October 22, 2025 • 26 mins
Can Fonterra maximise returns for farmers while taking risks off the table? We’re joined by Andrew Murray, Group Chief Financial Officer for the dairy exporter. Andrew walks us through the $4.22B NZD sale of Fonterra’s consumer business, and their new laser focus on high-return channels like ingredients and food service.
Discover how their evolved strategy has delivered Fonterra’s highest-ever dividend amidst geopolitical tensions and tariffs. Why is the surging global demand for protein a big deal for dairy? What makes Andrew confident about selling off brands like Anchor and Mainland? How does the co-op aim to win back market share from its competitors?
Plus, Fonterra’s plans to generate earnings from financial trading.
For more or to watch on YouTube—check out http://linktr.ee/sharedlunch
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Cureda and welcome to Shared Lunch brought to you by
shares E's. My name is Leighton Roberts, and today I'm
at the headquarters of Fonterra in Auckland, and I'm joined
by their new CFO, Andrew Murray. Andrew's just delivered the
cooperative's four year results and the pending sale of Mainland
Group and the consumer business. Before we get started, here's
(00:26):
some important information.
Speaker 2 (00:27):
Investing and involves the risk you might lose the money
you start with. We recommend talking to a licensed financial advisor.
We also recommend reading product disclosure documents before deciding to invest.
Everything you're about to see and here is current at
the time of recording.
Speaker 1 (00:41):
Welcome Andrew, Thanks so much for joining us today.
Speaker 3 (00:44):
No problem. I'm glad that you guys got a chance
to come down to our lovely headquarters.
Speaker 1 (00:47):
Yeah, yeah, no, we appreciate you having us and nice
to have a return trip and make it regular. So
you're new to the CFO role, we'd love to hear
a little bit first about you and what brought a Scott's.
Speaker 3 (01:00):
And to Frontier Dairies new for me? So I'm I
guess I'm about two and a half years in the
co op now and just over a year in this role.
I spent most of my career actually in consumer goods actually,
so in various different parts of the world. And just
before I started at Fonterra, I did a few years
(01:20):
in a US agri business And you know, I'll probably
regret saying this at some point, but geez, the agribusiness
bit was much harder than consumer right, Like, if you've
got to grow your commodities instead of buying them, it
does make things a little bit more interesting and you
can never really predict the weather, so it adds an
extra layer of complexity. And so I really enjoyed that
agri space. And so I was in based in Australia
(01:42):
at the time, and I got approached to the role
at Fonterra, and to be honest, it wasn't an organization
I particularly knew. There's not as many places, you know,
even in Australia actually, but certainly for New Zealand that
you get to have the same sort of global scale
and reach that Fonterra does and that was really attractive.
So that's sort of brought me in and and the
industry is fascinating, right like it's a lot at play.
(02:05):
There's huge amounts of opportunity still and yeah, that's that's
always quite attractive.
Speaker 1 (02:09):
Yeah, it's always great to hear about opportunity. So a
year into the group CFO role, I think prior to
that was heat of global markets.
Speaker 3 (02:16):
Yeah, yeah, global markets, Yeah, which is I guess a
lot of our consumer business actually, but but but also
food service and ingredients.
Speaker 1 (02:22):
So right, and how's how's the first year being in
the in the hot seed if you like?
Speaker 3 (02:26):
Yeah, it's it's it's been really good. Actually, I think
I'm very fortunate to have quite a broad rule. So yeah,
we've got core finance in there, but I also have
the group strategy, have a transformation, I have it, you know,
so so it's actually quite broad from that perspective, and
I think that's a that's the evolution of a CFO rule.
I think that's where things are heading, where it's actually
(02:47):
much more broad than just being about finance.
Speaker 1 (02:50):
And biground more finance, is it, yeah.
Speaker 3 (02:52):
Almost exclusively? Yeah, yeah, I mean I've always I've always
had again relatively broad finance rules. So it's it's finance
plus and I think that's you know, for me actually
that's the core of what a CFO is there to do. Right,
It creates space for the CEO to focus much more
on this sort of external and those things, whereas the
CFO can actually do a lot of that's you know,
(03:12):
the strategy, the execution, managing a lot of the complexity
and risk. And I think that partnership for me certainly
has worked really well. And that's something that I've had
the opportunity to do at the co op as well.
So having that broad space, as I said, I think
it's part of what a CFO role has evolved into.
But it's what makes it really really interesting and to
be able to work on stuff that is super long term,
(03:34):
like you know, our asset footprint or innovation, you know.
But then at the same time, you know, you're also
paying the bills. You know. It's it's quite nice, but
it gives you, It keeps things well, it keeps things interesting.
But actually it's I think one of the few roles
and actually has said this to my lead team earlier
this year we were having a conversation about what are
we here for. It's one of the very very few
(03:56):
spaces where you get to see the whole of the
enterprise that is not a part to the organization that
we don't see and we don't get involved in. It
gives you an opportunity to make connections and to see
things that actually other people don't necessarily get an opportunity
to see, and that you know, that puts a setlement
of responsibility on you then for actually driving outcomes and
driving the execution of what is a strategy. So yeah,
(04:20):
it's been really energizing to be able to do that.
And I think what we are seeing is that our
strategy is working and I've got some good results.
Speaker 1 (04:27):
Yeah, I mean, let's get straight into it. The end
could just give us a rundown on the numbers.
Speaker 3 (04:31):
Yeah, for sure, a really good set of results for
the co op. You know, we had a we had
a very strong farm gate milk price, so we ended
up at ten dollars sixteen. That was up from seven
dollars eighty three the year before, so a big What.
Speaker 1 (04:44):
Was that compared to like early forecasts like how much
high it was.
Speaker 3 (04:48):
The O Yeah, look it was it. It was up. So,
I mean we started relatively little, but we went up
relatively you know, early in the year. So we knew
pretty early on we thought it was going to be
a strong year, so you know, we ended at ten
dollars sixteen. You know, we sort of hovered around ten
dollars for quite a while and we just came in
slightly better than that at the end, which is good.
(05:08):
There's always variability, right, I mean, the markets move often,
and we have a lot of you know, it's not
just the commodity prices, the affx that goes with it,
and then there's you know, we do quite a bit
of financial trading as well to try and manage some
of that volatility. So you never know until the last
minute exactly what it's going to be. But I've got
a good result, right, and then if I look at
what we delivered, you know, on top of that and
(05:30):
the value created within the co op, then our operating
profit was up thirteen percent year on you so just
about one point seven billion, and we were able to
do a final sorry full year dividend of fifty seven
cents this year, which was up from the highest the
co ops ever paid and now fully imputed as well,
so we're giving the imputation credits, which again the cop
(05:52):
hasn't done in the past, so quite some decent moves
there are just in terms of underlying performance of the business,
and we're seeing it actually in all parts the business
as well.
Speaker 1 (06:00):
Interesting sort of counter cyclical as well, and that you
look at what else is happening around the economy. Is
one of the things I've always been fascinated by is
like how few people realize just how big Frontier is
is an organization. But also the impact that you know,
agriculture broadly has on our economy. So like any early
(06:22):
science view on how that's starting to flow out into
communities and things like you think farmers are planning to
do some more investment from.
Speaker 3 (06:28):
Here, Yeah, look, I think that they will. I think
what's interesting, you know, if I look at cash generated
by the co op that went back to farmers this year,
sixteen point three billion, that's I think that a lot
of cash right back, And that's just that was up
from fifteen the year before. It's a big moves. What
we're seeing at the moment is obviously farmers are being
down debt, so we're definitely seeing that. And actually I
(06:51):
talked to the banks quite often and they're all like, oh,
we think this is a good idea, but actually we're
not lending. It is a bit of a double ah
side there, but definitely seeing that that there's that happening,
I think there is a very much an investment mind.
But people are definitely cautious as polyday. This is not
a you know, I'm out buying a boat or a
(07:11):
holiday house or something like that, right, this is I
can invest in the future of what my farm looks like,
I can pay down some debt. And we are definitely
seeing people that are people are looking at it in
a very can see sensible way. It's it's not frivolous.
Speaker 1 (07:25):
I mean they seem to be very good business people
like reputation of it with their mind as well.
Speaker 3 (07:29):
As Yeah, but I think there is that space around
you know that there is all of that though, flows
back into essentially rural communities, right, so they will be spending,
people will be building. They might be building a new
shared or a new you know, putting up some different
infrastructure that creates jobs in those local communities as well
as well, maybe you know, buying a tractor or two
like it all creates actually quite good movement for the
(07:53):
for the rural economy in New Zealand as well.
Speaker 1 (07:55):
And so what about guidance heading into this year. What
are you thinking on that at the moment.
Speaker 3 (07:59):
Yeah, so we've put we've had we've split our guidance
a little bit. So what we've been clear on is
what does a continuing business look like. So we have
a divestment which is coming up, so again not really
exactly sure when that will happen at this point in time,
at some point during next year if we get this
yearholder approval. So we've just given guidance for the continuing
(08:21):
business and essentially we've got a range of forty five
to sixty five cents of innings if I take that
part of the business. Last year it was fifty six,
so we're sort of in the same space. We feel
really good about being able to deliver, you know, similar
to last year, considering it was the best financial performance
the corpers ever had. And there's still plenty of volatility
(08:41):
out there, right, we do still have tarifs, We've got,
you know, what is the impact on economies from some
of the geopolitical type of uncertainty. So I think we
just got to be cautious about how some of that
stuff plays out. But certainly, you know, a strong milk
price encourages production. So we're seeing good milk flows in
New Zealand. We're seeing a bit of increased production in
(09:01):
the US and also through Latin America. So there's the
supply out there and you know that that's what sorts
through into essentially. But demand remains robust, which is a
nice space for it to be sitting at the moment.
But some of those geopolitical things, you've just got to
be careful.
Speaker 1 (09:17):
Yeah, it's a time out there. Well, I mean, that's
a great segue into the biggest news certainly, you know
it's been everywhere really, which is the sale of the
consumer business in August to the French dairy Giantlet tell
us lest list right, I'd have to work on that.
For three point eight four billion, then that's another big number.
(09:38):
Can you tell us a little bit about that? And
I actually might be a little bit higher now.
Speaker 3 (09:42):
Yeah, yeah, yeah, So four point two two billion actually
is a sale price.
Speaker 1 (09:47):
So that's an additional that's the additional deal which.
Speaker 3 (09:51):
Was for the bigger licenses that were included yet. So
we're just just sort of finalized that a couple of
days too late after we announced the rest of it.
The four point two two billion is spot's out there,
so you know a bit about the process. I guess,
you know, we we we were running dual tracks, so
there was you know, we were looking at IPO for
for quite a bit of time actually in terms of
(10:11):
coming through there, because it's an organization that business can operate.
It would have been a reasonably sizeable organization of its
own right, and so we looked at that. We got
good feedback, you know, as we put it on sort
of road shows in New Zealand, Australia up through Hong Kong, Singapore.
There was good appetite for it. But it did become
clear that you know, a trade sale as you would
(10:34):
call it, was probably going to get us some better
value and ultimately that's where we ended up. So we
feel good about about the actual value that is in there.
It's a good multiple and and a good partner actually
that wants to partner with Fonterra for the future. And
I think that's an important part of how we look
at the deal. It's not just the financials, but it's
it's you know, how what does that mean for fon
(10:54):
Terra on an ongoing basis? Was I guess a couple
of the lenses that we looked at it, but ultimately
it's good value for the assets, which which is something
that obviously, you know, that's what we want, so like
to Lisa, you know, French family owned company the world's
biggest dairy company. I think I'm pretty sure it is,
but heavily in the consumer space. So whilst we index
(11:16):
more in ingredients and in food service, l like Lise
are very much heavily over into that consumer space, and
they are you know, they've grown significantly, you know, over
the past couple of decades, I guess, and do like
to do a bit of acquisition, so I think they've
done something like one hundred and twenty seven acquisitions in
the past twenty years.
Speaker 1 (11:34):
So the seasoned operators, Yeah, without the consumer business, like
what's six sort of mean for the earnings and stuff
like when you when do you forecast at your next
feedback at the sort of y twenty five earnings with
without that business.
Speaker 3 (11:46):
That is actually something that we've we've given guidance on now,
I guess is the best way to think about it,
so we we know that I mean particularly for farmers,
but for you know, sure holders more broadly. People want
to know what the future looks like. It's all very well, here,
I'm going to give you a two dollar capital return,
but actually that's I want to know what the future
looks like. And you know farmers in general are they're
(12:08):
here for generations. They're not here for for you know,
a quick two bucks. So I think that space was
something that was important to us. So we did do
that as we put our annual results which would have
been last week, and being really clear that we believe
that if we continue to do what we have been
doing for the past you know, twelve eighteen months around
ingredients and in food service, then our growth path takes
(12:30):
us back to the same level of airnings that we
had in twenty five in twenty twenty eight, so you know,
getting back up there, but are much more efficient business
on the other end of that, so much less capital intents,
which actually allows us to put our return and capital
up you know, over that period. So whilst it's like
we're getting the same airnings but with a smaller capital base,
(12:52):
so you're getting a better return on your share from
a dividend perspective, but you're also getting you know, you're
getting the capital return, but we're also an ongoing business
which delivers a higher return on capital.
Speaker 1 (13:03):
So it's pretty much a done deal. But the sharholder
votes October thirtieth.
Speaker 3 (13:08):
Yeah, so there's a couple of I mean, there's a
couple of conditions that that's that that that that are there.
One is obviously this year holder vote, so that is
scheduled for the theatieth of October. Online voting is open.
Speaker 1 (13:19):
Now.
Speaker 3 (13:19):
That's the first sort of approval huddle. And then the
second one is that we've obviously got some regulatory approval
that that has to go as well, so we will
have you know, ohio here in in New Zealand, there's
an equivalent in Australia FORB. We've already got to the
A Triple C, which is the Ustulian Communist Commission that's
already through, which was an important part of it actually
because Lactalis already has a business in Australia that's that's
(13:42):
reasonably sizable. So making sure so the A Triple C
were as have already given the green light, right, which
is good.
Speaker 1 (13:49):
One of the sticky points for the Shilds I think
your cheer Peter McBride talked about is the double each
sword with the market wanting more details. A I think,
you know, it's a lot of commentary about it, feeling
opaiq can shouldn't need light on that.
Speaker 3 (14:04):
In terms of like ongoing supply. Yeah, yeah, yeah, it's interesting.
So I was I was actually fortunate enough to be
out on the road with Peter last week, so he
did talk about that a few times. It's fair to say,
you know, we got a lot of questions last week.
So we do found a road shows after every sort
of half year and full year results. This one was
obviously quite a heavy divestment focus, but a lot of
(14:25):
questions around that. That's sort of supply agreement and there
are two agreements, and Peter's talked about that. We have
a we have a milk a raw milk agreement, so
that's the sort of drinking milk that you pick up
in the supermarket. We have that agreement that's a ten
year agreement and it's on the same sort of you know,
terms that we have to provide because it's regulated. We
also have then a supply agreement for ingredients essentially that
(14:48):
then Lacktally schioll use to manufacture the products that they
that you know that that currently are manufactured by us,
and that's just it's a three year agreement. It has
a three year notice period, but it's on the same
and it's it's a commercial agreement, right, So I'm not
going to see much more about it, don't I don't
feel like it's a peak. But I wouldn't tell you
about any of my other customer really you know arrangements.
(15:09):
So I wouldn't say anymore about that one other than
it's broadly on the same sort of terms as we
would have with any of our major customers.
Speaker 1 (15:14):
Okay, And so I mean this is it does represent
to change and strategy for the cooperative, and you know,
we just love to hear a bit more about that
sort of moving more into the ingredients business and the
food service that we have heard a lot about that
and just just interested in how you're sort of articulating
that and how that's been picked up.
Speaker 3 (15:33):
Yeah, it is interesting. I think I think a lot
of people thought our strategy was to divest of consumer, right,
which is not the strategy. Right. The strategy has been about,
you know, it has been about us being clear about
what it is that we are as a co op
and there's a co op, what we're here for is
end to end value for the farmer, and sometimes that's
about getting milk price and sometimes that's about earnings. But
(15:56):
actually for us, we're a co ops and we're sort
of ambivalent between the two of them, but actually that's
what we're trying to maximize. What well maximizes the milk
price and the earnings that that goes along with it.
And so our strategy is that, well, then how do
we do that, how are we best place to be
able to do that? But also at the same time
being clear that we don't just play a financial role
(16:17):
for the farmer. We also play quite a big risk roll.
And so you know, we know we have a network
of assets that means that we will always come and
pick up the milk and we will always pay for
it on the fifteenth of month. And then we have
a network of assets which allows us to then turn
that into the most profitable setup of products. Right. We
have asset flexibility, which gives us optionality depending on you know,
(16:38):
how the markets are looking, we can choose to make
different things. We also have a whole heap of assets
that we can use so that we're not dependent on
just one in one area. Or any of that sort
of stuff. So that flexibility, so that does actually a
lot of risk mitigation on behalf of the farmer as well.
So the farmer offering is something that is super important.
How do we make sure that we are the most
compelling offer. That's what we want to make sure because
(16:59):
you know, co op of scale is important to the industry,
we believe, so we look at it from that perspective.
And then the two channels that are the best return
for us is ingredients and food service and consumer. You know,
despite the fact that you know, we've had a really
good improvement in the performance over the past few years,
it's still less than farmers cost the capital. That's the
(17:21):
sort of return that we're getting on there. So it
doesn't make sense for us to retain that business when
we have other channels that we can get a better
return in. And it's not about us saying that it's
a bad business, because it's not. It's a great business.
But we have another one that gives us better returns.
And so our choice is not to say, hey, do
you want a B or C. It is between between
(17:42):
those what is the best mix, And for us, that
becomes about ingredients of food service, So ingredients, you know,
that's always I mean, it's where we make the vast
majority of our profit. It always has been. There is
so much demand there for high value ingredients, advanced proteins,
medical grade nutrition is very important now more so, and
people want natural nutrition. And the business that we have
(18:04):
within food services, you know, we have great product sets
and they have great functionality that is valued by chefs,
and that's essentially who is choosing these food service products.
Our business is quite heavily in China, and I'd love
to see us do a bit more outside of China
in that food service space. But you know, again there's
plenty of opportunity out there as well, so that's where
(18:25):
we get the best returns. We're also it's a B
to B business. It's a simpler business. We can be
more agile, and that allows us to really develop long
term partnerships with our customers. That's where we focus our innovation.
That's where we focus. Are you our resources is about
getting good long term relationships. That's what actually creates value.
Speaker 1 (18:43):
So we're looking at these, you know, these two primary
verticals now of the ingredients business and the food service
Like what's what is the sort of size of the
growth opportunity ahead of you there.
Speaker 3 (18:55):
Yeah, I mean I think they're quite different markets. Obviously.
Let's start with with ingredients. The demand for things like
protein is just not stopping, you know, like you could
have called it a fad, but it's ten years right,
and it's even in the US at the moment, the
demand for protein is twenty percent Kegart like, it's not
every podcast is everything people are talking about protein, right,
and you pick up the drinks and it's things. Because
(19:16):
I think what's happening is that, you know, people are
looking for nutrition, they also want natural nutrition, and dairy
is is very nutritionally dense, which is tremendous but also
seen as relatively natural, and particularly if you look at
New Zealand where it's pasture fed, grass fed, right, so
it's got an added element of that good for me
space in there. Like it's it's definitely something that's that's
(19:37):
that's been around for a while and we certainly see
it staying. But people are the way that they're consuming
dairy is changing. So you know, when I was growing up,
we drank milk. That's not what people are like. People
are not doing that as much anymore, they'll have a
protein powder or a protein shake or a protein bar
or that, or it will be added into something else.
I don't know. I mean, I don't think there's a
product you can pick up anymore that doesn't have an
(19:58):
extra protein version. The demand for ingredients is incredibly high,
and I just don't see that that not in the
certainly not in the medium term that I don't see
that changing. And it suits us for quite a few
different spaces. But one, so it's the components of dairy
that become important rather than just hey, there's a glass
of milk. That's like, oh, there's protein and that there's fat,
And it's about about those components for you to.
Speaker 1 (20:20):
Say like you've sort of got a market shaer growth
opportunity as well as just the market growth probably.
Speaker 3 (20:26):
So it will be switching like it's it's different, right. So,
so what that will mean for us is less commodity
whole milk powder and more advanced ingredients.
Speaker 1 (20:34):
Right.
Speaker 3 (20:35):
And maybe some of the other places where dairy is
growing in the world might pick up some of that
commodity milk price powder, but for us, the return is
much higher in the other space. So we'll see that
shift and we're certainly seeing that play out and that's
the way that again for us, we help it helps
us to continue to grow. We're getting more value out
of dairy. And what about food service side, Yeah, food
service I think is obviously slightly different. I mean, you know,
(20:56):
we have we have quite a China concentration is probably
the way think about it from a business standpoint. At
the moment, there is lots of geographical opportunity. If I
look at markets such as Korea, for example, they're definitely
increasing in terms of dairy consumption, but doing it in
a relatively similar way than actually some of the Western
markets work. So it's the same sort of stuff, so
(21:17):
that you know, it is mozzarella, and it's you know,
it's cream cheese, and like, it's those spaces where it's
not different, it's not that different, So there's an opportunity
to go in there and get those And also, you know,
if you look at the Korean market, they're sort of
used to the New Zealand color of the product and
the flavor of the product, which is different to what
(21:38):
you would get from a European one, for example. So
it's quite interesting how different those things are. So I
think there's opportunity in markets that we're not particularly present
in the moment, like Korea, but we do have, you know,
a reasonable business in Southeast Asia that I think there's
just so much more opportunity. But it's about localizing for
local flavor profiles and those sorts of things. And that's
(21:59):
the one thing we have very well in China is
that we actually innovate locally in China, because one, you
get the speed of it, and you know, China's economy
is fantastic. It moves so quickly, the trains move so quickly, right,
and in two weeks it'll be something different. And if
you're not able to keep up with that, even in
particularly in things like food, because people will see something
in TikTok and they're like, well, well, I want to
(22:19):
eat that, and then in two weeks it's something different,
you've got to be able to locally innovate. And I
think there's an opportunity for us to do that through
Soctea Stagia as well, which allows us just to get
a product like dairy, but make it something that's more
in line with how people want to consume it, and
that will be a little bit different. In different space.
Speaker 1 (22:38):
If Fontier clicks more than three quarters of the country's
milk the moment, the fan gate, but there's plenty of
competition sort of out there by at the heels. And
I think the annual report showed this time that you
actually had lost some market share. Like what's the sort
of strategy in thinking around that?
Speaker 3 (22:52):
Yeah, so so I mean we did lose a little
bit of market share, I think, and we have done
for a little while. So you know, the whole I
think in having you know, deregulated the industry as it
were and opened up is that actually we allow is
to allow for competition, and we've seen that come in
and some process have done better than others, to be honest.
(23:14):
So we're in that space now where it's healthy to
have competition. We like to have competition, you know, for supply,
but ultimately we also believe that we have a really
compelling offer. So we do want to continue to grow milk,
and I think we can move back and actually take
a bit more market share, but ultimately we're here for
the good of the industry and I think you know,
a corp of scally helps in that space.
Speaker 1 (23:34):
Let's talk about little bit of the future. What's the
sort of the key priorities over the next twelve months,
and you know, a little bit longer as well, like
what do you see five years out is the evolution
of the corp.
Speaker 3 (23:44):
But I mean the next twelve months, hopefully we're going
to be divesting your consumer business. Let's assume that we
get the vote through, so that's obviously going to take
up a lot of time. And the other big thing
that we're doing, actually those two big ones. One is
we are we are replacing your core ERP as well,
so our SAP platform. We're doing an EARP implementation. They're
(24:05):
always quite fraught and sometimes they.
Speaker 1 (24:08):
Have through that.
Speaker 3 (24:10):
We just we're going to first go live in November,
right and so touch without At this point in time,
we're on track and on budget. But let's let's see
a huge amount of effort going into that. That'll be
quite transformed because it sets another good platform for us
to leverage data and AI in a different way than
we can now, so it's actually really helpful for us.
And then we've got a couple of big capital investments
that we've done that come online in the next tree
(24:32):
of months as well, so we've got a new advanced
protein cape capacity at Studham and we've also got a
new UHT line coming in at Edendale as well, so
that allows us one of those is really focused on
ingredients and the other ones focused on food service, so
that those investments comes on, they give us the capacity
to continue to grow in that space. So that's definitely
what that looks like. So, you know, twelve months a
(24:54):
wee busy. I reckon that. You know, five years, I
don't think it's going to be anything crazy different because
actually our strategy is so clear to us now that
actually they were just continuing to execute on it. Things
will change, obviously, but but actually the core of the
strategy is right. The one thing that that's probably a
little bit different to what we've done in the past
is I mentioned it briefly earlier. We do see an
(25:15):
opportunity for us to to amp up a little bit
in the financial trading space. So you know, how do
we use you know, those financial markets to try and
take one to take volatility out of our earnings, but
two actually as an ending stream, So you know, how
can we use the knowledge that we have around the
markets to be able to effectively you know, trade in
(25:38):
those markets, but trade in them as as financial markets
rather than just trading the actual commodity itself, knowing of
course that we can always you know, back that up
with with the commodity if we need to, because we'll
make the product. So it gives us actually quite a
nice different value stream which I think could provide us
with a nice bit of opportunity that we've not really
looked at too much in the past.
Speaker 1 (26:00):
Super interesting. Hey, thanks so much for joining us, Andrew,
really appreciate your time and best of luck with a
year here and congratulations on a great twelve months.
Speaker 3 (26:07):
Thank you, Yeah, appreciate it.
Speaker 1 (26:09):
Thanks for tuning in. You can watch Shed Lunch on
YouTube or wherever you get your podcasts.
Speaker 3 (26:14):
Catch you soon.
Cureda and welcome to Shared Lunch brought to you by
shares E's. My name is Leighton Roberts, and today I'm
at the headquarters of Fonterra in Auckland, and I'm joined
by their new CFO, Andrew Murray. Andrew's just delivered the
cooperative's four year results and the pending sale of Mainland
Group and the consumer business. Before we get started, here's
(00:26):
some important information.
Speaker 2 (00:27):
Investing and involves the risk you might lose the money
you start with. We recommend talking to a licensed financial advisor.
We also recommend reading product disclosure documents before deciding to invest.
Everything you're about to see and here is current at
the time of recording.
Speaker 1 (00:41):
Welcome Andrew, Thanks so much for joining us today.
Speaker 3 (00:44):
No problem. I'm glad that you guys got a chance
to come down to our lovely headquarters.
Speaker 1 (00:47):
Yeah, yeah, no, we appreciate you having us and nice
to have a return trip and make it regular. So
you're new to the CFO role, we'd love to hear
a little bit first about you and what brought a Scott's.
Speaker 3 (01:00):
And to Frontier Dairies new for me? So I'm I
guess I'm about two and a half years in the
co op now and just over a year in this role.
I spent most of my career actually in consumer goods actually,
so in various different parts of the world. And just
before I started at Fonterra, I did a few years
(01:20):
in a US agri business And you know, I'll probably
regret saying this at some point, but geez, the agribusiness
bit was much harder than consumer right, Like, if you've
got to grow your commodities instead of buying them, it
does make things a little bit more interesting and you
can never really predict the weather, so it adds an
extra layer of complexity. And so I really enjoyed that
agri space. And so I was in based in Australia
(01:42):
at the time, and I got approached to the role
at Fonterra, and to be honest, it wasn't an organization
I particularly knew. There's not as many places, you know,
even in Australia actually, but certainly for New Zealand that
you get to have the same sort of global scale
and reach that Fonterra does and that was really attractive.
So that's sort of brought me in and and the
industry is fascinating, right like it's a lot at play.
(02:05):
There's huge amounts of opportunity still and yeah, that's that's
always quite attractive.
Speaker 1 (02:09):
Yeah, it's always great to hear about opportunity. So a
year into the group CFO role, I think prior to
that was heat of global markets.
Speaker 3 (02:16):
Yeah, yeah, global markets, Yeah, which is I guess a
lot of our consumer business actually, but but but also
food service and ingredients.
Speaker 1 (02:22):
So right, and how's how's the first year being in
the in the hot seed if you like?
Speaker 3 (02:26):
Yeah, it's it's it's been really good. Actually, I think
I'm very fortunate to have quite a broad rule. So yeah,
we've got core finance in there, but I also have
the group strategy, have a transformation, I have it, you know,
so so it's actually quite broad from that perspective, and
I think that's a that's the evolution of a CFO rule.
I think that's where things are heading, where it's actually
(02:47):
much more broad than just being about finance.
Speaker 1 (02:50):
And biground more finance, is it, yeah.
Speaker 3 (02:52):
Almost exclusively? Yeah, yeah, I mean I've always I've always
had again relatively broad finance rules. So it's it's finance
plus and I think that's you know, for me actually
that's the core of what a CFO is there to do. Right,
It creates space for the CEO to focus much more
on this sort of external and those things, whereas the
CFO can actually do a lot of that's you know,
(03:12):
the strategy, the execution, managing a lot of the complexity
and risk. And I think that partnership for me certainly
has worked really well. And that's something that I've had
the opportunity to do at the co op as well.
So having that broad space, as I said, I think
it's part of what a CFO role has evolved into.
But it's what makes it really really interesting and to
be able to work on stuff that is super long term,
(03:34):
like you know, our asset footprint or innovation, you know.
But then at the same time, you know, you're also
paying the bills. You know. It's it's quite nice, but
it gives you, It keeps things well, it keeps things interesting.
But actually it's I think one of the few roles
and actually has said this to my lead team earlier
this year we were having a conversation about what are
we here for. It's one of the very very few
(03:56):
spaces where you get to see the whole of the
enterprise that is not a part to the organization that
we don't see and we don't get involved in. It
gives you an opportunity to make connections and to see
things that actually other people don't necessarily get an opportunity
to see, and that you know, that puts a setlement
of responsibility on you then for actually driving outcomes and
driving the execution of what is a strategy. So yeah,
(04:20):
it's been really energizing to be able to do that.
And I think what we are seeing is that our
strategy is working and I've got some good results.
Speaker 1 (04:27):
Yeah, I mean, let's get straight into it. The end
could just give us a rundown on the numbers.
Speaker 3 (04:31):
Yeah, for sure, a really good set of results for
the co op. You know, we had a we had
a very strong farm gate milk price, so we ended
up at ten dollars sixteen. That was up from seven
dollars eighty three the year before, so a big What.
Speaker 1 (04:44):
Was that compared to like early forecasts like how much
high it was.
Speaker 3 (04:48):
The O Yeah, look it was it. It was up. So,
I mean we started relatively little, but we went up
relatively you know, early in the year. So we knew
pretty early on we thought it was going to be
a strong year, so you know, we ended at ten
dollars sixteen. You know, we sort of hovered around ten
dollars for quite a while and we just came in
slightly better than that at the end, which is good.
(05:08):
There's always variability, right, I mean, the markets move often,
and we have a lot of you know, it's not
just the commodity prices, the affx that goes with it,
and then there's you know, we do quite a bit
of financial trading as well to try and manage some
of that volatility. So you never know until the last
minute exactly what it's going to be. But I've got
a good result, right, and then if I look at
what we delivered, you know, on top of that and
(05:30):
the value created within the co op, then our operating
profit was up thirteen percent year on you so just
about one point seven billion, and we were able to
do a final sorry full year dividend of fifty seven
cents this year, which was up from the highest the
co ops ever paid and now fully imputed as well,
so we're giving the imputation credits, which again the cop
(05:52):
hasn't done in the past, so quite some decent moves
there are just in terms of underlying performance of the business,
and we're seeing it actually in all parts the business
as well.
Speaker 1 (06:00):
Interesting sort of counter cyclical as well, and that you
look at what else is happening around the economy. Is
one of the things I've always been fascinated by is
like how few people realize just how big Frontier is
is an organization. But also the impact that you know,
agriculture broadly has on our economy. So like any early
(06:22):
science view on how that's starting to flow out into
communities and things like you think farmers are planning to
do some more investment from.
Speaker 3 (06:28):
Here, Yeah, look, I think that they will. I think
what's interesting, you know, if I look at cash generated
by the co op that went back to farmers this year,
sixteen point three billion, that's I think that a lot
of cash right back, And that's just that was up
from fifteen the year before. It's a big moves. What
we're seeing at the moment is obviously farmers are being
down debt, so we're definitely seeing that. And actually I
(06:51):
talked to the banks quite often and they're all like, oh,
we think this is a good idea, but actually we're
not lending. It is a bit of a double ah
side there, but definitely seeing that that there's that happening,
I think there is a very much an investment mind.
But people are definitely cautious as polyday. This is not
a you know, I'm out buying a boat or a
(07:11):
holiday house or something like that, right, this is I
can invest in the future of what my farm looks like,
I can pay down some debt. And we are definitely
seeing people that are people are looking at it in
a very can see sensible way. It's it's not frivolous.
Speaker 1 (07:25):
I mean they seem to be very good business people
like reputation of it with their mind as well.
Speaker 3 (07:29):
As Yeah, but I think there is that space around
you know that there is all of that though, flows
back into essentially rural communities, right, so they will be spending,
people will be building. They might be building a new
shared or a new you know, putting up some different
infrastructure that creates jobs in those local communities as well
as well, maybe you know, buying a tractor or two
like it all creates actually quite good movement for the
(07:53):
for the rural economy in New Zealand as well.
Speaker 1 (07:55):
And so what about guidance heading into this year. What
are you thinking on that at the moment.
Speaker 3 (07:59):
Yeah, so we've put we've had we've split our guidance
a little bit. So what we've been clear on is
what does a continuing business look like. So we have
a divestment which is coming up, so again not really
exactly sure when that will happen at this point in time,
at some point during next year if we get this
yearholder approval. So we've just given guidance for the continuing
(08:21):
business and essentially we've got a range of forty five
to sixty five cents of innings if I take that
part of the business. Last year it was fifty six,
so we're sort of in the same space. We feel
really good about being able to deliver, you know, similar
to last year, considering it was the best financial performance
the corpers ever had. And there's still plenty of volatility
(08:41):
out there, right, we do still have tarifs, We've got,
you know, what is the impact on economies from some
of the geopolitical type of uncertainty. So I think we
just got to be cautious about how some of that
stuff plays out. But certainly, you know, a strong milk
price encourages production. So we're seeing good milk flows in
New Zealand. We're seeing a bit of increased production in
(09:01):
the US and also through Latin America. So there's the
supply out there and you know that that's what sorts
through into essentially. But demand remains robust, which is a
nice space for it to be sitting at the moment.
But some of those geopolitical things, you've just got to
be careful.
Speaker 1 (09:17):
Yeah, it's a time out there. Well, I mean, that's
a great segue into the biggest news certainly, you know
it's been everywhere really, which is the sale of the
consumer business in August to the French dairy Giantlet tell
us lest list right, I'd have to work on that.
For three point eight four billion, then that's another big number.
(09:38):
Can you tell us a little bit about that? And
I actually might be a little bit higher now.
Speaker 3 (09:42):
Yeah, yeah, yeah, So four point two two billion actually
is a sale price.
Speaker 1 (09:47):
So that's an additional that's the additional deal which.
Speaker 3 (09:51):
Was for the bigger licenses that were included yet. So
we're just just sort of finalized that a couple of
days too late after we announced the rest of it.
The four point two two billion is spot's out there,
so you know a bit about the process. I guess,
you know, we we we were running dual tracks, so
there was you know, we were looking at IPO for
for quite a bit of time actually in terms of
(10:11):
coming through there, because it's an organization that business can operate.
It would have been a reasonably sizeable organization of its
own right, and so we looked at that. We got
good feedback, you know, as we put it on sort
of road shows in New Zealand, Australia up through Hong Kong, Singapore.
There was good appetite for it. But it did become
clear that you know, a trade sale as you would
(10:34):
call it, was probably going to get us some better
value and ultimately that's where we ended up. So we
feel good about about the actual value that is in there.
It's a good multiple and and a good partner actually
that wants to partner with Fonterra for the future. And
I think that's an important part of how we look
at the deal. It's not just the financials, but it's
it's you know, how what does that mean for fon
(10:54):
Terra on an ongoing basis? Was I guess a couple
of the lenses that we looked at it, but ultimately
it's good value for the assets, which which is something
that obviously, you know, that's what we want, so like
to Lisa, you know, French family owned company the world's
biggest dairy company. I think I'm pretty sure it is,
but heavily in the consumer space. So whilst we index
(11:16):
more in ingredients and in food service, l like Lise
are very much heavily over into that consumer space, and
they are you know, they've grown significantly, you know, over
the past couple of decades, I guess, and do like
to do a bit of acquisition, so I think they've
done something like one hundred and twenty seven acquisitions in
the past twenty years.
Speaker 1 (11:34):
So the seasoned operators, Yeah, without the consumer business, like
what's six sort of mean for the earnings and stuff
like when you when do you forecast at your next
feedback at the sort of y twenty five earnings with
without that business.
Speaker 3 (11:46):
That is actually something that we've we've given guidance on now,
I guess is the best way to think about it,
so we we know that I mean particularly for farmers,
but for you know, sure holders more broadly. People want
to know what the future looks like. It's all very well, here,
I'm going to give you a two dollar capital return,
but actually that's I want to know what the future
looks like. And you know farmers in general are they're
(12:08):
here for generations. They're not here for for you know,
a quick two bucks. So I think that space was
something that was important to us. So we did do
that as we put our annual results which would have
been last week, and being really clear that we believe
that if we continue to do what we have been
doing for the past you know, twelve eighteen months around
ingredients and in food service, then our growth path takes
(12:30):
us back to the same level of airnings that we
had in twenty five in twenty twenty eight, so you know,
getting back up there, but are much more efficient business
on the other end of that, so much less capital intents,
which actually allows us to put our return and capital
up you know, over that period. So whilst it's like
we're getting the same airnings but with a smaller capital base,
(12:52):
so you're getting a better return on your share from
a dividend perspective, but you're also getting you know, you're
getting the capital return, but we're also an ongoing business
which delivers a higher return on capital.
Speaker 1 (13:03):
So it's pretty much a done deal. But the sharholder
votes October thirtieth.
Speaker 3 (13:08):
Yeah, so there's a couple of I mean, there's a
couple of conditions that that's that that that that are there.
One is obviously this year holder vote, so that is
scheduled for the theatieth of October. Online voting is open.
Speaker 1 (13:19):
Now.
Speaker 3 (13:19):
That's the first sort of approval huddle. And then the
second one is that we've obviously got some regulatory approval
that that has to go as well, so we will
have you know, ohio here in in New Zealand, there's
an equivalent in Australia FORB. We've already got to the
A Triple C, which is the Ustulian Communist Commission that's
already through, which was an important part of it actually
because Lactalis already has a business in Australia that's that's
(13:42):
reasonably sizable. So making sure so the A Triple C
were as have already given the green light, right, which
is good.
Speaker 1 (13:49):
One of the sticky points for the Shilds I think
your cheer Peter McBride talked about is the double each
sword with the market wanting more details. A I think,
you know, it's a lot of commentary about it, feeling
opaiq can shouldn't need light on that.
Speaker 3 (14:04):
In terms of like ongoing supply. Yeah, yeah, yeah, it's interesting.
So I was I was actually fortunate enough to be
out on the road with Peter last week, so he
did talk about that a few times. It's fair to say,
you know, we got a lot of questions last week.
So we do found a road shows after every sort
of half year and full year results. This one was
obviously quite a heavy divestment focus, but a lot of
(14:25):
questions around that. That's sort of supply agreement and there
are two agreements, and Peter's talked about that. We have
a we have a milk a raw milk agreement, so
that's the sort of drinking milk that you pick up
in the supermarket. We have that agreement that's a ten
year agreement and it's on the same sort of you know,
terms that we have to provide because it's regulated. We
also have then a supply agreement for ingredients essentially that
(14:48):
then Lacktally schioll use to manufacture the products that they
that you know that that currently are manufactured by us,
and that's just it's a three year agreement. It has
a three year notice period, but it's on the same
and it's it's a commercial agreement, right, So I'm not
going to see much more about it, don't I don't
feel like it's a peak. But I wouldn't tell you
about any of my other customer really you know arrangements.
(15:09):
So I wouldn't say anymore about that one other than
it's broadly on the same sort of terms as we
would have with any of our major customers.
Speaker 1 (15:14):
Okay, And so I mean this is it does represent
to change and strategy for the cooperative, and you know,
we just love to hear a bit more about that
sort of moving more into the ingredients business and the
food service that we have heard a lot about that
and just just interested in how you're sort of articulating
that and how that's been picked up.
Speaker 3 (15:33):
Yeah, it is interesting. I think I think a lot
of people thought our strategy was to divest of consumer, right,
which is not the strategy. Right. The strategy has been about,
you know, it has been about us being clear about
what it is that we are as a co op
and there's a co op, what we're here for is
end to end value for the farmer, and sometimes that's
about getting milk price and sometimes that's about earnings. But
(15:56):
actually for us, we're a co ops and we're sort
of ambivalent between the two of them, but actually that's
what we're trying to maximize. What well maximizes the milk
price and the earnings that that goes along with it.
And so our strategy is that, well, then how do
we do that, how are we best place to be
able to do that? But also at the same time
being clear that we don't just play a financial role
(16:17):
for the farmer. We also play quite a big risk roll.
And so you know, we know we have a network
of assets that means that we will always come and
pick up the milk and we will always pay for
it on the fifteenth of month. And then we have
a network of assets which allows us to then turn
that into the most profitable setup of products. Right. We
have asset flexibility, which gives us optionality depending on you know,
(16:38):
how the markets are looking, we can choose to make
different things. We also have a whole heap of assets
that we can use so that we're not dependent on
just one in one area. Or any of that sort
of stuff. So that flexibility, so that does actually a
lot of risk mitigation on behalf of the farmer as well.
So the farmer offering is something that is super important.
How do we make sure that we are the most
compelling offer. That's what we want to make sure because
(16:59):
you know, co op of scale is important to the industry,
we believe, so we look at it from that perspective.
And then the two channels that are the best return
for us is ingredients and food service and consumer. You know,
despite the fact that you know, we've had a really
good improvement in the performance over the past few years,
it's still less than farmers cost the capital. That's the
(17:21):
sort of return that we're getting on there. So it
doesn't make sense for us to retain that business when
we have other channels that we can get a better
return in. And it's not about us saying that it's
a bad business, because it's not. It's a great business.
But we have another one that gives us better returns.
And so our choice is not to say, hey, do
you want a B or C. It is between between
(17:42):
those what is the best mix, And for us, that
becomes about ingredients of food service, So ingredients, you know,
that's always I mean, it's where we make the vast
majority of our profit. It always has been. There is
so much demand there for high value ingredients, advanced proteins,
medical grade nutrition is very important now more so, and
people want natural nutrition. And the business that we have
(18:04):
within food services, you know, we have great product sets
and they have great functionality that is valued by chefs,
and that's essentially who is choosing these food service products.
Our business is quite heavily in China, and I'd love
to see us do a bit more outside of China
in that food service space. But you know, again there's
plenty of opportunity out there as well, so that's where
(18:25):
we get the best returns. We're also it's a B
to B business. It's a simpler business. We can be
more agile, and that allows us to really develop long
term partnerships with our customers. That's where we focus our innovation.
That's where we focus. Are you our resources is about
getting good long term relationships. That's what actually creates value.
Speaker 1 (18:43):
So we're looking at these, you know, these two primary
verticals now of the ingredients business and the food service
Like what's what is the sort of size of the
growth opportunity ahead of you there.
Speaker 3 (18:55):
Yeah, I mean I think they're quite different markets. Obviously.
Let's start with with ingredients. The demand for things like
protein is just not stopping, you know, like you could
have called it a fad, but it's ten years right,
and it's even in the US at the moment, the
demand for protein is twenty percent Kegart like, it's not
every podcast is everything people are talking about protein, right,
and you pick up the drinks and it's things. Because
(19:16):
I think what's happening is that, you know, people are
looking for nutrition, they also want natural nutrition, and dairy
is is very nutritionally dense, which is tremendous but also
seen as relatively natural, and particularly if you look at
New Zealand where it's pasture fed, grass fed, right, so
it's got an added element of that good for me
space in there. Like it's it's definitely something that's that's
(19:37):
that's been around for a while and we certainly see
it staying. But people are the way that they're consuming
dairy is changing. So you know, when I was growing up,
we drank milk. That's not what people are like. People
are not doing that as much anymore, they'll have a
protein powder or a protein shake or a protein bar
or that, or it will be added into something else.
I don't know. I mean, I don't think there's a
product you can pick up anymore that doesn't have an
(19:58):
extra protein version. The demand for ingredients is incredibly high,
and I just don't see that that not in the
certainly not in the medium term that I don't see
that changing. And it suits us for quite a few
different spaces. But one, so it's the components of dairy
that become important rather than just hey, there's a glass
of milk. That's like, oh, there's protein and that there's fat,
And it's about about those components for you to.
Speaker 1 (20:20):
Say like you've sort of got a market shaer growth
opportunity as well as just the market growth probably.
Speaker 3 (20:26):
So it will be switching like it's it's different, right. So,
so what that will mean for us is less commodity
whole milk powder and more advanced ingredients.
Speaker 1 (20:34):
Right.
Speaker 3 (20:35):
And maybe some of the other places where dairy is
growing in the world might pick up some of that
commodity milk price powder, but for us, the return is
much higher in the other space. So we'll see that
shift and we're certainly seeing that play out and that's
the way that again for us, we help it helps
us to continue to grow. We're getting more value out
of dairy. And what about food service side, Yeah, food
service I think is obviously slightly different. I mean, you know,
(20:56):
we have we have quite a China concentration is probably
the way think about it from a business standpoint. At
the moment, there is lots of geographical opportunity. If I
look at markets such as Korea, for example, they're definitely
increasing in terms of dairy consumption, but doing it in
a relatively similar way than actually some of the Western
markets work. So it's the same sort of stuff, so
(21:17):
that you know, it is mozzarella, and it's you know,
it's cream cheese, and like, it's those spaces where it's
not different, it's not that different, So there's an opportunity
to go in there and get those And also, you know,
if you look at the Korean market, they're sort of
used to the New Zealand color of the product and
the flavor of the product, which is different to what
(21:38):
you would get from a European one, for example. So
it's quite interesting how different those things are. So I
think there's opportunity in markets that we're not particularly present
in the moment, like Korea, but we do have, you know,
a reasonable business in Southeast Asia that I think there's
just so much more opportunity. But it's about localizing for
local flavor profiles and those sorts of things. And that's
(21:59):
the one thing we have very well in China is
that we actually innovate locally in China, because one, you
get the speed of it, and you know, China's economy
is fantastic. It moves so quickly, the trains move so quickly, right,
and in two weeks it'll be something different. And if
you're not able to keep up with that, even in
particularly in things like food, because people will see something
in TikTok and they're like, well, well, I want to
(22:19):
eat that, and then in two weeks it's something different,
you've got to be able to locally innovate. And I
think there's an opportunity for us to do that through
Soctea Stagia as well, which allows us just to get
a product like dairy, but make it something that's more
in line with how people want to consume it, and
that will be a little bit different. In different space.
Speaker 1 (22:38):
If Fontier clicks more than three quarters of the country's
milk the moment, the fan gate, but there's plenty of
competition sort of out there by at the heels. And
I think the annual report showed this time that you
actually had lost some market share. Like what's the sort
of strategy in thinking around that?
Speaker 3 (22:52):
Yeah, so so I mean we did lose a little
bit of market share, I think, and we have done
for a little while. So you know, the whole I
think in having you know, deregulated the industry as it
were and opened up is that actually we allow is
to allow for competition, and we've seen that come in
and some process have done better than others, to be honest.
(23:14):
So we're in that space now where it's healthy to
have competition. We like to have competition, you know, for supply,
but ultimately we also believe that we have a really
compelling offer. So we do want to continue to grow milk,
and I think we can move back and actually take
a bit more market share, but ultimately we're here for
the good of the industry and I think you know,
a corp of scally helps in that space.
Speaker 1 (23:34):
Let's talk about little bit of the future. What's the
sort of the key priorities over the next twelve months,
and you know, a little bit longer as well, like
what do you see five years out is the evolution
of the corp.
Speaker 3 (23:44):
But I mean the next twelve months, hopefully we're going
to be divesting your consumer business. Let's assume that we
get the vote through, so that's obviously going to take
up a lot of time. And the other big thing
that we're doing, actually those two big ones. One is
we are we are replacing your core ERP as well,
so our SAP platform. We're doing an EARP implementation. They're
(24:05):
always quite fraught and sometimes they.
Speaker 1 (24:08):
Have through that.
Speaker 3 (24:10):
We just we're going to first go live in November,
right and so touch without At this point in time,
we're on track and on budget. But let's let's see
a huge amount of effort going into that. That'll be
quite transformed because it sets another good platform for us
to leverage data and AI in a different way than
we can now, so it's actually really helpful for us.
And then we've got a couple of big capital investments
that we've done that come online in the next tree
(24:32):
of months as well, so we've got a new advanced
protein cape capacity at Studham and we've also got a
new UHT line coming in at Edendale as well, so
that allows us one of those is really focused on
ingredients and the other ones focused on food service, so
that those investments comes on, they give us the capacity
to continue to grow in that space. So that's definitely
what that looks like. So, you know, twelve months a
(24:54):
wee busy. I reckon that. You know, five years, I
don't think it's going to be anything crazy different because
actually our strategy is so clear to us now that
actually they were just continuing to execute on it. Things
will change, obviously, but but actually the core of the
strategy is right. The one thing that that's probably a
little bit different to what we've done in the past
is I mentioned it briefly earlier. We do see an
(25:15):
opportunity for us to to amp up a little bit
in the financial trading space. So you know, how do
we use you know, those financial markets to try and
take one to take volatility out of our earnings, but
two actually as an ending stream, So you know, how
can we use the knowledge that we have around the
markets to be able to effectively you know, trade in
(25:38):
those markets, but trade in them as as financial markets
rather than just trading the actual commodity itself, knowing of
course that we can always you know, back that up
with with the commodity if we need to, because we'll
make the product. So it gives us actually quite a
nice different value stream which I think could provide us
with a nice bit of opportunity that we've not really
looked at too much in the past.
Speaker 1 (26:00):
Super interesting. Hey, thanks so much for joining us, Andrew,
really appreciate your time and best of luck with a
year here and congratulations on a great twelve months.
Speaker 3 (26:07):
Thank you, Yeah, appreciate it.
Speaker 1 (26:09):
Thanks for tuning in. You can watch Shed Lunch on
YouTube or wherever you get your podcasts.
Speaker 3 (26:14):
Catch you soon.
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