New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

Fonterra Shareholders Fund / Equity Bottom-Up

<ul><li>Fonterra’s revised strategy update showed no dramatic changes in strategic direction, highlighting the expected heightened focus on its Ingredients and Foodservice businesses.</li><li>The key quantitative targets that have changed, vs its prior strategy shift in September 2021, are: (1) increased return on capital to 10%–12%, up from 9%–10% (FY18–FY23 average of 8.6%), (2) increased dividend policy to 60%–80% of normalised EPS, up from 40%–60%.</li><li>The latter is not surprising given the balance sheet strength (FY24 net debt to EBITDA of 1.2x), but was ahead of our expectations. </li></ul>

Fonterra’s revised strategy update showed no dramatic changes in strategic direction, highlighting the expected heightened focus on its Ingredients and Foodservice businesses.The key quantitative targets that have changed, vs its prior strategy shift in September 2021, are: (1) increased return on capital to 10%–12%, up from 9%–10% (FY18–FY23 average of 8.6%), (2) increased dividend policy to 60%–80% of normalised EPS, up from 40%–60%.The latter is not surprising given the balance sheet strength (FY24 net debt to EBITDA of 1.2x), but was ahead of our expectations. 

Fonterra Shareholders Fund

Fonterra - Sticking to the Core