Ansell Limited (ANN) 2015 AGM Report

Company/ASX Code : Ansell Limited (ANN)
Venue :
10.30am Grand Hyatt
123 Collins St
Melbourne, Victoria
Monitor : Ms Fiona Addison
AGM Details / NoM : Thursday 8th October, 2015
# of Attendees : Approximately 250
# Holdings represented by ASA : 196
Value of Proxies : $5.8 million
# Shares Represented by ASA : 300,000
Market Capitalisation : $2.82 billion

Unexpected first strike against the Remuneration Report

Chairman Glenn Barnes addressed shareholders’ by highlighting that Ansell has been ‘born out of innovation’. It is this innovation that is highlighted by the 50th anniversary of their GAMMEX brand this year. Mr Barnes advised of Ansell’s solid performance for FY2015 with a:

  • 19% increase in underlying profit on FY2014;
  • Solid cashflow;
  • Strong balance sheet; and
  • An increased dividend (US 39c in FY2014 to US 43c in FY2015)

Despite the company’s positive performance, Mr Barnes highlighted that a 35% drop in the share price had been due to the impact of foreign exchange rates on company profitability along with negative market sentiment. He advised that the remuneration policy would be reviewed in the first half of 2016, with the commencement of the transition period to be on 1 July 2016.  

CEO Magnus Nicolin restated the company’s good performance highlighting that sales, profitability and profit were steadily growing, as reflected by the solid cashflows. Mr Nicolin reported that customer service, quality control, and how the company works with distribution partners around the world are some of the strategies driving value creation. In addition, the company’s focus is on:

  • People and processes: Focused on lean management.
  • Brand: Building brand recognition.
  • Innovation: Moving to fewer and bigger product launches.
  • Mergers and acquisitions: 10 acquisitions in the last 5 years, with 7/10 exceeding performance expectations.
  • Emerging markets: More manufacturing and global procedures in these markets.

All divisions performed well, with the main profit driver being the growth in the Industrial sector. The FY2016 outlook was highlighted with a warning of ongoing currency volatility, uncertain market conditions and a US$100 million share buy-back.

General discussion - Q&A

The Chairman advised that all items were open for discussion during the Q & A session and then all voting would be held at the end.  It is felt that this change of format stifled question time as shareholders seemed reluctant to address the meeting.

As at previous Ansell AGM’s, trade unions representatives were present, advising that 290 workers at a Sri Lankan manufacturing plant were unfairly dismissed. Mr Barnes advised that the wellbeing of employees is important for the company. It was stated that Mr Nicolin had not met with a union colleague, however in response, Mr Nicolin said that discussions are continuing between the union and the respective head of that division.

Agenda items

The ASA voted FOR all the resolutions.

Re-election of Directors

Shareholders voted on the re-election of Mr John Bevan and Mrs Marissa Peterson, with the resolutions both passing by >97%.  Both directors addressed the shareholders during the meeting.

Performance of share rights to the CEO

Shareholders’ voted on the grant of share rights to the CEO, with the resolution passing with 68.8% voting FOR the resolution. 

Performance of options to the CEO

Shareholders voted AGAINST the grant of options to the CEO.  This resolution recorded 65.8% against. This special grant of options was aimed at lifting the CEOs remuneration to be in-line with agreed market benchmarks. It is noted that the total remuneration package of Mr Nicolin is heavily weighted towards equity and that actual salary levels are below those of CEOs of similar sized International companies.

Remuneration Report

There was an unexpected 33.21% vote against the remuneration report. This earned the company their first strike. This outcome was unexpected.  Discussions with the company as to the reasons behind the large protest vote did not reveal any underlying reason or cause of the large protest vote.  The vote against the remuneration report contrasts with previous AGMs where the remuneration report had solid support (2014: 88%, 2013: 95.6%).