Synlait Milk Limited, Annual Meeting 2025

November 10^th 2025

Synlait Milk Limited (SML)

The company will hold its Annual Shareholders Meeting at 1.00pm Friday 21 November 2025.

The location is Bealey Rooms 4 and 5, Te Pae Christchurch Convention Centre, 188 Oxford Terrace Christchurch.

You can also join the meeting online at this link.

Company Overview

Synlait was co-founded by Dr John Penno in 2000. By 2005, the company owned eight farms and in 2007 constructed its first plant at Dunsandel Dairies, one of its larger farms. In 2010, Bright Dairy China took a major stake in the company and in 2013 SML listed on the NZX, also listing on the ASX in 2016.

During the FY24 year, the company held two Special Shareholder Meetings to approve a loan of $130 million from Bright Dairy to repay bank loans and also approve Placements to Bright Dairy and a2 Milk.

Following a recapitalisation in September 2024, Bright Dairy are now the largest shareholder at 65.5% (up from 39%) whilst a2 Milk maintained their shareholding at 19.8%.

Following the September Special Meeting, the company no longer operates under an NZX waiver that allows Bright to appoint a number of directors in excess of its shareholding. With Bright now owning an outright majority, it is clear this is no longer required.

In October 2025, the company advised that the Overseas Investment Office (OIO) had granted global healthcare leader, Abbott, consent under the Overseas Investment Act 2005 to acquire the company’s remaining North Island assets. Synlait announced the conditional sale last month. The North Island assets include:

• the Pōkeno manufacturing facility
• the company’s blending and canning facility on Richard Pearse Drive
• the warehouse facility on Jerry Green Street
• associated inventory and leasehold arrangements

The sale price totals US$178 million (NZ$307 million), with targeted completion on 1 April 2026.

Paul Washer, who was appointed to the Board in 2022, will retire at the ASM. Richard Wyeth was appointed CEO in May 2025.

Current Strategy

The website describes the company as follows.

“We’re 1,000 down-to-earth, authentic people working together with 220+ milk suppliers to create the very best in milk nutrition for our global customers. Our disruptive, innovative spirit combined with resolute determination to do the right thing for planet and people sets us apart.”

The company highlights its “Big 6 for ‘26” priorities within the annual report:

Disclaimer

To the maximum extent permitted by law, New Zealand Shareholders Association Inc. (NZSA) will not be liable, whether in tort (including negligence) or otherwise, to you or any other person in relation to this document, including any error in it.

Forward looking statements are inherently fallible.

Information on www.nzshareholders.co.nz and in this document may contain forward-looking statements and projections. For any number of reasons, the future could be different – potentially materially different. For example, assumptions may be wrong, risks may crystallise, unexpected things may happen. We give no warranty or representation as to any future financial performance or any other future matter. We may not update our website and related materials for changes.

There is no offer or financial advice in our documents/website.

Information included on www.nzshareholders.co.nz and in this document is for information purposes only. It is not an offer of financial products, or a proposal or invitation to make any such offer. It is not financial advice and does not take into account any person’s individual circumstances or objectives. Prior to making any investment decision, NZSA recommends that you seek professional advice from a licensed financial advice provider.

There are no representations as to accuracy or completeness.

The information, calculations and any opinions on www.nzshareholders.co.nz and in this document are based upon sources believed reliable. The NZSA, its officers and directors make no representations as to their accuracy or completeness. All opinions reflect our judgement on the date of communication and are subject to change without notice.

Please observe any applicable legal restrictions on distribution

Distribution of our documents and materials on www.nzshareholders.co.nz (including electronically) may be restricted by law. You should observe all such restrictions which may apply in your jurisdiction.

Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees:  Synlait discloses the fees approved by shareholders for the Chair, Committee Chairs, and non-executive Directors. This alternative view is also supported by NZSA.

The company does not disclose whether other benefits (e.g., retirement benefits, share-based payments, or special exertion payments) are available or paid to Directors. We note that the table of payments to Directors is prefaced as “total remuneration” [emphasis added]. Therefore, while NZSA doesn’t believe that any additional benefits are paid, we would prefer more explicit disclosure.

Director Share Ownership:  Directors are not required to own shares. We note only one Director owns shares.

CEO Remuneration:  While there is limited disclosure in the actual Annual Report, the company discloses its Strategic Remuneration Policy on its website, which includes disclosure of the remuneration philosophy, frameworks and objectives applicable to the company. The People Environment and Governance Remuneration Committee are responsible for the policy.

Incentives: The CEO is paid a short-term incentive (STI) and a long-term incentive (STI)

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the new NZX Remuneration Reporting Template.

Neither the Annual Report nor the remuneration policy provide any details of the criteria used to calculate the STI.

The only disclosure around the LTI relates to the measures used to determine vesting, being total shareholder returns (TSR) and return on net capital employed (RoNCE). Vesting is over 3 years.

There is no disclosure as to the relationship of STI or LTI to base remuneration (ie, the level of ‘award’ made).

In mitigation, NZSA notes that no payments were made under either scheme in FY25.

We would expect a far clearer disclosure for FY26 and would point to the NZX Code of Corporate Governance which requires clear disclosures around CEO remuneration.

The company discloses the gender pay gap but not the CEO/employee remuneration ratio.

Golden Parachutes: In the interests of transparency and ‘no surprises’, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

We note the former CEO, Grant Watson, was paid $1,003,286 described as “Other remuneration includes annual leave and discretionary payments.” We would expect to see the full details of this payment as part of  transparency.

Director Independence: Synlait’s ownership changed during 2024, with Bright Dairy now owning a majority of the shares and thereby the removing the previous waiver from NZ RegCo that allowed the major shareholder (then owning 39.0%) to appoint four Directors to the Synlait Board.

NZSA believes that subsequent events have highlighted the weakness of this waiver in ensuring long-term governance effectiveness.

Currently, the Synlait Board continues to not have a majority of independent Directors, thereby not following the NZX Corporate Governance Code recommendation.

Board Composition:  The Annual Report includes a composite skills matrix, however NZSA prefers the matrix attributes skill sets to individual Directors to demonstrate how they add value to the company through their governance skills.

Our previous reports for the Special Meetings noted continued Board instability during the year. We expect that the recent recapitalisation will lead to more stability on the Board, notwithstanding NZAS’s continued advocacy for a majority of independent directors.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

Bright appointee (non-independent) Shiang Yang has served since 2010. After serving for 15 years, we would expect Bright to consider succession. The other Directors’ appointment dates range from 2022 to 2024. Whilst not an issue at present, at some point careful consideration will be required to ensure orderly rotation whilst retaining institutional knowledge.

ASM Format: Synlait Milk Limited is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management: NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. We also look or evidence that the company is across its risk mitigation approaches.

There is disclosure in the Board Charter that the Directors are able to access internal management and external advice as required to support decision-making. The Company Secretary has access to the Board on governance matters. Not disclosed if the company has an internal audit function.

We note the disclosure around risk management (contained on their website) in particular non-financial, business and operations risks and how these are managed. 

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules. In November 2024 KPMG replaced PwC as Audit Firm in line with Bright Dairy Ltd appointing KPMG as Auditor. This is allowed for efficiencies in the audit process between both companies.

Environmental Sustainability

We note that this year, Synlait are due to release their sustainability report later in November. We encourage the company to consider releasing sustainability reporting together with the company’s annual report (as it has done in the past).

On this basis, we are unable to provide an assessment at this time. We note that Synlait’s sustainability practices and disclosures were relatively strong in FY24.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations:  Whilst the Annual Report does not disclose any political donations NZSA expects an explicit disclosure around whether political donations are made.

Financial & Performance

Synlait’s share price rose from $0.41 to $0.74 (as of 20^th November 2025) over the last 12 months – an 80% increase. This compares favourably with the NZX 50 which rose 4% in the same period. The capitalisation of SML is $446m, placing it 49^th out of 115 companies on the NZX by size and makes it a large company. The company is not a member of the NZ50, given liquidity constraints caused by the concentration of its two major shareholders.

¹ per share figures based off actual shares at balance date (not weighted average)

The start of FY25 was pivotal as SML raised capital and managed to restructure their balance sheet, alleviating going concern issues. Although liquidation may have been averted at the 11^th hour, and performance has improved in FY25, the company still performed at a sub-par level and performance needs to improve further to support future shareholder returns.

We note the announcement made on November 14^th that the company has temporarily increased its working capital, through a new revolving credit facility, by $50m. This expires on March 31^st 2026. The company highlights that it remains in compliance with its bank covenants. The sale of the company’s North Island assets will also make a meaningful impact on the company’s current debt profile.

Revenues were up 12% to $1,827m, and the gross profit margin also increased to 6% meaning that Gross Profit was up significantly by 88% to $105m. However, expenses, both distribution and administrative, combined to give negative EBIT of -$6.3m.

SML’s NTA decreased further to $1.09 per share on the back of the additional shares issued during the capital raise. Shares trade at a 32% discount to NTA which is an indication the market is wary of Synlait’s underlying long-term resilience and prospects.

Operating cashflows were up significantly at $165m, (we note that trade and payables increased YOY by $120m) and inventory levels were also up. Inventory turnover was higher at 7.01.

The company released an investor presentation in conjunction with their annual results. No quantitative forward-looking statements were provided.

The success of Synlait remains predicated on retaining their supplier base and increasing margins in a perpetually competitive environment.

Bright Dairy Holding Limited is the largest shareholder, with a controlling 65.3% stake. The a2 Milk Company retain their 19.8% holding in Synlait. This means minority shareholders have no influence in the running of this company.

Resolutions

Paul McGilvary was appointed to the Board on 2 December 2022. He has extensive dairy sector experience. Paul previously held several executive roles including, CEO of Tatua Cooperative Dairy Company Limited, CEO of HortResearch, and Managing Director, Fonterra (Europe).

We will vote undirected proxies IN FAVOUR of this resolution.

Julia Zhu was appointed as a Bright Appointed Director in June 2023. She has expertise in investment consulting, financial advisory, and strategic planning. Julia began her career at KPMG Advisory (China) Limited before joining OCBC (China) Limited as Assistant Vice President of Global Investment Banking Division. Julia has held various leadership roles at Bright Food Group, including Investment Director and General Manager of numerous subsidiaries and functional divisions.

We will vote undirected proxies IN FAVOUR of this resolution.

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

This refers to the sale of the company’s North Island assets as set out in the Overview above. The full details are set out in the Notice of Meeting. Bright Dairy who holds 65.5% of the shares in SML has confirmed it will vote these shares in favour of the resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 1.00pm Wednesday 19 November 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA