Accordant Group ASM presentations

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021

Ross Keenan
CHAIRMAN

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Ross Keenan
CHAIRMAN
Agenda Item 1

For the Year Ended 31 March 2021
Agenda Item 2

Simon Bennett
EXECUTIVE DIRECTOR
Agenda Item 3

FY2022 so far...
Strong start to the Financial Year
•High client demand in tight candidate market
Impact of the Delta outbreak
•Resilience in the white collar brands
•Negative impact on AWF as a labour hire business

Finances
Improved Forecasting
•Strong communication
•Businesses seeking more exclusive and retained work
Interim Dividend
•Dividend policy to pay 70 –85% of underlying earnings
•Pre recent lockdown, tracking to 7-9 cents share
•Board to decide between a range of 5.5 and 8 cents per
share, to be announced with results in October
Strong Balance Sheet
•Headroom for acquisition

Employmentmarket
Continuing high demand for talent drives clients to our
businesses for resources and candidate reach
Strong performance
and resilience in
candidate-short
market
Increase in
permanent
recruitment
compensating for
reduced temp market
Huge growth potential
in tech and cyber
security sectors
Temp placement
heavily impacted by
candidate shortages
Accordant brand to
become more visible
in the market, driving
Group capability

Accordant Progress and
Achievements
Retaining focus on employee retention with high
pressure from competitors
Received legal endorsement of our business model and
processes
Growing The Work Collective channel to enable client
social objectives
Dedicated team and capable new CEO

Jason Cherrington
CEO

Agenda Item 4

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Agenda Item 4 -Resolutions
4.1 Recommended re-election of Ross Keenan
Of the shares voted by proxy, 95.27% support resolution 4.1

Agenda Item 4 -Resolutions
4.2 Recommended re-election of Simon Bennett
Of the shares voted by proxy, 95.27% support resolution 4.2

Agenda Item 4 -Resolutions
4.3 Authorise the Directors to fix the fees for the Auditors for the year
Of the shares voted by proxy, 95.3% support resolution 4.3

Agenda Item 5

Agenda Item 6

Questions and General Business
Agenda Item 7

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Accordant Group Limited
Level 6, 51 Shortland Street, Auckland
PO Box 105 675, Auckland 1143
Tel 09 526 8770
accordant.nz
ACCORDANT GROUP LIMITED (AGL)
ANNUAL MEETING OF SHAREHOLDERS – CHAIRMAN’S ADDRESS

29 September 2021

Kia ora and good morning attendees– and welcome to what is now our second “virtual” annual meeting, due to
the ongoing COVID-19 restrictions here in Auckland.

After a year like no other it was actually very satisfying to be able to deliver a very healthy financial result, and of
course be able to announce a resumption of our dividends with the payment of an 8.2 cents final dividend.

As of now, we are certainly on track to keep the dividends in place and we thank long-suffering shareholders for
your support through the turbulence of 2020.

I said last year that we had just on 800 shareholders and so I should comment that this year (as at the end of
March) that’s down about 10%.

And so, my name is Ross Keenan, and it is my pleasure, as Chairman of the Accordant Board, to Chair this
meeting.

Today we will talk you through the statutory requirements of our Annual Shareholders’ Meeting, plus you will hear
commentary from Simon Bennett in his new capacity of Executive Director, but also covering ‘the year that was’
as our Chief Executive. I will ask Simon Bennett to introduce Jason Cherrington, our recently appointed (as of 21
June) Chief Executive.

Simon Bennett will of course cover any aspects of the 2020/21 operating year, and so he should because -
notwithstanding the toll the pandemic took on people, on business relationships, and on brand values – Simon
led the Group to achieve what was a very sound result. And we started the new year very well – indeed
demonstrating the value of the broad sector mix of the Group.

It is appropriate that I introduce my fellow directors. Joining from various locations around the country, I will let
directors introduce themselves to you.

[Simon Hull, Wynnis Armour, Nick Simcock and Laurissa Cooney address the meeting by introducing
themselves]

Thank you everyone. You will hear from Simon Bennett later in the meeting – he will provide the commentary
around the year that was, and perhaps some observations on the year to date. Simon will also introduce his
successor as Chief Executive, Jason Cherrington.

Today we will be putting to you, resolutions to formally appoint Simon Bennett to the Board, and to reappoint myself
– effectively until the end of the 2021 calendar year.

Both of these resolutions, as you will realise, from our releases, are part of the implementation of our succession
planning. What that means in practical terms, is that I will retire from all involvement with the Group as at 31
December 2021, and the Board will appoint a new Chair, effective 1 January 2022.

I, and my family interests, hold about half a million AGL shares, and it will be our intention to retain these.

We don’t see a resumption of the dividend reinvestment scheme – whilst it perhaps achieved its purpose when
we wanted to retain cash, we are now past that point.

And just one further comment from me about the year that was – and that’s about the superb leadership from
Simon Bennett, and from his team who, not only completed a very tidy end of year, but managed the year
aggressively – taking costs out (so that the Group’s operating cost basis reduced by over 15%). Branches were

Accordant Group Limited
Level 6, 51 Shortland Street, Auckland
PO Box 105 675, Auckland 1143
Tel 09 526 8770
accordant.nz

made leaner and more efficient, and now in a position to accommodate growth. Senior staff all took salary
reductions without hesitation.

So as the 21/22 Year has got underway, we expect revenues to return to normal levels for the Group, but
margins are improving as care is taken to ensure sustainable growth before fixed costs are added.


For the Board,


Ross Keenan, Chairman
021 685 655

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Accordant Group Limited
Level 6, 51 Shortland Street, Auckland
PO Box 105 675, Auckland 1143
Tel 09 526 8770
accordant.nz
ACCORDANT GROUP LIMITED (AGL)
ANNUAL MEETING OF SHAREHOLDERS – EXECUTIVE DIRECTOR AND CEO’S PRESENTATION

29 September 2021

Simon Bennett, Executive Director
(Chief Executive up to June 2021)

FY2022
• Strong start to FY22, then impacted by the COVID-19 Delta outbreak and Level 4 lockdown. The business
was ready to operate remotely, with greater level of confidence than the first lockdown.
• From the beginning of FY22, we have been experiencing high levels of recruitment activity in a landscape of
significant client demand and a very tight candidate market.
• Madison, Absolute IT and JacksonStone had been performing very strongly. Permanent recruitment has
been at encouragingly high levels with clients largely continuing at pace.
• JacksonStone will likely have a record EBITDA result at half year. Madison will also perform well to the end
of the Half Year, Absolute IT is performing well, but not at the levels we had anticipated prior to the
lockdown.
• AWF is a different story however, with core income from blue collar candidates working for clients in the
field. Many are neither deemed to be ‘essential services’ nor have any opportunity to work from home. AWF
income dropped by over 50%, notwithstanding large numbers of workers being placed with Countdown. The
business took up the initial 2-week wage subsidy to pay over 1000 workers, however, has not qualified for
subsequent subsidy extensions.
• AWF has not performed to our expectation or budget and its profitability has been eroded during the
lockdown.

Finances
• Improved internal forecasting ability over last 12 months.
• JacksonStone engages the majority of its business on an exclusive and retained basis, giving certainty of
revenue; and Madison and Absolute IT have been steadily moving towards more exclusive and retained
work to drive better outcomes.
• Interim dividend: Our published dividend policy is to pay between 70 and 85% of underlying earnings. Prior
to the latest lockdown, we expected our earnings to enable the Board to decide within a range of 7 and 9
cents per share for our interim dividend. We now expect the Board to decide between a range of 5.5 and 7.5
cents per share for the interim dividend, which will be announced with our results in October.
• The balance sheet is in good shape, with net debt of $13.2 million, which is a comfortable level and allows
headroom for acquisition.

Employment Market
• Very different market to last year. We are seeing rapid growth in hiring intentions, increase in job
advertisements and a decrease in application numbers to each of the adverts.
• Many clients have fewer tools to reach candidates, when job boards are not working as well. This is driving
client demand significantly across our businesses where the strength of our brands, candidate reach, and
marketing resources result in successful candidate placements.
• JacksonStone is performing ahead of expectations and the final earnout payable (in relation to the purchase)
is expected to be higher than that assessed at Year End. Dave Hollander and his team are performing very

Accordant Group Limited
Level 6, 51 Shortland Street, Auckland
PO Box 105 675, Auckland 1143
Tel 09 526 8770
accordant.nz

strongly and are looking to build team numbers in the latter part of the year, with a greater presence in
Auckland.
• Madison is benefiting from the strength of the employment market and some large projects. The mix has
skewed away from temp towards permanent recruitment, as a result of client demand and shortage of temp
candidates. This has increased resilience to the drop-off in some temp numbers during the recent lockdown.
• Absolute IT perhaps has the greatest potential with the strength of its market. The business is trading at
good levels, but needs to grow consultant numbers and build more capability.
• AWF recovered well last year, with significant client demand, however could not meet this demand due to
declining candidate availability. Blue collar temp work is becoming increasingly difficult with the closed
borders, resulting in lack of both migrant workers and working holiday travellers. AWF is adapting to this
change in market but not as quickly as in the white collar businesses, and is significantly affected by level 4
restrictions.
• The launch of the groupwide Accordant brand has been well received by internal stakeholders. You can
expect to see more of Accordant as the year progresses. We are continuing to drive our digital
transformation and recruitment marketing capability.

Progress and Achievements
• Significant activity during FY2021.
• Seeing internal staff targeted by competitors and clients alike - retention and growth of our people is of
considerable focus.
• As we have shared earlier, we were handed a comprehensive victory in the employment status case taken
to a full bench of the Employment Court by plaintiffs supported by the PSA. This is an endorsement of the
way we do business. An application to seek leave to the Court of Appeal was recently declined and so the
matter has closed.
• The Work Collective remains important to us in being able to facilitate positive social outcomes. We are
seeing growing interest in the inclusion of social outcomes within client procurement contracts.
• I am proud of the achievements of my team this year and grateful for their support. We are positioned well
for the year ahead and the business is in very good heart. After a decade being hands on, it is with some
personal sadness that I leave the CEO role, although I look forward to my ongoing contribution to the
business as a Director.
• In handing over to our new CEO, Jason Cherrington, I am thrilled to have engaged such a capable and
driven guy. He had led teams, projects and businesses across many sectors and across different
geographies. Of particular note, is his knowledge of the broad digital and transformative sectors, where we
seek to grow. Most importantly though, he is a great character, and we are very much enjoying his good
humour and human approach, which is so important in this people-centric business.

Jason Cherrington, Chief Executive
(Since June 2021)

• Thank you to the Accordant family for the warm welcome I’ve received during my first few months with the
Group. Engagement across the teams has been both rewarding and insightful; revealing themes of
dedication, commitment to health and safety, and digital innovation.
• A world class commitment to health, safety and wellbeing has been built into the DNA of our Group. This
duty of care has also helped our teams positively navigate through COVID-19 lockdowns.
• Our digital capability, via market-leading recruitment tools and platforms, has further enhanced the way in
which we operate, communicate and do business. In a candidate-scarce market, the ability to deliver a
consistent and seamless end to end recruitment experience is a big differentiator for clients and candidates

Accordant Group Limited
Level 6, 51 Shortland Street, Auckland
PO Box 105 675, Auckland 1143
Tel 09 526 8770
accordant.nz

alike. With technology as a key enabler, Accordant is well-placed to take a leading role in this area, and this
specific topic did form a key component in my decision to join the team.
• Many NZ companies are looking to accelerate their own digital transformation programmes. Enabling more
flexible and remote working practices places more demand on legacy technical infrastructure, drives the
need for more cloud-based solutions and increases the need for even greater cyber and information security
resilience.
• The skills across these areas were already stretched in NZ, and with current immigration restrictions
temporarily cutting off the tech supply tap, this has created immense growth potential with the least amount
of available resource.
• The tech sector is still predicted to become NZ’s largest exporter by the end of the decade, currently $12
billion and expected to almost double in size. How capability is sourced remains a challenge, and thus a
significant opportunity for Accordant.
• We may see an increase in the borderless skills market – that is, being able to transact, operate and access
resources, regardless of location and time zone. If physical access to talent globally remains problematic in a
COVID locked world, these virtual access concepts could become increasingly mainstream.
• Another key strength of Accordant’s capability is collaboration to provide a complete client solution, made
possible by our strong brands combining as one, to great effect. I expect the opportunity to deliver in this
capacity will keep growing.
• In any fragmented market, there is the opportunity for growth via acquisition, whether that be geographic or
an expansion of capability or sector. We will remain alert to these opportunities, but equally measured.
• The last few years have taught all of us to anticipate the unexpected. Our business planning and strategic
reviews will naturally consider this and the broader opportunities that lie ahead. I’m looking forward to being
part of the exciting growth and expansion in front of us.