joining Fonterra in 2015, Teh-han was Chief Executive 
Officer of Louis Dreyfus Commodities China, where he doubled 
the business, expanded the company’s business lines, built and 
acquired production facilities, and was involved in establishing 
multiple joint-ventures including COFCO Agricultural Industry 
Investment Fund. Prior to Louis Dreyfus, Teh-han was Managing 
Director for Greater China for J.R. Simplot, a United States-
based diversified agribusiness with farming and food processing 
operations in China.

Teh-han has a Bachelor’s degree in Marketing from California State 
University Northridge, and a Master’s degree, with honours, in 
International Management from Thunderbird Graduate School of 
International Management.

Managing Director, People and Culture
Kate was appointed as Managing Director People and Culture in 
August 2021.

She has oversight of the teams responsible for facilitating 
Fonterra’s people strategy including Culture, Employment 
Relations, Leadership Development, Talent and Future 
Capabilities, Rewards and Global Mobility.

Kate first joined Fonterra in December 2020, making significant 
contribution to the Co-operative as Director of HR for COO, 
where she held responsibility for leading the HR function for 
Fonterra across NZ Manufacturing, Technical Excellence, Global 
Supply Chain, Global Sustainability, Global Quality & Safety, 
Category Strategy & Innovation and Information Technology.

Prior to joining Fonterra, Kate had extensive experience in 
Human Resources and Communications leadership, having held 
senior roles across these portfolios since 2001. Kate previously 
led a transformation of the People and Culture function at 
the BNZ. She also was appointed as the Chief People and 
Communications Officer with Fletcher Building Ltd. Kate was 
awarded the HRINZ HR person of the year in 2018 in recognition 
for her contribution to Fletcher Building.

Kate has a Bachelor of Commerce in Economics and International 
Finance and a Bachelor of Science in Pharmacology, both from 
the University of Auckland.

Managing Director, Co-operative Affairs
Mike Cronin oversees Co-operative Affairs which includes 
Governance, Risk and Audit, Farm Source, Global Sustainability, 
Stakeholder Affairs and Trade, Legal, Inclusion and Māori Strategy.

Mike joined Fonterra in 2002 and has been a member of teams 
that have contributed to some of Fonterra’s key initiatives, 
including Trading Among Farmers, the Governance and 
Representation Review, the Fonterra Purpose, The Co-operative 
Difference and Flexible Shareholding.

Prior to 2014 when he joined the Fonterra Management Team, 
Mike was the General Manager of Strategy Deployment and then 
Group Director Governance and Legal.

Mike has a Bachelor of Laws and Bachelor of Arts from the 
University of Auckland.

52

Information about the  
Board of Directors can be  
found in the Governance  
& Statutory Disclosures.

Komal Mistry-Mehta 

Emma Parsons 

Anna Palairet 

Chief Innovation and Brand Officer
Komal leads Fonterra’s innovation, research and development 
functions along with the Co-operative’s brand and 
communications activities. This includes shaping the future 
of Fonterra by developing and commercialising innovation, 
technologies and new business models.

In addition, Komal oversees the Active Living Business Unit, and 
has responsibility for setting the global strategy for Core Dairy, 
Foodservice and the Nutrition Science portfolio.

Prior to joining the Fonterra Management Team in August 2022, 
Komal led Fonterra’s high-value global ingredients business 
Active Living, unlocking growth through developing and 
commercialising science-backed health and wellness solutions. 
In her prior role, Komal’s work establishing and developing 
Fonterra Ventures earned her the title of New Zealand’s Young 
Executive of the Year in the 2017 Deloitte Top 200 Awards. Prior 
to joining Fonterra in 2011, Komal worked for Deloitte in Europe.

She is known for her leadership in developing people and her 
strong advocacy for diversity and inclusion.

Komal has completed the Executive Program at Stanford 
University School of Business and holds Bachelor of Laws  
and Bachelor of Management degrees from the University  
of Waikato. She is a Barrister and Solicitor of the High Court  
of New Zealand as well as a member of the New Zealand 
Institute of Chartered Accountants.

Managing Director, Strategy and Optimisation 
Emma leads Fonterra’s work on strategy and optimisation, 
overseeing the product portfolio management function, and the 
development and implementation of strategy.

Prior to August 2022 when Emma joined the Fonterra 
Management Team, she was the General Manager of Capital 
Strategy and Chief Executive Officer of Agrigate, a joint venture 
between Fonterra and Livestock Improvement Corporation (LIC), 
GM Responsible Dairying, and had roles in Brazil and Argentina 
where she developed the Co-operative’s export relationships and 
supply chain integration across Latin America.

Before joining Fonterra in 2001, Emma worked for the 
New Zealand Dairy Board and Kiwi Dairies.

She has a Master of Business Administration, with First Class 
Honours, from Massey University, and Bachelor of Science and 
Bachelor of Commerce degrees from Victoria University of 
Wellington.

Chief Operating Officer (Acting)
Anna is currently the Chief Operating Officer (Acting) for 
Fonterra, responsible for our New Zealand manufacturing sites 
and global supply chain operations, technical excellence, and 
global safety, quality and regulatory teams.

She re-joined the dairy industry in October 2022 as the Director, 
Global Supply Chain before moving into the Chief Operating 
Officer (Acting) role in June 2023. She is also Chair of Kotahi 
Logistics.

Anna is an experienced business leader with a career spanning 
some of Australasia’s largest multinational companies across 
multiple industries including Fonterra, Carter Holt Harvey, 
Amcor, and Air New Zealand.

During her 16 years with Air New Zealand, Anna led commercial 
portfolios in the company’s Engineering, Group Supply Chain, 
Operations, Customer and Sales divisions. Positions included GM 
Air New Zealand Cargo, GM Property and Infrastructure, Head of 
Sustainability and Head of Procurement.

Anna is a past Board Director for the New Zealand Green 
Building Council (NZGBC) and past Board Trustee of Gladstone 
Primary School. She has a Bachelor of Science, Genetics and 
Microbiology degree from Massey University.

Information about the  

Board of Directors can be  

found in the Governance  

& Statutory Disclosures.

53

Jack, Maheswary & Bronte, 
Auckland

54

Reconciliation from profit after tax to total Group normalised EBITDA 

Profit after tax
Net finance costs from continuing operations
Net finance costs from discontinued operations
Tax expense from continuing operations
Tax expense from discontinued operations
Depreciation and amortisation from continuing operations
Depreciation and amortisation from discontinued operations
Total Group EBITDA 
Gain on sale of Chilean Soprole business
Loss on sale of Hangu China farm
Gain on sale of Global Dairy Trade
Brazil consumer and foodservice business impairment
Total normalisation adjustments
Total Group normalised EBITDA

GROUP $ MILLION

31 JULY 2023

31 JULY 2022
RE-PRESENTED1

1,577
211
50
303
77
654
8
2,880
(349)
12
–
–
(337)
2,543

583
194
37
131
31
602
33
1,611
–
–
(42)
57
15
1,626

1  Comparative information has been re-presented for consistency with the current period. Refer to the Notes to the Financial Statements section – 

Note 20 Re-presentations for further details.

Non-GAAP 
measures 

Fonterra uses several non-GAAP measures when 
discussing financial performance. Non-GAAP 
measures are not defined or specified by NZ IFRS. 
They are not subject to audit unless they are included 
in Fonterra’s audited annual financial statements. 

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. 

Please refer to the following tables for reconciliations of NZ IFRS to non-
GAAP measures, and the Glossary for definitions of non-GAAP measures 
referred to by Fonterra. Non-GAAP measures are not subject to audit unless 
they are included in Fonterra’s audited annual financial statements.

55

Reconciliation from profit after tax to total Group normalised EBIT

Reconciliation from profit after tax to normalised profit after tax and  
normalised earnings per share

Profit after tax
Net finance costs from continuing operations
Net finance costs from discontinued operations
Tax expense from continuing operations
Tax expense from discontinued operations
Total Group EBIT
Normalisation adjustments (as detailed on previous page)
Total Group normalised EBIT

GROUP $ MILLION

31 JULY 2023

31 JULY 2022  
RE-PRESENTED1

1,577
211
50
303
77
2,218
(337)
1,881

583
194
37
131
31
976
15
991

Profit after tax 
Normalisation adjustments (as detailed on the previous page)
Tax on normalisation adjustments
Normalised profit after tax
(Profit)/loss attributable to non-controlling interests
Normalisation adjustments attributable to non-controlling interests
Normalised profit after tax attributable to equity holders of the  
Co-operative
Weighted average number of Co-operative shares (thousands of shares)
Normalised earnings per share ($)

GROUP $ MILLION

31 JULY 2023

31 JULY 2022

1,577
(337)
89
1,329
(40)
–
1,289

583
15
(7)
591
1
(24)
568

1,610,507
0.80

1,613,353
0.35

Reconciliation from gross profit from continuing operations to total  
Group normalised gross profit

Gross profit from continuing operations
Gross profit from discontinued operations 
Total Group normalised gross profit

GROUP $ MILLION

31 JULY 2023

31 JULY 2022
RE-PRESENTED1

4,181
418
4,599

2,909
431
3,340

1  Comparative information has been re-presented for consistency with the current period. Refer to the Notes to the Financial Statements section – 

Note 20 Re-presentations for further details.

56

Glossary

Terms

Active Living

Adjusted net debt

Definitions

Terms

Definitions

represents ingredients and solutions sold to businesses who cater to consumers’ 
health and wellness needs. It addresses three dimensions of wellbeing (Physical, 
Mental, Inner), extending to meet the nutrition needs of medical patients through to 
everyday people pursuing active lifestyles.  This portfolio includes proteins, specialty 
ingredients such as probiotics, lactoferrin and lipids, and patented formulations.

is calculated as total borrowings, plus bank overdraft, less cash and cash equivalents, 
plus a cash adjustment for 25% of cash and cash equivalents held by the Group’s 
subsidiaries, adjusted for derivatives used to manage changes in hedged risks on debt 
instruments. Amounts relating to disposal groups held for sale are included in the 
calculation.

Cash operating expenses 
per kgMS

is continuing operations operating expenses, less non-cash costs (depreciation, 
amortisation, right of use asset costs, impairments). Shown by kilogram of 
New Zealand milk solids collected. 

Ceased Shareholder

is a Shareholder that has given notice of ceasing supply, or is treated as having given 
such a notice, and whose cease notice has become effective.

Consumer

is the channel of branded consumer products, such as powders, yoghurts, milk, 
butter and cheese.

Continuing operations

means operations of the Group that are not discontinued operations.

Associated Shareholder

is a Shareholder that is a Farm Lessor, Sharemilker or Contract Milker.

Core Operations

Attributable to equity 
holders of the Co-
operative

Average capital 
employed

Bulk liquids

Capital employed

Capital expenditure

is used to indicate that a measure or sub-total excludes amounts attributable to 
non-controlling interests.

is a 13-month rolling average of capital employed.

Custodian

Debt to EBITDA

means bulk raw milk that has not been processed and bulk separated cream.

is adjusted net debt less the cash adjustment (used in calculating adjusted net debt), 
plus cash and cash equivalents held by subsidiaries for working capital purposes, plus 
equity excluding hedge reserves and net deferred tax assets.

DIRA

represents core operating functions including New Zealand milk collection and 
processing operations and assets, supply chain, Group IT and Sustainability; Fonterra 
Farm Source™ retail stores; and the Strategy and Optimisation function.

means the Fonterra Farmer Custodian, which is the legal holder of the shares in 
respect of which economic rights are held for the Fund and any Market Makers.

is adjusted net debt divided by Total Group normalised earnings before interest, tax, 
depreciation and amortisation (Total Group normalised EBITDA) excluding share of 
profit/loss of equity accounted investees, net foreign exchange gains/losses and any 
normalised EBITDA relating to entities divested during the year.

means the Dairy Industry Restructuring Act 2001, which authorised Fonterra’s 
formation and regulates its activities, subsequent amendments to the Act, and the 
Dairy Industry Restructuring (Raw Milk) Regulations 2012.

is purchases of property (less specific disposals where there is an obligation to 
repurchase), plant and equipment and intangible assets (excluding purchases of 
emissions units), net purchases of livestock, and includes amounts relating to 
disposal groups held for sale.

Discontinued operations

means a component of the Group that is classified as held for sale (or has been sold) 
and represents, or is part of a single co-ordinated plan to dispose of, a separate major 
line of business or geographical area of operations, or is a subsidiary acquired 
exclusively with a view to resale.

Capital invested

is capital expenditure plus right of use asset (e.g. leases) additions and business 
acquisitions, including equity contributions, long-term advances, and investments.

Dividend yield

is dividends (per share) divided by volume weighted average share price for the 
period 1 August to 31 July.

Earnings before interest 
and tax (EBIT)

Earnings before interest, 
tax, depreciation and 
amortisation (EBITDA)

Earnings per share (EPS)

57

Terms

Definitions

Terms

Definitions

is profit before net finance costs and tax.

Free cash flow

is the total of net cash flows from operating activities and net cash flows from 
investing activities.

is profit before net finance costs, tax, depreciation and amortisation.

Fund

is the Fonterra Shareholders’ Fund. 

is profit after tax attributable to equity holders of the Co-operative divided by the 
weighted average number of shares on issue for the period.

EBIT margin

is EBIT divided by revenue from sale of goods.

EBITDA margin

is EBITDA divided by revenue from sale of goods.

Economic rights

means the rights to receive dividends and other economic benefits derived from 
a share, as well as other rights derived from owning a share.

Eliminations

represents eliminations of inter-business unit sales. 

Farmgate Milk Price

means the average price paid by Fonterra for each kilogram of milk solids (kgMS) 
supplied by Fonterra’s farmer shareholders under Fonterra’s standard terms of 
supply. The season refers to the 12-month milk season of 1 June to 31 May. The 
Farmgate Milk Price is set by the Board, based on the recommendation of the Milk 
Price Panel. In making that recommendation, the Panel provides assurance to the 
Board that the Farmgate Milk Price has been calculated in accordance with the 
Farmgate Milk Price Manual.

Fonterra's average NZD/
USD conversion rate

is the rate that Fonterra has converted net United States Dollar receipts into 
New Zealand Dollars including hedge cover in place.

Foodservice

represents the channel selling to businesses that cater for out-of-home consumption; 
restaurants, hotels, cafés, airports, catering companies etc. The focus is on customers 
such as; bakeries, cafés, Italian restaurants, and global quick-service restaurant 
chains. High performance dairy ingredients including whipping creams, mozzarella, 
cream cheese and butter sheets, are sold in alongside our business solutions under 
the Anchor Food Professionals brand.

Gearing ratio (%) 
(adjusted net debt)

is adjusted net debt divided by total capital. Total capital is equity excluding hedge 
reserves, plus adjusted net debt.

Global accounts

means large scale, multi-national/multi-region customers. 

Global Dairy Trade (GDT)

means the electronic auction platform that is used to sell commodity dairy products. 

Global Markets 

Greater China

Gross margin

represents the Ingredients, Foodservice and Consumer channels outside of 
Greater China.

represents the Ingredients, Foodservice and Consumer channels in Greater China.

is gross profit divided by revenue from sale of goods.

Gross profit from Core 
Operations per kgMS 

is Core Operations business unit (excluding Farmsource) gross profit, less the cost of 
New Zealand milk sold. Shown per kilogram of New Zealand milk solids sold by Core 
Operations (continuing business).   

Growth capital 
expenditure

Held for sale

Ingredients

is investments to drive business expansion or improvement toward our strategy and 
generate incremental revenue. This includes organic growth (existing business 
projects) and inorganic growth (mergers and acquisitions). 

is an asset or disposal group is classified as held for sale if it is available for immediate 
sale in its present condition and its sale is highly probable. A disposal group is a group 
of assets and liabilities to be disposed of (by sale or otherwise) in a single transaction.

represents the channel comprising bulk and specialty dairy products such as milk 
powders, dairy fats, cheese and proteins manufactured in New Zealand, Australia 
and Europe, or sourced through our global network, and sold to food producers 
and distributors.

58

Definitions

Terms

Definitions

means kilograms of milk solids, the measure of the amount of fat and protein in the 
milk supplied to Fonterra.

Price Relativities 

refers to the difference in the weighted average price (in USD) between the 
Co-op’s Reference Product portfolio and Non-reference Product portfolio. 
The difference between these two weighted average prices is a key driver of the 
Co-op’s gross margin. 

Terms

kgMS

Market Maker

is a third party appointed by the Co-op who is active in making bids and offers on a 
minimum number of Fonterra Co-operative Group Shares.

Maximum Holding 

is the maximum number of shares a Supplying Shareholder can hold, which is equal 
to 4 times the Share Standard.

Minimum Holding

is the minimum number of shares a Supplying Shareholder is required to hold, which is 
equal to 33% of the Share Standard. New entrants have up to six seasons to meet this. 

Net debt

means adjusted net debt.

Net working capital

is total trade and other receivables plus inventories, less trade and other payables. 
It excludes amounts owing to suppliers and employee entitlements.

Non-Reference Products

means all New Zealand milk solids processed by Core Operations, except for 
Reference Commodity Products.

Non-shareholding farm

means a farm where the owning entity is not entitled to hold shares in the 
Co-operative. As an example, farms supplying MyMilk.

Non-supplying 
Shareholder

Normalisation 
adjustments

means all shareholdings that are not Supplying Shareholders.

means adjustments made for certain transactions that meet the requirements 
of the Group’s Normalisation Policy. These transactions are typically unusual in 
size and nature. Normalisation adjustments are made to assist users in forming a 
view of the underlying performance of the business. Normalisation adjustments are 
set out in the Non-GAAP Measures section. Normalised is used to indicate that a 
measure or sub-total has been adjusted for the impacts of normalisation 
adjustments. E.g. ‘Normalised EBIT’.

Permitted Transferee

is a person who has been approved by the Co-op and who is (and remains) related to 
or associated with a Ceased Shareholder.

Product channel

Fonterra has three product channels, Ingredients, Foodservice and Consumer. 

Profit after tax margin

is profit after tax attributable to equity holders of the Co-operative, divided by 
revenue from sale of goods.

Reference Commodity 
Products (also referred to 
as Reference Products)

is commodity specifications of the five Reference Commodity Products (RCPs) which 
are Whole Milk Powder (WMP) and Skim Milk Powder (SMP), and their by-products 
Butter, Anhydrous Milk Fat (AMF) and Buttermilk Powder (BMP). These commodity 
groups are included in the calculation of the Farmgate Milk Price.

Reported

Retentions

is used to indicate a sub-total or total is reported in the Group’s Financial Statements 
before normalisation adjustments. E.g. ‘Reported profit after tax’.

means earnings per share, less dividend per share. Retentions are reported as nil 
where Fonterra has reported a net loss after tax.

Return on Capital (ROC) 

is calculated as Total Group normalised EBIT including finance income on long-term 
advances less a notional tax charge, divided by average capital employed.

Rules for Shareholding

is the Rules for Shareholding adopted by the Fonterra Board from time to time.

Season

New Zealand: A period of 12 months from 1 June to 31 May. 
Australia: A period of 12 months from 1 July to 30 June.

Secondary Shareholder 

is a sharemilker as defined in section 34 of the Co-operative Companies Act that 
holds shares as if they were a Supplying Shareholder, pursuant to section 44 of the 
Co-operative Companies Act and clause 30.5 of the Constitution.

Share Standard

means one share per one kgMS supplied, used to calculate a Supplying Shareholder's 
Minimum Holding and Maximum Holding.

Terms

Definitions

Shareholding farm

means a farm where the owning entity of the farm has a minimum required 
shareholding of at least 1,000 shares in the Co-operative. This includes farms where 
the owning entity is in the process of sharing up on a Share Up Over Time contract. 

Supplying Shareholder

is a shareholder supplying milk to the Co-op.

Sustaining capital 
expenditure

represents investments to maintain the capability of our existing assets from risk 
management, legislation/regulation commitments, business continuity and capital 
replacement, as well as projects that drive the Co-operative's sustainability targets.

Total Group

Total payout

is used to indicate that a measure or sub-total comprises continuing operations, 
discontinued operations and non-controlling interests. E.g. ‘Total Group EBIT’.

means the total cash payment per milk solid that is backed by a share, being the sum 
of the Farmgate Milk Price per kgMS and the dividend per share.

Total Shareholder Return 
(TSR) 

is the measure of share price movements and all economic distributions (e.g. 
dividends, capital returns) over a specified period of time, divided by the original 
investment amount. Expressed as an annualised percentage.

Tradeable shares 

represents shares on issue that are in excess of aggregate minimum shareholding. 

WACC

means weighted average cost of capital.

Weighted average share 
price

represents the average price Fonterra Co-operative Group Limited shares traded at, 
weighted against the trading volume at each price over the reporting period.

Working capital days

is calculated as 13-month rolling average working capital divided by revenue from the 
sale of goods (excluding impact of derivative financial instruments) multiplied by the 
number of days in the period. The working capital days calculation excludes other 
receivables, prepayments, other payables and includes working capital classified as 
held for sale.

59

Iso, 
Auckland

Directory

Fonterra Board  
of Directors

Registered   
Office

Fonterra Shares  
& FSF Units Registry 

Peter McBride 
Clinton Dines  
Brent Goldsack  
Leonie Guiney  
Bruce Hassall  
Holly Kramer  
Andrew Macfarlane  
John Nicholls  
Cathy Quinn 
Scott St John
Alison Watters

Fonterra 
Management Team

Miles Hurrell
Neil Beaumont
Judith Swales
Teh-han Chow
Kate Daly
Mike Cronin
Komal Mistry-Mehta
Emma Parsons
Anna Palairet

Fonterra Co-operative  
Group Limited

Computershare Investor  
Services Limited 

Private Bag 92032 
Auckland 1142 
New Zealand 

109 Fanshawe Street 
Auckland Central 1010 
New Zealand

Phone +64 9 374 9000 

Private Bag 92119 
Auckland 1142  
New Zealand  

Level 2, 159 Hurstmere Road 
Takapuna  
Auckland 0622  
New Zealand 

Investor Relations  
Enquiries 

Phone +64 9 374 9000  
https://www.fonterra.com/nz/en/
investors.html

Auditor 
KPMG  
18 Viaduct Harbour Avenue 
Auckland 1010  
New Zealand 

Farmer shareholder  
& supplier services 

Freephone 0800 65 65 68 

60

Drysdale Farm,  
Hawkes Bay

 
 
61

Drysdale Farm,  

Hawkes Bay

insightcreative.co.nz 

  FONTERRA116_AR

Fonterra Annual Review 2023
Arotake-ā-tau Te Mātāpuna

fonterra.com