Annual Report 2017

17ANNUAL REPORT 2017 p p p p p p 02 04 07 08 32 50 About Us Highlights Chairman’s CEO’s Year Sustainability, Directors’ Introduction In Review Community + + Remuneration People Reports Operating + Financial Review 20 Consolidated Financial Statements 78 Annual General Meeting Group Strategy 22 Executive Team 44 The 54th Annual General Meeting of the Company will be held at 11am on 26 October Group and Divisional Results 24 Directors’ Profiles 48 2017 at the Blackmores Campus, 20 Jubilee Avenue, Warriewood NSW 2102. Financial Review 26 Auditor’s Independence Declaration 72 Cover image: Fiona Yeo, Assistant Marketing Operating Review 28 Independent Auditor’s Report 73 Manger, Export Sales. Fiona is profiled in this Group Risks 30 Directors’ Declaration 77 report on page 42. Additional Information 118 Company Information 119 OUR ANNUAL REPORT 2017 BLACKMORES ANNUAL REPORT 2017 REPORT ANNUAL BLACKMORES OUR OUR #4 STRATEGIC VALUES PURPOSE PRIORITIES Blackmores’ values are at Blackmores improves Blackmores is committed the heart of our business. people’s lives by delivering to superior business These values, known as the world’s best natural performance. Our strategic PIRLS, are both behavioural health solutions. We direction is focused on and aspirational. They achieve this by translating delivering growth and underpin our work practices our unrivalled heritage and continuous improvement to and are supported by legal knowledge into innovative, maintain Blackmores’ leading policies and procedures. quality branded healthcare position in the industry and solutions that work. to achieve ongoing success Passion for Natural Health for our company, our people Integrity and our shareholders. Respect Leadership #1 Consumer Centricity Social Responsibility #2 Asia Growth #3 Product Leadership #4 Operational Effectiveness THE 2017 ANNUAL REPORT OF BLACKMORES LIMITED PROVIDES INFORMATION ON THE ORGANISATION AND COMPANY PERFORMANCE FOR THE YEAR 1 JULY 2016 TO 30 JUNE 2017. 1 BLACKMORES ANNUAL REPORT 2017 REPORT ANNUAL BLACKMORES Blackmores is Australia’s leading natural health company. Founded by visionary naturopath Maurice Blackmore in 1932, Blackmores combines traditional naturopathic expertise with scientific research to help people achieve optimal health and wellbeing. Committed to developing innovative natural health products and services of the highest quality, Blackmores reaches consumers in 17 markets around the world. supporting charitable with a market capitalisation community initiatives. of $1.5 billion. The Group Industry leaders for employs 1,000 people 85 years, Blackmores across Asia-Pacific and ABOUTBlackmores’ extensive established the includes BioCeuticals, range of vitamins, herbal Blackmores Institute in Australia’s leading and mineral supplements, 2012 to drive an evidence- practitioner range; Pure and nutritional foods uses based approach to natural Animal Wellbeing, natural premium ingredients from health through education, health products for pets; around the world, with research and professional and Global Therapeutics, products made to strict advisory services. For Australia’s leading provider Australian manufacturing health professionals of Chinese herbal medicine. standards and rigorous and consumers alike, Blackmores’ teams in quality checks. Blackmores Blackmores is a trusted Asia comprise sales and respects the innate link source of natural health marketing personnel as well between healthy people advice. as healthcare professionals. and a healthy planet, With a strong The Blackmores Campus implementing sustainable naturopathic heritage, head office and production packaging and waste- Blackmores is an ASX 200 facility is located on 02 reduction practices and publicly-listed company Sydney’s Northern Beaches. OUR BRANDS ISOWHEY BIOCEUTICALS BLACKMORES PURE ANIMAL FUSION ORIENTAL WELLBEING HEALTH BOTANICALS 2 BLACKMORES ANNUAL REPORT 2017 REPORT ANNUAL BLACKMORES KAZAKHSTAN MONGOLIA KOREA USA JAPAN CHINA TAIWAN HONG KONG MACAU VIETNAM GLOBAL FOOTPRINT CAMBODIA THAILAND MALAYSIA Operations and Markets COMPANY HEADQUARTERS, OPERATIONS AND SIGNIFICANT REVENUES OPERATIONS AND SIGNIFICANT SINGAPORE INDONESIA REVENUE (REGIONAL HEADQUARTERS) JOINT VENTURE OPERATIONS OR OPERATIONS AND EMERGING MARKETS BRAND PRESENCE AUSTRALIA NEW ZEALAND 3 BLACKMORES ANNUAL REPORT 2017 REPORT ANNUAL BLACKMORES VITAMIN AND SUPPLEMENT NO. COMPANY IN AUSTRALIA – 1 BLACKMORES HIGHLIGHTS NO. PRACTITIONER BRAND 1 – BIOCEUTICALS HEALTH FOOD STORE 04 NO. BRAND – FUSION HEALTH 1 CONSECUTIVE YEARS AS AUSTRALIA’S MOST TRUSTED BRAND IN VITAMINS & 9 SUPPLEMENTS NEW PRODUCTS LAUNCHED 110 ACROSS THE GROUP MEMBERS ACROSS ONLINE AND SOCIAL MEDIA PLATFORMS MILLION1.9 ACROSS THE GROUP EDUCATION TOUCHPOINTS ACROSS THE GROUP MILLION1.2 RELEASED INAUGURAL ST BLACKMORES GROUP 1 SUSTAINABILITY REPORT 4 BLACKMORES ANNUAL REPORT 2017 REPORT ANNUAL BLACKMORES HIGHLIGHTS NET PROFIT AFTER TAX 58 $MILLION Richard Henfrey, Blackmores’ newly appointed Chief Executive Officer. 5 BLACKMORES ANNUAL REPORT 2017 REPORT ANNUAL BLACKMORES MARCUS BLACKMORE In February I announced to shareholders that I was taking a sabbatical after 50 years in the business to give me the opportunity to ‘clean out the garage’, metaphorically speaking. Over the years we accumulate so much – some of it invaluable relics of our rich history and some of it junk – and occasionally it’s good to review what we have, so we can focus on our vision for the future and what we will need to get us there. This is also true for increasing amount of time agent with a focus on better prepared to grasp Blackmores. We have in recent years, including business transformation the countless opportunities refocused on the pillars of our invaluable relationships and driving a performance that we have before us as growth for our business – with governments, culture. She has nurtured the demand for high quality our unwavering values, a regulators and business our people and our values natural health solutions strong purpose and a clear partners in Asia. and enhanced our strategy continues to grow. strategy – and as a result As the financial year enabling Blackmores to As a substantial our company has stronger drew to a close, we expand our brand portfolio shareholder, I share the foundations. announced the news that and our geographic disappointment of our My sabbatical was an our CEO of the past nine footprint. She has served investors that this year’s opportunity for Stephen years, Christine Holgate, as a wonderful role model results have not matched Chapman to step into the would be moving on to for our staff and for women last year’s exceptional role of Chairman, after take on new challenges as in corporate life. She profits; however, I am more than 20 years serving the CEO of Australia Post. leaves Blackmores with our confident about the on the Board, where he While this is disappointing very best wishes and our future opportunities for did an outstanding job. I’m for me personally, deepest gratitude. Blackmores, knowing pleased he will continue to Christine leaves behind I am looking forward that our ‘house is in share his extensive business an exceptionally capable to working with Richard order’ and I thank you expertise and strong executive team and Henfrey in his new role as for your support. corporate governance emerging opportunities Chief Executive Officer of experience as he continues that will yield continued Blackmores. The best of health in the role. growth for our business. Our business has had This will enable me to I would like to thank its challenges in the past devote more to the areas Christine for the wonderful 12 months, and we have of the business where I contribution she has made. met them standing up and have been spending an She has been a change are stronger for it. We are Marcus C. Blackmore AM 6 BLACKMORES ANNUAL REPORT 2017 REPORT ANNUAL BLACKMORES CHAIRMAN’S INTRODUCTION Health checks are part of the vernacular at Blackmores. Blackmores Institute and BioCeuticals’ innovation teams are constantly investigating the latest in diagnostics to better understand the markers of inflammation or the indicators of compromised wellbeing. Boards take the same The board has declared and the continuation of quality of goods approach when looking a final dividend of 140 cents our growth strategy. He manufactured in Australia. at the health of a business, per share making the total understands the natural Our commitment assessing the markers dividend for the 2017 year healthcare industry, to the communities in and indicators of how 270 cents per share. We has demonstrated his which we operate and to a company is tracking believe this is consistent management capability and innovation was remarkably and how robust its with the profit for the year, he met all of the Board’s demonstrated this year underpinnings are to our sound financial criteria to become the next when Marcus and Caroline deliver the strategy. position and our leader of our business. Blackmore, through Though the remarkable confidence in the future. Asia continues to be their foundation, made a momentum of recent Leadership has also important to our vision significant contribution years was broken by a been a theme this year and therefore it was very to support research at disappointing first quarter with the Board initiating significant that Blackmores the National Institute of result, I’m pleased with the an evaluation process was appointed in July in a Complementary Medicine. progress we have made of internal and external key leadership

Load more