Fonterra Co-operative Group (FCG) Q3 2025 earnings summary

Executive summary

• Q3 normalised profit after tax reached $1,158m, up 11% year-over-year, with normalised EPS at 70c, driven by higher operating profit and strong Ingredients and Foodservice performance.

• Operating profit for Q3 was $1,740m, an increase of $267m from last year.

• Strategic focus remains on Ingredients and Foodservice channels, with divestment of global Consumer and associated businesses progressing as planned.

• Consumer segment saw 6% volume growth and a 29% increase in normalised operating profit to $319m.

• Foodservice Q3 operating profit grew 52% year-over-year, with YTD sales volume up 9%, though normalised operating profit was $55m below last year's record.

Financial highlights

• Operating profit increased 20.3% year-over-year to $1,732m from $1,440m.

• Revenue rose 15.9% to $19,699m, with gross profit up 10.9% to $3,389m.

• Earnings per share increased to 70c from 62c year-over-year.

• Interim dividend of 22c per share paid in FY25.

• Gross margin slightly decreased to 17.2% from 18.0% year-over-year.

Outlook and guidance

• FY25 normalised earnings per share guidance narrowed to 65–75c, with midpoint lifted to 70c, assuming flat Q4 earnings due to seasonality and higher input costs.

• Maintained 2024/25 Farmgate Milk Price forecast range of $9.70–$10.30 per kgMS, midpoint $10.00.

• Announced 2025/26 opening Farmgate Milk Price forecast range of $8.00–$11.00 per kgMS, with opening forecast at $10.00.

• Capital return to shareholders and unit holders targeted post-divestment.

• Q4 in-market channel performance expected to be up on prior year, but offset by seasonality and cost increases.