1. An endless horizon ahead

Dear shareholder,
Xero is in a unique and enviable position to embark on its next chapter of global growth. My comments largely focus on strategy, as it has been a relentless commitment to executing a clear strategy that has driven us to this point in our journey. It will be the same, disciplined focus on strategy and execution that will allow Xero to realise its considerable potential as we enter the next chapter of growth.
As Rod Drury discusses in the CEO review, Xero’s future will be as a truly global, cloud-based business platform. You can expect to see this reflected not only in product development but also in our geographic market strategy, continuing our near term focus on English language markets.
Succession planning in action
One of the Board’s primary accountabilities is to appoint the Chief Executive. We have been privileged and fortunate to have had Xero’s founder Rod Drury in this role since he founded the company 12 years ago.
Steve Vamos took over as Xero’s Chief Executive on 1 April this year and the Board welcomes him to Xero. Steve has a leadership track record in some of the world’s most iconic technology companies, including Apple, IBM, and Microsoft. He also has a deep understanding of high-growth companies, having worked with start-ups, including ninemsn in Australia, which he grew into an industry leader.
Steve brings an invaluable skill set to lead Xero. He understands the Xero business and the scale of the opportunity.
In the 18 months before he was appointed CEO, Steve worked as a consultant alongside Xero's leadership team in developing management capability, and honing Xero's operating model.
Steve’s appointment underpins Xero’s evolution from a founder-led company to a business with worldwide scale. Steve has the experience, capability and commitment we need to grow Xero, and the Board is delighted to have secured somebody of his calibre for this critical role.
Rod Drury: The first Xero
At the same time, Xero will continue to benefit from Rod’s vision and deep commitment to developing beautiful business products and to Xero’s continued success, in his role as a non-executive director on the Board.
Rod’s achievement of building a global company and community from New Zealand is unmatched. Through passion, commitment and sheer hard work, Rod has turned a good idea into one of the world’s most innovative technology companies. He has worked tirelessly to build Xero and its culture so that we now have a solid base to begin our next phase.
Rod has made an enormous contribution to Xero, to New Zealand, and to international business. On behalf of the Board and the whole Xero team, I want to thank Rod and acknowledge his tremendous leadership since founding the company. Likewise, the Board looks forward to continuing to work with Rod in his role as a non-executive director.
Board update
We were also pleased to welcome Dale Murray, CBE, as a non-executive director to the Board in April. Recruiting a UK-based director is in line with our strategic focus on that market as one of Xero’s growth engines. To attract Dale to Xero's Board is testament to our growing reputation around the world.
Consolidation of our listing on the ASX
The recent consolidation of Xero’s listing solely on the Australian Securities Exchange (ASX) and de-listing from the New Zealand Stock Exchange (NZX) is a reflection of our strategy in action.
As Xero continues to grow, having enhanced access to deeper capital markets, increased trading liquidity, and a broader base of potential investors is critical to fulfilling our aspirations and improving our visibility as a listed company.
Between 5 February 2018 (the date of our sole ASX listing) and 29 March 2018, average daily liquidity has increased by more than 200% and we’ve seen an increase in international index-based investment. In addition, on 9 March 2018, Xero was included in the S&P/ASX 100 index.
The next two years
Over the next 18 – 24 months we will focus on delivering continued strong growth within the core business, and developing products, markets and capabilities that execute on our strategy.
We will do this while maintaining a nimble culture and environment that enables people to do the best work of their lives. This involves careful adherence to the right strategy and continuing to develop our people, products and partnerships.
Conclusion
Xero is uniquely positioned to forge ahead on its next chapter. It has the right people, the right strategy and significant opportunities ahead.
As a shareholder, you should expect our company to continue on our journey with exactly what has got us to this moment: passion, vision, innovation, beautiful products, and a relentless commitment to our customers through disciplined strategy and execution.
On behalf of the Xero Board, thank you for your continued support.
Graham Smith
Chair
All chapters:
1. An endless horizon ahead
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