The Board of The a2 Milk Company says its Managing Director & CEO of less than 18 months, Jayne Hrdlicka, "has agreed to step down" from her role.
The a2 share price dropped sharply on opening on Monday, down 7% to $14.11, wiping nearly $800 million from the value of the company - although the price recovered later to over $14.50.
The NZX listed heavyweight says its board will "immediately" commence a global search for a new CEO but in the meantime the former CEO Geoffrey Babidge will retake the reins in an interim capacity.
The announced change comes less than a month after a2's annual meeting, which gave no hints of a change in management.
In a statement to NZX, a2 chairman David Hearn said: "The Board wishes to thank Jayne for the important contribution she has made to the Company and remains confident that the strategic course of the business which was recently communicated at the Annual Meeting will continue to deliver strong rewards to all shareholders in the future."
The same statement also had this quote from Hrdlicka: “The a2 Milk Company is an extraordinary business and I joined the company excited about the opportunity to help define its full potential and deliver against it. Board and management have worked closely together to chart the future and it is no doubt bright and we are well advanced in executing it. I am delighted with how much progress has been made, the momentum underway in executing the strategy and the strength of the current leadership team.
“The reality however is that the next 3-5 years will continue to require the CEO being present in our core markets of China and the US and that combined with running a New Zealand company based in Australia required more travel than I had anticipated when I joined the company. The Board and I agreed that this next phase is going to be too difficult to manage alongside my other commitments whilst also managing the health and wellness priorities of my family and me.
“My passion and commitment to this great company is unchanged and I will of course work closely with the board and new CEO as required to ensure a smooth transition.”
In a separate NZX statement made a few minutes after the announcement of Hrdlicka's departure, Babidge said: “I am delighted to be able to contribute to The a2 Milk Company’s continued success in any way I can. I recognise the positive changes that Jayne has brought to the business and will continue to pursue the strategies and plans developed by management and agreed by the Board.”
The company reaffirmed the outlook as advised at the annual meeting on 19 November 2019 which included:
• Full year EBITDA (earnings before interest, tax, depreciation and amortisation) margin % anticipated to be stronger than previously communicated and in the range of 29-30%;
• 1H20 revenue in the range of $780 million to $800 million with growth demonstrating strong performance against strategy;
• 1H20 EBITDA margin % expected to be higher than FY20 and in the range of 31-32%.
Before joining a2 in July last year Hrdlicka was most recently employed for 5 years in the role of CEO of the Jetstar Group, a wholly owned subsidiary of Qantas Limited and also served as a Non-Executive Director of Woolworths Limited during this time. In her earlier career, she was a partner at Bain & Company in the US, where she was focused on customer orientated businesses. Jayne is also the current non-executive President of Tennis Australia.
Hrdlicka caused an early stir after taking up the job last year when she offloaded about 340,000 a2 shares for about $4.3 million only shortly after taking the reins, prompting a sharp fall in the a2 share price.