Livestock Improvement Corporation Ltd · NZX:LIC
Livestock Improvement — Shareholder Meeting (October 2019)
45 slides from Livestock Improvement's shareholder meeting presentation, Oct 2, 2019
Slide 1: Delivering for Our Farmers – LIC Annual Meeting
DELIVERING FOR OUR FARMERS LIC ANNUAL MEETING 2nd October 2019
Slide 2: Welcome
Welcome Murray King - Chairman
Slide 3: Meeting Agenda
Meeting Agenda 1. Julia Jones - NZX Limited 6. Drivers of the Global LIC - Investment Perspective Dairy Market 2. Financial Overview 7. Financial Detail 3. Business Highlights 8. Shareholder Council Report 4. Dairy Herd Improvement 9. Honoraria Report Regulatory Review 10. Voting Resolutions 5. Outl
Slide 4: LIC – Investment perspective
LIC – Investment perspective - AGM 2 October 2019 nd JULIA JONES - HEAD OF ANALYTICS, NZX LIMITED
Slide 5: Financial DNA
FINANCIAL DNA 2
Slide 6: Best in Breed: Gross Dividend Yield
BEST IN BREED Gross Dividend Yield: LIC and relevant indices S&P/NZX 50 Index NZX Main Board S&P/NZX SmallCap Index S&P/NZX Primary Sector Equity Index MWE SML ATM SEA FSF CVT 3 PGW DGL FWL NZK TGG SAN SCL SEK LIC 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Slide 7: Best in Breed cont.
4 S&P/NZX 50 Index NZX Main Board S&P/NZX SmallCap Index S&P/NZX Primary Sector Equity Index CVT FSF SEA Gross Return SML Returns TGG SEK Net Return BEST IN BREED CONT. SAN MWE NZK PGW DGL SCL FWL ATM LIC 0% 60% 40% 20% -20% -40% -60%
Slide 8: Dry Spell: Liquidity
DRY SPELL Liquidity (median spread, bps) Lower = better liquidity 1000 4000 800 600 5 400 200 0 ATM SML FSF SCL SAN NZK CVT DGL SEK PGW MWE FWL TGG LIC SEA FWPP Median
Slide 9: Two Different Hats
TWO DIFFERENT HATS INVESTOR CUSTOMER 6
Slide 10: Thank You
THANK YOU Julia Jones Head of Analytics NZX Limited 7 Email: Julia.jones@nzx.com Phone: +64 27 524 8901 Twitter: @juliajones110
Slide 11: Results Overview & Business Highlights
Murray King - Chairman Results Overview & Business Highlights
Slide 12: Financial Overview
Financial Overview The major strategic projects we have completed since 2016 to shape LIC into a modern, progressive co-op have enabled this year’s strong result. Importantly, we believe the results are sustainable and we are confident that we will continue to build on them in the coming years.
Slide 13: Highlights
Highlights 246.5M TOTAL REVENUE 19.5M UNDERLYING EARNINGS 13.6M R&D INVESTMENT up 4% from $236.4 million last year. up 541% from $3.0 million last year. This continues to be high at 5.5% of revenue. is Net Profit After Tax (NPAT) excluding the increase on fair value of the biological assets and rela
Slide 14: Business Highlights: Resilient Dairy
Business Highlights Resilient Dairy: Innovative Breeding for a Sustainable Future WATCH
Slide 15: Business Highlights: Awards
Business Highlights Awards CIO of the Co-operative Co-operation High Tech Biosecurity Year Business of Amongst Awards Awards the Year Co-operatives Winner Winner Winner Finalist Finalist
Slide 16: Dairy Herd Improvement Regulatory Review
Dairy Herd Improvement Regulatory Review • LIC submitted on the Dairy Herd Improvement Regulatory Review in support of the current model, which balances access to core data and the promotion of industry innovation in data collection, analytics and use. • LIC has since reiterated its concerns that wh
Slide 17: Our Strategic Roadmap
Our Strategic Roadmap 2016 2019 Separation of LIC 2017 2018 2018 Innovation Herd Improvement Transformation Share Simplification Strategy Refresh Led Growth and Agritech A strong platform for future growth
Slide 18: Outlook
Outlook We expect underlying earnings to increase to $21-25 million in 2019-20, assuming no significant climate event or milk price drop takes place between now and then nor any major impacts from biosecurity threats such as M. bovis. We have to make sure that in the data-driven future of global dai
Slide 19: Drivers of the Global Dairy Market & Financial Detail
Wayne McNee – Chief Executive Drivers of the Global Dairy Market & Financial Detail
Slide 20: Drivers of the Global Dairy Market
Drivers of the Global Dairy Market Macro Factors Industry Dynamics Consumer 1 2 3 4 5 6 7 Rising Technology Changing shape Globalised Advances in Continued global Consumer demand environmental enabled and data of the NZ competition animal genetics demand for dairy for transparency demands driven agr
Slide 21: Our Strategy: Innovation-led Growth
Our Strategy 60% Innovation-led Growth GNO ST ICS DIA Optimise OEM Diagnostics Livestock the core Genetics OUR PURPOSE Lab ON Drive value from TI the current business MA LIC is a dairy farmer GE TO Dairy Animal Health NE owned co-operative which AU International Dairy TIC Automation Milk empowers li
Slide 22: Building Ecosystems Around Customers
Building Ecosystems Around Customers From To Query Query PRODUCT Query Query Advisor Query Query PRODUCT PRODUCT Query Query Query Query Farmer Query Query Query Query Query Query Vet PRODUCT PRODUCT Query Query Query Query Query PRODUCT Owner Query Query Products around cows Ecosystems around custo
Slide 23: What is fuelling us to achieve innovation-led growth?
What is fuelling us to achieve innovation-led growth?
Slide 24: Data
Data “The world’s most valuable resource is no longer oil, but data.” The Economist May 2017
Slide 25: How data is driving genetics and herd management innovations
1 BILLION PIECES OF DATA 2 THE CLOUD Stored in the cloud alongside over 1 billion pieces of data from LIC co-op farms. 1 3 LIC FARM DATA New and existing data analysed • Herd information, what animals make up a herd. How data is driving for insights to continuously improve products and services. • S
Slide 26: How data will drive innovation-led growth in the future
1 BILLION PIECES OF DATA 2 THE CLOUD Stored in the cloud alongside over 1 billion pieces of data from LIC co-op farms. 1 3 LIC FARM DATA New and existing data analysed • Herd information, what animals make up a herd. How data will drive for insights to continuously improve products and services. • S
Slide 27: Financial Detail
Financial Detail
Slide 28: Investment in Research & Product Development
LIC 2018/19 Investment in Research & Product Development Information to Improve Hardware & Systems 17% Decision Making 4% International 3% R&D Support & Delivery 3% Emerging Markets 5% Development Projects 10% Genetics & Information 23% Dairy Sire Proving 35% Around $13.6M invested annually in produ
Slide 29: Capital Approvals 2018/19
Capital Approvals 2018/19 M. bovis including purchase IP and Trademark, cloud lift and shift of Chudleigh Farm $4.7M and external software $7.0M Other projects and Digital channel store, HT online book Wash Line $0.8M system and Diagnostics rebuild $3.6M HT Pools, Weigh Station Improvements, Robot r
Slide 30: Financial Overview: Total Revenue
Financial Overview Total Revenue 300.0 236.4 246.5 250.0 232.5 211.5 210.7 199.5 203.5 200.0 177.5 165.6 NZD $M 150.0 100.0 50.0 0.0 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Slide 31: LIC Contribution to Value on Farm
LIC Contribution to Value on Farm 2019/20 2020/21 2021/22 Genetic Merit $339M $340M $340M Health $3.5M $3.5M $3.7M Reproduction $30M $30M $30M Production $39M $41M $44M
Slide 32: Shareholder Council Report
Mark Meyer Council Chair Shareholder Council Report
Slide 33: Honoraria Report
David Gasquoine Honoraria Committee Honoraria Report
Slide 34: Meeting Resolutions
Murray King Chairman Meeting Resolutions
Slide 35: Director Remuneration
Director Remuneration CURRENT PROPOSED DIFFERENCE Chair $123,600 $123,600 NIL Each of the other nine Directors $51,500 $54,000 $2,500 *Maximum sum available to reimburse for additional duties and skills $60,000 $60,000 NIL Total for LIC Board (as a whole) $647,100 $669,600 $22,500 *Maximum pool avai
Slide 36: Resolution 1: Approval of Directors' Remuneration
Resolution 1 Approval of Directors’ Remuneration To receive and consider the LIC Shareholder 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 Directors’ taken together being inc
Slide 37: LIC Shareholder Councillor Remuneration
LIC Shareholder Councillor Remuneration CURRENT PROPOSED DIFFERENCE Chair $30,000 $30,000 NIL Deputy Chair $9,000 $9,000 NIL Each of the other 19 Councillors $5,000 $5,000 NIL Total for LIC Shareholder Council (as a whole) $134,000 $134,000 NIL Daily Allowance $220 $320 $100 There is also a daily al
Slide 38: Resolution 2: Approval of Shareholder Councillor's Remuneration
Resolution 2 Approval of Shareholder Councillor’s Remuneration To receive and consider the LIC Shareholder Honoraria Committee’s recommendation as to maintain the current level of Shareholder Councillor’s Remuneration and resolve by way of ordinary resolution to: “Approve an increase in the daily al
Slide 39: Resolution 3: Reappointment of External Auditor
Resolution 3 Reappointment of External Auditor To consider, and if thought fit, to resolve by way of ordinary resolution to: “Reappoint the chartered accountancy partnership KPMG as the Auditor until the conclusion of the Company’s next Annual Meeting, and that the Directors be authorised to fix its
Slide 40: LIC Shareholder Council's Budget
LIC Shareholder Council’s Budget 2018/19 2019/20 EXPENDITURE BUDGET ACTUAL BUDGET Honoraria $142,000 $142,088 $142,000 Training Costs $15,500 $7,059 $21,500 Meeting Related Expenses $74,672 $31,290 $75,200 Administration $4,280 $2,287 $4,320 TOTAL $236,452 $182,724 $243,020
Slide 41: Resolution 4: Approval of Shareholder Council Budget
Resolution 4 Approval of Shareholder Council Budget To consider, and if thought fit, to resolve by way of ordinary resolution to: “Approve the LIC Shareholder Council’s budget for the year ending 31 May 2020 as outlined in the Explanatory Note in the Notice of Annual Meeting.”
Slide 42: Resolution 5: Ratify reappointment of Tim Gibson
Resolution 5 Ratify the reappointment of Tim Gibson as an Appointed Director To consider, and if thought fit, to resolve by way of ordinary resolution to: “Ratify the reappointment of Tim Gibson as an Appointed Director for a further three year term.”
Slide 43: Resolution 6: Ratify appointment of Sophie Haslem
Resolution 6 Ratify the appointment of Sophie Haslem as an Appointed Director To consider, and if thought fit, to resolve by way of ordinary resolution to: “Ratify the appointment of Sophie Haslem as an Appointed Director until the 2020 Annual Meeting of Shareholders.”
Slide 44: General Business & Q&A
General Business & Q&A
Slide 45: OLIC
OLIC
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