G45 AR (2019)

ANNUAL REPORT 2018/2019

ISSN 1177-665X nzte.govt.nz

Disclaimer: This document only contains general information and is not formal advice. The New Zealand Government and its associated agencies (‘the New Zealand Government’) do not endorse or warrant the accuracy, reliability or fitness for any purpose of any information provided. It is recommended that you seek independent advice on any matter related to the use of the information. In no event will the New Zealand Government be liable for any loss or damage whatsoever arising from the use of the information. While every effort is made to ensure the accuracy of the information contained herein, the New Zealand Government, its officers, employees and agents accept no liability for any errors or omissions or any opinion expressed, and no responsibility is accepted with respect to the standing of any firms, companies or individuals mentioned. NOVEMBER 2019 NZTE’S INTERNATIONAL NETWORK

OUR IN-MARKET SUPPORT EUROPE EAST ASIA GREATER CHINA AUSTRALIA-PACIFIC 7 regions OFFICES OFFICES OFFICES OFFICES Hamburg Bangkok Beijing Brisbane 40 languages Istanbul Ho Chi Minh City Chengdu Melbourne 40 international locations London Jakarta Guangzhou Port Moresby 176 private sector advisors Madrid Kuala Lumpur Hong Kong Sydney Milan Manila Shanghai, NZ Central offshore NZTE employees 280 Moscow Seoul Taipei Paris Singapore Tokyo

Europe

United Kingdom

Greater China

East Asia

North America

NEW ZEALAND OFFICES Whangarei Auckland Tauranga Hamilton NORTH AMERICA LATIN AMERICA INDIA, MIDDLE EAST New Plymouth OFFICES OFFICES & AFRICA OFFICES Napier Los Angeles Bogotá Abu Dhabi Palmerston North New York Mexico City Dubai Wellington San Francisco Santiago Mumbai Nelson Vancouver São Paulo New Delhi Christchurch Washington Riyadh Latin America India, Middle East & Africa Australia and the Pacific New Zealand Dunedin CONTENTS

SECTION 1: ABOUT NZTE 02 NZTE at a glance 04 Performance highlights 06 Executive summary 08 Our strategy

SECTION 2: OPERATIONS 14 Export customers 24 Services 26 International 38 Investment customers 40 Power of collaboration 40 NZ Inc 41 Regional Business Partner Network 42 Working with and for Māori 44 Government to Government 46 New Zealand Story 47 Expo 2020

SECTION 3: INSIDE NZTE 48 Our organisation 56 Good employer requirements 58 Governance and risk management 60 Board members

SECTION 4: REPORTING 62 Statement of Responsibility Our purpose is to grow 64 Statement of Performance 72 Financial Statements companies internationally 75 Notes to the Financial Statements — bigger, better, faster — 95 Independent Auditor’s Report 98 Other Statutory Reporting Requirements for the good of New Zealand. 100 Glossary

01 NZTE AT A GLANCE

The Government’s economic strategy is to grow a “productive, sustainable To help deliver on this strategy, NZTE’s purpose is to grow companies and inclusive New Zealand”, driven by exports and supported by quality – bigger, better, faster – for the good of New Zealand. The focus of our investment. Within this is a focus on diversification and a shift in economic activity is on the diversified and value-add part of the economy. activity from volume to value.

GOVERNANCE

Crown Entity Board Investment per annum $207m

THE CAUSE EXPORT CUSTOMERS SERVICES OUR PARTNERS

Portfolio value $40b People 617 NZ Inc Higher focus customers Private sector providers Callaghan Innovation Government’s plan 704 176 Education New Zealand Export Credit Office To grow a productive, sustainable Lighter touch customers International locations and inclusive New Zealand 5,324 40 Ministry of Business, Innovation and Employment Coalitions 26 Ministry of Foreign Affairs New Zealand locations 10 and Trade Māori customers Ministry for the Environment 173 People located offshore Ministry for Primary Industries 46% New Zealand Venture Investment Fund INVESTMENT CUSTOMERS Service modules Regional Economic 16 Development agencies Investors Tourism New Zealand 2,309 Te Puni Kōkiri Our purpose Value of pipeline $ To grow companies internationally 7.2b Industry bodies – bigger, better, faster – for the Iwi Greenfield deals in pipeline good of New Zealand 122 Non-government organisations Growth stage companies deals 110 BusinessNZ Aotearoa Circle Māori deals 27 Champions for Change

OUR CULTURE Working together as One Global Team: Ambition Drives Us: Our ambition Adventure Teaches Us: Honesty Frees Us: We explore Trust Binds Us: Our people Manaaki Is Us: We celebrate the for our customers is high, and we Experimentation is more powerful challenges with an open mind. may be worlds apart, but it’s mana (strength and dignity) of always rise to the occasion. We help than perfection as only through Only when we ask questions and trust that holds us together. each other as being equal to or meet their business expectations by learning from our missteps can we truly listen can we discover the Growing a nation is only possible greater than our own. We strive expecting greatness of ourselves. truly succeed. That’s why ‘giving right way forward. when we keep promises and to enhance mana in everything it a go’ is the best way to learn. honour commitments. we do through our hospitality, generosity and mutual respect.

03 PERFORMANCE HIGHLIGHTS

EXPORT CUSTOMERS

With NZTE’s help, our Export $ customers achieved 2.4b 902 EXPORT DEALS INTERNATIONAL GROWTH OUTCOMES

Our Focus700 customers 54% +62 rate us highly SAY THAT TO A GREAT OR VERY NET PROMOTER SCORE GREAT EXTENT, NZTE HAS PUT THEM IN A STRONGER POSITION TO GROW INTERNATIONALLY

INVESTMENT CUSTOMERS

Investment impact we achieved for $645m 75 New Zealand INVESTMENT DEALS INVESTMENT DEALS

Quality of investment $2.5b $1 to $3.8 INVESTMENT BENEFIT RATIO OF DEALS TO ECONOMIC BENEFIT

04 NZTE Annual Report 2018/19 EXECUTIVE SUMMARY WHAKARĀPOPOTOTANGA MATUA As a trading nation dependent on its relationships with the rest of the world, I te mea he whenua tauhokohoko a Aotearoa he mea nui ōna hononga ki te ao New Zealand needs an export sector that is committed to building connections katoa, me whai rāngai hoko ki tāwāhi a Aotearoa e kaingākau ana ki te hanga, and capability. ki te whakapakari hoki i ngā hononga, i ngā pūmanawa hoki.

NZTE is the government’s international business • supporting investment into the regions, including Ko Te Taurapa Tūhono te ūmanga whakawhanake • Te tautoko i te haumi i ngā rohe, tae atu ki ā mātou development agency. We are a key partner in our work with the Provincial Growth Fund and the pakihi ā-ao o te kāwanatanga. Ka noho hei hoa tautoko mahi ki te Provincial Growth Fund me ngā ūmanga supporting our exporters to succeed and helping match regional economic development agencies; mātou ki te taha o te hunga e hoko ana ki tāwāhi kia eke whakawhanaketanga ōhanga ā-rohe; investment opportunities with capital and international • supporting Māori economic development; and panuku ai rātou, kei te awhina hoki mātou i a rātou ki te • e tautoko ana i te whakawhanaketanga ōhanga connections, for the good of New Zealand. • working with, and in support of, NZ Inc, to deliver honohono ki ngā pūtea, oti rā ki ngā hononga ā-ao, hei Māori; me te painga mō Aotearoa. NZTE has a dual focus: growing export companies a cohesive approach to investment attraction. • mahi i te taha o, e tautoko ana hoki i, a NZ Inc, ki te out of New Zealand and attracting investment into We assist companies in need of capital investment, E rua ngā aronga a Te Taurapa Tūhono: he whakatipu i whakatakoto i tētahi huarahi whakahonohono ki te New Zealand. NZTE’s approach is aligned with the help them prepare their business and then match ngā pakihi hoko ki tāwāhi kia puta ki waho o Aotearoa, rapu kaiwhakangao. Government’s overall agenda, to build a productive, he whakamanea mai hoki i te pūtea tautoko ki Aotearoa. these companies with investors (from both within Ka tautoko mātou i ngā pakihi e whai ana i te pūtea sustainable and inclusive economy. E hāngai ana te huarahi o Te Taurapa Tūhono ki te New Zealand and overseas). tautoko, ka āwhina i a rātou ki te whakarite i tā rātou aronga matua o te Kāwanatanga, arā, kia hanga i te With this strategy we have helped our investment pakihi, kātahi ka kimi kaiwhakangao mā aua pakihi (mai ōhanga whai hua, pūmau hoki, mā te katoa. For export customers… customers achieve: i roto o Aotearoa, i tāwāhi hoki). NZTE partners with export companies on their Mā tēnei rautaki kua āwhina mātou i ō mātou kiritaki ki growth journey. We work intensively with 704 • 75 investment deals, with a total investment Mō ngā kiritaki hoko ki tāwāhi… of $645 million; te whiwhi i: export customers, with a lighter touch for over Ka mahi tahi a Te Taurapa Tūhono ki te taha o ngā 5,300. In particular we focus on those companies • these deals will generate $2.5 billion of economic umanga hoko ki tāwāhi i a rātou e whakatipu haere nei. • ngā hokohoko 75, e $645 miriona te nui katoa o which make up the value-add, diversified part of the benefit to New Zealand (above the target of Ka ngana kaha mātou ki te taha o ngā kiritaki hoko ki te haumi; export economy. $2.0 billion); tāwāhi, 704 ngā umanga, ā, ka paku awhina anō mātou • mā ēnei hokohoko ko te hua ā-ōhanga ka puta ko te Over the past year we have helped our export • each investment dollar generates $3.80 i te āhua 5,300 ngā umanga. $2.5 piriona ki Aotearoa ( neke atu i te whāinga o te customers achieve: in benefit to New Zealand (up from $2.80 Ina koa, ka arotahi atu mātou ki ngā umanga kei te $2.0 piriona); • $2.4 billion in new export deals (against a target last year). wāhanga whakaputa kē, e whai ana ki te whakapakari i • mā ia kotahi tāra o te haumi ko te hua ka puta ki of $1.5 billion) These results are the highest ever recorded te taha ōhanga hoko ki tāwāhi. Aotearoa he $3.80 (neke tau i te $2.80 o te tau kua pahure). • 902 pre-deal commercial “International Growth by NZTE. They are particularly pleasing given I te tau kua pahure kua tautoko mātou i ā mātou kiritaki Outcomes” (against a target of 700) the increasingly challenging international hoko ki tāwāhi ki te whakatutuki i te: Kāore he hua nui ake i ēnei i mua mā Te Taurapa economic environment. Tūhono. I runga i te uaua haere o te āhua o te taiao • the group of customers1 we focus on have grown • $2.4 piriona i ngā hokonga hou ki tāwāhi (ko te $1.5 piriona kē te whāinga) ōhanga ā-ao o nāianei he tino rawe ēnei. their export revenue 3.6 percentage points more 2019/20 and beyond… than a benchmark group of exporters. • 902 ngā tauhokohoko hoko-mua “Putanga We will continue to lift our operational performance; 2019/20 ki tua… We continue to provide an effective experience for Whakatipu Ā-Ao" (ko 700 kē te whāinga) better recruitment, better training, better value to Kei te hiki tonu mātou i tā mātou whakatutukinga our customers, with a Net Promoter Score of +62. • kua piki te whiwhinga hoko ki tāwāhi o ngā kiritaki e customers through both human and digital channels, ā-whakahaere; kua pai ake te kimi kaimahi, kua pai aronuitia ana e mātou ki te 3.6 ōrau he nui ake tērā i all in the name of delivering more impact. ake te whakangungu, kia nui ake ngā hua ki ō mātou tētahi rōpū paerewa o ngā kaihoko ki tāwāhi. For investors… During this stage of our strategy we are intensely kiritaki ā-kanohi, ā-matihiko hoki, kia pai ake ai te As with export customers, NZTE approaches its focussed on building up personalised knowledge and Kei te whakatakoto tonu mātou i tētahi wheako whai whakatutukinga o ngā mahi. investment customers with deliberate strategy and hua mā ō mātou kiritaki me te Tapeke Kaiwhakatairanga services for distribution through new digital channels. I waenga i tēnei wāhanga o te rautaki ko tō mātou focus. Across our two primary workstreams – promoting More o te +62. Not only does this deliver more value to our existing tino aronga ko te whakapiki i ngā mātauranga me ngā greenfield developments and early stage companies export and investment customers, but it also allows ratonga i whakawhaiarotia mō te tohatoha mā ngā – we are actively focussed on three key areas: greater access and reach for those new customers Mā ngā kaiwhakangao… aratuku hou. Pēnei i ngā kiritaki hoko ki tāwāhi, ka āta whakamahi a needling light-touch services. I tua atu i te whakapikinga uara ki ō tātou kiritaki hoko Te Taurapa Tūhono i te rautaki me te arotahi ki te taha ki tāwāhi, haumi hoki, ka nui ake te whai wāhitanga mai, o ngā kiritaki haumi. Puta noa i ā mātou mahi matua e te whātoronga atu hoki mā ngā kiritaki hou e hiahia ana rua – te whakatairanga i ngā whanaketanga papa wātea i te paku āwhina noa iho. (hou rawa) me ngā pakihi kātahi anō ka tīmata – e tino arotahi ana mātou ki ngā wāhi matua e toru:

Andrew Ferrier Charles Finny Peter Chrisp Andrew Ferrier Charles Finny Peter Chrisp Chair, NZTE Board Chair, Audit & Risk Chief Executive, NZTE Heamana, Te Pōari Heamana, Komiti Audit & Risk Te Tumuaki

1 Less those companies with international revenue over $500m o Te Taurapa Tūhono Te Taurapa Tūhono o Te Taurapa Tūhono 07 Our strategy shows how The “what” and “how” we deliver to our purpose OUR STRATEGY we deliver on our purpose are the range of services and support our people provide through our two operating models. The Government’s economic strategy provides a framework for NZTE. Our strategy connects the Government’s objectives – to develop a productive, sustainable and inclusive As one global team, we provide tailored support to New Zealand – to our purpose: to grow companies our two sets of customers (export and investment), internationally – bigger, better, faster – for the good delivered through our knowledge and connections, of New Zealand. experience and international networks.

NZTE is engaged in continual transformation. The current version of this can be described as follows:

FROM: TO:

A PRODUCTIVE, WHY… FOR NEW ZEALAND SUSTAINABLE, Economy INCLUSIVE NEW ZEALAND Volume Value To grow companies internationally Goods NZTE PURPOSE – BIGGER, BETTER, FASTER – Goods and services for the good of New Zealand Market concentration Market diversification

KNOW HOW & KNOW WHO to grow companies internationally Operating model

Building of Customer Way Mastery of Customer Way WHAT FOR FOR EXPORT CUSTOMERS INVESTMENT CUSTOMERS Focus on F700 Enhance F700, more value to Foundation “Discover, Plan, Perform” “Originate, Prepare, Connect” Preparing and enabling Originating and preparing Building of Investment Way companies to succeed in market investment opportunities that Mastery of Investment Way and sustain international growth we connect to investors

Services AMBITION DRIVES US ADVENTURE TEACHES US Mostly human services Human and digital services HOW HONESTY FREES US TRUST BINDS US Knowledge ad-hoc Knowledge curated and distributed MANAAKI IS US

People

Culture implicit ‘One Global Team’ culture

Leaders managing Leaders developing culture

More diverse More diverse and inclusive

Health and safety Safety and wellbeing

A NZ organisation working globally A global organisation for New Zealand

08 NZTE Annual Report 2018/19 09 Our internal programme of improvement is named Kāhu Our operating models deliver Within our operating models, we have on our strategy strategic levers that allow us to orientate our Kāhu is the native hawk and is a symbol of flight. services to deliver against the Government’s Our customers are at the heart of everything economic objectives. we do. To deliver on our purpose, NZTE has two As part of our commitment to continuous • Developing new global practice areas, operating models: the Customer Way and the Our focus is on internationally competitive, improvement NZTE develops and implements where we think there is enhanced value for Investment Way2. innovative and knowledge-intensive companies. regular internal strategy reviews and change customers, initially focussed on sustainability These companies differentiate themselves on Experience has taught us that, when we work programmes. Kāhu is our current strategy and digital commerce. the quality, ingenuity and authenticity of their more intensively with our export customers to change programme. • A focus on supporting our Māori customers products. We achieve our focus through customer understand their ambitions and support these with in a tailored way, recognising their unique segmentation and selection processes. The key elements of Kāhu are: focussed services, we deliver the most impact. characteristics, values and drivers. • Mastering our core operating models, the To this we have added a specific emphasis We also know that investment is vital to that Customer Way and the Investment Way. Mastery • Kaitiakitanga, care of people and place. This on developing expertise in sustainability and success, and by developing a pipeline of suitable means the pursuit of excellence to support every includes care for the environment, diversity digital commerce. companies ready for investment, and then customer to achieve their potential, with an and inclusion, and safety and wellbeing. matching them with the right investors, we are able In addition, NZTE supports investment customers increased focus on digital delivery to customers. • Supporting all of this with a real focus on to deliver even more growth. in strategically selected target sectors, including our people – through culture, leadership • Digital delivery of knowledge and services to a tech, food and beverage, and tourism. greater number of customers. and capability. Underpinning this approach is the drive for constant innovation – particularly in Digital Delivery and Knowledge – to deliver more value Engagement drives to more customers. performance At NZTE, we continue to emphasise our culture To achieve all this requires investment in our people. and characters. We know that the more engaged These are the essential ingredients of our strategy. our people are, the more impact they will have on our customers’ success. This is why the continuing If we do all this, we will contribute to the growth of a enhancement of our organisation is a key part of productive, sustainable and inclusive New Zealand. our strategy. For more on our organisation, see section 3. GROWING COMPANIES INTERNATIONALLY – BIGGER, BETTER, FASTER –

KNOW HOW & KNOW WHO

EXPORT CUSTOMERS INVESTMENT CUSTOMERS

6% by 2021 $3b by 2021 Going digital Over the past few years, NZTE’s digital focus has been on improving our own IT environment, to ensure our EXPORT MASTERY INVESTMENT MASTERY people have access to the technology they need, and to support the development of our one global team.

Now, our focus has shifted to the digital services we offer our customers. The world is highly connected – “Discover, Plan, Perform” Kāhu “Originate, Prepare, Connect” • Strengthening companies for growth • Originate investment opportunities information, questions and answers all travel at speed – and NZTE and its services must be a seamless part • Preparing companies for market • Prepare opportunities • Enabling success in market • Connect to high quality investor networks of this conversation. In addition, digital services will allow a greater reach and enable more customers to access NZTE’s services.

A range of new digital platforms, including separate websites for early-stage exporters and the investment DIGITAL KNOWLEDGE PRACTICE AREAS INNOVATION AND E-commerce community, will be launched in 2019/20. STORYTELLING Sustainability In particular, the development of a personalised digital portal – intuitive and rich with NZTE’s knowledge and KAITIAKITANGA insights – will provide a new experience for both existing and new customers. It will allow them to access (Care of people and place)

AMBITION DRIVES US information as and when they need it, to better understand how NZTE can support them, and to connect with ADVENTURE TEACHES US HONESTY FREES US their peers, so that they can learn from the experiences of others. TRUST BINDS US MANAAKI IS US

2 See section 2 for information on these operating models

10 NZTE Annual Report 2018/19 11 PERFORMANCE SCORECARD

NZTE’s success is driven by the development and Particularly pleasing is the increase in investment deals application of internal change programmes. The current, combined with a lift in the quality of that investment, three-year strategic plan began in 2017/18. It continues to which means that more dollars have been invested and drive improvements in the performance of both export they have delivered more benefit to New Zealand. and investment customers.

EXPORT CUSTOMERS FY18 FY19

% Growth margin above export sector +9.2% +3.6%

$ Export customer deals $1.7b $2.4b # International Export Growth Outcomes 917 902

Export customers (F700) NPS +69 +62

Export customers (Foundation) NPS +28 +18 NPS for services +67 +72

INVESTMENT CUSTOMERS # Investment deals 57 75 $ Benefit of investment deals $2.3b $2.5b

Benefit of each investment dollar for New Zealand 1 to 2.8 1 to 3.8

ORGANISATION % Employee engagement* 78% 75% $ Operational and co-investment spend $193m $207m

*NZTE uses Culture Amp Methodology. NZTE’s result places it in the top 30% of all organisations worldwide. 2019 Better By Design CEO Summit. The Better by Design CEO Summit won the New Zealand Events Association award for Best Business Event last year. 12 NZTE Annual Report 2018/19 Presenter: Shelley Guerard of Icebreaker 13 EXPORT CUSTOMERS

The diagram below illustrates the revenue makeup THE CUSTOMER WAY Growing companies The Customer Way – our FOR EXPORT CUSTOMERS from New Zealand of both the general exporter population and operating model to accelerate NZTE’s customer portfolio. INT’L BUSINESS To build a more productive, sustainable and customer growth DEVELOPMENT MANAGERS inclusive economy, New Zealand needs more The Customer Way is NZTE’s operating model for growing New Zealand companies into CHINA companies that can compete internationally. Success is growing companies EAST EUROPE ASIA NZTE’s success is based on how well our customers international markets. NZTE aims to challenge and advise those export LATIN perform, so we measure the annual international IMEA companies that become our customers, building Companies in New Zealand are supported AMERICA revenue growth of our Focus customer portfolio. In INTERNATIONAL their capability and using our networks to open through New Zealand-based Customer Managers. MARKETS 2018/19, we also set the following targets to track NORTH AUSPAC doors internationally. Internationally our operations are organised into AMERICA DISCOVER that performance and demonstrate the impact PLAN seven regions (see International on page 26 for our PERFORM NZTE is having on customer performance: regions), and our companies are supported by in- C NN Internationally competitive O OO • Support export customers to achieve trade deals A COMPANIES I I market Business Development Managers. L TT IN NEW ZEALAND AA IT companies are needed to grow DD I of $1.5b O NN N UU At the heart of the Customer Way operating S OO the New Zealand economy • 700 International Growth Outcomes4 FF New Zealand’s economy includes around 12,000 model is an engagement framework: Discover, 5 • 63% of Focus700 customers say, in our annual F companies that export goods and services Plan, Perform. 700 survey, that NZTE has put them in a stronger around the globe. However, the majority of The Discovery process is designed to allow position to grow internationally to a great or NZ CUSTOMER these companies earn less than $5m a year in our Customer Managers to understand each MANAGERS very great extent international revenue. Conversely, a much smaller company and identify the growth challenges and • Customers’ Net Promoter Score for Foundation number of companies earn more than $25m per opportunities facing them. The Plan and Perform Build services of +28. year, and it is those companies that contribute the steps allow them and NZTE to work together to majority of New Zealand’s export earnings. The Statement of Performance in section 4 shows identify the best approach for success. NZTE works with more than 6,000 export the performance against each measure. companies, with a June 2019 portfolio value of Starting with where the customer F700 Customer composition by sector 3 is on their export journey approximately $40b . 300 We recognise that our customers have differing 255 growth stages, capability and aspirations, so we 250 have classified our customers into Focus and Foundation (Build and Start) segments. The EXPORT GOODS + SERVICES EARNINGS, YEAR TO DECEMBER 2017* NZTE’s portfolio of around 200 189 6,000 companies cuts majority of our efforts are on the Focus700 and 175 Number of New Zealand across all revenue bands, Focus Coalition6 segments of our portfolio. exporters by revenue band with a concentration 150 $51b on small to medium- Alongside the Government’s commitment to grow size companies a productive, sustainable and inclusive economy, 100 COMPANIES 76 297 our Focus700 portfolio is spread across the earn > $25 million following sectors towards the technology, high 50 value-add food and beverage, and specialised 9 manufacturing sectors. 0 $7b 411 COMPANIES F&B Infrastructure Manufacturing Services Tech earn $5 – $25 million Focus700 customers

$ 4b Foundation 10,784 COMPANIES customers earn < $5 million

NUMBER OF NEW ZEALAND EXPORTERS *Source: Statistics New Zealand (generalised)

3 NZTE works with a range of customers, but only collects financial data, and can measure growth from this data, from those companies it focusses on (called Focus700). The $40b figure, therefore, relates to this group only 4 International Growth Outcomes or IGOs are those activities that are a precursor to export deals for customers 5 Focus700 refers to the group of high potential companies that we work intensively with. We work with a maximum of 700 companies. The actual number at any one time may vary, as companies are segmented in and out of this group. 6 Coalitions are a self-selected group of companies that work together for a common go-to-market purpose.

14 NZTE Annual Report 2018/19 15 Focus customers require commitment Companies may move between Focus and Foundation customers are a diverse companies with scale-up potential. They are also and engagement Foundation segments over time. group at various stages of growth the pipeline for our Focus700. Focus companies have both the growth Focus companies are not always the biggest or We increased the number of Foundation This year we began to focus on building our aspirations and ability to compete internationally, those with the most revenue. There are large customers we worked with from 4,883 in 2017/18 pipeline of Focus and Foundation customers and are where NZTE and NZ Inc can deliver the numbers of small companies in the Focus700. to 5,324 in 2018/19. We have a strong commitment through prospecting and intentional segmentation. biggest impact. In 2018/19 we saw some growth in the numbers to deliver more light-touch value to more We made new connections with 676 companies Foundation customers through our investment Focus companies must also be willing to engage of companies in the $3m-$10m and $10m-25m in New Zealand in 2018/19, 25 joined the Focus in digital channels. with us and share their plans and growth history. revenue bands. However, 37% of Focus customers portfolio and 142 are now in the Foundation This enables us to understand their business and have revenue of less than $3m. Start customers are at the beginning of their export portfolio. A further 87 businesses moved from tailor our support so that it is of greatest value to journey and our support focusses on building the Foundation Build portfolio into the Focus each customer. understanding of what is involved in exporting, so customer segment. they can make good decisions. As part of this prospecting and to maintain an Build customers may be more experienced, active portfolio, we work with various NZ Inc domestically or internationally, and range from and private business partners to identify highly experienced corporates to high-growth suitable candidates.

F700 Composition by international revenue band Number of Foundation customers has continued to increase

300 2017/18

257 2018/19 250 240 198 200 175 4,883 5,324 158 143 150 2017/18 2018/19 106 97 100

50

Our Foundation customer are segmented into Start and Build 0 <$3m $3m-$10m $10m-$25m Over $25m

Start Build Customers Customers 3,991 1,333

2018/19 2018/19

CUSTOMER SNAPSHOT ACKAMA GROUP LIMITED

Ackama Group Limited is a Wellington-based With a strong export focus, Ackama has grown ICT services company that designs and builds rapidly over the past two years and has ranked mobile and web technologies. Its key projects as high as 25th on the Deloitte Fast 50. Its have included boosting the web capabilities of the Australian clients include the Commonwealth crowdsourcing website PledgeMe, and designing Bank of Australia, State Library Victoria and the New Zealand Post Parcelstore tracking service. Yarra Valley Water.

16 NZTE Annual Report 2018/19 17 New Zealand regions Throughout the past year, NZTE placed special emphasis on its resources across New Zealand’s regions, to enable their export customers to grow even more.

A Regional Manager has been recruited into As well as working closely with the Provincial Northland, with an office based in the co-working Development Unit, NZTE arranged a number of space The Orchard. A focus on developing business specific investment events, to help prepare export relationships has resulted in 37 new customers in companies for an injection of capital, and we have NZTE’s pipeline for additional support. delivered 29 export capability workshops across the regions. An additional Foundation Customer Manager in Hamilton has enabled the Waikato region to grow In a special arrangement with ExportNZ, winners its Foundation customers from 50 to 64, and a Tech of regional business awards are automatically Foundation Customer Manager in Christchurch has invited to the judging stage of the New Zealand seen that portfolio grow from 35 to 58 customers. International Business Awards, one of the nation’s most prestigious business events.

Northland Our customers Customers: 104 Focus700

Auckland Foundation Build Customers: 2736 Whangarei Foundation Start

Waikato Customers: 293 Auckland Map key Bay of Plenty Customers: 227 Tauranga NZTE offices Hamilton Gisborne Customers: 48

Taranaki New Plymouth Customers: 117

Hawke’s Bay Napier Customers: 208 Palmerston North Manawatu/Whanganui Customers: 167

Nelson Wellington Customers: 715 Wellington

Nelson/Tasman Christchurch Customers: 158

Marlborough Customers: 101

West Coast Customers: 13

Canterbury Customers: 792 Dunedin

Otago Customers: 297

Southland Customers: 51

18 NZTE Annual Report 2018/19 19 Performance for 2018/19 F700 growth by international revenue band

Focus700 portfolio growth up 10.1% In 2018/19 we achieved a result of 54% of 2017 growth Focus700 customers believing we had put them in The Focus700 portfolio (<$500m) grew 10.1% in 100 2018 growth 2018/2019, or an additional $1.4b of international a stronger position to grow to a great or very great 2019 growth revenues. This is a strong result, especially given extent. This is a very good result, but below the 90 the volatile international trading conditions. The very high level achieved in 2017/18 (63%). 82% 80 tech sector continues to be a highlight, with The survey continues to provide us rich insights growth of 22%. that will help us improve our service offering to 70 The differential between the NZTE Focus700 customers. Analysis of the survey results show portfolio growth, and the export benchmark of we have an opportunity to work better with new 60 similar companies, was 3.6 percentage points, customers to the Focus700 portfolio, and those 50 above our target of 3 percentage points. who have been in the portfolio for several years. 46% 42% percentage The export benchmark rose to 6.5%, up from 1.6% The NPS for Focus700 customers was +62, again 40 in 2017/18. A key reason for this change was the a very strong result. There was an increase in the very strong growth of the New Zealand services number of new companies into this portfolio and it 30 22% sector (including tech companies). This is an will take more time for our value to have an impact. 20 16% 17% excellent result for the country, showing both We delivered more impact for 12% 10% 10% strong overall export growth and diversification 10 8% 7% away from agricultural commodities. Foundation customers 2% We have changed our way of working with 0 NZTE exceeded our Trade Deal and our Foundation customers, so we wanted to <$3m $3-$10m $10-$25m $25-$500m International Growth Outcome targets measure how they perceived the effectiveness This year we assisted our customers to achieve of that change, by using the Net Promoter Score $2.4b in export deals, exceeding our export (NPS) methodology. deals’ target by $0.9b. Our target for Foundation services was ambitious International Growth Outcomes are a measure (+30) and there was a significant increase in the F700 portfolio growth rate by sector of how NZTE helps customers with non-financial response rate. Due to this much higher response 2018 growth platforms for growth, such as sourcing and signing rate, we consider this had an impact on the NPS 2019 growth a distributor in market. In 2018/19, NZTE achieved result, causing a fall from +28 to +18. However, 902 IGOs. This was above our target of 700. as a result of this response rate we now have 25 a far better understanding of our Foundation 22% 20% customer needs. NZTE put Focus companies in a 20 stronger position to grow A key element of our performance framework We increased the number of Māori 15 is measuring our customers’ perceptions of customers we work with 11% 10% 10% 9% our impact on their international growth, which In 2018/19 we worked with 52 Māori customers 10 8% percentage is strongly aligned to our purpose – to grow in our Focus segment and 125 in our Foundation 5% 5 companies internationally. Build segment.

The sector mix of these customers is similar 0 to that of the Focus700, with a slightly higher Food & Beverage Manufacturing Services Tech Export deals representation in the food and beverage sector.

$1.7b $2.4b

2017/18 2018/19

20 NZTE Annual Report 2018/19 21 CASE STUDY Coalition customers Coalitions are groups of companies with a shared Coalitions aim to develop a joined-up product, A WORLD FIRST: FROM opportunity or challenge that join forces to achieve service or solution that capitalises on international international growth. A coalition can be made up of market opportunities by sharing knowledge, costs NEW ZEALAND TO CHINA NZTE customers and non-customers, although the and risks. As well as working with individual companies, Partnership (Focus), Landcorp Farming (Focus), latter often soon become customers. The advantage is that, together, these companies NZTE also helps like-minded businesses to connect Zespri Shanghai (Focus), Fiordland Lobster Co Focus, Build and Start customers can all be can build their capability to succeed internationally, and build strategies to grow internationally (Focus), Smartfoods (Focus), Alliance Group in coalitions, which can also include other win big deals, solve complex problems and enter together, through formal coalitions. (Focus), Babich Wines (Focus), Cherri Global organisations, such as industry bodies or supply competitive markets with focus, clarity and scale. (Focus), Future Cuisine (Focus), Zealong Tea In early 2019, Alibaba – China’s leading online chain partners. Estate (Focus), Rockit Global (Focus)​. Our coalitions model has been operating for trading company – came to NZTE with an In 2018/19 we supported the formation of, and four years and is reasonably well embedded. ambitious proposal for New Zealand to be the first Alibaba has signed a Memorandum of worked with, 41 coalitions. We continue to learn as we go about what works, nation to open its own country flagship store on Understanding for preferential support and what doesn’t, and what contributes most to our Tmall Fresh. It would provide unparalleled attention online promotion and marketing campaigns. The coalition customers’ success. for premium New Zealand food & beverage brands. partnership will also allow New Zealand Food Basket brands to explore other opportunities via NZTE has worked closely with Alibaba and their Alibaba’s New Retail sales channels. Tmall teams to identify suitable New Zealand brands, build the business model, identify supply New Zealand Food Basket unites the companies chain partners and create the Tmall country under a common New Zealand brand story, pavilion store with more than 200 products. with ongoing support from NZTE and a unique FernMark Licence, which will build trust among New Zealand Food Basket was launched in April Chinese consumers who prioritise food safety and features 18 of the country’s most respected and quality. food and beverage brands: Lewis Road Creamery (Focus), NZ Wild Catch (Focus), Sealord Group The project is the most recent to be facilitated (Focus), Picot Productions Ltd (Focus), Sanford under NZTE’s Coalition activities. Group (Focus), Shott Beverages (Focus), Fonterra Insights from our work with coalition customers Brands NZ (Network Partner), Oha Honey Limited Through NZTE’s work with coalitions we continue to learn about what makes a successful coalition and we are building this into our approach for 2018-19 and beyond.

Ingredients for success include:

Deep, insightful discovery to uncover weak alignment and potential tension points and identify areas of true collaboration – this is the role of the NZTE Coalition Manager. It’s no secret that even big, successful As Chinese consumers’ demand for high- New Zealand companies can struggle to get quality imported produce continues to Skin in the game counts. Our insistence on co-funding for all activities demonstrates brand recognition on Chinese e-commerce grow, New Zealand producers have a unique and drives business-led commitment to the coalition. platforms. A collective approach, with Alibaba’s opportunity to leverage the country’s strong backing, is a huge opportunity.” country brand to market their produce. Alibaba is delighted to see New Zealand Strategic alignment between the goals of each company and the goals of the coalition. Lewis Road Creamery Founder Peter Cullinane leading the way with this innovative initiative in partnership with our marketplaces.” Momentum matters. Coalitions take time, but they also reinvent themselves along the way. They can change names, membership, focus, and intensity quickly. NZTE’s Maggie Zhou, Alibaba Group’s Managing Director for Australia and New Zealand support must be patient and agile. We (New Zealand Food Basket) wouldn’t be here without NZTE’s support! If I look back Relationships matter. Coalitions are a complex web of relationships. NZTE helps over the past year, NZTE’s support in forming coalition partners connect on a human level and deal with areas of misalignment. it and making it happen has been invaluable, It’s an outstanding group of Kiwi food from a coalition perspective, it wouldn’t’ have brands. This will help all of us build a network happened without NZTE”. that’s easy to use.”

Nicola O’Rourke – Chairman NZ Food Basket, Pic Picot, founder of Pic’s Peanut Butter

22 NZTE Annual Report 2018/19 23 SERVICES

NZTE’s global presence enables us to deliver value to companies through Customer segments our know-how and know-who. NZTE’s customers receive assistance that OUR SERVICES AT A GLANCE Start Build Focus700 is relevant to their international growth stage, capability and aspirations. Export Essentials workshops • • • Our services range from practical toolkits and NZTE uses the Net Promoter Score to measure templates through to in-depth global partnerships success across our services. For IGF projects we Regional advisory and support to succeed in new markets. We cover measure both the potential and realised economic • • • areas such as sales, design thinking, investment benefits resulting from these projects. readiness, access to international private-sector What we achieved in 2018/19: Missions and events experts, and in-market immersion programmes. • • • NZTE also funds services through the Regional • Net Promoter Score for the Regional Business Partner Network: +72. Business Partner Network for businesses to access Market research early-stage business advice and support. • Net Promoter Score for NZTE services: +72. • •

We also support companies with the International • Potential Direct Economic Impact ratio from the Growth Fund (IGF), where NZTE co-invests IGF: $1 to $7.6. In-market immersion • • with Focus and Coalition customers in projects we consider will have a positive impact on the New Zealand economy. IGF projects include International business development • • initiatives such as entering new markets or developing new products. Investment readiness • •

Beachheads • • Services are tailored to our customers’ needs We offer a range of support to our Strategy • • customers including tailored services to meet the needs of our Start, Build and Focus customers. Sales for growth • • In the past year we have increased our offering for more customers by Selling proposition launching three new Services for • • our Foundation Build and Focus customers: Strategy; Sales for Growth Design thinking and Position for Growth. •

Governance •

International Growth Fund •

Digital •

Sales performance •

24 NZTE Annual Report 2018/19 25 INTERNATIONAL Our international teams provide NZTE’s unique value; the people who provide unrivalled knowledge and local expertise to make a key difference for our customers.

Our international network allows us to In 2018/19, NZTE’s international teams focussed support customers in their target markets on Export Mastery. NZTE has people, networks, Beachheads7 advisors Customers are enabled to succeed in-market and connections in 40 international locations through understanding their value and niche; – from Brisbane to Beijing, São Paulo to San setting up and scaling for long-term growth; Francisco, Mumbai to Milan – who understand using high-quality connections to drive growth; not only how things work locally, but also the and converting opportunities to capture value. challenges that New Zealand businesses face. As part of our One Global Team collaboration, The international teams’ role is to understand we use Game Plans as the main vehicle to the dynamics of international markets and build achieve international value and impact. This is the influential networks in them. We then use this customer’s plan for that market and is developed know-how and know-who to help our customers through collaboration between NZTE teams and establish themselves in these markets and grow the customer. their businesses. Since 2017, we have been very focussed on Successful companies spend time establishing Game Plans as the key ‘currency’ for in market our International team. Building and growing an international business In 2018/19, we launched two further innovations. from New Zealand is tough and takes resilience, Game plans are now agreed with customers, so that perseverance and long hours. Successful there is a clear understanding for both parties on companies spend time in the market, with what actions are planned for the coming 12 months. customers, buyers, partners, distributors and staff. NZTE’s international teams support this. Secondly, Game Plans now state the customer’s commercial goal for that market. This change has International performance had the greatest impact, transforming the nature 2018/19 of our conversations with customers in-market. Our measures for success for the international A further highlight of the year was the teams bring together elements of the Customer development of learning modules to support the Way and the Investment Way. This means we build leadership and capability of our in-market Business international growth through both export deals Development Managers. Investing in our BDMs is and IGOs. The international team also supports our a vital way to support our customers to grow investment team to bring economic benefit to bigger, better and faster. New Zealand.

Seequent develops geoscience analysis, modelling and collaborative technologies 7 Beachheads advisors are a network of around 200 private sector experts, located throughout New Zealand and around the world, who have experience in to solve complex problems, manage risk, and uncover valuable insights from data. running international businesses and can help companies to grapple with specific challenges and maximise opportunities Seequent’s software played a key role in the Thailand cave rescue, and the company won the Supreme Award at NZTE’s New Zealand International Business Awards for 2018. 26 NZTE Annual Report 2018/19 INSIGHTS FROM ACROSS THE WORLD Almost half of NZTE’s people are located in our seven geographic regions. They also have a small team working in New Zealand, to provide the most impact for their activities.

EUROPE GREATER CHINA NORTH AMERICA

Prepare for Brexit: review your operations and identify Think local: hire Chinese talent, either into your business Nail the niche: It doesn’t mean being narrow in your any areas of potential disruption. For many this is only in NZ or preferably in the market. You need the balance of capabilities, rather laser focussed in a market where a few hours looking at supply chains, contracts, staffing, local language speakers and other experienced operators. opportunities are endless. Be an inch wide and a and checking in with partners. mile deep. Get on a plane: expose your key decision-makers (CEO, Adapt your marketing plan for culture: Though Europe Board) to the market. The senior leadership team should 24/7 networking: Americans are the masters of the is a cohesive market for exporting, companies need to visit quarterly, and the Board regularly. hustle. Every conversation you have is a pitch. That’s consider adapting their marketing and sales approach on because you never know who you’re talking to – they a country-by-country basis – an image that works well in What’s your difference: how does your product or could be your next employee, or a potential customer Germany may fall flat in France. And online marketing is service distinguish itself in an increasingly crowded or a venture capitalist. becoming increasingly important. market? Do you know what problem you are solving for a Chinese consumer? Double the budget: Double the time horizon and halve Be aware of your footprint: Europe is particularly eco- the sales forecast – it will take longer than you think conscious – consumers are demanding reduced plastics, to get traction, so plan accordingly. recyclable products and for brands to be aware and open about their supply chains, and not just in consumer goods.

INDIA, MIDDLE EAST & AFRICA EAST ASIA AUSTRALIA-PACIFIC LATIN AMERICA

Tech is growing: parts of the IMEA region are Get on a plane: there is no substitute for coming First port of call: Australia is an important market for Green shoots: economic activity continues to recover transitioning to a greater focus on digital and tech to market to explore opportunities. Building and New Zealand food and beverage companies and often from the negative growth of 2015 and 2016, albeit solutions for commerce and society. Demand is high for maintaining relationships face to face is crucial to where they learn the challenges of exporting. Room to modestly, led by Peru, Chile and Colombia. innovative solutions to a global challenge. ongoing success. grow: Australia also provides scalable opportunities for specialised manufacturing and technology companies Use your know-how: New Zealand expertise in agricultural Connect and diversify: the Middle East continues to Collaborate to compete: The most effective approach across infrastructure, resources and defence. and horticultural technologies is highly regarded and develop as an important gateway. Strong connections for New Zealand companies is to partner with other Kiwi considered suitable for adaption to local conditions. into Africa and Europe, and investment by the private businesses and win as a country. Our real competitors The Pacific reset: the region offers good opportunities and public sector into logistics infrastructure, make cities are other international companies. for companies active in renewable energy, infrastructure Think digital: the youth demographic is driving strong in the Gulf a hub for international business. and consultancy, with increased funding from bilateral uptake of digital technology and leading to local Tell a different story: New Zealand is only one of many and multilateral agencies as they refocus their efforts innovation in e-commerce and fintech. countries with rolling hills and wide open spaces. Our on the Pacific. evolution is to lead with our sustainability, our Māori culture and deeper stories of how we develop our products and services. It is our ingenuity and integrity that makes us special.

28 NZTE Annual Report 2018/19 29 REGIONAL ACTIVITIES:

CHINA EAST ASIA EUROPE consumers (18 to 39 year-olds have the highest income in China). They are more comfortable than Western counterparts with change, handing over Export deals Export deals Export deals $593m their data and living their life on their smartphones $385m $280m (convenience and time saving are why 62% buy food online). Investment pDEI Investment pDEI $ Investment pDEI $ $743m Made for China is also a growing expectation – 125m 106m product needs are often different from the West, whether milk, fashion or appliances. Innovation in The China regional market strategy the tech sector is shifting the centre of gravity for The East Asia regional market strategy The Europe regional market strategy focusses on: world-leading technology from the Silicon Valley focusses on: focusses on: Increased scale: Supporting companies to scale to Shenzhen. Sustainable growth: particularly for premium Customer engagement: to reflect the geographic up, in terms of in-market resource and/or strong F&B companies. expanse of the region and differences that exist partnerships to achieve sustained success. Renewable energy: with a specific focus on world- across markets. Leadership: This past year has proved that we need class engineering consulting, hydro and geothermal. Focus areas: Agritech, high-value food and to take a more purposeful, longer-term approach Year one of the Kāhu capability training has beverage, marine. to build our leadership capability in China. strongly signalled the move in South East Asian Managing the growing interest among China’s consumer-led economic growth will markets from largely transactional support and New Zealand exporters in a post-Brexit UK will add the equivalent of one Australian economy introductions (especially for F&B customers) to be an important role for our London-based team. to the Chinese giant in 2019. At the forefront of deeper and more challenging market development. Managing this growth in demand will sit alongside consumption are digitally-obsessed, younger All eyes are on Japan as the Rugby World Cup supporting all of our European customers to approaches – the Japanese market is rich with successfully navigate a post-Brexit Europe. opportunity and our customers are responding With the current turmoil in British politics and the to this. ongoing delays to Brexit, the past year has been a Regardless of moderate GDP growth, interest time of uncertainty in this region. We are seeing a in Japan continues to grow as customers look marked increase in customers looking to establish for higher margins and premium opportunities. a trading base in mainland Europe. Consequently, Dairy, beef and kiwifruit exports have benefited we have been developing a system to enable them considerably from CPTPP and it is expected that to objectively prioritise market selection. further investment into New Zealand will follow. Meanwhile, negotiations continue for an EU-NZ Korean opportunities still suffer from a lack of FTA agreement, which would create a level playing awareness among our customers along with field for New Zealand businesses by reducing the benefits that the Free Trade Agreement tariffs, duties and other trade barriers. It should also has delivered. support the growing services and digital sectors, helping businesses of all sizes. Viet Nam is still seen as a ‘hot market’ by our customers but the road to success is a long one and often customers don’t appreciate how sophisticated the market is and the level of competition they will face. A number of international companies have relocated or are considering the relocation of manufacturing to Viet Nam and Thailand from China, as a consequence of the China – US trade war.

NZTE supported the trade mission to China that accompanied the Minister for Trade and Export Growth, David Parker (centre). 31 INDIA, MIDDLE EAST AUSTRALIA PACIFIC LATIN AMERICA NORTH AMERICA AND AFRICA

Export deals $261m Export deals $119m Export deals $462m Export deals $260m Investment pDEI $704m The Latin America (LATAM) market Investment pDEI $322m Investment pDEI $17m strategies focusses on: Agribusiness: in particular, technology and The Australia Pacific (AusPac) regional expertise in pasture-based farming systems, The North America regional market The India, Middle East and Africa (IMEA) market strategy focusses on: including equipment, seeds, genetics, consultancy strategy focusses on: regional market strategy focusses on: High-value manufacturing: Australia provides and animal pharma. Tech including Healthtech Specialised manufacturing technology and scalable opportunities for specialised CPTPP Leveraging (Mexico & Peru): to ensure Specialised Manufacturing manufacturing and technology companies across that New Zealand businesses understand the systems: for the food and beverage industry in the Food and Beverage Gulf and for local and export-focussed businesses infrastructure, resources and defence. opportunities, not just tariff reductions but access Agri-solutions in India; Food & Beverage: Australia is an important market to public procurement projects and how to utilise remedies for technical barriers to trade. Critical Infrastructure Building and construction: with the emphasis on for New Zealand food & beverage and is the first innovation across the region. port of call for many of our customers. We are Digital: enabling companies to localise their digital The North America region continues to see focussed on supporting our customers with retail marketing and e-commerce strategies to the increasing numbers of customers targeting the High-value Food & Beverage: including hotel, excellence, channel extension, and value creation. LATAM ecosystems. market, particularly the US. food service and premium retail in the Gulf, India and Sri Lanka. Australia continues to be a large, wealthy market With a portfolio weighted towards more mature While tensions between the US and China can not enjoying strong levels of prosperity and growth. Focus700 companies, the focus in LATAM is how be ignored, most customers are taking a business- The regional team has launched NZTE’s Expo There are significant opportunities for New Zealand to add more value to companies who have already as-usual approach. 2020 Business Leveraging Programme, with companies who are prepared to invest in the entered the market and are seeking to gain scale $3m invested in a series of initiatives to stimulate Large-scale (mega) corporations are increasingly market, bring new ideas and innovation that solve in the region. customer engagement in the brand and business controlling market share, potentially stifling issues around increasing compliance and improved building opportunities that will exist in Dubai over The recruitment of a new Trade Commissioner New Zealand companys’ ability to compete. efficiency and value. the next two years. in Brazil and the incorporation of Mexico into Developing a deep understanding of the A major modernisation of Australian’s defence the expanded LATAM region means we are well- competitive landscape, pricing strategies, and Food security in the Gulf States remains a capabilities offers huge potential for New Zealand resourced and better aligned with the way many of market share opportunities is a key part of significant opportunity for New Zealand companies specialised manufacturing and technology firms. our customers approach the region. NZTE’s approach. as countries across the region continue to seek to NZ Inc has been mobilised for an NZTE-led secure food supplies and increase production levels CPTPP has meant that Mexico has become The US labour market is as tight as it has ever been. programme supporting New Zealand companies to for their growing populations. New Zealand’s second FTA partner in LATAM (after The result of strong economic conditions that can build capability and connections to win business in Chile) and this has resulted in immediate gains for be to our customers’ advantage, this tight labour A continuing question is how we help unlock the defence sector. customers. Peru is expected to ratify in the next market has also made it increasingly difficult for our India for our customers. It is a nation of massive In the retail sector, the Coles & Woolworths duopoly few months. customers to recruit the right talent at the right price. opportunity for New Zealand, with strong cultural, is threatened by the growing strength of Aldi and historical and sporting links. There are opportunities for technology companies E-commerce continues to change the face of retail Costco, and new entrant Kaufland. This means we and we have seen an upturn of interest in the region and we are seeing an increasing need to consider Rampant growth across Africa in core sectors will continue to see price erosion as a means for from food processing and software customers. an omni-channel approach. On the one hand this continues to attract companies and countries retailers to counter competitive pressures. allows SMEs to compete in a way they haven’t been willing to pioneer new partnerships, products, Governments and large commercial dairying On the other hand, New Zealand suppliers who able to before; on the other, it means they need services and channels. interests in LATAM are also keen to explore the offer innovation and value, and play to new and efficiency gains that can be achieved through the to quickly come to grips with what this means for emerging trends around health and well being, adaptation of New Zealand systems. their business. will attract favourable interest from retailers. Sustainability or “conscious buying” as a trend is emerging strongly. This offers a potential opportunity for our customers and we need to understand what this means for them in the context of the US market. CUSTOMER SNAPSHOT COMPAC

In January, Westfalia Fruit Colombia opened the success has been a crucial part of New Zealand largest avocado processing and packing facility in demonstrating that its agritech innovation goes Colombia, and at the heart of the plan is equipment beyond the dairy industry. from Compac Sorting Equipment. The company’s

32 NZTE Annual Report 2018/19 33 CASE STUDY: WAIKATO MILKING SYSTEMS

Waikato Milking Systems is a pioneer in designing and China, with representatives in most of the and manufacturing dairy technology and systems main dairying nations of the world. for the rest of the world. Based in the Waikato, the The company has developed some of the most company has been operating for more than 50 technologically advanced innovations on the years and has earned an international reputation market, including composite dairy platforms, for agricultural innovation. mid-line swing-over milking parlours, milk- The company’s engineering facility is in the sensing technology, milk cooling systems, dairy Waikato but the company also has offices and management systems, as well as effluent and warehouses in Australia, the US, United Kingdom environmental solutions.

How we worked together

Waikato Milking Systems is a complex customer to In Ireland, NZTE arranged a VIP visit, which included support, with its main target markets being the UK, New Zealand’s Ambassador to Ireland, to see the Ireland, Russia, China, the US, Canada and Australia. newly commissioned 50-bail Orbit platform of a It demands the most effective use of NZTE’s One client of Waikato Milking Systems. Global Team. This was a demonstration of NZTE’s know-who NZTE hosted Waikato Milking Systems at the China showing how New Zealand technology can benefit Dairy Exhibition in Tianjin, where the company Irish farmers. demonstrated its milking automation and dairy Both activities illustrate the aligned approach management systems. The focus was on explaining that NZTE takes with its customers, ensuring that how these systems make life easier for the people activities have a demonstrable impact on their and animals in the milking parlour, an example of export success. targeted New Zealand story-telling.

Waikato Milking Systems attended the China Dairy Exhibition in Tianjin, hosted there by NZTE. Here are Waikato Milking Systems staff, from 34 NZTE Annual Report 2018/19 left, David Morris, Tracey Kitching, YuLing Liu, Michael Liu and Jim Duan at their expo site, showing the company’s Small Ruminant Rotary. Services modules International Growth Fund Services modules are those services that are delivered as programmes to The International Growth Fund (IGF) is part of a tailored package of customers, by contracted providers. In 2018/19 NZTE Services continued the services we offer to our Focus and Coalitions customers. NZTE co-invests refinement of the suite of services offered and aimed to achieve an NPS of taxpayers’ money into growth projects to fast-track these customers’ +72 for NZTE services and +72 for the Regional Business Partner Network. international success.

Export Essentials workshops to help Providing clear follow-up actions Since its inception in 2009, the IGF has approved IGF performance close to a quarter of a billion dollars in co- companies learn the basics to customers In 2018/19 we approved co-investment of over investment with customers, for around 600 $35 million into 107 projects with customers, Export Essentials, which are workshops that help Aside from the continuous improvement of many separate projects. with a potential direct economic impact for the companies learn the fundamentals of being an of our Services, a strategic focus on embedding has New Zealand economy of $5.70 for every $1 exporter and the ingredients for success, was impacted customer perceptions over the past year. NZTE has been evolving the service it provides invested. The actual (or realised) return from the launched in 2017 and has continued to grow over As part of this focus, we now provide clear next as part of the Fund, based on customer feedback completed customer projects was $7.60 to $1, the last year. 182 companies attended Export steps and actions for customers to implement after and lessons from past projects. In particular, we are well above our target of $4 to $1. This is up from Essentials workshops nationwide over the past year. the specific Service has been provided. endeavouring to make the processes less onerous for customers. We have accelerated this refinement $6.10 to $1 reported in last year’s results. work over the past year, with some excellent Continued focus on quality feedback received from customers about the co-investment projects quality of the service we were able to achieve. The Fund has seen a sustained level of interest Beachheads from customers, up from 82 in 2016/17 and on a par with 109 projects approved in 2017/18. Our focus Our Beachheads programme connects participating companies to a network “The IGF has been instrumental through the year has been on driving good quality of around 200 private sector advisors in New Zealand and around the world. validation of in-market strategies and business These advisors can provide insights into the realities of international business. in our success within the Japan models, and smart spending on agreed market market. Without it we would have entry and acceleration plans. After all, our customers only get to spend the and approach specific issues. They are highly struggled to succeed.” Private sector experts gain unique money once, so our effort goes into helping them experienced private-sector experts – they’ve been insights into success maximise the Impact of the IGF co-Investment. there, made mistakes and still succeeded. These These advisors run “Fresh Thinking” sessions with We finished the year with a robust pipeline of are their insights on the ingredients for customers, both in New Zealand and internationally, future co-investment opportunities, evidence that international success. to work through strategies, leverage opportunities our customers continue to seek market success in partnership with NZTE.

Number of full IGF projects and Value of full IGF projects and market validations for past 2 years market validations for past 2 years Beachheads advice to customers: Full projects Full projects Formulate a clear market strategy: know Transparency is not a choice: consumers/business Market validations how you will transition from selling directly to partners may find out anything about your Market validations customers in New Zealand to using distributors or business in the digital era. Make it your strength 60 35 international partnerships 55 54 55 31 Commit to sustainability: it is a basic principle 52 30 28 Simplify and execute: develop answers to simple for businesses today. Not committing to it makes 50 questions which can be understood you vulnerable 25 40 and acted on Keep the customer at the centre: carefully 20 Don’t neglect digital technology: embrace it and consider the questions, emotions, barriers and 30 15 Number

use it to your advantage, no matter what industry touch points your customers will experience at $ millions 20 sector or whether you are business to business or every stage of the journey 10 business to customer 5 5 Company culture is important: as you scale your 10 5 Think global from day one: compare yourself business and build offices in new markets, codify with competitors internationally, not only within and disseminate your culture so your team can 0 0 2017/18 2018/19 2017/18 2018/19 your industry in New Zealand act with one voice.

36 NZTE Annual Report 2018/19 37 What we helped our investment NZTE continued its support for the New Zealand INVESTMENT CUSTOMERS customers to achieve investor ecosystem – 50% of the completed deals This year NZTE’s investment team facilitated 75 obtained their capital domestically. Investment Investment is fundamental for the growth of the New Zealand economy. investment deals, representing $645m of capital from Australia accounted for 24% of transactions NZTE Investment is tasked with generating productive, sustainable, and flows and $2.5bn of pDEI. This is a significant by volume, followed by North America at 10%. inclusive investment opportunities to accelerate the growth of New Zealand. increase on last year’s 57 deals and $2.2bn of pDEI. There has also been significant growth for The quality of investment deals, in terms of their our customers, with the average capital raise positive impact on the New Zealand economy, increasing from $2m to $3.1m year on year. We do this by using our global networks and deep regions and driving innovation that capitalises on continues to grow. This is measured by the ratio In addition, NZTE has also supported customers local knowledge within New Zealand to bring New Zealand’s sustainable competitive advantage. of pDEI to the investment value of the deal. In with multiple rounds of capital raising, as they investment and opportunity together – helping Across our two primary workstreams we are 2018/19, that ratio increased to 3.8:1, up from 2.8:1 progress through their growth curve. This investors discover great businesses and high-value actively focussed on three key areas: in 2017/18. In 2016/17 the ratio was 2.5:1. demonstrates that our New Zealand customers opportunities for growth within New Zealand. are meeting their milestones, a vital component • Advancing investment into the regions, as We also give our businesses the knowledge and One of the key metrics for potential economic value to successful investment. supported by our work with the Provincial connections they need to meet their capital needs is the number of jobs created in New Zealand. For Growth Fund and the regional economic for international growth. 2019’s completed deals, there was a total of 1002 development agencies jobs created, 654 high-skilled and 348 lower-skilled. Investment is essential to enabling our companies • Supporting Māori economic development to to grow faster, launch new initiatives, gain be prosperous and successful competitive advantage and lift economic well- being in New Zealand. It is about more than just • Working with, and in support of, NZ Inc to the flow of capital; it brings knowledge, capability deliver a cohesive and impactful approach to Focussing on lifting investment Focussing on the regions investment attraction. and connectivity. in target sectors An increasing focus for NZTE has been identifying regional investment opportunities and preparing In the past four years, NZTE Investment has been We focus on sectors where we can have the THE INVESTMENT WAY them to go to market for investors. Quality involved in facilitating almost $4 billion worth of FOR INVESTMENT CUSTOMERS greatest impact. We look for investor demand, investment that brings job creation, research investment that is forecast to provide over $8 sectors where New Zealand has a clear competitive advantage, and where there is economic benefit to and development, expertise and other flow- billion of economic benefit to New Zealand. INT’L INVESTMENT MANAGERS New Zealand. on benefits is a key pillar of the Government’s A pipeline of more than $7 billion worth of economic strategy. investment has also been created, with 231 different To develop this pipeline we concentrate on tourism, AL D With NZTE’s support, Taranaki, Waikato and the Bay N O technology, food and beverage, wood processing, investment opportunities across all our focus O M I E T S of Plenty attracted significant catalytic investment A T advanced transportation and renewable energy. N I sectors, and 114 of these in the regions. R C E T A high priority is our support to Māori, their this year. As NZTE expands its reach into the N INVESTORS I regions, through our involvement with the Provincial The Investment Way economic development and their contribution to ORIGINATE, New Zealand’s future prosperity. NZTE assists in Growth Fund (PGF), we expect to see a significant MATCHINGPREPARE, NZTE’s Investment team originates and develops CONNECT building the Māori investment story, helping Māori investment flow to areas other than major cities. proposals and then connects these with domestic companies get investment ready and generating S and international investors. NZTE has a twin E NEW ZEALAND S C OPPORTUNITIES N T O O I opportunities for Māori entities. R G focus on growth-stage companies and large- S E R scale greenfield projects. These investment Investment pDEI by Sector opportunities offer significant benefits shared COMPANIES across New Zealand and lead towards NZTE’s goal 1400 2016/17 of a diversified, value-add economy. NZ INVESTMENT 1,314 MANAGERS 2017/18 The Investment Team’s focus on these two distinct 1200 1077 2018/19 areas is driven by Government rationale: Our main measure of success for investment is 1,013 1000 • Support New Zealand growth-stage companies the economic benefit that investment brings to New Zealand (with NZTE’s help). Potential direct to understand the capital-raising process, 800 697 prepare them to be investment ready, and economic impact (pDEI) is the forecast return to successfully connect them with capital for New Zealand through increased profits, wages and 600 554 445 internationalisation and scale. supplier spend. pDEI in millions 403 400 287 • Originate, develop and accelerate large scale In 2018/19, our target was to achieve a pDEI of 246 commercial greenfield operations and new $2b. We also track the number and dollar value 200 140 62 initiatives in New Zealand in partnership with of investment deals that our people facilitate 49 39 28 0 investors, providing new jobs, growing our or support. Food & Infrastructure Manufacturing Services Tech Beverage & Resources

38 NZTE Annual Report 2018/19 39 POWER OF COLLABORATION

NZ Inc Regional Business REGIONAL SCORECARD NZ Inc helps to unlock the expertise and services of government agencies – Partner Network these are our NZ Inc partners – for the benefit of our customers. The Regional Business Partner Numbers of businesses engaged (RBP) Network is a programme

Working together on customer problems Supporting new policy perspectives set up to support small-to-medium We work with NZ Inc to address customer In 2018/19, NZTE helped to develop a NZ Inc enterprises (SMEs) to grow problems that are beyond NZTE’s control perspective on the support needed in the and innovate. 2018/19 5,796 and expertise, particularly when it comes to ecosystem for start-ups, and the unique market-access issues (e.g. barriers to trade and opportunity for the New Zealand agritech sector, understanding regulations and international with support for the launch of the Government’s NZTE and Callaghan Innovation jointly fund 14 requirements), export finance, product innovation first Industry Transformation Plan. This work will regional organisations (a mix of development 2017/18 6,117 and R&D, and access to migrant skills. inform potential policy interventions, or other agencies, business chambers and councils) to operational changes needed to support companies employ advisors who can help business owners to NZTE harnesses NZ Inc channels and networks to in these groups. identify opportunities for, and barriers to, growth identify customer issues that can be addressed and innovation. They are then able to connect the Businesses with capability vouchers by partner agencies, and directs customers to the Collaborating with Callaghan Innovation business owners to a variety of available support. right agency for resolution. for customer impact NZTE measures the joint Focus700 customers Regional Business Partner Working together on government we share with Callaghan Innovation. This provides performance 2018/19 priorities a strong understanding of where the agencies 2018/19 saw the RBP team work closely with 2,393 One of the key areas of focus this year for NZ Inc can collaborate to create the most impactful Callaghan Innovation to build on the results agencies was to work with the Government on its interventions for customers, to benefit the overall achieved in 2017/18. new industry policy. Economic agencies worked New Zealand economy. together to identify the contribution they can make Focus on quality engagements 2017/18 2,479 In 2018/19 NZTE collaborated with Callaghan to the Government’s economic objectives, and The number of businesses supported through Innovation to work with 375 Focus700 customers. to support the launch and development of new the RBP continues to exceed the KPI of 5,000 industry transformation plans, starting with the with 5,796 businesses engaged in 2018/2019. agritech sector. Businesses with business mentors Capability development vouchers were issued Supporting MBIE and MFAT totaling $5.9m to around 2,400 businesses. These For the Provincial Growth Fund (PGF), NZTE numbers are slightly down on the year prior due to continues to support MBIE and multiple NZ Inc a focus on the quality of the service. 2018/19 1,582 agencies to develop and deliver the PGF. NZTE Changes at Business Mentors NZ (BMNZ) has also been a member of the interagency group Businesses accessing BMNZ has reduced to 1,582. working on Brexit and the possible scenarios and implications for our customers. Brexit preparations In 2018/2019, BMNZ has implemented a number 2017/18 have been led by our team in London, supported of changes with a new CEO, new team and new 1,758 by colleagues in New Zealand. systems being introduced.

We are also supporting the Government’s Focussing on professional development NPS score “Trade for All” agenda, which is a forward-looking, Another focus area was professional development broad conversation about the role of trade in for Growth Advisors. In 2018/19, Understanding New Zealand. This includes support to help Intellectual Property Strategy training was maximise opportunities for SME participation delivered to Growth Advisors from 14 regions. in international markets. 2018/19 +72 Meeting customer expectations The Regional Business Partners NPS also exceeded its target of +60, achieving +72. 2017/18 +64

40 NZTE Annual Report 2018/19 41 Working with and for Māori Improving our capability to support Māori As well as recruiting more Māori and developing more Māori leaders, we recognise that everyone Because of our commitment to Te Tiriti o Waitangi and the economic Recognising our Māori customers’ unique values, drivers and complexities, NZTE has grown our at NZTE has a part to play. Among other long- development of Māori, NZTE has specific strategies to support the growth people specifically recruited to implement our term diversity and inclusion goals, NZTE has of Māori companies and investors. We are motivated to work with Māori Māori strategy. Our Māori Business Group (Te made a commitment to continue to improve our customers in a way that recognises the unique characteristics, values and Pora Māori) has the specialist Māori commercial Māori capability across the organisation. We need and cultural know-how and know-who to engage not only to grow our Māori customers, but also drivers that will grow the opportunities within the Māori economy. with a wide range of Māori companies and key strengthen our delivery to all customers, and be stakeholders, find ambitious Māori exporters to better representatives for Aotearoa New Zealand. Kia Kaha, our two-day marae-based induction With a strong asset base of NZ$50 billion and Among the major achievements bring into the NZTE portfolio, and create impact for programme, is one way we enable our people from a comparatively young, and growing, Māori of 2018/19 were: those customers in international markets. all over the globe to experience Māori culture, population, the Māori economy has the power to Prepack Ltd: NZTE supported this customer to people and business. As we connect with Māori create significant economic uplift for Aotearoa secure a major deal. Prepack is a pick-and-pack language and culture, we also connect more deeply New Zealand. Our Māori customers’ culture- exporter of ration packs to military, emergency, and with our other international cultures, and become a led approach to trade is a distinct advantage disaster relief organisations globally and secured a stronger, more authentic One Global Team. in international markets and the foundation of contract with the Australian Defence Force. strong relationships built over time helps stabilise Miro Berry: This is an example of where support all businesses. Supporting our Māori customers’ from NZTE in the very nascent stages can help turn international growth contributes to the overall a dream into reality. Miro is a vertically integrated wellbeing of Māori and Aotearoa New Zealand. berry export business, owned by more than 20 NZTE continues to grow our portfolio of Māori Māori trusts, iwi and entities from the top of the customers and we now work with close to north to the top of the South Island, from the East 50 Māori Focus customers and 200 Māori Coast to Taranaki. They came together “because Foundation customers. We also work with three we wanted jobs for our people, higher returns on Māori coalitions. By Māori customers we mean our land, and to own IP and a global business that entities that self-identify as Māori, that are would secure a future for our mokopuna”. With the undertaking commercial activity, and want to help of NZTE, they recently secured a significant grow internationally. investment deal.

From ration-packs to live crayfish and software Animation Research Ltd (ARL): Māori entrepreneur solutions, our portfolio of Māori customers is Ian Taylor (Ngāti Kahungunu and Ngāpuhi) diverse. Primary industries dominate, particularly founded Animation Research, which is renowned the food and beverage sector, but there are also for its cutting-edge tech used to animate sport significant numbers emerging in the tech sector. such as the America’s Cup. NZTE supported ARL Their markets are varied, but China, the United to secure rights to the PGA Golf Tour and there are States and Australia are major targets. more major sports events to be announced.

Our Māori customers span a range of business Waiū: In the investment field, Waiū (formerly and community structures, including SMEs and known as the Kawerau Dairy collective) is a major large companies; iwi asset-holding companies and unique infrastructure development – a $33m and commercial subsidiaries; and Māori Trusts geothermal milk plant in the heart of Eastern Bay and incorporations under Te Ture Whenua of Plenty. This joint venture brought together Māori Act 1993. Many of our Māori customers 11 Māori entities, including whanau trusts, Māori balance several competing demands: cultural, lands trusts and iwi asset holding companies. political, environmental and social, as well as their NZTE played a crucial role in facilitating additional commercial imperatives. investment, including from Japanese firm Imanaka. Exemplifying whanaungatanga (collaboration) Our Māori customers want many of the same and tino rangatiratana (self-determination), Waiū services from NZTE, but it is vital that there is s continues to grow, supporting employment in shared understanding of history, stories, culture, provincial Aotearoa New Zealand. values and drivers. These are all a core part of our deep and ongoing relationship.

Hack Tairāwhiti is an NZTE event held in Gisborne, which connects the tech sector with Māori businesses to fast-track solutions that will lead to more export success.

42 NZTE Annual Report 2018/19 43 UNLOCKING TIME Government to Government (G2G Know-how) FOR BUSINESS IN THE PHILIPPINES

The purpose of G2G is to commercialise New Zealand government know-how The business licensing and registration system in fill out multiple forms and submit documentation (practices, methods and intellectual property) and deliver these as solutions to the Philippines has been a bureaucratic and time- by lining up in person at different government partner governments in international markets. consuming process, resulting in an opportunity agencies during weekday office hours only. This cost for local business. has added a physical challenge due to the significant traffic volumes in the Greater Metro Digital services have been underdeveloped and Operating primarily across South/South-East Asia New Zealand networks remains the key competitive Manila area. and the Persian Gulf, the G2G Know-How team advantage. This has been further strengthened under-used by government agencies, which haven’t now has considerable experience delivering the by a growing alignment with MFAT’s Economic been benefiting from the cost, resourcing and access All these factors contributed to a business programme, and securing deals against tough Diplomacy (and Aid) objectives across key markets efficiencies provided by modern digital services. registration and licensing environment where agencies were not fully maximising the potential international competition. in South/South-East Asia and the Persian Gulf. A large amount of time has been spent on the revenue returns due to perceived and real deterrents physical processing of paper, businesses having Key sectors include digital government, ease of End of Financial Year Results of small businesses of leaving the ‘black economy’. doing business, disaster management, education, to duplicate information numerous times across (Note: G2G Know-How was operating environmental management and agriculture. different government agency processes, having to on a biannual target FY17/19) G2G Know-How has finished the financial year almost $8m ahead of its two-year $16m target, 2017/19 Target $16m with more than 70 programmes now contracted How we worked together across 19 countries since inception. The growing 2017/19 Actual New Zealand was asked for assistance by the HQ successfully submitted their proposal and success of the model has led to the Government’s $23.7m Government of the Philippines because we are were awarded a contract to deliver three key reconfirmation of the operating budget for a ranked #1 in the World Bank’s Ease of Doing service reforms. further three years, with new KPIs set at $36m in Cumulative Revenue since inception $38.8m Business Report. A project team was established revenue over the next three years. With funding The solution includes a mobile phone-based by G2G Know-How, the New Zealand Embassy confirmed, the focus will remain on taking G2G business registration platform; a single web-based Number of contracts in Manila and New Zealand Trade and Enterprise. Know-How to scale through: larger deals; more portal to house a comprehensive directory of all won since G2G’s inception 72 After agreeing to an initial concept, G2G Know- focussed and detailed product lines; co-investment local government processes and charges relevant How engaged Wellington Regional Economic with third party funders; and by driving greater to business registration and licensing required by Total Pipeline value Development Agency’s innovation arm, Creative capacity and capability into the supplier base and $54m different local authorities across the Philippines; HQ, as the lead New Zealand facilitator. the G2G Know-How team itself. and a prototype design for implementation of a Total Pipeline number A diagnostic study involved small-business owners, single business identification number for The ability to leverage New Zealand’s offshore 93 brokers for foreign investors, and officials in Philippines business registration. network through the NZTE, MFAT and Education agencies across the system, and was conducted in The project is also building the capability – both Greater Metro Manila area and the regional cities of CASE STUDY technical and mindset – in the Philippines’ Cebu and Davao. government system, enabling them to be able to The Philippines Government next created an open move towards and implement a 24/7 service tender procurement process to secure services to provision culture and environment. deliver on the study’s recommendations. Creative

CUSTOMER SNAPSHOT GLOBAL EDUCATION SYSTEMS The prototypes have the ability to radically This project has not been about imposing change the way businesses register themselves New Zealand’s system in the Philippines, but Global Education Systems (Global Ed) is an with the largest education publishing company in with the government. They were developed over about combining New Zealand’s experience educational resource publishing company that sells the US, Houghton Mifflin Harcourt. The partnership five days, proving that technology solutions with the creative talent of young Filipinos millions of books and other published resources will see the development of a reading package in the government can be developed quickly. to improve the business environment in the worldwide, in both print and digital formats. With featuring award winning New Zealand children’s This method can compress years of work into Philippines. At the core of this approach is a NZTE support, Global Ed secured a new partnership author and educationalist Jill Eggleton QSO. months and weeks and provides us with the changed mindset, one that treats citizens as chance to seriously make improvements in our customers, not taxpayers.” Ease of Doing Business ranking.” David Strachan, New Zealand Ambassador.

44 NZTE Annual Report 2018/19 Guillermo M. Luz, private sector co-chairman, National 45 Competitiveness Council New Zealand Story Expo 2020 The New Zealand Story Group’s purpose is to enhance our country’s reputation The indigenous, environmental ethos of kaitiakitanga will be the underlying beyond natural beauty. To successfully do this, we need to be clear on what theme of New Zealand’s pavilion at Expo 2020 Dubai, inspired by the world- we stand for. We need to tell a consistent and compelling story – a common first legal status accorded to the Whanganui River. narrative we can collectively own and use to influence how the world and our customers see us. In 2017, the river was recognised as a living entity, The pavilion will also showcase New Zealand’s called Te Awa Tupua, by virtue of innovative trade capabilities, investment opportunities, legislation that obliges the government, local education providers and tourism experiences. NZ Story creates quality resources to provide Ko tātou ēnei – it’s who we are authorities and all communities of the river to New Zealand will be positioned as a trusted partner New Zealand exporters, the Government and its New Zealand is a progressive nation of creative work together under Tupua Te Kawa, the innate working for the good of the world. agencies with the tools, skills and knowledge to people, challenging the status quo, delivering new values of Te Awa Tupua. These values encapsulate communicate more consistent and compelling As the delivery agency for New Zealand’s solutions to problems and turning ideas into reality, Whanganui Iwi kaitiakitanga. NZTE and Whanganui stories about New Zealand. participation in Expo 2020, NZTE is coordinating whilst always caring for people, place and planet. Iwi, via its governance entity Ngā Tāngata Tiaki with NZ Inc partners (Ministry of Foreign Affairs NZ Story is also responsible for the protection of o Whanganui, have signed a memorandum that The International Strategy is to highlight stories that and Trade, Te Puni Kōkiri, Ministry for Primary our national symbol, the FernMark, and operates acknowledges the mana (status) and integrity of showcase this combination of values. Alongside Industries, Ministry of Education, Ministry for the FernMark Licence Programme. Te Awa Tupua, ahead of the development of the our low hierarchy environment, an open and Culture and Heritage, Callaghan Innovation) to New Zealand pavilion in Dubai. Our New Zealand story is a narrative built on tolerant society, and a ‘born global’ perspective, the leverage the global mega-event. international perception research and underpinned narrative is supported by examples that provide Themed Care for People and Place, the pavilion is NZTE has developed a business leverage by our values. It cuts to the heart of who we are a compelling starting point to demonstrate how based on the deep connection between people programme for NZTE customers to help them and how we want to be perceived. New Zealand is good for the world. and the natural world which lies at the core of the realise their potential in the Gulf. The programme kaitiakitanga ethos. Together we create solutions that When export businesses combine our core The Domestic Strategy is to enable businesses to will run a series of activities around the following: build and deliver their own value proposition, brand are not only New Zealand, but good for the world. narrative with our values, they can begin to tell • Food and beverage their own unique and powerful New Zealand story, and story to assist in their offshore success. Expo 2020 runs for six months from October • Specialised manufacturing (including food and reflecting our nation’s values through their own 2020, and represents a key global opportunity for NZ Story 2018/19 performance beverage production) marketing efforts. NZ Story creates a halo effect New Zealand, with 192 participating nations and • NZ Story improved its Net Promoter Score, • Building and construction around our export and investment opportunities. 25 million visits expected. achieving +68 compared with +67 last year, • Technology Our country’s narrative is made up of three values against a target of +52. New Zealand’s pavilion will demonstrate how we are building a sustainable future for all, based • Māori economy. that define us as people and as a country. The • The NZ Story toolkit has 13,756 registered users on kaitiakitanga, and the role humans play as more the world knows about these, the greater our and a total of 131,621 assets downloaded. chance to grow New Zealand’s global reputation. guardians of the natural environment. • NZ Story launched Inside Stories & achieved It’s not one of these qualities alone that makes us global reach of 3.6 million views. unique; it’s the combination of care and ingenuity, • NZ Story achieved 4.5 million impressions per underpinned by integrity that truly sets us apart. month on social media channels. Kaitiaki Our genuine care of people and place for now and for the future. We are guardians of people, place and planet.

Ingenuity Our fresh, progressive thinking and creative smarts, which delivers amazing new thinking and solutions to problems that others can’t solve.

Integrity Our sense of mana and coming from a good place. We do what we say we will do, and we do the right thing, because it’s the right thing to do.

46 NZTE Annual Report 2018/19 47 OUR ORGANISATION

At NZTE, we pride ourselves on being a good employer and looking Reinforcing our characters To support those undertaking this development, we after our people. We are constantly looking for ways to reinforce our have designed and built a series of “how we lead” characters including: resources. We are seeing results from this work, • local and regional team celebrations and awards with an increase in employees’ perceptions of the We have a fundamental, underlying belief that Kaitiakitanga represents sustainability in a holistic for living the characters quality of coaching and the feedback they receive if our people are engaged and enthusiastic, it sense and, as such, it combines our commitments to from their people leader. In 2019, 76% of our people • presenting a Pounamu (annual) award for teams translates into an improved experience and our people, our communities and the environment. rated favourably the quality of coaching and or individuals best showcasing the characters impact for our customers. The workstreams of Diversity and Inclusion, Safety feedback they receive to lift their performance. and Wellbeing and Care for Environment are • global storytelling and reference to living our As a knowledge-based organisation whose impact included in this comprehensive approach. characters, including our Chief Executive’s Diversity and inclusion depends on our know-who and know-how, we fortnightly vlog, on our internal Yammer feed, NZTE has been on a deliberate journey around are only as good as the quality of our people. Environment and our Intranet (ONE) We therefore put a lot of effort into the culture, Diversity and Inclusion since 2017. In 2019, 77% of The new approach includes a focus on Care • position descriptions with our characters as a leadership and capability that we need to deliver employees answered favourably about the extent for Environment. core behavioural requirement and character fit impact for our customers. to which NZTE is diverse and inclusive. As an organisation, we recognise that we have being a key criteria in hiring decisions a responsibility to protect and restore the Customers will benefit from our diversity Our culture and characters • a leadership model focussed on how to lead environment for future generations. This will be through our characters of perspectives, thoughts and ideas NZTE’s ONE Global Team is focussed on To help New Zealand businesses across the globe, a focus for 2019/20. • understanding our characters as a core part of collaboration, with the customer at the heart we need to be representative of the cultures, our induction process. of what we do. Enabling our people is great for customers customers and markets we work in. We want our We set ourselves the expectation of providing Everyone in NZTE, wherever they are in the world, Our annual culture survey, OurVoice, gives us customers to benefit from our diversity of thought a seamless, wraparound service that is great for works as one for the benefit of the customer and, insight into how our people experience each of our and ideas; and to do this we need to embrace and customers while, at the same time, ensuring our through them, for the good of New Zealand. characters. In 2019, 80% of our people rated our deliver an inclusive culture. people are properly enabled to do so (with great characters favourably. NZTE’s diversity and inclusion goals are: The spirit of Kaitiakitanga tools, access to shared knowledge, the right As part of a Kāhu strategy review this year, support, and a vibrant culture). Leadership at NZTE • Our employees feel valued and included, and we NZTE’s approach to its people and its global make better quality decisions with better quality Our five characters underpin everything we do and Leadership is a high priority at NZTE and is impact has been redesigned around the concept outcomes for customers: diversity is our strength are how we all need to work to grow companies founded on our five characters. Over the past of Kaitiakitanga – Care of People and Place. This • We continue to focus on our 40/40/20 bigger, better and faster. 12 months we have continued to embed our concept now sits alongside our characters, as the leadership model, which reflects what we need gender target for our leadership roles, glue that binds us together. for success – a model that is designed to ensure including our Board (40% women, 40% men, leaders are self-aware and lead people and culture. 20% either). Currently 47.3% of leadership roles are filled by women. We continue to roll out a comprehensive • We intentionally attract and develop leadership programme a diverse workforce We have developed a fit-for-purpose 360-degree • We deliver on gender pay. assessment to measure current leadership capability and draw insights as part of a personal We continue our focus on inclusiveness, transformation journey. We have also scoped, Women in Leadership and Māori designed, built and delivered a comprehensive The three gaps we remain focussed on are: AMBITION ADVENTURE HONESTY TRUST MANAAKI leadership programme called “Leaders for Impact”. • Cultural diversity and inclusion: fostering diverse DRIVES US TEACHES US FREES US BINDS US IS US Five cohorts of NZTE leaders have been through thinking and enabling everyone to contribute this programme with additional cohorts planned Our ambition for Experimentation is We explore Our people may We celebrate the mana and feel valued our customers more powerful than challenges be worlds apart, (strength and dignity) for 2019 and 2020. is high, and we perfection as only with an open mind. but it’s trust that of each other as being • Increasing the number of women in our always rise to the through learning Only when we ask holds us together. equal to or greater leadership roles occasion. We help from our missteps questions and truly Growing a nation is than our own. We Coaching is an important part of our meet their business can we truly listen can we only possible when strive to enhance mana leadership framework • Making NZTE more relevant to Māori: we have expectations by succeed. That’s why discover we keep promises in everything we do NZTE has developed an internal coaching squad expecting greatness ‘giving it a go’ is the the right way and honour through our hospitality, set ourselves a targets of 70% attendance at of ourselves. best way to learn. forward. commitments. generosity and mutual to help leaders continue to grow. We have also Kia Kaha (a 2-day immersion programme on respect. created a focus on coaching as a critical tool for a marae) and increasing the number of Māori leaders to use every day. leaders at NZTE.

48 NZTE Annual Report 2018/19 49 Inclusion is a core aspect of Manaaki is Us, which is one of our five characters. Our diversity and inclusion programme focusses on three areas. PEOPLE PROFILE At June 30 2019

Our cultural diversity makes us stronger Full-time equivalent employees

We foster diverse thinking and enable everyone to contribute and feel valued. 282.6 INTERNATIONAL Target Actual 455.3 CUSTOMER FACING 162.6 CORPORATE 335.3 NEW ZEALAND Flexible work arrangements 85% 82% 617 Timeout when needed 90% 91% Diverse perspectives 85% 79% Gender: male vs female at NZTE Leaders care about wellbeing 90% 90% 43.3% 56.7% 47.3% Based on the OurVoice survey June 2019 MALES FEMALES 61 WOMEN IN LEADERSHIP ROLES (OUT OF 129)

More women in leadership roles Age <20 0.0% The percentage of women in our population should be reflected in our leadership roles. 20-29 10% Target Actual 30-39 24.1% 40-49 32.5% No. of leadership teams at 40/40/20 7/ 7 4/7 50-59 17% 60+ 5.9% % of Trade Commissioners that are women Min. 40% 39% Unknown 10.6%

Jadestar data June 2019

Overall Middle Eastern/ Latin American/African 3.2% NZTE NZTE more relevant to Māori Pacific peoples 0.5% ethnicity Māori are the tangata whenua of New Zealand. Growing the Māori economy is key to New Zealand’s Māori 5.1% economic success. Other ethnicity 6.3% Target Actual European 51.2% Asian % of NZTE people who have attended Kia Kaha 70% 68% 20% Not declared 13.8% % of Māori leaders 5% 3.9% No. of Māori leaders 5 Disability NZTE is an equal opportunities employer. We value our diverse workplace and inclusive culture, and therefore No. of Māori Board members 3 we appreciate the importance of eliminating barriers that cause inequality in the workplace. In all NZTE-owned properties, we ensure that the building and design caters to people of all abilities. Assistive technology is Jadestar & Board data June 2019 available to all employees as required.

50 NZTE Annual Report 2018/19 51 Fair pay and closing the gap Our CEO joined the Business Leaders H&S Forum We can expect the unexpected • Second, NZTE is designing an approach to To provide a robust comparison of the gender pay this year, alongside a group of 300+ private and Working across 50 locations globally, we can better support our people’s mental health within gap across all of NZTE, including our overseas- public CEOs, with a commitment/pledge to zero expect that unexpected events will happen for our the workplace. based locally employed staff, NZTE compares the harm in the workplace. people and our customers, and we’re committed to • Finally, we will update our technology to enable average position in range for men and women. being prepared. our people to let us know, in real time, when an We have a global approach This enables us to make comparisons regardless of incident has occurred, so that we can better Our Global Safety and Wellbeing Team meets every We have experienced our people’s care and currency and local market conditions. support them and track key data across our four months and continues to provide valuable leadership needs during the Christchurch terrorist global network. Continuing to monitor our gender pay gap insights and recommendations from across the attacks, the Paris riots, Riyadh missile attacks and globe as to how to focus our efforts. In addition earthquakes in a number of locations. As at 30 June 2019, the gender pay gap using Developing our capability this methodology was -2.3%, compared to 0.6% to this, local offices engage our people and uphold We annually review and test every office’s To support the development of NZTE’s capability, at the same time the previous year. We will our commitment to safety and wellbeing. Emergency and Business Continuity Plan, to ensure we have constructed a learning framework. This has continue to maintain this measure as part of NZTE’s Lead Team and Board are actively our people are safe and have support during and meant agreed priority modules, with a controlled our Diversity and Inclusion reporting and are engaged with our people’s safety and wellbeing after an emergency or unexpected event. design methodology to ensure the programmes contributing to the Government’s gender pay through regular review of dashboards, High Meeting our standards are high quality. objectives. We are committed to keeping our pay Potential Harm Hazards, Uncontrolled Hazards Our Safety and Wellbeing target is that 97.5% of practices fair for everyone. and Incident Registers. We’ve developed a number of new all high-potential harm hazards are controlled modules to upskill our people We recognise that achieving a more balanced We are working together with the Government within four weeks, and all incidents (including Among these have been some critical modules for gender pay distribution is an ongoing process and Health & Safety Lead Team and MFAT to share near misses) are investigated and resolved within getting started at NZTE and a number of modules will require some time, even though there is no best practise and collaborate. We also participated four weeks. This year, across the organisation, we designed to upskill people on our customer significant issue in NZTE. The strategies NZTE has in a Government Health & Safety internship had five high-potential harm hazards with 100% operating model. We have also implemented implemented are: over summer. meeting the target, and 91 reported incidents, with behaviourally focussed modules (e.g. Brave • addressing individual relativity issues in the We work together with global suppliers to ensure 96% compliance. The four incidents that were not conversations, Coaching, Unconscious bias). annual remuneration review process, particularly our people are physically well (International SOS), resolved within four weeks required external parties for females in leadership roles and mentally supported (Employee Assistance to take action. Capability to go digital • converting remuneration increases into Moving to the digital service environment will Programme (EAP), LifeWorks). We have continued our commitment that every lump-sum payments for individuals that are introduce new ways of working and new skills. new member of the organisation is trained in significantly above the upper cap of the Leaders genuinely care about wellbeing Health and Safety within four weeks of joining. We will invest in solving ‘who knows what’ and ‘who remuneration range Our people continue to tell us that their leaders knows how’, intelligent relationship systems, with genuinely care about individual wellbeing, with All local hazard registers have been reviewed and • providing hiring managers with more guidance the potential for rapid customer growth in mind. updated for each of our 51 offices. on employment offers and the average the OurVoice measure (employee engagement Our people will need to be trained to use these remuneration for similar roles in NZTE survey) staying relatively consistent at 88% (90% Our Board and Lead Team have had a specific in 2018, 87 in 2017). This year we added wording new tools and systems and will need to learn to • ensuring awareness and recognition of potential training session on their legal obligations as Officers to focus the question on both mental and physical accurately record this information. Knowledge will gender bias; techniques to avoid it are included under the Health and Safety at Work Act 2015. wellbeing. The global top 25% score for this be readily available and able to be shared with our in leadership development programmes. question was 89%. Our focus for the year ahead customers. This will require a change in mindset. There are three key areas: Identifying areas where we need to We are learning from the growing global discussion The pace of change will not slow down and change take action around mental health to discover what’s important • Following an annual review of our hazards and will be constant. Our challenge is to ensure our We have undertaken a number of activities to for our people. This has included Board and Lead incidents, our key insight was that we’re not people keep up. Systems will always be cloud- date to reduce the gap. We engage with the State Team discussions, and NZTE piloted a leadership focussed enough on the most high-risk areas. based and located internationally. This is done to Services Commission and Ministry for Women on workshop on how to identify and support team This year we will review our Safety and ensure information and insights are stored as close guidelines and programmes that support agencies members to thrive. We have continued to share Wellbeing system design around critical risks, to as possible to each of our offices, over the fastest in reducing their gender pay gap. stories and ideas across our teams through leader ensure that we have effective controls and are connections possible. and organisational communications, including a doing everything we can to support our people. We are committed to safety focus on World Mental Health Day in October and A critical risk is something that has the potential and wellbeing awareness of our EAP programme. to kill or seriously and irreversibly harm us while Our organisational goal continues to be “One we are at work. We’ve communicated the new legislative leave Global Team, Safe and Well”, with the aspiration provisions for domestic violence to our NZ-based that our people leave work in the same or better people, and paid special leave can be used for our state than when they arrived. NZTE’s highest risks international employees where their countries don’t continue to be unfamiliar surroundings, facilities, have specific domestic violence leave provisions. equipment, security and travel-related hazards.

52 NZTE Annual Report 2018/19 53 CASE STUDY MANAAKI TO THOSE IN NEED

Arguably the most powerful of NZTE’s characters The event is now a regular feature of the local area is Manaaki Is Us – the desire to develop strength and has included NZTE Customers, such as Jucy in everyone. Rentals, and local investment leaders. It is hosted in several locations and hundreds of homeless In Los Angeles, one of our Business Development and at-risk people now have something to help Managers, Diem van Groth, became increasingly build autonomy, dignity and choice in their lives. concerned at the number of homeless he was The handwritten notes that are included remind seeing in the Santa Monica community. everyone that those on the streets are still part of No longer wanting NZTE to sit on the sidelines the community. as the issue became worse, Diem created “Give Back Tuesday”. No one is left behind. Businesses from around the media hub of Santa Monica, including Amazon, Sony Playstation and others, joined NZTE in its office to create care Not surprisingly, Diem won the Manaaki Is Us packages for a local community shelter. More recognition at our annual Pounamu Awards than 40 people from various neighboring offices in December. contributed at that first gathering.

Betacraft: Betacraft is a family-owned business specialising in the manufacture of outdoor wear and protective clothing. As an NZTE customer, they feature in an Export Essentials case study, 54 NZTE Annual Report 2018/19 to inspire other New Zealand companies to become exporters themselves. 55 GOOD EMPLOYER REQUIREMENTS

NZTE is committed to being a good employer and an employer of choice. • consideration and tailoring of our response to • we have an online health and safety training We promote equal employment opportunities through organisation-wide individual needs in instances of long-term or module and a potential harm assessment that serious illness all staff complete annually policies and practices to promote equity, fairness and the seven ‘good • laptops and mobiles, with secure systems, • we are working toward our people having a employer’ elements. These are regularly reviewed and refreshed. Our policies provided to staff to enable greater flexibility greater focus on mental wellbeing and practices are all available in ‘The Fine Print’, our streamlined guide to and functionality • our employee wellbeing initiatives include: policies and procedures, on our intranet. • the ability to work remotely (including from –– a change in Employee Assistance Programme NZTE offices around the world) provider to Optum. This change will • parent rooms available in key locations. enable greater access to assistance for our Being a good employer is important to Employee development, promotion international team and increase the number Recruitment, induction and selection us and we implement a range of new and exit of sessions provided from four to six initiatives each year. • diversity and inclusion strategy developed and • equal opportunities for employee development, –– ergonomic assessments and ergonomic Our activities this year are summarised against the being implemented secondments and promotion equipment seven elements of a ‘good employer’ below: • raising awareness of and developing strategies • individual learning and development plans for –– sit-to-stand desks available to all staff to mitigate unconscious bias in recruitment all employees, which must be reviewed every Leadership, accountability and culture and leadership –– smoking cessation support • three cohorts of 90 people leaders commenced 120-days • NZTE’s employment process is impartial and –– discounted group medical insurance. their “Leaders for Impact” journey • one-to-one refresher training provided for all transparent with active recruitment to reflect the customer-facing staff on our CRM system Remuneration, recognition and • a focus on developing and embedding coaching diversity of our customer base skills at NZTE through “Coaching for Impact” • a new learning framework developed conditions • hiring managers are provided with guidance on and guides for leaders • individual performance plans recognise delivery • tools and resources available to assist with providing fair employment offers and avoiding against key indicators, agreed actions and • continuous improvement to ‘The Fine Print’ career development, which are newly available gender bias demonstration of NZTE characters on our intranet • developed a new employee value proposition • automated new joiners’ process (systems and • we apply a standard remuneration methodology (Grow Companies, Grow New Zealand, Grow • exit guidelines in place equipment) to ensure our new joiners feel with rewards to recognise performance and You) to be launched internally • induction – new modules in our induction welcome and have a smooth start at NZTE achievement • working toward shifting NZTE’s strategy from a processes including Path to Success, BDM • new joiners participate in a tailored 90-day • we analyse pay rates annually, with fair and New Zealand organisation working globally, to a inductions, Leaders for Today, and continuous induction plan and our two-day induction robust practices used to compare remuneration global organisation working for New Zealand improvement of Ignite event, “Ignite” to the New Zealand and international markets • regular Chief Executive vlogs and briefings, • updated career workbook to support our people • all employees attend the Kia Kaha programme: • our gender pay gap as at 30 June 2019 is -2.3% and opportunities to engage with leaders on to define their career journey. The workbook also two days based on a marae to learn about Māori • international market conditions are continuously issues, particularly organisational performance, helps us ensure opportunities and the aspirations business, culture and people. alignment with strategy and key areas of focus of our people are visible. monitored to ensure employment conditions every third Harassment and bullying prevention meet or are above local employment law Flexibility and work design • NZTE’s characters, ‘The Fine Print’ policies, • the continuation of Ferns: an NZTE “Women in • “in the moment recognition” is encouraged to • flexible working policy to provide work-life harassment-free workplace guidelines and Leadership” group, including interactive sessions acknowledge when our people go above and balance for employees commitment to the Standards of Integrity and with successful women leaders. beyond what is normally expected • annual leave accrued while on parental leave Conduct detail our expected behaviours. • leaders have budgets to allow them to give is paid at the salary rate prior to taking small tokens of appreciation to individuals or parental leave Safe and healthy environment • NZTE has a Global Health and Safety team, their teams • five days’ special leave if an employee’s partner which includes international and domestic NZTE • many teams and regions have set up their own gives birth or they adopt a child employee representatives local awards to recognise achievements • flexible approach taken to return to work • we produce a monthly health and safety • our annual Pounamu Awards recognise and following parental leave dashboard, which is closely monitored by our celebrate individuals and teams that have Lead Team exemplified NZTE characters.

56 NZTE Annual Report 2018/19 57 GOVERNANCE AND RISK MANAGEMENT Board member meeting attendance Board Member Board Audit & Risk People & International Governance The Board meets every second month for full day Committee Culture Growth Fund & Nominations Our Governance Committee Committee Committee As a Crown entity, NZTE is governed by the Crown meetings, which are held across all regions of Andrew Ferrier 6/6 – – – 1/1 Entities Act 2004, the Public Finance Act 1989, and New Zealand. Other meetings are held as required. Charles Finny 6/6 5/5 5/5 – 1/1 the NZTE Act 2003. The Ministers responsible for Twice a year, the Board includes direct customer Carmel Fisher* 5/6 3/3 2/2 4/4 NZTE are the Minister for Economic Development engagement within their programme. Usually Jennifer Kerr 6/6 5/5 5/5 – 1/1 and the Minister for Trade and Export Growth. this includes visiting our customers and hosting Charlotte Walshe 5/6 – – 4/4 a networking function for all customers and Our Board has the key role of ensuring that we Wayne Norrie 6/6 – – 4/4 1/1 stakeholders in the region in which the meeting are achieving results within our budget. The Board Traci Houpapa** 1/3 1/2 2/3 – is held. has convened subcommittees for specific matters Actual attendance/eligible to attend such as Audit and Risk, People and Culture, the The Chief Executives of MBIE and MFAT act as *Carmel Fisher attended other Committee meetings temporarily while a Board vacancy was being filled. International Growth Fund, and Governance and special advisors to the Board. In 2018/19 Carolyn ** Traci Houpapa joined the Board in December 2018 Nominations. The Board delegates the day-to-day Tremain (Chief Executive) or her delegate Paul management and leadership of NZTE to the Stocks (Deputy Chief Executive, Science, Skills • Governance and Nominations: oversight of NZTE’s ‘The Fine Print’ is our ‘one source of truth’. Chief Executive. and Innovation), represented MBIE; and MFAT was governance and succession planning for the These guidelines provide a simple, clear framework represented by Brook Barrington (previous Chief Chief Executive and Board. The first Committee for the principles we apply to make decisions, Engaging with our Ministers Executive) and Chris Seed (current Chief Executive) meeting was held in April 2019. the fixed rules for everyone, and who can make or a delegate. It’s important that our Ministers are well engaged Members: Andrew Ferrier (Chair), Charles Finny, decisions. The Fine Print ensures NZTE employees with what we do and that they have trust and The Board is guided by a charter that documents Jennifer Kerr, and Wayne Norrie. are aware of the importance of managing risks confidence in our work. Our Ministers connect its intentions and general approach to the The Director – People and Capability and effectively, by providing guidance on areas such as: with NZTE’s customers and the wider business fulfilment of its governance responsibilities. Manager – Board Governance act as advisors to • managing conflicts of interest, and reporting community when they visit cities or regions, This incorporates a code of conduct and rules the Committee. fraud, bribery and corruption speak at events and participate in trade missions. regarding disclosure of interests. Other ad hoc committees may be formed from time • committing us and keeping us secure We provide our Ministers with timely, accurate to time to deal with specific issues as required, and To ensure the most effective and efficient use • spending, travel and gifts. information on a no-surprises basis. This includes each committee is guided by a Terms of Reference. of its time and resources, the Board convenes briefings, fortnightly reports, and six monthly committees to deal with specific matters. As at performance reports. Project management 30 June 2019, these were: Managing risk Our three-year challenge programmes are NZTE’s risk management framework supports • Audit & Risk: governance and monitoring of our developed with the Lead Team and approved by The role of the Board and the achievement of our strategy, operational audit, risk and financial management systems. NZTE’s Board. In 2018/19 NZTE operated projects effectiveness and efficiency, protection of our Committees Members: Charles Finny (Chair), Jennifer Kerr under the Kāhu programme (see section 1). people, informed decision making, and compliance NZTE’s Board provides governance over our and Carmel Fisher; Traci Houpapa replaced with applicable laws and regulations. Our improvement programmes bind projects strategy and future operating intentions. This Carmel Fisher from March 2019. is done in conjunction with overseeing and together under a tightly defined 120-day results The GM Internal Partners acts as an advisor The Board has delegated responsibility to monitoring organisational performance and methodology. This enables an enterprise-wide, to the Committee. Audit New Zealand also monitor and review the effectiveness of NZTE’s maintaining a strong, trusted relationship focussed and co-ordinated effort toward the provides reports and attends each meeting. risk management framework to the Audit and with our Chief Executive, Lead Team and outcomes that will lift impact for our customers. • Culture & People: governance and performance Risk Committee. NZTE’s independent internal our Ministers. oversight of our people, culture and health, audit function reports directly to the Audit and As outlined in this report, NZTE’s current We value the extensive knowledge and wide safety and wellbeing strategies. Risk Committee. NZTE’s external auditors also improvement programme, Kāhu, will use the same variety of backgrounds that our Board members Members: Jennifer Kerr (Chair), Charles Finny provide input to the Audit and Risk Committee methodology for managing projects, but will bring to NZTE in business, investment, exporting and Carmel Fisher; Traci Houpapa replaced regarding NZTE’s risk management framework allow General Managers to manage day-to-day and public policy. Carmel Fisher from March 2019. and internal controls. improvement (mastery and operational excellence) The GM Internal Partners and Director People through their leadership teams. During 2018/19, the Board members were: Capability act as advisors to the Committee. – Andrew Ferrier (Chair) Monitoring progress will be through analysing – Carmel Fisher • International Growth Fund (IGF): metrics and progress against outcomes, rather than – Charles Finny governance and performance oversight of the through activity milestones. – Charlotte Walshe IGF Programme. – Jennifer Kerr Members: Wayne Norrie (Chair), Charlotte – Traci Houpapa (joined December 2018) Walshe, and Carmel Fisher. – Wayne Norrie The GMs of Customers and the Strategy Group act as advisors to the Committee.

58 NZTE Annual Report 2018/19 59 BOARD MEMBERS AS AT 30 JUNE 2019

ANDREW FERRIER CARMEL FISHER WAYNE NORRIE CHARLOTTE WALSHE

Andrew Ferrier (Chair) is an experienced global business Carmel Fisher is a seasoned investment professional Wayne Norrie has over 30 years’ experience working in the Charlotte Walshe has a wealth of experience in the executive, having run companies in Canada, the United with more than 30 years’ experience in the New Zealand technology and finance sectors around the globe. technology sector and is the CEO of Jade Software. States and New Zealand for more than 20 years. investment industry. Wayne co-founded Revera, a New Zealand cloud services Her career has been spent in both multinationals and Andrew runs his own Investment business, Canz Capital Carmel established fund manager and KiwiSaver provider provider, and grew the company rapidly to a successful exit. New Zealand based SMEs, with particular focus on global Ltd, with investments in New Zealand and Canada. He sits Fisher Funds Management Limited in 1998, following a Wayne is Chairman of Sportsground, and Furnware. new product commercialisation, and operations. on the Council of the University of Auckland and is a Board successful career as an investment analyst and portfolio Wayne’s previous positions include Chairman for Online Charlotte has a background in joint industry and member of Bunge Limited in New York and George Weston manager. Carmel recently stepped down as CEO and Republic, Fronde, Maven, Team BLM, NZTE Beachheads, government research and commercialisation activities, Limited in Toronto. Director of Fisher Funds Management Limited, yet remains and Director of Aspeq. including a current engagement on the Board of the Dodd For eight years through to 2011, Andrew was CEO of a Director and active member of the investment committee Wayne was awarded the 2016 IDC Outstanding Contribution Walls Centre of Research Excellence. Fonterra Co-operative Group, New Zealand’s largest of NZX listed investment companies Kingfish, Barramundi to the New Zealand Technology Sector, and the 2016 AUT For 10 years, Charlotte was the CEO and a Director company and the world’s largest dairy processor. Prior to and Marlin Global. Leadership Award for contribution to business. He is a of Christchurch-based Dynamic Controls, a global Fonterra, Andrew was CEO of GSW Inc. of Toronto, Canada, Carmel is of Ngāti Raukawa descent, a graduate of Victoria Chartered Fellow of the Institute of Directors, a member of designer, manufacturer and marketer of medical devices a manufacturer of consumer durable products. University of Wellington, a member of New Zealand Global the World Class New Zealand network, and a Fellow of the and health informatics. Women and a keen advocate for mentoring and coaching New Zealand Institute of Management. Previously, Charlotte has been a Director at Enable Services, other women to achieve their potential. deploying the Government’s Ultrafast Broadband network for Christchurch, and has served as a Chair and Deputy Chair on the Ministry of Science and Innovation’s Sector Advisory and Funding Advisory Groups.

CHARLES FINNY TRACI HOUPAPA JENNIFER KERR

Charles Finny has more than 22 years’ experience in Traci Houpapa is an award-winning company director and Jennifer Kerr has deep governance experience both in government and diplomatic roles, and has worked a recognised industry leader. A trusted advisor to Māori, New Zealand and overseas. She is currently a Director on in Singapore, Beijing and Taipei. He is a partner at Government, public and private sector, Traci’s portfolio Callaghan Innovation and is Chair of the Health & Safety the Wellington Government Relations consultancy, spans agribusiness, training, education and sustainable Committee. She has extensive international executive Saunders Unsworth. economic development. She is known for her strong and experience in North America, Continental Europe, the Charles is on the Board of Woolyarns Limited and is a inclusive leadership and clear focus on building the wealth United Kingdom and New Zealand. Chartered Fellow of the Institute of Directors. and prosperity of Aotearoa. Jennifer was formerly General Manager of Customers, Previously, Charles was Chair of the Education New Zealand Traci has been named in the top ten most influential women People and Environment at Transpower and Group Board, served on the Boards of the New Zealand Film in New Zealand agribusiness, and political influencers in Director Human Resources and Health & Safety at Commission, and Business Central. He served for seven years New Zealand. She won the Westpac Fairfax Media Women Fonterra. She has also operated her own consultancy on the Victoria University of Wellington Council. He was CEO of Influence Board and Management award and has been business, and prior to that was the Group Manager of of the Wellington Regional Chamber of Commerce for five and named on Westpac’s New Zealand Women Powerbrokers Human Resources for Mobil Oil for all of Europe. She has a half years. Prior to that, he held a variety of government roles list. Traci was awarded the Massey University Distinguished strong experience in Organisation strategy, Health & Safety, at the Ministry of Foreign Affairs and Trade, the Department of Alumni Service Award for services to New Zealand CEO recruitment and succession, executive remuneration Trade and Industry and the Department of the Prime Minister agribusiness and Māori, and named amongst the BBCs and stakeholder relationships. and Cabinet. Charles was, for a period the lead negotiator 100 Most Influential Women in the World. Traci has an Jennifer is a member of New Zealand Global Women and for the China-New Zealand free trade agreement, and also MBA from Massey University, and is a Member of the has taken an active role during her career in mentoring and led the negotiation on the agreement with the separate New Zealand Order of Merit, a Justice of the Peace and coaching other women to achieve their potential. She is of customs territory of Taiwan, Penghu, Kinmen and Matusu. Marriage Celebrant. Ngāti Mutunga and Ngāti Tama descent.

60 NZTE Annual Report 2018/19 61 STATEMENT OF RESPONSIBILITY TE TAUĀKĪ NOHO HAEPAPA The NZTE Board is responsible for the preparation of the annual financial Kei te Poari o Te Taurapa Tūhono te haepapa mō te whakatakoto i ngā tauākī statements and statement of performance, and the judgements used in them. pūtea ā-tau, tae atu ki te tauākī whakatutukinga mahi, me ngā whakawātanga i This includes responsibility for any end-of-year performance information whakamahia i aua tauākī. Tae atu tēnei haepapa ki ngā kōrero whakatutukinga provided by NZTE, under section 19A of the Public Finance Act 1989, whether mahi i te mutunga o te tau ka whakaritea mai e Te Taurapa Tūhono i raro i te or not that information is included in this annual report. wāhanga 19A o Te Ture Pūtea Tūmatanui 1989, ahakoa kei roto aua kōrero i tēnei pūrongo kāore rānei. The Board is also responsible for establishing and On behalf of the Board. maintaining a system of internal controls designed Kei te noho haepapa hoki te Poari mō te whakatū Mā te Poari. to provide reasonable assurance as to the integrity me te whakahaere i tētahi pūnaha mana ā-roto and reliability of financial reporting. i whakahoahoa ki te whakaū i te pono me te In the opinion of the Board, the annual financial whaikiko o ngā pūrongo pūtea. statements and statement of performance for the Andrew Ferrier Charles Finny E whakapono ana te Poari ko ngā tauākī pūtea, tae year ended 30 June 2019 fairly reflect the financial Chair, NZTE Board Chair, Audit atu ki te tauākī whakatutuki mahi mō te tau i mutu position and operations of NZTE. Andrew Ferrier Charles Finny & Risk i te 30 o Pipiri 2019, e whakaatu tika ana i te āhua 30 October 2019 Heamana, Poari Heamana, Komiti o te pūtea me ngā mahi whakahaere pūtea a Te Te Taurapa Tūhono Audit & Risk Taurapa Tūhono. Te Taurapa Tūhono 30 October 2019

Ko Mātou Ēnei

Ko mātou ēnei Te Taurapa Tūhono E tū atu nei E mihi atu nei

Nō reira Kia kaha rā Aotearoa Te Taurapa Tūhono e

(Left to right) Peter Chrisp, Jennifer Kerr, Charlotte Walshe, Andrew Ferrier, Wayne Norrie, Carmel Fisher, Charles Finny and Traci Houpapa. Our Te Taurapa Tūhono name and waiata was composed for New Zealand Trade and Enterprise by Tipi Wehipeihana in 2016. We use it to introduce ourselves, to manaaki others, and to connect with Aotearoa from wherever we are in the world. 62 NZTE Annual Report 2018/19 63 STATEMENT OF PERFORMANCE

NZTE’s Multi-Category Appropriation – MBIE NZTE’s Multi-Year Appropriation – MFAT Year to date June 2019 Year to date June 2019

YTD YTD YTD YTD Actual Budget Actual Budget $000 $000 $000 $000

Statement of Cost of Service – output expenses Statement of Cost of Service – output expenses

International Business Growth Services Dubai Expo 2020

Revenue Crown 150,892 147,298 Revenue Crown 8,443 7,790 Revenue Other 8,778 5,576 Revenue Other 0 0 Total Revenue 159,670 152,874 Total Revenue 8,443 7,790 Expenses 155,423 152,874 Expenses 1,921 7,790 Net Result 4,247 0 Net Result * 6,522 0

Support the Growth and Development of New Zealand businesses Cumulative Appropriation expenditure** to 30 June 2019 10,343 10,800 Revenue Crown 15,181 15,181 Remaining Appropriation 43,608 43,151 Revenue Other 0 0 Total Appropriation 53,951 53,951 Total Revenue 15,181 15,181 * Net result is a surplus due to (1) expenditure on the Expo pavilion build ($6,508) Expenses 14,554 15,181 being transferred to work in progress – see Note 11 in the financial statements and (2) Net Result 627 0 reversal of depreciation on the Expo restoration provision ($14).

** This is expenditure incurred against Vote Foreign Affairs and Trade: Collaborative Activity and Significant Events Expo 2020 Dubai 2017-2021 (MYA) Revenue Crown 6,119 5,786 Revenue Other 200 783 Total Revenue 6,319 6,569 Reconciliation of Operating Surplus in Annual Accounts

Expenses 5,985 6,569 Int’l Bus Support Growth Collaborative Dubai Net Result 334 0 Growth & Development Activity & Expo Services of NZ businesses Special Events 2020 Total

Total Crown Revenue – MBIE 172,192 168,265 Board Surplus 4,247 627 334 6,522 11,730 Use of 2017/18 surplus (6,480) (1,162) (230) 0 (7,872) Fair value of 2019/20 derivatives (3,561) Statement of Cost of Service – Grant expenses Unrealised FX 173 International Growth Fund Surplus for the year per Statement of 470 Revenue Crown 25,155 30,027 Comprehensive Revenue and Expense Revenue Other 0 0 Total Revenue 25,155 30,027 Expenses 25,155 30,027 Net Result 0 0

Sector Strategies and Facilitation – Strategic Investment Fund Revenue Crown 790 1,204 Revenue Other 0 0 Total Revenue 790 1,204 Expenses 790 1,204 Net Result 0 0

64 NZTE Annual Report 2018/19 65 STATEMENT OF PERFORMANCE 2018/19

International Business Growth Services Activity Actual Actual Target Actual Indicator 2016/17 2017/18 2018/19 2018/19 We support individual or groups of companies to enhance their global reach and Number of customers in NZTE’s 671 670 650-750 704 grow in international markets, and match quality investment with opportunities, the Focus700 customer portfolio15 growth of whom benefits New Zealand. This output is our greatest area of focus. Number of customers in NZTE’s 4,365 4,883 3,500 5,324 Foundation customer portfolio (demand driven) We help individual or groups of companies to internationalise by: This customer segment is demand • improving their capability and readiness driven and impacted by many factors, • identifying and exploiting market opportunities including a drive to attract additional • overcoming internationalisation barriers and enabling access to international business networks. Foundation customers.

We help potential recipients of investment funds, and investors looking to invest in New Zealand business opportunities by: Number of coalitions under 24 26 25 26 active management (demand driven) • identifying and connecting with investors domestically and internationally • matching quality investment with New Zealand opportunities in target sectors.

Our customer managers and international teams provide tailored support, advice and linkages for our internationalising customers. Around this, we wrap services to build capability, connect with global opportunities, access capital and develop effective strategies for growth.

Performance Measures

Performance Actual Actual Target Actual Measure 2016/17 2017/18 2018/19 2018/19

Annual growth in international revenue for NZTE’s 5.6 percentage 9.2 percentage 3 percentage 3.6 percentage Focus700 customers with international revenue points above points above points above points above under $500m8 the NZ export the NZ export the NZ export the NZ export benchmark benchmark benchmark benchmark Portfolio growth has been strong at 10.1% The export benchmark, as derived from Statistics NZ, has increased significantly, from 1.6% in 2017/18 to 6.5% in 2018/19. This increase has been driven by increased exports, especially in the Services sector. Therefore, this has reduced the export margin compared to 2017/18. Total value of export deals9 achieved with $1.8b $1.7b $1.5b $2.4b NZTE involvement This result was driven by a higher median deal value (up 40%) due to a number of large one off deals – plus very 8 We measure the Focus700 (less than $500m) portfolio growth against the ‘NZ Goods & Services Exports Benchmark’. The Benchmark is a subset of the total NZ strong results for China, especially food and beverage Goods & Services exports (sourced from Statistics New Zealand) which only includes companies with exports under $500 million, and in similar sectors as the Focus700. The model adjusts for the difference in financial year end reporting dates, to create a ‘like for like’ comparison. The measure excludes customers who have Number of International Growth Outcomes 890 917 700 902 changed their financial year- end, or from whom NZTE has received insufficient financial data. NZTE relies on information supplied by the customer to calculate this measure. NZTE reviews the information for reasonableness but cannot confirm the accuracy of the data. (IGOs)10 achieved with NZTE involvement. 9 A trade deal is a sale of goods and services with a dollar value over a defined time period, achieved with the assistance of NZTE. The deal value should generally be This result is consistent with the previous two years. calculated over a 12 month period, but can be calculated beyond this period if it is specified in an agreed signed contract. NZTE relies on information supplied by the customer within the confines of available commercial information to calculate this measure. NZTE reviews the information for reasonableness but cannot confirm the % Focus700 that consider to a great 57% 63% Meets or 54%11 accuracy of the data. or very great extent that NZTE has put them in exceeds 10 An IGO is a result achieved in-market with the assistance of NZTE, that is not a sale, but a result that provides a significant platform for future international growth. a stronger position to grow internationally 2017/18 result 11 A reversion to 2017 level results, off a very high achievement in 2018. Analysis of the results show we can improve our offering to new customers to the F700 portfolio and also those who have been in the portfolio for a number of years. Note, the score for customers saying that NZTE has put them into a stronger position to grow Total Net Promoter Score for Build +23 +28 Meets or +18 internationally, to a Moderate, Great, and Very Great extent, is 87%. 12 exceeds 12 The Net Promoter Score is calculated by taking the percentage of promoters (those that gave a score of 9 or 10) and subtracting the percentage of detractors (those that Foundation customers gave a score of 0 to 6). This is a measure of how likely customers are to promote the service to others, and is an indicator of the perceived value added by that service. 2017/18 result 13 Potential Direct Economic Impact is the forecast return to the economy through increased profits, wages and supplier spend. Disclosures required of the Key Total Net Promoter Score for NZTE services +62 +67 +50 +72 investment manager assumptions that have gone into the calculations: – a discount rate of between 3-8% is selected based on the risk profile This result reflects a focus on improving the quality of – economic benefit is between 5-10 years unless there is a definitive lift NZTE services and connecting customers to the right – the discount rate and project life are selected through professional judgement of the investment team, based on best information available, and actual results may vary. service at the right time in their journey. – NZTE relies on information supplied by the participant to calculate this measure. NZTE reviews the information for reasonableness but cannot confirm the accuracy of the data. Potential Direct Economic Impact to capital $1.9b14 $2.3b $2.0b $2.5b 14 NZTE previously reported pDEI for investment deals as $1.7b in 2016/17. The previous calculation included Foreign Direct Investment deals only. NZTE now includes deployed for investment deals13 both Foreign Direct Investment and Capital Mobilisation Investment in the calculation on the basis that this also provides economic impact to New Zealand. 15 Performance standard is the number of Focus700 customers at the end of the financial year.

66 NZTE Annual Report 2018/19 67 STATEMENT OF PERFORMANCE 2018/19

Services to support the growth and Collaborative Activity and Special Events development of New Zealand businesses We collaborate with other New Zealand agency partners to leverage We build and enhance business and management capability by providing New Zealand’s profile and diaspora in international markets, and secure access to effective assessment, advice, training, mentoring and information. and capitalise on special events or opportunities that support New Zealand’s export growth. Services funded under this output are mainly delivered via the Regional Business Partner Network or other third-party providers. Activities within this output class include: The Regional Business Partner network is a network of 14 regional organisations that are jointly funded by NZTE and Callaghan Innovation to deliver specialist services, support and funding to enhance business management capability • G2G Know-how – established with MFAT to internationalise our public sector skills, systems and know-how and grow business investment in research and development. • The New Zealand Story – a free business toolkit, delivered with NZ Inc partners, to help New Zealand businesses promote themselves internationally Performance Measures • Leveraging significant events, such as the Rugby World Cup.

Performance Measure Actual Actual Target Actual Performance Measures 2016/17 2017/18 2018/19 2018/19

Total Net Promoter Score for the +60 +64 +60 +72 Performance Measure Actual Actual Target Actual Regional Business Partner Network 2016/17 2017/18 2018/19 2018/19 Value of contracts secured through $15.1m16 $9.6m $16m $23.7m G2G Know-how Cumulative result Cumulative Cumulative for This result reflects a mature sales and for the period target for the the period Jul 17 Activity Indicator Actual Actual Target Actual engagement model for G2G, plus a Jan 15 – Jun 17 period Jul 17 – – Jun 19 2016/17 2017/18 2018/19 2018/19 strategic focus on Asia and the Middle East. Jun 19 Number of businesses receiving 6,015 6,117 5,000 5,796 Total Net Promoter Score for +53 +67 +52 +68 business development services through (demand driven) the New Zealand Story the Regional Business Partner Network This is a result of a new website and improved toolkit containing the right content for registered users.

Activity Indicator Actual Actual Target Actual 2016/17 2017/18 2018/19 2018/19

Number of customers working with New indicator 361 Baseline 375 NZTE and Callaghan Innovation in 2017/18

16 The G2G Know-how targets have been updated to reflect cumulative periods. These longer periods take in to account the uneven nature of G2G deals and the time required to negotiate deals between governments. The previous period was to end in June 18 however due to the budget rollover of G2G Know-how, that period ended in Jun 17 and was reported on in NZTE’s 16/17 Annual Report. The new cumulative period from 1 July 2017 to 30 June 2019 has commenced with a cumulative target of $16m.

68 NZTE Annual Report 2018/19 69 STATEMENT OF PERFORMANCE 2018/19

Expo 2020 Dubai Grants The New Zealand at Expo 2020 project team is responsible for the delivery of New Zealand’s participation in Expo 2020. In addition, NZTE administers two grants: Our team is managing the design, build and operation of the New Zealand Pavilion, seeking sponsors and participants, coordinating activities across NZ Inc and creating a platform for NZTE customers to grow internationally. In 2019/20, the Expo 2020 project will be focussed on setting up the platform for New Zealand businesses to take International Growth Fund (IGF) advantage of the opportunity presented by Expo 2020 Dubai in 2020/21. This work programme in 2019/20 is centered The IGF supports high-growth businesses to carry out additional market development and business capability activities around the construction of the New Zealand Pavilion, the development of the Business Leverage Programme, and the required for internationalising and growth in new markets. This delivers benefits for both the businesses concerned and the Commercial Partnership Programme. The majority of export outcomes for New Zealand businesses are expected to be wider New Zealand economy. achieved from the 2020/21 financial year. Sector Strategies and Facilitation (Strategic Investment Fund) Performance Measures The Strategic Investment Fund co-funds feasibility studies. These studies are used to develop and present the business case for investment in New Zealand.

Activity Indicator Actual Actual Target Actual Performance Measures 2016/17 2017/18 2018/19 2018/19

Leverage programme Terms of New Measure New Measure Achieved Achieved Performance Actual Actual Target Actual Reference approved by Steering Group Measure 2016/17 2017/18 2018/19 2018/19 by 31 August 2018 Potential Direct Economic Impact ratio 6.5 to 1 6.1 to 1 4 to 1 5.7 to 1 Entering into a contract for pavilion New Measure New Measure Achieved Partially for approved IGF grants17 catering services by 30 September 2018 Achieved Contract signed December 2018 Realised Direct Economic Impact ratio 6.1 to 1 6.1 to 1 4 to 1 7.6 to 1 for completed IGF projects18 Entering into a contract for pavilion New Measure New Measure Achieved Not Achieved This result was driven by exceptional results construction services by 31 0ctober 2018 for two IGF projects. Final design stage extended, therefore the contract is yet to be signed.

Detailed Pavilion design complete 28 New Measure New Measure Achieved Partially Activity Actual Actual Target Actual February 2018 Achieved Indicator 2016/17 2017/18 2018/19 2018/19 Completed in April 2019 Number of IGF grants awarded 82 109 80 (demand 107 driven)

Number of SIF grants awarded 5 6 6 (demand 10 Additional feasibility studies were undertaken, driven) to support the governments regional and sector priorities.

17 Potential DEI does not apply to market validations and coalition projects. NZTE relies on information supplied by the participant to calculate this measure. NZTE reviews the information for reasonableness but cannot confirm the accuracy of the data. The pDEI results refer to non-risk adjusted calculations. 18 Results are based on completed IGF projects for IGF grants approved in the preceding five years. NZTE relies on information supplied by the participant to calculate this measure. NZTE reviews the information for reasonableness but cannot confirm the accuracy of the data.

70 NZTE Annual Report 2018/19 71 FINANCIAL STATEMENTS FINANCIAL STATEMENTS For the year ending 30 June 2019 As at 30 June 2019

Statement of comprehensive revenue and expense Statement of financial position

Budget Notes Actual Actual Budget Notes Actual Actual 2019 2019 2018 2019 2019 2018 $000 $000 $000 $000 $000 $000

Income ASSETS Current assets 168,265 Revenue from Crown – operating 2 180,635 175,144 9,574 Cash and cash equivalents 8 30,705 30,142 31,231 Revenue from Crown – grants 2 25,945 24,253 17,641 Trade and other receivables 9 1,013 1,647 5,749 Operating revenue 3 6,600 7,682 13,600 Crown Debtor – Grants 9 12,748 12,968 610 Finance revenue 4 2,551 3,977 3,000 Prepayments 4,307 4,110 205,855 Total income 215,731 211,056 – Inventory 446 – 400 Deposits 650 278 Expenditure – Derivative financial asset 10 – 2,302 94,019 Personnel costs 5 101,225 92,564 44,215 Total current assets 49,869 51,447 5,000 Depreciation and amortisation expense 11,12 5,642 5,426 Non-current assets – Finance expense 6 3,561 – 14,244 Property, plant and equipment 11 19,643 13,969 31,231 Grant expense 25,945 24,253 3,956 Intangible assets 12 5,308 4,008 75,605 Other operating expenses 7 78,888 81,107 1,780 Deposits 1,834 2,083 205,855 Total expenses 215,261 203,350 19,980 Total non-current assets 26,785 20,060 – Surplus/(deficit) before income tax 470 7,706 64,195 Total assets 76,654 71,507 – Other Comprehensive Revenue and Expense – – – Total comprehensive revenue and expense 470 7,706 LIABILITIES Explanations of significant variances against budget are detailed in note 23. Current liabilities The accompanying notes form part of these financial statements. 19,650 Trade and other payables 13 16,519 14,268 6,050 Employee benefits and provisions 14 6,305 5,557 130 Finance and other liabilities 15 202 195 13,600 Accruals – grants 16 12,748 12,968 Statement of changes in equity – Derivative financial liabilities 10 1,258 – Budget Actual Actual 39,430 Total current liabilities 37,032 32,988 2019 2019 2018 Non-current liabilities $000 $000 $000 2,537 Employee benefits 14 2,119 2,184 2,195 Finance and other liabilities 15 1,773 1,075 Contributed capital 4,732 Total non-current liabilities 3,892 3,259 15,648 Balance at 1 July 15,648 15,648 44,162 Total liabilities 40,924 36,247 – Capital contribution – – 20,033 Net assets 35,730 35,260 15,648 Balance at 30 June 15,648 15,648 20,033 Equity 35,730 35,260

Accumulated surplus/(deficit) The accompanying notes form part of these financial statements. 4,385 Balance at 1 July 19,612 11,906 For and on behalf of the members of the Board, which authorised the issue of the financial statements on 30 October 2019 – Surplus/(deficit) for the year 470 7,706 Explanations of significant variances against budget are detailed in Note 23 4,385 Balance at 30 June 20,082 19,612

20,033 Total equity 35,730 35,260

Andrew Ferrier Charles Finny Chair, NZTE Board Chair, Audit & Risk

72 NZTE Annual Report 2018/19 73 FINANCIAL STATEMENTS For the year ending 30 June 2019 NOTES TO THE FINANCIAL STATEMENTS For the year ending 30 June 2019

Statement of Cash Flows Note 1 : Statement of accounting policies for the year ended 30 June 2019

Budget Notes Actual Actual 2019 2019 2018 Reporting entity Changes in accounting policy $000 $000 $000 NZTE is a Crown Agency as defined by the Crown There have been no changes in accounting policies Entities Act 2004 and is domiciled in New Zealand. during the financial year, apart from the early adoption Cash flows from operating activities NZTE’s parent is the New Zealand Crown. of PBE IFRS 9. 167,028 Revenue from Crown – operating 180,635 188,661 31,231 Revenue from Crown – grants 26,165 23,179 The consolidated financial statements of the Group Standard early adopted 5,749 Client and other income 7,254 7,273 consist of the parent entity NZTE and its subsidiaries, In line with the Financial Statements of the 610 Interest received 690 592 NZ G2G Partnerships Ltd and NZTE Limited. Together Government, NZTE has elected to early adopt PBE (72,945) Payments to suppliers (71,270) (83,339) referred to as New Zealand Trade and Enterprise. IFRS 9 Financial Instruments. PBE IFRS 9 replaces (93,819) Payments to employees (99,451) (92,370) NZTE’s primary objective is to encourage and PBE IPSAS 29 Financial Instruments: Recognition and (31,231) Payments to grant recipients (26,165) (23,334) promote economic development and investment Measurement. Accounting policies have been updated – Net Goods and Services Tax (374) 2,502 opportunities in New Zealand, as opposed to making to comply with PBE IFRS 9. The main update is to (1,202) Capital charge paid (2,016) (1,702) a financial return. Note 9 Receivables. This policy has been updated to 17 5,421 Net cash flows from operating activities 15,468 21,462 reflect that the impairment of short-term receivables NZTE has designated itself as a public benefit entity is now determined by applying an expected credit loss – Cash flows from investing activities (PBE) for financial reporting purposes. model. There are no changes as a result of adopting Proceeds from sale of property, plant and equipment – 80 69 The financial statements for NZTE are for the year the new standard. (2,240) Purchase of property, plant and equipment (12,251) (3,594) ended 30 June 2019, and were approved on behalf (2,000) Purchase of intangible assets (2,737) (2,245) Standards issued and not yet affected and of the Board on 30 October 2019. (4,240) Net cash flows used in investing activities (14,908) (5,770) not early adopted Basis of preparation PBE IPSAS 41 Financial Instruments Cash flows from financing activities The XRB issued PBE IPSAS 41 Financial Instruments The financial statements are prepared in accordance – Landlord contribution to other lease liabilities – – in March 2019. This standard supersedes PBE IFRS 9 with the requirements of the Crown Entities Act – Net cash flows from/(used in) financing activities – – Financial Instruments, which was issued as an interim 2004, which includes the requirement to comply with standard. It is effective for reporting periods beginning New Zealand generally accepted accounting practice 1,181 Net increase in cash and cash equivalents 560 15,692 on or after 1 January 2022. Although NZTE has not (NZ GAAP). 8,393 Cash and cash equivalents at beginning of year 30,142 14,359 assessed the effect of the new standard, it does not – Effect of exchange rate fluctuations on cash held 3 91 The financial statements have been prepared on expect any significant changes as the requirements 8 9,574 Cash and cash equivalents at end of year 30,705 30,142 a historical cost basis, except derivative financial are similar to PBE IFRS 9. instruments, namely forward exchange contracts, The GST (net) component of operating activities reflects the net GST paid and received with the Inland Revenue Department Amendment to PBE IPSAS 2 Statement of (IRD). GST has been presented on a net basis as the gross amounts do not provide meaningful information for financial which are stated at fair value. Cash Flows reporting purposes. The financial statements have been prepared in An amendment to PBE IPSAS 2 Statement of Cash The accompanying notes form part of these financial statements. accordance with Tier 1 PBE accounting standards. Flows requires entities to provide disclosures that Explanations of significant variances against budget are detailed in Note 23 These financial statements comply with PBE enable users of financial statements to evaluate accounting standards. changes in liabilities arising from financial activities, including both changes arising from cash flows and The financial statements are presented in non-cash changes. This amendment is effective for New Zealand dollars and all values are rounded to annual periods beginning on or after 1 January 2021, the nearest thousand dollars ($000). The functional with early adoption permitted. NZTE does not intend currency of NZTE is New Zealand dollars. to early adopt the amendment.

74 NZTE Annual Report 2018/19 75 NOTES TO THE FINANCIAL STATEMENTS For the year ending 30 June 2019

2019 2018 Summary of Significant Accounting Accounting estimates and judgements $000 $000 Policies Application of NZTE’s accounting policies requires the use of estimates and judgements. Foreign currency transactions The estimates are based on historical experience and Note 3 : Other operating revenue Foreign currency transactions (including those other factors that are believed to be reasonable. Actual Rental income 1,934 2,180 for which forward exchange contracts were held) results may differ from these estimates. The areas of Other income 3,831 4,134 are translated into New Zealand dollars using significant estimation and judgement are as follows: Dubai Expo 2020 – 442 the exchange rates prevailing at the date of the Revenue from sale of consultancy services to offshore government entities 835 926 transactions. Foreign exchange gains and losses • grant accrual (note 16) Total other operating revenue 6,600 7,682 resulting from the settlement of such transactions • useful lives of property, plant and equipment (note 11) and from the translation at year-end exchange rates • useful lives of intangible assets (note 12) of monetary assets and liabilities denominated in Note 4 : Finance revenue Interest Income 690 592 foreign currencies are recognised in the Statement Gains on derivative financial instruments – unrealised – 2,391 of Comprehensive Revenue and Expense. Net gains from derivative financial instruments – realised 1,688 838 GST Foreign exchange gains – unrealised 173 156 Items in the financial statements are presented Total finance income 2,551 3,977 exclusive of GST, except for receivables and payables, which are presented on a GST-inclusive basis. Where Note 5 : Personnel costs GST is not recoverable as input tax, it is recognised as Salaries 98,299 89,076 part of the related asset or expense. The net amount Contributions to superannuation plans 2,340 3,520 of GST recoverable from, or payable to, the IRD is Increase/(decrease) in employee benefit provisions 586 (32) included as part of receivables or payables in the Total personnel costs 101,225 92,564 statement of financial position. The net GST paid to, or received from, the IRD, including the GST relating to Note 6 : Finance expenses investing and financing activities, is classified as a net Net losses from derivative financial instruments – unrealised 3,561 – operating cash flow in the statement of cash flows. Total finance expenses 3,561 –

Note 2 : Revenue from Crown – operating and Revenue from Crown – grants

NZTE received funding from the Crown for the specific – grants is recognised when the revenue conditions purposes of NZTE as set out in the Statement of have been met, which is when the related grant Service Performance Expectations 2018-19 and the expenditure is incurred, and a grant receivable is scope of the relevant government appropriations. due. Grant expenditure is recognised when the third party recipient incurs expenditure that meets the NZTE considers there are no conditions attached to grant conditions. the funding and it is recognised as revenue at the point of entitlement. These two revenue streams are considered non- exchange transactions. NZTE received funding from the Crown for grants as set out in the Statement of Service Performance Expectations 2018-19 and the scope of relevant government appropriations. Revenue from Crown

76 NZTE Annual Report 2018/19 77 NOTES TO THE FINANCIAL STATEMENTS For the year ending 30 June 2019

2019 2018 2019 2018 $000 $000 $000 $000

Note 7 : Other operating expenses Note 8 : Cash and cash equivalents Audit fees – for the audit of the financial statements 245 240 Cash and cash equivalents include cash on hand, deposits held on call with both domestic and international banks, and Audit fees – other than Audit New Zealand – 9 other short-term, highly liquid investments, with original maturities of three months or less. Board fees 204 216 Development and implementation of high impact projects, international multi customer Current account 102 25 5,708 7,563 activity and other initiatives Call account 9,657 13,365 Capability training and mentoring services 10,799 10,967 Term deposits with maturities less than 3 months 15,000 13,012 Loss on disposal of property, plant and equipment 338 449 Foreign currency accounts 5,946 3,740 Operating lease expenses 16,273 15,793 Total cash and cash equivalents 30,705 30,142 Telling the New Zealand Story 2,048 2,889 Other services provided by third parties 6,692 5,337 The current, call and term accounts earn interest at rates set from time to time by NZTE bankers. Some foreign Costs to third party service providers for sale of consulting services to offshore 835 926 currency accounts earn interest at floating rates based on daily bank deposit rates. government entities While cash and cash equivalents at 30 June 2019 are subject to the expected loss requirements of PBE IFRS 9, Other sponsorship and promotional activity 1,260 2,806 no loss allowance has been recognised because the estimated loss allowance for credit losses is trivial. Total Missions and Events Centre and Coalitions (including Rugby World Cup) 2,452 2,023 Dubai Expo 2020 2,735 2,342 Capital charge 2,016 1,702 Note 9 : Trade and other receivables Trade and other receivables are recorded at the amount due, less an allowance for credit losses. NZTE applies the Capital charge simplified credit loss model of recognising lifetime expected credit losses for receivables. Short term receivables are written off when there is no reasonable expectation of recovery. In the previous year, the allowance for credit losses was NZTE pays a capital charge to the Crown on its equity as at 30 June and 31 December each year. based on the incurred credit loss model. An allowance for credit losses was recognised only when there was objective evidence that the amount would not be fully collected. The effect of the change in accounting policy has not resulted in any changes to trade and other receivables

Trade and other receivables Trade receivables from non-related parties 1,013 1,647

Trade receivables from non-related parties are non-interest bearing and are generally on 20th of month following invoice terms. Trade receivables are shown net of provision for doubtful debts amounting to $19,000 (2018: $7,000) recognised in the current year.

Receivable from Crown – grants 12,748 12,968

Receivable from Crown – grants are due from MBIE to pay grants administered by NZTE. MBIE pays funds to NZTE just before the claim under the grant is paid to the recipient.

78 NZTE Annual Report 2018/19 79 NOTES TO THE FINANCIAL STATEMENTS For the year ending 30 June 2019

2019 2018 Note 11 : Property, plant and equipment $000 $000 Property, plant and equipment asset classes consist of Leasehold improvements are depreciated over computer hardware, leasehold improvements, furniture the unexpired period of the lease or the estimated Note 10 : Derivative financial assets and liabilities and office equipment, and motor vehicles. Property, remaining useful lives of the improvements, which ever Current portion of derivative financial assets/(liabilities) (1,258) 2,302 plant and equipment are shown at cost, less any is the shorter. The residual value and useful life of an accumulated depreciation and impairment losses. asset is reviewed, and adjusted if applicable, at each The notional principal amounts of material outstanding forward exchange contracts at 30 June 2019 are as follows. financial year end. Additions Currency Million Million The cost of an item of property, plant or equipment Impairment is recognised as an asset only when it is probable Property, plant and equipment and intangible Australian dollar 5 6 that future economic benefits or service potential assets that have a finite useful life are reviewed Canadian dollar 1 1 associated with the item will flow to NZTE and the cost for impairment whenever events or changes in Chinese renminbi 57 58 of the item can be measured reliably. circumstances indicate that the carrying amount may Euro 3 3 not be recoverable. An impairment loss is recognised Great Britain pound 2 2 Disposals for the amount by which the asset’s carrying amount Hong Kong dollar 9 10 Gains and losses on disposals are determined by exceeds its recoverable amount. The recoverable Japanese yen 148 182 comparing the proceeds with the carrying amount of amount is the higher of an asset’s fair value less costs Singapore dollar 5 4 the asset. Gains and losses on disposals are included in to sell and value in use. United States dollar 9 8 the surplus or deficit. Value in use is the depreciated replacement cost for For those financial instruments recognised at fair value in the Statement of Financial Position, fair values are determined Subsequent costs an asset where its future economic benefits or service according to the following hierarchy: Costs incurred subsequent to initial acquisition potential are not primarily dependent on its ability to • Level 1 – Quoted market prices are capitalised only when it is probable that future generate net cash inflows and where NZTE would, • Level 2 – Valuation techniques using observable inputs economic benefits or service potential associated with • Level 3 – Valuation techniques with significant non-observable inputs if deprived of the asset, replace its remaining future the item will flow to NZTE and the cost of the item can economic benefits or service potential. As at 30 June 2019, all financial instruments measured at fair value were categorised as level 2. be measured reliably. The costs of day-to-day servicing If an asset’s carrying amount exceeds its recoverable of property, plant and equipment are recognised as an amount, the asset is impaired and the carrying amount expense in the surplus or deficit. is written down to the recoverable amount. The total Depreciation impairment loss is recognised as an expense in the Depreciation is provided on a straight-line basis on all surplus or deficit. property, plant and equipment at rates that will write off the cost of the assets to their estimated residual values over their useful lives. The useful lives and associated depreciation rates of major asset classes have been estimated as follows:

Computer hardware 3 years 33%

Furniture and office 4 to 5 years 20% to equipment 25%

Leasehold Up to 12 years 8% to 33% improvements

Motor vehicles 4 years 25%

80 NZTE Annual Report 2018/19 81 NOTES TO THE FINANCIAL STATEMENTS For the year ending 30 June 2019

Expo Computer Furniture Leasehold Motor Total 2019 2018 Pavilion hardware and office improvements vehicles $000 $000 equipment $000 $000 $000 $000 $000 $000 Summary of work in progress Expo Pavilion 6,508 – Year ended 30 June 2019 Computer hardware 11 234 Cost Furniture and office equipment 41 6 Balance at 1 July 2018 – 11,732 6,471 22,357 3,129 43,689 Leasehold improvements 304 898 Additions 6,508 1,062 549 1,560 392 10,071 Total work in progress 6,864 1,138 Disposals – (556) (715) (1,781) (309) (3,361) Impairment – – – – – – Balance at 30 June 2019 6,508 12,238 6,305 22,136 3,212 50,399 Expo Pavilion Year ended 30 June 2018 NZTE entered into a memorandum of understanding with MFAT to complete New Zealand’s pavilion at the Dubai Expo 2020. Cost Costs incurred in the pavilion design and build have been included in Work in Progress. Balance at 1 July 2017 – 11,972 6,952 19,652 2,971 41,547 The Dubai Expo is to be held in Dubai from October 2020 to April 2021. The pavilion is expected to be depreciated over Additions – 698 118 3,143 414 4,373 this period. Disposals – (938) (599) (438) (256) (2,231) After the expo the pavilion will be demolished and the site returned to it’s original condition. A restoration asset and liability of $192,298 as at balance date has been provided for in the financial statements. Impairment – – – – – – Balance at 30 June 2018 – 11,732 6,471 22,357 3,129 43,689 Year ended 30 June 2019 Note 12 : Intangible assets Accumulated depreciation and impairment loss Software acquisition and development Balance at 1 July 2018 – 9,676 5,193 12,601 2,250 29,720 Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to Depreciation charge for the year – 1,358 572 1,875 464 4,269 use the specific software. Costs that are directly associated with the development of software for internal use Elimination on disposal – (553) (702) (1,669) (309) (3,233) by NZTE, are recognised as an intangible asset. Direct costs include software development, employee costs and Impairment – – – – – – an appropriate portion of relevant overheads. Staff training costs, costs associated with maintaining computer Balance at 30 June 2019 – 10,481 5,063 12,807 2,405 30,756 software, and costs associated with the development and maintenance of NZTE websites are recognised as an Year ended 30 June 2018 expense when incurred. Accumulated depreciation and impairment loss Amortisation Balance at 1 July 2017 – 9,270 5,163 11,189 2,016 27,638 The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful Depreciation charge for the year – 1,353 630 1,786 490 4,259 life. Amortisation begins when the asset is available for use and ceases when the asset is derecognised. The Elimination on disposal – (947) (600) (374) (256) (2,177) amortisation charge for each period is recognised in the Statement of Comprehensive Revenue and Expense. The Impairment – – – – – – useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows: Balance at 30 June 2018 – 9,676 5,193 12,601 2,250 29,720 Carrying amount at 30 June 2019 Computer software (developed) 20% to 33% Cost 6,508 12,238 6,305 22,136 3,212 50,399 Computer software (acquired) 20% to 25% Accumulated depreciation and impairment – (10,481) (5,063) (12,807) (2,405) (30,756) Net carrying amount 6,508 1,757 1,242 9,329 807 19,643 Carrying amount at 30 June 2018 Cost – 11,732 6,471 22,357 3,129 43,689 Accumulated depreciation – and impairment (9,676) (5,193) (12,601) (2,250) (29,720) Net carrying amount – 2,056 1,278 9,756 879 13,969

Restrictions There have been no restrictions on property, plant and equipment throughout the reporting period.

82 NZTE Annual Report 2018/19 83 NOTES TO THE FINANCIAL STATEMENTS For the year ending 30 June 2019

Computer 2019 2018 software $000 $000 Total $000 Note 13 : Trade and other payables Year ended 30 June 2019 Cost Payables due to non-related parties 9,610 9,087 Balance at 1 July 2018 11,370 Income in advance 3,859 1,612 Additions 2,895 FBT, GST, VAT and PAYE payable 3,050 3,569 Disposals (3,451) Total trade and other payables 16,519 14,268 Impairment – Balance at 30 June 2019 10,814 Creditors and other payables are non interest bearing and are normally settled on the 20th of month following invoice terms. Year ended 30 June 2018 The carrying value of trade and other payables therefore approximates fair value. Cost Balance at 1 July 2017 12,671 Additions 2,185 Note 14 : Employee benefits and provisions Disposals (3,486) Current liabilities Impairment – Salary and wages accrual 480 383 Balance at 30 June 2018 11,370 Annual leave 5,370 5,044 Year ended 30 June 2019 Sick leave 130 130 Accumulated amortisation and impairment loss Provision for restructuring 325 – Balance at 1 July 2018 7,362 Total current employee benefits 6,305 5,557 Amortisation expense 1,373 Disposals (3,229) Non-current liabilities Impairment – Long-service leave 192 159 Balance at 30 June 2019 5,506 Retirement leave and other leave 1,927 2,025 Year ended 30 June 2018 Total non-current employee benefits 2,119 2,184 Accumulated amortisation and impairment loss Balance at 1 July 2017 9,570 Movement in provision for restructuring Amortisation expense 1,167 Opening balance – 318 Disposals (3,375) Additions for the year 325 144 Impairment – Amounts used – (462) Balance at 30 June 2018 7,362 Closing balance 325 – Carrying amount at 30 June 2019 Cost 10,814 NZTE continues to review and evaluate its organisational structure and skillsets to meet the performance Accumulated amortisation (5,506) of its responsibilities. Net carrying amount 5,308 Carrying amount at 30 June 2018 Cost 11,370 Accumulated amortisation (7,362) Net carrying amount 4,008

The total amount of intangibles in work in progress is $741,000 (2018: $1,000,000)

The majority of intangible assets are internally generated software projects which may include components which have been externally acquired.

Restrictions There are no restrictions on intangibles.

84 NZTE Annual Report 2018/19 85 NOTES TO THE FINANCIAL STATEMENTS For the year ending 30 June 2019

2019 2018 2019 2018 $000 $000 $000 $000

Note 15 : Finance and other liabilities Note 17 : Reconciliation of total comprehensive revenue and expenses Current financial liabilities with net cash flows from operating activities Lease incentives – landlords 202 195 Total comprehensive revenue and expense 470 7,706

Non-current financial liabilities Add non-cash items: Lease incentives – landlords – later than one year and not later than five years 650 148 Depreciation of property, plant and equipment 4,269 4,259 Other non-current financial liabilities 1,123 927 Amortisation of intangible assets 1,373 1,167 Net unrealised foreign exchange (gains) / losses (3) (90) Total non-current financial liabilities 1,773 1,075 Increase/(decrease) in non-current employee entitlements (65) 67 Fair value changes in derivatives 3,561 (2,391) NZTE subleases office space at Quay Street, Auckland. The total non-cancellable operating lease relates to the Total non-cash items 9,135 3,012 lease of 2662 sq m over two floors and represents the landlord contribution to the fit out. The lease expires 31 December 2024 with an option of two rights of renewal of two terms of three years. Add / less items not classified as operating activity NZTE leases office space at Madison Avenue, New York. The total non-cancellable operating lease relates to the Net loss/(gain) on disposal of property, plant and equipment 338 449 lease of 349 sq m and represents the landlord contribution to the fit out. The lease expires on 30 June 2021. Add / less working capital movements: NZTE leases office space at West Pender Street, Vancouver. The total non-cancellable operating lease relates to (Increase)/decrease in trade and other receivables, prepayments and deposits 315 14,060 the lease of 166 sq m and represents the landlord contribution to the fit out. The lease expires on 31 August 2023. (Increase)/decrease in stock (446) – NZTE leases office space at Olympic Boulevard, Los Angeles. The total non-cancellable operating lease relates to (Increase)/decrease in Crown debtor grants 220 (1,074) the lease of 668 sq m and represents the rent free period of 6 months to NZTE. The lease expires on 31 July 2020, Increase/(decrease) in trade payables 4,849 (3,480) with an option of one right of renewal for five years. Increase/(decrease) in grants accrual (220) 919 Increase/(decrease) in employee benefits 807 (130) Note 16 : Accruals – grants Total working capital movements 5,525 10,295 Net cash flow from operating activities 15,468 21,462 Accruals – grants 12,748 12,968

The grant accrual is calculated on a grant by grant basis by assessing the probability of a grant recipient having Note 18 : Financial risk management incurred qualifying expenditure for which a claim has not yet been received and management’s estimation of NZTE’s principal financial instruments (other than derivatives), comprise cash and short-term deposits. The main project progress. purpose of these financial instruments is to fund NZTE’s operations. NZTE has various other financial instruments such as trade debtors and trade creditors which arise directly from its operations.

NZTE also enters into derivative transactions consisting of forward currency contracts. The purpose of these is to manage the currency risks arising from NZTE’s operations. It is NZTE’s policy, and has been throughout the period under review, that no trading in financial instruments shall be undertaken.

NZTE is exposed to credit risk, interest rate risk, liquidity risk and foreign currency risk. NZTE’s senior management oversees the management of these risks. NZTE’s senior management is supported by an Audit and Risk Committee that provides assurance to senior management and the Board that NZTE’s financial risks are identified, measured and managed in accordance with NZTE’s policies and procedures.

86 NZTE Annual Report 2018/19 87 NOTES TO THE FINANCIAL STATEMENTS For the year ending 30 June 2019

Financial instruments categories and fair value a) Credit risk The fair values together with the carrying amounts shown in the statement of financial position are as follows. In the normal course of business, NZTE is exposed to credit risk from cash and term deposits with banks, trade and other receivables, and derivative financial instrument assets. For each of these, the maximum credit exposure Notes Carrying Carrying is best represented by the carrying amount in the Statement of Financial Position. amount amount 2019 2018 Concentration of credit risk from accounts receivable are limited due to the large number and variety of customers. $000 $000

Financial assets and receivables The status of trade receivables for NZTE at the reporting date is as follows: Cash and cash equivalents 8 30,705 30,142 Gross Allowance for Gross Allowance for Trade and other receivables and Crown debtor – grants 9 13,761 14,615 receivables credit losses receivables credit losses Deposits 2,484 2,361 2019 2019 2018 2018 $000 $000 $000 $000 Financial liabilities measured at amortised cost Trade and other receivables 1,032 (19) 1,654 (7) Trade and other payables 13 9,610 14,268 Analysed as :- Financial liabilities 15 1,123 927 Not past due 613 – 347 – Past due 0-30 days 115 (3) 1,119 – Fair value through Statement of Comprehensive Revenue and Expense Past due 31-120 days 225 – 179 – Derivative financial assets/(liabilities) 10 (1,258) 2,302 Past due 121-364 days 77 (14) 1 – Past due more than one year 2 (2) 8 (7) The carrying amounts represent the fair values of financial instruments. Total trade and other receivables 1,032 (19) 1,654 (7) The carrying amount of derivatives included in the Statement of Financial Position reflects the fair value of derivatives at balance date. This has been determined by using a valuation technique using observable inputs Movements in the allowance for credit losses of receivables are as follows: provided by independent trading banks. 2019 2018 Estimation of fair values analysis $000 $000 Major methods and assumptions used in estimating the fair values of financial instruments reflected in the table Balance at 1 July (7) (2) above are summarised below. Additional provisions made during the year (12) (5) Allowance for credit losses at 30 June (19) (7) Derivatives The fair value of forward exchange contracts has been determined using a discounted cash flow valuation The allowance for credit losses of trade receivables relate to insolvent customers or debts in recovery assessed methodology based on quoted forward foreign exchange market rates. as uncollectible. In the case of insolvency, the group generally writes off the receivable in full unless there is clear evidence that a receipt is highly probable. Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate is a market related rate for a similar instrument at balance date. Where other b) Interest rate risk pricing models are used, inputs are based on market-related data at balance date. NZTE has interest rate risk arising from interest bearing bank accounts. NZTE manages its exposure to interest rate risk by regularly reviewing placement of funds. Trade and other receivables and payables For receivables and payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.

Capital management NZTE’s capital is its equity, which comprises capital injections by the Crown and accumulated funds. Equity is represented by net assets. NZTE is subject to the financial management and accountability provisions of the Crown Entities Act 2004, which imposes restrictions in relation to borrowings, acquisition of securities, issuing guarantees and indemnities and use of derivatives. NZTE has complied with these restrictions throughout the year. NZTE manages its equity as a by-product of prudently managing revenue, expenses, assets, liabilities, investments, and general financial dealings to ensure that NZTE effectively achieves its objectives and purpose, while remaining a going concern.

88 NZTE Annual Report 2018/19 89 NOTES TO THE FINANCIAL STATEMENTS For the year ending 30 June 2019

c) Liquidity risk 2019 2018 NZTE manages liquidity risk by continuously monitoring forecast and actual cash flow requirements. $000 $000 The following are the contractual maturities of financial liabilities, including estimated interest payments. The amounts disclosed are the contractual undiscounted cash flows. Note 19: Commitments at balance date Contractual Less than 6 to 12 1 to 2 2 to 5 More than cashflows 6 months months years years 5 years Capital Commitments Leasehold Improvements – 990 2019 Total capital commitments – 990 Trade and other payables 9,610 9,610 – – – – Finance and other liabilities 1,123 – – – 1,123 – Capital commitments represent capital expenditure contracted for at balance date but not yet incurred. Derivative financial liabilities 1,258 – 1,258 – – – Non-cancellable operating lease commitments 11,991 9,610 1,258 – 1,123 – Not later than one year 8,640 9,200 2018 Later than one year and not later than five years 13,070 19,014 Trade and other payables 9,087 9,087 – – – – Later than five years 3,980 7,236 Finance and other liabilities 927 – – – 927 – Total non-cancellable operating lease commitments 25,690 35,450 10,014 9,087 – – 927 – Non-cancellable operating lease commitments are for office rental and international residential rentals. The operating lease commitments expire from July 2019 to January 2028. d) Foreign currency risk NZTE has offices overseas and undertakes transactions denominated in foreign currencies. As a result of these activities The 2019 commitments have been calculated in accordance with PBE IPSAS 13 which requires the exclusion of right of exposures in foreign currency arise. The currencies giving rise to this risk are primarily the United States dollar, Chinese renewal periods. renminbi, Euro, Great Britain pound, Hong Kong dollar, Singapore dollar and Australian dollar. It is NZTE policy to hedge There are no restrictions placed on NZTE by any of its leasing arrangements. foreign currency risks and use forward and spot foreign exchange contracts to manage this exposure. In accordance with Crown policy, the foreign exchange contracts are completed approximately nine months before the financial year begins. Note 20: Contingent liabilities The appropriation from the Crown for the financial year is primarily based on the same foreign exchange contracted rates. The total foreign exchange exposure hedged during the year ended 30 June 2019 was 77 percent (2018: 78 percent) of total NZTE has potential disputes, with an estimated value of (not including costs) at 30 June 2019 of $6,000 (2018: $98,000 for overseas expenditure in foreign currencies. potential contractual disputes). NZTE has no contingent assets (2018: $nil). Forecasted transactions NZTE has not designated its forward exchange contracts as cash flow hedges. Accordingly, fair value movements in outstanding forward exchange contracts are accounted for either as a net gain or loss from derivative financial instruments directly in the surplus or deficit. The net fair value of forward exchange contracts used as hedges of forecasted transactions at 30 June 2019 was $1,258,000 liability (2018: $2,302,000 asset), comprising $6,000 assets (2018: $2,352,000) and liabilities of $1,264,000 (2018: $50,000) that were recognised in the fair value of derivatives. Recognised assets and liabilities Changes in the fair value of forward exchange contracts that economically hedge monetary assets and liabilities in foreign currencies and for which no hedge accounting is applied are recognised in the surplus or deficit. Both the changes in fair value of the forward contracts and the foreign exchange gains and losses relating to the monetary items are recognised as part of finance income and finance expense (see notes 4 and 6). The fair value of forward exchange contracts used as economic hedges of monetary assets and liabilities in foreign currencies at 30 June 2019 was $1,258,000 (2018: $2,302,000) recognised in fair value derivatives. Sensitivity analysis At 30 June 2019, it is estimated that a general increase of one percentage point in the value of the New Zealand dollar against other foreign currencies would have decreased NZTE’s total surplus or deficit by approximately $495,000 for the year ended 30 June 2019 (2018: ($491,000)). A general decrease of one percentage point in the value of the New Zealand dollar against other foreign currencies would have increased NZTE’s total surplus or deficit by approximately $500,000 for the year ended 30 June 2019 (2018: $495,000). The forward exchange contracts have been included in this calculation.

90 NZTE Annual Report 2018/19 91 NOTES TO THE FINANCIAL STATEMENTS For the year ending 30 June 2019

Note 21: Related party disclosure 2019 2018 All related party transactions have been entered into on normal supplier or recipient terms or conditions, no more or less $000 $000 favourable than those not expected if the entity was not a related party. NZTE is a Crown entity in terms of the Crown Entities Act 2004, and is a wholly owned entity of the Crown. The government Note 22 : Board member remuneration significantly influences the roles of NZTE as well as being its major source of revenue. Board members earned the following remuneration (fees) during the year. Controlled Entity Member NZTE has a 50 percent shareholding in The New Zealand Way Ltd. This company is the operating entity of a joint venture Andrew Ferrier 56,000 56,000 between NZTE and Tourism New Zealand. Carmel Fisher 24,500 24,500 The cost as at 30 June 2019 of $75 (2018: $75) represents NZTE’s share in the issued and paid up capital of The New Zealand Charles Finny 26,950 26,950 Way Ltd. The financial year end of The New Zealand Way Limited is 30 June. Robin Hapi – 26,950 The New Zealand Way Ltd owns the intellectual property to the Brand New Zealand fern mark and the website URL Traci Houpapa 14,292 – NewZealand.com. Jennifer Kerr 26,950 26,950 Significant transactions with government-related entities Wayne Norrie 29,400 28,175 The Crown provided NZTE with actual funding of $206 million (2018: $197 million) for the specific purposes set out in its Charlotte Walshe 25,725 26,950 founding legislation and the scope of NZTE government appropriations. 203,817 216,474 Collectively, but not individually, significant, transactions with government-related entities In conducting its activities, NZTE is required to pay various taxes and levies (such as GST, FBT, PAYE and ACC levies) to There have been no payments made to committee members appointed by the Board who were not Board members during the Crown and entities related to the Crown. The payment of these taxes and levies, other than income tax, is based on the the financial year. standard terms and conditions that apply to all tax and levy payers. NZTE is exempt from paying income tax. NZTE has provided a deed of indemnity to Board members for certain activities undertaken in the performance of NZTE’s functions.

Key management personnel compensation NZTE has effected Directors’ and Officers’ Liability and Professional Indemnity insurance cover during the financial year in respect of the liability or costs of Board members and employees. 2019 2018 No Board members received compensation or other benefits in relation to cessation as at 30 June 2019 (2018: $nil). $000 $000

Board Members Remuneration 204 216 Number of members 7 7 Leadership Team Remuneration 3,726 3,993 Full-time equivalent members 8.83 9.25 Total key management personnel remuneration 3,930 4,209 Total full-time equivalent members 15.83 16.25

Key management personnel include the Board, Chief Executive, and the other six members of the Lead Team. Board members are calculated as full-time equivalents based on time spent on Board activities. Related Party Transactions required to be disclosed All transactions entered into with government departments and other Crown entities are conducted on normal business terms. In overseas countries NZTE operates with other government agencies in securing cost-effective representation. A number of companies in which NZTE Board members have an interest are members of industry groups. All transactions with these industry groups are on the same basis as all other industry groups and are not considered related party transactions. Related party disclosures have not been made for transactions that are: 1) within a normal supplier or client/recipient relationship; and 2) on terms and conditions no more or less favourable than those it is reasonable to expect NZTE would have adopted in dealing with the party at arm’s length in the same circumstances.

92 NZTE Annual Report 2018/19 93 NOTES TO THE FINANCIAL STATEMENTS For the year ending 30 June 2019 INDEPENDENT AUDITOR’S REPORT

Note 23 : Major budget variations To the readers of New Zealand Trade and • the performance information on pages 64 to 71: –– presents fairly, in all material respects, Revenue from Crown – operating is above budget due to funding received for the Dubai Expo ($8.4m) and Enterprise’s group financial statements NZTE’s performance for the year ended utilisation of the F19 underspend ($2m) and performance information for the year 30 June 2019, including: ended 30 June 2019 Revenue from Crown – grants and Grant expense are below budget due to lower approvals in prior years, and †† for each class of reportable outputs: lower utilisation rates of the amounts originally approved for each grant. The Auditor-General is the auditor of New Zealand »» its standards of delivery performance Finance revenue is above budget due to the realised net gain from the revaluation of derivative financial Trade and Enterprise group (NZTE). The Auditor- achieved as compared with forecasts included in the statement of instruments ($1.7m). General has appointed me, Ajay Sharma, using the performance expectations for the staff and resources of Audit New Zealand, to carry Personnel costs are higher than budget primarily due to more permanent staff being employed in Digital, filling financial year; and out the audit of the financial statements and the of vacancies across the group and the effect of the previous year’s salary increase. »» its actual revenue and output performance information, including the performance expenses as compared with the Cash and cash equivalents is higher than budget primarily due to receiving the funding for June in the month, information for appropriations, of NZTE on his behalf. compared to budget when the funding was budgeted in the following month. forecasts included in the statement Opinion of performance expectations for the Trade and other receivables is lower than budget due to the June funding being received in the month, compared financial year; and We have audited: to the budget in the following month. †† what has been achieved with the Inventory is above budget due the first time recognition of merchandise stock. • the financial statements of NZTE on pages 72 appropriations; and to 94, that comprise the statement of financial †† the actual expenses or capital expenditure The derivative financial liability is due to the impact of the hedge rates being higher than the year end spot rates. position as at 30 June 2019, the statement of incurred compared with the appropriated or Property, plant and equipment is over budget due to spend on Dubai Expo pavilion being classified as capital, comprehensive revenue and expense, statement forecast expenses or capital expenditure. but budgeted as operating spend. of changes in equity and statement of cash flows –– Complies with generally accepted accounting for the year ended on that date and the notes practice in New Zealand. Intangible assets are higher than budget due to the $1.1m spend on the new initiative of the customer portal to the financial statements including a summary development project. Our audit was completed on 30 October 2019. of significant accounting policies and other This is the date at which our opinion is expressed. Trade and Other payables are over budget primarily due to the timing of the spend of funds received for Dubai explanatory information; and Expo ($2.6m). The basis for our opinion is explained below. • the performance information of NZTE on pages In addition, we outline the responsibilities of the Cash flows from operating activities for Revenue from Crown – operating is above budget primarily due to 64 to 71. Board and our responsibilities relating to the funding received for the Dubai Expo ($8.4m) and utilisation of the F19 underspend ($2m). In our opinion: financial statements and the performance information, Cash flows from operating activities for Revenue from Crown – grants and the corresponding payments to grant we comment on other information, and we explain • the financial statements of NZTE on pages recipients is below budget due to lower approvals in prior years which impacts the level of claims in the current year. our independence. 72 to 94: Cash flows from operating activities – payments to suppliers is above budget due to expenditure incurred that –– present fairly, in all material respects: Basis for our opinion was funded from prior year reserves, and spend on the Dubai Expo. †† its financial position as at 30 June 2019; We carried out our audit in accordance with the Cash flows used in investing activities is above budget due to higher than budgeted spend on the customer and Auditor-General’s Auditing Standards, which portal development ($1.1m) and unbudgeted spend on leasehold improvements ($1.6m), largely being Beijing and †† its financial performance and cash flows incorporate the Professional and Ethical Standards a refit of New Zealand Central in Shanghai. for the year then ended; and and the International Standards on Auditing –– comply with generally accepted accounting (New Zealand) issued by the New Zealand Auditing practice in New Zealand in accordance with and Assurance Standards Board. Our responsibilities Note 24 : Events after balance date Public Benefit Entity Reporting Standards; and under those standards are further described in the Responsibilities of the auditor section of our report. Subsequent to balance date, NZTE committed to approximately $16.9 million relating to Expo 2020.

94 NZTE Annual Report 2018/19 95 INDEPENDENT AUDITOR’S REPORT (continued)

We have fulfilled our responsibilities in accordance when it exists. Misstatements are differences or • We evaluate the appropriateness of the reported Other information with the Auditor-General’s Auditing Standards. omissions of amounts or disclosures, and can arise performance information within NZTE’s The Board is responsible for the other information. from fraud or error. Misstatements are considered framework for reporting its performance. We believe that the audit evidence we have obtained The other information comprises the information material if, individually or in the aggregate, they could is sufficient and appropriate to provide a basis for • We conclude on the appropriateness of the included on pages 1 to 63 and 98 to 101, but does not reasonably be expected to influence the decisions our opinion. use of the going concern basis of accounting include the financial statements and the performance of readers, taken on the basis of these financial by the Board and, based on the audit evidence information, and our auditor’s report thereon. statements and the performance information. Responsibilities of the Board for obtained, whether a material uncertainty exists Our opinion on the financial statements and the the financial statements and the For the budget information reported in the financial related to events or conditions that may cast performance information does not cover the other performance information statements and the performance information, significant doubt on NZTE’s ability to continue as information and we do not express any form of audit our procedures were limited to checking that a going concern. If we conclude that a material The Board is responsible on behalf of NZTE for opinion or assurance conclusion thereon. preparing financial statements and performance the information agreed to NZTE’s statement of uncertainty exists, we are required to draw information that are fairly presented and comply performance expectations and relevant Estimates and attention in our auditor’s report to the related In connection with our audit of the financial with generally accepted accounting practice in Supplementary Estimates of Appropriations 2018/19. disclosures in the financial statements and the statements and the performance information, our performance information or, if such disclosures responsibility is to read the other information. In doing New Zealand. The Board is responsible for such We did not evaluate the security and controls over the are inadequate, to modify our opinion. Our so, we consider whether the other information is internal control as it determines is necessary to enable electronic publication of the financial statements and conclusions are based on the audit evidence materially inconsistent with the financial statements it to prepare financial statements and performance the performance information. information that are free from material misstatement, obtained up to the date of our auditor’s report. and the performance information or our knowledge whether due to fraud or error. As part of an audit in accordance with the Auditor- However, future events or conditions may cause obtained in the audit, or otherwise appears to be General’s Auditing Standards, we exercise professional NZTE to cease to continue as a going concern. materially misstated. If, based on our work, we In preparing the financial statements and the judgement and maintain professional scepticism conclude that there is a material misstatement of this • We evaluate the overall presentation, structure performance information, the Board is responsible throughout the audit. Also: other information, we are required to report that fact. and content of the financial statements and on behalf of NZTE for assessing NZTE’s ability to We have nothing to report in this regard. continue as a going concern. The Board is also • We identify and assess the risks of material the performance information, including the responsible for disclosing, as applicable, matters misstatement of the financial statements and the disclosures, and whether the financial statements Independence performance information, whether due to fraud and the performance information represent the related to going concern and using the going concern We are independent of NZTE in accordance with or error, design and perform audit procedures underlying transactions and events in a manner basis of accounting, unless there is an intention to the independence requirements of the Auditor- responsive to those risks, and obtain audit that achieves fair presentation. merge or to terminate the activities of NZTE, or there General’s Auditing Standards, which incorporate evidence that is sufficient and appropriate to is no realistic alternative but to do so. • We obtain sufficient appropriate audit evidence the independence requirements of Professional provide a basis for our opinion. The risk of not regarding the financial statements and the and Ethical Standard 1 (Revised): Code of Ethics for The Board’s responsibilities arise from the Crown detecting a material misstatement resulting from performance information of the entities or Assurance Practitioners issued by the New Zealand Entities Act 2004 and the Public Finance Act 1989. fraud is higher than for one resulting from error, business activities within NZTE to express an Auditing and Assurance Standards Board. as fraud may involve collusion, forgery, intentional Responsibilities of the auditor for the opinion on the consolidated financial statements omissions, misrepresentations, or the override of Other than the audit, we have no relationship with or audit of the financial statements and and the consolidated performance information. internal control. interests in NZTE. the performance information We are responsible for the direction, supervision Our objectives are to obtain reasonable assurance • We obtain an understanding of internal and performance of the Group audit. We remain about whether the financial statements and the control relevant to the audit in order to design solely responsible for our audit opinion. audit procedures that are appropriate in the performance information, as a whole, are free from We communicate with the Board regarding, among circumstances, but not for the purpose of material misstatement, whether due to fraud or other matters, the planned scope and timing of the expressing an opinion on the effectiveness of error, and to issue an auditor’s report that includes audit and significant audit findings, including any Ajay Sharma NZTE’s internal control. our opinion. significant deficiencies in internal control that we Audit New Zealand Reasonable assurance is a high level of assurance, • We evaluate the appropriateness of accounting identify during our audit. On behalf of the Auditor-General policies used and the reasonableness of but is not a guarantee that an audit carried out in Our responsibilities arise from the Public Audit Wellington, New Zealand accounting estimates and related disclosures accordance with the Auditor-General’s Auditing Act 2001. Standards will always detect a material misstatement made by the Board.

96 NZTE Annual Report 2018/19 97 OTHER STATUTORY REPORTING REQUIREMENTS

Ministerial directions 2018/19 2017/18 (Sections 114 and 115 Crown Entities Act 2004) Band New Zealand Based International Based New Zealand Based International Based No directions were given to NZTE in writing by a Minister under any enactment during the year ended 390,000+ 1 30 June 2019. 400,000+ 1 1 410,000+ 2 Enforcement of Acts 420,000+ 1 1 1 (Section 20(3) Crown Entities Act 2004) 430,000+ 1 1 No natural person acts were enforced against NZTE in reliance on section 20 of the Crown Entities Act 2004 440,000+ 1 during the year ended 30 June 2018. 450,000+ 1 460,000+ 1 Employee remuneration 470,000+ 1 1 The table below shows the number of NZTE employees who received remuneration and/or benefits 490,000+ 1 (excluding redundancy and cessation payments) of $100,000 or more during the year ended 30 June 2019. 660,000+ 1 1 Total 229 154 200 140 2018/19 2017/18 The total remuneration paid to locally engaged employees in our international offices has been converted Band New Zealand Based International Based New Zealand Based International Based to New Zealand dollars, based on the average exchange rate during the year ended 30 June 2019.

100,000+ 32 18 26 15 During the year ended 30 June 2019, cessation payments totalling $275,447 were paid to 13 employees. 110,000+ 42 15 29 17 120,000+ 26 13 28 17 This compares with cessation payments totalling $1,672,820 paid to 37 employees during the year ended 130,000+ 20 15 26 8 30 June 2018. 140,000+ 22 7 21 8 150,000+ 13 8 14 9 160,000+ 18 6 14 4 170,000+ 11 7 9 7 180,000+ 6 12 4 9 190,000+ 7 8 3 3 200,000+ 2 5 2 3 210,000+ 7 3 4 2 220,000+ 2 2 3 230,000+ 3 3 3 240,000+ 2 1 2 3 250,000+ 1 3 3 2 260,000+ 4 1 3 270,000+ 1 4 280,000+ 5 3 290,000+ 2 2 300,000+ 1 3 1 2 310,000+ 1 1 1 3 320,000+ 4 5 330,000+ 1 340,000+ 3 2 1 350,000+ 2 1 1 360,000+ 3 1 370,000+ 1 1 2 380,000+ 1

98 NZTE Annual Report 2018/19 99 GLOSSARY

Ascent NZTE’s challenge improvement programme that ran from December 2015 He kai kei aku ringa The Crown-Māori Partnership for Economic Development. to June 2018. International Growth Fund A service for our Focus700 and coalition customers. The International Build and Start customers Foundation customers who we work with in a less intensive manner than (IGF) Growth Fund co-invests in projects that will have a positive impact on the our Focus700 customers. New Zealand economy. Characters The way we want to work together across our One Global Team, and with International Growth A result achieved in market with the assistance of NZTE that is not a sale, our customers: Ambition Drives Us, Adventure Teaches Us, Honesty Frees Outcomes (IGOs) but provides a significant platform for future international growth. Us, Trust Binds Us, and Manaaki Is Us. International Revenue Percentage change in customer international revenue from one year to Coalition A group of companies working together to go to market in a co-ordinated Growth the next. approach. NZTE has a team to support coalitions, as we believe that The Investment Way Our operating model for investment customers. working together allows companies to scale bigger and faster. Kāhu NZTE’s new improvement programme, implemented in July 2018. Co-funding An activity that supports firms or groups of firms where the costs of the activity are shared between NZTE and the participants. This may include Kia Kaha programme NZTE's Māori cultural competency programme. grant programmes where NZTE supports firms with funding but requires Know-how Our collective insight, wisdom and experience of growing participants to also invest in delivering the activity. companies internationally. The Customer Way The overarching approach we use for how we work with trade customers: Know-who Our network of committed people in New Zealand and around the world, consistent, collaborative problem-solving engagement that adds value and who we can call upon in our customers’ interests. accelerates international growth. Our Customer Way approach describes Net Promoter Score (NPS) A widely used customer loyalty or satisfaction metric used to measure three main phases of engagement: Discovery; Planning; and Performing. success across our services. It is an index ranging from -100 to 100 that Diversity and inclusion Our diversity and inclusion strategy has three main goals: to make NZTE measures the willingness of customers to recommend a company’s strategy more relevant to Māori, to get more women into leadership roles, and to products or services to others. achieve overall inclusion of all cultures. NZ Inc New Zealand’s internationally-facing agencies. NZTE works closely Export Essentials Service A service for NZTE customers to help them understand the basics with them, in order to work towards building a more competitive and of exporting. internationally connected economy. Export deals A deal is a sale of goods and services with a dollar value over a defined NZTE Board NZTE’s board of directors who are responsible for providing governance time period, achieved with the assistance of NZTE. over our strategy, future operating intentions, and who monitor The Fine Print NZTE’s internal guidelines which provide a simple, clear framework of the organisational performance. principles we apply to make decisions, the fixed rules for everyone, and potential Direct Economic pDEI is the forecast return to the economy through increased profits, who can make decisions. Impact (pDEI) wages and supplier spend. Focus700 Around 700 NZTE customers who are managed by a Customer Manager Regional Business Partner The network of 14 Regional Business Partners provide training vouchers, and who have Growth Plans. These customers have high growth potential Network information, connections and small business mentoring services to and already have some experience and scale in exporting, but are not businesses throughout New Zealand. We fund this jointly with big enough to be self-sufficient in a particular market. By assisting these Callaghan Innovation. customers, we believe this is where we will deliver the best return for The Strategic Investment Fund co-funds feasibility studies. These studies New Zealand. Strategic Investment Fund are used to develop and present the business case for investment in G2G Our joint venture with MFAT that takes New Zealand government skills, New Zealand. systems and know-how to market on a commercial basis. The phrase G2G NZTE’s Māori name. Taurapa means the stern post on the back of the is often used interchangeably with ‘Government Know-How’. Te Taurapa Tūhono traditional Māori waka, or canoe, that helps to stabilise and guide the boat. Game Plans A plan that outlines the international market or regional strategy for the Tūhono is a term that represents connections to people and an ability to customer (the opportunities/challenges), and the objectives and actions to build relationships. address this strategy.

100 NZTE Annual Report 2018/19 101