ONE YEAR ANNUAL RESULTS FONTERRA FONTERRA CO-OPERAT CO-OPERA IVE GROUP LTD

Transcription

1 ONE YEAR ANNUAL RESULTS FONTERRA CO-OPERATIVE GROUP LTD 1

2 SIR HENRY VAN DER HEYDEN CHAIRMAN FONTERRA CO-OPERATIVE GROUP LTD 2

3 OVERVIEW Highlights Business performance Update on strategy Questions and answers FONTERRA CO-OPERATIVE GROUP LTD 3

4 PAYOUT Dividend (1) Farmgate Milk Price Retentions (3) (2) Notes: (1) Cents per share (2) $ per kgms. (3) Retentions are calculated as net profit after tax attributable to Co-operative Shareholders divided by number of shares at 31 May, less dividend per share. FONTERRA CO-OPERATIVE GROUP LTD 4

5 GDT PRICE MOVEMENTS 1,600 GDT TM Trade Weighted Index Pric ce Index (M March 2010 = 1000) 1,400 1,200 1, FONTERRA CO-OPERATIVE GROUP LTD 5

6 RECORD MILK COLLECTIONS Volume (mil llion litres/ /day) Fonterra s New Zealand season milk volume 2009/ / /12 0 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Source: Fonterra Note: Volumes represent a six day moving average of daily production FONTERRA CO-OPERATIVE GROUP LTD 6

7 TRADING AMONG FARMERS LATE OCTOBER/ EARLY NOVEMBER LATE OCTOBER/ LATE NOVEMBER END NOVEMBER Fonterra Offer Documents and Annual Report availableailable Demand and Supply Offer period Fonterra Shareholders Market and Fonterra Shareholders Fund begin operating FONTERRA CO-OPERATIVE GROUP LTD 7

8 THEO SPIERINGS CHIEF EXECUTIVE FONTERRA CO-OPERATIVE GROUP LTD 8

9 FY2012 HIGHLIGHTS NZD million FY2011 FY2012 Change Total Sales Volume (000 MT) 3,866 3, % Revenue 19,871 19,769 (0.5%) Normalised EBITDA (1) 1,494 1, % Normalised EBIT (1) 1,005 1, % Profit Before Tax % Profit for the period (19.1%) Operating cash flow 1,184 1, % Normalised EBIT of $1,028 million, reflecting: Higher price achievement above GDT ANZ impacted by challenging trading conditions Strong NZD negatively impacted Asia and Middle East and Latam earnings Improved operating cash flow of $1.4 billion up 17.4% Group sales volume growth of 2% to 3.9 million MT was broad based Earnings stability through a period of market volatility Note: (1) Normalised EBITDA and normalised EBIT excludes non-recurring items of $41 million in FY2012 and ($23) million in FY2011. FONTERRA CO-OPERATIVE GROUP LTD 9

10 FY2012 NZ MILK PRODUCTS Normalised EBIT ($m) (1) Volume Growth (2) 6.6% Strong normalised EBIT growth up 23% Sales volume up 7% to 2.8 million MT 7% increase in contribution margin to $385 per MT Normalised EBIT Growth 22.6% FY2011 FY2012 Notes: (1) FY2011 has been restated to reflect the movement of Quick Service Restaurants (QSR) into NZ Milk Products from ANZ and China Foodservice sales out of NZ Milk Products into Asia/AME. These both occurred in FY2012. The comparative figures in the segment note of the FY2012 Financial Statements has been restated to reflect this. (2) Calculated using total (external plus intersegment) sales volumes. FONTERRA CO-OPERATIVE GROUP LTD 10

11 MAJOR FACTORS DRIVING NZ MILK PRODUCTS EBIT Price above GDT Indicator WMP/WMP GDT Shorter-term fixed price customer contracts t Prices above GDT Adding value for key customers Favourable impact from product mix Source: Fonterra estimates FONTERRA CO-OPERATIVE GROUP LTD 11

12 FY2012 ANZ Normalised EBIT ($m) (1,2) Volume Growth (3) -12.5% Normalised EBIT Growth -20.3% Lower result reflects challenging trading conditions Higher trade and promotional spend to maintain market share Good performance from foodservice Stable performance in New Zealand and in ingredients Plan in place focus on efficiency FY2011 FY2012 Notes: (1) FY2011 has been restated to reflect the movement of Quick Service Restaurants (QSR) into NZ Milk Products from ANZ. This occurred in FY2012. The comparative figures in the segment note in the FY2012 Financial Statements has been restated to reflect this. (2) EBIT of $5 million in FY2011, relates to business activities in Western Australia that were divested in FY2011. (3) Calculated using total (external plus intersegment) sales volume. FONTERRA CO-OPERATIVE GROUP LTD 12

13 FY2012 ASIA, AFRICA AND MIDDLE EAST Normalised EBIT ($m) (1) FY2011 FY2012 Volume Growth (2) 3.1% Normalised EBIT Growth 0.5% Strong demand Currency impact on normalised EBIT EBIT growth of 8% (constant currency) Anlene and Anmum performed well in Vietnam, Hong Kong, Philippines and Malaysia Strong volume growth by Anlene and Anmum in China Strong performance in Sri Lanka across all categories Notes: (1) FY2011 has been restated to reflect the movement of China Foodservice sales into Asia, Africa and Middle East from NZ Milk Products. This occurred in FY2012. The comparative figures in the segment note in the FY2012 Financial Statements has been restated to reflect this. (2) Calculated using total (external plus intersegment) sales volumes. FONTERRA CO-OPERATIVE GROUP LTD 13

14 FY2012 LATAM Soprole normalised EBIT up 6% to $83 million Normalised EBIT ($m) (1) Latam normalised EBIT growth of 16% 119 FY FY2012 Volume Growth (2) 2.2% Normalised EBIT Growth 8.4% (constant currency) Product innovation DPA related income of $46 million up 12% (1) Notes: (1) FY2012 has been normalised for an impairment of $8 million in the value of Venezuela. (2) Calculated using total (external plus intersegment) sales volumes. FONTERRA CO-OPERATIVE GROUP LTD 14

15 JONATHAN MASON CHIEF FINANCIAL OFFICER FONTERRA CO-OPERATIVE GROUP LTD 15

16 STRONG BALANCE SHEET POSITION 43% 42% 41.8% Economic Gearing (D/D+E) (1) 42% 41% 41% 40% 40% 39% 39.1% 39% 38% 38% FY2011 FY2012 Note: (1) Gearing is measured as economic net interest bearing debt over economic net interest bearing debt plus equity (reflecting debt hedging in place at balance date). Equity excludes the cashflow hedge reserve. FONTERRA CO-OPERATIVE GROUP LTD 16

17 CAPITAL EXPENDITURE $m FY2010 FY2011 FY2012 Actual Actual Actual NZ Milk Products Australia and New Zealand Asia, Africa and Middle East Latam Total capital expenditure FONTERRA CO-OPERATIVE GROUP LTD 17

18 THEO SPIERINGS FONTERRA CO-OPERATIVE GROUP LTD 18

19 STRATEGY REFRESH UPDATE Our Vision and Story What we stand for Cash Generators Must do Growth Generators Can do New Business Want to do New Zealand Milk China India Middle-East & North Africa (MENA) Optimise i ANZ Everyday nutrition ASEAN Latin America (LATAM) Out-of-Home Nutrition Advanced Nutrition What we go for US/Europe Right size Organisational Capabilities Capital Structure FONTERRA CO-OPERATIVE GROUP LTD 19

20 PROGRESS ON STRATEGY REFRESH 1 Strategic Paths Optimise NZ milk Highlights NZDL First milk through Darfield EVERYDAY Build and grow beyond our current customer positions 2 Announced packing and blending plant in Indonesia OUT-OF-HOME Deliver on foodservice 3 Shanghai Innovation Centre potential ADVANCED 4 Grow our position in mobility Agreement with A-Ware in Holland on whey 5 Develop selected leading position in paeds and maternal Extending position in infant nutrition ENABLERS 6 Selectively invest in milk pools China Farm Hub 7 Alignment of business and organisation Realigned our business to deliver strategy FONTERRA CO-OPERATIVE GROUP LTD 20

21 SUMMARY Payout $ % down Volume Milk volumes up 11% Sales volumes up 2% Value Normalised EBIT up 2% NZMP normalised EBIT up 23% ANZ normalised EBIT down 20% Focus on sales mix / costs Velocity New structure in place Strategy deployment underway around 90 projects FONTERRA CO-OPERATIVE GROUP LTD 21

22 GLOBAL SITUATION August: Farmgate Milk Price of $5.25 per kilogram of milksolids Recent price improvement on GDT eroded by high NZD TAF blackout No earnings updates prior to Prospectus being lodged FONTERRA CO-OPERATIVE GROUP LTD 22