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Fonterra CEO Theo Spierings to step down

Author
NZ Herald,
Publish Date
Wed, 21 Mar 2018, 11:31AM
The Fonterra CEO has been in charge for seven years. Photo / Jason Oxenham
The Fonterra CEO has been in charge for seven years. Photo / Jason Oxenham

Fonterra CEO Theo Spierings to step down

Author
NZ Herald,
Publish Date
Wed, 21 Mar 2018, 11:31AM

Fonterra chief executive Theo Spierings has resigned and will step down later this year.

The cooperative's chair John Wilson made the announcement at the Fonterra results this morning.

Speaking at the end of a presentation on its first-half results, Wilson said the board had started a global search for a new chief executive late last year and the board had decided to bring forward the announcement of Spierings's departure after some seven years in the role.

"We are in the process of the CEO succession plan, and we're committed to the smooth transition to the next chief executive," Fonterra said. "We do envisage that even with the new CEO, Theo remains in an advisory role."

Spierings said he was approaching the seven-year mark and it had been "quite a ride" but when he came in he could see Fonterra was the envy of the dairy world and that was still the case.

"Fonterra remains close to my heart," Spierings said.

Five to seven years was a normal period of tenure, he said, adding of the future that he would like to focus on a better world rather than a bigger job.

Wilson said the decision was not a reaction to the cooperative's performance, saying "Theo has delivered extraordinary value".

Spierings would continue in the role until a new chief executive was appointed and was likely to continue in a consulting role during the handover process.

This comes off the back of Fonterra's result, which showed an after-tax loss of $348 million in the first half to January 31, down 36 per cent.

READ MORE: Fonterra posts net loss of $348m on back of Beingmate impairment 

However, board chairman John Wilson said the loss included a one-off Danone settlement and a write-down of the value of its Beingmate investment and its normalised profit is $248 million.

"While our reported net profit after tax shows a loss of $348 million, it includes the payment to Danone and the Beingmate impairment," Wilson said.

"As these are one-off events, our normalised net profit after tax of $248 million is a better reflection of our underlying operating performance for the half year."

The company said it had written down the value of its investment in Beingmate by $405 million to $244m. Beingmate, which develops and sells children's food and infant milk formula in China, in January downgraded its earnings for 2017 to a loss of $171–$214m.

"Our shareholders and unitholders will be rightfully disappointed with this outcome. Beingmate's continued under-performance is unacceptable," Wilson said.

The result also accounted for the $183 million settlement to French food company Danone after Fonterra's precautionary recall of whey protein in August 2013.

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