Fonterra Shareholders' Fund (NS) Analysis

Overview

The Fonterra Shareholders' Fund (FSF) is a registered managed investment scheme under the Financial Markets Conduct Act 2013. The FSF provides investors an opportunity to invest in the performance of Fonterra Co-operative Group Limited (Fonterra). Outside investors who are not allowed to hold shares in Fonterra can invest in units in the FSF which gives them access to economic rights (such as distributions and capital movements), similar to those of a share. The Manager of the FSF is FSF Management Company Limited.

Fonterra is a dairy co-operative, owned and supplied by nearly 9,000 farming families in Aotearoa, New Zealand. Through the spirit of co-operation and a can-do attitude, Fonterra’s farmers, along with 20,000 employees around the world, share the goodness of our milk through innovative consumer, foodservice and ingredient brands. Sustainability is at the heart of everything we do, and we’re committed to leaving things in a better way than we found them. Everyday people working hard to be Good Together in the community.

The FSF has been granted Listing with a 'Non-Standard' ("NS") designation. This designation was granted because of the unique governance arrangements and unit holder restrictions. For further information, please see a copy of the waiver under Documents on FSF's homepage on nzx.com.

Performance

The following information was extracted from Fonterra Shareholders' Fund Interim Report , released 23 March 2026:

Fonterra’s business performance

Operating profit increased from $1.1 billion to $1.2 billion, reflecting an improved performance through stronger in market pricing and favourable product mix, particularly in Foodservice, which benefited from continued demand across key Southeast Asia and Greater China markets. Ingredients performance reflected improved market pricing and product mix, although higher milk input costs compressed margins relative to the prior year.

Fonterra’s profit after tax of $750 million includes $90 million of cost related to the divestment and separation of Mainland Group, including $54 million of tax impacts. These costs have been considered as part of the capital return. Excluding them, the Cooperative’s normalised earnings per share is 51 cents, up 4 cents on prior year.

Net debt has reduced from $5.5 billion to $4.9 billion, and leverage metrics were down on prior year supporting increased dividends.

The Co-operative’s return on capital of 11.2% is above last year and tracking to be within the FY26 target range of 10 – 12%.