LIC Annual Meeting Presentation

Farmers investing in
high value genetics
to help meet the
sector’s climate goals
Annual Meeting — 14 October 2021

Using the Online Platform
Voting card
Question box
Farmers investing in
high value genetics
to help meet the
sector’s climate goals
Annual Meeting — 14 October 2021
2

Welcome
Murray King — LIC Chair3

Meeting Agenda
1. Sustainability Report
2. Financial Overview
3. Business Highlights
4. Outlook
5. Strategy
6. Research & Development
7. Financial Detail
8. LIC Chief Executive
9. Honoraria Report
10. Voting Resolutions
11. General Business
4

Sustainability
Report
Wayne McNee — LIC Chief Executive5

Purpose of
the Report
To demonstrate to our shareholders
our commitment to them when it
comes to sustainability, in addition
to meeting our annual reporting
requirements as a member of the
Sustainable Business Council.
Sustainability Report For the year ended 31 May 2021
Helping our farmers meet
sustainability goals
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ENVIRONMENT
Supporting
shareholders to
produce the most
sustainable and
efficient animals
and reducing
emissions at LIC.
Record milk production
in NZ in 2019-20, without
increasing cow numbers.
An increased focus on efficiency means
that cows around the country are
better at converting grass into milk.
We are working on a world-
leading methane research
programme, investigating the
link between methane emissions
from bulls and their genetics.
Launched indexes
to rank our artificial
breeding bulls on
their environmental
efficiency.
1.87%
Reduction in LIC’s
CO
2
Emissions
Change FY21
compared to FY20
Key highlights
7

Caring for our staff
and our farmer
shareholders.
SOCIAL
3.49
Total Reportable
Incident Rate
(Per 100 full time
equivalent employees).
Down from 4.5 last year.
840+
Full time equivalent
employees
Plus over 1,900 seasonal workers.
70
Organisational
Health Index (OHI)
OHI is a McKinsey tool which
measures the impact of our
organisation practices and
culture on performance against
international benchmarks.
LIC is in the upper end of the
second quartile of all tested
companies by McKinsey
worldwide.
Key highlights
8

Results Overview
& Business
Highlights
Murray King — LIC Chair9

Financial Overview
Presenting another strong result
to our farmer shareholders for
the fourth consecutive year
This result is in line with our market
guidance and a credit to our shareholders
for their support of significant initiatives
in the last five years to transform LIC
into a modern, progressive co-op.
These initiatives have delivered the
benefits we said they would, including
focussed investment in the business
and a better return for our farmers.
10

Financial Highlights
$
249m
Total Revenue from continuing
operations (excl automation*)
up 3.4% from $240.9
million last year
$
382m
Total Assets
0.5% increase from
$379.9 million last year
$
22.9m
Net Profit After Tax (NPAT)
up 31% from $17.5 million last year
$
1 7. 8m
12.51 c per share
Full Year Dividend
representing 80% of
underlying earnings
$
22.3m
Underlying Earnings*
down 1.9% from $22.7 million last
year after a one-off tax benefit
$
19-25m
Expected Underlying
Earnings*
for 2021-22
Please refer to the full market announcement to read notes about financial information11

Business Highlights
LIC’s premium genetics range accounted for almost half of
the co-op’s total artificial breeding inseminations.
Forward PackA2/A2 Bull TeamsSexed Semen
12

Divestment of LICA
In June this year LIC announced that it had
entered into an agreement to divest its
automation business, LICA, to MSD animal
health, for an amount of NZ$38,100,000 and
subject to a working capital adjustment.
13

Outlook
The co-op will be firmly guided by its
primary focus of delivering value for farmer
shareholders and delivering on our three
commitments to farmers; operational
excellence, faster genetic improvement
and software reliability and performance.
LIC expects Underlying Earnings* in 2021-22
to be in the range of $19-25 million.
Please refer to the full market announcement to
read notes about financial information14

Our three commitments to you
123
Operational
Excellence
We commit to getting the
basics right and delivering
for you, on time, every time.
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.
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.
15

St ra te g y,
R&D and
Financial Detail
Wayne McNee — LIC Chief Executive16

2021 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.
17

Genomics
LIC’s investment of more than $78 million
over three decades into genomic science
and genome sequencing technology
is generating markedly increased
productivity and health traits for dairy
cows and better returns for dairy farmers.
Utilising genomics (DNA information)
in animal evaluation is estimated to
be worth $180 million annually to the
New Zealand industry.
18

Investment in Research & Development
INVESTMENT
IN R&D
$
1 7.1 m
Development projects 6%
Dairy sire proving 29%
Genetics information 45%
Emerging markets 3%
International 1%
Information to improve decision making 4%
Hardware & systems 10%
R&D support & delivery 2%
19

Methane Trial
20

Capital Approvals
Computer hardware & office furniture
$
1.1m
MINDA Projects
$
3.6m
LICA Product development
$
2.6m
IP: Trademark & Patents, Software & Server upgrade
$
4.5m
Investment, Other Projects and Wash Line
$
1.1m
HT Pools, Analyser & Robot replacement
$
0.4m
Building improvement, vehicles, & other PPEs
$
8.8m
CAPITAL
APPROVALS
$
2 2 .1 m
21

Total Revenue
Continuing Operations Discontinued Operations
NZ $m
300.0
250.0
200.0
150.0
100.0
50.0
0.0
203.5
236.4
246.5
254.0
266.4
2016/172017/182018/192019/202020/21
22

LIC Contribution to Value on farm
Genetic Merit
$
292m
Reproductive
performance
$
35m
SPACE
$
15m
Health
(Johnes, BVD, Mastitis)
$
45m
Production
(Culling & SGL)
$
57m
23

Covid-19 Response
24

Reflections on eight years at LIC
25

LIC Chief Executive
• Farewell and thank you
to Wayne McNee.
• Chief Executive appointment update.
26

Honoraria
Report
Ian Brown — Honoraria Committee Chair27

Meeting
Resolutions
Murray King — LIC Chair28

Resolution 1:
LIC Directors Remuneration
Pre-Governance
Review*
Proposed 2020
Increase**
Proposed 2021
Increase***
Proposed Remuneration post
2021 Annual Meeting***
Chair$123,600 $6,400 $2,500 $132,500
Each of the other Directors $54,000 $2,500 $3,500 $60,000
Maximum sum available to reimburse
for additional duties & skills
†
$60,000 $0.00 $0.00 $60,000
Total for LIC Board$669,600 $26,400 $30,500 $672,500
Provision for potential 4th
Appointed Director
$60,000
††
$60,000
Total for LIC Board including
additional 4th Appointed Director
$90,500 $732,500
* based on a Board of ten Directors, as approved by shareholders in 2019.
** based on a Board of nine Directors post governance changes.
*** based on a Board of nine Directors but with allowance for the Board to appoint a 4th Appointed Director if the Board should
decide that the addition of further skills/expertise is necessary (taking the Board to ten Directors).
† maximum pool available to the Board to compensate Directors for additional attendances and/or special skills, including for roles as Committee Chairs.
†† to be paid on a pro-rata basis for appointments of less than one year.
29

Resolution 1:
Approval of LIC Directors
Remuneration
To receive and consider the LIC Honoraria Committee’s
recommendation as to Director’s remuneration, and if
thought fit, to resolve by way of ordinary resolution to:
“Approve the total remuneration of all Directors
being increased from $669,600 to $732,500 (with
that remuneration to apply to up to 10 Directors
in total, allowing for the option of an additional
Appointed Director)”
30

Resolution 2:
LIC Shareholder Reference Group Remuneration
Pre-Governance
Review*
Proposed 2020
Increase **
Proposed 2021
Increase **
Proposed Remuneration
post 2021 Annual Meeting**
Chair$30,000 $2,500 $2,500 $35,000
Deputy Chair$9,000 $1,000 $6,000 $16,000
Each of the other 10 SRG members$5,000 $2,000 $5,000 $12,000
Total for Shareholder Reference
Group as a whole
$89,000**$23,500 $58,500 $171,000
Daily Allowance
Daily Allowance$320 $0 $0 $320
* Initial SRG remuneration was based on Shareholder Council remuneration levels as previously approved by shareholders
** based on the SRG of 12 members
31

Resolution 2:
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 remuneration of all Shareholder
Reference Group members being increased from
$134,000 to $171,000”
32

Resolution 3:
To reappoint KPMG as
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 remuneration”
33

Resolution 4:
To ratify the reappointment
of Candace Kinser as an
Appointed Director
To consider, and if thought fit, to resolve by way of
ordinary resolution to:
“Ratify the reappointment of Candace Kinser as an
Appointed Director for a term expiring at the conclusion
of the third Annual Meeting following this Annual Meeting
(approximately three years)”
34

Resolution 5:
Appointment of Gordon
Glentworth to the Honoraria
Committee
To consider, and if thought fit, to resolve by way of
ordinary resolution to:
“Approve the appointment of Gordon Glentworth to the
Honoraria Committee, with effect from the conclusion of
this Annual Meeting”
35

Resolution 6:
Re-appointment of Ian Brown
to the Honoraria Committee
To consider, and if thought fit, to resolve by way of
ordinary resolution to:
“Approve the re-appointment of Ian Brown to
the Honoraria Committee, with effect from
the conclusion of this Annual Meeting”
36

General
Business
37

Helping farmers reduce their
environmental footprint
38

Q & A
39

40

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LIC Annual Meeting
Thursday 14 October 2021
Chairman’s and Chief Executive’s Address

Good morning everyone, welcome to LIC’s annual meeting. I’m Murray King, Chairman of LIC.
Thank you for joining us virtually today.

Before we start the proceedings, I have a small number of housekeeping matters to cover:
• If you have not already voted, voting has now reopened and will remain open until we
close this meeting.
• To vote you will need your shareholder number provided by Link Market Services. You
can vote using the online platform, please click on the “Get a Voting Card” button and
enter your shareholder number.
• There are six resolutions to be considered today - a poll will be held on each one.
• All shareholders can vote on all resolutions.
• All the resolutions are ordinary resolutions and require 50% approval.
• Results will be announced soon after the conclusion of the meeting.
• If anyone has any items of general business or questions they would like to ask, please
send them via the “ask a question” button now, or at any time throughout the meeting.
These will be collated by the team and answered in the general business section
towards the end of the meeting.

We may take a few minutes to collate and review these before general business.

Given the uncertainty that Covid-19 has created and the need to protect our staff and
business, this is a fully virtual meeting. I understand that these meeting formats can cause
some complications with voting and asking questions so before we officially begin the meeting,
I would like to cover a few points regarding using the online platform. If you have any issues
during the meeting, please call the number at the top of the screen and someone will be able
to help you.

To ask questions using the online platform, please click on the “Ask a Question” button. You
will then need to enter your shareholder number.

It’s worth noting that your questions will only be visible to myself and the team who will be
moderating and answering the questions.

To vote using the online platform, please click on the “Get a Voting Card” button. You will then
need to enter your shareholder number.

Voting remains fully confidential, no one on the call will see your vote.

I would just like to reiterate, if you have any issues asking questions or voting please call the
phone number on screen now, 0800 200 220.

2
Welcome again to LIC’s Annual Meeting:
• Fellow shareholders
• The Shareholder Reference Group
• Ian Brown from the Honoraria Committee
• LIC’s auditors, lawyers, bankers, and advisors

I would like to introduce Wayne McNee and LIC’s 8 Directors who are joining us today:
• Ben Dickie
• Dr Alison Watters
• Gray Baldwin
• Matt Ross
• Sophie Haslem
• Tim Gibson
• Candace Kinser
• Ken Hames

The Notice of Meeting has been circulated to all Shareholders and is taken as read.

I realise that this is a busy time for our farmers – both this time of year and this time of the day
- so we appreciate your attendance.

Here’s the agenda for today’s meeting, which I will run you through briefly:
• Wayne McNee will speak about sustainability report.

I will cover the:
• Financial Overview
• Business Highlights
• Outlook

Wayne will then speak to:
• The refined strategy
• Research & Development
• Financial Detail

We will then move to the:
• Update on Chief Executive
• Honoraria Report
• Voting Resolutions
• General Business


SUSTAINABILITY REPORT

This year LIC has released its first sustainability report.

We are members of the Climate Leaders Coalition, The Aotearoa Circle and the Sustainable
Business Council (SBC). When joining SBC, members are required to introduce annual

3
reporting practices, which outline progress on environmental, social, governance and
economic issues.

This report meets those requirements from a business perspective, but it’s also an opportunity
to demonstrate how we are responding to sustainability challenges facing our farmers and the
New Zealand dairy industry.

I’ll now pass over to Wayne who will talk to the report.

Purpose of the Report
As a farmer-owned co-operative and world leader in pasture based dairy genetics and herd
management, we have a critical role to play in helping New Zealand’s dairy farmers meet their
sustainability goals.

We exist to deliver superior genetics and technological innovation to help our shareholders
sustainably farm a profitable animal – so sustainability is baked into our purpose.

While many industries only recently began responding to climate challenges, LIC and its
farmer shareholders began work over 30 years ago to improve genetic gain within the herd
using genomics.

The purpose of this report is to demonstrate to our shareholders our commitment to them
when it comes to sustainability, in addition to meeting our annual reporting requirements as a
member of SBC.

This is LIC’s first Sustainability Report, and presents information about our environmental,
social and economic performance for the year ended 31 May 2021. The report features key
highlights under these three areas.

We’ve made great progress on our sustainability journey, especially over the last 4 years.

Environmental Highlights
Supporting shareholders to produce the most sustainable and efficient animals and reducing
emissions at LIC.

As shown on this slide:
• Record milk production in NZ in 2019-20, without increasing cow numbers. An
increased focus on efficiency means that cows around the country are better at
converting grass into milk.
• 1.87% Reduction in LIC’s CO2 Emissions Change FY21 compared to FY20.
• Launched indexes to rank our artificial breeding bulls on their environmental efficiency.
• We are working on a world leading methane research programme, investigating the
link between methane emissions from bulls and their genetics.

Social Highlights
All aspects of the report are important, and measuring our performance from a social
perspective is a new feature of our reporting.

4

As shown on the slide:
• 70 Organisational Health Index (OHI) OHI is a McKinsey tool which measures the
impact of our organisation practices and culture on performance against international
benchmarks. LIC is in the upper end of the second quartile of all tested companies by
McKinsey worldwide.
• 3.49 Total Reportable Incident Rate (Per 100 full time equivalent employees). Down
from 4.5 last year.
• 840+ Full time equivalent employees Plus over 1,900 seasonal workers.

The economic section of the Sustainability Report explains how we are delivering value to our
farmer shareholders by investing in initiatives to help them breed the most profitable and
sustainable animal. Murray will speak to the economic highlights in his financial overview later
on in this meeting.

We know that environmental and regulatory considerations are front of mind for our farmers,
but we hope that this report will become a useful place to find out what LIC is doing each year
to help the industry meet new challenges head on. Each year LIC will report back to you on
how it is progressing and going about delivering on that commitment.

We are committed to open and transparent reporting on sustainability, and LIC will be further
developing its reporting framework over time. The report is available on the LIC website, and
the report was also emailed to all shareholders on Wednesday the 6
th
of October. I urge you
all to read this.

RESULTS OVERVIEW & BUSINESS HIGHLIGHTS – MURRAY KING, CHAIRMAN

We’re proud to present another strong result for the fourth consecutive year.

This result is in line with our market guidance and is a credit to our shareholders for their
support of significant initiatives in the last five years to transform LIC into a modern,
progressive co-op. These initiatives have delivered the benefits we said they would, including
focussed investment in the business and a better return for our farmers.

Financial Highlights
There are some specific numbers I would like to cover:
• Total Revenue was $249 million, an increase of 3.4% from $240.9 million last year.
This is from continuing operations only, so excludes the sale of LICA.
• Net Profit After Tax was $22.9 million, up 31% from 17.5 million last year.
• Underlying Earnings of $22.3 million, this is down 1.9% from $22.7 million last year
after a one-off tax benefit.
• Total Assets equal $382 million, a 0.5% increase from $379.9 million last year.
• Dividend $17.8 million or 12.51 c per share, representing 80% of underlying earnings.
• Expected Underlying Earnings for 2021 – 22 are $19-25 million.

5
Business Highlights
We’ve seen good growth across core business areas this year but particularly in our premium
genetics range 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.

That value combined with a solid dividend makes this result a win-win for our farmers. It also
means we can continue our work to invest in products, services and technology that drive long
term and sustainable customer value.

LIC’s premium genetics range accounted for almost half of the co-op’s total artificial breeding
(AB) inseminations (41.3% or 1.79 of 4.3 million semen straws), more than double three years
ago. This is predominantly from the Forward Pack and A2/A2 bull teams - 1.6 million straws
combined.

It also includes sexed semen, which experienced significant growth with triple the number of
straws sold on the previous year (110,125 vs 33,804). The number of dairy cows mated to
sexed semen is set to double this year (to around 200,000 up from 110,125 last year) as
farmers look to capitalise on the technology. To meet the increasing demand, LIC now houses
the world’s biggest fresh sexed semen sorting facility in partnership with Sexing Technologies
at our Hamilton headquarters.

This growth will have a significant impact on-farm this spring and deliver a huge amount of
value to our farmers, with more high quality heifer replacements and fewer bobby calves.
We’re expecting this to be even greater next year.

Meanwhile, the number of traditionally daughter proven bulls used for AB continued to decline,
now down 40% from three years ago (1.2M straws in 20-21 vs 2.02M in 17-18). This shift
reflects farmers’ growing confidence in LIC’s proprietary genomic work and a willingness to
adopt new tools and solutions to help meet sustainability goals.

Divestment of LICA
In June this year LIC announced that it had entered into an agreement to divest its automation
business, LICA, to MSD animal health, for an amount of NZ$38,100,000 and subject to a
working capital adjustment.

The LIC Automation product portfolio joined Allflex Livestock Intelligence (a business unit
within MSD Animal Health which has manufacturing facilities at Palmerston North New
Zealand).

The transaction included the following:
• Continued migration onto new generation Protrack systems for customers with legacy
technology, as well as associated software development.
• LIC to continue providing service and support to customers through transition.
• Ongoing interaction between Protrack operating systems and LIC’s herd management
system, MINDA.
• Access to data generated by the automation technology for LIC, to continue to support
the co-op’s research and development activities.

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• The data includes any future data generated by In Line Milk Meters, if these are
launched in New Zealand by any of MSD’s businesses.

The divestment of the automation business is in line with LIC’s refined strategy and will allow
the co-op to sharpen its focus and play to its strengths delivering world-leading pasture based
dairy genetics and herd management for New Zealand farmers.

Last year LIC shareholders voted down a proposal from the Board for LIC to purchase a stake
in Israeli agritech company Afimilk, which had included a potential subsequent transaction for
Afimilk to purchase LIC Automation.

We were aiming to access data from Afimilk as a result of that transaction, but have secured
that access through the transaction with MSD from a New Zealand perspective.

We know automation delivers a lot of value on-farm, but despite significant efforts by our
people, the automation business itself has seldom been profitable, partly due to reducing cow
numbers in NZ dairy and limited traction in international markets.

This divestment will allow us to focus on delivering value for our farmer shareholders - with
the increased capital it will provide and, importantly, ongoing access to key data from the
automation and sensor technology to support core LIC business into the future.

We are pleased that MSD Animal Health has chosen to acquire this technology for their Allflex
Livestock Intelligence Business Unit. We are confident this is the best way forward - for the
technology, for our farmers who have invested in these systems and for the wider co-op
shareholder base.

The Board is considering all options for the use of funds from the divestment of LICA.

Outlook
The co-op will be firmly guided by its primary focus of delivering value for farmer shareholders
and delivering on our three commitments to farmers: operational excellence, faster genetic
improvement and software reliability and performance.

LIC expects Underlying Earnings* in 2021-22 to be in the range of $19-25 million.

Our Three Commitments to Shareholders
When we released our refined strategy in April, we also made three commitments to our
shareholders. We will be guided by our primary focus of delivering value for our farmer
shareholders.

These commitments are:
• Operational Excellence We commit to getting the basics right and delivering for you,
on time, every time.
• 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.

7
• 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.

We would like to thank shareholders for their constructive engagement and positive feedback
on the strategy and, in particular, for the commitments that we have made in the key areas.
We will be reporting back on how we are delivering against our commitments and will be in
touch with shareholders shortly to confirm how our performance will be measured.

Chief Executive Appointment
As announced previously, Wayne McNee comes to the end of his time with LIC at the end of
November. The Board is progressing with its selection of a successor and is in the final stages
of selection. An announcement will be made shortly but note that the restrictions imposed by
the Covid-19 pandemic have delayed the process.

At this time I want to formally acknowledge Wayne's significant contribution to LIC over the
last eight and a half years and highlight some significant achievements, including:

• Refurbishment of the Newstead headquarters to a modern, efficient and user friendly
workspace along with investment in farms and facilities around the country
• Refinement, stability and improvement to the technology components of LIC with
significant investment
• Progressed genomic selection and its accuracy
• Developed and cultured strong relationships with other businesses critical to LIC both
nationally and internationally
• Led the business transformation known as the PACE project and the impressive
Organisational Health Index that goes with it
• Assisted with the share structure refinement
• Represented LIC and helped elevate awareness of the business and its unique role in
the NZ dairy industry through involvement in such things as the NZ Sustainable
Business Council and Agricultural Leaders' Health and Safety Action Group
• Raised the level of risk management and awareness to a new level which has assisted
in the recent management of the M bovis and Covid-19 incursions

Wayne has executed his duties to a high standard, setting strong expectations and operating
to a level of extreme professionalism. In turn, that level of expectation has disseminated
throughout the business and financial results.

We wish him well in his future endeavours.


Finally, thank you to our staff and shareholders for their hard work and continued support over
the past year, we look forward to working together and delivering another great result next
year.

The Directors and I are available to talk with you throughout the year.

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Thank you all for attending the Annual Meeting, and for your support over the last year to help
us achieve the great result we have shared today.

STRATEGY, R&D, AND FINANCIAL DETAIL – WAYNE MCNEE, CHIEF EXECUTIVE

Our Strategy
In April this year we announced our refined strategy.

Driving value for our farmer shareholders is at the heart of our refined strategy. We will drive
value, innovate and deliver a positive impact for our customers and shareholders. We’re
focussing on helping our farmers optimise value from their livestock by enabling them to
produce the most sustainable and efficient animals and the highest value product.

We will drive value through a focus on four key areas:
1. Our farmers
2. Animal
3. Data & digital
4. Innovation

Genomics
The purpose of genomics in animal evaluation is to predict the future; it enables elite young
bulls to be used for artificial breeding, effectively fast-tracking genetic gain to breed a more
sustainable animal.

Increasing genetic gain through breeding the best quality heifer calves has become an even
more valued aspect of dairy farmers’ seasonal focus, and genomics is one of the critical
technologies to help farmers breed more productive and climate-friendly cows.

LIC’s investment of more than $78 million over three decades into genomic science and
genome sequencing technology is generating markedly increased productivity and health
traits for dairy cows and better returns for dairy farmers.

Genomic bulls are selected using a combination of DNA and ancestry information to predict
their future performance, which enables access to the elite genetics from a younger age. LIC
genomic science is also about identifying the desirable traits of a cow from its genetic code
and breeding for them to generate increased productivity and health traits for dairy cows.

Farmers are adopting genomically selected sires now to get ahead of the curve. It shows
growing confidence in LIC’s proprietary genomic work and farmers’ willingness to adopt new
tools and solutions to help them meet sustainability goals.

Investment in R&D
The co-op invested $17.1 million in R&D, up 15.4% from the previous year (or up 11.5%
including automation*), reaffirming LIC’s position as one of the biggest investors for the
primary sector.

9
GeneMark and MINDA LIVE are two of the areas that we have invested heavily in over the
past year.

We invested $10m in new GeneMark software, and in a new Illumina platform. This technology
enables LIC to obtain more information from an animal's DNA and do all our own parentage
testing and genomic evaluation, and provide new and larger scale services to our farmer
shareholders.

We also spent $3 million to improve our MINDA LIVE herd management system, with 66 new
features added based on farmer feedback. MINDA remains a focus for the coming year.

Will be sharing a new roadmap of the work we plan to do with improvements and features
before MINDApro is retired in 2022.

Methane Trial
The methane research project that we are working on with CRV is another key area of R&D
that has fostered a lot of interest over the past year.

When announced in May, a promising pilot trial phase measuring the feed intake and methane
emissions – in the form of burps – from 20 young bulls had just been completed. Let’s take a
look at that announcement when we hosted Minister of Agriculture Damien O’Connor.

[Play video]


The research has now progressed to the much larger study where operations have scaled up
to collect measurements from 300 young bulls, the full intake from LIC and CRV’s Sire Proving
Scheme.

If this genetic link is confirmed, farmers will ultimately be able to breed low methane-emitting
cows from low methane-emitting bulls.

Total Revenue

As Murray mentioned, total revenue from continuing operations (excl automation*) was
$249 million. Overall total revenue (continuing and discontinued operations) was $266.4
million for the year.

This is another record revenue for LIC and a result that shows farmer confidence in LIC
products and services.

Contribution to Value on Farm
This is a slide we include in our annual meeting each year. This year I would like to focus on
the Genetic Merit section at $292 million.

Genetic merit improvement of the dairy herd generates the majority of the value, based on the
increase in Breeding Worth (BW) over time.

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High genetic merit is more than just milk production traits; these animals need to be well
balanced with good fertility, animal health, conformation, longevity as well as milk fat and
protein production relative to their liveweight.

Covid-19 Response
It is critical that we continue to deliver important services to our customers despite Covid-19,
and in the safest possible manner.

M.Bovis taught us a lot when it comes to protecting our national herd. Throughout the year we
have undertaken ongoing contingency planning to ensure business continuity relating to
Covid-19 and that we have the correct protections around peak season.

We are in a fortunate position where the majority of our services are deemed essential and
can therefore continue to operate during heightened Covid-19 Alert Levels under strict safety
protocols.

Our key priorities as we head into our peak operational period are keeping you safe, our staff
safe and our business operating so we can continue delivering our products and services to
you during this critical time on-farm.

I would like to thank all our staff who are working to ensure that LIC can continue to deliver
our essential services to our customers at such a critical time of the season.