Slides
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Fonterra Co-operative Group FY26 Annual Results
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Contents FY26 Highlights 3-6 Strategic Performance 7-15 Dairy Market Environment 16-20 FY26 Business Performance 21-34 FY27 Outlook 35-38 Appendix: Supplementary Information 39-52 2
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Total Payout $10.42 57c Ordinary Cash Dividend 16c Mainland Special Dividend $9.69 Milk Price • Total cash distributions for a fully shared up farmer shareholder of $12.42 • Total Payout of $10.42 • Capital Return of $2.00 • Record milk volumes collected and processed; highest second half shipments in a decade • Total Group operating profit of $3.4b, including the Mainland Group divestment benefit of $1.2b • Excluding Mainland, underlying operating profit of $1.8b, up from $1.5b, due to higher milk collections and margins • Underlying profit after tax of $1.2b, equivalent to 71c per share¹, up on 54c the prior year • Capital investment of $1b in higher-value portfolio capacity and a resilient operations network • Adjusted net debt reduced $967m to $1.7b reflecting strong cash flows and Mainland sale proceeds retained to support resilience and growth • Excluding Mainland, underlying return on capital of 14.2%, up from 11.7% FY26, delivering results Total Payout $10.42 Capital Return $2.00 $12.42 Total Cash Distribution 3 1. EPS presented is profit attributable to equity holders of the Co-operative Note: Definitions of Mainland divestment benefit, underlying performance, earnings per share and return on capital outlined on Slide 4.
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Strong performance delivering value for shareholders Mainland Divestment Benefit¹ $1.2b Underlying Earnings per Share4 71cents from 54c Underlying Return on Capital5 14.2% from 11.7% Capital Return $3.2b 4 Underlying Operating Profit2,3 $1.8b from 1.5b Total Group Profit after Tax $2.6b from 1.1b 1. The Mainland Divestment Benefit of $1,160m is the benefit to the Group after consideration of all related costs and benefits. The gain on sale disclosed in the Financial Statements of $1,250m is net of incremental costs that are directly attributable to the sale, as required under Accounting standards. 2. Underlying performance is Fonterra’s continuing operations represented as if the Mainland trade terms had applied for the full period to provide a comparative of Fonterra’s continuing operations and align with the pro forma historical financial information disclosed in the Notice of Special Meeting 2025 (29 September 2025). This representation is applied to operating profit, profit after tax, EPS and return on capital. 3. FY25 underlying earnings have been restated to account for finalisation of trade terms and transaction perimeter relating to the Mainland divestment. 4. EPS presented is profit attributable to equity holders of the Co-operative. 5. Return on capital calculated as Total Group normalised EBIT including finance income on long-term advances less a notional tax charge, divided by 13-month rolling average capital employed.
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16 20 50 55 57 57 22 286.8% 12.4% 11.3% 11.7% 14.2% FY22 FY23 FY24 FY25 FY26 35 80 71 54 7117 16 1.0 2.2 1.5 1.7 3.4 FY22 FY23 FY24 FY25 FY26 5.3 3.2 2.6 2.6 1.7 42% 29% 24% 24% 21% FY22 FY23 FY24 FY25 FY26 9.30 8.22 7.83 10.16 9.69 9.50 8.72 8.38 10.73 10.42 FY22 FY23 FY24 FY25 FY26 Creating value through sustained performance Operating Profit and EPS Net debt and Gearing Underlying business EPS (cents) Reported operating profit ($b) Gearing Ratio Adjusted net debt ($b) Total Dividend and ROCTotal Payout ($) Milk Price Cash dividend (cents) Dividend Special dividend (cents) Underlying return on capital1 5 Mainland EPS (cents) 71 87 Imputation credits (cents) Includes Soprole $0.35b gain on sale Includes Mainland $1.16b Benefit 1. FY22 to FY24 return on capital shown on a Total Group basis.
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6 B2B performance delivering earnings growth • At the end of FY25, the Co-op set a target to return to pre-divestment operating profit of $1.7 billion within 3 years, this was achieved ahead of plan in FY26. • The Co-op had stronger than anticipated earnings growth due to – Favourable product portfolio performance, ahead of planned structural benefits – Increased milk volumes • The Co-op remains focused on the structural gains it outlined at the end of FY25 – Unlock higher value product capacity – Cost reduction, including ERP completion • Having achieved the FY25 target to return to pre-divestment operating profit ahead of plan, the Co-op will no longer report against this measure and will revert to forecasting earnings for the relevant year. Achieved target to return to FY25 pre-divestment operating profit ahead of plan 1. Total Group reported operating profit, Excluding Mainland section is underlying operating profit. 1.0 1.9 1.5 1.7 1.5 1.8 2.2 FY22 FY23 FY24 FY25 FY25 FY26 Operating Profit¹ (NZD billion) Excluding Mainland Includes Soprole $0.35b gain on sale
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Strategic performance Content to be added Explanation of Content Question to consider
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Our Strategy
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9 Fonterra Management Team • Richard Allen appointed Chief Executive, April 2026. • Shift to a market-led model, with single-point accountability per market for Foodservice and Ingredients. • Growth and Strategy function established to connect strategy across the Co-op. • New structure lets the Co-op move faster in market, with more capability closer to customers. • Management Team changes, effective 15 June 2026: • Elisa Giusti Chief Growth and Strategy Officer • Effective 3 August 2026: • Teh-han Chow CEO Greater China (Ingredients and Foodservice in Greater China) • Gaby Amade President Global Markets (Ingredients and Foodservice globally outside of Greater China) Richard Allen Chief Executive Officer Andrew Murray Chief Financial Officer Anna Palairet Chief Operating Officer Kate Daly Managing Director, People and Culture Matt Bolger Managing Director, Co-operative Affairs Teh-han Chow CEO Greater China Gaby Amade President Global Markets Elisa Giusti Chief Growth and Strategy Officer
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10 Unleash our Ingredients engine Next era of growth driven by complementary market-led strategies While our channel strategies remain, portfolio priorities, investments and accountability will be market-led in our next growth era • Market-led structure will enable the Co- op to move faster in market and work closer with our customers. • Complementary channels to maximise value from every milk component. • Ingredients accelerating high-value protein, Foodservice expansion of milk fats. • Innovation and capital investments to focus on customer needs and highest value products. Keep momentum in Foodservice Deepen our position as a world-leading provider of sophisticated dairy ingredients, to grow both the Farmgate Milk Price and earnings. Expand our successful Foodservice business in and beyond China to grow earnings. • Deeper partnerships with customers who value our unique offering. • From manufacturing through to pricing and sales, optimising as one, to unlock value. • Integrating physical and financial portfolios to unlock new sources of value. • Invest growth capital in new capacity to increase milk allocated to high-value ingredients. • Invest in innovation to develop advanced ingredient products and solutions. • Maintain our leadership position in China and expand our footprint into new cities. • Selectively accelerate Foodservice growth in markets outside China, with a capital-light approach. • Continue to invest in local application centers to tailor our products to customer needs. • Deliver new product innovations to maintain and grow market share. • Invest growth capital in new capacity to increase milk allocated to Foodservice.
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11 FY27 priorities focused on value growth • Full Mainland operational separation by end of FY27. • Deliver operating cost savings through a more focused operating model. • Drive plant productivity and reliability to support milk price, earnings and resilience. Operational Efficiency • Completion of announced: ‒ Studholme | $75m | Advanced protein hub Complete and nearing commercial production ‒ Edendale | $150m | UHT cream expansion On track for completion in 2026 ‒ Clandeboye | $75m | Butter line Build started January 2026 ‒ Edgecumbe | $35m | Pastry butter expansion Announced March 2026 • Incremental $1b to accelerate protein network in South Island Investing for Growth • ERP remains on budget and on track for completion in late 2028 • Expanding digital maintenance capability to improve manufacturing performance • Selective deployment of AI Digital Transformation Driving value through operational efficiency, growth investments and strengthening digital capability
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Accelerating capability to turn more of your milk into higher-value products $1.3 – $1.6b of capital invested annually over FY27 – FY29 ~$1b phased over 3yrs Expand South Island advanced protein network $100-300m / annum Cleaner energy and wastewater ~$600m / annum Keeping our sites safe and resilient Sustaining Assets 0x 1x 2x 3x 0.7x (Target range 30 – 40%) 0% 10% 20% 30% 40% Energy & Wastewater ~$335m committed Studholme completed, rest comes online in FY27 Growth Assets Remain comfortably inside Co-op’s Board approved policy settings Gearing 21% FY26 FY29 modelled impact of announced programme Debt / EBITDA (less than 3.0x) What we have committed South Island network What we intend to deliver over next 3 years 12
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Expansion of South Island protein manufacturing network Every growth project competes for your capital How we decide 1 Protect the core first Safe, reliable sites, a strong balance sheet, dividends in line with policy 2 Growth projects compete Each must earn its place on through-cycle returns, not the latest cycle 3 Value back to you Stronger returns for farmer shareholders over the long term What we are building in the South Island ~$1b over three years 2029 fully operational 50 - 60 permanent roles Why invest in the South Island manufacturing network 13 • Follows milk growth – Acceleration to support South Island resilience as network nears capacity at peak • Moves milk up the value chain – Further tensions Milk Price as we shift milk into value-add protein • Deepens customer relationships – Strengthens partnerships through increased advanced protein capability • Improves Co-op’s sustainability position – Better environmental performance, including our impact on water and emissions
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Sustainability: Emissions reductions support continued access to customers worth about one-third of Fonterra’s FY26 revenue Scope 1 & 2 emissions target performance (Absolute scope 1 & 2 emissions vs FY18 base year) -17.3% -20.2% -28.7% -50.4% • Scope 1 & 2 emissions (primarily from manufacturing) have reduced year on year despite increased milk processed On-farm emissions intensity target performance (Scope 1 & 3 FLAG emissions from dairy per tonne of fat and protein corrected milk vs FY18 base year) -5.0% -6.2% -6.2% -30.0% • On-farm emissions intensity held constant year on year, while milk volumes increased Focused on: • Carbon removals • Novel technology • Improved on-farm efficiencyFocused on transitioning from coal & gas to renewable energy 14 FY24 FY25 FY26 FY30 target FY24 FY25 FY26 FY30 target
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15 $10,000 $20,000 $30,000 FY22 FY23 FY24 FY25 FY26 WPC80 Casein Growing nutrition demand is supporting strong protein prices (USD/MT) • Demand from healthy ageing, active lifestyles and specialised nutrition is expanding the global market for high-value dairy proteins. • Through NZMP , we combine New Zealand’s grass-fed dairy advantage with advanced protein capability and deep customer partnerships to capture this growth. How we are positioning Ingredients to capture the opportunity • Expand our higher-value protein portfolio ‒ Grow functional and specialised dairy proteins for healthy ageing, active lifestyles and specialised nutrition. • Focus investment and capability towards the highest-value opportunities ‒ Use customer insights, targeted partnerships and NZMP’s market presence to prioritise the most attractive customers, markets and applications. • Invest to capture more value from milk ‒ The new Studholme protein hub, together with our European protein capability, increases the Co-op’s capacity to meet growing demand for high- value functional dairy proteins. Ingredients NZMP connects New Zealand's grass-fed dairy advantage with growing global demand for nutrition solutions 341 360 336 364 379 FY22 FY23 FY24 FY25 FY26 Growing cheese and protein production increases the Co-op’s capacity to capture value Fonterra cheese and protein production (million kgMS)
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Foodservice operating profit by region (%) 421 444 447 460 486 FY22 FY23 FY24 FY25 FY26 16 AFP’s proven China model is driving growth across Asia Fonterra cream production (million kgMS)• AFP's proven China model is being replicated across key Asian markets, driving growth beyond Greater China. • Southeast Asia’s contribution to Foodservice operating profit has increased from 9% to 23% since 2023, demonstrating successful expansion across the region. How we are positioning Foodservice to capture the opportunity • Strengthen our position in China ‒ Deepen customer partnerships through insights, innovation and chef-led application expertise. • Extend our successful model across Southeast Asia ‒ Apply proven customer solutions and capabilities developed in China to local market opportunities. • Invest in cream capability to support value growth ‒ Expand UHT cream capability, including through the new Edendale plant, to meet growing customer demand and direct more milk into high-value Foodservice products. Foodservice Through Anchor Food Professionals , we combine New Zealand dairy expertise, chef-led application capabilities, trusted customer relationships and locally tailored solutions to help customers grow. Growing cream production increases the Co-op’s capacity to support higher-value growth 91% 85% 81% 77% 9% 15% 19% 23% FY23 FY24 FY25 FY26 Greater China Southeast Asia
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Dairy market environment Content to be added Explanation of Content Question to consider
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Production Imports EUROPE 3-month 2.3% 12-month 4.6% US 3-month 3.9% 12-month 4.5% NZ 3-month 4.3% 12-month 4.5% MEA 3-month 35.2% 12-month 17.8% ASIA (ex China) 3-month 1.4% 12-month 2.5% LATAM 3-month 0.3% 12-month 3.4% CHINA 3-month 7.8% 12-month 3.7% 18 Strong global supply, prices supported by mixed demand strength Global supply • Milk supply has increased, supported by favourable weather, better farm economics and the absence of animal-health challenges. • Production growth may moderate as European weather pressures, tighter margins and potential El Niño impacts increase downside risks to milk supply. • Commodity prices remain relatively supported despite higher milk production, indicating that additional supply continues to find demand. • China's domestic milk production has stopped growing as low farmgate prices push smaller farms to reduce herds or exit. Global demand • Import demand remains resilient overall, although regional performance continues to be mixed. • China’s domestic dairy consumption remains soft, keeping import demand for milk powders subdued, while foodservice-led growth continues to support demand for cheese and butter. • Middle East and Africa import volumes are materially lower, driven by reduced powder purchases, though Fonterra has maintained continuity of supply to customers through the region.
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Farmgate Milk Price 2023/24 2024/25 2025/26 2026/27 Forecast $7.83 $10.16 $9.69 $9.50 -1.0 - 1.0 2.0 3.0 4.0 Dairy markets remain supportive despite increasing global milk production $4,000 $4,400 $2,600 $3,200 $3,500 $3,200 $3,200 $3,900 June 24 June 25June 23 June 26 $3,550 19 GDT WMP Price (USD/MT) Cumulative Milk Supply Change (kgMS, billion)
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20 Growth in Fonterra milk collections and market share maintained Milk Collections • Fonterra's milk collections kept growing in the 2025/26 season, with 1,571m kgMS collected, up by 4.1% on a year earlier and the highest level in more than a decade. • Favourable weather drove most of that growth, with mild conditions supporting late- season production. • Production per farm increased to 194,000 kgMS, helped by better productivity and a larger average farm size. Strongest Farmer Offering • A resilient Co-op with competitive returns and growing milk supply • FY26 cash distributions of $19.6b, and maintained resilient balance sheet • Milk supply market share stable ‒ 2026: net gain vs competition ‒ 2027: net gain vs competition and land use change • Over 130 first time farm owners joined the Co-op at the beginning of the 2027 Season 1,478 1,480 1,471 1,509 1,571 166 170 176 183 194 FY22 FY23 FY24 FY25 FY26 79% 79% 78% 78% 78% Fonterra milk collections and market share kgMS collected (million) Average kgMS collections per farm (thousand) Market share
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21 Drivers of the Farmgate Milk Price 10.16 0.05 (0.65) 0.20 (0.07) 9.69 2025 Final FGMP Volume Product Prices Foreign Exchange Net Costs 2026 Final FGMP Farmgate Milk Price (FGMP) ($ per kgMS) Revenue • Higher milk collections, up 4.1%, increased the volume of product available for sale, improved asset utilisation and spread fixed costs across a larger milk pool. • Weighted average USD shipment prices for reference products declined 3.7%, reflecting lower prices for WMP, butter and AMF. Foreign exchange • A lower average hedge rate, from NZD/USD 0.5988 in 2025 Season to NZD/USD 0.5895 in the 2026 Season, increased NZD returns from USD sales. Costs • Inflationary pressure on milk collection, energy, packaging and labour was partly offset by improved operating leverage from higher milk volumes. • The price of lactose, an input cost to the Milk Price, also increased 25% season-on-season. FY26 Farmgate Milk Price (FGMP) of $9.69 per kgMS was lower than the prior season, reflecting softer reference product prices as global milk supply recovered across major exporting regions. FY25 and FY26 monthly milk prices ($ per kgMS) ($ per kgMS) $6 $8 $10 $12 Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May 2024/25 Season 2025/26 Season Higher milk cost at start of season driven by demand for WMP 2024/25 season monthly milk prices average to $10.16, the Farmgate Milk Price 2025/26 season monthly milk prices average to $9.69, the Farmgate Milk Price
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FY26 Business Performance Content to be added Explanation of Content Question to consider
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FY25 to FY26 Underlying operating profit ($ million) Earnings growth from stronger margins and higher collections 23 32 46 126 (9) 14 104 38 1,489 1,840 FY25 Operating Profit Core Operations Volume Margin Operating Expenses Volume Margin Operating Expenses FY26 Operating Profit Due to improved pricing of UHT cream and cream cheese. Lower operating expenses from rationalising Greater China consumer businessDriven by higher protein prices and higher sales volumes of casein and cheese Ingredients in-market performance $163m Foodservice in-market performance $156m
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54c EPS 71c EPS 914 45 398 (92) (83) 1,182 FY25 Profit after Tax Volume & Product mix Margin Operating expenses & Other Net finance costs & Tax FY26 Profit after Tax Earnings growth from stronger margins and higher collections 24 FY25 to FY26 Underlying profit after tax ($ million) Net finance costs improved $18m, due to lower debt. Tax expense $101m higher on increased earnings. Stronger margin driven by improved pricing in non-reference products Increased allocation to higher value products Operating expenses up $59m, due to higher IT costs and inflationary pressure. ‘Other’ decreased $33m as a favourable one-off item in FY25 Other income was not repeated. Note: For the year ended 31 July. Profit after tax presented in the graph includes profit attributable to non-controlling interests. EPS presented is for profit attributable to equity holders of the Co-operative.
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25 Ingredients Foodservice Total External sales volume (million kgMS) 1,362 3.3% 240 2.1% 1,602 3.1% Underlying operating profit (excludes Mainland) Core Operations $206m $78m $135m $110m $341m $32m In-market $1,087m $163m $412m $156m $1,499m $319m Total $1,293m $85m $547m $266m $1,840m $351m Return on Capital 13.5% From 12.8% 16.3% From 8.5% 14.2% From 11.7% Strong in-market performance underpinning higher return on capital
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547 102 340 159 82 78 91 483 120 361 175 83 77 93 491 127 348 160 99 69 95 497 118 361 180 98 65 103 508 123 384 188 103 75 103 Whole Milk Powder Skim Milk Powder Cream (Butter and AMF) Cheese Cream (other) Casein Other Proteins Whole Milk Powder: • Higher milk solids allocation driven by increased milk supply in 2026, with proportion of total milk solids below the prior year, in line with strategic decisions to allocate milk solids into higher value products Cream: • Butter demand across Greater China, Europe and the United Kingdom supporting an increase in allocation of milk solids into the cream portfolio, both Reference and Non-Reference • Higher relative returns from butter over AMF supported the prioritisation of milk solids into butter production Cheese • Record cheese volumes manufactured in FY26, with early contracting helping to secure demand ahead of increased US export availability from recent capacity investments • Additional cheese enabled increased supply of high-value proteins. Proteins • Strong demand for protein ingredients continued to support Fonterra's higher-value portfolio. • Casein remained a valuable contributor, supported by demand across nutrition applications Breakdown of milk solids allocated to product groups Reference Products Non-Reference Products NZ milk solids manufactured (kgMS millions) For 12 months to 31 July % milk solids manufactured 1. Changes in table present total NZ manufactured milk solids and does not align to charts which exclude Butter Milk Powder, and other smaller Non-Reference commodity groups 22 23 24 25 26 22 23 24 25 26 22 23 24 25 26 22 23 24 25 26 22 23 24 25 26 22 23 24 25 26 22 23 24 25 26 7.1% 8.4% 9.0% 8.1% 8.2% 38.5% 34.0% 34.7% 34.2% 33.6% 23.9% 25.5% 24.6% 24.9% 25.4% 11.2% 12.3% 11.3% 12.4% 12.4% 5.7% 5.8% 7.0% 6.8% 6.8% 5.5% 5.5% 4.9% 4.5% 4.9% 6.4% 6.5% 6.7% 7.1% 6.8% Change in kgMS millions1 Total Reference Non-Reference 62 39 23 26
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253 502 426 27 224 412 414 243 14.5% 14.5% 13.2% 6.6% 13.4% 11.6% 13.1% 11.0% -80.0% -70.0% -60.0% -50.0% -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 0 100 200 300 400 500 600 700 800 900 1000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Operating profit ($ million) Gross margin (%) 1,208 (78) 46 126 (9) 1,293 FY25 Operating Profit Core Operations Volume Margin Operating expenses & Other FY26 Operating Profit Key performance drivers Underlying operating profit ($ million) In-market performance Quarterly performance1 FY26 27 Ingredients: Strong global demand for protein driving in-market performance • Ingredients operating profit increased $85m due to: – lower attribution from Core Operations reflecting higher cost of protein being expensed through FY26 relative to prior year – strong in-market performance, recovering the higher protein costs, driven by volume growth and higher sales prices achieved – The Co-op’s European protein business complemented the New Zealand sourced portfolio and contributed $67m to the uplift in earnings • The impact of costs associated with upgrading our ERP system are in the Core Operations allocation, in FY26 this was $135m compared to $123m in FY25. • The Co-op’s FY26 H2 shipped volumes were the highest in a decade, with Q3 and Q4 Ingredients sales volumes totalling 1.4m MT, up 8% or 104,000 MT. • FY25 Q4 impacted by the seasonal milk curve, narrowing margins and increased operating expenses for the quarter. 1. FY25 performance has been restated to account for finalisation of trade terms and transaction perimeter relating to the Mainland divestment FY25
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60 97 56 68 65 231 135 116 16.1% 18.7% 16.5% 21.7% 15.8% 28.3% 23.3% 25.8% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 0 100 200 300 400 500 600 700 800 900 1000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Operating profit ($ million) Gross margin (%) 281 110 14 104 38 547 FY25 Operating Profit Core Operations Volume Margin Operating expenses & Other FY26 Operating Profit Key performance drivers Underlying operating profit ($ million)1 In-market performance Quarterly performance1 FY26 28 Foodservice earnings growth driven by margin expansion • One-off costs in FY25 of $67m to exit a product line were not repeated and favourable foreign exchange conditions also supported margins. • Foodservice operating profit increased $266m due to: – higher attribution from Core Operations reflecting easing in milk costs expensed – sustained strong product margins, particularly UHT cream and cream cheese – operating costs were lower, reflecting rationalising of the residual Consumer business in Greater China – Sales volumes were moderately higher, as growth was partially offset by the rationalising of remaining Consumer products 1. FY25 and FY26 performance has been restated to account for finalisation of trade terms, transaction perimeter and included business units relating to the Mainland divestment FY25
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Core Operations manufacturing cash costs ($/kgMS) 2.70 2.91 2.76 2.77 2.78 2.30 2.63 2.58 2.66 FY22 FY23 FY24 FY25 FY26 Inflation adjusted Actual Operating expense and Core Operations manufacturing cash costs Cash operating expenses ($/kgMS) 1.37 1.44 1.45 1.46 1.30 1.17 1.30 1.36 1.40 1.03 1.00 1.00 FY22 FY23 FY24 FY25 FY26 Inflation adjusted Actual Actual excluding ERP build & Mainland Group 29 • Manufacturing costs were level in real terms in FY26, balancing cost pressure from higher lactose and freight costs with efficiency gains from higher manufacturing throughput. • Sustained productivity improvement and energy efficiency remain a focus in strengthening the competitiveness and resilience of the Co-op’s manufacturing cost base. • Cash operating expenses per kgMS improved following the Mainland divestment • Investment in the Co-op’s ERP platform accelerated in FY26, with the project accounting for $0.08/kgMS of costs. • Excluding Mainland and the ERP platform costs, cash operating expenses remain in line with prior year supported by higher milk volumes Higher milk collections and a more focused Co-op create opportunities for further efficiency gains
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New Zealand manufacturing performance 30 94.5% 95.3% 95.8% 95.7% 96.0% FY22 FY23 FY24 FY25 FY26 0.36% 0.26% 0.46% 0.41% 0.48% FY22 FY23 FY24 FY25 FY26 Cost of QualityMade Right First Time Operational resilience supported higher milk volumes, with further opportunity to reduce the cost of quality % of Revenue 30 Milk Utilisation 1.48 1.48 1.47 1.51 1.57 96.5% 96.3% 96.7% 96.6% 96.6% FY22 FY23 FY24 FY25 FY26 Milk collected (kgMS billion) % of milk utilised • The Co-op maintained a high milk utilisation rate while managing higher milk volumes. • Continued focus on production efficiency and reliability drove continued improvements in products being made to specification first time. • Higher volumes and the production of more complex products resulted in an increase cost of quality failures. • Supplementary feed impacts were higher, with the Co-op focused on working with farmers to reduce these impacts. % of product made right first time
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1,262 315 (601) 413 565 3,993 (310) 5,637 FY25 Free Cash Flow Earnings Taxes Paid Suppliers payable Trade and other working capital Divestments Capex and other FY26 Free Cash Flow FY25 to FY26 Free Cash Flow ($ million) Movements In Cash Flow 31 Proceeds from divestments including $4,047m from Mainland Higher earnings and gain on sale resulting in additional tax paid Higher capital investment in resilience, efficiency and growth Favourable position due to lower milk price and advance rate reduction High milk volumes increased trade receivables
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489 561 499 580 693 53 47 56 167 253 30 79 106 128 89 572 687 661 875 1,035 FY22 FY23 FY24 FY25 FY26 Other capital invested Growth capital expenditure Sustaining Capital Expenditure Capital invested¹ Full financial year figures ($ million) 32 281 333 291 317 407 54 51 54 71 578 85 40 104 165 76 92 114 88 116 489 561 499 580 693 2022 2023 2024 2025 2026 Other operations Decarbonisation & Energy Security Wastewater NZ operations Breakdown of sustaining capital expenditure Full financial year figures ($ million) • Capital invested increased to $1b, as the Co-op invested to support future growth, energy security and supporting the long-term reliability and resilience of assets. • FY26 elevated investment levels are expected to continue over FY27 – FY29. • Growth capital expenditure included expanding Ingredients and Foodservice production capability, with investment in the Edendale UHT cream expansion and Clandeboye butter plant. • Sustaining investment included the Whareroa cool storage expansion to support supply chain resilience. • Energy investment to electrify plants and reduce emissions progressed at Whareroa and Edendale. Investing in value-led growth, sustainability and reliable operations $1b invested in FY26, with $1.3 – $1.6b of capital invested annually over FY27 – FY29 1.Capital Invested excluding Mainland Group
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• Adjusted net debt reduced $967m from $2.6b to $1.7b, driven by: ‒ Conclusion of the Mainland divestment with 0.8b of proceeds retained ‒ Stronger earnings and a higher suppliers payable balance, which together have supported dividend payments and higher capital expenditure • Gearing ratio decreased reflecting: ‒ Lower net debt and an increase in retained earnings ‒ Lower balance sheet equity following divestment of Mainland • Adjusted net debt/EBITDA down due to strong underlying earnings and repayment of debt. • S&P Global credit rating retained at A- with stable outlook. Lower debt and gearing strengthen financial capacity 33 5.3 3.2 2.6 2.6 1.7 FY22 FY23 FY24 FY25 FY26 42.4 28.8 24.0 23.9 20.8 FY22 FY23 FY24 FY25 FY26 Working capital days 98 91 89 89 84 FY22 FY23 FY24 FY25 FY26 Gearing ratio (%) Net debt/EBITDA Adjusted net debt ($ billion) 3.2 1.3 1.2 1.1 0.7 FY22 FY23 FY24 FY25 FY26
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($ million) 2025 2026 Average capital employed 6,925 7,044 Net operating profit after tax 888 952 Return on capital (%) 12.8% 13.5% Ingredients 13.5% from 12.8% Foodservice 16.3% from 8.5% Return on capital by channel Average capital employed 2,422 2,443 Net operating profit after tax 205 399 Return on capital (%) 8.5% 16.3% 34 Underlying Return on Capital¹ 1. Underlying performance is Fonterra’s continuing operations represented as if the Mainland trade terms had applied for the full period to provide a comparative of Fonterra’s continuing operations and align with the pro forma historical financial information disclosed in the Notice of Special Meeting 2025 (29 September 2025). FY25 performance has been restated to account for finalisation of trade terms and transaction perimeter relating to the Mainland divestment For the 12 months ended 31 July NZD million 2025 2026 Operating profit 1,489 1,840 Finance income on long-term advances 8 11 Notional tax charge (404) (500) Net operating profit after tax 1,093 1,351 Capital employed at 31 July 8,020 8,075 Impact of seasonal capital employed 1,327 1,412 Average capital employed 9,347 9,487 Return on capital 11.7% 14.2% • Return on capital increased to 14.2%, above last year and exceeding the target range of 10% – 12%. • The change relative to previous period reflects: − $351m higher operating profit due to high volumes and margins; − $140m increase in average capital employed due to higher milk volumes and capital investment, offset by higher supplier payables. • Ingredients return on capital increased due higher volume and margins. Capital employed increased due to higher inventory reflecting increased milk collections. • Material increase in Foodservice return on capital driven by operating profit growth and stable capital employed.
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836 1,587 1,348 1,348 1,593 12,356 12,774 11,904 12,348 11,679 FY22 FY23 FY24 FY25 FY26 Total Group net operating profit after tax ($m) Average capital employed ($m) Return on capital 6.8% 12.4% 11.3% 10.9% 13.6% Total Group return on capital For 12-month period to 31 July 35 Total Group Return on Capital • FY26 Total Group return on capital of 13.6%, above the 5-year average and exceeding the FY26 target range of 10%-12%. • The Co-op continues to show steady improvement in return on capital through earnings growth, portfolio optimisation and disciplined capital management. • Capital employed includes Mainland through to completion of the divestment in March 2026. • Mainland divestment benefits not included in FY26 operating profit. Note: Notional tax rate in FY25 and FY26 is 27%, prior years use 16.1%
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FY27 Outlook Content to be added Explanation of Content Question to consider
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2026/27 Season Forecast Farmgate Milk Price 2027 Full Year Forecast earnings range FY27 Outlook $8.50 – $10.50 per kgMS 65 – 85 cents per share The forecast range reflects: • Continued favourable price relativities, with reversion toward longer-run averages expected through the financial year • Stronger contracting and hedging positions than prior seasons for non- reference products • Higher H1 milk volumes compared to prior year, with second-half supply subject to El Niño drought risk • Delivery of productivity initiatives across cost of goods sold and operating expenses, against ongoing geopolitical and supply chain uncertainty 37 The forecast range reflects: • Contracted volumes are currently at relatively low levels, creating a broader range of possible outcomes, contract uptake is tracking to expectations and remains consistent with prior seasons. • Milk volume growth, current forecast collections slightly over 1.6b kgMS, end of season potentially impacted by El Niño drought risk • Demand remains resilient, markets absorbing incremental supply with recent improvements in global prices, particularly WMP and SMP
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38 Organic milk programme positioned for long-term growth 2026/27 Season Forecast Organic Milk Price $13.30 – $15.30 per kgMS Overview • 102 certified organic farms supplying 11 million kgMS, with additional farms currently in conversion • Organic milk supply has doubled since 2020, averaging 15% annual growth between 2020 and 2025 South Island expansion • Recruitment underway in the lower South Island, aligned with manufacturing capability • Organic production planned from FY29, subject to securing sufficient milk supply Sales forecast and demand • FY27 forecast sales volumes up 7.5% on FY26 • Demand remains supported by consumer interest in health, wellness and sustainability, while signs of supply recovery are emerging in the US
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Supplementary Information Content to be added Explanation of Content Question to consider
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For the 12 months ended 31 July Total Group Continuing operations Discontinued operations NZD million 2025 2026 ∆% 2025 2026 ∆% 2025 2026 ∆% Sales volume ('000 MT) 3,488 3,413 (2)% 2,933 3,024 3% 555 389 (30)% Sales volume (million kgMS) 1,620 1,660 2% 1,554 1,602 3% 66 58 (12)% Revenue 26,450 27,432 4% 24,052 25,398 6% 2,398 2,034 (15)% Cost of goods sold (22,259) (23,025) (3)% (20,797) (21,619) (4)% (1,462) (1,406) 4% Gross profit 4,191 4,407 5% 3,255 3,779 16% 936 628 (33)% Gross margin (%) 15.8% 16.1% 13.5% 14.9% 39.0% 30.9% Operating expenses (2,587) (2,348) 9% (1,802) (1,861) (3)% (785) (487) 38% Other1 128 1,363 965% 113 80 (29)% 15 1,283 nm Operating profit 1,732 3,422 98% 1,566 1,998 28% 166 1,424 nm Net finance costs (186) (166) 11% (184) (166) 10% (2) 0 100% Tax expense (467) (648) (39)% (369) (486) (32)% (98) (162) (65)% Profit after tax2 1,079 2,608 142% 1,013 1,346 33% 66 1,262 nm Earnings per share (cents) 65 160 146% 61 81 35% 4 79 nm Normalisations3 106 (1,160) - (156) (178) (14)% 262 (982) - Normalised profit after tax3 1,185 1,448 22% 857 1,168 36% 328 280 (15)% Normalised EPS (cents) 71 87 23% 51 71 39% 20 16 (20)% Total Group performance 1. Comprises other operating income, (inclusive of the share of profit of equity accounted investees), gain on sale of Mainland and foreign exchange gains/(losses) 2. Includes amounts attributable to non-controlling interests 3. Total Group Normalisations of $(1,160)m relating to the Mainland Group Divestment Benefit Note: Comparisons restated for consistency. 40
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For the 12 months ended 31 July 2025 2026 NZD million Fonterra reported continuing operations Pro Forma Adjustments Fonterra Underlying1 Fonterra reported continuing operations Pro Forma Adjustments Fonterra Underlying1 Revenue from sale of goods 24,052 (77) 23,975 25,398 (158) 25,240 Cost of goods sold (20,797) - (20,797) (21,619) - (21,619) Gross profit 3,255 (77) 3,178 3,779 (158) 3,621 Operating expenses (1,802) - (1,802) (1,861) - (1,861) Other2 113 - 113 80 - 80 Operating profit (EBIT) 1,566 (77) 1,489 1,998 (158) 1,840 Net finance costs (184) - (184) (166) - (166) Profit before tax 1,382 (77) 1,305 1,832 (158) 1,674 Tax expense (369) (22) (391) (486) (6) (492) Profit after tax 1,013 (99) 914 1,346 (164) 1,182 Earnings per share (cents) 61 54 81 71 Continuing operations pro forma Statement of P&L Pro forma, i.e. underlying, results have been compiled by extracting the results of Continuing operations and making pro forma adjustments to: • remove the effects of Fonterra’s transfer pricing arrangements related to Mainland Group that ceased post divestment; and • recognise the impact of the Raw Milk Supply, Global Supply, and Distribution Agreements 41 1. Underlying performance is Fonterra’s continuing operations represented as if the Mainland trade terms had applied for the full period to provide a comparative of Fonterra’s continuing operations and align with the pro forma historical financial information disclosed in the Notice of Special Meeting 2025 (29 September 2025). This representation is applied to operating profit, profit after tax, EPS and return on capital. 2. Comprises other operating income (inclusive of the share of profit of equity accounted investees) and foreign exchange gains/(losses) Note: Figures as shown in table may not align to the total figure calculation based on numbers in the table due to rounding, comparative information includes re-presentations for consistency with the current period.
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End-to-end Channel performance 1. Underlying performance is Fonterra’s continuing operations represented as if the Mainland trade terms had applied for the full period to provide a comparative of Fonterra’s continuing operations and align with the pro forma historical financial information disclosed in the Notice of Special Meeting 2025 (29 September 2025). 2. Percentages as shown in table may not align to the calculation of percentages based on numbers in the table due to rounding of figures 3. Comprises other operating income (inclusive of the share of profit of equity accounted investees) and foreign exchange gains/(losses) 4. Includes corporate costs of $638m in FY26 (FY25: $637m). Allocation between Ingredients and Foodservice of $473m and $165m (FY25: $470m and $167m), respectively For the 12 months ended 31 July Underlying Operations¹ Ingredients Foodservice NZD million 2025 2026 ∆%² 2025 2026 2025 2026 Sales volume ('000 MT) 2,933 3,024 3% 2,375 2,463 558 561 Sales volume (million kgMS) 1,554 1,602 3% 1,319 1,362 235 240 Revenue 23,975 25,240 5% 19,313 20,337 4,662 4,903 Cost of goods sold (20,797) (21,619) (4)% (16,984) (17,861) (3,813) (3,758) Gross profit 3,178 3,621 14% 2,329 2,476 849 1,145 Operating expenses (1,802) (1,861) (3)% (1,215) (1,251) (587) (610) Other3 113 80 (29)% 94 68 19 12 Operating profit4 1,489 1,840 24% 1,208 1,293 281 547 Gross margin 13.3% 14.3% 12.1% 12.2% 18.2% 23.4% Operating profit margin 6.2% 7.3% 6.3% 6.4% 6.0% 11.2% 42
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2025 2026 Change Sales Volume (‘000 MT) Reference Products 1,701 1,773 4% Non-Reference Products 956 978 2% Revenue (NZD) Reference Products ($ billion) 12.7 13.3 4% Non-Reference products ($ billion) 7.6 8.4 10% Reference Products ($ per MT) 7,491 7,496 0% Non-Reference products ($ per MT) 7,974 8,575 8% Cost of Milk (NZD) Reference Products ($ billion) (10.0) (9.1) 9% Non-Reference Products ($ billion) (4.4) (3.9) 13% Reference Products ($ per MT) (5,861) (5,123) 13% Non-Reference Products ($ per MT) (4,653) (3,970) 15% New Zealand-sourced Ingredients’ product mix Note: Percentages as shown in table may not align to the calculation of percentages based on numbers in the table due to rounding o f figures. Table includes Ingredients’ products that are on-sold to the Foodservice channel and excludes bulk liquid milk. Bulk liquid milk for 2026 was 75,000 MT of kgMS equivalent (for the comparative period it was 74,000 MT of kgMS equivalent). 43
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2,500 3,500 4,500 5,500 6,500 Impact of price relativities smoothed by financial trading portfolio Fonterra Revenue Reference and Non-Reference Price Relativities (USD/MT) FY24 FY25 FY26 Non-Reference Product shipment price Reference Product shipment price • Revenue price relativities widened over FY26. Compared to the same time last year, the average price for the Non-Reference portfolio increased USD 242 per MT or 5%, compared with the Reference portfolio, which decreased USD 104 per MT or 2%. • The developing financial trading portfolio moderated the earnings impact of physical price relativities. In FY25, hedging benefited earnings as relativities narrowed; in FY26, hedging reduced the upside captured as relativities widened. H1 H2 FY25 Average Non-Reference price 4,326 4,664 4,504 Average Reference price 4,129 4,590 4,360 Price difference 197 74 144 H1 H2 FY26 Average Non-Reference price 4,727 4,764 4,746 Average Reference price 4,396 4,135 4,256 Price difference 331 629 490 44Note: Reference shipment prices presented are ‘Milk Price Informing’ prices only, a subset of the Reference portfolio
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Mainland Group divestment benefit 45 1. Trade and other receivables of $367m, less trade and other payables of $147m 2. Includes the reclassification of foreign currency translation reserves in respect of net investment hedges ($30m) NZD Million 2026 Sale proceeds 4,457 Post completion adjustments receivable 160 Total Proceeds 4,617 Stand-alone replicated information technology (147) Proceeds attributed to the divestment 4,470 Net assets disposed of (3,598) Intercompany balances recognised as external balances upon sale1 220 Directly attributable transaction costs (123) Reclassification of foreign currency translation reserves2 281 Gain on Sale 1,250 Transaction, separation and tax-related costs (131) Other accounting adjustments 41 Net Mainland divestment benefit 1,160
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FY26 Integrated Scorecard as at 31 July 2026 Key Metrics FY24 Actual FY25 Actual FY26 Scorecard FY26 People Serious harm¹ 13 6 5 5 Quality of post-Health, Safety and Wellbeing incident actions 0.41 0.39 0.60 0.64 Culture Measure 79 81 80 78 Nature GHG emissions reduction (Scope 1,2)² (17.3)% (20.2)% (27.0)% (28.7)% Additional percentage of New Zealand supplying Farms achieving Emissions Excellence³ – (2.2)% 6% 6.6% Relationships Share of New Zealand milk collected for the season to 31 May 78.1% 77.8% 78% 77.6% Delivered in full, on time (DIFOT, at time of arrival) 66.1% 73.7% 77% 78.6% Financial / Assets & Infrastructure Cash operating expenses per kgMS (real)⁴ 1.13 1.12 1.08 1.08 Core Operations manufacturing cash costs per kgMS (real)⁵ 2.76 2.77 2.65 2.78 Return on capital⁶ 12.4% 11.7% 10%-12% 14.2% Farmgate Milk Price ($) $7.83 $10.16 $9.00-$11.00 $9.69 Alignment Rights FCG Share Price (volume weighted average price) Dividends paid⁷ $2.66 $0.55 $4.70 $0.57 Not Available $5.52 $0.73 On-farm profitability ($ per hectare)⁸ $2,845 $4,849 Not Available Not Available 46 1. Includes Contractors. 2. Relative to the FY18 base year, restated to exclude Mainland Group. Comparative periods reflect a minor restatement relating to the Heerenveen site 3. FY26 result reflects additional 535 farms, including 319 reducing emissions footprint, above the target of additional 490 farms with minimum of 270 reducing footprint. 4. Continuing operations, based on New Zealand milk solids collected, FY26 base year. 5. Based on New Zealand milk solids collected. Excludes the cost of milk. FY26 base year. 6. Results are on an underlying continuing operations basis to reflect comparable operating performance before and after the Mainland Group divestment. 7. For the period 1 October to 30 September. As an indication, FY26 is the 12-month VWAP to 10 September 2026, and FY26 Dividends. 8. DairyNZ Economic Survey 2024-2025 (Owner-Operator). 2026 expected to be published in June 2027.
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47 Key Metrics FY25 FY26 FY27 Scorecard People Serious harm¹ 6 5 5 Quality of post-Health, Safety and Wellbeing incident actions 0.39 0.64 0.65 Culture Measure 81 78 79 Nature GHG emissions reduction (Scope 1,2)² (20.2)% (28.7)% (33.2)% Percentage of supplier base achieving Emissions Excellence – 84.6% 85% Relationships Share of New Zealand milk collected for the season to 31 May 77.8% 77.6% 78% Delivered in full, on time (DIFOT, at time of arrival)3 74.4% 78.4% 80% Financial / Assets & Infrastructure Cash operating expenses per kgMS (real)4 1.14 1.10 1.03 Core Operations manufacturing cash costs per kgMS (real)4,5 2.70 2.61 2.51 Return on capital6 11.7% 14.2% 10%-12% Farmgate Milk Price ($) $10.16 $9.69 $8.50-$10.50 Alignment Rights FCG Share Price (volume weighted average price)7 Dividends Paid $4.70 $0.57 $5.52 $0.73 Not Available On-farm profitability ($ per hectare)8 $4,849 Not Available Not Available Speaker Notes Document Speaker: Ronald 1. Includes Contractors. 2. Relative to the FY18 base year. 3. DIFOT comparatives have been restated to include New Zealand domestic orders, aligning the measure with the expanded FY27 methodology, and resulting in a slightly lower FY26 outcome than previously reported on an export- only basis. 4. Based on New Zealand milk solids collected across the financial year. Comparatives restated to FY27 base year. 5. Excludes the cost of milk and internally-generated lactose. 6. Prior year comparatives are on an underlying continuing operations basis to reflect comparable operating performance before and after the Mainland Group divestment. 7. For the period 1 October to 30 September. As an indication, FY26 is the 12-month VWAP to 10 September 2026, and FY26 Dividends. 8. DairyNZ Economic Survey 2024-2025 (Owner-Operator). 2026 expected to be published in June 2027. FY27 Integrated Scorecard for the year ended 31 July 2027
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Data sources Dairy Production and Imports • 12-month production − New Zealand (Sep 2025 – Aug 2026 compared to Sep 2024 – Aug 2025), DCANZ, USDA − EU, US (Aug 2025 – Jul 2026 compared to Aug 2024 – Jul 2025), Eurostat, USDA • 3-month production − New Zealand (Jun 2026 – Aug 2026 compared to Jun 2025 – Aug 2025), DCANZ − EU, US (May 2026 – Jul 2026 compared to May 2025 – Jul 2025), Eurostat, USDA • 12-month imports − Asia (excl. China), LATAM, Middle East & Africa (Jul 2025 – Jun 2026 compared to Jul 2024 – Jun 2025), S&P Global − China (Aug 2025 – Jul 2026 compared to Aug 2024 – Jul 2025), S&P Global • 3-month imports − Asia (excl. China), LATAM, Middle East & Africa (Apr 2026 – Jun 2026 compared to Apr 2025 – Jun 2025), S&P Global − China (May 2026 – Jul 2026 compared to May 2025 – Jul 2025), S&P Global 48
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Fonterra uses several non-GAAP measures when discussing financial performance. Non-GAAP measures are not defined or specified by NZ IFRS. Management believes that these measures provide useful information as they provide valuable insight on the underlying performance of the business. They may be used internally to evaluate the underlying performance of business units and to analyse trends. These measures are not uniformly defined or utilised by all companies. Accordingly, these measures may not be comparable with similarly titled measures used by other companies. Non-GAAP financial measures should not be viewed in isolation nor considered as a substitute for measures reported in accordance with NZ IFRS. Non-GAAP measures are not subject to audit unless they are included in Fonterra’s audited annual financial statements. Please refer to the Glossary for definitions of non-GAAP measures referred to by Fonterra. 49 Non-GAAP Measures Attributable to equity holders of the Co-operative is used to indicate that a measure or sub-total excludes amounts attributable to non-controlling interests Average capital employed is a 13-month rolling average of capital employed Bulk liquids means bulk raw milk that has not been processed and bulk separated cream Capital employed is adjusted net debt less the cash adjustment (used in calculating adjusted net debt), plus cash and cash equivalents held by subsidiaries for working capital purposes, plus equity excluding hedge reserves and net deferred tax assets Capital invested is capital expenditure plus right-of-use asset (e.g. leases) additions and business acquisitions, including equity contributions, long-term advances, and other investments Cash operating expenses per kgMS is continuing operations operating expenses, less non-cash costs (depreciation, amortisation and impairments). Shown by kilogram of New Zealand and Australia milk solids collected Consumer is the channel of branded consumer products, such as powders, yoghurts, milk, butter and cheese Continuing operations means operations of the Group that are not discontinued operations Core Operations represents core operating functions including New Zealand milk collection and processing operations and assets, supply chain, Fonterra Farm Source retail stores, and the physical and financial commodity portfolio management function Core Operations manufacturing cash costs per kgMS is the logistics costs, variable and fixed costs of the COO business unit less non-cash costs (depreciation, amortisation and impairment) shown by kilogram of New Zealand milk solids collected. Excludes milk, ocean freight and farm costs. Debt to EBITDA is adjusted net debt divided by Total Group normalised earnings before interest, tax, depreciation and amortisation (Total Group normalised EBITDA) excluding share of profit/loss of equity accounted investees, net foreign exchange gains/losses and any normalised EBITDA relating to entities divested during the year Discontinued operations means a component of the Group that is classified as held for sale (or has been sold) and represents, or is part of a single coordinated plan to dispose of, a separate major line of business or geographical area of operations, or is a subsidiary acquired exclusively with a view to resale Eliminations represents eliminations of inter-business unit sales Gearing ratio (%) is adjusted net debt divided by total capital. Total capital is equity excluding hedge reserves, plus adjusted net debt Glossary
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Glossary Greater China represents the Ingredients, Foodservice and Consumer channels in Greater China Ingredients represents the channel comprising bulk and specialty dairy products such as milk powders, dairy fats, cheese and proteins manufactured in New Zealand, Australia and Europe, or sourced through our global network, and sold to food producers and distributors Net debt is calculated as total borrowings, plus bank overdraft, less cash and cash equivalents, plus a cash adjustment for 25% of cash and cash equivalents held by the Group’s subsidiaries, adjusted for derivatives used to manage changes in hedged risks on debt instruments. Amounts relating to disposal groups held for sale are included in the calculation Non-Reference Products means all NZ milk solids processed by Core Operations, except for Reference Commodity Products Normalisation adjustments means adjustments made for certain transactions that meet the requirements of the Group’s Normalisation Policy. These transactions are typically unusual in size and nature. Normalisation adjustments are made to assist users in forming a view of the underlying performance of the business. Normalisation adjustments are set out in the Non-GAAP Measures section. Normalised is used to indicate that a measure or sub-total has been adjusted for the impacts of normalisation adjustments. E.g., ‘Normalised EBIT’ Operating profit (EBIT) Is profit before finance costs and tax. Price relativities refers to the difference in the weighted average price (in USD) between the Reference Product portfolio and Non-Reference Product portfolio. The difference between these two weighted average prices is a key driver of the Ingredients’ gross margin Reference Products are the five commodity groups used to calculate the Farmgate Milk Price, being Whole Milk Powder (WMP) and Skim Milk Powder (SMP), and their by-products Butter, Anhydrous Milk Fat (AMF) and Buttermilk Powder (BMP) Total Group is used to indicate that a measure or sub-total comprises continuing operations, discontinued operations and non-controlling interests. E.g., ‘Total Group operating profit’ Trade working capital is total trade and associate receivables plus inventories, less trade and associate payables and accruals. It excludes amounts owing to suppliers and employee entitlements and includes trade working capital classified as held for sale Working capital days is calculated as 13-month rolling average working capital divided by revenue from the sale of goods (excluding impact of derivative financial instruments) multiplied by the number of days in the period. The working capital days calculation excludes other receivables, prepayments, other payables and includes working capital classified as held for sale Foodservice represents the channel selling to businesses that cater for out-of- home consumption; restaurants, hotels, cafés, airports, catering companies etc. The focus is on customers such as; bakeries, cafés, Italian restaurants, and global quick-service restaurant chains. High performance dairy ingredients including whipping creams, mozzarella, cream cheese and butter sheets, are sold alongside our business solutions under the Anchor Food Professionals brand 50
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Important Cautions and Disclaimer 51 Forward looking statements This presentation contains certain forward-looking statements. There are risks (both known and unknown), uncertainties, assumptions and other important factors that could cause the actual conduct, market conditions, results, performance or achievements of Fonterra to be materially different from the future conduct, market conditions, results, performance or achievements expressed or implied by the forward looking statements, or that could cause future conduct to be materially different from historical conduct. Deviations as to future conduct, market conditions, results, performance and achievements are both normal and to be expected. Forward looking statements generally may be identified by the use of forward looking words such as ‘target’, ‘targeting’, ‘aim’, ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘forecast’, ‘foresee’, ‘future’, ‘intend’, ‘likely’, ‘may’, ‘planned’, ‘potential’, ‘should’, or other similar words. Any estimates or projections as to events that may occur in the future (including EBITDAF, revenue, profit, underlying profit, dividends, margin, expenses, earnings, assets, liabilities and performance) are based upon the best judgement of Fonterra from the information available as of the date of this presentation. A number of factors could cause actual results or performance to vary materially from the estimates or projections. No person (including Fonterra and its directors, officers, employees and advisers) gives or makes any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this presentation will actually occur or, except to the extent (if any) required by applicable law or any applicable Listing Rules, assumes any obligation to provide any additional information or update these forward looking statements for events or circumstances that occur subsequent to the date of this presentation. No reliance should be placed on any forward looking statements. Non-NZ GAAP financial information Fonterra uses several non-GAAP measures when discussing financial performance. Non-GAAP measures are not defined or specified by NZ IFRS. Management believes that these measures provide useful information as they provide valuable insight on the underlying performance of the business. They may be used internally to evaluate the underlying performance of business units and to analyse trends. These measures are not uniformly defined or utilised by all companies. Accordingly, these measures may not be comparable with similarly titled measures used by other companies. Non-GAAP financial measures should not be viewed in isolation nor considered as a substitute for measures reported in accordance with NZ IFRS. Non-GAAP measures are not subject to audit unless they are included in Fonterra’s audited annual financial statements. Not financial advice This presentation does not take into account the individual investment objectives, financial situation or needs of any shareholder. Shareholders must make their own decisions and seek their own advice in this regard. The information contained in this presentation does not constitute, and should not be taken as constituting, financial advice, financial product advice, investment advice, tax advice or legal advice. In particular, this presentation does not constitute a recommendation or offer to buy or sell securities in Fonterra or the Fonterra Shareholders’ Fund.