Diversified approach: Blackmores’ new chair on the lookout for directors to broaden expertise – exclusive interview
Wendy Stops was appointed Chair of Blackmores and took on the role officially from November 25 last year, succeeding Anne Templeman-Jones who decided to step down after helming the board for two years and one month.
Stops first joined Blackmores on April 2021 as an independent non-executive director and later chaired the firm’s Risk and Technology Committee, as well as becoming a member of the People and Remuneration and Nominations Committee.
Speaking to NutraIngredients-Asia, Stops said that the search for new directors to replace the vacancy left by Templeman-Jones was ongoing.
She expects to appoint one to two more new directors to the board, with the intention of diversifying the boards’ expertise – a task which she said was one of the three key focuses of the board for the past two years.
“In terms of the team of directors, we have there now a very strong team, they each bring diverse skills, they're very experienced, but we need to expand that, we've shrunk a little bit, so we need to increase that team.
“We need to increase the diversity, the commercial and operational aspects and importantly, industry perspective as well.
“And so, we'll continue to seek out directors with the right experience and strengths to add to the board,” said Stops who was also on the board of supermarket chain Coles Group.
Elaborating on the objectives, she pointed out the need to enhance the board’s expertise in manufacturing and operational aspects, having decided to buy its Braeside manufacturing plant located at Victoria in year 2019.
Another attribute that she is looking out for is directors with commercial experience in the Asia Pacific region, as well as in the natural health industry.
“I think the most important is probably the sort of industry specific and what I mean by that is that we are a natural health company, we were underlying naturopathic principles and so on, so to have more of that kind of insight on the board would be extremely helpful,” she highlighted.
Asked the timeline of new directors’ appointment, she replied that she would like to do so in the upcoming months.
“We are out there looking, and we've got some help doing that. But we'll just have to wait and see how quickly we can nail some of that down.
“We are open [to the number of new directors to appoint to the board], but I think probably two [new directors] would be a good start, obviously we lost Anne and we would like to replace her and then one other would be good.
“But again, it depends on the combination of skills that were able to find in any one person,” she said.
With Stops taking on the role as chair, Stephen Roche, current Chair of the People and Remuneration Committee has taken on the role of chair of the Risk and Technology Committee.
The company celebrated its 90th anniversary last year.
Other immediate priorities
Stops also outlined the immediate priorities that the board will focus on together with the management, such as strengthening the business in the medium term through new product innovation and digital transformation.
The purpose is to achieve sustainable, profitable growth and improve shareholder returns.
To deliver the goals, the company announced its five key strategic pillars in August 2021.
They are 1) driving growth in targeted segments and markets 2) simplifying operations and reducing cost 3) strengthening its supply chain 4) igniting the Australian vitamin and dietary supplements opportunity and 5) transforming digital commence and operations.
“Each of those pillars are at various stages of execution. When combined, they're all about creating a strong foundation for sustainable, profitable growth and importantly, improving shareholder returns,” Stops said.
To drive growth in targeted segments and markets, the company is working on introducing more halal-certified products in Indonesia. Earlier on, it also launched ultra-refined black seed oil for the Indian market which has a tradition of consuming the ingredient.
Elsewhere in China, the focus is on digital marketing around both its human and pet health products.
“This sort of innovation that we're doing in our geographies is really providing us with some earnings resilience and more opportunity for growth,” Stops said.
On the other hand, the company has commenced on digital transformation since year 2021, where the focus is on building a cloud-based planning system and cybersecurity.
“We want to reduce some of the complexities. We want to get more sophisticated offerings around things like customer relationship management, product lifecycle, product lifecycle management, and deliver more digital capabilities that's going to enable us to engage more with our practitioners and our customers, but also ultimately serve the end consumers a lot better as well.”
Market unpredictability
Stops also acknowledged ongoing challenges around raw material shortages, global supply chain and distribution.
“The last two or three years have been quite rough. And now of course, we're dealing with some further market challenges that have been brought on by things like the raw material shortages, the rising cost, high inflation across most of our markets.
“We have to continue to face those challenges and all the unpredictability. I think a lot of companies are trying to get into a rhythm of dealing with unpredictability.
“But I think with that strategy and the focus that we've got; we can sort of see a great future for Blackmores.”
Summing up her thoughts on taking up the new role, she said the firm hoped to continue the legacy of founder Maurice Blackmore and his son, Marcus Blackmore, who was also the firm’s largest shareholder, owning a stake of around 20 per cent in the company.
“I'm really proud and honoured to be appointed the new chair. Blackmores is obviously a great Australian company. It's a pioneer in natural health. They're always an icon here in Australia.
“We're going to continue the legacy of Maurice and Marcus Blackmore and others who made this company great. And that includes positioning the company for continued strong growth, both in Australia and overseas and obviously the returns to our shareholders is of utmost importance.”
Blackmores’ recent performance
For its latest annual performance, Blackmores reported a group revenue of AUD$649.5m (US$434m), which was 12.8 per cent higher year-on-year.
Underlying gross margin was up 1.1 ppts to 53.4 per cent while underlying net profit after tax had increased 22.6 per cent to AUD$31.1m.
However, the company’s earnings per share was reported to have declined from $4.06 in 2018 to $1.60 in 2022.
During the firm’s Annual General Meeting held in October last year, Marcus Blackmore again raised his dissatisfaction with the board and the management for poor performance.
Local Australian media The Sydney Morning Herald reported that Blackmore had voted against the remuneration report and incentives set out for CEO Alastair Symington for 2023 during the meeting.
Overall, 43.35 per cent of votes casted during the meeting were against the remuneration report – amounting to a “strike”, which occurs when more than 25 per cent of a firm’s shareholder vote against the remuneration policy.
“The Board acknowledges the ‘strike’ received on the Remuneration Report. The Board values the feedback of its shareholders and will continue to engage with our shareholders regarding our remuneration approach,” the company said in an ASX announcement following the meeting.
