Dynamic business dec2015

DYNAMIC BUSINESS Exclusive Report: Deloitte TOP 200 Awards

Wowing the judges Meteoric growth sees Ebos take the award for Company of the Year, while Air New Zealand’s Christopher Luxon and Rob McDonald are honoured for their individual performances

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ast year was an iconic one for the Deloitte Top 200 Awards. Not only was a quarter century of Kiwi business success celebrated, but NZME took the reins as media partner and spurred the awards night to a higher level.

This year the top honour was presented to Ebos Group, which has progressed from a standout performer to the standout winner among the Top 200 companies.

Following the 2013 acquisition of Australian pharmaceuticals giant Symbion, Ebos Group has gone from strength to strength.

The judges remarked on the company’s “meteoric growth” which saw revenue increase from around $1.5 billion before the Symbion transaction to $6.1 billion this year, making it one of New Zealand’s largest turnover companies.

Ebos has also delivered sustained value to shareholders. Over the past 25 years, it has posted an average annual average return of 25.9 per cent.

Air New Zealand was the deserving recipient of the top company award in 2014.

This year, it was the company’s best people who were recognised on awards night, with Christopher Luxon taking out Chief Executive of the Year and Rob McDonald awarded Chief Financial Officer of the Year — the first time this category has been recognised in the awards.

There were plenty of reasons for Dame Suzie Moncrieff to say “wow” on awards night, as the World of Wearable Art pioneer was recognised for a lifetime of service to the business and creative communities as the 2015 Visionary Leader.

Joan Withers has long been a beacon for aspiring women business leaders and was recognised as Chairperson of the Year for her leadership at Mighty River Power and

Television New Zealand.

The Diversity Leader award, presented for the first time last year, went this year to Westpac, commended for its commitment to “a broad and organisation-wide diversity and inclusion strategy” through which it set and met demanding targets.

Tourism Holdings took out the top spot for best growth strategy — and for good reason too.

Though this year’s revenue increase was a modest 4 per cent, net profitability is up 81 per cent, efficiency is improving and the asset base of the company continues to expand.

New Zealand’s lone refining company, the Marsden Point-based Refining NZ took out the award for Most Improved Performance — bouncing back from consecutive years of falling profits to get firmly back in the black — a 302.4 per cent uptick in profits being the primary catalyst.

The NZ Superannuation Fund won the excellence in governance category and Craig West was young executive of the year.

Away from the glam-

our of the Top 200 Awards are the underlying numbers which the judging panel: Fran O’Sullivan (convenor), Dame Alison Paterson, Cathy Quinn, Neil Paviour-Smith, Sandy Maier and Jonathan Mason tap as they assess the financial performance of our top companies and decide winners and finalists for the 10 award categories.

Presented in full at the rear of Dynamic Business 2015 are the primary financial figures from our largest companies — showing their revenue, profitability, efficiency and more.

The numbers offer an insight into how the biggest companies in New Zealand operate and are accompanied with explanations and insight from the Herald’s team of business reporters.

Last year was a banner year for a significant proportion of Top 200 companies. This year has again been positive — but the growth trajectory has slowed.

Revenues grew by 1.1 per cent from $175.7 billion to $177.5 billion — accounting for nearly three-quarters of New Zealand’s GDP for an idea of scale.

Eight new companies made their debut on the Top 200 list this year — the most highprofile was home-grown cloud accounting firm Xero. It took the biggest proportional revenue increase for all Top 200 companies to break into the table.

But the $100 million barrier has now firmly been breached for Xero and it will expect to rapidly ascend the ranks in the coming years.

Following on from a relatively pedestrian

Last year was a banner year for a significant proportion of Top 200 companies. This year has again been positive — but the growth trajectory has slowed.

2014, our financial institutions posted marquee performances across the board, improving revenues by 8.5 per cent while growing the underlying asset bases of those firms by 6.2 per cent.

ANZ proved that bigger is better in 2015 — the star performer among the Top 30 Financial Institutions.

Sitting atop the financial rankings once again, ANZ grew its asset base by $4.1 billion while improving profit by almost 25 per cent to $1.72 billion.

Picture / World of Wearable Art TM

© Deloitte 2015

www.deloitte.co.nz

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nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Inside Dynamic Business Section One: The New Conversation

See the finalists

3: Thomas Pippos 4: Felicity Evans 5: Bill Bennett Section Two: Exclusive Report 7: Company of the Year Winner: Ebos Group 9: Chief Executive of the Year Winner: Christopher Luxon, Air New Zealand

Liam Dann

Holly Ryan

15: Young Executive of the Year Craig West, Downer NZ 17: Diversity Leader Westpac

10: Chief Financial Officer of the Year Winner: Rob McDonald, Air New Zealand

18: Visionary Leader Dame Suzie Moncrieff

11: Chairperson of the Year Joan Withers, Mighty River Power/TVNZ

Section Three: Business Transformation Leading NZ companies talk about crucial change issues

12: Excellence in Governance NZ Superannuation Fund 13: Best Growth Strategy Tourism Holdings 14: Most Improved Performance Refining NZ

Section Four: Top 200 Tables 26-34 Alexander Speirs and Greg Hall unpack the 2015 Top 200 Tables: Top Profit makers, Top Loss makers; Winners and Losers and more.

Meet the Deloitte Top 200 CEO of the year, Air NZ’s Christopher Luxon as he chats about leadership with Business Editor Liam Dann in our online video series. The series also includes finalists Jacki Johnson of IAG and Z Energy’s Mike Bennetts.

The three Young Executive of the Year finalists: Craig West of Downer NZ, M2 Group’s Taryn Hamilton and Wellington Zoo’s Daniel Warsaw feature in interviews with business reporter Holly Ryan.

Also in the series, Deloitte CEO Thomas Pippos discusses the awards theme — the New Conversation — with Liam Dann.

All videos are available to view at www.busnessherald.co.nz

Dynamic Business 2015

NZME: Editorial Director — Business Fran O’Sullivan Writers: Liam Dann (Business Herald Editor), Christopher Adams, Bill Bennett, Greg Hall, Tamsyn Parker, Holly Ryan, Graham Skeller.n Data Analysis: Alexander Speirs, Greg Hall.

Subeditor: Isobel Marriner.

Advertising: Nathan Laing, Nancy Dudley.

Deloitte Team Top 200 Project Partner: Andrew Hirst Head of Marketing and Communications: Cassandra Worrall Data Project Lead: Kim Fisher Data Gathering and Analysis: Aalia Bahadur, Perilla Peter, Dhwanee Patel, Tarun Saggar Maori List: Leon Wijohn, Mark Lash, Miriama Tito Deloitte Top 200 Awards Event Group Events Director: Ash Lomberg Event Director: Sarah D’Audney Event Producer: Elizabeth Dale, Kirsty Raubenheimer, Kate Carter Administration: Lucy Campbell Public Relations: Anna Jobsz Graphic Designer: Ashleigh van Graan, Justine Black Consumer Marketing: Laura Lynskey Online: nzherald.co.nz www.top200.co.nz

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The New Conversation

Defying gravity with adaptivity The new conversation is a modern version of a tried and tested business theme, writes Thomas Pippos

T

his year’s Top 200 theme, “the new conversation,” is a reflection of the changing nature of business and in particular the way in which businesses interact with customers, employees and communities. While “new” in some respects, the conversation also reflects some age-old business themes that have simply evolved over time. What’s often just different is the speed of change that can drive these conversations today and the speed that businesses can succeed or fail if they fall in and out of favour with an increasingly connected and involved customer base.

A key ingredient of the new conversation is the ability to adapt quickly.

Globally recognised management expert Tom Peters puts the ability to adapt as arguably Goal / Skill # 1 in these perilous and fast changing times. Moreover, he has commented that the bones of those old and young who failed to adapt litter the landscape. At a conceptual level this is neither surprising nor new, whether in business or elsewhere.

A related theme to that of adaptation is one of resilience. In fact, a notable trait of many of our largest companies has been just that — the staying power of those in the Top 200. Recognising the evolution of corporate groups over time, it might be a surprise to some that 26 years ago at the inception of the Top 200 Awards many of the then largest

companies on the list (by revenue) continue to be represented today around the top of the list.

Relevant then and now are the current incarnations of Fletcher Challenge, the Australasian Banks, Telecom, Air New Zealand, the offshoots of the Electricity Corporation and what is now Fonterra. The comment around “current incarnations” is an important one as many of our largest organisations today are living evidence of the evolution of brands and companies.

In fact, this level of resilience in our biggest companies is highly desirable given the relative importance of the Top 200 organisations to the country has continued. They remain the backbone of our economy, if not more so now, as they did over 25 years ago.

The adaptability and resulting resilience of some of our largest organisations is in some respects not that surprising as it flows from the adaptive skills of empowered and talented leaders, held to task through their boards and shareholders — with many of these stakeholders recognised in the various Top 200 awards.

Adaptability and resilience is not however to be taken for granted. Businesses don’t always defy gravity, particularly if they are exposed to structural reform that directly impacts on them. Noticeable omissions today from the 1989 Top 200 list are those that fell

from favour following the structural reform of the share market in 1987.

These include Elders Resources NZFP, Chase Corp, Brierley Investments and NZI Corporation, although aspects of their businesses continue today in different guises.

But for those that fail there are also those that succeed. The upper echelons of our Top 200 organisations are being replenished by companies that have had a prolonged period of focused growth — those who have adapted to the market and succeeded accordingly.

Examples include Fulton Hogan, which has moved its ranking over the last 26 years from 95th to 12th place. Other examples of noticeable corporate movers include Ebos Group, The Warehouse, Mainfreight and Zespri who respectively now rank 5th, 16th, 22nd and 27th on the list.

The new conversation is therefore in some respects quite “old” and a modern permutation of a well-worn theme. For many it’s more about the new opportunities that the new conversation creates than the threats it presents. Ultimately, it means that we live in an exciting and dynamic time to be in business; with the Top 200 Awards looking to recognise and encourage those that succeed — those that adapt to the market and win accordingly. ● Thomas Pippos is the chief executive of Deloitte New Zealand

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nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

The New Conversation

Notable women need to be noticed I

Felicity Evans

t’s important for businesses to reflect the makeup of their customer base and the communities they serve. But there’s also a strong case for taking a lead.

Women may be under-represented in senior roles, but when it comes to being seen and heard it can almost seem like they’re not there at all.

If we really want more women in leadership positions, it’s time for those who are already there to stand up and be seen — as role models whose achievements inspire girls from a young age to follow them.

We can’t bring about change if we don’t.

It’s clear that younger generations notice what others are doing. Research has shown the top career choices for young girls in New Zealand remain traditional female-dominated jobs like hairdressers, air hostesses and teachers.

Girls see women doing these jobs well and can imagine themselves doing the same. We owe it to them — perhaps they’re our sisters, daughters or nieces — to show them that women also hold leading positions in business, government and other fields. In reality, the number of women at senior levels in business has been steadily growing in recent years.

At ANZ, they include our Chief Financial Officer, Head of Marketing and Head of Products.

But many girls have grown up hardpressed to see or hear from many. The new reality is often not reflected in the business spokespeople they see in the media, though we know many women are approached for comment. Often they are reluctant or unavailable to

front for their organisation.

Even within their organisations, women can be reluctant to put themselves forward. Like many others, I let years pass without voicing my career

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ambition. I thought my good work would speak for itself. I had the experience and ability, and a keen desire to move to another level.

But we don’t work for mind-readers.

I needed to take that step, to actually voice my ambitions, demonstrating that I had career aspirations.

Once I did, change happened and career opportunities were given to me.

Today I’m in a position to support others in their ambitions, as the head of Human Resources at New Zealand’s largest bank.

Why do so many capable, highachieving women cringe at the idea of putting themselves forward, when a male colleague might jump at the opportunity? Here are five typical roadblocks many women leaders must overcome to stand up and be noticed: “I don’t want the limelight“ Building your profile is an important part of succeeding in business. It might not be in your job description, but you will do your career a big favour by building a marketable personal brand. And, you will be helping to promote your organisation, increasingly expected of senior leaders today.

“I don’t know enough“ It’s easy to think you need to be an encyclopaedia of knowledge on a topic before you can talk about it. I’ve seen women turn down an opportunity, then look on in frustration as someone less knowledgeable takes the limelight with their views.

The lesson is clear: back yourself.

Be honest about what you don’t know, but within what you do know you’re likely to have plenty of observations and insights to share. By sharing them you’ll reinforce, to yourself as well as others, that you’re an authority worth listening to.

“No one would care what I think“ If you know your subject and are an expert in your field then people will

be interested in your opinion. There will always be someone more qualified but that doesn’t make your opinion any less valid. Your opinion is actually what many other women are interested in.

“I’ve had a bad experience talking to media” If there are specific issues or inaccuracies point them out to the journalist. But try to stay focused on the big picture — journalists want to speak to you because they feel you’ll have something of value to say. They’re right, as long as you say it. Front up, try to build relationships and see your media activity as an opportunity to build your profile. Have a good photo you can share, so you don’t fret about how you look.

“I’m not on social media“ Well, you should be. Social media is where your customers are, it’s where many of your peers are and it’s where you’ll be noticed. I soon realised that by not being on social media I was missing out on an entire community.

The important conversations of the day are increasingly playing out online and as a modern business leader you need to be part of it. Open a Twitter account, tidy up your LinkedIn profile and get connected.

ANZ is determined to show some leadership of its own.

Earlier this year we launched our award-winning Notable Women programme which provides training and support to encourage senior female leaders to become more active at industry events, in the news media and on social media. ● Felicity Evans is General Manager Human Resources at ANZ New Zealand ● ANZ was a finalist for this year’s Diversity Leader. See p16-17

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The New Conversation

Learning to live with disruption E

very Deloitte Top 200 company faces some form of disruption. Many are planning their own disruptions. The goal is to get on the front foot; to be the hunter not the hunted.

Technology is the main disruptive force. Not just any technology, but specifically digital technology and the internet.

There have been technology-led disruptions in the past. The history of modern capitalism is all about navigating through those disruptions.

Schumpeter’s creative destruction dominated business thinking in the second half of the 20th century. The idea is that innovation keeps economies churning with newer technologies and businesses replacing older, redundant ones.

For most of modern history the pace of innovation has accelerated.

It has now reached the point where companies and industries no longer have time to bed down or respond to one wave of change before the next arrives. Modern change is continuous. Because there is no sign of it stopping, the only sensible strategy is not to resist, but to embrace disruption and ride the wave.

Technology changes everything.

When the first Deloitte Top 200 was announced 26 years ago in 1989, the internet was still embryonic. While America already had its first internet service providers, New Zealand’s internet was restricted to academia and hobbyists dabbling at the fringes.

Today modest homes enjoy better, faster digital connections than the links that connected the whole of New Zealand to the rest of the world in 1989. You can now have a faster connection on your mobile phone than scientists had back then.

Digital disruption means people live differently. We have changed

Sooner or later most serious business conversations address disruption. For longestablished companies in once-stable industries disruption can be a threat. But disruption is also an opportunity, finds Bill Bennett

Simon Moutter: waves of change sweeping through NZ business.

how we buy and consume products and services, how we keep up to date with news, friends and family. We now have new forms of entertainment and education. We go to new markets when we shop, they can be on the other side of the world.

Above all, technology has changed the way businesses operate. Today no significant business can survive without a strong online presence.

That’s where the action is. It’s also where the challenges and challengers come from.

Air New Zealand depends as much on its internet booking systems as it relies on airplanes. New Zealand’s primary producers can now sell their products direct to the vast Chinese market through the Alibaba online

market. Many of the fastest-selling and most lucrative products available today are virtual. They are made of electronics travelling through cables instead of atoms being shipped around the world in containers.

In a generation, business has moved from needing to invest huge capital sums in enterprise computer systems, to using pay-as-you-go cloud services. The shift from capex to opex has a profound effect on corporate finance. It also means small start-up companies can have access to the same resources as multinationals.

That means your next competitor is likely to be someone you’ve never heard of, possibly a start-up. Technology removes barriers to market entry. This, in turn, makes it possible for

a small team to form a new business from scratch, get it to global scale and take on the world. You can do that from New Zealand as easily from anywhere else. Just ask Xero, Vend or the Wynyard Group.

The best-known disruptors are international. Alibaba has come from nowhere to be the world’s largest retailer, yet it has no stores and holds no inventory. Almost overnight Airbnb became the world’s largest accommodation business without owning any real estate. In a couple of years Uber grew to become the world’s largest taxi company. It doesn’t own a single vehicle.

Disruption works both ways.

Established companies can find new markets or new ways to address markets. They may discover new ways to differentiate their business from competitors. Thanks to the disruptive technology they can move quickly and relatively cheaply to become a disruptor. Many companies are setting up start-up like internal departments with a brief to upset the apple cart.

That was one of the first things Simon Moutter did when he took over as Telecom managing director.

His digital ventures group operates outside the core operation and aims to sniff out opportunities.

When Moutter spoke to journalists at a function earlier this month he talked of the waves of change sweeping through New Zealand business and how his company has refocused and rebranded to meet the challenge

of digital disruption. The change is so profound that Telecom, one of the best known brands in New Zealand became Spark underlining its transformation to customers.

The message is clear: the company has moved on from being just a telephone network and now sells digital services.

Air New Zealand is hiring a chief digital officer. This is a senior level executive who will report direct to chief executive officer Christopher Luxon. The job will be to oversee the company’s digital transformation and to work to increase its digital presence. At Westpac Simon Pomeroy was the chief digital officer, but is now chief transformation officer. Elsewhere similar roles are described as the chief values officer.

These job titles are not just window-dressing, they reflect the importance attached to having senior executives dedicated to dealing with and then exploiting disruption. In the past these roles would have been responsible for keeping information systems working, in effect looking after a company’s digital plumbing. Today they are more business-focused.

One thing behind every company that successfully manages its digital transformation to become a disruptor and every disrupting start-up is a high tolerance for risk. The task requires innovative thought and a willingness to let go — there’s no place in the disruptive world for swimming to the side of the pool. Welcome to the brave new world.

tems with managed infrastructure.

In 2013 Spark paid almost $100 million to acquire Revera, New Zealand’s largest data centre specialist.

This was followed in 2014 when Spark bought Appserv, a business cloud specialist that, among other things, offered desktop-as-a-service. Miles says the company sold a number of non-core assets to raise the funds for the purchases. “Now we are the disruptor. Cloud is on a rapid growth path and we’re leading the way in New Zealand while the emphasis on managed infrastructure allows us to play to our strengths.”

To underline that rapid growth, Spark New Zealand’s first half results for 2015 noted Revera revenues grew 42 percent. Spark Digital’s overall revenue declined by three percent, in

part because of unwinding legacy IT service contracts, but EBITDA climbed 5.7 per cent overall.

Miles says emphasising cloud was a direct result of focusing on what Spark Digital’s customers wanted from their service provider. “We understand our customers are experts in their businesses.

“We can give them added value by investing more in having the right people work for us so they can manage customers’ infrastructure leaving their in-house technology staff to deal with strategic matters such as creating the right apps.”

Cloud plays a central role in most organisations’ digital transformation. It gives companies the agility they need to respond quickly to rapidly changing circumstances. When companies grow fast they can add capacity in minutes, or reconfigure as needed following acquisitions and divestments.

Another aspect of the digital transformation wave sweeping through industry is the explosion in the amount of data being captured as companies do business.

Miles says the growth in data generated is so high that if you look at a graph of data use, the time up until now would be almost a flat horizontal line.

From today on there’s a steep upward curve.

This has led to Spark’s other emerging digital service: big data and the advanced analytics needed to make sense of vast amounts of information.

This is handled by the company’s Qrious operation, for now still part of Spark Ventures, the company’s inhouse new business incubator.

Miles says Qrious is adding value to his customers by providing fresh insights that wouldn’t be possible using everyday techniques.

Our transformation story

Tim Miles tells Bill Bennett how Spark’s disruption experience can help its clients From the outside Telecom New Zealand’s decision to change its name to Spark was seen as a rebranding exercise. Internally, it was part of something bigger: the transformation of a former state-owned telephone monopoly into a digital services company.

Spark Digital CEO Tim Miles says the first thing customers going through a similar digital transformation want to hear are stories about how Spark did it. Spark Digital, previously Gen-I, is Spark’s information and communications technology division. It is the nation’s largest supplier of technology services to business and government.

Miles says Spark Digital has a key advantage when talking to New Zealand companies. “We look like them.

We’re based in New Zealand. Decisions are made here. We don’t report to headquarters in Australia, the US or the UK. And we face similar challenges.

“Most of our customers are in industries that are either already being visibly disrupted or where they can see it coming. I don’t know of any industry or business that doesn’t face the threat of digital disruption, although it can be as much of an opportunity as a challenge,” he says.

Disruption is now the starting point for most high-level conversations in industry. Miles says he often reminds customers that meeting that disruption with a digital transformation isn’t a oneoff event. He says: “They know we’ve been through changes at Spark. We’re already a couple of years in. We have made visible progress and we have

learnt valuable lessons. But I also have to tell them that we are all still in the early stages.”

Spark’s digital transformation started when the company was still Telecom. At the time it was adjusting to life after the Chorus network operation was split-off to build the government’s UFB fibre network. The company had a new CEO: Simon Moutter.

“The management team took a good, honest look at the business and then peered three or five years into the future,” Miles says. “What they saw wasn’t an appealing prospect; mainly thanks to a declining core telephone business disrupted by changes such as internet calling. We knew customers were moving from fixed voice services to internet protocol alternatives such as FaceTime and Skype.”

The next step meant searching for a more positive alternative future. He says: “We looked three years out and wanted to know what would be a good outcome for us. We realised we could become victims of disruption or we could seize the opportunity. Only one of those options was realistic”.

Deciding to change the business to meet the disruption head on was the easy part, implementing the changes was harder. Miles says the first step meant talking to staff, explaining the need to make fundamental changes.

“Then we implemented organisation change to speed up the business and we centred our thinking about what we believed our customers would need.”

All these building blocks were put

in place well before the company changed its name in August last year.

It wasn’t just cosmetic, the company needed to shake of the deeply idea that it was still just a telephone company.

Since then Spark has moved further into selling digital services with projects such as the LightBox streaming TV and a joint venture to deliver sports programming through the internet.

There is also the Morepork home security businesses.

If anything there a more pronounced change of direction at Spark Digital.

Miles says it decided to be on the winning side of disruption and that meant narrowing its focus and doubling down on its investment in cloud computing. This is the fastest-growing information technology sector as companies replace traditional in-house sys-

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nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Deloitte Top 200 judges 2015

Sandy Maier, Independent Director

Cathy Quinn, Chairman, Minter Ellison Rudd Watts

Neil Paviour-Smith Chairman, Forsyth Barr

Dame Alison Paterson, Independent Director

Jonathan Mason, Independent Director

Fran O’Sullivan, Editorial Director — Business NZME (convenor)

SANDY (SAMFORD) MAIER worked in international commercial and investment banking with Citicorp/ Citibank for 15 years in various management positions in the Caribbean, South America and Australasia. He has lived and worked in New Zealand since 1986, serving on the board of the Bank of New Zealand and as the statutory manager of DFC New Zealand Limited, for which he received a 1990 Commemoration Medal for services to New Zealand. He has served as chief executive, chairman, and board member of a range of NZ companies.

CATHY QUINN is the chair of Minter Ellison Rudd Watts, and a corporate and commercial lawyer who leads the Mergers and Acquisitions and Private Equity teams. Quinn is highly regarded for her specialist legal work in mergers, acquisitions, securities law, corporate governance and private equity.

Her practice encompasses Corporate and Commercial, Government, Agribusiness and Health and Ageing. She has particular expertise with Directors Duties, and was a past co-author of one of the leading company and securities law texts in New Zealand, Morison’s

On Company and Securities Law, as well as being the principal author of Minter Ellison Rudd Watts’ White Paper on Corporate Governance.

Quinn is a member of the Commercial Advisory Board to the New Zealand Treasury and a member of the Board of the NZ China Council.

is a council member of Victoria University of Wellington. He is a fellow of the Institute of Finance Professionals NZ and chairman of the NZ Society of Investment Analysts.

Alison is currently chair of eight boards and a member of the NZX Market Disciplinary Tribunal.

Harvey. Mason also serves as an Adjunct Professor of Management at the University of Auckland, specialising in international finance.

NEIL PAVIOUR-SMITH is Managing Director of Forsyth Barr Limited, a director of the New Zealand Exchange (NZX) and the NZ Institute of Chartered Accountants and a director designate of Chartered Accountants Australia New Zealand. He

ALISON PATERSON was appointed a Dame Companion of the New Zealand Order of Merit for services to business in the New Year Honours list 2014 and was previously awarded the QSO for services to the community. She is a Fellow of the University of Auckland, DCom [Massey], an ADFInstD and FCA. She was 2010 QBE Chairman of the Year. Dame

JONATHAN MASON has more than 30 years’ experience in the financial sector, with an emphasis on emerging markets. He serves as a director on the boards of Air New Zealand, Vector and Zespri.

Prior to taking up his governance roles, he was Chief Financial Officer of Fonterra Cooperative Group. He held similar positions at US-based chemicals company Cabot Corporation and Carter Holt

FRAN O’SULLIVAN is NZME Editorial Director — Business working across all NZME business brands and platforms including digital, publishing, radio and events. O’Sullivan is also a prominent television and radio commentator and highprofile columnist for The New Zealand Herald. She launched the Herald's annual “Mood of the Boardroom” which is now into its 15th year.

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D7

Company of the Year

Ebos Group T

he successful integration of a major Australian acquisition helped propel Ebos Group to Company of the Year in 2015 after being runner-up for the title three times in the past decade.

The NZX-listed healthcare distributor has gone through a meteoric phase of growth, completing roughly 20 acquisitions over the past 10 years.

The most significant of those was its $1.1 billion purchase of Australian pharmaceutical wholesaler Symbion in 2013, which increased revenue from around $1.5 billion before the transaction to $6.1 billion in the 12 months to June 30 this year.

Forsyth Barr managing director Neil Paviour-Smith, one of the judges of the award, said the acquisition had been “transformative” for Ebos.

“The reality is that Ebos could have potentially won this award many times before now,” he said. “The reason I felt it was a deserving winner this year was that it has successfully integrated the Symbion acquisition.”

Paviour-Smith said the market had also deemed the acquisition and integration a success.

“It’s one thing to make big acquisition and another to make it successful,” he said. “And on top all of that, if you look at the earnings momentum, the analysts’ forecasts for Ebos have been revised upwards. So not only did they meet expectations or even exceed expectations on the back of this very significant acquisition, since that time the analysts have upgraded Ebos even further which indicates how well the company has performed.”

Paviour-Smith said it was especially impressive that a major change of management had taken place during the integration of Symbion.

Patrick Davies, who previously headed Symbion, took the helm of

Ebos last year from Mark Waller, who had been in the top job for almost three decades. Waller is now the firm’s chairman.

“The management change has been seamless,” Paviour-Smith said.

Ebos investors have had a great run with the company, now generating around 80 per cent of earnings in Australia.

The firm has notched up a spectacular total shareholder return over the past 25 years of 31,309 per cent, or 25.9 per cent per annum.

That means every dollar invested into Ebos in 1990, with dividends reinvested, is worth $313 today.

The company’s market capitalisation has jumped from about $5 million around 20 years ago to more than $2 billion today.

Highlights for Ebos in the 2015 year included the firm’s $57.8 million acquisition of Australia’s BlackHawk Premium Pet Care and a 25 per cent investment in Good Price Pharmacy Warehouse.

It also secured a contract with the Government of New South Wales for the distribution and warehousing of consumable medical products to the state’s public hospitals.

Annual profit jumped 15 per cent to $150.7 million.

Paviour-Smith said: “In terms of the 12 months under review by the judges, they’ve put the runs on the board and exceeded expectations.”

Addressing shareholders at the firm’s annual meeting last month, Davies said Ebos had been broadening operations for many years through both internal growth and acquisitions.

“Pleasingly, we saw in the year just past the benefit of having a diverse portfolio of transtasman businesses.”

Despite its size, the company has a relatively low profile.

However, it distributes well-known

Chairman Mark Waller (left) and CEO Patrick Davies of Ebos.

Transformed by meteoric growth

brands including Deep Heat and AntiFlamme, and Eukanuba pet food. At the annual meeting Davies pointed out that for almost anyone accessing medicine and healthcare items on both sides of the Tasman, Ebos is likely to play a role in the delivery of products.

“There’s no other company that can make this statement but we can because of our diversity and our longstanding commitment to expanding our company to ensure we participate in emerging opportunities.”

The company first listed on the New Zealand stock exchange in 1960 as Ebos Dental and Surgical Supplies.

Its roots stretch back to the Early Brothers Trading Co, which was founded in Christchurch in 1922 and sold lamps for horse-drawn carriages.

In a Business Herald interview last year, Waller reflected on how much the company had changed since he joined the business, initially as chief financial officer, in the 1980s.

Back then, it was only marginally profitable and turning over about $8 million.

“We’ve completely reinvented the place about every five years so I feel like I’ve had about five jobs,” he said.

In the early 1990s, Ebos’ major shareholder, Brierley Investments, exited the business and the firm lost its dental division during the breakup of the company.

Waller said the company found itself on delicate ground at that time, as its core business — the local distribution of international brands — was being undermmined by the end of the export licence era.

“That was really, really hard.

Saving the company; travelling the world with a very young family; three weeks away at a time, just constantly, to try to find new opportunities to save the day.”

The company needed scale and it

needed it fast. That sparked an appetite for acquisitions that has continued to this day.

300 per cent gain in share price since August 2012, giving it a market capitalisation of over $4 billion.

Finalist: Fisher & Paykel Healthcare Fisher & Paykel Healthcareboss Mike Daniell gave an impressive insight into the company’s vast growth prospects at a finance industry conference last month. He said there was potential for the Auckland-based medical device maker to be treating 30 million patients annually within 10 years, which would provide annual revenue in the region of US$1.8 billion ($2.6 billion).

That would be an almost three-fold increase on the operating revenue of around $800 million the company has given guidance for in the current financial year. A profit in the range of $135 million to $140 million is also expected.

Daniell, who recently announced his retirement from the firm, sees big healthcare opportunities in the many parts of the world with rapidly ageing populations. F&P Healthcare’s products include devices for the treatment of obstructive sleep apnoea, as well as respiratory humidifiers used in intensive care units.

“We see this ageing demographic coming through, which is going to pretty much double the number of people over the age of 65,” he told the Business Herald last month. “Plus, we’ve got developing markets — China being a good example — where they’re rapidly improving their healthcare infrastructure.”

F&P Healthcare, which employs more than 400 research and development staff in Auckland, has been enjoying the fruits of heavy investment in R&D, driving a slew of new product releases recently. Record financial results and numerous profit upgrades have stoked a more than

Finalist: Z Energy Z Energy, which has already been a phenomenal performer for investors, is on the cusp of a major expansion.

In June the petrol station operator launched a $785 million acquisition bid for Chevron NZ, operator of the Caltex and Challenge! brands.

Should the deal receive regulatory approval from the Commerce Commission, it will take Z’s share of the total fuel market to 49 per cent from about 28 per cent at present.

Craigs Investment Partners head of private wealth research Mark Lister has said the acquisition would transform Z’s business. “It gives them some real scale,” he said.

The service station operator proved to be an incredible investment for the New Zealand Superannuation Fund and Infratil, who purchased Shell NZ’s downstream assets in 2010 and rebranded them as Z in 2012. The spruced-up business was floated on the stock exchange the following year. Z’s share price has almost doubled since the IPO and Infratil booked a $392 million profit when it sold its remaining 20 per cent stake in the firm in September.

The Super Fund, which reduced its Z holding to just over 10 per cent from 20 per cent in the same block sale, has reaped around $785 million in total proceeds from the investment, while its remaining shares were worth $246.6 million at the time of the September sell-down.

Super Fund chief investment officer Matt Whineray said the retention of the 10 per cent holding reflected the confidence the fund had in Z’s business strategy and management team.

— Christopher Adams

D8

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

This ad has far too many words.

And far too many words mean far too much reading. But that’s just how ads were back in the day.

Of course, we don’t intend to disappoint our ancestors. So to honour their appreciation of short novels, we’re going to tell you about Air New Zealand’s 75th Anniversary Exhibition at Auckland Museum. And to do that, we’re going to enlighten you with six paragraphs of extraordinary detail.

What you’ll encounter is a sensory rich, interactive experience. Sound fancy? It is. Come and swish and swipe your way through more than seven decades of our airline’s history. We’ve got living portraits, virtual reality headsets and other impressivesounding gizmos. *Museum entry conditions apply.

But first you’ll discover our bridge back through time. What a glamorously nostalgic stroll this is. You’ll be charmed with memorable uniforms from days gone by.

You’ll also be reminded of some forgettable hairstyles that are best left in the past.

Then on to our fleet of aircraft. Big ones, small ones. Some that landed on water.

We’ve flown some beauties over the years, so we’ve re-created two of their cabins – that of the glamorous Solent flying boat and the DC-8 from the jet age of the 6Os. You’ll also learn a thing or two about our very first airport at Mechanics Bay, in Auckland. And go behind the scenes to see what it takes to get our Dreamliner 787-9 ready for its next flight in just 9O minutes.

What matters most is that you come and see the exhibition for yourself. The last 75 years wouldn’t have been possible without you, and we’d love for you to relive the magic and share your memories. And for those of you who skipped to the end, here’s what you need to know: Visit the Air New Zealand Exhibition.

Now on at Auckland Museum.

Exhibition entry is free.* airnewzealand.co.nz/75th

D9

Chief Executive of the Year

Christopher Luxon: Air NZ Facing hard issues and finding win-win solutions

“T

Liam Dann

here is a mission and purpose that I’ve signed up for that is bigger than myself,” says Air New Zealand chief executive Christopher Luxon, when asked to describe his core leadership values.

Luxon, the 2015 Deloitte Top 200 Chief Executive of the Year, is very clear about his success being underpinned by a strong team.

“The most important part of it actually is the casting of the leadership team and I’m really proud of the leadership team we have in place,” he says. “My job is just to be the best leader I can be in a team of great leaders.”

But there is no doubt Luxon, who is now four years into his time at Air New Zealand, has made an enormous personal contribution to the company and big impact on the local business scene.

After serving as Group General Manager International he took over as chief executive from Rob Fyfe in January 2013.

“You can’t deny that Air NZ’s financial performance and increase in profitability has coincided with Christopher taking on the role as CEO,” says Award Judge Cathy Quinn, chair at Minter Ellison Rudd Watts.

“Airlines are seen as difficult business to run profitably. Air New Zealand faces big and large competitors with deep pockets.”

It has been a good run financially, Luxon says. “We’ve had three or four years of record results and expanding profits. The market cap of the company has almost tripled over the past three years.”

In August the airline announced a net profit of $327 million in the 12 months to June, up 24 per cent on the same period last year. Its pre-tax

The finalists were Z Energy’s Mike Bennetts and IAG’s Jacki Johnson (above).

normalised earnings were $496 million, up 49 per cent on the previous year. But financial results are only one part of it, Luxon says.

“A lot of it is about: how do we take those profits and pour them back into the company to enhance the customer proposition and the culture of the company? When we look at the cultural metrics of how we perform and the customer service metrics as well as the commercial performance those are the three lenses by which we measure success.”

Luxon’s has been deft at balancing the softer aspects of the good practice with hard-nosed decision making.

“Christopher is a CEO who is seen as being willing to face the hard issues, talk about them and be willing to look for win-win solutions where possible,” Quinn said.

“For example, his being willing to front that some routes just do not make business sense to operate unless more demand can be created.

Christopher has talked to some regions about their attracting more tourism by holding events in the shoulder season — that is good for the

regions, Air NZ and its customers.”

Luxon, 45, grew up in Christchurch and made his name on the international business stage. He rose through the ranks at global food and consumer goods group Unilever — a company he joined after completing his MBA at Canterbury University.

Prior to joining Air New Zealand he was president and CEO of Unilever Canada.

In the face of widespread technological disruption of the business world, Luxon says he feels happy to be in a business that knows exactly what it will be doing in five or 15 years.

“We know we will still be an airline and fundamentally the aircraft technology won’t change a lot over that time.”

But the company this year appointed a chief digital officer and Luxon says the big tech challenge is around how the company interacts with its customers.

Collaboration with the wider business community is also something Luxon has pushed during his time leading Air New Zealand.

He is widely seen as a leader who

has engaged with other participants in the sector with a view to improving the experience of tourists to New Zealand, Quinn says.

The company takes a lead role in promoting New Zealand as a tourist destination and has made a big impact marketing itself around high profile Kiwi icons like the All Blacks and the Hobbit movies.

“We have raised ambition for this company. But we can’t do it on our own,” Luxon says.

“So we’re working with our union partners in a very different way, we’re working with the tourism industry in quite a different way and we’re working with our trade partners in a different way.”

“I go around the world and people tell us we shouldn’t exist anymore.

But we do exist because we have tremendous support from the New Zealand people.

“All of Air New Zealand’s success is owned by many many people.”

Finalist Mike Bennetts, Z Energy Mike Bennetts has led Z Energy through a strong period for shareholders with company’s market capitalisation up by more than 60 per cent in the past 12 months.

The finalist for Chief Executive for the Year says he aims for a “balanced scorecard” approach.

Underlying earnings and profits have been up year-on-year, he says.

But there is also an intense focus on customer satisfaction and employee engagement. “If your people are fizzed-up and they know what to do to satisfy customers then that will lead to good shareholder returns.”

Bennetts became CEO at Z after 25 years with BP. While there he held leadership roles in China, South Africa, the UK, Singapore as well as New Zealand.

When it comes to leadership he

says it is a team effort. “All I try to bring to the table is to be myself.

Nobody can be a better me than me.

Generally people warm to having a leader they can connect with, somebody who is true to there own values and calls it as it is.”

Finalist Jacki Johnson, IAG IAG New Zealand chief executive Jacki Johnson arrived in New Zealand from Australia in 2010 right after the first Christchurch quake.

It has without a doubt been one of the most intense periods for local insurers and has presented a range of challenges for the business.

The Chief Executive of the Year finalist says she now knows Christchurch better than any other part of the country. But she hasn’t allowed the quakes and the disruption they’ve caused to stall the development of the business and her team. “We just couldn’t park our business and say we’ll get back to your development plans in five years. We’ve used it as an opportunity to grow people.”

Johnson started her career in behavioural science as an occupational therapist and then with a safety science degree before heading into the corporate and executive world. “I think that was an unusual blend to hit what I then faced. It has allowed me to care deeply about people and understand people’s motivations and what we need to do to galvanise people,” Johnson says.

“One of my direct reports calls it firm but fair,” she says of her management style. “They always say they wouldn’t die wondering. I give them clarity but allow to them to take responsibility and accountability.” ● Video interviews with Christopher Luxon, Mike Bennetts and Jacki Johnson are available at nzherald.co.nz/business

D10

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Chief Financial Officer of the Year

Rob McDonald, Air New Zealand Battling headwinds to return record profits

D

elivering record profits for the past two years, it’s no surprise Air New Zealand’s Rob McDonald has been named Deloitte chief financial officer of the year.

The top executive has been with Air New Zealand for 23 years and chief financial officer since 2005.

He was selected as the standout performer by the judging panel, who commended his ability to create longterm value for shareholders and his deal-making wins in upgrading Air New Zealand’s aircraft fleet.

In nominating McDonald, Air New Zealand chief executive Christopher Luxon said his stewardship of the company’s balance sheet had ensured it was a top-performing airline through some of the tougher times for the industry.

“Air New Zealand has reported consecutive record annual profits the previous two financial years.

“The airline’s financial performance has been recognised by Moody’s who in July upgraded Air New Zealand’s credit rating to Baa2, one of the highest ratings in the aviation sector,” Luxon said in his submission.

Air New Zealand’s profits grew 24 per cent in the year to June 30, to a record $327 million.

That came on top of the previous year’s record $262 million profit, which was up 44 per cent. Revenue for 2015 also grew 5.4 per cent to $4959 million.

After-tax profit has grown from $71 million in 2012 as the airline has been able to maximise returns from new long-haul aircraft, pull out from lossmaking routes, forge profitable alliances and dominate the lucrative domestic market.

It has also been able to trim costs and this year and has benefited from lower fuel prices.

Luxon said McDonald’s leadership of the airline’s fleet strategy had resulted in it having a competitive cost base, allowing it to compete in every market it operates in.

Air New Zealand had budgeted spending $2.6 billion on new aircraft over four years and is about to spend hundreds of millions of dollars establishing new routes to Buenos Aires in Argentina and Houston, Texas.

The judges also commended McDonald for adding value to the chief executive role and being able to do so under a range of chief executives.

McDonald has served under Ralph Norris, Rob Fyfe and Luxon in his time with Air Zealand.

In judging the award, Dame Alison Paterson said she was looking for a CFO who was able to stay focused on the job because there was a risk that once a CFO became focused on positioning themselves to be a CEO, issues could fall through the two roles, putting the company at risk.

Luxon said McDonald brought a vast amount of experience to the business that was invaluable to the executive team.

“His input ensures that the executive has a strategic focus, with a growth mindset countered with an appropriate amount of realism and awareness to recognise and consider potential changes to the operating environment, whether economic or competitive.”

McDonald was also credited with maintaining strong relationships with the company’s shareholders and

Judges’ comments The inaugural Chief Financial Officer category was full of extraordinary candidates, a combination of CFO's who have added to shareholder value over a long period of time and those who have successfully confronted formidable challenges over the past 12-24 months.

All of the excellent candidates combined competent leadership of the finance and investor relations functions with a close relationship with the CEO and other members of the executive team that resulted in better quality decision making on key improvements areas for the company.

Andy Carroll

Jolie Hodson

I’m looking for a Chief Financial Officer candidate who is not lusting to be a CEO, because once they decide they don’t want to be a CFO anymore, and they are positioning themselves to be a CEO, there is a huge risk for the company that things will fall between two stools.

Dame Alison Paterson

bankers and the board of directors.

He responsibilities include the airline’s 1.9 million member loyalty programme and being a leader in relationships with aircraft manufacturers and aircraft lessors.

Luxon said McDonald also played a key role in the digital transformation at Air New Zealand, where he had taken the lead across the executive team to determine which teams should become part of the new digital function within Air New Zealand.

“He has led the appointment of the new digital leadership team and is actively leading them through the transition of structures and people as a new function is established.

“His ability to take a wider perspective and to promote organisational

change to enable the organisation to deliver a key strategic initiative demonstrates his focus on ensuring Air New Zealand will be set up for success in the future, utilising digital technologies to deliver better outcomes for our customers both locally and globally.”

McDonald started his finance career as a commerce graduate with a building products company in 1980 and worked overseas before joining Coopers and Lybrand in the corporate advisory and valuation practice in 1985. He joined Air Zealand in 1993 initially as group financial planning manager and was appointed group treasurer in 1995.

He has a Bachelor of Commerce from Auckland University and in 1999 completed the programme of Management Development at Harvard Business School.

McDonald has been an active member of the New Zealand Institute of Chartered Accountants since 1984 and served on its council from 2010 to 2013.

Outside Air New Zealand, he is a regular contributor on professional panels and has spoken at the TransTasman Business Circle, as well as working with the University of Auckland in a judging and mentoring capacity.

Finalist: Andy Carroll, Chorus Having joined Chorus in 2011, Andy Carroll has steered Chorus through remarkably difficult times and under his keen financial management, the company has come out the other end better-off.

The progress that the company has made under his careful financial hand is obvious. Faced with tough regulatory challenges and the prospect of a $1bn funding gap through to 2020, Carroll led the organisation’s financial team in developing a plan of action. Over the next few years, Carroll’s work led to the conclusion of revised agreements with Crown Fibre Holdings and Chorus’ banks.

The organisation’s share price has

doubled as a result.

Chorus Chief Executive Mark Ratcliffe says Carroll’s success in the role is in large part thanks to his ability to engage with stakeholders at every level- banks, rating agencies, financial analysts and major investors; to openly explain his company’s position and future plans. The regulatory challenges he has faced during his time with Chorus has made him a battle-hardened navigator of the environment in which he works.

Ratcliffe says: “Andy has been absolutely inspirational during a time of enormous upheaval and financial challenges.

His consistent, considered view of what Chorus needed to do best to respond to the regulatory challenges has resulted in investors responding positively and welcoming Chorus’ ability to weather the storm without seeking further capital,” says Ratcliffe.

The judges agreed that “Andy Carroll has very broad skills, he is smart, he is strategic and he is very good in the regulatory challenge space. All round he is a very impressive CFO.” Finalist: Jolie Hodson, Spark Jolie Hodson was appointed CFO of Spark (then Telecom) in 2013.

Deloitte Top 200 judges were impress by the rate at which Hodson took control of the role. Her arrival marked the end of a ten-year losing streak for the company. Since then her tenure has been notable for not only her sound financial performance, but her skill as a top leader within a large organisation. Her role in Spark’s recent success is beyond question.

Her leadership of Spark’s business portfolio has been demonstrably sound. She can count among her achievements the successful divestment of a number of business at excellent prices, including difficultto-move entities such as AAPT. She also oversaw the Revera acquisition, a strong contributor to Spark’s improving performance. She is also credited with the development of Spark’s Turnaround Programme, which has delivered cost reductions and cashflow improvements worth hundreds of millions of dollars.

Simon Moutter, Spark Chief Executive, says: “Jolie is an outstanding leader of herself and her people. She has strong values and combines these with a very authentic and powerful style, powerful intellect and a deep commitment to results.”

— Tamsyn Parker, Greg Hall

D11

Chairperson of the Year

Joan Withers: Mighty River Power The driving force behind strategy

W

hen it comes to governance, Joan Withers is the person you want chairing your board.

This was the view of the Top 200 judges, who have chosen to name her 2015’s Chairperson of the Year.

Withers has a number of governance roles under her belt.

She is the chair of the board of Mighty River Power, a position held since 2009. During her tenure, she has steered the energy retailer through its transition from a stateowned-enterprise to a publicly listed business.

The company has thrived despite a year of low rainfall and near-record low hydro generation. Nevertheless, Withers has helped Mighty River deliver a return of $296 million to its owners, representing a 59 per cent year-on-year boost to cash returns.

This year, she was appointed Chair of TVNZ and has led the board in a year that has seen the state broadcaster perform strongly against private sector and global digital competitors delivering a 15 per cent return on equity to the government shareholder.

Her work ethic can be seen from her rise to business prominence.

Having emigrated from the United Kingdom at a young age, she quit school at 16. She worked in advertising and sales, before eventually

pursuing an MBA in her 30s, when her son was a teenager. It enabled her to move on to executive roles at Fairfax and The Radio Network, before shifting into governance.

As chair, she is notable for consistency.

She has successfully guided her charges through public floats and is highly regarded in the business community. No matter the organisation, while she has a role in governance, she will be taking an active role. The judges praised her for often being the driving force behind organisationwide strategy. The Top 200 judges noted that she is highly regarded by her board colleagues, has a calm head and is seen as a strong strategic

The Top 200 judges noted Withers is highly regarded by her board colleagues, has a calm head and is seen as a strong strategic thinker.

thinker who teams with her chief executives.

The judges also commented that in giving the award they look for a chair of standout character.

In addition to being active as a chairperson, Withers has been a dominant advocate for board diversity. She was the first woman to win the NZ Shareholders Association Beacon Award, in recognition for her leadership and guidance in corporate practice, in particular her courage in standing out from the crowd on controversial issues.

Previous recipients of the Beacon award include former Air NZ chief Rob Fyfe, Ryman Healthcare boss Simon Challies, Sir Michael Hill and former FMA chief Sean Hughes.

Withers is also a member of the 25 per cent group, an organisation looking for female membership of boards rising to 25 per cent by the end of 2015.

Mark Verbiest, Spark Mark Verbiest has been the chairman of Spark since the end of 2011, the chairman of Transpower since 2010 and the chairman of Willis Bond Capital since 2010.

As well as these appointments, Verbiest is a director at ANZ and Freightways, and is a member of the Commercial Operations Advisory Board for the Treasury.

The Top 200 Judges consider Verbiest well-respected around the markets and an all-round “top guy.”

Rob Hewett, Silver Fern Farms Rob Hewett is best known as the chairman of the board at Silver Fern Farms, though he has a wide governance profile.

Hewett was appointed chair of Silver Fern Farms in 2008. The country’s largest meat exporter had an eventful 2015, with September’s confirmation of a 50/50 joint venture between itself and China’s Shanghai Maling Aquarius. The announcement received much publicity and Hewett was largely the public face of deal. Progress towards that deal is very much on track, with Hewett announcing positive financial results in the lead up to the joint venture.

This included a 28 per cent increase in earnings before interest, taxation and amortization for the year ending September and an increase in net profit after tax from $500,000 last year to $24.9 million this year.

The judges praised Hewett's leadership of the Silver Fern Farms board as it grappled with adversity by reducing debt, introducing a new CEO and forging a joint venture with a new Chinese partner.

— Greg Hall

Mark Verbiest

Rob Hewett

D12

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Excellence in Governance

New Zealand Superannuation Fund Good guardianship N

ew Zealand Superannuation Fund’s board is guardian of an important $29.8 billion wealth fund. With the number of New Zealanders aged 65 and over expected to pass one million by 2020, a well-governed superannuation fund is critical to the country’s future.

Thankfully, the Deloitte Top 200 Judges were unanimous in their agreement that the governance of the New Zealand Super Fund can only be described as “exceptional.”

The judges were unanimous in their agreement that the governance of the New Zealand Superannuation Fund Is exceptionally good and provides leadership to others.

Defining corporate governance is an elusive task. For the NZ Super Fund, the clue is in its statutory name: guardians. It oversees the fund at the top level. It sets risk management policy, reviews strategy and analyses the long and short-term fund performance.

Fund chairman Gavin Walker defines the board’s role: “We’re the guardians of the fund — our primary responsibility is really oversight — setting policy in relation to risk management, reviewing strategy, and reviewing the long and short term performance of the fund”.

“It is a big responsibility and I think it’s one that all guardians including myself are very aware of. We have stakeholders that number 4.5 million New Zealanders. We are responsible for the future part funding of their superannuation so I can assure you that we take our responsibilities very seriously.”

Gavin Walker

On that note, Walker acknowledged that the board’s position in relation to the operational arms of the company demands special attention.

“I think one of our key strengths is our level of communication between the board and the management team,” he explains. “In my view, as chairman of the board, it is absolutely critical that we have open and transparent communication between all the stakeholders.”

Shouldering great responsibility seems to be a recurring theme in the governance of the fund. The organisation was a founding member of the Corporate Governance Forum, the es-

tablishment of which Walker calls essential: “One of the things we pride ourselves on at the fund is our openness around communication. We’re a very transparent investor. The forum was an opportunity for us to take our expectations around corporate governance to the New Zealand marketplace and tell investee companies about those expectations.”

As far as the governance of such an important entity is concerned, the challenges are many. “We like in a changing world. It seems to be every day both domestically and internationally, there are new regulations which affect us directly or affect those participating in financial services related to us.”

The NZ Super Fund being what it is, the board has a unique set of considerations to engage with, particularly around the element of risk inherent in the business.

“Corporate risk culture has to be owned at the very top — In this case owned by the board,” says Walker.

“We’re always trying to find out whether the settings around risk culture are right.

“We’re always surveying our staff, always interested in their feedbacks, but at the end of the day it’s really the outcomes that are important around risk culture. Our standards are high, our expectations are high, and I’m pleased to say is that basically it think

that we have a very strong risk culture at the fund as a result.”

The eclectic and top-level nature of their nature can make it hard to assess their effectiveness.

“That’s very tough,” Walker agrees.

“The way I look at the Superannuation Fund is that it’s a long-term investment vehicle. If you look at the fund in that way, we first invested in September 2003 and over the period of 12 years we’ve generated a return of 10.1 per cent per annum and that’s after cost and before tax.”

10.1 per cent equates to $19.31 billion over that period, after costs and before tax.

Runner-up: Air New Zealand It’s more than a year since Tony Carter was appointed chairman of the Air New Zealand board. In that time both he and the Air New Zealand board have kept the wheels turning in what is always a tumultuous industry.

Air New Zealand posted another year of record profits, the latest in a series of stellar performances over the past three to four years. In addition to the financials, Air New Zealand’s year will be marked by its push into the digital age, establishing the role of Chief Digital Officer this year.

The board is helming a fast-growing company. Off the back of increased demand, fleet capacity grew 12 per cent last year and 11 per cent this year, the fastest rate of growth in the airline’s 75 year history.

The board continues to reap the rewards of their executive appointments. Successes from CEO

Christopher Luxon and CFO Rob McDonald — both Top 200 Award recipients in their respective categories — are a testament to the board’s sharp eye for talent.

Runner-up: NZ Shareholders Association The New Zealand Shareholders Association seeks to support and encourage the ethical management of listed companies for the benefit of all shareholders.

The judging panel has been impressed by the board’s ability to thrive despite the departure of founder Bruce Sheppard in 2010, a man that the judges called a “hard act to follow.”

Despite that, the board, led by longtime chairman John Hawkins, has been a vision of consistency. This has been especially important given the Association’s responsibility for pooling shareholder influence New Zealand-wide and putting it to work to advocate for shareholders and their interests.

“They’re a grass-roots ‘people that pay their money’ organisation,” remarked the judges.

The role that corporate governing bodies play can be varied, but one consistent theme is leadership. The Award judges noted that the Shareholders Association board has embraced this responsibility wholeheartedly.

The judges remarked that “the Association is not afraid to take strong public stances on most subjects including those that people shy away from that need to be done and whether appropriate or not.”

Congratulations to

NZ Super Fund winners of the Top 200 MINTER ELLISON RUDD WATTS EXCELLENCE IN GOVERNANCE AWARD

Good Governance It’s about leadership, diversity of thought and creating value

Thinking creatively and having the courage to stand strong while providing direction leads to success and growth in challenging environments. As lawyers, we rely on the same attributes that are cornerstones of good governance, which is why we are proud to sponsor the Top 200 Excellence in Governance Award.

minterellison.co.nz

D13

Best Growth Strategy

Tourism Holdings T

ourism Holdings put in an impressive effort to consolidate and improve its operations — and the result has been a big boost in profitability.

Tourism Holdings is the largest motorhome rentals operator in Australia and New Zealand under the Maui, Kea, United Campervans, Britz and Mighty brands, and the company has lowered the overall fleet size to make it more competitive.

It also consolidated its RV manufacturing facilities at Kea’s Albany plant and established Motek in Melbourne to service Australian rentals.

Tourism Holdings won the Best Growth Strategy award after reporting net profit of $20.1 million, up 81 per cent, for the 2015 financial year ending June, while operating profit was $32.1 million, up 41 per cent.

The profits were achieved on total revenue of $236.7 million, with costs of $171.4 million.

The sell-down of its motorhome fleet enabled Tourism Holdings to reduce net debt from $119.6 million (2013 full year) to $69.2 million (2015). The company has lifted its full year dividend to 15c.

The judges say Tourism Holdings’ improved growth is a good story.

“We have seen this coming for a number of years with its investing and buying (Road Bear US acquisition and merger of United and Kea NZ), and it has a good spread of independent directors from different boards in New Zealand.”

Reducing the fleet pays off

Grant Webster, Tourism Holdings

Judge Sandy Maier says Tourism Holdings is made up of a number of businesses and it has established a co-ordinated strategy. “It is building momentum and we are impressed by the projections and set of actions.”

As well as the motorhomes and manufacturing facilities, Tourism Holdings operates leading attractions and guided experiences — Kiwi Experience, Waitomo Glow Worm Caves, Ruakuri Cave, Aranui Cave and Black Water Rafting.

The 2015 operating profit for the New Zealand Rentals division was $12.2 million, up 65 per cent; Australian Rentals $6.1 million, also up 65 per cent; United States Rentals $8.9 million, up 17 per cent; and Tourism division $7.7 million, up 16 per cent.

Kiwi Experience completed the introduction of a new leased fleet.

The sharp fall in fuel prices, depreciation of the NZ and Australian dollars and increasing number of visitors from UK, Germany and United States are all expected to help Tourism Holdings meet its newly-stated target of net profit of $30 million by 2019.

Finalist: IAG New Zealand IAG New Zealand’s move to buy competitors in tough times and in a “hard as nails” industry is bold and

interesting, say the judges.

“Acquiring competitors to grow is a valid growth strategy and IAG NZ has had to put runs on the board — the results are good,” according to the judges.

Insurance Australia Group (IAG) bought AMI and Lumley insurance companies, making it New Zealand’s largest general insurer and the biggest player in intermediate insurance, for commercial cover sold by brokers.

IAG NZ made a full-year 2015 profit of $26 million as its parent company reported a $1.2 billion profit, representing an insurance margin of 10.7 per cent. Net natural peril claim costs increased $543 million, and gross written premium grew 17 per cent to $12.5 billion. The net profit was $799 million.

IAG said in announcing its latest result: “New Zealand continued to perform strongly as the business maintained its market-leading position, with gross written premium growth of 22.8 per cent derived from the acquired local former Wesfarmers business (Lumley), which was augmented by a favourable foreign exchange effect.”

Underlying profitability was expected to remain strong, considering there will be further benefits from continuing to integrate the Wesfarmers business. The imple-

THE UNIVERSITY OF AUCKLAND BUSINESS SCHOOL CONGRATULATES

Tourism Holdings on winning the

Best Growth Strategy in the Deloitte Top 200 Awards

mentation of the quota share agreement with Berkshire Hathaway would reduce earnings volatility from 20 per cent of the group’s business, IAG said.

Finalist: Z Energy Fuel distributor and service station operator Z Energy has undoubtedly added value to its forecourts and stores and modernised the former Shell brand.

The judges knew Z Energy was a credible finalist held back to some extent by the pending decision from the Commerce Commission on the company’s purchase of Chevron NZ. The judges felt it might also be a little early to fully test Z Energy’s long term growth strategy.

Z Energy reported an increased net profit of $67 million for the six months ending September 30 on the back of $1.31 billion revenue.

The full year 2015 net profit was $7 million on revenue of $3.09 billion.

The company believes the synergy benefits from the Chevron takeover will be between $25 million and $30 million.

Chevron is expected to gross $150- $160 million in earnings for the full 2015 year, up from $132 million in 2014. Analysts have increased Z Energy’s 2016 gross earnings to $274 million, up $12 million, and believe the company has positive earnings momentum from the refinery. Fuel margins also remain firm.

— Graham Skellern

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nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Most Improved Performance

Refining NZ:

A golden run in performance

G

uided by the strong hands of chief executive Sjoerd Post, Refining NZ this year has had a record run — both in throughput and financial performances.

The national oil refiner turned in a net profit of $65.3 million for the six months ending June 30 compared with a loss of $7 million for the same period in 2014. Refining NZ’s net profit for the year ending December 2014 was $10 million, built on revenue or processing fee of $232 million, and its next full-year net profit is forecast to reach an impressive $148 million on revenue of $372 million, which would be the highest since 2006.

It was enough for Refining NZ to win the Deloitte Top 200 Most Improved Performance award.

The big turnaround occurred after Refining NZ implemented a strong “self-help” action plan that included strengthening its balance sheet, improving margins by generating more high-value products from the same barrel of oil, introducing lean manufacturing processes and managing its costs.

Refining NZ enjoyed a record throughput of 7.52 million barrels during July/August this year, producing year-to-date processing revenue of $234 million — the highest since 2006.

The revenue was boosted by a low NZ dollar of US66c and a strong gross refining margin of $US9.25 a barrel.

The judges say Refining NZ stood out for this award. Sjoerd is a tough individual and has driven perform-

ating cash flows by about $50 million a year.

The investment will take Refining NZ’s share of the country’s petrol demand to 65 per cent, from 55 per cent.

Refining NZ chairman Simon Allen said in the latest interim report: “In the absence of another major project the size of Te Mahi Mou, we are confident there is a sufficient ‘funnel’ of improvement ideas within the team to pursue a series of smaller capital projects that will enhance margin over the next three to four years.”

Chief executive Sjoerd Post

ance. “He is a top guy and fairly much your non-typical top 50 chief executive officer.”

Judge Sandy Maier says “we were impressed by Refining NZ’s deliberate actions to improve earnings. We looked at whether it was a one-off or they had got on top of the situation.

We think the latter applies.”

Refinery NZ’s new $365 million Te Mahi Hou CCR (continuous catalytic regeneration) unit at Marsden Point is about to be commissioned and this will boost the company’s performance.

Based on the present low crude oil price, the modern unit is expected to improve refining margins by US9095c a barrel, processing volumes by about three million barrels, and oper-

Congratulations

Craig West

Winner of the IMNZ/Eagle Technology Young Executive of the Year

2015

Craig West Executive General Manager Infrastructure Services, Downer NZ

Finalist: Zespri Global kiwifruit marketer and exporter Zespri and its 2500 growers are in pretty good shape after the Psa bacterial vine disease struck five years ago.

The big-selling gold kiwifruit crop was ravaged in the main growing area of Bay of Plenty but the hardy green (Hayward) variety held up well.

Zespri has just completed its third season of selling its new and Psaresistant Gold3 variety, marketed as Sungold, and its immediate success in the overseas markets has helped the industry stage a grand comeback.

Production and sales are back to pre-Psa levels — and growing. Zespri sold 95 million trays of New Zealandgrown kiwifruit, an increase of 11 per cent, during the 2014/15 financial year and the sales fetched $1.568 billion, up 16 per cent.

Zespri doubled its net profit to $34.6 million, which included a one-

off gain of $13.1 million from Gold licence incomes. The growers received fruit and service payments, including loyalty premiums, of $940 million, up 17 per cent.

Zespri says volumes have increased 25 per cent in the present selling season and sales should near $2 billion. Zespri has despatched a record 32 million trays of Gold3, up from 18.6 million trays in the previous year.

Boosted by a shortage of rival Chilean kiwifruit on the overseas markets, the green variety is having a revival. The average orchard gate return for green kiwifruit has gone over $6 per tray, and average hectare return is a record $53,884. Average yields per hectare are now nearly 9000 trays.

The Gold3 volumes will keep increasing over the next few years, as more orchards mature, and this will have some impact on green demand and returns. Also, the bigger Gold3 crop will create challenges for Zespri to maintain a premium price.

Finalist: Comvita New Zealand Comvita, based in Paengaroa, south of Tauranga, could be described as a “noisy neighbour”. It is constantly communicating its New Zealand natural health and marketing story, particularly to the Asia-Pacific markets.

Its passionate chairman, Neil Craig, and new chief executive Scott Coulter, formerly marketing manager, lead the charge in spreading the message.

Comvita has thrived on online

activity — through social media and selling on seven country-specific e-commerce websites. Sales through the direct digital channels have increased 55 per cent.

Comvita’s products, containing “life-giving” ingredients such as UMF manuka honey, propolis, olive leaf and Omega-3 oil, are sold in 68 retail stores in Hong Kong, Taiwan, South Korea, Japan, UK and New Zealand, as well as 400 outlets in China.

In Australia the products are sold through Health Food stores and pharmacies.

The products cover four categories: Healthcare, functional foods, personal care, and medical.

Over the past 12 months, Comvita’s share price has soared to more than $8 after reaching a low of $3.49.

Comvita increased its sales revenue 32 per cent to $53 million during the 2014/15 financial year, and it made a record net profit of $10.2 million. For the six months ending September, net profit was $3 million on sales of $91 million. This compared with an after-tax loss of $3.3 million and sales of $60 million in the previous corresponding period.

Coulter said, at the time of the sixmonth announcement: “We are confident that leveraging our premium brand position, our strong path to market and our continued focus on optimising profitability across all facets of the company, should result in the company continuing to deliver sustainable earnings growth into the future.”

— Graham Skellern

Eagle Technology - Specialising in geospatial mapping technology.

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Geospatial mapping technology is used in more than 400 organisations and over 30 sectors. It is at the core of infrastructure projects, electricity supply and asset management. It’s being used to clean up farming practices, manage forestry and design smart cities for a better future for New Zealand’s environment and economy.

Make the geospatial connection for your organisation. connect@eagle.co.nz

Since 2005 Eagle Technology is proud to have partnered IMNZ in supporting the leaders of tomorrow by sponsoring the IMNZ|Eagle Technology Young Executive of the Year.

Eagle Technology Group Limited | Auckland: 09 639 0600 | Wellington: 04 802 1400 | www.eagle.co.nz

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Young Executive of the Year

Craig West: Downer NZ

A

Sporting skills passed on to business

fter a serious injury put paid to a promising rugby career for Chiefs prop Craig West, he turned his attention to business and at 35 has just been named the Deloitte Top 200 young executive of the year for 2015.

The award, sponsored by the Institute of Management New Zealand (IMNZ) and Eagle Technology since 2005, celebrates executives up to the age of 38 who have had a role in influencing, growing and providing direction within an organisation.

West said his sporting career had given him skills that had transferred across to business including resilience, a strong work ethic and knowing the value of team work.

Judges Fiona Hewitt from IMNZ, Liam Dann from the Business Herald, Glenys Talivai from Tower Insurance and last year’s winner Michael Lewis from NZ Post say West’s strength of character made him stand out as a strong leader.

“Craig was a strong winner among a very talented pool of talented winners, Lessons from the end of his rugby career through injury taught him the importance of resilience, agility and faith and this has further shaped his work ethics and approach.”

According to the judges, West epitomised the Downer philosophy of humbly smart, preferring to compliment his team’s work over his own abilities, with his approach to the way he worked, connected with others and the commitment to his people clearly evident.

Growing up, West’s passion was in rugby, playing for the Chiefs and New Zealand Maori All Blacks rugby teams. He was 28 when he was injured, leaving the rugby hopeful unsure of his next move.

“It was certainly a change in focus and a challenge [not being able to play], however I have really enjoyed this challenge,” he said.

He decided to have a go at business. Prior to playing rugby he had been involved in civil engineering which he said had exposed him to some great people in the industry.

He took up a job as a cadet at infrastructure business Downer New Zealand. In his 15 years there, West has moved through the ranks from cadet to general manager northern.

He says good leadership is all about people skills.

“When I say people skills it’s about being able to communicate and influence people,” West said. “I think being able to articulate the vision and purpose and try to create and engender that passion and motivation in people and inspire people — those are a couple of the key things for me in

Craig West

● Position: General manager northern

● Company: Downer NZ ● Judges’ comments: “We were

incredibly impressed with Craig’s mana, personal ethos, integrity, drive and level of achievement he has made and this resulted in him being named the Young Executive of the Year.”

Daniel Warsaw

● Position: General manager for business and partnerships

● Company: Wellington Zoo ● Judges’ comments: “Daniel is a

highly skilled and passionate young executive who impressed the judges with his desire to make a difference within a not-for-profit environment. In his time as GM Business & Partnerships, Daniel has had significant influence on the performance of Wellington Zoo creating numerous growth opportunities and inspiring his team with new ideas and business concepts.”

terms of communication, but also emotional intelligence and being quite self-aware in terms of how do you encourage others to succeed and take those next steps.”

West says Downer NZ is a company that affects people’s lives every day from water mains and roading to infrastructure and phone lines — a factor that made him passionate about his work, with the company able to help New Zealand grow, prosper and be competitive internationally. His best career move, he said, was taking up the role as general manager northern with the company.

“This is a really challenging role and it’s a lot of focus around the cultural change and the cultural shift from where we have been historically, to where we operate now and where we want to be going in the

well around leading people and being able to influence people and articulate the vision and that’s something I really enjoy.”

The judges said West was committed to building capability and understanding within his industry, and to ensuring his approach to business was well-rounded, innovative and fresh. “We were incredibly impressed with Craig’s mana, personal ethos, integrity, drive and level of achievement he has made and this resulted in him being named the Young Executive of the Year,” they said.

Finalists for the young executive

category have typically had exceptional people skills, leadership capability, an overwhelming sense of purpose and a vision for themselves and their organisation. West said being a finalist for the award had allowed him to reflect on the work he and the company had achieved.

“We don’t take the time to look at what we’ve achieved very often and this has forced me to stop and have a think about that and look at what we have achieved,” he said. “It’s been really good for me personally but I also think it demonstrates the growth in people and the leadership that the organisation at Downer has promoted and invested heavily in.”

Although West’s injury left him unable to play rugby professionally, he still finds time in between his work at Downer to coach and support the Waikato Development team and the Waikato Under 20’s rugby team.

This year’s Deloitte Top 200 young executive finalists represent a range of different categories and sectors, with Daniel Warsaw working in the not-for-profit sector at Wellington Zoo, and Taryn Hamilton the general manager for consumer at telco business M2.

— Holly Ryan

future,” West said. “Leading a large team of over 700 people across the region has been a big role and obviously what that means for me is that I’m the youngest general manager for Downer. I suppose that provides a lot of confidence and pride for me personally, but it probably uses my skills

Taryn Hamilton

● Position: General manager for consumer ● Company: M2 Group ● Judges’ comments: “Taryn is clearly a strong leader.

He was dynamic, very direct and came across as someone who was prepared to take a few risks and shake-up the status quo. He said it best himself: ‘You don’t come to work to push paper you come to effect change’. Taryn is clearly ambitious and has great potential as a business leader.”

The judges Fiona Hewitt

Liam Dann

Glenys Talivai

Michael Lewis

Fiona Hewitt — Chief executive, IMNZ. With a career spanning almost 20 years in senior management and executive roles working for high profile New Zealand travel, insurance, entertainment, non-for-profit, sporting and human behaviour organisations, Fiona has honed her skills in strategy, business development, marketing, and relationship engagement and stakeholder management which has supported her passion to work with and for organisations committed to achieving strong results.

Liam Dann — Business editor, New Zealand Herald. Overseeing business content in print and online, he has been a journalist for 20 years, covering business for the past 15. He has also worked in the banking sector in London and travelled extensively. His passion is for Markets and Economics, because they are the engine of the New Zealand economy.

Glenys Talivai — General manager, claims and strategy, Tower Insurance.

Prior to her current role, Glenys was with Medical Assurance Society, where

she held the role of general manager of sales and marketing. Before MAS, Glenys held numerous roles at ANZ Bank including head of branch transformation and northern regional manager for ANZ Retail Banking.

Glenys has previously held directorship roles including deputy chair at the Institute of Management, and in 2012 won Young Executive of the Year at the Deloitte Top 200 Awards.

Michael Lewis — General manager northern operations, New Zealand Post and 2014 New Zealand Young

Executive of the Year. Mike originally joined New Zealand Post as part of its graduate programme 11 years ago and has excelled in roles across the business, as a specialist, middle and now senior manager since 2013 in the role of GM northern operations. Mike is accountable for 2000-plus employees and for leading network operations from Northland to Taupo, their national print production operations, and the processing and freight forwarding operations for NZ Post International business.

D16

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

For the first time, more than 70 members of the Westpac team walked alongside friends and family in February's Auckland Pride Parade.

#youbeingyou We passionately believe in the value of a diverse New Zealand. Check out the stories of some of our people at westpac.co.nz/youbeingyou Westpac New Zealand Limited.

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Diversity Award

Working for a greater good

Judging advisers

Sarah Kennedy is a Global Women member and currently the CEO of Designer Textiles International. Previously, she has held roles with Fonterra and Healtheries/Vitico NZ Ltd.

,,

T

he business case for diversity is well documented, but Westpac chief executive David McLean says it’s about more than that: embracing diversity is good for the country.

“There’s huge opportunity for us to embrace this and leverage it as a strength for the country so that we can lead the world again.

“New Zealand was the first country to give women the vote, and we’ve led the world in a lot of these things.

Have we come off pace a bit? I think we have, and we’ve got a huge advantage in New Zealand from an ethno-diversity point of view.”

When he says we’ve been falling behind, he’s talking about things like a survey Westpac commissioned earlier this year. It found that nearly half of all New Zealanders are afraid to bring their true selves to work. “I find that number sad and disturbing.”

So what is Westpac doing that sets them apart?

Firstly, a look at the bank’s top table shows the organisation’s commitment to diversity: there is a 50-50 split within the senior executive between men and women. On top of that, leadership roles throughout the rest of the organisation are 47 per cent filled by women. Considering this figure sat at around 17 per cent in the late 1990s, the strides Westpac has taken are huge.

But even with their achievements in upper management, McLean says his company’s success starts at the other end: from the bottom up.

“If we feel there’s an issue that needs to be addressed, we’ll gather the smartest people that are closest to that issue on the ground floor,” he explains.

“We say, tell us what you need, how you think we can move the dial, and then the role of the leadership team is to simply support them in whatever they come up with. If you do it bottom-up like that, and get the people who are living these issues day-to-day, then the outcome — whatever diversity initiative they might come up with — will be very sustainable.”

The sphere of diversity in the corporate space is often talked about with reference to internal gender biases, but Westpac recognises the need to keep the wheels turning on all diversity issues. This focus on engendering a broader environment of inclusion particularly impressed the diversity judging panel. Nowhere is this attitude more evident than in their dementia initiatives.

“We’re the first dementia-friendly bank in New Zealand and it’s something I’m really proud of.

“It’s an important thing that doesn’t get enough attention in New Zealand, yet it’s something likely to affect a large number of New Zealanders personally or through family or friends.”

McLean is bang on: the 2015 World Alzheimer Report has the number of New Zealanders with dementia tripling to over 150,000 by 2050.

The initiative is a multi-pronged one. The bank helps customers in the early stages of dementia to prepare themselves and their accounts for the future, they train their staff to recognise the signs of dementia and financial abuse and better equip them to help concerned customers.

Harking back to his approaching diversity as a task that can benefit the entire country, McLean explains he doesn’t see diversity as a contest between other companies and his own.

“As I said, I do think diversity has a strong business case and that it’ll make us a better bank. But it’s not a contest in becoming more diverse. I think there’s a greater good here that

Westpac

It’s not a contest in becoming more diverse. I think there’s a greater good here that if we all share our learnings and help each other along the way, New Zealand will be a lot better off.

David McLean

if we all share our learnings and help each other along the way, New Zealand will be a lot better off.”

He points to Westpac’s You Being You initiative as a recent example.

Aimed at supporting the LGBT “It Gets Better” movement, the bank released a video featuring members of staff personally affected by issues of diversity.

A member of another New Zealand organisation reached out to McLean after the event, saying they’d gone back to their company and inspired management to set up a LGBT support group and start on the same journey. “To me, that’s a winner.”

The judges agreed, pointing to Westpac’s demonstrated willingness to share their diversity learnings as a key influence in their decision to award Westpac this year’s Diversity Leader award.

Finalist: ANZ Achieving a diverse and inclusive workplace is hard work well worth doing, according to ANZ general manager of HR Felicity Evans.

As she puts it: “There’s no silver bullet.”

“But organisations need to realise that it makes business sense to represent your customers, represent your workforce,” she explains. “We do affinity groups for LGBT staff, we sponsor community events, and all these little things add up to make us representative of our multicultural country.

The hard work often lies in defining the problem. ANZ spends time each month auditing key diversity indicators; how many women are being recruited, how many have been promoted, and so on. This audit leads to the setting of concrete diversity goals. For example, ANZ is targeting 15 per cent increase in Maori and Pacific Island recruits, an annual one per cent Women In Management Increase year on year and an employee engagement rate of 75 per cent.

Outside gender, ANZ is committed to supporting their staff who might be raising families, and have developed a number of initiatives to meet their needs.

ANZ’s “all roles flex” policy is aimed at giving employees of all ages and life stages the opportunity to main-

tain the work/life balance their unique situations might demand. The uptake has been huge. This year’s ANZ staff engagement survey reported that 86 per cent of respondents were taking advantage of the policy, up from just 40 per cent last year.

Then there’s ANZ’s parental leave policy. The company will pay the difference between an employee’s ordinary salary and whatever they receive from the government’s parental leave payment system. They’ve increased the duration of their top up payments from 14 to 16 weeks from April this year, and that number is set to increase to 18 weeks starting next year.

The support continues when employees return to work, with ANZ organising “Returning from parental leave” workshops which support them with planning, flexible work options and general preparation for coming back to work after time away.

Michael Stevens is programme director at The Rainbow Tick. He has an extensive background working with New Zealand’s Rainbow Communities, has been an invited speaker at numerous conferences, and is a published author on the topics of human sexuality, social change, well-being and public health.

Finalist: Air New Zealand Air New Zealand’s diversity strategy is comprehensive and well-linked to both business goals and customer imperatives.

The company has shown its commitment to diversity with a focus on gender through initiatives such as its programme to accelerate high potential women within the organisation.

It has set itself an ambitious goal of having the senior leadership team constituted by 40 per cent women by 2020, and has already committed and spent $1,000,000 on its women leadership and networking events. Its Women’s Network connects female employees from throughout the organisation and can report that over 1500 women have directly attended the event since it was launched.

Other aspects of Air New Zealand’s diversity efforts that impressed the judging panel was its nurturing of employee communities within the company (Women’s Pride, Young Professionals, Maori and Pacific Island networks).

Sarah Naude is a managing partner at Propero and in industrial psychologist with over 15 years’ experience working with some of New Zealand’s largest organisations, from Telecom to the New Zealand Navy.

Air New Zealand’s efforts in the diversity space are the product of continued engagement with the concerned parties on the issues. The judges were particularly impressed with senior management seeking feedback from senior women within the company, its networking with other aviation companies on issues of diversity and reviewing the policies of organisations around the world. On top of that, Air NZ’s internal “Your Voice” survey at the end of last year boasted a 80 per cent employee participation rate and enabled it to create a baseline to use in tracking progress in the diversity and inclusion space.

— Greg Hall

D18

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Visionary Leader

W

Dame Suzie Moncrieff:

orld of Wearable Art creator Dame Suzie Moncrieff is the winner of the Deloitte Top 200 2015 Visionary Leader Award.

Her World of Wearable Art Awards Show has been running since 1987. It started in Nelson as a promotional event for a rural art gallery before moving to Wellington. Today it is Wellington’s biggest single event, selling more tickets than the Rugby Sevens, attracting designers and visitors from around the world and putting the city on the global map as a creative centre.

Former Air New Zealand chairman John Palmer is Moncrieff’s brother-inlaw and has closely watched how she developed her high profile arts business. He says: “Visionary is exactly the right word when talking about Suzie.

She had the idea for the show in the first place and a rough vision of what it might one day become. It took drive and determination to deal with tough, and at many times, impossible odds as she pursued the idea of what WOW should look like and become what it is today.”

Palmer says when the show first started many people thought it was a crazy idea. “She wanted to take art off the wall and on to the body. Suzie never accepted there were limits to how far she could take that idea,” he says.

There were times when Moncrieff had to live on the smell of an oily rag: “In the early days there was little money and next to no income. She got through that with persistence and

The epitome of creativity

determination while never deviating from the view that the show had to be an artistic success.”

Moncrieff’s sister Heather Palmer has worked with her on WOW since the early days and saw how that business developed. She says Moncrieff began her career as a sculptor and in the 1980s held a successful

show in Wellington where she sold her work. At the time she was shocked that dealers could take 35 per cent of the sale price and decided to open her own gallery to cut out the middle man.

She says: “Suzie found a suitable place in Spring Grove near Wakefield.

It was one of the oldest buildings in

the country. She walked in off the street and asked if she could buy it.

The owner rented it to her and helped pay for restoration. It became a gallery and something of an artists’ coop.”

Moncrieff was looking for ideas and heard there was a wearable art show in Auckland. Heather Palmer says: “She flew there and found a show that was mainly hand-painted dresses, not what she expected to see.

On the way back she made her own notes about a wearable art event to promote the gallery. Ever the optimist, she gambled on it being a success and paying for itself.”

Palmer describes her sister as an accidental businesswoman. “Her success arrived because she seized opportunities and made the right spontaneous decisions. She has an intuitive grasp of marketing. She never gets hung up on the what-ifs and has the enthusiasm to continually try new ideas. Along the way her vision has

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Visionary Leader

World of Wearable Art

continued from D18

been supported by a lot of talented individuals.”

While the two sisters formed the company and have worked together on WOW for years, Palmer says the vision is all Moncrieff’s.

Today the business employs 12 full time staff and six part-timers in Nelson. This grows to around 400 people during show time. Palmer says for years much of the work was done by family and friends, with Moncrieff taking a hands-on role.

“Although we appointed an artistic director, Suzie is still very much involved today. She continues to write scripts and compile the show’s music, while acting as a mentor to the artistic director.”

Heather Palmer says Moncrieff had international ambitions for WOW from after the very first show. By the

time of the third show in Nelson’s Trafalgar Centre, people were turning up from overseas. “We knew we had something special by then and Suzie was sure it would be an international success. We couldn’t develop the show any more without moving from Nelson so we decided to move elsewhere. When the show went to Wellington we started seeing the commercial success we needed to develop things further.”

Kerry Prendergast was Wellington mayor at the time the WOW awards show moved there from Nelson. She says at the time Wellington was working hard to attract major events and build on its reputation and a cultural and creative centre. “When an intermediary came and asked if we were interested in WOW, we jumped at the chance. For me it represents the very epitome of creativity. It met every one of our strategic objectives and

Judges’ comments

● Dame Suzie Moncrieff is a self-

made business leader in the best traditions of Kiwi entrepreneuralism. She is the creator and founder of the World of Wearable Art Awards Show which has been running since 1987 and has become a New Zealand institution. She was the Artistic Director and Scriptwriter for 22 years and continues to be the driving force behind the WOW concept. In 1999, World of Wearable Arts won the Supreme NZ Tourism Award. Now the show is also presented internationally with shows in Hong Kong and exhibitions in Australia and Hawaii. She is truly a global phenomenon mixing creativity with entrepreneurial verve to create a show that has put not just Nelson and Wellington but New Zealand on the map. In essence, a truly visionary leader.

WOW founder Dame Suzie Moncrieff (above).

gave us a huge reach both nationally and internationally. It was clearly a marriage made in heaven,” she says.

The marriage worked both ways.

Prendergast says after the initial contact, the next step was for Moncrieff to visit her office for a meeting. “She could hear we were supportive, but the moment she heard me talking with enthusiasm about creativity, we sealed the deal.”

Prendergast describes Moncrieff as “an amazing woman” saying she

Pictures / World of Wearable ArtTM

is full of creativity and blessed with an incredible vision.

“Suzie wanted to take WOW to the world and saw Wellington as a first step after Nelson.

“The creativity is still there — each year she comes up with a fresh show, the choreography and organisation to do that is a major achievement.

People seeing the show for the first time find it is an arts and cultural extravaganza.”

— Bill Bennett

D20

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Z Energy aims to be a shining light of sustainability.

It is Z Energy’s aim to be one of New Zealand’s shining lights when it comes to sustainability – so where better to start than a project to reduce the energy consumption of its retail lighting?

Sustainability Manager, Gerri Ward, says Z has set some really ambitious goals, with a focus on reducing waste at its retail sites and making operations more efficient.

A critical area for consideration was Z’s retail electricity use. Forecourt power and lighting alone accounted for more than a quarter of Z’s total retail electricity use.

“By changing out all of the external lighting in service station canopies with energyefficient LED lighting, we reduced electricity consumption, cut carbon emissions and demonstrated to our staff and customers that taking sustainability seriously is not only better for the planet, it can save you money,” says Ward.

EEC3775_NZH

In 2014, Z partnered with Philips New Zealand to install 2200 state of the art energy efficient LED light fittings with intelligent lighting controls in 171 retail sites across New Zealand.

The defining aspect of this project is its size and scale. Z invested $2.7 million into the six month project, along with support from EECA BUSINESSTM.

On the back of the successful roll-out of this retail programme, Z has undertaken a canopy lighting upgrade project across its truck-stop network in this financial year.

Initial results based on data from 19 completed sites shows that the project is delivering an average 68% lighting energy savings through direct load reduction.

Z’s determination to shine light on its sustainability goal demonstrates how energy efficiency can help fuel your business and improve the customer experience.

Further energy savings have been achieved through intelligent lighting controls, such as occupancy dimming. The current results alone account for an estimated 6% less energy usage across the retail network in the first three months of operation.

Philips have also identified an expected CO2 saving as a result of the project of up to 490 tonnes per year, over 10 years (being the expected life of the fittings). This represents a 16% reduction of carbon emissions from retail operations.

Ward says the project also improves visual comfort and safety at service stations by providing much better and more uniform light quality.

“Site staff and customers have told us the new lighting has helped them feel safer and see better at night, further enhancing the ‘Z experience’.”

www.eecabusiness.govt.nz

BIG NUMBERS •

$2.7 million investment into

energy efficiency

•

171 retail sites across New Zealand

•

2200 high-end energy efficient LED light fittings

68% lighting energy savings • 16% reduction of carbon emissions •

from retail operations.

D21

Business Transformation

The business of cutting energy use Greg Hall finds out how smart businesses are putting in place plans to reduce their power consumption

N

ew Zealand’s business sector spends $8.4 billion a year on energy. The energy it uses accounts for over half of New Zealand’s total.

These are staggering numbers. Fortunately, a number of forward-thinking companies are seeing the business sense of cutting energy consumption.

Several Top 200 Award finalists are among them. They’re being helped by the Energy Efficiency and Conservation Authority, a government body that aims to create a more efficient and lower carbon business sector. They’ve been working hard to reach this goal, so much so that they can now boast agreements with what amounts to 40 per cent of New Zealand’s business energy use.

“EECA congratulates all of the finalists in the Deloitte Top 200,” beams Gary Walker, the EECA’s business account director, North. “We are particularly proud of those we have worked with in their stride toward energy efficiency.

“Smart businesses have energy management programmes in place and are using better energy management to get ahead. Businesses who don’t start thinking of energy efficiency risk getting left behind.”

It’s hard to argue with Walker’s assertions when some of the Top 200 Awards’ most prolific nominees are counted among EECA’s partners.

Air New Zealand Air New Zealand features prominently in this year’s awards. It aims to be the world’s most environmentally

LED fittings with intelligent lighting controls across the business. The partnership has paid dividends, delivering an average 68 per cent in lighting energy savings and a 16 per cent reduction in carbon emissions.

Z Energy is among businesses cutting energy consumption.

sustainable airline by 2020. It demonstrated its commitment to this goal by signing a two-year partnership with the EECA which would save 10 gigawatthours a year. The partnership target has increased Air New Zealand’s cost savings and has seen the introduction of an innovative energy-efficient heating and ventilation system in the Auckland Airport departure lounge.

Pramesh Maharaj, the EECA Manager responsible for the Air NZ account, sung the airline’s praises: “Air New

Zealand’s no-holds-barred approach to energy and fuel efficiency has made it an international ambassador for lower carbon ways of doing business, which brings positive spin-offs for all New Zealanders.”

Z Energy This topic is obviously one close to Z Energy, having invested $2.7 million into its energy efficiency initiative across all 171 NZ retail sites.

Much of the effort is directed at the

meat of Z’s energy consumption: lighting. A quarter of the company’s total retail electricity use comes from forecourt power and lighting.

“Z Energy’s determination to shine a light on its sustainability goal demonstrates how energy efficiency can help fuel your business and improve your customer experience,” explains Chris Thurston, business account manager at EECA. Z Energy partnered with Phillips NZ in 2014 to install 2200 high-end energy

IAG When you’re as large as IAG, energy consumption is a big deal. In New Zealand alone, the international insurance company tenants 100 sites all over the country.

Working with EECA, IAG pledged to operate its energy-consuming assets in accordance with best business practice by mid-2016. The company partnered with its landlords to get the most energy efficient outcome from its NZ sites. It will benchmark its current energy use and commit to monitor its progress as it rolls out the changes across New Zealand.

The NZI Centre in Auckland (see picture p22) is the flagship for IAG’s commitment to energy efficiency. The Centre was developed by Newcrest with Jasmax Architects. The building scored a 5.5 out of 6 under the NABERSNZ energy rating scheme, the first building in Auckland to rate a “market leading” score.

“Companies that are interested in energy efficiency tend to be big energy users,” explains Dane Fredriksson, EECA business account manager. “IAG recognises the intrinsic benefits of energy efficiency — staff wellbeing and being a good corporate citizen. Over time, role models like IAG can have a significant impact on the quality and character of commercial buildings.”

S I LV E R F E R N FA R M S 100% Made of New Zealand

When you love food, you make it well.

And when it’s this well made by nature, you take care of it and where it comes from.

Sharing only the best, with the ones that matter the most. This is what we’re made of.

100% Made of New Zealand.

D22

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Business Transformation

The quiet revolution Managers and company directors are increasingly being held legally responsible for the actions of others writes Travis Atkinson

T

here’s a quiet revolution going on in New Zealand corporate culture. Over the past five years there has been a resurgence of regulation designed to protect consumers and workers. The implications for the personal liability of directors and managers of our companies is far reaching.

In many cases, new rules are being written that make directors and managers personally responsible for the actions of their company and the people that work under their authority.

Coming into the global financial crisis, New Zealand was one of the least regulated economies in the world. Many of us considered our regime admirably “light hand” until we got our wakeup call through disasters like the finance company meltdowns of 2007-9 and the Pike River mine disaster of 2010.

It was clear we needed to up our game to protect consumers and workers, and the government has been busy doing just that. Over the past five years a concerted government programme of new legislation and regulations started bringing our regulatory framework into line with the rest of the developed world.

A big part of that change has been a significant shift to make directors and senior managers directly liable for their actions or omissions in ways that they haven’t been in the past.

First to be tightened up was the finance sector. Frustrated by the difficultly of convicting directors after the finance company meltdowns, the government moved to make directors’ responsibility more explicit in a range of areas. Paramount among these has been the disclosures they

make to mum and dad investors when they issue securities.

The latest focus of regulatory redress is our health and safety regime.

A new Health and Safety Act is due to come into force next year and potentially will have an even greater impact on company directors and the managers of their companies.

For many industries, the new Health and Safety Act will require nothing short of a culture change.

Under the new Act there will be an explicit articulation of directors’ and senior managers’ duty of care for employees and contractors, and an obligation to proactively manage the

66 per cent of New Zealand CEOs rated cyber threats such as data security as a significant risk to their company’s growth in 2015. health and safety of those under their care.

The new regime will give more power to whistle-blowers as well. If a work environment is shown to be dangerous, regardless of whether anyone has been injured or not, then the managers and directors may be held personally responsible. Negligence can result in fines of up to $600,000 and five years imprisonment.

Next on the block will be privacy

legislation. Our Privacy Act was world leading when it came into force in 1993 — but that was before the internet permeated every corner of our lives and our personal data became so valuable.

There’s no doubt that New Zealand business leaders appreciate the significance of potential threat. In PWC’s latest Annual Global CEO Survey, 66 per cent of New Zealand CEOs rated cyber threats such as data security as a significant risk to their company’s growth in 2015, up from 40 per cent in 2014.

New privacy legislation is currently making its way through Parliament to redress the omissions of the current legislation.

Among those will be companies being held responsible for the protection of the personal data they hold on you. This new legislation will impose another new slew of liabilities on companies and individuals.

All this represents a significant change in New Zealand corporate culture. Compared to a decade ago there’s a greater expectation that company directors and managers will be professional and personally accountable for the decisions they oversee.

It means directors and managers have a greater duty to be more engaged in the day-to-day activities of their company, and that they have a responsibility to up-skill themselves on their liabilities. It also means they would be prudent to contact their insurance broker and ask for a personal liability assessment and audit of the cover that they hold. ● Travis Atkinson is executive general manager of NZI.

D23

Business Transformation

Moving forward at light speed The move to fibre-optic technology has sparked further disruptions that are changing the way we live and work

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horus NZ network strategy manager Kurt Rodgers says fibre is the disruptor that reshaped New Zealand’s telecommunications industry.

He says: “Deciding to build a fibre network was only the first disruption.

The network build is now past the halfway point, as adoption grows and the technology itself evolves it enables new disruptions. They aren’t likely to stop.”

Rodgers is talking about the changes that swept through New Zealand’s telecommunications sector in the past six years. Thanks to the growing demand for data and the explosion in mobile use, the sector was already on the move. The rate of change stepped up in 2009 when, then communications minister, Steven Joyce announced government plans to spend $1.5 billion building a new fibre network.

Joyce’s initial plan was for the 75 per cent of New Zealanders living in the 33 largest cities and towns to have fast fibre broadband connections.

That has since been extended to cover around 80 per cent of the population. When finished, the Ultrafast broadband network will replace the 100-year-old copper telephone network with data connections capable of carrying vast amounts of information at high speeds.

Fibre meant the restructure of the telecommunications industry. In order to win UFB contracts, the largest company, Telecom NZ, had to spin off its Chorus network division. That changed the nature of Telecom.

Five years ago no-one could foresee the change that has already happened.

Kurt Rodgers

Since then, Telecom changed its name to Spark NZ, reflecting its new role providing a broader range of digital services. Meanwhile Vodafone acquired Telstra Clear becoming a full service telecommunications provider in the process. On top of these moves a wave of consolidations has created stronger competitors. The market is no longer one giant and a string of minnows.

Rodgers says this all happened because of the move to fibre optic technology. He says: “It’s a fantastic technology for broadband. Not only

is it incredibly fast, but it is reliable and stable in ways other communications technologies are not. Copper and wireless broadband performance can be heavily impacted by climate or interference. This makes it impossible to predict what data speeds a customer will see.”

Because fibre is stable, service providers are able to sell different speeds to customers. Rodgers says everyone gets exactly the speed they purchase — at least from the local fibre access network. Actual overall network performance will depend on other factors either downstream with national and international connections or more locally as the data is distributed around their homes and offices. He says wireless and copper service providers can’t sell speed in the same way because they can’t guarantee what customers get.

Another difference between fibre and other telecommunications technologies is that it is easy to upgrade.

And that’s why Rodgers says fibre will continue to be disruptive.

When UFB connections were first sold here, most customers chose the lowest priced 30 Mbps service. This offers roughly the same speed as the best copper broadband service, but with fibre’s stability and reliability.

Now he says the most popular UFB service is 100 Mbps. “To upgrade a customer from 30 to 100 Mbps doesn’t require much change, they don’t need new equipment or engineers to call. It all happens seamlessly at the service provider’s end.”

A friendly reminder to get your personal liability check-up

Times are changing. As a company director or senior manager, you work in an ever-evolving legal and regulatory environment and you may be held personally liable for what happens to your employees, or for the products or services you provide to your customers. It pays to understand what your personal risks are and how you can mitigate them through the use of liability insurance.

Talk to your insurance broker about which NZI liability insurance solutions are right for you. nzi.co.nz

One curious aspect of being able to offer different speeds is that service providers can differentiate their products by price. Users with modest requirements, maybe just wanting email and web browsing can have a low cost 30 Mbps plan while those who want to stream television and other digital entertainment can pay more to buy faster connections.

Rodgers says online television has been 2015’s big disruptor. When Netflix entered New Zealand service providers reported a doubling of traffic. It has driven up demand for data and seen providers increase capacity.

It is causing customers to switch from copper to fibre.

Online television is disrupting local broadcasters and Sky TV with competition coming from new entrants like Spark’s Lightbox and the Premier League Pass football service.

“You really need a fast fibre connection for online television because it needs high peak speeds. Fastforwarding or rewinding video content means large bursts of data arrive to quickly fill buffers. You’ll get a much better television experience with 100 Mbps or higher”.

About 25 per cent of new customers want more than 100 Mbps and choose the even faster 200 Mbps services. Rodgers says as recently as five years ago when the UFB project started, 200 Mbps was thought to be faster than anyone would ever need.

“But household demand continues to climb. Every year each house has more digital devices, people have more apps, they do more online,

businesses use more cloud computing services and the quality of digital content improves. Next year we’ll see more 4K television which means higher definition pictures, higher frame rates. Fibre is able to take all that in its stride”.

Rodgers says by 2020 the standard fibre connection in New Zealand will operate at 1 Gbps and that will mean further disruption. Some New Zealanders are already using that speed.

Dunedin won the Chorus Gigatown competition and customers in that city can buy 1 Gbps connections at normal UFB prices. The city already has higher average speeds than the rest of the country and customers use more data. Rodgers says Dunedin already has a higher uptake of fibre services than most towns and demand is still growing there.

It’s not just Dunedin. The latest uptake figures suggest that after a relatively slow start, New Zealand is now the world’s fastest-growing fibre market. Rodgers says that’s likely to accelerate because the first wave of the Chorus’ UFB build focused on areas with businesses, schools and hospitals. From now it will be running fibre into potentially high-uptake suburbs.

Rodgers says speeds are growing so fast and the pace of technological change is so rapid that looking forward, say, five years is difficult.

“Five years ago no-one could foresee the change that has already happened. All we know is that more disruption is on the way.”

— Bil Bennett

D24

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Company of the Year 2015

Winning reputation a team effort

42 LOCATIONS ACROSS AUSTRALIA AND NEW ZEALAND

EBOS GROUP, ONE OF NEW ZEALAND’S OLDEST AND LARGEST COMPANIES, HAS BEEN NAMED COMPANY OF THE YEAR AT THE DELOITTE TOP 200 AWARDS. From small beginnings it has grown to become New Zealand’s third-largest company, reporting $6.1 billion in revenue for the June 2015 year.

Chairman Mark Waller said the Group’s consistently strong performance was a team endeavour.

HEALTHCARE

“Together we have built market leading positions in New Zealand and Australia and rewarded shareholders for more than two decades.

6,068

ANIMAL CARE

5,757

“Our performance has been strong because our team is strong. Our culture is inclusive and performance-driven and has delivered positive and consistent results over the long term,” he said.

2015

2014

1,822

1,427 2012

2013

1,341

EBOS is the largest and most diversified Australasian marketer, wholesaler and distributor of healthcare, medical and pharmaceutical products, and a leading marketer and distributor of animal care products.

2011

“Our Board, management team and staff are extremely pleased with the achievements that lie behind this award.

Thank you to all and congratulations to the other award winners and finalists.”

REVENUE ($MILLIONS)

“There is every reason to look to the future with confidence. We have made a positive start to the new financial year, with our long-term businesses and those recently acquired performing well.

D25

Success on a smaller scale Slowing economy sees the Government’s tax take from the Top 200 companies drop by 10.9 per cent

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here was growth among the Top 200 companies in 2015, but it was far from the riveting success seen last year.

After a 6.6 per cent year on year improvement in 2014, growth slowed to 0.9 per cent in 2015 — as cumulative revenue reached $177.2 billion.

That was an improvement of $1.6 billion, which sounds like a lot. But compared to the $17.4 billion growth of last year — it’s not quite so impressive. Overall profit was up 1 per cent, even though the underlying earnings, EBITDA, was down 4.2 per cent.

That drop in underlying earnings was magnified for the government’s tax-take, which dropped 10.9 per cent.

Last year, one of the big stories was how the government was managing to capture an increasingly small portion of ballooning profits — this year, the opposite is true.

As profits have shrunk, the government’s portion has dropped even further.

Fonterra’s profit was a big story, particularly during what has been a tumultuous time for global dairy markets and milk farmers. The top ranked company on the Top 200 more than doubled last year’s $179 million profit, that total expanding past the half billion-dollar mark in 2015.

Cloud accounting wonderchild Xero made its Top 200 debut, as revenues soared beyond the $100 million mark for the first time this year. Xero turned in the most improved revenue year-on-year

Top 200 companies Alexander Speirs among all Top 200 companies to come in at 195th in 2015. Don’t expect to see the company languish at the lower end for long however, as Xero is set to steadily climb the ranks for years to come.

At the other end of the spectrum, electronics retailer Dick Smith plummeted 51 spots down the rankings to 158th place, with revenues falling by more than 30 per cent to $199.4 million in a competitive retail environment.

After falling a few million dollars shy last year, the New Zealand arm of cloud and analytics behemoth SAP placed one spot outside the Top 200.

With uptake on cloud computing technologies still in its infancy in New Zealand businesses, there is strong potential for SAP to grow revenues just by maintaining its present market share. Time will tell whether next year will see SAP make its Top 200 debut.

Among the financial institutions, ANZ remains by far the largest — boasting $128.9 billion in assets. That’s an increase of $8.5 billion year on year, and almost $50 billion ahead of its closest competitor, Westpac.

Category Revenue Profit After Tax Tax Paid EBITDA Assets Equity

2015 $000s 177,217,447 7,663,106 2,248,754 22,306,023 247,080,981 114,352,066

2014 $000s 175,657,467 7,583,542 2,523,473 23,276,131 232,412,264 108,522,185

% Change 0.9 1.0 -10.9 -4.2 6.3 5.4

Top 30 financial institutions Category Revenue Profit After Tax Tax Paid EBITDA Assets Equity

2015 $000s 31,382,266 5,523,192 2,124,248 20,772,235 447,557,204 38,554,392

2014 $000s 28,927,610 4,559,289 1,620,381 18,267,047 421,360,952 36,687,193

% Change 8.5 21.1 31.1 13.7 6.2 5.1

Shining a light on positive role models Leon Wijohn

Last year, for the first time, the Deloitte Top 200 included a separate list of the top nine Ma¯ori business entities based on total asset value. In 2015, this list has expanded to 10.

At Deloitte we believe it is vitally important to recognise and celebrate business success in Aotearoa.

But this is often challenging for New Zealanders, especially for Ma¯ori for whom the cultural norm is generally to refrain from talking about one’s success.

Nevertheless, by recognising the success of Ma¯ori organisations and their people through the Deloitte Top 200, we are shining a light on positive role models for Ma¯ori businesses — an increasingly important exercise as the Ma¯ori economy stands at an estimated $40 billion and growing and Ma¯ori demonstrate an aspiration to move from being passive asset holders to active managers of their land and other assets.

Like last year, some of the organisations on the 2015 list may not be what most people would intuitively describe as a Ma¯ori business.

Deciding if a business is “Ma¯ori” can be subjective. In our view it is not only about being a Ma¯ori Trust or Incorporation.

For the purposes of the Deloitte

Maori Business Rank 1 2 3 4 5 6 7 8 9 10

Organisation Ngai Tahu Waikato Tainui Ngati Whatua ki Orakei Aotearoa Fisheries Limited Tauhara North No 2 Trust Parininihi ki Waitotara Tuhoe Te Uru Taumatua Ngati Porou Pukeroa Oruawhata Te Wananga o Aotearoa

Total Assets 1,277,625 1,163,828 631,031 532,223 317,800 267,143 254,046 206,071 182,932 166,162

Revenue 353,644 92.880 41,350 175,262 51,374 30,715 11,556 27,648 13,528 154,729

We are shining a light on positive role models for Ma¯ori businesses — an increasingly important exercise as the Ma¯ori economy stands at an estimated $40 billion and growing .

EBITDA 132,842 102,716 70,598 28,997 31,198 15,159 8,283 5,437 11,119 17,754

Total Equity 1,061,666 861,561 481,746 412,714 129,404 196,809 251,682 188,540 104,716 147,869

Top 200 we have taken the more general view that the Ma¯ori economy is made up of all those businesses where “Ma¯ori-ness” matters.

First, an organisation needs to identify as Ma¯ori. Then we look more closely at four attributes; stakeholders, kaupapa, ownership and results. What portion of the organisation’s stakeholders are Ma¯ori? How does the organisation demonstrate it follows Ma¯ori kaupapa?

How much of the business is owned by Ma¯ori individuals, Iwi and

other Ma¯ori groups or organisations?

And are the results — the purpose and profits — of the company predominantly to benefit or promote Ma¯ori initiatives?

The answers to these questions collectively inform the extent to which any business is defined as Ma¯ori.

In addition, in 2015 we include not only the total asset value for each entity, but also their earnings before interest, taxes, depreciation, and amortisation (EBITDA). As these business entities fundamentally exist to benefit or promote Ma¯ori initiatives, EBITDA offers a proxy for how much resource they have to serve this purpose.

Presenting the EBITDA figures is also useful for comparison as it discounts the distortionary effects of differing legal statuses, tax rates, asset classifications, etc.

We congratulate the 10 largest Ma¯ori organisations for making the 2015 Deloitte Top 200 Ma¯ori companies list. We hope their leadership continues to inspire other Ma¯ori organisations to grow and make a difference for their uri, Ma¯ori people and New Zealand as a whole. ● Leon Wijohn is a Deloitte Private partner and National Ma¯ori Business Sector Leader

D26

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Rank

Top profits Despite turmoil in global Rank Company Profit (000s) dairy markets and consistently falling milk prices 1 Fonterra 506,000 over the course of the 2 Infratil 466,300 year, Fonterra rallied from 3 Spark 375,000 a disappointing 2014 to 4 Air NZ 327,000 take out the title of top 5 Fletcher Building 280,000 profit maker for the 6 Meridian Energy 247,000 Deloitte Top 200. The 7 Ryman Healthcare 241,918 $506 million profit gave 8 Auckland Airport 223,500 farmers some hope of re9 Downer 210,200 lief in the near future, with 10 Woolworths 181,633 a forecast bump in the 11 Goodman Property 179,700 farmgate milk price.

12 Sky TV 171,764 Infrastructure investor 13 Housing New Zealand 163,000 firm, Infratil was a major 14 Fulton Hogan 151,643 mover this year — as 15 Vector 149,393 profits grew by $190 16 TrustPower 144,014 million to $466.3 million.

17 NZ Post 143,000 The bulk of that change 18 Contact Energy 133,000 can be attributed to a big 19 Orora Packaging 131,400 shift in revenue from 20 SkyCity 128,744 discontinued operations, with the sale of PayGlobal and Infratil Energy Ausdriven profits up a further 25 per cent, tralia.

Spark, which took out the top spot but will face tightening margins on last year with a profit of $460 million, lucrative North American routes with saw its final bottom line drop by $85 American Airways entering the fray.

Sky Television improved net profits million — although last year’s figures did include the $450 million sale of Aus- by 6.4 per cent to $171.8 million, bucking global trends which are seeing subscriptralian business AAPT. With EBITDA growth and improving tion television operators cannibalised cash flow within the business, Spark by online competition. Sky did see a 1.5 will be a competitor to get back into per cent drop in subscription rates, but that was offset by an improved take per the top spot next year.

Air New Zealand captured Company customer.

Vector rounds out the top 15 with of the Year honours at last year’s Top 200 Awards, with a $262 million profit a profit of $149.3 million. Base revenues — good for sixth spot among our biggest grew, with an increase in costs that are earners. This year, chief executive passed on directly to the customer but Christopher Luxon and his team have overall profits dropped by $21.9 million.

Biggest losses Thirty-three companies in the Top 200 reported lossRank Company Profit (000s) es, cumulatively accounting for a $970.7 million 1 Kiwirail Holdings (166,500) shortfall.

2 Goodman Fielder (132,887) KiwiRail Holdings led 3 Vodafone (120,700) all companies down, with 4 Xero Ltd (69,534) $166.5 million in losses for 5 Orion Health Group (60,815) the past financial year.

6 Watercare Services (55,356) That only tells part of 7 Independent Liquor (52,553) the story though — de8 Oceana Gold Holdings (37,909) preciation and write9 Juken (36,592) downs comprise a sig10 Two Degrees Mobile (33,613) nificant portion of that loss 11 ExxonMobil NZ (33,510) — with KiwiRail’s EBITDA 12 Cavalier Corporation (25,715) a comparatively healthy 13 Elders Rural Holdings (23,752) $148.1 million.

14 Landcorp Farming (20,000) Last year’s biggest loss15 General Cable (17,381) maker, Goodman Fielder, 16 Hewlett-Packard (15,571) posted a $446 million loss 17 Haier New Zealand (12,556) in 2014 as the business was 18 Transfield Services (12,551) readied for sale — with 19 Ravensdown (11,490) significant value written 20 BallanceAgrichemicals 11,070 off the business. This year, those losses narrowed to $132.9 million — although $168.7 overall loss, after a revaluation of million was again attributed to interest rate swaps to fair value rewritedowns. sulted in a $89.2 million writedown.

Though competitor Spark sits near Losses continue to balloon for Inthe top of the profit table, Vodafone dependent Liquor, as new owners is languishing at the other end of the Asahi wrote off the remaining goodspectrum, reporting a $120.7 million will in the business, a tool to offset loss for the past year — a figure much gains made from a settlement with tougher to endure than the $27.9 the former owners over claims they million loss from 2014. had been misled over the company’s Orion Health Group posted a $60.8 earnings. That $255.1 million impairmillion loss, prompting shareholders ment changed a $212.2 million to vote with their feet on the NZX this EBITDA to a $52.5 million loss. year.

Losses narrowed for Two Degrees, Orion’s stocks have lost close to 40 per cent of their value over the past as it continues to approach profitabil12 months as sales in the United States ity. Revenues grew to $398.4 million, up from $308.8 million the year prior disappointed.

Auckland Council owned Water- — resulting in a bottom line improvecare Services reported a $55.4 million ment of $2.3 million for the year.

Prev year

Name

Revenue ($000s)

% change

1 2 3 4 5

1 2 27 5 4

Fonterra Co-operative Group Fletcher Building Downer New Zealand Foodstuffs North Island Ebos Group

19,207,000 8,685,000 7,041,000 6,439,531 6,073,240

-14.6 3.1 -4.7 13.5 5.4

6 7 8 9 10

3 6 7 87 9

Woolworths Air NZ Spark Orora BP NZ

6,003,510 4,959,000 3,523,000 3,420,800 3,306,004

2.7 5.4 -11.0 28.1 -0.4

11 12 13 14 15

8 10 14 12 11

Z Energy Fulton Hogan Meridian Energy Foodstuffs South Island ExxonMobil

3,087,000 2,916,478 2,912,000 2,881,891 2,803,978

16 17 18 19 20

13 15 18 (-) 16

The Warehouse Group Contact Energy Silver Fern Farms Farmlands Co-operative Infratil

21 22 23 24 25

19 20 17 21 23

26 27 28 29 30

Profit after tax ($000s) 506,000 280,000 210,200 18,381 105,941

Rank

% change

1 5 9 97 28

182.7 -20.2 -2.7 -52.6 15.1

181,633 327,000 375,000 131,400 30,326

10 4 3 19 62

16.9 24.8 -18.5 282.0 -70.4

-9.1 -10.2 15.7 4.0 -2.1

7,000 151,643 247,000 18,805 (33,510)

142 14 6 94 224

-92.6 9.7 7.5 -12.7 -177.5

2,787,108 2,428,000 2,323,418 2,213,101 2,133,600

4.5 -1.0 15.8 1.2 -12.9

50,937 133,000 474 1,784 466,300

44 18 192 183 2

-34.1 -43.2 101.7 -57.3 69.8

Genesis Energy Mainfreight Vodafone Mighty River Power Nuplex Industries

2,098,900 2,054,339 1,974,700 1,686,000 1,514,700

4.6 6.8 -4.4 -1.5 -8.3

104,800 82,405 (120,700) 47,000 73,600

29 34 232 46 38

113.0 -8.1 -332.6 -77.8 34.7

31 28 24 22 26

Methanex Zespri Alliance Group New Zealand Post Vector

1,501,838 1,474,681 1,461,528 1,309,000 1,296,139

25.8 19.9 5.4 -5.0 2.7

104,098 34,621 6,210 143,000 149,393

30 56 145 17 15

-4.9 100.8 10.6 33.6 -12.8

31 32 33 34 35

25 30 32 29 47

ANZCO Foods British American Tobacco Housing New Zealand PGG Wrightson Haier

1,260,405 1,232,942 1,205,000 1,204,162 1,131,910

-1.6 1.5 5.8 -1.7 45.8

6,016 126,484 163,000 32,753 (12,556)

147 21 13 58 218

-50.8 -3.9 15.6 -22.5 59.5

36 37 38 39 40

34 35 33 45 41

Transpower New Zealand Toyota New Zealand Chorus TrustPower Tasman Steel Holdings

1,045,500 1,027,598 1,014,000 994,532 948,094

4.2 4.2 -4.9 22.3 10.7

113,300 13,417 91,000 144,014 43,169

26 112 31 16 51

-47.5 133.8 -38.5 25.1 148.9

41 42 43 44 45

40 38 43 65 44

Datacom Group Sky Network Television SkyCity Open Country Dairy Bunnings

936,478 928,325 918,419 908,693 900,244

8.7 2.1 11.7 66.8 10.4

24,347 171,764 128,744 29,801 12,034

75 12 20 63 117

-52.6 6.4 30.7 91.5 105.6

46 47 48 49 50

37 36 48 54 51

Ballance Agri-Nutrients Goodman Fielder Bidvest The Colonial Motor Company Hellaby Holdings

896,365 869,310 830,464 789,377 779,605

-3.1 -7.6 9.9 12.9 6.3

(11,070) (132,887) 24,885 18,705 28,403

215 233 73 95 65

-214.5 34.0 5.1 -7.4 22,117.8

D27

EBITDA

EBIT

% return on revenue

1399000.00 724000.00 569200.00 86840.00 198994.00

838,000 495,000 316,100 86,840 174,876

4.4 5.7 4.5 1.3 2.9

439835.00 984000.00 989000.00 323400.00 99269.00

330,419 582,000 536,000 225,300 67,706

5.5 11.7 15.2 6.6 2.0

49000.00 318264.00 612000.00 26290.00 120.00

6,000 233,702 335,000 26,290 (15,774)

146105.00 459000.00 56825.00 5826.00 824600.00

Total assets $000s 18,315,000 7,501,000 4,004,400 2,645,587 2,550,058

Rank

% change in assets

% return on assets

Total equity

Rank

% return on equity

Proprietorship ratio (ave)

Balance date

3 6 15 22 23

17.9 8.1 3.5 -3.6 10.4

3.0 3.9 5.3 0.7 4.4

6,659,000 3,710,000 2,035,300 762,420 1,051,028

2 5 11 34 27

7.7 7.8 10.5 2.4 10.4

39.35% 51.38% 51.70% 28.30% 43.26%

07/15 06/15 06/15 03/15 06/15

4,476,150 6,775,000 3,206,000 2,937,000 1,357,293

14 7 20 21 36

11.8 15.8 -1.1 6.6 -8.6

4.3 5.2 11.6 4.6 2.1

1,880,964 1,965,000 1,778,000 1,442,000 445,868

13 12 16 17 56

10.1 17.0 21.5 9.3 7.0

44.36% 31.13% 55.14% 50.68% 31.37%

06/14 06/15 06/15 06/15 12/14

0.2 8.0 11.5 0.9 -0.6

1,373,000 1,714,635 7,661,000 1,010,558 1,071,164

35 34 5 52 49

-10.8 3.0 0.9 5.9 -2.1

0.5 9.0 3.2 1.9 -3.1

505,000 685,826 4,748,000 337,840 110,685

53 38 4 67 123

1.3 24.3 5.3 5.8 -26.0

34.67% 40.60% 62.27% 34.38% 10.22%

03/15 06/15 06/15 02/15 12/14

87,471 255,000 27,663 5,826 665,400

3.1 10.5 1.2 0.3 31.2

1,198,798 6,089,000 760,847 411,653 5,947,700

42 9 63 96 11

5.9 -1.5 -8.7 6.0 9.1

4.4 2.2 0.1 0.4 8.2

544,282 3,171,000 319,256 127,797 2,555,300

46 7 71 116 9

9.5 3.9 0.2 1.4 20.3

46.71% 51.68% 40.05% 31.95% 44.84%

08/15 06/15 09/14 06/15 03/15

322700.00 160898.00 424700.00 498000.00 145500.00

208,300 126,736 27,400 198,000 106,100

9.9 6.2 1.4 11.7 7.0

3,528,000 1,124,455 2,218,200 6,058,000 1,182,100

18 46 26 10 44

-2.8 15.2 -4.3 6.5 -1.5

2.9 7.8 -5.3 0.8 6.2

1,825,400 508,618 157,100 3,337,000 576,400

14 52 104 6 44

5.7 17.3 -55.4 1.4 13.5

51.01% 48.43% 6.93% 56.81% 48.39%

06/15 03/15 03/15 06/15 06/15

183200.00 56159.00 41045.00 300000.00 584251.00

130,144 50,926 21,098 216,000 389,098

8.7 3.5 1.4 16.5 30.0

1,010,206 461,279 504,755 19,217,000 6,122,957

53 89 85 2 8

1.5 3.8 4.1 9.3 4.9

10.4 7.6 1.3 0.8 2.5

325,412 109,548 296,684 1,170,000 2,298,632

70 124 74 24 10

34.4 34.8 2.1 12.1 6.5

32.45% 24.19% 59.95% 6.36% 38.43%

12/14 03/15 09/14 06/15 06/15

29925.00 181262.00 536001.00 64976.00 83492.00

18,232 180,556 321,000 55,748 15,499

1.4 14.6 26.6 4.6 1.4

506,274 568,525 21,816,000 652,953 1,825,099

84 76 1 71 31

9.4 5.3 11.3 2.9 5.8

1.2 22.8 0.8 5.1 -0.7

217,849 155,338 17,622,000 267,368 119,445

86 106 1 79 119

2.8 84.5 1.0 12.2 -9.9

44.96% 28.03% 85.10% 41.53% 6.73%

09/14 12/14 06/15 06/15 12/14

620000.00 30362.00 591000.00 340806.00 127382.00

385,100 23,460 267,000 242,540 70,175

36.8 2.3 26.3 24.4 7.4

5,727,300 376,158 3,841,000 3,581,599 1,197,562

12 100 16 17 43

1.0 13.8 4.4 13.8 20.1

2.0 3.8 2.4 4.3 3.9

1,376,100 62,018 819,000 1,810,236 628,328

21 165 31 15 42

8.1 22.0 11.7 8.7 7.2

24.15% 17.55% 21.78% 53.81% 57.27%

06/15 03/15 06/15 03/15 06/14

71421.00 376645.00 307478.00 59793.00 53225.00

39,274 259,432 218,186 46,045 34,461

4.2 27.9 23.8 5.1 3.8

383,294 1,942,021 1,925,561 533,807 494,332

97 29 30 81 87

1.6 4.1 5.1 20.0 4.8

6.4 9.0 6.9 6.1 2.5

171,259 1,337,203 816,922 284,391 56,941

99 23 32 75 170

14.4 13.3 16.2 11.1 23.6

45.03% 70.24% 43.49% 58.13% 11.79%

03/15 06/15 06/15 09/14 06/15

43910.00 77619.00 54402.00 34882.00 58707.00

(10,207) (91,040) 40,948 30,702 44,173

-1.1 -10.5 4.9 3.9 5.7

541,874 1,093,200 251,756 282,353 433,505

79 47 122 118 93

-8.6 -14.4 3.8 14.5 11.8

-2.0 -11.2 10.1 7.1 6.9

435,429 396,534 135,209 152,576 219,074

57 60 115 108 84

-2.6 -28.7 19.3 12.7 13.9

76.72% 33.45% 54.70% 57.69% 53.34%

05/15 06/15 06/15 06/15 06/15

D28

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Rank

Most improved profit Investment firm Hellaby Rank Company % Holdings reported a strong return to profit in 2015 as 1 Hellaby Holdings 22117.8 last year the company paid 2 Westland Dairy 3754.1 100 per cent tax. They 3 Reckitt Benckiser 1044.5 paced all Top 200 com4 Dow AgroSciences 1034.9 panies on a percentage 5 Unilever New Zealand 474.9 basis while generating a 6 Aotearoa Fisheries 463.5 healthy $28.4 million in 7 NZ Refining Company 302.4 profit for their share8 Sealed Air 297.4 holders.

9 Sony NZ 291.3 Despite a 16.8 per cent 10 Orora Packaging 282 drop in revenue, Westland 11 Newmont Waihi Gold 260 Co-operative Dairy Com12 Mazda Motors 192.4 pany made a similarly 13 Goodyear & Dunlop Tyres 182.9 strong return to profit this 14 Fonterra 182.7 year. 2015’s 46th ranked 15 GPC Asia Pacific 181.3 company on the Top 200 16 Kura (50% AF) 157.1 posted a final profit of $19.4 17 Christchurch Airport 150.2 million — well up from the 18 Tasman Steel 148.9 slim $500,000 profit made 19 Honda NZ 136.1 last year.

20 Kordia Group 135.5 A big increase in revenue for Aotearoa Fisheries, translated into even bigger profit growth this year. increase in revenue to $154.2 million After improving revenue by 34.7 per translated into a nearly $40 million cent, up to $175.3 million, New Zea- profit, resulting in a healthy dividend land’s largest Maori-owned fishing for Christchurch Council. group improved profits more than For the second straight year, New400 per cent to $22 million. mont Waihi Gold has made the list Fonterra led all companies in the of most improved profit makers, with Top 200 with a mammoth half-billion an after-tax profit of $48.8 million, up profit for the year, good enough to from $13.6 million last year. crack the top 10 for most improved It’s been a strong year for bottom lines too, with a 182.7 per cent automakers and the local arms of improvement year on year.

Christchurch Airport more than Mazda and Honda both experienced doubled profit as passenger numbers top-tier profit growth amongst Top continue to grow. A 19 per cent 200 companies.

Most improved revenue Despite investor concern Rank Company % about cash burn rates at Xero, the underlying finan1 Xero Ltd 75.4 cial figures continue to im2 Open Country Dairy 66.8 prove in a big way, year3 BCS Group 66.4 on-year. After narrowly 4 Tetra Pak 60.9 missing out on a Top 200 5 CDC Pharmaceuticals 50.8 debut last year, a 75.4 per 6 Haier New Zealand 45.8 cent increase in revenues 7 Aotearoa Fisheries 34.7 — the best of among all Top 8 AWF Madison Group 32.9 200 companies — 9 Comvita 32.7 propelled the home-grown 10 Two Degrees Mobile 29 accounting firm from 11 Orora Packaging 28.1 230th to 195th position.

12 Mitsubishi Motors 25.9 Though the focus for 13 Methanex New Zealand 25.8 Rod Drury and company 14 Green Cross Health 25.1 will continue to be on get15 TrustPower 22.3 ting Xero’s own books into 16 Suzuki New Zealand 21.3 the black — he at least 17 ZESPRI Group 19.9 continues to deliver in 18 Christchurch Airport 19 terms of building his 19 Mercedes-Benz 18.5 revenue base.

20 NZ Wool Services 17.2 After a strong performance turned in by our largest automakers last year, there’s certain to be more champagne Park are a real threat to break into being poured in their boardrooms the top one hundred companies next this silly season. year, as increasing volumes at Mitsubishi Motors and Suzuki Fonterra’s Waitoa plant drive were both big climbers among the revenues higher. automakers too, improving their Following their acquisition by revenue by 25.9 per cent and 19.9 per Japanese material handling conglomcent respectively. erate Daifuku late last year, BCS Mercedes-Benz also made the cut, Group cracked the Top 200 for the but whether they can continue strong first time in 2015, spurred on by 66 local growth will no doubt be affected per cent revenue growth — good for by the ongoing emissions testing $139.2 million. scandal ravaging fellow German Two Degrees maintained strong automaker Volkswagen — certainly a trend to watch over the next 12 fiscal growth for a sixth consecutive year, outpacing 2014’s growth with a months.

For the second consecutive year, revenue improvement of 29 per cent.

Tetra Pak turned in a top-five per- The upstart mobile provider has yet formance — growing revenues a fur- to officially turn a profit, but conther 60.9 per cent to $280.5 million. tinued growth in a largely stagnant After debuting last year at 168th, Tetra mobile market is a major positive.

Prev year

Name

Revenue ($000s)

% change

Profit after tax ($000s)

Rank

% change

51 52 53 54 55

42 52 56 50 49

Kiwirail Holdings Harvey Norman RTA Pacific Turners & Growers H J Heinz

769,300 756,304 738,750 733,929 723,244

-8.0 4.7 9.5 -0.5 -2.8

(166,500) 20,158 82,578 16,620 68,301

234 90 33 103 39

32.9 5.5 10.3 -3.6 53.9

56 57 58 59 60

39 46 55 60 57

Ravensdown Fertiliser Westland Co-operative Dairy Wilson & Horton Fisher & Paykel Healthcare Sime Darby Motor Group

719,465 666,810 656,827 649,157 645,612

-18.4 -16.8 -2.4 13.4 -0.8

(11,490) 19,386 51,130 113,173 15,503

216 92 43 27 106

-2,177.8 3,754.1 -11.8 16.6 12.7

61 62 63 64 65

61 58 62 66 63

Hewlett-Packard Lion Apple Sales Ingram Micro Transfield Services

621,377 595,347 569,726 562,342 545,859

9.0 -7.6 0.8 6.4 4.9

(15,571) 44,024 15,137 (1,122) (12,551)

219 48 107 202 217

-6.2 -20.2 44.3 91.6 -202.9

66 67 68 69 70

75 69 76 71 64

Opus International Auckland Int. Airport Oregon Group Watercare Services DB Breweries

541,080 521,000 517,675 513,957 511,460

16.9 6.9 12.2 6.0 -6.7

26,240 223,500 45,219 (55,356) 22,388

70 8 47 229 79

15.2 3.5 -72.0 -559.6 -27.9

71 72 73 74 75

70 80 68 79 83

Briscoe Group Steel & Tube Coca Cola Holden Freightways

509,835 502,422 501,471 496,175 479,601

5.0 13.6 -0.9 11.8 10.9

39,302 21,447 53,962 16,319 43,283

53 85 41 104 50

17.1 19.8 -11.2 13.6 3.8

76 77 78 79 80

78 84 73 72 59

Ford Imperial Tobacco Kura Sanford Synlait

477,039 476,058 461,785 458,531 448,162

5.3 10.3 -1.1 -2.2 -25.4

8,267 20,496 25,355 22,364 10,552

134 88 72 80 122

-33.9 3.7 157.1 9.6 -46.2

81 82 83 84 85

86 85 81 67 88

Powerco Beca Frucor Beverages Fairfax Kathmandu

445,902 436,588 432,159 414,328 410,845

7.3 4.1 -1.6 -21.5 4.1

73,664 34,316 22,289 13,129 20,419

37 57 81 113 89

-19.8 -8.3 -9.0 -97.1 -51.6

86 87 88 89 90

104 89 93 91 101

Two Degrees Mobile Nestle Independent Liquor Toll Group Resteraunt Brands

398,372 390,475 378,938 375,467 372,605

29.0 -0.8 5.9 -1.1 12.8

(33,316) 43,640 (52,553) 3,242 23,830

225 49 228 169 76

6.4 6.0 -26.4 105.3 19.4

91 92 93 94 95

90 (-) 112 96 97

IBM Ngai Tahu Mitsubishi Motors TVNZ Pact Group

366,728 353,644 346,971 344,488 342,848

-5.5 12.8 25.9 -1.8 -0.7

39,436 115,767 8,538 28,115 37,660

52 24 133 67 55

-2.2 -27.9 14.0 55.2 -10.7

OfficeMax City Care Ltd Market Gardeners Northpower Pan Pac Forest Products

333,941 333,545 333,480 326,334 326,234

-5.3 -4.9 14.0 5.2 -5.4

1,471 10.225 7,283 (447) 52,364

187 124 139 199 42

-85.9 -20.7 14.1 -102.8 -47.0

96 94 97 95 98 105 99 103 100 98

D29

EBITDA

EBIT

% return on revenue

Total assets $000s

Rank

% change in assets

% return on assets

Total equity

Rank

% return on equity

Proprietorship ratio (ave)

Balance date

148100.00 27595.00 93858.00 46840.00 134771.00

(145,400) 27,595 90,928 32,616 108,520

-18.9 3.6 12.3 4.4 15.0

948,600 243,172 738,819 559,397 710,100

55 123 65 78 67

2.8 10.2 -17.2 21.7 -0.9

-17.8 8.7 10.1 3.3 9.6

520,400 141,462 341,691 282,972 371,518

50 112 66 76 62

-33.4 14.3 21.2 6.0 20.0

55.62% 60.99% 41.88% 55.53% 52.08%

06/15 06/14 12/14 12/14 12/14

9512.00 61118.00 134871.00 199743.00 27934.00

(9,412) 35,292 110,329 168,095 23,177

-1.3 5.3 16.8 25.9 3.6

533,241 538,165 1,141,188 669,816 297,567

82 80 45 70 116

-2.3 12.5 -7.5 6.3 13.7

-2.1 3.8 4.3 17.4 5.5

379,859 207,788 591,994 471,190 21,791

61 89 43 55 209

-3.1 8.9 7.5 25.8 109.7

70.41% 40.88% 49.86% 72.48% 7.79%

05/15 07/15 12/14 03/15 06/14

-792.00 96109.00 29618.00 13088.00 -6814.00

(8,510) 69,385 29,087 8,070 (16,518)

-1.4 11.7 3.9 1.4 -3.0

163,604 1,064,838 132,951 234,769 452,113

154 50 172 125 91

-52.7 7.8 62.8 6.8 48.9

-6.1 4.3 14.1 -0.5 -3.3

(240,706) 849,682 11,180 17,971 154,700

235 30 224 215 107

N/A 5.3 137.7 -6.1 -7.8

-94.47% 82.79% 10.42% 7.91% 40.94%

10/14 09/14 09/14 12/14 06/15

55386.00 437100.00 91171.00 217319.00 55590.00

39,157 372,300 81,429 7,400 37,757

7.2 71.5 15.7 1.4 7.4

351,314 5,101,500 1,341,112 8,684,7542 325,951

103 13 37 4 110

4.8 7.8 8.2 3.6 -7.1

7.6 4.5 3.5 -0.6 6.6

150,334 3,042,900 751,512 5,875,001 102,607

109 8 36 3 126

18.4 7.5 6.3 -0.9 20.3

43.80% 61.88% 58.24% 68.83% 30.32%

12/14 06/15 06/15 06/15 12/14

60424.000 38339.00 117578.00 22680.00 86481.00

54,895 33,394 89,692 22,560 72,197

10.8 6.6 17.9 4.5 15.1

234,754 287,801 699,818 179,515 498,668

126 117 69 146 86

9.0 3.9 4.8 5.2 9.9

17.5 7.6 7.5 9.3 9.1

155,559 167,009 329,313 56,849 207,804

105 102 68 171 88

26.5 13.1 16.6 30.4 21.3

69.12% 59.14% 45.90% 32.47% 43.63%

01/15 06/15 12/14 12/14 06/15

11839.00 39845.00 48084.00 60025.00 38295.00

11,446 34,444 38,993 42,050 24,293

2.4 7.2 8.4 9.2 5.4

130,424 154,456 747,883 777,338 579,782

174 162 64 62 75

-3.2 -11.8 2.3 1.3 21.6

6.2 12.4 3.4 2.9 2.0

50,301 39,436 409,199 545,841 171,846

181 195 59 45 98

16.7 51.2 6.4 4.1 5.9

37.94% 23.93% 55.34% 70.67% 32.53%

12/14 09/14 09/14 09/14 07/15

246885.00 59236.00 45860.00 85470.00 47952.00

170,401 51,968 31,400 64,540 34,077

38.2 11.9 7.3 15.6 8.3

2,053,404 178,608 646,945 841,155 430,451

28 147 72 60 95

5.8 4.2 7.5 -3.5 5.4

3.7 19.6 3.6 1.5 4.9

534,397 99,298 494,887 209,608 313,314

47 130 54 87 72

14.0 34.8 4.5 5.5 6.6

26.76% 56.75% 79.25% 24.47% 74.71%

03/15 03/15 12/14 06/14 07/15

45076.000 67710.00 212219.00 13085.00 50155.00

(13,642) 61,708 (60,898) 6,406 33,425

-3.4 15.8 -16.1 1.7 9.0

430,696 129,945 459,848 118,490 144,605

94 176 90 184 165

-2.1 2.2 -11.6 -18.6 33.5

-7.7 34.0 -10.7 2.5 18.8

94,219 15,266 1,540 68,312 71,210

134 217 229 156 153

-31.1 221.4 189.0 4.9 35.1

21.65% 11.88% 0.31% 51.75% 56.31%

12/14 12/14 12/14 06/14 03/15

61280.000 132842.00 13002.000 51283.000 79695.00

51,589 124,266 11,914 36,742 68,363

14.1 35.1 3.4 10.7 19.9

335,631 1,277,625 140,511 270,658 348,981

107 39 166 119 104

21.9 11.6 9.3 18.0 -4.9

12.9 9.6 6.3 11.2 10.5

184,631 1,061,666 101,088 204,277 101,957

92 26 128 91 127

23.8 11.3 8.8 14.8 35.6

60.45% 87.65% 75.15% 81.70% 28.49%

12/14 06/15 03/15 06/15 06/14

11369.00 24708.00 15148.00 26361.00 89980.00

5,803 14,638 11,776 6,537 72,897

1.7 4.4 3.5 2.0 22.3

232,424 108,454 180,188 442,883 706,581

127 196 144 92 68

8.1 -1.8 0.8 4.7 8.2

0.7 9.3 4.1 -0.1 7.7

178,101 55,689 93,137 252,049 513,312

93 173 135 80 51

0.8 19.2 8.1 -0.2 10.7

79.62% 50.89% 51.89% 58.21% 75.51%

12/14 06/15 06/15 03/15 03/15

D30

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Rank

Return on assets Return on Assets Rank Company Return% (ROA) provides an indication of how ef1 Nestle New Zealand 34.0 ficiently a company 2 Visionstream 30.0 manages its assets in 3 British American Tobacco Holdings 22.8 order to generate 4 Hallenstein Glasson 20.6 earnings.

It is 5 ABB Limited 19.9 calculated by meas6 Beca Group 19.6 uring profit against 7 Mars New Zealand 19.4 total assets reported.

8 Restaurant Brands 18.8 ROA numbers are 9 Briscoe Group 17.5 heavily influenced 10 Fisher & Paykel Healthcare 17.4 by the requirements 11 Newmont Waihi Gold 16.4 of the industry in 12 New Zealand Sugar 15.5 which the business 13 Apple Sales 14.1 operates.

14 Tetra Pak 14.0 Agriculture and 15 AsureQuality 13.7 manufacturing busi16 ITW NZ 13.6 nesses for example, 17 IBM 12.9 requiring significant 18 Imperial Tobacco 12.4 amounts of property, 19 Spark 11.6 plant and equipment, 20 Green Cross Health 11.6 will typically have a much lower return on assets than a softTobacco continues to prove making ware company.

Nestle bettered last year’s 29.7 per cigarettes is a lucrative business.

BAT generated $126.5 million of cent ROA, to move to the top of the list with 34 per cent. Revenue and asset revenue from an asset base of $568.5 levels both remained consistent year million and was the highest-ranked on year, but a higher profit yield company in the Top 200 on this list.

Engineering consultancy Beca conbumped performance in this category.

Last year’s leader, Fairfax, was tinues to be a picture of consistency.Its buoyed by the sale of its remaining revenues, profits and asset base have holding in Trade Me. That saw its ROA all been strong performers in recent drop from 36.2 per cent to 1.5 per cent years, rewarded with a move from 9th to 6th place on this last. in 2015.

Tetra Pak’s revenue growth was a big Telecommunications and ICT company Visionstream improved ROA by story further up the book — but is yet 25 per cent, also on consistent revenues to translate into substantial profit — moving from 7th to 2nd place — an improvements. impressive performance considering With a moderate increase in assets, ROA dropped from 14.4 to 14 per cent, last year was its Top 200 debut.

Even though New Zealand smoking although relative to the Top 200 comrates continue to decline in the face of panies as a whole — it is an improveprogressive tax hikes, British American ment.

Return on equity Nestle topped this category for a second straight year, generatRank Company Return ing a profit of $43.6 million from an average equity base of $19.7 1 Nestle New Zealand 221.4 million. Its 221.4 per cent Return 2 Apple Sales New Zealand 137.7 on Equity this year is well 3 Sime Darby Motor Group 109.7 ahead of last year’s 140 per cent 4 British American Tobacco 84.5 result.

5 Visionstream 62.2 ROE is a measure of how 6 McDonald's 52.7 effectively a company can gen7 Imperial Tobacco 51.2 erate income relative to the 8 Tetra Pak 47.1 amount of money that share9 MARS NZ 44.0 holders have invested in the 10 New Zealand Investment 42.2 firm. It’s a useful tool for in11 ABB Limited 41.7 vestors to use when comparing 12 Avis 39.2 companies within the same in13 Mercedes-Benz NZ 37.0 dustry.

14 Pact Group 35.6 It is calculated by measuring 15 Restaurant Brands 35.1 profit earned against the aver16 Beca Group 34.8 age equity held over the past 17 ZESPRI Group 34.8 two years — to prevent changes 18 BCS Group 34.7 in shareholder contributions 19 Methanex 34.4 skewing the results.

20 AsureQuality 28 Both McDonalds and Restaurant Brands — who operate the local KFC, Pizza Hut, Carl’s Jr and holders — appearing at 3rd and 7th Starbucks — turned in strong perform- respectively.

Despite improved revenues and ances for the fast food sector.

A lower overall standard this year, improved profits, changes to the overhas meant McDonald’s’ improvement all equity in Mercedes-Benz has seen from 51.8 per cent to 52.7 per cent, has it drop down the list — as profits haven’t moved them from 11th place to 6th grown relative to the worth of the place. Similarly, a modest improve- shareholder’s capital. Their ROE ment from 31.9 per cent to 35.1 per cent dropped from 46.8 per cent to 37 per for Restaurant Brands, off the back of cent this year.

A strong year for kiwifruit exporters a $3.9 million uptick in profit, saw Restaurant Brands crack the list this saw profit for Zespri double year on year, with $34.6 million profit generyear.

Both of the tobacco companies on ated from average equity of just under the Top 200, British American Tobacco $100 million. Its 34.8 per cent ROE saw and Imperial Tobacco, continue to gen- them scrape onto the list, just ahead erate strong returns for their share- of BCS Group, Methanex and Holden.

Prev year

Name

Revenue ($000s)

% change

101 117 102 82 103 100 104 (-) 105 92

Green Cross Health Oceana Gold DHL Holdings Orion Corp Kordia

324,451 323,826 321,855 304,088 302,962

25.1 -25.4 -3.4 13.7 -18.2

106 115 107 99 108 106 109 159 110 167

Fuji Xerox Mondelez NZ Investments Orica Investments CDC Pharmaceuticals Tetra Pak

301,508 300,373 294,912 293,565 280,505

11.2 -12.2 0.8 50.8 60.9

111 112 113 114 115

Port of Tauranga Visionstream Bupa Care Services CB Norwood Distributors Tatua Dairy Company

279,661 277,126 272,937 271,906 267,676

116 111 117 130 118 126 119 116 120 113

Allied Foods Coles Group Mazda Motors Unilever Scales Corporation

121 128 122 143 123 102 124 125 125 (-)

126 127 128 129 130

Profit after tax ($000s) 18,890 (37,909) (5,491) 82,615 8,641

Rank

% change

93 227 208 32 132

0.3 71.2 -166.4 63.7 135.5

(2,313) 5,328 26,009 161 11,400

205 154 71 193 121

88.2 -47.7 37.3 -57.1 37.3

1.1 1.2 10.6 12.6 15.9

79,148 21,570 32,125 7,259 12,478

36 84 60 141 116

1.1 33.3 -24.9 42.6 19.8

266,009 265,658 262,977 262,247 259,488

-3.6 15.1 13.1 -0.5 -5.4

13,042 28,177 8,047 5,341 18,375

114 66 135 153 98

-2.5 43.3 192.4 474.9 -10.1

Weyville Holdings Mercedes-Benz Nutricia Dunedin City Holdings Mediaworks

258,173 255,194 252,372 248,292 247,449

10.9 18.5 -20.9 3.6 N/A

13,648 16,656 (1,191) 12,952 11,989

110 102 203 115 118

10.8 2.4 -160.0 3.8 N/A

Linde Holdings GPC Asia Pacific Pumpkin Patch Tourism Holdings NZPM Group

243,924 243,505 239,709 239,645 238,853

4.4 7.5 -0.9 4.0 -2.1

28,903 9,361 (9,079) 20,099 (6,142)

64 129 213 91 210

0.7 181.3 -189.3 80.8 -349.3

131 (-) 132 145 133 139 134 137 135 140

Dimension Data Livestock Improvement Corp CablePrice NZ Refining Smiths City Group

237,127 233,002 232,908 231,956 231,800

5.0 9.5 5.6 3.9 1.3

(320) 13,669 9,310 10,023 8,000

197 109 130 126 136

87.4 -24.3 -17.6 302.4 95.1

136 153 137 131 138 118 139 146 140 148

Ryman Healthcare Millstream Equities Landcorp Farming Abano Healthcare Hallenstein Glasson

227,112 226,660 224,100 223,048 222,935

11.8 -1.2 -9.8 5.2 6.6

241,918 (1,242) (20,000) 96 17,386

7 204 221 194 100

24.2 87.0 -136.6 -98.4 21.8

141 120 142 150 143 141 144 136 145 155

New Zealand Sugar Newmont Waihi Gold McDonald's Restaurants Ports of Auckland Cavalier Corporation

222,301 221,523 220,976 220,303 217,267

-9.1 6.6 2.0 -1.7 7.2

23,059 48,800 30,752 63,188 (25,715)

78 45 61 40 223

0.9 260.0 0.1 -14.6 -544.1

146 147 148 149 150

Fernhoff Juken New Zealand NZ Wool Services International Bridgestone Delegat's Group

217,124 216,939 216,767 216,401 211,957

7.1 -10.5 17.2 -2.0 9.8

(4,797) (36,592) 4,395 10,136 32,523

207 226 161 125 59

86.6 -193.3 32.3 5.9 -23.6

109 114 119 124 129

127 133 123 132 121

154 122 163 138 135

D31

EBITDA

EBIT

% return on revenue

31164.00 66065.00 126.00 156807.00 40083.00

26,665 (42,481) (2,990) 115,826 18,447

8.2 -13.1 --0.9 38.1 6.1

16700.00 23982.00 62282.00 1710.00 17113.00

8,109 15,930 54,698 1,260 16,077

153658.00 31192.00 63852.00 14380.00 2707300

Total assets $000s

Rank

% change in assets

% return on assets

Total equity

Rank

% return on equity

Proprietorship ratio (ave)

Balance date

191,051 351,582 160,510 1,083,942 217,521

139 102 156 48 133

42.1 -13.4 -5.5 4.3 1.1

11.6 -10.0 -3.3 7.8 4.0

99,421 57,606 47,996 759,694 80,764

129 169 186 35 146

20.0 -49.8 -9.9 11.1 9.9

61.09% 15.21% 29.06% 71.55% 37.34%

03/15 12/14 12/14 03/15 06/14

2.7 5.3 18.5 0.4 5.7

312,331 239,712 259,973 63,329 87,666

114 124 121 214 201

15.6 -1.9 7.6 38.3 15.8

-0.8 2.2 10.4 0.3 14.0

14,200 39,330 172,029 12,284 27,399

221 196 97 223 204

-15.1 14.6 16.4 1.5 47.1

4.88% 16.25% 68.58% 22.52% 33.54%

03/15 12/14 09/14 03/15 12/14

122,483 28,287 51,154 11,909 19,825

43.8 10.2 18.7 4.4 7.4

1,297,018 72,363 966,130 136,827 179,953

38 211 54 168 145

12.3 1.0 14.2 9.5 10.7

6.5 30.0 3.5 5.5 7.3

887,550 48,391 268,830 70,273 71,723

29 185 78 154 152

9.3 62.2 13.1 10.6 19.5

72.40% 67.20% 29.68% 53.68% 41.88%

06/15 12/14 12/14 12/14 07/14

27374.00 42095.00 14076.00 19929.00 39424.00

18,783 39,134 12,449 9,563 29,775

7.1 14.7 4.7 3.6 11.5

116,844 340,958 80,056 109,894 226,410

186 106 205 194 128

-11.7 9.4 11.0 1.0 -17.0

10.5 8.6 10.6 4.9 7.4

85,816 298,019 46,811 65,907 146,330

142 73 187 160 110

14.2 9.9 18.8 8.4 11.4

68.89% 91.33% 61.51% 60.26% 58.64%

08/14 06/14 03/15 12/14 12/14

26955.00 29618.00 4919.00 81041.00 36186.00

19,267 29,087 66 63,867 25,649

7.5 11.4 0.0 25.7 10.4

218,785 341,657 126,014 1,029,435 353,854

131 105 177 51 101

3.3 -24.8 18.6 -0.5 N/A

6.3 4.2 -1.0 1.3 N/A

176,163 53,315 8,364 175,173 206,659

94 175 225 95 90

8.0 37.0 -13.3 7.5 N/A

81.84% 13.40% 7.20% 16.98% 16.98%

12/14 12/14 12/14 06/15 09/14

72975.00 18039.00 7573.00 68000.00 3096.00

49,412 14,513 (2,521) 34,786 (1,531)

20.3 6.0 -1.1 14.5 -0.6

631,560 190,103 103,722 318,281 111,417

73 140 197 113 193

0.7 4.1 -26.7 7.7 -3.3

4.6 5.0 -7.4 6.5 -5.4

369,938 121,592 28,177 172,523 18,305

63 117 202 96 214

7.8 8.1 -25.8 12.1 -28.3

58.79% 65.25% 22.98% 56.21% 16.15%

12/14 12/14 07/15 06/15 03/15

5029.00 43645.00 15428.00 88635.00 16700.00

3,266 21,735 13,968 16,803 15,300

1.4 9.3 6.0 7.2 6.6

159,965 301,509 112,360 1,253,738 149,700

157 115 191 40 164

9.0 6.2 -1.1 17.8 -1.3

-0.2

7,326

4.7 8.2 0.9 5.3

218,792 50,791 644,679 49,600

226 85 179 40 183

-4.5 6.3 19.0 1.6 17.3

4.78% 74.76% 44.94% 55.63% 32.91%

09/14 03/15 03/15 12/14 04/15

261149.00 54884.00 -13100.00 20858.00 32370.00

250,382 39,122 (13,800) 10,754 24,368

110.2 17.3 -6.2 4.8 10.9

3,312,148 856,094 1,774,700 221,133 86,296

19 58 32 129 202

21.4 -0.3 1.5 -1.4 4.6

8.0 -0.1 -1.1 0.0 20.6

1,101,321 680,918 1,412,900 90,373 63,415

25 39 18 136 162

23.9 -0.2 -1.4 0.1 27.5

36.46% 79.41% 80.21% 40.58% 75.12%

03/15 06/14 06/15 05/15 08/15

38393.00 102754.00 72021.00 103339.00 -2477.00

32,365 67,660 58,165 82,226 (21,180)

14.6 30.5 26.3 37.3 -9.7

155,160 323,089 329,379 850,128 169,126

161 111 109 59 151

9.5 19.2 -2.7 9.5 -14.6

15.5 16.4 9.2 7.8 -14.0

120,212 230,637 58,415 521,318 66,184

118 82 167 49 159

19.4 23.7 52.7 12.5 -32.3

81.00% 77.62% 17.49% 64.10% 36.05%

12/14 12/14 12/14 06/15 06/15

24405.00 6662.00 10023.00 17208.00 67178.00

(1,469) (49,511) 8,547 14,076 54,630

-0.7 -22.8 3.9 6.5 25.8

333,036 381,300 113,321 131,303 560,393

108 98 190 173 77

2.1 -14.9 15.1 -4.5 20.3

-1.5 -8.8 4.2 7.5 6.3

55,218 245,471 20,202 96,584 273,415

174 81 213 133 77

-7.8 -13.7 23.7 10.4 12.4

16.75% 59.21% 19.08% 71.85% 53.29%

12/14 03/15 06/14 12/14 06/15

D32

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Rank

New this year There are a number of comRank Company panies either debuting on the list or returning to it after 19 Farmlands dropping off in previous years.

93 Ngai Tahu After threatening to make 104 Orion Corp their Top 200 debut last year, 125 Mediaworks Xero finally made the cut in 131 Dimension Data 2015 — moving up from 230th 185 Comvita to 195th place off the back of 189 Schneider Electric a 75.4 per cent uptick in their 192 BCS revenues — as the company 195 Xero smashed through the $100 197 Johnson & Johnson million barrier.

200 Niwa Xero has had a busy year, pulling together deals such as their agreement with National Australia Bank to integrate the following its sale to Daifuku, accounts of Xero customers who also Both Johnson & Johnson and the conduct their banking with NAB. The National Institute of Water and move is a benefit.

Atmospheric Research (Niwa) were With continual positive signs of close to making the list last year — growth, expect to see Xero continue with modest growth helping them to make steady steps up the list in makes their debut in 2015 at 197th and the coming years.

200th place respectively.

Fellow software firm BCS group, New eligibility rules for Maori comspecialising in airlines and logistics, panies mean that Ngai Tahu makes has made similar strides to Xero. It its main list debut in 2015. was one place in front of Xero last As for true newcomers, only year at 229th, but has made an impressive leap into the Top 200 at Mediaworks, Dimension Data and Schneider Electrical are companies 192nd.

That followed a 66.4 per cent that placed in the Top 200 and have growth in revenue to $139.1 million, never cracked the list before.

Missed the cut Rank Company For the second straight year, the New Zealand arm of cloud 201 SAP and analytics giant SAP fin202 Reckitt Benckiser ished one place short of crack203 New Zealand Oil and Gas ing the Top 200.

204 Lyttelton Port Company This year, revenues were 205 NZ Automobile Association Inc just $2 million shy of 200th 206 Alsco Investments placed Niwa.

207 DFS New Zealand Consumer Goods company 208 GlaxoSmithKline Reckitt Benckiser made a 209 Ashburton Trading Society steady improvement, but fin210 Seeka Kiwifruit Industries ished in 202nd with $123.3 211 MetroGlass Holdings Ltd million.

212 Dow AgroSciences The New Zealand Auto213 Horizon Energy Distribution mobile Association, better 214 3M known to most as the AA, 215 Philips were considered for the first 216 Pacific Brands Holdings time — with its $119.4 million 217 Paperlinx in revenue good for 205th 218 Blue Sky Meats place — five shy of making the 219 Metlifecare main list.

220 Methven After debuting at 180th last year, MetroGlass Holdings couldn’t sustain its position on the list — as revenue fell to $115 million revenue, did not have its financial in 2015, well short of this year’s $126.6 statements available by the cut-off million threshold for making the Top date and was therefore not eligible for 200 list. inclusion this year.

Dow AgroSciences, specialising in The same was true for Solid Energy agricultural chemicals, experienced a similar drop-off. It was placed 184th (2014: 78th), NZ Snack Holdings (2014: on the list last year, but a $42.3 million 108th), and Wesfarmers Industrial fall in revenues also saw it fall well and Safety Holdings (2014:110th). short of the Top 200 cutoff — the first A change in ownership to Beijing time in a number of years.

Capital Waste Management (2014: GlaxoSmithKline missed the cut 77th) and Nobilo (2014: 143rd), saw this time around, after a $31.6 million neither included in this year’s list. drop in revenues. For the past two Other narrow missers include New years, the pharmaceuticals company Zealand Oil and Gas at (203), Littleton placed at 185th on the Top 200.

Mitre 10, last year’s 53rd largest Port Company (204) 3M (214) and company with $718.1 million in Phillips (215).

Prev year

Name

Revenue ($000s)

% change

Profit after tax ($000s)

Rank

% change

151 147 152 160 153 149 154 144 155 157

JB Hi-Fi Unison Networks Kiwi Income Property Trust ABB Limited Skellerup

211,478 210,492 206,686 204,215 204,136

0.9 9.7 -1.0 -4.4 3.4

2,232 27,520 115,190 23,174 21,933

180 68 25 77 83

33.9 13.8 13.7 81.2 -46.6

156 151 157 164 158 107 159 161 160 185

Sealed Air Trade Me Group DSE NZ Investment AWF Madison Group

201,522 201,115 199,437 198,402 197,626

-1.9 10.5 -30.3 5.7 32.9

16,995 80,168 3,682 18,425 5,416

101 35 167 96 152

297.4 0.1 131.5 1.8 37.0

161 162 163 164 165

158 168 162 165 134

MARS New Zealand AsureQuality Bayer New Zealand Airways Corporation General Cable

195,250 190,389 187,428 186,899 186,065

0.1 9.4 0.9 3.1 -17.7

21,304 11,413 (6,918) 15,102 (17,381)

86 120 212 108 220

7.4 -9.0 88.0 27.6 35.8

166 167 168 169 170

170 152 176 197 169

Wellington Electricity PMP BMW Aotearoa Fisheries Vitaco Health

184,861 184,317 177,236 175,262 173,907

9.4 -9.8 12.2 34.7 1.8

(937) 4,730 1,069 21,957 4,764

201 158 190 82 157

85.5 65.4 -81.7 463.5 -68.8

171 172 172 178 173 173 174 171 175 190

Goodman Property Trust Orion Health Precinct Properties Fujitsu Suzuki

173,100 170,831 170,700 169,559 165,375

3.6 8.6 3.1 1.2 21.3

179,700 (60,815) 122,400 5,152 2,989

11 230 23 156 175

34.0 -5,248.7 4.4 -13.1 102.4

176 177 178 179 180

156 181 177 174 188

Alcatel-Lucent Avon Pacific Honda ITW Siemens

162,957 160,691 160,283 159,043 157,164

-18.0 3.3 1.6 -0.6 11.5

6,748 5,429 2,314 26,306 3,151

143 151 179 69 173

-27.8 -49.7 136.1 -14.5 -30.5

181 182 183 184 185

186 179 175 198 209

Cerebos Gregg's Compass AgResearch Christchurch Int. Airport Comvita

156,075 154,670 154,451 154,184 154,002

6.3 -1.2 -3.4 19.0 32.7

9,825 3,354 (113) 39,274 10,244

127 168 196 54 123

-10.3 26.1 -105.6 150.2 34.5

186 187 188 189 190

195 199 187 (-) 194

Tru-Test NDA Group Norske Skog Tasman Schneider Electric Flight Centre

150,517 146,561 145,494 142,289 141,654

13.5 14.8 2.0 2.1 6.7

4,225 4,044 2,981 2,889 7,769

163 165 176 177 137

93.9 25.6 103.6 -51.5 1.8

191 192 193 194 195

193 228 192 182 229

NZ Radio Network BCS Group CDL Hotels Holdings Rakon Xero

139,343 139,171 139,096 136,960 134,932

4.5 66.4 4.2 -11.7 75.4

13,426 4,653 24,393 3,190 (69,534)

111 159 74 170 231

5.4 62.0 -25.0 103.8 -95.6

196 197 198 199 200

189 203 196 191 201

Avis Rent A Car Johnson & Johnson Kimbyr Investments Pepsico Niwa

134,457 133,448 132,089 128,855 126,622

-3.7 10.5 -0.1 -3.6 2.4

11,452 6,183 5,565 (4,312) 5,755

119 146 150 206 148

-7.8 -1.7 38.8 -500.4 9.0

D33

EBITDA

EBIT

% return on revenue

Total assets $000s

Rank

% change in assets

% return on assets

Total equity

Rank

% return on equity

Proprietorship ratio (ave)

Balance date

5666.00 81852.00 176429.00 32481.00 38300.00

3,202 54,018 176,429 29,663 30,996

1.5 25.7 85.4 14.5 15.2

74,307 720,726 2,295,567 119,213 211,631

209 66 24 183 134

-5.4 7.1 2.7 5.3 14.0

2.9 3.9 5.1 19.9 11.0

55,971 342,914 1,382,624 60,872 159,660

172 65 19 166 103

4.1 8.2 9.0 41.7 14.4

73.23% 49.22% 61.02% 52.37% 80.38%

06/14 03/15 03/15 12/14 06/15

27021.00 136648.00 11850.00 36044.00 12729.00

23,917 121,364 9,779 30,492 9,917

11.9 60.3 4.9 15.4 5.0

210,604 889,212 90,793 162,601 78,284

136 57 200 155 206

-25.7 2.6 3.4 -0.4 1.7

6.9 9.1 4.1 11.3 7.0

170,135 690,831 51,004 43,778 35,931

100 37 178 189 198

8.2 11.7 7.5 42.2 19.1

68.85% 78.69% 57.11% 26.87% 46.29%

12/14 06/15 06/14 12/14 03/15

32821.00 22871.00 7006.00 43890.00 -9024.00

30,079 15,907 2,380 23,069 (14,421)

15.4 8.4 1.3 12.3 -7.8

113,641 86,032 150,277 174,126 155,571

189 203 163 148 160

7.4 6.7 -2.5 7.8 -6.5

19.4 13.7 -4.5 9.0 -10.8

51,573 42,303 24,837 87,175 87,317

177 190 206 138 137

44.0 28.0 -36.1 18.4 -20.5

47.01% 50.77% 16.32% 51.95% 54.23%

12/14 06/15 12/14 06/15 12/14

87344.00 18979.00 1979.00 32279.00 16311.00

56,254 10,499 1,581 28,997 13,116

30.4 5.7 0.9 16.5 7.5

895,187 120,585 64,411 532,223 210,649

56 182 213 83 135

2.5 -11.8 1.5 5.7 -1.2

-0.1 3.7 1.7 4.2 2.2

98,767 77,086 1,018 412,714 98,151

131 151 231 58 132

-0.9 7.2 10.4 5.4 4.9

11.17% 59.91% 1.59% 79.71% 46.31%

12/14 06/14 12/14 09/14 03/15

195,600 (50,343) 162,700 7,274 4,264

113.0 -29.5 95.3 4.3 2.6

2,177,600 201,291 1,753,200 51,111 52,171

27 137 33 220 218

2.8 84.3 0.3 -0.3 -7.8

8.4 -39.2 7.0 10.1 5.5

1,376,700 112,782 1,338,300 21,176 40,572

20 122 22 211 193

13.6 -85.7 10.0 22.8 7.7

64.09% 72.64% 76.46% 41.38% 74.59%

03/15 03/15 06/15 03/15 03/15

11960.00 13100.00 16890.00 46810.00 5393.00

10,621 8,997 5,956 41,738 4,320

6.5 5.6 3.7 26.2 2.7

125,427

111,594 164,366 158,716 75,778

178 192 153 158 208

-4.9 -1.4 -5.2 -30.5 -39.8

5.2 4.8 1.4 13.6 3.1

27,884 63,420 87,003 140,697 28,305

203 161 139 113 201

27.5 7.0 2.7 20.7 5.6

21.67% 56.43% 51.52% 72.67% 28.07%

12/14 06/14 03/15 12/14 09/14

14177.00 7408.00 11149.00 106572.00 18707.00

9,986 4,743 307 71,604 17,449

6.4 3.1 0.2 46.4 11.3

130,380 52,089 270,335 1,212,795 199,722

175 219 120 41 138

13.3 2.7 3.2 3.1 34.3

8.0 6.5 0.0 3.3 5.9

86,580 25,827 226,500 766,766 118,679

140 205 83 33 121

11.4 13.9 -0.1 5.2 9.7

70.55% 50.24% 85.10% 64.18% 68.11%

12/14 09/14 06/15 06/15 03/15

17722.00 9856.00 22839.00 5906.00 15639.00

9,886 7,946 11,892 4,961 12,764

6.6 5.4 8.2 3.5 9.0

134,201 188,819 173,725 123,704 165,485

171 142 149 181 152

-1.2 0.9 -9.8 0.9 3.8

3.1 2.2 1.6 2.3 4.8

28,713 78,186 62,334 83,645 70,158

200 150 164 144 155

14.1 5.4 4.9 3.5 11.7

21.27% 41.59% 34.04% 67.93% 43.18%

03/15 12/14 12/14 12/14 06/15

13.5 4.4 26.3 2.1 -50.0

189,502 50,626 777,493 124,854 378,398

141 221 61 180 99

7.7 26.3 4.6 -2.8 39.2

7.3 10.3 3.2 2.5 -21.4

167,827 14,957 641,707 79,409 345,653

101 218 41 147 64

8.2 34.7 3.9 4.0 -23.2

91.85% 32.97% 84.40% 62.71% 106.32%

12/14 06/14 12/14 03/15 03/15

14.9 6.5 6.4 1.1 6.4

135,824 117,157 74,116 318,440 135,185

169 185 210 112 170

1.8 1.9 7.3 1.2 -2.3

8.5 5.3 7.8 -1.4 4.2

34,947 86,328 44,034 85,020 105,402

199 141 188 143 125

39.2 7.3 13.5 -5.2 5.5

25.96% 74.37% 61.51% 26.85% 77.07%

12/14 12/14 07/14 12/14 06/15

195600.00 -44995.00 162700.00 9174.00 4503.00

25538.00 6904.00 45585.00 10758.00 -49466.00

34401.00 12325.00 11048.00 9763.00 22420.00

18,767 6,144 36,534 2,820 (67,456)

19,978 8,653 8,447 1,396 8,042

D34

nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015

Deloitte top 200 criteria T

he Deloitte Top 200 is a listing of New Zealand’s largest organisations ranked by revenue.

This includes publicly-listed companies and larger unlisted entities which are required to disclose audited financial statements, including New Zealand subsidiaries and branches of overseas companies and the commercial operations of Maori organisations.

It also includes producer boards, cooperatives, local authority trading enterprises and state-owned enterprises.

To be included in the Top 200, organisations must operate for a commercially determined profit. They will generally but not always be liable for tax on earnings.

Companies fully owned by another New Zealand company are excluded if they are reported as a consolidated group.

In some instances where it is believed that the separate results are more meaningful because the company in question is competing with other similar NZ enterprises and where separate figures are available, these have been used in the tables and the holding Company results excluded. All figures are the latest available, verified and audited. ● Revenue: as disclosed in the entity's Statement of Income or equivalent.

Includes sales (excluding gross commission sales), rent, dividends, share of income from associated companies and interest received. ● Profit After Tax: includes equity accounted profit and profit attributable to non controlling (minority) interests. ● EBITDA: earnings before interest, tax, depreciation and amortisation and impairments of property, plant and equipment or intangible assets.

Top 200 team

● Top 200 Project Partner:

● EBIT: earnings before interest and tax, includes unusual income and expense items. Not shown for the financial institutions. ● Return On Revenue: calculated by profit before interest and tax divided by revenue. Where no profit figures are shown, this calculation is not applicable as indicated by N/A. ● Total Assets: as disclosed in the entity's financial statements. Includes current and non-current assets, investments, tangible and intangible assets, deferred tax assets and goodwill. ● Total Equity: as disclosed in the entity's financial statements including non-controlling (minority) interests.

For New Zealand branches of overseas companies, the amount shown as owing to head office is taken as deemed equity. ● Return on Total Equity/Total Assets: calculated by profit after-tax divided by average total equity/total assets over the past two years. Where an entity is in its first year of operation the current year total equity/total

assets figure has been used as an approximate. ● Proprietorship Ratio; Total Equity (see above) divided by average total assets over the past two years expressed as a percentage.

General ● Companies that have operated less than six months are not included in this listing. ● Majority shareholdings greater than 50 per cent by other New Zealand entities are indicated in brackets. A key to these abbreviations follows the listing. ● Not disclosed (N/D) is used where figures were not disclosed by the company or disclosed but not able to be verified. ● An (-) indicates the company was not ranked last year.

Financial Institutions Includes banks, finance companies, insurance companies (life/fire and general/superannuation). These are ranked on total assets and appear separately. The financial institution results are based on the entity's legal

Andrew Hirst Head of Marketing and Communications: Cassandra Worrall Data Project Lead: Kim Fisher Data Gathering and Analysis: Aalia Bahadur, Perilla Peter, Dhwanee Patel, Tarun Saggar Maori List: Leon Wijohn, Mark Lash, Miriama Tito Writers: Bill Bennett, Greg Hall, Alexander Speirs Subeditor: Isobel Marriner Editor: Fran O’Sullivan For more news about the Deloitte Top 200 Awards please go to: www.top200.co.nz

set of accounts and not those accounts which include funds under administration (ie accounts which include assets that are not legally owned by that institution but administered by it). ● Profit After Tax: is shown for information purposes only and no ranking is given, ● Total Equity: as disclosed in the entity's financial statements including non controlling (minority) interests.

For New Zealand branches of overseas companies, the amount shown as owing to head office is taken as deemed equity. ● Return on Total Assets/Equity: calculated by profit after tax divided by average total assets/total equity over the past two years Where an entity is in its first year of operation the current year total equity/total assets figure has been used as an approximate.

Andrew Hirst

Leon Wijohn

Cassandra Worrall

Greg Hall

Another good year in finance No change in the rankings among the Big Four banks, but rural financier Heartland makes it into the top 10

W

ith the Global Financial Crisis now firmly in the rear-view mirror, our financial institutions will be celebrating a second consecutive banner year — with strong performances and growth in every metric across the Top 30.

Revenue for the Top 30 finance companies grew by 8.5 per cent, a noted improvement on last year’s 3.7 per cent growth figure. It’s noteworthy too that they far outpaced their non-financial Top 200 counterparts, who grew at 1.1 per cent — a role reversal from last year (2014: Top 200 — 6.6 per cent Top 30 — 3.7 per cent).

Perhaps more importantly for the financial sector when they judge their own performance is asset growth.

Year on year, the Top 30 grew their asset bases by $26.2 billion, representing cumulative holdings of $447.6 billion. That was a 6.2 per cent improvement, far outpacing 1.9 per cent growth in 2014.

A positive year for the financial sector worked out well for the government’s bottom line, too. The tax paid by the Top 30 companies grew by 31.1 per cent, a half billion-dollar improvement from 2014 — and proportionally, a much higher greater growth rate than final profit.

This year, despite fierce competition among the big four banks, there has been no change at the rankings for another year.

ANZ continues to lead the way with its enormous asset base — as well as setting the standard for performance in almost every metric.

With $128.9 billion of assets, ANZ hold $47.3 billion more than its closest

competitor Westpac. That gap widened in the past year a further $4.1 billion. Behind Westpac, Bank of New Zealand and ASB remain within relative striking distance — but all three have held its positions now for a number of years.

Westpac saw a major change to its equity during the period, growing by more than $700 million to overtake ASB Bank. It still trails Bank of New Zealand in that regard, but have closed the gap significantly from the last period.

Profits were up across the board for the big four banks cumulatively by 19.1 per cent. ANZ led the way with a 24.8 per cent improvement to $1.72 billion, while ASB trailed far behind, growing by 6.6 per cent for an $859 million profit.

Heartland Bank, the rural-focused financier and insurance provider established in 2011, made its way into the top 10 for the first time, the only major movement amongst the largest institutions.

It did so with $342 million asset growth — a more than 10 per cent increase. It caps off consecutive years off growth, which has seen Heartland progress from 16th place to 10th.

Among insurers, IAG were a standout, increasing its revenue 5 per cent from the prior period, as investment income has increased from shareholders’ funds. This year, they completed the acquisition of Wesfarmers insurance underwriting business too, in what was a largely positive period.

AIG in contrast saw its revenue dip by 9 per cent, as insurance premium revenue fell and investment income dropped.

Top 30 financial institutions Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

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Company

ANZ Bank Westpac Bank of New Zealand ASB Bank Kiwibank Rabobank New Zealand IAG (NZ) Holdings TSB Bank Hongkong & Shanghai Banking Heartland New Zealand AMP Life Suncorp Group The Bank of Tokyo-Mitsubishi New Zealand Life Insurance Southland Building Society GE Finance and Insurance Group Deutsche Bank AG New Zealand Citibank The Cooperative Bank Toyota Finance New Zealand Lumley General Insurance Fidelity Life Assurance Tower Auckland QBE Insurance AIG Insurance Southern Cross Medical Care Motor Trade Finances Mercedes-Benz Financial Services Medical Assurance Society Kookmin Bank

Assets 128,915,000 1,678,000 79,685,000 75,903,000 18,344,000 10,010,328 6,959,687 5,912,151 5,308,720 3,359,259 3,266,937 3,075,603 3,018,986 2,996,000 2,862,657 2,758,642 2,132,000 1,980,111 1,806,339 1,129,649 834,954 813,685 790,596 781,951 683,108 602,133 540,910 521,923 511,647 374,228

Profit 1,716,000 1,019,000 850,000 859,000 127,000 105,488 25,986 25,517 66,456 48,163 102,741 159,045 (500) 126,000 19,437 62,948 24,000 21,117 8,888 12,733 14,453 23,806 23,611 15,823 26,290 5,765 6,143 8,112 16,381 3,789

Equity 11,781,000 5,499,000 5,741,000 5,378,000 1,003,000 1,171,869 965,250 497,715 43,949 480,125 576,626 741,891 98,446 1,314,000 243,676 673,827 152,000 195,531 150,266 142,520 164,969 206,915 326,009 190,579 132,407 400,108 80,676 35,841 162,899 4,298

Ret/assets Ret/equit 1.4 14.8 1.3 19.8 1.1 14.9 1.2 16.3 0.7 12.7 1.1 9.4 0.4 2.7 0.4 5.2 1.3 300.4 1.5 10.3 3.3 17.9 5.1 22.6 0.0 -0.5 4.3 9.7 0.7 8.1 2.2 9.8 1.0 17.1 1.0 11.0 0.5 6.1 1.1 8.5 1.6 9.5 3.2 12.1 1.9 6.7 1.8 11.8 3.6 22.0 1.0 1.5 1.3 7.8 1.6 22.1 3.1 10.6 1.0 74.3

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Deloitte Top 200 celebrates the finalists Spark’s Jolie Hodson (finalist, CFO); NZME Managing Editor Shayne Currie chats to Sarah MacDonald and Gary Langford; Carolyn Luey, Group Strategy and Operations Director at NZME.

Food and entertainment; NZ Herald Editor Murray Kirkness and Deloitte’s Kirsty Raubenheimer.

Above, NZME CEO Jane Hastings and Deloitte partner Andrew Hirst; top right, Joan Withers (Chairman of the Year); Deloitte's Cassandra Worrall and Silver Fern Farms chairman Rob Hewett (finalist in Chairman of the Year).

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nzherald.co.nz | The New Zealand Herald | Friday, November 27, 2015