INTERIM REPORT 2016
INTERIM RESULTS PRESENTATION 2016
INTERIM RESULTS INVESTOR WEBCAST
The Ingredients segment represents the ingredients businesses in New Zealand, Australia and Latin America. This segment also includes the Co-operatives corporate activities and Farm Source (formerly RD1), a rural supplies retailer in New Zealand
Our New Zealand ingredients business delivered a strong performance with higher sales volume, no peak costs and improved product mix returns and efficiencies. Despite lower milk collection, sales volume grew by six per cent to 11.8 billion LME. Fonterra exported record volumes for a single month in December 2015, with more than 300,000 MT shipped to global markets. Normalised EBIT was up 27 per cent to $617 million. This was driven by New Zealand ingredients, where our plant investments and improvement programmes achieved efficiency gains, better yields and quality benefits.
CONSUMER & FOODSERVICE
The Consumer and Foodservice segment represents the consumer brands and foodservice businesses in Oceania, Asia, Greater China and Latin America.
Our consumer and foodservice segment delivered to plan with strong volume and margin growth. Sales volume increased by ten per cent to 2,484 million LME with broad-based volume growth across the consumer and foodservice regions. This represents an additional 235 million LME into the consumer and foodservice business to access the higher-value demand. Normalised EBIT was $241 million, up 108 per cent compared to the first half last year. This was a result of a broad performance across regions with both volume growth and lower input costs.
International Farming represents China farming operations
Our farms in China are key to our integrated dairy business and the Co-operative now has access to raw milk on an annual basis and has achieved sufficient scale to capture downstream value. In the six months to 31 Jan 2016, sales volume of raw milk increased 54 per cent to 103 million LME, largely due to the additional farms at Hub 2 (Ying) coming online during the period.