Fonterra Shareholders (FSF) H2 2025 earnings summary

Executive summary

• Leadership expressed strong satisfaction with the year's financial results, highlighting hard work and delivery of solid numbers for stakeholders.

• Clear strategic focus on executing existing plans in ingredients and foodservice, with new capacity investments coming online.

Financial highlights

• FY25 benefited from hedging, providing a $120M uplift versus FY24, but this is expected to revert to long-term averages in FY26.

• One-off costs totaling about $80M, including impairments and business exits, were not normalized in FY25 results.

• EBIT target for FY28 is set at approximately $250M, with growth driven equally by cost base reductions and business mix improvements.

Outlook and guidance

• EBIT growth to FY28 is underpinned by clear plans, new business investments, and cost removal, with execution risk seen as manageable.

• CapEx is expected to remain elevated (~$1B) through FY27, then normalize to ~$600M from FY29 onward.

• Net debt is projected to rise gradually, reaching a 2.6x level by FY28, with a relatively flat profile through the period.

• Foodservice margin and stream returns are key variables for the guidance range, with US tariffs being a downside risk.