Good morning, ladies and gentlemen. Nice to see some very familiar faces in the room. My name is John Bevan, and I am your Chairman of Ansell Limited. It is my great pleasure to welcome you today to the 2023 Ansell Annual General Meeting. I'd like to begin by acknowledging the traditional owners and custodians of the land on which we meet today, the Wurundjeri people of the Kulin Nation. I pay my respects to their elders, both past and present. Before I open the meeting, I would like to take you through the procedural aspects of the meeting. Today's meeting is being held in person as well as virtually via the Computershare platform, where shareholders, proxy holders and guests can watch a live webcast of the meeting, and shareholders and proxies can ask questions and submit questions and votes online.
A significant number of shareholders have already voted, appointed proxies, and submitted questions ahead of this meeting, and I thank them for doing so. Every effort has been made to ensure the meeting runs smoothly. A full recording of this meeting will be provided on our website. Now, I'll start today by walking through a few procedural guidelines for question and voting submission for those in person and online. It is my duty as Chairman to ensure that shareholders have the opportunity to ask questions and discuss the items of business during the meeting. I ask that all questions and comments be concise, be confined to matters relevant to shareholders as a whole, and be informative and respectful. I will take questions from those physically present at the meeting, followed by written and audio questions from participants who join us online.
Depending on the questions asked, I will decide as to whether I will answer or ask a member of management or the auditor to respond. I will now move to the formal proceedings of the meeting. The Company Secretary has confirmed that a quorum is present, and I declare the Annual General Meeting open. Voting is now open on all aspects of business, so please submit your votes at any time. I will give you a warning before I move to close voting. The notice of meeting was released on the 25th of September, 2023, and with your approval, I will take the notice as read. This is a shareholders' meeting, and only shareholders, their attorneys, proxies, and authorized company representatives are entitled to vote and ask questions at the meeting.
If you are attending as a proxy and have been instructed how to vote, I ask you to ensure that any vote you cast is in accordance with those instructions. Voting today will be conducted by way of a poll on all items of business, and we have appointed Michael Hutchinson, a manager of Computershare Investor Services, as Returning Officer for this meeting. For those attending the meeting online and who are eligible to vote, as the poll is open, a voting icon is available on your screen. Selecting this icon will bring up a list of resolutions and present you with your voting options. For those voting online, you are free to submit your votes at any time. To cast your vote, simply select one of the options. There is no need to hit Submit, as the vote is automatically recorded.
Please ensure you cast a vote for all resolutions. You will receive a vote confirmation notification on your screen. Now, to change or cancel your vote, click the link "Click here to change your vote" at any time until the poll is closed. Votes may be changed up to the time I declare voting is closed. For shareholders, proxies, and corporate representatives attending in person, I'll ask you to vote once you've gone through all items of business today by completing the voting card that has been provided to you upon admission. White cards are for visitors only who cannot vote or ask questions today. Shareholders with a yellow card are not entitled to vote on the items of business. I will provide a warning before I move to close voting at the end of the meeting.
Thank you to those shareholders who submitted questions in advance of the meeting today. Where appropriate, we have replied directly to shareholders before the meeting. Many questions have been submitted that were on similar topics, and I will respond to the most common themes during my address. For those attending today in person and who have a question or wish to make a comment, when I call for questions during each relevant item of business, please make your way to the nearest microphone. Then, when it is your turn, please give your name to the attendant, who will introduce you. There is an attendant at each microphone, and I'll now ask them to stand and identify themselves so they can. So you can see where they are. Thank you.
If you're attending the meeting in person, only shareholders, validly appointed proxies, and corporate representatives who are given a blue or yellow voting card upon entry are entitled to vote and to ask questions. When I call for questions, please raise your blue or yellow card and state your name or organization you represent before asking your questions. For those attending the meeting online who wish to submit a written question, you may do so at any time during the meeting via the speech bubble icon on your screen. Simply type your question in the chat box on the right of the screen and then select Send. Confirmation that your message has been received will appear above. Please note that while you can submit written questions from now on, I will not address them until the relevant time in the meeting.
While time constraints may prevent us from answering all questions, we'll do our best to address all your questions during the meeting. Today, Michael Evans, our Head of Investor Relations, will be helping to moderate any questions via the Computershare platform. Instructions on how to ask a verbal question are shown below the broadcast window on the online platform. If you are asking a verbal question, please state your full name before asking your question, and please limit your questions to only one or two questions at a time, and then rejoin the queue to allow others to ask their questions. Joining me today in Melbourne are Nigel Garrard, Debra Goodin, Managing Director and Chief Executive Officer, Neil Salmon, and Company Secretary, Catherine Stribley. Joining us by video link today are the other board members, Bill Reilly, Christine Yan, Leslie Desjardins, Morten Falkenberg, and Christina Stercken.
Penny Stragalinos, who was KPMG's Audit Engagement Partner on the Ansell account for fiscal year 2023, is present with us today and available to answer any questions during the meeting regarding the conduct of the audit and the content and preparation of the audit report. Now for my address. As many of you will know, this will be my final address to you as Ansell's chairman, having announced in June that after 12 years, I'll be retiring from the board, effective at the conclusion of the annual general meeting. It has been a privilege to serve Ansell as a director over this time. And with a history spanning 130 years, Ansell is unique in Australia's corporate landscape, and I'm proud to have contributed in some small way to that history.
I'd like now to offer some commentary on the company's recent performance and work underway to position it for the future. Just need to lift it up a bit. Yep. Thank you. Not that far, down a little bit. Thank you. Thank you. Clearly, the last year or so has been a challenging time for Ansell, for reasons that we have made plain to the market. We all know that COVID-19 triggered an unprecedented surge in demand for protective equipment for healthcare in 2020 and in 2021, and that Ansell and other PPE suppliers stepped up production sharply to meet that demand. As pandemic conditions began to ease in late 2021 and early 2022, the industry then found itself awash with stock. Not only Ansell, but our distributors and end users were left with much more inventory than they needed as demand eased.
These were not easy circumstances to predict or plan for, and today, we are still working through the aftermath of that disruption. Over the past 12-18 months, we have seen waves of destocking in, firstly, the exam single-use market, followed by surgical and life sciences. Inevitably, that's been reflected in our 2023 performance. There are signs that the worst of this destocking is behind us, and it is pleasing to note that end-user demand has largely returned to normal. However, the global unwinding of excessive healthcare PPE inventory at the distributor and the supplier level has a way to go. In his address following, our CEO, Neil Salmon, will provide more context on the shifting demand picture and what this means for the company's outlook.
While the effect of destocking described weighed heavily on our healthcare business, Ansell's industrial business, serving specialist mechanical and chemical markets, recorded pleasing growth, highlighting the benefit of a diversified portfolio. I want to now turn to Ansell's progress on meeting our commitments on sustainability, including labor rights and modern slavery. Ansell is committed to respecting human rights and providing decent work to workers connected with our operations and partnering with third-party suppliers to support them to do the same. We operate in a high-risk industry for labor rights exploitation due to both the type of work and the geographic locations of our operations and value chain.
As a market leader in this industry, we have an important role to play in improving the lives of workers across our value chain, and we are absolutely aware of our responsibility to ensure these workers are treated fairly and not subject to exploitative conditions. We continue to progress in our ambitions, and among other initiatives in the past year, Ansell has introduced forced labor indicator audits at all our own and third-party sites, designed to further assess and identify the presence of forced labor risks. The results of these audits have shown a consistent improvement in workplace conditions across the supply chain. New independent grievance mechanisms introduced across our manufacturing sites also help us identify, assess, and mitigate labor rights risks across the group. There is no easy fix to labor rights and modern slavery risks, and by no means is Ansell's journey complete.
But as I said, we are genuine in our commitment to lead on this issue, and will continue to do important ongoing focus for us. The other key pillar of our sustainability commitment is managing Ansell's impact on climate. Our commitment is to reduce Scope 1 and Scope 2 emissions by 42% by 2030, and to be at net zero emissions by 2040 against the 2020 baseline. We are making tangible progress against these targets. The reality is that, for a business like Ansell, the best impact we can have on Scope 1 and 2, that is direct and indirect emissions, is through reducing our reliance on fossil-based energy sources. Renewables, therefore, play an increasingly important part in this energy mix. Today, renewable electricity accounts for 29% of our energy needs, compared to 2% in 2020.
More challenging is our Scope 3 emissions profile, which goes to the products and materials we purchase from our suppliers, as well as the impact of these products we supply over their life cycle. Ansell is working hard on developing new products using different materials and compounds, ones that carry less embedded energy. We're also strengthening our engagement with customers and suppliers on initiatives to reduce emissions across our value chain. Indeed, the basis of our Scope 3 reduction strategy is a pathway we are developing for collaboration, training, and other activities with our suppliers. As well as managing our carbon footprint, Ansell has clear commitments on waste and water, and we have made great progress on these.
Pleasingly, we have now achieved zero waste on landfill at all our operating sites, with the exception of the newly purchased Ansell Seremban plant and Ansell's Kovai plant in India, which is under development. Elsewhere, Ansell successfully exited Russia during the past year. The company's operations are now in the hands of our local distributor. In managing this process, it was important to us that the bulk of our former employees were able to maintain employment and healthcare benefits after we exited. We can confirm that this is the case under the new owners, and while we have exited Russia completely, essential medical products may still be exported into Russia by third-party distributors.
Looking ahead, as the effects of the pandemic on our business eventually recede, it will be critical that Ansell is positioned to maintain global leadership in PPE in the new normal for our industry. To this end, in July, Neil announced Ansell's accelerated productivity investment program as our response to the post-COVID market. This program will see us become more efficient and customer-focused, and even more invested in differentiated products. It also maps a path to a unified global ERP platform, which will better position our global business to deliver products to customers in a timely way. As I said, this is my last address to shareholders. I want to thank you for your support during my dozen years on the board, including as chair for the past four years.
I'm proud of what Ansell has achieved in that time, in some of the most challenging and turbulent business conditions I have seen. Throughout Ansell's history, the company has been guided by a terrific set of values and ethics, and I have no doubt these will continue to hold Ansell in good stead in the years to come. You will hear from my replacement chairman, Nigel, shortly. Nigel will make an excellent board chair. As well as experience in strategic and commercial acumen, he will provide continuity of strategy at a critical time for Ansell. I want to thank my fellow directors, who have been such wonderful colleagues, and the Ansell leadership group, led so capably by Neil Salmon in his first two years as CEO.
Finally, on behalf of the board, I want to extend my gratitude to Ansell's 14,000 employees around the world. Without their dedication and commitment, the company's success simply would not be possible. I would now like to invite Neil to provide more detailed comments on the 2023 results and the outlook for the current year.
Thank you, John, and thank you to all of you for your interest in Ansell today and for joining us in the meeting room and also online. Good day to my fellow shareholders. Today, I want to provide you with a review of the company's performance and key milestones in the 2023 financial year, and an update on our outlook for this current financial year. As we have previously described, and John highlighted already, fiscal year 2023 was a difficult year for Ansell's healthcare business, as we continued to deal with the aftermath of the pandemic and its effect on our industry.
It was important that as we responded to these short-term challenges, we also took steps to position Ansell to build on the improving results seen in our industrial business, and to maintain our overall market leadership positions and compete strongly in the post-pandemic environment. The strategic initiative I announced in July, our Accelerated Productivity Investment program, is designed to do just that.
I'll explain our goals for this program in my remarks to come. But first, to the company's financial performance in the year just past. Group revenue was down 11% on an organic basis for the year, and as John noted, this was due to significant destocking across our healthcare segments and the continued normalization of pricing for our exam single-use products. Healthcare channel partners and end users had accumulated inventory over the course of the pandemic to ensure against supply chain risk and product availability concerns. Inevitably, they would move to unwind this excess inventory as the requirements of the pandemic eased. This process has not been uniform, but rather has occurred in stages across the segments in which we operate.
We first experienced it in exam single-use products in fiscal year 2022, before demand in this category began to return and pricing stabilized toward the end of fiscal year 2023. Surgical and life science sales were then similarly affected in fiscal year 2023, masking robust end-user demand trends. As you know, Ansell has worked hard in recent years to build a balanced portfolio, serving a very wide range of verticals and geographies, and this was to our advantage in 2023, as growth in industrial markets partially offset the softness in healthcare described. We had success from new product innovation, particularly in our mechanical SBU, and strong growth in emerging markets. We also saw chemical return to growth after a period of pandemic-induced volatility, with our range of high-end chemical hand and body protection products performing well.
The overall reduction in sales in fiscal year 2023 was the principal driver of the 6.7% organic decline in earnings before interest and tax, which was supported by lower short- and long-term incentive costs than is customary. Growth was lower on a reported basis, additionally, due to unfavorable currency movements, only partially offset by our currency hedging program, and no contribution from our Russia business, which we exited in the second half of fiscal year 2022. We finished the year with adjusted earnings per share of $1.153. We excluded a small gain on the sale of our Russia business. This was at the lower end of our original guidance range and just above the midpoint of the updated range I provided in February. Reflecting on our 2023 performance, several positive trends stand out.
Margins improved through the year as outsourced finished goods costs fell in exam single use, and we implemented price increases in industrial. Industrial growth was strong, particularly in mechanical, despite uneven end market conditions. And towards the back end of the year, volumes in exam single use strengthened, as did end user demand in surgical, an important step in reducing the excess inventory held by customers in this category. In the face of these post-COVID market adjustments, we continue to make strategic investments that are important to Ansell's long-term success. In February, we completed the buyout of our Careplus joint venture and assumed full control of this manufacturing facility. Integration has progressed smoothly, and we are already seeing improvements in plant performance.
The Careplus facility gives us new flexibility to boost insourcing of key styles and to test new product innovation, and will be an important node in our manufacturing network for the future. Construction of our $80 million greenfield facility, surgical facility in Kovai, in southern India, is progressing well, and once completed, will provide us with important new capacity to meet the growing global demand for surgical gloves, including into the rapidly growing Indian market. As ever, we continue to invest in R&D with good results from new product launches, in particular the ultra-lightweight, HyFlex cut protection styles. We devoted significant time and effort into improving our supply chain planning, bearing fruit in the form of a strong improvement in our supply chain metrics and reported customer experience dealing with Ansell.
We continue to invest in improving our systems and digital capabilities, with seamless transition of two of our largest manufacturing entities to modern cloud-based ERP systems. Our track record of successful ERP upgrades provides us with confidence to embark on a larger ERP consolidation program, incorporating our commercial entities, and this is a centerpiece of the productivity investment program we are embarking on in fiscal year 2024. Turning now to safety. Ansell's core mission is safety, safety for all, and it is our first priority to provide a safe workplace for our employees. In recent years, we've worked hard to embed safety, accountability, and competencies across all levels of our operations, and this work is paying off. Against almost all the key safety metrics we monitor, we performed strongly in 2023.
Total injury rates for the full year were down 30%, with medical treatment injuries down 43% to a new record low. Lost time injuries increased slightly, albeit off an already very low base. Our leading indicators, the reporting of near misses, unsafe acts, and unsafe conditions, were up by 29%, evidence that our employees are highly committed to finding and addressing operational hazards, however small, before they have the potential to translate to injuries. I'd now like to discuss our sustainability commitments and add some details to the comments John made earlier. And as he noted, we made good progress in fiscal year 2023. We think of our commitments under the headings of people and planet, and being recognized as a leader for safe, respectful, and inclusive workplaces in our industry, and keeping to an absolute minimum the footprint our operations leave on the planet.
As John has pointed out, modern slavery is a difficult global challenge that Ansell, as a responsible business, must face. This has two strands: elevating our own labor practices so that they are at or above world-class standards, and doing everything we can to ensure our supply chain is free of conditions associated with forced labor. On the first of these, Ansell advanced several important initiatives in 2023. We completed our program to compensate workers who no longer work for us for recruitment fees they paid on starting Ansell employment many years ago. We introduced more intensive forced labor indicator audits across our own sites, and we rolled out independent grievance mechanisms across six of our facilities. Beyond our own operations, we strengthened collaboration with our supply chain partners with a view to aligning them with our modern slavery commitments, and their response has been very positive.
By year-end, all our finished goods suppliers in Malaysia had formally declared that they had reimbursed recruitment fees for currently employed migrant workers, representing a total reimbursement of $30 million to approximately 19,000 migrant workers. Key Wave One finished goods suppliers had completed forced labor indicator audits and were making progress in rectifying issues identified, and subsequently, we extended our supply management framework to include smaller Wave Two and Three suppliers. Now, I'd like to talk briefly about progress against our environmental commitments. Our journey toward net zero Scope 1 and 2 by 2040 is advancing well.
We are particularly pleased with the growing role of renewable energy in our energy mix, with 29%, as John mentioned, now sourced from renewables and set to increase further as we build Sri Lanka's largest single-site rooftop solar photovoltaic cell installation at our manufacturing facility in Biyagama, just outside Colombo. Our water commitment is to reduce our water withdrawals by 35% by 2025 compared to that fiscal year 2020 baseline. Although our withdrawals increased moderately by 3% in fiscal year 2023 due to decreased plant shutdown days, we see a path to improved performance in 2024 through optimizing recent investments we've made in reverse osmosis technology, including in our Thailand facility and building on pilots currently underway in Malaysia and Sri Lanka. These investments will reduce our freshwater consumption through improving water recycling in our manufacturing facilities.
On waste, as John mentioned, I'm particularly pleased to report the company has delivered on its commitment to achieving zero waste to landfill, with all our long-standing plants certified as such during 2023. I'm proud to be able to say that of the more than 19,000 metric tons of waste generated in these manufacturing facilities in 2023, less than 0.5% went to landfill. A truly exceptional achievement. Our new plants, the recently acquired Careplus facility and the under-construction Kovai facility, are now embarking on their zero waste to landfill journey. I'd now like to speak to our strategy for adapting our organization to post-pandemic operating conditions and ensuring we are positioned to begin a new era of growth. Our accelerated productivity investment program, announced in July, is a 3-year initiative designed to position Ansell for improved earnings growth over the medium term.
The implementation of this program follows careful consideration by Ansell's board and my leadership team of what sets Ansell apart in the market, how the requirements of PPE customers and end users have evolved, what Ansell needs to do to meet these requirements, leveraging our competitive advantages, and the realities of the operating and economic conditions in the markets in which we participate. There are three objectives to the program. First, streamlining our leadership and organizational structure to reduce duplication of responsibilities and better align it to customer needs and growth strategies. Second, improving efficiencies in our manufacturing operations, including automating processes where we can, continuing our strategy of insourcing key styles, and outsourcing or exiting product categories with limited differentiation. And finally, accelerating and broadening our digitization strategy, transitioning our business to a consolidated global ERP system, building on our recent success with major IT implementations.
Our intention is to fund these investments in organization and manufacturing changes from reductions in our inventory. Based on our improved supply chain performance, we are confident we can manage this inventory drawdown without compromising sales, revenue growth, or customer service. Four months into the year, I can report good progress in implementing the program. My team has worked intensively through the design and implementation of the new organization structure, with this work completed by the end of September. We've been reducing headcount in our manufacturing facilities as production has slowed, affording us time to make investments to automate key production steps, principally in the packaging of our products. Slower production rates have ensured we're on track against our objective to lower in-house inventory.
We've also progressed the evaluation of longer-term manufacturing changes to optimize our overall sourcing network, and we expect to begin the implementation of these in fiscal year 2025. Overall, we're seeing good results from the initial components of the program, with saving from these components at or above the estimates assumed in the targets we communicated in July and that are shown here. And also an expectation of costs to deliver these components being similarly at or moderately above our initial estimates. Other elements of the program are further out and continue to have a range of potential outcomes in benefit and cost. And so we'll look to provide an update to estimated costs and benefits for the total program at the half year result. I'd now like to take a minute to describe the changes I have made to our executive leadership team, reflecting this adjusted organizational structure.
I've created a single global product and marketing organization led by Rikard Fröberg, which is responsible for managing product innovation, product portfolio management, and marketing activities for both our industrial and healthcare segments and their component SBUs. We've also made leadership changes in our commercial teams, with Sean Sweeney appointed as Chief Commercial Officer for the Americas team and Augusto Accorsi to the equivalent position for EMEA and APAC. Sean and Augusto have progressed through sales, marketing, and product management roles at Ansell, and they both bring significant experience to what is a strengthened CCO responsibility versus the prior structure. As I put our focus on developing and executing a more customer-centric growth strategy. These changes simplify and refresh my executive leadership team, and I'm confident we have the right structure and team in place to get Ansell growing again and deliver strong results in the years to come.
Now, let me turn briefly to expectations for the current year. Overall, market conditions are broadly in line with our expectations at this point of the year. As expected, surgical and life science channel partners are still reducing inventory, and we continue to believe these conditions in these market segments will begin to normalize in the second half of this fiscal year. As I've mentioned, we've made good early progress against implementation of our investment program objectives, and with the key changes to our organizational structure now made, we will see SG&A savings from October onwards. As expected, the benefits from manufacturing changes and investments will be offset in fiscal year 2024 by increased cost of goods sold as we slow production to reduce inventory.
Based on this, we have maintained our guidance for 2024 adjusted earnings per share to be in the range of $0.92-$1.12, and for fiscal year 2024 statutory EPS to be in the range of $0.57-$0.77. The timing impact to the various revenue and cost factors that I've commented on lead us to anticipate adjusted EPS to have a somewhat greater weighting to the second half than in previous years. In conclusion, Ansell continues to face a challenging operating environment.
Our team is working very hard to respond to these challenges and execute on our strategy to create long-term shareholder value. We continue to invest in our future success while taking necessary steps to improve short- and long-term performance, and I'm confident that the plans I've outlined today will position Ansell to do just that. Thank you for your time and continued interest in our company. Thank you for your attention, and now back to you, John.
Thank you, Neil. Ladies and gentlemen, we will now move to the formal items of business set out in the notice of meeting. As has been mentioned earlier, the poll is open on all items. The results of the proxy votes already received for each resolution will be displayed after any questions in respect to the resolution has been, has been dealt with. The final result for each resolution will not be displayed at the meeting, but will be lodged at the ASX following the meeting. The first item is to receive and consider the financial report and the report of the directors and auditor of the company for the 2023 financial year.
This item gives shareholders the opportunity to ask questions or make any comments in relation to the financial statements, the directors' or auditors' reports, or the operations of the company. I ask the questions relating to the remuneration report be held until we reach that item later in the morning. There will be sufficient opportunity to address those questions then. I will now take questions from the floor. For those attending in person, if you have questions on this item, please make your way to the microphone. So we have Mr. Ron Guy.
Thank you, John. Yeah, on, representing the Regional Trades Hall Human Rights Shareholder Group, and, our concerns, you've, you, you have made statements on them, which is pleasing to see on, on a couple of the issues. But I have written down the questions and, so maybe it'll double up a little bit, about the ethical social governance, obligations and procurement, with relation to the modern slavery, which has been dogging the company for a while, so it's good to see that there is some movement on it. But, Brightway, it was the only Malaysian PPE producer to still be subject to withholding release orders from U.S. Customs and Border Protection. This year, it was taken by U.S. Customs, nearly, so that's been going on for about two years now.
And you've indicated that you've made some changes and improvements in there. But there's also a litigation case against Ansell in the U.S. courts, and I think that was lodged on the 20th of the eighth, 2023. But in regard to spending millions on lawyers and lawyering up instead of supplying remediation. So obviously, there's a few things that still need to be resolved there. But the other area that there was the concern for the payment of redundancies for long periods these workers worked for Ansell is in Thailand. And I think they've commenced legal action.
So I guess the main issue is that, you know, this becomes costly to the shareholder, to Ansell's shareholder future. And so I guess the quicker that these things are resolved, the better. So there's still a few of these issues that are hanging over and haven't been resolved. So I guess just a little bit further information to try and see how you're going with those last ones to tie up, to tidy up.
And I guess this is a problem that's happening with a lot of companies now, that they've outsourced a lot of their work, et cetera, but they don't seem to follow up on their procurement issues to a lengthy degree, and they're satisfied with what they're being told. So I guess in future, whether there's any move for you to be more proactive in making sure and researching that, that these things aren't going to, keep raising their, their ugly head. And as you, as you know, that, there's a lot of horrific, crimes against people in the world, so.
Look, you, you've raised a number of issues through your, your commentary there. Let me just say that at a board level, the issues around modern-day slavery are on every board meeting agenda, and we go through all of the items that are happening both within our company and externally. We see ourselves as a leader in this field. We operate in geographies where modern-day slavery, particularly with foreign workers in Malaysia, lead to exploitation. The company has done a lot of work, both of its own operations, but also back through its supply chain. We've reduced the number of external suppliers to provide finished product to us because they couldn't meet our standards of what we're, we're aiming for.
So we're, we see ourselves as a leader in this field, but we operate in an industry where poor practice is actually quite common. And so, from a leadership perspective, you should be comfortable, take comfort that the board and the management take this area very seriously. It's not about cost, it's about doing the right thing, and we have done-we've taken significant steps forward to ensure that we are compliant.
There will always be issues in our industry which will emerge from time to time, and we will respond in the appropriate manner for those. So this is a long journey. We've been on this journey now for seven or eight years to try and make sure that we're okay and that from an industry perspective, we are improving. So, I note what your comments are, but let me just say that from a board and management perspective, we see this as a long-term but very important values to see.
Okay, and good luck with the retirement.
Thank you.
Next up, we have Mr. Peter Aird.
Morning, Peter.
Good morning. I'm a volunteer from the Australian Shareholders Association, representing retail shareholders. Today I have proxies from 152 shareholders for approximately 245,000 shares. Your strategic priorities have changed to a more medium-term this year. I think Neil has commented in some detail on the changes, but I just wondered when you expect that this will impact the business's performance?
Well, I think it's impacting on our business performance already. I think the organization has now refocused to what is the post-pandemic sort of position. We've made a number of organizational changes, and we've committed to slowing down some of our plants for the moment, in the short term, to ensure that the stocking issue gets sorted through over the next 12 months. And we should start to see, as the market improves, our revenues start to grow again in the next 12 months. So you'll see that over the next 12 months, the improvements starting to come through.
Thank you. And just one other, if you don't mind. I note the reason for international directors not being present today. But I did wonder whether you can tell us how often the board meets as a complete board, face-to-face, and in those circumstances where that is actually occurring?
Okay. So obviously, during COVID-19, we all met on Zoom for the entire two years. So since that has gone away, we've actually been traveling a lot. So we always visit the United States, which is our largest unit, and Europe once a year, and the rest of the most of the other board meetings are actually on our operating sites. So we've been to Sri Lanka this year, we've been to Malaysia, to Thailand, and the next 12 months will probably include India and Vietnam. So most of the meetings, well, all of the meetings are held outside of Australia, with the exception of the one that occurs today. And this is, for us, a board meeting where some of the directors are present and some are on Zoom. But that's the only meeting we have in Australia.
Thank you.
Are there any more questions? Okay, there appear to be no further questions from the floor. Michael, have we any written questions from the online board?
Chairman, we have a question from Ms. Jillian King. The question is: It has been very pleasing to read and hear of Ansell's huge efforts to reduce its damage to the climate. I particularly welcome the company's leadership on reducing Scope 3 greenhouse gas emissions. We are observing accelerating global warming with associated consequences.
For example, 2023 is on track to be the warmest year globally, at currently 1.4 degrees warmer than pre-industrial times, and one in three days in 2023 being over 1.5 degrees warmer, and September beat the previous September record by 0.5 degrees, with many areas of Australia being 3-5 degrees warmer. The increasing urgency for action to stop damage to our climate is clear. Given that, will Ansell move to accelerate its shift to 100% renewable electricity so that it achieves that transition well before 2040?
Okay, very good question. So the move to renewable energy is determined by two things. One is the degree to which the grid has converted to renewables. So if renewables are available, we will convert to that. We are putting a very substantial amount of money into both building biomass boilers and putting solar on the roofs of all of our sites to ensure we get there as fast as we can. But we will not get there without the grid being, you know, more renewable energy being available from the grid. Are there any more questions?
Chairman, there are no further written questions.
Okay, so if there are no more written questions from the online participants, I'll now take audio questions. Do we have any audio?
There are no questions on the phone line at this time.
Thank you. I'll now move to the next item, being the election of directors. The first director seeking re-election is Nigel Garrard. Nigel resides in Australia and joined the board as a non-executive director in March 2020. He retires in accordance with Rule 33C of the company's constitution, and being eligible, he offers himself for re-election. Nigel's experience and board committee memberships are detailed in the notice of meeting. On the 13th of June, Ansell announced that subject to re-election at the AGM, Nigel will replace me as chairman, effective from the conclusion of this AGM. The board considers Nigel to be an independent director. Nigel, would you like to say a few words?
Thank you, John, and good morning, ladies and gentlemen, and fellow shareholders. Before I talk about my re-election, I just wanted to take a moment to thank John for his contribution to Ansell over the last 12 years. Eight years as a non-executive director and four years as chairman. It has been an exciting but difficult time, particularly over the last four years with COVID, and John has led the board and the company with distinction and leaves behind a positive legacy. His contribution, certainly from us around the board table, will be missed. John, I'd like to thank you on behalf of your fellow board members and shareholders for everything you've done over the last 12 years. For me, I'm up for re-election today, and I've been a director of Ansell so far for three and a half years.
As John indicated, the first two years of my appointment, I was serving Ansell from my study at home, because those of us living in Melbourne know that we weren't allowed more than five kilometers from our house for most of those two years. But I've had the opportunity over the last 12 months to visit pretty much every site, major site of of Ansell throughout Asia, as well as the U.S. and and Europe. And from my perspective, the business is an exciting one. It's one with a 130-year history, and the opportunities ahead of us are both challenging but also very exciting, and I think Neil and the team have an excellent plan to position the business well as we go forward.
From a personal point of view, I have executive experience in different industries and geographies, and I serve on other listed company boards and also some private company boards. I look forward to continuing to serve shareholders as we go forward, subject to your continued support, and thank you for that support to date. Thank you.
Thank you, Nigel. I now move that Nigel be re-elected as a director of the company. I will now take questions from the floor. If you have any questions, please make your way to the microphone.
Chairman, it's Peter Aird.
Good morning again. This is more of a generic question for you that affects the total board. I note that Ms. Goodin's appointment to the board, and she is based in Australia. I also note that Ansell are required to have a minimum of two directors as Australian residents. However, given that unforeseen circumstances can arise that may affect membership of the board, what is the thinking behind limiting the local membership to the bare minimum? And what contingency do you have in place if such an occurrence happens?
Okay, well, let's hope that doesn't ever happen. We used to have three Australian-based directors, but some years ago, we made the decision to go down to two. The reason for that is that 96% of this Australian company's sales are actually made outside of Australia, and we operate in markets which are diverse, and we need a diverse board with international experience to cover that off. So for all of our directors, that international experience is important, and really, two directors here, who have a good understanding of ASX requirements and so forth, and governance in this particular area, with Nigel and Debbie, we're well covered. Should anything happen to them, Glenn Barnes, who's sitting in the front row here, who used to be the chairman of the company, is on standby, as is Peter Day, another former director.
And once I finish this, I'll probably go into that same group. So should something urgently happen, and you have to have two directors to continue to operate, one of us would be asked back in before a selection process moved forward. So we do have a contingency plan should that happen.
Thank you.
Are there any more questions from the floor? Okay, Michael, are there any written questions?
Chairman, we have a question from Mr. Stephen Mayne. The question is: Shareholders rarely get any insight into chair succession matters. Could Nigel Garrard provide his perspective on how the chair succession was handled? Was a headhunter or external party involved in the process, or was it all done just with the assistance of the company secretary, like what happened at Macquarie Group? Were there multiple candidates for chair, and was there a ballot? Did we look outside the existing directors for a new chair, similar to what Westpac announced last week? Also, given that John Bevan is about to exit, wouldn't it have made more sense for Nigel to chair this meeting, given that he is the future?
There's about 20 questions in there from Stephen. So, let me say, you would hope that your board actually has a process around succession, and succession both for Chief Executive and Chairman of the Board, and all of those activities is the thing that runs constantly through the year's agenda. My stepping down as Chair was clear to the board nearly 12 months ago. We went through an internal process where we had multiple candidates, and Nigel was selected by the board to take on that role. And the decision was, at the time, that I would run the as Chairman of the Board through to the end of the AGM, and then Nigel would take over thereafter. So that was the decision of the board. So that's the answer to those questions. I'm sorry, we had another question from the floor?
Another question from the floor from Mr. Ron Guy.
. Yeah, Nigel, seeing you're the man that we'll be fronting up to next year to ask questions, I was just after you can have my votes of support, but I was after a commitment that we're not asking the same questions about the workers at risk of modern slavery. And the workers in Thailand that are from Myanmar, and in many cases are unable to return home, have difficulties with their immigration status, due in part to their unexpected termination, and are in poverty due to the lack of redundancy pay. So, I'm hoping that you will take that personally to try and resolve that issue for the Ansell factory, so that we don't have to ask you those embarrassing questions next.
Can I just say you'll probably have opportunities to ask those questions every year, because this is an ongoing risk to the industry that we operate in, and I hope that you'll hear year-on-year improvements on what we have done. So Nigel takes over as the Chair, but there's no change in strategy, and this will remain a commitment for the organization to go forward.
I've got faith in Nigel.
Good. Okay. So if there are no more questions from you, Michael, are there any audio questions?
There are no audio questions at this time.
Okay, so no further questions. I'll now move on to the proxy results. Proxy results in respect to the re-election of Nigel as a director are now displayed on the screen. The next director seeking re-election is Christina Stercken. Christina resides in Germany and joined the board as a non-executive director in October 2017. She retires in accordance with Rule 33C of the company's constitution, and being eligible, she offers herself for re-election. Christina's experience and board committee memberships are detailed in the notice of meeting. The board considers Christina to be an independent director. Christina, would you like to say a few words?
Dear shareholders, my name is Christina Stercken, and I stand for re-election today. I'm a member of the Ansell board since the AGM 2017 and chair the Sustainability and Risk Committee since 2021. I have spent most of my executive career with BMW and Siemens. Within Siemens, I had various management positions, for example, in finance and M&A, as head of a global business unit in the IT services sector, and as head of Task Force China, supporting business setup and strategy in China. I started my career with BMW in marketing and sales in South Africa. After my executive career, I had my own consulting company, advising numerous companies and industries such as healthcare, chemicals, automotive, and machinery. With my management responsibilities in large companies and my functional focus on internationalization strategy and M&A, I bring a range of competencies which are relevant to Ansell.
Since I joined the Ansell board, the company has been exposed to numerous challenges: COVID-19 and the unprecedented demand surge, supply chain disruptions, increased ESG requirements, now, destocking of distributors and customers, just to mention a few. The management team has achieved a lot. Improved manufacturing footprint to support and further strengthen Ansell's market position, the company's commitment to environmental leadership and to respecting human rights. The recently announced productivity program will drive EPS growth and improve returns on capital employed. I'm highly motivated to continue my service with the Ansell board. Ansell is a safety company, which has a clear purpose: protecting people at home and at work. I enjoy working in a diverse, global, and value-based business environment with an excellent team at Ansell. I'm looking forward to serving on the Ansell board, alongside with my board colleagues, contributing to the company's future. Thank you.
Thank you, Christina. I now move that Christina be re-elected as a director of the company. I'll now take questions from the floor. If a question, please make your way to the microphone. Michael, are there any written questions?
Chairman, there are no written questions at this time.
Okay. Are there any audio questions?
There are no audio questions at this time.
As there are no further questions, I will now move on to the proxy results. Proxy results in respect to the re-election of Christina as a director are now displayed on the screen. The next director seeking re-election is Bill Reilly. Bill resides in the United States of America and joined the board as a non-executive director in October 2017. He retires in accordance with Rule 33C of the company's constitution, and being eligible, he offers himself for re-election. Bill's experience and board committee memberships are detailed in the notice of meeting. The board considers Bill to be an independent director. Bill, would you like to say a few words?
Thank you, Chairman. Ladies and gentlemen, fellow shareholders, and honored guests, I am pleased to speak to you today and to have once again been nominated for another term on the Ansell Limited Board of Directors. This will mark my third term on the Ansell Board. As many of you know, I served as Ansell's General Counsel for over 17 years, unquestionably the crowning role of my legal career. I retired from my full-time executive role in 2017, and believe my six-year service as an Ansell director, in addition to my 37+ years of legal experience, render me uniquely qualified to continue my service to the company and to Ansell shareholders.
Today, as we say goodbye to and congratulate John Bevan on his years of service as a director, deputy chair, and chairman, and indeed, we are all grateful for his many noteworthy contributions to Ansell over that time. We also welcome Nigel Garrard as our new chairman and formally welcome Debra Goodin to the board. While we are grateful to have such incredible talents added to our ranks, I believe I am well positioned to assure retention of a solid working knowledge of Ansell's corporate history, a rich and complex one, to the benefit of this new generation of directors. Moreover, I bring a rather strong legal, regulatory, and compliance skill set to round out the many skills of this incredibly talented board.
I note that in my time as an Ansell director, I'm proud of all that we have managed to accomplish, including, among other things, the successful CEO succession and transition process. We have continued to make meaningful investments and progress to delivery on our sustainability, labor rights, and diversity and inclusion agendas. We successfully navigated the perils and aftershocks of the global pandemic, all the while maintaining our fundamental commitment to Ansell shareholders, customers, and employees. That is the trust and integrity of the Ansell brand and all it stands for. I am honored to continue my service. I look forward to the challenges and opportunities over the next few years, and thank you.
Thank you, Bill. I will now move that Bill be reelected as a director of the company. I will now take any questions from the floor on his re-election. Michael, any questions, written questions?
Chairman, there are no written questions at this time.
Are there any audio questions?
There are no audio questions at this time.
Okay, so proxy results in respect to the re-election of Bill as a director are now displayed on the screen. The next director seeking election is Debra Goodin. Debbie resides in Australia and joined the board as a non-executive director in December 2022. She retires in accordance with Rule 33B of the company's constitution, and being eligible, she offers herself for election. Debbie's experience and board committee memberships are detailed in the notice of meeting. The board considers Debbie to be an independent director. Debbie, would you like to say a few words?
Thank you, John. Good morning, ladies and gentlemen. I was appointed to the Ansell board in December last year, and at that time, to the Human Resources and Audit and Compliance Committees. Since that time, I have had the opportunity to visit our operations in Malaysia, as well as our corporate offices in the U.S., Belgium, and of course, here in Melbourne. You have received my background as it is detailed in the annual report and notice of meeting. As you will see, I have senior executive experience in global operations with full P&L responsibility, leading M&A activity, and as a CFO in both the public and private sectors. Since commencing my career as a full-time non-executive director, I have served on a number of publicly listed and unlisted companies.
My current board appointments include my role as Chair of Atlas Arteria Limited and Director and Chair of Finance and Audit for APA Group. I confirm that I have the appropriate time available and capacity to undertake the Ansell board appointment in addition to my other responsibilities. I believe that I bring value to the Ansell board with my strong background in corporate governance, especially in the ASX-listed environment, operations, financial markets and M&A. Ansell is a well-known and strong Australian company with extensive global operations. I am proud to have been selected to join the board and to be serving you as a director. I look forward to receiving your support to my nomination at today's meeting. Thank you.
Thank you, Debbie. I now move that Debbie be elected as a director of the company. I'll now take any questions from the floor. Michael, are there any questions?
Chairman, we have a question from Mr. Stephen Mayne. The question is: Could new director Debra Goodin and the Chair comment on the recruitment process that led to her appointment to the board? Was a headhunter involved? Did the full board interview Debra, and did they interview any other candidates? Did Debra know any of our directors before engaging with the recruitment process? Finally, how does this two Australian-based directors requirement work, and why don't we change that constraint?
Okay, so yes, there was a headhunter involved, and Debbie was interviewed by all directors, and she was selected as a result of that. So that, yes, we did use an external party to help us select a new director. I don't think she had worked with any of the other directors before. So that's the answer. What was the last part of the question, please?
On the Australian-based directors, the two cap.
Well, that's a Corporations Act requirement that there's a minimum of two, and therefore, we're satisfying it on that basis.
No further questions.
Okay. Are there any audio questions?
There are no audio questions at this time.
Okay, so as there are no more questions, the proxy results in respect to the election of Debra as a director are now displayed on the screen. The next item of business relates to the grant of performance share rights to the Chief Executive Officer, Neil Salmon, under the terms of the company's long-term incentive plan, which is part of Neil's remuneration package, entitling him to an annual grant under the plan. This award is subject to the satisfaction of various performance conditions and entitles Neil to a grant of one ordinary share in Ansell Limited per performance share right. Accordingly, shareholder approval is sought for the issue of 144,526 performance share rights to Neil Salmon under the plan, in accordance with the ASX Listing Rule 10.14.
I now move that the approval be given to the grant of performance share rights to the Chief Executive Officer, Neil Salmon, on the terms summarized in the explanatory notes of the notice of meeting. I'll now take any questions from the floor. Michael, are there any online questions?
Chairman, we have a question from Mr. Stephen Mayne. The question is: Could CEO Neil Salmon summarize his past LTI grants as to whether they have vested or lapsed? Also, has he ever sold any ordinary shares in the company or bought any on-market without relying on an incentive scheme to build his equity position in the company?
Okay, so I'll answer that question. Neil has been with the company for nearly 10 years, and on many of the years of that, there was either partial or no LTI grant vesting, including this year, no LTI vesting. So it does not vest every year. It's only vest when all of those performance conditions are met. So there's been a variable impact on that. Neil has built his shareholding as is required by him to accumulate three years' salary as part of his share requirement as being the Chief Executive. The only circumstance where he would have had to sell shares is to meet tax requirements in the various jurisdictions where he's lived, and we grant him that only up to the amount for the tax is payable, so he retains the balance. I think that answers most of that question.
No further questions.
Okay. Are there any audio questions?
There are no audio questions at this time.
Okay, so as there's no further questions, I will now move to the proxy results. As set out in the notice of meeting, in accordance with the Corporations Act, any votes cast in favor of this resolution by Neil Salmon or by his associates will be disregarded. Proxy results, as you can see. The next item of business relates to an increase in the maximum aggregate amount of directors' fees per annum that may be paid by the company to its non-executive directors, as defined as the fee pool. Shareholders' approval is sought to increase the fee pool from $1.6 million- $2.1 million, an increase of $500,000, for the reasons as set out in the explanatory notes of the notice of meeting.
It is noted that the proposed fee pool increase is, if it's approved, does not necessarily represent the full sum paid to non-executive directors each financial year. The company will continue to set the actual level of remuneration for its non-executive directors within the fee pool, having regard to independent external advice, market practice, board performance, and other appropriate factors. I now move that approval be given to the increase of the fee pool on the terms summarized in the explanatory notes of the notice of meeting. So I'll now take questions from the floor on this item. Michael?
No written questions at this time.
Audio?
There are no audio questions at this time.
All right. As there are no further questions, I will now move on to the proxy results. As set out in the notice of meeting, in accordance with the Corporations Act, any votes cast in favor of this resolution by any of the company directors or by their associates will be disregarded. Proxy results, as you can see. Ladies and gentlemen, the final item on the agenda is a non-binding advisory vote on the adoption of the remuneration report, which is set out on pages 43-66 of the company's annual report. Your board commends the remuneration report to you, and I now move that the remuneration report for the year ended the 30th of June, 2023, be adopted. I'll now take any questions from the floor regarding the remuneration report.
Chairman, Mr. Peter?
Good morning again. We believe the content and structure of the remuneration report is excellent. But we're disappointed that, as many companies do now, there's no details of the change for financial year 2024 incentives and payments to executives, and we would like to see that considered for your report in the future.
Okay, I think that there are some items in the notice of meeting, which is not in the remuneration report, that relate to 2024. But I note that, and we'll look at that again for the next twelve months. Thank you. Are there any other questions from the room? Michael.
Chairman, we have a question from Mr. Stephen Mayne. The question is: Thank you for offering shareholders a hybrid AGM this year, and will Nigel commit to keep doing this in future years to maximize shareholder participation, albeit potentially with a later start than 9:00 A.M.? Is Nigel a morning person like Mr. Bevan? Big companies like BHP, Boral, Brickworks, Commonwealth Bank, Fortescue Metals, Harvey Norman, Origin, Santos, Ramsay Health Care, Rio Tinto, and Seven Group all banned online questions and voting in 2022. So well done for showing them up.
What was the experience like from your end? And finally, will you join the likes of ASX, Myer, Tabcorp, Metcash, Altium, and AUI and disclose the voting results by shares and shareholders, similar to a scheme of arrangement? This provides a public insight into retail shareholder sentiment and will encourage retail voting participation if taken up across the market, as we will feel less swamped by the big institutional voters. This is particularly relevant on remuneration report votes like this one, which will probably have been opposed by a majority of voting retail shareholders.
Okay. Thank you, Stephen. Yes, I am a morning person, and I have no idea if Nigel is a morning person, so we'll let him set the time for next year's AGM when that comes. On the subject of pre-releasing the proxy votes, I actually don't think that's appropriate. I think if we're going to continue to have AGMs like this, it's important that people are in the room, can hear the questions that are asked, and cast their own votes without having seen what those votes are beforehand. So I think we'll continue with the current format. The format of having it as a hybrid meeting is appropriate for shareholders, and I think that's the way we should we'll continue. So thank you, everyone, on that particular question. I think that's what we'll do. Are there any audio questions?
There are no audio questions at this time.
Okay, so I'll put up the results of the proxy. As set out in the notice of meeting, company's key management personnel, including directors and senior management, may not vote in relation to this matter, except as a proxy for a shareholder who is not prohibited from voting, or if the proxy is the chairman, and the appointment expressly authorizes the chairman to exercise the proxy, even though the resolution is connected with remuneration-related matters. So the proxy results are, as you can see on the screen. Now, one last time, are there any further questions anyone would like to ask? Michael?
Chairman, we have a question from Mr. Stephen Mayne. The question is: Apart from the ASA opposing Neil Salmon's LTI grant, did any of the four other proxy advisors in the Australian market, ACSI, Ownership Matters, Glass Lewis, and ISS, recommend a vote against any of today's resolutions? If so, what reasons did they give?
Stephen, I don't discuss what the proxy advisors publish to their subscription customers. That's for them to deal with their own prescriptions, so that's a confidential thing between them and their customers, so I won't reveal what they are. So that's... I'll leave it at that. Are there any audio questions?
Sorry, John.
There are no audio questions at this time.
We have some further questions from Mr. Stephen Mayne.
Yep.
Will you disclose the proxy votes before the debate on each resolution, so shareholders can ask questions about the reasons, if there have been any protest votes? Why not disclose the proxy position to the ASX with the formal addresses to offer more timely disclosure to the market? Many other companies are now doing this. Will Nigel commit to making this change in 2024?
Well, Stephen, you can, you can ask, Nigel that question next year, and then he'll answer that question next year. At this point, we are publishing the, the speeches that we made today. They're already up on the ASX announcement. We're not going to put the proxies up ahead of the meeting. We'll do it in the, in the manner which we've just talked about.
Chairman, one final question from Mr. Stephen Mayne: "Thank you to John Bevan for his 11 years of service, the last 4 as chairman. It is always helpful for investors to have access to some exit perspectives from retiring independent directors, particularly chairs. In his final contribution as an Ansell director, could John please comment on what he regards as the 3 best decisions Ansell made during his time on the board, and does he have any regrets?
I certainly don't have any regrets. And, I think one of the things that's really happened in the last 11 years is that, when Ansell came out of Pacific Dunlop in 2002, it was the, in fact, the financial company of Pacific Dunlop, and the, the company had a lot of debt and a lot of liabilities it had to clear through. And the board, in that first 10 years or so, after it came out of Pacific Dunlop, really worked hard to pay down debt, to ensure that the company could then look to the future. And so what they did was absolutely terrific, and the time I've had on the board has come from that strengthening of the balance sheet.
That balance sheet has enabled the manufacturing facilities of the company to be reinvested in, to be world-class, and to enable the company to be genuinely competitive, both at the innovation level, with lots and lots of money now spent on R&D in developing new products and services, but also to ensuring that our engineering facilities, engineering staff, can actually manufacture and run very modern, globally competitive, plants, and that enables the company to continue to grow and succeed. What's happened over the last three or four years, particularly since the sale of the Sexual Wellness business, which was in 2017, the capital that was returned to the company from that sale has been invested in, new plant, around the globe, and that has really made a big difference.
So that was a very significant decision that was made by the board before I was actually I was on the board, but not, not the chair. So I think it's been a fantastic dozen years. I think the company is, has a pause in performance now. We all know that demand doubled in COVID-19 and now back down to the level it was prior. And thank goodness that is because we don't want to have another COVID-19 anytime soon. But the company's long-term growth prospects are even stronger now than they were before COVID-19 because of that new plant that we bought on.
And I think the new leadership team and the changes that Neil has made now, actually focusing on the end customer much more than perhaps we've done over the last four or five years, will hold the company in good stead. So, I guess I'm leaving very proud of the time I've had on the company, and I think it's in very good hands. So thank you very much. Okay, so let's just finish up here. We can have a cup of tea. So, just if you could move on. There are no further questions, I don't think, on the audio side? No.
There are no audio questions at this time.
All right. So that concludes the discussion on the items of business. The poll will close shortly. If you are ready, Computershare staff members are now coming around the room, to collect your ballot cards. As mentioned earlier, the final outcome of the polls will be announced by notice to the ASX later. And although the business of the meeting is finished, there will be a five-minute period of closure of the meeting, during which time to finalize your voting. Ladies and gentlemen, that brings us to the conclusion of the business today. I thank you for attending.