Mr Coull: “The total forecast payout of $6.80 - $6.90 is encouraging for our Farmers given the tough conditions over the preceding period. However when looking a little deeper into the results, past the Beingmate impairment and the Danone pay-out, the declines in Normalised EBIT and Gross Margin together with headwinds in the Consumer and Foodservice segments point to a tough six months for the business.

“However there are still six months to go in the season so these figures need be read in the context for which they are intended. Ultimately the numbers that matter the most are those that are announced at full year and as such there is an opportunity and expectation that Management will turn these figures around within that timeframe.”

In relation to Beingmate Mr Coull noted that while the Council viewed the latest impairment as reflective of the reality of the situation he understood Farmers’ frustrations with what the Council has described as an unacceptable situation.

“Council had asked Farmers to be patient until the interim results had been announced and now that we understand what we’re dealing with in regards to the impairment I encourage Fonterra Farmers to attend next week’s roadshow meetings with an expectation that their Board will provide full, frank and transparent conversation on its learnings to date and most importantly what actions will be undertaken to rectify matters.”

Speaking to the announcement that CEO Theo Spierings would step down from his role later in the year Mr Coull said it was positive for the Co-op that the Board and Theo had been undertaking these discussions with the long-term very much front of mind.

“A lot has been achieved in the time Theo has been at the helm of Fonterra and Council is encouraged that he is still committed to driving our Co-op forward. We look forward to him and his team doing so in the second half of this financial year.”

| A Fonterra Shareholders Council release  ||  March 21, 2018   |||