12 August 2002
Fonterra Releases Its First Annual Report
Fonterra Co-operative Group Limited today released its Annual Report for the year to 31 May 2002 - its first period of
operation since the creation of the company in New Zealand's biggest corporate merger in October last year.
The report is being mailed to shareholders around the country from today.
The Chief Executive Officer, Mr Craig Norgate, said the report was geared towards providing shareholders with an
in-depth picture of the global businesses they now have a direct stake in.
Highlights of the report include:
· A record turnover of $13.9 billion with total assets of $11.8 million
· A record payout to shareholders of $5.33 per kilogram of milksolids (kgms), less 3 cents per kgms for industry
good activities
· Progress ahead of schedule in realising the merger benefits promised to shareholders in the runup to formation
of the company at $74 million, exceeding the 31 May target by $43 million
· A busy programme to extend the international reach of the company, including:
o The formation of the joint venture with Nestle in the Americas, which is expected to contribute to the company's
results from the 2004 financial year o The restructuring of operations in Australia and New Zealand to form
Australasian Food Holdings (Australia), a $2.3 billion trans-Tasman consumer dairy business
o Extension of the joint venture with Dairy Farmers of America to encompass production of milk protein concentrate
in that country
o Establishment of Fonterra as the largest exporter of skim milk powder from the United States through an
agreement with Dairy America
o Establishment of a joint venture with Arla Foods to improve the company's positioning in the yellow fats market
in the United Kingdom and Europe
o Purchase of La Mesa and Eugenia businesses establishing Fonterra as the leading participant in Mexico's cheese
market and number three in spreads
· The company's ongoing focus and investment in research & development and the environment
· Adjustments to equity totalling $1.5 billion as a result of merger accounting including an increase of $1,384
million in the value of brands
· A detailed discussion of the company's financial and operating commitments
Mr Norgate said the report highlighted the rapid falls in commodity prices in the second half of the year, and added
that these would have a substantial impact on shareholder returns in the current year. "It also shows the fundamental
strength of the company's balance sheet, and this will stand us in good stead," he said.
ENDS