Fonterra announces share buyback programme

8 June 2022 Fonterra announces share buyback programme Fonterra Co-operative Group Limited (Fonterra) advises that it will allocate up to $50m to an on-market share buyback programme commencing 30 June 2022. Chairman Peter McBride says that in making this decision, Fonterra has looked at prevailing prices in the Fonterra Shareholders Market (FSM) alongside the Co-op's strategy and overall business performance. "The Co-op considers the prevailing price particularly since late April has undervalued Fonterra shares, which is a key reason for announcing this buy-back," says Mr McBride. The buyback programme will be made under section 65 of the Companies Act and may run for up to 12 months from commencement. Fonterra may acquire shares through the FSM at the prevailing market price from time to time in that period. This programme is separate to the allocation of up to $300m Fonterra announced last year to support liquidity in the FSM as farmer shareholders transition to the Flexible Shareholding capital structure, through an on-market buyback (Transitional Buyback) and other tools such as the market-making arrangements. Mr McBride notes that Fonterra is preparing to implement the Flexible Shareholding structure as soon as possible but has not yet set a date for when it will be effective. In April, the Government announced its support for the structure and has signalled that it expects the amendments to progress through Parliament this year. "We remind shareholders that even though share compliance obligations remain on hold until at least 6 months after the new structure is effective, shareholders can still buy or sell shares within Fonterra's current constitutional limits (which is generally 1x - 2x a supplying shareholders' three-season average milk supply). Shareholders should seek advice from their financial advisor, accountant, lawyer, or rural professional before making any decisions," says Mr McBride. The maximum number of shares that may be acquired pursuant to this buyback programme and the Transitional Buyback (should that also proceed under section 65 of the Companies Act) taken together over the next 12 months is 80,667,893 shares. This number of shares is set in accordance with section 65 of the Companies Act and represents 5% of Fonterra's shares on issue 12 months prior to the acquisition of shares. The number of shares purchased under the buyback from time to time, and the average price, will be notified to the NZX and ASX on the business day following the date on which those shares are bought back. Shares bought back will be cancelled upon acquisition, so the number of shares on issue will reduce accordingly. Throughout the buyback period, Fonterra will continue to assess market conditions, its prevailing share price, available investment opportunities and all other relevant considerations. Fonterra reserves the right to suspend without notice or terminate the buyback programme at any time. The buyback programme will not run during the black-out period in respect of Fonterra's 2022 annual results, which (for this year) will run from 1 August 2022 until the first trading day after the Fonterra annual results announcement is made, unless Fonterra agrees other arrangements with the brokers who will execute the buyback. This announcement is made in accordance with FSM Listing Rule 3.12.2. Attachments o Chairman's email to Fonterra Co-operative Group Limited farmers ENDS For further information contact: Fonterra Communications Phone: +64 21 507 072 End CA:00393380 For:FSF Type:ADMIN Time:2022-06-08 08:30:37