Annual Results Announcement

14 November 2019

Name of Listed Issuer: SANFORD LIMITED (SAN)
FINANCIAL RESULTS for the year ended 30 September 2019

Sanford Reports Higher Returns from Lower Sales Volumes in Full Year Results 2019,
Supporting Value Add Strategy and Innovation Commitment

2019 vs 2018

Catch / Harvest Volumes (000 GW tonne) 113 -4%
Sales Volumes (000 GW tonne) 115 -5%

$m

Revenue 545 +6%
Gross Profit 107 -6%

Like for Like Revenue* 558 +8%
Like for Like Gross Profit* 120 +6%
Like for Like Gross Profit %* 21.5% -0.6%

Adjusted EBIT 64.8 0%
Net Profit After Tax 41.7 -1%

Earnings per Share 44.6 cents

Dividend per Share 23 cents

Final Dividend paid 6th December 14 cents

*Like for like views revenue (and gross profit) comparable to 2018 without implementing the new revenue
accounting standard (NZ IFRS 15)

New Zealand’s largest seafood company Sanford Limited (NZX: SAN) has reported Net Profit After Tax
(NPAT) for the financial year ending September 30, 2019 of $41.7m, compared to its 2018 result of
$42.3m. Sanford’s underlying Adjusted Earnings before Interest and Tax (EBIT) are $64.8m,
compared to $64.7 million in 2018. Sales revenue however, increased to $558m on a like-for-like
basis*, up 8% from $515 million in the prior year, despite sales volume decreasing by 5% to 115,000
tonnes.
CEO Volker Kuntzsch says that while the result did not meet original expectations, it was a good
outcome following a difficult year and certainly confirms that Sanford has adopted the right strategy
for challenging times.

“Climate change is the number one risk we face as a business. We see the consequences of warmer
waters and adverse weather conditions playing out in the oceans and on our bottom line. In this
situation, it is important for Sanford to be doing the right thing on the water to ensure we fish
sustainably, and also to be vigilant and agile so that we are best placed to manage these changes.
Our strategy to mitigate this risk through investing in innovation across the business and bringing our
customer focus to life at the same time is clearly bearing fruit. Achieving significant top line growth
with reduced volumes strongly aligns with our strategic direction.”
Among the challenges faced by Sanford in 2019 year was the sad loss of crew member Steffan
Stewart in a tragic accident on the deepwater vessel, the San Granit. Sanford removed the vessel
from operations for three months to complete a further and even more highly detailed risk analysis
of all factory equipment and processes, despite having already had extensive adjustments made to
the vessel to align it to regulatory safety standards prior to its addition to Sanford’s fleet.
Mr Kuntzsch says safety is a top priority for Sanford.
“With safety such a major area of focus for us, we were pleased that our latest engagement survey
shows a very high awareness of the focus on safety and health across the business, with the outcome
of 85%, the highest score of the entire survey, well above the international benchmark. We will not
compromise on safety and we are glad our people see that and are actively taking part in the safety
conversation within the business.”
The three-month tie-up of the San Granit meant a reduction in catch volumes as did the decision by
Sanford to support an industry initiative to voluntarily forgo 20,000 tonnes of hoki quota on the West
Coast as a precautionary sustainability measure. These volume reductions could only partially be
compensated for through higher catches of species like squid and product mix improvements on
board the deepwater fleet. The Precision Seafood Harvesting (PSH) fishing method has been
approved by the Ministry for Primary Industries (MPI) for use in inshore and in deepwater fishing and
has since been deployed across Sanford’s fleet. This New Zealand-developed fishing gear is a game
changer in world fisheries, delivering a superior quality of product through its gentler method.
Mr Kuntzsch says “PSH is creating a strong level of interest globally. Our fishing crews and our
customers are enjoying the improvement in quality and customers are already telling us they want
‘fish caught the PSH way’.”
In the face of algal blooms limiting harvests in the Marlborough Sounds, Sanford’s mussel business
posted an encouraging result on the back of stronger volumes, sales channel focus and product
diversification. The mussel powder operation was boosted with the launch of the Sea To Me
nutraceutical brand. The company has confirmed its intention to make a substantial investment in a
marine extracts facility in Blenheim in 2020.
Sanford’s salmon division delivered a very good result, due to stronger volumes and value realisation.
This was partly driven through its Big Glory Bay brand which is now on offer on menus in high end
restaurants in New Zealand and the US. Sanford has been granted a consent variation for its Stewart
Island salmon farm which will allow it to farm up to 30% more fish over the next three years. The
salmon business was challenged by an algal bloom causing higher mortalities and a management
plan is now in place to deal with climate change related risks in Big Glory Bay.

Sanford Chief Financial Officer Katherine Turner says despite reporting flat year-on-year EBIT, 2019
has been very successful in achieving other key milestones.
“We have laid the foundation for further value creation by realising a number of operational
projects, for example the sale of our pelagic business in Tauranga and the footprint optimisation in
Southland. Furthermore, the innovation and value strategies are proving themselves, and we are
now focusing on investing into our scampi fleet and the marine extracts facility. The opening of the
refurbished Auckland Fish Market in the city’s rapidly growing Wynyard Quarter earlier this year
went really well and highlights our increasing focus on consumers. It includes our Sanford and Sons
Fishmonger where we showcase our wonderful seafood to the public.”
Another key measure necessary to ensure successful implementation of the company’s strategy is
people engagement. Ms Turner says higher engagement survey results from staff and sharefishers
provided one of the most satisfying numbers for the leadership team.
“We saw a lift in our people engagement in 2019 with an overall engagement score of 72% which
was a significant improvement on 2018. Of the many numbers we report, this is one of the most
satisfying, along with the staff endorsement on health and safety already mentioned.”
Volker Kuntzsch agrees.
“Having our people focused on our strategy, embracing our values of care, passion and integrity and
the principle of achieving together, this is also for me a very satisfying aspect of 2019. With that level
of engagement from our people, we are now well placed to make 2020 a year of further successes.
As our heightened level of investment into asset rejuvenation and innovation continues over the next
three years, we will be creating greater value for every kilogram of seafood we harvest. Along the
way, we will need to tackle the challenges of climate change and ensure we stay abreast of rapidly
changing customer and consumer expectations. We want our people to feel increasingly engaged in
this journey and together we are feeling positive about what we can do in 2020.”

For more information or to arrange interviews, please contact:
Fiona MacMillan
GM Corporate Communications, Sanford
fmacmillan@sanford.co.nz
+64 (0)21 513 522

For investor relations queries, please contact:
Katherine Turner
Chief Financial Officer
kturner@sanford.co.nz
+64 (0)21 470 436

---

SANFORD
INTEGRATED REPORT 2019

Ropes deftly plaited, though a skill as
old as fishing itself, remains integral
to the game-changing innovation
that is Precision Seafood Harvesting,
now approved for commercial fishing
use on deepwater and inshore vessels.
The plaits’ important place in the
next generation of fishing technology
serves as a powerful analogy of what
it takes to bring us closer to our goal
to be the best seafood company in
the world.
The plaits, knots and splices that are
so skilfully performed by so many of
our people, especially those on our
vessels and farms, enable multiple
strands to be brought together
to create an efficient, reliable and
effective whole. It is not surprising
we see it as a good way of describing
how we work.
Our job is simple really: seafood in
all its forms starts out pretty perfect,
all we have to do, on the sea, on the
land and out in the market, is to get
that perfection to a plate.
To do that, we work together –
one team from sea to shore to sales
– using skills, science, intellect and
intuition to create a seamless whole.
It’s a big ambition to be the best
seafood company in the world.
But we can get there –
TOGETHER.
Volker Kuntzsch
CEO, SANFORD LIMITED
STRONGER
TOGETHER

CARE
At Sanford, we value caring for the
wellbeing of ourselves, the team
around us, our customers and
consumers, key stakeholders and the
communities we work in. Crucially,
we care for the environment we are
privileged to work in.
PASSION
We are passionate about our
relationships with our people,
customers, consumers, resources,
country and future. Our passion
extends to protecting our oceans,
caring for the environment and
having successful partnerships.
INTEGRITY
We strive to live our values every day
in everything we do. This means
having straight up conversations,
delivering on the expectations of
our key stakeholders and being
respectful, honest, open and
transparent, as we work to always do
the right thing.
ACHIEVING TOGETHER
PEOPLE
PHOTO: Vanessa
Wilkinson in Coromandel

OCEANS

—
ABOUT
THIS REPORT
—
TOGETHER is the theme for our 2019 annual
report. It’s an economical word for the many
things we do across Sanford for the creation
and sharing of value with our investors, our
people, our customers and consumers, as well
as the communities in which we live and work.
We’re proud to share some examples in this
document which have contributed to our
performance this year.
Together sums up our philosophy that we will
always be stronger as a team, on sea, on land, in
our markets and in our local neighbourhoods.
It speaks to the care and attention we all pay to
the seafood we farm and fish, because it takes
a chain of skilled hands across many disciplines
to preserve the perfection of our catch.
It’s the way we work with our stakeholders,
especially in regional communities where
many people want to be confident that we
are respecting them and the environment,
as we go about our business.
It is a good description of our relationship
with the many research scientists who share
our view that we have wide horizons ahead
when it comes to nutritional benefits of
seafood and its role in supporting health.
Working together, we are unlocking
that potential.
Together reflects our need to work with nature,
respecting the cycles of the climate and the
sea, the conditions that our farmed and
wildcaught harvests need and our responsibility
to act sustainably.
It also recognises that we are far from the only
people with a stake in the sea. Others care for
it and rely on its goodness as much as we do,
so we need to collaborate when important
decisions must be made.
Our vision to be the best seafood company in
the world can only be realised when we are the
preferred and trusted supplier of sustainable
seafood to our local and global customers
and consumers.
“Best” is a high benchmark, and we are finding
together is a good place to start. The more
we talk to our consumers, and understand
their needs, the more we find opportunities
to work even closer together, creating value
for everyone and opportunities to create
even more.
Care, passion and integrity have been our core
values for several years. Achieving together has
recently been added as an overarching
principle. We hope this report will show you
some of the ways we have been doing that
in 2019.
04Sanford Annual Report 2019

SUPPORTING STRONG
COMMUNITIES AND
PARTNERSHIPS
DELIVERING CONSUMERS’
EXPECTATIONS
BUILDING A SUSTAINABLE
SEAFOOD BUSINESS
1. SANFORD AND OUR OPERATIONS
Chairman and CEO Review06
CFO Review12
Report structure14
Our global operations16
How we create value18
Highs and lows20
4. GOVERNANCE AND FINANCIALS
Corporate governance86
Financial statements96
Notes to the financial statements104
Combined independent auditor’s
and limited assurance report138
2. REPORTING WHAT MATTERS
Stakeholder engagement approach 22
Materiality Matrix 23
Regional perspective25
Business Excellence Framework 26
5. APPENDICES AND REFERENCE
Appendices145
Corporate Directory157
20 years of reporting158
Accreditations and awards159
2019 Annual Meeting159
27
59
39
67
49
75
3. OUR SIX PERFORMANCE OUTCOMES
ENSURING HEALTHY OCEANS
AND PROTECTING AND
ENHANCING THE ENVIRONMENT
CREATING A SAFE AND
HIGH PERFORMING
WORKPLACE
LEADING THE WAY TO
HEALTHY FOOD AND
MARINE EXTRACTS
CONTENTS
QR CODES
QR codes appear throughout this
Report. Use these to access relevant
video and other content by opening
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phone and hovering over the code.
Select the web page that appears on
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On our cover (clockwise from top left): Falefa Tuimaualuga, Jonny Bamford and Norman Ramsey,
Lana West, Augusta Van Wijk, Ted Culley, Mary Henry, Joshua Spooner and Fernanda Bispo

The financial year gone by has tested our
resilience: Steffan Stewart’s fatal accident
on the San Granit early in the year had a
significant impact on all of us at Sanford.
Also, the diverse consequences of climate
change across our fishing, salmon and
mussel farming businesses and the limited
availability of skilled and motivated labour
in small communities are amongst an array
of challenges that necessitate greater
innovation and an ever growing focus on
people and our role as businesses in society.
The result of our team’s enthusiasm in
realising Sanford’s vision has borne fruit.
We are very happy with the outcome of our
latest companywide engagement survey,
which resulted in the participation of 62%
of our workforce and an engagement score
of 72%, a significant improvement on prior
years’ surveys. Our teams around the
country have largely embraced our strong
focus on the values of passion, care and
integrity in achieving together the shift
from a volume and commodity dependency
to emphasising the intrinsic value of our
finite marine resources.
In a world that is increasingly complex and
connected in ways we are still trying to
comprehend, it seems even more important
that we come together to understand, grow
and invest in ways that provide stability and
prosperity into the future. It is difficult to
read headlines without feeling a sense of
fear, anxiety or frustration and it is
therefore imperative that Sanford’s
dependence on natural resources and our
ability to deal with increasing volatility takes
centre stage as we move forward.
As Chairman and CEO of this company, we
are very positive about the journey we are
on. With care, passion and integrity and
with the courage to move beyond the
traditional mindset in our industry, we are
– together with our stakeholders – focused
on the ambitious outcomes of our business
excellence framework. This focus appears
to have created an environment of trust in
us being able to accomplish our vision by
adjusting well and innovatively to the
changing nature of the challenges and
opportunities that are certainly abundant in
our line of work.
Paul Norling
CHAIRMAN
Volker Kuntzsch
CHIEF EXECUTIVE OFFICER
CHAIRMAN AND CEO REVIEW
WHY SANFORD? It is a question
we hear often – from
prospective employees,
investors and other
stakeholders alike. One
where the answer is critical
in their decision making.
But it is also one that our
children and grandchildren
contemplate around
the dinner table as they
consider the future world
where our environment,
food and communities face
unprecedented change at a
speed yet unfathomable to
most of us. It is critical that
we get the answer right.
06Sanford Annual Report 2019
SANFORD AND OUR OPERATIONS
1
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OUR OPERATIONS

07
OUR FY19 FINANCIAL RESULTS
The company’s Net Profit after Tax
(or Statutory Profit) was $41.7 million
compared to our FY18 result of
$42.3 million.
Underlying or Adjusted Earnings before
Interest and Tax (EBIT) for FY19 at
$64.8 million is comparable to our FY18
of $64.7 million, which is somewhat
disappointing as it again did not meet
our expectations for the year.
Like for like* sales revenue, however, was
$558 million (+8% on PY) from sales
volume of 115,000 green weight tonnes,
which was 5% down compared with prior
year, primarily due to reduced catches in
our fishing business.
Gross Margin (on a like for like basis)
improved by $6.3 million with favourable
sales pricing, product mix and sales channel
optimisation more than offsetting cost
pressures such as higher labour and fuel
costs. As we continue investing into
improving organisational capabilities,
additional operating expenses kept overall
profitability flat compared to prior year.
While the overall profit result for the
company is as noted, we believe that the
major components of the business
performed reasonably well when compared
with FY18. This is more so considering some
of the headwinds encountered during the
year, which – amongst others – resulted in
volume shortfalls and operational
inefficiencies as a result of that.
Our balance sheet has strengthened with
year-end debt down by $16 million to
$139 million. This increase in debt
headroom is pleasing and will be utilised for
capital investment to advance the business
across a number of fronts.
A full summary of our financial results
can be found under the CFO Review
on page 12.
BUILDING CAPABILITY AND RESILIENCE
As shareholders are aware, Sanford is in the
midst of a major transition from essentially
being a fishing company selling
commodities via wholesale intermediaries
to a producer and marketer of premium
high quality seafood and high value items to
discerning customers and consumers. This
shift is substantial and has major change
management challenges right across the
company as we develop and implement a
high value branding and sales channel
strategy. Beyond the need for some
significant operational and capital
expenditure, our value-add strategy
impacts on our assets, the kind of products
we produce, our company culture and the
people we deal with, not least our
customers. To this end we have
progressively made and will need to
continue to make significant investments in
building our people resources and
capabilities to steer and realise this
transition.
Beyond this operational expense, we have
also been investing heavily into innovation
where results look very promising
particularly on the supply side, which we
discuss in more detail in the following
sections.
At the same time, our aging fleet has not
been operating at an optimal level, which
we are addressing now. Coinciding with this
operational headwind we are feeling the
effects of climate change that present a
different set of management challenges.
Improved information flow and the need for
better decision making at a faster pace are
the objectives of our SanCore project, a
significant investment over the next two
years into IT systems and processes. The
PHOTO: Sanford Chairman Paul Norling (left) and CEO Volker Kuntzsch
* Like for like views revenue (and gross profit) comparable to 2018 without implementing the new revenue
accounting standard (NZ IFRS 15).
1
SANFORD &

OUR OPERATIONS

project team has identified our
shortcomings and the future state Sanford
requires to reach these objectives across
the organisation and we are now working
with potential vendors in developing and
implementing modern and user-friendly
solutions.
The underlying performance of our business
units highlights the appropriateness of our
strategy, both in terms of creating value
and in mitigating climate change related
risks. The diversity of our business presents
ample opportunity in this regard, but we will
highlight expected risk from climate change
on our business and our response in more
detail going forward.
The growing strategic alignment of our
business with changing customer
expectations, consumer preferences and
environmental risks and opportunities,
provides us with a good reason when being
asked ‘Why invest in Sanford?’ or ‘Why work
for Sanford?’, with the following sections
providing more detail on our positive view.
The Board and management team
appreciate that shareholders understand
the path we are on and are very conscious
of your patience as we progress this
transition with our dividend level being
maintained rather than increasing in the
meantime. The work necessary to realise
our strategy across the organisation while
mitigating new environmental challenges
being a much larger undertaking than we
had expected previously.
AN ENCOURAGING YEAR FOR
GREENSHELL MUSSELS
While algal blooms don’t harm our
Greenshell mussels, the presence of algae
do render the species unsuitable for human
consumption at the time and this may
interrupt harvesting and processing for
several months. Algal blooms will likely
become a more common occurrence in the
Marlborough Sounds and our risk mitigation
in this area centres on geographic diversity
to enable continuous harvesting for our
plants in Havelock and Tauranga (NIML). We
received valuable new water space in
Golden Bay this year and have already
started the development of this area to add
another sourcing alternative.
Prioritising Science and Diversification
The positive performance of our mussel
business was driven by a variety of factors.
Harvest volumes exceeded expectations
and attractive pricing of regular items like
frozen halfshell mussels helped the
improvement on last year. However, we are
also starting to reap the benefits of our
product diversification into mussel powder.
In addition to our bulk powder business,
which is primarily aimed at the lucrative pet
food industry, the ‘Sea to Me’ brand had
been launched successfully. This is our first
foray into nutraceuticals, but due to the
limited product range, sales volumes are
still very small. With the recent approval of
investments exceeding $20m into a marine
extracts facility, we will capitalise on the
considerable value adding potential of
nutraceuticals and expand the range,
bringing current third party innovation,
processing and packing in-house. The
facility will be built in Blenheim over the
course of 2020 and production, which will
include fish oils and collagen for human
consumption, will commence from 2021.
In collaboration with the Cawthron Institute
we are currently undertaking clinical testing
as part of the High Value Nutrition National
Science Challenge to enable the use of health
claims on Greenshell mussels. The benefits
of this healthy protein are still undervalued,
both as food and as powder or oil.
Our Nelson based Greenshell mussel
research company Shellfish Production &
Technology NZ Ltd (SPAT
nz) recently
released the phenomenal results of its
multi-year breeding programme developed
in partnership with the Ministry for Primary
Industries and the Cawthron Institute, an
independent science organisation. The
results bode well for Sanford and the wider
industry and we are very optimistic about
the future volume and value growth
prospects. Please see this report’s chapter
on innovation for more detail.
GAINING TRACTION WITH
KING SALMON
Following on from a good year in 2018,
when updated stock in water value strongly
supported the result of our salmon business
unit, this year was marked by a mixed bag
of challenges and successes. Water
temperatures in Big Glory Bay, the site of
our salmon farms in Stewart Island, reached
highs over 17°C, which, in conjunction
with an algal bloom, unfortunately led to
mortalities of 5% of our salmon. However,
with the insights gained during an
international research trip by our salmon
farming experts and with subsequent
changes including innovative farming
adjustments, we are confident that we
can contain the impact of warming oceans
on our farm for the foreseeable future.
In addition to this we have put an algae
mitigation strategy in place to avoid
similar levels of mortality as we
experienced this year.
Good news was received when our
application for a resource consent variation
in Big Glory Bay was accepted on the basis
of updated scientific modelling, allowing us
to increase the volume of salmon we can
farm in Big Glory Bay by over 30%, which
will occur over the next three years. The
team delivering this outcome, did an
outstanding job in preparing the case,
ensuring in-depth understanding of all
variables and their impact on the Bay and its
environmental uniqueness. We focused on
including the Stewart Island community to
foster understanding around the viability of
salmon farming in their part of the world
and we thank the local community for their
vision and support.
Value from Branding and
Operational Efficiencies
Financially, the salmon business unit
improved significantly from prior year.
Notwithstanding higher mortalities, harvest
volumes improved through better growth
in the second half of the year to reach
just over 4000mt for FY19. As a result
of generally higher prices for all salmon
species internationally and the continuing
implementation of our very targeted
sales channel strategy, we achieved
very attractive prices across all markets.
The ‘Big Glory Bay’ brand for Sanford’s
top quality product continued its growth
CHAIRMAN AND CEO REVIEW – CONTINUED
08Sanford Annual Report 2019
SANFORD AND OUR OPERATIONS
1
SANFORD &

OUR OPERATIONS

09
in the high end foodservice sector in
New Zealand, the US and Hong Kong. The
volume sold under this brand is still under
5% of total, but with improving consistency
in supply we are targeting this share to
exceed 10% in 2020.
In order to gain operational efficiencies and
prepare our processing facility in Bluff for
future development, we created a centre
of excellence for salmon and relocated
whitefish processing to Timaru. The build of
a new salmon farm barge that houses the
salmon feed and the living quarters for our
team on the water in Big Glory Bay is
underway and new pens will soon be
installed. Planning for a new hatchery in
Southland is underway, where we intend to
grow our smolt to a larger size, before
transferring them to our farm. This should
improve their resilience and help limit
environmental impacts.
FISHING: BUILDING MOMENTUM IN A
CHALLENGING ENVIRONMENT
While Greenshell mussels are Sanford’s
single biggest species in volume terms and
King salmon’s contribution to the overall
profitability of the company far outweighs
the size of this business unit, our fishing
business remains the major cornerstone of
Sanford, making up circa two thirds of total
volume. Our activities in this regard span
inshore – and offshore fishing with fleets
ranging from small trawlers to large freezer
vessels. In addition, our longliners spend
months in the Ross Sea in Antarctica and the
waters of South Georgia to fish for toothfish.
This diversity makes Sanford one of the most
unique seafood operations globally, which
certainly provides for a delicate mix of
opportunities and challenges while, at the
same time, producing an unparalleled choice
of species for our customers and consumers.
This business was impacted this year by the
three-month outage of our largest fishing
vessel, the San Granit, following Steffan’s
fatality. The scheduled ten-week re-fit of
San Enterprise, another one of our large
freezer vessels, impacted on year-on-year
catch capacity as well. Also, the sale of our
pelagic assets in Tauranga, which included
15,000mt of quota, meant reduced volume
available to absorb the overhead
investment into the company over the last
years to improve our organisational
capabilities. While some of the cost
overhang will be eliminated through
efficiency improvements, the remainder will
be compensated through the increased
returns from our branding and channel
strategies and the further investment we
are making in the reliability and efficiency
of our catching fleet.
In spite of the setbacks, the Deepwater
business unit performed relatively well and
we are also seeing a continuous increase in
the return per kg fish caught. One of the
major contributors to this trend is a greater
focus on producing higher value items and a
good example in this regard is the shift
from hoki fillet blocks for further
processing to hoki fillets for immediate
consumption. This has not only delivered a
better product, but also a significantly
improved contribution to the bottom line.
Excellent catches of squid, accompanied by
high prices for this species globally, and a
very satisfactory toothfish season, in this
case with somewhat reduced sales prices
internationally, helped our offshore fishing
business to a respectable turnaround over
the latter part of the year. Our Korean
fishing partners, Dong Won New Zealand
and Jaico, complemented our fishing
capacity and capability with their vessels.
Their support in fishing species we would
otherwise not utilise effectively leads to
growing value gains as the demand for
seafood protein grows.
The greatest challenge for our Deepwater
team is the crewing of their vessels in a
consistent and reliable manner. High people
turnover, especially at entry level, and the
limited availability of motivated and
ambitious sharefishers, creates a
demanding environment for our
management team in Timaru, where the
Deepwater fleet is based. There is currently
a concerted effort with our People team to
rectify this issue. We have made some good
progress with our employment
arrangements across our processing sites
around the country and would expect to
deliver in due course a similar outcome for
all those working on our vessels as well.
Our inshore fishing business, where the
focus is on selling the fish fresh, i.e. never
frozen, has lived up to our expectations of
delivering high quality New Zealand
seafood. This can be evidenced by the
presentation of a vast array of species at
our Auckland Fish Market, which has been
refurbished and officially opened earlier
this calendar year to highlight the premium
quality of our seafood. We are grateful to
the many stakeholders that help us offer a
wonderful portfolio of product at the
market and to the restauranteurs who have
created a delightful environment for
customers and visitors.
While our fishermen caught our annual
catch entitlement for all valuable inshore
species, we did decide this year to refrain
from catching hoki with our inshore fleet,
as we can create more value for the species
on our freezer vessels. We also moved our
South Island based vessel, the Ikawai, which
traditionally targeted barracouta, to the
North Island to enhance our fishing
capacity there with higher value species.
For quality reasons inherent to barracouta
the markets for this species have dwindled
over time, leaving us no choice but to
deploy our catch effort elsewhere.
PHOTO: Tyler Bryan at work on the Ikawai
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Innovation and Investment in Fishing
The product cascade change on our large
freezer vessels and the quality improvement
across our inshore fleet is greatly helped
by the rollout of the precision seafood
harvesting fishing method (PSH) across
most of our operations. This PGP project
between Sanford, Sealord, Moana, Plant &
Food Research and Fisheries New Zealand
has very successfully completed its 7-year
development period to identify a fishing
method that would be a game changer.
The objective of delivering significantly
improved product through careful handling
of our marine resources, while facilitating
the opportunity to return unwanted fish to
the sea alive and healthy has certainly been
met. The all-up total cost of the project
amounted to $43 million and the outcome
is outstanding. Our crews at sea as well as
our customers, some of whom are now
demanding ‘fish caught the PSH way’,
are excited by the superior quality of
the product they receive. Following
a presentation at the International
Groundfish Forum in Berlin in October
2019 several fishing companies from around
the world have voiced their strong interest
in our invention. The commercialisation of
the project is currently being considered.
We have previously highlighted the need
for rejuvenation of our aging fleet. Over
the last few years we have encouraged
increasing numbers of private fishermen to
work with us in our inshore operations and
complement our own fishing capacity. We
retired a few vessels for reasons ranging
from safety to product quality and
efficiency considerations and are
proceeding with plans for investment
into replacement vessels.
Our offshore fleet will be upgraded
through investment into three new scampi
vessels, which are being designed to
replace our aging vessels in this fishery
over the next two years. The specification
for our new scampi vessels aims to
improve operational efficiency, reduce
environmental impact, enable consistent
product quality and provide a safe and
attractive working and living environment
for our crews, especially in the light of more
frequent bad weather events.
While there is a lot going on in our overall
fishing business it is still a considerable
work in progress to deliver returns that
achieve and ultimately exceed its weighted
average cost of capital (WACC). This is a
focus area for management.
THE SAFETY OF OUR PEOPLE
Leading with safety is a priority at Sanford
and losing Steffan Stewart in a tragic
accident on board the San Granit in
November had a significant personal
impact on us all. While extensive work had
been undertaken on the vessel to reflect
regulatory and internal safety requirements
prior to launch in NZ, we removed the
vessel from the fleet for three months
to undertake further highly detailed risk
analysis of all factory equipment and
processes after the accident. We have
continued to invest in safety and our people
and believe we are in the process of setting
new industry standards for factories on
board vessels.
Our latest engagement survey indicates
very high awareness of our focus on
safety and health around the business,
with the outcome at 85% being well above
international benchmark. The introduction
of a safety management system that has a
clear focus on risk management and covers
strategic initiatives ranging from the
introduction of a ‘just culture’ leadership
approach to the promotion of safety, health
and wellbeing awareness throughout the
company supported this improvement.
Within a ‘just culture’ incidents are
foremost investigated on the basis of
circumstantial challenges leading to
accidents, e.g. time pressure, insufficient
training or other human or environmental
factors. Serious harm incidents are usually
not the result of reckless behaviour or
malicious intent and we encourage our
employees to speak up in situations that
feel unsafe. Above mentioned score also
highlights the belief across the company
that we are all taking the safety of our
people very seriously.
The heightened safety consciousness
around the company has resulted in
increased reporting of near misses
compared to prior year (+36.6%). Following
a 21% and 6% reduction in total injuries and
incidents in FY17 and FY18 respectively, this
number has remained static at around 970
in FY19, with the majority of these being
sprains and strains, which increased year
on year. Our focus on reducing the risk of
lacerations and stings through fish bones,
spikes and knife handling has reduced
injuries in this category by 22%.
We provide more detail on this important
topic in the chapter ‘Creating a Safe and
High Performing Workplace’ later in
this report.
MAKING A DIFFERENCE TOGETHER
We will continue to invest into organisational
capability to optimise the implementation
of our strategy, especially in terms of
customer interaction, innovation and
business development. Our objective of
providing a safe and stimulating working
environment means more roles will need
to be created in the People function of
the company.
We have adjusted the six outcomes in our
business excellence framework to better
reflect our strategic direction. Two
outcomes have been merged into a single
environmental pillar, ‘Enabling Healthy
Oceans and Protecting the Environment’,
and a new outcome representing our focus
on consumers and the need to understand
the fast evolving nature of their
expectations and preferences, i.e.
‘Delivering Consumers’ Expectations’
has been added.
We can only be successful in achieving the
targets we have set ourselves for the six
outcomes by collaborating with relevant
stakeholders. Examples of this include our
work with WWF and Moana NZ to protect
Maui dolphin in New Zealand’s waters. As
part of the public consultation of Fisheries
New Zealand’s and the Department of
Conservation’s Threat Management Plan,
we submitted Option 5 that connected the
need to protect these very vulnerable
dolphins with the need to also protect
Our latest engagement survey
indicates very high awareness of
our focus on safety and health
around the business, with the
outcome at 85% being well
above international benchmark.
CHAIRMAN AND CEO REVIEW – CONTINUED
PHOTO: Ariel Tehei-Lewis in Coromandel
10Sanford Annual Report 2019
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11
the livelihoods of fishers and the need
to step-up research into other threats
to dolphins.
Our interaction with the Stewart Island
community to ensure better understanding
of our salmon farming activity in Big Glory
Bay followed our principle of providing
utmost transparency and eliminating any
doubt in us doing the right thing.
Our support of Paralympics New Zealand
and the Graeme Dingle Foundation
stretches well beyond a financial company
commitment as we are seeing increasing
engagement of colleagues in furthering the
good causes of, for example, Kiwi Can.
A SENSE OF URGENCY
We have committed ourselves to targets
that highlight our belief that the
consequences of climate change and the
dawn of a generation of consumers with
far wider expectations of companies like
Sanford are significant. Please see the
targets set out in each chapter of this
report for more detail.
We choose to measure ourselves against
outcomes with timelines we will live to
witness. Progress at Sanford may have
appeared overwhelming or courageous to
some over the last few years, much of this
had to do with the need to build a solid
foundation, realise a cultural shift and build
our social license to operate. The future will
not be less exciting: from here on we will
be more nimble and able to accommodate
challenges as opportunities to innovate
and improve.
New Zealand remains at the forefront of
sustainable fisheries management globally
and Fisheries New Zealand’s recent
announcement of an ambitious aquaculture
strategy for our country was very
encouraging as it clearly highlights the
potential of this industry. However, against
this background and the opportunity we
have to lead by example in managing our
oceans in the light of the numerous
challenges facing us, we do need to ensure
increased agility and urgency at regulator
level. We will certainly play our part in
bringing about a greater commitment to
ensuring the sustainable future of our
marine environment, ideally with all
relevant stakeholders, including the
recreational fishing sector and
environmental NGOs.
The heightened awareness of animal protein
production’s impact on the environment,
ever increasing health consciousness,
expectations for total transparency in
supply chains and a general need for
companies like Sanford to live up to societal
expectations, ensures our agenda remains
an interesting one. We believe that our
company has proven its resilience and are
very motivated to continue our journey
to becoming the best seafood company
in the world.
DIVIDEND
Because of the continuing and substantial
investment needs (both capital and
operational expenditure) which is required
from both our transition as well as asset
rejuvenation perspective, your Board has
determined that the dividend should remain
at 23 cents per share. The final dividend
of 14 cents per share will be paid on
December 6th, 2019.
CEO ACKNOWLEDGEMENTS
At the end of a year that proved to be an
emotional rollercoaster for many, yet
delivered successfully on many fronts,
we wholeheartedly thank the team for
their hard work and dedication to
Sanford. Onwards!
As CEO, I would like to thank my Executive
Team for their tireless support in turning
Sanford into a formidable business. I also
thank the Board for their guidance in
sometimes testing circumstances. My
sincere appreciation to our Chairman, Paul
Norling, for his support of our vision for the
company and his ability to lure me out of
my comfort zone on numerous occasions
over the last 5 years. That has certainly
stretched our visionary considerations
beyond business as usual.
BOARD AND CHAIRMAN
ACKNOWLEDGEMENTS
It has been another very busy and, at times,
challenging year for the company, our
management team and the Board.
Our thanks to Volker and his management
team for their continuing dedicated work in
progressing what is a major transition
journey for the company – in addition to the
operational and nature’s challenges that
occur in the seafood sector.
My thanks also to my Board colleagues for
their application and advice in addressing
the many important governance matters
that have come before us. This particularly
includes the Chairs of our Board sub-
committees who perform a vitally
important role in our oversight functions.
Two members of the Board come up for
shareholder approval at this year’s AGM
– Peter Kean who joined the Board in 2014
for re-election and Peter Cullinane who
was appointed by the Board in February
of this year and is required to have his
appointment confirmed by shareholders as
required by the NZX Listing Rules. Both
have the Board’s strong support for their
re-election.
In conclusion, this is my final Annual
General Meeting as I will be retiring both as
Chairman and as a board member following
this meeting. It has been a privilege to serve
in both capacities in what, to my mind, is an
iconic New Zealand company with a great
history and even more importantly a future
which has many opportunities of great
potential from its very strong foundation
today. My best wishes to my successor
Sir Rob McLeod as your new Chairman, the
Board as a whole and to the management
team - all of whom will steer the company
going forward and successfully navigate and
capitalise on the future for our shareholders
and all stakeholders.
Paul Norling
CHAIRMAN
13 November 2019
Volker Kuntzsch
CEO
13 November 2019
It has been a privilege to
serve in both capacities in
what, to my mind, is an iconic
New Zealand company with a
great history and even more
importantly a future which has
many opportunities of great
potential from its very strong
foundation today.
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With higher returns achieved on
lower overall sales volumes, Sanford’s
performance for the year ended
30 September 2019 has validated our
value-focused strategy and its aim to
lift earnings on every green weight
kilo caught or harvested and sold.
We moved marginally closer towards our
goal of $1 profit (EBIT) per kilogram
(GW kg) with our 2019 number at 56 cents,
a 2 cent gain on the prior year’s 54 cents.
This was achieved despite a difficult start
to the season, with our deep water vessel,
San Granit out of action from mid-
November to February, followed by algal
blooms in the Marlborough sounds from
March through to August and an algal
bloom in Stewart Island during the second
quarter. All these factors slowed our
planned progress in both our fishing and
aquaculture businesses. Without these
factors, we estimate that we could have
achieved an average EBIT/GW kg of
60 cents. However, adversity builds
resilience and sustainability and we are
confident that what we have learned and
the adaptations we are making as a result
will stand us in good stead for both the
2020 year and the future.
The tragic loss of crew member Steffan
Stewart on board San Granit occurred on
14 November 2018. This report is published
around the anniversary of his death and our
thoughts remain with his family, friends,
crew and all who were affected.
2019 KEY FIGURES
Financially we ended the year with much
the same profit result as last year with
adjusted (underlying) Earnings before
Interest and Tax (EBIT) of $64.8 million
compared to $64.7 million. Our Net Profit
After Tax (NPAT) was $41.7 million compared
to last year’s $42.3 million and our Earnings
per Share was 44.6c versus last year’s
45.2 cents.
Reported Sales revenue for the year was
$545 million. On a like for like accounting
basis with last year’s revenue, sales revenue
was $558 million, up 8% on last year’s result
of $515 million. During the year, we adopted
a change in our accounting policy on revenue
recognition (refer note 2 of the financial
statements) which has resulted in some
revenue transferring to offset distribution
expenses, with a nil impact on profit.
Lower sales volumes of 115,000 GW tonne,
down 5% on last year due to our lower
catch volumes, impacted our usual ability
to absorb both land and sea based fixed
processing costs. However, with our drive
to improve quality and convert more volume
into higher value products, our strong
relationships with our fishing partners, our
brand, market and channel diversification
strategies, coupled with strong demand
driving favourable pricing, we were able to
more than offset increasing cost pressures
such as higher labour and fuel costs. Gross
margin (on a like for like basis) improved by
$6.3 million but fell as a percentage of sales
by 0.6% from last year’s 22.1%.
Operating expenses were $4.9 million
higher than last year. As previously
signalled, this reflects required investment
in our people, training, research and
development, information technology
and systems and marketing to continue to
build the capability to enable Sanford to
capitalise effectively and sustainably on the
many opportunities within our grasp.
This year’s result also included a net gain
on sale of $5.1 million for our pelagic
quota and assets whereas last year’s
result included a $6.8 million net pre-tax
benefit of the Havelock earthquake
insurance settlement.
Cash flow
Our operating cash flow of $48.7 million
was lower than the $72.4 million last year
due to the timing of tax payments, a return
to normal working capital levels from 2018
where low fourth quarter mussel sales due
to the Havelock plant closure for
earthquake repairs reduced receivables,
and a $10 million one-off insurance receipt
in 2018 for the Havelock site.
We spent $38.3 million on capital and,
noting our previously stated intention to
invest $120 million over 2019 and 2020,
the cash flow spend in relation to the
growth and asset rejuvenation investments
we have underway is expected to ramp up
significantly in 2020.
Net proceeds of $24.3 million from the
sale of our pelagic business, coupled with
$9 million for the sale of our investment
in the China-based processing plant,
Weihai Dong Won Food Co. Ltd, led to
a lowering of the overall group secured
borrowings from $155 million in 2018
to $139 million this year. This positively
impacted the gearing ratio, improving
it from 27% to 24%, and strengthened
our balance sheet in advance of outgoing
investing activities cash flows related to
our capital investment programme.
GREENSHELL MUSSELS FINANCIAL OVERVIEW
Sales Volume (GWT)+3%
Revenue+13%
Profit contribution +69%
Despite the algal bloom experienced in
Marlborough affecting harvest timing,
harvested volumes at 29.4k GW tonne,
were up 9% on last year.
Sales revenue grew 13% as we moved more
product away from raw sales into half shell
production and took full advantage of the
strong half shell pricing, realigned our sales
channel from the US to Asia where demand
is higher and grew our powder operations
by a further 40%.
Our mussel operations in Havelock
continued to benefit from the selective
breeding programme operation by our
Nelson-based SPAT
nz team with the shorter
growth cycle and the uniformity of the
product increasing throughput for our
automatic mussel openers. However,
for our Coromandel operations and
Tauranga plant, farming and operational
efficiency was unfavourably impacted as we
experienced snapper strike on mussel spat
and higher bio-fouling from warmer waters.
Overall, despite the climate related
challenges, the mussel business profitability
rebounded strongly from last year’s
challenges, back to 2017 levels and with the
current condition of the crop in the water
and with the diversification of product and
channels, the outlook for 2020 is positive.
—
CFO
REVIEW
—
PHOTO: Sanford CFO Katherine Turner
12Sanford Annual Report 2019
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13
KING SALMON FINANCIAL OVERVIEW
Sales Volume (GWT)+16%
Revenue+23%
Profit contribution (excluding prior
year one off stock in water
adjustment)
+62%
Harvested salmon volumes at 4,000 GW
tonne, were up 15% on last year. Our salmon
farms recovered from the algal bloom in
Big Glory Bay experienced in the second
quarter of this year, with the fish rapidly
gaining in weight and condition. The ability
of some fish to flourish in post bloom
conditions is being investigated in our
breeding programme as a longer-term
mitigation against climate change risks.
Albeit delayed by algal bloom, the recovery
of the biomass, along with the overall weight
and quality of the fish, has supported good
progress in our Big Glory Bay brand rollout
to prime locations in the US.
Sales volumes also increased by 16% and
sales revenue grew 23%. Higher feed costs
year on year are attributable to a higher
biomass in the water. Last year’s salmon
result included an $8 million one-off gain in
the value of the salmon biomass in the
water. As a result, year on year profit
performance appears flat. However,
normalising for last year’s one-off stock
adjustment, we are very satisfied with the
growth in the underlying performance of
the salmon business this year, in spite of the
climate related challenges faced.
WILD CATCH FINANCIAL OVERVIEW
Sales Volume (GWT)-9%
Revenue+7%
Profit contribution-3%
Catch volumes at 78k GW tonne were
overall 8% lower this year. After the
challenges in the first half, our fishing
business was able to come back strongly
and the final result, given the
circumstances, was satisfying.
While lower catch volume, in part reflected
San Granit’s three-month lay-up in our deep
water fleet and the planned ten-week
outage for the refit of San Enterprise, it also
reflected the sale of our pelagic business to
Pelco at the end of the skipjack tuna season
and our inshore boats being out of service
for either essential repairs, upgrades to
support higher product quality, or
unfavourable weather. A further
contributor to lower catch volumes was the
voluntary reduction in our hoki catch in
response to changing patterns being
observed in one of the five Hoki fishing
grounds. This was part of an industry
initiative to shelve 20,000 tonnes of West
Coast quota, which represented a 22%
catch reduction on the West Coast.
Offsetting these downsides, we have made
continued progress in converting more of
our catch into higher value frozen fillets
away from lower value fillet blocks.
This change in product mix has more than
offset the impact of lower Hoki catches
with an estimated incremental $5 million
lift in profit year on year.
While we experienced healthy catches in
squid and toothfish, pricing for squid was
strong while pricing for toothfish was 20%
softer due to an oversupply in the North
American market. Great catches in
southern blue whiting offset poor hoki
catches on the West Coast at the end of
the season, albeit a less profitable species.
Overall Wild catch sales grew 7%, reflecting
both our strategic shift to focus on higher
value offerings and strong squid pricing.
The strong sales growth however was
unfortunately not sufficient to fully recover
the additional costs incurred this year and
overall profit performance in wild catch was
marginally below last year.
FOCUS ON INVESTMENT
Investments have been made this year in
processing plant improvement on our vessels
and in our sites supporting operational
excellence. Operational investments in
Precision Seafood Harvesting technology
on our vessels and in reducing the ambient
temperatures in the landing pounds and
processing areas have supported our ability
to improve and maintain catch quality.
We have also invested in technology and
training to put robust risk mitigation
systems in place in our Big Glory Bay farms,
acknowledging that climate change is a
significant risk to the business.
We have made good progress in the
planning and design phase of SanCore,
our company wide information system and
process replacement project that will have
a phased implementation approach over the
next two to three years.
Our strong balance sheet supports
investments next year to accelerate
progress with our innovation strategy,
specifically with marine extracts and our
asset rejuvenation strategy. We will be
building our own purpose built marine
extracts facility in Blenheim during 2020.
We are replacing our scampi fleet over the
next two years with larger vessels capable
of delivering the highest quality of scampi,
a high-value product in Sanford’s portfolio.
Well-considered investments in our fleet
and facilities are supporting our strategy to
reduce our commodity volumes from 80%
to 50% to increase our value returns. We
will also be focussing our efforts on
developing the assets required to grow our
mussel and salmon volumes.
OUTLOOK
Our result this year has demonstrated we
are on the right track with our strategy,
building increasing resilience into the
business as we also focus on quality over
quantity, using our provenance and brands
to create stronger customer connections
and investing in the innovation which is
creating new revenue streams from our
marine resources.
Progress is good, but we are not there yet.
There is more work to be done to improve
our margins by reducing and containing our
fixed costs and to recover our investments
in sales and marketing through focussing
our customer base around value.
Against a backdrop of global economic
uncertainty, we are feeling quietly
optimistic about the coming year.
While ensuring our business today continues
to create value for our shareholders and
stakeholders, we will continue to focus on
setting up Sanford for the next 100 years
in a way that prioritises the sustainability
of our practices and our business.
Katherine Turner
CHIEF FINANCIAL OFFICER
13 November 2019
Our strong balance sheet
supports investments next year
to accelerate progress with our
innovation strategy, specifically
with marine extracts and our asset
rejuvenation strategy.
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Welcome to Sanford’s sixth
integrated Annual Report 2019 –
TOGETHER.
It charts our progress towards our
ambitious vision to be the best seafood
company in the world and our achievements
this year in bringing to life our purpose,
which is to share the natural goodness
of our oceans with uncompromising care.
This progress has been made while
honouring our shared values of Care,
Passion and Integrity underpinned by
the principle of Achieving Together.
In this report we provide a snapshot of
Our Global Operations on pages 16 and 17,
commenting on how we are progressing
with our work to move our beautiful
New Zealand seafood up the value chain
by delivering more high return products,
while keeping the focus on sustainability
front and centre.
How We Create Value, on page 18 and 19,
provides an integrated overview of our
business model.
Our stakeholders are important to us and
our annual Reporting What Matters section
on pages 22 to 26, covers how we work
with them to determine what matters most
to them, so that our operations reflect and
respect these material issues.
THE OUTCOMES – ANOTHER APPROACH
We have made some changes this year in
our reporting against our Business
Excellence Framework and the six
outcomes it is designed to achieve.
Where in previous reports we began
our Business Excellence Framework
reporting with Building a Sustainable
Seafood Business, our approach this year
recognises that creating a sustainable
business is the sum total of all our actions
across our framework.
As a result, this year’s order is:
• Enabling Healthy Oceans and Protecting
the Environment
•
Creating a Safe and High Performing
Workplace Culture
• Leading the Way to Healthy Food
and Marine Extracts
•

S
upporting Strong Communities
and Partnerships
•
Delivering Consumers’ Expectations
• Building a Sustainable Seafood Business
We have combined the two outcomes of
Enabling Healthy Oceans and Protecting
the Environment and put these first.
We have also added Delivering Consumers’
Expectations, recognising our focus
on what is important to them as we
increasingly move away from commodities
to become a higher value seafood business.
BUSINESS EXCELLENCE FRAMEWORK
Our people are integral to our performance
each year and ultimately the achievement
of our vision. We are Creating a Safe and
High Performing Workplace, because we
want to be an employer of choice by
delivering industry leading safety risk
management, ensuring a culture of high
performance and growth in which we are
living our values.
Every year, we learn new ways to make
more of the amazing marine resources
available to us. Leading the Way to Healthy
Food and Marine Extracts shows how we are
driving sustainable performance across our
value chain and positioning our brand as the
industry partner and supplier of choice.
Supporting Strong Communities and
Partnerships speaks to our leadership in
creating employment and opportunities,
coupled with our understanding of the
needs of our communities and partners,
ensuring we deliver a significant and
positive contribution everywhere we work.
Delivering Consumers’ Expectations
recognises that to be the brand and supplier
of choice for New Zealand seafood, we
must understand customers’ and
consumers’ needs and preferences and
respond with a consistent high value, high
quality product, supported by a strong story
about provenance and sustainability.
Our sixth outcome, Building a Sustainable
Seafood Business is the net result of all the
other outcomes working together. It
reflects our desire to deliver sustainable,
profitable and socially beneficial outcomes
through our people, sector leadership and
approach to innovation and risk
management. This section of the report
then leads through to our full financial
statements for 2019.
Sustainable seafood needs healthy origins,
so we begin with Enabling Healthy Oceans
and Protecting the Environment. We aim
to lead by example in the management
of the marine environment so that future
generations can enjoy and benefit from our
biologically diverse, safe, healthy oceans.
We work with our people, customers and
suppliers to show how we can responsibly
maximise the use of our resources from
the sea while minimising our footprint
and protecting the environment wherever
we operate.
—
REPORT
STRUCTURE
—
14Sanford Annual Report 2019
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15
UNITED NATIONS SUSTAINABLE
DEVELOPMENT GOALS
Sanford’s sustainability strategy is aligned
with the UN Sustainable Development Goals.
There are 17 goals agreed by the United
Nations and a full description is available
here https://www.un.org/
sustainabledevelopment/
We have chosen to focus on the eight
development goals where we believe we
can make a difference. These goals are
Good Health and Wellbeing (Goal 3),
Quality Education (Goal 4), Decent Work
and Economic Growth (Goal 8), Industry,
Innovation and Infrastructure (Goal 9),
Responsible Consumption and Production
(Goal 12), Climate Action (Goal 13), Life
Below Water (Goal 14) and Partnerships to
Achieve the Goal (Goal 17).
We have captured these in the ‘Future
Focus’ section for each of our six
performance outcomes, and throughout
some of our case studies.
VALUE CREATION – THE SIX CAPITALS
FINANCIAL
HUMAN
MANUFACTURED
INTELLECTUAL
NATURAL
SOCIAL AND RELATIONSHIP
Value creation in any one performance
outcome, as set out in our Business
Excellence Framework, will typically
create value across more than one of
the six capitals.
Examples in this year’s report include
investments in infrastructure to improve
efficiencies in our fleet and in processing,
the ongoing development of our Sea To Me
inflammation management brand and
further research into marine extracts and
their potential. We have formed closer
customer relationships through our
strategy to rationalise distributorships in
high value markets and we have celebrated
the bounty of the sea through the
reopening of our iconic Auckland Fish
Market. Recognising that Sanford’s future
is in the hands of its people, we have kept
up our efforts to keep them engaged, safe,
challenged and growing, both personally
and professionally. Finally, we aim to
make sure that everything we achieve
will contribute to the natural capital that
supports our business, as well as our
communities and stakeholders, over
the long term.
ROBUST REPORTING FRAMEWORKS
This Report has been developed in
accordance with the International
Integrated Reporting Council (IIRC)
Integrated Reporting Framework. This
enables us to explain how we create value
over time and provide transparency on
every aspect of our business activity.
We remain committed to integrated
reporting because it is the right thing to
do and we know an increasing number
of stakeholders are interested in how
we create long term sustainable value.
We wish to be transparent.
We also applied the Global Reporting
Initiative (GRI) Sustainability Reporting
Standard 2016 to a core level of
compliance, and report across a range
of best practice environmental, social
and governance (ESG) indicators. The
GRI index is included in Appendix E.
DISCLOSURE
Unless otherwise indicated, this Report
covers performance from all our
operations, including North Island Mussels
Ltd in which Sanford has a 50% interest. It
does not include a full year contribution
from Weihai Dong Won Foods processing
facility in Weihai China, subsequent to the
sale of our 50% shareholding to Japanese
restaurant group Plenus, was finalised
during the first quarter of FY19 with the
cash receipt of $9.0m.
Also disclosed at the half year was the sale
of our pelagic assets in Tauranga to local
company Pelco, including pelagic quota in
Fisheries Management Area 1. This was
completed on March 29 with cash
settlement on April 3. The quota sale
reduces Sanford’s overall quota holding
under New Zealand’s Quota Management
System from around 22% to approximately
19% of the total volume available for
commercial catch. In value terms, the sale
of quota represents just 3.75% of the
company’s quota book value.
All financial data is presented in
New Zealand dollars, unless otherwise
stated. Any changes or restatements of
previously reported figures are identified
throughout the Report. KPMG has provided
independent assurance of this Report, and
this covers both statutory financial and
selected nonfinancial information. The
combined independent auditors and limited
assurance report is on pages 138 to 144.
This Report, produced by Sanford’s
management team and reviewed by our
Executive team, has been signed off by
Volker Kuntzsch, our Chief Executive
Officer and the Board as a true and
accurate picture of our value creation
during the year. The Directors are pleased
to present the Integrated Annual Report
of Sanford Limited for the year ended
30 September 2019.
For and on behalf of the Board of Directors:
P G Norling
CHAIRMAN
13 November 2019
Sir R A McLeod
CHAIR AUDIT FINANCE AND RISK COMMITTEE
13 November 2019

We welcome feedback and questions on
this Report; and encourage you to send
these to our GM Corporate
Communications at: info@sanford.co.nz.
1
SANFORD &

OUR OPERATIONS

Indian Ocean
South Pacific
North Atlantic
South Atlantic
Tropic of Capricorn
Equator
Tropic of Cancer
Arctic Ocean
North Pacific
Southern Ocean
Melbourne
AUSTRALIA
(INC. PACIFIC ISLANDS)*
9.3
%
SOUTH
KOREA*
1.3
%
2018: 2.2%
2018: 11.1%
AFRICA*
0.7
%
2018: 1.2%
OTHER ASIA*
3.4
%
2018: 2.8%
JAPAN*
2.8
%
2018: 3.4%
*
EUROPE*
12.3
%
2018: 12.0%
NORTH AMERICA*
13.4
%
2018: 11.0%
11.4
%
2018: 12.0%
CHINA
(INC. HONG KONG)*
In our 2019 Integrated Report, we have
created a new outcome in our Business
Excellence Framework: Delivering
Consumers’ Expectations. Consumers and
customers are at the heart of what we do,
as we work to bring them beautiful and
sustainable New Zealand seafood. In this
global snapshot of our revenue by territory,
many of the changes reflected here from
2018 demonstrate our strategy of prioritising
higher value markets and channels and
growing our brands in our move away from
commodity focus.
In the map above, percentages shown relate
to the operations revenue from our top nine
geographical locations at point of sale
NORTH AMERICA – our market here has
grown as a percentage of sales in 2019
on the back of our focus on introducing
our premium species into high end food
service channels. Key highlights include the
introduction of Big Glory Bay salmon, we have
feet on the ground in Los Angeles and have
been successful in gaining listings in some of
the best restaurants in the land. Significant
growth in scampi sales and increased share of
market for toothfish have also contributed to
this growth. We have also greatly increased
our sales of squid to North America in 2019,
and have seen margin for this product grow
significantly. This market remains a key focus
for 2020 and beyond as we continue to grow
our premium brand offerings.
EUROPE – this market has remained strong
in 2019, with both ups and downs in key
species. A positive has been revenue growth
in Greenshell mussels as we continue to
diversify markets. Revenue was offset
however by a reduction in the volume of
skipjack tuna sales. In line with our cascade
improvements for hoki, revenue from this
species has grown 20% in this region.
AFRICA – this market is a traditional
commodity market driven mainly by species
which Sanford exited in 2019 with the sale of
our pelagic fleet, as we continue to focus on
higher return areas of our business.
WORKING TOGETHER
AROUND THE WORLD
—
OUR
GLOBAL SALES
FOOTPRINT
—
16Sanford Annual Report 2019
SANFORD AND OUR OPERATIONS
1
SANFORD &

OUR OPERATIONS

17
ProcessingAquaculture
FishingFish Market
Processing
Joint Arrangements
Aquaculture
Joint Arrangements
Head OfficeFishing area
Top Export Countries
* Percentage of operations revenue
from top nine geographical
locations at point of sale
KEY
Auckland
Nelson
Havelock
Timaru
Bluff
Waitaki
Kaitangata
Stewart Island
Coromandel
Tauranga
Blenheim
1,597
SANFORD PEOPLE BRINGING
BEAUTIFUL NEW ZEALAND
SEAFOOD TO THOUSANDS OF
PEOPLE AROUND THE WORLD
EVERY DAY.
CHINA INCLUDING HONG KONG – the
greater China market was slightly down on
previous years in 2019. The principle driver
of this was a decline in orange roughy sales
although we expect that to bounce back in
2020. This has been offset by significant
growth in scampi revenue, which we look to
grow further in 2020 as Sanford explores
e-commerce channels in Asia.
JAPAN – a challenging year in this market
as key species, including scampi, saw softer
demand due to higher prices globally.
Highlights for the year included increased
revenue from Greenshell mussels. The focus
for 2020 includes growth in premium species
such as salmon.
SOUTH KOREA – Core seafood sales in
this market were steady in 2019 with good
success in the mussel category. The decline
in revenue this year was primarily driven by
fishmeal sales as other markets had higher
demand with better returns.
AUSTRALIA – we have launched Big Glory
Bay salmon into the market with the Merivale
Group in Sydney and look to further develop
this brand in the coming year. The decline
in this market compared to 2018 is largely
a result of the improved hoki cascade and
reduced block revenue as premium fillets are
in strong demand in other markets. However,
we are looking to reinvigorate this market in
2020 as we move our offerings up the value
chain and into branded product.
NEW ZEALAND – 2019 has been another
year of revenue growth in our home market
with continued success in the premium
foodservice sector and increased revenue
from our fishing partners.
Our Big Glory Bay salmon expansion has
been highly successful and now sees this
product branded on the menus of many of
New Zealand’s top restaurants. This has also
benefited our fresh white fish business and
the channel as a whole by creating added
interest in our wider portfolio.
Sea To Me mussel powder direct to consumer
business was launched in 2019 and continues
to grow steadily.
The domestic market continues to be a
primary focus for us in 2020 as we strengthen
our branded offerings.
NEW ZEALAND*
43 .9
%
2018: 42.9%
1
SANFORD &

OUR OPERATIONS

B
M
T

A
N
D

B
I
T

S
T
R
A
T
E
G
Y

A
N
D

E
X
E
C
U
T
I
O
N
SOCIAL &
RELATIONSHIP CAPITAL
NATURAL CAPITAL
INTELLECTUAL CAPITAL
MANUFACTURED CAPITAL
HUMAN CAPITAL
FINANCIAL CAPITAL
Pool of necessary funds (equity, debt
and grants) provided by banks and
shareholders, or generated through
operations or investments
Competencies, capabilities and experience
of our employees, our key asset, and the
capacity to add value through human
capital development
Tangible, production-orientated goods and
infrastructure owned, leased or controlled
by Sanford that contributes to the delivery
of our products and services
Stock of natural resources or
environmental assets (water,
atmosphere, land, materials, biodiversity
and ecosystem health) that are
fundamental to our future prosperity
Relationships within Sanford, and between
Sanford and its external stakeholders,
which are essential to retaining our social
licence to operate, including relationships
to maintain quotas and licences
Intellectual property, brand and
reputation, a key element of our
future earning potential and
competitive advantage
WE SHARE THE NATURAL GOODNESS OF OUR OCEANS
WITH UNCOMPROMISING CARE
ACHIEVING TOGETHER
CAREPASSIONINTEGRITY
OUR VALUES
OUR PURPOSE
Our value creation process is impacted by the external
environment in which we operate, which includes
economic conditions, technological change, societal
change and environmental conditions
VALUE CREATION PROCESS OVER TIME
783
M
MEALS
PRODUCED
INPUTSOUR BUSINESS
37
VESSELS
219
FARMS
7
PLANTS
750+
CUSTOMERS
—
HOW WE CREATE VALUE
—
18Sanford Annual Report 2019
SANFORD AND OUR OPERATIONS

19

B
M
T

A
N
D

B
I
T

S
T
R
A
T
E
G
Y

A
N
D

E
X
E
C
U
T
I
O
N
OUTPUTSOUTCOMES
HIGHS AND LOWS
PAGES 20-21
BEAUTIFUL
NEW ZEALAND
SEAFOOD
REVENUE IN 2019
$545.1
M
THE BEST
SEAFOOD
COMPANY IN
THE WORLD
OUR VISION
We will lead by example in health ocean management so
that future generations can enjoy and benefit from our
biologically diverse, safe and healthy oceans.
We will work with our people, customers and
suppliers to lead the way in maximising resource
utilisation, minimising our footprint and protecting
the environment wherever we operate.
ENSURING HEALTHY OCEANS AND PROTECTING
AND ENHANCING THE ENVIRONMENT
We will endeavour to deliver sustainable,
profitable and socially beneficial
outcomes through our people, sector
leadership, approach to innovation and
risk management strategies.
BUILDING A SUSTAINABLE
SEAFOOD BUSINESS
We will lead the way in driving sustainable
performance across our value chain, and
positioning our brand as the industry
partner and supplier of choice.
LEADING THE WAY TO HEALTHY
FOOD AND MARINE EXTRACTS
Our leadership in creating employment
and skills opportunities, coupled with our
understanding of the needs of our
communities and partners, ensure we
deliver a significant and positive
contribution everywhere we work.
SUPPORTING STRONG
COMMUNITIES AND PARTNERSHIPS
We strive to become an employer of choice by
delivering industry leading safety risk
management, ensuring a culture of high
performance and growth and by living our values.
CREATING A SAFE AND HIGH
PERFORMING WORKPLACE
We will work with customers and
consumers to bring them the best of our
sustainably harvested seafood and marine
extracts, demonstrating great care for our
beautiful New Zealand products and
achieving the optimal value for these
precious resources.
DELIVERING CONSUMERS’
EXPECTATIONS
1
SANFORD &

OUR OPERATIONS

ENSURING
HEALTHY OCEANS
AND PROTECTING
AND ENHANCING
THE ENVIRONMENT
HIGHSLOWS
VALUE CREATION
OUTCOMES
LEADING
THE WAY TO
HEALTHY FOOD
AND MARINE
EXTRACTS
CREATING A
SAFE AND HIGH
PERFORMING
WORKPLACE
5
Vessels using Precision Seafood
Harvesting (PSH)
2018 4
▼
13%
decrease in overall carbon
emissions intensity across all
operations when compared to
revenue (CO
2
-kg/revenue)
164
seabirds killed
2018 273
▼
40% decrease
46
marine
mammals Killed
2018 71
(although 35%
reduction on
previous year)
2
Notifiable Spills
2018
4
72%
reported levels of
engagement across
the group (2018: 53%)
through a new digital
people survey, providing
deeper insights
(Peakon survey)
▼
18%
reduction in
ACC claims
96
2018 118
1
ST
inaugural
sea-faring officers’
conference
151
front line team leaders and supervisors
graduated from the San Ignite programme and
60 vessel officers and functional managers
graduated from the San Activate programme
2018 121 for both programmes
12
more Serious Harm (Notifiable) Injuries than
the previous year, a total of 17 (2018: 5). One
reason for the increase is the inclusion in the
2019 data of 8 notifiable occurrences with
no injury. In prior years the data only
captured actual injuries notified to
regulatory bodies.
2018 5
DEATH
OF STEFFAN
STEWART
ABOARD
SAN GRANIT
17.75
LTIFR (based on
hours worked)
2018 13.89
▲ 27.7% increase
COMPLETED
South Island project to setup the Bluff
processing facility as a centre of
excellence for salmon, Timaru for white
fish and Havelock for mussels.
COAL USE
REDUCED TO ZERO
following conversion of boiler
in Timaru to woodchips
2018
234 tonnes
REDUCTION
of aged inventory in the quantity
of stock held (-13% on 2018)
▲
7.9%
improvement of the average
DIFOT over 2018 (DIFOT
– delivery in full, on time)
162
customer food quality complaints
received (62% justified) relative to
133 received in 2018 (56% justified).
▼
16%
customer service quality rating
very positive experience 44%
2018
59%
—
HIGHS AND LOWS
—
20Sanford Annual Report 2019
SANFORD AND OUR OPERATIONS
1
SANFORD &

OUR OPERATIONS

21
DELIVERING
CONSUMERS’
EXPECTATIONS
2 Openings
• Auckland Fish Market, the foodservice hub
• Sanford and Sons Fishmongers
2 Delays
• Roll-out of Big Glory Bay premium
brand salmon to USA, due to
algal blooms
• Fish oil production, due to no
suitable manufacturing capability
available. Resolved with opening
of new marine extract facility in
2020/21 based in Blenheim
4 Launches
• Sea to Me nutraceuticals brand
• Catch to Cook campaign with Annabel Langbein
• Big Glory Bay brand in Australia and USA
SUPPORTING
STRONG
COMMUNITIES AND
PARTNERSHIPS
Impact
on Staff in
Southland
of our footprint changes in the South Island,
which were also initially disappointing to the
community. This was worked through via
constructive interactions with staff and
stakeholders.
$365
K

contributed to community, charity
and sponsorship programmes
2018 $244k
57
schools supported through
Graeme Dingle Foundation
partnership
2018
57
10,660
students supported through
Graeme Dingle Foundation partnership
2018 10,667
BUILDING A
SUSTAINABLE
SEAFOOD
BUSINESS
HIGHSLOWS
VALUE CREATION
OUTCOMES
$545.1
M
▲ 8% (like for like)
2018 $515.0M
$0.56
EBIT Value per kg
▲ 3.7%
2018 $0.54/kg
23
Toolbox Toolkits – video updates for
staff and sharefishers accelerating
internal communications
23.6%
GEARING
▼ positive fall from
26.6% in 2018
▲
15%
SALMON
$64.8
M
2018 $64.7m – Flat
▼
4%
fall in overall
GWT harvested
(113 k MT vs 118 k MT
for 2018)
RETURN ON
AVERAGE EQUITY FELL
from 7.3% to 7.1%. Profit after tax is similar to
prior year which has dampened the expected
increase in this measure.
and 9% mussel harvests higher,
despite separate algal blooms
impacting these businesses
ALGAL
BLOOMS
impacted production in
Marlborough mussel
harvests and Stewart
Island salmon, the
growth achieved could
have been higher.
Revenue
Adjusted EBIT
1
SANFORD &

OUR OPERATIONS

OUR APPROACH
Each year we engage with key stakeholders
both inside and outside Sanford to better
understand what matters most to them.
With support from our partner thinkstep
ANZ, we identify and rank the issues
stakeholders regard as material for our
business using a combination of interviews,
workshops and surveys, informed by the
International Integrated Reporting Council
(IIRC) Framework and the Global Reporting
Initiative (GRI) Standards.
THE FIVE STEPS OF STAKEHOLDER ENGAGEMENT

01
IDENTIFY
STAKEHOLDERS
This year we engaged with 50 stakeholders (32 external and 18 internal) through three
workshops and eight interviews. Since 2017, we have engaged with more than 100
stakeholders over three years, through the current iteration of our materiality assessment
process. These stakeholders were selected and ranked using best practice criteria from the
AA1000 Stakeholder Engagement Standard 2015, with selection based on elements such as
dependency, responsibility, urgency, influence and diversity of their perspective.
02
ENGAGE THROUGH
INTERVIEWS AND WORKSHOPS
We introduced a new regional workshop format this year, running three workshops in
August 2019: two in Marlborough (one with external stakeholders and one with internal
stakeholders) and one in Tauranga (with both external and internal stakeholders combined).
These workshops were designed to bring together stakeholders within a local community
and to get them to think constructively about the current challenges for Sanford as well as
their aspirations for the future of the seafood industry.
We also interviewed a further eight stakeholders in detail (four external and four internal)
using the same interview format as in 2017 and 2018, based on a set of open-ended
questions designed to allow the stakeholders to discuss their views on the issues most
crucial for Sanford in the short, medium and long term.
03
ASK STAKEHOLDERS
TO SCORE EACH ISSUE
A shortlist of 30 issues was prepared from the interviews and workshops, and a web-based
questionnaire was sent to all stakeholders. They were asked to rank each of the issues that
were identified by all stakeholders collectively. The list of issues remains substantively the
same as last year, though three issues have been renamed to reflect stakeholder feedback.
04
PRODUCE A
MATERIALITY MATRIX
The questionnaire results are shown in the materiality matrix, laid out to reflect how
important the issues are to internal stakeholders (vertical axis) and external stakeholders
(horizontal axis). This year, a 50% weighting was applied to the average stakeholder scores
from 2019 and a 50% weighting was applied to the average of the scores from previous
years. This gives an equal weighting to the current and past data.
05
SENSE-CHECK
THROUGHOUT THE PROCESS
Sources of information used to check for completeness included the UN Sustainable
Development Goals (SDGs), outputs from our Audit, Finance and Risk Committee,
Colmar Brunton's Better Futures report and lists of global megatrends.
—
REPORTING
WHAT
MATTERS
—
TOP IMAGE: Phil Tate guiding Sanford’s Materiality
workshop in Marlborough
22Sanford Annual Report 2019
2
REPORTING

WHAT MATTERS
REPORTING WHAT MATTERS

Materiality matrix
THE TOP ISSUES AND KEY CHANGES
BETWEEN 2018 AND 2019
This matrix shows the top 30 issues,
grouped into the six performance outcome
areas that we focus on through this Report.
We also highlight issues in common with
our Enterprise Risk process, and summarise
key mitigation strategies for these in
Appendix B. Our focus on these issues in
the Report reflects the importance that
both internal and external stakeholders
placed on these issues.
In 2019, our top 10 Materiality issues are:
1.
Health, safety and wellbeing of
our people
2.
Sustainable seafood
3. Food safety and quality
4. Social licence to operate
5.

T
ransparent and effective
communication
6.
M
aking Sanford a world-class employer
7. Innovation in operations
8.
Biosecurity
9. Shared vision
10.

G
etting the most out of the catch
A summary of the key issues and changes
since last year is given below:
Health, safety and wellbeing remains our
#1 material issue, its importance increasing
even further this year for external
stakeholders. The tragic death of Steffan
Stewart while aboard the San Granit in
November 2018 remains front of our minds,
and the physical and mental wellbeing of
the whole Sanford family is our top priority
as a business.
Sustainable seafood has climbed further
this year to #2 on our Materiality Matrix
and is the top-ranked issue by external
stakeholders. Food safety and quality
5.05.5
6.06.57.07.58.08.59.09.510.0
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
Market access risks
Future protein competition
Benefits for local communities
Minimising Sanford’s environmental footprint
NZ Inc. brand
Building trust in the seafood industry
Marine conservation
Biosecurity
Making Sanford a world-class employer
Social licence to operate
Food safety
and quality
Health, safety
and wellbeing
Sustainable seafood
Making Sanford a world-class employer
Innovation in operations
Take a public stand on
healthy oceans
Constructive relationship
with recreational fishers
Collaboration
Regulatory risk
World-class brand
Profitability
Innovation in products and markets
Getting the most out of the catch
Shared vision
Maximising $/kg of seafood
Operational excellence
Sanford sets example
Impacts due to climate change
Traceability
and provenance
EXTERNAL STAKEHOLDER CONCERN
BUSINESS IMPACT
IMPORTANT
IMPORTANT
MATERIAL
MATERIAL
Responsive fisheries management
PERFORMANCE OUTCOMES
RISK OVERLAY
ENSURING HEALTHY
OCEANS AND
PROTECTING AND
ENHANCING THE
ENVIRONMENT
BUILDING A
SUSTAINABLE
SEAFOOD
BUSINESS
LEADING THE
WAY TO HEALTHY
FOOD AND
MARINE
EXTRACTS
SUPPORTING
STRONG
COMMUNITIES AND
PARTNERSHIPS
CREATING A SAFE
AND HIGH
PERFORMING
WORKPLACE
DELIVERING
CONSUMERS’
EXPECTATIONS
KEY BUSINESS RISKS IDENTIFIED THROUGH
ENTERPRISE RISK MANAGEMENT PROCESS
2
REPORTING

WHAT MATTERS
23

PHOTO: Participants at Sanford's Materiality workshop in Tauranga
rounds out our top-three issues, falling very
slightly from 2018. Together, these three
issues highlight that in order to deliver
on our mission of being the best seafood
company in the world, we must strive
towards safe, healthy food and marine
extracts that are produced in a way which
respects both the natural environment
and our own people.
Social licence to operate has climbed two
places to fourth, though its position on the
matrix has moved only slightly from last
year. It is part of a cluster of issues which
complete our top-ten: transparent and
effective communication (#5), making
Sanford a world-class employer (#6),
innovation in operations (#7), biosecurity
(#8), shared vision (#9) and getting the
most out of the catch (#10). Of these,
the biggest mover was innovation in
operations, which jumped up six places
as a result of the importance placed on
this issue by our own people. There is a
recognition internally that for Sanford to
sustain success, we must further improve
our internal IT systems and continue to
invest in our fleet, aquaculture farms and
onshore technology.
Issues linked to sustainable seafood all
climbed in importance this year: take a
public stand on healthy oceans (up eight
places to #11), building trust in the seafood
industry (previously “address lack of trust in
the seafood industry” and up three places
to #12) and marine conservation (up five
places to #13). The ranking of all three
issues increased for both internal and
external stakeholders in 2019, with the
largest increase coming from internal
stakeholders. The sentiment that we
must act as stewards of the seas, so that
the richness of our oceans can be shared
fairly both within and between generations
of New Zealanders, was expressed in both
the regional workshops held this year in
Marlborough and Tauranga.
The importance of profitability and the
related issue of maximising dollars per
kilogram of seafood continued their decline
among both internal and external
stakeholders, each falling 10 places this year
to #19 and #20 respectively. This reflects
the views expressed by a variety of regional
stakeholders this year, youth stakeholders
last year, and of NGOs across all years.
However all stakeholders acknowledge that
Sanford must make a profit to stay in
business. We also saw providing benefits
for local communities increase four places
to #17.
The NZ Inc. brand (up six places to #14)
was the most polarising issue this year,
increasing significantly in importance
for internal stakeholders but falling in
importance for external stakeholders.
This is likely to be due to the emphasis
placed on regional workshops this year,
which meant that our pool of stakeholders
included dozens of New Zealanders but only
one customer from outside of New Zealand
(who ranked this issue 10/10).
Impacts due to climate change increased
slightly to 16th place, after a big jump
from 25th place to 17th place last year.
The change this year was largely due
to increased emphasis from external
stakeholders. This is an area where we
see a difference between our Materiality
process and our Enterprise Risk process.
However there are several factors driving
this and a key one is immediacy. External
stakeholders are not as close to the front
line of our business as we are. Sanford
people see the impacts of climate change
on the water, so it is more immediate and
obvious to us. Also risk assessment is, by its
nature, more future focused. Materiality
is not. However it is interesting to note
that the ranking of climate change in our
Materiality process is rapidly catching up
to the view reflected in our Enterprise
Risk process. We expect to see this
trend continue.
Minimising Sanford’s environmental
footprint jumped five places to #18,
reflecting increased awareness among
stakeholders of ocean plastics, packaging
waste and movements towards a more
circular economy.
“Reforming the Quota Management
System” has been renamed to responsive
fisheries management to better reflect
wider and more general opportunities for
change. This issue moved up one place
to #26. The change in name follows
feedback from the regional workshops
and stakeholder interviews that suggested
more scientific research is needed, both
of individual fish species and of the wider
ecosystems they contribute to. This
research should then be applied to enable
more sustainable management of wild-
catch and farmed fisheries in response to
observed changes. Several stakeholders
also commented that the observations of
skippers and their crews should also be
incorporated, given that they are the ones
out on the water every day.
While there was quite a lot of movement
at the bottom-left of the materiality matrix,
the rankings of constructive relationship
with recreational fishers, market access
issues and future protein competition
remain unchanged for 2019 at #28, #29
and #30 respectively.
ENGAGING WITH STAKEHOLDERS
We value our relationships with
stakeholders and the opportunity
to learn from them. We continue to
invest heavily in continuing to improve
engagement processes, and developing
positive relationships founded on shared
understanding. Further details of the roles
of our respective stakeholder groups,
including principal memberships and the
key roles that Sanford representatives
contribute, are set out in Appendix C.
24Sanford Annual Report 2019
2
REPORTING

WHAT MATTERS
REPORTING WHAT MATTERS

Becoming the best seafood
company in the world requires
in-depth engagement with our
stakeholders, including those
in our regional operations.
This year, we took our stakeholder
engagement process directly to the
regions, bringing the local Sanford
family together with community
members they work or interact with,
including suppliers, customers,
research organisations, iwi, training
institutions, local government
representatives and the local
Chamber of Commerce.
We ran three half-day workshops in
August 2019: two in Marlborough (one
with external and internal stakeholders,
and one for our internal team) and one
in Tauranga (with both external and
internal stakeholders combined). All
workshops were run off-site by an
external facilitator from our partner
thinkstep ANZ to help create an open,
friendly environment.
Using the Three Horizons method,
we posed stakeholders the following
three questions:
1.
What challenges do you see that
Sanford needs to address regarding
its current operations?
2.

What w
ould a vibrant future seafood
industry look like to you, and what
values do you believe are necessary
to support it?
3. What innovations or initiatives could
provide pathways and linkages to
that future industry vision?
From this process came a series of
future visions, as well as some tangible
steps to help bridge the gap between
the present and the desired future.
As an example, the future visions from
the four stakeholder groups selected
in the Marlborough workshop were:
•

L
ocal community: a seamless
integration of shared values
and aspirations
•
I
wi: A vision of the future that
focuses on the long-term
• “Generation Greta” and consumers:
In search of authenticity and
transparency
•
Research community: Using bold,
open thinking to create new lines
of business
BRINGING A
REGIONAL PERSPECTIVE
—
PHOTOS: Participants at Sanford's Materiality workshop in Marlborough. Sanford thanks all participants in both regions for their contributions
CASE STUDY •
Thank you for providing me
the opportunity to participate
in a process like this... This
process shows the level of
commitment Sanford is
making to achieving its
sustainability goals.
—
Brendon Burns
CHAIR, SMART+CONNECTED
AQUACULTURE
We spend as much time with
our crewmates as we do with
our families, so we look out
for each other when we’re
out on the water.
—
Rodney Hanson
SANFORD
2
REPORTING

WHAT MATTERS
25

ADDRESSING MATERIAL ISSUES THROUGH OUR BUSINESS EXCELLENCE FRAMEWORK
Addressing the most material issues is our priority at Sanford. We achieve this through our focus
on the six outcomes which are described in the performance section of this Report (on pages 27
to 85). In the diagram below, we link the material issues to the performance outcomes and
identify the overall priority of each to the stakeholders we consulted through our stakeholder
engagement and materiality processes over the last three years: 2017-2019.
SUPPORTING STRONG
COMMUNITIES AND PARTNERSHIPS
(page 59)
• Social licence to operate (4)
• Providing benefits for
local communities (17)
• Collaboration (25)
• Constructive relationship with
recreational fishers (28)
LEADING THE WAY TO HEALTHY
FOOD AND MARINE EXTRACTS
(page 49)
• Food safety and quality (3)
•
Biosecurity (8)
CREATING A SAFE AND
HIGH PERFORMING WORKPLACE
(page 39)
• Health, safety and wellbeing
of our people (1)
•

S
hared vision (9)
•
Making Sanford a world-class
employer (6)
DELIVERING CONSUMERS'
EXPECTATIONS (page 67)
•
T
raceability and provenance (22)
•
NZ I
nc. brand (14)
•
W
orld-class brand (23)
•
F
uture protein competition (30)
ENSURING HEALTHY OCEANS AND
PROTECTING AND ENHANCING
THE ENVIRONMENT (page 27)
• Sustainable seafood (2)
• Building trust in the
seafood industry (12)
•
Impacts due to climate change (16)
•
Marine c
onservation (13)
•
T
ake a public stand on
healthy oceans (11)
•
Minimising Sanford’s
environmental footprint (18)
•
San
ford sets example (24)
•
R
esponsive fisheries management (26)
BUILDING A SUSTAINABLE
SEAFOOD BUSINESS (page 75)
• Transparent and effective
communication (5)
• Profitability (19)
•
Maximising $/kg of seafood (20)
• Getting the most out of the catch (10)
• Innovation in products and markets (15)
•

I
nnovation in operations (7)
•
Operational excellence (21)
• Regulatory risk (27)
•

Mark
et access issues (29)
26Sanford Annual Report 2019
2
REPORTING

WHAT MATTERS
REPORTING WHAT MATTERS

Sanford can responsibly produce
food and marine extracts by
efficiently using resources and
growing the aquaculture industry.
Our efforts to do more and better
with less, and the growth of our
aquaculture sector’s comparatively
small environmental footprint
(relative to other protein sources)
contributes positive, sustainable
outcomes for New Zealand. We are
formalising our approach towards
improving our resource efficiency,
and driving innovation.
Climate change is affecting every
country and the disruption is likely
to have a significant impact on all of
our stakeholders. We are conscious
of the impact that climate change
will have on the oceans and the
inherent risk to our business model.
We can reduce climate change
impact through our operations and
are striving to reduce our
greenhouse gas emissions to 30%
below 2005 levels by 2030.
The oceans – their temperature,
chemistry, currents and life – drive
global systems that make the earth
habitable for humankind. They are
the natural capital that Sanford’s
business relies upon to provide value
to our stakeholders. It is therefore
imperative that we do everything in
our power to ensure their health.
The biggest difference we can make
is by sustainably utilising fish stocks
and in our aquaculture operations,
ensuring that we don’t pollute the
resource we rely on for our product.
Sanford is also taking a leadership
role, both within New Zealand and
globally to support sustainable
ocean management.
Healthy oceans require strong
multi-stakeholder partnerships that
cut across the boundaries of
industry, government, academia and
non-governmental organisations
(NGOs). Sanford is an industry
leader in breaking down barriers so
that collaborative partnerships can
evolve to develop innovative
solutions and long-term
commitments, with a goal to
ensuring healthy and sustainable
oceans for generations to come.
ENSURING
HEALTHY
OCEANS AND
PROTECTING AND
ENHANCING THE
ENVIRONMENT
We will lead by example in the
management of the marine environment
so that future generations can enjoy and
benefit from our biologically diverse,
safe and healthy oceans.
We will work with our people, customers
and suppliers to lead the way in
maximising resource utilisation,
minimising our footprint and protecting
the environment wherever we operate.
27

It all starts with the health of the oceans and the wider
environment. Sustainable seafood needs healthy oceans,
whether for wildcatch or farming. Both are exposed to the risks
from climate change and these are risks we see, and do our best
to mitigate, every day at Sanford.
It is no exaggeration to say that our oceans are vital to our
survival. A recent study showed they absorbed around a third
of the carbon humans put into the atmosphere between 1994
and 2007*. If we don’t nurture our oceans at a company level,
or a national level, or indeed a species level, then no amount
of mitigation will be enough. We may have great customer
relationships, leading edge fishing technology and wonderful
people, but we still need to be able to sustainably harvest the
raw materials from clean, cool seas.
This is why we put this section on Healthy Oceans and Protecting
the Environment first, because to us it comes first and everything
else is built on it. It deserves urgent attention and focus. We see
it and the contents of this chapter reflect that, beginning with
our work with partners WWF and Moana New Zealand to fight
to protect endangered marine species, moving on to look at the
science and mitigation strategies we have in place to help us
adapt to climate change and then ending with the story of one of
our skippers and his crew working in one of the most protected
fisheries in the world and showing how research and fishing can
work hand-in-hand to ensure sustainability.
We know our stakeholders care about this as much as we do.
Sustainable seafood and maintaining our social licence to
operate were the second and fourth highest ranked issues
respectively in our materiality work (see page 23).
With all this in mind, at sea and on the land,
we work together to minimise our impact and
protect resources for future generations.
* published in Science 15 March, 2019 The oceanic sink for anthropogenic CO2 from 1994 to 2007, N Grouber et al
3.1
PERFORMANCE OUTCOME:

HEALTHY OCEANS
28Sanford Annual Report 2019
ENSURING HEALTHY OCEANS AND PROTECTING THE ENVIRONMENT
TOGETHER

This table summarises Sanford’s material issues relating to enabling healthy oceans and protecting the environment, the
strategic goals defined through our Business Excellence Framework, our targets for 2019, and our progress against
these targets in contributing to value creation. At the end of this section, we also define our future targets and vision
to 2025.
MATERIAL ISSUES &
STRATEGIC GOALS

2019 TARGETS

PROGRESS AGAINST TARGETS
Sustainable Fish Stocks,
marine farms and marine
conservation
Comply with all applicable laws
and regulations governing our
operations, including relevant
international conventions,
recognising the importance of
healthy ocean and farming
management.
All fishers to continue to record and
report their catch to ensure
maximum transparency of the fish
stock status and to comply with all
fisheries and marine regulations at
all times.
Achieved. Full and compliant catch monitoring. This year we
upgraded our system to enable up to the minute tracking of
our vessels and mapping all the restricted fishing areas to
ensure that no vessels fish in those areas. Sanford are being
guided by the regulators as to when cameras will be
introduced. Two Sanford Inshore vessels San Tongariro and
San Rakaia will be part of the Fisheries New Zealand West
Coast North Island camera installation programme.
Continue engaging with New
Zealand’s Deepwater Group and
Fishing Inshore NZ to ensure that
the industry collaborates to ensure
the health and continuing existence
of NZ fish species managed under
the QMS.
Achieved. The industry continues to demonstrate concern
for the health of fish stocks by collectively agreeing to
reduce the available catch limits for species which the
industry believes do not appear to be present in expected
numbers. The industry came together both in 2018 and 2019
and voluntarily in each of these years agreed to reduce the
hoki catch limits in order to protect the biomass of this
important species to the New Zealand industry.
Maintain third party certifications
across Sanford aquaculture farms,
validating our commitment to farm
efficiently and deliver sustainable
seafood.
Achieved. Five certifications maintained including Best
Aquaculture Practice (Big Glory Bay King (BGB) salmon and
Greenshell™ mussel farms); Certified Organic (BGB mussel
farms and processing plant); Marine Farm Association
Environmental Certification (mussel farms Marlborough);
A+ Sustainable Aquaculture (mussel farms).
Support MSC sustainability
certification for deepwater species
in New Zealand’s Exclusive
Economic Zone.
Achieved. Sanford continues to actively engage with and
support MSC certification for deepwater species. In 2019,
36% of our total deepwater wildcatch by greenweight tonne
(GWT) was MSC certified (FY18: 44%).
Endangered, threatened
and protected species
Ensure protection of marine
species, including seabirds, sea
lions, dolphins and sharks through
delivering best practice farming
and fishing practices,
implementing protection
measures and participating in
ongoing robust research
programmes.
Implement ongoing initiatives to
minimise seabird and marine
mammal interactions through
research, technology and best
practice mitigation.
Ongoing. We continue to focus on research, technology and
training to reduce our interactions with endangered,
threatened and protected species through a range of
industry initiatives. We recognise the importance of
transparent reporting and are focusing on targeted
initiatives as we strive to improve our performance.
Develop and implement a Plan to
progressively remove fishing-
related threats and enable the
Māui dolphin population to recover
and expand.
Achieved. Work and engagement with fishers and World
Wildlife Fund to remove residual risk to Māui Dolphin has
continued in 2019.
Material issues and value creation
29
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PERFORMANCE OUTCOME:

HEALTHY OCEANS

MATERIAL ISSUES &
STRATEGIC GOALS

2019 TARGETS

PROGRESS AGAINST TARGETS
Environmental Effects
Focus on having no adverse
impact on the environment when
carrying out our business
operations, avoid pollution or
contamination of land, air and
water and enhance the
environment in which we operate
through sound management and
mitigation.
Maintain certification to ISO
14001:2015 across all of our
operations.
Achieved. ISO 14001:2015 certification. Ongoing
enhancement to Environmental Management System.
Design and implement a targeted
engagement programme, raising
awareness of marine plastic
pollution.
Ongoing. This year we built on last years World Oceans Day
initiatives, by co-developing lesson plans with the Graeme
Dingle Foundation around marine plastics, holding themed
events and beach clean ups around the country.
Identify, define and deliver targeted
initiatives to reduce plastic waste.
Ongoing. This year we developed and launched tote bags
made of recycled plastic bottles at our retail stores in line
with the governments ban on single-use plastic shopping
bags. A range of other initiatives are in progress, from
packaging innovations to the ongoing roll-out of eco-ties in
our aquaculture operations.
Resource Utilisation and
Efficiency
Do more with less by maximising
efficient use of resources and
ensuring waste minimisation,
re-use and recycling.
Improve water intensity by 3% at all
land-based processing sites.
Achieved. -12.6% (12.6% decrease in land-based water
intensity in 2019 compared to 2018FY. When comparing
total potable water used in land-based processing sites by
total processing site sales L/NZD).
Reduce the core intensity at our
land-based processing sites by 3%.
Achieved. -7.2% (7.2% decrease in Core energy intensity in
2019 compared to 2018FY. When comparing total energy
used at land based processing sites by total processing site
sales MJ/NZD).
35% waste diversion rate across all
of our operations.
Ongoing. 30% diversion rate achieved across all Sanford
operations in 2019FY. This is a 1% decrease in diversion rate
when compared to 2018FY. Projects are ongoing to achieve
our target of 35% diversion rate.
Carbon reduction and
offsetting
Demonstrate our commitment to
climate change responses by
actively reducing our energy
consumption and emission of
greenhouse gases and seeking to
introduce low carbon solutions
into our value chain, where
practicable.
Reduce our carbon emission
intensity by 2.5% across all of our
operations.
Achieved. Overall carbon emission intensity decreased 13%
across all operations, when compared to Revenue (CO
2
-kg/
Revenue $).
Save 5GWh of energy or renewable
energy conversion potential across
all operations in line with the Energy
Efficiency and Conservation
Authority (EECA) agreement.
Ongoing. EECA collaboration agreement ongoing. Targeted
initiatives and reporting continued throughout 2019
including an energy audit of San Won coolstore which
opened up energy management opportunities. Significant
ongoing focus on streamlining data collation, tracking and
reporting at overall business and operational levels.
30
Sanford Annual Report 2019
ENSURING HEALTHY OCEANS AND PROTECTING THE ENVIRONMENT TOGETHER
3.1
PERFORMANCE OUTCOME:

HEALTHY OCEANS

With Maui dolphin critically endangered, Sanford is
working together with WWF and Moana New Zealand to
bring new thinking to their conservation.
New Zealand is home to one of the world’s rarest Cetaceans, the
critically endangered native Maui dolphin.
Our concern and our care for these precious mammals is not new.
We partnered with Moana New Zealand and WWF New Zealand in
2016 to create our Maui Protection Plan, where we committed to
mitigations which have made a difference. Other fishing companies
joined us. Together we changed where and how we fished on the
water and working with set net fishers in harbours to collect data
that was used in the science process. These included changing the
areas where we fish and working on a transition plan to dolphin safe
fishing in any areas where we or our partners and contractors might
overlap with recognised Maui habitat.
Initiatives under that plan have reduced the total remaining fisheries
risk to Māui dolphins by an estimated 16% using Ministry for Primary
Industries and Department of Conservation risk modelling. We
understand that fishing activity remains a risk factor for Maui and
we are looking to do more to help.
An opportunity arose when the 2019 Threat Management Plan
(TMP) discussion document was released by the Department of
Conservation and Ministry for Primary Industries. This was a chance
for a conversation about what more we and others could do to help,
without having to hurt the people whose lives and livelihoods are
dependent on the ability to fish. Within the TMP was information
that was a controversial revelation for many, that toxoplasmosis, a
parasitic disease spread by cat faeces, is a confirmed cause of death
in Hector’s and Māui dolphins and a significant risk to the species.
Collaborating
for Maui
Fishing versus disease is a passionate and polarising debate, so it’s
easy to talk past one another and much harder to talk face to face.
In WWF New Zealand, with their “together possible” approach, we
have a courageous partner and we have been able to agree with
them and Moana, a clear and shared vision of what really matters
here – both dolphins and people. As WWF say, it is about people
living in harmony with nature.
The TMP process brought the three Protection Plan partners back
around the table in 2019 to balance the urgent need to protect New
Zealand’s Maui with the importance of respecting and assisting
fishing communities. Hector’s dolphins were also included in the
TMP and we felt that any strategies we could develop to help Maui
would also be of great use in the areas where the more populous,
but still delicate Hector’s populations live.
Our collaboration culminated in an alternative option, which we call
Option 5, a robust and innovative plan designed to protect both
dolphins and people including the industry and communities they
represent. It took courage and concessions – but no compromises
when it came to our respective values.
Option 5 includes:
•

A WWF led initiativ
e to address toxoplasmosis through creating a
research and education infrastructure to tackle its effects on
wildlife and people
•
a “move on” rule if fishing vessels see, detect or are advised of
Maui dolphins in an area
•

tr
aining in dolphin-safe fishing practices for fishers
•
drone monitoring in partnership with high-tech charity Maui63 to
enable us to track exactly where Maui are, helping us to
understand their movements and direct fishing vessels to avoid
them, potentially in real time
These changes follow on from our 2016 voluntary actions to
withdraw Annual Catch Entitlement (ACE) from set net fishers
north of New Plymouth by October 2017 and invest in trialling
alternative dolphin-safe fishing methods to be in place by the end
of 2022.
PHOTO: Maui dolphin, image courtesy of DOC, photographer Martin Stanley
OPTION 5
“A ROBUST AND INNOVATIVE PLAN DESIGNED TO
PROTECT BOTH DOLPHINS AND PEOPLE INCLUDING THE
INDUSTRY AND COMMUNITIES THEY REPRESENT”
31
3.1
PERFORMANCE OUTCOME:

HEALTHY OCEANS
WORKING TOGETHER

In our partnership with WWF New Zealand and Moana we believe
we have a genuine, workable solution. The work has already started
and will continue regardless of the outcome of the TMP decision-
making process by the Department of Conservation (DOC), and the
Ministry for Primary Industries (MPI) and their associated Ministers.
Just as in 2016, we are not waiting to do the right thing.
Our full submission is here http://awsassets.wwfnz.panda.org/
downloads/option_5_submission_20_08.pdf
MPI Summary Of Sanford’s Reported Incidental Catch Data
SEABIRDSMARINE MAMMALS
1
2019201820192018
Uninjured 8317356
Injured 3200
Dead 1642344671
Total 2504095177
Mortality Rate (%)
2
66%57%90%92%
Athletic
Achievers
If there was an Olympics for mussels, SPATnz
Greenshell™ mussels would be the epitome of the
games’ motto of “faster, higher, stronger” with one
small exception. Higher would be replaced by fatter
and therein lies a great story about science, sustainable
seafood and the economic potential of working together.
Nelson-based SPATnz (Shellfish Production and Technology
New Zealand), with its team of 23, has just completed the final year
of a seven-year Primary Growth Partnership research programme.
This programme has been a collaboration between Sanford and the
Ministry for Primary Industries, with help from science
organisations like the Cawthron Institute and AgResearch.
It’s a case of nature helped by nurture. In the wild, mussel spat is
harvested from Te-Oneroa-a-Tōhē (Ninety Mile Beach), or by
hanging ropes in Golden and Tasman Bays. Both sources are
unpredictable in terms of supply. Hatchery spat is derived from
selectively bred mussels and the high-performing spat goes on to
farms to complete its life cycle. Under the programme SPAT
nz has
produced four selective breeding cohorts with close to 100 mussel
families in each, building on the foundation work of previous years.
Research has shown that the selectively bred mussels outperform the
wild spat. SPAT
nz Greenshell mussels took on average 16.7 months to
grow from seed to harvest size, versus 28.3 months for the weighted
average of the wild caught varieties – nearly a year faster.
As well as growing much faster than their wild cousins, the hatchery
mussels are reported to be more easily processed thanks to more
consistent size and cleaner shells.
The faster, fatter, stronger Greenshell™ mussels produced by the
SPAT
nz team are contributing to Sanford’s goal of $1 of EBIT for
every greenweight kilogram of seafood.
1. For context, Sanford has never harmed
a Maui dolphin. Sadly in 2019 one
Hectors dolphin was recorded as
deceased in our fishing gear.
2. Mortality rate is calculated as the ratio
between total species caught and
species caught dead.
PHOTO: From left to right, Volker Kuntzsch and Livia Esterhazy (CEO WWF) appear
on the AM Show with Mark Richardson, Amanda Gillies and Duncan Garner
Breeding Better Mussels – the story of SPATnz
www.youtube.com/watch?v=gH8N9TL6al4
SANFORD RECORDED
2 notifiable spills
IN 2019 TOTALLING 10 LITRES
COMPARED TO 4 SPILLS IN 2018
TOTALLING 49 LITRES
32Sanford Annual Report 2019
ENSURING HEALTHY OCEANS AND PROTECTING THE ENVIRONMENT TOGETHER
3.1
PERFORMANCE OUTCOME:

HEALTHY OCEANS

Programme Manager Rodney Roberts says “we are selectively
breeding by choosing some of the best that nature has to offer
to produce our SPAT
nz mussels. Careful selective breeding has
the potential to help future-proof the New Zealand mussel
industry against threats like ocean acidification, climate change
and disease.”
The programme also offers opportunities beyond mussels for
nutrition. SPAT
nz is looking at the potential of enhancing the
anti-inflammatory qualities of Greenshell™ mussels with careful
selective breeding. This will support advances in our mussel
powder business in Blenheim which produces the mussel
powder which goes into our Sea to Me inflammation
management products.
SPAT
nz has exclusive use of the IP for five years from the
completion of the programme. When the research is fully
commercialised across the entire mussel sector, a possible
increase in GDP of $193 million per year has been forecast
by a BERL report which looked at the potential contribution
of this technology to the wider New Zealand economy.
Our stakeholders spoken to for our Materiality review in 2019
told us that they wanted to see us using innovation in our
operations (issue ranked seventh in our Materiality Matrix,
see page 23). The work going on at SPAT
nz is one example
of that approach in action.
0
10
20
30
40
50
60
70
Golden
Bay wild 2
Golden
Bay wild 1
Kaitaia
wild
Hatchery
3
Hatchery
2
Hatchery
1
WEIGHT GAIN (G)
We are selectively breeding
by choosing some of the
best that nature has to
offer to produce our
SPAT
nz mussels. Careful
selective breeding can also
help future-proof the
New Zealand mussel
industry against threats
like ocean acidification,
climate change and disease.
—
Rodney Roberts
PROGRAMME MANAGER
SPAT
NZ
3
billion
EGGS PER
SPAWNING DAY
7.1
million
SPAT PER DAY
ON AVERAGE
83
spat
PER SECOND
ON AVERAGE
Mussel production
numbers, approx. at SPAT
nz
Sea To Me website
https://seatome.co.nz/
Weight gain (g) over 20 months at 10 sites in Marlborough
MUSSEL FACTS
PHOTOS: At top, Karen Davey and Karen Savage monitoring algae bags. Lower image, Hannah
Coote at SPAT
nz.
33
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PERFORMANCE OUTCOME:

HEALTHY OCEANS

The crew of the San Aspiring are an exemplar of how we
work together as fishing crews and with others outside
Sanford to ensure we fish in the right way.
On his first deepwater trip, longline fishing for ling, Shane Cottle
reckons he was “growing muscles on muscles” with the hard work at
the peak of the season on the Chatham Rise, 1,400 kilometres East
of Bank’s Peninsula. Seasickness in the first days didn’t help either
and he thought his first trip might be his last.
Now, 26 years of experience later, the newly minted skipper of the
San Aspiring, is completely at home fishing in the waters of South
Georgia and the South Sandwich Islands or in the Ross Sea in
Antarctica during the 90-100-day window when the sea ice clears
and conditions allow fishing for toothfish.
“Antarctica lies beneath a permanent high-pressure system and on
occasion the conditions can be magic. Sometimes you would think
you were fishing on a lake. Combine that with seeing incredible
wildlife and floating icebergs every day and it’s pretty amazing.”
Also amazing is the view from the bridge when Shane’s highly
experienced crew is seamlessly working together. Emphasising in
his mind that success at sea is very much about teamwork.
“When you have two experienced guys working at the line hauling
station side by side, and you are in my position looking over a line
full of fish coming on board, it is pretty impressive watching the
communication and skill between them as they together lift each
fish on board, hook after hook, making sure everything we do is well
within the boundaries of the CCAMLR rules.”
CCAMLR is the Convention on the Conservation of Antarctic
Marine Living Resources, a group of 25 countries, including New
Zealand, who agreed with the European Union to establish a 1.55
million square kilometre Ross Sea region Marine Protected Area in
December 2017.
Strict rules allow for bottom longline fishing using hooks and lines
which ensures a very low environmental footprint from
participating vessels. Sanford can send two long liners into the Ross
Sea and Shane says a crew with many years of experience in the
fishery is invaluable when they are competing with other vessels for
a strictly limited Total Allowable Catch.
“They are very knowledgeable about fish and wildlife identification,
bird mitigation, and the MARPOL (the International Convention for
the Prevention of Pollution from Ships) requirements to prevent
marine pollution.”
Driving
Sustainable Fishing
When you have two experienced guys working at the line
hauling station side by side, and you are in my position
looking over a line full of fish coming on board, it is pretty
impressive watching the communication and skill between
them as they together lift each fish on board, hook after
hook, making sure everything we do is well within the
boundaries of the CCAMLR rules.
Shane Cottle
SKIPPER – SAN ASPIRING, SANFORD
34Sanford Annual Report 2019
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1. Based on Sanford’s total wildcatch (by GWT) for 2019. Deviations reflect
fluctuations with seasonality, annual catch entitlements,
species composition and climate events such as El Niño/la Niña.
41%
2015
37%
2016
46%
2017
44%
2018
36%
2019
Wild caught MSC certified catch
1
The fishing is overseen by two independent scientific observers and
an Electronic Monitoring system, also independently monitored,
records all hauling, fish tagging and setting of gear, with an infrared
camera capturing night work.
Our vessels also contribute to research in the Ross Sea with
San Aspiring tagging and releasing 343 fish last season. A special
research zone within the Marine Protected Area acts as a reference
zone for monitoring natural variability in the fish stocks, including
long term changes.
Shane says fish size is a key indicator of fish stock conditions and
the vessels are getting good catches of fish within a consistent
size range.
Toothfish is a prized catch, loved by chefs for its flavour and ease
of cooking. In the 2019 financial year, our catch contributed
$22.9 million of revenue compared to a $27 million contribution
in 2018.
Antarctica lies beneath a
permanent high-pressure
system and on occasion the
conditions can be magic.
Sometimes you would think
you were fishing on a lake.
Combine that with seeing
incredible wildlife and
floating icebergs every day
and it’s pretty amazing.
—
Shane Cottle
SKIPPER – SAN ASPIRING
SANFORD
PHOTO: Shane Cottle in the
wheelhouse, San Aspiring
Sustainability is a key theme that will drive every single part
of the seafood industry in the next 10–20 years. Being on the
right side of it will be important. Sanford is doing a great job.
—
Øyvinn Rimer
DIRECTOR, SENIOR RESEARCH ANALYST
HARBOUR ASSET MANAGEMENT
35
3.1
PERFORMANCE OUTCOME:

HEALTHY OCEANS

595
INDEPENDENT
SHAREFISHERS
2018: 621
15
DEEPWATER &
INSHORE VESSELS
2018: 22
7
PROCESSING SITES
INCLUDING JOINT
OPERATIONS
2018: 8
313
2
FISH STOCKS
2018: 313
TONNES OF FISHMEAL
AND OIL PRODUCED
10,084
2018: 11,184
WILDCATCH GREENWEIGHT
TONNES
90,351
3
2018: 92,612
87
2
SPECIES
2018: 87
1. Quota ownership based on New Zealand annual catch
entitlement (ACE) equivalent
2.
Figur
es relate to Sanford’s New Zealand quota only
3.

T
otal wildcatch GWT comprises Sanford fleet, including
contracted ACE fisher’s landings
SANFORD IS NZ’S SECOND LARGEST
– QUOTA HOLDER –
19%
1
2018: 22%
OUR QUOTA: HOW DO WE USE IT?
HOW HAVE WE PERFORMED?
ENSURING HEALTHY OCEANS AND PROTECTING THE ENVIRONMENT
TOGETHER
3.1
PERFORMANCE OUTCOME:

HEALTHY OCEANS
36Sanford Annual Report 2019

MATERIAL ISSUES &
STRATEGIC GOALS 2020 TARGETSOUR 2025 VISION
Sustainable Fish Stocks,
marine farms and
marine conservation
Comply with all applicable laws
and regulations governing our
operations, including relevant
international conventions,
recognising the importance
of healthy ocean and
farming management.
All fishers to continue to record and report their catch to
ensure maximum transparency of the fish stock status and to
comply with all fisheries and marine regulations at all times.
Key target is no prosecutions.
Sanford continues to play a key and
influencing role within the NZ fishing and
aquaculture industries to support the
sustainable management of fish stocks and
marine farms.
Continue engaging with New Zealand’s Deepwater Group and
Fishing Inshore NZ such that the industry collaborates to
ensure the health of NZ fish species managed under the QMS.
Actively engage with our regulators and publish submissions
on proposed legislation as the opportunity arises.
Maintain third party certifications across Sanford
aquaculture farms, validating our commitment to farm
efficiently and deliver sustainable seafood.
Positively participate in all New Zealand stakeholder audits
(for example QMS, environmental and MOSS related),
with the target of achieving clean audit findings. Where
recommendations are made, put in place improved
processes, controls and reporting structures to ensure
all recommendations are actioned.
Support MSC sustainability certification for deepwater
species in New Zealand’s Exclusive Economic Zone.
Endangered, threatened
and protected species
Ensure protection of marine species,
including seabirds, sea lions,
dolphins and sharks through
delivering best practice farming
and fishing practices, implementing
protection measures and
participating in ongoing robust
research programmes.
Continuous improvement in the protection of marine
species, reducing fatal interactions.
Sustained continuous improvement in
the protection of marine species.
Work with WWF and Moana New Zealand to support more
detailed work improving understanding of the financial and
fisheries management issues associated with transitioning
from set-netting and conventional trawling. While we believe
that this should be led by MPI, we commit to engage
constructively and proactively in these discussions.
Environmental Effects
Focus on having no adverse
impact on the environment
when carrying out our business
operations, avoid pollution
or contamination of land, air
and water and enhance the
environment in which we
operate through sound
management and mitigation.
Maintain certification to the updated ISO 14001:2015 EMS
standard across all of our operations.
Sanford’s limited impact on the
environment is regarded as best practice.
No abatement notices across the group.
Appropriately and sufficiently resource the environmental
team to ensure a robust management process is consistently
applied across the business in order that legal compliance is
met and that all critical environmental risks are identified,
monitored and mitigated.
Launch and successfully implement new software for
capturing and reporting environmental data. This will
facilitate the measurement of non conformance of
environmental KPIs and will provide clarity of actions
and improvement areas for management to remedy.
Additionally, the new system will provide an initial bench
mark for key KPIs going forward from 2020.
Our future focus
37
3.1
PERFORMANCE OUTCOME:

HEALTHY OCEANS

1. GRI and UN Global Compact 2017: Business Reporting on the SDGs – An Analysis of the Goals and Targets.
Resource Utilisation and
Efficiency
Do more with less by maximising
efficient use of resources and
ensuring waste minimisation,
re-use and recycling.
Achieve year on year water intensity improvements at all
land-based processing sites when compared to total sales
by site (Litres/Sales $).
Sanford where practicable, fully utilises
all materials and reuses, recycles
or where necessary, disposes of,
in a sustainable manner.
Reduce the core energy intensity at our land-based
processing sites relative to 2019 (MJ/Sales $).
Improve on the 2019 waste diversion rate across all of our
operations, targeting plastic waste streams as a key priority
to reduce.
Carbon reduction and
offsetting
Demonstrate our commitment
to climate change responses by
actively reducing our energy
consumption and emission of
greenhouse gases and seeking to
introduce low carbon solutions into
our value chain, where practicable.
Reduce our net carbon emission intensity year on year
across all of our operations comparing CO
2
per kg relative
to revenue (CO
2
-kg/ Revenue $).
Sanford strives to be carbon neutral.
Use fewer giga watt hours of energy year on year across all
land-based operations.
These targets for 2020 have been informed by Sanford’s strategy, Global Reporting Initiative (GRI) Sustainability Reporting Standards and
a review of international guidance
1
on business commitments to support achievement of the UN Sustainable Development Goals.
38Sanford Annual Report 2019
ENSURING HEALTHY OCEANS AND PROTECTING THE ENVIRONMENT TOGETHER
3.1
PERFORMANCE OUTCOME:

HEALTHY OCEANS

Ensuring healthy lives and
promoting wellbeing at all ages
is essential to sustainable
development. From a global
perspective our workforce are
relatively healthy and well, but
there are always opportunities to
add value to our people over and
above our economic contribution.
As a key material issue to our
business, the health, safety and
wellbeing of our people, as well
as those in our supply chain,
represent key focus areas that
we are actively working on.
Continuous investment in our
people is critical to ensure that the
business is always learning. We
invest in our people from the
frontline, through vocational
training and formal qualifications,
through to our company-wide
talent pool for senior
management, who are deepening
their understanding of leadership
and personal development. Due to
our active commitment towards
education, we are enriching the
lives of our people as well as
adding value to the business.
Sanford can improve the
economic outcomes of local
communities through the jobs we
create (particularly in the areas
that would otherwise have limited
employment opportunities)
and the associated local
employment through the supply
chain. It is critical that all work
is safe; our people’s wellbeing is
very important to us. The growth
targets Sanford has for the future
are aimed at contributing
toward this outcome.
Sanford works in partnership with
our stakeholders to ensure that
we provide sustainable outcomes
for our people. Our partnerships,
help us protect our people from
risk and ultimately work to create
a high performing culture. By
collaborating with stakeholders,
we can shift the dial in the areas
where we can make the most
difference to our people.
CREATING A
SAFE AND HIGH
PERFORMING
WORKPLACE
We strive to become an employer of
choice by delivering industry leading
safety risk management, ensuring a
culture of high performance and
growth and by living our values.
PHOTO: Anna Larmer talks to Marie McDonald in Bluff
39

CREATING A SAFE AND HIGH PERFORMING WORKPLACE
TOGETHER
All our people contribute every day to our performance.
At sea, on the land, in our local and international markets
- people make up the chain which delivers sustainable
seafood to customers and consumers. Conditions at sea
are often demanding, processing requires precision to
preserve perfection and customers and consumers expect
nothing but the best – we do not underestimate the
responsibility and work required.
Our values are care, passion, integrity and achieving
together, and our actions as employers, employees,
sharefishers and partnering contractors must work to
reflect those values. The health, safety and wellbeing of
our people is the number one issue identified by internal
and external stakeholders as part of our Materiality
process outlined in the opening section of this report and
is one of the top three issues in our Enterprise Risk Matrix.
Through our focus on a Just Culture (outlined in this
section), our constant attention to health and safety and
our determination to fully engage our people, we aim
to show every one of them that they matter and we can
achieve more together.
3.2
PERFORMANCE OUTCOME:

SAFE AND HIGH PERFORMING WORKPLACE
40Sanford Annual Report 2019

This table summarises Sanford’s material issues relating to creating a safe and high performing workplace, the
strategic goals defined through our Business Excellence Framework, our targets for 2019, and our progress against
these targets in contributing to value creation. At the end of this section, we also define our future targets and vision
to 2025.
MATERIAL ISSUES &
STRATEGIC GOALS

2019 TARGETS

PROGRESS AGAINST TARGETS
Safety and Health
Through the way we work and
behave, and the initiatives we
implement to continually enhance
our work environments, we will
take all practicable steps to
protect our people from the risk
of harm, whether it be operational
or occupational injury or ill health.
Continue to increase and monitor
near miss reporting, utilising
learnings to inform and reduce risk
profiles, closing out 75% by year end.
Achieved. Raised 674 Health and Safety System
Improvement Notices (SINs), of which 62% were closed
out as at 30 September 2019. 37% increase in near miss
reporting to 515 (FY18: 376).
Implement Safety and health
focused training across all levels
of Sanford operations.
Ongoing. The training programme was rolled out across
all levels of the business, delivering 824 hours of frontline
leadership training in FY19 – general safety and health
management and Just Culture.
Continue to build on the SanWell
wellness programme at all
Sanford sites.
Ongoing. Implementation on the majority of sites. This year
Timaru achieved gold certification, Tauranga is working
towards achieving silver and Bluff achieved bronze and
Auckland continues to work toward Bronze. The programme
also supported the national campaigns to generate greater
awareness of anti-bullying and mental health.
Achieve a tertiary status in the
Accident Compensation
Corporation (ACC) Partnership
Programme.
Achieved.
Developing Our People
Create a high performance
culture where every one of our
people is skilled, empowered and
engaged in contributing to the
goals of the business and reaching
their full potential.
Extend and embed Sanford’s
learning and development
framework to increase capability and
engagement in business and achieve
recognition as a high performing
business and employer of choice.
Ongoing: In 2019 a further 13 people graduated from
our Keeping it Fresh literacy and numeracy programme
improving their ability to understand communication across
the business and contribute their best in team meetings.
151 front line team leaders and supervisors graduated from
the San Ignite programme and 60 vessel officers and
functional managers graduated from the San Activate
programme, building on their ability to lead themselves
and their team.
Strengthen workforce planning
with a focus on succession planning
across the business.
Ongoing. Succession plans for the senior leadership group
are now in place and the next tier under development.
Strengthening our
Workplace Culture
Build a culture of high
engagement and performance
across our workforce to optimise
people and business outcomes.
Achieve 10% annual improvement
in engagement across the business
each year.
Achieved: After an extensive investigation as to the most
appropriate and best suited engagement survey platform
to use across the Sanford group, it was determined that
the Peakon survey would be used in 2019. The team are
extremely proud that engagement has been measured at
72%, acknowledging that there is still plenty of room for
improvement in this key measure of workplace culture.
Material issues and value creation
41
3.2
PERFORMANCE OUTCOME:

SAFE AND HIGH PERFORMING WORKPLACE

To be the best seafood company in the world we
must also be the safest. We are building a leadership
driven health, safety and wellbeing culture where all
of our people are actively engaged in monitoring and
strengthening our safety culture. To this end, we have
commenced the roll out of our Just Culture programme,
starting with our senior leaders and the Operations team.
Between April and September, 103 leaders in Operations have
received a total of 824 hours of training, with further courses
scheduled for the new financial year.
Just Culture
at Sanford
Supporting our Just Culture model are risk management systems
and procedures to protect people from harm and a commitment
to ensuring people are treated in a consistent, fair and equitable
manner when mistakes are made. We accept that people make
mistakes but we have an obligation to ensure there are controls
in place, with the goal of preventing mistakes from happening.
In the event of an incident, a thorough investigation of what
went wrong and why, carried out by a leader on site who is
trained as an independent investigator focuses on identifying
the organisational factors that could have contributed to the
incident. The report that follows includes next steps which are
fair, practical and designed to prevent further incidents. It is a
system well proven in fields like aviation and medicine where
mistakes can be fatal and mitigating risks requires people to
confidently report incidents, behaviours or system failures.
Sanford’s Chief People Officer, Karen Duffy says a Just Culture
understands that good people make mistakes, sometimes
through errors, and sometimes because systems and processes
are not as good as they could be.
“It also recognises that people may also do something wilful
or reckless and they could break health and safety rules, which
creates the potential for harm to themselves and to others.
Just Culture at Sanford
https://youtu.be/KIMf55B2peU
824 hours
OF TRAINING, FOR 103 LEADERS
IN OPERATIONS
PHOTO: Stephen McDougall and Toa Mangu in Bluff
42Sanford Annual Report 2019
3.2
PERFORMANCE OUTCOME:

SAFE AND HIGH PERFORMING WORKPLACE
CREATING A SAFE AND HIGH PERFORMING WORKPLACE TOGETHER