AWF Madison ASM Presentation

Level 6, 51 Shortland Street
PO Box 105675, Auckland City, Auckland, 1143
Tel 09 526 8770
awfmadison.co.nz
AWF MADISON GROUP
ANNUAL MEETING OF SHAREHOLDERS – CHAIRMAN’S ADDRESS
31 July 2019
Good morning shareholders – guests – AWF Madison team members plus key advisors, and welcome to this Annual
Shareholders meeting for the AWF Madison Group. My name is Ross Keenan, and as I am Chairman of the AWF
Madison Board, it is my pleasure to Chair this meeting.
We have been able to offer a steady dividend which, notwithstanding a disappointing operating performance, we were
pleased to be able to retain at 16.2 cents for the year. Each year we take particular advice on dividend policy and
again, based on our very strong cash flow, we have been able to maintain dividend levels. And of course, with the
Dividend Reinvestment Plan in place, we have made steady progress in reducing net debt, and enjoy a very positive
relationship with our Bank.
ASB is our banker and as a Board and Management, we have been delighted with this relationship over the last couple
of years and this remains very positive.
With respect to the DRP itself, we are pleased to report a steady lift in shareholder interest in this, which, based on the
Final Dividend paid in July, saw a take up of nearly 65% by shares and by nearly 21% of shareholders by number – a
lift of over 90% on the first introduction of the DRP last year to now 147 shareholders representing that 21%.
As one who regularly looks through our shareholder register so I can see who might be creeping up (or down) I have
been pleased to note a steady increase in number of shareholders to 723 as at 31 March – an increase in over 14% for
the year. And I don’t know what this means, but we have new shareholders from locations such as Malta, New Mexico
and Isle of Man.
Later we will hear from Simon Bennett and he will introduce his key management team; this year including David
Hollander, Chief Executive of JacksonStone & Partners.
At the time of releasing our Annual Report we were delighted to be able to announce the purchase of JacksonStone &
Partners, effective 1 June, and I think you will find it interesting to hear from both Simon and David how this purchase
fits the bigger picture for our Group - and David, welcome to the world of a Public Company.
Last year, I talked about the commitment we make to Health & Safety and, particularly in the AWF business; and the
role Simon Hull plays in that process. Compliance is very expensive but necessary, and our incident rate is, by any
measure, very good. It is appropriate that I reiterate that commitment again this year. In my commentary in the Annual
Report I stated that “As a Board we wonder if vigilance across the sector is where it should be to ensure Health &
Safety compliance.” What I meant by that is that it is staggering to us that very large NZ organisations continue to deal
with labour providers who skip from one job to another without evidence being provided around stringent compliance
that NZ legislation requires. As one who comes out of an industry where regulation and controls are mandatory and
measured – not just taken as guidelines – this attitude by some of corporate NZ, is astonishing.
Which leads me to my other subject of relevance in recent times: A few years ago I used to stand up at these meetings
and sing the praises of our wonderful Filipino workforce, and that part continues, but bureaucracy has, over the last two
years, turned this into a nightmare of inflexibility and uncertainty – wasted opportunity at a time when NZ business is
crying out for skilled workers. We have a backlog of workers waiting in countries of origin to be approved for travel by
NZ Immigration; and as a Board, we struggle to understand the reasoning behind the process.
So that’s enough from me, and of course we will allow plenty of time in General Business to cover off any questions you
may have.
For the Board,

Ross Keenan, Chairman
021 685 655

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Level 6, 51 Shortland Street
PO Box 105675, Auckland City, Auckland, 1143
Tel 09 526 8770
awfmadison.co.nz
AWF MADISON GROUP
ANNUAL MEETING OF SHAREHOLDERS – CEO’S ADDRESS
31 July 2019
Good morning, it is a pleasure to be here in front of you today. I am proud to lead this dynamic and diverse
business which makes such a difference to our people our clients and our country.

This sector we operate in is not always easy, with people being our tool of trade. The growing workforce
challenges for our clients remains a significant opportunity for us. With the changing world of work, lower
retention rates (leading to more frequent hiring) and growing demand for contingent workers to flex the scale of
workforces, the problem we solve is very real for our clients.

Our vision remains to grow our impact as NZ’s leading recruitment and resourcing company. It is a worthwhile
cause which can reward us with impact for our country, our candidates and our clients, while providing our
shareholders a good return.

I am very satisfied that we have been able to maintain our dividend for the year. Despite a drop in earnings, our
well-subscribed Dividend Reinvestment Plan has allowed us to achieve a strategic goal in the acquisition of
JacksonStone & Partners and hold the dividend steady. We have made better use of our balance sheet, and our
current business mix is leaner on its requirement for working capital.

As Ross mentioned, we released our annual report when we announced on May 29
th
which was a first for the
business. This allowed a greater flow of information to shareholders earlier. We talked to a number of our
shareholders post-announcement and an area that was perhaps not well understood was the strategic nature of
the JacksonStone acquisition. Dave Hollander, the CEO, will shortly give us an overview of the business but I
thought I should focus my time today on the reason for this particular acquisition and the broader Group strategy
as we move into the year ahead.

We have sought to diversify the business from that of a blue-collar business to a balanced white and blue collar
recruitment and resourcing company. We also seek to balance the levels at which we recruit and the types of
recruitment we carry out. AWF is largely a business of temporary workers from entry level upwards, with a new
but growing permanent recruitment offer. Madison works equally in permanent and temporary placements, with a
number of independent professional contractors at higher levels. Absolute IT has added a mix of independent
professional contractors and broad (including some high-level) permanent recruitment. We lacked ability in
executive search and interim executive recruitment at the top level. The lack of discipline in this area limited our
access to C-level clients and the subsequent opportunities that this brings.

To be explicit, the recruitment of a CEO will often lead to the opportunity to recruit other C-suite roles that a
change in leadership may bring. Chief Executives drive business transformation, and with it, new programmes of
work requiring new permanent and contingent resource (across the organisation the work can flow to Absolute IT,
Madison and AWF potentially). Knowledge and input into these workflows gives us much better opportunity to
gain future work. We are very satisfied to have achieved this strategic goal. Needless to say, JacksonStone is a
business with great heart, strong relationships and depth of expertise and we are really enjoying working together
- even at this early stage.

Much of our work is with Government agencies, and a key goal is to engage better - not only with Government -
but also officials charged with helping to drive Government goals and legislation. We see our credibility at the ‘top
table’ critical, to ensure we can assist and influence this dynamic sector that we are part of.

Changes to the legislative framework can have a significant impact on us as a large employer. The Holidays Act
is being reviewed, the Fair Pay Agreements working group has released its first report, the Employment Relations
Amendment Act recently came into force and the Employment Relations (Triangular Employment) Amendment
Bill has been passed. Submissions that we made on this Bill were positively received and had some impact on

Level 6, 51 Shortland Street
PO Box 105675, Auckland City, Auckland, 1143
Tel 09 526 8770
www.awfmadison.co.nz
changes made to the final Bill, as passed. We continue to engage Government and drive thought leadership and
management of the changing face of the employment landscape.

Inside the business we are continuing to develop our tech tools to help engage better with candidates and clients,
while building more efficient recruitment processes to reduce costs in a low-margin environment. The tools we
have to date have seen us win pieces of work and deliver innovative end to end solutions. This development will
continue, and we will seek to utilise these tools across all of our business units. Kris Huurnink, our IT lead, is with
us today and this year marks his 14
th
year in the business.

Our recruitment marketing capability remains a differentiator, but we must continue to invest in this area. There is
opportunity to offer new solutions to clients and make inroads in industries we do not currently serve. We are
committed to growing our capability and expertise in this area. Liz Meleisea who leads this function is not with us
today as she is pitching such a proposal to a prospective client. Liz has ably replaced Shereen Low (who took
maternity leave) and is adding huge value already. Shereen has returned part time and is assisting us with our
Innovation across the Group.

The mix of our technology, marketing and recruitment capability enabled us to successfully tender for and deliver
“Managed Service” solutions, which we have talked about. We have continued emphasis in this area and strive to
develop our product offering. Growing such offerings is a key part of our strategy. We are currently working on
one new opportunity, but seek further growth in this area. We are yet to launch a full Managed Service solution
for a blue collar client, which remains a goal for us.

As I mentioned earlier, we see technology as a tool but we are also wary of the disruptive nature of technology in
our sector. There is a lot of talk of being able to ‘uberise’ recruitment. The NZ legislative framework in both
employment and safety would suggest that this will be difficult for a ‘platform’ to deliver. However, discrete pieces
of work or tasks are already being carried out in this way by onshore and offshore workers. An example would be
‘app development’ which is easily tendered online and purchased regardless of the domicile of the worker or
employment conditions.

We do see a number of related services and tools being developed for employers and recruiters which are of
interest to us. We plan to be a party to some of this innovation rather than be reactive, and hence are building an
innovation roadmap. This would see us partner with - or possibly even acquire - an early stage technology
business in our sector, or related employment sector.

White collar business has confirmed its worth to us over the past year, with Madison and Absolute IT both
performing respectably. Following Madison’s success in the prior year from a major project, we have reinvested
in building Madison’s core business, but maintain a focus on those significant opportunities which are worth
seeking out. Madison GM Christian Brown, together with Liz as mentioned, couldn’t be here due to a client
presentation for a new business opportunity.

Absolute IT has continued to deliver, and GM Tracey Johnson is here with us today. In a market where IT
continues to be an in-demand sector, we are continuing to invest in the brand to maintain relevance and our
market leading position; and develop offerings to be able to reflect the standard that candidate and clients of NZ’s
leading IT recruiter would expect.

Last but not least - and in fact our key priority - is to rebuild AWF and position for growth. As we announced in
May we had a disappointing year and have sought to stabilise our top line earnings and position the business for
a conservative growth trajectory. We have the business running well and we are doing a very good job for our
clients. We are proud of our commitment to safety and the care we take of our people. We have certainly halted
the decline of the last Financial Year, but are yet to see the level of growth we are seeking. Despite this, I remain
confident in our people to deliver on our goals in the medium term. GMs Donna Lynch and Fleur Board are both
here today and they have led this strong commitment we make to our people and our clients.

Level 6, 51 Shortland Street
PO Box 105675, Auckland City, Auckland, 1143
Tel 09 526 8770
www.awfmadison.co.nz
In terms of our reporting and compliance, Tony Staub, our Commercial Director who is with us here today, has
delivered us some strong process improvements resulting in us confirming published audited results
simultaneously with each of our half year and full year reporting. No mean feat, from where we have come from.
He works hand in hand with David Lazarus our Company Secretary who provides us great comfort in our NZX
and broader Company compliance. He is also a great support to me personally.

With that I have introduced you to all of my team whilst traversing the business strategy. I am grateful to have
such a stable hardworking, dedicated and capable group of people. Whilst we have not delivered the financial
result we were seeking, I assure you that we have committed to addressing the challenges that have held us
back, and repositioning – once again – for that growth which we aspire to.


Simon Bennett
Chief Executive
021 036 8387

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Annual Meeting
of Shareholders
31 July 2019
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

Chairman’s Address
ROSS KEENAN
CHAIRMAN
Agenda Item 1.

Consolidated
financial statements
for the Year Ended
31 March 2019
Agenda Item 2.

Fully imputed final dividend
of 8.2 cents per share
Overall dividend of
16.2 cents for FY2019
Agenda Item 3.

Resolutions
Director Elections
5.1
Recommended re-election of
Nick Simcock
Agenda Item 5.
Of the shares voted by proxy, 99.18% support resolution 5.1

Resolutions
Auditors’ Remuneration
5.2
Authorise the Directors to fix the
fees for the Auditors for the year
Agenda Item 5.
Of the shares voted by proxy, 99.18% support resolution 5.2

Special Resolution
Amendment to the Constitution
of the Company
5.3
Recommended adoption of the
amended Constitution
Agenda Item 5.
Of the shares voted by proxy, 99.18% support resolution 5.3

Auditors’
Reappointment
Agenda Item 6.

Update on
Senior Employee
Share Incentive Scheme
Agenda Item 7.

Agenda Item 4.CEO’s Report and Update
SIMON BENNETT
CHIEF EXECUTIVE

Protect
Grow
Innovate
Our vision is to grow our impact as New Zealand’s
leading recruitment and resourcing company

Introducing: JacksonStone & Partners
Presented by David Hollander, Chief Executive

Background
• JacksonStone & Partners takes its name
from two of our founders; Lindsay Jackson
and Richard Stone.
• Joining Lindsay and Richard were our
founding Directors Annabel McCallum,
Andrew Watson and myself (David
Hollander).
• JacksonStone & Partners was established in
2011, starting with a team of ten people,
and expanding to 30+ today.

Specialisations
• Full-service executive search
• Permanent recruitment
• Professional contracting and consulting
• Project management of change programmes
• Organisational start-ups
• Talent pooling and management
• Psychometric assessment
• We conduct these services across the public,
private and NFP/NGO sectors.

Reach and Alliances
• Our reach extends to all New Zealand
regions, as well as the Pacific Islands. The
majority of our appointments are in the
Wellington region.
• JacksonStone & Partners is proud to be part
of the CFR Global Executive Search alliance
through which we have access to
international talent.
• CFR is an alliance of executive search firms
working from 59 offices across 62 countries,
including Australasia, South-East Asia,
Europe, Latin and North America, the Middle
East, China and India.

Success story
• Year on Year growth and consistent
earnings.
• Top performer for All of Government.
• Provider to the Government for Officers of
Parliament and Chief Executives.
• Growing presence in the Private sector.
• Even with substantial growth to both
revenues and our team, we have
maintained an impeccable reputation.

Thank you

Agenda Item 8.General
Business

Close of Meeting