1 00:00:03,360 --> 00:00:06,440 Speaker 1: Cureda and welcome to Shared Lunch brought to you by 2 00:00:06,480 --> 00:00:10,440 Speaker 1: shares E's. My name is Leighton Roberts, and today I'm 3 00:00:10,440 --> 00:00:14,440 Speaker 1: at the headquarters of Fonterra in Auckland, and I'm joined 4 00:00:14,480 --> 00:00:18,439 Speaker 1: by their new CFO, Andrew Murray. Andrew's just delivered the 5 00:00:18,480 --> 00:00:22,720 Speaker 1: cooperative's four year results and the pending sale of Mainland 6 00:00:22,760 --> 00:00:26,360 Speaker 1: Group and the consumer business. Before we get started, here's 7 00:00:26,360 --> 00:00:27,800 Speaker 1: some important information. 8 00:00:27,840 --> 00:00:30,320 Speaker 2: Investing and involves the risk you might lose the money 9 00:00:30,360 --> 00:00:33,760 Speaker 2: you start with. We recommend talking to a licensed financial advisor. 10 00:00:34,479 --> 00:00:38,320 Speaker 2: We also recommend reading product disclosure documents before deciding to invest. 11 00:00:38,560 --> 00:00:40,960 Speaker 2: Everything you're about to see and here is current at 12 00:00:40,960 --> 00:00:41,839 Speaker 2: the time of recording. 13 00:00:41,960 --> 00:00:43,920 Speaker 1: Welcome Andrew, Thanks so much for joining us today. 14 00:00:44,080 --> 00:00:46,000 Speaker 3: No problem. I'm glad that you guys got a chance 15 00:00:46,040 --> 00:00:47,520 Speaker 3: to come down to our lovely headquarters. 16 00:00:47,600 --> 00:00:50,120 Speaker 1: Yeah, yeah, no, we appreciate you having us and nice 17 00:00:50,159 --> 00:00:52,440 Speaker 1: to have a return trip and make it regular. So 18 00:00:53,000 --> 00:00:56,800 Speaker 1: you're new to the CFO role, we'd love to hear 19 00:00:56,840 --> 00:01:00,320 Speaker 1: a little bit first about you and what brought a Scott's. 20 00:01:00,080 --> 00:01:04,880 Speaker 3: And to Frontier Dairies new for me? So I'm I 21 00:01:05,120 --> 00:01:07,000 Speaker 3: guess I'm about two and a half years in the 22 00:01:07,000 --> 00:01:09,600 Speaker 3: co op now and just over a year in this role. 23 00:01:10,000 --> 00:01:13,720 Speaker 3: I spent most of my career actually in consumer goods actually, 24 00:01:14,400 --> 00:01:18,160 Speaker 3: so in various different parts of the world. And just 25 00:01:18,200 --> 00:01:20,199 Speaker 3: before I started at Fonterra, I did a few years 26 00:01:20,240 --> 00:01:24,360 Speaker 3: in a US agri business And you know, I'll probably 27 00:01:24,400 --> 00:01:26,640 Speaker 3: regret saying this at some point, but geez, the agribusiness 28 00:01:26,680 --> 00:01:29,720 Speaker 3: bit was much harder than consumer right, Like, if you've 29 00:01:29,720 --> 00:01:32,160 Speaker 3: got to grow your commodities instead of buying them, it 30 00:01:32,160 --> 00:01:33,959 Speaker 3: does make things a little bit more interesting and you 31 00:01:34,000 --> 00:01:36,160 Speaker 3: can never really predict the weather, so it adds an 32 00:01:36,200 --> 00:01:39,400 Speaker 3: extra layer of complexity. And so I really enjoyed that 33 00:01:39,440 --> 00:01:42,280 Speaker 3: agri space. And so I was in based in Australia 34 00:01:42,319 --> 00:01:45,840 Speaker 3: at the time, and I got approached to the role 35 00:01:45,840 --> 00:01:47,880 Speaker 3: at Fonterra, and to be honest, it wasn't an organization 36 00:01:47,920 --> 00:01:51,680 Speaker 3: I particularly knew. There's not as many places, you know, 37 00:01:51,720 --> 00:01:54,120 Speaker 3: even in Australia actually, but certainly for New Zealand that 38 00:01:54,160 --> 00:01:56,120 Speaker 3: you get to have the same sort of global scale 39 00:01:56,440 --> 00:01:59,680 Speaker 3: and reach that Fonterra does and that was really attractive. 40 00:01:59,680 --> 00:02:01,840 Speaker 3: So that's sort of brought me in and and the 41 00:02:01,880 --> 00:02:04,600 Speaker 3: industry is fascinating, right like it's a lot at play. 42 00:02:05,280 --> 00:02:08,800 Speaker 3: There's huge amounts of opportunity still and yeah, that's that's 43 00:02:08,800 --> 00:02:09,720 Speaker 3: always quite attractive. 44 00:02:09,760 --> 00:02:12,280 Speaker 1: Yeah, it's always great to hear about opportunity. So a 45 00:02:12,360 --> 00:02:14,840 Speaker 1: year into the group CFO role, I think prior to 46 00:02:14,919 --> 00:02:16,400 Speaker 1: that was heat of global markets. 47 00:02:16,639 --> 00:02:19,440 Speaker 3: Yeah, yeah, global markets, Yeah, which is I guess a 48 00:02:19,480 --> 00:02:21,560 Speaker 3: lot of our consumer business actually, but but but also 49 00:02:21,600 --> 00:02:22,880 Speaker 3: food service and ingredients. 50 00:02:22,880 --> 00:02:25,240 Speaker 1: So right, and how's how's the first year being in 51 00:02:25,280 --> 00:02:26,680 Speaker 1: the in the hot seed if you like? 52 00:02:26,800 --> 00:02:29,000 Speaker 3: Yeah, it's it's it's been really good. Actually, I think 53 00:02:29,040 --> 00:02:31,959 Speaker 3: I'm very fortunate to have quite a broad rule. So yeah, 54 00:02:31,960 --> 00:02:34,200 Speaker 3: we've got core finance in there, but I also have 55 00:02:34,320 --> 00:02:38,760 Speaker 3: the group strategy, have a transformation, I have it, you know, 56 00:02:38,840 --> 00:02:41,120 Speaker 3: so so it's actually quite broad from that perspective, and 57 00:02:41,360 --> 00:02:45,200 Speaker 3: I think that's a that's the evolution of a CFO rule. 58 00:02:45,280 --> 00:02:47,280 Speaker 3: I think that's where things are heading, where it's actually 59 00:02:47,400 --> 00:02:50,160 Speaker 3: much more broad than just being about finance. 60 00:02:50,680 --> 00:02:53,000 Speaker 1: And biground more finance, is it, yeah. 61 00:02:52,840 --> 00:02:55,520 Speaker 3: Almost exclusively? Yeah, yeah, I mean I've always I've always 62 00:02:55,560 --> 00:02:58,680 Speaker 3: had again relatively broad finance rules. So it's it's finance 63 00:02:58,720 --> 00:03:02,160 Speaker 3: plus and I think that's you know, for me actually 64 00:03:02,200 --> 00:03:04,280 Speaker 3: that's the core of what a CFO is there to do. Right, 65 00:03:04,280 --> 00:03:07,919 Speaker 3: It creates space for the CEO to focus much more 66 00:03:07,960 --> 00:03:10,880 Speaker 3: on this sort of external and those things, whereas the 67 00:03:10,919 --> 00:03:12,920 Speaker 3: CFO can actually do a lot of that's you know, 68 00:03:12,919 --> 00:03:15,840 Speaker 3: the strategy, the execution, managing a lot of the complexity 69 00:03:15,880 --> 00:03:18,200 Speaker 3: and risk. And I think that partnership for me certainly 70 00:03:18,200 --> 00:03:20,680 Speaker 3: has worked really well. And that's something that I've had 71 00:03:20,680 --> 00:03:22,280 Speaker 3: the opportunity to do at the co op as well. 72 00:03:22,360 --> 00:03:25,400 Speaker 3: So having that broad space, as I said, I think 73 00:03:25,400 --> 00:03:27,960 Speaker 3: it's part of what a CFO role has evolved into. 74 00:03:29,160 --> 00:03:31,480 Speaker 3: But it's what makes it really really interesting and to 75 00:03:31,560 --> 00:03:34,280 Speaker 3: be able to work on stuff that is super long term, 76 00:03:34,440 --> 00:03:37,880 Speaker 3: like you know, our asset footprint or innovation, you know. 77 00:03:37,960 --> 00:03:40,280 Speaker 3: But then at the same time, you know, you're also 78 00:03:40,320 --> 00:03:43,000 Speaker 3: paying the bills. You know. It's it's quite nice, but 79 00:03:43,080 --> 00:03:46,160 Speaker 3: it gives you, It keeps things well, it keeps things interesting. 80 00:03:46,200 --> 00:03:49,120 Speaker 3: But actually it's I think one of the few roles 81 00:03:49,480 --> 00:03:51,640 Speaker 3: and actually has said this to my lead team earlier 82 00:03:51,640 --> 00:03:54,000 Speaker 3: this year we were having a conversation about what are 83 00:03:54,040 --> 00:03:56,000 Speaker 3: we here for. It's one of the very very few 84 00:03:56,120 --> 00:03:58,040 Speaker 3: spaces where you get to see the whole of the 85 00:03:58,160 --> 00:04:00,960 Speaker 3: enterprise that is not a part to the organization that 86 00:04:01,000 --> 00:04:03,160 Speaker 3: we don't see and we don't get involved in. It 87 00:04:03,160 --> 00:04:06,560 Speaker 3: gives you an opportunity to make connections and to see 88 00:04:06,560 --> 00:04:09,120 Speaker 3: things that actually other people don't necessarily get an opportunity 89 00:04:09,160 --> 00:04:12,240 Speaker 3: to see, and that you know, that puts a setlement 90 00:04:12,280 --> 00:04:15,800 Speaker 3: of responsibility on you then for actually driving outcomes and 91 00:04:15,880 --> 00:04:20,200 Speaker 3: driving the execution of what is a strategy. So yeah, 92 00:04:20,640 --> 00:04:22,800 Speaker 3: it's been really energizing to be able to do that. 93 00:04:22,880 --> 00:04:24,479 Speaker 3: And I think what we are seeing is that our 94 00:04:24,560 --> 00:04:27,599 Speaker 3: strategy is working and I've got some good results. 95 00:04:27,720 --> 00:04:29,599 Speaker 1: Yeah, I mean, let's get straight into it. The end 96 00:04:29,600 --> 00:04:31,479 Speaker 1: could just give us a rundown on the numbers. 97 00:04:31,920 --> 00:04:34,359 Speaker 3: Yeah, for sure, a really good set of results for 98 00:04:34,520 --> 00:04:36,520 Speaker 3: the co op. You know, we had a we had 99 00:04:36,520 --> 00:04:39,120 Speaker 3: a very strong farm gate milk price, so we ended 100 00:04:39,200 --> 00:04:42,159 Speaker 3: up at ten dollars sixteen. That was up from seven 101 00:04:42,200 --> 00:04:44,839 Speaker 3: dollars eighty three the year before, so a big What. 102 00:04:44,960 --> 00:04:47,880 Speaker 1: Was that compared to like early forecasts like how much 103 00:04:47,960 --> 00:04:48,400 Speaker 1: high it was. 104 00:04:48,320 --> 00:04:50,640 Speaker 3: The O Yeah, look it was it. It was up. So, 105 00:04:50,680 --> 00:04:52,680 Speaker 3: I mean we started relatively little, but we went up 106 00:04:52,720 --> 00:04:55,480 Speaker 3: relatively you know, early in the year. So we knew 107 00:04:56,480 --> 00:04:58,160 Speaker 3: pretty early on we thought it was going to be 108 00:04:58,200 --> 00:05:01,120 Speaker 3: a strong year, so you know, we ended at ten 109 00:05:01,160 --> 00:05:03,880 Speaker 3: dollars sixteen. You know, we sort of hovered around ten 110 00:05:03,920 --> 00:05:05,919 Speaker 3: dollars for quite a while and we just came in 111 00:05:05,960 --> 00:05:08,560 Speaker 3: slightly better than that at the end, which is good. 112 00:05:08,560 --> 00:05:11,760 Speaker 3: There's always variability, right, I mean, the markets move often, 113 00:05:12,560 --> 00:05:14,240 Speaker 3: and we have a lot of you know, it's not 114 00:05:14,279 --> 00:05:16,560 Speaker 3: just the commodity prices, the affx that goes with it, 115 00:05:16,600 --> 00:05:18,840 Speaker 3: and then there's you know, we do quite a bit 116 00:05:18,880 --> 00:05:21,280 Speaker 3: of financial trading as well to try and manage some 117 00:05:21,320 --> 00:05:23,520 Speaker 3: of that volatility. So you never know until the last 118 00:05:23,520 --> 00:05:26,000 Speaker 3: minute exactly what it's going to be. But I've got 119 00:05:26,000 --> 00:05:28,159 Speaker 3: a good result, right, and then if I look at 120 00:05:28,160 --> 00:05:30,720 Speaker 3: what we delivered, you know, on top of that and 121 00:05:30,760 --> 00:05:33,839 Speaker 3: the value created within the co op, then our operating 122 00:05:33,839 --> 00:05:36,560 Speaker 3: profit was up thirteen percent year on you so just 123 00:05:36,600 --> 00:05:39,720 Speaker 3: about one point seven billion, and we were able to 124 00:05:40,320 --> 00:05:43,600 Speaker 3: do a final sorry full year dividend of fifty seven 125 00:05:43,640 --> 00:05:46,880 Speaker 3: cents this year, which was up from the highest the 126 00:05:46,920 --> 00:05:50,120 Speaker 3: co ops ever paid and now fully imputed as well, 127 00:05:50,160 --> 00:05:52,440 Speaker 3: so we're giving the imputation credits, which again the cop 128 00:05:52,440 --> 00:05:55,479 Speaker 3: hasn't done in the past, so quite some decent moves 129 00:05:55,480 --> 00:05:57,760 Speaker 3: there are just in terms of underlying performance of the business, 130 00:05:58,320 --> 00:06:00,440 Speaker 3: and we're seeing it actually in all parts the business 131 00:06:00,440 --> 00:06:00,760 Speaker 3: as well. 132 00:06:00,960 --> 00:06:04,800 Speaker 1: Interesting sort of counter cyclical as well, and that you 133 00:06:04,800 --> 00:06:06,520 Speaker 1: look at what else is happening around the economy. Is 134 00:06:06,600 --> 00:06:08,760 Speaker 1: one of the things I've always been fascinated by is 135 00:06:10,160 --> 00:06:13,240 Speaker 1: like how few people realize just how big Frontier is 136 00:06:13,279 --> 00:06:16,680 Speaker 1: is an organization. But also the impact that you know, 137 00:06:16,760 --> 00:06:22,000 Speaker 1: agriculture broadly has on our economy. So like any early 138 00:06:22,080 --> 00:06:24,040 Speaker 1: science view on how that's starting to flow out into 139 00:06:24,760 --> 00:06:27,440 Speaker 1: communities and things like you think farmers are planning to 140 00:06:27,640 --> 00:06:28,760 Speaker 1: do some more investment from. 141 00:06:28,680 --> 00:06:30,640 Speaker 3: Here, Yeah, look, I think that they will. I think 142 00:06:30,640 --> 00:06:33,320 Speaker 3: what's interesting, you know, if I look at cash generated 143 00:06:33,320 --> 00:06:35,479 Speaker 3: by the co op that went back to farmers this year, 144 00:06:35,520 --> 00:06:38,200 Speaker 3: sixteen point three billion, that's I think that a lot 145 00:06:38,240 --> 00:06:40,880 Speaker 3: of cash right back, And that's just that was up 146 00:06:40,920 --> 00:06:44,440 Speaker 3: from fifteen the year before. It's a big moves. What 147 00:06:44,440 --> 00:06:48,240 Speaker 3: we're seeing at the moment is obviously farmers are being 148 00:06:48,240 --> 00:06:51,479 Speaker 3: down debt, so we're definitely seeing that. And actually I 149 00:06:51,520 --> 00:06:53,600 Speaker 3: talked to the banks quite often and they're all like, oh, 150 00:06:53,680 --> 00:06:55,760 Speaker 3: we think this is a good idea, but actually we're 151 00:06:55,800 --> 00:06:58,240 Speaker 3: not lending. It is a bit of a double ah 152 00:06:58,320 --> 00:07:01,680 Speaker 3: side there, but definitely seeing that that there's that happening, 153 00:07:01,760 --> 00:07:04,560 Speaker 3: I think there is a very much an investment mind. 154 00:07:05,440 --> 00:07:08,960 Speaker 3: But people are definitely cautious as polyday. This is not 155 00:07:09,000 --> 00:07:11,640 Speaker 3: a you know, I'm out buying a boat or a 156 00:07:11,680 --> 00:07:13,840 Speaker 3: holiday house or something like that, right, this is I 157 00:07:13,880 --> 00:07:16,160 Speaker 3: can invest in the future of what my farm looks like, 158 00:07:16,240 --> 00:07:19,320 Speaker 3: I can pay down some debt. And we are definitely 159 00:07:19,320 --> 00:07:21,400 Speaker 3: seeing people that are people are looking at it in 160 00:07:21,440 --> 00:07:25,680 Speaker 3: a very can see sensible way. It's it's not frivolous. 161 00:07:25,800 --> 00:07:27,760 Speaker 1: I mean they seem to be very good business people 162 00:07:27,840 --> 00:07:29,960 Speaker 1: like reputation of it with their mind as well. 163 00:07:29,840 --> 00:07:32,760 Speaker 3: As Yeah, but I think there is that space around 164 00:07:33,600 --> 00:07:36,240 Speaker 3: you know that there is all of that though, flows 165 00:07:36,280 --> 00:07:39,600 Speaker 3: back into essentially rural communities, right, so they will be spending, 166 00:07:39,640 --> 00:07:41,440 Speaker 3: people will be building. They might be building a new 167 00:07:41,480 --> 00:07:44,080 Speaker 3: shared or a new you know, putting up some different 168 00:07:44,120 --> 00:07:47,360 Speaker 3: infrastructure that creates jobs in those local communities as well 169 00:07:47,520 --> 00:07:49,520 Speaker 3: as well, maybe you know, buying a tractor or two 170 00:07:49,560 --> 00:07:52,960 Speaker 3: like it all creates actually quite good movement for the 171 00:07:53,120 --> 00:07:54,960 Speaker 3: for the rural economy in New Zealand as well. 172 00:07:55,000 --> 00:07:57,680 Speaker 1: And so what about guidance heading into this year. What 173 00:07:57,720 --> 00:07:58,760 Speaker 1: are you thinking on that at the moment. 174 00:07:59,080 --> 00:08:02,040 Speaker 3: Yeah, so we've put we've had we've split our guidance 175 00:08:02,400 --> 00:08:04,440 Speaker 3: a little bit. So what we've been clear on is 176 00:08:04,480 --> 00:08:07,040 Speaker 3: what does a continuing business look like. So we have 177 00:08:07,080 --> 00:08:12,120 Speaker 3: a divestment which is coming up, so again not really 178 00:08:12,280 --> 00:08:14,920 Speaker 3: exactly sure when that will happen at this point in time, 179 00:08:14,920 --> 00:08:17,160 Speaker 3: at some point during next year if we get this 180 00:08:17,240 --> 00:08:21,600 Speaker 3: yearholder approval. So we've just given guidance for the continuing 181 00:08:21,640 --> 00:08:24,480 Speaker 3: business and essentially we've got a range of forty five 182 00:08:24,520 --> 00:08:27,160 Speaker 3: to sixty five cents of innings if I take that 183 00:08:27,200 --> 00:08:29,400 Speaker 3: part of the business. Last year it was fifty six, 184 00:08:29,440 --> 00:08:31,960 Speaker 3: so we're sort of in the same space. We feel 185 00:08:32,120 --> 00:08:35,319 Speaker 3: really good about being able to deliver, you know, similar 186 00:08:35,320 --> 00:08:38,680 Speaker 3: to last year, considering it was the best financial performance 187 00:08:38,720 --> 00:08:41,839 Speaker 3: the corpers ever had. And there's still plenty of volatility 188 00:08:41,840 --> 00:08:44,199 Speaker 3: out there, right, we do still have tarifs, We've got, 189 00:08:44,240 --> 00:08:46,680 Speaker 3: you know, what is the impact on economies from some 190 00:08:46,720 --> 00:08:49,360 Speaker 3: of the geopolitical type of uncertainty. So I think we 191 00:08:49,520 --> 00:08:51,240 Speaker 3: just got to be cautious about how some of that 192 00:08:51,280 --> 00:08:54,760 Speaker 3: stuff plays out. But certainly, you know, a strong milk 193 00:08:54,760 --> 00:08:59,000 Speaker 3: price encourages production. So we're seeing good milk flows in 194 00:08:59,040 --> 00:09:01,920 Speaker 3: New Zealand. We're seeing a bit of increased production in 195 00:09:01,960 --> 00:09:04,680 Speaker 3: the US and also through Latin America. So there's the 196 00:09:04,720 --> 00:09:08,200 Speaker 3: supply out there and you know that that's what sorts 197 00:09:08,240 --> 00:09:11,880 Speaker 3: through into essentially. But demand remains robust, which is a 198 00:09:11,920 --> 00:09:13,520 Speaker 3: nice space for it to be sitting at the moment. 199 00:09:14,120 --> 00:09:16,719 Speaker 3: But some of those geopolitical things, you've just got to 200 00:09:16,760 --> 00:09:17,200 Speaker 3: be careful. 201 00:09:17,400 --> 00:09:21,000 Speaker 1: Yeah, it's a time out there. Well, I mean, that's 202 00:09:21,000 --> 00:09:24,480 Speaker 1: a great segue into the biggest news certainly, you know 203 00:09:24,520 --> 00:09:26,680 Speaker 1: it's been everywhere really, which is the sale of the 204 00:09:26,720 --> 00:09:31,360 Speaker 1: consumer business in August to the French dairy Giantlet tell 205 00:09:31,440 --> 00:09:34,720 Speaker 1: us lest list right, I'd have to work on that. 206 00:09:35,559 --> 00:09:38,360 Speaker 1: For three point eight four billion, then that's another big number. 207 00:09:38,640 --> 00:09:40,000 Speaker 1: Can you tell us a little bit about that? And 208 00:09:40,679 --> 00:09:42,120 Speaker 1: I actually might be a little bit higher now. 209 00:09:42,280 --> 00:09:46,400 Speaker 3: Yeah, yeah, yeah, So four point two two billion actually 210 00:09:46,520 --> 00:09:47,640 Speaker 3: is a sale price. 211 00:09:47,679 --> 00:09:51,559 Speaker 1: So that's an additional that's the additional deal which. 212 00:09:51,440 --> 00:09:55,200 Speaker 3: Was for the bigger licenses that were included yet. So 213 00:09:55,360 --> 00:09:58,040 Speaker 3: we're just just sort of finalized that a couple of 214 00:09:58,080 --> 00:10:00,000 Speaker 3: days too late after we announced the rest of it. 215 00:10:00,400 --> 00:10:02,640 Speaker 3: The four point two two billion is spot's out there, 216 00:10:03,520 --> 00:10:05,760 Speaker 3: so you know a bit about the process. I guess, 217 00:10:05,760 --> 00:10:07,880 Speaker 3: you know, we we we were running dual tracks, so 218 00:10:07,920 --> 00:10:09,960 Speaker 3: there was you know, we were looking at IPO for 219 00:10:09,960 --> 00:10:11,920 Speaker 3: for quite a bit of time actually in terms of 220 00:10:11,920 --> 00:10:15,840 Speaker 3: coming through there, because it's an organization that business can operate. 221 00:10:15,880 --> 00:10:18,760 Speaker 3: It would have been a reasonably sizeable organization of its 222 00:10:18,800 --> 00:10:21,160 Speaker 3: own right, and so we looked at that. We got 223 00:10:21,240 --> 00:10:24,000 Speaker 3: good feedback, you know, as we put it on sort 224 00:10:24,000 --> 00:10:28,400 Speaker 3: of road shows in New Zealand, Australia up through Hong Kong, Singapore. 225 00:10:28,440 --> 00:10:31,040 Speaker 3: There was good appetite for it. But it did become 226 00:10:31,080 --> 00:10:34,480 Speaker 3: clear that you know, a trade sale as you would 227 00:10:34,520 --> 00:10:36,160 Speaker 3: call it, was probably going to get us some better 228 00:10:36,240 --> 00:10:39,120 Speaker 3: value and ultimately that's where we ended up. So we 229 00:10:39,160 --> 00:10:43,200 Speaker 3: feel good about about the actual value that is in there. 230 00:10:43,520 --> 00:10:46,640 Speaker 3: It's a good multiple and and a good partner actually 231 00:10:46,640 --> 00:10:49,160 Speaker 3: that wants to partner with Fonterra for the future. And 232 00:10:49,200 --> 00:10:51,040 Speaker 3: I think that's an important part of how we look 233 00:10:51,080 --> 00:10:52,839 Speaker 3: at the deal. It's not just the financials, but it's 234 00:10:52,880 --> 00:10:54,600 Speaker 3: it's you know, how what does that mean for fon 235 00:10:54,679 --> 00:10:57,760 Speaker 3: Terra on an ongoing basis? Was I guess a couple 236 00:10:57,760 --> 00:11:00,120 Speaker 3: of the lenses that we looked at it, but ultimately 237 00:11:00,360 --> 00:11:03,560 Speaker 3: it's good value for the assets, which which is something 238 00:11:03,559 --> 00:11:06,840 Speaker 3: that obviously, you know, that's what we want, so like 239 00:11:06,880 --> 00:11:10,480 Speaker 3: to Lisa, you know, French family owned company the world's 240 00:11:10,480 --> 00:11:13,040 Speaker 3: biggest dairy company. I think I'm pretty sure it is, 241 00:11:13,160 --> 00:11:16,160 Speaker 3: but heavily in the consumer space. So whilst we index 242 00:11:16,240 --> 00:11:19,520 Speaker 3: more in ingredients and in food service, l like Lise 243 00:11:19,559 --> 00:11:22,360 Speaker 3: are very much heavily over into that consumer space, and 244 00:11:22,480 --> 00:11:25,520 Speaker 3: they are you know, they've grown significantly, you know, over 245 00:11:25,559 --> 00:11:29,120 Speaker 3: the past couple of decades, I guess, and do like 246 00:11:29,200 --> 00:11:31,400 Speaker 3: to do a bit of acquisition, so I think they've 247 00:11:31,400 --> 00:11:33,640 Speaker 3: done something like one hundred and twenty seven acquisitions in 248 00:11:33,640 --> 00:11:34,440 Speaker 3: the past twenty years. 249 00:11:34,480 --> 00:11:39,720 Speaker 1: So the seasoned operators, Yeah, without the consumer business, like 250 00:11:39,800 --> 00:11:41,959 Speaker 1: what's six sort of mean for the earnings and stuff 251 00:11:42,000 --> 00:11:43,559 Speaker 1: like when you when do you forecast at your next 252 00:11:43,600 --> 00:11:45,840 Speaker 1: feedback at the sort of y twenty five earnings with 253 00:11:45,840 --> 00:11:46,720 Speaker 1: without that business. 254 00:11:46,760 --> 00:11:50,040 Speaker 3: That is actually something that we've we've given guidance on now, 255 00:11:50,080 --> 00:11:52,559 Speaker 3: I guess is the best way to think about it, 256 00:11:52,600 --> 00:11:55,199 Speaker 3: so we we know that I mean particularly for farmers, 257 00:11:55,200 --> 00:11:57,760 Speaker 3: but for you know, sure holders more broadly. People want 258 00:11:57,800 --> 00:12:00,400 Speaker 3: to know what the future looks like. It's all very well, here, 259 00:12:00,520 --> 00:12:02,400 Speaker 3: I'm going to give you a two dollar capital return, 260 00:12:03,160 --> 00:12:05,160 Speaker 3: but actually that's I want to know what the future 261 00:12:05,160 --> 00:12:08,120 Speaker 3: looks like. And you know farmers in general are they're 262 00:12:08,120 --> 00:12:10,280 Speaker 3: here for generations. They're not here for for you know, 263 00:12:10,320 --> 00:12:12,960 Speaker 3: a quick two bucks. So I think that space was 264 00:12:12,960 --> 00:12:15,640 Speaker 3: something that was important to us. So we did do 265 00:12:15,720 --> 00:12:18,360 Speaker 3: that as we put our annual results which would have 266 00:12:18,360 --> 00:12:22,040 Speaker 3: been last week, and being really clear that we believe 267 00:12:22,080 --> 00:12:24,920 Speaker 3: that if we continue to do what we have been 268 00:12:24,960 --> 00:12:27,160 Speaker 3: doing for the past you know, twelve eighteen months around 269 00:12:27,320 --> 00:12:30,600 Speaker 3: ingredients and in food service, then our growth path takes 270 00:12:30,679 --> 00:12:32,439 Speaker 3: us back to the same level of airnings that we 271 00:12:32,520 --> 00:12:35,880 Speaker 3: had in twenty five in twenty twenty eight, so you know, 272 00:12:35,920 --> 00:12:39,120 Speaker 3: getting back up there, but are much more efficient business 273 00:12:39,200 --> 00:12:42,920 Speaker 3: on the other end of that, so much less capital intents, 274 00:12:43,440 --> 00:12:45,960 Speaker 3: which actually allows us to put our return and capital 275 00:12:46,080 --> 00:12:49,400 Speaker 3: up you know, over that period. So whilst it's like 276 00:12:49,480 --> 00:12:52,319 Speaker 3: we're getting the same airnings but with a smaller capital base, 277 00:12:52,360 --> 00:12:54,920 Speaker 3: so you're getting a better return on your share from 278 00:12:54,960 --> 00:12:57,719 Speaker 3: a dividend perspective, but you're also getting you know, you're 279 00:12:57,720 --> 00:13:00,840 Speaker 3: getting the capital return, but we're also an ongoing business 280 00:13:00,840 --> 00:13:03,280 Speaker 3: which delivers a higher return on capital. 281 00:13:03,480 --> 00:13:06,560 Speaker 1: So it's pretty much a done deal. But the sharholder 282 00:13:06,600 --> 00:13:08,000 Speaker 1: votes October thirtieth. 283 00:13:08,120 --> 00:13:09,360 Speaker 3: Yeah, so there's a couple of I mean, there's a 284 00:13:09,400 --> 00:13:12,080 Speaker 3: couple of conditions that that's that that that that are there. 285 00:13:12,480 --> 00:13:15,800 Speaker 3: One is obviously this year holder vote, so that is 286 00:13:15,840 --> 00:13:18,960 Speaker 3: scheduled for the theatieth of October. Online voting is open. 287 00:13:19,000 --> 00:13:19,160 Speaker 1: Now. 288 00:13:19,720 --> 00:13:22,079 Speaker 3: That's the first sort of approval huddle. And then the 289 00:13:22,120 --> 00:13:24,360 Speaker 3: second one is that we've obviously got some regulatory approval 290 00:13:24,440 --> 00:13:26,000 Speaker 3: that that has to go as well, so we will 291 00:13:26,040 --> 00:13:29,760 Speaker 3: have you know, ohio here in in New Zealand, there's 292 00:13:29,760 --> 00:13:33,840 Speaker 3: an equivalent in Australia FORB. We've already got to the 293 00:13:33,840 --> 00:13:36,960 Speaker 3: A Triple C, which is the Ustulian Communist Commission that's 294 00:13:37,000 --> 00:13:39,640 Speaker 3: already through, which was an important part of it actually 295 00:13:39,679 --> 00:13:42,640 Speaker 3: because Lactalis already has a business in Australia that's that's 296 00:13:42,679 --> 00:13:45,559 Speaker 3: reasonably sizable. So making sure so the A Triple C 297 00:13:45,720 --> 00:13:49,360 Speaker 3: were as have already given the green light, right, which 298 00:13:49,400 --> 00:13:49,680 Speaker 3: is good. 299 00:13:49,760 --> 00:13:52,080 Speaker 1: One of the sticky points for the Shilds I think 300 00:13:52,440 --> 00:13:55,240 Speaker 1: your cheer Peter McBride talked about is the double each 301 00:13:55,360 --> 00:14:00,280 Speaker 1: sword with the market wanting more details. A I think, 302 00:14:00,360 --> 00:14:01,760 Speaker 1: you know, it's a lot of commentary about it, feeling 303 00:14:01,760 --> 00:14:03,840 Speaker 1: opaiq can shouldn't need light on that. 304 00:14:04,040 --> 00:14:07,319 Speaker 3: In terms of like ongoing supply. Yeah, yeah, yeah, it's interesting. 305 00:14:07,320 --> 00:14:10,400 Speaker 3: So I was I was actually fortunate enough to be 306 00:14:10,440 --> 00:14:13,200 Speaker 3: out on the road with Peter last week, so he 307 00:14:13,240 --> 00:14:15,720 Speaker 3: did talk about that a few times. It's fair to say, 308 00:14:15,960 --> 00:14:18,080 Speaker 3: you know, we got a lot of questions last week. 309 00:14:18,120 --> 00:14:20,320 Speaker 3: So we do found a road shows after every sort 310 00:14:20,360 --> 00:14:22,640 Speaker 3: of half year and full year results. This one was 311 00:14:22,640 --> 00:14:25,840 Speaker 3: obviously quite a heavy divestment focus, but a lot of 312 00:14:25,880 --> 00:14:29,640 Speaker 3: questions around that. That's sort of supply agreement and there 313 00:14:29,680 --> 00:14:31,880 Speaker 3: are two agreements, and Peter's talked about that. We have 314 00:14:31,920 --> 00:14:34,360 Speaker 3: a we have a milk a raw milk agreement, so 315 00:14:34,360 --> 00:14:36,000 Speaker 3: that's the sort of drinking milk that you pick up 316 00:14:36,000 --> 00:14:38,840 Speaker 3: in the supermarket. We have that agreement that's a ten 317 00:14:38,920 --> 00:14:40,920 Speaker 3: year agreement and it's on the same sort of you know, 318 00:14:41,200 --> 00:14:44,040 Speaker 3: terms that we have to provide because it's regulated. We 319 00:14:44,120 --> 00:14:48,800 Speaker 3: also have then a supply agreement for ingredients essentially that 320 00:14:48,840 --> 00:14:51,600 Speaker 3: then Lacktally schioll use to manufacture the products that they 321 00:14:51,680 --> 00:14:54,240 Speaker 3: that you know that that currently are manufactured by us, 322 00:14:55,160 --> 00:14:58,520 Speaker 3: and that's just it's a three year agreement. It has 323 00:14:58,760 --> 00:15:00,800 Speaker 3: a three year notice period, but it's on the same 324 00:15:00,920 --> 00:15:02,840 Speaker 3: and it's it's a commercial agreement, right, So I'm not 325 00:15:02,840 --> 00:15:04,440 Speaker 3: going to see much more about it, don't I don't 326 00:15:04,480 --> 00:15:05,840 Speaker 3: feel like it's a peak. But I wouldn't tell you 327 00:15:05,880 --> 00:15:09,240 Speaker 3: about any of my other customer really you know arrangements. 328 00:15:09,280 --> 00:15:11,200 Speaker 3: So I wouldn't say anymore about that one other than 329 00:15:11,200 --> 00:15:12,840 Speaker 3: it's broadly on the same sort of terms as we 330 00:15:12,840 --> 00:15:14,480 Speaker 3: would have with any of our major customers. 331 00:15:14,760 --> 00:15:19,040 Speaker 1: Okay, And so I mean this is it does represent 332 00:15:19,160 --> 00:15:23,000 Speaker 1: to change and strategy for the cooperative, and you know, 333 00:15:23,040 --> 00:15:24,440 Speaker 1: we just love to hear a bit more about that 334 00:15:24,520 --> 00:15:27,200 Speaker 1: sort of moving more into the ingredients business and the 335 00:15:27,240 --> 00:15:29,200 Speaker 1: food service that we have heard a lot about that 336 00:15:29,440 --> 00:15:32,200 Speaker 1: and just just interested in how you're sort of articulating 337 00:15:32,240 --> 00:15:33,360 Speaker 1: that and how that's been picked up. 338 00:15:33,560 --> 00:15:36,160 Speaker 3: Yeah, it is interesting. I think I think a lot 339 00:15:36,160 --> 00:15:39,400 Speaker 3: of people thought our strategy was to divest of consumer, right, 340 00:15:39,400 --> 00:15:41,640 Speaker 3: which is not the strategy. Right. The strategy has been about, 341 00:15:42,040 --> 00:15:44,040 Speaker 3: you know, it has been about us being clear about 342 00:15:44,040 --> 00:15:45,920 Speaker 3: what it is that we are as a co op 343 00:15:46,760 --> 00:15:48,480 Speaker 3: and there's a co op, what we're here for is 344 00:15:48,560 --> 00:15:52,120 Speaker 3: end to end value for the farmer, and sometimes that's 345 00:15:52,480 --> 00:15:56,560 Speaker 3: about getting milk price and sometimes that's about earnings. But 346 00:15:56,600 --> 00:15:59,160 Speaker 3: actually for us, we're a co ops and we're sort 347 00:15:59,160 --> 00:16:02,720 Speaker 3: of ambivalent between the two of them, but actually that's 348 00:16:02,760 --> 00:16:05,680 Speaker 3: what we're trying to maximize. What well maximizes the milk 349 00:16:05,720 --> 00:16:09,120 Speaker 3: price and the earnings that that goes along with it. 350 00:16:09,320 --> 00:16:10,960 Speaker 3: And so our strategy is that, well, then how do 351 00:16:11,040 --> 00:16:13,000 Speaker 3: we do that, how are we best place to be 352 00:16:13,040 --> 00:16:14,960 Speaker 3: able to do that? But also at the same time 353 00:16:15,040 --> 00:16:17,560 Speaker 3: being clear that we don't just play a financial role 354 00:16:17,600 --> 00:16:19,800 Speaker 3: for the farmer. We also play quite a big risk roll. 355 00:16:20,000 --> 00:16:22,160 Speaker 3: And so you know, we know we have a network 356 00:16:22,160 --> 00:16:24,560 Speaker 3: of assets that means that we will always come and 357 00:16:24,600 --> 00:16:26,360 Speaker 3: pick up the milk and we will always pay for 358 00:16:26,400 --> 00:16:28,640 Speaker 3: it on the fifteenth of month. And then we have 359 00:16:28,680 --> 00:16:30,840 Speaker 3: a network of assets which allows us to then turn 360 00:16:30,920 --> 00:16:34,320 Speaker 3: that into the most profitable setup of products. Right. We 361 00:16:34,320 --> 00:16:38,040 Speaker 3: have asset flexibility, which gives us optionality depending on you know, 362 00:16:38,320 --> 00:16:40,280 Speaker 3: how the markets are looking, we can choose to make 363 00:16:40,280 --> 00:16:43,240 Speaker 3: different things. We also have a whole heap of assets 364 00:16:43,280 --> 00:16:45,880 Speaker 3: that we can use so that we're not dependent on 365 00:16:46,000 --> 00:16:47,600 Speaker 3: just one in one area. Or any of that sort 366 00:16:47,640 --> 00:16:49,360 Speaker 3: of stuff. So that flexibility, so that does actually a 367 00:16:49,400 --> 00:16:51,760 Speaker 3: lot of risk mitigation on behalf of the farmer as well. 368 00:16:52,120 --> 00:16:54,800 Speaker 3: So the farmer offering is something that is super important. 369 00:16:54,880 --> 00:16:56,440 Speaker 3: How do we make sure that we are the most 370 00:16:56,440 --> 00:16:59,520 Speaker 3: compelling offer. That's what we want to make sure because 371 00:16:59,720 --> 00:17:02,080 Speaker 3: you know, co op of scale is important to the industry, 372 00:17:02,200 --> 00:17:05,000 Speaker 3: we believe, so we look at it from that perspective. 373 00:17:05,320 --> 00:17:08,000 Speaker 3: And then the two channels that are the best return 374 00:17:08,080 --> 00:17:12,199 Speaker 3: for us is ingredients and food service and consumer. You know, 375 00:17:12,240 --> 00:17:14,480 Speaker 3: despite the fact that you know, we've had a really 376 00:17:14,480 --> 00:17:17,000 Speaker 3: good improvement in the performance over the past few years, 377 00:17:17,920 --> 00:17:21,760 Speaker 3: it's still less than farmers cost the capital. That's the 378 00:17:21,800 --> 00:17:23,760 Speaker 3: sort of return that we're getting on there. So it 379 00:17:23,800 --> 00:17:27,000 Speaker 3: doesn't make sense for us to retain that business when 380 00:17:27,000 --> 00:17:29,560 Speaker 3: we have other channels that we can get a better 381 00:17:29,600 --> 00:17:32,240 Speaker 3: return in. And it's not about us saying that it's 382 00:17:32,240 --> 00:17:34,280 Speaker 3: a bad business, because it's not. It's a great business. 383 00:17:34,359 --> 00:17:37,040 Speaker 3: But we have another one that gives us better returns. 384 00:17:37,400 --> 00:17:39,520 Speaker 3: And so our choice is not to say, hey, do 385 00:17:39,560 --> 00:17:42,639 Speaker 3: you want a B or C. It is between between 386 00:17:42,640 --> 00:17:44,639 Speaker 3: those what is the best mix, And for us, that 387 00:17:44,680 --> 00:17:47,720 Speaker 3: becomes about ingredients of food service, So ingredients, you know, 388 00:17:47,800 --> 00:17:49,760 Speaker 3: that's always I mean, it's where we make the vast 389 00:17:49,760 --> 00:17:53,199 Speaker 3: majority of our profit. It always has been. There is 390 00:17:53,240 --> 00:17:57,000 Speaker 3: so much demand there for high value ingredients, advanced proteins, 391 00:17:57,080 --> 00:18:01,600 Speaker 3: medical grade nutrition is very important now more so, and 392 00:18:01,840 --> 00:18:04,840 Speaker 3: people want natural nutrition. And the business that we have 393 00:18:04,960 --> 00:18:08,159 Speaker 3: within food services, you know, we have great product sets 394 00:18:09,040 --> 00:18:11,919 Speaker 3: and they have great functionality that is valued by chefs, 395 00:18:12,040 --> 00:18:14,720 Speaker 3: and that's essentially who is choosing these food service products. 396 00:18:15,200 --> 00:18:17,440 Speaker 3: Our business is quite heavily in China, and I'd love 397 00:18:17,440 --> 00:18:19,320 Speaker 3: to see us do a bit more outside of China 398 00:18:20,000 --> 00:18:22,760 Speaker 3: in that food service space. But you know, again there's 399 00:18:22,760 --> 00:18:25,440 Speaker 3: plenty of opportunity out there as well, so that's where 400 00:18:25,480 --> 00:18:27,920 Speaker 3: we get the best returns. We're also it's a B 401 00:18:28,040 --> 00:18:30,080 Speaker 3: to B business. It's a simpler business. We can be 402 00:18:30,160 --> 00:18:33,840 Speaker 3: more agile, and that allows us to really develop long 403 00:18:33,920 --> 00:18:37,040 Speaker 3: term partnerships with our customers. That's where we focus our innovation. 404 00:18:37,119 --> 00:18:39,600 Speaker 3: That's where we focus. Are you our resources is about 405 00:18:39,600 --> 00:18:43,040 Speaker 3: getting good long term relationships. That's what actually creates value. 406 00:18:43,240 --> 00:18:46,480 Speaker 1: So we're looking at these, you know, these two primary 407 00:18:46,600 --> 00:18:50,080 Speaker 1: verticals now of the ingredients business and the food service 408 00:18:50,160 --> 00:18:51,800 Speaker 1: Like what's what is the sort of size of the 409 00:18:51,800 --> 00:18:54,280 Speaker 1: growth opportunity ahead of you there. 410 00:18:55,119 --> 00:18:57,639 Speaker 3: Yeah, I mean I think they're quite different markets. Obviously. 411 00:18:58,080 --> 00:19:02,119 Speaker 3: Let's start with with ingredients. The demand for things like 412 00:19:02,160 --> 00:19:04,640 Speaker 3: protein is just not stopping, you know, like you could 413 00:19:04,680 --> 00:19:06,920 Speaker 3: have called it a fad, but it's ten years right, 414 00:19:06,960 --> 00:19:08,840 Speaker 3: and it's even in the US at the moment, the 415 00:19:08,840 --> 00:19:11,440 Speaker 3: demand for protein is twenty percent Kegart like, it's not 416 00:19:11,560 --> 00:19:14,320 Speaker 3: every podcast is everything people are talking about protein, right, 417 00:19:14,359 --> 00:19:16,480 Speaker 3: and you pick up the drinks and it's things. Because 418 00:19:16,480 --> 00:19:19,760 Speaker 3: I think what's happening is that, you know, people are 419 00:19:19,760 --> 00:19:24,200 Speaker 3: looking for nutrition, they also want natural nutrition, and dairy 420 00:19:24,320 --> 00:19:27,320 Speaker 3: is is very nutritionally dense, which is tremendous but also 421 00:19:27,440 --> 00:19:29,919 Speaker 3: seen as relatively natural, and particularly if you look at 422 00:19:29,920 --> 00:19:32,199 Speaker 3: New Zealand where it's pasture fed, grass fed, right, so 423 00:19:32,280 --> 00:19:34,480 Speaker 3: it's got an added element of that good for me 424 00:19:34,760 --> 00:19:37,320 Speaker 3: space in there. Like it's it's definitely something that's that's 425 00:19:37,359 --> 00:19:39,360 Speaker 3: that's been around for a while and we certainly see 426 00:19:39,400 --> 00:19:42,400 Speaker 3: it staying. But people are the way that they're consuming 427 00:19:42,480 --> 00:19:45,600 Speaker 3: dairy is changing. So you know, when I was growing up, 428 00:19:45,600 --> 00:19:48,160 Speaker 3: we drank milk. That's not what people are like. People 429 00:19:48,200 --> 00:19:50,359 Speaker 3: are not doing that as much anymore, they'll have a 430 00:19:50,359 --> 00:19:52,880 Speaker 3: protein powder or a protein shake or a protein bar 431 00:19:53,560 --> 00:19:55,520 Speaker 3: or that, or it will be added into something else. 432 00:19:55,600 --> 00:19:56,960 Speaker 3: I don't know. I mean, I don't think there's a 433 00:19:56,960 --> 00:19:58,719 Speaker 3: product you can pick up anymore that doesn't have an 434 00:19:58,760 --> 00:20:02,800 Speaker 3: extra protein version. The demand for ingredients is incredibly high, 435 00:20:03,440 --> 00:20:05,720 Speaker 3: and I just don't see that that not in the 436 00:20:05,840 --> 00:20:07,600 Speaker 3: certainly not in the medium term that I don't see 437 00:20:07,600 --> 00:20:10,880 Speaker 3: that changing. And it suits us for quite a few 438 00:20:10,880 --> 00:20:14,240 Speaker 3: different spaces. But one, so it's the components of dairy 439 00:20:14,320 --> 00:20:16,320 Speaker 3: that become important rather than just hey, there's a glass 440 00:20:16,359 --> 00:20:18,359 Speaker 3: of milk. That's like, oh, there's protein and that there's fat, 441 00:20:18,440 --> 00:20:21,000 Speaker 3: And it's about about those components for you to. 442 00:20:20,920 --> 00:20:22,680 Speaker 1: Say like you've sort of got a market shaer growth 443 00:20:22,720 --> 00:20:26,639 Speaker 1: opportunity as well as just the market growth probably. 444 00:20:26,280 --> 00:20:28,920 Speaker 3: So it will be switching like it's it's different, right. So, 445 00:20:28,920 --> 00:20:31,879 Speaker 3: so what that will mean for us is less commodity 446 00:20:31,880 --> 00:20:34,320 Speaker 3: whole milk powder and more advanced ingredients. 447 00:20:34,840 --> 00:20:34,959 Speaker 1: Right. 448 00:20:35,280 --> 00:20:37,399 Speaker 3: And maybe some of the other places where dairy is 449 00:20:37,400 --> 00:20:38,760 Speaker 3: growing in the world might pick up some of that 450 00:20:38,760 --> 00:20:41,280 Speaker 3: commodity milk price powder, but for us, the return is 451 00:20:41,359 --> 00:20:43,239 Speaker 3: much higher in the other space. So we'll see that 452 00:20:43,280 --> 00:20:47,000 Speaker 3: shift and we're certainly seeing that play out and that's 453 00:20:47,040 --> 00:20:49,480 Speaker 3: the way that again for us, we help it helps 454 00:20:49,560 --> 00:20:51,480 Speaker 3: us to continue to grow. We're getting more value out 455 00:20:51,520 --> 00:20:53,560 Speaker 3: of dairy. And what about food service side, Yeah, food 456 00:20:53,560 --> 00:20:56,320 Speaker 3: service I think is obviously slightly different. I mean, you know, 457 00:20:56,359 --> 00:20:59,720 Speaker 3: we have we have quite a China concentration is probably 458 00:20:59,720 --> 00:21:01,639 Speaker 3: the way think about it from a business standpoint. At 459 00:21:01,640 --> 00:21:06,520 Speaker 3: the moment, there is lots of geographical opportunity. If I 460 00:21:06,520 --> 00:21:09,399 Speaker 3: look at markets such as Korea, for example, they're definitely 461 00:21:09,400 --> 00:21:12,040 Speaker 3: increasing in terms of dairy consumption, but doing it in 462 00:21:12,080 --> 00:21:14,760 Speaker 3: a relatively similar way than actually some of the Western 463 00:21:14,840 --> 00:21:17,879 Speaker 3: markets work. So it's the same sort of stuff, so 464 00:21:17,920 --> 00:21:20,639 Speaker 3: that you know, it is mozzarella, and it's you know, 465 00:21:20,720 --> 00:21:24,280 Speaker 3: it's cream cheese, and like, it's those spaces where it's 466 00:21:24,320 --> 00:21:27,359 Speaker 3: not different, it's not that different, So there's an opportunity 467 00:21:27,359 --> 00:21:30,359 Speaker 3: to go in there and get those And also, you know, 468 00:21:30,480 --> 00:21:32,479 Speaker 3: if you look at the Korean market, they're sort of 469 00:21:32,560 --> 00:21:35,680 Speaker 3: used to the New Zealand color of the product and 470 00:21:36,160 --> 00:21:38,000 Speaker 3: the flavor of the product, which is different to what 471 00:21:38,000 --> 00:21:40,840 Speaker 3: you would get from a European one, for example. So 472 00:21:41,080 --> 00:21:43,680 Speaker 3: it's quite interesting how different those things are. So I 473 00:21:43,680 --> 00:21:46,840 Speaker 3: think there's opportunity in markets that we're not particularly present 474 00:21:46,840 --> 00:21:49,280 Speaker 3: in the moment, like Korea, but we do have, you know, 475 00:21:49,600 --> 00:21:51,840 Speaker 3: a reasonable business in Southeast Asia that I think there's 476 00:21:51,840 --> 00:21:55,040 Speaker 3: just so much more opportunity. But it's about localizing for 477 00:21:55,640 --> 00:21:59,160 Speaker 3: local flavor profiles and those sorts of things. And that's 478 00:21:59,240 --> 00:22:01,199 Speaker 3: the one thing we have very well in China is 479 00:22:01,200 --> 00:22:04,399 Speaker 3: that we actually innovate locally in China, because one, you 480 00:22:04,440 --> 00:22:07,120 Speaker 3: get the speed of it, and you know, China's economy 481 00:22:07,119 --> 00:22:11,680 Speaker 3: is fantastic. It moves so quickly, the trains move so quickly, right, 482 00:22:11,680 --> 00:22:13,760 Speaker 3: and in two weeks it'll be something different. And if 483 00:22:13,760 --> 00:22:15,760 Speaker 3: you're not able to keep up with that, even in 484 00:22:15,920 --> 00:22:18,040 Speaker 3: particularly in things like food, because people will see something 485 00:22:18,320 --> 00:22:19,840 Speaker 3: in TikTok and they're like, well, well, I want to 486 00:22:19,840 --> 00:22:21,840 Speaker 3: eat that, and then in two weeks it's something different, 487 00:22:21,960 --> 00:22:24,119 Speaker 3: you've got to be able to locally innovate. And I 488 00:22:24,160 --> 00:22:25,840 Speaker 3: think there's an opportunity for us to do that through 489 00:22:25,840 --> 00:22:28,440 Speaker 3: Soctea Stagia as well, which allows us just to get 490 00:22:28,520 --> 00:22:32,080 Speaker 3: a product like dairy, but make it something that's more 491 00:22:32,600 --> 00:22:35,879 Speaker 3: in line with how people want to consume it, and 492 00:22:35,880 --> 00:22:37,480 Speaker 3: that will be a little bit different. In different space. 493 00:22:38,040 --> 00:22:40,480 Speaker 1: If Fontier clicks more than three quarters of the country's 494 00:22:40,480 --> 00:22:42,960 Speaker 1: milk the moment, the fan gate, but there's plenty of 495 00:22:42,960 --> 00:22:46,679 Speaker 1: competition sort of out there by at the heels. And 496 00:22:46,760 --> 00:22:48,520 Speaker 1: I think the annual report showed this time that you 497 00:22:48,600 --> 00:22:50,600 Speaker 1: actually had lost some market share. Like what's the sort 498 00:22:50,600 --> 00:22:51,879 Speaker 1: of strategy in thinking around that? 499 00:22:52,640 --> 00:22:54,640 Speaker 3: Yeah, so so I mean we did lose a little 500 00:22:54,680 --> 00:22:57,840 Speaker 3: bit of market share, I think, and we have done 501 00:22:57,840 --> 00:23:00,520 Speaker 3: for a little while. So you know, the whole I 502 00:23:00,520 --> 00:23:04,080 Speaker 3: think in having you know, deregulated the industry as it 503 00:23:04,119 --> 00:23:07,879 Speaker 3: were and opened up is that actually we allow is 504 00:23:07,920 --> 00:23:10,560 Speaker 3: to allow for competition, and we've seen that come in 505 00:23:11,359 --> 00:23:14,520 Speaker 3: and some process have done better than others, to be honest. 506 00:23:14,720 --> 00:23:16,760 Speaker 3: So we're in that space now where it's healthy to 507 00:23:16,800 --> 00:23:20,240 Speaker 3: have competition. We like to have competition, you know, for supply, 508 00:23:20,600 --> 00:23:22,480 Speaker 3: but ultimately we also believe that we have a really 509 00:23:22,480 --> 00:23:25,200 Speaker 3: compelling offer. So we do want to continue to grow milk, 510 00:23:25,240 --> 00:23:28,080 Speaker 3: and I think we can move back and actually take 511 00:23:28,080 --> 00:23:30,639 Speaker 3: a bit more market share, but ultimately we're here for 512 00:23:30,680 --> 00:23:32,600 Speaker 3: the good of the industry and I think you know, 513 00:23:32,680 --> 00:23:34,399 Speaker 3: a corp of scally helps in that space. 514 00:23:34,880 --> 00:23:36,399 Speaker 1: Let's talk about little bit of the future. What's the 515 00:23:36,440 --> 00:23:38,920 Speaker 1: sort of the key priorities over the next twelve months, 516 00:23:38,600 --> 00:23:40,720 Speaker 1: and you know, a little bit longer as well, like 517 00:23:40,760 --> 00:23:43,280 Speaker 1: what do you see five years out is the evolution 518 00:23:43,359 --> 00:23:44,040 Speaker 1: of the corp. 519 00:23:44,359 --> 00:23:46,959 Speaker 3: But I mean the next twelve months, hopefully we're going 520 00:23:47,000 --> 00:23:49,800 Speaker 3: to be divesting your consumer business. Let's assume that we 521 00:23:49,840 --> 00:23:52,120 Speaker 3: get the vote through, so that's obviously going to take 522 00:23:52,160 --> 00:23:54,280 Speaker 3: up a lot of time. And the other big thing 523 00:23:54,280 --> 00:23:57,919 Speaker 3: that we're doing, actually those two big ones. One is 524 00:23:57,960 --> 00:24:01,200 Speaker 3: we are we are replacing your core ERP as well, 525 00:24:01,240 --> 00:24:05,440 Speaker 3: so our SAP platform. We're doing an EARP implementation. They're 526 00:24:05,480 --> 00:24:08,600 Speaker 3: always quite fraught and sometimes they. 527 00:24:08,560 --> 00:24:09,479 Speaker 1: Have through that. 528 00:24:10,040 --> 00:24:12,080 Speaker 3: We just we're going to first go live in November, 529 00:24:12,200 --> 00:24:15,199 Speaker 3: right and so touch without At this point in time, 530 00:24:15,400 --> 00:24:17,359 Speaker 3: we're on track and on budget. But let's let's see 531 00:24:17,520 --> 00:24:19,359 Speaker 3: a huge amount of effort going into that. That'll be 532 00:24:19,480 --> 00:24:22,239 Speaker 3: quite transformed because it sets another good platform for us 533 00:24:22,240 --> 00:24:24,520 Speaker 3: to leverage data and AI in a different way than 534 00:24:24,520 --> 00:24:26,520 Speaker 3: we can now, so it's actually really helpful for us. 535 00:24:27,320 --> 00:24:30,000 Speaker 3: And then we've got a couple of big capital investments 536 00:24:30,040 --> 00:24:32,320 Speaker 3: that we've done that come online in the next tree 537 00:24:32,359 --> 00:24:34,600 Speaker 3: of months as well, so we've got a new advanced 538 00:24:34,600 --> 00:24:39,320 Speaker 3: protein cape capacity at Studham and we've also got a 539 00:24:39,359 --> 00:24:41,560 Speaker 3: new UHT line coming in at Edendale as well, so 540 00:24:41,600 --> 00:24:43,919 Speaker 3: that allows us one of those is really focused on 541 00:24:44,080 --> 00:24:45,959 Speaker 3: ingredients and the other ones focused on food service, so 542 00:24:46,119 --> 00:24:48,440 Speaker 3: that those investments comes on, they give us the capacity 543 00:24:48,480 --> 00:24:50,879 Speaker 3: to continue to grow in that space. So that's definitely 544 00:24:50,880 --> 00:24:54,040 Speaker 3: what that looks like. So, you know, twelve months a 545 00:24:54,040 --> 00:24:58,240 Speaker 3: wee busy. I reckon that. You know, five years, I 546 00:24:58,280 --> 00:25:00,560 Speaker 3: don't think it's going to be anything crazy different because 547 00:25:00,560 --> 00:25:02,840 Speaker 3: actually our strategy is so clear to us now that 548 00:25:02,880 --> 00:25:05,920 Speaker 3: actually they were just continuing to execute on it. Things 549 00:25:05,960 --> 00:25:08,399 Speaker 3: will change, obviously, but but actually the core of the 550 00:25:08,440 --> 00:25:10,879 Speaker 3: strategy is right. The one thing that that's probably a 551 00:25:10,920 --> 00:25:12,679 Speaker 3: little bit different to what we've done in the past 552 00:25:12,760 --> 00:25:15,720 Speaker 3: is I mentioned it briefly earlier. We do see an 553 00:25:15,720 --> 00:25:18,719 Speaker 3: opportunity for us to to amp up a little bit 554 00:25:18,720 --> 00:25:21,800 Speaker 3: in the financial trading space. So you know, how do 555 00:25:21,840 --> 00:25:26,520 Speaker 3: we use you know, those financial markets to try and 556 00:25:26,560 --> 00:25:28,960 Speaker 3: take one to take volatility out of our earnings, but 557 00:25:29,040 --> 00:25:31,680 Speaker 3: two actually as an ending stream, So you know, how 558 00:25:31,720 --> 00:25:34,040 Speaker 3: can we use the knowledge that we have around the 559 00:25:34,080 --> 00:25:38,199 Speaker 3: markets to be able to effectively you know, trade in 560 00:25:38,240 --> 00:25:41,280 Speaker 3: those markets, but trade in them as as financial markets 561 00:25:41,359 --> 00:25:45,040 Speaker 3: rather than just trading the actual commodity itself, knowing of 562 00:25:45,080 --> 00:25:48,280 Speaker 3: course that we can always you know, back that up 563 00:25:48,320 --> 00:25:50,160 Speaker 3: with with the commodity if we need to, because we'll 564 00:25:50,160 --> 00:25:52,520 Speaker 3: make the product. So it gives us actually quite a 565 00:25:52,600 --> 00:25:56,040 Speaker 3: nice different value stream which I think could provide us 566 00:25:56,040 --> 00:25:58,119 Speaker 3: with a nice bit of opportunity that we've not really 567 00:25:58,119 --> 00:25:59,359 Speaker 3: looked at too much in the past. 568 00:26:00,119 --> 00:26:03,120 Speaker 1: Super interesting. Hey, thanks so much for joining us, Andrew, 569 00:26:03,160 --> 00:26:05,240 Speaker 1: really appreciate your time and best of luck with a 570 00:26:05,480 --> 00:26:07,720 Speaker 1: year here and congratulations on a great twelve months. 571 00:26:07,720 --> 00:26:08,879 Speaker 3: Thank you, Yeah, appreciate it. 572 00:26:09,119 --> 00:26:11,720 Speaker 1: Thanks for tuning in. You can watch Shed Lunch on 573 00:26:11,760 --> 00:26:13,720 Speaker 1: YouTube or wherever you get your podcasts. 574 00:26:14,480 --> 00:26:15,040 Speaker 3: Catch you soon.