More annual reports from Blackmores Limited:
2021 ReportPeers and competitors of Blackmores Limited:
e.l.f. Beauty26 August 2021
ASX Market Announcements Office
Australian Securities Exchange
Exchange Centre
20 Bridge Street,
Sydney NSW 2000
2021 ANNUAL REPORT
Attached for release is the Blackmores Limited Annual Report for the year ended 30 June
2021.
Further information on Blackmores can be found at www.blackmores.com.au.
This announcement was authorised for release by the Board of Directors.
Richard Conway
Group General Counsel & Company Secretary
Blackmores Limited
Annual Report 2021
Good health
changes
everything
Acknowledgement of Country
We acknowledge the Traditional Owners of the land on
which we live and work and pay our respects to Elders
past and present. We honour the continuing culture of
the Aboriginal and Torres Strait Islander people and their
custodianship of the natural resources on which we rely
and co-exist with all respect.
COVID-19 pandemic
Our thoughts are with those who have lost loved ones
and those struggling with the day-to-day impacts of
continued lockdowns and restrictions. Thank you to
all frontline personnel, including the hard-working
health practitioners and pharmacists at the heart of our
business, for your enormous sacrifice to keep people
and communities as safe and healthy as possible.
Blackmores is investing in a new masterbrand
campaign in FY22 led by the simple but compelling
message 'Good health changes everything' that
focuses on the transformative power that good
health can have on every aspect of life for everyone,
everywhere.
Cover photo: Sunrise at Bungan Beach on Sydney's
Northern Beaches is a favourite morning ritual for
these sisters, watched on from out of frame by their
mother Robyn Taylor, Executive Assistant to the CEO.
Below: Peter Tsigolis of Blackmores Institute, more
commonly found behind the camera producing our
award-winning online education materials, with his
children Billie and Orlando, wife Simone, and playful
puppy Lola.
Contents
01
02
03
04
05
06
07
08
Year in Review
Chair’s Report
CEO’s Year in Review
Growth Strategy
Ignite for 2024
Consumer-led Innovation
Research and Education
Company Leadership
Board of Directors
Executive Team
Operating & Financial Review
Group and Divisional Financial Results
Operating Review
Corporate Governance
Group Risks
Health and Safety
Sustainability, People & Community
Sustainability
Our People
Community
Financial Report
Director’s Report
Remuneration Report
Financial Statements
12
14
20
24
26
30
32
38
40
42
44
50
54
56
58
60
62
66
94
ACN 009 713 437
ASX: BKL
20 Jubilee Avenue
Warriewood NSW 2102 Australia
Blackmores Limited Annual General Meeting
Wednesday 27 October 2021
Details at blackmores.com.au/about-us/investor-centre
Phone: +61 2 9910 5000
Fax: +61 2 9910 5555
blackmores.com.au
ISBN/ISSN
© 2021
1
BLACKMORES ANNUAL REPORT 2021
Leah Boonthanom,
Group Communications
& Content Manager
Purpose led,
performance
driven
Blackmores was founded to give people
the choice to take control of their health
and wellbeing through the power of
nature. Our purpose remains as it did in
1932, when visionary naturopath Maurice
Blackmore combined nature and science
to deliver quality health solutions.
2
BLACKMORES ANNUAL REPORT 2021 About
Blackmores Group is an ASX
publicly-listed company
employing over 1,200 people.
Our purpose
To give people a choice to make living well each day a
natural way of life.
Our mission
Combine our knowledge of nature and science to
deliver quality solutions to bring wellness to people
and their pets everywhere, every day.
Our values
Our PIRLS company values are both
behavioural and aspirational – underpinning
our work practices and decisions and
supported by our governance frameworks.
Our ambition
To connect 1 billion people to the healing
power of nature by 2025.
Our brands
Our research and
education centre
3
BLACKMORES ANNUAL REPORT 2021 Our
footprint
Access to 3 billion
consumers across
Asia-Pacific
4
Sydney, Australia – global headquarters, production and distribution centresBraeside, Victoria – manufacturing facilityShanghai, China – China head office and Global Innovation Centre350+ employees and 670+ retail product advisors across Asia850+ employees across ANZSingapore – International regional officeIndonesia – joint venture partner PT Kalbe FarmaIndia – new market FY22BLACKMORES ANNUAL REPORT 2021 13
markets reached
40+
years proudly
in Asia
33k+
global points
of distribution
Australian manufacturing,
packing and distribution
facilities
3
1,200
employees
1
Global Innovation
Centre in Shanghai
5
BLACKMORES ANNUAL REPORT 2021 FY21
Financial
Snapshot
1. 3% at constant FX; 1% at actual FX.
2. Excludes JobKeeper
3. Full year dividend includes final dividend of 42 cents
per share (fully franked) combined with interim
dividend of 29 cents per share (fully franked).
6
$575.9m
Group Revenue
3%1
$25.4m
Underlying NPAT2
61%
$47.6m
Underlying EBIT2
52%
52.3%
Gross Margin
164bps
71 cents
Dividend per share3
$70.1m
Group net cash
BLACKMORES ANNUAL REPORT 2021
112%
Cash conversion ratio
28%
$280.6m
ANZ Revenue
14%
$163.7m
International Revenue
27%4
$131.6m
China Revenue
28%
27%
Group sales from
e-commerce
$22m
In year savings through Leading
Value Position (LVP) and
improvements in OPEX
Taylor, 13, with Maisy
4. 27% at constant FX; 18% at actual FX
7
BLACKMORES ANNUAL REPORT 2021
FY21 Company
Highlights
A year of action, progress, and connecting
people to the healing power of nature.
Consumer and brand
Operations
#1
2.6 billion
Blackmores market leadership
in Australia1, Indonesia2 and
Thailand3
tablets and capsules produced
at Braeside in our first full year
as a manufacturer
1 in 5
31 million
Australian households use
our products4
units bottled at Warriewood
packing facility
#1
1st
BioCeuticals is the leading
practitioner brand in pharmacy
in Australia5
imported brand in Indonesia
with Halal certification by
Majelis Ulama Indonesia (MUI)
8
BLACKMORES ANNUAL REPORT 2021 1. Nielsen AU Pharmacy & Grocery MAT to
19/06/21 Domestic (Retail & Practitioner).
2. IQVIA Feb 2021 (premium brand).
3. IQVIA CHR Sell-out MAT 06/2021.
4. Nielsen Homescan MAT to 19/06/21.
5. Nielsen AU Pharmacy & Grocery MAT to
19/06/21.
Left page: Jingyi Zhang, Senior
Brand Manager, Group Marketing
& Innovation.
Right page: Claire Briggs,
Senior Technical Manager and
Vlad Stajic, Group Director
Research & Technical Affairs,
Blackmores Institute.
Research and education
Sustainability
147,000
educational touchpoints with
health practitioners, pharmacy
students and consumers
41
research projects exploring
natural health solutions
8
education awards for the
Blackmores Institute
25%
of energy is now from
renewable sources
162
fewer tonnes of carbon
emissions than prior year, even
with a full year of manufacturing
emissions included
98%
of packaging confirmed
recyclable by Group
packaging audit
9
BLACKMORES ANNUAL REPORT 2021 01
Year in
Review
10
BLACKMORES ANNUAL REPORT 2021 Strong foundations for
sustainable, profitable
growth
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
11
BLACKMORES ANNUAL REPORT 2021
Chair’s Report
Acknowledging the continued leadership
and commitment of our people.
The past twelve months has continued to be a challenging year
for many of our customers, healthcare practitioners, and our
people across our ANZ, China and International markets due to the
coronavirus pandemic. Blackmores’ focus during this time was and
continues to be resolute in protecting our people and their families
and the continuity of manufacturing and supply of our products
to our customers and consumers. The Board acknowledges and
thanks the extraordinary commitment of our people who continue
to respond quickly to the changing demands of COVID-19.
Progressing our key
strategic priorities
The Blackmores Executives and
the teams that support them have
continued to progress against a
number of strategic priorities while
simplifying the way we operate during
a period of extreme disruption:
• divesting a number of non-core
brands and businesses, including
Global Therapeutics, which has
enabled us to sharpen our strategic
focus on our core brands,
• utilising research insights from the
Blackmores Institute to enhance
our innovation process and deliver
outcomes that provide solutions
in complementary medicine to
address the health issues of our
consumers
integration of the Braeside
manufacturing facility creating the
opportunity for control over the
supply chain to deliver products to
all our market channels.
•
Building strength
and resilience
Robust and effective corporate
governance and risk management
are key to our ability to deliver on our
purpose and strategy. This includes
the responsibility to renew the Board
with skills that align to supporting
management in their delivery of
strategic goals.
We acknowledge and thank the
contribution of Directors for their
considerable service to the company
who stepped down from the Board
in FY21:
• Brent Wallace (Chair) in
October 2020
• John Armstrong (Chair of the
Audit and Risk Committee) in
September 2020
• Christine Holman (Chair of
the People & Remuneration
Committee) in July 2021.
On behalf of the Board, I make
special mention of Marcus Blackmore
who stepped down from the Board
in October 2020. Marcus made a
significant contribution for over
57 years in both his leadership
and passion for complimentary
medicine, bringing choice to those
people seeking natural medicine. He
created an iconic Australian brand,
Blackmores, which is trusted and
respected in Australia, China and
South East Asia, and for which we are
all immensely proud to be given the
honour of continuing to build.
On behalf of the past and
present employees and their
families, Blackmores customers, our
shareholders, and our new Board, I
thank you Marcus for the legacy you
have created and your significant
contribution to the lives of many
people.
In April 2021 we announced the
appointment of Wendy Stops and
Sharon Warburton to the Blackmores
Board. Wendy brings deep global
information technology and risk
management experience at a time that
12
BLACKMORES ANNUAL REPORT 2021 1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
13
the world and Blackmores becomes
more digitised and data-driven
and chairs our Risk & Technology
Committee. Sharon brings extensive
board and executive experience
in corporate strategy, business
operations, finance, accounting, and
risk management and chairs our
Audit Committee.
Our Board skills assessment is
outlined in the Corporate Governance
section of this Annual Report on
page 43. We continue to build a full
complement of skills, including from
the health sector, required to support
the delivery of our transformation
program and Blackmores’ future
growth.
Business performance
and dividends
During FY21 the Blackmores
leadership team and our people
delivered:
• the fundamentals to deal with the
pandemic, and ensure the health
and wellbeing of our people in all
locations
• growth in key segments and
markets (China and International)
while addressing structural changes
in the ANZ market
• simplified operations and delivered
on a cost out program
• the Braeside integration with
manufacturing capability to
establish a competitive advantage
that will be enhanced with a
transformation program to deliver
supply chain efficiency.
Capital management disciplines have
been introduced and adopted. There
has been significant progress made
this year to the financial health of
the business, which is now in a much
better position with a strengthened
balance sheet due to the successful
capital raising and debt reduction.
An ongoing focus on disciplined
capital management and cost control
will enable the business to invest in
capabilities that will provide greater
returns for our shareholders.
In light of Blackmores’ performance
and strong capital position, the
Board has declared a fully franked
final dividend of 42 cents per share.
Combined with the interim dividend
of 29 cents declared earlier in the year,
total dividends for FY21 are 71 cents
per share fully franked with a payout
ratio of 48%.
Towards a healthier,
more sustainable world
Blackmores is committed to
sustainable business practices to
reach Net Zero Carbon Emissions
by 2030 and has taken the first
steps to reducing our emissions by
transitioning to renewable sources
of energy. In September 2021 our
Sustainability Report will be published.
We have identified areas of our
supply chain that are vulnerable to the
impacts of climate change, informing
our supply chain resilience risk
assessment and understanding the
potential impacts to the business.
Blackmores recognises that
safeguarding human rights across
our supply chain is an area of
great importance to our people,
shareholders, customers, and the
communities in which we operate.
Blackmores is committed to the
global effort in eliminating modern
slavery in all forms. In January 2021,
we published our first Modern Slavery
Statement made in accordance with
the Australian Modern Slavery Act
2018 (Cth.) The statement describes
the steps Blackmores took during the
2020 year to seek to minimise the risk
of modern slavery occurring in our
operations and across our supply chain.
Looking ahead
Our Board and the Executive Team
supported by our people and our
shareholders have an incredible
opportunity ahead of us to build
and further strengthen the
Blackmores brand.
Now is the time for a heritage
Australian company with strong
brands and quality products to lead
as a business that contributes to
supporting choice for consumers
owning their health and wellbeing
and participating in a manner that will
contribute to our economy and the
communities in which we operate.
On behalf of the Board, I would like
to take this opportunity to thank you
for your continued support.
Anne Templeman-Jones
Chair, Blackmores Limited
BLACKMORES ANNUAL REPORT 2021
CEO’s Year
in Review
In February 2020 we shared our Ignite for 2024
plan that sets Blackmores on the path to deliver
sustainable profitable growth. Consistency over the
long term requires strong footings. Our focus in FY21
was to ensure that Blackmores has foundational
elements in place while dealing with the disruption
caused by a pandemic.
The health and
wellbeing of our
employees and the
communities we serve
continues to be our top
priority
Across many of the markets we
serve COVID-19 continues to impact
communities, pressure health services,
and change how we work and interact
with each other. Ensuring that our
people are protected, feel safe and
secure, and that we supply much
needed health products to those most
in need continues to be the focus for
all of us here at the Blackmores Group.
In Australia for the past 12 months
restrictions and lockdowns have led
to a consumer shift, with foot traffic
moving from pharmacy to grocery,
and from traditional retail to online.
Today, the vast majority of our
employees continue to work from
home. The exception is our make,
packand deliver teams as well as
our frontline sales and education
colleagues who have ensured that
we could bring products to our
consumers while observing strict and
varied safety protocols. The ability of
our teams to respond to the sudden
and dramatic shifts in demand brought
on by rolling lockdowns and border
closures in each of the 13 markets
we serve has been an incredible
achievement.
Financial Year 2021
results
Despite the uncertain environment,
Blackmores has delivered a strong
result for 2021, with revenue up 3%
on a constant currency basis and
underlying earnings before interest and
tax (EBIT) up 52%.
Across Asia revenue was up 28%
at constant currency for the year, with
the region now contributing 51% of
sales for the Group. For the full year our
International segment revenue was up
27% on a constant currency basis. The
China recovery continues with far better
online marketing and stronger customer
events with Tmall.com and JD.com
during key consumption periods, with
revenue for the year up 28%.
Blackmores ANZ faced
unprecedented challenges in 2021,
with revenue down 14%. The vitamin
and dietary supplement (VDS) category
fell $200m1 in retail sales on an annual
basis. This was driven by fewer sales to
travellers and international students in
retail outlets and a decline in average
weight of purchase. Traffic to both
traditional and discount pharmacy was
down, as lockdowns forced a shift to
grocery channels where the average
spend per trip is much lower. Sales of
our largest BioCeuticals sub-brand,
ArmaForce, were down as a result of
pantry loading in prior year 2020 and
the lack of a cold and flu season.
PAW by Blackmores posted strong
growth results.
Focus in ANZ is on restoring value to
the marketplace in Australia via superior
innovation, optimised channel pack/
price architecture, investing in brand
support, and partnering with retailers to
deliver a superior shopper experience.
1. IQVIA Grocery and Pharmacy 12 month MAT 12/06/21
14
BLACKMORES ANNUAL REPORT 2021 Progress against our Strategic Pillars in 2021
Ignite the Australian vitamin and
dietary supplement (VDS) category
Despite the category challenges faced in Australia brought
on by lower foot traffic in pharmacy, the lack of a cold
and flu season, and the decline of the Daigou trade,
the ANZ team was able to execute on the channel and
pricing strategy needed to drive value with customers and
improve our underlying EBIT margin by 221bps.
Our team in Australia and New Zealand remain
focused on delivering the channel differentiation that
is needed to drive value across the category through
innovation and improving the consumer and practitioner
experience offline and online, while continuing to drive the
distinctiveness of our brands through stronger and more
engaging messaging.
Drive growth in targeted segments
and markets
Our aspiration is to reach 1 billion consumers by 2025 and
generate $900m in sales. This ambition requires us to look
at different ways Blackmores can build confidence with
consumers whose needs are not being adequately served.
In FY21 we extended our range of Halal certified
products which allow us to bring our products to previously
under-served consumers to help improve the health of
those in countries like Indonesia and Malaysia in ways
that provide a deep level of Halal assurance. With unique
products and benefits we will ensure that more consumers
than ever before have trust in Blackmores.
Our Global Innovation Centre in Shanghai is focused on
designing products for the modern career woman, a key
target consumer for Blackmores in all markets we serve. This
target consumer provides a clear focal point around which
to build out innovations that best meet the needs of this
important consumer group.
In March 2021 we launched our personalised online
direct-to-consumer offer B(more), which allows consumers
to consult with our online naturopaths and build
personalised vitamin subscriptions, delivered straight to
your door in convenient daily packages.
When it comes to our furry friends, PAW is already the
most recognised pet supplement brand in Australia. We
will continue to bring more innovation and education to
vets, specialty retailers and pet parents alike. In the past 12
months growth in our pet health business has been driven
by delivering education programs with our vets, improved
programs on e-commerce and specialty pet channels, and
new-to-market innovation like PAW OsteoAdvanced.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
15
BLACKMORES ANNUAL REPORT 2021
CEO’s Year
in Review
Transform digital commerce and
operations
For many sectors, COVID-19 has highlighted that the move
to a more omnipresent digital economy is much closer than
what we all predicted just 12 months ago. Our e-commerce
sales contributed 27% of sales in FY21. We now deliver
100% of our education content through digital channels.
With a disproportionate amount of our growth to come
from digitally enabled communication and sales channels
as more consumers and practitioners shift their own
preferences to a digital experience, our aim is that more
than 40% of sales will come from online by 2024.
To stay ahead of the shift, we are exploring where
technology, data and insights can enable us to move to a
completely different way of working.
Our investments will be focused on technology-led
innovation and superior end-to-end digitally enabled
experiences, including better e-commerce platforms for
our leading brands, superior digital communication and
content, improved B2B e-commerce, and a superior digital
health ecosystem that offers innovative, integrated and
personalised health solutions beyond the pill.
Importantly, digital growth will be underpinned by
operational efficiency as we move to become a connected
enterprise and unlock our organisational experience,
capacity and productivity via digitally enabled operations
and automation.
Simplify our operations and
reduce cost
At the beginning of 2020 we set ourselves a target to deliver
$50m of annual gross savings ongoing by FY23. This year
we delivered $22m in year savings through our Leading
Value Position (LVP) program as well as changes to our
organisational design to better align to our strategic growth
priorities and strategic revenue management.
In April we increased our target to $55m by FY23 and
are well on track to deliver our savings initiatives. We will
reinvest approximately half of our productivity and cost
savings to fuel growth, while delivering a higher standard of
performance more consistently over time.
We simplified our portfolio through brand divestments
and streamlining of our product offerings. By the end
of calendar year 2021 we will reduce our SKU count by
40%. During the year IsoWhey/Wheyless and Global
Therapeutics were divested.
Blackmores is in a much better financial position than just
12 months ago. A move to a much stronger balance sheet,
good operating cash flow and a relentless focus on cost
control means that our financial health is very strong and
provides us more freedom to invest in core capabilities that
will generate a better return for our shareholders over time.
16
Strengthen our supply chain
Following the acquisition of our Braeside facility in 2019,
Blackmores became a vertically integrated manufacturing,
distribution, sales and marketing organisation for the first
time in 89 years. This was a bold strategic move and led to
significant change not only in manufacturing and supply but
in product development, business planning, compliance
and regulatory affairs impacting everything we do at
Blackmores.
Blackmores now has more than 65% of volume own
sourced, made and packed and over the past 12 months we
delivered a record volume of 2.6b standard-unit doses.
We are proud of our investment in Australian-based
advanced manufacturing capabilities.
We will continue to accelerate the necessary supply costs
savings to ensure important improvements such as factory
efficiencies, portfolio simplification, reformulation of our
products and procurement savings to drive manufacturing
efficiency for the Group.
To safeguard product orders in transit, Woolcool liners provide
effective insulation using a waste product from the wool
industry which is 100% compostable with a recyclable cover
for lower impact on the planet.
BLACKMORES ANNUAL REPORT 2021 1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
17
Delivering natural
health solutions, while
protecting nature’s
precious resources
Blackmores has a rich heritage in
demonstrating our commitment
to environmental and social
responsibility. This year we’ve
accelerated our corporate citizenship
initiatives to deliver on our vision for a
world where people and nature thrive
together.
For Blackmores Group we have
three areas that underpin our
commitment to a cleaner, safer, and
more equitable world. To reach Net
Zero Carbon Emissions by 2030,
we have mapped a clear pathway
and taken the first steps to reducing
our emissions by transitioning to
renewable sources of energy. This
included decommissioning the
gas-fired trigeneration plant which
was the primary source of energy for
our Warriewood Campus for the last
decade.
Addressing our packaging
emissions is another important
workstream. Packaging medicines
requires materials that protect the
efficacy of every ingredient for
the shelf-life of the product. Even
though more than 98% of our current
packaging is recyclable, we have an
ambition to have 100% recyclable
packaging by 2025.
We have deepened our supply
chain transparency to assess and
address the risk of modern slavery.
This involved people from across our
business and many of our suppliers
engaging in training and education
programs and implementing new
procurement systems that support
a structured approach to risk
assessment and supplier audits.
With a zero tolerance policy
of gender-based harassment,
discrimination and bullying, we are
committed to targeted and ongoing
training of all our people at all levels
of our organisation and our diversity
and inclusion policy and strategy is
supported by a steering group. I am
pleased to announce that in 2021
we achieved our gender leadership
targets and continue to provide
equal opportunity to our people
regardless of gender, ethnicity and
age. Importantly, we have no gender
remuneration gap and are committed
to maintaining this.
The Blackmores Group
transformation is well underway.
We have simplified our operating
model and are more focused than
ever on delivering sustainable,
profitable growth.
Our Blackmores team has always
been known for its resilience and
passion for natural health. There is no
other time in our history where this
has been more evident and where our
mission to connect 1 billion consumers
to the healing power of nature by
2025 is more relevant.
I look forward to continuing to
share progress on our journey with
all our shareholders, customers and
consumers.
Wishing you, your family and pets
good health,
Alastair Symington
CEO and Managing Director
BLACKMORES ANNUAL REPORT 2021
Family members of our
employees: Indica, 11,
(centre) joins Olive, 11,
and David Finch for a
park kick-around.
02
Growth
Strategy
18
BLACKMORES ANNUAL REPORT 2021 Focused on 3 core
brands, key markets,
and 5 consumer
growth platforms
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
19
BLACKMORES ANNUAL REPORT 2021
Growth Strategy
Ignite for
Growth 2024
Our ambition is to connect 1 billion
people to the healing power of nature
and deliver $900m of net sales.
Our Goals
1. Consumers
To be the most loved, trusted and
chosen brand in the categories we play
2. Growth
Consumption ahead of the market;
sustained profit performance
World-Class
People &
Culture
Quality &
Safety
Consumer
Understanding
Education
& Thought
Leadership
Innovation
Commercially
Astute
Winning
Partnerships
3. Our People
Ranked #1 employer of
choice in the health industry
4. Sustainability
Net Zero Emissions by 2030
5. Value
Shareholder return ahead of
the market (EPS)
6. Health Leadership
Ranked #1 thought leader
in natural health
20
BLACKMORES ANNUAL REPORT 2021 1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
21
3 core brands
Blackmores
BioCeuticals
PAW
Focus markets
Australia
South East Asia
China
India
5 consumer
growth
platforms
Core
Modern Parenting
Everyday Mental Wellbeing
Move
Pet Health
BLACKMORES ANNUAL REPORT 2021
Growth Strategy
Our
Priorities
S
T
R
A
T
E
G
I
C
P
I
L
L
A
R
S
1. Drive growth in
targeted segments
and markets
2. Simplify our
operations and
reduce cost
3. Strengthen our
supply chain
4. Ignite the
Australian VDS
opportunity
5. Transform digital
commerce and
operations
22
BLACKMORES ANNUAL REPORT 2021
Strategic milestones
achieved in FY21
Blackmores’ strategic
targets by FY24
Demonstrating strong progress
on our transformation and
growth strategy
Blackmores’ transformation
will deliver key strategic
targets
Double digit revenue and profit
growth in China and International
markets
Increased brand investments in
Australia and Asia
Portfolio simplification – sale of
non-core brands and ~500 net SKU
rationalisation from 1,400>900
Organisational redesign completed,
delivering $15m in run rate OPEX
savings
Braeside integration
Supply chain enhancements
delivering $11m in-year cost savings
Implemented channel-based
pricing strategy
E-commerce now represents
27% of Group sales
B(more) direct-to-consumer
platform launched
Reach 1 billion consumers and
$900m of net sales
International and China markets
to contribute >60% sales and
fully operational in India,
Philippines, Vietnam
Ongoing portfolio optimisation
towards more productive SKUs
$55m in annualised OPEX and
COGS savings by FY23
Future proof supply chain,
automation and continuous
improvement at Braeside plant
Market leading customer and
practitioner experience
Gross profit margin in the
high-50s and EBIT margin
mid-teens
Omni-channel excellence with
e-commerce >40% of total
Group sales
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
23
BLACKMORES ANNUAL REPORT 2021
Consumer-led
Innovation
Our approach to innovation
Our three-year innovation ambition
is to drive sustainable growth through
brilliant ideas that answer the needs of
our consumers across our markets.
The revamp of our innovation process in FY20-
21 was geared around our five Consumer Growth
Platforms using local consumer insights.
The Blackmores Innovation Engine is an end-to-
end delivery framework – processes, systems, and
resources – designed to bring big ideas to market with
efficiency and clarity to deliver our three-year growth
ambition. Ultimately, we want to bring consumer-led ideas
to our markets quickly.
Consumer-led innovation taps into trends, behaviours,
and demands that lead to ideas for products, services and
ways of doing business. It starts and ends with what
consumers want.
Innovation in FY21
___
25 scalable, global ideas identified in 6
months to be developed in FY22
___
Global Innovation Centre in
Shanghai delivered local market
consumer insights
___
High value net sales target
for innovation over the next 3
years sparked by deep consumer
insights
24
“The lifeblood of innovation
at Blackmores starts and
ends with our consumer.
We source rich consumer
insights across our global
markets and use these to
deliver quality, efficacious
solutions that delight and
empower people to make
living well each day a
natural way of life.”
Joanne Smith
Chief Marketing and
Innovation Officer
BLACKMORES ANNUAL REPORT 2021
Asia
In FY21 we delivered blockbuster innovations across Asia.
• Blackmores Power Up: Currently available in
Singapore, Taiwan and Hong Kong. A unique herb
blend found in clinically-studied doses to boost healthy
testosterone levels in men and developed in response
to research that men want increased performance
and confidence.
• Blackmores Ultra Body Shaper: Now #1 selling product
in Hong Kong and Taiwan. Formulated with
patented African Mango Seed extract and clinically
shown to reduce weight and fat in 4 weeks by breaking
down fats and carbohydrates.
China
Our Global Innovation Centre in Shanghai fast-tracked the
launch of a Blackmores premium line of products
specifically designed for the modern parenting consumer
growth platform. The range features highly targeted
formulations to meet consumer needs across conception,
pregnancy, breastfeeding, and children’s health.
Australia
Our innovation centered around support for immunity and
stress in response to the heightened needs of our
consumers during the pandemic.
• Blackmores Run Down Rescue: A multi-action formula
that relieves tiredness, supports energy levels and
immune system health specially formulated with a
blend of vitamins, minerals, plant and mushroom
extracts, Siberian ginseng and vitamin C.
• Blackmores Sleep Sound Magnesium: A triple-action
sleep product that relieves muscle tensions, spasms and
symptoms of stress.
• BioCeuticals D3 Vegan Spray: Provides a therapeutic
dose of Vitamin D3 to support healthy bone
development and healthy cardiovascular and immune
system function for vegan consumers.
Pet health
• PAW Digesticare SB: Contains a probiotic yeast
that can be given in conjunction with antibiotics to
reduce duration and occurrence of antibiotic-
associated diarrhoea and help support digestive system
health in dogs.
Looking forward
We have a strong three-year global innovation pipeline
targeted to deliver significant net sales growth across the
business by FY24.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
25
Humera Ahmad, Group Product Development Director,
Group Marketing & Innovation.
BLACKMORES ANNUAL REPORT 2021
Research and
Education
Our vision is to be the leading
authority on natural health
education and research.
Blackmores Institute is committed to conducting and
supporting research that builds the evidence base,
translates into practice and improves public health.
We strive to push the boundaries of understanding,
evidence and application in our focus areas to identify
natural medicine opportunities and future demand trends.
We use our research outcomes to build authority and
leadership in the industry and with consumers.
Evidence-based responses to health needs
More than ever, consumers are interested in their
own health and wellbeing and Blackmores Institute is
responding with support for customers and practitioners.
Our thought leadership is based on evidence-informed
education, from singular consumer interaction online
through to institutional partnerships and government
advisory boards. We recognise our unique position in the
health industry between pharmaceutical and fast-moving
consumer goods.
Our expanding partnerships and research programs
across Asia and in Australia are adding to the global
knowledge base of complementary medicine. The focus
is on healthcare practice, discovery and innovation, novel
ingredients and product development.
Advancing the science of complementary and
integrative medicine
Blackmores Institute is on a mission to bring safe, effective
and affordable health solutions to the masses. Our global
research is focused on bringing greater understanding of
how integrative medicine, complementary medicine, and
lifestyle choices can improve public health outcomes.
Key research undertaken in FY21 included clinical
trials for vision improvement, memory, pre-diabetes and
birth defects, as well as pharmacokinetic studies and
literature-based projects including a systematic review
of gut long axis.
Blackmores strengthened its collaboration with CSIRO
who conducted a narrative synthesis of the evidence
for our Impromy health and weight management
program, confirming significant weight loss of 6-10% and
improvements in blood pressure and blood glucose. In
FY22 Impromy will continue a partnership with Charles
Perkins University on inter-generational obesity in Australia
focused on infant and maternal health outcomes.
FY21 Achievements in
Research and Education
___
41 research projects exploring natural
health solutions
___
8 excellence in education awards,
including Complementary Medicines
Australia – Most Outstanding
Contribution to Education and Training
___
147k educational touchpoints with
health practitioners, pharmacy student
and consumers
___
27k course completions in our
Complementary Medicine Education
(CMEd) program across Australia,
Malaysia and Thailand
___
Partnerships with 19 leading
universities and academic institutions
across Australia and Asia
“The right health choices change
your life and the people around you.
Our research is about creating new
knowledge, and sometimes pushing the
boundaries of what we think we can do
with supplements.”
Dr Lesley Braun (pictured at right)
Global Director of Blackmores Institute and
member of Australian federal taskforce to develop
national roadmap for medical products including
pharmaceuticals and complementary medicine.
26
BLACKMORES ANNUAL REPORT 2021
By sharing knowledge through
science communication, we empower
people to make healthy choices.
Blackmores Institute was well positioned to adapt to online
training from the outset of the pandemic, with virtual learning
platforms already assessed and in use and additional skilled
virtual facilitators quickly trained to ensure we continued
delivering best-in-class education through FY21.
Our Complementary Medicine Education (CMEd)
program for pharmacists across Australia, Malaysia and
Thailand had 27k completions, while our BeCertified
micro-credential, product-focused retail training had
23.4k completions with exceptional feedback. In Australia,
we ranked number one for retail education and training
(Advantage Survey September 2020).
Blackmores Institute further employs digital
communication strategies, podcasting, journal publication
and conference keynotes to continue to extend our global
reach while building depth and breadth.
Naruemol Roongaphirakkul, New Product
Development Manager, Blackmores Thailand.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
27
BLACKMORES ANNUAL REPORT 2021
03
Company
Leadership
28
BLACKMORES ANNUAL REPORT 2021 Committed leadership
making a difference
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
29
BLACKMORES ANNUAL REPORT 2021
Board of Directors
Anne Templeman-Jones
BCOM, EMBA, MRM*, CA, FAICD
Chair and Independent Non-Executive
Director
Appointed Chair of Blackmores
on 28 October 2020
Board Committees:
Audit Committee (Member), People &
Remuneration Committee (Member),
Risk & Technology Committee (Member)
Anne brings a wealth of corporate experience and is currently serving
as a Non-Executive Director of Commonwealth Bank of Australia,
GUD Holdings Limited and Worley Limited.
During her 30-year executive career, Anne has held a number of
leadership positions in corporate and private banking with domestic
and offshore banks including Westpac Banking Corporation, Australia
and New Zealand Banking Group Ltd, and Bank of Singapore.
Anne is the former Chairperson of Commonwealth Bank’s financial
advice companies and has served on the boards of The Citadel
Group Ltd, Cuscal Ltd, HT&E Limited, Pioneer Credit Ltd, Notre Dame
University, TAL Superannuation Fund, and HBF Limited (private and
general insurance companies).
Anne has significant experience in strategy, financial and non-
financial risk, and corporate governance. Anne is also a Director of the
Cyber Security Research Centre Ltd.
* Masters of Risk Management
Alastair Symington
BEC, PG DIP INTL, BUS, MAICD
Group Chief Executive Officer and
Managing Director
Appointed: 1 October 2019
Alastair joined Blackmores as Group CEO and Managing Director in
September 2019. He brings deep global FMCG experience with leadership
roles in health and beauty categories across multiple geographies.
Prior to joining Blackmores Alastair was the Senior Vice President of
APAC, Latin America and the Middle East for Coty based in Dubai. He
has extensive experience in commercial operations across multiple
geographies during his time at P&G and Coty having held roles in Market
Strategy and Planning across APAC (P&G) based in Singapore, Managing
Director China Wella (P&G), based in Shanghai, Head of Emerging Markets
(Wella) P&G, based in Geneva, and SVP Consumer Beauty, Coty based in
Dubai. Alastair started his career in Australia and has a deep understanding
of consumer retail and brand marketing in the local market having held
roles at both at Nestle and Gillette.
Alastair has a Bachelor of Economics and a Post-Graduate Diploma in
International Business from Monash University, and is a member of the
Australian Institute of Company Directors.
David Ansell
BA (COMMUNICATION), GAICD
David has enjoyed a highly successful career in consumer-facing
organisations in Australia, Asia and the United States.
Independent Non-Executive Director
David played a pivotal role in the start-up years of Foxtel, was CEO
Appointed: 22 October 2013
Board Committees:
People & Remuneration Committee
(Chair), Risk & Technology Committee
(Member)
of advertising agency Saatchi & Saatchi, Managing Director of Mars
Incorporated in Australia, and President of a global Mars unit based in
the United States.
David has a strong operating and supply chain skill set and a deep
understanding of brand and customer strategy. David recently stepped
down as Managing Director of Jacobs Douwe Egberts Peets, after six
years running Australia and New Zealand’s largest pure play coffee
Company. Since then, he has led the acquisition of the Campos Coffee
Company, which he now Chairs as an Independent Director.
David is a former Director of the peak body of cycling in this country,
Cycling Australia, where he served for five years until early 2020.
30
BLACKMORES ANNUAL REPORT 2021
Sharon Warburton
BBUS (ACCOUNTING & BUSINESS LAW), FCA,
FAICD, FAIB
Independent Non-Executive Director
Appointed: 28 April 2021
Board Committees:
Audit Committee (Chair), People &
Remuneration Committee (Member),
Risk & Technology Committee (Member)
Sharon joined the Board in April 2021 and is Chair of the Audit
Committee. She has extensive board and executive experience in
corporate strategy, business operations, finance, accounting and risk
management, along with significant expertise in governance and
remuneration.
She is currently a Non-Executive Director and Chair of the Audit
and Risk Committee of Wesfarmers Limited, as well as being a
Non-Executive Director of Gold Road Resources Limited and
Worley Limited.
Sharon has also been a part-time member of the Takeovers Panel
since 2015, and is an Adjunct Professor in Leadership and Strategy at
Curtin University’s Faculty of Business and Law.
Wendy Stops
BAPPSC (INFORMATION TECHNOLOGY),
GAICD
Independent Non-Executive Director
Appointed: 28 April 2021
Board Committees:
Risk & Technology Committee (Chair),
Audit Committee (Member), People &
Remuneration Committee (Member)
Wendy joined the Board in April 2021 and is Chair of the Risk
& Technology Committee. She brings deep global information
technology, operational and risk management experience
with leadership roles in Asia-Pacific and operational and risk
management globally.
Wendy is currently a Non-Executive Director with the Coles
Group and Fitted for Work, a Council Member of the University
of Melbourne, Chair of the Industry Advisory Board for the
Melbourne Business School’s Centre for Business Analytics, a
member of the Digital Experts Advisory Panel for the Department
of Prime Minister and Cabinet’s Digital Taskforce and a member of
the AICD’s Governance of Technology & Innovation Panel.
She was previously a Non-Executive Director of the
Commonwealth Bank of Australia (2015-2020) and Altium Ltd
(2018-2019).
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
31
BLACKMORES ANNUAL REPORT 2021
Executive Team
Alastair Symington
Group Chief Executive Officer and Managing Director
Appointed in October 2019
Prior to joining Blackmores Alastair was the Senior Vice President of APAC, Latin America and the Middle East for
Coty based in Dubai. Alastair is a global business leader and passionate brand builder with more than 25 years
of consumer goods experience in health and beauty across multiple geographies. Having started his career
at Nestle in Australia, he then moved to Gillette and then Procter and Gamble (P&G) in 2005. In 2008 Alastair
moved to Singapore as Head of Strategy and Planning across the APAC group for P&G beauty and grooming
categories. In 2012 Alastair moved to Shanghai as China Managing Director for Wella (P&G). His role expanded
in 2014 to take on responsibility for all Wella emerging markets which consisted of more than 80 markets across
APAC, Latin America, Middle East and Africa and Central Eastern Europe and relocated to Geneva, Switzerland.
In 2016, Alastair joined Coty as part of the merger between P&G specialty beauty brands and the former Coty
company, as Senior Vice president. He relocated to Dubai and led the formation of the Coty consumer beauty
division. As a CEO that has led other CEO’s Alastair has proven track record at leading teams and operating in
the highly competitive consumer goods sector here in Australia and across Asia Pacific.
Alastair has a Bachelor of Economics and a Post-Graduate Diploma in International Business from Monash
University, and studied Mandarin while living and working in Shanghai. He is passionate about finding ways to
connect more people to holistic health solutions, believing that healthy people and their pets naturally lead to a
healthier planet.
Cecile Cooper
Chief Governance Officer
Cecile is committed to sustainability and good governance at Blackmores, championing both throughout
her 30-year career with Blackmores. As Chief Governance Officer, Cecile is responsible for regulatory affairs,
medical and product safety, government and public affairs, and work health and safety.
As one of Blackmores’ longest serving employees, Cecile knows the business inside out. Over recent years,
she has been especially passionate about embedding sustainability across the business. She has held a variety
of senior positions within Blackmores, including 13 years as Company Secretary, Director of Corporate Affairs,
Business Manager for Product Development, Marketing and Sales and Finance Manager.
Cecile is a Chartered Secretary and a Certified Practicing Accountant with a Bachelor of Business
(Accounting) and a Graduate Diploma of Applied Corporate Governance from the Governance Institute of
Australia. She is a graduate of the Australian Institute of Company Directors, serves on the Governance Institute
of Australia’s Legislation Review Committee, and is the Chair of CCNB Limited, a not-for-profit community care
organisation. Cecile was awarded the Rotary Paul Harris Fellow in 2015.
Dean Garvey
Managing Director, International
An experienced commercial operator, Dean is responsible for driving international growth across our Asia
markets (excluding China), including new entries through direct investment or distribution partners. He is
based at our international hub in Singapore, leading a team of almost 800 people in Hong Kong, Indonesia,
South Korea, Malaysia, Pakistan, Singapore, Taiwan, Thailand and Vietnam. Prior to this Dean was Blackmores’
Deputy Managing Director Asia since 2014, spearheading our joint venture with Kalbe Farma in Indonesia of
which he is President Director. Dean is passionate about learning about new cultures and helping pioneer the
natural health industry in Asia. Before joining Blackmores, he was General Manager for Sales and Marketing at
Vodafone Australia and held senior roles in M&A advisory both in-house with SingTel Optus and professional
services firms. Dean has degrees in commerce and chemical engineering from the University of Sydney and is a
Chartered Accountant.
32
BLACKMORES ANNUAL REPORT 2021
Gunther Burghardt
Chief Financial Officer
Gunther Burghardt was appointed CFO in January 2020. He is a successful finance and business leader with
more than 27 years’ experience in the consumer goods, food and beverage industries. His diverse global
career includes leading teams in finance and information technology and in commercial and operations
functions. Prior to joining Blackmores, Gunther was Executive Vice President Operations at Treasury Wine
Estates (TWE), based in California, USA. At TWE he also held various senior finance roles working across
regions including Asia, Europe, the Americas and Oceania, and also held the role of Group CFO during his
time there. Earlier in his career Gunther held senior roles at Mondelez International (formerly Kraft Foods),
Reckitt Benckiser and Procter & Gamble. Gunther holds a Bachelor of Business Administration, Finance and
Accounting from Wilfrid Laurier University in Canada, and has fellowship from the University of Melbourne
Graduate School of Accounting and Industry partnerships. Originally from Canada, he enjoys being active in
the great outdoors and believes pets improve wellbeing and engagement with life.
Jane Franks
Chief People Officer
Jane joined Blackmores in October 2018 in a newly created CPO role, responsible for developing and
executing the Blackmores’ people strategy. As guardian of the employee value proposition, she delivers a
strategic focus on culture, capability and talent across all global markets. Passionate about people, performance
and making a difference, Jane is an accomplished executive with over 20 years’ experience in the financial
services and consumer products sectors across HR, strategy, and business management roles. She has a strong
track record of building partnerships to improve business performance through change and transformation,
improving leadership and organisational capabilities of the future and embedding rigorous talent practices.
Prior to joining Blackmores, Jane was HR Director for Diageo Australia and before that held senior roles across
the Westpac Group for over 15 years. She has a Bachelor of Business and membership of the Australian
Institute of Company Directors and Australian Human Resources Institute.
Jeremy Cowan
Chief Operations Officer
Jeremy joined Blackmores in July 2018 and has a strong record of generating value through supply chain
strategies and continuous improvement. His exceptional leadership and strategy capability is linked to
extensive functional and technical acumen across end-to-end supply chain, encompassing sales and
operations planning, manufacturing, logistics, and strategic sourcing. He is skilled at developing high
performing teams and nurturing positive workplace cultures. Prior to joining Blackmores, Jeremy was Asia
Pacific Sourcing Director of Nando’s and before that enjoyed a 20-year career with Mars Incorporated in
various Supply Chain and Sourcing Director roles across multiple segments based in both Australia and
the USA. A keen triathlete who completed his first full Iron Man race in 2018, Jeremy has a Bachelor of
Commerce degree from Deakin University with an Accounting and Economics major.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
33
BLACKMORES ANNUAL REPORT 2021
Executive Team
Joanne Smith
Chief Marketing and Innovation Officer
Holding a stellar track record in global brand building and innovation, Joanne drives marketing
excellence and consumer-led innovation for Blackmores and is a proud champion of holistic health.
With over two decades of commercial and global marketing leadership expertise, Joanne’s key
strengths include business and brand development, consumer-centric global growth strategies and
transformational organisational change. Prior to joining Blackmores in March 2020, Joanne was Global
Marketing Director at DuluxGroup, driving the Selley’s brand across Australia, New Zealand and Asia. She
has held executive marketing positions with well-known consumer brands, including Regional Director
for Johnson & Johnson (Asia) and Global Marketing Director for Unilever (USA) leading the Dove brand
globally. Joanne has a Bachelor’s degree in Marketing from the University of Technology Sydney and a
MBA with an International Business major.
Kitty Liu
Managing Director, China
With a strong marketing pedigree and reputation for great brand strategy and business growth, Kitty
has more than two decades of experience with blue chip multi-national organisations including General
Mills, Mead Johnson, Yum! and Unilever. She has successfully implemented omni-channel strategies
across e-commerce, including JBP experience with Alibaba and Tencent. As VP, Marketing Strategy
and Sales Operation for Mead Johnson Nutrition, she reshaped the infant and child nutrition product
portfolio and sales strategy in China, achieving double-digit top line growth by gaining share in the
winning channels of e-commerce B2C and mother and baby store chains. Kitty’s roll-up-her-sleeves
approach to leadership combined with a MBA means she is passionate about delivering results and
keen to foster a performance culture where all team members feel supported to reach their full potential.
She is a firm believer in gender equity and the importance of building a strong pipeline of talent to
support future business growth.
Ayumi Uyeda, Managing Director of Australia and New Zealand, left the company on 9 July 2021,
with CEO Alastair Symington assuming responsibility for the ANZ business until a replacement is appointed.
34
BLACKMORES ANNUAL REPORT 2021 Adjunct Professor Lesley Braun
Director, Blackmores Institute
Lesley is responsible for education and research programs across the Blackmores Group. She is an Adjunct
Professor at National Institute of Complementary Medicine (Western Sydney University) and the National Centre
for Naturopathic Medicine (NCNM) Southern Cross University, and has held various positions at The Alfred
Hospital, Monash University and RMIT University. Lesley was Vice President of the National Herbalists Association
of Australia, an Academic Board Member of Endeavour College, and former member of key industry groups
including the Australian Therapeutic Goods Advisory Council, Advisory Committee for Complementary Medicine,
the National E Health Transition Authority (NeHTA) medicines terminology group, Clinical Oncological Society of
Australia, and Advisory Committee for the Australasian Integrative Medicine Association. She is a current member
of the Menzies Research Catalyse Program, Pharmaceutical Society of Australia, Australian Institute of Company
Directors, International Women’s Forum. Lesley also sits on course advisory committees for the nutrition degrees
at Endeavour College and Think Group. She is the main author of four bestselling textbooks including Herbs and
Natural Supplements – an evidence-based guide, founding Editor-in-Chief of the journal Advances in Integrative
Medicine, and was a regular columnist for the Australian Journal of Pharmacy for 20 years. She was named CEO
Magazine’s Health and Pharmaceutical Executive of the Year in 2018.
Richard Conway
Group General Counsel & Company Secretary
A passion for the consumer products industry saw Richard join Blackmores in July 2021 as its Group General
Counsel & Company Secretary. Richard leads Blackmores’ legal and compliance functions, as well as providing
company secretarial support to the Blackmores Board of Directors.
Richard is a seasoned corporate and commercial lawyer and experienced governance professional. Most
recently, he spent almost six years working in a range of operational and strategic legal roles at Coca-Cola
Amatil including as General Counsel of its Australian business unit and as Deputy Group General Counsel and
Group Company Secretary. Richard's private practice legal experience includes public and private M&A roles
based in London, Moscow and Sydney for Freshfields Bruckhaus Deringer and Herbert Smith Freehills.
Richard is an admitted lawyer in New South Wales, England and Wales and is a member of the Governance
Institute of Australia.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
35
BLACKMORES ANNUAL REPORT 2021
BaLong Nguyen:
Team Leader,
Bungarribee
Distribution Centre
04
Operating
& Financial
Review
36
BLACKMORES ANNUAL REPORT 2021 Investing in efficiency
and growth
Group and Divisional Financial Results
Operating Review
Corporate Governance
Group Risks
Health and Safety
38
40
42
44
50
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
37
BLACKMORES ANNUAL REPORT 2021
Group and Divisional
Financial Results
Blackmores delivered revenue of $575.9m up
3%* driven by strong China and International
growth, with Net Profit After Tax (NPAT)
of $28.6m up 89%.
*in constant currency
Growth has been driven by International up 27% (in constant currency) and
China up 28%, but offset by the ANZ region down 14% over the prior year
which continues to be impacted by the loss of daigou trade and a mild cold
and flu season.
A focus on optimisation of price, product mix, trade spend, and a savings
program in Cost of Goods Sold (COGS) has driven a 1.6% increase in gross
profit margin and a 83% increase in EBIT.
A structural change in the VDS market has seen a shift from traditional
channels to e-commerce and growth markets in Asia. We have also benefited
from higher growth in our Asia markets including China, which now represent
51% of Group sales.
Tight cost control aligned with restructuring activities has seen Group-wide
supply chain and OPEX savings programs deliver meaningful results.
Australia & New
Zealand (including
BioCeuticals)
Australia and New Zealand revenue
of $280.6m was down 14% on the
prior corresponding period, with
reported EBIT down 15%. Sales in the
region were impacted by the ongoing
effects of COVID-19 including border
closures and a reduction in retail foot
traffic and sales from international
students and visitors.
COVID similarly has changed
shopper behaviour and foot traffic
in grocery where the average spend
per trip is much lower. This has driven
a period of heightened promotional
activity as these channels have sought
to maintain greater share of consumer
vitamin spend.
BioCeuticals was impacted by the
prolonged lack of cold and flu season
and lower replenishments rates for
ArmaForce, though BioCeuticals
remains Australia’s leading practitioner
brand in Australian pharmacy1.
These declines have been
tempered by strong growth in sales of
our PAW brand as it continues to gain
momentum.
Blackmores brand metrics remain
strong. Blackmores is the leading VDS
brand with 12.3%2 share of market
and the most trusted VDS brand in
Australia for the 13th year running3
and in New Zealand too.
International
Our International business delivered
strong revenue growth of 27% at
constant currency (18% at actual FX) to
$163.7m, with reported EBIT growth
of 48%.
The strong result was driven by
significant growth across our key
markets of Indonesia, Thailand
and Malaysia due to the increase
in consumer demand for immunity
products which has been accelerated
by COVID-19 with low levels of
containment across several of the
markets in the international segment.
Top line growth has also been
supported by the investment in more
Product Advisors (now totalling 679)
as well as more targeted price/pack
initiatives to deliver net sales per
unit uplift.
Lower numbers of overseas
travellers impacted sales in our smaller
markets of Singapore and Hong Kong.
Market innovation in the region
included the launch of Ultra Body
Shaper (now our top-selling product
in Hong Kong and Taiwan) and Power
Up (which became our top-selling
product in Singapore within six weeks
of launch).
Good progress is being made with
our Halal strategy across South East
Asia. Blackmores is the only imported
brand with halal certification by Majelis
Ulama Indonesia (MUI) – two-thirds of
our product range is certified.
China
China revenue is up 28% to $131.6m
with the segment posting reported
EBIT of $14.3m compared to a break-
even result in the prior year.
The result was driven by FTZ
growth of 34%, with this channel now
accounting for more than 70% of net
sales.
Performance across e-commerce
platforms was very strong in both the
Double 11 and 618 online shopping
festivals. This performance is a result
of ongoing investment in innovation
as well as local capabilities to deepen
CBEC and digital health performance.
Blackmores was a top 4 VDS brand
across all CBEC platforms in China
during both these e-commerce
events4.
Blackmores is committed to more
investment in brand and OPEX to
build capability in this market.
We remain focused on driving
brand awareness and product
innovation in key product categories
(e.g. fish oil, joint and kids) to underpin
momentum in China. As part of this
focus, our Global Innovation Centre
established in Shanghai is providing us
with rich local insights.
1. Nielsen AU Pharmacy & Grocery MAT to 19/06/21
(Practitioner sales only).
2. Nielsen AU Pharmacy + Grocery MAT 9/06/21
Domestic (Retail & Practitioner).
3. Reader’s Digest Most Trusted Brands Surveys 2009
to 2021.
4. Smartpath 2/8/21.
38
BLACKMORES ANNUAL REPORT 2021
Revenue1
$575.9 million
The Group delivered
revenue of $575.9m
across all divisions
and brands, up 3%2
on the prior year.
EBIT3
$45.8 million
Earnings before
interest and tax of
$45.8m was up 83%
compared to the
prior year.
NPAT3
$29 million
Net profit after
tax attributable to
shareholders of $29m,
up 89% on the prior year
compared to $15m.
EPS3,4
148 cents
Earnings per share
of 148 cents were
up 71% on the prior
year1.
Dividends
per share
71 cents
Dividend represents
payout ratio of 48%
for the year ending
30 June 2021.
800
700
600
500
400
300
200
100
160
140
120
100
80
60
40
20
100
80
60
40
20
600
500
400
300
200
100
500
400
300
200
100
01
Australia &
New Zealand
17
18
19
20
21
R E V E N U E
$281
million
500
400
300
200
100
0
344
354
359
326
281
17
18
19
20
21
02
International
164
139
107
82
68
R E V E N U E
$164
million
160
150
125
100
75
50
25
0
17
18
19
20
21
17
18
19
20
21
03
China
143
117
122
132
103
R E V E N U E
$132
million
150
120
90
60
30
0
2017 2018 2019 2020 2021
17
18 19
20
21
1. FY21 and FY20 exclude revenue from the discontinued operation.
2. 3% at constant FX; 1% at actual FX.
3. FY20 restated for change in accounting policy arising from IFRIC Saas
clarification, EBIT – $4.3m, NPAT – $3m, and EPS – 17.2 cents.
4. Basic EPS from continuing and discontinued operations.
1
1
Y
Y
E
E
A
A
R
R
I
I
N
N
R
R
E
E
V
V
I
I
E
E
W
W
2
2
G
G
R
R
O
O
W
W
T
T
H
H
S
S
T
T
R
R
A
A
T
T
E
E
G
G
Y
Y
3
3
C
C
O
O
M
M
P
P
A
A
N
N
Y
Y
L
L
E
E
A
A
D
D
E
E
R
R
S
S
H
H
I
I
P
P
4
4
O
O
P
P
E
E
R
R
A
A
T
T
I
I
N
N
G
G
&
&
F
F
I
I
N
N
A
A
N
N
C
C
I
I
A
A
L
L
R
R
E
E
V
V
I
I
E
E
W
W
5
5
S
S
U
U
S
S
T
T
A
A
I
I
N
N
A
A
B
B
I
I
L
L
I
I
T
T
Y
Y
&
&
C
C
O
O
M
M
M
M
U
U
N
N
I
I
T
T
Y
Y
6
6
F
F
I
I
N
N
A
A
N
N
C
C
I
I
A
A
L
L
R
R
E
E
P
P
O
O
R
R
T
T
7
7
R
R
E
E
M
M
U
U
N
N
E
E
R
R
A
A
T
T
I
I
O
O
N
N
R
R
E
E
P
P
O
O
R
R
T
T
8
8
F
F
I
I
N
N
A
A
N
N
C
C
I
I
A
A
L
L
S
S
T
T
A
A
T
T
E
E
M
M
E
E
N
N
T
T
S
S
39
BLACKMORES ANNUAL REPORT 2021
Operating Review
The ongoing delivery of our growth strategy
will enable Blackmores to return to sustainable,
profitable growth and support shareholder
value creation.
About Blackmores Group operations
16 sites
13 markets
Accountable to
20+ regulatory
authorities
Make
Pack
Deliver
Manufacturing at
Braeside, Victoria
– a 30,000m2 soft
gel and hard tablet
manufacturing
facility producing
65% of our volume
Group headquarters
at Warriewood – a
25,000m2 purpose-
built facility where
most products are
packaged and quality
checked
Distribution centre at
Bungarribee, Western
Sydney – a 16,000m2
warehouse processing
3500 orders per week
Overview
This year we continued to execute against our growth
strategy to return Blackmores to sustainable, profitable
growth and shareholder value creation, mindful of
uncertainty around COVID-19. Our decision to vertically
integrate our manufacturing has:
• secured a manufacturing footprint in Australia for an
iconic local brand
• provided certainty for many Asia-registered products
• enabled strategic supply solutions (including how we
reach under-served groups)
• optimised sequencing and minimal wastage through
manufacturing 100% of our own Blackmores product
volume.
Braeside year 1 – performance highlights and
challenges
Despite pandemic restrictions, our Braeside facility is
delivering excellent performance across all metrics.
Operational performance is meeting or exceeding
expectations in efficiency, uptime, scrap levels, plant
performance and delivery.
In FY21, Braeside achieved an all-time record
production increase of 24% year-on-year over the
plant’s entire 30-year operating history.
Towards FY24, we will continue to streamline operational
performance and product mix.
Read more about our first full year as a manufacturer on
the opposite page.
Ensuring complete business continuity
Across end-to-end production which is comprised of make,
pack and deliver, owning complete supply chain facilities
has enabled greater internal management of COVID risk.
Controlling facilities and working conditions ourselves
delivered zero disruption or downtime due to the
pandemic restrictions or fluctuating consumer demand.
While the global supply chain - both inbound and
outbound - was marked by unpredictable delays, our
maturing IBP process has supported FY21 performance
and confidence in supporting growth across Australia,
China and international markets.
Like many other businesses, COVID has caused
unforeseen issues and complexity across the supply
chain, ranging from delays with inbound raw materials
or packaging to our ability to move finished goods to
consumers in a predictable way.
FY21 has seen 100% business continuity across
production. We took proactive and preemptive measures
around segregation, splitting shift times, and social
distancing. Across every part of our operations, we
protected our people so that in turn we could protect our
ability to make and sell products.
Control of our make, pack and deliver
environments has resulted in zero
production downtime because of COVID.
40
BLACKMORES ANNUAL REPORT 2021
International
& China
Growth
Packaging
Strategy
IBP Process
Simplified
Value
Halal
Certification
E-commerce
Growth ANZ
CMO
Source
for
PAW/Pet
Our Leading Value Position (LVP)
program identifies where value
can be unlocked in the business to
fuel growth
Our Leading Value Position (LVP) program has seven
individual workstreams – plan, source, make, pack,
deliver, quality and facilities.
LVP is evolving Blackmores’ culture to be one of
questioning, challenging how and why we do things,
and looking to extract value to help fuel our growth.
Our LVP work has identified areas where value can
be unlocked to fuel our growth strategy. This value
comes from continuous improvement initiatives across
our supply chain including our direct and indirect
spend categories, underpinned by evolving maturity in
our IBPprocess.
In FY21 we set a target of extracting $10m of value
that, if not for the LVP work and focus, would still be
costing the business. This year we have delivered
$11m of savings through LVP and we’re setting another
>$10m LVP target in FY22.
Supplying the right product at the right
time supports amazing growth.
Integrated Business Planning (IBP) progress
We’re committed to the ongoing maturity and evolution of
the Integrated Business Planning (IBP) process so we can
better plan for our own customers. The IBP process is the
glue that connects demand and supply in our business.
Our process has transformed over the past two years.
Our planning horizon is at 6-9 months, with an aim to shift
to two years to better supply against a longer-term, more
accurate view of demand – minimising out-of-stocks for
customers.
We’re proud to support amazing growth through
supplying the right product at the right time, particularly
in many of our international markets. Despite some
challenges with BioCeuticals reformulations resulting
in some out of stocks in the past year, we have every
confidence in supporting growth in FY22 and beyond
across Australia, China and International markets.
Dr Jing Lin, Head of Formulation Development at our
Braeside Manufacturing Facility and author/co-author
of several industry patents.
Braeside:
2.6 billion doses in FY21
A key investment in our supply chain
Our manufacturing plant in Braeside, Victoria is our
single biggest investment for the year – a 30,000m2
soft gel and hard tablet manufacturing facility. FY21 is
our first full year of operations in manufacturing, and it
has proved a valuable strategic investment in securing
our supply chain and staying responsive to consumer
demand.
“We’re thrilled with the first full year of operation.
By having 100% of our own volume in the facility, we
have certainty in demand,” said Jeremy Cowan, Chief
Operations Officer.
“We can optimise production sequencing and
changeovers to minimize downtime and scrap
generation. We can capital invest to improve uptime
efficiency and all conversion metrics over time
because we are in control of our own destiny.”
• Australian first technology with a high-volume,
state-of-the-art tablet press and continuous coater
• A record-breaking 2.6b doses produced in FY21
• 65% of Blackmores volume is now own sourced,
made and packed
• The only known soft gel and hard tablet facility in
Australia with Halal certification for Majelis Ulama
Indonesia (MUI) to serve consumers in our fast-
growing Indonesia market
• Supply cost savings through optimisation projects,
SKU simplification, and product reformulation
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
41
BLACKMORES ANNUAL REPORT 2021
Corporate
Governance
Approach to corporate governance
Our Board and all levels of management are committed to
continuously improving our governance practices in line
with the needs of our business and stakeholders, aligning
accountability and stronger risk management within the
business.
Our corporate governance framework, illustrated in the
diagram on this page, strives to achieve the right balance
between accountability, delegation and oversight to ensure
effective and timely decision making.
The Board is responsible for setting Blackmores’ strategic
direction, ensuring good governance and oversight and
instilling a culture that considers and fairly balances the
needs of all our stakeholders.
Responsibility for Blackmores’ day-to-day management
and performance is delegated by the Board to the CEO
and from the CEO to other levels of management via a
comprehensive delegation of authority framework.
While the Board is responsible for establishing and
maintaining the corporate governance framework, good
governance is also the responsibility of the CEO and other
members of our Executive Team.
Detailed information about corporate governance at
Blackmores is provided in our Corporate Governance
Statement available at www.blackmores.com.au/about-us/
investor-centre/corporate-governance.
Corporate Governance Framework
OUR STAKEHOLDERS
Board
Delegation and
oversight
Accountability
and reporting
I
T
N
E
M
E
G
A
N
A
M
K
S
R
&
Y
G
E
T
A
R
T
S
R
U
O
Audit
Committee
Nominations
Committee
People &
Remuneration
Committee
Risk &
Technology
Committee
CEO
Responsible for day-to-day operations of Blackmores and for
implementing our strategy and business plans.
Leadership Team
Responsible for leading our people and translating our strategies
and plans into clear deliverables and expectations.
Our People
Responsible for daily execution against deliverables and
expectations.
OUR POLICIES, SYSTEMS & PROCESSES
Independent
assurance and
advice
Provided by:
External Audit,
Internal Audit
I
)
S
L
R
P
(
S
E
U
L
A
V
R
U
O
42
BLACKMORES ANNUAL REPORT 2021
Board skills and experience
Robust and effective governance and risk management are essential to our ability to deliver on our
purpose and strategy. Applying these fundamental principles through the Board renewal process
enabled us to identify the uplift in skills that was needed across a combinations of disciplines. The Board
skills matrix below sets out the current skills and experience we consider essential to the effectiveness
of the Board and its Committees, and we will continue to use this framework to identify potential Board
candidates in our ongoing renewal process with a commitment to and focus on improving the way we
operate to achieve our Environment, Social and Governance (ESG) goals.
Blackmores Board skills matrix
Skill and experience
Leadership
5
Manufacturing, supply chain and
consumer products
3
2
Health
2
Leading successful business outcomes and
high standards of corporate governance, as
demonstrated by sustained success in a senior
leadership role such as CEO level or similar position
in an organisation of significant size or complexity.
Deep experience in manufacturing, logistics,
distribution channels and/or consumer products
sectors particularly in Asia.
Relevance to Blackmores
Setting strategy, driving
performance in senior leaders for
effective decision making.
Appreciation of the operating
environment, including
opportunities, challenges and
constraints for our business.
Experience in the health sector (services or
regulator) or consumer health products. Exposure
to regulation in health sector (e.g. TGA or similar
regulator in overseas jurisdictions).
Appreciation of the framework
within which our business operates,
including key industry concepts and
regulation.
Strategy/Global perspective
5
Having a global perspective through exposure or
responsibility for leading international operations,
particularly in the Asia-Pacific region.
Insight into and ability to shape our
approach to harnessing key growth
opportunities outside Australia.
Enhanced customer or consumer outcomes
2
3
Experience in understanding the needs of
customers and/or consumers and how technology
can enhance outcomes.
Ensuring customer and consumer
needs are front of mind at all levels.
Governance
1
3
Experience as a Non-Executive Director of at least
two other listed entities (Australia or overseas)
and an understanding of legal and regulatory
frameworks underpinning corporate governance
principles.
Understanding of the local and
offshore listed environment and
associated corporate governance
frameworks to operate effectively
as a Director.
Digital Technology and Operations
2
2
Experience in technology strategies and innovation
and how they can be utilised to deliver greater
efficiency. Cybersecurity is included in this.
Supporting our technology strategy
and cybersecurity.
Financial Acumen
2
3
Understanding of the financial drivers of the
business, experience in financial accounting,
reporting, corporate finance and internal controls,
and capital markets.
Assessing financial and capital
management initiatives, particularly
in addressing complex issues.
Risk management
1
3
Experience in identifying, assessing and
monitoring systemic, or emerging risks, strategic
risks and both operational and financial risks.
ESG
M&A
3
3
People & Culture
5
2
2
Assessing our risk profile and
monitoring our decision making to
ensure we operate within our risk
appetite and adapt to new risks as
they emerge.
Influencing decision making to
support sustainable practices and
positive environmental and social
outcomes.
Understanding potential social and environmental
risks and opportunities.
Experience in major acquisitions, divestments,
mergers, etc., including strategy, due diligence,
valuation and/or integration.
Assessment of inorganic growth
opportunities in the context of our
organic growth strategy.
Oversight of the Group culture and the Code
of Conduct.
Understanding organisational
culture, succession planning
and renumeration and reward
frameworks.
Practiced/direct experience
High competency, capability, knowledge and experience
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
43
BLACKMORES ANNUAL REPORT 2021
Group Risks
Overview
We operate in a dynamic and evolving environment.
Our operations – domestic, international and digital –
continue to present both opportunities and risks that
could materially impact the business.
S trategic
Risks
nce
lia
p
m
o
C
F
i
n
a
n
c
ial
O
peration a l
Part of a strong governance
framework is understanding the
risks that have the potential to
have the greatest impact on our
business. In FY21 we focused
on gaining a more sophisticated
understanding of these risks, both
current and emerging, and putting
in place strategies that ensure we
protect our brands, our business
and our people.
cial
n
a
n
i
F
-
n
o
N
Risk Management Framework
Overseen by the Board and the Board Risk & Technology
Committee, Blackmores Risk Management Framework
supports the identification, management and reporting of
material risks. Risks are identified that have the potential
to impact the delivery of business plans and objectives
and are assessed using a risk framework that considers the
likelihood and consequence of occurrence using consistent
risk assessment criteria.
The framework incorporates a ‘Three Lines of
Accountability’ model for managing risks and controls
and considers both financial and non-financial risks
across strategy, operations and compliance. This includes
consideration of risks in areas such as health and safety,
environment (including climate change), information
technology and cyber, finance, reputation and brand, legal
and compliance, and social impacts.
The content and status of risk profiles and mitigation
plans is considered and updated, in line with changes to
our environment and operations, through regular reviews
by management. All employees are responsible for making
risk-based decisions and managing risk within our Board
approved risk appetite and specific limits.
The Board reviews Blackmores material risks each
quarter and assesses the effectiveness of the Company’s
risk management framework annually in accordance
with the ASX Corporate Governance Principles and
Recommendations.
The material risks faced by the Group that may impact on
our ability to achieve our key strategic priorities are outlined
in the Material Risks section on the following pages.
44
BLACKMORES ANNUAL REPORT 2021 Risk governance overview
The diagram below sets out an overview of risk governance and management at
Blackmores across three levels of accountability together with key responsibilities
of the Board, Group Executive Team, Group Risk and the business.
RISK LEADERSHIP
BOARD OF DIRECTORS
(Assisted by Board Committees)
Sets and
communicates
expectations for
risk management
Endorses
Blackmores’
mission, values,
strategy and Code
of Conduct
underpinning our
culture and ways
of working
Approves
Blackmores’ risk
policy, framework
and appetite
and ensures
appropriate
processes are in
place
Provides
oversight of
risk exposures
and response
plans
Monitors the
effectiveness of
Blackmores’
overall
governance
program
ACCOUNTABILITY
Executive Team
Sets business direction,
manages and resolves
material business risk
issues, and reports to
the Board as required
Provides
recommendations to the
Board on risk policy,
frameworks, appetite, and
processes via Executive
Risk, Assurance &
Compliance Committee
Manages risks and
fosters a proactive risk
culture and
accountability for
management of risk
within agreed appetite
levels
Implements effective
risk management
within business units
and across major
projects
1st line of accountability
2nd line of accountability
3rd line of accountability
PEOPLE AND OPERATIONS
OVERSIGHT FUNCTIONS
INDEPENDENT ASSURANCE
Owns and manages risks.
Business Units
Group Services
Oversees and sets frameworks
and standards. Monitor risk and
provide assurance.
Provides independent assurance
of frameworks and controls
effectiveness.
Group functions:
Risk
Strategy
People & Culture
Safety, Health & Wellbeing
Sustainability
Legal & Compliance
Finance
Internal Audit
External Audit
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
45
BLACKMORES ANNUAL REPORT 2021
Group Risks
Material risks
During FY21 we continued to face heightened uncertainty
and complexity across our operations in light of the
COVID-19 pandemic. The broader impacts as a result of
both global and domestic economies and businesses
continues to unfold and increases the risk landscape,
requiring ongoing response and management across many
of our existing material risks to minimize impacts. We have
been adapting our response and taking an agile approach
in the way we work and the decisions we make.
Throughout we have been purpose-led and focused on
doing the right thing and prioritizing customer, business
partner and team safety. We are ensuring continuity of our
operations and supporting activities, including our supply
chain to provide our products and services to our customers
and maintain our financial resilience in response to changes
in global markets.
We continue to remain vigilant when considering our
responses and the impact on team members, customers,
suppliers, regulatory requirements, and the communities
we serve.
Below describes the specific key material risks where the
Board and management focus their efforts. It includes a mix
of existing and emerging risks that could materially impact
the execution and success of Blackmores strategy.
Risks
Description
Key actions we are taking
Laws,
regulations
and
geopolitical
landscape
Reputation
and brand
Blackmores operates in a
highly regulated industry in
all markets in which goods
are manufactured and sold.
Changing geopolitical
landscapes and regulations
in each of these jurisdictions
may impact many aspects
of our operations, including
tax assessment and dividend
payments to the Group and
all aspects of the supply chain
(access to raw materials,
production, manufacturing,
pricing, marketing, advertising,
labour, distribution, and product
sales).
Remaining compliant with,
abreast of, and responsive to
changes (some of which can
significantly impact the nature
of operations in these markets)
requires diligent monitoring and
responsiveness by the business.
The strength of Blackmores'
brand and its portfolio is key to
business success.
Managing the reputation of
brands, and mitigating events
that may damage brands (e.g.
inaccurate media coverage,
product quality issues,
counterfeit product, third
party supplier negligence or
incidents, unsatisfactory supplier
performance, etc. is critical to
Blackmores’ ongoing success.
• We have a defined Compliance Framework, Risk Framework, and Assurance
program supported by company policies, standards and procedures.
• We employ specialised and experienced resources and teams (Legal, Quality,
Regulatory, Safety etc.) – both in-market and within corporate operations to
oversee and educate stakeholders of relevant regulatory requirements and
monitor potential changes. Where required, we also engage specialist advisors
to support legal and regulatory oversight for new and emerging markets.
• Our Executive Risk, Assurance and Compliance Committee (RACC), the Board
Risk & Technology Committee and the Board, provide oversight of key aspects
of our legal and regulatory frameworks and operations.
• We actively engage with key government, industry and regulatory bodies to stay
abreast of regulatory and policy changes.
• We utilise a supplier selection process and flexible supply chain practices are
overseen by specialist technical and quality resources.
• We have expanded our risk assessment to monitor the additional risks of
broadening our international markets beyond our existing primary markets,
which has been undertaken to diversify and lessen our dependence on these
key markets.
• Our customer base, supply base, route to market, and product base is
strategically diversified and we continue to focus on reducing key partner and
supplier dependencies where appropriate and establish dual sourcing for key
inputs to mitigate the impact of any unanticipated regulatory or geopolitical
changes.
• Blackmores takes pride in its company and brand values and mission, ensuring
that our strategy (supported by company policies, standards and procedures)
remain consistent with these core values.
• Our marketing principles are clearly defined and aligned internal review and
approval processes oversee all product claims, marketing and communications
material development.
• We utilise a structured Supplier Quality Assurance (SQA) and selection program,
have many long-term supplier relationships and apply audits and training
• Through our acquisition of the Braeside manufacturing plant, we are
increasingly gaining more control over our end-to-end supply chain.
• We employ specialised and experienced technical, quality, assurance and
product safety teams overseeing over 30 tests and quality assessments on every
product.
• Blackmores ensures product supply chain traceability technology, tamper evident
bottle seals, and ongoing testing over the shelf life of every production batch
• We are compliant with and subject to periodic external certification audits &
accreditations (TGA & Equivalent overseas bodies).
• We maintain current Crisis Management, Business Continuity, Disaster Recovery,
Complaints Handling and Product Recall procedures. Our consumer advisory
line responds to all consumer product information queries.
• Our consumer insights and innovation team monitor brand health, media
(including social/digital) and consumer trends, sharing timely insights with
relevant teams.
• Blackmores has established brand and intellectual property protection
strategies in place protecting our brands and products.
46
BLACKMORES ANNUAL REPORT 2021
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
47
Risks
Description
Key actions we are taking
Cybersecurity
and data
management
Data and information security
is essential to protect business
critical intellectual property
and data privacy. Continuing
advances in technology, systems,
and communication channels
mean increasing amounts of
private and confidential data are
now stored electronically. This,
together with increasing cyber-
crime, heightens the need for
robust data security measures.
Key
partnerships
People and
culture
Blackmores relies on select
key markets and customers
(distributors and retailers) to
support sales and delivery of
strategic initiatives.
Suboptimal performance
of these markets or key
customers, and/or detrimental
shifts in market power, could
have a significant impact on
Blackmores’ ability to deliver
against strategic initiatives.
Blackmores’ ability to deliver
on strategic targets is reliant
on retaining and attracting
experienced, skilled, and
motivated talent.
It also requires strong, resilient,
and effective leaders as the
business grows at pace.
• Our specialised Cybersecurity and supporting teams monitor, assess and
respond to continually evolving cyber threats to evolve and keep pace with
changing security needs.
• The business uses ongoing technology and software updates, including
automated patching with incorporated security services to protect our data and
technology services.
• Blackmores ensures restricted and segregated management of sensitive
personal, business, supplier and customer data. We have defined data
governance, classification and encryption (where relevant) standards.
• Further enhancing our Security Awareness program by introducing annual
employee cyber/information security training and phishing simulations.
• User access reviews, vulnerability management program and penetration testing
across Group information systems to continually assess our cyber posture.
• The business has implemented and tested disaster recovery procedures to be
followed in the event of a cyber incident in order to restore critical services
• External cyber-attack simulations and assessments provides valuable
information to improve overall Group security.
• We are uplifting IT Security Governance by implementing new security policies
and guidelines.
• We have an ongoing program of work with the objective to continually enhance
cyber security and data management across the organisation.
• Blackmores collaborates with a range of government and industry bodies to
provide insights and support to strengthen our cyber resilience.
• Blackmores has a deliberate multi-country and diversified customer base with a
focus on continued channel expansion, particularly throughout Asia, in addition
to ANZ.
• We are diversifying our go to market options with both offline and online
channels for customers and end consumers.
• We place focus on brand health, category growth through innovation, and
listening and responding to consumer needs to drive demand through our sales
channels.
• We invest in strong and multifaceted customer relationships via joint business
planning processes to support and align internal and external partner incentives.
• Our Code of Conduct, People and Culture strategy and supporting programs
work to create an environment and attract and retain talent consistent with and
aligned to our stated values and mission.
• We have a rolling workforce and succession planning process, established talent
and performance management cycle including employee development, career
planning and capability mapping.
• Our incentive and reward programs are aligned to Blackmores’ vision and
growth initiatives, and actively used to celebrate team member performance
and contribution.
• We use our leadership capability to ensure our culture is driven by a consistent
tone from the top and aligned incentives.
• Our attraction and retention program is prioritised towards skills and capabilities
critical to business growth.
BLACKMORES ANNUAL REPORT 2021
Group Risks
Risks
Description
Key actions we are taking
• Safety, health and wellbeing is at the heart of Blackmores business. We
emphasis and embed it in everything we do, from our values and mission to our
day-to-day operations.
• We have defined employee safety and wellbeing policies supporting
frameworks, standards and procedures. All facilities are fitted and equipped
with relevant personal protective equipment to meet our defined standards.
We also have established flexible workplace and work from home policies and
procedures in place as well as secure remote working capabilities.
• We have established safety, health and wellbeing focused leadership training
programs, KPIs, and periodic monitoring and reporting. Our team members
have ongoing access to mental health and wellbeing resources and support,
and all complete safety, health and wellbeing induction and periodic refresher
training.
• Our supply chain processes include embedded safety, health and wellbeing
standards that apply to our supplier strategy and selection procedures. The
business is trained in current Crisis, Business Continuity and Disaster Recovery
procedures in the event of an emergency. This and other related business
resilience policies, frameworks and standards, have been updated to reflect
learnings from the pandemic and strengthen responses.
• Blackmores actively monitors and is guided by Government directives and
trusted sources advice. A range of responses has been established throughout
the pandemic including activation of our Business Crisis Management Team
(BCMT) to specifically address employee and business partner safety and
wellbeing needs throughout the COVID-19 pandemic. Our response strategy
has included employee and visitor body temperature screening upon entry,
social distancing measures, workforce rotation and segregation systems,
additional mental health and wellbeing support, and regular employee
communications.
• Our strategy is focused on high growth categories, markets and channels,
investing in strong and multifaceted customer relationships via joint business
planning processes. Customer demand and demand shifts (particularly during
COVID-19) are closely monitored, including the use of IT applications used by
our in-market product advisors in our Asian markets.
• Our integrated business planning processes include portfolio reviews and
global volume alignment processes, to best manage inventory and safety
stock in line with demand. As part of our response to Covid-19 driven changes
in demand and supply chain disruption, we increased our safety stock in all
markets and rapidly adapted production to meet demand shifts.
• Our brand portfolio and product strategy includes consistent pricing guidelines,
product prioritisation via portfolio rationalisation and targeted investment in
consumer marketing.
• Our online channel development and capability uplift initiatives, joint business
partner planning, and direct to consumer marketing programs are building our
digital channel in line with shifting consumer trends.
• Our ‘Blackmores Institute’ research and education centre of excellence, is
dedicated to finding new evidence based solutions that support the quality use
of natural medicine to improve public health.
• Our consumer insights and innovation teams track consumer trends, conduct
product research, and manage our innovation pipeline to ensure we are focused
on current consumer health and wellness needs.
• Blackmores maintains current and cyclically updated Crisis, Business Continuity
and Disaster Recovery plans, supported by training and simulations for relevant
team members.
• The business use primarily cloud-based, resilient and fail safe IT systems
supporting remote working capabilities.
• We continuously monitor and respond to threats to continuity of operations
via embedded ‘business as usual’ processes including site audit, repair and
maintenance, our health and safety framework, compliance, risk and assurance
programs, multi-regional sourcing and production strategy, IBP process and
safety stock maintenance, market, political and media monitoring insights,
• Blackmores maintains comprehensive insurance coverage to minimise the
financial impact of unforeseen events and enable timely recovery to business as
usual operations.
Safety, health
and wellbeing
Blackmores cares about the
physical and psychological
safety, health and wellbeing of
our customers, team members
and business partners, including
employees of our suppliers.
We are committed to creating a
safe and supportive environment
for everyone working with, using,
and impacted by our products
and brand.
Throughout the COVID-19
pandemic and in the last 2 years
in particular, Blackmores has
ensured that measures were
in place to protect our team
members and business partners
as a matter of priority.
Consumer and
marketplace
Unanticipated changes in
consumer preferences and
demand, or competitive
pressures that significantly
alter the market landscape
(e.g. COVID-19, online channel
growth, acquisitions, aggressive
price wars) can have adverse
effects on the business’ ability to
capture growth opportunities or
effectively manage inventory and
supply.
Significant
business
interruption
Blackmores’ current scope of
operations could expose it to
a range of business disruption
risks, such as environmental
catastrophes, pandemics (such
as COVID-19), natural and man-
made hazards and incidents, or
politically motivated violence or
actions.
Significant business disruption
could result in Blackmores’
sites or employees being
harmed or threatened, loss of
key infrastructure, impacts to
supply chain, manufacturing
and inventory shortages or loss,
financial and reputation impacts.
48
BLACKMORES ANNUAL REPORT 2021 Risks
Description
Key actions we are taking
Climate and
sustainability
Business
transformation
Financial and
treasury
Blackmores’ high quality and
sustainability standards together
with limited availability of natural
ingredients, puts pressure on the
continuous supply of some key
products.
• Blackmores has defined a strong Sustainability Charter and science-based
approach to understanding the resilience of key ingredients.
• Our sustainability program includes defined and tracked commitments for
sustainable sourcing, packaging, waste management and process efficiencies,
clean energy and net zero carbon emissions (by 2030).
• We undertake regular climate-related scenario assessments to progress
Blackmores’ ability to effectively
respond to and manage the
impacts of climate related
change and changing markets
is key to the company’s values,
commitments and growth
initiatives.
ongoing adaptive measures.
• Specialised and experienced internal sourcing and procurement teams oversee
the Supplier Quality Assurance (SQA) and selection program as part of our
ethical and sustainable supply chain program.
• Blackmores has worked to strengthen supplier relationships and contracts and
continues to mitigate our dependency risks with our raw material supplier base.
• We aim to have flexible manufacturing options via a combination of Blackmores
owned facilities and outsourced arrangements.
The business continues to focus
on transformation initiatives that
support effective and efficient
end-to-end processes. Delivery
of these initiatives will be critical
to Blackmores’ ability to optimise
our existing asset base and drive
efficiencies while sustaining
growth.
• Blackmores has defined business transformation initiatives including key
process optimisation and supporting information technology and digital system
upgrades aligned to the business strategic growth ambitions.
• Our business transformation program is supported by an approved capital
investment plan, and Executive led Transformation Office overseeing resource
allocation and governance of key projects and initiatives.
• Our people and culture strategy and initiatives, including workforce planning,
the leadership framework, talent management and training program is aligned
to our business transformation initiatives.
Major events in financial markets
(e.g. fluctuations to currency,
interest rates, FX, cost of capital,
banking/commercial credit, etc.),
economic, political, social and/
or major business event (e.g.
product recall, pandemics like
Covid-19 etc.) can significantly
impact the business’ profitability,
cash flow and results.
Our ability to hold sufficient
liquidity to ensure the fulfilment
of all payment obligations, and
the management of capital
and availability of funding, are
important requirements to
support business operations and
growth.
• Blackmores has a number of established processes and controls embedded
within financial operations to support the production of financial statements.
These processes are also subject to reviews and independent audits, the results
of which are reported to the Board Committees.
• Board and management have introduced a defined capital management plan
that provides a governance structure as it relates to decisions on capital and
operating expenditure, cash flow monitoring and dividends to ensure the ability
to deliver the strategic plan.
• We have a defined and established Treasury Policy and supporting processes
to effectively manage treasury risks including liquidity, funding, interest rates,
foreign currency and funding risks. These risks are managed within the day-to-
day operations of the Treasury function.
• Financial targets are set and regularly reviewed to measure progress. This
includes monthly updates to our 12-month rolling analysis and projections of
financial results including scenario analysis across key factors (e.g. leverage
ratios, FX movements, etc.). This enables the business to proactively manage
risks and pursue opportunities.
• The business’ diversified supply base, customer base and routes to market
also act as natural hedges to many financial risks, and are risk assessed by the
business during selection and onboarding.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
49
BLACKMORES ANNUAL REPORT 2021
Product safety and pharmacovigilance
As Australia’s most trusted VDS brand, our consumers trust
us with their health.
In recognition of that privilege, we are committed to best-
in-class consumer healthcare and product safety through a
pharmacovigilance program underpinned by a legal and
regulatory framework.
Our brand reputation rests on the quality and safety of
our products. Historically, our brands have had different
approaches to product safety. In FY21 we have developed
one product safety standard for all brands across all
markets.
Our Group-wide product safety processes align
all phases of the product lifecycle – from new product
development and dose tolerances through to product
safety warnings and reporting adverse reactions.
Throughout the year, the safety team conducted reviews
on over 300 ingredients and over 480 products.
Operating in a COVID-safe environment
Our Business Continuity Management Team (BCMT)
continued to operate in FY21, bringing senior functional
leaders together within the Australian Inter-Service Incident
Management System framework to steer our business
response. The BCMT are guided by the core principle of
ensuring the safety and wellbeing of our people.
Blackmores sites were subject to strict COVID-safe
procedures, including split shifts, increased hygiene and
sanitation and temperature testing.
We continue to follow government guidelines in each
jurisdiction. Teams across Asian locations continue to be in
lockdown with remote-first working models, while teams
in China are largely back on site. In Australia, we continue
to operate a hybrid working model to manage ongoing
lockdowns and restrictions – some employees choose to be
in the office several days a week and alternate with working
remotely. Our people continued to adapt well to remote
working, and were supported with resources to inspire
resilience, connectivity and continuity across the business.
Health and Safety
Overview
As an industry leader, Blackmores has a robust
regulatory and safety framework. In the past
year we have been building on our capabilities
and strengthening frameworks across the
business to ensure they align with our strategy
into FY24.
This alignment delivers on the commitment we have given
our consumers regarding product safety and our aspiration
to build a world-class operation supported by best-in-class
systems and processes.
Part of a strong governance framework is understanding
the risks that have the potential to have the greatest impact
on our business. In FY21 we focused on gaining a more
sophisticated understanding of these risks, both current and
emerging, and putting in place strategies that ensure we
protect our brands, our business and our people.
Work health and safety
Blackmores Group has significantly uplifted capability in
workplace health and safety with a new function reporting
to the Chief Governance Officer. This reflects the changing
risk profile following the 2019 acquisition of our Braeside
manufacturing facility.
The development of this function resulted in improved
systemisation of safety data reporting and management
with a new data management system being within key
manufacturing sites.
The data captures incidents, hazards, and near miss
events across all sites in Australia and New Zealand and has
resulted in a significant increase in reporting.
The increased reporting has enabled trend modelling
and more accurate root cause identification. Compared to
the prior reporting year, distribution teams have been able
to reduce their overall exposure to safety incidents.
On-site physiotherapists and exercise physiologists
have been introduced to evaluate employees' functional
work capacity and assist with ergonomically-appropriate
stretching and body movements to maintain work fitness
and reduce strains and sprains.
A workplace healthcare provider has been appointed to
provide injury triage services so that our employees receive
immediate medical assistance from qualified practitioners.
Further training for Blackmores’ mental health first aid
attendants has been provided as well as a focus on training
new recruits to become qualified in offering mental health
first aid.
Continuous support for employees has been extended
throughout all lockdowns and periods of increased
workplace restrictions and social distancing as a response
to the pandemic. This included online exercise classes,
mediation sessions and an Employee Assistance Program to
support the wellbeing of our people.
50
BLACKMORES ANNUAL REPORT 2021 1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
51
Clockwise from top: Carlo Falcone,
Quality Technician, Group Operations.
Karen Sammut, Distribution Operation,
Bungarribee Distribution Centre.
Martin Hussey, Head of Regulatory
Operations, Braeside.
Alex Lintner Nolan, Social Media
Manager, Blackmores Australia.
BLACKMORES ANNUAL REPORT 2021
05
Sustainability,
People &
Community
52
BLACKMORES ANNUAL REPORT 2021 Building healthier,
sustainable
communities
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
53
BLACKMORES ANNUAL REPORT 2021
Sustainability
Blackmores recognises the strong connection
between healthy people and a healthy planet.
Learn more about sustainability at
Blackmores in our 2021 Sustainability
Report to be released in September at
blackmoressustainability.com.au
Progress towards
Net Zero Carbon
Emissions by
2030
Deliver
sustainable
packaging
solutions
Transition to
renewable
energy
Optimise
material
recycling and
recovery
Improve
community
health and
wellness
Nurture a
values-driven
culture that
makes a positive
contribution
to the
community
Create a safe
and healthy
workplace
Healthy People,
Healthy Planet
Embed high
business
standards
Take action
on climate
change
Invest in
research and
education
Value diversity,
inclusion and
equality
Commit to an
ethical supply
chain
Adopt
sustainable
sourcing
standards
Partner with
others to make
a difference
Overview
With a vision of a world where people and
nature thrive together, we are committed
to reducing our impact on the environment
and making a positive contribution to the
communities in which we operate.
Our commitment to ethical corporate growth
takes into account our responsibilities to our
employees, customers and consumers, our
supply chain, and the general community.
Our Goals
Our key initiatives
__
Net zero carbon
emissions by 2030
__
Ethical and sustainable
supply chain
__
100% recyclable
packaging by 2025
54
BLACKMORES ANNUAL REPORT 2021 Sustainability progress FY21
Emissions down, even with first full year of
manufacturing impact
• Group carbon emissions were down by 162 tonnes.
Though a modest 1% decline, the prior year contained
only eight months of emissions from the recently-
acquired Braeside manufacturing facility.
• Our Net Zero Carbon Emissions by 2030 initiatives have
already facilitated a 24.7% reduction in the Group’s
footprint trajectory, compared to the prior year, had the
Net Zero pathway not progressed.
• 25% of energy is now from renewable sources, up from
8% the prior year.
• 86% of corporate fleet now hybrid vehicles.
Taskforce on Climate-related Financial
Disclosures (TCFD) progress
• Developed a Financial Sensitivity Model to quantify
potential climate impacts on future earnings to inform
reporting in line with the TCFD and identify areas of focus
for our sustainable sourcing program.
Driving efficiencies and waste avoidance
• Shipper optimisation project at Blackmores’ Braeside
manufacturing facility removed 3.5 metric tonnes of
cardboard and 780kg of plastic bags from our processes.
“We made clear progress to take control of our
emissions and to assess human rights and climate
resilience in our supply chain. But the strongest
sustainability outcome over the year has been the
shared passion of the greater Blackmores team
to deliver on our vision for a world where people
and nature thrive together.”
Raffaele D’Alisa
Director Communications and Corporate Citizenship
Ethical audits
Deepening our understanding of human rights in
supply chains
At Blackmores, we’re proud of the care we show for
our people. We believe our employees should work
here because they choose to, be paid fairly, enjoy good
working conditions in a safe workplace and have the
right to share their concerns without fear. Our goal is a
future where every worker in our broader supply chain
has those same rights.
In FY21 our sustainable and ethical sourcing focus has
been on progress towards a goal of zero exploitation
within our supply chain. We continued to commission
ethical audits – including independent on-site human
rights and sustainability audits using the Sedex Members
Ethical Trading Audit (SMETA) protocol.
The protocol evaluates all aspects of responsible
business practice in the global supply chain including
labour standards, health and safety, the environment,
and business ethics.
Strong sustainable supply chain progress
• Completed sustainability risk assessments on 100%
of raw material, packaging, packing and contract
manufacturing suppliers.
• Engaged 41% of tier one direct suppliers in our
Partnering for Adaptation program to collaborate on
climate risk and biodiversity impacts.
• 345 human rights training modules completed to
uplift employee capability and awareness.
• First supply chain biodiversity risk assessments
undertaken.
• Published our first Modern Slavery statement.
Sustainable packaging
• Undertook our first comprehensive Group packaging
audit, confirming more than 98% of current
packaging is recyclable. Affirmed our commitment to
100% recyclable packaging by 2025.
• The Australasian Recycling Label was added to a
further 115 products and now appears on 51% of
Australian and New Zealand products. Exceeding
our 2025 target.
Improving safety and sustainability systems
• Introduced a new safety management system
resulting in increased reporting on hazards and
capturing ‘near miss’ incident data.
• Developed a Group Energy Management System
and Energy Management Plan, building capability
with the potential to halve future Group carbon
emissions.
• Transitioned our Environmental Management
System to a Sustainability Management System,
incorporating human rights protection.
Tilly, 9, from our Blackmores community.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
55
BLACKMORES ANNUAL REPORT 2021
Our People
“The resilience our people have shown,
the resolve that they have, is profound.”
Jane Franks, Chief People Officer
In FY21 Blackmores Group had 1200+ permanent full-time, part-time,
and fixed-term employees in 13 markets across Asia Pacific.
A year of transformation and change has been marked by new ways of
working. Our key priorities were the health and safety of our essential
manufacturing workers on-site through evolving restrictions, and on
engaging office-based employees working remotely.
Employee feedback and connection opportunities included check-in
and engagement surveys, leadership sessions, town hall meetings and
our Staff Liaison Committee.
1
2
A year of building capability
We invested in building new capabilities critical to
delivering our Group strategy in strategic sourcing, revenue
management, marketing and innovation.
We also invested in our China and international markets
to deliver on the potential of these growing regions.
Our FY21 investment in new talent has already begun
delivering on its promise with both China and international
regions exceeding their targets, and positive forecasted
impacts through FY22.
6
56
5
4
3
1. Erin Zhang, Operation Director (left) and Kitty Liu, Managing
Director, Blackmores China. 2. Cliff Sollis, Area Leader, Production
Encapsulation at our Braeside Manufacturing Facility. 3 Watsaya
Wisetsakdakorn, Senior Brand Manager, Blackmores Thailand.
4. Robyn Taylor, Executive Assistant to CEO. 5. Matt Minor, Head
of Data & Analytics, Group IT. 6. (L-R) Kalbe Blackmores Nutrition
– Windy Hendrawan, Graphic Designer; Mei Sari, Marketing Staff;
Rizky Wijaya, Trade Marketing Supervisor; and Harnadiemas
Fikrinurinsyah, Trade Marketing Manager.
BLACKMORES ANNUAL REPORT 2021 70%
Experimental Learning
New and challenging
experiences
20%
Social Learning
Communities, networks,
coaching and mentoring
10%
Formal Learning
Learning courses, classes
and training programs
Learning and professional
development
Our philosophy includes a 70/20/10 learning
framework for all employees.
In FY21, we built best-in-class leadership
coaching capabilities which have proved vital to
leading the organisation through transformation.
We launched a world-class marketing
capability program, Vitality Brand Masters, and
built a first-ever bespoke Blackmores sales
capability curriculum to accelerate growth across
sales disciplines.
Learning and growth remains a key pillar in
FY22.
As part of our upcoming Wellbeing project,
we have created the Natural Health Simplified
employee education program. By supporting
everyone that comes into Blackmores to learn
about their own health and wellbeing, we
stay connected to our naturopathic principles
and heritage and create healthy people who
advocate for our brand.
Diversity, equity and inclusion
We are proud of our progress on our diversity, equity and
inclusion agenda – including gender diversity goals and
understanding cultural diversity for continued business
improvements.
Gender equity
We have robust governance in place to support gender
equity with our flexible working philosophy and gender-
equal policies for parental leave and domestic violence. After
closing a 19% wage gap in FY20, we maintained gender
pay parity in FY21. We have a roadmap to improve gender
diversity across critical STEM functions over three years.
We are on track to achieve our 2025 diversity targets of
40/40/20 which means we aim to ensure all levels are made
up of 40 per cent women, 40 per cent men, and 20 per cent
any gender (which may vary depending on industry talent
pool or reflect those who identify as non-binary).
Cultural diversity and inclusion
We take pride in bringing to life a broader definition
of inclusion, equity, and diversity. We aim to reflect the
diversity of our consumer base in our employee base
across the Group.
Our first diversity, equity and inclusion survey this year
reflects our commitment to stay informed and intentional
in our workplace practices – to nurture a culture where all
perspectives are heard, valued and respected.
To continue improving our global mindset and
understanding of key growth regions we:
• offered multi-language options in key
•
communications and employee surveys
increased cultural events across all locations including
Lunar New Year, Ramadan and Songkran to celebrate
the rich diversity of our markets and people
• made plans to limit conflicts between key events with
local holidays or customs
• built workforce plans to align local leadership with an
increasingly diverse consumer base.
Blackmores Diversity FY21
Females on the Board1
Females in senior executive positions2
2021
60%
50%
Focused on engagement
Our quarterly check-in surveys and employee engagement
survey provided insights to understand what we are
doing well and where we need to improve our everyday
experiences and workplace culture.
Females in senior management positions3
54%
Female employees4
59%
1. As at 12 August 2021.
2. As at 31 July 2021.
3. Count includes CEO.
4. Count excludes CEO.
In FY22, we will seek a citation as an Employer of Choice by
the Workplace Gender Equality Agency (WGEA) in Australia.
As a 70% female organisation with a core consumer
base of predominantly females, this citation reflects our
commitment to all genders.
Employee health and wellbeing
In a business founded on naturopathic principles, the health
and wellbeing of our people is a priority. As the impact of
the pandemic continues to provide new challenges, cross-
functional teams have rallied to support colleagues across
all sites and markets.
We engaged 250 employees in an online resilience
program in partnership with Ripen Resilience, trialled access
to a Healthy Minds wellness curriculum which will continue
in FY22, and supported leaders with training in managing
mental health and conversations around wellbeing.
We offer all employees naturopathics consultations and
support and are looking forward to extending a range of
new initiatives and support to help employees activate and
sustain great health and wellbeing.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
57
BLACKMORES ANNUAL REPORT 2021
Community
Making a difference by building
healthier communities.
Overview
Blackmores Group is a values-led organisation that gives back to the
communities where we operate. We strive to make a difference by
building healthier communities, supporting charitable organisations and
inspirational individuals who are helping to create a brighter future.
Our continued commitment to community in FY21 is reflected in our
support for a range of charities and social causes, including Quest for Life
Foundation in Australia, Bumi Sehat Foundation in Indonesia, The Cardiac
Children Foundation in Thailand and Royal Guide Dogs Australia.
Providing product through the pandemic
As the pandemic continued to impact many of our
markets, we were unable to continue many of our long-
term community initiatives. We shifted focus to providing
immunity products like vitamin C to frontline and healthcare
workers, and to the underprivileged whose need for
nutritional support may have increased.
Product donations worth $3m RRP were made to
Westmead Hospital and Foodbank in Australia; Chiangmai
Provincial Public Health Office and Samutsakhon Provincial
Public Health Office in Thailand; and Taipei Far Eastern
Memorial Hospital, Taipei Medical University Hospital, and
Taipei City Hospital in Taiwan.
Building a Better Life in Thailand
Since 1997 Blackmores has partnered with The Cardiac
Children Foundation of Thailand to help save the lives of
kids in need with congenital heart disease. Through our
FY21 Better Life Project we ran a consumer campaign,
raising a 300k baht donation for seven children to have
surgery in addition to the 27 children we already helped in
past years. During Ramadan, we provided post-fast meals to
70 orphan Muslim children at Bann Alkawthar Foundation in
northern Thailand.
40 years of hamper history
Started 40 years ago by Marcus Blackmore, each year we
partner with the Rotary Clubs of Manly and Upper Northern
Beaches to provide festive food hampers to local families
doing it tough over Christmas. To keep supporting people
in need through COVID-19, we had to do it differently.
In December 2020 as a COVID-safe alternative to our
Blackmores and Rotary volunteers assembling the hampers
themselves, we enlisted help. Sunnyfield offer commercial
packing solutions and employment opportunities for
people with intellectual disability. Four hundred hampers
were packed and given to 17 local charities for distribution
to families in need.
Celebrating women and wellbeing
The Blackmores Mercie Whellan Women and Wellbeing
Awards celebrate women who have made an outstanding
contribution to their local community by improving the
mental health and wellbeing of others.
Run annually in partnership with CCNB – a not-for-profit,
community-based organisation – the annual awards recognise
individuals and support registered charities of their choice.
Congratulations to the 2021 winners – Jo Westh, Founder
of 4 Voices; Margie Bestmann, Mental Health Advocate; and
Fatima Merchant, Mental Health Youth Ambassador.
Cancer Council’s Biggest Morning tea
Employees across the Group were delighted to support the
Cancer Council’s Biggest Morning Tea by hosting events
across our Australian offices. Together we raised $6000 for
the cause and this amount was matched by the business.
Matched donations employee scheme
Our employees are encouraged to be part of a giving
program where 0.5% of their taxable pay is deducted into
an interest-bearing trust account. Blackmores matches
this amount and twice yearly, the employee nominates
a registered charity to receive the donation. In FY21
Blackmores Group employees donated $181,000 to
registered charities of their choice.
Healthy furry friends
In FY21, we donated PAW shampoo and conditioner
products to animal shelters across NSW, including RSPCA
and Riding for Disabled.
Our commitment ranges from
hampers for humans to products
for animal shelters.
58
BLACKMORES ANNUAL REPORT 2021 Blackmores in the community:
Supporting Quest for Life
Blackmores is proud to invest in healthy communities by
supporting not-for-profit organisations like the Quest for
Life Foundation. Founded by Petrea King, the Foundation is
a small organisation that accomplishes a great deal across
trauma support and recovery.
“I have been doing this kind of work for many decades,
inspired by my own near death experience with acute
myeloid leukemia soon after my brother Brenden’s suicide.
As a qualified naturopath, herbalist, clinical hypnotherapist,
yoga and meditation teacher my patients have included
people living with cancer and other life-challenging
illnesses, grief, loss, trauma, depression, anxiety and
tragedy,“ Petrea says.
“The last year has been very challenging – our work
has doubled as we respond to community need. We’ve
extended our support to bushfire victims, and wildlife
carers, and to Principals and teachers who are struggling to
manage children who are acting out parental stresses.”
Petrea says the Foundation moved fast to shift services
and programs online – including three-day resilience
programs and weekly meditations – as their work grew
across new areas of trauma.
We are so very grateful to Blackmores. We share the
same philosophy of healthy living – our programs are
based on evidence-based healthy lifestyle practices as
well as managing the mind and emotions,” she says.
By enabling enable people and communities to heal
by equipping them with the skills to overcome their
challenges, Quest for Life is making a profound and
positive difference.
Find out more at questforlife.org.au
“We’re here to assist people at the
lowest ebb in their life. Without help
from Blackmores, we’d be leaving a lot of
people isolated without good support.”
Petrea King, Founder of Quest for Life Foundation
(pictured below right)
Top: Blackmores has helped 34 children
with congenital heart disease to have
life-saving surgery through our ongoing
support of The Cardiac Children
Foundation of Thailand.
Right: Christmas charity hampers
2020 – (pictured left to right)
Stephen Robb, General Manager of
Employment Services at Sunnyfield;
Marcus Blackmore; David Brown, Past
President of Rotary Club of Manly; and
Alastair Symington, Blackmores CEO.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
59
BLACKMORES ANNUAL REPORT 2021
Bonnie
Macqueen,
Brand
Manager,
ANZ.
06
Financial
Report
5 Year History
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Independent Auditor’s Report
Directors’ Declaration
Financial Statements
Notes to the Financial Statements
Company Information
61
62
66
88
89
93
94
100
143
60
BLACKMORES ANNUAL REPORT 2021 5 Year History
$’000
Revenue
Earnings before interest, tax, depreciation, and
amortisation (EBITDA)1
Depreciation and amortisation1
Earnings before interest and tax (EBIT)1
Net interest expense1
Profit before tax
Income tax expense
Discontinued operations
Gain/(loss) attributable to non-controlling interests
Profit after tax attributable to shareholders of Blackmores
Limited (NPAT)2
Net (cash)/debt
Shareholders’ equity
Total assets
Current assets
Current liabilities
Net tangible assets (NTA)
Cash generated from operations
Number of shares on issue (’000s)7
Earnings per share (EPS) – basic (cents)2
Ordinary dividends per share (DPS) (cents)
Share price at 30 June
NTA per share
Cash conversion ratio3
Return on shareholders’ equity4
Return on assets5
Dividend payout ratio
Gearing ratio6
EBIT to revenue ratio
Effective tax rate
Current assets to current liabilities (times)
Net interest cover (times)
Gross interest cover (times)
% change on prior year
Revenue
EBITDA
EBIT
NPAT
EPS
DPS
2021
Restated8
2020
2019
2018
2017
575,916
568,353
588,914
579,535
530,550
71,643
25,853
45,790
3,528
42,262
13,398
4,650
4,895
44,485
19,396
25,089
5,913
19,176
6,123
2,962
907
87,322
10,768
76,554
4,995
71,559
20,947
2,818
(39)
106,556
8,848
97,708
3,931
93,778
27,281
2,726
(782)
90,773
8,223
82,550
4,182
78,372
22,962
2,618
(985)
28,619
15,108
53,469
70,005
59,013
(70,054)
373,156
560,422
321,629
144,172
265,534
80,390
37,345
299,499
550,831
303,357
130,501
182,458
69,629
19,366
148.1
71
$73.47
$13.71
112.2%
7.7%
8.2%
47.9%
(23.1%)
8.0%
31.7%
2.30
13.0
12.5
1.3%
61.1%
82.5%
89.4%
71.5%
NMF
18,678
86.4
-
$77.95
$9.77
156.5%
5.0%
4.8%
-
11.1%
4.4%
31.9%
2.32
4.2
4.1
(3.5%)
(49.1%)
(67.2%)
(71.7%)
(70.5%)
(100%)
94,484
207,292
493,624
308,222
153,205
122,508
51,806
17,362
309.2
220
$78.95
$7.06
59.3%
25.8%
16.0%
71.2%
31.3%
13.0%
29.3%
2.01
15.3
14.6
1.6%
(18.1%)
(21.6%)
(23.6%)
(27.9%)
(27.9%)
49,532
192,875
464,850
302,507
174,467
123,860
90,131
17,227
406.4
305
$142.50
$7.19
81.5%
36.3%
22.3%
75.0%
20.4%
16.9%
29.1%
1.73
24.9
23.4
9.2%
17.4%
18.4%
18.6%
18.6%
13.0%
44,717
177,541
412,174
258,662
142,556
107,369
95,310
17,226
342.6
270
$95.84
$6.23
100.7%
33.2%
20.2%
78.8%
20.1%
15.6%
29.3%
1.81
19.7
18.9
(10.9%)
(37.8%)
(40.6%)
(41.0%)
(41.0%)
(34.1%)
1. Excluding the discontinued operation (Global Therapeutics).
2. Including the discontinued operation.
3. Calculated as cash generated from operations divided by EBITDA.
4. Calculated as net profit after tax divided by closing shareholders' equity.
5. Calculated as EBIT divided by average total assets.
6. Gearing ratio is calculated as net debt divided by the sum of net debt and shareholders' equity.
7. Number of shares on issue at year end.
8. The year ended 30 June 2020 has been restated as a result of change in accounting policy detailed in note 1.7. No other prior years have been adjusted.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
61
BLACKMORES ANNUAL REPORT 2021
Directors’
Report
2021
62
BLACKMORES ANNUAL REPORT 2021 Directors’ Report
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021
DIRECTORS’ SHAREHOLDINGS
The following table sets out each Director’s relevant interest in all financial instruments issued by Blackmores as at the date
of this report.
DIRECTORS
David Ansell
Wendy Stops
Alastair Symington1
Anne Templeman-Jones
Sharon Warburton
Total
FULLY PAID ORDINARY SHARES
SHARE RIGHTS
1,413
2,500
18,536
652
-
26,014
-
-
73,986
-
-
73,986
1. A Symington’s holdings include 13,650 Restricted Shares and 73,986 Share Rights under the Executive Performance Share Plan.
SHARE RIGHTS GRANTED TO DIRECTORS AND SENIOR EXECUTIVES
Selected Senior Executives are invited annually by the Board to participate in the Executive Performance Share Plan (EPSP). Under this
plan, eligible Senior Executives are granted rights to acquire shares in Blackmores.
Refer to the Remuneration Report on page 86 for more details.
The following table sets out all rights granted to Directors and Senior Executives during the year ended 30 June 2021.
Executive Director
Alastair Symington
Senior Executive
Gunther Burghardt
Total
20211
NUMBER
38,364
7,386
45,750
1. Includes rights granted under the 2021 financial year (FY21) Long-Term Incentive Plan (LTI). Provided specific performance objectives and hurdles are met rights vest over
the three-year period commencing 1 July 2020 to the year ending 30 June 2023.
SHARE OPTIONS
During and since the end of the financial year, no share options were in existence and no new share options were granted to
Directors or Senior Executives of Blackmores.
REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
Information about remuneration of Directors and Key Management Personnel is set out in the Remuneration Report of this Directors’
Report, on pages 66-87.
COMMITTEE MEMBERSHIPS
As at the date of this report, the Company had an Audit Committee, a Nominations Committee, People and Remuneration Committee
and a Risk and Technology Committee. Members of the Board acting on the Committees during the year were.
Audit Committee:
Sharon Warburton, Chair5
David Ansell
Wendy Stops3
Anne Templeman-Jones4
John Armstrong6
Christine Holman8
Brent Wallace9
Nominations Committee:
Anne Templeman-Jones, Chair4
David Ansell
Wendy Stops3
Alastair Symington
Sharon Warburton5
John Armstrong6
Marcus Blackmore7
Christine Holman8
Brent Wallace9
People & Remuneration
Committee:
David Ansell, Chair2
Anne Templeman-Jones4
Christine Holman8
Brent Wallace9
Risk & Technology Committee1:
Wendy Stops, Chair3
David Ansell
Anne Templeman-Jones4
Sharon Warburton5
John Armstrong6
Christine Holman8
Brent Wallace9
1. The Risk Committee was renamed Risk and Technology Committee effective April 2021.
2. David Ansell was appointed Chair of the People and Remuneration Committee 28 July 2021.
3. Wendy Stops joined as a Non-Executive Director 28 April 2021 and was appointed Chair of the Risk and Technology Committee.
4. Anne Templeman-Jones joined as a Non-Executive Director 28 October 2020 and was appointed Chair of the Board and the Nominations Committee.
5. Sharon Warburton joined as a Non-Executive Director 28 April 2021 and was appointed Chair of the Audit Committee.
6. John Armstrong resigned as a Non-Executive Director 8 September 2020.
7. Marcus Blackmore resigned as an Executive Director 23 October 2020.
8. Christine Holman resigned as Non-Executive Director 28 July 2021.
9. Brent Wallace resigned as a Non-Executive Director 27 October 2020.
Details of current Board Committee memberships are set out on pages 30-31.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
63
BLACKMORES ANNUAL REPORT 2021
Directors’ Report
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021
COMPANY SECRETARIES
Richard Conway, LLB (Hons) and BA, Certificate in Governance
Practice.
Mr Conway joined Blackmores in July 2021 as its Group General
Counsel and Company Secretary. Richard leads Blackmores’
legal and compliance functions. Mr Conway was previously
Deputy Group General Counsel and Group Company Secretary
at Coca-Cola Amatil Limited. Richard’s private practice legal
experience includes public and private M&A roles based on
London, Moscow and Sydney for Freshfields Bruckhaus Deringer
and Herbert Smith Freehills.
Mr Conway is an admitted lawyer in New South Wales and
England & Wales and is a member of the Governance Institute of
Australia.
Cecile Cooper, BBus, Dip Inv Rel (AIRA), CPA, GAICD. Ms Cooper
joined Blackmores in 1991. Ms Cooper resigned as Company
Secretary 26 July 2021.
PRINCIPAL ACTIVITIES
The principal activity of the Blackmores Group in the course of
the financial year was the development, sales and marketing
of natural health products for humans and animals including
vitamins, and herbal and mineral nutritional supplements. The
Blackmores Group has operations in Australia, New Zealand
and Asia.
RESULTS
The Financial Report for the years ended 30 June 2021 and
30 June 2020 and the results herein have been prepared in
accordance with Australian Accounting Standards.
GROUP STRATEGY
A refreshed strategy was approved during the 2021 financial
year. The three-year FY24 growth strategy is to deliver
sustainable, profitable growth. The strategy is set out in the
annual report on pages 20-23.
CHANGES IN STATE OF AFFAIRS
During the financial year, there was no significant change in the
state of affairs of the Blackmores Group other than that referred
to in the Consolidated Financial Statements or notes thereto and
elsewhere in the Annual Report of the Blackmores Group for the
year ended 30 June 2021.
EVENTS SUBSEQUENT TO THE BALANCE
SHEET DATE
Impact of COVID-19 pandemic
The full impact of the COVID-19 pandemic continues to evolve
at the date of this report. Management is actively monitoring the
global situation and its impact on the Group's financial condition,
liquidity, operations, suppliers and industry. Given the daily
evolution of the COVID-19 outbreak and the global responses
to curb its spread, the Group is not able to accurately estimate
the effects of the COVID-19 outbreak on its results of operations,
financial condition, or liquidity for the 2021-22 financial year.
Although the Group cannot estimate the length or gravity of the
impact of the COVID-19 outbreak at this time, if the pandemic
continues it may have a material adverse effect on the Group’s
results of future operations, financial position, and liquidity for
2021-22.
Final dividend
The statutory net profit after tax (NPAT) of the Blackmores Group
for the financial year was $28.6m (2020: $15.1m).
A final dividend was declared as described in note 4.5 on
page 129.
There has not been any other matters or circumstances, other
than referred to in the Consolidated Financial Statements or
notes thereto, that has arisen since the end of the financial,
that has significantly affected, or may significantly affect, the
operations of Blackmores Limited, the results of those
operations, or the state of affairs of the Blackmores Group in
future financial years.
A review of the operations of the Blackmores Group during the
financial year and the results of those operations is set out in the
Operating and Financial Review on pages 36-51 inclusive.
DIVIDENDS
The amounts paid or declared by way of dividend since the start
of the financial year are:
• a final dividend of nil cents per share in respect of the year
ended 30 June 2020
• an interim dividend of 29 cents per share fully franked in
respect of the year ended 30 June 2021 was paid on
12 April 2021
• on 26 August 2021, the Board declared a final dividend for
the year ended 30 June 2021 of 42 cents per share fully
franked. The record date for the dividend will be 9 September
2021 and the payment date will be 24 September 2021.
This will bring total ordinary dividends for the year ended 30
June 2021 to 71 cents per share fully franked (2020: nil cents
per share).
64
BLACKMORES ANNUAL REPORT 2021 Directors’ Report
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021
CORPORATE GOVERNANCE AND RISK
In recognising the need for the highest standards of corporate
behaviour and accountability, the Board of Blackmores endorses
the ASX Corporate Governance Council’s Corporate Governance
Principles and Recommendations. Blackmores’ Corporate
Governance Statement is available on its website at
blackmores.com.au (go to ‘Investor Centre’, then click
‘Governance & Board of Directors’). See also pages 42-43.
The material risks that could affect Blackmores’ future financial
performance and their potential impacts are set out in the
Operating and Financial Review on pages 44-49.
INDEMNIFICATION OF OFFICERS AND AUDITORS
During the financial year, Blackmores paid a premium in respect
of a contract insuring the Directors, the Company Secretary
and all Executive Officers of the Blackmores Group against any
liability incurred in their role as Director, Company Secretary or
Executive Officer to the extent permitted by the Corporations Act
2001. The contract of insurance prohibits disclosure of the nature
of the liability and the amount of the premium. Blackmores
has not otherwise, during or since the end of the financial year,
indemnified or agreed to indemnify an Officer or auditor of the
Blackmores Group against a liability incurred as such an Officer
or auditor.
DIRECTORS’ MEETINGS
The number of Directors’ meetings held (including meetings of Committees of Directors) during the financial year is as follows
BOARD OF
DIRECTORS
AUDIT
COMMITTEE
RISK & TECHNOLOGY
COMMITTEE
NOMINATIONS
COMMITTEE
DIRECTORS
David Ansell
Wendy Stops 2
Alastair Symington
Anne Templeman-Jones 3
Sharon Warburton 4
John Armstrong 5
Marcus Blackmore 6
Christine Holman 7
Brent Wallace 8
H
17
3
17
9
3
6
8
17
8
A
16
3
17
9
3
6
7
17
8
H
5
3
-
6
3
2
-
8
2
A
5
3
-
6
3
2
-
8
2
H
4
1
-
3
1
1
-
3
1
A
4
1
-
3
1
1
-
3
1
H
2
-
2
1
-
1
1
2
1
A
2
-
2
1
-
1
1
2
1
H: Number of scheduled meetings held during the time that the Director held office or was a member of the committee during the year.
A: Number of meetings attended.
PEOPLE &
REMUNERATION
COMMITTEE
H
5
-
-
3
-
-
-
5
2
A
5
-
-
3
-
-
-
5
2
1. The Risk Committee was renamed Risk and Technology Committee effective April 2021.
2. Wendy Stops joined as a Non-Executive Director 28 April 2021.
3. Anne Templeman-Jones joined as a Non-Executive Director 28 October 2020.
4. Sharon Warburton joined as a Non-Executive Director 28 April 2021.
5. John Armstrong resigned as a Non-Executive Director 8 September 2020.
6. Marcus Blackmore resigned as an Executive Director 23 October 2020.
7. Christine Holman resigned as Non-Executive Director 28 July 2021.
8. Brent Wallace resigned as a Non-Executive Director 27 October 2020.
All Non-Executive Directors who are not members of the standing Board Committees are invited to attend the standing Board
Committee meetings. The independent Non-Executive Directors met separately during the financial year.
Details of current Directors, their experience, qualifications, Directorships of other listed entities and current Board Committee
memberships are set out on pages 30-31, 43.
STATEMENT OF NON-AUDIT SERVICES
The Directors are satisfied that the provision of non-audit services during the year by the auditor (or by another person or firm on
the auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note
7.2 to the Consolidated Financial Statements.
Directors have accepted a statement from the auditor that it is satisfied that the provision of these services did not breach the
independence standards included in the Corporations Act 2001. Based on this statement from the auditor and having regard to
the nature and fees involved in the provision of these non-audit services, the Directors are satisfied that the provision of non-audit
services during the year by the auditor (or other person or firm on the auditor’s behalf) did not compromise the audit independence
requirements of the Corporations Act 2001.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration is set out on page 88 of this Annual Report.
ROUNDING OFF AMOUNTS
In accordance with the Australian Securities and Investments Commission (ASIC) Corporations Instrument 2016/191, the amounts in
the Directors’ Report and the Financial Report are rounded off to (and expressed in) the nearest thousand dollars, unless otherwise
indicated.
Amounts in the Remuneration Report are actual dollars.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
65
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Letter from the Chair of the Board’s People and
Remuneration Committee (PRC)
Blackmores’ EBIT, Net Sales and Net Working Capital as a
percentage of Net Sales for FY21 and as compared over the
past five years are shown in the following graphs. Note, the
EBIT graph is prior to changes for the IFRIC Cloud computing
clarification consistent with how the targets were initially set.
EBIT ($M)
100
80
60
40
20
0
44
2017
2018
2019
2020
2021
NET SALES ($M)
640
620
600
580
560
540
520
0
576
2017
2018
2019
2020
2021
NET WORKING CAPITAL AS A % OF NET SALES
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0
20.9%
2017
2018
2019
2020
2021
Dear Shareholder,
On behalf of the Board, I am pleased to present to you our
2021 Remuneration Report. The Report outlines performance
and remuneration outcomes for Blackmores Key Management
Personnel (KMP), encompassing the Chief Executive Officer
(CEO), the Chief Financial Officer (CFO), and Executive and
Non-Executive Directors.
A YEAR OF PROGRESS
In a challenging year, Blackmores made solid progress against
our strategic priorities, despite the ongoing impact of COVID-19.
We did so while prioritising the health and safety of our
employees and customers in all of our markets.
Statutory EBIT in FY21 was positively impacted by the receipt of
income from government subsidies related to COVID-19, such
as JobKeeper. The Board used its discretion to exclude these
subsidies for the purposes of STI determination and Profit Share.
Throughout the year, management continued to strengthen
the foundations of our business, simplifying the portfolio,
divesting non-core assets, investing behind key opportunities
and importantly, ensuring our supply chain remained capable
of servicing our customers and consumers. We experienced
positive growth in China and International, offset by performance
in ANZ.
While we still have much to do to unlock the full potential of our
brands, our employees, and our business, we are confident in our
direction.
Against this backdrop, we continued to offer a competitive
remuneration framework while strengthening the alignment
between remuneration and stakeholder outcomes.
During FY21, the PRC engaged an external third party
remuneration consultant to provide remuneration benchmarking.
The Board approved a change to the metrics for LTI to better
align outcomes for Senior Executives with those of shareholders.
Further it was agreed that the remuneration disclosure in the
statutory annual report in section 8 provided for the aggregate
reporting for non KMP to avoid duplication.
FY21 REMUNERATION OUTCOMES
1. Fixed Remuneration
There were no increases in FY21 to the fixed remuneration of
the current Executive Team, including the CEO.
2. STI Plan
Under the current remuneration framework, EBIT is the key
performance measure, with a gateway threshold of 90%
of Group Budgeted EBIT to be met before any STI award
becomes payable. The STI plan also includes three Group
performance financial measures by which the Executive Team
and key leaders’ KPIs are measured, once the gateway has
been achieved:
• Group Reported EBIT (weighting: 50% of the overall pool)
• Group Reported Net Sales (weighting: 25% of the overall pool)
• Group Net Working Capital as a percentage of Net Sales
(weighting: 25% of the overall pool)
66
BLACKMORES ANNUAL REPORT 2021 2021 Audited Remuneration Report
Letter from the Chair of the Board’s People and
Remuneration Committee (cont.)
FY21 STI outcomes
The business delivered an EBIT outcome that fell marginally short
of the budgeted gateway.
FY21 STI payments
STI payments were awarded to the CEO and CFO as follows:
• CEO $156,000 representing 20% at Target STI and 5.7% of
In contemplating any executive variable pay decision and
the use of discretion, the Board took a number of factors into
consideration with respect to:
• the current framework,
• broader information on corporate performance and
impact on stakeholders (the customers, investors and
employees) and applying an independent assessment by the
independent Directors,
• a set of principles that were designed to provide fairness and
clarity aligned in allocating any performance recognition, and
• timely signals to executives and employees on performance
and conduct that is in the long-term interests of the company.
The Board has used its discretion to deem the gateway as being
met to allow for a reduced payment of STI to fairly reflect both
the financial outperformance of both the International and China
business units, recognising the group operational support and
adjusting for the underperformance of the ANZ business.
the adjusted pool
• CFO $62,500 representing 20% at Target STI and 2.3% of the
adjusted pool
They did not achieve their individual financial targets but the
Board considered their performance across their individual non-
financial KPI’s for the following company Strategic objectives:
• building a world class organisation,
• rejuvenating Australia,
• simplification of the supply chain, and
• the cost out and the integration of Braeside
The Board considers the exercise of discretion and the manner
in which it has been allocated for the CEO and CFO as fair and
equitable, against those others who delivered on financial and
non-financial performance and to reflect greater proportionality
for the leadership accountability they have for the overall
business results and personal performance.
The Board also took into consideration the results that were
delivered:
FY21 STI plan and outcomes are also detailed on pages 73
and 77.
• during a time of extreme change including the integration of
Braeside and the introduction of manufacturing and supply
change management,
• the disruptive impact of COVID-19 to business activity, and
the adjustments to the operating model that were made to
ensure employee work place safety and to accommodate
new consumer buying practices,
• the operational team and those of our people in the supply
chain of “make, pack and deliver” to meet the increased
demand for product in the overseas markets.
Adjusted FY21 STI
An Adjusted STI pool of $2.7m, being 40% of maximum targeted
STI, was created and then allocated as follows:
Allocation
% of STI pool
CEO and CFO
ANZ non-KMP Executives
ANZ teams (excluding sales commissions teams)
Group functions
China and International (Executive and teams)
8%
14%
8%
32%
38%
100%
The Board considers the exercise of discretion and the manner
in which it has been allocated as fair and equitable, in line with
STI plan rules for assessing performance and differentiating
those who delivered on financial and non-financial performance
notwithstanding the degree of difficulty of the change
experienced during the year.
3. LTI Plan
The LTI plan has a three-year performance period. The FY19
plan did not vest due to the threshold performance hurdle of
5% three-year compounded annual growth rate (CAGR) in EPS
not being met.
4. Profit Share Plan
Under the long-standing Profit Share plan, up to 10% of
forecast NPAT is paid to Blackmores employees. In FY21
a total payment of $0.8 million, equivalent to three days’
incremental salary was paid. In noting payments, the CEO
chose not to receive profit share in FY21.
5. CEO Recognition Grants
In addition to the discretionary STI payments, the Board
approved a one-off recognition grant of share rights
to twelve individuals who were non-Executive Team
members, identified by the CEO in July 2020, for their FY20
performance and critical future contribution to the Company.
These share rights totalled $695,214, and were valued as a
percentage of fixed remuneration received. The fair value of
the rights was accounted for over the vesting period which
was 12 months on 14 August 2021. Conditions related to
tenure and maintenance of minimum performance level
were required for qualification.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
67
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Letter from the Chair of the Board’s People and
Remuneration Committee (cont.)
The non-financial measures will be aligned to delivery on
progress across the five strategic pillars.
2.2 FY22 LTI changes
The Long-Term Incentive framework remains a three-year plan.
However to align more closely with market benchmarking
data, the LTI metrics have been amended as follows:
- CEO LTI (% of FAR): at threshold 50% ( no change), at target
100% (no change), and at maximum is reduced from 200% to
150% (% of FAR)
- CFO LTI (% of FAR): at threshold 50% (increased from 10%),
at target 60% (increased from 20%) and at maximum is
increased from 80% to 100%.
3. New Employee and Director Share Rights Plan
The People and Remuneration Committee on behalf of the
Board, undertook a review of the various employee share
plans in place at Blackmores in FY21. As a result of the review,
the multiple plans, being the Staff Share Plan and Staff Share
Acquisition Plan will be decommissioned with no further
participation offerings made under these two plans post FY21.
Commencing in November 2021, Blackmores will offer a new
Employee and Director Share Rights Plan designed to provide
the opportunity for eligible Australian employees, including
Senior Executives and Directors, to acquire rights to receive
shares through sacrificing a portion of their remuneration.
This will allow eligible Australian employees and Directors
the opportunity to become shareholders and share in the
success of the group, aligning the interests of employees
and Directors with those of shareholders and providing
employees and Directors, the opportunity to acquire shares in
a tax-effective manner. A similar scheme is being explored for
Blackmores’ International employees.
On behalf of the Board and the People and Remuneration
Committee, I invite you to read the 2021 Remuneration Report
and welcome your feedback on our approach to, and disclosure
of, Blackmores’ remuneration arrangements.
David Ansell
Chair, People and Remuneration Committee
6. Non-Executive Director fees
There were no increases to Non-Executive Director fees in
FY21. As a result of an independent review of Non-Executive
Director fees conducted in FY20, an increase was made
to the Board Chair fee in FY21 to $305,000, inclusive of
superannuation, which was effective from 28 October 2020
upon the appointment of the new Chair.
Based on a reassessment of the Committee structure in FY21
and to ensure oversight and governance of risk, compliance
and delivery on strategic pillars, the Board created separate
Audit and Risk and Technology Committees. The existing fee
structure applies to this new Committee.
APPROACH TO FY22 REMUNERATION
Looking forward to FY22, we are committed to simplifying our
framework, rewarding outperformance and maintaining full
transparency in all aspects of remuneration to our KMPs and
Executive Team, to reflect our strategy, our values, and our
growth ambitions.
1. Fixed Remuneration
Other than the Board Chair fee, there will be no increases to
the fixed remuneration of the CEO, CFO, and the Executive
Team in FY22. Increases to the Superannuation Guarantee
rate from 9.5% to 10.0% as of 1 July 2021 are absorbed
within the total fixed remuneration, with base salary reducing
and superannuation contributions increasing by the
commensurate 0.5%.
There will be no increases to Non-Executive Director fees
in FY22. Increases to the Superannuation Guarantee rate
from 9.5% to 10.0% as of 1 July 2021 are absorbed within
the Non-Executive Director fees, with cash fee reducing
and superannuation contributions increasing by the
commensurate 0.5%.
2. Short-Term Incentive (STI) and Long-Term Incentive (LTI)
Framework
Insights from the benchmarking review undertaken by the
external remunerations consultants, and feedback from our
shareholders during the year were taken into consideration
in reviewing the alignment of potential total remuneration
outcomes for CEO, CFO and the Executive Team, with those
of value for shareholders.
2.1 FY22 STI changes
The Gateway threshold for incentive payments has been
increased from 90% to 95% of reported EBIT and must be met
before the plan will activate.
Group performance measures for both financial and non-
financial are aligned to our five strategic pillars, and will be
weighted
- CEO and CFO: 70/30 financial and non-financial
- other Executive Team members: 60/40 financial and
non-financial.
The financial measures are:
- Group Reported EBIT (weighted 50%)
- Group Reported Net Sales (weighted 25%)
- Group Net Working Capital (weighted 25%)
68
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
1
2
3
4
5
6
7
8
Introduction
Senior Executive Remuneration Framework
Performance and Remuneration Outcomes
Senior Executive Remuneration Outcomes Table (Non-Statutory)
Senior Executive Remuneration Tables (Statutory)
Remuneration Governance
Non-Executive Director Remuneration
Additional Statutory Disclosures
1
INTRODUCTION
The Directors of Blackmores Limited present the Remuneration Report for the Blackmores Group. The report outlines Blackmores’
remuneration framework and the outcomes for the year ended 30 June 2021 (FY21) for Blackmores’ KMP.
The report has been prepared in accordance with the requirements of section 300A of the Corporations Act 2001. In this report the
following terms and phrases have the meanings that are references for FY21 and the comparative year where applicable, as
indicated below:
Role definitions
Directors
Executive Directors and Non-Executive Directors
Executive Directors
Former Executive Director Marcus Blackmore and the Chief Executive Officer
Senior Executives
Executive Directors and the other executives defined as Key Management Personnel (KMP) who have authority and
responsibility for planning, directing and controlling the activities of the Blackmores Group, directly or indirectly
Key Management
Personnel (KMP)
CEO and CFO, Executive Directors and Non-Executive Directors
Executive Team
CEO and the direct reports to the CEO
Other definitions
Exercised
Granted
Vested
Owned
Assigned to, but not yet vested
Met performance and service criteria and available to be exercised, but not yet owned
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
69
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Key Management Personnel
The following table lists the KMP during FY21.
Non-Executive Directors
Anne Templeman-Jones Non-Executive Director, Chair of the Board (appointed 28 October 2020), Chair of the Nominations Committee,
member of the Audit Committee, Risk and Technology Committee, and People and Remuneration Committee
David Ansell
Wendy Stops
Sharon Warburton
Non-Executive Director and member of the Risk and Technology Committee, People and Remuneration Committee,
and Nominations Committee (appointed as Chair of the People and Remuneration Committee on 28 July 2021)
Non-Executive Director, Chair of the Risk and Technology Committee (appointed 28 April 2021), member of the
Audit Committee, Nominations Committee, and People and Remuneration Committee (appointed 5 August 2021)
Non-Executive Director, Chair of the Audit Committee (appointed 28 April 2021), member of the Risk and
Technology Committee, Nominations Committee, and People and Remuneration Committee (appointed 5 August
2021)
Former Non-Executive Directors
Brent Wallace
Non-Executive Director, Chair of the Board, Chair of the Nominations Committee, member of the Audit Committee,
Risk Committee, and People and Remuneration Committee (ceased as KMP on 27 October 2020)
John Armstrong
Non-Executive Director, Chair of the Audit Committee, Risk Committee, and member of the Nominations Committee
(ceased as KMP on 8 September 2020)
Christine Holman
Non-Executive Director, Chair of the People and Remuneration Committee, member of the Audit Committee, and
Nominations Committee (ceased as KMP on 28 July 2021)
Executive Director
Alastair Symington
Chief Executive Officer and Managing Director and member of the Nominations Committee
Former Executive Director
Marcus Blackmore
Executive Director and member of the Nominations Committee (ceased as KMP on 23 October 2020)
Senior Executive
Gunther Burghardt
Chief Financial Officer
FY20 Remuneration Report feedback
At the FY20 AGM, Blackmores recorded a yes vote of 96.27% on the resolution to adopt the FY20 remuneration report which took
into account the strong support from proxy advisors and shareholders on the remuneration approach. Additional disclosure details in
relation to Board skills as relevant to the company strategy is detailed in 'Section 4 Operations' of this annual report.
70
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
2
SENIOR EXECUTIVE REMUNERATION
FRAMEWORK
The remuneration framework links remuneration outcomes to
both the Group’s performance and the individual’s performance
and behaviour. It also provides the opportunity to share in
the success and profitability of Blackmores in alignment with
increased shareholder wealth. The key elements of the FY21
framework are illustrated below.
BLACKMORES’ REMUNERATION FRAMEWORK
Rewards the achievement of strategic goals, financial
targets, operational performance and behaviour gateway
Attracts and retains talented Senior Executives
Aligns Senior Executives to the enhancement of Blackmores’
earnings and shareholder wealth
BLACKMORES’ REMUNERATION STRUCTURE
Staff Share Plan1
Profit Share
Whole of organisation
plan for eligible
permanent employees,
which recognises and
rewards the collective
contribution employees
make to the Blackmores
Group
Award is dependent on
forecasted Group NPAT
achieved for the period
ending November
and May, aligned to
Blackmores’ business
strategy and objectives.
A pool of up to 10% of
Group NPAT is available
to be shared among
eligible employees,
including Executives
To allow all eligible
permanent
employees and
Senior Executives
to purchase shares
in the company,
matched by the
Company to
provide a benefit to
the participant
Share ownership
directly aligns
participant interests
with those of
Blackmores’ other
shareholders
The matching ratio
is normally one
share for every three
shares purchased
during the financial
year. The total cost
to the Company is
capped at $500,000
for the matched
shares.
Long-term
Incentive (LTI)
To motivate and align
Executives with the
long-term interests
of Blackmores’
shareholders
Aligned to long-term
earnings and returns
targets
Three-year Earnings
Per Share (EPS) CAGR
(weighting: 50%) and
three-year Return on
Average Invested
Capital average of a
3 year performance
period (ROIC)
(weighting: 50%)
Purpose
Link to
performance
Performance
measures
Delivery
Fixed
Remuneration
Short-term
Incentive (STI)
To attract and
retain key talent
by providing
reasonable and fair
remuneration
To reward high
performance
aligned to
improving company
performance in the
short to mid-term
Linked to clearly-
specified annual
Group targets and
individual objectives
and behaviours
The STI scheme is
designed around
appropriate Group
level performance
benchmarks based
on quantitative
and qualitative
gateway measures.
A Group STI pool
is determined
based on three
key performance
measures: Group
EBIT, Group Net
Sales, and Group
Net Working
Capital.
Targeted to be
reasonable and fair,
taking into account
Senior Executives’
responsibilities,
experience
and individual
and Company
performance.
Benchmarked
annually through
independent review
against companies
with relative size and
scale of Blackmores’
operations.
Market data of
three comparator
peer groups is
considered:
1. comparative
market capitalisation;
2. bespoke company
selection; 3. Australia
and New Zealand
consumer staples
companies.
Base salary,
superannuation, and
any non-monetary
benefits (including
fringe benefits tax)
Performance rights.
Comprises cash
payments and as
applicable to the
CEO, CFO and
other members of
the Executive Team,
there is a deferral
of a portion of the
award into equity
The matched
shares are delivered
following the
completion of the
annual service
period and subject
to vesting.
Cash paid twice a year.
All eligible permanent
employees in Australia,
including Senior
Executives, may
purchase up to $1,000
of Blackmores’ shares
each year under the Staff
Share Acquisition Plan2
with money that would
have otherwise been
received under the Profit
Share Plan.
1. The Staff Share Plan will be decommissioned with no further participation offerings made under this plan post FY21. Further detail is outlined in the Chair introductory
letter on page 63, item number 3.
2. The Staff Share Acquisition Plan will be decommissioned with no further participation offerings made under this plan post FY21. Further detail is outlined in the Chair
introductory letter on page 68, item number 3.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
71
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Remuneration delivery
Year 1
Year 2
Year 3
Fixed remuneration
STI
50% paid in cash
50% paid in equity
Profit share
Cash or elect to
sacrifice into
Blackmores shares
(up to $1,000)
Base salary,
superannuation
and other
non-monetary
benefits
50% cash STI
paid at the end
of the one-year
performance
period
Paid twice-yearly
50% equity: one
year deferral for
Executive Team
50% equity: two year deferral for the CEO
LTI
100% delivered in
performance rights
50% subject to three-year EPS CAGR
50% subject to three-year ROIC
Minimum shareholding requirement (MSR)
In order to assist in aligning the interests of the Executive Team, including the CEO and the Non-Executive Directors, with the interests
of the Company’s shareholders, the Board approved a minimum shareholding requirement (MSR) Policy Guideline in June and
August 2020, respectively. Under the guideline, the KMP and Executive Team are encouraged to build a minimum shareholding in the
Company and maintain it during their tenure.
For the CEO and the Executive Team, the policy requires shareholdings equal to 100% and 50% respectively of their total fixed
remuneration within 5 years of their appointment. For determining whether the minimum shareholding has been met, the calculation is
based on the share price at the time of purchase.
Non-Executive Directors are required to build minimum shareholding equal to 100% of their annual Non-Executive Director base
fees including superannuation but not including Committee fees, within 3 years of their appointment. For determining whether the
minimum shareholding has been met, the calculation is based on the share price at the time of purchase.
Senior Executive Remuneration Mix
In determining the mix of Senior Executive remuneration, the Board aims to find a balance between:
• Fixed (not at risk) and performance (at risk) remuneration
• Short and long-term remuneration
• Remuneration paid in cash and equity.
Blackmores’ target and maximum Senior Executives' remuneration mix, as a percentage of total remuneration3, is outlined below.
t
e
g
r
a
T
n
O
d
r
a
w
e
R
m
u
m
i
x
a
M
t
A
d
r
a
w
e
R
CEO
CFO
CEO
CFO
38
23
39
59
29
12
24
28
48
36
36
28
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Fixed Remuneration1
STI
LTI2
1. Fixed remuneration includes cash, superannuation and non-monetary benefits (including fringe benefits tax).
2. LTI value is expressed as the % of Fixed Annual Remuneration as at the start of the three-year performance period.
3. Total is the aggregate reward (Fixed Annual Remuneration plus STI plus LTI). Note, in a format that more accurately reflects the remuneration
mix, profit share is separately disclosed on page 80.
72
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Short-term Incentive (STI) – Details
The following table outlines the details of the STI plan. Specific information relating to the actual award outcomes are set out in the
table on page 77.
What is the STI and
who is eligible to
participate?
The STI plan provides eligible employees with a 50% cash and 50% equity award for annual performance against
measured targets set at the beginning of the performance period. Eligible employees include the Executive
Director, Senior Executives, Executive Team, and other nominated employees (for other nominated employees,
STI awards are delivered as 100% cash).
Chief Executive Officer
% of Fixed Annual
Remuneration (FAR)
Chief Financial Officer
What is the
amount the
eligible employee
can earn?
Target
Maximum
60
120
50
100
What were the
performance
conditions for
FY21?
Gateway measures: In order for any STI to be paid, certain minimum threshold levels of performance (gateways)
at the Group level must be met for:
1. Quantitative: Group Budgeted EBIT; and
2. Qualitative: A discretionary gateway determined by the Board to decide whether Blackmores has performed
satisfactorily in the areas of brand reputation, safety, and quality.
Group STI pool: The total Group STI pool is determined based on the STI target at a % of fixed remuneration, and
the business must also meet three key performance measures:
• Group Reported EBIT (weighting: 50% of the overall pool)
• Group Reported Net Sales (weighting: 25% of the overall pool)
• Group Net Working Capital as a percentage of Net Sales (weighting: 25% of the overall pool)
Each of the above three measures has its own corresponding threshold, target and stretch performance levels
and corresponding payout level.
Region/Functional pool: Each region (ANZ, China, International) / function is then allocated a proportion of the
Group pool relative to other markets/functions.
Individual assessment: Individual performance is rated against personal KPIs to determine an individual’s STI
outcome.
Senior Executives are not awarded any STI in the instance of not meeting minimum individual performance
expectations.
The person to whom a Senior Executive reports to assesses that individual’s performance by reviewing his or her
individual KPIs, key tasks and performance indicators and the extent to which they have been achieved.
Why were these
performance
measures
chosen?
EBIT performance is a well-recognised measure of financial performance and a key driver of shareholder returns.
Group measures align employees with the overall Group objectives and performance. The pool funding
mechanism is based on overall Group performance against three key business metrics.
Individual performance drives performance at local market/function level which contributes to Group level
performance. The plan aims to drive a performance culture and allows for greater differentiation at both the
local market/function and individual levels and recognises contributions that have led to success of the broader
Blackmores Group.
When are
performance
conditions
tested?
Performance conditions are tested and calculated by Blackmores at the end of the financial year, verified by
Blackmores’ auditors and published in the Group’s Financial Statements before any payment is made. This
method was chosen to ensure transparency and consistency with disclosed information.
Individual KPIs are set at the start of each financial year and the Board reviews performance assessments for
Senior Executives and the Direct Reports to the CEO.
Does the Board
have an Executive
Clawback Policy?
The Board has adopted a Clawback Policy that is applicable to STI participants with a view to further aligning
the interests of KMP with the long-term interests of Blackmores. In the event of any deliberate misstatement or
manipulation of results in the Financial Statements for any of the immediately preceding three financial years
after assessment, the Board may require that STI participants repay all or part of the STI award and withhold the
payment or allocation of all or part of an unpaid STI.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
73
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Staff Share Plan – Details
The following table outlines the details of the Staff Share Plan1. Specific information relating to the actual award outcome is set out in
the table on page 85.
What is the Staff Share
Plan and who is eligible to
participate?
All eligible permanent employees in the Group, including Senior Executives, can elect to contribute
between $1,000 and $10,000 to be used to purchase shares in the Company. At the end of the
financial year, the Company will normally provide a benefit by applying a matching ratio to the shares
purchased by each participant for that financial year.
What is the amount the
Senior Executive can earn?
The total benefit an Executive can earn is determined by the number of matched shares the Company
will provide. This number is subject to the maximum capped total cost to the Company.
In order to be eligible to receive matching shares, an Executive must be employed by the Company at
30 June of the relevant financial year and have purchased shares during the year which remain in the
plan as at the vesting date (which is normally 31 July).
What is the amount the
participants can earn?
The matching ratio is normally one share for every three shares purchased during the financial year.
The total cost to the Company is capped at $500,000 for the matched shares.
What is the purpose of this
plan?
Increasing Senior Executive’s shareholding in Blackmores directly aligns their interests with those of
Blackmores’ other shareholders.
When are the matching
shares provided?
Matched shares are provided following completion of the annual service period and subject to vesting
(vesting date is normally 31 July and the issuing of matched shares normally occurs no later than 15
August, or as otherwise determined by the Board).
1. The Staff Share Plan will be decommissioned with no further participation offerings made under this plan post FY21. Further detail is outlined in the Chair introductory
letter on page 68, item number 3.
Profit Share – Details
The following table outlines the details of the Profit Share plan. Specific information relating to the actual award outcome is set out
on page 68.
What is the Profit Share
plan and who is eligible to
participate?
All eligible permanent employees in the Group, including Senior Executives, participate in a profit share
plan, whereby up to 10% of Group NPAT is allocated to all eligible permanent employees on a pro-rata
basis by reference to their Fixed Annual Remuneration. The profit share plan is in addition to the STI
award.
What is the amount the
Senior Executive can earn?
The amount distributed is a percentage of Group NPAT. As the amount is distributed on a pro-rata
basis, the amount earned in any year depends on both the Group NPAT achievement based on
November and May forecasts, and the total number of employees and salaries in the calculation.
What were the performance
conditions for FY21?
Under the Company’s Collective Agreement, up to 10% of Group NPAT is allocated to eligible
employees.
Why were these
performance measures
chosen?
NPAT is a well-recognised measure of financial performance and a key driver of shareholder returns.
Using NPAT as an incentive performance measure ensures that incentive payments are aligned with
Blackmores’ business strategy and objectives.
When are performance
conditions tested?
Profit share is paid twice a year, in December and June, based on Blackmores’ NPAT calculation on
management forecasts for November and May in the reporting year.
All eligible permanent employees in Australia, including Senior Executives, may purchase up to $1,000
of Blackmores shares each year under the Staff Share Acquisition Plan1 with money that would have
otherwise been received under the profit share plan.
1. The Staff Share Acquisition Plan will be decommissioned with no further participation offerings made under this plan post FY21. Further detail is outlined in the Chair
introductory letter on page 68, item number 3.
74
BLACKMORES ANNUAL REPORT 2021 2021 Audited Remuneration Report
Long-term Incentive (LTI) – Details
The following tables outline the details of the LTI plan. Specific information relating to the actual annual performance awards is set out
in the table on page 78.
Table 1 EPS Measures
Performance Level
Annual EPS Growth Rate
Vesting
Below Threshold
Threshold
Between Threshold & Target
Target
Stretch
Table 2 ROIC Measures
Performance Level
Below Threshold
Threshold
Between Threshold & Target
Table 3 LTI payout
outcomes (% of FAR)
Target
Stretch
CEO
Executive Team
Senior Managers
Less than 10%
As per below table 3
10%
10% –15%
15%
25%
ROIC%
Less than 7%
7%
7% –9%
9%
11%
As per below table 3
Pro-rata between Threshold and
Target as per below table 3
As per below table 3
As per below table 3
Vesting
As per below table 3
As per below table 3
Pro-rata between Threshold and
Target as per below table 3
As per below table 3
As per below table 3
Below Threshold
Threshold
Target (capped)
Stretch (capped)
0%
0%
0%
50%
10%
5%
100%
20%
10%
200%
80%
40%
What is the LTI and who is
eligible to participate?
Eligible employees are invited annually by the Board to participate in the LTI Executive Share Plan.
Under this plan, eligible employees are granted rights to acquire shares in Blackmores.
What were the
performance conditions
for FY21?
Why were these
performance measures
chosen?
Eligible employees include Executive Directors, Senior Executives and other nominated employees.
• Three-year Earnings Per Share (EPS) CAGR. Weighting: 50%
•
Three-year Return on Average Invested Capital 3 year average over the performance period
(ROIC). Weighting: 50%
The three-year performance period for the EPS and ROIC measures is FY21 – FY23.
EPS performance measure:
•
In determining the EPS performance measure for Blackmores’ LTI plan, the Board has recognised
EPS growth to be the key driver of shareholder value, influencing both share price and the capacity
to pay increased dividends.
Basing the vesting of rights on EPS growth encourages Senior Executives to improve Blackmores’
financial performance. As Senior Executives increase their shareholding in Blackmores through
awards received under the LTI plan their interests become more directly aligned with those of
Blackmores’ other shareholders.
ROIC performance measure:
•
The ROIC performance measure allows Blackmores to assess its efficiency at allocating the capital
under its control to profitable investments, giving a sense of how well Blackmores is using its
money to generate returns. ROIC focuses on managing both the financial returns and the invested
capital base used to generate those returns.
ROIC, alongside a traditional profitability measure such as EPS, provides a means to consider the
level of profitability generated, once capital has been taken into account. It ensures alignment with
the long-term focus on return and ensures improvement of execution standards.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
75
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Long-term Incentive (LTI) – Details (cont.)
What is the allocation
methodology?
The value of rights granted to eligible employees is equivalent to a percentage of their base
remuneration at the time of grant.
The number of rights granted equals the value of rights divided by:
•
The volume weighted average price of Blackmores’ shares for the 14 trading days prior to and 14
trading days after Blackmores’ results in respect of the prior financial year results announced to the
ASX, less
•
The amount of any final dividend per share declared as payable in respect of the prior financial year.
The rights will automatically exercise following vesting, audit clearance of the 2023 Financial
Statements, Board approval and the first trading window. These Blackmores shares are issued to
participants at zero cost.
The number of shares issued is identical to the number of rights exercised.
Where regulations prohibit an equity-based plan, a cash equivalent is awarded. In the case of Kitty Liu
(Managing Director China), a cash equivalent is paid in lieu of shares.
When are performance
conditions tested?
Compounded annual growth in EPS and ROIC is calculated at the end of the three-year performance
period and verified with reference to Blackmores’ audited Financial Statements prior to determining
the number of rights that will vest.
What happens if the
eligible employee ceases
employment during the
performance period?
Does the Board have an
Executive Clawback Policy?
If an executive ceases employment during the three-year performance period, the rights lapse. In
certain circumstances the Board has discretion to allow a portion of rights to vest either at the end of
the three-year performance period or on the termination of employment for a ‘good leaver’.
The Board has adopted a Clawback Policy that is applicable to KMP with a view to further aligning
the interests of KMP with the long-term interests of Blackmores. In the event of any deliberate
misstatement or manipulation of results in the Financial Statements for any of the immediately
preceding three financial years, after assessment, the Board may require KMP to repay all or part of the
LTI award, forfeit all or any unvested LTI; and withhold all or part LTI to the extent it has not been given
to that KMP.
3
PERFORMANCE AND
REMUNERATION OUTCOMES
Performance Incentives – Actual Performance
2021 Financial Year
Actual performance over the past five years is shown in the
following graphs:
DIVIDEND PER SHARE (CENTS)
300
250
200
150
100
50
0
71
2017
2018
2019
2020
2021
SHARE PRICE ($) AS AT 30 JUNE 2021
RETURN ON SHAREHOLDERS
EQUITY (%)
73.47
60
50
40
30
20
10
0
2017
2018
2019
2020
2021
2017
2018
2019
2020
2021
150
120
90
60
30
0
76
BLACKMORES ANNUAL REPORT 2021 2021 Audited Remuneration Report
Short-term Incentive (STI)
Under the current remuneration framework, EBIT is the key
Group performance measure, with a gateway threshold of 90% of
Group Budgeted EBIT to be met before any STI award becomes
payable. The STI plan also includes three Group performance
financial measures by which the Executive Team and key leaders’
KPIs are measured, once the gateway has been achieved:
• Group Reported EBIT (weighting: 50% of the overall pool)
• Group Reported Net Sales (weighting: 25% of the overall pool)
• Group Net Working Capital as a percentage of Net Sales
(weighting: 25% of the overall pool)
FY21 STI outcomes
The business delivered an EBIT outcome that fell marginally short
of the budgeted gateway.
In contemplating any executive variable pay decision and
the use of discretion, the Board took a number of factors into
consideration with respect to:
• the current framework,
• broader information on corporate performance and impact
on stakeholders( customers, investors and employees) and
applying an independent assessment by the independent
Directors,
• a set of principles that were designed to provide fairness and
clarity aligned in allocating any performance recognition, and
• timely signals to executives and employees on performance
and conduct that is in the long-term interests of the company.
The Board has used its discretion to deem the gateway as being
met to allow for a reduced payment of STI to fairly reflect both
the financial outperformance of both the International and China
business units, recognising the group operational support and
adjusting for the underperformance of the ANZ business.
The Board also took into consideration the results that were
delivered:
• during times of extreme change including the integration of
Braeside and the introduction of manufacturing and supply
change management,
• the disruptive impact of COVID-19 to business activity, and
the adjustments to the operating model that were made to
ensure employee work place safety and to accommodate
new consumer buying practices,
• the operational team and those of our people in the supply
chain of “make, pack and deliver” to meet the increased
demand for product in the overseas markets.
Adjusted FY21 STI
An Adjusted STI pool of $2.7m, being 40% of maximum targeted
STI, was created and then allocated as follows:
FY21 STI payments
STI payments were awarded to the CEO and CFO as follows:
• CEO $156,000 representing 20% at Target STI and 5.7% of
the adjusted pool
• CFO $62,500 representing 20% at Target STI and 2.3% of the
adjusted pool
They did not achieve their individual financial targets but the
Board considered their performance across their individual non-
financial KPI’s for the following company Strategic objectives:
• building a world class organisation,
• rejuvenating Australia,
• simplification of the supply chain, and
• the cost out and the integration of Braeside
The Board considers the exercise of discretion and the manner
in which it has been allocated for the CEO and CFO as fair and
equitable, against those others who delivered on financial and
non-financial performance and to reflect greater proportionality
for the leadership accountability they have for the overall
business results and personal performance.
The three Group performance financial measures, Blackmores’
EBIT, Net Sales and Net Working Capital as a percentage of Net
Sales for FY21, and as compared over the past five years are
shown in the following graphs. Note, the EBIT graph is prior to
changes for the IFRIC Cloud computing clarification consistent
with how the targets were initially set.
EBIT ($M)
100
NET SALES
($M)
80
60
40
20
0
640
620
600
580
560
540
520
0
44
2017
2018
2019
2020
2021
576
Allocation
% of STI pool
2017
2018
2019
2020
2021
CEO and CFO
ANZ non-KMP Executives
ANZ teams (excluding sales commissions teams)
Group functions
China and International (Executive and teams)
8%
14%
8%
32%
38%
100%
The Board considers the exercise of discretion and the manner
in which it has been allocated as fair and equitable, in line with
STI plan rules for assessing performance and differentiating
those who delivered on financial and non-financial performance
notwithstanding the degree of difficulty of the change
experienced during the year.
NET WORKING CAPITAL AS A % OF NET SALES
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0
20.9%
2017
2018
2019
2020
2021
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
77
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Long-term Incentive (LTI)
EPS achievement was selected as the Group performance measure for the LTI awards in the years prior to FY20. From FY20, an
additional measure of Return on Average Invested Capital (ROIC), was introduced to the LTI plan. The two measures (EPS and ROIC)
are equally weighted (50% EPS weighting and 50% ROIC weighting) and the LTI plan has a three-year performance period.
Due to not meeting the EPS performance hurdle under the FY19 LTI plan (i.e., performance period beginning 1 July 2018 and
ending 30 June 2021), there were no FY19 LTI awards eligible to vest in FY21. The FY20 and FY21 plans were not eligible to vest in
the current year.
The total remuneration for the financial year, the details of which are shown on page 80 includes an accounting expense of $875,226
(2020: $262,565) for these performance rights. This amount has been calculated based on an assessment of the achievement of the
performance hurdle over the three-year performance period and represents one-third of the total value of the unvested rights.
EPS (CENTS)
ROIC (%)
600
500
400
300
200
100
0
35
30
25
20
15
10
5
0
142.1
9.6
2017
2018
2019
2020
2021
2017
2018
2019
2020
2021
CEO Remuneration Outcomes – Five-Year History
The Group’s remuneration framework is designed to
reward participants based on the achievement of the
Group’s performance goals and to share in the success
and profitability of Blackmores in alignment with
increased shareholder wealth. CEO performance-related
remuneration over the past five years illustrates this
linkage to business performance. Alastair Symington was
appointed CEO during FY20. The performance-related
remuneration in the prior years relate to the prior CEO's,
Christine Holgate and Richard Henfrey, who ceased in
FY18 and FY19 respectively. Prior to FY21, the STI plan
was based on NPAT gateway performance measure
and from FY21 is based on EBIT gateway performance
measure.
STI EARNED AS A % OF MAXIMUM
$M
105
90
75
60
45
30
15
0
STI earned as a
% of maximum
100
80
60
40
20
0
2017
2018
2019
2020
2021
Earnings before interest and tax (EBIT)
Net profit after tax (NPAT)
STI
ROIC %
30
25
20
15
10
5
0
LTI AWARDED AS A % OF MAXIMUM
LTI awarded as a
% of maximum
100
80
60
40
20
0
Cents
600
500
400
300
200
100
0
LTI awarded as a
% of maximum
100
80
60
40
20
0
2017
2018
2019
2020
2021
2017
2018
2019
2020
2021
ROIC (first introduced as a measure for LTI in 2020)
LTI
Earnings per share (EPS)
LTI
78
BLACKMORES ANNUAL REPORT 2021 2021 Audited Remuneration Report
4
SENIOR EXECUTIVE REMUNERATION OUTCOMES TABLE (NON-STATUTORY)
The following table has been provided to disclose additional non-statutory information to assist shareholders in understanding the
total value of the Senior Executives’ remuneration for FY21.
The following table sets out the remuneration that the Senior Executives became entitled to during FY21 and that was either paid or
payable during the financial year or will be paid subsequent to the end of the year.
The remuneration outcomes prepared in accordance with accounting standards as required by the Corporations Act 2001 are
contained on page 80 of the report. The totals in the statutory remuneration table on page 80 of the report differ to the following table.
This is because of the following:
1.
2.
Leave movements – the statutory remuneration table shows annual leave and long service leave entitlements due to an increase in
the statutory provisions, rather than cash payment.
Share-based payments – the accounting standards require the share-based payments expense to be calculated using the fair
value of the shares at grant date, amortised over the relevant performance and service period. The statutory table includes the
accounting expense, rather than any amount received by the individual.
The FY18 rights under the LTI plan were forfeited as the performance conditions were not met. Both the statutory remuneration table
and the following outcomes table include nil value for the FY18 LTI awards.
The FY19 rights under the LTI plan have forfeited as the performance conditions were not met. Both the statutory remuneration table
and the following outcomes table include nil value for the FY19 LTI awards.
The FY19 rights under the staff share plan which have vested were valued at $141.95 in the statutory remuneration table. This differs to
the following outcomes table, which includes the FY19 share plan awards valued at $89.68, which was the share price on the 31 July
2019 vesting date.
SALARY
AND FEES
STI AND
NON-
PROFIT SHARE1 MONETARY2
$
$
$
OTHER3
$
TERMINATION
PAYMENTS4
SUPER
ANNUATION
EQUITY THAT
TOTAL
VESTED REMUNERATION
RECEIVED
TOTAL DURING 20215
$
$
$
$
$
5
21,694 1,379,864
21,003 1,346,738
- 1,379,864
- 1,346,738
Executive Director
Alastair Symington6
2021
2020
Senior Executive
Gunther Burghardt7
2021
2020
1,278,316
974,007
78,000
9,687
1,854
42,041
-
300,000
603,315
274,122
38,188
-
1,536
33,912
-
-
-
-
-
-
Former Executive Director
Marcus Blackmore8
2021
2020
121,080
354,857
-
5,588
10,601
10,314
-
4,836
90,810
-
10,697
21,003
233,188
396,598
21,694
10,501
664,733
318,535
-
-
-
-
664,733
318,535
233,188
396,598
Former Senior Executives
Aaron Canning9
2021
2020
Peter Osborne10
2021
2020
-
407,059
-
830,392
-
8,796
-
9,333
-
2,930
-
2,923
-
-
-
-
-
-
-
-
-
11,066
-
432,774
-
2,870
-
435,644
-
-
-
839,725
-
3,049
-
842,774
Total
2021
2020
2,002,711
2,840,437
116,188
33,404
13,991
89,197
-
307,759
90,810
-
54,085 2,277,785
63,573 3,334,370
- 2,277,785
5,919 3,340,289
1. $78,000 for Alastair Symington is the cash portion of FY21 STI which is 50% of his FY21 STI award outcome. The remaining 50% is deferred for two years into equity in
the form of performance rights. Alastair Symington chose not to receive profit share in FY21. $38,188 for Gunther Burghardt comprises $6,938 for FY21 Profit Share
payment and $31,250 for cash portion of FY21 STI which is 50% of his FY21 STI award outcome. The remaining 50% is deferred for one year into equity in the form of
performance rights.
2. ‘Non-monetary’ includes motor vehicle benefits, relocation and accommodation benefits and any fringe benefits tax paid on these benefits.
3. ‘Other’ includes insurance and superannuation membership fees for Marcus Blackmore and Aaron Canning in FY20. $300,000 for Alastair Symington is contractual sign-
on cash payment made to Alastair Symington following commencement of employment in FY20.
4. Termination payment for Marcus Blackmore is payment in lieu-of notice paid as an employment termination payment (ETP).
5. The equity that vested in FY20 relates to the FY19 Staff Share Plan grant. The value disclosed is based on the share price on the vesting date 31 July 2019.
6. Alastair Symington joined as Chief Executive Officer and Managing Director on 16 September 2019.
7. Gunther Burghardt joined as Chief Financial Officer on 6 January 2020.
8. Marcus Blackmore ceased to be KMP on 23 October 2020.
9. Aaron Canning ceased as a Senior Executive on 6 January 2020.
10. Peter Osborne ceased as a Senior Executive on 20 December 2019.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
79
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
5
SENIOR EXECUTIVE REMUNERATION TABLES (STATUTORY)
Statutory Remuneration Table
The following table discloses the remuneration outcomes of the Senior Executives for the financial year ended 30 June 2021. The table
has been prepared in accordance with Section 300A of the Corporations Act 2001.
The amounts in the statutory tables differ to the remuneration table on page 79 as outlined previously. The statutory remuneration table
includes the accounting value for LTI grants for the FY19 year which did not vest and the FY20 and FY21 years which have not
yet vested.
TERMINATION
BENEFITS
POST-
EMPLOYMENT
BENEFITS
OTHER
LONG-TERM
EMPLOYMENT
BENEFITS
SHARE-
BASED
PAYMENT
TERMINATION
PAYMENTS4
SUPER
ANNUATION
PERFORMANCE
RIGHTS6, 7
OTHER
$
$
$
TOTAL
$
SHORT-TERM
EMPLOYMENT
BENEFITS
SALARY
AND FEES
STI AND
NON-
PROFIT SHARE1 MONETARY2
$
$
$
OTHER3
$
Executive Director
Alastair Symington8
2021
2020
Senior Executive
Gunther Burghardt9
2021
2020
1,278,316
974,007
78,000
9,687
1,854
42,041
12,958
377,899
603,315
274,122
38,188
-
1,536
33,912
24,629
13,238
$
-
-
-
-
Former Executive Director
Marcus Blackmore10
2021
2020
121,080
354,857
-
5,588
10,601
15,150
-
-
90,810
-
10,697
21,003
21,694 393,84813
21,003 262,56513
496,807 2,283,477
- 1,687,202
21,694
10,501
-
-
-
-
71,554
-
760,916
331,773
-
-
233,188
396,598
Former Senior Executives
Aaron Canning11
2021
2020
Peter Osborne12
2021
2020
-
381,499
-
717,857
-
8,796
-
9,333
-
5,853
-
23,185
-
-
-
28,048
-
-
-
-
-
12,466
-
42,6805
-
378
-
474,857
-
-
-
-
-
402
-
755,640
Total
2021
2020
2,002,711
2,702,343
116,188
33,404
13,992
96,956
37,586
442,370
90,810
-
54,086
64,973
393,848
305,245
568,361 3,277,581
780 3,646,070
1.
2.
3.
‘STI and profit share’ includes amounts paid by way of cash STI and profit share. $78,000 for Alastair Symington relates to cash portion of FY21 STI which is 50% of
his total FY21 STI award outcome. The remaining 50% is deferred for two years into equity in the form of performance rights and is shown in the performance rights
column. Alastair Symington chose not to receive profit share in FY21. $38,188 for Gunther Burghardt comprises $6,938 for FY21 Profit Share payment and $31,250 for
cash portion of FY21 STI which is 50% of his total FY21 STI award outcome. The remaining 50% is deferred for one year into equity in the form of performance rights
and is shown in the performance rights column.
‘‘Non-monetary’ includes benefits such as relocation and accommodation benefits and any fringe benefits tax paid on these benefits.
‘Other’ shown in short-term employment benefits relates to provisions for annual leave, with the exception of the $377,899 amount showing for Alastair
Symington, of which $77,899 relates to provision for annual leave and $300,000 relates to contractual sign-on cash payment made to Alastair Symington following
commencement of employment.
Termination payments for Marcus Blackmore is payment in lieu-of notice paid as an employment termination payment (ETP).
‘Other’ shown in long-term employment benefits relates to provisions for long service leave.
4.
5.
6. The FY21 share-based payments include the LTI plan and represent the FY21 portion of the fair value of rights granted in FY19, FY20 and FY21, being $418,807
for Alastair Symington and $40,304 for Gunther Burghardt. The FY19 rights have not vested and there is nil value included in FY21as the performance conditions
were not met. Vesting of the FY20 and FY21 rights remains subject to performance and service conditions as outlined on page 75. The FY21 share based
payments related to FY21 deferred STI in the form of performance rights for Alastair Symington and Gunther Burghardt is $78,000 and $31,250 respectively. The
deferral period is 2 years and 1 year, respectively, and represents 50% of their total FY21 STI award outcome. The remaining 50% is paid as cash and is shown in
the STI column.
The FY20 share-based payments include the Staff Share Plan and represent the FY20 portion of the fair value of rights granted in FY19.
7.
8. Alastair Symington joined as Chief Executive Office and Managing Director on 16 September 2019.
9. Gunther Burghardt joined as Chief Financial Officer on 5 January 2020.
10. Marcus Blackmore’s LTI plan is paid as a cash equivalent in lieu of shares. Marcus Blackmore ceased as an Executive Director on 23 October 2020.
11. Aaron Canning ceased as a Senior Executive on 6 January 2020.
12. Peter Osborne ceased as a Senior Executive on 20 December 2019.
13. This amount relates to Sign-On Shares issued under Executive Share Plan as part of Alastair Symington’s employment contract. These Shares are subject to a
service condition being continuous employment with Blackmores Limited from 16 September 2019 to 16 September 2022.
80
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Performance-related remuneration
Statutory performance-related remuneration table
The following table shows an analysis of the fixed remuneration and performance-related (STI, Profit Share and LTI) components of the
FY21 remuneration mix detailed in the Statutory Remuneration table.
NON-PERFORMANCE-
RELATED REMUNERATION1
STI AND
PROFIT SHARE
PERFORMANCE
TOTAL PERFORMANCE-
RIGHTS2,3 RELATED REMUNERATION
Executive Director
Alastair Symington4
2021
2020
Senior Executive
Gunther Burghardt5
2021
2020
Former Executive Director
Marcus Blackmore6
2021
2020
Former Senior Executives
Aaron Canning7
2021
2020
Peter Osborne8
2021
2020
Total
2021
2020
74.8%
99.4%
85.6%
100.0%
100.0%
98.6%
-
98.1%
-
98.7%
79.1%
99.1%
3.4%
0.6%
5.0%
0.0%
0.0%
1.4%
-
1.9%
-
1.3%
3.5%
0.9%
21.8%
0.0%
9.4%
0.0%
0.0%
0.0%
-
0.1%
-
0.1%
17.4%
0.0%
25.2%
0.6%
14.4%
0.0%
0.0%
1.4%
-
1.9%
-
1.3%
20.9%
0.9%
1. Non-performance-related remuneration includes the accounting expense from all of the columns in the ‘Statutory Remuneration Table’ other than ‘STI and Profit Share’
and the LTI ‘Performance Rights’.
2. Performance Rights includes the LTI plan and represents the FY21 accounting expense of the FY21 portion of the rights granted in FY19, FY20 and FY21.
3. Performance Rights includes the Staff Share Plan and represents the FY20 accounting expense of the FY20 portion of the rights granted in FY20.
4. Alastair Symington joined as Chief Executive Officer and Managing Director on 16 September 2019.
5. Gunther Burghardt joined as Chief Financial Officer on 6 January 2020.
6. Marcus Blackmore ceased as an Executive Director on 23 October 2020.
7. Aaron Canning ceased as a Senior Executive on 6 January 2020.
8. Peter Osborne ceased as a Senior Executive on 20 December 2019.
Short-term Incentive
The following table shows the details of the STI awarded as remuneration to Executive Directors and Senior Executives for the financial
year ended 30 June 2021.
Executive Director
Alastair Symington
Senior Executive
Gunther Burghardt
Former Executive Director
Marcus Blackmore4
STI
INCLUDED IN
REMUNERATION1,3
% OF STI AWARD
AS A MAXIMUM
STI AWARD
% OF MAXIMUM
STI AWARD
FORFEITED2
156,000
62,500
-
10
10
-
90
90
100
1. Amounts included in remuneration for the financial year represent the amount related to the financial year based on achievement of personal goals and satisfaction of
performance criteria.
2. Amounts forfeited are due to the performance or service criteria not being met in relation to the current financial year.
3. The awards are paid according to the table on page 73.
4. Marcus Blackmore ceased as an Executive Director on 23 October 2020.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
81
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
6
REMUNERATION
GOVERNANCE
Remuneration Governance
Overview
The diagram below outlines
the role of the Board, People
and Remuneration Committee
and other parties in overseeing
remuneration governance at
Blackmores.
Makes recommendations to
the Board on remuneration
strategy and policy for KMP
and other executives of
Blackmores that are in the
best interests of Blackmores
and its shareholders.
Board
Provides oversight of Blackmores' remuneration strategy
and policies for KMP and other executives. Approves
recommendations made by the People and Remuneration
Committee on NED fees and Executive remuneration
People and Remuneration Committee
Advises the Board on remuneration
policies and practices for the
Company. Detailed responsibilities
are set out in the Committee's
charter which can be found on
the Company's website at
blackmores.com.au (go to 'Investor
Centre', then click on Governance
and Board of Directors'). The
charter is reviewed annually by the
Committee and the Board.
The People and Remuneration Committee currently
comprises four independent Non-Executive
Directors who have experience in both remuneration
governance and the Blackmores business. The
members during FY21 were Christine Holman
(Committee Chair resigned 28 July 2021), David
Ansell (appointed Committee Chair on 28 July
2021), Brent Wallace (Chair of the Board until 27
October 2020) and joined by the new Chair of the
Board, Anne Templeman-Jones on 28 October 2020.
Wendy Stops and Sharon Warburton were appointed
members of the Committee on 5 August 2021.
Management
Audit Committee
Risk & Technology
Committee
Advisors to the
Committee
Reviews and proposes
changes to remuneration
policies and structures
and provides information
and recommendations
on NED and Executive
remuneration to the PRC
for review and approval.
Provides oversight on
the integrity of financial
information provided to
the PRC for the purposes
of decision making on
remuneration outcomes.
Provides oversight
of business risks and
behavioural issues provided
to the PRC for the purposes
of decision making on
remuneration outcomes.
The PRC has established protocols
for engaging and dealing with
external advisors and these are
included in the Committee's charter.
The Committee obtains specialist
external advice about remuneration
structure and levels. The advice is
used to support its assessment of
the market to ensure that the CEO,
Executive Team members and NEDs
are being rewarded appropriately.
During FY21, the Committee
engaged an independent external
remuneration consultant to provide
remuneration benchmarking and
assistance with this remuneration
report. The Board was satisfied
that the advice received was free
from any undue influence by KMP
or other executives to whom the
advice may relate, as the established
protocols were observed and
complied with and all remuneration
advice was provided to the
Committee Chair. The fee paid for
the service in FY21 was $148,830.
No remuneration recommendations
as defined by the Corporations Act
were provided.
82
BLACKMORES ANNUAL REPORT 2021 2021 Audited Remuneration Report
SENIOR EXECUTIVE EMPLOYMENT CONTRACTS
The remuneration and other terms of employment are covered in employment contracts. No contract is for a fixed term.
Senior Executives’ contracts can be terminated by Blackmores or by the Senior Executive providing notice periods as shown in the
following table.
Name
Notice periods/termination payments
Alastair Symington
(CEO) and
Gunther Burghardt
(CFO)
Six months’ notice (or payment in lieu).
May be terminated immediately for serious misconduct.
Redundancy Payments
Years of continuous service
Termination payments
Up to one year
Two weeks’ pay.
Between one and 10 years
Two weeks’ pay plus an additional three weeks of pay for each completed
year of service.
10 years or more
29 weeks’ pay plus an additional three weeks of pay for each completed year
of service following 10 years capped at a maximum of 52 weeks of pay.
7
NON-EXECUTIVE DIRECTOR REMUNERATION
Non-Executive Directors receive fixed annual fees comprising a Board fee, Committee fee and Committee Chair fee as applicable. No
incentive-based payments are awarded to Non-Executive Directors.
Blackmores makes superannuation contributions on behalf of Non-Executive Directors in accordance with statutory obligations and
each Non-Executive Director may sacrifice their fees in return for additional superannuation contributions paid by Blackmores.
At a meeting held on 25 October 2018, shareholders determined the maximum total Non-Executive Director fees payable, including
Committee fees, to be $1,300,000 per year, to be distributed as the Board determines. The pool value remains unchanged and allows
for six Non-Executive Directors.
Compensation arrangements for Non-Executive Directors are determined by Blackmores after reviewing published remuneration
surveys and market information. With the appointment of a new Board Chair and in line with market review, the Board Chair fee was
increased in FY21 by 9.08%. There were no changes to the Non-Executive Director fees in FY21, which have remained at current levels
since FY19.
In order to assist in aligning the interests of Non-Executive Directors with the interests of the Company’s shareholders, the Board
approved a minimum shareholding requirement (MSR) Policy Guideline in June and August 2020, respectively. Under the guideline,
Non-Executive Directors are encouraged to a build minimum shareholding in the Company and maintain it during their tenure.
The policy requires Non-Executive Directors to build minimum shareholding equal to 100% of the annual Non-Executive Director base
fees, including superannuation but not including Committee fees, within 3 years of their appointment. For determining whether the
minimum shareholding has been met, the calculation is based on the share price at the time of purchase.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
83
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Non-Executive Director fees (inclusive of superannuation) for FY21 were:
FEES
Board
Audit and Risk1
People and Remuneration
Risk & Technology1
Nominations
CHAIR
$
305,000
21,900
21,900
21,900
-
2021
MEMBER
$
142,350
10,950
10,950
10,950
-
CHAIR
$
279,615
21,900
21,900
-
-
2020
MEMBER
$
142,350
10,950
10,950
-
-
1. The Audit and Risk Committee was renamed Audit Committee in February 2020. Risk Committee was created in February 2020. There were no additional fees for the Risk
Committee. The Risk Committee was renamed Risk & Technology on 28 April 2021 and fees paid for Committee membership.
The total annual Non-Executive Director remuneration for the Board of five (four in 2020) for FY21 was $736,120 (2020: $803,690).
The following table discloses the remuneration of the Non-Executive Directors for the financial year ended 30 June 2021.
SHORT-TERM
EMPLOYMENT
BENEFITS
POST
EMPLOYMENT
BENEFITS
FEES AND ALLOWANCES
$
NON-MONETARY1
$
SUPERANNUATION
$
TOTAL
$
Non-Executive Directors
Anne Templeman-Jones2
2021
David Ansell
2021
2020
Christine Holman3-
2021
2020
Wendy Stops4
2021
Sharon Warburton5
2021
Former Non Executive Directors
John Armstrong6
2021
2020
Jackie McArthur7
2021
2020
Helen Nash7
2021
2020
Brent Wallace8
2021
2020
Total
2021
2020
187,418
156,385
146,538
160,000
155,116
25,846
25,846
30,577
146,538
-
17,308
-
17,308
88,000
254,000
674,072
736,808
-
-
-
-
-
-
2
134
-
-
-
-
620
622
134
16,230
203,648
14,857
13,921
15,200
14,736
2,455
2,455
2,905
13,921
-
1,644
-
1,644
7,324
20,882
171,241
160,460
175,200
169,852
28,302
28,302
33,484
160,594
-
18,952
-
18,952
95,944
274,882
61,426
66,748
736,120
803.690
1. ‘Non-monetary’ includes benefits and any applicable fringe benefits tax.
2. Anne Templeman-Jones was appointed Chair of Blackmores on 28 October 2020.
3. Christine Holman joined as a Non-Executive Director on 18 March 2019 and was appointed Chair of the People and Remuneration Committee on 12 August 2019.
Resigned as Non-Executive Director on 28 July 2021.
4. Wendy Stops was appointed as a Non-Executive Director on 28 April 2021.
5. Sharon Warburton was appointed as a Non-Executive Director on 28 April 2021.
6. John Armstrong resigned as Non-Executive Director on 8 September 2020.
7. Jackie McArthur and Helen Nash resigned as Non-Executive Directors on 5 August 2019.
8. Brent Wallace ceased to be KMP on 27 October 2020.
84
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
8
ADDITIONAL STATUTORY DISCLOSURES
Share-based Payments
The following table outlines the shares and rights over ordinary shares in the Company that were granted as compensation to
Executive Directors and Senior Executives during FY21 and FY20. The fair value of awards is calculated in accordance with AASB 2
Share-based Payments.
(a) LTI plan
NAME
GRANT
VESTED
EXERCISED
END OF
HOLDING
LOCK
NUMBER OF
RIGHTS
DATE
FAIR VALUE
PER RIGHT
$
TOTAL FAIR
VALUE1
$
SHARE
PRICE
$
MAXIMUM
VALUE2
$
NUMBER
% OF
OF NUMBER
DATE RIGHTS3 GRANTED
NUMBER
VALUE4 OF RIGHTS
VALUE5
DATE
VALUE OF
RIGHTS NOT
VESTED
$
Executive Director
Alastair Symington6 31/10/19
13,650
86.56
1,181,544
73.26
1,000,000
19/12/19
35,622
81.47
2,902,124
84.74
3,018,608
14/12/20
38,364
65.50
2,512,842
67.77
2,599,928
Senior Executive
Gunther Burghardt7 26/6/20
6,098
75.29
459,118
77.23
470,949
14/12/20
7,386
65.50
483,783
67.77
500,549
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
09/22
08/22
08/23
08/22
08/23
1. The total value of rights granted in the year is the fair value of the rights calculated at the time of grant. This amount is allocated to remuneration over the vesting period
(i.e. FY21 grant over 1 July 2020 to 30 June 2021).
2. Disclosure of maximum value is required under Section 300A of the Corporations Act 2001. The value disclosed represents the underlying value of shares at the time of
grant multiplied by the number of rights granted to each individual. The minimum value of rights awarded is zero if performance conditions are not achieved.
3. The number of rights vested is equal to the number of rights exercised and the number of shares issued; vesting occurs on 30 June and shares are issued in September
following audit clearance of the Group’s results and Board approval.
4. Value of rights vested is equal to the fair value per right multiplied by the number of rights vested.
5. Value of rights at exercise is equal to the number of rights exercised multiplied by the share price at exercise date.
6. Alastair Symington joined as Chief Executive Officer and Managing Director on 16 September 2019. The 13,650 number relates to grant of contractual sign-on shares.
7. Gunther Burghardt joined as Chief Financial Officer on 6 January 2020.
(b) Staff Share Plan
Under the Staff Share Plan, vesting of 44 rights granted to Senior Executives for the year ended 30 June 2021, occurs on 31 July 2021
and shares are issued in September 2021.
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
85
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Options
During FY21 and FY20 there were no share options in existence. There have been no share options issued since the end of the
financial year.
Shares
The following table outlines the fully paid ordinary shares of Blackmores Limited held by KMP.
Fully paid ordinary shares of Blackmores Limited
Non-Executive Directors
Anne Templeman-Jones2
David Ansell
Christine Holman3
Wendy Stops4
Sharon Warburton5
Executive Director
Alastair Symington6
Senior Executive
Gunther Burghardt
Former Executive Director
Marcus Blackmore7
Fomer Non-Executive Directors
John Amstrong8
Brent Wallace9
Total
OPENING
BALANCE
NUMBER
RECEIVED ON
SETTLEMENT
OF RIGHTS
NUMBER
NET CHANGE
OTHER1
NUMBER
CLOSING
BALANCE
NUMBER
-
1,000
2,500
-
-
18,123
500
3,658,276
800
12,302
3,693,501
-
-
-
-
-
-
-
-
-
-
-
652
413
413
2,500
-
652
1,413
2,913
2,500
-
413
18,536
134
634
826
3,659,102
413
413
6,177
1,213
12,715
3,699,678
1. Includes shares issued under the Company’s Staff Share Plan.
2. Anne Templeman-Jones was appointed Chair of Blackmores on 28 October 2020.
3. Christine Holman ceased as a Non-Executive Director on 28 July 2021.
4. Wendy Stops was appointed as a Non-Executive Director on 28 April 2021.
5. Sharon Warburton was appointed as a Non-Executive Director on 28 April 2021.
6. These shares include 13,650 restricted shares.
7. Marcus Blackmore ceased as an Executive Director on 23 October 2020 and his closing balance is as at this date.
8. John Armstrong ceased as a Non-Executive Director on 8 September 2020 and his closing balance is as at this date.
9. Brent Wallace ceased to be KMP on 27 October 2020 and his closing balance is as at this date.
Rights to shares
The following table outlines the rights to fully paid ordinary shares of Blackmores Limited held by KMP:
GRANTED AS
COMPEN-
BALANCE
AS AT 1/7/20
SATION EXERCISED
NET OTHER BALANCE AS
CHANGE AT 30/6/21
BALANCE
VESTED AT
VESTED
BUT NOT
30/6/21 EXERCISABLE
VESTED
AND
RIGHTS
VESTED
EXERCISABLE DURING YEAR
Executive Director
Alastair Symington
Senior Executive
Gunther Burghardt
Total
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER
35,622
38,364
6,098
41,720
7,386
45,750
-
-
-
-
73,986
-
-
13,484
87,470
-
-
-
-
-
-
-
-
-
-
-
-
86
BLACKMORES ANNUAL REPORT 2021
2021 Audited Remuneration Report
Loan disclosures
There were no loans due from KMP during or at the end of the financial year (2020: $nil).
Other transactions with Key Management Personnel
Transactions entered into during the year with KMP of Blackmores Limited and the Group are on the same terms and conditions as
employees or customers dealing on an arms-length basis which includes:
•
the receipt of dividends on their shareholdings, whether held privately or through related entities or through the employee share
plans in the same manner as all ordinary shareholders
•
terms and conditions of employment
• purchases of goods and services
• expense reimbursement.
No interest was paid to or received from KMP.
Signed in accordance with a Resolution of the Directors made pursuant to s298(2) of the Corporations Act 2001.
On behalf of the Directors
David Ansell
Chair, People and Remuneration Committee
Dated in Sydney, 26 August 2021
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
87
BLACKMORES ANNUAL REPORT 2021
Auditor’s Independence Declaration
88
BLACKMORES ANNUAL REPORT 2021 Independent Auditor’s Report
89
BLACKMORES ANNUAL REPORT 2021 Independent Auditor’s Report
90
BLACKMORES ANNUAL REPORT 2021 Independent Auditor’s Report
91
BLACKMORES ANNUAL REPORT 2021 Independent Auditor’s Report
92
BLACKMORES ANNUAL REPORT 2021 Directors’ Declaration
The Directors declare that:
(a) In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable;
(b) In the Directors’ opinion, the attached Financial Statements are in compliance with International Financial Reporting Standards, as
stated in note 1.2 to the Financial Statements;
(c) In the Directors’ opinion, the attached Financial Statements and notes thereto are in accordance with the Corporations Act 2001,
including compliance with accounting standards and giving a true and fair view of the financial position and performance of the
Group; and
(d) The Directors have been given the declarations required by s.295A of the Corporations Act 2001.
At the date of this declaration, the Company is within the class of companies affected by ASIC Corporations Legislative Instrument
2016/785. The nature of the deed of cross guarantee is such that each company that is party to the deed guarantees to each creditor
payment in full of any debt in accordance with the deed of cross guarantee.
In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Class Order
applies, as detailed in note 6.2 to the Financial Statements will, as a group, be able to meet any obligations or liabilities to which they
are, or may become, subject by virtue of the deed of cross guarantee.
Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors
Anne Templeman-Jones
Chair
Dated in Sydney, 26 August 2021
93
BLACKMORES ANNUAL REPORT 2021 Financial
Statements
94
BLACKMORES ANNUAL REPORT 2021 Financial Statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
96
97
98
99
1
General Information
100
5
Our Financial Risk Management
130
5.1 Categories of financial instruments
5.2 Financial risk management objectives
5.3 Foreign currency risk management
5.4 Interest rate risk management
5.5 Credit risk management
5.6 Liquidity risk management
5.7 Fair value measurements
6
Our Group Structure
136
6.1 Parent entity information
6.2 Subsidiaries
6.3 Joint operations
7
Other
140
7.1 Related party and Key Management
Personnel disclosures
7.2 Remuneration of auditor
7.3 Contingent asset
7.4 Contingent liability
7.5 Events after the reporting period
7.6 Approval of financial statements
1.1 Reporting entity
1.2 Statement of compliance
1.3 Basis of preparation
1.4 Ongoing impact of COVID-19
1.5 Basis of consolidation
1.6 Application of new and revised Australian Accounting
Standards
1.7 Change in accounting policy
2
Our Operations
104
2.1 Revenue and other income
2.2 Segment information
2.3 Profit for the year
2.4 Other financial information
2.5 Working capital
2.6 Income taxes
2.7 Provisions
2.8 Remuneration structure
3
Our Investments
116
3.1 Property, plant and equipment
3.2 Goodwill and intangible assets
3.3 Commitments for expenditure
3.4 Business combinations
3.5 Discontinued operations and asset sales
3.6 Leases
4
Our Financing
126
4.1 Capital management
4.2 Financing facilities
4.3 Financing liabilities
4.4 Issued capital
4.5 Shareholder returns
1
Y
E
A
R
I
N
R
E
V
I
E
W
2
G
R
O
W
T
H
S
T
R
A
T
E
G
Y
3
C
O
M
P
A
N
Y
L
E
A
D
E
R
S
H
I
P
4
O
P
E
R
A
T
I
N
G
&
F
I
N
A
N
C
I
A
L
R
E
V
I
E
W
5
S
U
S
T
A
I
N
A
B
I
L
I
T
Y
&
C
O
M
M
U
N
I
T
Y
6
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
7
R
E
M
U
N
E
R
A
T
I
O
N
R
E
P
O
R
T
8
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
95
BLACKMORES ANNUAL REPORT 2021
Consolidated Statement of Profit or
Loss and other Comprehensive Income
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021
Revenue
Other income
Gain on sale of assets
Gain arising from bargain purchase
Revenue and other income
Raw materials and consumables used
Employee benefits expenses
Selling and marketing expenses
Depreciation and amortisation expenses
Facility and maintenance expenses
Professional and consulting expenses
Freight expenses
Licences and registrations
Cloud IT expenses
Impairment of financial assets
Impairment of non-financial assets
Loss on derecognition of receivables
Other expenses
Total expenses
Earnings before interest and tax
Interest revenue
Interest expense
Net interest expense
Profit before tax
Income tax expense
Profit after tax from continuing operations
NOTES
2.1
2.1
2.1
3.4
2.3
1.7
3.1, 3.2
2.6.1
2021
$’000
575,916
9,969
4,102
-
589,987
214,734
166,461
63,466
25,853
17,319
10,050
13,090
7,519
808
(268)
9,767
-
15,398
544,197
45,790
144
(3,672)
(3,528)
42,262
(13,398)
28,864
Restated2
2020
$’000
568,353
4,537
-
6,243
579,133
235,876
160,760
58,506
19,396
17,079
14,847
14,173
6,218
6,191
1,725
-
227
19,046
554,044
25,089
258
(6,171)
(5,913)
19,176
(6,123)
13,053
Profit after tax from discontinued operations
3.5
4,650
2,962
Profit for the year
Profit attributable to:
Owners of the parent1
Non-controlling interests
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign controlled entities
Net gain/(loss) on hedging instruments entered into for cash flow hedges (net of tax)
Other comprehensive expense
Other comprehensive expense for the period (net of tax) 1
Total comprehensive income for the period
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests
EARNINGS PER SHARE
From continuing operations
Basic earnings per share (cents)
Diluted earnings per share (cents)
From continuing and discontinued operations
Basic earnings per share (cents)
Diluted earnings per share (cents)
33,514
16,015
28,619
4,895
33,514
15,108
907
16,015
(3,282)
1,429
(11)
(1,864)
31,650
27,196
4,454
31,650
124.0
123.6
148.1
147.5
(503)
(905)
-
(1,408)
14,607
13,690
917
14,607
69.4
69.4
86.4
86.4
4.5.1
4.5.1
4.5.1
4.5.1
Notes to the Consolidated Financial Statements are included on pages 100-141.
1. The discontinued operation had no profit/(loss) or other comprehensive income/(expense) relating to non-controlling interests (note 3.5).
2. The year ended 30 June 2020 has been restated as a result of change in accounting policy detailed in Note 1.7.
96
BLACKMORES ANNUAL REPORT 2021
Consolidated Statement of Financial Position
AS AT 30 JUNE 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Receivables
Inventories
Tax assets
Other assets
Derivative assets
Assets held for sale
Total current assets
NON-CURRENT ASSETS
Property, plant and equipment
Right-of-use assets
Goodwill and intangible assets
Deferred tax assets
Other financial assets
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Tax liabilities
Lease liabilities
Provisions
Other liabilities
Liabilities associated with assets held for sale
Derivative liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Interest-bearing liabilities
Lease liabilities
Deferred tax liabilities
Provisions
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
CAPITAL AND RESERVES
Issued capital
Reserves
Retained earnings
Equity attributable to shareholders of Blackmores Limited
Equity attributable to non-controlling interests
Total equity
Notes to the Consolidated Financial Statements are included on pages 100-141.
1. The year ended 30 June 2020 has been restated as a result of change in accounting policy detailed in Note 1.7.
NOTES
2.5.1
2.5.3
2.5.4
3.1
3.6
3.2
2.6.2
2.5.5
3.6
2.7
4.3
3.6
2.6.2
2.7
4.4
2021
$’000
Restated1
2020
$’000
70,054
108,492
115,690
12,255
14,633
505
-
321,629
112,462
30,945
72,684
21,031
1,542
129
238,793
560,422
112,650
7,466
7,855
15,152
872
-
177
144,172
-
21,893
11,241
4,162
-
37,296
181,468
378,954
47,655
93,354
120,716
-
10,963
12
30,657
303,357
116,781
28,894
77,938
22,112
1,749
-
247,474
550,831
97,341
1,855
7,186
14,797
882
6,676
1,764
130,501
85,000
20,632
10,559
1,449
1,847
119,487
249,988
300,843
196,126
4,002
173,028
373,156
5,798
378,954
146,388
3,112
149,999
299,499
1,344
300,843
97
BLACKMORES ANNUAL REPORT 2021
Consolidated Statement of Cash Flows
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (net of promotional and other rebates)
Payments to suppliers and employees
Cash generated from operations
Interest and other costs of finance paid
Income taxes paid
Net cash flows from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of assets
Payments for business combinations
Payments for property, plant and equipment
Payments for intangible assets
Dividends received
Net cash flows from/(used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank borrowings
Repayments of bank borrowings
Proceeds from other borrowings
Repayments from other borrowings
Repayments of lease liabilities
Dividends paid
Proceeds from the issue of share capital (net of transaction costs)
Net cash flows from/(used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on the balance of cash held in foreign currencies
Cash and cash equivalents at the end of the year
Cash held by continuing operations
Cash held by discontinued operations
NOTES
20211
$’000
Restated2
20201
$’000
628,320
(547,930)
80,390
691,877
(622,248)
69,629
(3,674)
(18,262)
58,454
(6,172)
(7,620)
55,837
3.4
3.1
3.2
156
65
34,632
-
(11,018)
(7,421)
89
16,503
258
88
-
(56,512)
(11,681)
(5,463)
36
(73,274)
70,000
(155,000)
-
(1,335)
(9,424)
(4,171)
48,313
(51,617)
23,340
47,659
(945)
70,054
2021
$’000
70,054
-
70,054
953,000
(987,000)
7,478
(6,143)
(7,962)
(9,917)
90,991
40,447
23,010
24,516
133
47,659
2020
$’000
47,655
4
47,659
2.5.1
NOTES
3.5
Notes to the Consolidated Financial Statements are included on pages 100-141.
1. The above Consolidated Statement of Cash Flows includes both continuing and discontinued operations. Amounts relating to discontinued operations are disclosed in
note 3.5.
2. The year ended 30 June 2020 has been restated as a result of change in accounting policy detailed in Note 1.7.
98
BLACKMORES ANNUAL REPORT 2021
Consolidated Statement of Changes in Equity
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021
EQUITY-SETTLED
EMPLOYEE CASH FLOW
BENEFITS
RESERVE
FOREIGN
CURRENCY
HEDGING TRANSLATION
RESERVE
RESERVE
ATTRIBUTABLE
TO OWNERS OF
NON-
RETAINED BLACKMORES CONTROLLING
INTEREST
EARNINGS
LTD
TOTAL
EQUITY
$’000
$’000
$’000
$’000
$’000
$’000
$’000
ISSUED
CAPITAL
$’000
Balance as at 1 July 2019 (restated)1
53,039
67
(321)
4,617 147,100
204,502
427 204,929
Profit for the year
Other comprehensive income/(expense)
for the year (net of tax)
Total comprehensive income/(expense) for
the year
Dividends declared
Share-based payments expense
Issue of shares under Dividend Reinvestment
Plan (DRP)
Issue of shares under employee incentive plans
(net of tax)
Issue of shares under Capital Raise
(net of transaction costs)
Balance as at 30 June 2020 (restated)1
Balance at 1 July 2020 (restated)1
Profit for the year
Other comprehensive income/(expense)
for the year (net of tax)
Total comprehensive income/(expense)
for the period
Dividends declared
Share-based payments expense
Issue of shares under Dividend Reinvestment
Plan (DRP)
Issue of shares under employee incentive plans
(net of tax)
Issue of shares under Capital Raise
(net of transaction costs)
Balance as at 30 June 2021
-
-
-
-
-
-
-
-
-
-
-
- 15,108
15,108
907
16,015
-
(905)
(513)
-
(1,418)
10
(1,408)
-
(905)
(513)
15,108
13,690
917
14,607
-
234
2,291
-
67
(67)
-
-
-
-
- (12,209)
-
-
(12,209)
234
- (12,209)
234
-
-
-
-
2,291
-
2,291
-
-
-
-
90,991
146,388
-
234
-
(1,226)
-
-
4,104 149,999
90,991
299,499
- 90,991
1,344 300,843
146,388
-
234
-
(1,226)
-
4,104 149,999
28,619
-
299,499
28,619
1,344 300,843
4,895 33,514
-
1,429
(2,841)
(11)
(1,423)
(441)
(1,864)
-
1,429
(2,841)
28,608
27,196
4,454 31,650
-
2,319
1,408
-
17
(17)
-
-
-
-
- (5,579)
-
-
(5,579)
2,319
- (5,579)
2,319
-
-
-
-
1,408
-
1,408
-
-
-
-
48,313
196,126
-
2,536
-
203
-
-
1,263 173,028
48,313
373,156
- 48,313
5,798 378,954
Notes to the Consolidated Financial Statements are included on pages 100-141.
1. The year ended 30 June 2020 has been restated as a result of change in accounting policy detailed in Note 1.7.
99
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
1
General
Information
Blackmores Limited (the Company) is a public company listed on the Australian
Securities Exchange (trading under the symbol ‘BKL’), incorporated in Australia
and operating across Australia, New Zealand and Asia.
Blackmores Limited’s registered office and
its principal place of business is as follows:
20 Jubilee Avenue
Warriewood
NSW 2102
Telephone +61 2 9910 5000
The Group’s principal activity is the development,
manufacture, sales and marketing of health products
for humans and animals, including vitamins, and
herbal and mineral nutritional supplements.
1.1 REPORTING ENTITY
Blackmores Limited (the Company) is a company domiciled in Australia. The Consolidated Financial Report (Financial Report) of
Blackmores as at and for the twelve months ended 30 June 2021 comprises Blackmores and its subsidiaries (the Group).
The Consolidated Annual Financial Report of the Group as at and for the year ended 30 June 2021 is available upon request from the
registered office of Blackmores at 20 Jubilee Avenue, Warriewood, NSW 2102 or online at blackmores.com.au.
1.2 STATEMENT OF COMPLIANCE
These Financial Statements are General Purpose Financial Statements which have been prepared in accordance with the Corporations
Act 2001 and Accounting Standards and Interpretations and comply with other requirements of the law.
The Financial Statements comprise the Consolidated Financial Statements of the Group. For the purposes of preparing the
Consolidated Financial Statements, the Company is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the
Financial Statements and notes of the Company and the Group comply with International Financial Reporting Standards (IFRS).
The Financial Statements were authorised for issue by the Directors on 26 August 2021.
1.3 BASIS OF PREPARATION
The Consolidated Financial Statements have been prepared on the basis of historical cost, except for certain non-current assets and
financial instruments that are measured at revalued amounts or fair values, as explained in the following accounting policies. Historical
cost is generally based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian
dollars, unless otherwise noted.
The accounting policies and methods of computation in the preparation of the Consolidated Financial Statements are consistent with
those adopted and disclosed in the Consolidated Financial Statements for the year ended 30 June 2020, unless otherwise stated.
The Company is a company of the kind referred to in ASIC Corporations Instrument 2016/191, and in accordance with that Instrument
amounts in the Financial Statements are rounded off to the nearest thousand dollars, unless otherwise indicated.
100
BLACKMORES ANNUAL REPORT 2021
1.1 REPORTING ENTITY
1.2 STATEMENT OF COMPLIANCE
1.3 BASIS OF PREPARATION
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
1.3 BASIS OF PREPARATION (CONT.)
Accounting policies
Goods and services tax
Revenues, expenses, and assets are recognised excluding goods and services tax (GST), or equivalent. The net amount of
GST recoverable from, or payable to, the taxation authorities is included within receivables or payables. Operating cash
flows are included in the Consolidated Statement of Cash Flows inclusive of GST. GST in relation to investing of financing
activities which is recoverable from, or payable to, the taxation authorities is classified within operating cash flows.
Foreign Currencies
Individual Controlled Entities
The individual Financial Statements of each Group entity are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). For the purpose of the Consolidated Financial
Statements, the financial results and financial position of each Group entity are expressed in Australian Dollars ($), which is
the functional currency of the Company, and the presentation currency for the Consolidated Financial Statements.
Foreign Currency Transactions
In preparing the Financial Statements of the individual entities, transactions in currencies other than the entity’s functional
currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At the
end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at
that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates
prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical
cost in a foreign currency are not retranslated.
Foreign Operations
For the purpose of presenting Consolidated Financial Statements, the assets and liabilities of the Group’s foreign
operations are translated at exchange rates prevailing at the end of the reporting period. Income and expense items are
translated at the average exchange rates for the period, unless exchange rates fluctuate significantly, in which case the
exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other
comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate).
1.4 ONGOING IMPACT OF COVID-19
The full impact of the COVID-19 pandemic continues to evolve at the date of this report. Management is actively monitoring the global
situation and its impact on the Group's financial condition, liquidity, operations, suppliers, and industry. Given the daily evolution of
the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19
outbreak on its results of operations, financial condition or liquidity for future financial years.
Although the Group cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic
continues, it may have a material adverse effect on the Company's results of future operations, financial position and liquidity for
future financial years.
1.5 BASIS OF CONSOLIDATION
The Consolidated Financial Statements incorporate the Financial Statements of the Company and entities (including structured entities)
controlled by the Company and its subsidiaries. Control is achieved when the Company:
• has power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or
more of the three elements of control listed above. Where necessary, adjustments are made to the Financial Statements of subsidiaries
to bring their accounting policies into line with those used by other members of the Group. All intragroup assets and liabilities, equity,
income, expenses, and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
101
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
1
General
Information
1.6 APPLICATION OF NEW AND REVISED AUSTRALIAN ACCOUNTING STANDARDS
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board
(AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1 July 2020.
For the financial year the adoption of the new and amended Standards and Interpretations had no material impact on the financial
statements of the Group.
EFFECTIVE FOR ANNUAL REPORTING
PERIOD BEGINNING ON OR AFTER
Standards and Interpretations adopted
AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business
AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material
Conceptual Framework for Financial Reporting and AASB 2019-1 Amendments to Australian
Accounting Standards – References to the Conceptual Framework
AASB 2020-4 Amendments to Australian Accounting Standards – COVID-19-related
Rent Concessions
AASB 2021-3 Amendments to Australian Accounting Standards – COVID-19-related
Rent Concessions beyond 30 June 2021
1 January 2020
1 January 2020
1 January 2020
1 June 2020
1 April 2021
Certain Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective and have
not been adopted by the Group for the year ended 30 June 2021. These amendments are not expected to have a significant impact
on the financial statements of the Group on application.
EFFECTIVE FOR ANNUAL REPORTING
PERIOD BEGINNING ON OR AFTER
Standards and Interpretations in issue, not yet adopted
AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate Benchmark
Reform Phase 2
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements
2018-2020 and Other Amendments
AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting
Policies and Definition of Accounting Estimates
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities
as Current or Non-current
1 January 2021
1 January 2022
1 January 2023
1 January 2023
1.7 CHANGE IN ACCOUNTING POLICY
Implementation of IFRS Interpretations Committee (IFRIC) agenda decision and new accounting policy
During the year, the Group revised its accounting policy in relation to upfront configuration and customisation costs incurred in
implementing SaaS arrangements in response to the IFRIC agenda decision clarifying IFRIC's interpretation of how current accounting
standards apply to these types of arrangements. The new accounting policy is presented below.
Software-as-a-Service (SaaS) arrangements
SaaS arrangements are service contracts providing the Group with the right to access the cloud provider’s application software over the
contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider's application
software, are recognised as operating expenses when the services are received. These costs are recorded under Cloud IT expenses
within the Consolidated Statement of Profit or Loss and Other Comprehensive income.
Some of these costs incurred are for the development of software code that enhances or modifies, or creates additional capability to,
existing on-premise systems and meets the definition of and recognition criteria for an intangible asset. These costs are recognised as
intangible software assets and amortised over the useful life of the software on a straight-line basis. The useful lives of these assets are
reviewed at least at the end of each financial year, and any change accounted for prospectively as a change in accounting estimate.
102
BLACKMORES ANNUAL REPORT 2021
1.6 APPLICATION OF NEW AND REVISED AUSTRALIAN ACCOUNTING STANDARDS
1.7 CHANGE IN ACCOUNTING POLICY
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
1.7 CHANGE IN ACCOUNTING POLICY (CONT.)
Key judgements in applying the entity’s accounting policies
In applying the entity’s accounting policy, the Directors made the following key judgements that may have the most significant effect on
the amounts recognised in the Financial Statements.
Capitalisation of configuration and customisation costs in SaaS arrangements
Part of the customisation and configuration activities undertaken in implementing SaaS arrangements may entail the development of
software code that enhances or modifies, or creates additional capability to the existing on-premise software to enable it to connect
with the cloud-based software applications (referred to as bridging modules or Application Programming Interfaces).
Judgement was applied in determining whether the additional code meets the definition of and recognition criteria for an intangible
asset in AASB 138 Intangible Assets.
Determination whether configuration and customisation services are distinct from the SaaS access
Costs incurred to configure or customise the cloud provider's application software are recognised as operating expenses when the
services are received. In a contract where the cloud provider provides both the SaaS configuration and customisation, and the SaaS
access over the contract term, the Directors applied judgement to determine whether these services are distinct from each other or not,
and therefore, whether the configuration and customisation costs incurred are expensed as the software is configured or customised
(i.e. upfront), or over the SaaS contract term.
Specifically, where the configuration and customisation activities significantly modify or customise the cloud software, these activities
will not be distinct from the access to the cloud software over the contract term. Judgement has been applied to determine whether
the degree of customisation and modification of the cloud-based software would be significant.
The Group revised its accounting policy in relation to SaaS arrangements during the year resulting from the implementation of agenda
decisions issued by the IFRIC. Historical financial information has been restated to account for the impact of the change in accounting
policy, as follows:
30 June 2020
Consolidated Statement of Financial Position
Intangible assets
Deferred tax assets
Total assets
Retained earnings
Total equity
Consolidated Statement of Comprehensive Income
Cloud IT related expenses
Depreciation and amortisation
Profit before tax from continuing operations
Income tax expense
Profit after tax from continuing operations
Basic and Diluted Earnings per Share from Continuing Operations
Basic EPS (cents)
Diluted EPS (cents)
Consolidated Statement of Cash Flows
Payments to suppliers and employees
Net cash generated by operating activities
Payments for intangible assets
Net cash used in investing activities
1 July 2019
Consolidated Statement of Financial Position
Intangible assets
Deferred tax assets
Total assets
Retained earnings
Total equity
Previously
Reported
$'000
Adjustment
$'000
Restated
$’000
DR/(CR)
DR/(CR)
DR/(CR)
86,2181
19,628
556,6272
(155,795)
(306,639)
(8,280)
2,484
(5,796)
5,796
5,796
77,938
22,112
550,831
(149,999)
(300,843)
-
21,293
(23,470)
(7,411)
(16,059)
6,191
(1,897)
4,294
(1,288)
3,006
6,191
19,396
(19,176)
(6,123)
(13,053)
86.6
86.6
(17.2)
(17.2)
69.4
69.4
(6,191)
(6,191)
6,191
6,191
(622,248)
(622,248)
(5,463)
(5,463)
(616,057)
(616,057)
(11,654)
(11,654)
Restated
$'000
DR/(CR)
90,8571
17,728
505,188
(147,100)3
(204,929)
1. Includes the effect of software assets reclassified from Property, Plant, and Equipment from 1 July 2019, refer note 3.1 and 3.2.
2. GST Payable of $4.5m was reclassified to receivables to present a net GST receivable.
3. Includes $2.8m due to the effect of change in accounting policy
103
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2
Our
Operations
Blackmores is a leading natural healthcare company across the Asia Pacific
region. Blackmores’ operations include product innovation and formulation,
sourcing of the highest quality ingredients, quality programs to ensure
compliance with standards of goods manufacturing, and the marketing, sales
and distribution of products to customers and consumers.
2.1 REVENUE AND OTHER INCOME
Sales (net of discounts)
Promotional and other rebates
Revenue
Gain arising from disposal of assets
COVID-19 relief payments including JobKeeper and JSS (Singapore)
Other
Other income
NOTES
2021
$’000
2020
$’000
701,852
(125,936)
575,916
712,880
(144,527)
568,353
4,102
8,151
1,818
14,071
-
1,041
3,496
4,537
Gain arising from bargain purchase
Revenue and other income
3.4
-
589,987
6,243
579,133
Key estimates and judgements
Promotional and other rebates
Recognition of rebate accruals at balance date requires
management to exercise significant judgement with respect
to the amount of required accruals based on a combination
of actual and forecast customer sales volumes for the period
as well as growth and/or contributions by customers towards
promotional activities.
For the year ended 30 June 2021 the continuing operations
within the Group recognised promotional and other rebates
of$125.9m (2020: $144.5m) which have been charged against
sales revenue as disclosed in the Consolidated Statement of
Profit or Loss and Other Comprehensive Income.
Accounting policies
Revenue
Revenue is measured at the fair value of the consideration
received or receivable. Revenue is reduced for discounts,
estimated customer returns, and promotional and other rebates
which are considered variable consideration.
Sale of goods
Revenue from the sale of goods is recognised when the
performance obligation of the sale has been fulfilled and
control of the goods has been transferred to the customer.
Specifically, revenue from the sale of goods is recognised when
goods are delivered and legal title is passed.
Sale of goods on consignment
Revenue from the sale of goods on consignment is recognised
upon the sale of the goods by the consignee. Control of the
goods remains with Blackmores until such time as the goods
are sold by the consignee.
Accruals for promotional and other rebates as at 30 June 2021
are included within Other creditors and accruals in note 2.5.5.
Other income
Other income relates primarily to government grants and
income assistance including JobKeeper and the Singapore
Jobs Support Scheme (JSS). Blackmores recognised $10.1m of
other income in H1 of FY21 related to the JobKeeper program,
and in H2 of FY21 Blackmores elected to repay $2.4m of these
JobKeeper receipts which resulted in a net full year other income
impact of $7.7m (2020: $0.6m) from JobKeeper. The Singapore
Jobs Support Scheme also resulted in Other Income of $0.5m
(2020: $0.5m) in FY21.
Discounts, promotional and other rebates
The amount of revenue recognised for a transaction is net of
any discounts, promotional and other rebates, which includes
growth rebates and/or contributions to customers towards
promotional activities.
Government grants and assistance income
Government grants and assistance income, including
JobKeeper, are recognised when there is reasonable assurance
that the grant will be received and all attaching conditions will
be complied with. If conditions are attached to the grant which
must be satisfied before the Group is eligible to receive the
contribution, the recognition of the grant as other income will
be deferred until those conditions are satisfied.
104
BLACKMORES ANNUAL REPORT 2021
2.1 REVENUE AND OTHER INCOME
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2.2 SEGMENT INFORMATION
Following the restructure and transformation of the Group during 2020, the Group's reportable operating segments have changed and
therefore the comparative figures below have been restated. Information reported to the Group's Chief Operating Decision maker for
the purpose of resource allocation and assessment of segment reporting is now based on three key regions. The Group now reports
three revenue generating operating segments and a fourth corporate segment. The ANZ segment now includes the operations of the
BioCeuticals business and excludes the discontinued operations of Global Therapeutics. The reportable segments under AASB 8 are
now as follows:
ANZ
Comprising the Blackmores, PAW by
Blackmores, Impromy and BioCeuticals
practioner brands sold across Australia
and New Zealand, including the benefit
of sales made to customers which are
ultimately intended for Asian markets, and
manufacturing on behalf of third parties
within our Braeside facility.
CHINA
Comprising Blackmores brand in China (in
country) and China Export Division.
INTERNATIONAL
Comprising the Blackmores and PAW by
Blackmores brands in Thailand, Malaysia,
Singapore, Hong Kong (China), Taiwan
(China), Korea, Indonesia, India, Philippines,
Vietnam, Pakistan, and Kazakhstan.
CORPORATE COSTS
Those costs which cannot be reliably
allocated to a specific segment, or which
have been incurred for long-term growth
opportunities.
2.2.1 Revenue by segment
ANZ
International
China
2021
$’000
2020
$’000
280,643
163,691
131,582
575,916
326,293
139,127
102,933
568,353
1. The ANZ segment now includes the operations of the BioCeuticals business and excludes the discontinued operations of Global Therapeutics.
The Group had one customer who contributed more than 10% of the Group's revenue in the year (2020: one). Revenue earned from
this customer amounts to $96.7m (2020: $111.7m). This customer is reported in the ANZ segment.
2.2.2 EBIT by segment
ANZ
International
China
Corporate
1. The ANZ segment now includes the operations of the BioCeuticals business and excludes the discontinued operations of Global Therapeutics.
2.2.3 Revenue history by segment
326
281
S
N
O
I
L
L
I
M
$
350
300
250
200
150
100
50
0
164
139
103
132
2021
$’000
31,861
21,146
14,348
(21,565)
45,790
Restated
2020
$’000
37,340
14,333
244
(26,828)
25,089
2020
2021
1. ANZ has been adjusted to exclude Global Therapeutics, which is a discontinued operation.
ANZ 1
International
China
105
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2
Our
Operations
2.3 PROFIT FOR THE YEAR
PROFIT FOR THE YEAR HAS BEEN ARRIVED AT AFTER CHARGING:
NOTE
2021
$’000
2020
$’000
Employee benefits expense
Defined contribution plans
Redundancy payments
Other employee expenses
Share-based payments
Equity-settled share-based payments
Other:
Provision for stock obsolescence
Hedge ineffectiveness
2.4 OTHER FINANCIAL INFORMATION
Cost of goods sold
9,051
6,477
148,614
9,098
2,844
148,584
2,319
166,461
234
160,760
6,386
16,357
252
925
2021
$’000
2020
$’000
274,886
280,592
The Group’s internal measurement for the cost of goods sold (COGS) in the period differs from 'Raw Materials and Consumables
Used', in that it includes the allocation of direct labour and overheads relating to production at the Braeside facility and packing at the
Warriewood facility. In the statutory presentation in the Statement of Profit or Loss, which is presented by nature, these costs appear
within employee benefits, depreciation and amortisation, and other expense line items. Since the acquisition of Braeside and the
Group’s move into manufacturing, COGS provides additional useful information for the users of our Financial Statements to understand
the costs associated with our operations and how they compare to prior periods.
106
BLACKMORES ANNUAL REPORT 2021
2.3 PROFIT FOR THE YEAR
Cash and cash equivalents (as presented in the Consolidated Statement of Financial Position)
Cash and cash equivalents (included within assets held for sale)
2021
$’000
70,054
-
2020
$’000
47,655
4
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2.5 WORKING CAPITAL
2.5.1 Cash and cash equivalents
Included in cash and cash equivalents is restricted cash of $0.3m (2020: $nil) held by HSBC Bank Australia relating to cash collateral
held against an issued letter of credit.
Accounting policy
Cash and cash equivalents comprise cash-on-hand and cash-at-bank and call deposits with an original maturity of three months or less.
2.5.2 Reconciliation of profit after tax to net cash flows from operating activities
2.4 OTHER FINANCIAL INFORMATION
Profit after tax
Non-cash expenses
Depreciation and amortisation
Net (profit) on disposal of property plant and equipment
Impairment of non-financial assets
Gain on disposal
Non-cash income
Revaluation of investments
Investing cash flow items
Interest revenue
Dividend income
Other
(Increase)/decrease in assets
Receivables
Inventories
Other assets
Tax assets
Amounts advanced to related parties
Increase/(decrease) in liabilities
Trade and other payables
Tax liabilities
Provisions
Other liabilities
(Decrease)/increase in equity
Equity-settled share-based payments expense
Payment for on market share purchase
Net cash flows from operations
2021
$’000
Restated
2020
$’000
33,514
16,015
25,935
272
9,767
(8,898)
19,396
(88)
-
-
(235)
100
(156)
(89)
-
(258)
(36)
(88)
(15,138)
5,026
(3,592)
(11,175)
-
44,115
1,468
3,254
(4,020)
3,600
13,417
6,293
3,068
(1,857)
(32,484)
2,004
5,848
(3,156)
2,319
(17)
58,454
234
(67)
55,837
107
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2
Our
Operations
2.5 WORKING CAPITAL (CONT.)
2.5.3 Receivables
Trade receivables
Allowance for expected credit loss
Allowance for claims
Other debtors
Goods and services tax recoverable
Allowance for expected credit loss
Balance at the beginning of the financial year
Assets obtained through business combinations
Assets held for sale
(Decrease)/increase to allowance
Amounts recovered/(expensed as uncollectable)
Balance at the end of the financial year
2021
$’000
113,641
(3,436)
(4,473)
1,315
1,445
108,492
Restated
2020
$’000
98,355
(4,127)
(3,220)
2,091
255
93,354
4,127
-
-
(959)
268
3,436
3,230
19
(318)
2,921
(1,725)
4,127
The allowance for expected credit loss associated with the ageing of trade receivables at reporting date is detailed below.
Not past due
Past due 0 - 30 days
Past due 31 - 60 days
Past due 61 - 90 days
Past due > 90 days
Total
Accounting policy
Total
$’000
97,501
10,945
1,322
174
3,699
113,641
2021
Allowance
$’000
(49)
(20)
(19)
(28)
(3,320)
(3,436)
Total
$’000
81,214
11,887
955
563
3,736
98,355
2020
Allowance
$’000
(153)
(178)
(71)
(472)
(3,253)
(4,127)
Trade and other receivables are recognised initially at fair value and are subsequently measured at amortised cost using the
effective interest method, less an allowance for impairment. They generally have terms of up to 60 days.
An allowance for doubtful debts is recognised for expected credit losses for trade receivables. The expected credit losses are
estimated using a matrix based on the Group's historical credit loss experience, shared risk characteristics and days past due
adjusted for any material changes to the customers' future credit risk. The historical loss rate is then adjusted for current and
forward-looking macroeconomic information affecting the Group.
Refer to note 5.5 for more detail on how the Group manages credit risk.
Customers who wish to trade on credit terms are subject to extensive credit verification procedures. Receivables balances are
monitored closely and management takes appropriate steps if a receivable becomes overdue and/or impaired.
108
BLACKMORES ANNUAL REPORT 2021
2.5 WORKING CAPITAL (CONT.)
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2.5 WORKING CAPITAL (CONT.)
2.5.4 Inventories
Ingredients
Raw materials
Finished goods
2021
$’000
2020
$’000
24,100
26,819
64,771
115,690
26,449
27,711
66,556
120,716
The provision at balance date to cover inventory write-downs is $14.9m (2020: $16.4m) and is included in the balance above.
Key estimates and judgements
Management must exercise judgement regarding the provision for inventory write-downs. Management assesses slow
moving or obsolete inventory on a regular basis and a provision is raised to write-down inventory to its net realisable value.
Significant judgement is required in estimating the value of slow moving and potentially obsolete inventory as many items
have a limited shelf life. Furthermore, there is uncertainty over changes in consumer preferences and spending patterns,
which are primarily driven by wider trends in the wellness sector. This could have an impact on the level of inventory provision
required. In addition, there is a recoverability risk associated with new product launches regarding forecasting of demand,
including the possible change in demand between the time the inventory order is placed with the supplier and the ultimate
date of sale of the inventory to the customer.
Management have considered the implications of COVID-19 and extended holding periods of inventory which could impact
the value of slow moving and potentially obsolete inventory, as well as resulting in additional holding costs. As a result,
additional provisions have been recognised.
Accounting policy
Inventories are stated at the lower of cost and net realisable value. Costs, including an appropriate proportion of fixed and
variable overhead expenses, are assigned to inventory on hand by the method most appropriate to each class of inventory,
with the majority being valued on a first-in-first-out basis. Net realisable value represents the estimated selling price less all
estimated costs of completion and costs necessary to make the sale.
2.5.5 Trade and other payables
Trade payables1
Other creditors and accruals
2021
$’000
63,609
49,041
112,650
Restated
2020
$’000
46,414
50,927
97,341
1. The credit period on purchases ranges from 0 to 90 days from the end of the month of the invoice.
The Group has financial risk management policies in place to ensure all payables are paid within the credit time frame. The majority of small suppliers are paid
between 0 and 30 days.
Accounting policy
Refer to note 5 Our Financial Risk Management.
109
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2
Our
Operations
2.6 INCOME TAXES
2.6.1 Income tax recognised in profit or loss
Current tax
Current tax expense
Adjustments recognised in the current year adjustments in relation to the current tax of prior years
Deferred tax
Deferred tax expense relating to the origination and reversal of temporary differences
Adjustments recognised in the current year in relation to the deferred tax of prior years
Total income tax expense recognised in the current year relating to continuing operations
Income tax expense is attributable to:
Profit from continuing operations (as reported in the Consolidated Statement of Profit or Loss)
Profit from discontinued operations (refer note 3.5)
Total income tax expense
Reconciliation between tax expense and profit before income tax
Profit before income tax expense - continuing operations
Profit before income tax expense - discontinued operations (refer note 3.5)
Profit before income tax expense
Income tax expense using the Australian corporate tax rate of 30%
Tax effect of amounts which are not deductible / (taxable) in calculating taxable income
Non deductible expenses
Tax concessions
Impairment
Previously unrecognised tax losses utilised
Previously unrecognised capital losses utilised
Tax losses not recognised
Impact of differences in offshore tax rates
Other
Adjustments relating to prior years
Income tax expense
2021
$’000
Restated
2020
$’000
12,195
393
5,554
(551)
1,406
(26)
13,968
13,398
570
13,968
1,771
689
7,463
6,123
1,340
7,463
42,262
5,220
47,482
19,176
4,302
23,478
14,245
7,043
4,507
(136)
1,652
(974)
(2,050)
97
(3,267)
(473)
13,601
367
13,968
1,290
(335)
-
-
451
(346)
(778)
7,325
138
7,463
The tax rate used for the 2021 and 2020 reconciliations is the corporate tax rate of 30% payable by Australian corporate entities on
taxable profits under Australian tax law.
Accounting policy
Income tax payable represents the amount expected to be paid to taxation authorities on taxable income for the year, using
tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous
years.
110
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2.6 INCOME TAXES
2.6 INCOME TAXES (CONT.)
2.6.2 Deferred tax balances
Deferred tax balances arise from the following:
Temporary differences 2021
Property, plant and equipment
Prepayments and other
Provisions
Accruals
Cash flow hedges1
Foreign currency monetary items
Capitalised expenses
Indefinite life intangible assets
Carried forward tax losses2
Other
OPENING
BALANCE
$’000
704
45
10,904
4,132
916
(347)
780
(8,177)
3,184
(589)
11,552
TRANSFERRED TO
MOVEMENT DIFFERENCES ACQUISITIONS HELD FOR SALE
$’000
FILING
$’000
$’000
$’000
47
(118)
(257)
1,479
(660)
944
(100)
(37)
(2,281)
(811)
(1,794)
260
(114)
(89)
13
-
(93)
(1)
-
(74)
130
32
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
CLOSING
BALANCE
$’000
1,011
(187)
10,558
5,624
256
504
679
(8,214)
829
(1,270)
9,790
1. Cash flow hedges movement was recognised in other comprehensive income.
2. Unutilised tax losses were recognised as deferred tax assets during 2021. The recognition was dependent on future taxable profits of the relevant entities in excess of the
profits arising from the reversal of existing taxable temporary differences. The likelihood of sufficient future taxable profits is supported by historic increases in sales and
operating profits of the relevant entities and further projected increases prior to expiry of the losses.
Temporary differences 2020 (restated)
Property, plant and equipment
Prepayments and other
Provisions
Accruals
Cash flow hedges1
Foreign currency monetary items
Capitalised expenses
Indefinite life intangible assets
Carried forward tax losses2
Other
OPENING
BALANCE
$’000
809
(31)
7,077
3,867
427
(68)
(4)
(10,741)
2,804
1,778
5,918
TRANSFERRED TO
MOVEMENT DIFFERENCES ACQUISITIONS HELD FOR SALE
$’000
FILING
$’000
$’000
$’000
304
148
2,509
26
489
(425)
572
-
549
175
4,347
473
75
162
129
-
146
212
-
(169)
(339)
689
(885)
(147)
1,462
129
-
-
-
(1,864)
-
(2,203)
(3,508)
3
-
(306)
(19)
-
-
-
4,428
-
-
4,106
CLOSING
BALANCE
$’000
704
45
10,904
4,132
916
(347)
780
(8,177)
3,184
(589)
11,552
1. Cash flow hedges movement was recognised in other comprehensive income.
2. Unutilised tax losses were recognised as deferred tax assets during 2020. The recognition was dependent on future taxable profits of the relevant entities in excess of the
profits arising from the reversal of existing taxable temporary differences. The likelihood of sufficient future taxable profits is supported by historic increases in sales and
operating profits of the relevant entities and further projected increases prior to expiry of the losses.
Presented in the Consolidated Statement of Financial Position as follows:
Deferred tax asset
Deferred tax liability
2021
$’000
21,031
(11,241)
9,790
Restated
2020
$’000
22,111
(10,559)
11,552
111
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2
Our
Operations
2.6 INCOME TAXES (CONT.)
2.6.3 Unrecognised deferred tax assets
The following tax losses have not been brought to account as deferred tax assets:
Capital (no expiry date)
Revenue (expiry FY21: 2022-2030)
2021
$’000
110
480
590
Restated
2020
$’000
1,959
1,030
2,989
Accounting policy
Deferred tax arises when there are temporary differences between the carrying amount of assets and liabilities and the
corresponding tax base of those items. Deferred taxes are not recognised for temporary differences relating to:
• the initial recognition of assets and liabilities that is not a business combination affecting neither taxable income nor
accounting profit;
• the initial recognition of goodwill; and
•
investments in subsidiaries where the Group is able to control the timing of the reversal of the temporary difference, and it is
probable that they will not reverse in the foreseeable future.
Deferred tax assets are recognised to the extent that it is probable that future taxable amounts will be available against which the
assets can be utilised. During the year ended 30 June 2021 no tax loss was recognised as deferred tax assets. (In 2020, deferred
tax assets of $123 thousand $1.9m and $28 thousand were recognised with respect to losses incurred by Pat Health Limited,
Blackmores China and Blackmores Taiwan respectively). Deferred tax assets and liabilities are measured at the tax rates expected
to apply to the periods when the asset is realised or the liability is settled based on tax rates and tax laws that have been enacted
or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
2.7 PROVISIONS
Current
Employee benefits
Other
Non-current
Employee benefits
Other
112
2021
$’000
2020
$’000
14,694
458
15,152
1,935
2,227
4,162
13,906
891
14,797
1,449
-
1,449
BLACKMORES ANNUAL REPORT 2021
2.6 INCOME TAXES (CONT.)
2.7 PROVISIONS
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2.7 PROVISIONS (CONT.)
Accounting policy
Provisions are recognised when the Group has:
• a present obligation (legal or constructive) as a result of a past event, and
• it is probable that the Group will be required to settle the obligation, and
• when a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end
of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cashflows (where
the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the
receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable
can be measured reliably.
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave
when it is probable that settlement will be required and they are capable of being measured reliably.
Liabilities recognised in respect of short-term employee benefits are measured at their nominal values using the remuneration rate
expected to apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits are measured as the present value of the estimated future cash
outflows to be made by the Group.
2.8 REMUNERATION STRUCTURE
2.8.1 Key Management Personnel compensation
The aggregate compensation made to Key Management Personnel of the Group and Company is set out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payment
2021
$
2020
$
2,845,171
115,512
393,848
90,810
568,361
4,013,702
4,012,015
131,721
305,245
-
780
4,449,761
The compensation of each member of the Key Management Personnel of the Group and a discussion of the compensation policies
of the Company are detailed in the Directors' Report and Remuneration Report which accompany these Consolidated Financial
Statements.
2.8.2 Share-based payments
Accounting policy
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the
equity instrument at the grant date. Fair value is measured by use of the Black-Scholes model. The expected life used in the
model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and
behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis
over the vesting and holding lock periods, based on the Group’s estimate of equity instruments that will eventually vest with a
corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the
remaining vesting period, with corresponding adjustment to the equity-settled employee benefits reserve. For cash-settled share-
based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability. At the
end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured,
with any changes in fair value recognised in profit or loss for the year.
113
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2
Our
Operations
2.8 REMUNERATION STRUCTURE (CONT.)
Executive and Employee Share Option Plan
The Executive Performance Share Plan was approved at the Blackmores Annual General Meeting in October 2018. Participation is open
to Senior Executives as determined eligible by the Board. Under this plan, rights to acquire shares in the Company are granted annually
to eligible Senior Executives at no cost and vest provided specific performance hurdles are met.
The fair value of rights granted is calculated in accordance with AASB 2 ‘Share-based Payments’. Under the Company Executive
Performance Share Plan, during the year the Company granted entitlements to an allocation of ordinary shares provided specific
performance objectives and hurdles are met over the three-year period commencing 1 July 2020 to the year ending 30 June 2023.
If the performance and employment vesting conditions are met, the minimum number of rights that could be vested under the
entitlement is 18,948 (2020: 24,964) and the maximum number of rights that could be vested is 113,234 (2020: 107,148). Several grant
dates applied to these rights; as a result, the following fair values applied to the number of rights listed below.
Share rights series
Grants in the 2021 year
Granted - Short-Term Incentives
Granted - Long-Term Incentives
Grants in the 2020 year
Granted – Long-Term Incentives
Granted – Long-Term Incentives
NUMBER
OF RIGHTS
GRANT
DATE
EXPIRY
DATE
EXERCISE FAIR VALUE AT
GRANT DATE
PRICE
9,445
120,324
14-Aug-20
14-Dec-20
14-Aug-21
30-Jun-23
23,226
83,922
26-Jun-20
19-Dec-19
30-Jun-22
30-Jun-22
N/A
N/A
N/A
N/A
$73.54
$65.50
$75.29
$81.47
The following reconciles the share-based arrangements outstanding at the beginning and end of the year:
Balance at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Balance at the end of the year
Exercisable at the end of the year
2021
WEIGHTED
AVERAGE
OF RIGHTS EXERCISE PRICE
NUMBER
2020
WEIGHTED
AVERAGE
OF RIGHTS EXERCISE PRICE
NUMBER
146,509
129,769
(38,890)
-
-
237,388
237,388
N/A
102,783
107,148
(63,422)
-
-
146,509
146,509
N/A
Long-term share rights are vested at 30 June three years after grant and shares are subsequently issued in September of that year
following audit clearance of the Group's result and Board approval. Short-term incentives share rights vest twelve months after grant
and are subsequently issued in August 2021.
114
BLACKMORES ANNUAL REPORT 2021
2.8 REMUNERATION STRUCTURE (CONT.)
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
2.8 REMUNERATION STRUCTURE (CONT.)
The allocation is based on a percentage of the Senior Executives’ and Senior Managers’ base remuneration and the allocation varies
depending on the actual EPS growth delivered and ROIC for the relevant year as follows:
Percentage of participant’s base remuneration
2021 rate of EPS growth
Less than 10%
10%
10%-15%
15%
25%
Pro rata between Threshold and Target
2021 ROIC1
Less than 7%
7%
7%-9%
9%
11%
Pro rata between Threshold and Target
Percentage of participant’s base remuneration
2020 rate of EPS growth
Less than 5%
5%
5% to 10%
10%
Greater than 10%
2020 ROIC1
Less than 18.1%
18.1%
18.1% to 21%
Greater than 21%
Pro-rata between
Pro-rata between
CHIEF
EXECUTIVE
OFFICER
0%
25%
25% to 50%
50% (capped)
100% (capped)
CHIEF
EXECUTIVE
OFFICER
0%
25%
25% to 50%
50% (capped)
100% (capped)
CHIEF
EXECUTIVE
OFFICER2
0%
50%
50% to 100%
100%
100%
CHIEF
EXECUTIVE
OFFICER2
0%
50%
50% to 100%
100%
SENIOR
EXECUTIVES
0%
5%
5% to 10%
10% (capped)
40% (capped)
SENIOR
EXECUTIVES
0%
5%
5% to 10%
10% (capped)
40% (capped)
SENIOR
EXECUTIVES
0%
10%
10% to 40%
40%
40%
SENIOR
EXECUTIVES
0%
10%
10% to 40%
40%
OTHER SENIOR
COMPANY
MANAGEMENT
0%
2.50%
2.5% - 5%
5% (capped)
20% (capped)
OTHER SENIOR
COMPANY
MANAGEMENT
0%
2.50%
2.5% - 5%
5% (capped)
20% (capped)
OTHER SENIOR
COMPANY
MANAGEMENT
0%
5%
5% to 20%
20%
20%
OTHER SENIOR
COMPANY
MANAGEMENT
0%
5%
5% to 20%
20%
1. ROIC measure was introduced to the plan in FY20. Refer Remuneration Report for details regarding ROIC measures on page 75.
2. Chief Executive Officer refers to Alastair Symington.
Share-based conditions
The number of shares to be issued to a Senior Executive is determined by dividing the percentage amount of base remuneration
calculated in accordance with the above by:
• the weighted average price of the shares fourteen trading days prior to and fourteen trading days after Blackmores’ results in
respect of the prior financial year are announced to the ASX, less
• the amount of any final dividend per share declared as payable for the prior financial year.
Staff share acquisition plans
The Group has established two staff share acquisition plans.
The first plan is open to all eligible employees, including Senior
Executives, and enables them to purchase up to $1 thousand of
Blackmores shares tax free (subject to taxable income thresholds)
each year with money that would have otherwise been paid as
profit share. 231 shares were issued during the year ended
30 June 2021 (2020: 699 shares). In July 2021, 193 shares
(2020: nil shares) will be issued to employees, including Senior
Executives, for profit share entitlement that would otherwise have
been paid in cash during the year ended 30 June 2021.
The second plan is open to all eligible employees including
Senior Executives and enables them to purchase up to $10
thousand of Blackmores shares each year out of after-tax pay.
For every three purchased shares acquired using the employees’
contributions, subject to employment vesting conditions and
capping applied under the plan, the Company will provide one
extra share. The vesting date for the year ended 30 June 2021 is
31 July 2021. The maximum cost of the shares provided by the
Company for the 2021 financial year has been set at $0.5m.
The People and Remuneration Committee on behalf of the Board
undertook a review of the two staff share acquisition plans during
the year. As a result, both plans will be decommissioned post FY21.
Options plan
At 1 July 2020 there were no share options outstanding. Nil were
issued during the year ended 30 June 2021 (2020: nil) and as at
30 June 2021 (2020: nil) there were no unexercised share options.
The compensation of each member of the Key Management
Personnel of the Group and a discussion of the compensation
policies of the Company are detailed in the Remuneration Report
on pages 66-87.
115
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
3
Our
Investments
The Blackmores Group carries investments in property, plant and equipment,
goodwill, and intangible assets.
3.1 PROPERTY, PLANT AND EQUIPMENT
Year ended 30 June 2020 (restated)
Cost
Accumulated depreciation and impairment
Net carrying amount
Movement
Net carrying amount at the beginning of the financial year
Transfers to intangible assets2
Transferred to assets held for sale
Assets obtained through business combinations (refer to note 3.4)
Additions
Disposals and write-offs
Depreciation
Other (including foreign exchange movements)
Net carrying amount at the end of the financial year
FREEHOLD LAND
AND BUILDINGS
$’000
PLANT AND
LEASEHOLD
EQUIPMENT IMPROVEMENTS
$’000
$’000
TOTAL
$’000
77,877
(10,998)
66,879
88,933
(44,184)
44,749
8,068
(2,915)
5,153
174,878
(58,097)
116,781
39,827
-
-
28,000
393
-
(1,341)
-
66,879
38,074
(14,354)
(226)
21,475
7,602
(365)
(7,479)
22
44,749
2,853
-
(42)
-
3,686
(166)
(1,181)
3
5,153
80,754
(14,354)
(268)
49,475
11,681
(531)
(10,001)
25
116,781
Assets under construction included above
-
1,829
-
1,829
Year ended 30 June 2021
Cost
Accumulated depreciation and impairment
Net carrying amount
Movement
Net carrying amount at the beginning of the financial year
Additions
Disposals and write-offs
Depreciation
Other (including foreign exchange movements)
Net carrying amount at the end of the financial year
FREEHOLD LAND
AND BUILDINGS1
$’000
PLANT AND
LEASEHOLD
EQUIPMENT IMPROVEMENTS
$’000
$’000
TOTAL
$’000
78,070
(12,536)
65,534
93,760
(48,907)
44,853
8,442
(6,367)
2,075
180,272
(67,810)
112,462
66,879
195
-
(1,540)
-
65,534
44,749
9,975
(1,931)
(7,902)
(38)
44,853
5,153
848
(2,856)
(1,044)
(26)
2,075
116,781
11,018
(4,787)
(10,486)
(64)
112,462
Assets under construction included above
-
2,666
-
2,666
1. Freehold land and buildings includes $25.7m of non-depreciable land (2020: $25.7m).
2. As a result of the change in the Group's SaaS configuration and customisation accounting policy the Group has also reclassified costs originally capitalised to property,
plant and equipment to intangible assets to better reflect the nature of the expenditure.
116
BLACKMORES ANNUAL REPORT 2021
3.1 PROPERTY, PLANT AND EQUIPMENT
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
3.1 PROPERTY, PLANT AND EQUIPMENT (CONT.)
Critical judgements and estimates
Impairment
In the first half of the FY21 financial year, an impairment of $2.8m (pre-tax) was recognised with respect to leasehold
improvement assets at the Kippax Street office in Sydney. This impairment was booked as some of the space was deemed
surplus, in part due to changing work practices during the COVID-19 pandemic and also due to the fact that the transformation
program and its impact on headcount by site resulted in some under-utilised space in this office. Management will continue to
monitor utilisation of the site, and at the date of this report does not expect any further impairment.
Accounting policies
Carrying value
The Group’s property, plant and equipment are measured at cost less accumulated depreciation/amortisation and accumulated
impairment losses. The cost of property in the course of construction includes borrowings, holding and development costs until
the asset is complete.
Depreciation
Assets are depreciated on a straight-line basis over their estimated useful lives. Leasehold improvements are amortised over the
shorter of the remaining period of the individual leases or the estimated useful life of the improvement to the Group. Useful lives
are reassessed each reporting period.
Freehold land and property in the course of construction are not depreciated. The expected useful lives are as follows:
Buildings
Plant and equipment
Leasehold improvements
25-40 years
4-10 years
3-10 years
Proceeds from sale of assets
The gross proceeds from asset sales are recognised at the date that control transfers to the purchaser. The net gain/(loss) is
recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
Impairment
Property, plant and equipment are tested for impairment in accordance with the policy for impairment of non-financial assets
disclosed in note 3.2.
117
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
3
Our
Investments
3.2 GOODWILL AND INTANGIBLE ASSETS
Year ended 30 June 2020 (restated)
Cost
Accumulated amortisation and impairment
Net carrying amount
Movement
Net carrying amount at the beginning of the financial year
Transfers from property, plant and equipment
Transferred to assets held for sale
Assets obtained through business combinations
Additions
Amortisation
Impairment and disposals
Other (including foreign exchange movements)
Net carrying amount at the end of the financial year
Allocated to cash generating unit
ANZ
BioCeuticals
Braeside
Impromy
PAW
China
International
Year ended 30 June 2021
Cost
Accumulated amortisation and impairment
Net carrying amount
Movement
Net carrying amount at the beginning of the financial year
Additions
Amortisation
Impairment and disposals
Other (including foreign exchange movements)
Net carrying amount at the end of the financial year
Allocated to cash generating unit
ANZ
BioCeuticals
Braeside
Impromy
PAW
China
International
OTHER
INDEFINITE LIFE
INTANGIBLE
ASSETS1
$’000
BRANDS
$’000
OTHER
INTANGIBLE
ASSETS2
$’000
GOODWILL
$’000
TOTAL
$’000
26,903
-
26,903
16,041
-
16,041
6,925
-
6,925
43,721
(15,652)
28,069
93,590
(15,652)
77,938
34,500
-
(7,597)
-
-
-
-
-
26,903
-
20,849
-
5,039
1,015
-
-
26,903
30,244
-
(14,203)
-
-
-
-
-
16,041
-
14,410
-
1,631
-
-
-
16,041
8,385
-
(1,160)
-
-
-
(300)
-
6,925
2,472
264
-
-
1,189
3,000
-
6,925
3,374
14,354
-
7,202
5,463
(2,342)
-
18
28,069
16,592
636
7,202
2,441
-
-
1,198
28,069
76,503
14,354
(22,960)
7,202
5,463
(2,342)
(300)
18
77,938
19,064
36,159
7,202
9,111
2,204
3,000
1,198
77,938
26,903
(5,039)
21,864
16,041
(503)
15,538
7,698
(876)
6,822
48,500
(20,040)
28,460
99,142
(26,458)
72,684
26,903
-
-
(5,039)
-
21,864
-
20,849
-
-
1,015
-
-
21,864
16,041
-
(503)
-
-
15,538
-
14,410
-
1,128
-
-
-
15,538
6,925
773
(3)
(873)
-
6,822
2,089
544
-
-
1,189
3,000
-
6,822
28,069
6,648
(4,574)
(1,671)
(12)
28,460
17,393
636
7,202
2,441
-
-
788
28,460
77,938
7,421
(5,080)
(7,583)
(12)
72,684
19,482
36,439
7,202
3,569
2,204
3,000
788
72,684
1. Other indefinite life intangible assets relate to registrations, trademarks, and formulations.
2. Other intangible assets relate to software, patents, capitalised website costs, customer relationships, royalty streams and licenses.
118
BLACKMORES ANNUAL REPORT 2021
3.2 GOODWILL AND INTANGIBLE ASSETS
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
3.2 GOODWILL AND INTANGIBLE ASSETS (CONT.)
Critical judgements and estimates
The ranges of rates used in determining recoverable amounts are set out below:
Long-term growth rate
Post-tax discount rate (BioCeuticals, Impromy)
Post-tax discount rate (Braeside)
Post-tax discount rate (PAW)
2021
%
2.0
9.0
16.4
8.5
2020
%
2.0
5.6
16.4
5.6
The Group believes that any reasonably possible change in the key assumptions applied would not cause the carrying value of
assets to exceed their recoverable amount and result in a material impairment based on current economic conditions and Cash
Generating Unit (CGU) performance. The Group uses a range of post-tax discount rates for impairment assessments between
8.0% and 16.4%.
The recoverable amount of the CGU is determined on a value-in-use calculation. This calculation uses cash flow projections
based on the five-year plan approved by management and also uses a terminal value calculation. Budgeted sales growth is
expected to be in line with sales growth in the category. Budgeted margins are expected to remain consistent.
Evidence from both internal and external sources was considered to ensure no indicators of impairment existed.
The Braeside Manufacturing plant represents a separate CGU in accordance with AASB 136 Impairment of Assets. An
impairment indicator assessment was completed noting that there is no goodwill or indefinite life intangible assets held in the
Braeside CGU, and there were no indicators of impairment at 30 June 2021. No impairment test was required to be performed
at 30 June 2021 for the Braeside CGU.
Accounting policies
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the share of the net identifiable assets
acquired. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Intangible assets
Intangible assets are measured at cost less accumulated amortisation and impairment losses (if any).
Where acquired in a business combination, cost represents the fair value at the date of acquisition. Intangible assets with finite
lives are amortised on a straight-line basis over their estimated useful lives.
An internally-generated intangible asset arising from development is only recognised once the feasibility, intention, and ability
to complete the intangible asset can be demonstrated. Any expenditure on research activities is recognised as an expense
when incurred. Useful lives are reassessed each period. The useful lives of intangible assets have been assessed as follows:
Patents
Research partnerships
Customer relationships
20 years
14 years
10 years
Customer database and royalty streams
Software and capitalised website development
5 years
2-3 years
Impairment
Intangible assets are tested for impairment in accordance with the policy for impairment of non-financial assets disclosed in this note.
Impairment of non-financial assets
The carrying amounts of the Group’s property, plant and equipment (refer to note 3.1), goodwill, and intangible assets (refer to
note 3.2) are reviewed for impairment as follows:
Property, plant and equipment and finite life intangibles – when there is an indication that the asset may be impaired (assessed
at least each reporting date) or when there is an indication that a previously recognised impairment may have changed.
Goodwill and indefinite life intangibles – at least annually and when there is an indication that the asset may be impaired.
119
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
3
Our
Investments
3.2 GOODWILL AND INTANGIBLE ASSETS (CONT.)
Accounting policies (cont.)
Calculation of recoverable amount
In assessing impairment, the recoverable amount of the asset is estimated in order to determine the extent of the impairment
loss (if any).
The recoverable amount of an asset is the greater of its value in use and its fair value less costs to dispose (FVLCTD). For an
asset that does not generate largely independent cash inflows, the recoverable amount is assessed at the cash generating unit
(CGU) level, which is the smallest group of assets generating cash inflows independent of other CGUs that benefit from the use
of the respective asset. Goodwill is allocated to those CGUs or groups of CGUs that are expected to benefit from the business
combination in which the goodwill arose, identified according to operating segments and grouped at the lowest levels for which
goodwill is monitored for internal management purposes.
An impairment loss is recognised whenever the carrying amount of an asset or its CGU exceeds its recoverable amount.
Impairment losses are recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. Impairment
losses recognised in respect of a CGU will be allocated first to reduce the carrying amount of any goodwill allocated to the CGU
and then to reduce the carrying amount of other assets in the CGU on a pro-rata basis to their carrying amounts.
Reversal of an impairment
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has
been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
3.3 COMMITMENTS FOR EXPENDITURE
Catalent business combination1
Not longer than 1 year
IT infrastructure and software
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Capital projects
Not longer than 1 year
Promotional services
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Sponsorship
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Research and development contracts
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
2021
$’000
2020
$’000
-
465
6,397
7,028
13,425
3,420
2,851
6,271
5,800
5,451
-
560
560
-
27
27
1,447
1,554
-
3,001
1,067
360
1,427
48
10
58
1,599
1,417
31
3,047
1. Blackmores Limited completed the acquisition of Catalent Australia on 25 October 2019.
Lease commited to but not yet commenced
Blackmores Group has a premises lease contract that is committed to but has not yet commenced as at 30 June 2021. The future lease
payments for this non-cancellable lease contract is $130 within one year, and $720 within five years.
120
BLACKMORES ANNUAL REPORT 2021
3.2 GOODWILL AND INTANGIBLE ASSETS (CONT.)
3.3 COMMITMENTS FOR EXPENDITURE
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
3.4 BUSINESS COMBINATIONS
Acquisition of Catalent Australia
On 25 October 2019, Blackmores Limited confirmed settlement on the acquisition of Catalent Australia’s manufacturing facility in
Braeside Victoria.
The acquisition represented Blackmores’ expansion into soft-gel and tablet manufacturing supporting the Group's strong focus on
growth and product innovation, in addition to protecting the Group's portfolio of brands.
At 30 June 2021, the accounting for the business acquisition is final.
Consideration Transferred
Assets acquired at the date of acquisition
Current assets
Cash at bank
Receivables
Inventories
Other assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Total assets
Current liabilities
Trade and other payables
Provisions
Non-current liabilities
Deferred tax liabilities
Provisions
Total liabilities
Identifiable net assets
Gain arising from bargain purchase
Consideration paid in cash
Less: fair value of the identifiable net assets acquired
Gain arising from bargain purchase (12 months to 30 June 2020)
2020
$’000
56,977
2,533
11,235
16,024
495
30,287
49,475
7,202
1,442
58,119
88,406
15,345
4,603
19,948
4,951
287
5,238
25,186
63,220
56,977
63,220
6,243
Impact of acquisition on results of the Group
The impact of the acquisition on the results of the Group for the prior year ended 30 June 2020 included a recognition of a gain
resulting from the bargain purchase of $6.2m in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
This bargain gain resulted primarily from increases in property values between contract execution in April 2018 to settlement in late
October 2019. The production variances in the prior year were adverse to the amount of $9.6m and also impacted the prior years'
Consolidated Statement of Profit or Loss and Other Comprehensive Income. These variances occurred due to under-utilisation of
capacity and adverse product mix. While Blackmores has owned the facility for the full twelve months to 30 June 2021 (compared
to only eight months in the prior year), any impact of annualising the ownership of the facility has been more than offset by $10.9m
in savings from the LVP (Leading Value Position) supply savings program. During FY21, the site had a full year of use of its new Solid
Dose North high-efficiency solid tableting lines, and procurement savings and process efficiencies at the site (as well as higher volume
and utilisation) have begun to improve the unit cost structure of bulk tablets produced at this site. The Braeside site is of strategic
importance to the group and it holds vital product registrations for Blackmores’ products in our Asian markets.
121
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
3
Our
Investments
3.5 DISCONTINUED OPERATIONS AND ASSET SALES
3.5.1 Discontinued operations
At the half-year ended 31 December 2019, Blackmores announced the divestment of non-core brands as part of its new strategic
focus. As a result, the Board approved to divest of the Global Therapeutics business (which included the Fusion Health and Botanical
Orientals brands) and the IsoWhey and Wheyless brands.
On 27 October 2020, Blackmores Group announced the sale of the Global Therapeutics business to McPhersons Limited for $27.0m
for brands, product formulas, and customer agreements. In addition a payment of $2.2m was received for other tangible assets
including inventory and fixed assets and other net working capital adjustments.
The disposal was completed on 30 November 2020, on which date control of Global Therapeutics passed to the acquirer. Details of
the assets and liabilities disposed of, and the calculation of the gain or loss on disposal, are presented below.
Global Therapeutics
Consideration received in cash
Payment for net working capital in advance
Total consideration received
Net working capital adjustments
Transaction costs
Total consideration net of transaction costs
Less fair value of the assets disposed
Current assets
Receivables
Inventories
Other current assets
Non-current assets
Property, plant and equipment
Intangible assets
Other non-current assets
Total assets
Current liabilities
Provisions
Non-current liabilities
Deferred tax liabilities
Provisions
Total liabilities
Identifiable net assets disposed
Gain arising on disposal
27,000
2,170
29,170
(1,828)
(1,002)
26,340
1,990
2,896
146
5,032
71
22,057
26
22,154
27,186
342
342
4,211
80
4,291
4,633
22,553
3,787
The Global Therapeutics business is presented separately in the Consolidated Statement of Profit or Loss and Other Comprehensive
Income as a discontinued operation.
122
BLACKMORES ANNUAL REPORT 2021
3.5 DISCONTINUED OPERATIONS AND ASSET SALES
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
3.5 DISCONTINUED OPERATIONS AND ASSET SALES (CONT.)
The profit for the Global Therapeutics business for the reporting period is set out below including comparative information.
Revenue
Other income
Revenue and other income
Total expenses
Earnings before interest and tax
Net interest income/(expense)
Profit before tax
Income tax expense
Profit after tax before gain on sale of discontinued operations
Gain on sale of discontinued operations
Profit after tax from discontinued operations
30 JUNE 2021
$'000
30 JUNE 2020
$’000
7,160
(13)
7,147
5,724
1,423
10
1,433
(570)
863
3,787
4,650
19,190
(83)
19,107
14,803
4,304
(2)
4,302
(1,340)
2,962
-
2,962
There is no tax on the capital gain on the sale of Global Therapeutics due to the recoupment of carried forward tax losses.
Statement of Cash Flows
Cashflow from operating activities
Cashflows from investing activities
Cashflow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
3.5.2 Asset sales
30 JUNE 2021
$'000
30 JUNE 2020
$’000
2,499
(2,457)
(46)
(4)
4
-
4,856
(4,746)
(113)
(3)
7
4
IsoWhey and Wheyless brands
On 14 August 2020, Blackmores Group entered into an asset sale agreement to sell the IsoWhey and Wheyless brands. The sale price of
$1.1m covered the IsoWhey/Wheyless brands, product formulas, customer agreements, and digital assets. Additional payments of $1.3m
were received for the stock that transferred with the sale at cost. No people transferred with the sale, which completed in September 2020.
Sale of investment property
On 25 November 2020, Blackmores entered into a contract for sale of land for the investment property at 15 Jubilee Avenue
Warriewood NSW 2102. The land had a book value of $2.2m and the sale of $6.2m plus GST completed in May 2021.
3.6 LEASES
Right-of-use assets
Year-ended 30 June 2021
Cost
Accumulated depreciation
Net carrying amount
Movement
Net carrying amount at the beginning of the financial year
Additions
Depreciation
Disposals
Other (including foreign exchange movements)
Net carrying amount at the end of the financial year
Lease liabilities
Current
Non-current
Total lease liabilities
PROPERTY
$’000
PLANT AND
EQUIPMENT
$’000
FLEET
$’000
TOTAL
$’000
39,331
(12,444)
26,887
25,882
10,454
(8,125)
(1,044)
(280)
26,887
4,715
(1,591)
3,124
2,170
2,071
(1,119)
(23)
26
3,125
1,645
(711)
934
45,691
(14,746)
30,945
842
1,111
(642)
(353)
(25)
933
28,894
13,636
(9,886)
(1,420)
(279)
30,945
6,337
19,323
25,660
1,009
2,148
3,157
509
422
931
7,855
21,893
29,748
123
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
3
Our
Investments
3.6 LEASES (CONT.)
Amounts recognised in profit or loss
Depreciation expense on right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term or low value assets
2021
$’000
CONTINUED OPERATIONS
2021
$’000
DISCONTINUED OPERATIONS
9,886
1,130
105
35
1
67
Cash flow
The cash outflow during the year for leases relating to continuing operations was $9.4m. The cash outflow relating to discontinued
operations $32 thousand.
The future cash outflows relating to leases that have not yet commenced are disclosed in Note 3.3.
Year 1
Year 2
Year 3
Year 4
Year 5
Onwards
Total
MATURITY ANALYSIS $’000
Continuing operations
7,855
7,135
6,269
4,026
3,674
789
29,748
Right-of-use assets
Year-ended 30 June 2020
Cost
Accumulated depreciation
Net carrying amount
Movement
Net carrying amount at the beginning of the financial year
Assets obtained through business combinations
Additions
Depreciation
Other (including foreign exchange movements)
Net carrying amount at the end of the financial year
Lease liabilities
Current
Non-current
Total Lease liabilities
Amounts recognised in profit or loss
Depreciation expense on right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term or low value assets
PROPERTY
$’000
PLANT AND
EQUIPMENT
$’000
FLEET
$’000
TOTAL
$’000
31,557
(5,675)
25,882
2,647
(477)
2,170
1,356
(514)
842
35,560
(6,666)
28,894
-
-
31,585
(5,699)
(4)
25,882
6,031
18,767
24,798
-
2,398
248
(476)
-
2,170
717
1,526
2,243
-
-
1,424
(577)
(5)
842
438
339
777
-
2,398
33,257
(6,752)
(9)
28,894
7,186
20,632
27,818
2020
$’000
CONTINUING OPERATIONS
2020
$’000
DISCONTINUED OPERATIONS
6,752
531
1,786
81
2
10
Cash flow
The cash outflow during the year for leases relating to continuing operations was $8.4m. The cash outflow relating to discontinued
operations was $0.1m.
124
BLACKMORES ANNUAL REPORT 2021
3.6 LEASES (CONT.)
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
3.6 LEASES (CONT.)
MATURITY ANALYSIS $’000
Continuing operations
Discontinued operations
Year 1
7186
25
Year 2
5,210
11
Year 3
5,188
6
Year 4
Year 5
Onwards
Total
4,700
-
2,641
-
2,893
-
27,818
42
The Group has applied the practical expedient retrospectively to all rent concessions that meet the conditions in AASB 16.46B. As
noted in Note 1.6, the Group has chosen to apply AASB 2021-3 Amendments to Australian Accounting Standards – COVID-19-Related
Rent Concessions beyond 30 June 2021 before its mandatory application date and accordingly, the practical expedient has been
applied to additional rent concessions negotiated during the financial year which meet the conditions in AASB 16.48B.
The Group has benefited from a concessional reduction of lease payments on some of the property leases across the Group. The
waiver of lease payments of $25 thousand (2020: $nil) has been accounted for as a negative variable lease payment in profit or loss.
The Group has derecognised the part of the lease liability that has been extinguished by the forgiveness of lease payments, consistent
with the requirements of paragraph 3.3.1 of AASB 9 Financial Instruments.
Accounting policies
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of
low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right
to use the underlying assets.
i) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for
any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of
the assets including plant, equipment and motor vehicles. If ownership of the leased asset transfers to the Group at the end of
the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of
the asset.
The estimated useful life used in the calculation of depreciation on ROU assets is aligned to the term of the leases (2 to 6 years).
ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments)
less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be
paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group
exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to
produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement
date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount
of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the
carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease
payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments)
or a change in the assessment of an option to purchase the underlying asset.
iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e. those
leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value.
Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the
lease term.
125
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
4
Our
Financing
The Group manages its capital to ensure that entities in the Group will be able
to continue as a going concern while maximising the return to shareholders
through optimisation of the debt and equity balance.
4.1 CAPITAL MANAGEMENT
The capital structure of the Group consists of equity as well as available loan facilities, with the latter remaining unutilised at 30 June 2021.
The Group operates globally, primarily through the Company and subsidiary companies established in the markets in which the Group
trades. None of the entities within the Group is subject to externally imposed capital requirements with the exception of any regulatory
requirements which are applicable in the countries where the Group operates.
Operating cash flows are used to maintain and expand the Group’s production, distribution, and Information Technology systems
as well as making routine outflows of tax, dividends, and repayment of maturing debt if drawn. The Group’s policy is to raise capital
centrally, using a variety of capital market issues and borrowing facilities, to meet anticipated funding requirements.
The Group’s Audit Committee reviews the capital structure of the group on a semi-annual basis. Based upon recommendations of the
Committee, the Group will balance its overall capital structure through the payment of dividends. The Committee considers new share
issues and buy-backs, in conjunction with the issue of new debt or redemption of existing debt with third parties and if appropriate,
related parties.
As at 30 June 2021, $16.1m of cash sits in a jurisdiction where although it can be utilised and invested by the local business, its
remittance to the parent is temporarily restricted due to local regulations. Blackmores expects it will be able to remit the majority of this
cash to the parent in future.
Gearing ratio
The gearing ratio at the end of the financial year was as follows:
Debt
Cash and cash equivalents
Net (cash)/debt
Equity
Total capital
Gearing ratio
(Net debt as a % of total capital)
2021
$’000
-
(70,054)
(70,054)
373,156
303,102
Restated
2020
$’000
85,000
(47,655)
37,345
299,499
336,844
(23.1%)
11.1%
Receivables purchase agreement
In FY20, the Group entered into an uncommitted non-recourse receivables purchase agreement to sell certain domestic
receivables, from time to time, to an unrelated entity in exchange for cash. The receivables are derecognised where the risks and
rewards of the receivables have been transferred. Receivables totalling $2.3m were sold under this arrangement. No receivables
were sold during the year ended 30 June 2021.
4.2 FINANCING FACILITIES
Unsecured revolving letter of credit facility under Common Terms Deed
Unsecured revolving term debt facility under Common Terms Deed
Unrestricted access was available to the Group at the reporting date to the following unused lines of credit:
Bank loan facilities
Bank overdrafts
126
2021
$’000
9,579
-
9,579
2020
$’000
10,879
85,000
95,879
290,421
5,000
295,421
204,121
5,000
209,121
BLACKMORES ANNUAL REPORT 2021
4.1 CAPITAL MANAGEMENT
4.2 FINANCING FACILITIES
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
4.2 FINANCING FACILITIES (CONT.)
Debt facilities
Total debt facilities as
at 30 June 2021 are
as follows:
Undrawn facilities
$290 million
3%
Drawn facilities
$10 million
Maturity profile
The maturity profile
of existing bank loan
facilities by financial
year is as follows:
180
160
140
120
100
80
60
40
20
0
S
N
O
I
L
L
I
M
$
S
U
A
97%
170
70
60
2022
2023
2024
Facility expires by Financial Year
Bank loan facilities may be drawn at any time, subject to the terms of the lending agreements. The above facilities are subject
to certain financial covenants and undertakings. No covenants have been breached during the financial year (2020: nil).
4.3 FINANCING LIABILITIES
Current
Lease liabilities
Non-current
Lease liabilities
Interest-bearing liabilities
Reconciliation
Balance at the start of the year
Non-cash movements
Principal repayments
Interest repayments
Balance at the end of the year
2021
$’000
2020
$’000
7,855
7,186
21,893
-
20,632
85,000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
Interest-bearing liabilities
Lease liabilities
85,000
-
(85,000)
-
-
119,000
-
(34,000)
-
85,000
27,818
12,485
(9,424)
(1,130)
29,748
-
36,311
(7,962)
(531)
27,818
127
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
4
Our
Financing
4.3 FINANCING LIABILITIES (CONT.)
Accounting policies
All bank loans are initially recognised at the fair value of the consideration received, less directly attributable transaction costs.
After initial recognition, interest-bearing loans are subsequently measured at amortised cost, using the effective interest method,
with interest expense recognised on an effective yield basis.
4.4 ISSUED CAPITAL
2021
ISSUED
CAPITAL
$’000
2020
NUMBER
2020
ISSUED
CAPITAL
$’000
2021
NUMBER
Fully paid ordinary shares
Balance at beginning of financial year
Issue of shares under Executive and Employee Share Plans (note 2.8)
Issue of shares under Dividend Reinvestment Plan (DRP)
Issue of shares under Capital Raise
Transaction costs
Balance at end of financial year
18,677,903
231
17,573
669,812
-
19,365,519
146,388
17
1,408
48,563
(250)
196,126
17,361,515
14,345
33,077
1,268,966
-
18,677,903
53,039
67
2,291
92,000
(1,009)
146,388
Fully paid ordinary shares carry one vote per share and carry a right to dividends.
Employee share plans
Further details of the Group’s Executive and employee share plans are contained in note 2.8 to the Consolidated Financial Statements.
4.5 SHAREHOLDER RETURNS
4.5.1 Earnings per share
From continuing operations
Profit attributable to shareholders of Blackmores Limited
WANOS1 used in the calculation of basic EPS2
WANOS1 used in the calculation of diluted EPS2
Basic EPS
Diluted EPS
From continuing and discontinued operations
Profit attributable to shareholders of Blackmores Limited
WANOS1 used in the calculation of basic EPS2
WANOS1 used in the calculation of diluted EPS2
Basic EPS
Diluted EPS
2021
$’000
Restated
2020
$’000
23,969
12,146
Number
19,327,760
19,397,822
Number
17,494,831
17,494,831
Cents
124.0
123.6
Cents
69.4
69.4
28,619
15,108
Number
19,327,760
19,397,822
148.1
147.5
Number
17,494,831
17,494,831
86.4
86.4
1. Weighted average number of ordinary shares.
2. The variance in the WANOS used in the calculation of the basic EPS and the diluted EPS is attributable to employee share plans.
128
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
4.5 SHAREHOLDER RETURNS (CONT.)
4.5.2 Dividends
Recognised amounts
Fully paid ordinary shares
Final dividend for year ended 30 June 2020 (2020: 30 June 2019)
– fully franked at 30% corporate tax rate
Interim dividend for year ended 30 June 2021 (2020: 30 June 2020)
– fully franked at 30% corporate tax rate
Unrecognised amounts
Fully paid ordinary shares
Final dividend for year ended 30 June 2021 (2020: 30 June 2020)
– fully franked at 30% corporate tax rate
4.5.3 Franking account balance
Adjusted franking account balance
2021
CENTS PER
SHARE
TOTAL
$’000
2020
CENTS PER
SHARE
TOTAL
$’000
70
12,209
29
29
5,579
5,579
-
70
-
12,209
42
8,134
2021
$’000
2020
$’000
32,500
31,386
129
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
5
Our Financial Risk
Management
5.1 CATEGORIES OF FINANCIAL INSTRUMENTS
CLASSIFICATION
Amortised cost
Amortised cost
Fair value through profit or loss
Fair value through profit or loss
Fair value through profit or loss
Amortised cost
Amortised cost
Amortised cost
2021
$’000
Restated
2020
$’000
70,054
108,492
1,542
505
177
-
112,650
29,748
47,655
93,354
1,382
12
1,764
85,000
97,341
27,818
NOTE
2.5.1
2.5.3
5.7
5.7
5.7
4.3
2.5.5
3.6
Financial assets
Cash and cash equivalents
Receivables
Unquoted equity investments
Derivative financial assets
Financial liabilities
Derivative financial liabilities
Borrowings
Trade payables
Lease liabilities
Accounting policies
Financial instruments
Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of the
instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate,
on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately in profit or loss.
5.1.1 Financial assets
The Group classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income, or profit or loss); and
• those to be measured at amortised cost.
The classification depends on the Group’s business model for managing financial assets and the contractual terms of the cash
flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income.
For investments in debt instruments, this will depend on the business model in which the investment is held.
Loans and receivables
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and
interest are measured at amortised cost.
Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest income is
recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be
immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts
(including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.
Impairment of financial assets
In relation to the impairment of financial assets, AASB 9 requires the use of an expected credit loss model. The expected credit
loss model requires the Group to account for expected credit losses and changes in those expected credit losses at each
reporting date.
The Group measures the loss allowance for trade receivables using the simplified approach under AASB 9 at an amount equal to
the lifetime expected credit losses. A lifetime expected credit loss allowance has been calculated for trade receivables through
the use of an expected credit loss model. The model is based on the Group's historical credit loss experience, shared credit risk
characteristics and days past due adjusted for any material expected changes to the customers' future credit risk.
The carrying amount of trade receivables is reduced through the use of an allowance account. When a trade receivable is
considered uncollectable, it is written off against the allowance account.
130
BLACKMORES ANNUAL REPORT 2021
5.1 CATEGORIES OF FINANCIAL INSTRUMENTS
5.1.2 Financial liabilities and equity instruments
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
5.1 CATEGORIES OF FINANCIAL INSTRUMENTS (CONT.)
Derecognition of financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
Classification as debt or equity
Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual
arrangement.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
Financial liabilities
Non-derivative financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs and subsequently
measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The
effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over
the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected
life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled, or have
expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable is recognised in profit or loss.
Derivative financial instruments
The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange
rate risk, including forward foreign exchange contracts and interest rate swaps. Further details of derivative financial instruments
are disclosed in notes 5.3 and 5.4 to the Consolidated Financial Statements. Derivatives are initially recognised at fair value on the
date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting
gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in
which event, the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
Hedge accounting
The Group designates certain hedging instruments, which include derivatives and non-derivatives in respect of foreign currency
risks, as either fair value hedges, cash flow hedges or hedges of net investments in foreign operations. Hedges of foreign exchange
risk on firm commitments are accounted for as cash flow hedges. At the inception of the hedge relationship the entity documents
the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy
for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group
documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item
attributable to the hedged risk. Notes 5.3 and 5.4 sets out details of the fair values of the derivative instruments used for hedging
purposes. Movements in the hedge reserve in equity are also detailed in the Consolidated Statement of Changes in Equity.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised
in other comprehensive income and accumulated under the heading of cash flow hedging reserve. The gain or loss relating to
the ineffective portion is recognised immediately in profit or loss, and is included in the ‘other gains and losses’ line item. Amounts
previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods
when the hedged item is recognised in profit or loss, in the same line of the Consolidated Statement of Profit or Loss and Other
Comprehensive Income as the recognised hedged item. However, when the hedged forecast transaction results in the recognition
of a non-financial asset or a non-financial liability, the gains and losses previously recognised in other comprehensive income and
accumulated in equity are transferred from equity and included in the initial measurement of the cost of the non-financial asset
or non-financial liability. Hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedging
instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss
recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised when the
forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain
or loss accumulated in equity is recognised immediately in profit or loss.
5.2 FINANCIAL RISK MANAGEMENT OBJECTIVES
The Group’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial
markets, and monitors and manages the financial risks relating to the operations of the Group. The Group seeks to minimise the
effects of currency risk and interest rate risks by using derivative financial instruments to partially or fully hedge these risk exposures.
The use of financial derivatives is governed by the Group’s policies. As at 30 June 2021 the relevant Treasury Policy is in place.
Blackmores is in the process of renewing this policy with its Board of Directors to recognise, amongst other things, the increasingly
large role that its Asian subsidiaries will play in its future growth and profitability projections. The Group does not enter into or trade
financial instruments including derivative financial instruments, for speculative purposes.
131
BLACKMORES ANNUAL REPORT 2021
1
1
GENERAL
GENERAL
INFORMATION
INFORMATION
2
2
OUR
OUR
OPERATIONS
OPERATIONS
3
3
OUR
OUR
INVESTMENTS
INVESTMENTS
4
4
OUR
OUR
FINANCING
FINANCING
5
5
OUR FINANCIAL
OUR FINANCIAL
RISK MANAGEMENT
RISK MANAGEMENT
6
6
OUR GROUP
OUR GROUP
STRUCTURE
STRUCTURE
7
7
OTHER
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
5
5
Our Financial Risk
Management
5.3 FOREIGN CURRENCY RISK MANAGEMENT
Sources of risk
The Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange
rate fluctuations arise.
Risk management
Exchange rate exposures are managed within approved policy parameters utilising forward exchange contracts.
Blackmores undertakes transactions denominated in foreign currencies which exposes it to foreign exchange rate risk. The currencies
which Blackmores has a material exposure to include the United States Dollar (USD), Euro (EUR), New Zealand Dollar (NZD) and Canadian
Dollar (CAD). It also undertakes transactions in Swiss Franc (CHF), Korean Won (KRW), Malaysian Ringgit (MYR), Thai Baht (THB), and Taiwan
Dollars (TWD), amongst others. Blackmores enters into derivative financial instruments to manage this risk, including forward foreign
exchange contracts. The table below excludes the impact of derivatives.
CURRENCY
USD
EUR
NZD
CAD
Other
LIABILITIES
2021
$’000
LIABILITIES
2020
$’000
ASSETS
2021
$’000
2,669
135
3,469
167
483
8,094
485
1,598
165
604
778
65
54
-
(11)
ASSETS
2020
$’000
2,039
31
669
-
10
Fluctuations in the Australian dollar relative to the USD, EUR, and NZD or other foreign currencies may impact on Blackmores' cash flows,
financial performance and profitability. The following table details the Group’s sensitivity to a 10% increase and decrease against a number
of relevant foreign currencies. The sensitivity analysis includes outstanding foreign currency denominated monetary items and adjusts
their translation at the period end for a 10% change in foreign currency rates. A positive number in the table below indicates an increase in
profit or equity where the Australian dollar strengthens 10% against the relevant currency, and a negative number indicates the opposite.
The Group also has exposure in terms of Net Sales in International Asia markets. In countries like Malaysia, Thailand and Indonesia the
Group sells in the local currency of each country, whereas in China invoicing to key customers is undertaken in Australian dollars. The
tables below exclude the impact of derivatives.
CURRENCY
USD impact
EUR impact
NZD impact
CAD impact
Other impact
PROFIT / (LOSS)
10% INCREASE
2021
$’000
2020
$’000
10% DECREASE
2021
$’000
2020
$’000
172
18
310
15
61
550
(71)
84
15
54
(210)
6
(379)
(19)
(35)
(673)
(188)
(103)
(18)
(66)
In markets like Thailand and Malaysia, while the sales to third parties are in local currency these markets have an indirect transaction foreign
exchange rate exposure to Cost of Goods sold which are sold into International Asia in Australian dollars. If the AUD strengthens 10%
against the MYR currency for a full year, the reduction in profit would equate to $1.3m. If the AUD strengthens against the THB by 10% for
a full year, the reduction in profit would be $1.4m. The corollary is true if the A$ weakens against those two currencies.
The following forward foreign exchange contracts were still open at the reporting date, in local currency:
CURRENCY
USD
MYR
THB
NZD
CAD
KRW
HKD
TWD
EUR
NOTIONAL PRINCIPAL AMOUNT
2020
$’000
2021
$’000
FAIR VALUE
2021
$’000
10,700
32,500
248,000
1,100
-
1,295,000
5,225
25,300
-
25,505
-
-
1,170
-
-
-
-
-
415
(120)
72
3
-
(24)
(23)
5
-
2020
$’000
(1,316)
-
-
(2)
-
-
-
-
-
There were no material ineffective hedging relationships at June 2021 (2020: loss $0.9m).
132
BLACKMORES ANNUAL REPORT 2021
5.3 FOREIGN CURRENCY RISK MANAGEMENT
1
1
GENERAL
GENERAL
INFORMATION
INFORMATION
2
2
OUR
OUR
OPERATIONS
OPERATIONS
3
3
OUR
OUR
INVESTMENTS
INVESTMENTS
4
4
OUR
OUR
FINANCING
FINANCING
5
5
OUR FINANCIAL
OUR FINANCIAL
RISK MANAGEMENT
RISK MANAGEMENT
6
6
OUR GROUP
OUR GROUP
STRUCTURE
STRUCTURE
7
7
OTHER
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
5.4 INTEREST RATE RISK MANAGEMENT
Sources of risk
The Group is exposed to interest rate risk as it borrows funds on a floating interest rate basis.
Risk management
The risk is managed by the Group by the use of interest rate swap contracts.
The following table sets out the Group’s exposure to interest rate risk.
Financial liabilities
Borrowings
Interest rate swaps1
Net exposure
1. Represents the notional amount of the interest rate swaps.
The following table sets out the Group’s exposure to interest rate risk.
2021
$’000
2020
$’000
-
-
-
(85,000)
30,000
(55,000)
Outstanding fixed or floating contracts
Less than 1 year
1 to 2 years
2 to 5 years
> 5 years
AVERAGE CONTRACTED
FIXED INTEREST RATE
NOTIONAL
PRINCIPAL AMOUNT
FAIR VALUE
2021
%
2020
%
2021
$’000
2020
$’000
2021
$’000
2020
$’000
-
-
-
-
0.00%
-
-
0.88%
-
0.88%
-
-
-
-
-
-
-
30,000
-
30,000
-
-
-
-
-
-
-
(433)
-
(433)
The interest rate swaps settle on a quarterly basis. The floating rate on the interest rate swaps is the Australian bank bill swap bid rate.
All interest rate swap contracts are designated as cash flow hedges.
The Group will settle the difference between fixed and floating interest on a net basis.
All other financial assets and liabilities (in the current and prior financial years) are non-interest-bearing.
The sensitivity analysis below has been determined based on the exposure to interest rates for both derivative and non-derivative
instruments at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant
throughout the year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to Key Management
Personnel and represents Management’s assessment of the possible change in interest rates.
For the year ended 30 June 2021, if interest rates had been 50 basis points higher or lower and all other variables were held constant,
the Group’s net profit would decrease by $0.2m (2020: $0.8m) or increase by $0.2m (2020: $0.8m) respectively as a result of changes
in the interest rates applicable to commercial bank bills.
There has been no change to the manner in which the Group manages and measures the risk from the previous year.
Interest rate swap contracts
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts
calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the
fair value of variable rate debt. The fair value of interest rate swaps at the end of the reporting period is determined by discounting the
future cash flows using the curves at the end of the reporting period and the credit risk inherent in the contract and is disclosed below.
The average interest rate is based on the outstanding balances at the end of the financial year.
The Group entered into $nil of new interest rate swaps during the 2021 financial year (2020: $40.0m), $nil matured during the year
(2020: $23.0m), and $30.0m were terminated during the 2021 financial year (2020: $40.0m).
133
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
5
Our Financial Risk
Management
5.5 CREDIT RISK MANAGEMENT
Sources of risk
The Group is exposed to counterparty credit risk from trade and other receivables.
Risk management
The information used to determine creditworthiness is supplied by independent rating agencies where
available and, if not available, the Group uses publicly available financial information, trade references,
and their own trading record to rate their major customers. Ongoing credit evaluation is performed on
the financial condition of accounts receivable. The credit risk on liquid funds and derivative financial
instruments is limited because the counterparties are banks with sound credit ratings assigned by
international credit-rating agencies. The carrying amount of financial assets recorded in the Consolidated
Financial Statements, net of any allowances for losses, represents the Group’s maximum exposure to credit
risk. The Group’s increased exposure to credit risk is commensurate with the impact of COVID-19 on a
global basis, as a result there continues to be an increased level of payment default risk in comparison to
prior years.
The Group continues to manage and measure risk with respect to the collectability of all receivables.
5.6 LIQUIDITY RISK MANAGEMENT
Sources of risk
Exposure to liquidity risk derives from the Group’s operations and from external interest bearing liabilities
that it holds.
Risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has
established an appropriate liquidity risk management framework for the management of the Group’s
short-term, medium-term and long-term funding and liquidity management requirements. The Group
manages liquidity risk by maintaining adequate reserves and banking facilities and through the continual
monitoring of forecast and actual cash flows.
Liquidity and interest risk tables
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment
periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the Group can be required to pay. The tables include both interest and principal cash flows.
WEIGHTED AVERAGE
EFFECTIVE INTEREST RATE %
2021
Trade and other payables
Lease liabilities
2020 (restated)
Trade and other payables
Borrowings
Lease liabilities
-
2.63
-
1.57
2.63
<1 YEAR
$’000
1-5 YEARS
$’000
>5 YEARS
$’000
TOTAL
$’000
112,650
7,855
120,505
-
21,104
21,104
-
789
789
112,650
29,748
142,398
97,341
-
7,186
104,527
-
85,000
17,739
102,739
-
-
2,893
2,893
97,341
85,000
27,818
210,159
There has been no change to the Group's exposure to liquidity risks or the manner in which it manages and measures the risk from the
previous year.
134
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
5.6 LIQUIDITY RISK MANAGEMENT (CONT.)
The following table details the Group's liquidity analysis for its derivative financial instruments. The table has been drawn up based on
the undiscounted net cash inflows/(outflows) on the derivative instrument that settle on a net basis and the undiscounted gross inflows/
(outflows) on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed
has been determined by reference to the projected interest rates as illustrated by the yield curves existing at the reporting date.
<1 MONTH
$’000
1-3 MONTHS
$’000
3 MONTHS
TO 1 YEAR
$’000
1-5 YEARS
$’000
>5 YEARS
$’000
TOTAL
$’000
2021
Net settled:
Interest rate swaps
2020
Net settled:
Interest rate swaps
5.7 FAIR VALUE MEASUREMENTS
-
-
-
-
-
-
(53)
(54)
(160)
(210)
-
(477)
The Directors consider that the carrying amounts of financial assets and financial liabilities recognised at amortised cost in the
Consolidated Financial Statements approximate their fair values.
Valuation techniques and assumptions applied for the purpose of measuring fair value
The fair values of financial assets and financial liabilities are determined as follows:
• the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are
determined with reference to quoted market prices;
• the fair value of derivative instruments are calculated using quoted prices. Where such prices are not available, a discounted cash
flow analysis is performed using the applicable yield curve for the duration of the instruments for non-optional derivatives and
option pricing models for optional derivatives; and
• the fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance
with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market
transactions.
Fair value measurements recognised in the Consolidated Statement of Financial Position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
grouped into Levels 1 to 3 based on the degree to which the fair value is observable:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
Financial assets
Unquoted equities
Foreign exchange derivatives
Financial liabilities
Foreign exchange derivatives
Interest rate derivatives
2021
$’000
2020
$’000
1,542
505
2,047
1,382
12
1,394
177
-
177
1,372
392
1,764
Level 3
Level 2
Level 2
Level 2
135
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
6
Our Group
Structure
6.1 PARENT ENTITY INFORMATION
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Retained earnings
Reserves
Total equity
Financial performance
Profit/(Loss) for the year
Other comprehensive income/(loss)
Total comprehensive income/(loss)
6.1.1 Commitments for expenditure – parent entity
Catalent transaction1
Not longer than 1 year
IT infrastructure and software
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Capital projects
Not longer than 1 year
Promotional services
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Sponsorship
Not longer than 1 year
Research and development contracts
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
1. Blackmores Limited acquired Catalent Australia on 24 October 2019.
136
2021
$’000
Restated
2020
$’000
214,994
249,366
464,360
159,865
275,176
435,041
213,903
22,244
236,147
146,737
108,756
255,493
196,126
29,462
2,625
228,213
146,388
33,519
(359)
179,548
1,522
1,429
2,951
(5,584)
(905)
(6,489)
-
465
6,397
7,028
13,425
3,420
2,851
6,271
3,775
5,451
560
-
560
1,020
360
1,380
7
20
1,384
1,335
-
2,719
1,487
1,229
-
2,716
BLACKMORES ANNUAL REPORT 2021
6.1 PARENT ENTITY INFORMATION
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
6.2 SUBSIDIARIES
NAME OF ENTITY
Blackmores Nominees Pty Limited
Pat Health Limited
Blackmores Beijing Co. Limited
Blackmores China Co. Limited
Blackmores (Taiwan) Limited
Pure Animal Wellbeing Pty Limited
Blackmores (New Zealand) Limited
Blackmores (Singapore) Pte Limited
Blackmores (Malaysia) Sdn Bhd
Blackmores Holdings Limited
Blackmores Limited
Blackmores Korea Limited
Blackmores International Pte. Limited
PT Kalbe Blackmores Nutrition1
Blackmores Vietnam Co. Limited
FIT-BioCeuticals Limited
FIT BioCeuticals (NZ) Limited2
PharmaFoods Pty Limited2
FIT-BioCeuticals Limited
FIT-BioCeuticals (HK) Limited
Hall Drug Technologies Pty Limited2
Blackmores SPV Co Pty Limited
New Century Herbals Pty Limited2
Global Therapeutics Pty Limited2
Blackmores Japan Limited
Catalent Australia Holdings Pty Ltd2
Catalent Australia Pty Ltd 2
Blackmores Philippines Inc.
Blackmores India Private Limited
COUNTRY OF
INCORPORATION
OWNERSHIP INTEREST
2020
2021
%
%
PRINCIPAL ACTIVITY
Australia
100
Hong Kong (China) 100
100
China
100
China
100
Taiwan (China)
100
Australia
100
New Zealand
100
Singapore
100
Malaysia
100
Thailand
100
Thailand
100
Korea
100
Singapore
50
Indonesia
100
Vietnam
100
Australia
100
New Zealand
Australia
100
United Kingdom 100
Hong Kong (China) 100
100
Australia
100
Australia
100
Australia
100
Australia
100
Japan
100
Australia
100
Australia
100
Philippines
100
India
100
100
100
100
100
100
100
100
100
100
100
100
100
50
0
100
100
100
100
100
100
100
100
100
100
100
100
0
0
Management of employee share plans
Marketing of natural health products
Marketing of natural health products
Marketing of natural health products
Marketing of natural health products
Holder of intellectual property for PAW
Marketing of natural health products
Marketing of natural health products
Marketing of natural health products
Holding company
Marketing of natural health products
Marketing of natural health products
Regional head office
Marketing of natural health products
Marketing of natural health products
Marketing of natural health products
Marketing of natural health products
Marketing of natural health products
Marketing of natural health products
Marketing of natural health products
Holding company
Holding company
Marketing of natural health products
Marketing of natural health products
Marketing of natural health products
Holding company
Manufacturing of natural health products
Marketing of natural health products
Marketing of natural health products
1 PT Kalbe Blackmores Nutrition is consolidated into the Group at 100%, and the 50% of profit or loss attributable to non-controlling interests is recognised in equity.
2 These wholly-owned subsidiaries have entered into a deed of cross guarantee with Blackmores Limited pursuant to ASIC class order 98/1418 and are relieved from the
requirements to prepare and lodge an audited financial report.
137
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
6
Our Group
Structure
6.2 SUBSIDIARIES (CONT.)
6.2.1 Controlled entities
The Consolidated Statement of Profit or Loss and Other Comprehensive Income and the Consolidated Statement of Financial Position
of the entities party to the deed of cross guarantee are as follows:
Revenue
Other income
Gain on sale of assets
Gain arising from bargain purchase
Revenue and other income
Raw materials and consumables used
Employee benefits expenses
Selling and marketing expenses
Depreciation and amortisation expenses
Facility and maintenance expenses
Professional and consulting expenses
Freight expenses
Licences and registrations
Cloud IT related expenses
Impairment of financial assets
Impairment of non-financial assets
Other expenses
Total expenses
Earnings before interest and tax
Interest revenue
Interest expense
Net interest expense
Profit before tax
Income tax expense
Profit after tax from continuing operations
Profit from discontinued operations
Profit for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Net gain/(loss) on hedging instruments entered into for cash flow hedges (net of tax)
Other comprehensive expense for the period (net of tax)
Total comprehensive income for the period
2021
$’000
481,120
5,004
10,615
-
496,739
248,952
130,681
26,803
21,675
14,119
6,978
5,445
6,857
808
(650)
9,767
17,777
489,212
7,527
57
(3,312)
(3,255)
4,272
(1,476)
2,796
Restated
2020
$’000
467,747
2,675
-
6,243
476,665
235,001
121,924
23,348
15,420
13,673
11,031
6,902
5,823
6,191
1,613
-
16,861
457,787
18,878
59
(5,927)
(5,868)
13,010
(5,344)
7,666
4,650
2,962
7,446
10,628
1,429
1,429
(905)
(905)
8,875
9,723
138
BLACKMORES ANNUAL REPORT 2021
6.2 SUBSIDIARIES (CONT.)
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
6.2 SUBSIDIARIES (CONT.)
6.2.1 Controlled entities (cont.)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Receivables
Inventories
Tax assets
Other assets
Derivative assets
Disposal group
Total current assets
NON-CURRENT ASSETS
Property, plant and equipment
Right-of-use assets
Goodwill and intangible assets
Deferred tax assets
Other financial assets
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Provisions
Other liabilities
Disposal group
Derivative liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Interest-bearing liabilities
Lease liabilities
Deferred tax liabilities
Provisions
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
CAPITAL AND RESERVES
Issued capital
Reserves
Retained earnings
Total equity
6.3 JOINT OPERATIONS
2021
$’000
Restated
2020
$’000
11,218
88,869
95,785
11,719
12,241
423
-
220,255
110,365
23,743
62,411
13,199
5,571
546
215,835
436,090
87,677
5,632
13,945
274
-
5
107,533
-
16,674
9,532
3,512
-
29,718
137,251
298,839
11,231
86,375
101,192
-
8,867
12
30,657
238,334
115,620
26,667
74,723
10,424
8,247
-
235,681
474,015
79,398
7,954
14,902
391
6,676
918
110,239
85,000
17,614
5,251
1,538
321
109,724
219,963
254,052
196,126
7,089
95,624
298,839
146,388
3,858
103,806
254,052
During the financial year ended 30 June 2020, Bemore Partnership Pty Ltd was deregistered following suspension of the operations of
the partnership in 2018. Blackmores did not enter into any new joint operations during the year ended 30 June 2021.
139
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
Other
7
7.1 RELATED PARTY AND KEY MANAGEMENT PERSONNEL DISCLOSURES
7.1.1 Equity interests in subsidiaries
Details of the percentage of ordinary shares held in controlled entities are disclosed in note 6.2 to the Consolidated Financial
Statements.
7.1.2 Loan disclosures
There were no loan balances exceeding $0.1m due from Key Management Personnel during or at the end of the financial
year (2020: $nil).
7.1.3 Other transactions with Key Management Personnel
Key Management Personnel received dividends on their shareholdings, whether held privately or through related entities or through
the employee share plans in the same manner as all ordinary shareholders.
No interest was paid to or received from Key Management Personnel.
7.1.4 Related party transactions
The immediate parent and ultimate controlling party of the Group is Blackmores Limited (incorporated in Australia). Balances
and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on
consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed
below.
Trading transactions
During the year, Group entities did not enter into any trading transactions with related parties that are not members of the Group
(2020: $nil).
Other related party transactions
No transactions occurred between the Group and its related parties during the financial year end 30 June 2021.
During the financial year ended 30 June 2020, the following transactions occurred between the Group and its other related parties:
• Fiftyfive5 Pty Ltd, a company of which Brent Wallace is a Director, performed certain consulting services for the Company for which
fees of $0.1m were charged. Brent Wallace was a Director of the Group and resigned on 27 October 2020.
Balances with related parties
No balances were outstanding at the end of the financial year with related parties that are not members of the Group (2020: $nil).
7.2 REMUNERATION OF AUDITOR
Auditor of the parent entity
Auditing or reviewing the Financial Statements
Taxation services
Other non-audit services1
Network firm of the Parent Company Auditor
Auditing or reviewing the Financial Statements
Other non-audit services1
Total
The auditor of Blackmores Limited is Deloitte Touche Tohmatsu.
1. Other non-audit services is comprised of fees in relation to the provision of consulting services and assurance services.
140
2021
$
2020
$
396,969
70,000
53,500
520,469
455,534
61,000
48,500
565,034
338,713
9,039
347,752
322,170
55,511
377,681
BLACKMORES ANNUAL REPORT 2021
1
GENERAL
INFORMATION
2
OUR
OPERATIONS
3
OUR
INVESTMENTS
4
OUR
FINANCING
5
OUR FINANCIAL
RISK MANAGEMENT
6
OUR GROUP
STRUCTURE
7
OTHER
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – FINANCIAL YEAR ENDED 30 JUNE 2021
7.3 CONTINGENT ASSET
During the financial year ended 30 June 2021 a fire at one of the Group’s contract manufacturers led to a loss of earnings for the Group
and an insurance claim was made in respect of those losses. As at 30 June 2021 the claim was in progress and at the date of the report
has not settled. An inflow of economic benefits relating to the impending settlement of this claim is considered by management to be
probable, but discussions and related documentation were not sufficiently advanced as at 30 June 2021 to meet the ‘virtually certain’
requirement as set out in AASB 137.33.
7.4 CONTINGENT LIABILITY
Blackmores has been in discussions with a relevant authority in one of the countries in which it trades pertaining to the historical use of
and compliance with export classification codes and related exemptions claimed under free trade agreements between the periods of
2009 to 2014. These discussions have been ongoing for over 5 years. The relevant authority has issued assessments for approximately
$10.0m (AUD). In the year ended 30 June 2020, corresponding bank guarantees totalling $10.0m (AUD) were issued by the Group.
Blackmores has initiated an appeal process for these assessments. Blackmores considers that it has correctly interpreted and complied
with all relevant requirements under the free trade agreement and continues to pursue all legal avenues of objection. It remains unclear
when a resolution to this matter will be reached. As at the date of signing, based on current legal advice received no legal liability exists
in relation to the assessments under applicable laws of that jurisdiction. A reliable estimate of potential risks or probable outflows, if
any, cannot be determined. Accordingly, applying AASB 137 Provisions, Contingent Liabilities and Contingent Assets, no liability has
been recorded in the accounts at 30 June 2021.
7.5 EVENTS AFTER THE REPORTING PERIOD
Impact of COVID-19 pandemic
The full impact of the COVID-19 pandemic continues to evolve at the date of this report. Management is actively monitoring the global
situation and its impact on the Group's financial condition, liquidity, operations, suppliers and industry. Given the daily evolution of
the COVID-19 outbreak and the global responses to curb its spread, the Group is not able to accurately estimate the effects of the
COVID-19 outbreak on its results of operations, financial condition or liquidity for future financial periods.
Although the Group cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues
it may have a material adverse effect on the Group’s results of future operations, financial position and liquidity for future financial periods.
Final dividend
The Directors declared a fully franked final dividend of 42 cents per share on 26 August 2021 as described in note 4.5.
Other than the foregoing, no other matter or circumstance has arisen since 30 June 2021 that has significantly affected or may significantly
affect the Group's operations, the result of those operations, or the Group's state of affairs in future years.
7.6 APPROVAL OF FINANCIAL STATEMENTS
The Consolidated Financial Statements were approved by the Board of Directors and authorised for issue on 26 August 2021.
141
7.2 REMUNERATION OF AUDITOR
BLACKMORES ANNUAL REPORT 2021
Additional
Information
Number of holders of equity securities as at 9 August 2021
Ordinary share capital
19,365,712 fully paid ordinary shares are held by 15,713 shareholders.
All issued ordinary shares carry one vote per share, and are entitled to participate in dividends.
There are no options in existence.
There are no restricted securities.
There is no current on-market buy-back.
Distribution of holders of equity securities
SPREAD OF HOLDINGS
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Holdings less than a marketable parcel
Substantial shareholders
FULLY PAID ORDINARY SHAREHOLDERS
Marcus C Blackmore
FIL Limited
AustralianSuper Pty Ltd
NO. OF ORDINARY SHAREHOLDERS
14,213
1,330
87
69
14
15,713
599
NUMBER
PERCENTAGE
3,659,102
1,759,618
1,223,878
18.89%
9.09%
6.33%
Twenty largest holders of quoted equity securities as at 9 August 2021
FULLY PAID ORDINARY SHAREHOLDERS
NUMBER
PERCENTAGE
HSBC Custody Nominees (Australia) Limited
JP Morgan Nominees Australia Limited
Mr M C Blackmore
Citicorp Nominees Pty Limited
National Nominees Limited
Blackmore Foundation Pty Limited
BNP Paribas Nominees Pty Ltd (DRP)
BNP Paribas Nominees Pty Ltd (Agency Lending A/C)
Mrs E M Whellan
Mrs P G Wright
Rathvale Pty Limited
Marcus Blackmore Holdings P/L (Blackmores S/F A/C)
Mr R Shepherd
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd DRP
Netwealth Investments Limited (Wrap Services A/C)
BNP Paribas Nominees Pty Ltd SIX SIS Ltd
Continue reading text version or see original annual report in PDF format above