Livestock Improvement Corporation Ltd · NZX:LIC
Livestock Improvement — Shareholder Meeting (October 2022)
49 slides from Livestock Improvement's shareholder meeting presentation, Oct 20, 2022
Slide 1: Continued investment in premium genetics to breed the best cows, faster
Continued investment in premium genetics to breed the best cows, faster Annual meeting – 20 October 2022
Slide 2: Using the Online Platform
Using the Online Platform LIC 2022 Annual Meeting Starts Oct 20th at 12:00 PM NZDT Continued Continued investment investment in in premium premiumgenetics to breed genetics to breed the best cows, faster the best cows, faster Annual meeting – 20 October 2022 Annual meeting – 20 October 2022 Voting c
Slide 3: Welcome
Welcome LIC 2022 Annual Meeting 3 Murray King — Board Chair
Slide 4: Meeting Agenda
Meeting Agenda LIC 2022 Annual Meeting 1. Business highlights 5. Honoraria report 2. Strategy & commitments 6. Meeting resolutions 3. Financial overview 7. General business 4. Breeding the best cows, faster 4
Slide 5: Business highlights
Business LIC 2022 Annual Meeting highlights 5 Murray King – Board Chair
Slide 6: Business highlights
Business highlights LIC 2022 Annual Meeting Increased farmer spend on premium genetics and herd improvement services is breeding more efficient cows with a lighter environmental footprint. Premium AB Products Animal Health Testing New Chief Executive, David Chin 6
Slide 7: The year ahead
The year ahead LIC 2022 Annual Meeting LIC’s focus will be on investing in R&D for the future and delivering on our commitments to farmer shareholders. LIC expects underlying earnings in 2022-23 to be in the range of $20-26 million. 7
Slide 8: Strategy & commitments
Strategy & LIC 2022 Annual Meeting commitments Murray King – Board Chair 8 David Chin – Chief Executive
Slide 9: Strategy
Strategy LIC 2022 Annual Meeting Our Farmers Deepen our understanding of the current and future needs of all of our farmers. Animal Most sustainable & efficient animal. Highest value products. Data & Digital Modernising the animal data & digital capabilities. Innovation Research & development. Respo
Slide 10: Our three commitments to you
Our three commitments to you LIC 2022 Annual Meeting 1 2 3 Operational Faster genetic Software reliability excellence improvement and performance 10
Slide 11: We need to measure it to manage it
LIC 2022 Annual Meeting We need to measure it to manage it 11
Slide 12: Operational excellence
Operational LIC 2022 Annual Meeting excellence We commit to getting the basics right and delivering for you, on time, every time. HERD TESTING GENEMARK Provide a result for 5-week turnaround 99.9% of all cows time for test results within 72 hours 99.9% (from booking week) 70% 5 12
Slide 13: Faster genetic improvement
Faster genetic LIC 2022 Annual Meeting improvement We commit to having your back when it comes to helping you meet the environmental challenges you face, in particular animal efficiency, and nitrogen and methane mitigation. PREMIER SIRES BULL TEAM GENETIC GAIN 15 BW increase per annum 20BW 13
Slide 14: Software performance and reliability
Software performance LIC 2022 Annual Meeting and reliability We commit to being better at delivering our software to you. We renew our commitment to continuous improvement and transparency around delivery of new features. MINDA ROADMAP All features in MINDA Roadmap released 98% 14
Slide 15: Financial overview
Financial LIC 2022 Annual Meeting overview 15 David Hazlehurst - Chief Financial Officer
Slide 16: Financial overview
Financial overview LIC 2022 Annual Meeting Delivering value for our farmers is at the centre of everything we do and it’s results like this that enable us to do just that. Products and services Solid dividend R&D investment 16
Slide 17: Financial Highlights
Financial Highlights LIC 2022 Annual Meeting $ 263.2m $ 26.7m $ 25.7m Total Revenue from Net Profit After Tax (NPAT) Underlying Earnings* Continuing Operations up 16.5% from $22.9 million up 15.3% from $22.3 up 5.7% from $249 million last year million last year last year $ 385.6m $ 26.2m $20-26m Tot
Slide 18: Total revenue
Total revenue LIC 2022 Annual Meeting 300.0 250.0 200.0 NZ $m 150.0 100.0 50.0 0.0 2018 2019 2020 2021 2022 18 Continuing Operations Discontinued Operations
Slide 19: Reinvesting – Capital approvals
Reinvesting – Capital approvals LIC 2022 Annual Meeting Data and digital 37% Buildings, including improvements and fit outs 33% CAPITAL Vehicles and other property, APPROVALS plant, and equipment 24% $ 24.8m Computer hardware, office furniture/equipment 6% 19
Slide 20: Investment in research and development
Investment in research LIC 2022 Annual Meeting and development $18.2 million Investment in R&D representing 6.9% of revenue, up from $17.1 million. LIC is the one of the largest private investors in R&D in the primary sector. 20
Slide 21: Research and development
Research and development LIC 2022 Annual Meeting LIC’s continued investment in R&D is helping dairy farmers build a better herd. GeneMark Genomics Short Gestation Johne’s Testing Length Semen 21
Slide 22: Breeding the best cows, faster
Breeding the LIC 2022 Annual Meeting best cows, faster 22 David Chin – Chief Executive
Slide 23: LIC 2022 Annual Meeting
The dairy industry needs to continue to LIC 2022 Annual Meeting evolve – for climate change and because of it. The production efficiency of our national herd has never been more important. Consumers expect a more sustainable approach to farming so we must continue to improve our environmental creden
Slide 24: Herd improvement is what we do
Herd improvement is what we do LIC 2022 Annual Meeting We’re providing farmers with precision genetics and technology tools to improve their herds and be more sustainable. 1:1 support Genetics Herd Milk DNA & via nationwide Management Analysis Diagnostic team Software Testing 24
Slide 25: The opportunity: All cows aren't created equal
The opportunity: All cows aren’t created equal LIC 2022 Annual Meeting Holstein BW Animal Average Average Average Average The best cows are more Quartile Count BW kgMS LWGT BV FERT BV Friesian efficient at turning feed into Q1 51,375 163 518 37 0.8 Q2 51,375 102 486 37 -0.2 +73 kgMS (16.4%) milk – t
Slide 26: We don't need more cows — we need the best cows
We don’t need more cows — we need the best cows LIC 2022 Annual Meeting We’ve made good progress over the years but to continue on this trajectory we need to sharpen our focus on breeding the best cows. The best cows 397 502 kgMS ? kgMS 188 288 kgMS kgMS kgMS 1950–51 2000–01 2020–21 2030 26 Source:
Slide 27: The size of the prize for New Zealand
The size of the prize for New Zealand — LIC 2022 Annual Meeting a profitable and sustainable dairy sector What it’s worth if we accelerate the rate of genetic gain and only breed the best cows: Increase cow production Maintain total milk Reduce agricultural relative to liveweight production from few
Slide 28: LIC 2022 Annual Meeting
LIC 2022 Annual Meeting At an individual farm level there can be many variable factors but it is conceivable that by 2030 your whole herd could be performing at the 28 level of your top 25% cows today.
Slide 29: Breeding the best cows, faster is key to solving the challenge
Breeding the best cows, faster is key to solving LIC 2022 Annual Meeting the challenge of being profitable and sustainable Farmers using LIC genetics are already doing this – they’ve almost doubled the speed of improvement in their herds over the last decade. 29
Slide 30: We're helping farmers breed the best cows and get the best from them
We’re helping farmers breed the best LIC 2022 Annual Meeting cows and get the best from them. Parentage verification – take Sexed semen – generate the guesswork out of matching more heifer replacements from calves to parents, adding your best-performing animals precision and selection accuracy to yo
Slide 31: We're focussed on new solutions for the future too
We’re focussed on new solutions for the future too LIC 2022 Annual Meeting LIC is one of the largest investors in R&D in the primary sector – $18 million in FY21 (6.9% of revenue) Methane Resilient Dairy Slick Gene Genomic Portfolio Research Programme Research selection and approach with and Trial e
Slide 32: LIC 2022 Annual Meeting
Breeding the best cows, faster is key to helping farmers LIC 2022 Annual Meeting solve the challenge of being profitable and sustainable. Farmers, industry and Government are aligned on the importance of improving the efficiency of the national dairy herd to achieve our environment goals. We’ve got
Slide 33: Honoraria report
Honoraria LIC 2022 Annual Meeting report 33 Ian Brown — Honoraria Committee Chair
Slide 34: Meeting resolutions
Meeting LIC 2022 Annual Meeting resolutions 34 Murray King — Board Chair
Slide 35: Approval of LIC Directors' Remuneration
Resolution 1: LIC 2022 Annual Meeting Approval of LIC Directors’ Remuneration To receive and consider the LIC Honoraria Committee’s recommendation as to Directors’ remuneration, and if thought fit, to resolve by way of ordinary resolution to: “Approve the total remuneration of all nine Directors to
Slide 36: Director Remuneration
Resolution 1: LIC 2022 Annual Meeting Director Remuneration Current Recommended $ Increase % Increase Chair $123,600 $132,000 $8,400 6.80% Director $54,000 $59,000 $5,000 9.26% Discretionary Pool* $60,000 $60,000 No change No change Total for LIC Board $615,600** $664,000 $48,400 7.86% * Maximum poo
Slide 37: Approval of LIC Shareholder Reference Group Remuneration
Resolution 2: LIC 2022 Annual Meeting Approval of LIC Shareholder Reference Group Remuneration To receive and consider the LIC Honoraria Committee’s recommendation as to Shareholder Reference Group’s remuneration, and if thought fit, to resolve by way of ordinary resolution to: “Approve the total re
Slide 38: Shareholder Reference Group Remuneration
Resolution 2: LIC 2022 Annual Meeting Shareholder Reference Group Remuneration Current Recommended $ Increase % Increase SRG Chair $35,000 $36,500 $1,500 4.29% SRG Deputy Chair $16,000 $17,000 $1,000 6.25% SRG Member $12,000 $12,600 $600 5.00% Total $171,000 $179,500 $8,500 4.97% Daily Allowance Dai
Slide 39: To reappoint KPMG as External Auditor
Resolution 3: LIC 2022 Annual Meeting To reappoint KPMG as External Auditor To consider, and if thought fit, to resolve by way of ordinary resolution to: “Re-appoint the chartered accountancy partnership KPMG as the Auditor until the conclusion of the Company’s next Annual Meeting, and that the Dire
Slide 40: To elect one Elected Director for the South Island
Resolution 4: LIC 2022 Annual Meeting To elect one Elected Director for the South Island To consider, and if thought fit: “Elect ONE (1) candidate representing the South Island, as an Elected Director to the Board of Directors with effect from the conclusion of this Annual Meeting” 40 Note: That onl
Slide 41: To elect one Elected Director for the South Island
Resolution 4: LIC 2022 Annual Meeting To elect one Elected Director for the South Island Siobhan O’Malley Corrigan Sowman Victoria Trayner 41
Slide 42: To ratify the re-appointment of Tim Gibson
Resolution 5: LIC 2022 Annual Meeting To ratify the re-appointment of Tim Gibson as an Appointed Director To consider, and if thought fit, to resolve by way of ordinary resolution to: “Ratify the re-appointment of Tim Gibson as an Appointed Director for a term expiring at the conclusion of the third
Slide 43: To elect two members of the Shareholder Reference Group
Resolution 6: LIC 2022 Annual Meeting To elect two members of the Shareholder Reference Group for the Upper North Territory To consider, and if thought fit: “Elect TWO (2) candidates from the Upper North Territory to the Shareholder Reference Group with effect from the conclusion of this Annual Meet
Slide 44: To elect two members of the Shareholder Reference Group
Resolution 6: LIC 2022 Annual Meeting To elect two members of the Shareholder Reference Group for the Upper North Territory Mark Benns Aleisha Broomfield Murray Hawkings 44
Slide 45: Re-election of Scott Montgomerie to the Honoraria Committee
Resolution 7: LIC 2022 Annual Meeting Re-election of Scott Montgomerie to the Honoraria Committee To consider, and if thought fit, to resolve by way of ordinary resolution to: “Approve the re-election of Scott Montgomerie to the Honoraria Committee, with effect from the conclusion of this Annual Mee
Slide 46: Re-election of Shirley Trumper to the Honoraria Committee
Resolution 8: LIC 2022 Annual Meeting Re-election of Shirley Trumper to the Honoraria Committee To consider, and if thought fit, to resolve by way of ordinary resolution to: “Approve the re-election of Shirley Trumper to the Honoraria Committee, with effect from the conclusion of this Annual Meeting
Slide 47: General business
General LIC 2022 Annual Meeting business 47 Murray King — Board Chair
Slide 48: Q&A
LIC 2022 Annual Meeting 48 Q&A
Slide 49: LIC 2022 Annual Meeting
LIC 2022 Annual Meeting 49
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