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Opera Australia Annual Report 2012 Vision

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Opera Australia Annual Report 2012 Vision OPERA AUSTRALIA ANNUAL REPORT 2012 VISION Enriching Australia’s cultural life with exceptional opera. MISSION To present opera that excites audiences and sustains and develops the art form. CORPORATE GOVERNANCE Opera Australia is a Company Limited by Guarantee. Its governance is the responsibility of its Board of Directors, who are elected by its Members. The Board is responsible for the overall strategic direction of the Company and its ongoing viability. The Company’s direction and activities are underpinned by its agreed Values: Pursuit of excellence in everything we do Respect for knowledge, imagination and creative ambition Honesty and integrity in all our dealings Fairness Sustainability Encouragement of professional development Respect and compassion for people Safe working environment The Board of Directors of Opera Australia is also the Board of Directors of the Australian Opera and Ballet Orchestra Limited, a wholly-owned subsidiary company of Opera Australia. The Board of Directors delegates to the Chief Executive, and through him to the executive team, authority to manage, within the parameters set by the Board, the Company’s activities. The work of the Board is supported by: The Audit and Risk Committee, which comprises all Directors. The Chief Executive and Finance Director attend its meetings, and the Company’s Auditors meet with it regularly to report on their processes and findings. The Audit and Risk Committee meets before each Board meeting, and otherwise as required, and is responsible for closely scrutinising the Company’s management systems, financial processes, risk management practices and the financial prudence of its strategies. The Remuneration Sub-Committee, which consists of the Chairman of the Board, the Chairman of the Audit and Risk Committee and one other Director. The Human Resources Director attends its meetings when required. The Remuneration Sub-Committee meets as necessary, and is responsible for overseeing the Company’s remuneration policy, including the remuneration of the Chief Executive and the executive team. CONTENTS Vision, Mission, Corporate Governance 2 Chairman's Report 5 General Manager and Artistic Director's Report 11 Our People 24 Artists - 2012 25 Australian Opera and Ballet Orchestra Report 27 Patron Program 30 Opera Australia Capital Fund 32 Opera Australia Capital Fund - Chairman's Report 33 Opera Australia Activities 36 Opera Australia Salutes its 2012 Partners 39 Photographs Jeff Busby, Branco Gaica, Ben Symons and Lisa Tomasetti CHAIRMAN'S REPORT Dr Ziggy Switkowski As the largest performing arts organisation in Australia supported by substantial federal and state government funding, Opera Australia is required to produce a five-year strategic plan and report against its milestones as agreed with the Major Performing Arts Board, one of seven boards within the Australia Council. This process is good corporate governance which imposes certain disciplines upon the Company in terms of financial decisions, pursuit of artistic vibrancy, risk management, and measurement and benchmarking of key performance indicators. The late management guru, Peter Drucker, always emphasised that ‘strategy is a sense of direction around which you improvise', a definition tailor-made for the arts. Our new business model remains such a work-in-progress. Our latest report makes the following points. In the last two years Opera Australia has undergone a major artistic and operational review which led to significant growth in its activities. The Company has focused on creating new content, broadening the audience for its work and, most importantly, deepening the level of engagement with the Australian public. In 2012, the first full year of the new business model, many initial milestones have been met and there is growing confidence in the decision to expand activities and diversify programming. The early successes of the first Handa Andrew Jones as Papageno The Magic Flute 5 ANNUAL REPORT 2012 CHAIRMAN'S REPORT CONTINUED Opera on Sydney Harbour, the national tour of South Pacific, our community partnerships and the overwhelming interest in the 2013 Melbourne Ring support our confidence in the validity of our strategy. During the flurry of new activities, the Company's mainstage seasons in Melbourne and Sydney have continued with new productions of The Magic Flute, The Marriage of Figaro, Die tote Stadt, Lucia di Lammermoor and Salome. Oz Opera commenced its biennual regional tour with a new production of Don Giovanni and the Company has co-produced two presentations in Asia – Madama Butterfly in Taipei and Don Pasquale in Tokyo. The new business model reinforces that mainstage seasons are fundamental to our role as the national opera company but forecasts that the broadening of our activities will not diminish. Few dispute that Opera Australia is already one of the busiest and most diversified opera companies in the world with 227 mainstage performances in Melbourne and Sydney this past year in addition to an outreach program which extends to schools, regional centres and other communities without ready access to the high arts. The Opera Australia family includes ensemble principal singers, choristers, and orchestral musicians, in addition to specialist staff in technical, stage, wardrobe and workshop, music and artistic support as well as marketing and administration, requiring over 1000 full-time and casual staff through the year. The 2012 year saw our total income lift sharply by $31m to $100m. Operating profits before consolidation of the Opera Australia Capital Fund (OACF) returns were $665,000 continuing the recovery from the down years post the Global Financial Crisis. With improvement in investment markets and early contributions from a major fund-raising campaign, the OACF produced a sharply higher return of $1.4m after the payment of a $400k dividend to the opera company – consistent with prior years and gratefully received. At calendar year end, OACF net assets stood at $10.5m. Our consolidated result saw a net profit of $2.07m. The operating results is a satisfactory outcome for the first full year of our new business model and the Board commends management for delivering good numbers in this past year of immense change. Our year end cash position stood at $8.5m – anomalously high and reflecting timing of cash flows associated with advance ticket sales and donations especially for the Melbourne Ring. The Company approaches 2013 with a sturdy balance sheet. The executive architects of the strategy and business plan for Opera Australia were the former CEO, Adrian Collette, the Artistic Director, Lyndon Terracini, and the acting General Manager and former CFO, Narelle Beattie. After 16 years leading Opera Australia, Adrian Collette stepped down at the end of the year and returned to Melbourne. His timing was unwelcome, understandable and exquisite. He has left the Company in rude health, confident, and pointed at the stars. The Board has thanked Adrian at a number of functions and I record our respect, appreciation and affection for our former CEO again in this Report. Following an international search, a new CEO has been appointed. Craig Hassall, whose early career included service at our company, will return from London to take up his role. In the meantime, Narelle Beattie and Lyndon Terracini continue to lead the organisation with the assistance of the strong executive team. The Company continues to benefit from the steadfast support of the federal government through the demanding economic cycle and we are greatly appreciative of the funding they make available to the opera company. We also value the quality of our relationship and interactions with the minister and his staff. The main government agencies: Major Performing Arts Board of the Australia Council, Arts NSW and Destination NSW, Arts Victoria and Victorian Major Events Company, continue as trusted and valued partners. 7 INCOME AND EXPENDITURE COMPONENTS 2012 INCOME 74% ($73.7 m) Box office, earned income and contributions 26% ($26.4 m) Government grants EXPENDITURE 57% ($56.1 m) Staff and employment expenses 14% ($14.1 m) Venue, transport and travel costs 18% ($17.3 m) Depreciation, other production and overhead costs 11% ($11.2 m) Marketing and promotion CHAIRMAN'S REPORT CONTINUED We’re always heartened and inspired by the support of our many benefactors. Corporate sponsors provide critical financial grants while injecting a necessary commercial discipline into our partnerships. Their support has not wavered. Individuals have continued their extraordinary philanthropy and the opera company is immensely grateful for their generosity and personal engagement. This past year has seen further changes to our board as part of our succession planning process. Our colleague, Richard Owens OAM, stepped down after serving 17 years on the OA Board. Few key decisions or dramatic moments in our history weren't polished by Richard's attention and commercial inputs and we are grateful for his many contributions. Two new board members are joining us: David Mortimer and Mary Waldron. They will strengthen our financial and risk management processes while bringing experiences in the performing arts, sponsorship and public policy. A lot has once again been asked of the Company's board members. Boards typically do the following: hire or fire the CEO, help shape the strategy, oversee management's execution of an approved plan, and ensure compliance to the rules and values. In 2012, we endorsed a new strategy and began the (ultimately successful) search for a new CEO. The other duties weren't neglected, however, but made easier by a very capable management team. I am very grateful for the efforts of all my colleagues on the Board, for their expert views and collegial spirit, and shared enthusiasm for the job. Under the chairmanship of Rupert Myer, the Opera Australia Capital Fund embarked upon a significant capital raising campaign aimed at strengthening the Company's capital base, a critical step as the risk profile associated with our innovative plans inevitably increases. Unsurprisingly, our patrons and benefactors have responded generously and we expect to reach key targets in the year ahead.
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