Half-Year Result 2022-23

There's always room for improvement
Livestock Improvement
Corporation Limited (LIC)
Interim Financial
Statements
For the six months ended 30 November 2022

2 Livestock Improvement Corporation Interim Financial Statements. For the six months ended 30 November 2022

Contents
Key results and position 4
Our results for the period 4
Our position 5
Our cash flows for the period 6
Changes in our position for the period 7
More details 8
Accounting policies 8
Business analysis 9
Equity 11
Other information 12

Key results and position
STATEMENT OF RESULTS FOR THE PERIOD
For the six months ended 30 November 2022
SIX MONTHS ENDEDYEAR ENDED
In thousands of New Zealand dollars
30 Nov 2022 30 Nov 202131 May 2022
Continuing OperationsNoteUnauditedUnauditedAudited
Revenue1177,199 169,360 263,182
Purchased materials(24,219)(22,093)(44,561)
People costs(67,138)(61,643)(108,969)
Depreciation and amortisation(11,181)(11,214)(22,749)
Research and development(8,498)(7,746)(18,184)
Other expenses(19,530)(16,709)(35,347)
Net finance costs(508)(366)(277)
Bull team revaluation- - (21,674)
Fair value change in Nil Paid Share receivable233 - 1,202
Profit/(loss) before tax expense from continuing operations46,358 49,589 12,623
Tax expense(13,054)(14,020)(2,000)
Profit/(loss) for the period from continuing operations33,304 35,569 10,623

Discontinued operations
Profit/(loss) after tax expense from discontinued operations- 15,191 16,100
Profit/(loss) for the period33,304 50,760 26,723
Hedge revaluations(446)229 124
Investment revaluations1,532 (288)(5)
Land and buildings revaluations- - 4,756
1,086 (59)4,875
Comprehensive income for the year 34,390 50,701 31,598
Profit from continuing operations per Ordinary Share (excl. treasury stock) $0.23 $0.25 $0.07
Profit per Ordinary Share (excl. treasury stock) $0.23 $0.36 $0.19
Supplementary non-GAAP note to the results for the period:
Profit/(loss) for the period33,304 50,760 26,723
Plus: Bull team revaluation- - 21,674
Tax effect on Bull team revaluation- - (6,069)
Less: Gain on divestment of Automation business- (15,490)(15,449)
Less: Fair value change in Nil Paid Share receivable(233)- (1,202)
Underlying earnings33,071 35,270 25,677
Underlying earnings per Ordinary Share (excl. treasury stock)$0.23$0.25$0.18
4 Livestock Improvement Corporation Interim Financial Statements. For the six months ended 30 November 2022

Key results and position
STATEMENT OF POSITION
As at 30 November 2022
SIX MONTHS ENDEDYEAR ENDED
In thousands of New Zealand dollars
30 Nov 2022 30 Nov 202131 May 2022
NoteUnauditedUnauditedAudited
Cash645,287 50,448 64,135
Debtors87,051 85,902 48,190
Other assets30,554 26,640 26,484
Nil Paid Shares receivable4,221 9,987 8,651
Bull team93,116 114,790 93,116
Land, buildings and equipment - owned & leased3107,66299,207 106,426
Software, goodwill and other intangible assets337,75942,410 38,608
Total assets405,650 429,384 385,610

Creditors635,904 32,600 28,612
Borrowings- - -
Deferred tax25,350 31,165 26,262
Other liabilities43,183 39,221 37,679
Total liabilities104,437 102,986 92,553
Net assets301,213 326,398 293,057
Share capital276,737 76,737 76,737
Retained earnings176,694 207,899 169,624
Other reserves247,782 41,762 46,696
Total equity301,213 326,398 293,057
Director
Date: 25 January 2023
Director
Date: 25 January 2023
Livestock Improvement Corporation Interim Financial Statements. For the six months ended 30 November 2022 5

Key results and position
STATEMENT OF CASHFLOWS FOR THE PERIOD
For the six months ended 30 November 2022
SIX MONTHS ENDEDYEAR ENDED
In thousands of New Zealand dollars
30 Nov 2022 30 Nov 202131 May 2022
NoteUnauditedUnauditedAudited
Customer receipts131,313 125,215 261,249
Supplier payments(114,903)(101,339)(206,181)
Tax payments(2,318)(69)2,125
Other operating cash flows197 (91)(63)
Net operating cash flows514,289 23,716 57,130
Software development(3,992)(2,567)(6,580)
Net sales/(purchases) of land, buildings and equipment(5,596)(8,162)(10,570)
Sale of net assets held for sale- 35,548 35,571
Other investment cash flows- (843)(739)
Net investment cash flows(9,588)23,976 17,682
Payment of principal portion of lease liabilities(1,879)(1,696)(3,597)
Nil Paid Share payments311 312 352
Dividends paid(21,881)(14,621)(26,363)
Net financing cash flows(23,449)(16,005)(29,608)
Movement in cash for the period(18,748)31,687 45,204
Cash at beginning of the year64,135 18,821 18,821
Currency movement on cash holdings(100)(60)110
Cash at end of the period45,287 50,448 64,135
6 Livestock Improvement Corporation Interim Financial Statements. For the six months ended 30 November 2022

In thousands of New Zealand dollarsNoteShare capitalRetained earningsOther reserves Total equity
Balance at 1 June 202276,737 169,624 46,696 293,057
Profit/(loss) for the period- 33,304 - 33,304
Dividends paid- (26,234)- (26,234)
Hedge revaluations- - (446)(446)
Investment revaluations- - 1,532 1,532
Balance at 30 November 2022 (Unaudited)76,737 176,694 47,782 301,213
Balance at 1 June 2021 as previously reported76,737 175,565 41,821 294,123
Impact of SAAS accounting policy change
Accounting
policies (v)
- (878)- (878)
Restated balance at 1 June 202176,737 174,687 41,821 293,245
Profit/(loss) for the period- 50,760 - 50,760
Dividends paid- (17,813)- (17,813)
Hedge revaluations- - 229 229
Investment revaluations- - (288)(288)
Adjustments on divestment- 265 - 265
Balance at 30 November 2021 (Unaudited)76,737 207,899 41,762 326,398
Restated balance at 1 June 202176,737 174,687 41,821 293,245
Profit/(loss) for the year- 26,723 - 26,723
Dividends paid- (32,052)- (32,052)
Hedge revaluations- - 124 124
Investment revaluations- - (5)(5)
Land and buildings revaluations- - 4,756 4,756
Adjustments on divestment- 266 - 266
Balance at 31 May 2022 (Audited)76,737 169,624 46,696 293,057
Key results and position
STATEMENT OF CHANGES IN POSITION FOR THE PERIOD
For the six months ended 30 November 2022
Livestock Improvement Corporation Interim Financial Statements. For the six months ended 30 November 2022 7

These financial statements set out the performance, position
and cash flows of Livestock Improvement Corporation Limited
("LIC" or the "Company") and its subsidiaries (the "Group") for
the six months ended 30 November 2022.
LIC is domiciled in New Zealand, registered under the
Companies Act 1993 and the Co-operative Companies Act
1996, and listed on the Main Board of the New Zealand Stock.
Exchange Limited ("NZX"). LIC is an FMC Reporting Entity for the
purposes of the Financial Reporting Act 2013 and the Financial
Markets Conduct Act 2013.
These financial statements should be read in conjunction with
the annual report for the year ended 31 May 2022.
Basis of Preparation
i. Statement of compliance
These financial statements comply with NZ GAAP as
appropriate for Tier 1, for-profit entities, NZIFRS and IFRS.

ii. Basis of measurement
The financial statements have been prepared on a GST
exclusive basis, with the exception of trade receivables and
trade payables, which are reported inclusive of GST.

The majority of the Group's business does not follow a
clearly identifiable operating cycle, therefore the balance
sheet is presented in order of liquidity as it is more relevant
to the users of the financial statements.
iii. Functional and presentation currency
The functional currency of the Company and the
presentation currency of the financial statements is New
Zealand Dollars ("NZD"), with amounts rounded to the
nearest thousand.
iv. Use of estimates and judgements
The key estimations 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 standards adopted in current year and
standards issued but not yet effective
Consistent with the annual report for the year ended
31 May 2022, these financial statements reflect the
impact of the IFRS Interpretation Committee's decisions
on accounting for software-as-a-service (SAAS)
arrangements, which reduced retained earnings and
software intangible assets by $0.878 million as at 1 June
2020 and 31 May 2021. In all other respects, accounting
policies have been applied consistently with prior periods.
Accounting policies
Accounting entity
8 Livestock Improvement Corporation Interim Financial Statements. For the six months ended 30 November 2022

In thousands of New Zealand dollars
SIX MONTHS ENDED 30 NOV 2022
(Unaudited)
NZ market
genetics
Herd
testing
Farm
software
DiagnosticsOtherEliminationsTotal
External revenue102,947 15,738 26,191 12,983 19,340 - 177,199
Inter-segment revenue- - - - 1,723 (1,723)-
Total revenue102,947 15,738 26,191 12,983 21,063 (1,723)177,199
Depreciation & amortisation(706)(2,726)(708)(2,726)(4,315)- (11,181)
Segment gross profit before tax68,527 6,706 19,530 4,599 12,952 - 112,314
Bull team revaluation-
Unallocated amounts(65,956)
Profit/(loss) before tax expense from continuing operations46,358
SIX MONTHS ENDED 30 NOV 2021
(Unaudited)
NZ market
genetics
Herd
testing
Farm
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 gross 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 expense from continuing operations49,589
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, tags and farm management information services.
- Diagnostics: provides DNA and animal health testing services.
NZ Market Genetics revenue is primarily recognised at a point in time, upon delivery of product to the customer. All other revenue lines
are primarily recognised over time, as the service to the customer is provided.
Livestock Improvement Corporation Interim Financial Statements. For the six months ended 30 November 2022 9

Notes to the Financial Statements
1. Business analysis (cont.)
In thousands of New Zealand dollars
YEAR ENDED 31 MAY 2022 (Audited)
NZ market
genetics
Herd
testing
Farm
software
DiagnosticsOtherEliminationsTotal
External revenue104,621 36,803 51,548 26,881 43,329 - 263,182
Inter-segment revenue- - - - 4,281 (4,281)-
Total revenue104,621 36,803 51,548 26,881 47,610 (4,281)263,182
Depreciation & amortisation(1,228)(5,606)(2,279)(3,297)(10,339)- (22,749)
Segment gross profit before tax69,091 19,874 38,439 10,682 18,542 - 156,628
Bull team revaluation(21,674)
Unallocated amounts(122,331)
Profit/(loss) before tax expense from continuing operations12,623
The Other segment includes international operations, research & development and support services. Unallocated amounts include
personnel costs, other expenses and net finance costs.
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.
10 Livestock Improvement Corporation Interim Financial Statements. For the six months ended 30 November 2022

Notes to the Financial Statements
2. Equity
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 (2021: 142,344,836
Ordinary Shares, excluding 5,337,584 shares held as treasury stock).
Other reserves and equity
In thousands of New Zealand dollars
Hedge
revaluation reserve
Investment
revaluation reserve
Land & building
revaluation reserve
Non-controlling
interests
Other
Reserves
Balance at 1 June 202258 4,858 41,780 - 46,696
Profit/(loss) for the period- - - - -
Dividends paid- - - - -
Revaluations(446)1,532 - - 1,086
Balance at 30 November 2022 (Unaudited)(388)6,390 41,780 - 47,782
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 2021(66)4,863 37,024 - 41,821
Profit/(loss) for the year- - - - -
Dividends paid- - - - -
Revaluations124 (5)4,756 - 4,875
Balance at 31 May 2022 (Audited)58 4,858 41,780 - 46,696
Livestock Improvement Corporation Interim Financial Statements. For the six months ended 30 November 2022 11

Notes to the Financial Statements
3. Acquisitions and disposals
SIX MONTHS ENDEDYEAR ENDED
In thousands of New Zealand dollars
30 Nov 2022 30 Nov 202131 May 2022
UnauditedUnauditedAudited
(i) Land, buildings and equipment
Acquisitions *6,318 6,249 10,588
Disposals(237)(94)(152)
(ii) Software and other intangible assets
Acquisitions4,064 3,454 6,501
Disposals/Impairment- (30)(2,278)
*Excludes the impact of NZ IFRS 16: Leases, which increased Land, buildings and equipment by $2.0 million in 2022 (November 2021:
$2.1 million, May 2022: $7.2 million).
SIX MONTHS ENDEDYEAR ENDED
In thousands of New Zealand dollars
30 Nov 2022 30 Nov 202131 May 2022
UnauditedUnauditedAudited
Remuneration of key Management and Directors1,710 2,803 5,280
Sale of goods and services to key Management and Directors404 293 512
Purchases of goods and services from key Management and Directors75 60 274
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 terms:
4. Transactions with Related Parties, Directors and Management
SIX MONTHS ENDEDYEAR ENDED
In thousands of New Zealand dollars
30 Nov 2022 30 Nov 202131 May 2022
UnauditedUnauditedAudited
Profit for the period33,30450,760 26,723
Adjusted for non-cash items:
Depreciation and amortisation11,18111,214 22,749
Bull team revaluation - - 21,674
Deferred tax expense(912)(770)(6,612)
Working capital movements and other non-cash items(29,284)(37,488)(7,404)
Net operating cash flows14,289 23,716 57,130
5. Reconciliation of the Profit/(loss) for the period to Net operating cash flows
12 Livestock Improvement Corporation Interim Financial Statements. For the six months ended 30 November 2022

Notes to the Financial Statements
6. Discontinued operations
Cash and Creditors in the November 2022 Statement of Position include $7.173 million (November 2021: $1.831 million, May 2022: $3.005
million) for balances held in LIC bank accounts on behalf of the purchaser of LIC's Automation business.
On 8 June 2021, LIC announced the divestment of its Automation business, with settlement completed on 11 June 2021. All proceeds
from the sale were paid in cash, with the exception of $3.8 million held in escrow. LIC continues to provide transitional services to the
purchaser until they fully establish operations.
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.
7. Audit
In relation to the 2022 financial year LIC declared a dividend of 18.43 cents per Ordinary Share, or $26.232 million (2021: 12.51 cents per
Ordinary Share, or $17.808 million). The fully imputed dividend was paid on 19 August 2022.
8. Dividend
Livestock Improvement Corporation Interim Financial Statements. For the six months ended 30 November 2022 13

605 Ruakura Road
Newstead 3286
Hamilton
New Zealand
07 856 0700 | lic.co.nz

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Results announcement
25 January 2023

Results for announcement to the market
Name of issuer Livestock Improvement Corporation Limited
Reporting Period 6 months to 30 November 2022
Previous Reporting Period 6 months to 30 November 2021
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$177,199 +4.63%
Total Revenue $177,199 +4.32%
Net profit/(loss) from
continuing operations
$33,304 -6.37%
Total net profit/(loss) $33,304 -34.39%
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
$1.91 $2.17
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. 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

25 January 2023

Unaudited financial statements accompany this announcement.

---

LIC is the trading name of Livestock Improvement Corporation Limited

Private Bag 3016
Hamilton 3240
New Zealand

0800 542 742
www.lic.co.nz


MEDIA RELEASE
25 January 2023

LIC half-year financial result in line with market guidance despite cost pressures

Summary of financials
• Total Revenue from Continuing Operations, up 4.6% at $177.2 million
• Net Profit After Tax (NPAT) from Continuing Operations: $33.3 million, down 6.4% from the same period last year
• Underlying Earnings forecast range at year-end: $21.5-25.5 million (previously $20-26 million)
• 2023-24 Underlying Earnings forecast range: $22-28 million

LIC has released a strong half-year result for the 2022-23 financial year, despite cost pressures, confirming it
is on track to deliver a year-end result in line with expectations and guidance previously provided to the
market.

Reporting increased revenue (up 4.6%) but a drop in profit (down 6.4%) compared to the same period last
year, Board Chair Murray King says he is pleased with the result given the current challenging economic
conditions.

“Like many other Kiwi businesses we’ve been challenged during this time by staff shortages, a weaker kiwi
dollar and rising costs associated with record inflation, but we’re pleased to confirm we remain on track to
achieve a strong result at year-end and keep up the positive momentum from our previous years’
performance.

“On behalf of the Board, I want to thank our farmers for their continued support, particularly as they are facing
these same headwinds. A special thanks also to our team who have rallied together through staff shortages to
continue to deliver a reliable service to our farmers. I look forward to presenting the full year result in July.”

King says the increased revenue was driven by further growth in uptake of the co-op’s premium bull genetics
and animal health tests, which reflects growing commitment from farmers to breed the best cows, faster.
“Kiwi farmers are continuing to sharpen their focus on herd improvement to help meet their environment
goals, investing in their herds now so they’re sustainable and profitable into the future. We’re proud to be part
of the solution for this, enabling them to breed genetically superior animals which produce more milk with a
lower environmental footprint, and at a faster rate.”
Recent research has found that long term users of LIC genetics have almost doubled the speed of
improvement in their herds over the last decade (10gBW per annum 2012-2016, to 19gBW per annum 2017-
2021), while farmers who don’t use LIC genetics have had lower rates of genetic gain over the same period
(7gBW to 10gBW).
King said the co-op’s prolonged and substantial investment in genomics has been the key contributor of this
improvement as the technology enables accurate identification of elite bulls at a younger age so they can be
made available to farmers earlier and fast track the rate of genetic gain on farm.
A record graduation rate of young bulls joining LIC’s artificial breeding (AB) teams this season is also
testament to its work in genomics, after the superior performance of these bulls predicted by genomics was
validated by herd testing data from their first crop of daughters now being milked on farms across the country.

Page 2 of 2
“It’s incredibly pleasing to see farmers are reaping the rewards of their co-op’s investment into genomics on
their behalf – both in their herds now with the increased speed of improvement and also with a strong pipeline
of elite genetics to support them into the future.”
The increasing uptake of cow wearable devices was also reflected in the result, as more farmers extended
their herd’s artificial breeding period, capitalising on the devices’ heat detection capabilities to utilise short
gestation genetics.

“These devices provide farmers with real-time data and insights to monitor their cow’s performance, health
and fertility and we’re pleased to partner with wearables suppliers (Afimilk, Allflex via Protrack, CowManager,
Datamars Tru-Test, Halter, SmaXtec and Waikato Milking Systems) to enable two-way flow of this data
between the devices and our herd management software (MINDA).”

King said other highlights from the reporting period include the promising results from the co-op’s methane
research programme which confirmed bulls’ genetics play a role in how much methane they emit, highlighting
the potential for farmers to breed low methane-emitting cows in the future. This work has now progressed to
mating bulls identified as low and high methane emitters to test whether the variation is passed on to their
daughters. Research to breed more heat tolerant cows is also continuing.

The co-op’s market guidance for year-end has been tightened, with Underlying Earnings now expected to be
in the range of $21.5-25.5 million (previously $20-26 million). The co-op is also forecasting 2023-24
Underlying Earnings in the range of $22-28 million.

King said the co-op’s focus to year-end is to continue working hard to deliver its three strategic commitments
in the co-op’s strategy - operational excellence, faster genetic improvement and software reliability and
performance.

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

Contact:
Shareholder enquiries: shareregistry@lic.co.nz or 0800 542 742
Media enquiries: Ashleigh.Sattler@lic.co.nz or 0276171942.

Notes to financial information*
• LIC’s half-year result incorporates the majority of revenues from 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.
• No dividend is declared at half year.
• These numbers should be read in conjunction with the financial details in the Interim Report and 2022
Annual Report.
• Figures have not been audited, with the exception of 31 May 2022 comparatives.
• Underlying Earnings: this is 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 determination of
dividends. 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.
• Discontinued operations: LIC divested its automation business in 2021-22. Accounting standards require
any profits from the Automation business to be disclosed as Discontinued Operations.
• Bull team valuation: LIC’s elite bull team is its largest biological asset, valued at $93.1million at 22-23
year-end. This valuation is based on an independent model that looks at future revenue streams and
costs associated with the current bulls owned, discounted back to current value.
• Market guidance is provided on the basis that no significant climate event or milk price change takes
place, nor any major impacts from M. bovis or Covid-19.

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