Livestock Improvement Corporation Ltd · NZX:LIC
Livestock Improvement — Shareholder Meeting (October 2018)
35 slides from Livestock Improvement's shareholder meeting presentation, Oct 18, 2018
Slide 1: A Transformational Year
LIC ANNUAL MEETING 18 October 2018 A Transformational Year
Slide 2: Murray King – Chairman
© Murray King - Chairr i i
Slide 3: Meeting Agenda
Meeting Agenda 1. Financial Overview 7. Strategy Refresh 2. Business Highlights 8. Financial Detail 3. Transformation Programme Results 9. Shareholder Council Report 4. Dairy Herd Improvement Regulatory 10. Honoraria Report Review 11. Voting on Resolutions 5. M. bovis Update 12. General Business 6.
Slide 4: Financials
Financials After a year of transformation and change, including share simplification, our co-operative is in strong shape. As a business, we are more match-fit than we have ever been and better positioned to drive good outcomes for our farmers.
Slide 5: Highlights
Highlights 236.4M TOTAL REVENUE 27M EARNINGS BEFORE 14.9M REPORTED EBIT INTEREST AND TAX (EBIT) up 16% from 2016-17. down 54% from 2016-17 due to the impact of up 175% from 2016-17 excluding bull team the one-off transformation costs and the annual revaluation and one-off transformation costs. reval
Slide 6: Transformation Programme Results
Transformation Programme Results 60M RECURRING BENEFITS 30.7M ONE-OFF BENEFITS Organisational Before transformation programme started: After one year: After two years: Health Score: 54 66 68 FOURTH QUARTILE SECOND QUARTILE SECOND QUARTILE
Slide 7: Evolution of AgriTech Investment
Evolution of AgriTech Investment Global AgriTech investment is up, despite lower farm income. Gross Agtech Investment Net Farm Income 3.0b 3b 150b 124b 114b 96b 2.0b 2b 100b 81b $Billions $Billions 77b 93b 80% CAGR 1b 0.9b 50b 0.5b 0.5b 0.4b 0 0b 2010 2011 2012 2013 2014 2015 Year Sources: US Depart
Slide 8: SPACE: A New Zealand First For Pasture Management
SPACE A New Zealand First For Pasture Management ™ WATCH
Slide 9: Imaging Tech - Automated Lameness Detection
Imaging Tech - Automated Lameness Detection WATCH
Slide 10: Dairy Herd Improvement Regulatory Review
Dairy Herd Improvement Regulatory Review • Core database was transferred to DairyNZ in December 2014 • Expected benefits to LIC have not been realised • The Cabinet paper on the regulatory review suggests regulatory shackles on LIC will be removed • MPI argues the current regulations do not keep pac
Slide 11: World-leading measures to combat Mycoplasma bovis (M. bovis)
World-leading measures to combat Mycoplasma bovis (M. bovis) • LIC bulls extensively tested and no sign or indication of M. bovis found • Working closely with farmers and MPI • Investing $800,000 in changes to effectively manage any risk of transmission of M. bovis • LIC absorbing cost – no price in
Slide 12: Our Strategic Roadmap
Our Strategic Roadmap Next Step 2016 2017 2018 2018 Step 1 Step 2 Step 3 Step 4 n n n io tio tio h s at ra ca re m pa ef ifi or pl yR sf Se m an Si g Tr te e ar ra Sh St
Slide 13: Strategy - Findings
Strategy - Findings FY19 Transformation Share Performance Programme Simplification $18-22m DELIVERING ONGOING IMPLEMENTED FORECAST underlying BENEFITS JULY 2018 earnings A strong platform for future growth
Slide 14: Outlook
Outlook The increased revenue position in the 2017-18 financial year was driven by the success of the transformation programme. LIC expects underlying earnings for the 2018-19 financial year to be in the range of $18-22 million, assuming no significant climate event or milk price drop takes place be
Slide 15: Wayne McNee – Chief Executive: Strategy Refresh & Financial Detail
Wayne McNee – Chief Executive Strategy Refresh & Financial Detail
Slide 16: External Factors Influencing LIC Strategy
Strategy - Findings External Factors Influencing LIC Strategy Macro Factors Industry Dynamics Consumer 1 2 3 4 5 6 7 Rising Technology Changing shape of Globalised Advances in animal Continued global Consumer demand environmental enabled and data the NZ dairy competition genetics demand for dairy fo
Slide 17: LIC 2018 Strategy Refresh
LIC 2018 Strategy Refresh OUR OUR STRATEGY PURPOSE AMBITION LIC is a dairy farmer Continuing to lead the An innovation-led owned cooperative which global pastoral dairy growth strategy for empowers livestock farmers system LIC, with an ongoing through the delivery of superior focus on the core NZ ge
Slide 18: LIC 2018 Strategy Refresh
LIC 2018 60% Strategy Refresh Optimise ICS NOST the core G DIA Drive value from OEM the current business Diagnostics Livestock Lab Genetics ON TI MA GE TO Dairy Animal Health NE AU International Dairy 30% TIC Automation Milk AI Farm Pregnancy S Sensors Testing Beef Genetics Inline Milk ICE & CONSULT
Slide 19: The Future of Genetics
The Future of Genetics Transforming Dairy Cattle Improvement Through Next Generation Genomic Selection And Strategic Mating WATCH
Slide 20: LIC 2017/18 Investment in Research & Product Development
LIC 2017/18 R&D TOTAL Investment in Research $13M & Product Development approx Around $13m invested annually in product development and 2% R&D; approx 5.6% of revenue R&D Support & Delivery 15% 14% New Product Development Hardware & Systems 4% Information to Improve Decision Making 1% International
Slide 21: Improving Farm Management: MINDA LIVE
Improving Farm Management MINDA LIVE ®
Slide 22: Capital Approvals 2018/19
Capital Approvals 2018/19 CAPITAL APPROVALS $22.3M $1.3M $0.8M Computer hardware and office furniture Building improvement,vehicles and other PPEs $4.1M $9.6M Herd Test Equipment, Analyser MINDA™ Projects – APIs, Multi herd and Robot replacement $1.0M Other projects and WRs- DIGAD, EZ Link, DataMATE
Slide 23: Financial Overview: Total Revenue
Financial Overview Total Revenue 240M 236M 233M 220M 212M 211M 204M 200M 199M 180M 177M 160M 166M 140M NZD $M NZD $M 120M 100M 80M 60M 40M M 20M 0M 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 Year End Result Year End Result
Slide 24: LIC Contribution to Value on Farm
LIC Contribution to Value on Farm 2018/19 2019/20 2020/21 Genetic Merit $334M $339M $344M Health $3.3M $3.5M $3.7M Reproduction $30M $30M $30M Production $39M $41M $44M
Slide 25: Shareholder Council Report
Mark Meyer Council Chair Shareholder Council Report
Slide 26: Honoraria Report
David Gasquoine Honoraria Committee Honoraria Report
Slide 27: Director Remuneration
Director Remuneration CURRENT PROPOSED DIFFERENCE Chair $120,000 $123,600 $3,600 Each of the other nine directors $50,000 $51,500 $1,500 *Maximum sum available to reimburse for additional duties and skills $60,000 $60,000 $0 Total for LIC Board (as a whole) $630,000 $647,100 $17,100 *maximum pool av
Slide 28: Resolution 1: Approval of LIC Directors' Remuneration
Resolution 1 Approval of LIC 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
Slide 29: LIC Shareholder Council Remuneration
LIC Shareholder Council 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 There is also a daily allowance of $220 available for Coun
Slide 30: Resolution 2: Reappointment of External Auditor
Resolution 2 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 31: LIC Shareholder Council's Budget
LIC Shareholder Council’s Budget 2017/18 2018/19 EXPENDITURE BUDGET ACTUAL BUDGET Honoraria (inc daily allowance) $140,300 $138,251 $142,000 Training Costs $15,000 $0 $15,500 Meeting Related Expenses $59,207 $45,536 $74,672 Administration $4,030 $2,576 $4,280 TOTAL $218,537 $186,363 $236,452
Slide 32: Resolution 3: Approval of Shareholder Council Budget
Resolution 3 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 2019 as outlined in the Explanatory Note in the Notice of Annual Meeting.”
Slide 33: Resolution 4: Ratify reappointment of Ms Candace Kinser Reed
Resolution 4 Ratify the reappointment of Ms Candace Kinser Reed as an Appointed Director To consider and, if thought fit, to resolve by way of ordinary resolution to: “Ratify the reappointment of Ms Candace Kinser Reed as an Appointed Director for a further three year term.”
Slide 34: General Business
General Business
Slide 35: QOLIC
QOLIC
Livestock Improvement — Shareholder Meeting (October 2018) on 6ix