Fonterra Co-operative Group Limited Results for announcement to the market

Fonterra Co-operative Group Limited Results for announcement to the market Reporting Period Six months to 31 January 2009 Previous Reporting Period Six months to 30 November 2007 Revenue from sale of goods Profit (loss) from ordinary activities after tax attributable to shareholder suppliers Net profit (loss) attributable to shareholder suppliers Amount (NZD millions) Percentage change $NZ 8,035 9.6% $NIL 0% $NIL 0% Interim/Final Dividend Amount per security Imputed amount per security N/A N/A Record Date Dividend Payment Date Comments: Not Applicable Not Applicable As a co-operative, Fonterra distributes its surplus after retentions to shareholders by way of pay out to suppliers. To be followed by the balance of the information required in the report pursuant to Appendix 1

PRELIMINARY HALF YEAR REPORT ANNOUNCEMENT Fonterra Co-operative Group Limited (Name of Listed Issuer) For Current Half Year Ended 31 January 2009 Previous Corresponding Half Year Ended 31 November 2007 Appendix 1 (Rule 10.4) Preliminary Half Year Report Preliminary Half Year Report on consolidated results (including the results for the previous corresponding half year) in accordance with Listing Rule 10.4.2. This report has been prepared in a manner which complies with generally accepted accounting practice and gives a true and fair view of the matters to which the report relates and is based on unaudited financial statements which will be approved by the Board of Directors. The Listed Issuer has a formally constituted Audit Committee of the Board of Directors. Consolidated Income Statement Previous 1 CONSOLIDATED INCOME STATEMENT Current *Up/(Down) corresponding Half Year % Half Year 1.1 REVENUE FROM SALE OF GOODS 8,035 9.6% 7,334 1.2 COST OF GOODS SOLD (6,958) 8.3% (6,427) 1.3 OTHER OPERATING INCOME 56 80.6% 31 1.4 OPERATING EXPENSE EXCLUDING FINANCE COSTS AND NET FOREIGN EXCHANGE GAINS / (LOSSES) (951) 13.5% (838) (a) Selling and marketing expenses (266) 20.9% (220) (b) Distribution expenses (223) 16.1% (192) (c) Administrative expenses (312) (2.8%) (321) (d) Other operating expenses (150) 42.9% (105) 1.5 NET FOREIGN EXCHANGE GAINS / (LOSSES) 147 (1570.0%) (10) 1.6 NET FINANCE COSTS (368) 128.6% (161) (a) Finance income 57 128.0% 25 (b) Finance cost (425) 128.5% (186) 1.7 SHARE OF PROFIT OF EQUITY ACCOUNTED INVESTEES 69 (4.2%) 72 1.8 IMPAIRMENT OF EQUITY ACCOUNTED INVESTEES (62) 1966.7% (3) 1.9 PROFIT / (LOSS) BEFORE TAXATION (32) 1500.0% (2) (a) Taxation credit / (expense) 31 10.7% 28 1.10 PROFIT FOR THE PERIOD (1) (103.8%) 26 (a) Profit attributable to Minority interests 1 (103.8%) (26) 1.11 PROFIT AFTER TAXATION AND MINORITY INTERESTS ATTRIBUTABLE TO SHAREHOLDER SUPPLIERS NIL NIL Where a change in the presentational format of the financial statements has been made during the period, comparative figures have been restated accordingly January 2009 Page 1 of 5

Consolidated Statement of Total Recognised Income and Expenses 2 STATEMENT OF TOTAL RECOGNISED INCOME AND EXPENSES Previous Previous Current corresponding corresponding Half Year Full Year Half Year Appendix 1 (Rule 10.4) Preliminary Half Year Report 2.1 Cash flow hedges: (a) Net fair value gains (1,665) 354 402 (b) Transferred and reported in revenue 764 (717) (199) (c) Transferred to goodwill NIL 24 NIL (d) Tax on cash flow hedge transactions 164 102 (61) (e) Effect of tax rate change on cash flow hedge reserve NIL NIL NIL 2.2 Net investment hedges (a) Net fair value gains/(losses) (230) (178) 2 (b) Tax on net fair value gains/(losses) 41 54 NIL 2.3 Foreign currency movements (a) Foreign currency translation attributable to shareholder suppliers 335 162 (18) (b) Foreign currency translation reserve transferred to profit/(loss) 20 (1) NIL (c) Foreign currency translation attributable to minority interests 19 12 (4) 2.4 Share of equity accounted investees reserve movements (4) (1) NIL 2.5 Income and expense recognised directly in equity (556) (189) 122 2.6 Profit/(loss) for the period (before value return) (1) 294 26 2.7 Total recognised income and expense for the period (557) 105 148 3 ENTITIES OVER WHICH CONTROL HAS BEEN GAINED There have been no material entities acquired during the period. 4 ENTITIES OVER WHICH CONTROL HAS BEEN DISPOSED OF There have been no material entities disposed of during the period. 5 REPORTS FOR INDUSTRY SEGMENTS Refer to Attachment 1 January 2009 Page 2 of 5

Consolidated Balance Sheet At end of At end of previous At end of previous Current Full Year Half Year 6 CONSOLIDATED BALANCE SHEET Half Year 6.1 CURRENT ASSETS (a) Cash and cash equivalents* 751 681 974 (b) Trade and other receivables 2,581 2,216 2,452 (c) Inventories 5,095 3,288 4,037 (d) Taxation receivable 51 31 49 (e) Derivative financial instruments 538 183 520 (f) Other current assets 54 58 92 TOTAL CURRENT ASSETS 9,070 6,457 8,124 6.2 NON-CURRENT ASSETS (a) Property, plant and equipment 4,446 4,292 4,291 (b) Equity accounted investments 629 592 666 (c) Intangible assets 2,847 2,680 2,491 (d) Deferred tax asset 183 139 39 (e) Derivative financial instruments 596 103 329 (f) Other non-current assets 189 176 164 TOTAL NON-CURRENT ASSETS 8,890 7,982 7,980 6.3 TOTAL ASSETS 17,960 14,439 16,104 Appendix 1 (Rule 10.4) Preliminary Half Year Report 6.4 CURRENT LIABILITIES (a) Bank overdraft* 79 67 17 (b) Borrowings* 1,890 2,016 2,391 (c) Trade and other payables 1,324 1,271 1,168 (d) Owing to suppliers 1,806 1,069 2,726 (e) Taxation payable 42 55 60 (f) Derivative financial instruments 2,103 348 115 (g) Provisions 129 233 102 (h) Other current liabilities 14 12 8 TOTAL CURRENT LIABILITIES 7,387 5,071 6,587 6.5 NON-CURRENT LIABILITIES (a) Borrowings* 6,209 4,502 3,580 (b) Capital notes* 35 35 35 (c) Derivative financial instruments 386 155 258 (d) Provisions 77 64 45 (e) Deferred tax liability 41 288 547 (f) Other non-current liabilities 35 55 56 TOTAL NON-CURRENT LIABILITIES 6,783 5,099 4,521 6.6 TOTAL LIABILITIES 14,170 10,170 11,108 6.7 EQUITY (a) Co-operative shares 4,392 4,297 4,769 (b) Retained earnings 14 18 (166) (c) Foreign currency translation reserve 165 (1) (54) (d) Cash flow hedge reserve (825) (88) 291 6.8 TOTAL EQUITY ATTRIBUTABLE TO SHAREHOLDER SUPPLIERS 3,746 4,226 4,840 6.9 MINORITY INTERESTS 44 43 156 6.10 TOTAL EQUITY 3,790 4,269 4,996 6.11 TOTAL LIABILITIES AND EQUITY 17,960 14,439 16,104 6.12 OTHER INFORMATION (a) Debt to Equity Ratio (%) (Total Liabilities divided by Equity) 373.88% 238.23% 222.34% (b) Total number of co-operative shares (millions) 1,217 1,200 1,261 (c) Net tangible assets per security 1.89 1.51 1.61 (d) Earnings per security N/A N/A N/A * Refer to Attachment 2 for detailed note on Loans and Borrowings Where a change in the presentational format of the financial statements has been made during the period, comparative figures have been restated accordingly January 2009 Page 3 of 5

Consolidated Cash Flow Statement Current Corresponding 7 CASH FLOWS RELATING TO OPERATING ACTIVITIES Half Year Half Year 7.1 CASH FLOWS FROM OPERATING ACTIVITIES (a) Cash inflows 8,922 7,001 (b) Cash outflows (8,811) (6,183) NET CASH FLOWS FROM OPERATING ACTIVITIES 111 818 Appendix 1 (Rule 10.4) Preliminary Half Year Report 7.2 CASH FLOWS FROM INVESTING ACTIVITIES (a) Cash inflows 95 19 (b) Cash outflows (554) (286) NET CASH FLOWS FROM INVESTING ACTIVITIES (459) (267) 7.3 CASH FLOWS FROM FINANCING ACTIVITIES (a) Cash inflows 2,458 3,471 (b) Cash outflows (2,117) (3,180) NET CASH FLOWS FROM FINANCINF ACTIVITIES 341 291 7.4 NET INCREASE IN CASH AND CASH EQUIVALENTS (7) 842 (a) Cash and cash equivalents at the beginning of the period 614 115 (b) Effect of exchange rate changes on cash balances 65 NIL CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 672 957 7.5 RECONCILIATION OF CLOSING BANK BALANCE TO THE BALANCE SHEET (a) Cash and cash equivalents 751 974 (b) Bank overdraft (79) (17) CLOSING CASH BALANCES 672 957 7.6 RECONCILIATION OF PROFIT/(LOSS) FOR THE PERIOD TO NET CASH FLOWS FROM OPERATING ACTIVITIES PROFIT/(LOSS) FOR THE PERIOD (1) 26 ADJUSTMENT FOR NON-CASH ITEMS (a) Depreciation / amortisation 234 231 (b) Other non-cash items (291) (97) (c) Movements in working capital (113) 141 (d) Items classified as investing and financing activities 282 517 NET CASH FLOWS FROM OPERATING ACTIVITIES 111 818 8 NON-CASH FINANCING AND INVESTING ACTIVITIES Provide details of financing and investing transactions which have had a material effect on group assets and and liabilities but did not involve cash flows: There were no material non cash financing and investing transactions for the Group for the six months ended 31 January 2009 January 2009 Page 4 of 5

9 EQUITY ACCOUNTED INVESTMENTS IN ASSOCIATES MATERIAL INTERESTS IN CORPORATIONS NOT BEING SUBSIDIARIES (a) The Group has a material (from Group's viewpoint) interest in the following corporations: Appendix 1 (Rule 10.4) Preliminary Half Year Report Name Percentage of ordinary shares held at end of Half Year Contribution to net surplus (deficit) after tax Equity Accounted Previous Previous Associates Current Corresponding Current Corresponding Half Year Half Year Half Year Half Year Equity Accounted in current year DairiConcepts Management, LLC 50.0% 50.0% AFF P/S 25.0% 25.0% Dairy Industries (Jamaica) Ltd 50.0% 50.0% Corporation Inlaca C.A. 25.0% 25.0% Earnings Earnings DPA Manufacturing Holdings Ltd 50.0% 50.0% $69 $72 Dairy Partners Americas Brasil Limitada 50.0% 50.0% Impairment Impairment Dairy Partners Americas Argentina S.A. 50.0% 50.0% ($62) ($3) Dairy Partners Americas del Ecuador S.A. 50.0% 50.0% Net Contribution Net Contribution DMV Fonterra Excipients GmBH & Co KG 50.0% 50.0% $7 $69 Britannia New Zealand Foods PVTE Limited 49.0% 49.0% Shijiazhuang San Lu Group Company Limited 43.0% 43.0% RD1 Limited 50.0% 50.0% 10 (b) In August 2008, Fonterra became aware that certain milk products manufactured in China had been contaminated. This included products sold by Shijiazhuang San Lu Group Company Limited ("San Lu"), a company in which Fonterra has a 43% interest. As a result of issues associated with the contamination, Fonterra recognised an impairment charge, for the 14 months ended 31 July 2008, of $139 million against the carrying value of the investment in San Lu. The remaining investment in San Lu of NZD 62 million has been written down to zero in the six month period ended 31 January 2009. OTHER INFORMATION If no report in any section, state NIL. If insufficient space below, provide details in the form of notes to be attached to this report. (a) Material factors affecting the revenues and expenses of the Group for the current half year Refer to Attachment 3 (b) Significant trends or events since end of current half year On 10 March 2009 Fonterra Co-operative Group Limited issued $800 million of six year unsecured fixed rate bonds. There were no other material events subsequent to 31 January 2009 that would materially impact these financial statements. (c) Management's discussion and analysis of financial condition, result and/or operations Refer to attachment 3 (d) Significant Accounting Policies Fonterra Co-operative Group Limited ( Fonterra or the Company ) is a co-operative company incorporated and domiciled in New Zealand. Fonterra is registered under the Companies Act 1993, and the Co-operative Companies Act 1996, and is an issuer for the purpose of the Financial Reporting Act. The consolidated interim financial statements of Fonterra, as at and for the six months ended 31 January 2009, comprise Fonterra and its subsidiaries (together referred to as the Group ) and the Group s equity accounted investees. The consolidated interim financial statements comply with New Zealand Generally Accepted Accounting Practice ( NZ GAAP ) and have been prepared in accordance with New Zealand Equivalent to International Accounting Standard ( NZ IAS ) 34: Interim Financial Reporting. The consolidated interim financial statements also comply with International International Accounting Standard ( IAS ) 34: Interim Financial Reporting. The consolidated interim financial statements should be read in conjunction with the financial statements for the 14 months ended 31 July 2008. The accounting policies used are consistent with those used to prepare the financial statements for the 14 months ended 31 July 2008 and the half year report for the six months ended 30 November 2007. There have been no changes in accounting policy during the interim period. Due to the seasonal nature of Fonterra s business, the final Milk Price can only be calculated at the end of the financial year. For the purpose of the consolidated interim financial statements it is assumed that 100% of profit attributable to shareholder suppliers for the six months to 31 January 2009 will be paid out as Payout to shareholder suppliers. At year end the Payout to shareholder suppliers is based on the amount declared by the Directors. The consolidated interim financial statements are presented in New Zealand dollars ( $ ), which is the Company s functional and presentation currency, and rounded to the nearest million. The Group is primarily involved in the collection, manufacture and sale of milk and milk derived products and is a profit oriented entity. January 2009 Page 5 of 5

Fonterra Co-operative Group Limited For the six months ended 31 January 2009 Attachment 1 5) SEGMENT REPORTING The Group has four reportable segments that are defined by product type and geographic area to reflect how the Group s operations are managed. The Commodities & Ingredients segment includes the manufacturing business in New Zealand together with the integrated offshore supply chain, manufacturing operations and specialty ingredients business. Commodities & Ingredients generates its revenue primarily from ingredient milk products. All other reportable segments generate their revenue primarily from consumer products and exclude any part of the Group s operations that is included within Commodities & Ingredients. Transactions between segments are based on estimated market prices. Reportable segment Commodities & Ingredients ANZ Asia / AME Latam Description Includes New Zealand Milk Supply, New Zealand Manufacturing, Sales and Operations Planning, Global Trade, Global Supply Chain, Fonterra Ingredients and Specialty Ingredients operations in North Asia, North America and Europe (including equity accounted investments), and Corporate. Represents operations in New Zealand (other than those included in Commodities & Ingredients) and Australia (including Milk Supply and Manufacturing). Represents operations and equity accounted investments in Asia (excluding North Asia), Africa and the Middle East. Represents operations and equity accounted investments in South America. Commodities & ANZ Asia / Latam Eliminations Total $ million Ingredients AME Group Segment revenue and assets For the six months ended and as at 31 January 2009 (unaudited) External revenue 4,965 1,504 1,208 358-8,035 Inter-segment revenue 923 461 40 37 (1,461) - Total revenue 5,888 1,965 1,248 395 (1,461) 8,035 Total assets 12,121 3,876 1,629 1,020 (686) 17,960 For the six months ended and as at 30 November 2007 (unaudited) External revenue 4,880 1,345 788 321-7,334 Inter-segment revenue 767 236 24 23 (1,050) - Total revenue 5,647 1,581 812 344 (1,050) 7,334 Total assets 11,217 3,610 1,382 674 (779) 16,104 i

Fonterra Co-operative Group Limited For the six months ended 31 January 2009 Attachment 1 Segment reporting (continued) $ million Commodities & Ingredients ANZ Asia / AME Segment revenue and assets For the 14 months ended and as at 31 July 2008 (audited) Latam Eliminations Total Group External revenue 13,517 3,302 1,904 789-19,512 Inter-segment revenue 2,009 696 84 53 (2,842) - Total revenue 15,526 3,998 1,988 842 (2,842) 19,512 Total assets 9,061 3,737 1,374 892 (625) 14,439 To complete segmental profit analysis for the Group, it is necessary to calculate Milk Price. Due to the seasonal nature of Fonterra s business, the final Milk Price can only be calculated at the end of the financial year. Accordingly, segmental profit analysis is not prepared for the half year reporting periods, and is only presented for the 14 months ended 31 July 2008. $ million Commodities & Ingredients ANZ Asia / AME Segment profit For the 14 months ended and as at 31 July 2008 (audited) Latam Eliminations Total Group Segment operating profit before depreciation, amortisation and nonrecurring items 824 266 96 119 (36) 1,269 Depreciation (362) (75) (8) (20) - (465) Amortisation (78) (1) (1) (1) - (81) Share of royalty income 2 1-17 - 20 Non-recurring items (156) 12 (1) - - (145) Segment profit before finance costs, equity accounted income and tax 230 203 86 115 (36) 598 Share of profit of equity accounted investees 137-7 14-158 Impairment of equity accounted investees - - (142) - - (142) Segment profit before finance costs and tax 367 203 (49) 129 (36) 614 Unallocated finance income 76 Unallocated finance costs (443) Unallocated tax income 47 Profit for the period (before Value Return) 294 ii

Fonterra Co-operative Group Limited For the six months ended 31 January 2009 Attachment 2 6) LOANS AND BORROWINGS 6 months to 6 months to 14 months to 31 Jan 2009 30 Nov 2007 31 July 2008 $ million Unaudited Unaudited Audited Balance at beginning of period 6,553 5,160 5,160 New issues Loans drawn 898 58 627 New finance leases 22 - - Commercial paper issued 729 2,061 4,958 Medium term notes issued 668-445 2,317 2,119 6,030 Repayments Bank lending (17) (525) (916) Finance leasing (23) (17) (126) Commercial paper matured (1,776) (804) (4,129) Medium term notes matured (57) (3) (10) (1,873) (1,349) (5,181) Other movements Amortisation of debt 37 15 105 Changes in fair value 168 41 34 Changes due to foreign exchange 932 20 405 1,137 76 544 Balance at end of period 8,134 6,006 6,553 Represented by: Current borrowings 1,890 2,391 2,016 Non-current borrowings 6,209 3,580 4,502 Capital notes 35 35 35 8,134 6,006 6,553 Net interest bearing debt position Total borrowings 8,134 6,006 6,553 Cash and cash equivalents (751) (974) (681) Long term interest bearing advances (102) (79) (79) Bank overdraft 79 17 67 Net interest bearing debt 7,360 4,970 5,860 Less carrying value of derivatives used to manage foreign exchange movements on debt (561) 212 70 Net interest bearing debt after deducting derivatives used to manage foreign exchange movements on debt 6,799 5,182 5,930 The following table explains the impact of other movements in loans and borrowings on the income statement: Total non-cash movement in loans and borrowings 1,137 76 544 Less amount recognised directly in FCTR (281) 8 (141) Less amount offset by derivatives used to manage foreign exchange movements on debt (782) (69) (298) Net pre-tax impact on profit or loss 74 15 105 The amount recognised directly in FCTR relates to translation of subsidiary debt and debt that has been designated as net investment hedges. The amount offset by the derivatives used to manage foreign exchange movements on debt relates to both realised and unrealised derivative contracts held throughout the period. The unrealised portion only remains on balance sheet as at reporting date. Any realised portion will be offset as a repayment of borrowings during the period. i

Fonterra Co-operative Group Limited For the six months ended 31 January 2009 Attachment 3 10a/c) Media Release i

Media Release 24 March 2009 FONTERRA ANNOUNCES SOLID HALF YEAR FINANCIAL RESULT Financial performance driven by seasonal factors, stronger contribution from regional consumer businesses and the lower Kiwi dollar Payout forecast for season unchanged at $5.10 per kgms Fonterra Co-operative Group announced today its financial results for the six months to January 31, 2009. Because of a change to the annual balance date last year, the result is affected by seasonal factors. The latest half year covers the period August 2008 to January 2009 and includes two additional high production months (December and January), distorting comparisons with the previous half year which went from June 2007 to November 2007. Highlights of the half-year result include: Revenue was up 9.6% to $8.0 billion. The higher revenue was driven by the inclusion of two high sales months due to the change in balance date, stronger contributions from Fonterra s regional consumer businesses, and the lower Kiwi dollar - offset by lower global dairy prices. - Commodities & Ingredients revenue up 2% to $5.0 billion. - Australia/New Zealand revenue up 12% to $1.5 billion. - Asia/Africa Middle East revenue up 53% to $1.2 billion. - Latin America revenue up 12% to $358 million. Adjusting for timing factors and including exchange hedging, total revenues would have been down by 7.6%, reflecting the lower international dairy commodity prices. Operating expenses as reported were up 13%. Adjusting for seasonal and currency factors, operating expenses would have been down by 2%. Debt gearing at January 31, 2009 was 61.5%, compared with 57.4% at July 31, 2008. The increase primarily reflects: - The cost of carrying higher inventories over the season s peak; - The devaluation of the New Zealand dollar which resulted in foreign currency debt increasing when converted to NZD. Although the Group has an offsetting hedge on the foreign debt, this hedge is recognised in the accounts as an asset and not as a reduction in debt; - And the higher-than-usual advance rate percentage Fonterra has been paying farmer-shareholders this season, which resulted in more than $700 million extra in payments to farmers over and above the normal payment schedule. Debt gearing is expected to reduce to more normal levels by year-end as working capital requirements ease due to the normal seasonal cycle and with other initiatives such as a freeze on non-essential capital expenditure. Additionally, the requirement announced last October that farmers must bring their shareholdings fully in line with this season s milk production is expected to bring in around $400 million of additional equity by the end of the financial year offsetting forecast share redemptions. By paying back short term loans and taking out longer term borrowings, average debt maturity has increased, putting the Co-operative in a stronger position to face uncertain times in financial markets. As at January 31, the weighted average length of borrowings was 4.1 years - up from 3.3 years at July 31, 2008. As at March 31, Fonterra s successful retail bond issue in New Zealand has extended the company s average maturity to 4.7 years. The payout forecast for the 2008/09 season is unchanged from the revised forecast of $5.10 per kilogram of milksolids (kgms) announced in late January. This would be Fonterra s third highest payout. Chairman Henry van der Heyden said the interim result was satisfactory given the global economic meltdown and its impact on dairy markets. Despite this climate, our payout is still forecast to be $5.10, and our result shows Fonterra to be in reasonable shape given the turmoil in the world economy - it s a tough time for everyone and Fonterra is no exception. We have taken, and will continue to take, the tough decisions to manage the business prudently in the current climate and get our farmers the highest payout. - ENDS - For further information contact: Fonterra Communications

Phone: +64 21 507 072 About Fonterra Fonterra is the world s largest dairy exporter, with annual revenues of about NZ$17 billion*. As New Zealand s largest and truly multinational business, Fonterra trades in 140 countries. Our portfolio includes dairy ingredients, liquid and powdered milks, cultured foods and yoghurts, butter, cheese and specialty foodservices products. Our brands include Anchor, Anlene, Anmum, Fresh n Fruity, Mainland, Peters, Brownes, Tip Top, and Chesdale. * Fonterra reported revenues of NZ$19.5 billion for 14 months ended 31 July 2008. If this material is not relevant to your purpose, you may wish to prevent further deliveries via email. To opt-out, please click this link.