Fonterra Co-operative Group Limited · NZX:FCG
Fonterra Co-operative — FY2009 Earnings Presentation
19 slides from Fonterra Co-operative's earnings presentation, Sep 23, 2009
Slide 1: Media/Analysts' Briefing Annual Results 2009
MEDIA/ANALYSTS’ BRIEFING ANNUAL RESULTS 2009 Sir Henry van der Heyden | Andrew Ferrier | Jonathan Mason 23 September 2009
Slide 2: Sir Henry van der Heyden, Chairman
Sir Henry van der Heyden Chairman 2 FONTERRA CO-OPERATIVE GROUP ANNUAL RESULTS 2009
Slide 3: Key highlights
Key highlights Lower Milk Price – Milk Price of $4.72 is down on the 2007/08 season’s record of $7.59 Higher Distributable Profit – Solid increase in Distributable Profit Stronger balance sheet – Gearing1 decreased to 52.7% at 31 July 2009, from 57.4% a year earlier and 61.5% at the 31 January
Slide 4: Andrew Ferrier, Chief Executive Officer
Andrew Ferrier Chief Executive Officer 4 FONTERRA CO-OPERATIVE GROUP ANNUAL RESULTS 2009
Slide 5: Highlights of financial results
Highlights of financial results $m FY09 YOY 1 Milk Price paid to 4.72 (38%) Shareholder Suppliers Distributable Profit per 49c 58% kgMS 2 Available For Payout per 5.21 (34%) kgMS Revenue 16,035 (18%) Distributable Profit per kgMS 2,4 c/kgMS 60 Underlying EBIT 3 890 20% 50 1 40 CAGR 12% Net operating
Slide 6: How we add value to milk
How we add value to milk Attractive branded positions • Anchor Assured quality product • Fernleaf from an efficient and • Mainland flexible core business • Tip Top • Anlene Fonterra • Whole milk powder • Anmum Brands • Skim milk powder • Soprole Dairy • Butter • Fresh’n Fruity Commodities • Cheese •
Slide 7: Commodity price and FX volatility, together with efficiencies affect the milk price
Commodity price and FX volatility, together with efficiencies affect the milk price 5,000 0.80 4,500 Increasing the transparency of 0.75 commodity prices (e.g. US$/MT FAS NZ$ to US$ 4,000 3,500 0.70 globalDairyTrade) will make 3,000 0.65 their impact on the Milk Price 2,500 0.60 easier to observe 2,
Slide 8: Fonterra Ingredients
Fonterra Ingredients FY09 results: Commodities & Ingredients underlying earnings1 increased by 27% yoy to $548m Good progress in investments made in dairy ingredients and dairy solutions – New technology cheese investments bedded down (shortened maturation for natural and mozzarella cheese) – Comm
Slide 9: Fonterra Commodities
Fonterra Commodities FY09 results: Commodities & Ingredients underlying earnings1 increased by 27% yoy to $548m Comprehensive and rapid response to demand shock caused by global financial crisis globalDairyTrade launched and growing in volume and customer participation Changes to organisationa
Slide 10: Fonterra Brands - Australia/NZ, Asia/Middle East, Latin America
Fonterra Brands - Australia/NZ, Asia/Middle East, Latin America FY09 results: Fonterra Brands underlying earnings1 increased by 21% yoy to $474m Continued to maintain and grow our Number One position in key dairy categories (e.g. cheese & spreads in Australia) Australia/NZ – Recently achieved Numb
Slide 11: Jonathan Mason, Chief Financial Officer
Jonathan Mason Chief Financial Officer 11 FONTERRA CO-OPERATIVE GROUP ANNUAL RESULTS 2009
Slide 12: Revenue and earnings by business segment
Revenue and earnings by business segment Segment Revenue Segment Earnings1 ($m) ($m) FY09 External Segment Share Revenue of FY09 Group Split Earnings COMMODITIES/ 10,504 548 66% DAIRY 54% 66% 66% INGREDIENTS 12,590 433 19% 3,116 248 66% ANZ 24% 2,888 182 10% 1,666 120 12% ASIA/ME 1,366 101 5% 749 10
Slide 13: Game of two halves: significant turnaround in the second half
Game of two halves … significant turnaround in the second half of the financial year $m Debt Equity Gearing Title Net Interest Bearing Debt Opening balance - 31 Jul 08 5,860 4,357 57.4% $m Movement in inventory 1,807 8,000 Suppliers Payable (737) 7,000 6,000 Movement in Co-op shares (95) 95 5,000
Slide 14: Stronger equity position, but redemption risk remains a concern
Stronger equity position, but redemption risk remains a concern Increase in milk solids in the 2008/09 season contributed to a net increase in equity from shareholders Drought in 2007/08 season contributed to drop in milk production and as a consequence significant equity outflows Co-op Shares S
Slide 15: Andrew Ferrier, Chief Executive Officer
Andrew Ferrier Chief Executive Officer 15 FONTERRA CO-OPERATIVE GROUP ANNUAL RESULTS 2009
Slide 16: Key take-outs
Key take-outs … FY10 Available For Payout forecast increased to $5.10 Underlying EBIT growth of 20% Net operating cash flow of $1.6b Stronger financial position with 8.8 point improvement in gearing in second half of FY09 Fonterra is performing & poised for growth, but needs to evolve its
Slide 17: Significant medium-term opportunities to pursue strategy have been identified
Significant medium-term opportunities to pursue strategy have been identified Significant opportunities for profitable investments, which build on proven platforms, are planned between now and July 2012, subject to capital availability, with a focus in the following areas: Investments in core manu
Slide 18: Supporting our Community
Supporting our Community We recognise that to operate as a successful business we need to support the communities in which we operate. We are committed to earning that support by giving back to communities through causes that matter to them and us. KickStart Breakfast, Fonterra Science Roadshow, Cle
Slide 19: Thank you
THANK YOU 19 FONTERRA CO-OPERATIVE GROUP ANNUAL RESULTS 2009
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