LIC Half-Year Result 2021-22

Private Bag 3016
Hamilton 3240
New Zealand

0800 651 156
www.lic.co.nz
LIC is the trading name of Livestock Improvement Corporation Limited
Market Statement
26 January 2022

LIC Half-Year Result 2021-22

Performance Highlights*:
• NPAT (net profit after tax) from Continuing Operations: $35.6 million, up 6.2% from $33.5 million in the
same period last year
• NPAT from Discontinued Operations following divestment of the Automation business: $15.2 million
• Total revenue: $169.4 million, up 5.4% from $160.7 million
• EBITDA (earnings before interest, tax, depreciation and amortisation) $61.2 million, up 4.7% from $58.4
million
• EBIT (earnings before interest and tax): $50.0 million, up 7.0% from $46.7 million
• Underlying earnings (NPAT excl bull valuation change)* range is now forecast to be $22-26 million for
year-end, compared to $22.3 million in 2020-21.
*Refer notes to financial information on last page of statement

Livestock Improvement Corporation (NZX: LIC) announces its half-year result for the six months to
30 November 2021, which shows continued strength in the farmer-owned co-operative’s financial
performance.

Murray King, LIC Board Chair said the Board is pleased to present another strong result to farmer
shareholders, particularly after a difficult period of Covid-19 restrictions and increasing cost pressure
in the business.

“The LIC team worked hard to deliver a largely business as usual season to our farmers this season,
despite our main bull farms and laboratories operating under the Level 3 Covid-19 restrictions that
were in place in the Waikato for most of this period.

“Spring is the most important time of year for our farmers, and for LIC, when demand for our
essential artificial breeding and herd testing services is at an all-time high. I want to thank our
farmers for trusting us to continue to deliver to them during this time.

“It is also pleasing to note that the business has worked hard to manage costs during this time, and
we remain on track to deliver another strong result at year-end.”

LIC’s half-year result incorporates the majority of revenues from LIC’s core artificial breeding (AB)
and herd testing services, but not a similar proportion of total costs so are not indicative of the
second half, nor the full year, result. Revenue from international business, technology products and
animal health testing is also spread through the year.

King said the half-year result was driven by more farmers investing in the co-op’s premium artificial
breeding (AB) products where young, genomically-selected bulls are used to fast-track genetic gain
and deliver more value on-farm through increased productivity and efficiency, including improved
environmental efficiency.

This year, more than half (50.3%) of total AB inseminations will be delivered by genomically selected
young bulls, up from 41.3% last year and 12.6% in 2016-17. Within that, more than 200,000 sexed
semen straws will be despatched to farmers, up from 110,000 last year, and 33,804 the year prior.

Page 2 of 3

“With a focus on cow quality over quantity, we’re seeing more farmers turn to high genomic BW
(gBW) sires to help them meet climate targets and drive efficiency gains.

“We’ve invested more than $80 million in genomic science over the last 30 years because we
passionately believe in its power to enhance herd improvement and the role it will continue to play in
the future of the New Zealand dairy industry.

“Genomic selection now underpins our breeding programme and we’re really proud of the value it is
delivering on-farm. Last month we shared the latest research* with our farmers which reaffirms that
genomics is the high-octane fuel that will help drive the next wave of productivity and efficiency
gains for their cows.

“It’s really encouraging to see that farmers that have predominantly been using LIC bulls over the
last 10 years are achieving markedly higher rates of genetic gain in their herds than the industry
average and seeing the benefit of our investment in genomics.”

The divestment of its automation business (NZX 8 June 2021) was also completed, with products,
services and staff now transitioned to Allflex Livestock Intelligence, a NZ-based business unit of
MSD Animal Health.

The co-operative also continued investment in Research & Development (R&D) projects including a
major research project with the aim of being able to select for lower methane emitting dairy cows.
Work to deliver on the improvement roadmap for MINDA, its cloud-based farm management
software, also continued.

King said the co-op also farewelled Wayne McNee in November after 8.5 years as Chief Executive
of LIC. Subsequently, David Chin, formerly LIC’s GM Operations & Service was appointed to the
role and started on 17 January.

“Wayne led the organisation through a period of significant growth and development across all areas
of the business while delivering strong shareholder returns, and LIC is a significantly better company
than when he started in 2013.

“Wayne executed his duties to a high standard, setting strong expectations and operating with a high
degree of professionalism. In turn, that level of performance has disseminated throughout the
business, delivering strong financial results, including this half-year.

“We are confident David Chin’s leadership combined with his deep operational knowledge, energy
and passion for delivering value to our farmers will serve the co-op very well into the future.

“On behalf of the Board I’d like to thank David Hazlehurst for stepping in as interim chief executive,
supporting the transition to the new CEO and his ongoing contribution as Chief Financial Officer.”

No dividend is declared at half-year, however the co-op paid its first special dividend on 21 January
to partially distribute funds from the divestment of its automation business in June 2021 (NZX 8
December 2021).

Outlook
Underlying earnings (NPAT excl bull valuation change)* at year-end is forecast to be in the range of
$22-26 million, assuming no significant climate event or milk price change takes place between now
and then, nor any major impacts from M. bovis or Covid-19. LIC expects underlying earnings* in
2022-23 to be in the range of $20-26 million.

ENDS
This statement has been authorised for release by the Board of Directors.

See notes overpage.

• For shareholder enquiries, phone 0800 542 742
• For media enquiries, contact LIC Communications Manager: Ashleigh.Sattler@lic.co.nz, 0276171942.

Page 3 of 3


About LIC
LIC is a farmer-owned co-operative and world leader in pasture based dairy genetics and herd management. LIC exists to deliver superior
genetics and technological innovation to help its shareholders sustainably farm a profitable animal. With origins dating back to 1909, LIC
has a long history of developing and delivering world-leading innovations for the dairy industry. The co-op continues to be one of the
sector’s biggest private investors in research and development. Today the New Zealand-based co-op employs more than 700 permanent
staff, swelling to 2000 during the spring peak dairy mating season. LIC also has offices in the United Kingdom, Ireland and Australia. All
LIC profit is returned to its farmer owners/shareholders in dividends, or reinvested for new solutions, research and development.
www.lic.co.nz


*Notes to Financial Information
Underlying Earnings is the company’s NPAT excluding bull valuation and nil paid share valuation movements and is considered useful to
investors as it is the basis on which LIC has historically reported and it is the basis on which LIC makes its determination of dividends.
Underlying Earnings for 2021-22 also excludes the one-off gain on divestment of Automation. Non-GAAP financial information does not
have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by
other entities. As this is a half-year update, the numbers relating to November 2021 have not been audited. These numbers should be all
read in conjunction with the interim financial accounts.
Accounting standards require profits from the Automation business for both November 2021 and 2020 to be separately disclosed as
Discontinued Operations. This has resulted in restatement of all profit lines for November 2020 to exclude Automation (including revenue
and R&D), therefore some November 2020 figures used in this statement for comparison to November 2021 will differ from the November
2020 Interim Results disclosure. Accounting standards prohibit separate disclosure of balance sheet items for November 2020, which still
includes balances relating to the Automation business.

Faster genetic improvement with genomics: New LIC research confirms the increasing rates of genetic gain our farmers are
achieving
LIC recently reviewed the rate of genetic gain in NZ herds that have predominantly been using LIC bulls over the last 10 years (with more
than 80% usage every year). This research found these herds are achieving markedly greater rates of genetic gain than the widely
acknowledged industry average of 10BW per annum:
• From 2012-2016, the average rate of genetic gain within these herds was 9gBW per annum.
• From 2017-2020 the average rate of genetic gain increased to 16gBW per annum.
It also found heifers born in 2020 had an average 171gBW – up from 71gBW in 2012. More info about the research is on the LIC website.

---

Livestock Improvement
Corporation Limited (LIC)
Interim Report
For the six months ended
30 November 2021

Contents
Key results and position
Our results for the period2
Our position3
Our cash flows for the period4
Changes in our position for the period4
More details
Accounting policies5
Business analysis6
Equity7
Other information8-9

STATEMENT OF RESULTS FOR THE PERIOD
For the six months ended 30 November 2021
In thousands of New Zealand dollarsSIX MONTHS ENDEDYEAR ENDED
Continuing operations
Note
30 Nov 2021
Unaudited
30 Nov 2020
Unaudited
31 May 2021
Audited
Revenue1169,360 160,690 249,013
Purchased materials(22,093)(20,055)(40,795)
People costs(61,643)(58,293)(103,576)
Depreciation and amortisation
(11,214)(11,716)(21,999)
Research and development(7,746)(6,428)(17,124)
Other expenses(16,709)(17,516)(33,615)
Net finance costs(366)(1,090)(1,376)
Bull team revaluation- - (718)
Fair value change in Nil Paid Share receivable- - 1,200
Profit/(loss) before tax expense from continuing operations49,589 45,592 31,010
Tax expense(14,020)(12,088)(7,397)
Profit/(loss) for the period from continuing operations35,569 33,504 23,613
Discontinued operations7
Profit/(loss) after tax expense from discontinued operations15,191 (67)(669)
Profit/(loss) for the period50,760 33,437 22,944
Hedge revaluations229 (141)(134)
Investment revaluations(288)(681)(195)
Land and buildings revaluations- - 1,443
(59)(822)1,114
Comprehensive income for the period50,701 32,615 24,058
Profit from continuing operations per Ordinary Share (excl. Treasury
stock)
$ 0.25$ 0.24 $ 0.17
Profit per Ordinary Share (excl. treasury stock)$ 0.36$ 0.23 $ 0.16
Supplementary non-GAAP note to the results for the period:
Profit/(loss) for the period50,760 33,437 22,944
Less Bull team revaluation- - 718
Tax effect on Bull team revaluation- - (201)
Less: Gain on divestment of Automation business(15,490)- -
Less Fair value change in Nil Paid Share receivable- - -
Underlying earnings35,270 33,437 22,261
Underlying earnings per Ordinary Share (excl. treasury stock)$ 0.25$ 0.23$ 0.16
Key results and position
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 20212

3
STATEMENT OF POSITION
As at 30 November 2021SIX MONTHS ENDED YEAR ENDED
In thousands of New Zealand dollars
Note
30 Nov 2021
Unaudited
30 Nov 2020
Unaudited
31 May 2021
Audited
Cash48,617 11,691 18,821
Debtors85,902 87,435 42,973
Assets held for sale- - 26,471
Other assets26,640 26,681 25,042
Nil Paid Shares receivable9,987 12,353 13,491
Bull team114,790 115,508 114,790
Land, buildings and equipment - owned & leased399,207 94,727 95,114
Software, goodwill and other intangible assets343,288 65,676 45,303
Total assets428,431 414,071 382,005
Creditors 30,769 27,136 24,541
Liabilities held for sale- - 2,656
Borrowings - 16,109 -
Deferred tax31,165 33,359 31,935
Other liabilities39,221 34,787 28,750
Total liabilities101,155 111,391 87,882
Net assets327,276 302,680 294,123
Share capital276,737 76,737 76,737
Retained earnings208,777 185,658 175,565
Other reserves241,762 40,285 41,821
Total equity327,276 302,680 294,123
Director
Date: 26 January 2022
Director
Date: 26 January 2022
Key results and position
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 2021

4
STATEMENT OF CASH FLOWS FOR THE PERIOD
For the six months ended 30 November 2021SIX MONTHS ENDED YEAR ENDED
In thousands of New Zealand dollars
Note
30 Nov 2021
Unaudited
30 Nov 2020
Unaudited
31 May 2021
Audited
Customer receipts125,215 122,128 254,989
Supplier payments(103,170)(100,793)(200,765)
Tax payments(69)(10,294)(13,477)
Other operating cash flows(91)(263)(291)
Net operating cash flows521,885 10,778 40,456
Software development(2,567)(5,338)(7,658)
Net sales/(purchases) of land, buildings and equipment(8,162)(5,462)(7,845)
Sale of assets held for sale35,548 - -
Other investment cash flows(843)(612)(612)
Net investment cash flows23,976 (11,412)(16,115)
Payment of principal portion of lease liabilities(1,696)(1,614)(3,460)
Drawdown/(repayment) of bank debt- 14,500 (1,616)
Investment share repurchases- (1,695)(1,695)
Nil Paid Share payments312 290 352
Dividends paid(14,621)(15,398)(15,398)
Net financing cash flows(16,005)(3,917)(21,817)
Movement in cash for period29,856 (4,551)2,524
Cash at beginning of the year18,821 16,488 16,488
Currency movement on cash holdings(60)(246)(191)
Cash at end of the period48,617 11,691 18,821
STATEMENT OF CHANGES IN POSITION FOR THE PERIOD
For the six months ended 30 November 2021
Key results and position
In thousands of New Zealand dollarsShare
capital
Retained
earnings
Other
reserves
Total equity
Balance at 1 June 202176,737 175,565 41,821 294,123
Profit/(loss) for the period- 50,760 - 50,760
Dividends paid- (17,813)- (17,813)
Adjustments on divestment- 265 - 265
Investment revaluations- - (288)(288)
Hedge revaluations- - 229 229
Balance at 30 November 2021 (Unaudited)76,737 208,777 41,762 327,276
Balance at 1 June 202078,432 170,720 41,090 290,242
Profit/(loss) for the period- 33,094 343 33,437
Dividends paid- (18,156)(326)(18,482)
Investment share repurchases(1,695)- - (1,695)
Hedge revaluations- - (141)(141)
Investment revaluations- - (681)(681)
Balance at 30 November 2020 (Unaudited)76,737 185,658 40,285 302,680
Balance at 1 June 202078,432 170,720 41,090 290,242
Profit/(loss) for the year- 22,944 - 22,944
Dividends paid- (18,156)(326)(18,482)
Hedge revaluations- - (134)(134)
Investment revaluations- - (195)(195)
Land and buildings revaluations- - 1,443 1,443
Acquisition of minority interest in subsidiary
-
57 (57)-
Investment share repurchases(1,695)- - (1,695)
Balance at 31 May 2021 (Audited)76,737 175,565 41,821 294,123
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 2021

Accounting Policies
Accounting entity
These financial statements set out the performance, position and cash f lows of Livest ock Improvement Corporation
Limited ("LIC" or the "Company") and it s subsidiaries (the"Group") for the six months ended 30 November 20 21.
LIC is domiciled in New Zealand, registered under the Companies Act 1993 and the Co-operative Companies Act 1996,
and list ed on the Main Board of the New Zealand Stock Exchange Limited ("NZX"). LIC is anFMC Reporting Entity for the
purposes of the Financial Reporting Act 2 0 13 and the Financial Market s Conduct Act 2013.
These financial st a t ement s should be read in conjunctionwith the annual report for the year ended31Ma y 20 21.
Basis of Preparation
(i) Statement of compliance
These financial statements comply withNZ GAAP as appropriate for Tier 1, for-profit entities, NZ I FRS and IFRS.
(ii) Ba sis of mea surement
Thefinancial statements have been prepared on a GST exclusive basis, with the exception of trade receivables and
trade payables, which are reported inclusive of GST.
(iii) Functional and presentation currency
Thefunctional currency of the Company and the presentation currency of the financial statements is New Zealand
Dollars ("NZD"), with amounts rounded tothe nearest thousand.
(iv) Use of est imat esand judgements
Thekeyestimations and judgements made in preparing these financial statements are the valuation of the Bull team
and the impairment testing of software and other intangible assets.
(v) New or amended st a ndards adopted in current year and st a ndards issued but not yeteffective
Theaccounting policies have been applied consist ent ly withprior periods.
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 2021
5
5
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 2021

In thousands of New Zealand dollars
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ssooff tt wwaa rreeDDiiaa ggnnoosstt iiccssOOtt hheerrEElliimmiinnaa tt iioonnssTToott aa ll
External revenue9 7, 5 0 314 , 6 8 626,31611, 6 8 819 , 16 7-116699,,336600
Inter-segment revenue----1, 2 10( 1, 2 10 )--
Total revenue9 7, 5 0 314 , 6 8 626,31611, 6 8 820,377( 1, 2 10 )116699,,336600
Depreciation & amortisation( 5 6 1)(2,722)( 1, 2 8 2 )( 1, 5 4 5 )( 5 , 10 4 )-((1111,,221144))
Segment profit before tax66,1316,53019 , 5 0 74, 8 7212 , 16 9-110099,,220099
Bull team revaluation--
Unallocated amounts((5599,,662200))
Profit/ (loss) before tax from continuing operations4499,,558899
NNZZ mmaa rrkkeett
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HHeerrdd
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FFaa rrmm
ssooff tt wwaa rreeDDiiaa ggnnoosstt iiccssOOtt hheerrEElliimmiinnaa tt iioonnssTToott aa ll
External revenue91,96214,23226,06611, 11817, 3 12-116600,,669900
Inter-segment revenue----1, 0 70( 1, 0 70 )--
Total revenue91,96214,23226,06611, 11818,382( 1, 0 70 )116600,,669900
Depreciation & amortisation(525)(2,502)(1,966)(552)( 6 , 171)-((1111,,771166))
Segment profit before tax62,9016,62218,4805,3339 , 75 1-110033,,008877
Bull team revaluation--
Unallocated amounts((5577,,449955))
Profit/ (loss) before tax from continuing operations4455,,559922
NNZZ mmaa rrkkeett
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FFaa rrmm
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External revenue99,25635,3975 0 , 8 1023,3314 0 , 2 19-224499,,001133
Inter-segment revenue----4,026(4,026)--
Total revenue99,25635,3975 0 , 8 1023,33144,245(4,026)224499,,001133
Depreciation & amortisation( 1, 0 5 9 )(5,308)( 3 , 5 9 1)( 1, 12 4 )( 10 , 9 17)-((2211,,999999))
Segment profit before tax6 5 , 72020,10136,60710 , 5 9 716 , 4 9 4-114499,,551199
Bull team revaluation((771188))
Unallocated amounts((111177,,779911))
Profit/ (loss) before tax from continuing operations3311,,001100
LIC's business, particularly the Parent's artificial breeding business,is highly seasonal. November results, since they
incorporate the majorityofthe artificial breeding revenues but not a similar proportionoftotal costs, are not indicative
of the second half result nor, therefore, the full year result.
The Other segment includes international operations, research & development and support services. Unallocated
amounts include personnel costs, other expenses and net finance costs. The 2020 segments have been updated to
replace Farm automation (discontinued operations) with Diagnostics and to use a consistent measureofsegment gross
profit before tax.
YYeeaarr eennddeedd
3311 MMaayy 22002211 ((AAuuddiitt eedd))
Notes to the Financial Statements
1. Business analysis
The Group operates in four key operating segments as set out below, and across four key geographies. Figures in
the following tables reflect information regularly reported to the Chief Executive on those key operating segments:
- NZ market genetics: provides bovine genetic breeding material and related services, predominately to
dairy farmers.
- Herd testing: herd testing and animal recording for pastoral farmers.
- Farm software: data recording and farm management information services.
- Diagnostics: provides DNA and animal health testing services.
SSIIXX MMOONNTTHHSS EENNDDEEDD
3300 NNoovv 22002200 ((UUnnaauuddiitt eedd))
SSIIXX MMOONNTTHHSS EENNDDEEDD
3300 NNoovv 22002211 ((UUnnaauuddiitt eedd))
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 20216
In thousands of New Zealand dollars
NNZZ mmaa rrkkeett
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FFaa rrmm
ssooff tt wwaa rreeDDiiaa ggnnoosstt iiccssOOtt hheerrEElliimmiinnaa tt iioonnssTToott aa ll
External revenue9 7, 5 0 314 , 6 8 626,31611, 6 8 819 , 16 7-116699,,336600
Inter-segment revenue----1, 2 10( 1, 2 10 )--
Total revenue9 7, 5 0 314 , 6 8 626,31611, 6 8 820,377( 1, 2 10 )116699,,336600
Depreciation & amortisation( 5 6 1)(2,722)( 1, 2 8 2 )( 1, 5 4 5 )( 5 , 10 4 )-((1111,,221144))
Segment profit before tax66,1316,53019 , 5 0 74, 8 7212 , 16 9-110099,,220099
Bull team revaluation--
Unallocated amounts((5599,,662200))
Profit/ (loss) before tax from continuing operations4499,,558899
NNZZ mmaa rrkkeett
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FFaa rrmm
ssooff tt wwaa rreeDDiiaa ggnnoosstt iiccssOOtt hheerrEElliimmiinnaa tt iioonnssTToott aa ll
External revenue91,96214,23226,06611, 11817, 3 12-116600,,669900
Inter-segment revenue----1, 0 70( 1, 0 70 )--
Total revenue91,96214,23226,06611, 11818,382( 1, 0 70 )116600,,669900
Depreciation & amortisation(525)(2,502)(1,966)(552)( 6 , 171)-((1111,,771166))
Segment profit before tax62,9016,62218,4805,3339 , 75 1-110033,,008877
Bull team revaluation--
Unallocated amounts((5577,,449955))
Profit/ (loss) before tax from continuing operations4455,,559922
NNZZ mmaa rrkkeett
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HHeerrdd
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FFaa rrmm
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External revenue99,25635,3975 0 , 8 1023,3314 0 , 2 19-224499,,001133
Inter-segment revenue----4,026(4,026)--
Total revenue99,25635,3975 0 , 8 1023,33144,245(4,026)224499,,001133
Depreciation & amortisation( 1, 0 5 9 )(5,308)( 3 , 5 9 1)( 1, 12 4 )( 10 , 9 17)-((2211,,999999))
Segment profit before tax6 5 , 72020,10136,60710 , 5 9 716 , 4 9 4-114499,,551199
Bull team revaluation((771188))
Unallocated amounts((111177,,779911))
Profit/ (loss) before tax from continuing operations3311,,001100
LIC's business, particularly the Parent's artificial breeding business,is highly seasonal. November results, since they
incorporate the majorityofthe artificial breeding revenues but not a similar proportionoftotal costs, are not indicative
of the second half result nor, therefore, the full year result.
The Other segment includes international operations, research & development and support services. Unallocated
amounts include personnel costs, other expenses and net finance costs. The 2020 segments have been updated to
replace Farm automation (discontinued operations) with Diagnostics and to use a consistent measureofsegment gross
profit before tax.
YYeeaarr eennddeedd
3311 MMaayy 22002211 ((AAuuddiitt eedd))
Notes to the Financial Statements
1. Business analysis
The Group operates in four key operating segments as set out below, and across four key geographies. Figures in
the following tables reflect information regularly reported to the Chief Executive on those key operating segments:
- NZ market genetics: provides bovine genetic breeding material and related services, predominately to
dairy farmers.
- Herd testing: herd testing and animal recording for pastoral farmers.
- Farm software: data recording and farm management information services.
- Diagnostics: provides DNA and animal health testing services.
SSIIXX MMOONNTTHHSS EENNDDEEDD
3300 NNoovv 22002200 ((UUnnaauuddiitt eedd))
SSIIXX MMOONNTTHHSS EENNDDEEDD
3300 NNoovv 22002211 ((UUnnaauuddiitt eedd))
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 20216
In thousands of New Zealand dollars
SIX MONTHS ENDED
30 Nov 2021 (Unaudited)
NZ market
genetics
Herd testingFarm
software
DiagnosticsOtherEliminationsTotal
External revenue97,503 14,686 26,316 11,688 19,167 - 169,360
Inter-segment revenue- - - - 1,210 (1,210)-
Total revenue97,503 14,686 26,316 11,688 20,377 (1,210)169,360
Depreciation & amortisation(561)(2,722)(1,282)(1,545)(5,104)- (11,214)
Segment profit before tax66,131 6,530 19,507 4,872 12,169 - 109,209
Bull team revaluation-
Unallocated amounts(59,620)
Profit/(loss) before tax from continuing operations49,589
SIX MONTHS ENDED
30 Nov 2020 (Unaudited)
NZ market
genetics
Herd testingFarm
software
DiagnosticsOtherEliminationsTotal
External revenue91,962 14,232 26,066 11,118 17,312 - 160,690
Inter-segment revenue- - - - 1,070 (1,070)-
Total revenue91,962 14,232 26,066 11,118 18,382 (1,070)160,690
Depreciation & amortisation(525)(2,502)(1,966)(552)(6,171)- (11,716)
Segment profit before tax62,901 6,622 18,480 5,333 9,751 - 103,087
Bull team revaluation-
Unallocated amounts(57,495)
Profit/(loss) before tax from continuing operations45,592
Year ended
31 May 2021 (Audited)
NZ market
genetics
Herd testingFarm
software
DiagnosticsOtherEliminationsTotal
External revenue99,256 35,397 50,810 23,331 40,219 - 249,013
Inter-segment revenue- - - - 4,026 (4,026)-
Total revenue99,256 35,397 50,810 23,331 44,245 (4,026)249,013
Depreciation & amortisation(1,059)(5,308)(3,591)(1,124)(10,917)- (21,999)
Segment profit before tax65,720 20,101 36,607 10,597 16,494 - 149,519
Bull team revaluation(718)
Unallocated amounts(117,791)
Profit/(loss) before tax from continuing operations31,010
6
The Other segment includes international operations, research & development and support services. Unallocated
amounts include personnel costs, other expenses and net finance costs. The 2020 segments have been updated to
replace Farm automation (discontinued operations) with Diagnostics and to use a consistent measure of segment
gross profit before tax.

LIC’s business, particularly the Parent’s artificial breeding business, is highly seasonal. November results, since they
incorporate the majority of the artificial breeding revenues but not a similar proportion of total costs, are not indicative
of the second half result nor, therefore, the full year result.

LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 2021
The Group operates in four key operating segments as set out below, and across four key geographies. Figures in the
following tables reflect information regularly reported to the Chief Executive on those key operating segments:
- NZ market genetics: provides bovine genetic breeding material and related services, predominately to dairy
farmers.
- Herd testing: herd testing and animal recording for pastoral farmers.
- Farm software: data recording and farm management information services.
- Diagnostics: provides DNA and animal health testing services.

Non-current assets includes the Bull team, Land, buildings & equipment, Software, goodwill and other intangible assets,
Nil Paid Share receivable and investments.
The Group’s significant subsidiaries are:
- New Zealand: LIC Agritechnology Company Limited (100%), LIC Automation Limited (100%) (discontinued operations)
- Australia: Livestock Improvement Pty Ltd (100%), Beacon Automation Pty Ltd (100%)
- Ireland: LIC Ireland Limited (100%)v
- United Kingdom: Livestock Improvement Corporation (UK) Ltd (100%)
The Group is not dependent on any one major customer in any of its reportable segments. New Zealand include
government research and development grant income of $7.273 million (2020: $4.834 million).
2. Bull team
The bull team is the cornerstone asset of LIC’s genetics business. The 938 total bulls (2020: 943 bulls) from which the bull
team are selected are carried at their fair value, which is based on LIC’s modelling of future cash flows from the bulls (a
“Level 3 valuation”). Changes in their fair value are reported in profit. The fair value from the bulls is partly dependent on
the future sales mix of LIC’s genetics products, which is historically strongly correlated to the Farmgate Milk Price paid by
Fonterra Co-operative Group. The valuation is also sensitive to a change in the WACC rate used to discount future cash
flows and the run off profile of bulls that make up the bull team.
7
Notes to the Financial Statements
OOtt hheerr rreesseerrvveess aanndd eeqquuiitt yyHHeedd ggee
rreevvaa lluuaa tt iioonn
rreesseerrvvee
IInnvveesstt mmeenntt
rreevvaa lluuaa tt iioonn
rreesseerrvvee
LLaa nndd && bb uuiilldd iinngg
rreevvaa lluuaa tt iioonn
rreesseerrvvee
NNoonn--
ccoonntt rroolllliinngg
iinntt eerreesstt ss
OOtt hheerr
RReesseerrvveess
In thousands of New Zealand dollars
Balance at 1 June 2020685,05835,5813834411,,009900
Profit/ (loss) for the period---343334433
Dividends paid---(326)((332266))
Revaluations( 14 1)( 6 8 1)--((882222))
BBaallaannccee aatt 3300 NNoovveemmbbeerr 22002200 ((UUnnaauuddiitt eedd))((7733))44,,3377773355,,5588114400004400,,228855
Balance at 1 June 2020685,05835,5813834411,,009900
Profit/ (loss) for the year------
Dividends paid---(326)((332266))
Revaluations( 13 4 )( 19 5 )1, 4 4 3-11,,111144
Acquisition of minority interest in subsidiary---(5 7)((5577))
BBaallaannccee aatt 3311 MMaayy 22002211 ((AAuuddiitt eedd))((6666..0000))$$ 44,,8866333377,,002244--4411,,882211
Balance at 1 June 2021(66)4,86337, 0 24-4411,,882211
Profit/ (loss) for the period------
Dividends paid------
Revaluations229(288)--((5599))
BBaallaannccee aatt 3300 NNoovveemmbbeerr 22002211 ((UUnnaauuddiitt eedd))11663344,,5577553377,,002244--4411,,776622
2. Equity
In July 2018 LIC's share structure was simplified and its two classes of shares, Investment Shares and Co-operative
Control Shares, were brought together into a single class of Ordinary Shares. All Ordinary Shares have voting rights
and the right to receive dividends based on the profits of the Company.
At reporting date there were 142,344,836 Ordinary Shares on issue, excluding 5,337,584 shares held as treasury stock
(2020: 142,344,836 Ordinary Shares, excluding 5,337,584 shares held as treasury stock).
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 20217
Other reserves and equity
Hedge
revaluation
reserve
Investment
revaluation
reserve
Land &
building
revaluation
reserve
Non-
controlling
interest
Other
Reserves
In thousands of New Zealand dollars
Balance at 1 June 2021(66)4,863 37,024 - 41,821
Profit/(loss) for the period- - - - -
Dividends paid- - - - -
Revaluations229 (288)- - (59)
Balance at 30 November 2021 (Unaudited)163 4,575 37,024 - 41,762
Balance at 1 June 2020
68 5,058 35,581 383 41,090
Profit/(loss) for the period
- - - 343 343
Dividends paid
- - - (326)(326)
Revaluations
(141)(681)- - (822)
Balance at 30 November 2020 (Unaudited)
(73)4,377 35,581 400 40,285
Balance at 1 June 202068 5,058 35,581 383 41,090
Profit/(loss) for the year- - - - -
Dividends paid- - - (326)(326)
Revaluations(134)(195)1,443 - 1,114
Acquisition of minority interest in subsidiary- - - (57)(57)
Balance at 31 May 2021 (Audited)(66)4,863 37,024 - 41,821
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 2021

3. Acquisitions and disposalsSIX MONTHS ENDEDYEAR ENDED
In thousands of New Zealand dollars
30 Nov 2021
Unaudited
30 Nov 2020
Unaudited
31 May 2021
Audited
(i) Land, buildings and equipment
Acquisitions *
6,249 2,958 8,496
Disposals
(94)(238)(297)
(ii) Software and other intangible assets
Acquisitions
3,454 4,887 7,750
Disposals/Impairment
(30)(71)(3,260)
* Excludes the impact of NZ IFRS 16: Leases, which increased Land, buildings and equipment by $2.1 million in 2021
(2020: $1.7 million).
4. Transactions with Related Parties, Directors and Management
The Group has had the following short term transactions with key Management and Directors during the period,
noting sale of goods and services were under normal trade term:
SIX MONTHS ENDED YEAR ENDED
In thousands of New Zealand dollars
30 Nov 2021
Unaudited
30 Nov 2020
Unaudited
31 May 2021
Audited
Remuneration of key Management and Directors2,803
2,671
4,573
Sale of goods and services to key Management and Directors293
319
598
Purchases of goods and services from key Management and Directors60
80
213
5. Reconciliation of the Profit/(loss) for the period to Net operating cash flows
SIX MONTHS ENDED YEAR ENDED
In thousands of New Zealand dollars
30 Nov 2021
Unaudited
30 Nov 2020
Unaudited
31 May 2021
Audited
Profit/(loss) for the year 50,760
33,437
22,944
Adjusted for non-cash items:
Depreciation and amortisation on owned assets 9,518
11,962
22,164
Bull team revaluation -
-
718
Lease liability principal repayment (classified as financing activity) (1,696)
(1,614)
(3,460)
Working capital movements and other non-cash items (36,697)
(33,007)
(1,910)
Net operating cash flows21,885 10,778 40,456
Notes to the Financial Statements
OOtt hheerr rreesseerrvveess aanndd eeqquuiitt yyHHeedd ggee
rreevvaa lluuaa tt iioonn
rreesseerrvvee
IInnvveesstt mmeenntt
rreevvaa lluuaa tt iioonn
rreesseerrvvee
LLaa nndd && bb uuiilldd iinngg
rreevvaa lluuaa tt iioonn
rreesseerrvvee
NNoonn--
ccoonntt rroolllliinngg
iinntt eerreesstt ss
OOtt hheerr
RReesseerrvveess
In thousands of New Zealand dollars
Balance at 1 June 2020685,05835,5813834411,,009900
Profit/ (loss) for the period---343334433
Dividends paid---(326)((332266))
Revaluations( 14 1)( 6 8 1)--((882222))
BBaallaannccee aatt 3300 NNoovveemmbbeerr 22002200 ((UUnnaauuddiitt eedd))((7733))44,,3377773355,,5588114400004400,,228855
Balance at 1 June 2020685,05835,5813834411,,009900
Profit/ (loss) for the year------
Dividends paid---(326)((332266))
Revaluations( 13 4 )( 19 5 )1, 4 4 3-11,,111144
Acquisition of minority interest in subsidiary---(5 7)((5577))
BBaallaannccee aatt 3311 MMaayy 22002211 ((AAuuddiitt eedd))((6666..0000))$$ 44,,8866333377,,002244--4411,,882211
Balance at 1 June 2021(66)4,86337, 0 24-4411,,882211
Profit/ (loss) for the period------
Dividends paid------
Revaluations229(288)--((5599))
BBaallaannccee aatt 3300 NNoovveemmbbeerr 22002211 ((UUnnaauuddiitt eedd))11663344,,5577553377,,002244--4411,,776622
2. Equity
In July 2018 LIC's share structure was simplified and its two classes of shares, Investment Shares and Co-operative
Control Shares, were brought together into a single class of Ordinary Shares. All Ordinary Shares have voting rights
and the right to receive dividends based on the profits of the Company.
At reporting date there were 142,344,836 Ordinary Shares on issue, excluding 5,337,584 shares held as treasury stock
(2020: 142,344,836 Ordinary Shares, excluding 5,337,584 shares held as treasury stock).
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 20217
8
6. Audit

In accordance with the Financial Reporting Act 2013 these interim financial statements are not required to be audited
and therefore, in line with previous years, have not been audited.
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 2021

9
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 2021
Notes to the Financial Statements
8. Dividend
In relation to the 2021 financial year LIC declared a dividend of 12.51 cents per Ordinary Share, or $17.8 million
(2020: 12.75 cents per Investment Share, or $18.2 million).
9. Subsequent events
On the 8th December 2021, LIC declared a special dividend of 10 cents per Ordinary Share, or $14.2 million, as a result
of the divestment of the automation business. The fully imputed dividend was paid on 21 January 2022.
LIVESTOCK IMPROVEMENT CORPORATION - INTERIM REPORT 202110
7. Discontinued operations

On 8 June 2021 LIC announced it had entered into an agreement to divest its automation business for $38.1 million
subject to customary requirements. The transaction was completed on 11 June 2021.

Accordingly, the Farm Automation segment has been reclassified as a discontinued operation and is no longer
presented in the business analysis note.

LIC expects gains from the sale of automation assets (being those reported as “Held for Sale” in the 2021 Annual
Report) to be approximately $15.5 million.

Note - in accordance with NZ IFRS 5: Non-current Assets Held for Sale and Discontinued Operations, paragraph
40, prior year balances in the Statement of Position have not been restated to classified amounts related to the
automation businesses as at 30 November 2020 as “held for sale”.


8. Dividend

In relation to the 2021 financial year LIC declared a dividend of 12.51 cents per Ordinary Share, or $17.8 million (2020:
12.75 cents per Investment Share, or $18.2 million).


9. Subsequent events

On the 8th December 2021, LIC declared a special dividend of 10 cents per Ordinary Share, or $14.2 million, as a
result of the divestment of the automation business. The fully imputed dividend was paid on 21 January 2022.

---

Shareholder update 26 January 2022
Half year result
2021—22

Financial highlights
* Refer notes to financial information on last page of market statement
$
169.4m
Total Revenue
up 5.4% from $160.7m
$
61.2m
EBITDA (earnings before
interest, tax, depreciation
and amortisation)
up 4.7% from $58.4m
$
35.6m
NPAT (net profit after tax)
from Continuing Operations
up 6.2% from $33.5m in the
same period last year
$
50.0m
EBIT (earnings before
interest and tax)
up 7.0% from $46.7m
$
15.2m
NPAT from Discontinued
Operations following
divestment of the
Automation business
$
22–26m
Forecast underlying earnings
(NPAT excl bull valuation
change)* for year-end
compared to $22.3m in 2020-21
2

Business
highlights
This result is driven by more farmers investing in the co-op’s
premium artificial breeding (AB) products, including sexed
semen. With a focus on cow quality over quantity, we’re seeing
more farmers turn to high genomic BW sires (gBW) to help them
meet climate targets and drive efficiency gains.
The average genetic gain per annum
from 2017–2020 was 16gBW, (up from
9gBW per annum in 2012-2016).
Genomic selection now underpins our
breeding programme and we’re proud
of the value it is delivering on-farm.
More info is available on our website.
The LIC team worked hard to deliver a
largely business as usual season to our
farmers this season, despite our main
bull farms and laboratories operating
under the Level 3 Covid-19 restrictions
that were in place in the Waikato for
most of this period.
This year, more than half (50.3%) of
total AB inseminations will be delivered
by genomically selected young bulls,
up from 41.3% last year and 12.6% in
2016-17. Within this, more than 200,000
sexed straws will be despatched to
farmers, up from 110,000 last year, and
33,804 the year prior.
50.3 %
2017—2020
16gBW
3

Video address:
Board Chair and Chief Financial Officer
4

Our strategyDoing what we are good at. Playing to our strengths.
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.
Responsive innovation.
5

Our three commitments to you
1
Operational
Excellence
We commit to getting the
basics right and delivering
for you, on time, every time.
2
Faster Genetic
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.
3
Software Reliability
and Performance
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.
6

Documents for download







Private Bag 3016
Hamilton 3240
New Zealand

0800 651 156
www.lic.co.nz
LIC is the trading name of Livestock Improvement Corporation Limited

Market Statement
26 January 2022

LIC Half-Year Result 2021-22

Performance Highlights*:
• NPAT (net profit after tax) from Continuing Operations: $ 35.6 million, up 6.2% from $33.5 million in the
same period last year
• NPAT from Discontinued Operations following divestment of the Automation business: $15.2 million
• Total revenue: $169.4 million, up 5.4% from $160 .7 million
• EBITDA (earnings before interest, tax, depreciation and amortisation) $61.2 million , up 4.7% from $58.4
million
• EBIT (earnings before interest and tax): $50.0 million, up 7.0% from $46.7 million
• Underlying earnings (NPAT excl bull valuation change)* range is no w forecast to be $22- 26 million for
year-end, compared to $22.3 million in 2020-21.
*Refer notes to financial information on last page of statement

Livestock Improvement Corporation (NZX: LIC) announces its half-year result for the six months to
30 November 2021, w hich shows continued strength in the farmer-owned co-operative’s financial
performance.

Murray King, LIC Board Chair said the Board is pleased to present another strong result to farmer
shareholders, particularly after a difficult period of Covid -19 restrictions and increasing cost pressure
in the business.

“The LIC team worked hard to deliver a largely business as usual season to our farmers this season,
despite our main bull farms and laboratories operating under the Level 3 Covid-19 restrictions that
were in place in the Waikato for most of this period.

“Spring is the most important time of year for our farmers, and for LIC, when demand for our
essential artificial breeding and herd testing services is at an all-time high. I want to thank our
farmers for trusting us to continue to deliver to them during this time.

“It is also pleasing to note that the business has worked hard to manage costs during this time, and
we remain on track to deliver another strong result at year-end.”

LIC’s half -year result incorporates the majority of revenues from LIC’s core artificial breeding (AB)
and herd testing services, but not a similar proportion of total costs so are not indicative of the
second half, nor the full year, result. Revenue from international business, technology products and
animal health testing is also spread through the year.

King said the half -year r esult was driven by more farmers investing in the co-op’s premium artificial
breeding (AB) products where young, genomically-selected bulls are used to fast -track genetic gain
and deliver more value on-farm through increased productivity and efficiency, including improved
environmental efficiency.

This year, more than half (50.3%) of total AB inseminations will be delivered by genomically selected
young bulls, up from 41.3% last year and 12.6% in 2016-17. Within that, more than 200,000 sexed
semen straws will be de spatched to farmers, up from 110,000 last year, and 33,804 the year prior.


Livestock Improvement
Corporation Limited (LIC)
Interim Report
For the six months ended
30 November 2021
Market StatementInterim Report
These documents are available to download on the LIC website
7

Outlook
Underlying earnings (NPAT excl bull valuation
change)* at year-end is forecast to be in
the range of $22-26 million, assuming no
significant climate event or milk price change
takes place between now and then, nor any
major impacts from M. bovis or Covid-19.  
LIC expects underlying earnings* in 2022-23
to be in the range of $20-26 million.
* Refer notes to financial information on
last page of market statement8

9

---

Results announcement
26 January 2022

Results for announcement to the market
Name of issuer Livestock Improvement Corporation Limited
Reporting Period 6 months to 30 November 2021
Previous Reporting Period 6 months to 30 November 2020
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$169,360 +5.40%
Total Revenue $169,853 +0.09%
Net profit/(loss) from
continuing operations
$35,569 +6.16%
Total net profit/(loss) $50,760 +51.81%
Interim Dividend
Amount per Quoted Equity
Security
No dividend has been declared
Imputed amount per Quoted
Equity Security
Not applicable
Record Date Not applicable
Dividend Payment Date Not applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$2.17 $1.87
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
These results reflect the highly seasonal nature of our business
activity and are not indicative of the second half, nor the full year
result. Total net profit/(loss) includes the gain on divestment of
the Automation business. For commentary on the results,
please refer to the market statement.

The Net Tangible Assets per Quoted Equity Security excludes
LIC ordinary shares held as treasury stock and unquoted LIC Nil
Paid shares which have the same voting and dividend rights as
LIC’s quoted ordinary shares.

Authority for this announcement
Name of person

authorised
to make this announcement
Marise Winthrop
Contact person for this
announcement
Marise Winthrop
Contact phone number +64 27 488 4615
Contact email address Marise.Winthrop@lic.co.nz
Date of release through MAP

26 January 2022

Unaudited financial statements accompany this announcement.