AWF Madison Group ASM Presentations

Level 6, 51 Shortland Street
PO Box 105675, Auckland City, Auckland, 1143
Tel 09 526 8770
awfmadison.co.nz
AWF MADISON GROUP
ANNUAL MEETING OF SHAREHOLDERS – CHAIRMAN’S ADDRESS
30 September 2020
Kia ora and good morning attendees. This is certainly a first for us, to conduct a “virtual” meeting.

My name is Ross Keenan, and it is my pleasure, as Chairman of the AWF Madison Board, to Chair this meeting.

I should comment on the lateness in the cycle of timing of this meeting at 30 September, compared to our normal
end of July timing. We took the decision to defer the meeting early, as when we announced at the end of May,
there was no way we had the remotest idea of what would be unfolding by July.

So here we are, actually with some benefits to shareholders in the context of giving indications of how we are
trading. The fact is we live on a diet of daily charge sheets, contract renewals, contract completions, etc. which
makes forecasting a very inexact process. We know that our inability to give shareholders indications at a July
meeting has been very frustrating, so we will be able to do better today.

It has been interesting to observe (notwithstanding the very disappointing share price) a steady lift in
shareholders to, as of end of August, nearly 800 shareholders.

Normally I would comment and thank our staff later in the meeting, but in this extraordinary last six months as a
Board, we were mightily impressed with the rapid and competent manner in which our team demonstrated
leadership within the COVID-19 operating environment as everything flowed up and down the scale of
opportunity or stalemate. The health and wellbeing of our people, and the protection of existing jobs and income
continued to be the primary focus for the Board and leadership team, particularly through this period.

Whilst we recognise the extreme level of uncertainty that continues to exist, we are extremely proud of how the
Group has achieved continuity, and in particular, the commitment from our frontline teams. Thank you all.

We acknowledge the benefits of the first two wage subsidy payments which certainly did enable the badly
affected areas of the Group to maintain a large number of skilled resources so that when (particularly in AWF)
opportunities arose to provide essential services through COVID-19 lockdown, we were able to respond speedily
and fully.

The reality of the lockdown was starkly realised in particular for AWF (blue collar), which collapsed by 60% and
Madison (white collar), which was down 50%. Absolute IT and JacksonStone steadily weathered the storm and
are now seeing some growth return.

It’s pretty obvious of course that the non-specialist white collar recruiters such as Madison will stay in a very
stressful position, as so many companies have either shut their doors or are struggling to find what the new
business base for them is. Recruitment certainly is not on their radar.

AWF on the other hand is seeing a steady lift in activity and recently just crept over 80% of last year for the most
recent week (still 20% off the pace, but steady).

The Group has certainly validated the broad base of income streams from its multiple brands and sector
coverage and we do see the need to examine further opportunities for acquisition, further expanding our sector
coverage.

It is worth reflecting on the trading brands we have at the moment: AWF Ltd, Select Recruitment Ltd, Madison
Recruitment Ltd, Absolute IT Ltd, JacksonStone & Partners... and the potential for others.

Level 6, 51 Shortland Street
PO Box 105675, Auckland City, Auckland, 1143
Tel 09 526 8770
www.awfmadison.co.nz
As a Board we think it’s time to review whether the existing group name “AWF Madison Group” is terribly
appropriate. More on that later.

In terms of the FY19/20 year that was, it does seem a while ago, but it was a difficult trading year as I noted in the
annual report. And in the reality of the effects of lockdown and the tumble of the AWF and Madison business
base in an unprecedented manner, plus the uncertainty of the way ahead, we took the decision to suspend our
final dividend. I don’t think this would have come as a surprise to you in the circumstances, with the significant
contraction of Madison and AWF’s core business, and where both Board and senior management took salary and
fee reductions.

But out of adversity comes opportunity. Our leadership worked hard to reduce business costs, including
temporary salary reductions through much of the business, and negotiating cost relief from suppliers and
landlords. Excellent work was also completed in updating systems and integrating platforms.

The star of the year was our acquisition of, and the performance of JacksonStone, and that business is well led
by David Hollander, who we introduced last year. He would say, “but I just lead a team” and whilst that’s true,
they have achieved that sector diversity that we felt that we needed – and so it has proven to be.

Through all the chaos as I seem to be calling it, cash flow remained strong – debtor management has been
excellent and further debt reduction was achieved. But we are only at September and we need to be very
cautious about the second six months. Particularly in the Madison white collar recruitment areas, we are hoping
to see some confidence in contracting, but certainly don’t see signs of this yet.

ASB continue to be our bankers, and as a Board we believe our relationship with them to be excellent.

Finally, to close on a positive note, you should expect us to fully consider resuming dividend payments. Whether
this will occur this calendar year or next is yet to be determined, but my view as Chairman is that we need to see
some trading in the second six months before making that decision.

Whilst we expect to deliver a strong result to end September (helped by the inclusion of six months’
JacksonStone results for the period), the second six months - and therefore the overall 20/21 result - is not yet
clear. My personal view is that to achieve in the second half EBITDA at levels we achieved through 19/20 would
be very creditable. We will however not reintroduce the dividend reinvestment scheme at this stage. It achieved
some of its purpose, but we don’t consider raising capital at the level the share price currently sits at, as being
appropriate.

For the Board,

Ross Keenan, Chairman
021 685 655

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Level 6, 51 Shortland Street
PO Box 105675, Auckland City, Auckland, 1143
Tel 09 526 8770
awfmadison.co.nz
AWF MADISON GROUP
ANNUAL MEETING OF SHAREHOLDERS – CEO’S PRESENTATION
30 September 2020

The Business’s COVID-19 Response
 Throughout the various Alert Levels, we have looked after our people and retained a strong focus on
safety.
 We actively sought to reduce business costs and implemented temporary salary sacrifices.
 The Government Wage Subsidy was utilised and this benefited hundreds of workers we would otherwise
have lost.
 The measures taken have stabilised the business and built our confidence in a post-COVID world.

Resetting Performance
 JacksonStone is trading well and is back to pre COVID levels after experiencing a drop in May. It has
been very additive to the Group this year.
 Absolute IT is finding strength in contracting, and permanent recruitment is also strong despite seeing a
drop in demand.
 AWF and Madison are both soft. AWF is slowly seeing linear growth since the impact of level 4
lockdown. Madison has been the most affected with many key clients not hiring, or doing this themselves.
 We are seeing a shift in demand post lockdown with the emergence of growth off a lower base and not
the swing to contingent that we experienced following the global financial crisis.
 Debt has been reduced with cost savings, due to a reduction in working capital and capital expenditure.

Pivoting the Business
 We will continue to protect our core business – driving and streamlining delivery.
 Much work has been done this year on integrating our platform and operating system in Absolute IT,
JacksonStone and Madison. The Group platform will increase leverage across the brands.
 We will build on non-traditional channels; expanding our social enterprise, The Work Collective, and
developing further channels for re-training and re-deployment, and we have allocated a general manager
resource to build this area.
 We will explore further opportunities in the health sector through organic growth and potential acquisition.
 With the new work we are doing across the businesses, we see the need for a shift in the Group’s identity
and positioning.

Group Identity
 AWF Madison has seen significant changes over the past 7 years; expanding and diversifying.
 The current name is historical in nature and is often confused with the two named operating businesses.
 We have steadily built up our Group resources and offerings and there are more opportunities for the
Group post COVID-19 in areas of training and redeployment beyond our existing trading businesses.
 We have decided it is time for a change, for inclusivity of all of our brands and offerings.

New Group Name Proposed: Accordant
 We will advise the NZX later in October and be issued a new ticker ID: AGL.
 This will be followed by a soft launch of the new name and brand identity.
 We expect to have the changeover in place by the issue of our Interim Report.

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Annual Meeting
of Shareholders
30 September 2020
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2020

Chairman’s
Address
ROSS KEENAN
CHAIRMAN
Agenda Item 1.

Consolidated
financial statements
for the Year Ended
31 March 2020
Agenda Item 2.

Resolutions
Agenda Item 4.

Resolutions
Director Elections
4.1
Recommended
re-election of
Simon Hull
Agenda Item 4.
Of the shares voted by proxy,
93.66% support resolution 4.1

Resolutions
Director Elections
4.2
Recommended
re-election of
Wynnis Armour
Agenda Item 4.
Of the shares voted by proxy, 93.64% support resolution 4.2

Resolutions
Director Elections
4.3
Recommended
re-election of
LaurissaCooney
Agenda Item 4.
Of the shares voted by proxy,
93.63% support resolution 4.3

Resolutions
Auditors’ Remuneration
4.4
Authorise the Directors to fix the fees for the
Auditors for the year
Agenda Item 4.
Of the shares voted by proxy, 93.66% support resolution 4.4

CEO’s Report and
Update
SIMON BENNETT
CHIEF EXECUTIVE
Agenda Item 3.

COVID-19 Response
•Looked after our people and retained a strong
safety focus.
•Reduced costs, made salary sacrifices.
•Government wage subsidy benefited hundreds of
workers we would otherwise have lost.
•Stabilisedthe business.

Reset
•JacksonStoneis trading well –back to pre COVID levels. Has
been very additive to the Group this year.
•Absolute IT is finding strength in contracting, and permanent
recruitment is also strong.
•AWFand Madisonare both soft.
•There is a shift in demand post lockdown –with the emergence of
growth off a lower base.
•Debt has been reduced with cost savings, due to a reduction in
working capital and capital expenditure.

Pivot
•Continue to protect core business –driving and
streamlining delivery.
•Leverage the Group platform.
•Build on non-traditional channels.
•Explore further opportunities in the health sector.
•Shift the Group identity and positioning.

Group identity
•Significant changes over the past 7 years.
•The current name is historical in nature and often confused with
our operating businesses.
•We have steadily built up our Group resources and offerings.
•There are more opportunities for the Group post COVID-19 in
areas of training and redeployment.
•We have decided it is time for a change.

•Advice to NZX in October followed
by a soft launch later in the month
•New ticker: AGL
•Changeover by Interim Report

Auditors’
Reappointment
Agenda Item 5.

Update on
Senior Employee
Share Incentive Scheme
Agenda Item 6.

Questions
and
General Business
Agenda Item 7.