GENUS PLC / ANNUAL REPORT 2023
ACCELERATING
CUSTOMER
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CONTENTS
12
OUR PURPOSE IN ACTION
36
SUSTAINABILITY REPORT
STRATEGIC REPORT
01 2023 Highlights
02 Business Model
12 Genus at a Glance
14 Chairman’s Statement
18 Market Overview
20 Strategic Framework and Key
Performance Indicators
24 Operating Reviews
30 Financial Review
34 People and Culture
36 Sustainability Report
46 TCFD Statement
58 Stakeholder Engagement
60 Non-Financial Information Statement
and Section 172 Statement
61 Principal Risks and Uncertainties
65 Going Concern and
Viability Statement
CORPORATE GOVERNANCE
66 Chairman’s Letter
68 Board of Directors and
Company Secretary
70 Genus Executive Leadership Team
72 Corporate Governance Statement
72 Board Leadership and Purpose
73 The Board’s Year in Review
76 Division of Responsibilities
78 Composition, Succession
and Evaluation
80 Nomination Committee Report
83 Audit & Risk Committee Report
89 Directors’ Remuneration Report
114 Directors’ Report
116 Directors’ Responsibilities
16
CHIEF EXECUTIVE Q&A
I’m excited about
the prospects
for Genus. I see
real potential in
maximising the
benefit of all
the investment
made to date.
JORGEN KOKKE
Chief Executive
FINANCIAL STATEMENTS
117
Independent Auditor’s Report
124 Group Income Statement
125 Group Statement of
Comprehensive Income
126 Group Statement of Changes
in Equity
127 Group Balance Sheet
128 Group Statement of Cash Flows
129 Notes to the Group
Financial Statements
187 Parent Company Balance Sheet
188 Parent Company Statement of
Changes in Equity
189 Notes to the Parent Company
Financial Statements
ADDITIONAL INFORMATION
199 Five-Year Record –
Consolidated Results
200 Alternative Performance
Measures Glossary
208 Glossary
209 Advisers
—
genusplc.com
01
GENUS PLC / ANNUAL REPORT 2023
2023 HIGHLIGHTS
SOLID GROUP PERFORMANCE
• Group revenue rose 10%2 in constant
currency (16% in actual currency)
• Adjusted operating profit including joint
ventures up 3% in constant currency
(10% in actual currency)
• R&D investment increased by 19%2 as
planned, including a 66%2 rise in gene
editing expense, in preparation for the
anticipated commercialisation of pigs
resistant to porcine reproductive and
respiratory syndrome virus (‘PRRSv’) which
continues to make excellent progress
• Adjusted profit before tax (‘PBT’) flat in
actual currency (8% lower in constant
currency), with net finance costs
up 124%2
• Statutory PBT reduced by 19% to
£39.4m with a £16.9m reduction in the
non-cash fair value IAS 41 valuation
of the Group’s biological assets
SOLID ABS PERFORMANCE, PROFIT GROWTH
ACHIEVED IN ALL REGIONS, OTHER THAN
LATIN AMERICA, WHICH WAS STABLE
• Volumes up 3%, revenue up 12%2
supported by robust price increases
• Adjusted operating profit up 5%, after
a stronger second half. Expansion
of long-term partnerships with
strategic accounts, underpinned
by Sexcel and NuEra beef genetics,
drove strong profit growth in North
America and good growth in Europe
• Latin America profits stable,
despite challenging market
conditions, particularly in Brazil
where macroeconomic conditions
continued to impact beef supply
and demand dynamics
• Sexed genetics volumes up 18%; strong
growth in volumes of Sexcel and
third-party IntelliGen production
Read more on pages 30-33
Read more on pages 26-27
RECORD PIC PERFORMANCE, PROFIT
GROWTH ACHIEVED IN ALL REGIONS
GOOD CASH FLOW, DEBT LEVERAGE
REDUCED AND DIVIDEND MAINTAINED
• Strong demand for PIC’s differentiated
genetics drove a 5% increase in
volumes, revenue up 7%2, and
strategically important royalty revenue
growth across all regions, up 10%2
• Adjusted operating profit including
joint ventures increased by 11%2, as the
business continued to expand and
strengthen commercial relationships
with producers around the world
• The performance was driven by
strong profit growth in North America,
Latin America and Asia. Good
growth in Europe, with improved
performance in the second half
• Performance in China was affected by
ongoing market volatility, particularly
in the second half of the year.
Volumes were 1% lower in the year,
with revenue stable. Royalty revenue
was up 26%2 and adjusted operating
profit growth was £9.4m (2022: £5.6m,
impacted by a £4m customer credit)
Read more on pages 24-25
1 Adjusted results are the Alternative Performance
Measures (‘APMs’) used by the Board to monitor
underlying performance at a Group and operating
segment level, which are applied consistently
throughout. These APMs should be considered in
addition to statutory measures, and not as a
substitute for or as superior to them. For more
information on APMs, see the APM Glossary
2 Constant currency percentage movements are
calculated by representing the results for the year
ended 30 June 2023 at the average exchange rates
applied to adjusted operating profit for the year
ended 30 June 2022
3 The primary intensity ratio is a measure of the
Group’s Scope 1 and 2 emissions per tonne of
animal weight
• Free cash inflow1 of £18.2m (2022:
£13.5m outflow), reflecting record high
adjusted EBITDA1, lower working capital
outflows and lower capital expenditure.
Strong cash conversion of 105%1 (2022:
82%) above target level of 90%
• Net debt to EBITDA ratio improved
to 1.6x1 (2022: 1.7x) within the 1.0x-2.0x
target range. Net debt1 of £195.8m
(2022: £185.0m) as expected
• Adjusted earnings per share rose
3%, full year dividend maintained at
32.0p per share, with 2.7x1 adjusted
earnings cover comfortably within
the 2.5x-3.0x target range.
Read more on pages 30-33
GOOD STRATEGIC PROGRESS AND
CONTINUED INVESTMENT FOR GROWTH
• Genus’s PRRSv-resistant pigs
programme continued to make
excellent progress, with submissions to
the US Food and Drug Administration
(‘FDA’) completed ahead of schedule
and approval expected in the first half
of 2024. We are making regulatory
progress in Colombia, Brazil and also
China, where we have obtained consent
for import of PRRSv-resistant pigs for
in-country assessment
• PIC’s new world-class elite farms in
Canada, Brazil and China well positioned
to capture future growth opportunities
GenusOne successfully deployed
throughout the majority of Europe in the
year; implementation underway in LATAM
• Strong progress in reducing CO2
emissions; primary intensity ratio
reduced by 36% and Scope 1
and 2 emissions reduced by 14%
compared to our 2019 baseline
Read more on pages 30-33
GROUP REVENUE
£689.7m
2022: £593.4m
STATUTORY PROFIT BEFORE TAX
£39.4m
2022: £48.4m
ADJUSTED PROFIT BEFORE TAX1
£71.5m
2022: £71.5m
ADJUSTED BASIC EARNINGS PER SHARE1
84.8p
2022: 82.7p
FREE CASH FLOW1
£18.2m
2022: £(13.5)m
DIVIDEND PER SHARE
32.0p
2022: 32.0p
STRATEGIC REPORT 02
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GENUS PLC / ANNUAL REPORT 2023
GENETIC IMPROVEMENT
DRIVING
GENETIC
IMPROVEMENT
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Trial outcomes
validate that
PIC800® delivers
superior survivability
and more full value
pigs in commercial
settings, leading
to a significant
economic advantage
for customers.
MATT CULBERTSON
Chief Operating Officer
Genus PIC
Genus breeds and sells market-leading
genetically superior animals, which enable
farmers to produce more animal protein
with fewer resources. Driving genetic
progress lies at the heart of our business.
Genus is a global leader in genetic
improvement. Our bovine business,
Genus ABS, has a strong dairy genetics
portfolio and has a leading beef
breeding programme. In Genus PIC,
our porcine programme has benefited
our customers by delivering over $3.00
profit improvement per commercial
pig per year in the past three years1.
We achieve these results by starting
with our world-class, proprietary herds,
and applying leading technology and
capabilities to rapidly improve them.
Genus is uniquely positioned as a
leading player of scale. Serving many of
the Top 100 pig producers and dairies
globally through our strategic supply
chain and distribution networks in over
80 countries. Our cash generation and
listed status enables us to invest more
in leading technologies2, which we can
leverage across species. We also attract
top talent across our 3,500 employees,
which include more than 130 PhDs.
Read more on pages 24-29
OUR INDUSTRY-LEADING NUERA BEEF
GENETIC PROGRAMME IS DELIVERING
NuEra, our proprietary beef
breeding programme, produces
industry-leading genetics for
beef supply chains around the
globe. These genetics have proven
their superiority in head-to-head
trials against competitors and
also in internal validations using
thousands of customer records
from NuEra-sired progeny. In these
evaluations of thousands of animals,
advantages for the beef supply
chain have ranged from $38 per
animal leaving the grower at four
months of age, up to more than
$400 per animal, for animals at
harvest when using NuEra. This has
driven demand for our proprietary
NuEra Genetics, which from full
commercial launch in FY18 now
represent more than a third of overall
ABS beef sales volumes in FY23.
GENUS NUERA GENETICS INDEX AND
NUERA SALES
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140
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110
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45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
FY18
FY19
FY20
FY21
FY22 FY23
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1 Based on three-year rolling average of our
porcine genetic index. See Strategic Framework
on page 20
2 See Technology section on page 4
NuEra % of total ABS beef volumes
NuEra Genetic Index
1 NuEra genetic index for Genus proprietary
T14 line
STRATEGIC REPORT
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GENUS PLC / ANNUAL REPORT 2023
GENUS PLC / ANNUAL REPORT 2023
MEETING THE UNIQUE
NEEDS OF THE INDIAN
DAIRY MARKET THROUGH
SEXED SEMEN
Milk is a major protein source in India
and demand is growing. With imported
milk being unaffordable, the country
needs more productive cows with better
genetic potential. However, conventional
breeding results in unwanted bulls,
which cannot be slaughtered, are
a drain on limited resources and
a safety risk on Indian roads.
In response, the Federal Government
has provided financial assistance to
establish sexed semen laboratories
and supported the purchase of sexed
semen straws. Through the Government
programme, we have served six Indian
states with over 400,000 Sexcel
straws, with repeat orders from five
states and over 50% market share.
Training in using sexed semen is vital,
since each straw costs up to 50 times
as much as conventional semen. In
FY23, we trained around 4,000 vets and
technicians, to help them understand
the importance of genetics and
selecting the right animals, and how to
store, handle and use the straws. This
helps to maximise farmers’ returns and
creates advocacy for using our genetics.
To further improve outcomes, we
imported seven Jersey bulls from the US.
Jersey milk has the right level of solids
and the cows have longer productive
lives and greater sustainability than
Holsteins in tropical conditions. The
new bulls have contributed to the
profitability index for the best Jersey
bull in India more than tripling.
Our R&D team in India is now working
on targeted improvements to our sexed
semen technology, to reflect demand
for sexed water buffalo semen. Water
buffalo are the most important farm
animals in Asia and account for around
58% of all milk production in India.
Read more on pages 28-29
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GENUS PLC / ANNUAL REPORT 2023
ENHANCING ANIMAL
WELFARE AND CUSTOMER
PROFITABILITY THROUGH
GENE EDITING
In the last year, we have made further
good progress with our programme
to produce gene-edited pigs that are
resistant to the deadly PRRS virus.
In particular, we have submitted
our final filings to the US FDA, with
acceptance expected in early 2024.
To support submissions in other key
countries, we have prepared an
international dossier and engaged
with authorities in Colombia, Brazil,
Mexico, Canada and Japan.
To encourage customer acceptance,
we are nearing completion of our life
cycle analysis, to demonstrate
their sustainability benefits, and
conducting research to show the
potential reduction in antibiotic use.
We are also focused on consumer
acceptance of gene-edited pigs,
which is essential for ensuring an
end-market for our customers.
As we prepare to offer PRRS-resistant
pigs commercially, we have started
to expand our pig population with
the initiation of a second nucleus
farm. This will give us greater scope
for detailed animal testing and
selection, to accelerate annual genetic
improvement, as well as increasing
the availability of elite breeding stock,
so we can begin sales worldwide.
Read more on pages 28-29
STRATEGIC REPORT 05
GENUS PLC / ANNUAL REPORT 2023
TECHNOLOGY
THROUGH
LEADING-EDGE
TECHNOLOGIES
Our world-class
teams of scientists
continue to break
new ground, as
we invest in our
programmes to
deliver rapid genetic
advances to benefit
our customers.
ELENA RICE
Chief Scientific Officer
and Head of R&D
To drive genetic improvement in our
proprietary herds and deliver superior
breeding animals to our customers, we
leverage leading-edge technologies
that we develop in-house and access
through strategic partnerships.
Our genome science and bioinformatics
teams have a deep understanding of
the link between DNA and animals’
observable characteristics, such as
protein and fat content, aided by our
extensive databases of real-world animal
performance data. We employ this
knowledge in our proprietary breeding
programmes to select superior parents
with desirable characteristics to breed
successive generations of animals.
10
countries where
IntelliGen operates
Our biosystems engineering team
uses technology to interrogate and
select cells, such as in our proprietary
semen sexing technology, IntelliGen,
one of only two commercially available
bovine sexing technologies globally.
Today IntelliGen operates in ten
countries, with 15 labs globally.
In gene editing, we have built strong
in-house technical and regulatory
capabilities. Our PRRSv resistance
programme is developing more
sustainable, disease-resistant breeding
pigs by making precise changes to
their genes. We are also exploring
whether gene editing can provide
solutions to other porcine diseases.
We have active R&D workstreams
in multiple advanced reproductive
technologies, including enhancing
embryo quality, efficient determination
of embryo viability and exploring how
embryonic stem cells can enhance
genetic gain and accelerate traits.
Read more on pages 28-29
STRATEGIC REPORT 06
GENUS PLC / ANNUAL REPORT 2023
SUPPLY CHAIN
INVESTING
IN OUR
SUPPLY CHAIN
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Genus’s global supply chain efficiently
delivers porcine and bovine genetics
to customers while mitigating risk for
us, for example by using third-party
multiplier farms and by spreading
facilities across the world.
PIC pure-bred pig lines are housed
in strategically located biosecure
facilities in four continents. ‘Market’ pigs
for processing are then produced in
‘breeding pyramids’ over four generations.
PIC supplies live animals and semen
to customers’ pyramids, enabling
them to produce pigs with the latest,
best-performing genetics. Third-party
herd multipliers and studs expand our
breeding pig populations and produce
semen for commercial sale, with PIC
controlling the sale of its animals to
protect our intellectual property. In
total, PIC boars are housed in more
than 400 studs globally and there are
more than 500 multiplication farms.
New farm builds, such as our owned
Atlas (Canada), Granja Genesis
(Brazil), and Ankang (China) farms have
expanded our global supply of elite
porcine genetics. In China our porcine
supply chain is unparalleled amongst
international genetics companies,
with over 180,000 great grandparent
and grandparent sows in owned, joint
venture and contracted farms locally,
enabling us to support industry growth.
ABS breeds elite bulls in four continents.
The best bulls go to one of ABS’s six
owned and contracted stud facilities
in the US, Europe, Brazil, India and
Australia, where over 1,000 bulls’
semen is collected for distribution
as frozen semen ‘straws’ or used to
create embryos for sale. ABS operates
embryo labs in Brazil, Mexico and the
US, and sexing operations in the US,
Europe, Latin America and Asia.
Animals at ABS’s and PIC’s facilities
benefit from industry-leading welfare
standards, and we have started to roll-
out solar panels, solar generation has
increased by more than 100% since FY22.
GROWING OUR SEXING PLATFORM
We have continued to grow our
sexing platform to support the
growing demand for Sexcel,
our proprietary genetics sexed
by IntelliGen, and third-party
demand for sexing services
provided directly by IntelliGen.
TOTAL SEXED SALES VOLUMES
(000s)1
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
FY18
FY19
FY20
FY21
FY22
FY23
Other sexed
Sexcel
IntelliGen (3rd Party)
Read more on pages 24-27
1 Sexed units delivered or produced for
customers in the year
07
GENUS PLC / ANNUAL REPORT 2023
Pork producers need
the right products at
the right time to keep
their operations running
smoothly and profitably.
PIC is dedicated to
making sure customers
can access the high-
quality genetics they
desire, and we work
with a global network
of partners to achieve
this goal.
NICK MCCULLEY
Global Porcine Supply Chain Director
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SUPPORTING
SUSTAINABILITY AND
PRODUCTIVITY WITH
GENEADVANCE
Over the last three years, we have
worked with Ancali dairy in Chile
to implement our GENEadvance
programme. GENEadvance uses
genomic testing to predict the genetic
merit of heifers at a very young age,
so the customer can use our ranking to
select the right animals to breed future
herd replacements and those to sell or
breed to beef. Our revenue is then based
on the outcomes for the customer.
“In Ancali, we are building an extremely
disruptive business model,” says Miguel
Aparicio, General Manager of Agrícola
Ancali. “We have built the largest
robotic farm worldwide, with the most
modern production and environmental
strategy, backed by a strong team. This
helps us to deliver our key sustainability,
social and governance pillars.
“We have a strong and successful
business relationship with ABS, using
GENEadvance to deliver our ambitious
production and sustainability objectives.
We are achieving excellent results,
and we are now starting a high-quality
embryo project for export purposes.”
Read more on pages 26-27
STRATEGIC REPORT 09
GENUS PLC / ANNUAL REPORT 2023
CUSTOMERS
PARTNERING
WITH OUR
CUSTOMERS
We build long-term
relationships with
our customers,
share in the value
we deliver for them
and continually look
for ways to serve
them better.
ANDREW THOMPSON
Head of ABS EMEA
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Genus serves over 50,000 customers
in more than 80 countries, including
many of the Top 100 pig producers and
Top 100 dairies globally. Our porcine
business is global leader and we are a
strong second in bovine. We sell products
through different channels, either as
multi-annual product and service bundles
or transactionally, always looking to align
pricing with value delivered to customers.
Our technical teams support customers to
get the best from our products, delivering
a superior customer experience.
We build trust with porcine customers by
linking pricing to on-farm performance
and by running validation trials. 85% of
our volumes1 are on multi-annual royalty
contracts, where PIC supplies animals
and semen at cost, and customers
typically then pay for every parent
selected for breeding, every piglet
weaned or every pig sent to market.
In bovine, customers have traditionally
purchased semen straws or embryos on a
per-unit fee. In FY19, we introduced multi-
annual product and service bundles,
which typically require customers to
commit to a three to five year contract
and purchase 100% of their product
requirements from ABS2. Today, this
business represents 32%3 of our direct
sales volumes in EMEA. To serve customers
better, we have introduced digital sales
channels, which account for around one
third of beef semen sales volumes in Latin
America, an early adopter. We have also
introduced digital tools and services to
support contracted customers in key
markets. We price each straw of semen
according to a genetic index score used
by the industry to estimate the economic
value of breeding animals for farmers. We
have also introduced beef weaned calf
fees, which are similar to PIC’s model.
Read more on pages 26-27
Including our Brazilian joint venture
1
2 Programme offering, customer commitment, pricing
and contract lengths vary
3 Contracted business for 1-5 years, including our key
account partner programme, reproductive
management services, Breeder Tag programme,
and other contracted services where the customer
has committed 80-100% business with Genus ABS
STRATEGIC REPORT
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GENUS PLC / ANNUAL REPORT 2023
STAKEHOLDERS
NOURISHING
THE WORLD
SUSTAINABLY
Superior genetics
are increasingly
important to ‘climate
smart’ production
of animal protein,
as we work to help
further reduce our
customers’ emissions.
JORGEN KOKKE
Chief Executive
Genus breeds more productive and
resilient breeding animals, which enables
farmers to produce meat and milk
more efficiently and sustainably. Our
market-leading breeding animals have a
significant impact on whole protein value
chains and benefit multiple stakeholders,
with customers being our central focus.
In the past 40 years, genetic improvement
has contributed to doubling US dairy
farmers’ average milk per cow, from 5.4
to 10.8 tonnes per year1. Genetic progress
has also helped to deliver significant
resource savings and environmental
benefits in protein production. Today
it takes 1.6kg less feed to produce a
kilogramme of pork in a professional
farm system than it did 50 years ago2.
By improving productivity, cost and
resource utilisation, genetic improvement
makes nutritious animal protein more
accessible to consumers globally,
helping to nourish the world more
sustainably, in line with our vision.
3,500 employees help to deliver our
vision and more than 12,000 shareholders
are invested in our opportunity3. By
sharing in the value that we deliver
to meat and milk producers globally,
we provide career opportunities
to our employees and generate
financial returns for our investors.
Read more on pages 36-59
PRODUCTIVITY INCREASES IN
PIC HERD4
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16
14
12
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2010
Pigs weaned/litter
2020
2.40x
2.20x
2.00x
1.80x
1.60x
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F
2030F
Feed
Genetic improvement in PIC herds
has delivered benefits across
multiple observable traits, including
pigs weaned per litter and feed
conversion. These all contribute
to improving the overall pork
produced per sow and reducing the
resources required to produce it.
1 USDA ERS data for the period 1980-2020
2 Genus PIC data for the period 1970-2020
3 Number of Genus shareholders as of 30 June 2023
4 Genus PIC data; PIC herd represents top performing
PIC customers
STRATEGIC REPORT
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GENUS PLC / ANNUAL REPORT 2023
STRATEGIC REPORT 12
GENUS PLC / ANNUAL REPORT 2023
GENUS AT A GLANCE
PIONEERING
ANIMAL GENETIC
IMPROVEMENT TO
HELP NOURISH
THE WORLD
WHAT WE DO
INVESTMENT CASE
We are a world-leading animal protein
genetics company. Our market-
leading breeding animals have
desirable characteristics such as feed
efficiency, disease resistance, growth
rate, protein and fat content, and
fertility. These characteristics enable
farmers to produce better quality
meat and milk more efficiently, and to
feed the world more sustainably.
HOW WE DO IT
We analyse animals’ DNA and look
for markers that we know are linked to
desirable characteristics for farmers. We
then select the animals with the strongest
genetic profile from our proprietary
and partner herds, and breed them
to produce even better offspring, in a
continuous cycle. We distribute these
superior genetics to customers in the
form of live animals, semen or embryos.
We also own technology that enables
us to sort semen for desirable traits,
for example to produce more female
calves for the dairy market. In addition,
we make precise gene edits to animals’
DNA, which we are employing in our
R&D programmes to produce animals
which are resistant to fatal disease.
We focus on serving progressive farmers,
who are best placed to realise and
measure the benefits of our superior
genetics and technologies.
Leading multi-species market positions
We supply 50,000+ customers in 75+
countries, including some of the world’s
top pig and dairy farmers. Our
international, multi-species model reduces
our reliance on individual markets. In
contrast, many of our competitors are
regional single-species cooperatives.
People and relationships
We attract some of the best talent in the
industry. Our 3,500 employees, including
130+ PhDs, enable us to deliver superior
products and services to our customers
globally. Close relationships with leading
research and strategic partners further
strengthen our capabilities.
Focused technology-driven
business model
We focus on delivering high-quality
breeding animals to farmers by
discovering, developing and delivering
pioneering technologies spanning the
genomics, gene editing, sexing and
reproductive technology fields, across
multiple species.
Scale and financial strength
Genus is the only large, listed animal
genetics company operating in pork,
beef and dairy. We are cash generative
with a strong financial position and
access to strategic capital. We leverage
our R&D investment across species to
further our genetic lead.
Positive long-term market
fundamentals
Demand for animal protein is growing
globally, while the need to operate
sustainably is becoming even greater.
Genus’s genetic improvement
technologies enable farmers to produce
more animal protein with fewer
resources, helping to reduce their
environmental impact.
STRATEGIC REPORT 13
GENUS PLC / ANNUAL REPORT 2023
OUR INNOVATION-DRIVEN BUSINESS MODEL
Genus’s business model is based on
creating and delivering genetically
improved breeding animals across
different species, by leveraging
a common, innovation-driven
technology platform across
different species. Our innovative
R&D function includes over 450+
highly skilled employees including
scientists, technicians, engineers and
bioinformaticians. Our world-leading
teams manage our proprietary
breeding programmes by leveraging
our extensive real-world data,
collected on farms and through DNA
analysis. More information on the
key aspects of our business model
can be found on pages 2 to 11.
GENETIC IMPROVEMENT
SHARED PROPRIETARY TECHNOLOGY PLATFORM
GENOMIC
SELECTION
BIOSYSTEMS
ENGINEERING
GENE
EDITING
REPRODUCTIVE
BIOLOGY
GENOME SCIENCE AND BIOINFORMATICS
SCIENTIFIC COMPUTING
OUR COMMERCIAL DIVISIONS
Genus’s leading porcine and bovine divisions, PIC and ABS, deliver genetically elite breeding animals and services to thousands of
farmers globally. Given the different nature of PIC’s and ABS’s markets and business models, PIC and ABS have different financial profiles.
CUSTOMER PROFILE
Consolidated and vertically integrated
Consolidating
REGIONAL VARIATION
Low
High
GENETIC VALUE BASIS
PIC proprietary index
Moving from public to proprietary indices
GENETICS PURCHASING
MODEL
Multi-year, royalty-based contracts
Priced per straw, shifting to multi-year
genetic programmes
NUMBER OF EMPLOYEES
ADJUSTED REVENUE1
ADJUSTED OPERATING
PROFIT1
ADJUSTED OPERATING
MARGIN2
650+
£349.5m
£145.3m
38.6%
2,400+
£318.8m
£43.6m
13.7%
1 Revenue and Adjusted Operating Profit Includes Joint Ventures
2 Excluding Joint Ventures
PIC divisional review can be read
on pages 24-25
ABS divisional review can be read
on pages 26-27
STRATEGIC REPORT
14
GENUS PLC / ANNUAL REPORT 2023
CHAIRMAN’S STATEMENT
SEIZING THE
OPPORTUNITIES
The Board carefully
considers the
balance between
investing for the
future and ensuring
an attractive
current return
for shareholders.
IAIN FERGUSON CBE
Chairman
Performance was robust in the Group,
which enabled us to deliver solid overall
results for FY23, despite challenging
market conditions for our customers
and continued weakness in the porcine
market in China. We continued to make
excellent progress with implementing
our strategy, leaving us well positioned
to seize the opportunities in front of us.
PERFORMANCE AND DIVIDEND
Genus PIC achieved strong operating
profit growth in most regions. However,
the weak Chinese porcine market from
December 2022 onwards resulted in PIC
China being only modestly profitable in
the last six months of FY23. Genus ABS
faced very challenging markets in Latin
America in the first half but saw better
trading in the second half of the year, with
operating profit growth in all regions.
Overall, the Group’s adjusted profit
before tax was £71.5m (2022: £71.5m)
and adjusted operating profit excluding
gene editing was £100.1m (2022: £85.6m).
Statutory PBT was £39.4m (2022: £48.4m).
• STRATEGIC REPORT 15
GENUS PLC / ANNUAL REPORT 2023
I want to thank Dr Bill Christianson, who
has retired as Chief Operating Officer
of Genus PIC after three decades with
the Group. Our succession planning
work identified Dr Matt Culbertson as
the outstanding candidate to step up
into Bill’s role and we are delighted to
have filled this key position internally.
LOOKING FORWARD
High inflation, rising interest rates and
geopolitical instability mean the near-term
economic environment remains uncertain.
However, the Board believes that our
continued focus on investing in our growth
drivers leaves Genus well placed for
success. We therefore look forward to the
future with confidence.
Iain Ferguson CBE
Chairman
The Board carefully considers the balance
between investing for the future and
ensuring an attractive current return
for shareholders. Our target is for the
annual dividend to be 2.5x-3.0x covered
by adjusted earnings. The Board is
recommending a final dividend of 21.7p per
share, which will give a total dividend of
32.0p (2022: 32.0p), including the
unchanged interim dividend of 10.3p per
share paid in March 2023. This results in
dividend cover of 2.7 times for the year,
within our target range. The final dividend
will be paid on 8 December 2023, to
shareholders on the register at the close
of business on 10 November 2023.
CONTINUED STRATEGIC PROGRESS
The nature of our business means
that whatever happens in our markets
in the near term, we must continue
to press forward with our strategic
investments. Working to improve the
genetic potential of animals and then
making that potential available to
customers can only take place across
multiple breeding cycles, which makes
it important to invest consistently.
Our differentiated genetics deliver long-
term value to our customers and are
key to achieving higher efficiency from
their herds, resulting in greater output
of animal protein from fewer resources.
This is at the heart of our purpose –
pioneering animal genetic improvement
to help nourish the world – while at the
same time reducing the associated
environmental impact. Increasingly, we
see our genetics as being ‘climate smart’,
equipping our customers to continue
as animal producers into the future by
protecting their licence to operate.
During the year, we made strong
progress with our PRRSv-resistant pigs
programme, which opens up significant
new opportunities for us. We have also
continued to strengthen our supply
chains, invest in digitalisation and develop
our long-term customer relationships.
More information can be found in the
Chief Executive Q&A on page 16.
THE BOARD
The most significant development on the
Board this year was Stephen Wilson’s
decision to retire after more than ten years
with Genus, including four as our Chief
Executive Officer. The Group has made
great strides in his time on the Board and
Stephen has made a major contribution
to its success. He leaves the business in
excellent shape. We are delighted to have
attracted a high-calibre replacement in
Jorgen Kokke, who joined the Board in
May 2023 and succeeded Stephen as CEO
on 1 July 2023. We have a well-ordered
process, supporting an effective handover
of responsibility in the lead up to Stephen’s
retirement at the end of September.
Lykele van der Broek will retire as a
Non-Executive Director at the Annual
General Meeting in November. He has
made an important contribution to the
Board over the last nine years and we
have begun the process of recruiting
a successor who will also offer Lykele’s
highly valuable experience in science-
based agricultural businesses.
OUR PEOPLE
Genus employs highly talented people
at all levels of the business and around
the world, and I thank them all on the
Board’s behalf for their contribution this
year. We continue to invest in learning and
development, strengthen our approach
to diversity and inclusion and enable our
people to share in the Group’s success
through a new employee share scheme.
We also celebrate and reward our people
in many other ways. The Chairman’s Awards
highlight outstanding innovation from
across the business, while the Genus CEO
Scholarships support colleagues to
accelerate their professional development.
We received a record number of
applications for the scholarships this year
and will cover the fees for two colleagues
to undertake MBAs.
• STRATEGIC REPORT 16
GENUS PLC / ANNUAL REPORT 2023
CHIEF EXECUTIVE OFFICERS’ Q&A
Our new Chief Executive Jorgen Kokke
(‘JK’) and his predecessor Stephen
Wilson (‘SW’) discuss our performance
in the year, our strategic progress and
Jorgen’s priorities for the future.
Genus is very well
positioned. We
have a very strong
workforce around
the world.
JORGEN KOKKE
Chief Executive
STRATEGIC REPORT 17
GENUS PLC / ANNUAL REPORT 2023
Genus has faced some tough market
conditions this year. How has this
affected performance?
SW: We delivered solid overall results,
despite challenging markets and
macroeconomic conditions. Genus
PIC had good results. The business
performed strongly in North America
throughout the year and also did well in
Latin America. European porcine markets
were difficult in H1 but the business
had a better second half. However,
the first half Chinese market recovery
stalled in December 2022, reflecting the
high supply of slaughter pigs and soft
consumer demand in China. Pig prices
fell to the point where producers were
unprofitable, causing many to delay
restocking their sow herds. That led to
PIC China swinging from an adjusted
operating profit of £8.8m in the first
half to only a modest profit in H2.
Conversely, Genus ABS saw trading
improve as the year progressed. The
North American business had a strong
year and Europe delivered good growth,
although market conditions remained
challenging in Brazil. Volumes in ABS
have continued to benefit from take-up
of sexed and NuEra beef genetics.
JK: We’re confident that our investments
in PIC China give us a strong platform
to capture the growth opportunities
and build a strong predictable
royalty-based business, including
commercialising PRRSv-resistant pigs.
What did these conditions mean for
Genus’s financial results?
SW: We finished the year with good growth
in adjusted operating profit excluding
gene editing of 9% in constant currency
(17% in actual currency). Increased
investment in gene editing as planned
and higher interest rates meant that
our adjusted profit before tax was
unchanged from the prior year, at
£71.5m (8% lower in constant currency).
Genus PIC’s volumes and revenue in
constant currency were up 5% and 7%
respectively, with strategically important
royalty revenue up 10%. Adjusted
operating profit (including joint ventures)
was 11% higher. Volumes in Genus ABS
increased by 3%, revenue was up 12% and
adjusted operating profit grew by 5%.
Stephen, you’re about to retire after a
decade on the Board. How has Genus
evolved in that time?
SW: We’ve seen many challenges through
that time but the key thing was that
we really stayed the course in building
for the long term. The business is in a
completely different place in terms of its
technology and R&D capability. Some
of the Group’s major achievements over
that time include launching IntelliGen
and NuEra beef genetics, the growth
of our dairy breeding programme with
De Novo, significantly strengthening
PIC across all geographies, a number
of very value-adding acquisitions and
a significant refresh of our facilities,
to give us world-class animal housing
for the next decade and more. I think
the capability in the team is also much
stronger across all areas of the business.
In the last 12 months, we’ve finished the
final animal studies for our PRRSv-resistant
pigs programme and we’re now waiting
for approval from the US FDA of the
submissions we completed since the year
end. In China, the regulatory environment
for this technology is moving forward,
with the publication of regulations on
gene-edited animals. We also have active
research programmes on using gene
editing to produce animals resistant to
other diseases. In addition, we’ve seen
encouraging progress in reproductive
biology and we’ve further enhanced our
IntelliGen capabilities and technology.
Our porcine business is benefiting from
our Atlas facility in Canada which was
fully operational in the year, Granja
Genesis in Brazil was stocked and
we have started stocking Ankang in
China. We’ve continued to build out
ABS’s facilities in Leeds, Wisconsin.
We’ve also completed the rollout of
GenusOne in the majority of Europe,
with Latin America and Asia next in the
plan. The system is giving us access to
data we didn’t have before, so we have
much better visibility of performance
in the countries where we’re using it.
JK: Since I joined the business, I’ve really
seen the benefit of the long-term
investment Stephen has talked about.
I think Genus is very well positioned.
We have a very strong workforce
around the world and the passion,
professionalism and dedication of the
team members is phenomenal. There
have been tremendous investments in
the animal barns, the R&D capability
is even stronger than I would have
envisaged and I’m impressed by the
cutting-edge science we’re performing.
Based on that, what are your immediate
priorities Jorgen?
JK: Having made the investments, we need
to work hard to monetise them, which
means developing programmes and
projects that will benefit customers and
ultimately shareholders. Commercial
excellence and efficiency will be a key
part of driving those returns. In ABS, we’re
already focusing on improving sales,
execution and operational performance.
From a technological standpoint the
PRRSv-resistant pig is the number one
opportunity before us. That will have
my full attention and it should make a
significant contribution over three to
five years. The question then is what’s
next? Resistance to other diseases
may be part of that and the R&D team
is working on other game-changing
technologies with great potential.
How are your sustainability plans
progressing?
SW: We’ve made real progress and we’re
continuing to work through our plan,
which delivered a 5% reduction in our
Scope 1 and 2 emissions during the year.
Since 2019 we have reduced our Scope
1 and 2 emissions by 14%, while also
growing our business, resulting in a 36%
improvement in our primary intensity
ratio. At the same time, our genetics can
support our customers with reducing
the emissions from their herds, which
will only become more important.
JK: Helping our customers with their
sustainability is a real opportunity for us.
We’ve recently received a grant of £3m
from Innovate UK to further our work on
climate-smart genetics in beef, which is
a validation of the work we have been
doing to show that genetics can make
an important difference. In addition, we
are working in collaboration with the
Gates foundation and other partners to
improve dairy genetics in East Africa.
What’s the outlook for the Group?
JK: From what I’ve already said, you’ll
understand that I’m excited about the
prospects for this business. I see real
potential in maximising the benefit of
all the investment that’s been done
to date and continuing to move the
science forward, to benefit customers
and society. We have a clear focus
on continuing to drive growth through
leveraging the significant investments
the Group has made in recent years.
The PRRSv-resistant pig represents
the most substantial opportunity in
the medium term with FDA approval
expected in the first half of 2024, having
completed our submissions ahead of
schedule. We will also continue to drive
commercial excellence to grow sales,
increase efficiency and improve margins.
In the near term, conditions remain
challenging for our customers in several
parts of the world, most notably for
Chinese pig producers and Brazilian
beef producers. However, the profit
growth achieved by both businesses
in FY23 illustrates the strength of
our strategy and competitiveness
of our offer to customers.
We anticipate that the China porcine
market will continue to be volatile,
reflecting continued disease outbreaks,
a less consolidated industry structure
and weak consumer demand. We
remain confident PIC China will be
a resilient growth business over the
medium-term through offering the
best genetics, customer service
and increasing the penetration
of our royalty-based model.
In FY24 we expect to continue to
perform in line with our expectations
for adjusted operating profit excluding
gene editing, in constant currency.
However, the recent strengthening
of the Pound Sterling relative to
several of our key trading currencies
is currently anticipated to lead to
a currency translation headwind of
approximately £5-6m in the year. In
addition, we expect finance costs
to increase by approximately £2m
as a result of the higher interest rate
environment. We therefore expect
modest growth in adjusted profit
before tax in actual currency for FY24.
The Board remains confident in the
Group’s strategy and our medium-term
growth expectations remain unchanged.
STRATEGIC REPORT
18
GENUS PLC / ANNUAL REPORT 2023
MARKET OVERVIEW
FEEDING THE
WORLD MORE
SUSTAINABLY
WHAT DRIVES DEMAND
FOR ELITE GENETICS
1 OECD FAO production forecasts for period
2022–2031
2 As demonstrated through Genus real-world data
and various trials in porcine, dairy and beef systems
3 Genus animals are selected according to indices
that include productivity and health traits
OUR POSITION
Genus is a leading player in global
porcine and bovine genetics markets,
serving many of the Top 100 pig producers
and dairies globally. Investment in our
proprietary genetic programmes has
delivered world-leading products in all
our species, validated by indices and
on-farm trials. Genus is also recognised
as a global leader in genomic, gene
editing and sexing technologies.
4 Source: Government agencies, Eurostat, pork
organisations, Genus estimates. Market shares
represent the estimated share of pig production in
top pig production markets
5 Source: Government agencies, USDA, OECD,
genetics and agriculture organisations, Genus
estimates. Market shares represent the estimated
share of combined dairy and beef volumes in ABS’s
Top 32 target markets for dairy and Top 8 target
markets for beef
INCREASING DEMAND FOR
ANIMAL PROTEIN
NEED TO PRODUCE FOOD
MORE SUSTAINABLY
The global population is expanding
and urbanising, and seeking a more
varied and nutritious diet. This is driving
increases in consumption of pork, milk
and beef, which are forecast to grow
by 1-2% p.a. in the next decade.1
Competition for resources, such as
land and water, and the need to
reduce greenhouse gas emissions to
tackle climate change, puts pressure
on farmers to become more efficient
through the use of technology and
genetically superior animals, which are
demonstrated to be more sustainable.2
CONSUMERS DEMANDING
BETTER PRODUCTS
FARM CONSOLIDATION AND
TECHNOLOGY ADOPTION
Consumers are increasingly
demanding healthier and more
sustainable products, which are
produced with a focus on animal
welfare, traceability and reduced
drug use. This increases farmers’
demand for genetically superior
breeding animals, which are naturally
more resilient and sustainable.3
Progressive farmers, who are more
open to new technologies and
measure performance in more
detail, are consolidating the sector.
They understand the economic and
sustainability benefits of genetically
superior animals and optimised
breeding strategies, such as combining
the use of sexed dairy and beef semen
on dairy herds to maximise profit.
1
2
3
4
5
6
78
9
10
1
BEEF & DAIRY5
7
1 Competitor 1
2 ABS
3 Competitor 2
4 Competitor 3
5 Competitor 4
6 Competitor 5
7 Other
16%
6%
5%
2%
2%
2%
1%
1%
1%
2%
19%
44%
2
3
4
5
6
11%
9%
8%
5%
4%
3%
60%
12
PORK4
11
1 PIC
2 Competitor 1
3 Competitor 2
4 Competitor 3
5 Competitor 4
6 Competitor 5
7 Competitor 6
8 Competitor 7
9 Competitor 8
10 Competitor 9
11 Internal programmes
12 Other
STRATEGIC REPORT
19
GENUS PLC / ANNUAL REPORT 2023
TRENDS IN OUR MARKET 1
TOTAL PORK
122mt
TOP 3 MARKETS
TOTAL BEEF
721mt
TOP 3 MARKETS
TOTAL MILK 2
911mt
TOP 3 MARKETS
45%
18%
10%
17%
12%
10%
22%
17%
11%
ADVANCED GENETICS USE
ADVANCED GENETICS USE
ADVANCED GENETICS USE
PRODUCTION
Pig production is largely technified with
progressive producers employing similar
production systems globally. To stock a
farm, producers typically acquire breeding
pigs and semen from specialist genetic
improvement companies or captive breeding
programmes. Thereafter, they periodically
acquire semen so they can benefit from
the latest and best-performing genetics.
Disease poses a significant risk to pig
producers, who rely on biosecurity protocols
and health products to manage the
threats such as African Swine Fever and
PRRSv, which causes billions of dollars
of damage to the industry annually.
China is by far the world’s largest pork
market and pigs there were historically
produced mainly in small ‘backyard’ farms.
In 2018, an outbreak of African Swine Fever
caused the national sow herd to decline
by about one-third. The resulting shortfall
in pork drove the expansion of large-scale
technified pig production, further aided by
the legislative drive to professionalise the
sector. Today, the top 50 producers control
around a quarter of the sow herd in China.
PRODUCTION
Beef is produced in a variety of systems
globally and from many breeds, using both
artificial insemination and ‘natural service’.
Beef animals are often traded multiple
times between birth and processing.
In the US, beef is mainly produced from
pure-bred beef animals, which are bred
naturally from bulls on farm or sourced from
the open market. A modest but growing
portion of beef cattle is produced by
breeding dairy cattle with beef semen
(Beef x Dairy). Beef x Dairy uses ‘surplus’
dairy breedings to produce high-quality
beef animals that are more consistent
than those from pure-bred beef systems.
In Brazil, beef is mainly produced from
pure-bred ‘tropical’ beef cattle suited to
local conditions, although tropical cattle are
increasingly being cross-bred with semen
from European breeds. The resulting cross-
bred calves have better meat quality and
growth rates than tropical animals, and are
more heat tolerant than European breeds.
PRODUCTION
Milk production systems vary due to genetics,
technification and the local environment,
resulting in the average US cow producing
over ten tonnes of milk annually compared
with two tonnes in India. Dairy production
is fragmented, but progressive farmers are
consolidating. Average herd size in the US
has grown by 77% over ten years3, and China’s
dairy sector has significantly consolidated
in recent years with the top three producers
controlling almost 20% of production.
Historically farmers selected breeding
animals based on their progeny’s
performance. However, in 2008, genomics
enabled the selection of animals at birth
from their DNA. Leading studs such as ABS
responded by consolidating the ownership
of elite genetics and transitioning from
purchasing bulls to proprietary breeding
programmes. Between 2008 and 2023,
the number of breeders featured in the
top bull rankings fell from 107 to 304.
Sexing technology use has grown
rapidly, enabling farmers to produce
herd replacements from their best cows
with fewer breedings, given the ~90%
chance of a female. Other animals in
the herd are increasingly bred with beef
semen to produce a high value cross-
bred beef calf. The proportion of ABS’s
sales to US dairies consisting of sexed
and beef genetics has grown from 16%
to 78% between FY16 and FY23.
GENUS OPPORTUNITY
• Maintain our genetic lead by
driving genetic improvement faster
than competitors and customers’
internal programmes
• Ensure biosecure supply of breeding
stock and semen for progressive
producers in all key markets
• Drive market share gains via strategic
partnerships with major producers
• Make China a ‘home market’, with local
nucleus herds, supply chain and superior
customer service
• Obtain approval for and launch our
gene-edited PRRSv-resistant pigs,
and explore technology solutions to
other diseases
GENUS OPPORTUNITY
• Demonstrate the superiority of our
proprietary beef genetics across the
value chain through trials and partnerships
• Build on our product leadership in beef
semen for dairy and tropical cross-breeding
• Develop naturally more resilient cattle,
through genomic selection and gene
editing technologies
• Progress pull-through demand
partnerships to underpin demand
for Beef x Dairy genetics
GENUS OPPORTUNITY
• Driving genetic improvement faster
than competitors
• Drive the adoption of our sexed and
Beef x Dairy genetics amongst dairy
farmers, to maximise their profitability
• Grow our presence with progressive
industry consolidators globally
• Deploy our proprietary sexing technology
with partner studs, delivering competition,
value and sustainability to the industry
1 Sources: OECD FAO 2023 (forecast data), Rabobank, Boyar, Journal of Swine Health and Production, Genus Analysis
2 Represents 81% cow milk, 15% buffalo milk, 4% other (OECD FAO 2023 forecast data)
3 USDA data for the period 2011 to 2021
4 Represents the number of US Holstein breeders represented in the Top 200 NM$ rankings by birth year; 2023 data based on Top 200 Holsteins active using August 2023 data
from the Council on Dairy Cattle Breeding
STRATEGIC REPORT
20
GENUS PLC / ANNUAL REPORT 2023
STRATEGIC FRAMEWORK
DELIVERING
AND SHARING
IN THE VALUE
We harness innovative
technologies and know-
how to breed genetically
superior animals for
progressive farmers
globally, and link our pricing
to the performance of our
products on-farm.
STRATEGIC PRIORITIES
DELIVER A
DIFFERENTIATED
PROPRIETARY
GENETIC OFFERING
FOCUS ON PROGRESSIVE
PROTEIN PRODUCERS
GLOBALLY
SHARE IN THE
VALUE DELIVERED
SUSTAINABILITY
AT THE HEART OF
OUR BUSINESS
STRATEGIC IMPLEMENTATION
Our overarching strategy, success
drivers (which feed into the focus
areas of our business model), and
associated KPIs are determined at
Group level. The strategy is then
implemented at business unit level.
Our overarching business unit
priorities and strategic progress
in FY23 can be found on pages 24-29.
Sustainability lies at the heart of our
business. KPIs marked with the icon
on the right are considered by the
Board to be indicative of our progress
in this area. For more information see
pages 36-57.
STRATEGIC REPORT 21
GENUS PLC / ANNUAL REPORT 2023
SUCCESS DRIVERS
WHAT DOES SUCCESS LOOK LIKE?
LINK TO KPIS
Read more on pages 22-23
ELITE ANIMALS
TECHNOLOGY
AND CAPABILITIES
DATA
GENETIC GAIN
Creating superior breeding animals
for farmers, measured against indices
comprising traits that help to drive
farmers’ productivity and sustainability.
GLOBAL POSITION
GLOBAL SUPPLY CHAIN
CUSTOMER EXPERIENCE
VOLUME GROWTH
Growing volumes, particularly with
progressive livestock farmers.
VALUE-BASED PRICING
PROFITABILITY
PRODUCT VALIDATION
LEVERAGE SCALE
Generating profit resulting from
the performance of our products in
customers’ systems, and growing
margin as we leverage scale and
R&D investment across species.
Our strategy is underpinned by our
approach to sustainable business and
the strength of our people. The Board
measures the performance of these
key areas using the KPIs opposite.
$3.74
Porcine Genetic
Improvement Index
1,084
Genomic Bull Net Merit
Index (NM$)
3%
Dairy & Beef Volume
Growth
5%
Porcine Volume Growth
£0.64
Adjusted Operating Profit
per Market Pig Equivalent
£0.72
Adjusted Bovine Operating
Profit per Dose
6.04
Primary Intensity Ratio
82%1
Engagement Survey Results
1 FY22 Result
STRATEGIC REPORT 22
GENUS PLC / ANNUAL REPORT 2023
KEY PERFORMANCE INDICATORS
MEASURING
OUR SUCCESS
KEY PERFORMANCE INDICATORS
PORCINE GENETIC IMPROVEMENT INDEX (US$)
GENOMIC BULL NET MERIT INDEX (NM$)
2023
2022
2021
2020
2019
0.00
LINK TO
STRATEGIC PRIORITIES:
3.74
3.73
3.53
3.15
3.12
2023
2022
2021
2020
2019
3.74
0
LINK TO
STRATEGIC PRIORITIES:
1,084
951
900
797
764
1084
Measures the genetic improvement we achieve in our porcine
nucleus herds, which ultimately filters down to our customers’ farms.
Measures the genetic quality of our bulls released to market,
based on economically relevant traits for farmers.
DEFINITION: The index measures the marginal improvement in
customers’ US$ profitability, per commercial pig per year, on a rolling
three-year average.
PERFORMANCE: Genus continues to deliver increasing rates of genetic
improvement through expanding and maintaining a large nucleus
population for high selection intensity, improving technical processes
for genomic evaluation, implementing precision data collection from
birth to consumer and continuing to add new traits and data streams.
DEFINITION: The average NM$ index score of generally available
Holstein commercial bulls launched in the year for genomically tested
sires. This definition has been revised this year to better reflect the
breadth of high quality bulls released to market each year.
PERFORMANCE: Genus continues to improve the quality of its
commercially available bulls to maintain a leading genetic position in
the dairy industry. Genus also has maintained a strong pipeline of
young bulls tested but not yet in production. This is mainly driven by
the large proportion of high-quality bulls sourced from our proprietary
breeding programme, De Novo.
DAIRY & BEEF VOLUME GROWTH (%)
PIC VOLUME GROWTH (%)
3
3
2023
2022
2021
2020
2019
0
LINK TO
STRATEGIC PRIORITIES:
8
6
0
2023
2022
2021
2020
15
5%
6% excl China
8% excl China
5% excl China
11% including China
6% excl China
13% including China
2019
0
15
0
LINK TO
STRATEGIC PRIORITIES:
5% excl China
13
Tracks our global unit sales growth in dairy and beef.
DEFINITION: The change in dairy, beef and sorted units of semen and
embryos delivered or produced for customers in the year.
PERFORMANCE: Bovine volumes improved 3% to 25.9 million units,
with strong growth in Asia and North America. Sexed volumes were
up 18%, reflecting strong growth in both Sexcel and third-party
IntelliGen production.
Tracks the growth in the number of commercial pigs with PIC
genetics globally.
DEFINITION: The change in volume of both direct and royalty animal
sales, using a standardised MPEs measure of commercial slaughter
animals that contain our genetics.
PERFORMANCE: Porcine volumes grew by 5%, 6% excluding China, to
197 million MPEs, with growth across North America, Europe and Asia.
Strategically important royalty volumes increased 7%. In China,
volumes declined 1%, with strong royalty volume growth of 41%, offset
by lower breeding stock volumes.
STRATEGIC REPORT 23
GENUS PLC / ANNUAL REPORT 2023
KEY TO STRATEGIC PRIORITIES
Deliver a differentiated
proprietary genetic offering
Focus on progressive
protein producers globally
Share in the
value delivered
Sustainability at the
heart of our business
ADJUSTED OPERATING PROFIT PER MARKET PIG EQUIVALENT (£)
BOVINE ADJUSTED OPERATING PROFIT PER DOSE (£)
2023
2022
2021
2020
2019
0.00
LINK TO
STRATEGIC PRIORITIES:
0.59
0.64
0.65
0.61
0.60
2023
2022
2021
2020
2019
0.65
0.00
LINK TO
STRATEGIC PRIORITIES:
0.72
0.71
0.69
0.72
0.55
0.50
Monitors porcine profitability per unit.
Monitors bovine profitability per unit.
DEFINITION: Net porcine adjusted operating profit globally,
expressed per MPE. Results include our share of Agroceres PIC,
our Brazilian joint venture.
DEFINITION: Bovine adjusted operating profit globally, expressed per
dose of semen or embryo delivered or produced for customers.
PERFORMANCE: Operating profit per MPE was £0.64, £0.05 higher
(stable in constant currency). This was primarily due to continued
royalty revenue growth across all regions, up 10% in constant currency,
partially offset by growth in porcine product development due to the
start of operations at our Atlas facility in Canada.
PERFORMANCE: Operating profit per dose was £0.72, up £0.01
(up £0.04 in constant currency). This was due to profit margin
expansion through continued sales growth of our premium Sexcel
product, robust pricing strategies to mitigate cost inflation impacts
and effective cost management, including across our bovine product
development investment.
OTHER NON-FINANCIAL KEY PERFORMANCE INDICATORS
PRIMARY INTENSITY RATIO
ENGAGEMENT SURVEY RESULTS
2023
2022
2021
2020
2019
6.04
6.98
2022
2019
2017
8.31
8.33
9.37
82%
79%
75%
LINK TO
STRATEGIC PRIORITIES:
LINK TO
STRATEGIC PRIORITIES:
Measures the emissions intensity of the Group’s operations,
which are largely driven by animal weight.
Measures levels of employee engagement over time.
DEFINITION: The primary intensity ratio is a measure of the Group’s
Scope 1 and 2 emissions per tonne of animal weight.
DEFINITION: Employees’ response to the statement “I would
recommend a friend to work at Genus”.
PERFORMANCE: The primary intensity ratio has reduced by 14.6% from
FY22. This is driven by improved efficiency of producing animals, improved
manure management to reduce methane and nitrous oxide emissions,
and increased herd size. We have continued to invest in biogas capture,
renewable energy generation and our elite genetics which have driven an
absolute reduction in our Scope 1 and 2 emissions in FY23.
PERFORMANCE: Our employee engagement survey, Your Voice, is
conducted every two years. No survey was carried out in FY23
although management remain focused on embedding the actions
which arose from the last survey in FY22.
The next survey will be conducted in FY24.
STRATEGIC REPORT 24
GENUS PLC / ANNUAL REPORT 2023
OPERATING REVIEW: PIC
INCREASING
OUR IMPACT
BUSINESS PRIORITIES
BUSINESS PRIORITIES
SHORT TERM
MEDIUM TERM
LONG TERM
Begin offering PRRSv-
resistant pigs to customers
in target markets, once
regulatory approval has
been received
Expand availability of
PRRSv-resistant pigs and
keep building our royalty
business in China
Continue to strengthen
relationships with customers
by enhancing genetic gain,
product performance and
consistency of supply
STRATEGIC PROGRESS IN 2022-2023
DR MATT CULBERTSON
Chief Operating Officer
Genus PIC
CREATE DIFFERENTIATED
PROPRIETARY GENETIC
SOLUTIONS
• Continued to enhance
genetic gain for target
traits (including prolificacy,
throughput, carcass value
and efficiency)
• Expanded use of digital
phenotyping to four further
sites, helping us identify
patterns in movement
and behaviour to aid
improvement of robustness
and longevity
• Added three facilities
to our nucleus network,
enhancing resilience of
supply and expanding
capacity in preparation
for the marketing of
PRRSv-resistant pigs
SERVE PROGRESSIVE PROTEIN
PRODUCERS EFFECTIVELY
SHARE IN THE
VALUE DELIVERED
• Delivered growth across
•
all regions through strong
product performance,
a robust supply chain and
world-class support services
Increased our share of
damline and sireline business
with producers across North
America, contributing to a
9% rise in operating profit
• Continued to invest in our
team, services and supply
chain in China, enabling us
to increase operating profit
by 32% despite challenging
market conditions
• Maintained momentum in
Latin America and Europe by
strengthening relationships
with strategic accounts,
enhancing operating profits
by 12% and 6% respectively
• Grew royalty volumes
in China by 41%, while
increasing the proportion
of global business covered
by royalty contracts to 85%1
Increased the volume of
boars distributed through
our CBV Max programme,
in which our most elite genes
command a higher price,
by 80%
•
• Commitment to improve the
knowledge of our products
and to show the economic
benefits of using PIC’s
genetics was shown through
61 product validation and
management trials in 10
countries, involving over
98,000 pigs
1 Genus Group (inc Brazil JV)
Year ended 30 June
Revenue
Adjusted operating profit exc JV
Adjusted operating profit inc JV
Adjusted operating margin exc JV
Actual currency
2023
£m
349.5
135.0
145.3
38.6%
2022
£m
306.6
112.3
121.2
36.6%
Change
%
14
20
20
2.0pts
Constant
currency
change
%
7
11
11
1.6pts
STRATEGIC REPORT Porcine markets around the world
continued to face challenging
conditions during the year. These
included economic uncertainty,
volatile pig prices and outbreaks of
disease, especially African Swine
Fever (ASF’) and PRRSv. China, the
world’s largest porcine market,
experienced greater volatility than
other markets. Pig prices in China
averaged 18.8 RMB/kg through
the year and were much weaker
than expected in the second half,
averaging 14.7 RMB/kg since January.
Price declines in many regions
caused significant pressure on
producer margins. This, together
with inflation increasing input costs,
drove some producers to reduce
or delay replenishing their herds.
Despite such challenging conditions
impacting porcine markets, PIC
increased adjusted operating profit
by 11% as the business continued to
expand and strengthen commercial
relationships with producers around
the world. Volumes rose by 5%, aided
by increased breeding stock sales
in Europe and further growth in
market share within North America.
Revenue growth across all regions
resulted in overall revenue increasing
by 7% and strategically important
royalty revenue rising by 10%.
All growth rates on this page
are presented in constant
currency, where relevant.
25
GENUS PLC / ANNUAL REPORT 2023
NORTH AMERICA
The US breeding herd declined slightly, with
slower production growth in the second
half of the year as domestic demand was
lower in the face of rising inflation and
competition from other proteins. Pig prices
fell sharply as a result, reducing producer
margins already under pressure from high
input costs. However, exports continued to
grow, aided by lower prices compared with
some other markets and the weakening
US dollar. This was driven particularly by
strong demand from China and Mexico.
PERFORMANCE: The business performed
strongly throughout the year, with
market share gains across our customer
base through sales of both sireline
and damline products (volumes up 4%
and 15% respectively). This was aided
particularly by the continuing popularity
of the PIC800® sire and Cambrough
sow. The increases in market share and
contributions from Olymel’s AlphaGene
programme drove strong royalty
revenue growth and a double-digit
increase in adjusted operating profit.
EUROPE
The region experienced the greatest
reduction in its breeding herd for 10 years
and production contracted in major markets,
due to the ongoing economic, geopolitical
and regulatory challenges impacting the
agricultural sector. This led to tight supply,
driving pig prices to record highs and
significantly improving producer margins.
These factors, along with high feed costs,
disease challenges and declining pork
exports, are likely to constrain industry
recovery and sow herd growth in the future.
PERFORMANCE: Despite challenging
market conditions, breeding stock sales in
relation to royalty contracts rose and led
to revenue growing by 20%. Rising royalty
revenue, including double-digit growth
in Spain, PIC’s largest European market,
and Russia, from previous expansion
projects, helped the business deliver
further growth in adjusted operating profit.
+9%
volumes
+4%
revenue
+8%
royalty
revenue
+9%
adjusted
operating
profit
+8%
volumes
+20%
revenue
+9%
royalty
revenue
+6%
adjusted
operating
profit
LATIN AMERICA
In Mexico, pork prices were lower than the
previous year but remained well above
the five-year average and rose again in
the final quarter. Production increased
slightly, as expected, but weaker domestic
demand meant many producers made
losses for much of the year, although they
are now approaching or above breakeven.
In Brazil, declining feed prices fuelled an
increase in production and helped to meet
rising export demand, particularly from
China. These exports, when combined with
seasonal domestic demand, helped pig
prices rise by over 10% in the final quarter,
but strengthening producer margins.
PERFORMANCE: Lower breeding stock
sales meant sales revenue declined.
However, strong royalty revenue from
Mexico, Chile, and Colombia, as well
as 14% growth in income from our joint
venture with Agroceres, drove a double-
digit increase in adjusted operating profit,
with all the larger countries contributing.
0%
volumes
-6%
revenue
+12%
royalty
revenue
+12%
adjusted
operating
profit
ASIA
Volatility in the China porcine market
continued through this fiscal year, with pig
prices declining from a high of 28 RMB/kg
in October 2022 to 14 RMB/kg by the end of
June 2023. In addition, China experienced
significant ASF outbreaks, which created
high levels of pork inventory, and there
was a slow recovery in domestic demand
following the relaxation of COVID-19
restrictions. All these factors resulted in
many producers operating at a loss and
remaining cautious. Elsewhere in the region,
ASF outbreaks affected both Vietnam and
the Philippines, although pork production
is gradually growing in both markets.
PERFORMANCE: Rising sales in the
Philippines and Asia franchise businesses,
including Vietnam and South Korea, led
to increased revenue. In China, market
volatility caused a decline in breeding stock
sales, but overall revenue remained stable,
aided in particular by solid growth in royalty
revenue. The growth in royalty revenue,
as well as the impact of a one-time £4m
customer credit in the prior year, meant
there was a double-digit rise in adjusted
operating profit despite lower breeding
stock margins and the impact of two
disease outbreaks on joint venture farms
in the second half of the year. Continued
investment in China’s supply chain and
biosecurity means Genus is well positioned
to benefit as the market stabilises.
+0%
volumes
+3%
revenue
+20%
royalty
revenue
(PIC China -1%)
(PIC China
stable)
(PIC China
+26%)
+32%
adjusted
operating
profit
(PIC China
+62%)
STRATEGIC REPORT
26
GENUS PLC / ANNUAL REPORT 2023
OPERATING REVIEW: ABS
SHARING IN
CUSTOMER
SUCCESS
BUSINESS PRIORITIES
SHORT TERM
MEDIUM TERM
LONG TERM
Implement actions arising
from our review of approach
to serving customers in
core markets
Leverage our world-leading
genetics, technology
and people to secure
further partnerships with
progressive producers
Drive innovative strategies to
develop more sustainable
food systems through further
genetic progress
STRATEGIC PROGRESS IN 2022-2023
CREATE DIFFERENTIATED
PROPRIETARY GENETIC
SOLUTIONS
• Expanded GENEadvance,
the programme through
which producers agree a
100% partnership with ABS, to
more than 600 herds globally
Increased sales of Sexcel
and Beef InFocus genetics,
so they now represent 75%
of units for GENEadvance
customers
•
• Expanded production
of NuEra Genetics, our
proprietary beef range,
and accelerated genetic
improvement in our
nucleus herds
SERVE PROGRESSIVE PROTEIN
PRODUCERS EFFECTIVELY
SHARE IN THE
VALUE DELIVERED
•
Initiated an extensive review
of our approach to serving
customers in core markets,
identifying key success
factors and sharing learning
between markets
• Expanded use of digital
platforms, particularly in
Latin America, with nearly
30% of sales in Brazil now
online (over 20% of Brazil’s
digital sales this year were
to new customers)
Increased market share in
key territories including Brazil,
US and China – despite
challenging market
conditions in each – and
achieved record results
in Australia
•
• Grew UK beef pull-through
volumes, with over 700 farms
now committed to ABS supply
chains, increased calf flow
to the Schmucker network
in the US and established
new supply chains in Spain,
France and the Netherlands
• Continued to ensure
GENEadvance contracts are
built around outcome-based
pricing, which rewards us
for the progress we help
customers make towards
their goals
• Began five new product
performance trials to
provide further evidence
of the superior value NuEra
Genetics delivers across
the beef supply chain
Year ended 30 June
Revenue
Adjusted operating profit
Adjusted operating margin
Actual currency
2023
£m
318.8
43.6
13.7%
2022
£m
272.0
40.5
14.9%
Change
%
17
8
(1.2)pts
Constant
currency
change
%
12
5
(1.1)pts
DR NATE ZWALD
Chief Operating Officer
Genus ABS Dairy
JERRY THOMPSON
Chief Operating Officer
Genus ABS Beef
STRATEGIC REPORT Declining feed costs encouraged
producers in Europe to maintain
high levels of milk production, but
markets in Latin America were
affected by high costs, drought and
limited forage. Growth in China
was more modest than expected
due to slow recovery following the
relaxation of COVID-19 restrictions.
High inventory and weaker consumer
demand led to reduced milk prices
in Brazil and China, and prices
in the US declined significantly
in the second half of the year.
Global beef production remained
steady, with dips in the US and
Europe offset by rises in Brazil and
Australia. Beef prices remained high
in the US, but declined year-on-year
in Brazil due to high inventory and
lower consumer spending power.
Prices in Europe declined as more
animals were sent to slaughter in
response to the falling milk prices.
Despite the challenging market
conditions, ABS continued to expand
and strengthen its partnerships
with strategic accounts around
the world. Through these exclusive
relationships, ABS is developing and
delivering bespoke genetic plans
and growing sales of Sexcel and
NuEra beef genetics to accelerate
customer success. These relationships
drove a 3% increase in volumes,
which more than offset lower sales of
conventional beef and dairy genetics
in some markets. More widely, the
business continued to follow robust
pricing strategies to mitigate the
impact of cost inflation and exercised
effective cost management. Such
factors helped to deliver a 12% rise
in revenue, which translated into
5% growth in adjusted operating
profit, after taking account of the
impact of higher supply chain costs
following an IT incident in June 2022.
All growth rates on this page are
presented in constant currency,
where relevant.
27
GENUS PLC / ANNUAL REPORT 2023
NORTH AMERICA
Dairy demand remained stable, but milk
prices fell significantly in the second
half of the year. This reduced producer
margins, leading to higher herd culling
and feed ration changes, which is likely
to slow growth in milk production. The
US beef herd contracted due to drought
conditions and production has declined
during 2023 to date, with tighter supply
driving wholesale prices to approach
record highs. These have yet to impact
retail demand, but the high prices
and lower domestic production have
significantly reduced export volumes.
PERFORMANCE: Double-digit growth
in revenue was driven by robust price
increases, rising sales of sexed genetics
and ancillary products and services.
This more than offset lower volumes
of conventional and beef genetics as
customers used sexed genetics to invest
in more replacement heifers, rather
than beef by-product income. These
activities, along with continued expansion
of our IntelliGen sexed processing for
third-party customers, achieved a 17%
increase in adjusted operating profit.
EUROPE
Lower input costs encouraged producers
to maintain milk production levels.
Following highs in the previous year,
milk prices declined amid concerns over
weakening consumer demand in the face
of inflationary pressure. Beef production
across the region dipped and carcass
prices have begun to decline as more cows
are sent for slaughter in response to the
falling milk price, although it remains well
above the five-year average. Beef exports
fell by more than 20% during the year, as
high carcass prices led customers in some
markets to source cheaper alternatives.
PERFORMANCE: Increased sales in most
retail markets, particularly France and
Russia, were partially offset by lower
volumes in some distributor-led markets,
due to economic conditions and limited
availability of certain types of bulls for
those markets. However, both revenue
and adjusted operating profit rose
following targeted price increases and
the expansion of GENEadvance long-
term contracts with strategic accounts.
IntelliGen third-party business in the region
continued to grow, with new customers
in Italy, the Netherlands and Israel.
+5%
volumes
+15%
revenue
+17%
adjusted
operating
profit
+1%
volumes
+8%
revenue
+7%
adjusted
operating
profit
LATIN AMERICA
High costs, drought and limited forage
availability affected milk production
in Argentina and Uruguay, reducing
producer margins. Milk production in Brazil
remained subdued and previously rising
prices are now declining due to lower
consumer demand and the increase in
supply following imports. Strong beef
exports from Brazil were driven by growing
demand from China in particular, but
high inventory and lower consumer
purchasing power impacted the domestic
market. Demand for beef in Mexico
remains steady and exports have recently
improved after a slow start to 2023.
PERFORMANCE: A transition from
conventional to sexed genetics across
the region, along with robust prices
increases, led to a 12% rise in revenue on
broadly stable volumes comparable to
the prior year. Growth and effective cost
management in Argentina supported
an increase in adjusted operating
profit there, although this was offset
by declines in other countries, primarily
Brazil, where there were challenging
market conditions that particularly
impacted the embryo business, along
with high business cost inflation.
ASIA
Milk production in China continued to
grow, albeit more slowly in the second half
of the year, but high domestic inventory
and weak consumer demand meant
that milk prices declined. This led to
growing numbers of animals being sent
to slaughter, boosting beef production.
Slaughter volumes also increased
in Australia, but lower domestic milk
production contributed to a double-
digit reduction in exports. Growth in
India’s milk production slowed, despite
increasing consumer demand, due to the
impact of disease outbreaks and rising
costs, particularly for feed. Demand
for beef in Japan continued to fall.
PERFORMANCE: Overall volumes rose by
8%, with double-digit growth in sales of
sexed genetics in Australia, China and
India tempered by fewer deliveries through
our distributor network, particularly in
Japan due to a market slowdown in
the second half of the year. Growth in
volumes in India was driven particularly
by a contract with the Government
of India and support for third-party
customers through IntelliGen technology.
This increase in volumes, together with
significant strategic account growth in
China, drove a 20% rise in revenue and 4%
increase in adjusted operating profit.
–1%
volumes
+12%
revenue
+0%
adjusted
operating
profit
+8%
volumes
+20%
revenue
+4%
adjusted
operating
profit
STRATEGIC REPORT 28
GENUS PLC / ANNUAL REPORT 2023
OPERATING REVIEW: R&D
ADVANCING
INNOVATION
BUSINESS PRIORITIES
SHORT TERM
MEDIUM TERM
LONG TERM
Gain regulatory approvals
for PRRSv-resistant pigs
in the US, Colombia and
Brazil. Secure third-party
customers for our dashboard
integrating data from
different instruments
Achieve regulatory approval
for PRRSv-resistant pigs
in China and other target
markets and accelerate work
on reproductive technology
Continue using pioneering
technology to enhance
genetic gain, combat disease
and support a sustainable
food system
DR ELENA RICE
Chief Scientific Officer
and Head of R&D
STRATEGIC PROGRESS IN 2022-2023
GENE EDITING
REPRODUCTIVE BIOLOGY
• Completed data package submissions to
seek approval for PRRSv-resistant pigs from
the Food and Drug Administration in the US,
while also completing regulatory submissions
in Colombia and Brazil
• Gained approval to import PRRSv-resistant pigs
to China, for in-country regulatory assessment
• Continued to evaluate potential target edits
to combat Swine Influenza
• Established several collaborations with
academic partners to accelerate work on
identifying target edits to combat African
Swine Fever
•
Introduced our new medium for embryo culture,
which improves the quantity and quality of
embryos produced, in commercial laboratories
• Expanded our work exploring how embryonic
stem cells could enhance genetic gain,
following encouraging results from initial
research, and began a new collaboration
with the University of Florida
GENDER SKEW
DATA STRATEGY
• Continued to enhance the efficiency of
• Completed implementation of our data
our proprietary bovine sexing technology,
increasing the number of straws produced
from each bull
• Established a further three IntelliGen
Technologies laboratories for third-party
customers and signed one technology transfer
contract, licensing customers to use our
process and instruments
•
analytics strategy, enabling us to link and
query different data sets simultaneously
and elicit faster and deeper insights to inform
genetic improvement
Integrated data from different locations around
the world and developed dashboards to
monitor production performance, instrument
efficiency and quality control parameters:
aiding our operations and establishing a
new product offer for third-party customers
STRATEGIC REPORT 29
GENUS PLC / ANNUAL REPORT 2023
Year ended 30 June
Porcine product development
Bovine product development
Gene editing
Other research and development
Net expenditure in R&D
During the year, net research and
development expenditure rose by 19%
in constant currency as planned. This
increase enabled further investment
in a wide range of areas, including the
research and development pipeline,
new technologies, gene editing projects
and product development initiatives.
+19%
net research and
development
expenditure
Actual currency
2023
£m
29.7
24.9
14.3
17.4
86.3
2022
£m
22.5
22.7
7.9
14.0
67.1
Constant
currency
change
%
Change
%
32
10
81
24
29
24
1
66
13
19
PORCINE PRODUCT DEVELOPMENT
Porcine product development made
further progress on genomic selection and
enhanced genetic gain for target traits,
including prolificacy, throughput, carcass
value and efficiency. We also expanded
our use of digital phenotyping to four
further sites, helping us identify patterns
in movement and behaviour to aid
improvement of robustness and longevity.
These advances, along with continued
expansion of our global supply chain
(including the addition of three facilities
to our nucleus network) enabled us to
enhance resilience of supply for customers
around the world. Product development
costs increased by 24% during the year,
due principally to the start of operations
at our Atlas facility in Canada. Higher feed
prices during the year also contributed
to the increase in expenditure.
BOVINE PRODUCT DEVELOPMENT
We continued to strengthen our
proprietary range of NuEra beef
genetics and to invest in further product
trials, from which preliminary data
shows positive performance against
competitor genetics in areas such as
feed efficiency and growth rates.
We made further investments in our
proprietary bovine sexing technology,
enabling us to continue strengthening
our capability to produce sexed genetics
for ABS and for third-party customers
through IntelliGen technology.
GENE EDITING
We made significant progress on our
PRRSv-resistant pig programme, as we
seek regulatory approval for our gene-
edited animals in target markets around
the world. This included completing data
submissions to the FDA ahead of schedule
and we expect approval in the first half
of 2024. We are also making regulatory
progress in Brazil and Colombia and
we gained consent to import PRRSv-
resistant pigs to China, for in-country
regulatory assessment. In parallel, we
continued to expand capacity across our
nucleus network in preparation for the
potential marketing of our gene-edited
animals. We also continued to explore
how responsible use of gene editing
could combat other porcine diseases.
This included evaluating potential
target edits and establishing further
collaborations with academic partners.
OTHER RESEARCH AND DEVELOPMENT
Other research and development
expenditure increased by 13%, compared
to the previous year. This enabled us to
make further progress with our pioneering
work on reproductive biology, including
collaborating with the University of
Florida to explore how embryonic
stem cells could enhance genetic
gain, and introducing a new medium
for embryo culture, which improves
the quantity and quality of embryos
produced in commercial laboratories.
The increased investment also helped
us develop our work on biosystems
engineering and data analytics, with
progress in the latter area enabling
us to link and query different data
sets simultaneously and elicit faster
and deeper insights to inform genetic
improvement. We also continued to
collaborate with external partners
on a series of discovery projects.
STRATEGIC REPORT 30
GENUS PLC / ANNUAL REPORT 2023
FINANCIAL REVIEW
SOLID
PERFORMANCE AND
GOOD STRATEGIC
PROGRESS
In the year, the
Group achieved
revenue growth
of 16% in actual
currency (10% in
constant currency).
ALISON HENRIKSEN
Chief Financial Officer
STRATEGIC REPORT 31
GENUS PLC / ANNUAL REPORT 2023
Year ended 30 June
Revenue
Operating profit
Operating profit inc JVs
Operating profit inc JVs exc gene editing
Profit before tax
Free cash flow
Basic earnings per share (pence)
Dividend per share (pence)
Adjusted results1
Actual currency
2023
£m
689.7
74.6
85.8
100.1
71.5
18.2
84.8
2022
£m
593.4
68.8
77.7
85.6
71.5
(13.5)
82.7
Change
%
16
8
10
17
–
n/a
3
Constant
currency
change
%2
10
2
3
9
(8)
n/a
(5)
Statutory results
Actual currency
2023
£m
689.7
40.5
n/a
n/a
39.4
50.8
32.0
2022
£m
593.4
49.4
n/a
n/a
48.4
62.5
32.0
Change
%
16
(18)
n/a
n/a
(19)
(19)
–
1 Adjusted results are the Alternative Performance Measures (‘APMs’) used by the Board to monitor underlying performance at a Group and operating segment level, which are
applied consistently throughout. These APMs should be considered in addition to, and not as a substitute for or as superior to statutory measures. For more information on
APMs, see APM Glossary
2 Constant currency percentage movements are calculated by representing the results for the year ended 30 June 2023 at the average exchange rates applied to adjusted
operating profit for the year ended 30 June 2022
In the year ended 30 June 2023, the Group achieved revenue
growth of 16% in actual currency (10% in constant currency).
Adjusted operating profit including joint ventures was up 10%
(3% in constant currency), reflecting good profit growth across our
businesses, and was 17% higher (9% in constant currency) before
gene editing costs. R&D investment increased by 29% (19% in
constant currency), as planned due to an increase in gene editing
costs as we move closer to commercialisation of the PRRSv-
resistant pig and higher porcine product development costs,
primarily due to the start of operations at our Atlas facility
in Canada.
On a statutory basis, profit before tax was £39.4m (2022: £48.4m).
The difference between the movement in statutory and adjusted
profit before tax was mainly due to a reduction in the non-cash
fair value of IAS 41 porcine biological assets, and a higher
share-based payment charge. Basic earnings per share
on a statutory basis were 50.8 pence (2022: 62.5 pence).
Adjusted profit before tax remained at £71.5m (down 8% in
constant currency), with the improved trading performance being
offset by higher interest expense, which increased from £6.2m to
£14.3m (up 124% in constant currency).
The effect of exchange rate movements on the translation of
overseas profits was to increase the Group’s adjusted profit before
tax for the year by £5.4m, compared with 2022, primarily due to
the strength of the Brazilian Real and Mexican Peso against
Sterling during the year. All growth rates quoted are in constant
currency unless otherwise stated. Constant currency percentage
movements are calculated by representing the results for the year
ended 30 June 2023 at the average exchange rates applied to
adjusted operating profit for the year ended 30 June 2022.
REVENUE
Revenue increased by 16% (10% in constant currency) to £689.7m
(2022: £593.4m). PIC’s revenue rose by 14% (7% in constant
currency) with growth across all regions and a double-digit
increase in strategically important royalty revenue. In ABS,
revenue was up 17% (12% in constant currency), reflecting the
continuing success of Genus’s sexed genetics and NuEra beef
genetics as well as the implementation of robust prices increases
to offset the effects of cost inflation.
ADJUSTED OPERATING PROFIT INCLUDING JVS
Actual currency
Year ended 30 June
Adjusted Profit Before Tax1
2023
£m
2022
£m
Change
%
Genus PIC
Genus ABS
R&D
Central costs
Adjusted operating profit
inc JVs
Net finance costs
Adjusted profit before tax
145.3
43.6
(86.3)
(16.8)
121.2
40.5
(67.1)
(16.9)
85.8
(14.3)
71.5
77.7
(6.2)
71.5
20
8
(29)
1
10
(131)
0
Constant
currency
change
%
11
5
(19)
1
3
(124)
(8)
1
Includes share of adjusted pre-tax profits of joint ventures and removes share of
adjusted profits of non-controlling interests
Adjusted operating profit including joint ventures was £85.8m
(2022: £77.7m), 3% higher in constant currency. The Group’s share of
adjusted joint venture operating profit, primarily from our Brazilian
joint venture with Agroceres, was higher at £10.8m (2022: £9.2m).
Gene editing investment, which is primarily focused on
the PRRSv-resistant pig programme, increased to £14.3m
(2022: £7.9m) as planned. This enabled us to continue
expanding our population of gene-edited animals and increase
preparation for commercialisation. Adjusted operating profit
including joint ventures and excluding gene editing investment
was £100.1m (2022: £85.6m), 9% higher in constant currency. Over
the last five years our compound annual growth rate in this profit
measure remains at 10% in constant currency, in line with our
medium-term objective.
PIC’s performance was a record level, with adjusted operating
profit including joint ventures up 11% in constant currency. Volumes
were up by 5% and strategically important royalty revenue was up
10%, with increases across all regions.
ABS’s volumes rose by 3% and adjusted operating profit also rose
by 5%. Demand for Sexcel, our proprietary bovine sexed product,
continued to increase, as well as our IntelliGen third-party sexed
processing, supporting an 18% rise in sexed volumes and further
growth in our proprietary NuEra beef genetics. There was adjusted
operating profit growth across most regions, with North America
increasing adjusted operating profit by 17% in constant currency.
Latin America’s profits were stable, despite the region continuing
to suffer from challenging market conditions. Europe’s adjusted
operating profit grew by 7%, due to growth across most countries,
and in Asia adjusted operating profit was 4% higher, due to strong
growth in our India IntelliGen business.
Central costs were stable, at £16.8m (2022: £16.9m) in constant
currency, primarily due to prudent cost management.
STRATEGIC REPORT 32
GENUS PLC / ANNUAL REPORT 2023
FINANCIAL REVIEW CONTINUED
STATUTORY PROFIT BEFORE TAX
TAXATION
The table below reconciles adjusted profit before tax to statutory
profit before tax:
Adjusted Profit Before Tax
Operating profit attributable to
non-controlling interest
Net IAS 41 valuation movement on biological
assets in JVs and associates
Tax on JVs and associates
Adjusting items:
Net IAS 41 valuation movement on
biological assets
Amortisation of acquired intangible assets
Share-based payment expense
Other gains and losses
Exceptional items
2023
£m
71.5
2022
£m
71.5
(0.4)
0.3
3.6
(3.9)
(16.9)
(7.7)
(6.0)
2.7
(3.5)
(1.4)
(2.6)
(5.4)
(8.3)
(3.7)
–
(2.0)
Statutory Profit Before Tax
39.4
48.4
Statutory profit before tax was £39.4m (2022: £48.4m), with
improved trading performance being offset by higher interest
expense, a higher non-cash fair value net charge for IAS 41
biological asset movement, higher share-based payment
expenses and higher net exceptional items. Within this, there was
a £24.9m reduction (2022: £24.5m uplift) in porcine biological
assets, primarily due to the temporary destocking of the Aurora
farm in Canada to complete a facility and health upgrade, and a
£8.0m uplift (2022: £29.9m reduction) in bovine biological assets,
due to certain fair value model estimate changes. Share-based
payment expense was £6.0m (2022: £3.7m). These reconciling
items are primarily non-cash, can be volatile and do not correlate
to the underlying trading performance in the year.
The statutory profit tax charge for the period, including share
of income tax of equity accounted investees, of £11.5m (June 22:
£14.3m) represents an effective tax rate (‘ETR’) of 26.6% (June 22:
28.0%). The reduction in the statutory ETR of 1.4 points results
from the recognition of additional deferred tax assets, net of
increased UK and foreign tax rates, as explained further below.
The adjusted profit tax charge for the year of £15.9m (June
22: £17.4m) represents an ETR on adjusted profits of 22.2%
(June 22: 24.3%), a reduction of 2.1 points. Of this, a decrease
of 6.2 points is due to the recognition of deferred tax assets
for brought forward losses in Genus’s Australia and France
subsidiaries. This is offset by a 1.5 point increase, due to the
rise in the UK and Consolidation Tax rates from 19% to 20.5%,
and by a further 2.6 point increase in overseas taxes during
the year. These higher overseas taxes are due to an increased
share of Group profits in higher tax jurisdictions and reduced
tax credits relating to agricultural activity in China. The Group’s
anticipated adjusted ETR for 2024 is 24% to 27%, which is higher
than the current year due to the full year impact of the UK tax
rate increase to 25% that took effect from April 2023 and the
above noted change in profit mix to higher tax rate jurisdictions.
EARNINGS PER SHARE
Adjusted basic earnings per share increased by 3% (5% reduction
in constant currency) to 84.8 pence (2022: 82.7 pence), reflecting
the improved trading performance and lower effective tax rate
and offset by higher interest expenses. Basic earnings per share
on a statutory basis were 50.8 pence (2022: 62.5 pence), taking
into account the factors above and the impact of a higher
non-cash fair value net charge for IAS 41 biological asset
movement, higher share-based payment expenses and higher
net exceptional items.
EXCEPTIONAL ITEMS
BIOLOGICAL ASSETS
There was a £3.5m net exceptional expense in the year
(2022: £2.0m net expense), which included legal fees of £5.4m
(2022: £1.4m) primarily related to Genus ABS’s ongoing litigation
with STgenetics and a £0.9m credit for a part that was settled
during the year. It also included a £1.7m credit relating to an
in-year sale of our Canadian ABS facilities, following the prior
year ABS restructuring.
The prior year benefited from a £3.3m credit relating to a non-
refundable cash receipt related to a legacy legal claim in Brazil,
and £2.8m of restructuring expense, principally related to the
closure of ABS supply chain barns in Canada and £0.5m of
one-time costs to resolve an IT security incident.
NET FINANCE COSTS
Net finance costs increased to £14.3m (2022: £6.2m), primarily due
to interest rate rises during the year. Average interest rates more
than doubled to 4.94% (2022: 2.27%), raising the cost of like-for-
like borrowings by £4.6m. Average borrowings increased by 30%
to £226.9m (2022: £173.9m), primarily due to the cash investments
in the prior period on supply chain capacity and the acquisition
of Olymel’s AlphaGene programme, resulting in a further £2.6m
increase in interest costs in this year. The interest rate increases
were partially mitigated by the Company’s fixed interest cover,
which reduced the impact of rate increases by around £1.0m.
Amortisation costs in the year were £1.1m (2022: £0.9m) and
within other interest there was IFRS 16 finance lease interest of
£1.2m (2022: £1.1m) and both a discount interest unwind on the
Group’s pension liabilities and put options totalling £0.5m
(2022: £0.4m). Foreign interest in the year was an expense of
£0.2m (2022: £0.3m income).
A feature of the Group’s net assets is its substantial investment
in biological assets, which under IAS 41 are stated at fair value.
At 30 June 2023, the carrying value of biological assets was
£364.7m (2022: £387.7m), as set out in the table below:
Non-current assets
Current assets
Inventory
Represented by:
Porcine
Dairy and beef
2023
£m
2022
£m
318.2
23.8
22.7
333.7
33.1
20.9
364.7
387.7
242.7
122.0
278.8
108.9
364.7
387.7
The movement in the overall balance sheet carrying value of
biological assets of £23.0m includes the effect of an exchange
rate translation decrease of £17.2m. Excluding the translation
effect there was:
• a £23.7m reduction in the carrying value of porcine biological
assets, due principally to the depopulation of animals held
in Aurora, our genetic nucleus farm in Canada, in preparation
for an upgrade to the farm facilities and health status,
and higher global interest rates which impact the valuation
discount rates; and
• a £17.9m increase in the bovine biological assets carrying value,
primarily reflecting increases in average selling prices.
The historical cost of these assets, less depreciation, was £83.4m
at 30 June 2023 (2022: £77.2m), which is the basis used for the
adjusted results. The historical cost depreciation of these assets
included in adjusted results was £13.4m (2022: £10.7m).
STRATEGIC REPORT 33
GENUS PLC / ANNUAL REPORT 2023
RETIREMENT BENEFIT OBLIGATIONS
NET DEBT AND CREDIT FACILITIES
The Group’s retirement benefit obligations at 30 June 2023 were
£6.9m (2022: £8.3m) before tax and £5.6m (2022: £7.0m) net of
related deferred tax. The largest element of this liability now
relates to some legacy unfunded pension commitments dating
prior to Genus’s acquisition of PIC.
Despite difficult stock market conditions, robust investment
strategies and higher bond yields during the year mean our two
main defined benefit obligation schemes remained in sound
financial positions. Prior to any IFRIC 14 amendments, both the
Dalgety Pension Fund and our share of the Milk Pension Fund
reported IAS 19 surpluses.
CASH FLOW
Cash flow (before debt repayments)
Cash generated by operations
Interest and paid taxes
Capital expenditure
Net cash received from JVs
Other
Free cash flow
Acquisitions and investments
Dividends
2023
£m
78.7
(28.3)
(35.2)
0.7
2.3
18.2
1.2
(21.0)
2022
£m
56.6
(22.3)
(50.9)
3.2
(0.1)
(13.5)
(19.5)
(20.9)
Net cash outflow (before debt repayments)
(1.6)
(53.9)
Cash generated by operations of £78.7m (2022: £56.6m)
represented cash conversion of 105% (2022: 82%) of adjusted
operating profit excluding joint ventures. The cash conversion
rate of adjusted operating profit to cash exceeded our objective
to achieve conversion of at least 90% annually. We expect
to continue meeting this objective in the coming year. The
increase in cash generation primarily reflected a record adjusted
EBITDA performance of £110.6m (2022: £99.9m), along with lower
working capital and biological asset outflows. Working capital
improvement was aided particularly by focused accounts
receivable collections, which improved days sales outstanding
by 8 days to 48 days.
Capital expenditure cash flow of £35.2m (2022: £50.9m) was
significantly lower as planned, after our peak year of investment
in 2022. Spend included £19.8m of continued investment in our
global facilities, as well as work to upgrade our Whenby UK
facility, further investment in global IntelliGen capabilities and
investment in software development, including the continued
rollout of our GenusOne platform and improvements to our
digital platform.
Net cash inflow from joint ventures was £0.7m (2022: £3.2m).
After interest and tax paid, total free cash flow was £18.2m inflow
(2022: £13.5m outflow).
The cash inflow from investments was £1.2m (2022: £19.5m outflow),
with proceeds from the sale of Caribou shares of £3.4m being
offset by investments in our China joint ventures of £1.0m, to
increase production capacity, and £0.8m of deferred
consideration payments from previous acquisitions. The prior-year
investments included £14.5m to acquire the intellectual property
in Olymel’s elite porcine genetics.
Net debt increased to £195.8m at 30 June 2023 (2022: £185.0m).
Cash inflows and outflows in the year largely balanced, with the
increase in net debt primarily driven by new lease agreements.
The ratio of net debt to EBITDA as calculated under our financing
facilities at the year-end has reduced to 1.6 times (2022: 1.7 times)
which remains in line with our medium-term objective of having
a ratio of net debt to EBITDA of between 1.0–2.0 times. At the end
of June 2023, interest cover was at 10 times (2022: 27 times).
During the year, the Group’s principal credit facilities comprised
a £190m multi-currency revolving credit facility (‘RCF’), a USD 150m
RCF and a USD 20m bond and guarantee facility. An additional
£40m of accordion facility remains available for the duration
of the facility agreement. The maturity date of the facility was
extended by a further year in August 2022, to 24 August 2025.
EBITDA, as calculated under our financing facilities, includes cash
received from joint ventures. Net debt as calculated under our
financing facilities excludes IFRS 16 lease liabilities up to a cap
of £30m but includes bank guarantees.
On 30 June 2023, the Group had headroom of £118.7m (2022: £77.8m)
under its available credit facilities.
CAPITAL ALLOCATION PRIORITIES AND RETURN
ON ADJUSTED CAPITAL
Our capital allocation prioritises the investment of cash in areas
that will deliver future earnings growth and strong cash returns on
a sustainable basis. This includes investment for organic growth
as a first priority through investment in our existing businesses,
including capital expenditure in infrastructure, innovation in new
products and the development of our people. We supplement
organic growth with value enhancing acquisitions in current and
adjacent market niches, aligned with our purpose. This brings new
technology, intellectual property and talent into the Group and
expands our market reach, keeping Genus well-positioned in
growing markets over the long term.
The return on adjusted invested capital, as defined in the
alternative performance measures glossary, was higher at 14.7%
(2022: 13.9%), reflecting growth of 14% in adjusted operating profit
including joint ventures after tax to £66.8m (2022: £58.8m), due to
the 10% increase in operating profit including joint ventures, and a
2.1 point improvement in the adjusted effective tax rate. Adjusted
invested capital increased at a slower rate, by 8% to £455.0m
(2022: £422.0m), as we continued to invest in facilities, IntelliGen
capacity, digital capability and our biological assets.
DIVIDEND
Recognising the importance of balancing investment for
the future with ensuring an attractive return for shareholders,
the Board is recommending a final dividend of 21.7 pence per
ordinary share, consistent with the prior year final dividend.
When combined with the interim dividend, this will result in
a total dividend for the year of 32.0 pence per ordinary share
(2022: 32.0 pence per share). Dividend cover from adjusted
earnings of 2.7 times (2022: 2.6 times), is within the medium-term
target of an adjusted earnings cover range of 2.5 to 3.0 times.
It is proposed that the final dividend will be paid on 8 December
2023 to the shareholders on the register at the close of business
on 10 November 2023.
STRATEGIC REPORT 34
GENUS PLC / ANNUAL REPORT 2023
PEOPLE AND CULTURE
PASSIONATE AND
PURPOSE-DRIVEN
PEOPLE
Across 24 countries, we
employ a global team of
3,500 colleagues, many
of them world-leading
experts in their field.
MAINTAINING OUR CULTURE
We nurture an open, supportive and
enjoyable working environment, built on
mutual respect and equal opportunity.
Our Company values remain at the heart
of this culture. Our global employee
handbook sets out behaviours expected
of all Genus employees to ensure a
workplace free from discrimination of
any kind. We embed this philosophy in
practice through recruitment, onboarding,
training and performance management.
These steps are helping us build an
increasingly diverse team and inclusive
Company. Examples include our ongoing
focus on recruiting, developing and
promoting more women across the
Company. We are continuing to enhance
inclusion of people with different needs,
with steps including the establishment
of a Company-wide minimum level of
leave for parents or carers when a new
child joins their family (through natural
birth, adoption or a long-term fostering
arrangement). Our employee resource
group AWAKE (Advancing Women’s
Advocacy, Knowledge and Empowerment)
is also helping us strengthen efforts
to enhance gender inclusion.
ATTRACTING AND DEVELOPING TALENT
We continue to offer a wide range of
internships, trainee schemes and graduate
programmes in different parts of the
world. Since 2018, for example, we have
attracted nearly 175 people to join our
programmes in the UK and North America.
This year, we received recruitment
industry recognition for our early career
hiring programme in North America.
Our global jobs framework maps out
career paths for colleagues and clarifies
the skills and competencies needed to
support their development and career
progression. This year, we also introduced
a global jobs portal to help colleagues
search and apply for vacancies around
the world. This also enables employees
to upload CVs and career goals, to
aid internal talent sourcing for roles.
We offer a wide range of training and
development opportunities to help our
people progress through career paths,
including the bespoke leadership and
management programmes explored
opposite. We also empower colleagues
to advance their own development
through a suite of on-demand courses
and content, with much of the material
available in multiple languages.
All employees also take a series of
mandatory annual training modules,
including on our Code of Conduct and
role-specific health and safety topics.
REVIEWING PAY AND BENEFITS
We regularly review our range of employee
benefits to ensure it caters for colleagues
with different needs, making improvements
where we identify opportunities. This
year, we also introduced a new benefits
portal in several countries to increase
understanding of, and access to, benefits
information and well-being resources.
This year, we also launched TakeStock,
a new share plan enabling employees
to become shareholders in the business.
Employees receive one free share for
every three purchased. We introduced
the plan in the US and UK, with over 25% of
eligible employees taking part, spanning
all segments of our workforce. To build on
this success, we are now exploring how we
can roll out this plan in other countries.
More widely, we continue to benchmark
local pay in the markets where we operate,
to ensure we are offering a competitive
package to attract and retain talent.
ANGELLE ROSATA
Group HR Director
We empower, equip
and support our
talented global
team to fulfil
their potential.
OUR VALUES
CUSTOMER CENTRIC
RESULTS DRIVEN
PIONEERING
PEOPLE FOCUSED
RESPONSIBLE
STRATEGIC REPORT 35
GENUS PLC / ANNUAL REPORT 2023
ENHANCING ENGAGEMENT
We continue to increase employee
involvement in the Company through
a multimedia communication and
engagement programme (from
newsletters and videos to town halls
and CEO round table discussions). Our
two Non-Executive Director ‘employee
representatives’, Lesley Knox and Lykele
van der Broek, also held a breakfast
discussion with employees at our Uberaba
site in Brazil, gathering feedback and
insights that they shared with the Board.
We introduced our new CEO, Jorgen
Kokke, to colleagues across the Company
through a range of communications.
Jorgen also held informal discussions and
Q&A discussions with colleagues on site
visits during his onboarding programme.
We are planning our next global
employee engagement survey, Your Voice,
for late 2023.
SAFEGUARDING HEALTH AND SAFETY
We maintained our focus on continuous
improvement of health and safety,
with developments this year including
a redesign of health and safety
audit reports, which are shared with
a wide range of leaders and key
stakeholders to enhance understanding
of performance and inspire action
on findings. We also introduced a
dashboard for managers, providing
real-time incident data for their teams.
More widely, we continued to support
employee wellbeing through a range
of initiatives. These included holding a
series of webinars exploring different
aspects of mental well-being, in
support of World Mental Health Day.
Our recordable injury rate for the year
was 2.03 incidents per 100 employees,
slightly lower than last year and in line
with our target of a 5% reduction year-on-
year (which we established three years
ago). We also reduced vehicle incidents
by 13% compared to the previous year,
surpassing our 5% reduction target.
ROUTES FOR RAISING CONCERNS
We have established a range of routes,
available in multiple languages, through
which employees can raise any issues
about unethical behaviour, including an
independent and anonymous hotline
(which supports our whistleblowing
policy). Any reports are immediately
referred to the Group General Counsel
and Company Secretary. They are
investigated and discussed with the Group
HR Director, Head of Risk Management
and Internal Audit and the Company’s
Audit & Risk Committee. This process is
regularly reviewed as part of our annual
Audit & Risk Committee activity.
DEVELOPING LEADERS
Our global jobs framework,
which contains career
paths for each role across
Genus, has strengthened
conversations regarding
career goals, development
and progression. It also
underpins a process that
invests in tailored support
for colleagues at different
stages of their career.
Our process spans four key elements:
• Learning through online courses and
content, either on an individual’s own
initiative or following discussion with
their manager
• Targeted training for front-line people
leaders, relevant to both new and
experienced managers
• A programme to help colleagues
transition from leading individuals
to leading teams
• Support for colleagues who lead
other leaders
HUMAN RIGHTS
Genus is committed to respecting the
human rights of workers throughout our
value chain and the local communities in
which we operate. We aim to ensure that
anyone who might be affected by Genus
can enjoy the human rights described
in the International Bill of Human Rights
and the ILO Declaration on Fundamental
Principles and Rights at Work.
We complement these activities with
training on behavioural competencies,
helping people managers role model
our values. We also offer an annual CEO
Scholarship, which helps an aspiring
leader accelerate their development
by sponsoring them for a part-time
or online leadership programme.
This year, we also held our first Global
Leadership Conference since COVID-19.
This drew together more than 100 leaders
to review business progress, align with
peers and learn from external speakers.
62%
of people managers have
completed a leadership
development programme
For details of current career
opportunities at Genus, please visit
www.genusplc.com/work-for-us
We monitor this through the same
process used for the policies
outlined earlier and there were no
issues identified during the year.
STRATEGIC REPORT 36
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY REPORT
SUSTAINABILITY
AT THE HEART OF
OUR BUSINESS
Our genetic improvement
work is directly focused on
helping farmers to meet the
challenge of producing more
healthy and happy animals
with less resources.
Sustainability lies at the heart of our
business. It informs our purpose of
pioneering animal genetic improvement
to help nourish the world and infuses
the core values that shape our work,
every day.
We make a positive contribution to the
world around us. According to the UN,
today the global population is over eight
billion people and is projected to reach
9.7 billion people by 2050. Our genetic
improvement work is directly focused on
helping farmers to meet the challenge
of producing meat and milk more
efficiently and sustainably, increasing the
availability of high-quality, affordable
animal protein around the world. This
challenge is exacerbated by global
climate change, and the risks to food
security which flow from it. As a result of
bovine and porcine genetic improvement,
our customers require fewer animals and
use far less land, water and other natural
resources to produce more milk or meat
than they did some decades ago. We
are therefore providing fundamental
sustenance to the world whilst reducing
the impact agriculture has on the
environment. We continue to drive our
genetic improvement and gene editing
programmes as we aim to lead the market
in sustainable animal protein production.
In parallel, we continue to reduce the
environmental impact of our own
operations, guided by our Climate Change
Policy. This policy, which is available on the
Company’s website, commits us to a 25%
reduction in our primary intensity ratio1
against our 2019 baseline by 2030, and
becoming a net zero greenhouse gas
(‘GHG’) emissions business by 2050.
Our operations will always have animal-
related emissions associated with them,
so our environmental focus is on delivering
practical solutions to reduce or offset our
residual emissions to net zero by 20502,
whilst our genetic improvement programmes
will make our animals more efficient.
We fulfil our commitment by challenging
ourselves and those around us to think
differently. From small improvements
in working practices to innovations
that address stakeholder needs, we
constantly develop and explore new
ideas for enhancing our contribution and
delivering positive, sustainable change.
To reflect the importance of sustainability
to our business, we continued to
refine our governance to ensure that
sustainability issues are receiving focus
at the highest levels of our organisation.
Our Sustainability Committee, chaired
by the Chief Executive, is attended by
our executive team, along with Lysanne
Gray, our Non-Executive sustainability
champion. The Committee’s activities are
reported directly to the Board of Directors,
ensuring that oversight of sustainability
is a matter for the Board as a whole.
For Genus, sustainability also means
ensuring our operations around the world
are underpinned by policies and practices
which reflect our core principles such as
the protection of animal well-being,
supporting community causes, and
ensuring we foster a dynamic, inclusive
and safe working environment for our
people. We articulate expectations,
provide information and deliver training
where needed to embed responsible
business practices across our organisation
and the people we work with.
For more information, refer to:
www.genusplc.com/sustainability.
Genus commits to equality across all of its
businesses. It recognises these targets are
challenging given the current availability of
women within the overall global agriculture
workforce. Our People and Culture reports
provide information on the targets we have
internally to promote or recruit more women
to management grade roles. The agriculture
sector has an unenviable safety record both
here in the UK and internationally, and we
are seeking to be class leaders in this area.
We are continuing to focus on efforts to
improve health and safety standards across
our business. We set and monitor progress
of key performance indicators (see pages 38
to 39). We also ensure employees have
multiple routes to raise any concerns
(including the independent whistleblowing
hotline explained earlier (page 35 Routes for
Raising Concerns).
During the year Genus was not subject to
any enforcement action by regulators in
any jurisdiction where we operate for
health, safety or environmental reasons.
We had no environmental incidents and
continued to maintain high standards
across the business.
External assurance
DNV Business Assurance Services UK
Limited (‘DNV’) were commissioned by
Genus to provide limited assurance over
selected information presented in the 2023
Annual Report for the FY23 reporting year.
The scope of the assurance was designed
to reflect some of the important FY23
sustainability goals and was restricted to
the non-financial metrics identified below:
• total Scope 1 emissions – combustion of
fuel, own transport and livestock
emissions;
• total Scope 2 emissions – purchased
electricity (and renewable generated),
steam, heat and cooling;
• total energy consumed;
• the percentage of women in
management roles; and
• for health and safety, the recordable
injury frequency rate.
We have published DNV’s
Assurance Statement on our
website with its observations and
opportunities for improvement see:
www.genusplc.com/sustainability/
policies-and-reports/.
1 More information can be found on our website:
www.genusplc.com/sustainability
Full details of how we measure the primary intensity
ratio can be found in our Basis of Reporting for
Non-Financial Metrics
2 Becoming a net zero business means that our
business activities and our value chain will have no
net impact on the climate from our GHG emissions
STRATEGIC REPORT
SUSTAINABILITY STRATEGY
Our sustainability strategy
comprises five pillars which
support our purpose.
37
GENUS PLC / ANNUAL REPORT 2023
R E S E A R C H AND DEVELOPMENT
ANIMAL
WELL-BEING
ENVIRONMENT
RESPONSIBLE
EMPLOYER OF
CHOICE
SUSTAINABLE
PROTEIN
PRODUCTION AND
FOOD QUALITY
PIONEERING
ANIMAL GENETIC
IMPROVEMENT
TO HELP NOURISH
THE WORLD
COMMUNITY
GOVERNANCE
Underpinning our strategy is a strong decision making and governance system
BOARD AND
MANAGEMENT
OVERSIGHT
CLIMATE
CHANGE AND
OTHER POLICIES
AND STANDARDS
TRAINING AND
DEVELOPMENT
RISK
MANAGEMENT
PROGRESSING OUR
SUSTAINABILITY STRATEGY
Our progress with our sustainability strategy,
including key performance indicators
where relevant, is summarised overleaf.
Our Sustainability Committee contains
experts from around our global Company.
The Committee sets our sustainability
strategy, articulates annual objectives
and monitors progress.
For more information on our work,
progress against the five pillars of
our strategy and our Sustainability
Committee, please see our website:
www.genusplc.com/sustainability
STRATEGIC REPORT 38
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY REPORT CONTINUED
HIGHLIGHTS IN FY23
FY24 GOALS
• Genetic improvement targets have
• Continue driving porcine and bovine genetic
•
•
•
been met for the year.
The PRRSv project is on track.
The Life Cycle Assessment (‘LCA’) for the
porcine business is nearing completion
for North America and Europe. Data for
China and Japan is being sourced and
validated for the standard market pig to
act as a comparator against our elite
genetics and our PRRSv-resistant pigs.
LCA work for our T14 beef cattle has
commenced and will follow the same
approach as used for the porcine LCA.
• UK Biotechnology and Biological
Sciences Research Council project with
Roslin/Scotland’s Rural College (‘SRUC’)
to look at inheritability of traits linked
to enteric methane emissions has
been started.
improvement and rapidly disseminate the genetics
to customers globally by:
(i) increasing porcine genetic improvement index
by 0.75 standard deviation1 per generation
(ii) increasing dairy genetic improvement index
by one standard deviation1 per generation
(iii) increasing beef genetic improvement index
by one standard deviation1 per generation
• Using LCA to quantify the potential reduction of
GHG emissions from the use of PIC genetics and
PRRSv-resistant pigs.
• Using LCA to quantify the benefits and reduction
of GHG emissions from the use of T14 beef cattle.
• Working on projects to understand the common
•
causes of early death on US beef feedlots, and the
impact of genetic selection.
Working with Innovate UK and SRUC to examine the
impact of genetics and the micro-biome in T14 and
T15 beef cattle to drive reductions of GHG emissions.
SUSTAINABILITY OBJECTIVE
(AND RELATED SDG)
SUSTAINABLE PROTEIN
PRODUCTION AND
FOOD QUALITY
Advancing animal genetic
improvement to help our
customers breed more
productive and resilient
animals which produce
high-quality milk and meat
more efficiently and sustainably
zero hunger
productivity and
incomes of small-scale
food producers
strengthen resilience
and adaptive capacity
to climate-related
hazards and natural
disasters in all countries
ENVIRONMENT
Reduce the environmental
impact of our own operations
waste/manures
renewables and
energy efficiency
low carbon transition
•
•
•
•
•
•
•
Initiated manure methane capture at
slurry ponds at our PIC Aurora facility.
Initiated an energy contract for all of
our UK facilities that ensures use of
renewable electricity.
Commissioned independent external
assurance of our Scope 1 and 2 emissions.
Captured and validated remotely
sensed satellite carbon data for 11
Genus facilities. This project was
cancelled as the technology did not
meet our expectations.
Initiated solar projects in Cheshire (UK),
Cremona (Italy), and Atlas (Canada).
Manure management project at
the Dekorra site in Wisconsin (US)
was completed.
Conducted environmental audits of
material facilities (Brazil and China).
• Examine and quantify water and waste use to better
determine risks and opportunities.
•
• Pilot project to install electricity sub-metering at
a UK site to better assess energy savings and the
benefits of solar photovoltaics.
Transitioning to hybrid and electric vehicles for
all new pool vehicles in the UK.
Continue our investment in renewable energy
projects at:
(i) Bluegrass (US) – anaerobic digestion
(ii) Aurora (US) – biogas project commission
and assess investment opportunities
•
•
(iii) Atlas and Aurora (US) – solar photovoltaics
Continue to implement an energy efficiency
programme, with energy audits in the UK at key
facilities and an updated UK energy savings plan.
• Further work on improving emissions data collection
and reporting of Scope 3 emissions.
STRATEGIC REPORT 39
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY OBJECTIVE
(AND RELATED SDG)
ANIMAL WELL-BEING
Continuously improve
animal well-being across
our business worldwide
HIGHLIGHTS IN FY23
FY24 GOALS
•
• 100% of employees with animal care
responsibilities received training on
Genus animal care standards.
Continued investment in PIC and ABS
animal housing facilities including
construction of Atlas and investment
at Gourley and Bluegrass.
•
Maintained animal care standards
• Published updated Animal Health &
Welfare Principles document.
• Update the Animal Welfare Policy and ensure revised
policy is rolled out globally.
• Ensure employees with animal care responsibilities are
regularly trained on Genus animal care standards.
RESPONSIBLE EMPLOYER
OF CHOICE
Be a people magnet with a
dynamic, inclusive and safe
working environment
gender equality
• Achieved recordable injury frequency
rate2 of 2.03 against a target of 2.36
• Commissioned independent external
assurance of our health and safety
data, and total number of women in
management (M-Grade) roles.
Percentage of women in M-Grade roles
currently at 30.2%, with the number of
women newly recruited or promoted to
M-Grade roles in FY23 at 36.2%.
•
• Achieve at least a rolling 5% year-on-year reduction
in recordable injury frequency rate, equivalent to at
least 2.24 or less.
Maintain or improve employee engagement, by:
(i) implementing ‘Your Voice’ Action Plans and
publishing the key opportunities in our
FY24 report.
•
(ii) launching an awareness campaign of
Company values.
(iii) increasing the proportion of female employees
recruited or promoted to M-Grade roles
(target new female appointments: minimum 33%;
stretch 50%).
COMMUNITY
Proactively engage and
make a positive contribution
in communities of which we
are a part
disaster deaths
•
• Roll out of our PIC Aurora & Atlas ‘Never
Stop Improving’ high school scholarship
programme (see page 40).
The Company has been working in
partnership with the Gates Foundation,
Land O’Lakes, Vetline and AbacusBio to
bring our elite genetics to farmers in
Africa (see page 41).
• Support measures to prevent and respond to local
•
•
•
community issues.
Recruit locally into nucleus farms, and encourage
support for local charities that align with our mission.
Continue our ‘Never Stop Improving’ high school
scholarship programme and our intern programme to
invest in future skills our business needs (see page 40).
Continue to deliver elite genetics to farmers in
Ethiopia, Kenya and Uganda in collaboration with
the local partners.
equitable sharing of
genetic resources
1 Genetic improvement considers factors that shape each animal’s carbon footprint during their lifetime. These include farm inputs which support growth (such and feed,
supplements and water) and outputs from the animals and their manures (including direct emissions and manure methane/nitrous oxide emissions). By calculating inputs and
outputs in this way, we can identify total emissions involved in the production of milk or meat and track the reduction from one generation to the next. For a detailed
explanation of how these targets are set and calculated, and the impact of genetic improvement on our and our customers’ carbon footprints, see our website:
www.genusplc.com/sustainability
2 Recordable injury frequency rate is the number of work related incidents that result in injury or illness, work restriction, or require treatment other than first aid
STRATEGIC REPORT 40
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY REPORT CONTINUED
The year’s highlights from our sustainability programme
REDUCING GREENHOUSE
GAS EMISSIONS
ENVIRONMENT –
METHANE CAPTURE FROM MANURE
As a business producing animals used
in breeding programmes across the
globe, Genus’s GHG emissions are
largely from livestock sources – the
methane from animals’ manures.
We have invested £1.2m at our PIC Aurora
facility in Canada to install covers across
our slurry lagoons that will enable the
biogas to be captured. Preparatory
works started in FY23 and the project
will reduce emissions by ~1,000 tonnes
of carbon from methane that would
have been emitted from the surface of
the lagoon. Commissioning of the full
system will take place in autumn 2023 and
spring 2024, with a break for the winter
where the amount of biogas generated is
expected to slow, due to the cold weather
conditions. This project builds on our
successful project in Granja in Brazil with
our joint venture partners, Agroceres.
Further investments of £1.5m are planned
to install solar photovoltaic panels during
FY24 at our PIC Aurora and Atlas facilities
in Canada to displace the relatively dirty
grid electricity and to build resilience to
climate change through the generation
of low carbon renewable energy.
ENVIRONMENT –
CARBON CAPTURE IN SOILS
In the current year, we have also changed
the way we manage our land and
soils, to provide greater opportunity
for carbon sequestration into soils and
improve soil biomass. We have examined
the use of satellite remote sensing
technology to look for and to track
carbon sequestration opportunities on our
farmland. Unfortunately, the technology
was not mature enough for us to
accurately record the capture of carbon
and we are reassessing how we can
demonstrate carbon capture in our soils.
COMMUNITY
ABS GENETIC IMPROVEMENT
IN ETHIOPIA AND KENYA
ABS has been working in partnership
with the Gates Foundation and Land
O’Lakes to deliver a $10m project to bring
our elite genetics to farmers in Ethiopia
and Kenya. The project aims to deliver
safe, affordable and locally sourced
dairy protein to meet local consumer
demand. We also aim to develop local
acceptance of the East African Dairy Profit
Index, to increase the adoption of sexed
genetics and to improve profitability for
local farmers. Currently, these farmers
are unable to meet domestic demand or
compete with cheaper dairy imports.
The dairy industry in Ethiopia and Kenya
faces a number of issues that block its
progress. For example, calf mortality
can be as high as 16%, which is further
compounded by the young stock having
slow growth rates and maturing later. This
results in less milk being produced, higher
input costs and higher GHG emissions
per unit of milk produced. Lower fertility
rates of sub 50%, further delay the time
to maturity of the animal, and increase,
by almost a third, the proportion of the
dairy cattle that are non-productive, yet
still emitting methane and consuming
feed. The amount of milk produced by
the traditional breeds of cattle in Ethiopia
and Kenya are also low (0.5–2 litres per
day), whereas on average a cow in the UK
will produce 26 litres per day with peak
production at around 60 litres per day.
Our partnership with Land O’Lakes ensures
they can work with farmers to improve
animal husbandry, health, nutrition and
welfare. This has already delivered results
through improved health and growth
rates, and lower mortality. ABS has been
providing elite genetics of cattle that are
more capable of delivering greater milk
yields, with health traits that are more
suited for the East African environment.
This has increased productivity and
reduced the costs of production,
increasing the farmer’s ability to meet
domestic market needs, compete with
imports and reduce GHG emissions.
Over the next three years the project will
deliver: (i) 46,000 improved dairy cows;
(ii) 10,000 genomic samples to contribute
towards developing an East African dairy
index; (iii) 170 million litres of additional
milk; and (iv) provide valuable new skills
and jobs for technicians in these countries.
STRATEGIC REPORT SUSTAINABLE PROTEIN
PRODUCTION
GENETIC IMPROVEMENT
As global climate change increases the
risks to global food security, our work in
genetic improvement provides livestock
which is more robust and resilient to
climatic extremes, helping farmers
produce milk and meat more efficiently
and sustainably, using fewer natural
resources. We measure progress by
assessing the factors that shape each
animal’s carbon footprint during their
lifetime, including the efficiency with which
the animal feeds, the production of milk,
and the health and robustness of the
animal during its lifetime. We set genetic
improvement targets each year, which
relate to life cycle carbon emissions. We
met all of our genetic improvement targets
in FY23 (see page 38).
Based on genetic improvements the
use of our improved genetics produces
the following estimated annual
reductions in carbon emissions1:
• Porcine – 429,000 tonnes CO2e;
• Dairy – 851,000 tonnes CO2e; and
• Beef – 70,800 tonnes CO2e.
1 These reductions in GHG emissions are estimates
only based on the calculation of CO2e reduction
from genetic improvement multiplied by the
estimated number of animals created each year
using our genetics. See page 56
41
GENUS PLC / ANNUAL REPORT 2023
We were very excited to announce our
first recipients of the PIC ‘Never Stop
Improving’ high school scholarship
in Kipling & Carlyle, Canada. Alexys
Roppel is a graduate from Kipling High
School. She is continuing her education
at the University of Saskatchewan for
Agriculture in Crop Science, and hopes to
become an agronomist, travelling from
farm to farm advising farmers with their
crops. Kerri Lachapelle graduates from
Carlyle’s Gordon F. Kells High School and is
enrolled at the Saskatchewan Polytechnic
College in Saskatoon. She is working
towards a career first in nursing and
then hopes to become an obstetrician.
In 2018 our North American ABS
business started its award-winning
‘early careers’ intern programme
www.startingatgenus.com. To date we
have sponsored 133 students who have now
successfully completed the programme.
Of the students recruited 60% are female
and 40% male, and we have retained 44%
of the interns within our own business,
whilst providing opportunities for others
to join the sector or to go onto new
roles elsewhere within agriculture or the
biotech industry. The interns that we
have retained have gone on to hold a
range of diverse positions in ABS such as
Beef Sustainability Scientist, Livestock
Supervisor, Sales Team Leader, Technical
Services Consultant and Beef Business
Development Specialist. This year we
welcomed our new intake of interns who
received a warm welcome from the ABS
and Genus management team and were
given an opportunity to hear and meet
some of the leaders covering topics
such as sustainability, leadership, and
to learn more about our elite genetics.
44%
of interns were retained
within our own business
PIC GENETIC IMPROVEMENT IN UGANDA
PIC, Vetline and AbacusBio are working
together to improve Uganda’s pig
production, health, and welfare in a
sustainable way. The aim of the venture
is to provide economic stability for pig
farmers and their families in Uganda,
while ultimately addressing broader
food production and food safety issues
in the supply chain to deliver nutritious,
healthy, and safe food. This will be done
through an integrated combination of
PIC genetics and expertise, artificial
insemination and veterinary services,
provided by Vetline, underpinned
by the database and information
platform delivered by AbacusBio.
By focusing on areas surrounding urban
development in Uganda and exploring
sustainable modern pig production
techniques, the venture has the potential
to positively impact the wider Ugandan
society. Pig farming is one of the fastest
growing livestock activities in Uganda and
is a means of increasing food, income,
and employment. Uganda is among the
largest per capita consumers of pork in
sub-Saharan Africa, but productivity is
low, and demand outstrips supply. This
venture with PIC, Vetline and AbacusBio
will greatly benefit local farmers in
producing pigs more efficiently and
sustainably. Through this project we
aim to provide more affordable nutrition
for the benefit of the local farmers and
their communities which fully aligns to
the core of our sustainability goals.
INTERNS AND SCHOOL
SCHOLARSHIP PROGRAMME
The PIC Aurora & Atlas ‘Never Stop
Improving’ high school scholarship
programme was started this year with the
goal of supporting our local youth to use
that very motto in their education, career
and family. Applicants were required
to submit a letter about themselves
describing their career plans and goals.
They also submitted an essay on the topic
of our PIC motto: ‘Never Stop Improving’ –
outlining why this motto is important in the
swine industry and how PIC has applied
this method to the agricultural industry.
133
students sponsored who
have now successfully
completed the programme
STRATEGIC REPORT 42
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY REPORT CONTINUED
CLIMATE CHANGE POLICY AND GREENHOUSE GAS (‘GHG’) REPORTING
Genus acknowledges the reality of climate change
and recognises the lasting impact it will have on our
business and our communities.
For Scope 1 and 2 emissions, we use
the percentage of our equity stake in
joint ventures to determine our share of
joint venture emissions, and omit some
livestock held by third parties where we
have limited information or control over
the management of livestock. We have
determined and reported the emissions
we are responsible for within this boundary
and believe there are no material
omissions for Scope 1 and 2 emissions.
EXTERNAL ASSURANCE
DNV provided limited assurance over our
Scope 1 and 2 emissions (see page 36).
GHG EMISSIONS REPORTING OUTCOMES
Our GHG emissions are primarily methane
produced by our animals, and carbon
dioxide from consuming fuel and other
materials for energy, and from transport.
Our total Scope 1 and 2 emissions have
reduced from 81,051 tonnes of CO2e in
FY22 to 77,366 tonnes of CO2e in FY23, a
reduction of 3,685 tonnes of CO2e. This is
a 4.6% reduction year-on-year, and is a
13.5% reduction against our FY19 Baseline.
When the data is normalised using our
PIR, the ratio has reduced from 6.98t CO2e
per tonnes of animal weight in FY22 to
6.04t CO2e per tonnes of animal weight
in FY23. This is a reduction of 13.5% year-
on-year and a 35.5% reduction from our
FY19 Baseline which is driven by improved
efficiency of producing animals, the
closure of some older farms and opening
of newer facilities, improved manure
management to reduce methane and
nitrous oxide emissions, improved energy
efficiency, and increased herd size.
The transformation of our vehicle fleet
is making less progress than we had
hoped for. Emissions have continued
to increase by 10% relative to the FY19
Baseline due to increased travel following
on from COVID, but they are down on
the FY22 absolute emissions by 208
tonnes of CO2e. The roll out of cleaner
vehicles is still being constrained by the
availability of replacement vehicles from
the manufacturers. In North America, the
lack of vehicles and infrastructure are
major barriers to progress. As an interim
measure for North America, we are seeking
to reduce the dependence of the business
on large V8 petrol engine vehicles and
to move to smaller V6 petrol trucks with
turbo support to improve fuel efficiency.
The average fuel efficiency of vehicles in
the North American market is generally
half of the European fleet. In the UK we
currently have a fleet of 235 cars and vans.
We have stopped replacing vehicles with
petrol or diesel only vehicles and have
been switching to petrol hybrid vans. We
have 36 pure electric vehicles in our fleet.
The transition to lower carbon vehicles will
continue with a further 26 diesel/petrol
vehicles being replaced with hybrids this
year. By the end of 2026 we will no longer
have any diesel vehicles in our fleet.
From 2026 onwards we will then seek to
transition to electric vehicles if the market
is able to support this transition, and this
should be completed as the four-year
replacement cycle for our vehicles works
through. Scope 3 Category 6 business
travel emissions for FY23 were 5,245 tCO2e.
We have published our Basis of
Reporting on our website:
www.genusplc.com/sustainability/
policies-and-reports/.
1 More information on our pathway to net zero
emissions by 2050 can be found on our website:
www.genusplc.com/sustainability
Genus has committed to take action
on climate change in a number of
ways, including:
• driving porcine and bovine genetic
improvements which support
productivity gains and improve
health and feed efficiency, enabling
a reduction in the production of
GHG emissions per unit of milk or
meat produced;
reducing the carbon footprint of our
operations through better manure
management, applying renewable
power solutions to our vehicles and
facilities and more efficient power
use; and
partnering and advocating for policies
that advance positive climate goals and
identified United Nations Sustainable
Development Goals (‘SDGs’).
•
•
OUR REPORTING APPROACH
We are committed to reducing GHG
emissions in our operations and we
use the ‘primary intensity ratio’ (‘PIR’)
to report emissions reductions. In FY20,
we refined our methods to measure
GHG emissions and developed an FY19
emission baseline (FY19 Baseline). We
aim to reduce the PIR by 25% by 2030
compared to our FY19 Baseline, and to
have net zero GHG emissions by 20501.
This means that even as our business
grows, we are seeking to ensure that
over time our GHG emissions shrink.
Genus is on a journey to meet the
TCFD recommendations and as with
most businesses, measuring emissions
is difficult. In FY24 we will take time to
examine our processes and procedures
for calculating emissions, to ensure
our data is accurate and robust, with
a focus on Scope 3 emissions. Many
businesses are currently grappling with
complexities associated with measuring
Scope 3 emissions, but the agriculture
sector presents additional challenges
with obtaining reliable data in support
of production and carbon performance,
which can become more complex when
managing globally traded commodities.
STRATEGIC REPORT 43
GENUS PLC / ANNUAL REPORT 2023
FY23
Tonnes of CO2
FY22
Tonnes of CO2e
FY21
Tonnes of CO2e
FY20
Tonnes of CO2e
FY19
Tonnes of CO2e
FY23
Global
(excluding
UK and
offshore)
Global
(excluding
UK and
offshore)
UK and
offshore
UK and
offshore
Global
(excluding
UK and
offshore)
Global
(excluding
UK and
offshore)
UK and
offshore
UK and
offshore
Global
(excluding
UK and
offshore)
% change
from FY19
Baseline
UK and
offshore
2,923
64,677
2,461
68,217
2,626
72,314
2,630
77,673
3,178
78,773
Emissions from
Scope 1 – combustion of fuel,
own transport and livestock
emissions
Total Scope 1
67,601
70,678
74,940
80,303
81,951
-18%
Scope 2 – purchased
electricity, steam, heat
and cooling
162
9,603
150
10,223
130
6,695
168
6,850
171
7,268
Total Scope 2
9,765
10,373
6,825
7,018
7,439
31%
Total Scope 1 and 2
3,086
74,280
2,611
78,440
2,756
79,009
2,798
84,523
3,349
86,041
-14%
Scope 3 emissions
Total emissions
13,542
90,908
16,195
97,246
14,664
96,429
16,119
103,440
21,489
110,879
12,812
11,611
9,839
10,488
9,543
6.04
6.98
8.31
8.33
9.37
-36%
Primary intensity measure
– animal weight (tonne)
Primary intensity ratio –
Scope 1 and 2 (tCO2e/tonne
animal weight)
GENUS ENERGY DATA
In line with the UK Government’s energy and carbon reporting requirements, further information on our energy consumption for FY23
and FY22 across Genus is set out on the next page, along with historic data back to FY19. This is sourced from data for the carbon data
reported and is tracked internally. All data is collected from metered data for electricity. Biogas combustion information is calculated
using assumptions based on records in China and Brazil. Fuel use is reported based on financial records of fuel purchased. We have
applied assumptions on standard calorific values to convert all liquid and gas fuel types to a common energy metric (kWh) and data
is reported for the period 1 July 2022 to 30 June 2023.
Annual emissions figures have been calculated based on actual nine-month data for July to March for travel and distribution and
ten-month data for July to April, with both extrapolated to full year.
Energy type
Source
Units
FY23
FY22
FY21
FY20
FY19
% change
from FY19
Baseline
Electricity Electricity imported
kWh
21,423,724
16,871,327
15,309,577
20,156,010
17,599,380
41%
Electricity generated from renewable
sources and used on site
Electricity generated from renewable
sources and exported
Electricity Imported – UK
kWh
1,120,678
590,330
384,012
334,670
303,800
269%
kWh
kWh
251,901
–
–
–
–
769,580
629,120
511,703
559,905
584,405
Electricity Imported – RoW
kWh
20,654,143
16,242,207
14,797,874
19,596,105
17,014,975
-37%
-18%
34%
–
32%
21%
STRATEGIC REPORT 44
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY REPORT CONTINUED
GENUS’S NET ZERO ROADMAP
ACTIONS FOR CONTINUING OUR
JOURNEY TOWARDS NET ZERO
The TCFD recommendations and
recommended disclosures recommend
that companies that have made GHG
reduction commitments should describe
their plans for the transition to a low-
carbon future and economy.
For Genus we have a wide range of
activities that will contribute to our own
decarbonisation efforts (as shown in
the graphic opposite) and in helping
our farmers and the wider value chain
to collectively move towards net zero
using our elite genetics. We are currently
reviewing our 2030 and 2050 targets
to ensure that they remain relevant
and continue to meet stakeholders’
expectations. The review will include
the outcomes from the TCFD scenario
analysis (see TCFD disclosures section)
and aim to ensure that our strategy
and financial planning considers the
future climate risks and opportunities
that may have a material impact.
KEY
Energy
Water
Genetic
improvement
Data
Environment
Financial
impact
Taking positive actions
to reduce our emissions
2019
2023
2025
100%
Ongoing Genetic
Improvement
Ongoing investment in
renewables in Europe and
the Americas
Investment in Solar PV
Dekorra, USA; Cremona, Italy;
APEX, Canada; Cheshire UK
Aurora biogas project
commissioned Green Power
Procurement contract for UK
75%
Biogas projects
Brazil and Canada
36 new petrol-hybrid vans
and 4 EVs. Charging
infrastructure review
O
I
T
A
R
Y
T
I
S
N
E
T
N
I
Y
R
A
M
R
P
I
No new petrol or diesel cars
in UK. Fleet of 235 cars/vans,
with 98 hybrids and 36 EVs
Ongoing transition to fuel
efficient vehicles in the US
Composting Project
Dekorra, USA
Assurance of Scope 1 and 2
emissions and PIR
Hybrid and
electric vehicle
Capital
investment
50%
GENUS PLC PRIMARY INTENSITY RATIO
25%
10.0
8.0
6.0
4.0
2.0
0.0
FY19
FY20
FY21
FY22
FY23
0%
Develop Scope 3 assessment
for porcine. Target FY24
Annual Report
No diesel or petrol-only
vehicles in fleet 2026
New Power Purchase
Agreement for energy needs
Set water and waste
baselines and
reduction targets
LCAs for Porcine and Beef
genetics used to measure
emissions and set targets
STRATEGIC REPORT
45
GENUS PLC / ANNUAL REPORT 2023
Building a climate resilient
business and continuing
towards net zero
Achieving net zero
and a climate
resilient business
2030
2040
2050
Achieve 25% reduction
of Primary Intensity Ratio
Develop comprehensive
Biodiversity Footprint
Offset remaining emissions
to achieve net zero
Ongoing Genetic
Improvement
Ongoing Genetic
Improvement
Update LCAs for Porcine and
Bovine Elite Genetics
Update LCAs for Porcine and
Bovine Elite Genetics
Update LCAs for Porcine
and Bovine Elite Genetics
Phase out of hybrid
vehicles and transition
to EVs in Europe
Water and waste
baselines and reduction
targets achieved
Ongoing investment in
renewable energy globally
Climate Change
Adaptation investment
Ongoing investment
in slurry pond covers
and anaerobic digesters
Ongoing investigation into
carbon sequestration in soils
Ongoing investment
in improvement in
electricity use efficiency
NET
ZERO
CO2e
STRATEGIC REPORT 46
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY REPORT CONTINUED
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (‘TCFD’) STATEMENT
The following statement is
consistent with the TCFD
Recommendations and
Recommended Disclosures,
identifying the risks and
opportunities arising
from climate change, the
potential impact on our
business and the actions
we’re taking to respond,
except as identified on
page 57. This provides a
description of the specific
TCFD Recommendations
and Recommended
Disclosures with which
we have not yet achieved
compliance and a response
to explain how we plan
to close this gap.
During the year the Financial Reporting
Council (‘FRC’) Corporate Review team
carried out a review of our Annual
Report and Accounts for the year ended
30 June 2022 (‘FY22 Report’). Their
review highlighted areas where the FY22
Report did not comply with the TCFD
Recommendations and Recommended
Disclosures. The FRC noted that the FY22
Report did not include a clear statement
explaining whether the report included
climate-related financial disclosures
consistent with the Recommendations
and Recommended Disclosures of the
TCFD, as required by Listing Rule 9.8.6(8)R,
and identified a number of areas where
improvements could be made to the
Company’s disclosures. Genus welcomed
this feedback and is providing a clearer
statement in this year’s Annual Report.
TCFD AND CLIMATE CHANGE SUMMARY
Genus recognises that climate change is a
significant systemic and strategic risk and
that livestock farming and management is
a contributor to climate change. Climate
change may exacerbate fluctuations in
animal feed costs (over the medium to
long term), cause more frequent impacts
from adverse weather conditions, and
limit access to water or increase the costs
of accessing and treating water. Our
qualitative and initial quantitative risk
assessments show that whilst we may be
at a greater risk from these events in the
short to medium term, the geographical
spread of our sites (largely driven by the
need to meet market demand and to
mitigate biosecurity risks), in conjunction
with our normal business continuity plans
(‘BCPs’) ensures that we are unlikely to
experience a material climate-related
loss in the next two to five years.
We are continuing to assess our exposure
to climate risks, and recently conducted
an independent consultant scenario
analysis that indicates, in the long term,
physical climate risks are not likely to
result in material losses for the business in
North America, Brazil or the UK. However,
the scenario analysis has its limitations,
and for example excludes our operations
in Asia which currently sit below the
materiality thresholds used in the analysis.
We recognise that we will need to revisit
the assumptions for Asia as the business
grows to meet the growing demand for
sustainably produced animal protein in
that region. The scenario analysis also
identifies the material climate transition
risks, with the most significant transition
risk relating to the exposure of the
business to carbon taxes and emission
trading. This is also linked to the energy
transition opportunities, and to a lesser
extent, to increased costs of producing
raw materials. The findings from this
scenario analysis support the climate
strategy that we have followed to date.
We have made commitments to reduce
our PIR and carbon footprint for Scope
1 and 2 emissions (see page 38) where
we are investing ~£2m per annum in
biogas, renewables and similar energy
projects. These projects reduce our
exposure to future increases in energy
prices and significantly reduce the Scope
1 and 2 emissions from our business
operations that could be subject to
future carbon taxation. Genus is also
working to improve its understanding
of its Scope 3 emissions and will work to
reduce these embedded emissions.
Genus has a global reach that seeks
to support leading farmers with more
productive and resilient breeding animals,
which enables farmers to produce meat
and milk more efficiently and sustainably.
As a global company we are aware of the
regional and global risks and opportunities
linked to changes of diet. Our elite animal
genetics have a significant impact on the
whole protein value chain and benefit
multiple stakeholders. With an increasing
world population that is expected to
reach 8.6 billion in 2030, and 9.8 billion
in 2050, we recognise that there will be
regional variations in demands for animal
protein, but see an overall increasing
global demand, requiring our improved
genetics to feed a growing global
population with greater aspirations to eat
a safe, affordable, and sustainable diet.
In the next sections we will examine
our progress in each of the core
elements of TCFD reporting, being
Governance, Strategy, Risk Management,
and Metrics and Targets.
GOVERNANCE
The Board has overall responsibility and
accountability for our Climate Change
Policy and TCFD reporting. Genus’s Chief
Executive has formal responsibility for
implementing and monitoring the strategy
to manage climate-related risks and
realise the opportunities, and the Board
reviews the business’s annual budgets,
strategic plans and capital investments
to ensure that the Company’s climate
change action plans are implemented
and integrated into the Company’s
wider financial planning and strategy.
STRATEGIC REPORT These activities are described in further
detail below.
Risks and opportunities
identification project
We performed a detailed business-
wide review of all sustainability risks
(this included climate change) and
opportunities, with an update to include
an assessment of risks and opportunities
by geographic region. We ran a series
of workshops to validate the risks and
opportunities within finance, sustainability,
and business leadership teams across
Genus. We ensured that we had a
common understanding of the risk
horizon, the qualitative understanding
of the risk impact to our financial
position and the variation within the
geographical regions where we operate.
We have also taken the decision to
align our use of climate scenarios with
the latest TCFD Recommendations
and Recommended Disclosures. The
risk assessment was between RCP 2.6
climate scenario (where global warming
is limited to below 2°C of pre-industrial
temperatures) and RCP 8.5 (which
assumes business as usual and therefore
catastrophic global warming of 4.5°C).
Qualitative Assessment
of Risks and Opportunities
We commissioned Marsh Consulting
to undertake a deep-dive qualitative
assessment of the following climate
change risks – sea level rise, riverine
flooding, flash flooding, drought,
extreme temperatures, cyclone and
wildfires. The sources utilised for this
analysis include private risk information
providers, such as Think Hazard, and
global entities such as the World Bank.
Academic sources were also used to gain
a qualitative understanding of specific
regional complexities to complement
the quantitative risk data. Marsh also
reviewed relevant news sources to gather
information on local natural disasters
that have occurred in recent years.
47
GENUS PLC / ANNUAL REPORT 2023
Sustainability Committee
Genus updated its oversight on climate-
related issues in FY23 to ensure that
climate change risks and opportunities
receive management focus at the highest
level. As a result of this review, all members
of the GELT as well as the Chairman of
the Board’s Audit & Risk Committee have
been appointed to the Sustainability
Committee, alongside operational
leaders, and subject matter experts with
accountability for delivering the Group’s
sustainability objectives, including
emissions reduction. The Sustainability
Committee meets three times a year and
is chaired by Genus’s Chief Executive.
Remuneration Policy
Genus has incorporated incentives for
the management of climate-related
issues into its remuneration policy for
Executives. Strategic objectives covering
strategy, leadership and culture,
innovation, and sustainability account
for 25% of the Executive Directors’ and
other Group executives’ total annual
bonus opportunity. From FY23 20% of
the Performance Share Plan opportunity
for the Executive Directors is linked to
the delivery of specific actions targeted
at emissions reductions within the
Company’s operations and driving
genetic improvements which make our
customers’ operations more efficient
and sustainable (see page 103).
STRATEGY AND RISK MANAGEMENT
Strategy
In the short to medium term, the most
significant impacts for Genus and its
strategies around porcine and bovine
genetic improvement are likely to arise
from transition risks, specifically policy-
driven carbon price increases. This
risk may impact the cost of feed and
electricity used in the animal protein
supply chain, increasing the price of the
product for the consumer in some regions.
We also recognise consumer preference
and technological change could have
an impact on our business strategies.
Genus believes that our ongoing
climate change mitigation activities, in
connection with our genetic improvement
programmes and our carbon footprint,
along with our continued investment in
R&D, will continue to deliver sustainability
and environmental benefits.
Genus derives almost all of its revenue
from products and services that make
a positive contribution towards climate
change mitigation and adaptation,
by breeding animals which are healthier,
grow faster, consume less feed and emit
fewer emissions, whilst being more
profitable for the farmers. We see strong
demand for our improved genetics, and
anticipate that this demand will grow over
time, particularly where customer demand
is supported and stimulated by
decarbonisation policies.
Our current actions to reduce emissions,
BCPs and the isolated location of our
facilities provide additional climate
change mitigation and adaptation
benefits that will seek to ensure that, in the
short to medium term, there is no material
detriment to our business. In the longer
term, increases in the frequency and
severity of physical risks, such as extreme
weather events, water stress and higher
ambient temperatures could have a
greater potential to impact sites, supply
networks and consumer value chains,
whilst changes to regional climates may
lead to changes to costs, the availability
of raw materials, and the ability of our
customers to produce feed and livestock.
Risk Management
As part of our Group Risk Management
process, the Sustainability Committee
oversees our sustainability principal risk,
including the impacts of climate change.
For more information, see page 61. The
Sustainability Committee oversees the
Company’s performance against its
emissions reduction targets and makes
recommendations to the Board in relation
to our business strategy and risk
management processes.
We regularly review and update our
sustainability risks, including climate
change, and update our Group Risk
Registers. We include in our review
climate-related risks for alternative
climate scenarios (1.5°C and 4.0°C of
warming). This has informed our risk
descriptions and management response
in relation to our aim to lead the market in
climate-focused breeding and our focus
towards our customers’ challenge of
managing fluctuations in animal feed
costs which we believe will be
exacerbated by climate-related factors
over the medium to long term.
Climate-Related Risks and Opportunities
– Identification, Determining Materiality
At the end of FY22, Genus had not
complied with TCFD Recommendations
and Recommended Disclosures to
undertake a qualitative and quantitative
assessment of our climate-related risks
and opportunities under different climate
scenarios. We had only undertaken a
limited qualitative analysis of climate-
related risks and opportunities for
alternative climate scenarios (RCP 2.6
versus RCP 4.5) and this had previously
been used to form an initial risk description
and management response.
We enhanced the risk and opportunity
assessment process through the
following initiatives:
• Risks and opportunities
identification project;
• Qualitative risks and opportunities
assessment, using Marsh
Consulting; and
• Quantitative risks and opportunities
scenario analysis using a big four
environmental consultancy team.
STRATEGIC REPORT 48
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY REPORT CONTINUED
TCFD STATEMENT CONTINUED
FY23 Risk and Opportunity Identification and Management Process
The table opposite shows the most
significant physical and transition risks
identified by Genus and the qualitative
assessment of their impact through the
Marsh input. Our risk assessment included
over one hundred individual risks that
have been assessed as being of minor
concern because they are either unlikely
to materialise or they are of low materiality
for our business. The risks identified
opposite are those we consider most
significant. In line with the requirements
of the TCFD, we have assessed how these
risks may vary by region. Generally, most
of the risks apply at a global level, but in
some cases, we have considered specific
geographies, supply chain and transition
risks at a market level (i.e., diet change
for environmental and climate reasons).
We will continue to keep these risks under
review, and to evaluate market trends
over time and by region and market
demographics, where appropriate.
Genus assesses risk by considering
the likelihood of the risk or opportunity
materialising within the time horizons
noted in the time horizons table and
having a potential financial impact of
>£3m. Where risks are deemed to be high
or medium, they have received additional
focus, and we plan to look at additional
climate mitigation actions in FY24. Once
the mitigating actions have been agreed,
we will re-score the risk, minus the impact
of the mitigating actions, to ensure we
have reached an acceptable level of risk
or to identify further mitigation activities.
In FY24, we will disclose how we have
improved our physical climate risk
exposure. The changes may be relatively
small given that our sites are not exposed
to significant physical climate risks,
because they are reasonably isolated
and not near forested areas, the coast or
major rivers. For the purposes of this report
we have only presented the gross-risk
score (i.e., pre-mitigation and re-scoring).
This simple assessment helped Genus to
prioritise our operational sites where there
is the greatest potential for a material
loss or disruption to our operations.
RISK OR
OPPORTUNITY
TIME HORIZON
POTENTIAL IMPACT
VARIATION BY REGION
HOW WE MANAGE RISKS
1-2
YEARS
3-5
YEARS
5+
YEARS
UK/EU
NAM
LATAM
ASIA
s
k
s
i
R
l
a
c
i
s
y
h
P
s
k
s
i
R
n
o
i
t
i
s
n
a
r
T
Extreme weather events disrupting
the value chain or our operations
(e.g. flooding, drought, extremes of
temperature, cyclones, and wildfires
impacting the value chain, including
the cost of raw materials).
Increased prevalence of pests,
diseases, and zoonotic infections
(e.g. climate change expands
the range and rate of spread
for diseases).
Risks to critical infrastructure
(e.g. risk to critical facilities or utilities,
including increased costs of, or
disruption to, water, energy,
transport, information technology).
Increasing consumer interest
in alternative proteins.
Failure to produce genetic
improvement that adapts to
different climatic environments.
Influence of regulators, investors,
or other stakeholders
(e.g. increased disclosure
requirements in the medium
to long term).
Government policies encouraging
carbon emissions reduction
(e.g. carbon pricing which is a cost or
incentive imposed by governmental
or sub-governmental authority
on carbon emissions, generating
a financial motivation for companies
to decarbonise).
1. Review the existing infrastructure (i.e., that outside of our business) and supply
chain to evaluate the robustness in the event of regional/countrywide weather event,
and review BCPs.
2. Identify any opportunities for value chain diversification across different locations
to reduce the impact of localised disruptions.
3. Review existing insurance policies and BCPs along with identifying key sites that
warrant investment to mitigate risks.
1. Identify the regions where in the long-term new pests, diseases and zoonotic
infections may migrate to.
2. Review the biosecurity and BCP controls to ensure they remain fit for purpose.
1. Periodically, conduct a comprehensive infrastructure vulnerability assessment
to identify potential weak points and develop contingency plans to update
BCP processes.
2. Continue to diversify and secure alternative sources of energy and transportation
to reduce reliance on vulnerable infrastructure.
3. Recognise that some regions have less resilient infrastructure and stress test the
BCP plans and assumptions on a more regular basis with the need for extended
resilience measures.
in other regions.
1. Watching brief. In the EU/UK we may see reduced protein consumption linked to
environmental concerns or government policy, balanced by increased consumption
1. Genus is well placed to produce elite genetics or cross breeds that are suited
2. Ensure that product development and R&D processes continue to manage these
to different climatic environments.
genetic improvement opportunities.
1. EU/UK greater focus on disclosure and interest from stakeholders versus other regions.
The LCAs will provide third-party validation and a strong business case for our genetics.
2. In the short to medium term we are likely to see the greatest changes in EU/UK/US
markets. Ensure environmental legislation register continues to be updated to monitor
changing regulations and ensures compliance with applicable legal requirements.
3. Genus is well placed to produce elite genetics that are suited to different climates.
Ensure that product development and R&D processes continue to manage these
genetic improvement opportunities.
1. Genus is well placed to produce elite genetics that will reduce GHG emissions.
2. Continued refinement of risks and opportunities through focused R&D programmes.
3. EU/UK greater focus on disclosure and interest from stakeholders versus other regions.
The LCAs will provide third-party validation and a strong business case for our genetics.
STRATEGIC REPORT
49
GENUS PLC / ANNUAL REPORT 2023
KEY TO TABLE
Low risk
Medium risk
High risk
Opportunity
No material difference relative to the global risk
Elevated relative to global risk
Low relative to global risk
RISK OR
OPPORTUNITY
1-2
YEARS
3-5
YEARS
5+
YEARS
TIME HORIZON
POTENTIAL IMPACT
VARIATION BY REGION
HOW WE MANAGE RISKS
UK/EU
NAM
LATAM
ASIA
s
k
s
i
R
l
a
c
i
s
y
h
P
s
k
s
i
R
n
o
i
t
i
s
n
a
r
T
Extreme weather events disrupting
the value chain or our operations
(e.g. flooding, drought, extremes of
temperature, cyclones, and wildfires
impacting the value chain, including
the cost of raw materials).
Increased prevalence of pests,
diseases, and zoonotic infections
(e.g. climate change expands
the range and rate of spread
for diseases).
Risks to critical infrastructure
(e.g. risk to critical facilities or utilities,
including increased costs of, or
disruption to, water, energy,
transport, information technology).
Increasing consumer interest
in alternative proteins.
Failure to produce genetic
improvement that adapts to
different climatic environments.
Influence of regulators, investors,
or other stakeholders
(e.g. increased disclosure
requirements in the medium
to long term).
Government policies encouraging
carbon emissions reduction
(e.g. carbon pricing which is a cost or
incentive imposed by governmental
or sub-governmental authority
on carbon emissions, generating
a financial motivation for companies
to decarbonise).
1. Review the existing infrastructure (i.e., that outside of our business) and supply
chain to evaluate the robustness in the event of regional/countrywide weather event,
and review BCPs.
2. Identify any opportunities for value chain diversification across different locations
to reduce the impact of localised disruptions.
3. Review existing insurance policies and BCPs along with identifying key sites that
warrant investment to mitigate risks.
1. Identify the regions where in the long-term new pests, diseases and zoonotic
infections may migrate to.
2. Review the biosecurity and BCP controls to ensure they remain fit for purpose.
1. Periodically, conduct a comprehensive infrastructure vulnerability assessment
to identify potential weak points and develop contingency plans to update
BCP processes.
2. Continue to diversify and secure alternative sources of energy and transportation
to reduce reliance on vulnerable infrastructure.
3. Recognise that some regions have less resilient infrastructure and stress test the
BCP plans and assumptions on a more regular basis with the need for extended
resilience measures.
1. Watching brief. In the EU/UK we may see reduced protein consumption linked to
environmental concerns or government policy, balanced by increased consumption
in other regions.
1. Genus is well placed to produce elite genetics or cross breeds that are suited
to different climatic environments.
2. Ensure that product development and R&D processes continue to manage these
genetic improvement opportunities.
1. EU/UK greater focus on disclosure and interest from stakeholders versus other regions.
The LCAs will provide third-party validation and a strong business case for our genetics.
2. In the short to medium term we are likely to see the greatest changes in EU/UK/US
markets. Ensure environmental legislation register continues to be updated to monitor
changing regulations and ensures compliance with applicable legal requirements.
3. Genus is well placed to produce elite genetics that are suited to different climates.
Ensure that product development and R&D processes continue to manage these
genetic improvement opportunities.
1. Genus is well placed to produce elite genetics that will reduce GHG emissions.
2. Continued refinement of risks and opportunities through focused R&D programmes.
3. EU/UK greater focus on disclosure and interest from stakeholders versus other regions.
The LCAs will provide third-party validation and a strong business case for our genetics.
STRATEGIC REPORT
50
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY REPORT CONTINUED
TCFD STATEMENT CONTINUED
TIME HORIZONS AND MATERIALITY
We use the following definitions and classifications to help us ensure alignment of the TCFD qualitative and quantitative
scenario analysis with our existing annual and strategic business planning cycles (see table below). We have set the
materiality threshold at £3m, which is consistent with our internal risk management assessment process.
Genus Time Horizon
Alignment within Genus
Scenario Analysis Time Horizon
Short
0–2 years
(2023–2025)
Medium
3–5 years
Long
5+ years
0–2 years linked to our annual business planning and risk management cycle.
N/A
3–5 years links to our strategic planning cycle, but it also captures the transition
risks and opportunities, and links to the planned R&D investment cycle (which is
also linked to government funded opportunities with this time horizon).
Short-term
(2023–2030)
5 years plus runs beyond our normal strategic planning cycle. This captures
physical and transition risks over the longer term, our achievement of net zero
goals, and emerging risks and opportunities that we are tracking.
Medium Term
(2031-2040)
Asset planning and depreciation is evaluated and considered by Genus within
these timeframes. See note 17 To the Group Financial Statements for the Year
ended 30 June 2023.
Long Term
(2041–2050)
Quantitative Scenario Analysis
Genus also sought a consultant’s
support to conduct scenario analysis to
understand the potential financial impact
of key physical and transition risks and
opportunities. The scenario analysis also
supports Genus with strategic business
planning as findings from scenario
analysis can highlight key elements of
a possible future and draw attention
to the key factors that will drive future
developments. The scenario analysis
sought to review and shortlist key risks and
opportunities to be quantified relating to:
• Transition risks and opportunities –
carbon pricing, electricity cost (energy
transition), raw material costs.
• Physical risks – across 11 key Genus sites
in the US, Canada, UK and Brazil (but not
including Asia).
A scenario analysis is a tool used to explore
different futures, by capturing different
assumptions about policy and physical
climate impacts to project into a range
of potential future outcomes. The main
benefits of the scenario analysis are its
value in informing strategic business
decisions, in that we can: (i) enhance
our risk management and identify
potential new revenue opportunities;
(ii) identify the appropriate climate
change adaptation and mitigation
options to support our transition; and
(iii) meet regulatory requirements and
provide enhanced disclosures to our
stakeholders. However, there are limitations
as scenarios are hypothetical, usually
limited in scope and do not encompass
all business activities or locations.
The significance of any exposure was
assessed in line with Genus’s materiality
threshold of £3m and the data from the
Marsh qualitative analysis was reviewed
and used to assess the physical and
transition risks for the scenario analysis.
Scenario Analysis – Method
The scenario analysis modelled the
impacts for the 1.5°C (Paris agreement
aligned) and 4°C (Business as usual)
climate projections and across the
Shared Socioeconomic Pathway 2 (‘SSP2’)
transition pathway and used the ‘best-
fit’ sectors for Genus (i.e., agriculture,
manufacturing and energy intensive
technology). These climate scenarios are
considered to highlight the variation in
risks and opportunities directly, and model
‘best-case’ and ‘worst-case’ outcomes for
our business and the planet. The scenario
analysis used our financial data from FY22,
because this data had been audited and
the FY23 financials were still incomplete.
The scenario analysis assessed physical
risk at 11 Genus sites (see figure opposite)
using consistent assessment criteria which
included both physical and transition
risks. We have modelled price changes
for our key raw materials (i.e., soya and
corn) where we have an active hedging
strategy. Energy costs and usage were also
modelled for the 11 Genus sites. The outputs
from the qualitative review of climate-
related risks and opportunities were
considered, through a series of reviews and
workshops to enable the transition risks to
be rationalised for the scenario analysis
to those shown in the table on page 48. It
should be noted that some of our transition
risks were deemed to be intangible and
therefore unsuitable for modelling at this
stage. For example, we explored how
diet change and interest in alternative
proteins could impact our business
in the short, medium, and long term.
Unfortunately, the diet change transition
risk is extremely difficult to quantify and
model, and we will continue to manage
this risk and opportunity using a qualitative
assessment. Other climate risks such as
new regulations, influence of investors,
stakeholders, and disclosure requirements
were also deemed to be unsuitable for the
quantitative scenario analysis. The scenario
analysis does not model transition risks
associated with access to, or the cost of
water, or the interaction with biodiversity.
STRATEGIC REPORT SELECTED CLIMATE SCENARIOS
AND QUANTIFICATION
•
In line with TCFD Recommendations
and Recommended Disclosures, our
consultants have considered Genus’s
climate risks and opportunities
against two temperature pathways,
1.5°C (Paris-aligned) and 4°C
(business-as-usual).
• Both scenarios are aligned to the
SSP2, which also feeds into the
IPCC’s sixth assessment report.
• The scenarios were selected to
represent two potential outcomes of
global emission trajectories and their
potential financial impact for Genus.
• The scenario analysis conducted
to quantify Genus’s key risk involved
overlaying Genus specific scope
and data (e.g. electricity cost/
volume and Scope 1 emissions)
with a proprietary integrated
assessment models economic and
climate science impact projects to
calculate the cost of decarbonising
the economy. The carbon price used
is calculated as the cost to the
economy in order to meet a
1.5°C scenario.
51
GENUS PLC / ANNUAL REPORT 2023
When considering emissions across both
scenarios, emissions decline significantly in
a 1.5°C scenario due to decarbonisation
measures across all sectors and countries.
Residual emissions derive from hard-to-
abate sectors such as steel, cement and
petrochemicals. In a 4°C scenario global
emissions still grow notably.
In each climate transition pathway,
economic and sector performance was
aligned with SSP2 which was a middle
of the road assumption, with moderate
population growth levelling in the second
half of the century, and GDP growing in line
with historical trends.
The consultant constructed a proprietary
economic model that calculates multiple
variables for the future climate and
economic projects (e.g., labour supply
and costs, cost and availability of capital,
carbon emissions, economic activity,
price changes for key commodities).
The output is then used to assess
how Genus’s financials are potentially
affected in these potential futures.
Method for assessment of Genus’s
transition risks, sites and scenario
analysis parameters.
SELECTION METHODOLOGY
• Our consultants considered Genus’s
documents and data for physical
and transition themes to identify
a long-list of relevant risks
and opportunities.
• We reviewed the impact/likelihood
as well as specificity of transition
risks to determine a short-list of risks
for quantified scenario analysis. For
physical risk analysis on Genus sites,
we assessed site replacement value,
strategic importance, and existing
physical hazard analysis to down-
select a proposed list.
In workshops, we identified and
agreed upon three key transition
risks and opportunities, as well as 11
Genus sites for a deep dive physical
risk assessment.
•
• Risks and opportunities that
are relevant but identified to be
non-quantifiable were excluded.
We have provided some qualitative
narrative in this annual report. Risks
classed as non-quantifiable are
those that, while may be significant,
are broad, without clear metrics
used to track materiality necessary
for quantified scenario analysis.
The regions and locations that were
assessed for the scenario analysis for
both transition and physical climate risks.
2
1
4
3
2. CANADA
• Atlas
• Aurora
3. BRAZIL
• Uberaba
4. UK
• Ruthin
• Towcester
1. USA
• Apex
• Dekorra
• DeForest
• Leeds
• Waunakee
• Windsor
(Pepsi Way)
The consultant used workshops to identify
three key transition risks and opportunities
(carbon pricing, electricity cost, and raw
material cost) in addition to the physical risk
assessment of the 11 sites.
As mentioned, the consultant considered
Genus’s climate risks and opportunities
against a 1.5°C and a 4°C pathway. In a
1.5°C scenario, GDP is shown to increase
over time across all countries, with all
developed/service-based economies
faring well, including countries included in
this analysis: the USA, UK, Canada and
Brazil. Economic performance is relatively
constrained in Canada and the USA when
compared to a 4°C scenario, due in part to
carbon pricing. In comparison, constraints
in Brazil’s economy in a 1.5°C scenario are
offset by a relatively low carbon price and
already significant hydropower generation,
resulting in a lower cost of transition relative
to other emerging economies. In a 4°C
scenario, GDP could increase at a greater
rate in all countries. In particular, emerging
economies grow at an accelerated pace in
this scenario. This is driven by business-as-
usual production pathways with no further
policy intervention to curb emissions,
thereby avoiding potential lost production,
stranded labour or assets.
STRATEGIC REPORT 52
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY REPORT CONTINUED
TCFD STATEMENT CONTINUED
Scenario Analysis – Findings
The findings of the scenario
analysis indicate:
• Genus’s most significant risk is carbon
cost – carbon pricing poses a potentially
significant financial impact to Genus
in a 1.5°C scenario, with the analysis
indicating an additional annual cost
of approximately £22m (NPV from
2022-2050 ~£53m) by 2050 for Scope 1
emissions (e.g. fuel and livestock) across
the 11 sites. At present, Genus currently
does not incur any carbon costs at
these sites.
• An opportunity to reduce electricity
cost through the use of renewables in
countries where the electricity grid is
fossil fuel based. There is a greater risk
to Genus’s electricity cost from carbon
pricing in a 1.5°C scenario. On an annual
basis, the electricity cost in a 1.5°C
scenario will be around £1.8m by 2050.
• There are limited physical risks to Genus
sites from extreme weather, with risk
highlighted at the low level across
extreme heat, extreme wind, soil
subsidence and forest fire.
• There is limited physical risk for feed and
raw materials. The transition risk for raw
materials and feed costs also indicated
a low significance.
Potential Financial Impact NPV
The scenario analysis showed that Genus’s
physical risk exposure at its 11 sites is
limited. The table below, quantifies the
exposure at the sites to physical risk
including, extreme heat, forest fires,
extreme wind and soil subsidence.
The 2025 physical risk figures only include
potential business interruption, but from
2030 to 2050 the figures include additional
costs that could be associated with site
damage. While the risk is limited, the
aggregated financial impact for extreme
heat could become more significant
between 2040 and 2050.
Type
Risk/Opportunity
Extreme Heat1
Aggregated Potential Impact
(2050 NPV)
£1.2m
Business interruption
by 2050 for NAM
Forest Fires
£0.2m
Negligible for
most sites
k
s
R
i
l
i
a
c
s
y
h
P
Extreme Wind
<£0.2m
Limited, but more
likely in the USA
Soil Subsidence <£0.2m
Potentially low
financial impact
Region
NAM
EMEA
LATAM
NAM
EMEA
LATAM
NAM
EMEA
LATAM
NAM
EMEA
LATAM
Genus (2025)
Short (2030)
Medium (2040)
Long (2050)
Genus (2025)
Short (2030)
Medium (2040)
Long (2050)
Drivers and if no mitigating actions taken by Genus
1.5°C Scenario
4°C Scenario
Local temperatures changing based on climate
projections. Heat extremes are assumed to
be associated with site disruption rather than
asset damage.
Change in local temperature, humidity, wind speeds
and forest fire prone land based on climate projections.
Very few of Genus’s sites are near heavily forested
areas. Across all assets the overall financial impact is
negligible in both scenarios, but more likely for Brazil
and DeForest in a 4°C scenario.
Change in baseline wind gust speed based on
changing weather systems. Analysis does not include
tropical cyclones, hurricanes or tornadoes because
these are difficult to predict and model at an
appropriate scale.
Change in soil moisture, and for soils that are
particularly prone to shrinkage during prolonged
drought occurring at a site’s location, increases the
probability of soil subsidence that results in damage
to buildings, drainage, and other site infrastructure.
1 Extreme heat only considers the impacts to business disruption such as drought, but not the direct impacts on the welfare of our people and livestock. We are aware that
extreme heat can cause semen production and quality to drop in our bulls. This will be an area for more detailed discussion and future analysis. The scenario analysis indicates
we have sufficient time to review and implement cost-effective mitigation options before 2040-2050
STRATEGIC REPORT
53
GENUS PLC / ANNUAL REPORT 2023
KEY TO SCENARIO POTENTIAL IMPACTS
Potential saving
Potential costs
Low <£1m
Medium £1-3m
High >£3m
Type
Risk/Opportunity
(2050 NPV)
Genus (2025)
Short (2030)
Medium (2040)
Long (2050)
Genus (2025)
Short (2030)
Medium (2040)
Long (2050)
Drivers and if no mitigating actions taken by Genus
Potential Financial Impact NPV
1.5°C Scenario
4°C Scenario
Local temperatures changing based on climate
projections. Heat extremes are assumed to
be associated with site disruption rather than
asset damage.
Change in local temperature, humidity, wind speeds
and forest fire prone land based on climate projections.
Very few of Genus’s sites are near heavily forested
areas. Across all assets the overall financial impact is
negligible in both scenarios, but more likely for Brazil
and DeForest in a 4°C scenario.
Change in baseline wind gust speed based on
changing weather systems. Analysis does not include
tropical cyclones, hurricanes or tornadoes because
these are difficult to predict and model at an
appropriate scale.
Change in soil moisture, and for soils that are
particularly prone to shrinkage during prolonged
drought occurring at a site’s location, increases the
probability of soil subsidence that results in damage
to buildings, drainage, and other site infrastructure.
Aggregated Potential Impact
Extreme Heat1
£1.2m
Business interruption
by 2050 for NAM
Forest Fires
£0.2m
Negligible for
most sites
k
s
i
R
l
a
c
i
s
y
h
P
Extreme Wind
<£0.2m
Limited, but more
likely in the USA
Soil Subsidence <£0.2m
Potentially low
financial impact
Region
NAM
EMEA
LATAM
NAM
EMEA
LATAM
NAM
EMEA
LATAM
NAM
EMEA
LATAM
STRATEGIC REPORT
54
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY REPORT CONTINUED
TCFD STATEMENT CONTINUED
The scenario analysis also concluded that
Genus’s overall transition risk exposure
is limited. The table below identifies the
transition risks of carbon price, energy and
raw materials (expressed with no mitigating
actions) and an aggregated potential
financial impact to 2050.
Type Risk/Opportunity
Aggregated Potential Impact
(2022-2050 NPV)
Carbon Cost Potential exposure of
£53.3m concentrated
in USA and Canada
Energy
Transition
Potential Exposure of
£2.0m with the USA
more exposed
A failure of sufficient action to decarbonise
the business could lead to significant
costs in the future of approximately
£53m in net present value in a 1.5°C
scenario for carbon taxation and pricing,
along with an additional potential
exposure of approximately £2m in
electricity costs. In each case, much
of the additional cost impacts were in
the US with a lower share of renewable
energy, and more aggressive transition
towards the Paris agreement goals.
The Next Steps
Following the scenario analysis, it is
anticipated that the following will occur:
• Continued review and analysis of the
implications of the scenario analysis;
• Embedding the scenario analysis within
the business to seek to mitigate risks
and capture opportunities;
• Conduct a broader scenario analysis
which includes Genus’s Asian sites;
• Create a more holistic transition
plan; and
Improve Scope 3 emissions data.
•
Region
Genus (2025)
Short (2030)
Medium (2040)
Long (2050)
4°C Scenario
Potential Financial Impact NPV
1.5°C Scenario
NAM
EMEA
LATAM
NAM
EMEA
LATAM
Not applicable
– The scenario
analysis
considers
the potential
remaining
exposure
between a BAU
4°C scenario
and the
transition to a
1.5°C scenario.
i
k
s
R
n
o
i
t
i
s
n
a
r
T
Raw Materials
(Corn)1
Low Risk £0.1m
NAM
None
EMEA Not applicable because corn is not used in this
region’s operations.
LATAM Not applicable because corn is not used in this
region’s operations.
Raw Materials
(Soya)1
Low Risk £0.9m
NAM
EMEA
LATAM
KEY TO SCENARIO POTENTIAL IMPACTS
Potential saving
Potential costs
Low <£1m
Medium £1-3m
High >£3m
1 Physical risk analysis for heat stress on crop production, water availability etc
have not been considered as part of this initial scenario analysis
STRATEGIC REPORT
55
GENUS PLC / ANNUAL REPORT 2023
In view of the impact our products have
on carbon emissions in our value chain,
we have adopted genetic improvement
targets which consider generational
change in the carbon impact of pork,
beef and dairy products. We believe
that animal genetics are core to helping
producers meet the increased demands
for affordable, nutritious food for all, using
fewer resources of water, energy and
land, at a fraction of the greenhouse gas
emissions of alternative systems. Through
our genetic improvement programmes,
which we have pioneered over many
decades, we offer our customers an
opportunity for measurable reductions
in their carbon emissions, use of water,
land and other natural resources.
The figures in the table overleaf highlight
the value our genetics provide per animal.
The real strength of our elite genetics
builds down successive generations and
with the number of animals produced by
our farmers across the globe. When we
have completed our LCA for our porcine
and bovine beef genetic lines, we will be
able to provide an accurate assessment of
the value our genetics brings to the value
chain and the corresponding savings in
carbon emissions.
METRICS AND TARGETS
Genus has committed to climate-related
carbon reduction targets to drive
performance in areas both directly
controlled by us and which provide
usefulness across our value chain, including:
• Total Scope 1 & 2 emissions;
• Primary Intensity Ratio (Tonnes of
CO2e/Tonne Live weight of animals
produced); and
• Genetic Improvement (separate indices
for Pork, Beef and Dairy sectors)
Genus also has goals and incentives for
Executives and executive management
for these climate-related targets
(see Remuneration Committee Report).
Scope 1 and 2 emissions
and Primary Intensity Ratio
Our total Scope 1 and 2 emissions and PIR
targets, and performance against those
targets, are set out on page 43.
Genetic Improvement Targets
We believe genomic approaches to
animal breeding offer the most cost-
effective way to lower carbon emissions.
Our approach focuses not only on
improved animal performance, but also
on improved health and wellbeing, which
has the potential to reduce the need for
antibiotics and veterinary care. We are
pioneering a number of breakthrough
technologies, such as gene editing and
advanced reproductive techniques.
These offer an immediate and effective
response to food security threats such as
those posed by novel viruses like PRRS.
STRATEGIC REPORT 56
GENUS PLC / ANNUAL REPORT 2023
SUSTAINABILITY REPORT CONTINUED
TCFD STATEMENT CONTINUED
GENETIC
IMPROVEMENT
TARGETS
PORCINE
TARGET DESCRIPTION
KPI
FY23 KPI
ACHIEVED
COMMENTARY
2.22 kg reduction in life
cycle carbon emissions
required to produce one
market pig.
One standard deviation of
improvement equivalent to
20 index points on PIC’s
proprietary index. -2.22 kg
CO2e per market pig.
22.4 points
improvement in
PIC index per
market pig.
The improvement of the PIC
index translates into a reduction
of 2.18 kg CO2e per market pig
in FY23.
We will be seeking to replace
this metric in FY24 with data
obtained from our peer
reviewed LCA.
Reduction of 0.287 kg CO2e/kg
carcass weight exceeds
target of 0.127 kg CO2e/kg
carcass weight.
The work to develop a beef LCA
will over time replace this metric.
Annual improvement of $NM 133
index, exceeding annual
improvement target of $NM 66.9.
FY23-sired cows would produce
279 kg less CO2e than the
FY22-sired cows to produce
the equivalent amount of
lifetime milk.
BOVINE
— BEEF
0.127 kg reduction in the
life cycle carbon emissions
required to produce 1 kg
of beef.
Change in feed conversion
ratio (‘FCR’) of 0.8, equivalent
to a yearly change in CO2e
emissions of 0.127 kg CO2e/kg
carcass weight.
0.287 kg CO2e/kg
carcass weight.
BOVINE
— DAIRY
Yearly improvement
of $66.9 in the $ net
merit index (a public
US dairy industry index
measuring commercial
performance traits).
Yearly improvement of $NM
66.9 index.
$NM 133
For a detailed explanation of our genetic improvement targets, how these targets are calculated,
and the impact of genetic improvement on the animals ultimate carbon footprint, see our website:
www.genusplc.com/sustainability.
STRATEGIC REPORT 57
GENUS PLC / ANNUAL REPORT 2023
NON-COMPLIANCE WITH THE TCFD
RECOMMENDATIONS AND
RECOMMENDED DISCLOSURES
Strategy and Risk Management
We have not complied with Strategy
recommendations B and C. TCFD requires
companies to describe the impact of
climate related risks and opportunities on
the organisation’s business, strategy, and
financial planning and to describe the
resilience of the organisation’s strategy,
taking into consideration different climate
related scenarios, including a 2°C or lower
scenario. We have recently undertaken our
first scenario analysis (see above), which
assessed the physical and transitional
risks and opportunities at 11 sites. We will
expand this assessment to additional
Genus sites in FY24, as well as performing
a quantitative analysis of the Company’s
climate-related opportunities. In relation
to the scenario analysis, we note that
we need more time to: (i) fully evaluate
the scenario analysis findings; (ii) review
and update our climate transition plan;
and (iii) fully understand how we can
work in partnership with our value chain
to drive down Scope 3 emissions. This
will be the focus of further work in FY24.
Metrics and Targets
We have not complied with Metrics and
Targets recommendations B and C.
TCFD requires companies to disclose
Scope 1, Scope 2, and if appropriate,
Scope 3 emissions, and the related
risks, and describe the targets used by
the organisation to manage climate-
related risks and opportunities, including
the performance against targets.
Whilst we have disclosed our Scope
3 emissions relating to business travel
and waste management, we have not
yet established a robust baseline for
our Scope 3 value chain emissions, nor
have we published details of how the
boundary for the Scope 3 emissions
has been set. In addition, we do not yet
have the processes and governance
in place to enable us to work with our
strategic value chain partners to agree
and deliver Scope 3 emission reductions.
In FY24, we will use the scenario analysis to
inform and update our transition plan and
road map (see page 44). In addition, we will
examine and report on material porcine
Scope 3 emissions and follow this in FY25
with material beef Scope 3 emissions.
STRATEGIC REPORT 58
GENUS PLC / ANNUAL REPORT 2023
STAKEHOLDER ENGAGEMENT
The Group actively
engages with its
stakeholders, to keep them
updated and ensure we
understand their priorities.
We look to understand our customers’
and consumers’ priorities, support
our employees in pursuing our
strategic goals and maintain strong
relationships with shareholders
while being a responsible and
environmentally conscious citizen within
our communities. The Board carries
out some engagement directly, while
other engagement occurs during the
running of the business, with the Board
being kept informed through reports
from management. The table opposite
describes our key stakeholders and
examples of engagement during
the year and actions which arose.
CUSTOMERS AND CONSUMERS
Board representative:
All Directors
HOW WE ENGAGE
KEY ISSUES IDENTIFIED
• The Board visits key customers
• Need for a high-quality
customer experience at an
appropriate cost to serve
ACTIONS ARISING
• Continued to roll out GenusOne
for customers in Latin America,
Europe and the UK
• The Board scrutinised ABS
management’s strategy, plans
and actions to address its
go-to market approach in
five key markets
and operators at different levels
of the supply chain, including
meeting with farmers, meat
packers and processors,
to understand what they
look for in genetics to meet
consumer demands
• Regular Board updates on
targeted customers and
customer wins
• Regular customer visits as part
of our service offering, enabling
our teams to work closely with
customers to better understand
their needs
• Keeping under review growth of
alternative non-animal proteins,
in light of consumer preference
EMPLOYEES
Board representative:
Lesley Knox, Lykele van der Broek
HOW WE ENGAGE
KEY ISSUES IDENTIFIED
• Direct engagement by
Workforce Engagement Directors
• Employee Your Voice survey
• Chief Executive video updates,
manager-led updates and
updates via intranet following
results announcements
• Global town hall meetings
• Leadership calls and quarterly
manager briefings
•
Improvement areas raised in the
Your Voice survey:
– Strengthen employee
experience
– Learning and development
– Increase focus on
sustainability
– Health and safety
ACTIONS ARISING
• Regular internal communications
• The Board reviewed feedback
from management
• Employee-led resource groups
• Health and safety training
programme and regular
updates/briefings
from employees received directly
and continued to monitor
management’s plans to address
the key points raised in the FY22
Your Voice survey
• Ensuring safe working
environments with a strong focus
on health and safety strategy
and culture
STRATEGIC REPORT 59
GENUS PLC / ANNUAL REPORT 2023
SHAREHOLDERS
Board representative:
Iain Ferguson
HOW WE ENGAGE
KEY ISSUES IDENTIFIED
•
Investor roadshows, led by the
Chief Executive and Chief
Financial Officer
• Results announcements,
presentations and webcasts
• AGM and trading update in
November 2022
• Annual Report
• Regular news flow on
key developments
• Shareholder consultation on
governance matters
• Ongoing shareholder interest in
sustainability and environmental
performance
ACTIONS ARISING
•
Continued focus on
sustainability (see page 36 to 57)
T
R
O
P
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R
C
G
E
T
A
R
T
S
I
COMMUNITIES AND ENVIRONMENT
Board representative:
Lysanne Gray
HOW WE ENGAGE
KEY ISSUES IDENTIFIED
• A range of placement and
employment opportunities
offered for students
and apprentices
• Support for charities close
to local businesses
• Providing educational support
•
for agriculture and animal
science programmes
Investing in activities designed
to reduce GHG emissions,
consistent with our Climate
Change Policy
• Potential impact of climate
change on the business and
our communities
ACTIONS ARISING
• The Board continued
to scrutinise management’s
strategy, plans and actions
to achieve climate
change targets
• The Board reviewed
and approved the Company’s
TCFD disclosures, including
an updated assessment of the
Company’s climate-related risks
and opportunities and related
climate scenario analysis
(see pages 50 to 54)
60
GENUS PLC / ANNUAL REPORT 2023
NON-FINANCIAL INFORMATION STATEMENT
The table below, and the information it refers to, is intended to help stakeholders understand our position on key non-financial matters
in line with the non-financial reporting requirements contained in sections 414CA and 414CB of the Companies Act 2006.
Reporting requirement
Policies and standards which
govern our approach
Environmental matters
Sustainability Framework
Risk management and
additional information
See pages 36 to 56
Employees
Global Employee Handbook;
See pages 35 to 35
Human rights
Social matters
Whistleblower Policy
Global Employee Handbook;
Whistleblower Policy
Charitable Donations Policy
Anti-corruption and anti-bribery
Anti-Bribery and Corruption Policy
See page 35
See page 35
See page 35
See page 39
See page 35
Policy embedding, due diligence
and outcomes
Global Employee Handbook
See Strategic Report on pages 1 to 33
Description of principal risks and impact
of business activity
Description of the business model
n/a
n/a
See Principal Risks and Uncertainties on
pages 61 to 64
See Business Model on pages 1 to 10
Non-financial key performance indicators
Sustainability Framework
See page 38 to 39
ENVIRONMENTAL IMPACT
Information on the Group’s environmental
impact can be found on pages 36 to 56.
Lysanne Gray is the Board’s Sustainability
Sponsor. She is a member of the
Sustainability Committee, which monitors
progress against the five pillars of the
Group’s sustainability framework including
the actions identified in the Group’s
Climate Change Policy.
TREATING SHAREHOLDERS FAIRLY
The Company’s shares are owned by a
wide range of institutional and individual
shareholders, with no shareholder having
a majority holding or significant influence
over the Group. As a result, no situations
arise in which any shareholders can be
treated differently, ensuring fair treatment
for all.
Section 172(1) of the Companies Act 2006
imposes a general duty on every company
director to act, in good faith, in the way
they consider would be most likely to
promote the success of the company for
the benefit of its shareholders. In doing so,
directors must take into account a list of
factors that include:
• the likely long-term consequences
of board decisions;
• how the company’s actions and
behaviours affect customers,
employees, suppliers, the community
and the environment;
• the desirability of maintaining a
reputation for high standards of
business conduct; and
• the need to act fairly between
shareholders.
This statement explains how the Board
has complied with its obligations under
section 172.
LONG-TERM CONSEQUENCES
OF BOARD DECISIONS
Genus has a business model and strategy
that deliver results on a multi-year basis.
For example, we target customers where
we can build long-term and mutually
beneficial relationships, rather than
seeking one-off transactions. Our
investment in R&D can also take several
years to result in revenue generating
products, meaning our success in the
short-term depends on long-term
decisions taken in previous years. As a
consequence, long-term decision making
is a natural part of the Board’s approach.
SECTION 172 STATEMENT
MANAGING OUR STAKEHOLDER
RELATIONSHIPS
To effectively consider the impact of
decisions on our stakeholders, we must
have a good understanding of their needs
and issues. We therefore actively listen
to our stakeholders at all levels of the
organisation, to ensure we take account of
and respond to their interests. Information
on how we engage with our stakeholders,
including the Board’s direct and indirect
engagement with them, can be found
on page 58 to 59.
The agenda for each Board meeting
indicates the relevant stakeholder groups
against each item, ensuring the Directors
are aware of the stakeholder interests they
need to consider in their decisions.
STANDARDS OF BUSINESS CONDUCT
The Board is aware of the need to
maintain high standards of business
conduct. The Group has a strong ethical
culture, underpinned by our values and
policies, which are endorsed by the Board.
The Group also has specific policies
and procedures to prevent bribery and
corruption, as described on pages 34 to 35
and as made available on our website
www.genusplc.com.
Maintaining high standards of business
conduct also relies on having the right
culture within the Group. Page 72
describes how the Board maintains
oversight of culture.
STRATEGIC REPORT 61
GENUS PLC / ANNUAL REPORT 2023
PRINCIPAL RISKS AND UNCERTAINTIES
RISK MANAGEMENT
From our broad risk universe, we have
identified 11 principal risks, which
we regularly evaluate based on an
assessment of the likelihood of occurrence
and the magnitude of potential
impact, together with the effectiveness
of our risk mitigation controls.
The Directors confirm that they have
undertaken a robust assessment of
the principal and emerging risks and
uncertainties facing the Group. More
information on our risk management
framework can be found in the Corporate
Governance Statement on pages 72 to 79.
T
R
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P
E
R
C
G
E
T
A
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T
S
I
Genus is exposed to
a wide range of risks and
uncertainties as it fulfils
its purpose of providing
farmers with superior
genetics, which in turn
supports the fulfilment
of its vision of nourishing
the world more sustainably.
LINK TO STRATEGY
Read more on pages 20 to 21
Delivering a differentiated
proprietary genetic offering
Focusing on large and progressive
protein producers globally
Sharing in the value delivered
Considered for Viability Assessment
Risk item focused on sustainability
and TCFD reporting
Some of these risks relate to our business
operations, while others relate to future
commercial exploitation of our leading-
edge R&D programmes. We are also
exposed to global economic and
political risks such as trade restrictions
attributed to the on-going Russia-
Ukraine conflict and slow economic
recovery in China post COVID-19.
As part of our risk management
process we monitor emerging risks
and consider when to include them in
our main risk assessment process. This
year our reviews of risks focused on:
• the continued impact of the Russia-
Ukraine conflict;
• geopolitical tensions across the globe;
• macroeconomic conditions;
impacts of climate change;
•
• carbon pricing; and
• cyber security.
There have been two changes to our
principal risks this year. The first is
an increase to our Sustainability risk
given increased regulations, reporting
requirements and carbon pricing. The
second is a reduction in our Hiring and
Retaining Talented People risk based on
our successful recruitment and succession
planning for key positions. Last year we
elevated cyber security to a principal
risk and we continue to see an increase
in the sophistication and frequency
of cyber crime across industries.
62
GENUS PLC / ANNUAL REPORT 2023
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
RISK
RISK DESCRIPTION
HOW WE MANAGE RISK
RISK CHANGE IN FY23
Strategic Risks
DEVELOPING
PRODUCTS WITH
COMPETITIVE
ADVANTAGE
STRATEGIC LINK
• Development programmes
fail to produce best genetics
for customers.
• Increased competition to secure
elite genetics.
CONTINUING TO
SUCCESSFULLY
DEVELOP
INTELLIGEN
TECHNOLOGY
STRATEGIC LINK
• Failure to manage the technical,
production and financial
risks associated with the
rapid development of the
IntelliGen business.
DEVELOPING AND
COMMERCIALISING
GENE EDITING AND
OTHER NEW
TECHNOLOGIES
STRATEGIC LINK
• Failure to develop successfully
and commercialise gene editing
technologies due to technical,
intellectual property (‘IP’),
market, regulatory or
financial barriers.
• Competitors secure ‘game-
changing’ new technology.
CAPTURING
VALUE THROUGH
ACQUISITIONS
STRATEGIC LINK
• Failure to identify appropriate
investment opportunities or to
perform sound due diligence.
• Failure to successfully integrate
an acquired business.
SUCCEEDING IN
GROWTH MARKETS
• Failure to appropriately develop
our business in China and other
growth markets.
STRATEGIC LINK
Dedicated teams align our
product development to customer
requirements. We use large-scale
data and advanced genomic analysis
to ensure we meet our breeding
goals. We frequently measure our
performance against competitors
in customers’ systems, to ensure
the value added by our genetics
remains competitive. We also partner
with universities and other bodies
to further our developments.
Our continued development of the
technology and its deployment to new
markets is supported by dedicated
internal resources and agreements
with suppliers. To ensure optimum
performance we provide maintenance
and specialist training to our customers
and continuously monitor productivity.
Current patent infringement
proceedings initiated by
STgenetics in the US continue
to be vigorously defended.
We stay aware of new technology
opportunities through a wide network
of academic and industry contacts.
Our Genus Portfolio Steering
Committee oversees our research,
ensures we correctly prioritise our
R&D investments and assesses the
adequacy of resources and the
relevant IP landscapes. We have
formal collaboration agreements with
key partners, to ensure responsible
exploration and development of
technologies and the protection of IP.
The Board is updated regularly on key
development projects.
We have a rigorous acquisition analysis
and due diligence process, with the
Board reviewing and signing off all
material projects. We also have a
structured post-acquisition integration
planning and execution process
focused on maximising value.
Our organisation blends local and
expatriate executives, supported
by the global species teams, to
allow us to grow our business in
key markets, while managing risks
and ensuring we comply with our
global standards and comply with
sanctions. We also establish local
partnerships where appropriate,
to increase market access.
No change. Our analysis
and benchmarking
continue to support our
genetic improvements.
No change. We have
expanded the number of
machines and our customer
base this year and continue
to optimise performance.
Continued uncertainty over
further legal actions and
uncertainties in relation to
patent infringements.
No change. Key initiatives
continue to progress through
the R&D life cycle, and we
maintain the high level of
investment needed to bring
the end products to market.
We work closely with regulators
to ensure our products meet
exacting standards. We are
expecting US FDA regulatory
approval for our PRRSv-resistant
pigs in the first half of 2024.
No change. We continue
to work diligently to identify
areas of opportunity consistent
with our strategic plans.
Values, and our aim to
accelerate growth and create
value for our shareholders.
Our experiences with
post-acquisition integration
provide a platform for
successfully integrating
newly acquired businesses.
No change. The global
macroeconomic conditions
driven by post COVID-19
recovery and the Russia-Ukraine
conflict have driven market
price volatility. This has been
especially felt in the China
porcine market. The risks
to our business in Russia
are described in note 4.
STRATEGIC REPORT
63
GENUS PLC / ANNUAL REPORT 2023
RISK
RISK DESCRIPTION
HOW WE MANAGE RISK
RISK CHANGE IN FY23
Strategic Risks continued
SUSTAINABILITY
STRATEGIC LINK
• Failure to lead the market in
sustainable animal protein
production and help our
customers to meet the
challenge of producing
meat and milk efficiently
and sustainably as climate
change increases demand.
• Failure to fulfil our commitment
to reduce the environmental
impact of our own operations and
implement our Climate Change
Policy and TCFD reporting.
Operational Risks
PROTECTING IP
• Failure to protect our IP could
STRATEGIC LINK
mean Genus-developed genetic
material, methods, systems and
technology become freely
available to third parties.
ENSURING
BIOSECURITY
AND CONTINUITY
OF SUPPLY
STRATEGIC LINK
• Loss of key livestock,
owing to disease outbreak.
• Loss of ability to move
animals or semen freely
(including across borders)
due to disease outbreak,
environmental incident or
international trade sanctions
and disputes.
• Lower demand for our
products, due to industry-wide
disease outbreaks.
HIRING AND
RETAINING
TALENTED PEOPLE
STRATEGIC LINK
• Failure to attract, recruit,
develop and retain the
global talent needed to
deliver our growth plans
and R&D programmes.
We have a global sustainability
strategy and Climate Change Policy
that are approved, and regularly
reviewed, at Board level. Our
Sustainability Committee oversees
the implementation of the strategy
and the annual objective setting
process as well as monitoring
progress using key performance
indicators and our sustainability risk
register. We have developed our
2030 emissions reduction plan (and
2050 net zero plan) and developed
quantifiable, robust performance
indicators in relation to life cycle
carbon reduction (per generation)
of pigs, beef and dairy cows. See our
TCFD reporting on pages 46 to 57.
We have a global, cross-functional
process to identify and protect
our IP. Our customer contracts
and our selection of multipliers
and joint venture partners include
appropriate measures to protect
our IP. We maintain IP appropriate
landscape watches and where
necessary conduct robust ‘freedom
to operate’ searches, to identify
third-party rights to technology.
We have stringent biosecurity
standards, with independent
reviews throughout the year to
ensure compliance. We investigate
biosecurity incidents, to ensure
learning across the organisation.
We regularly review the geographical
diversity of our production facilities,
to avoid over-reliance on single sites.
We have a robust talent and succession
planning process, including annual
assessments of our global talent pool
and active leadership development
programmes. The Group’s reward
and remuneration policies are
reviewed regularly, to ensure their
competitiveness, and we have a long-
term retention incentive scheme. We
work closely with several specialist
recruitment agencies, to identify
candidates with the skills we need.
Increased. There is increasing
regulation and demand
for transparency and
accuracy of reporting on
sustainability targets. There
is an increase in carbon cost
and a notable change in more
frequent weather related
events across the globe.
Our carbon reduction plans are
on track to meet our 2030 goals
and we have achieved a
significant reduction in our
intensity measures since 2019.
No change. We continue actively
to protect our IP by filing patents
attributed to our R&D activity.
No change. There continue to be
global supply chain challenges
driven by the current economic
climate, increased trade
sanctions, and, the continued
spread of ASF, especially
in China.
Reduced. We have been able to
attract and recruit key talent to
critical roles including the new
CEO. Post-COVID employee
turnover in certain areas has
now returned to normal levels.
STRATEGIC REPORT
64
GENUS PLC / ANNUAL REPORT 2023
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
RISK
RISK DESCRIPTION
HOW WE MANAGE RISK
RISK CHANGE IN FY23
Operational Risks continued
CYBER SECURITY
STRATEGIC LINK
• Failure to adequately detect and
mitigate a malicious cyber attack
by internal or external activists
and the ability to quickly recover.
• Failure to properly protect
our data and systems from
an attack.
Financial Risks
MANAGING
AGRICULTURAL
MARKET AND
COMMODITY
PRICES VOLATILITY
STRATEGIC LINK
• Fluctuations in agricultural
markets affect customer
profitability and therefore
demand for our products
and services.
• Increase in our operating costs
due to commodity pricing
volatility.
• Longer-term influence of
climate factors on the cost
and availability of agricultural
inputs (animal feed).
• Geopolitical tensions and the
Russia-Ukraine conflict impact
on agricultural markets.
We utilise a flexible multi-layered
approach that focuses on employee
awareness and training, policies,
software, and a third-party 24/7
monitoring Security Operations Centre
and follow ISO 27001 standards. We
have improved our system and data
backup procedures and hardened
our servers to further strengthen our
resilience and have a programme
focused on continued cyber security
improvements. Our GenusOne
programme continues to progress well,
improving our operational controls and
IT security as we move to the cloud.
No change. There has been
a continued rise in the
sophistication, methods of
attack and frequency of
cyber crime against global
organisations. Increased
geopolitical tensions also
heighten the risks of a
targeted cyber attacks.
To mitigate these risks, our
programme of enhancing
cyber protection following
the IT security incident in
June 2022 was successfully
implemented in the year.
We continuously monitor markets
and seek to balance our costs and
resources in response to market
demand. We actively monitor and
update our hedging strategy to
manage our exposure. Our porcine
royalty model and extensive use
of third-party multipliers mitigates
the impact of cyclical price and/
or cost changes in pig production.
No change. There has been a
slow post-COVID 19 economic
recovery and global inflationary
pressure, however agricultural
input prices are now reducing
for producers in many of
our markets.
The China pork market
continues to deal with the
challenges of ASF, volatile
prices and weak demand.
STRATEGIC REPORT
65
GENUS PLC / ANNUAL REPORT 2023
GOING CONCERN AND VIABILITY STATEMENT
In assessing the appropriateness of
adopting the going concern basis of
preparing the financial statements as
well as in assessing viability, the Board
have considered:
• Genus’s Strategic Plan which forms
management’s best estimate of the
future performance and position of
the Group;
• Genus’s results on 30 June 2023
whereby the Group recorded
adjusted profit before tax of £71.5m
in actual currency;
• Genus’s cash position on 30 June 2023
with net debt of £195.8m (2022: £185.0m)
and had substantial headroom of £119m
over available facilities (2022: £78m);
• Genus’s credit facility agreement which
consists of a £190m multi-currency RCF,
a 150m US dollar RCF and a US 20m USD
bond guarantee. The term of the facility
is for four years to August 2025 having
already exercised both extension
options. Additionally, there is an
uncommitted £40m accordion option
which can be requested a further two
occasions over the remaining lifetime
of the facility. The Group have yet to
enter discussions with the banking
syndicate regarding a new facility,
however given the current standing
of our business relationship with the
syndicate we have a reasonable
expectation that a new facility would
be offered on appropriate terms; and
• the potential use of mitigating actions
including reduction in dividends and
postponing certain capital spend
and investments.
As part of the Directors’ consideration
of the appropriateness of adopting the
going concern basis in preparing the
financial statements, as well as their
assessment of the Group’s viability, the
Board considered several key factors,
including our business model (see page 2)
and our strategic framework (see page 20).
In addition, all principal risks identified by
the Group were considered in a downside
scenario within the viability assessment
with specific focus paid to those that
could reasonably have a material impact
within our outlook period, including:
Three-year
cumulative
impact to
free cash flow
Growing in emerging markets,
which we have modelled
through reductions to
short-term growth
expectations, particularly
in China;
Managing agricultural market
and commodity prices
volatility; modelled through
reductions in price
expectations, particularly
in China;
Developing products with
competitive advantage,
modelled through reductions
to short-term growth
expectations because of
failing to produce best
genetics for our customers or
to secure elite genetics;
Ensuring biosecurity or
continuity of supply, which is
modelled through one-off
impacts of disease outbreaks
and border closures; and
Impact of the war in Ukraine,
modelled through reduction
in profit expectations and
cash restrictions.
£m
(114.7)
(1.5)
(42.4)
(47.2)
We have considered the position if each of
the identified principal risks materialised
individually and where multiple risks occur
in parallel. In addition, we have overlaid
this downside scenario, net of mitigating
actions, with reverse stress tests on both
our headroom and banking covenants to
ensure the range beyond the downside
scenario is fully assessed.
Based on this assessment our headroom
remains adequate under these sensitivities
and reverse stress tests, including our
mitigating actions and expectation of
renewing appropriate facilities.
In their assessment of the Group’s viability,
the Directors have determined that a
three-year time horizon, to June 2026, is
an appropriate period to adopt. This was
based on the Group’s visibility of its
product development pipeline, for
example, because of the genetic lag of
approximately three years between the
porcine nucleus herds and customers’
production systems and the pipeline of
young bulls. The Board also considered
the nature of the principal risks affecting
Genus, including the agricultural markets
in which it operates.
Based on this assessment, the Directors
have a reasonable expectation that
the Group has adequate resources
to continue its operational existence
for the foreseeable future and for a
period of at least 12 months from the
date of this report. Accordingly, the
Directors continue to adopt and consider
appropriate the going concern basis
in preparing the Annual Report.
Also, based on this assessment, the
Directors have a reasonable expectation
that the Group will be able to continue in
operation and meet its liabilities as they
fall due over the period to 30 June 2026.
There are no indications from this
assessment that change this expectation
when looking beyond 30 June 2026 at the
Group’s longer-term prospects.
The Strategic Report was approved by the
Board of Directors on 6 September 2023
and signed on its behalf by:
Jorgen Kokke
Chief Executive
6 September 2023
Alison Henriksen
Chief Financial Officer
6 September 2023
STRATEGIC REPORT 66
GENUS PLC / ANNUAL REPORT 2023
CHAIRMAN’S LETTER
ENSURING
SUSTAINABLE SUCCESS
Dear Shareholder
This section of the report explains our
corporate governance arrangements and
demonstrates how we complied with the
UK Corporate Governance Code
throughout the year.
As I outlined in my statement in the
Strategic Report, the key governance
event of the year was the recruitment
of Jorgen Kokke as our new Chief
Executive. Having joined the Board on
2 May 2023, Jorgen formally took over
from Stephen Wilson on 1 July 2023, with
Stephen supporting the transition of
responsibility until he retires at the end
of September. Jorgen has undertaken a
thorough induction programme and more
information on this and his recruitment
can be found in the Nomination
Committee report on page 80.
Approving and overseeing the Group’s
strategy is one of our most important
responsibilities as a Board. In addition to
our annual strategy session (see page
75), we are devoting time within every
Board meeting to discussing strategy and
ensuring we are focused on the areas
that are critical to Genus’s sustainable
success. The Non-Executive Directors’
external perspective is particularly
valuable when considering questions such
as the Group’s geographical balance
and where best to commit the Group’s
people and capital. Our work this year
has reaffirmed our opinion that Genus’s
strategy is correct and will continue
to deliver for all our stakeholders.
In last year’s report, we outlined our
reasons for continuing to operate in
Russia, following the invasion of Ukraine.
In summary, we concluded that we had
been granted licences from HM Treasury
and the Department of International
Trade to continue to trade and while
we continued to comply with all laws
and sanctions, we should adhere to our
purpose and principles and maintain
our operations in the country. In our
view, this was in the best interests of
our employees, our animals and the
many people who ultimately depend on
our work for their food. The Board has
reviewed this position throughout the
year and our view is currently unchanged.
We will continue to keep a close eye
on the situation as it develops.
For the coming year, the Board has
a number of priorities. These include
ensuring a successful CEO transition
and recruiting a replacement for Lykele
van der Broek, who will retire as a Non-
Executive Director at November’s AGM.
We will also play close attention to the
Group’s key strategic initiatives, such
as the commercialisation of PRRSv-
resistant pigs and the refinement of
ABS’s go-to-market approach.
Iain Ferguson CBE
Non-Executive Chairman
6 September 2023
IAIN FERGUSON CBE
Non-Executive Chairman
We devote time
at every Board
meeting to discuss
strategy and
ensure we are
focused on the
areas critical
to Genus’s
sustainable
success.
CORPORATE GOVERNANCE 67
GENUS PLC / ANNUAL REPORT 2023
UK CORPORATE GOVERNANCE CODE
COMPLIANCE STATEMENT
The UK Corporate Governance Code
2018 (the ‘Code’) applied to the financial
year ended 30 June 2023. The Code
is available at www.frc.org.uk.
During the year ended 30 June 2023,
Genus applied all the principles of the
UK Corporate Governance Code and
complied with all of the Code’s provisions.
More information on our application of
the Code can be found in the sections
indicated in the table opposite.
CODE PRINCIPLES
1. Board leadership
and Company purpose
The Board’s role
Purpose, culture, values
and strategy
Stakeholder engagement
The Board’s year in review
2. Division of responsibilities
Board roles and
responsibilities
Board and Committee
structure
Non-Executive Director
independence
Page(s)
72
72
72
72
73
76
76
76-77
76
3. Composition, succession
and evaluation
78-82
Board composition
Board effectiveness
Election and re-election
of Directors
Nomination Committee
report
4. Audit, risk and internal
control
Audit & Risk Committee
report
5. Remuneration
Directors’ remuneration
report
78
78
79
80-82
83-88
83-88
89-113
89-113
CORPORATE
GOVERNANCE
HEADLINES
AT A GLANCE
32.0p
Full Year Dividend
The Board is recommending a final
dividend of 21.7p per share, which will
give a total dividend of 32.0p (2022:
32.0p. The final dividend will be paid
on 8 December 2023, to shareholders
on the register at the close of business
on 10 November 2023.
1 0-2 years
2 2-4 years
3 4-6 years
4 6-8 years
5 8-9 years
1
3
2
0
2
BOARD TENURE1
1
2
5
4
3
1 As at 30 June 2023
INDEPENDENCE OF THE BOARD2
(Excluding the chair)
A
B
A Independent
B Executive
4 (57%)
3 (43%)
2 Board members as at 30 June 2023 and
remains correct as at the date of publication
of the Annual Report
BOARD ETHNIC DIVERSITY3
A
A White
B Mixed
B
7 (87%)
1 (13%)
3 See the Company’s 2022 submission to the
Parker Review for more information.
CORPORATE GOVERNANCE 68
GENUS PLC / ANNUAL REPORT 2023
BOARD OF DIRECTORS AND COMPANY SECRETARY
COMMITTEE
MEMBERSHIP
BOARD
APPOINTMENT
SKILLS AND
EXPERIENCE
IAIN FERGUSON CBE
Non-Executive Chairman
JORGEN KOKKE
Chief Executive
STEPHEN WILSON
Executive Director
ALISON HENRIKSEN
Chief Financial Officer
LYSANNE GRAY
Non-Executive Director
LYKELE VAN DER BROEK
Non-Executive Director;
Workforce Engagement
LESLEY KNOX
Senior Independent
Director
PROFESSOR
JASON CHIN
Non-Executive Director
DAN HARTLEY
Group General Counsel
and Company Secretary
Director
July 2020
May 2023
January 2013
January 2020
April 2016
July 2014
June 2018
April 2021
June 2014
• Extensive Board, governance
and leadership experience
• Strong commercial, science and
agribusiness expertise across a
range of industries, with a particular
focus on consumer goods and food
• Deep appreciation of capital
markets and investor sentiment
• Deep experience in the
international food and
agriculture sectors
• 14 years in global
leadership roles at
Ingredion Incorporated,
a leading New York
listed food and
beverage ingredient
solutions company
• Led Ingredion’s North
and South American
businesses, driving
growth by leveraging
R&D-led innovation
and commercial and
operational excellence
• Masters in Economics
from the University
of Amsterdam
• Six years as Group
Finance Director at
Genus with wide-
ranging operational,
strategic and
business development
responsibilities
• Extensive experience over
30 years in technology
businesses, including
finance, mergers
and acquisitions, IT
transformation and
investor relations
• International experience,
living and working in
Europe and the US
• Fellow of the Chartered
Institute of Management
Accountants
• Over 25 years of
international experience
in finance, mergers and
acquisitions, business
transformation and
investor relations,
operating across Europe,
Australia, Asia, the US
and South Africa
• Proven track record of
driving performance
in public and privately
held organisations, both
business to business and
business to consumer
• Qualified as a
Chartered Accountant
with Ernst & Young
• Significant experience
• Vast experience of
• Broad international,
• Extensive experience
of risk management,
audit, business
operations, acquisitions
and disposals, and
corporate governance,
gained within the
food sector
growing companies and
working in agricultural
businesses throughout
the world, including in
emerging markets
• One of our designated
Workforce Engagement
• Qualified Chartered
Directors
Accountant
• The Board’s
Sustainability Sponsor
strategic and financial
services experience, both
through executive and
non-executive roles
in academic and
commercial research
institutions, giving him
deep scientific expertise
• Has advised numerous
• Working to develop
companies including
manufacturers and
distributors of food
products, encompassing
poultry and poultry
breeding companies
• One of our designated
Workforce Engagement
• Associate Faculty
Directors
• Significant experience
in multi-jurisdictional
patent litigation, mergers
and acquisitions,
patent and technology
licensing and managing
product life cycles
• Degrees in science
and law
CURRENT
APPOINTMENTS
Chairman of Crest Nicholson
Holdings plc; Chairman of Personal
Assets Trust plc; Pro-Chancellor
of Cranfield University.
None
Non-Executive Director
of Renishaw plc; Non-
Executive Director of
Canonical Holdings Limited.
None
Executive Vice President
Sustainable Business
Performance and Reporting
at Unilever plc.
Chair of Eden Research plc
Senior Independent
None
Director of 3i Group plc;
Non-Executive Director
of Legal & General,
where she also chairs the
Remuneration Committee.
PAST
APPOINTMENTS
Senior Independent Director of
Sygen International plc; Chairman
of Berendsen plc; Chairman of
Stobart Group Ltd; Senior Independent
Director of Balfour Beatty plc;
Non-Executive Director of Greggs plc;
Lead Independent Director at the
Department for Environment, Food and
Rural Affairs; Chief Executive of Tate &
Lyle plc; General Manager of Unilever
AgriBusiness; Chair, Unilever Plantations
and Plant Sciences Group; and
Senior Vice President, Corporate
Development at Unilever.
Senior roles at Ingredion,
including Executive Vice
President & President
Americas, president, Asia
Pacific and EMEA, and
president, North America;
Vice President of Food &
Nutrition and Director of
Strategy and Business
Development at Corbion,
a producer of sustainable
ingredient solutions; and
leadership positions at
Loders Croklaan.
Group Finance Director
of Genus plc; Executive
Vice President and Chief
Financial Officer of Misys
plc; finance and business
development roles at IBM;
and Non-Executive Director
and Audit Committee Chair
of Xchanging plc.
Chief Financial Officer of
V.Group, a global leader in
ship management; Finance
Director, UK & Ireland and
Finance Director, Australia,
at Compass Group plc;
and Chief Financial
Officer of Specialty
Fashion Group Ltd, a former
ASX-listed company.
Financial Controller at
Member of the Board of
Unilever plc and Unilever NV;
Management of Bayer
Founder Director of British
Linen Advisers; senior roles
Chief Auditor of Unilever;
Chief Financial Officer of
Unilever’s global food
service business; and a
number of other senior
operational and financial
positions within Unilever.
CropScience, a division of
Bayer AG; senior
at Dresdner Kleinwort
Benson; solicitor at
international roles including
Slaughter & May; and
the Head of Bayer
CropScience’s BioScience
numerous non-executive
roles, including Centrica,
division; and President of the
SAB Miller, Alliance Trust,
Bayer HealthCare Animal
Hays, Scottish Provident,
Health division.
Bank of Scotland, Grosvenor
Group and Thomas Cook.
Senior Vice President and
International Counsel of
Shire plc; and senior and
global roles in private
practice, in the UK
and Australia.
and apply methods
for reprogramming
the genetic code
of living organisms,
spanning chemistry,
chemical biology and
synthetic biology
at the Wellcome
Sanger Institute,
where he researches
synthetic genomics
• Fellow of the Academy of
Medical Sciences; Trinity
College, Cambridge;
and the Royal Society
Head of the Centre for
Chemical and Synthetic
Biology at the Medical
Research Council
Laboratory for Molecular
Biology; Director and Chief
Scientific Officer of
Constructive Biology;
Non-Executive Director
of Department for Science,
Innovation and Technology.
Positions on the scientific
advisory boards of a
number of companies,
including Synaffix BV.
CORPORATE GOVERNANCE
69
GENUS PLC / ANNUAL REPORT 2023
BOARD GENDER BREAKDOWN
5 (62.5%)
M = Male
F = Female
3 (37.5%)
M
F
KEY TO COMMITTEES
Member of the Nomination Committee
Member of the Remuneration Committee
Member of the Audit & Risk Committee
Committee Chair
IAIN FERGUSON CBE
Non-Executive Chairman
JORGEN KOKKE
Chief Executive
STEPHEN WILSON
Executive Director
ALISON HENRIKSEN
Chief Financial Officer
LYSANNE GRAY
Non-Executive Director
LYKELE VAN DER BROEK
Non-Executive Director;
Workforce Engagement
Director
LESLEY KNOX
Senior Independent
Director
PROFESSOR
JASON CHIN
Non-Executive Director
DAN HARTLEY
Group General Counsel
and Company Secretary
July 2020
May 2023
January 2013
January 2020
April 2016
July 2014
June 2018
April 2021
June 2014
• Extensive Board, governance
and leadership experience
• Strong commercial, science and
agribusiness expertise across a
• Deep appreciation of capital
markets and investor sentiment
range of industries, with a particular
leadership roles at
focus on consumer goods and food
Ingredion Incorporated,
business development
• Deep experience in the
• Six years as Group
• Over 25 years of
• Extensive experience over
Australia, Asia, the US
international food and
agriculture sectors
• 14 years in global
a leading New York
listed food and
beverage ingredient
solutions company
• Led Ingredion’s North
and South American
businesses, driving
growth by leveraging
R&D-led innovation
and commercial and
operational excellence
• Masters in Economics
from the University
of Amsterdam
Finance Director at
Genus with wide-
ranging operational,
strategic and
responsibilities
30 years in technology
businesses, including
finance, mergers
and acquisitions, IT
transformation and
investor relations
living and working in
Europe and the US
• Fellow of the Chartered
Institute of Management
Accountants
international experience
in finance, mergers and
acquisitions, business
transformation and
investor relations,
operating across Europe,
and South Africa
• Proven track record of
driving performance
in public and privately
held organisations, both
business to business and
• Qualified as a
Chartered Accountant
with Ernst & Young
• International experience,
business to consumer
• Significant experience
of risk management,
audit, business
operations, acquisitions
and disposals, and
corporate governance,
gained within the
food sector
• Qualified Chartered
Accountant
• The Board’s
Sustainability Sponsor
• Vast experience of
• Broad international,
• Extensive experience
growing companies and
working in agricultural
businesses throughout
the world, including in
emerging markets
• One of our designated
Workforce Engagement
Directors
strategic and financial
services experience, both
through executive and
non-executive roles
• Has advised numerous
companies including
manufacturers and
distributors of food
products, encompassing
poultry and poultry
breeding companies
• One of our designated
Workforce Engagement
Directors
COMMITTEE
MEMBERSHIP
BOARD
APPOINTMENT
SKILLS AND
EXPERIENCE
CURRENT
APPOINTMENTS
Chairman of Crest Nicholson
Holdings plc; Chairman of Personal
Assets Trust plc; Pro-Chancellor
of Cranfield University.
None
Non-Executive Director
of Renishaw plc; Non-
Executive Director of
Canonical Holdings Limited.
None
PAST
APPOINTMENTS
Senior Independent Director of
Sygen International plc; Chairman
of Berendsen plc; Chairman of
Senior roles at Ingredion,
including Executive Vice
President & President
Stobart Group Ltd; Senior Independent
Americas, president, Asia
Director of Balfour Beatty plc;
Pacific and EMEA, and
Non-Executive Director of Greggs plc;
president, North America;
Lead Independent Director at the
Vice President of Food &
Department for Environment, Food and
Nutrition and Director of
Group Finance Director
of Genus plc; Executive
Vice President and Chief
Financial Officer of Misys
plc; finance and business
development roles at IBM;
and Non-Executive Director
and Audit Committee Chair
Rural Affairs; Chief Executive of Tate &
Strategy and Business
of Xchanging plc.
Chief Financial Officer of
V.Group, a global leader in
ship management; Finance
Director, UK & Ireland and
Finance Director, Australia,
at Compass Group plc;
and Chief Financial
Officer of Specialty
Fashion Group Ltd, a former
ASX-listed company.
Lyle plc; General Manager of Unilever
Development at Corbion,
AgriBusiness; Chair, Unilever Plantations
a producer of sustainable
and Plant Sciences Group; and
Senior Vice President, Corporate
Development at Unilever.
ingredient solutions; and
leadership positions at
Loders Croklaan.
Executive Vice President
Sustainable Business
Performance and Reporting
at Unilever plc.
Chair of Eden Research plc
Senior Independent
Director of 3i Group plc;
Non-Executive Director
of Legal & General,
where she also chairs the
Remuneration Committee.
Financial Controller at
Unilever plc and Unilever NV;
Chief Auditor of Unilever;
Chief Financial Officer of
Unilever’s global food
service business; and a
number of other senior
operational and financial
positions within Unilever.
Member of the Board of
Management of Bayer
CropScience, a division of
Bayer AG; senior
international roles including
the Head of Bayer
CropScience’s BioScience
division; and President of the
Bayer HealthCare Animal
Health division.
Founder Director of British
Linen Advisers; senior roles
at Dresdner Kleinwort
Benson; solicitor at
Slaughter & May; and
numerous non-executive
roles, including Centrica,
SAB Miller, Alliance Trust,
Hays, Scottish Provident,
Bank of Scotland, Grosvenor
Group and Thomas Cook.
in academic and
commercial research
institutions, giving him
deep scientific expertise
• Working to develop
and apply methods
for reprogramming
the genetic code
of living organisms,
spanning chemistry,
chemical biology and
synthetic biology
• Associate Faculty
at the Wellcome
Sanger Institute,
where he researches
synthetic genomics
• Fellow of the Academy of
Medical Sciences; Trinity
College, Cambridge;
and the Royal Society
Head of the Centre for
Chemical and Synthetic
Biology at the Medical
Research Council
Laboratory for Molecular
Biology; Director and Chief
Scientific Officer of
Constructive Biology;
Non-Executive Director
of Department for Science,
Innovation and Technology.
Positions on the scientific
advisory boards of a
number of companies,
including Synaffix BV.
• Significant experience
in multi-jurisdictional
patent litigation, mergers
and acquisitions,
patent and technology
licensing and managing
product life cycles
• Degrees in science
and law
None
Senior Vice President and
International Counsel of
Shire plc; and senior and
global roles in private
practice, in the UK
and Australia.
CORPORATE GOVERNANCE
70
GENUS PLC / ANNUAL REPORT 2023
GENUS EXECUTIVE
LEADERSHIP TEAM (‘GELT’)
ANGELLE ROSATA
Group HR Director
DR MATT CULBERTSON
Chief Operating Officer,
Genus PIC
JERRY THOMPSON
Chief Operating Officer,
Genus ABS Beef
SKILLS AND EXPERIENCE
CAREER
• Deep and broad expertise spanning
resourcing, talent management,
succession planning, leadership
development and health and safety
• Extensive HR strategic planning
skills and commercial acumen
• Masters in Human Resource
Development from
Vanderbilt University
• Joined Genus in September
2013, following more than 20
years in the healthcare sector
• Developed and delivered PIC’s
people strategy, before becoming
HR Director for ABS and then
Group HR Director on 1 July 2017
• Spent entire career in
porcine industry
• Has led the development and
implementation of Genus PIC’s
genetic strategy and technical
services capability, as well
as leading the commercial
engagement with many of PIC’s
most significant customers
• Doctorate in Animal Breeding
and Genetics from the
University of Georgia
• Joined Genus in 2011 as PIC’s
Director of Genetic Services
and Sales and took on the role
of Global Product Development
and Technical Services Director
in 2012 before becoming Chief
Operating Officer in July 2023
• Previously spent nine years working
for Murphy-Brown (now Smithfield
Foods), where he managed the
internal genetics programme
and technical operations for
its Eastern operations
• Natural entrepreneur with substantial
industry knowledge, commercial
skills and international experience
• Has helped Genus establish
and grow businesses in
countries as diverse as the UK,
Russia, India and China
• Degree in Agriculture from the
University of Plymouth and a
graduate of Harvard Business
School’s Advanced Management
• Joined PIC in 1992, working initially
in the UK and then Siberia and
Romania, before leading PIC
in Central and Eastern Europe
and then Europe as a whole
• Led PIC and ABS in Russia and Asia
Pacific, before becoming COO for
Genus Asia in 2012 and then COO
for Genus ABS Beef in July 2016
DR NATE ZWALD
Chief Operating Officer,
Genus ABS Dairy
DR ELENA RICE
Chief Scientific Officer and
Head of R&D
• Significant expertise and
experience of dairy genetics,
strong commercial focus and
• Deep expertise in running R&D
programmes, regulatory science
and portfolio management
passion for people development
• Has led the development and
• Board member of the Council
on Dairy Cattle Breeding and
Vice President of the National
Association of Animal Breeders
• Degree in Dairy Science and MBA
and PhD in Dairy Cattle Genetics
from the University of Wisconsin
15 years at Alta Genetics, including
ten years as General Manager of
its US business and more than two
years as Global Marketing Director
• Remains involved in his family’s
commercial dairy operation, Bomaz
farm in the US, which has produced
high-ranking industry and ABS sires
introduction of genetic improvement
technologies and nurtured a
portfolio of gene editing projects
• BSc and MSc in Biology from
Moscow State University, and PhD in
Plant Physiology and Biochemistry
from the Timiryazev Institute of
Plant Physiology in Moscow
Officer on 15 July 2019
• Spent 18 years in increasingly senior
roles at Bayer, leading teams using
pioneering science and cutting-
edge technology to help farmers
grow food more sustainably
• Joined Genus in January 2017 after
• Joined Genus as Chief Scientific
CORPORATE GOVERNANCE 71
GENUS PLC / ANNUAL REPORT 2023
EXEC GENDER BREAKDOWN
M = Male
F = Female
M
6 (67%)
3 (33%)
F
ANGELLE ROSATA
Group HR Director
DR MATT CULBERTSON
Chief Operating Officer,
Genus PIC
JERRY THOMPSON
Chief Operating Officer,
Genus ABS Beef
DR NATE ZWALD
Chief Operating Officer,
Genus ABS Dairy
DR ELENA RICE
Chief Scientific Officer and
Head of R&D
JORGEN KOKKE
Chief Executive
SKILLS AND EXPERIENCE
• Deep and broad expertise spanning
• Spent entire career in
resourcing, talent management,
succession planning, leadership
development and health and safety
• Extensive HR strategic planning
skills and commercial acumen
• Masters in Human Resource
porcine industry
• Has led the development and
implementation of Genus PIC’s
genetic strategy and technical
services capability, as well
as leading the commercial
Development from
Vanderbilt University
engagement with many of PIC’s
• Degree in Agriculture from the
• Natural entrepreneur with substantial
industry knowledge, commercial
skills and international experience
• Has helped Genus establish
and grow businesses in
countries as diverse as the UK,
Russia, India and China
University of Plymouth and a
graduate of Harvard Business
School’s Advanced Management
• Joined PIC in 1992, working initially
in the UK and then Siberia and
Romania, before leading PIC
in Central and Eastern Europe
and then Europe as a whole
• Led PIC and ABS in Russia and Asia
Pacific, before becoming COO for
Genus Asia in 2012 and then COO
for Genus ABS Beef in July 2016
most significant customers
• Doctorate in Animal Breeding
and Genetics from the
University of Georgia
• Joined Genus in 2011 as PIC’s
Director of Genetic Services
and Sales and took on the role
of Global Product Development
and Technical Services Director
in 2012 before becoming Chief
Operating Officer in July 2023
• Previously spent nine years working
for Murphy-Brown (now Smithfield
Foods), where he managed the
internal genetics programme
and technical operations for
its Eastern operations
CAREER
• Joined Genus in September
2013, following more than 20
years in the healthcare sector
• Developed and delivered PIC’s
people strategy, before becoming
HR Director for ABS and then
Group HR Director on 1 July 2017
• Significant expertise and
experience of dairy genetics,
strong commercial focus and
passion for people development
• Board member of the Council
on Dairy Cattle Breeding and
Vice President of the National
Association of Animal Breeders
• Degree in Dairy Science and MBA
and PhD in Dairy Cattle Genetics
from the University of Wisconsin
• Joined Genus in January 2017 after
15 years at Alta Genetics, including
ten years as General Manager of
its US business and more than two
years as Global Marketing Director
• Remains involved in his family’s
commercial dairy operation, Bomaz
farm in the US, which has produced
high-ranking industry and ABS sires
• Deep expertise in running R&D
programmes, regulatory science
and portfolio management
• Has led the development and
introduction of genetic improvement
technologies and nurtured a
portfolio of gene editing projects
• BSc and MSc in Biology from
Moscow State University, and PhD in
Plant Physiology and Biochemistry
from the Timiryazev Institute of
Plant Physiology in Moscow
• Joined Genus as Chief Scientific
Officer on 15 July 2019
• Spent 18 years in increasingly senior
roles at Bayer, leading teams using
pioneering science and cutting-
edge technology to help farmers
grow food more sustainably
STEPHEN WILSON
Executive Director
ALISON HENRIKSEN
Chief Financial Officer
DAN HARTLEY
Group General Counsel and
Company Secretary
See pages 68 and 69 for
Jorgen’s, Stephen’s, Alison’s
and Dan’s biographies.
CORPORATE GOVERNANCE 72
GENUS PLC / ANNUAL REPORT 2023
CORPORATE GOVERNANCE STATEMENT
BOARD LEADERSHIP
AND PURPOSE
THE BOARD’S ROLE
The Board is responsible for ensuring
our long-term success. It:
• approves our strategy and corporate
goals and monitors our performance
against them;
• determines that we have the necessary
resources, systems and controls to
achieve our objectives; and
• sets the culture and standards of behaviour
we want to see throughout Genus.
The Board is also responsible for other
critical decisions. These include:
• approving the corporate budget;
• stress-testing our scenario planning,
to ensure we have the right funding;
• approving material contracts, acquisitions,
licences and investments; and
• reporting to shareholders.
PURPOSE, CULTURE AND VALUES
Genus is a purpose-driven business, which
is reflected in our vision of pioneering
animal genetic improvement to help
nourish the world. This purpose provides
the bedrock for our strategy, with its focus
on improving genetics for the benefit of
progressive livestock farmers and helping
them to maximise their performance on
their farms, and with a growing emphasis
on using genetic advances to reduce the
environmental impact of animal protein
production. The Board regularly revisits
the Group’s purpose, including as part
of its annual strategy sessions, to ensure
it remains relevant to the business.
To deliver our strategy and achieve
our purpose, we must have the right
culture. Genus aims to maintain a
positive, inclusive and cooperative
culture, with a global outlook and a
focus on excellent customer service.
These values are aligned to both
our purpose and our strategy.
More information on our values
can be found on page 34.
The Board has a number of ways of
understanding and monitoring the culture
around the business. In particular, these
include the results of the Group’s Your
Voice employee survey and the Workforce
Engagement Directors’ interactions with
employees during the year, as described
below. The Board believes that health
and safety performance is another
important indicator of culture and the
Directors monitor performance on a
regular basis. The Directors also review
other measures that indicate the Group’s
culture, such as employee churn rates
and success with developing people and
filling vacancies from within the Group.
The Directors also meet numerous
people from around the Group, including
members of management who present
at Board meetings and through site
visits, giving them further insight into
the culture and talent within the Group.
During the year, the Board undertook
visits to sites in Brazil (see page 73).
The Board ensures its own culture is aligned
to the culture across the Group, through
the annual evaluations of the Board and
its Committees. More broadly, the Group’s
employee performance management
process also has a strong focus on
behaviours that are aligned to our values.
The Group has a Whistleblowing Policy and
an independent hotline to allow employees
to raise any concerns anonymously. This
process is overseen by the Audit & Risk
Committee on the Board’s behalf. More
information can be found on page 83.
This culture is underpinned by a set of values
that exemplify the business we want to be:
customer centric, results driven, pioneering,
people-focused and responsible.
The Board is therefore satisfied that
the Group’s culture is aligned with
its purpose, values and strategy
and that our workplace policies and
practices are consistent with them.
OVERSEEING STRATEGY
The Group’s corporate governance
framework plays a key role in the successful
delivery of our strategy. The table on
pages 74 to 75 shows how the Board’s
discussions during the year related to
specific aspects of the strategy. In addition,
the Board holds an annual strategy session,
focusing on the strategic direction and
goals of the Group and its business units.
More information on this can be found in
the Board’s Year in Review on page 73.
WORKFORCE ENGAGEMENT
Lykele van der Broek and Lesley Knox are
the designated Workforce Engagement
Directors. They continued to engage with
employees this year, holding face-to-face
meetings with ABS employees in Brazil. The
key points raised at town hall meetings
are set out in our Section 172 Statement
on page 60. The Board will continue to
monitor progress made against these
points as well as feedback received in
our global employee survey, Your Voice,
which will be conducted again in FY24. For
more information see page 35. In addition,
Lesley Knox and Lysanne Gray met with
members of our employee resource
group AWAKE to share insights into their
personal and professional journeys.
The Workforce Engagement Directors
will continue to work around the Group’s
different sites, to collect feedback and
wherever possible to hold face-to-face
meetings with employees as part of the
Board’s programme of annual visits.
ENGAGEMENT WITH OTHER
STAKEHOLDERS
The Group’s interactions with its other
stakeholders, including engagement
undertaken directly by the Board, is
summarised on page 58 in the
Strategic Report.
INFORMATION FLOW TO THE BOARD
The diagram to the right sets out our process for providing
information to the Directors, ahead of scheduled Board
meetings. This ensures our Board is well informed and
the Directors can contribute effectively to discussions.
To assist the Directors with discharging their duties under
Section 172 of the Companies Act, each item included in
the Board papers indicates the relevant considerations.
More information can be found in the Section 172 statement
on page 60.
The Chairman
sets the agenda
for the meeting,
with input from
the Chief
Executive, Chief
Financial Officer
and Group
Company
Secretary.
1
A week before
the meeting, the
agenda and
Board papers
are sent to the
Directors using a
secure electronic
system.
2
Board meetings
take place at
least eight times
per year.
3
The Group
Company
Secretary
monitors
decisions and
actions agreed
at each meeting.
4
The updated
list of actions
becomes part of
the agenda for
the next Board
meeting.
5
CORPORATE GOVERNANCE 73
GENUS PLC / ANNUAL REPORT 2023
THE BOARD’S YEAR
IN REVIEW
The Board held eight scheduled meetings during the year. At each
scheduled meeting, the Board receives updates on:
• business performance, business development, talent
development and competitive landscape developments from
the Chief Executive Officer;
• financial performance of the business and forecasts from the
Chief Financial Officer; and
• corporate governance and legal issues from the Group General
Counsel and Company Secretary, and external advisers.
The table below shows how many scheduled Board and
Committee meetings each Director attended during the year.
Director
Board
Nomination
Audit & Risk
Remuneration
Non-Executive
Chairman
Iain Ferguson
8/8
2/2
5/5
5/5
Executive
Directors
Stephen Wilson
Jorgen Kokke1
Alison Henriksen
Non-Executive
Directors
Lysanne Gray
Lykele van der
Broek
Lesley Knox
Jason Chin
8/8
1/1
8/8
8/8
7/8
8/8
8/8
0/23
N/A
2/22
2/2
2/2
2/2
2/2
5/52
1/12
5/52
5/5
5/5
4/5
5/5
5/5
1/1
5/5
5/5
5/5
4/5
5/5
Note: The maximum number of meetings that Directors could have attended during
the year: Board eight, Nomination Committee two, Audit & Risk Committee five and
Remuneration Committee five.
1 Jorgen Kokke was appointed to the Board on 2 May 2023
2 By invitation
3 Stephen Wilson did not attend committee meetings dealing with his own successor
VISITING OUR SITES
Site visits are an important part of the
Board’s annual programme.
In May 2023, the Board went to the Group’s locations
in Uberaba, Brazil. This included tours of ABS production
facilities, ABS genetic nucleus, IntelliGen and embryo
laboratories, customer site visits and business presentations,
as well as PIC and ABS business presentations. The Board also
had opportunities to meet with employees at all locations.
CORPORATE GOVERNANCE 74
GENUS PLC / ANNUAL REPORT 2023
CORPORATE GOVERNANCE STATEMENT CONTINUED
KEY TO STRATEGY
KEY TO STAKEHOLDERS
Deliver a differentiated proprietary genetic offering
Focus on progressive protein producers globally
Share in the value delivered
E
S
C
Employees
SC Supply Chain
Shareholders
EN
Environment
Customers
The table below provides more detail of the Board’s discussions and activities, and the outcomes from them. It also sets out how each
topic supports the delivery of our strategy and the fulfilment of the Directors’ duties under s172 of the Companies Act.
Topic and link
to our strategy
Activity
Actions arising
Leadership and
Effectiveness
Monitor Board
effectiveness
Internal evaluation undertaken during the year.
Progress
Focus areas identified
(see page 79)
LINK TO OUR STRATEGY
STAKEHOLDERS
E, S
S172 CONSIDERATIONS
a, b
Business
Development
and Strategy
LINK TO OUR STRATEGY
STAKEHOLDERS
S, C, SC
S172 CONSIDERATIONS
a
Research and
Development
LINK TO OUR STRATEGY
STAKEHOLDERS
S, C
S172 CONSIDERATIONS
a, c
Monitor pipeline of
senior talent
Board visits identify and set time aside to meet
talent within the organisation.
Workforce Engagement Directors meet talent
at employee meetings.
Presentations to AWAKE members.
Monitor progress against
our strategic objectives
Held strategy session with GELT and other
business leaders.
See page 75
Review and approve
business activities
Approved:
• PIC investment in SwineTech
Monitor strategic
developments
Received updates on:
• The activities of the Sustainability Committee
and the Company’s sustainability strategy
• The ABS digital and go-to-market strategies
• Material business development opportunities
• Continued regulatory progress of the PRRSv
development programme
• The Company’s cyber security improvements
• The Company’s activities in Russia
• Collaborations and potential collaborations including
business activities in China
Monitor R&D progress
Received updates on:
See pages 28-29
• The scientific progress of the PRRSv development
programme and other gene editing projects
• Ongoing improvements in IntelliGen technology
and its global rollout
• R&D programmes including the progress in reproductive
biology and other material projects
• The activities of the GPSC and the Scientific
Advisory Board
Received updates on:
• Key vacancies and hires including key roles in the
business, Group Finance and R&D
• Talent development in leadership below GELT level
See pages 34-35
People
LINK TO OUR STRATEGY
Review recruitment
pipeline
STAKEHOLDERS
E
S172 CONSIDERATIONS
a, b
Update on employee
feedback
Held Town Hall meetings with employees and the Chief
Executive, and received updates on meetings between
employees and the Workforce Engagement Directors.
See pages 34-35
Your Voice updates.
Shareholders
LINK TO OUR STRATEGY
Monitor investor attitudes
towards Genus
Updated on meetings with shareholders, potential
investors and analysts.
See pages 58-59
STAKEHOLDERS
S
S172 CONSIDERATIONS
c, f
CORPORATE GOVERNANCE
75
GENUS PLC / ANNUAL REPORT 2023
KEY TO S172 CONSIDERATIONS
(a)
(b)
(c)
Consequence of decisions in the long-term
Interests of the Company’s employees
Need to foster the Company’s business relationships with
suppliers, customers and others
(d)
(e)
Impact of the Company’s operations on the community
and environment
Desirability of the Company maintaining a reputation for
high standards of business conduct
(f)
Need to act fairly between members of the Company
Topic and link
to our strategy
Company
Performance and
Finance
LINK TO OUR STRATEGY
STAKEHOLDERS
S
S172 CONSIDERATIONS
a, f
Activity
Actions arising
Monitor performance
against plan
Received updates on the operational performance
of the business units and market conditions.
Progress
See pages 24-29
Review past and
projected financial
performance
Monitor key financial
issues
Monitor performance
against plan
Monitored the Group’s performance against
its strategy, budget and goals.
Approved the annual and interim results and dividends.
Approved the FY23 budget and the FY24-27 strategic plan.
Received tax and treasury updates.
See pages 30-33
Received pension updates.
Received updates on renewal of the Group’s external
borrowing facilities.
Reviewed going concern and viability, and reviewed
reports from the Company’s auditors.
Executive/GELT
Updates
Monitor business unit
performance and plans
Received financial and operational performance updates.
Received regular presentations from each business unit.
LINK TO OUR STRATEGY
STAKEHOLDERS
E, S, C, SC
S172 CONSIDERATIONS
a
Conducted strategy session setting out medium-term
strategic goal of the business unit and comparing
performance of each business unit against previously
presented strategic goals.
Sustainability,
Health and Safety
Ensure strong culture of
health and safety
Receive updates from the Sustainability Committee
discussions outlining the Group’s progress against goals.
See pages 36-57
LINK TO OUR STRATEGY
STAKEHOLDERS
E
S172 CONSIDERATIONS
b
Risk Management
LINK TO OUR STRATEGY
Monitor risk management
and control
STAKEHOLDERS
S
S172 CONSIDERATIONS
a, c
BOARD STRATEGY SESSION
Reviewed the Group’s health and safety strategy and
FY23 targets for health and safety and reviewed progress
throughout the year.
Received updates from the Head of Health and Safety,
including progress against relevant KPIs.
Monitored the Group’s risk register.
See pages 61-64
Received updates on the whistleblowing hotline reports
and investigations.
Receive updates on supply chains, biosecurity and animal
welfare from the business units.
The Board held its annual strategy meeting in January 2023. In preparation for the session, management provides the Board with a
pack of pre-reading and other information, including relevant videos such as industry seminars. This enables the Board to attend the
session well-informed about the latest context for the strategy discussion.
The session focused on a number of key areas, including the importance of the Group’s work on gene editing and its commercialisation,
the growth of IntelliGen and making the technology available to a broader group of customers, and the establishment of the Group’s
Scientific Advisory Board under Jason Chin’s leadership. This will enhance Genus’s horizon-scanning ability, which is important to
sustained success in a long-cycle business.
At the end of the strategy session, the Board concluded that the strategy for FY24-27 remained appropriate.
CORPORATE GOVERNANCE
76
GENUS PLC / ANNUAL REPORT 2023
CORPORATE GOVERNANCE STATEMENT CONTINUED
DIVISION OF
RESPONSIBILITIES
BOARD ROLES AND RESPONSIBILITIES
BOARD COMMITTEES
To ensure we have clear responsibilities at the top of the
Company, the Board has set out well-defined roles for the
Chairman and Chief Executive Officer. These, along with the
responsibilities of our other Directors, are summarised in the
table below.
The table below shows Board Committee membership at the
year end:
Director
Audit & Risk
Nomination
Remuneration
Committee
Iain Ferguson
Jorgen Kokke
Stephen Wilson
Alison Henriksen
Lysanne Gray
Lykele van der Broek
Lesley Knox
Jason Chin
C Chair
M Member
–
–
–
–
C
M
M
M
C
–
M
–
M
M
M
M
M
–
–
–
M
M
C
M
The Committee Chairs oversee and lead the Committees’
activities, within their terms of reference, and are responsible for
their effective operation. More information about the roles and
work of the Board Committees can be found in their statements
on pages 80 to 113, and in their terms of reference on our website
at www.genusplc.com.
NON-EXECUTIVE DIRECTOR INDEPENDENCE
The Board believes that all of the NEDs are independent in
character and judgement, and that there are no relationships or
circumstances that are likely to affect (or could appear to affect)
their judgement. As required by the Code, the Chairman was
independent on appointment.
Title
Responsibilities
Chairman
Iain Ferguson
Chief Executive
Jorgen Kokke
Iain’s primary responsibility is to lead the Board
and ensure it operates effectively. He achieves
this in part through promoting an open culture,
which allows people to challenge the status
quo, and holding meetings with the NEDs
without the Executives present. Iain also
communicates directly with shareholders.
Jorgen is responsible for devising and
implementing our strategy and for managing
our day-to-day operations. He is accountable
to the Board for the Group’s development, in
line with its strategy, taking into account the
risks, objectives and policies set out by the
Board and its Committees.
Chief Financial
Officer
Alison
Henriksen
Alison is responsible for helping the Chief
Executive Officer to devise and implement
the strategy, and for managing the Group’s
financial and operational performance.
Senior
Independent
NED
Lesley Knox1
Lesley provides a sounding board for the
Chairman and is an alternative line of
communication between the Chairman and
other Directors. She leads meetings of the NEDs,
without the Chairman present, to appraise
the Chair’s performance, and consults with
shareholders in the absence of the Chairman
and Chief Executive Officer.
NEDs
Lysanne Gray2,
Lykele van der
Broek1, Jason
Chin
The NEDs constructively challenge, oversee and
help to progress the execution of our strategy,
the management of the Group and the
management of our governance structures,
within the risk and control framework set by
the Board.
1 Also a Workforce Engagement Director
2 Also the Board’s Sustainability Sponsor
CORPORATE GOVERNANCE 77
GENUS PLC / ANNUAL REPORT 2023
BOARD AND COMMITTEE STRUCTURE
The diagram below shows the Board and the Committees that report to it:
BOARD COMMITTEES
AUDIT & RISK COMMITTEE
Ensures the integrity of our financial
reporting, evaluates our risk management
and internal control system, and oversees
the internal and external auditors. Refer to
the Committee’s report on pages 83-88
REMUNERATION COMMITTEE
Determines remuneration for our Executive
Directors and senior management, to
support our growth strategy and deliver
value for stakeholders. Refer to the
Committee’s report on pages 89-113
NOMINATION COMMITTEE
Reviews the Board’s structure, size and
composition and proposes candidates for
appointment to the Board. Refer to the
Committee’s report on pages 80-82
GENUS PLC BOARD
OTHER TEAMS REPORTING
TO THE BOARD
GELT
Leads our strategic delivery and ensures
organisational alignment, engagement
and efficient execution
SUSTAINABILITY COMMITTEE
Provides direction and oversight for
continuous improvement in our environmental
sustainability, health and safety, animal
well-being and community engagement
GENUS PORTFOLIO STEERING
COMMITTEE
Gives us a comprehensive view of our R&D
programme and involves our business units
in prioritising our R&D initiatives. Jason Chin
attends the GPSC and reports to the Board
on its activities
CORPORATE GOVERNANCE 78
GENUS PLC / ANNUAL REPORT 2023
CORPORATE GOVERNANCE STATEMENT CONTINUED
COMPOSITION,
SUCCESSION AND
EVALUATION
YEAR 1
An external Board effectiveness review
produces an action plan for the areas
of focus identified by the review.
YEAR 3
An internal review
using questionnaires
and interviews with the
Chair of the Board.
YEAR 2
A follow-up
questionnaire by
the same external
consultant enables us
to monitor our progress
with the focus areas.
THE BOARD’S COMPOSITION
ASSESSING THE BOARD’S EFFECTIVENESS
To ensure the Board provides effective leadership to the
Group, we have a three-year evaluation cycle, using
a mixture of internal and external evaluations.
This was the second year of the current three-year cycle, following
last year’s external evaluation, and we therefore followed the
process shown in the diagram above.
At the year end, the Board comprised the Non-Executive
Chairman, four independent Non-Executive Directors and
three Executive Directors – the Chief Executive Officer, the
Chief Executive Officer Designate and the Chief Financial
Officer. The Non-Executive Directors therefore form a majority
on the Board, as required by the Code. Stephen Wilson
stepped down as CEO on 1 July 2023 and will retire from
the Board on 30 September 2023, resulting in the number
of Executive Directors reducing to two from that date.
The Board has an appropriate blend of skills and professional
backgrounds. Almost all of our Directors have held leadership
positions in international companies, with several having
run businesses overseas. Several of our Directors, including
the Chair of the Audit & Risk Committee, have significant
financial experience, while others have strong backgrounds
in scientific research or in leading science-based businesses.
This breadth helps to ensure the Board provides even-
handed oversight, works in a constructive and focused
manner and has the capabilities to manage the challenges
of a complex and evolving global business environment.
CORPORATE GOVERNANCE 79
GENUS PLC / ANNUAL REPORT 2023
THE EVALUATION’S CONCLUSIONS
The review showed that the Board remains effective in most areas, with the feedback echoing the positive sentiments of the
previous year’s review. The Board is well led, and recommendations from the previous year’s evaluation had been well embedded
within its governance processes. The review demonstrated that the Board’s priorities are focused on the successful transition between
Stephen Wilson and Jorgen Kokke, as well as on broader executive and non-executive succession planning. In addition, the evolution
of the ABS strategy remains a high priority for the Board going forward.
BOARD FOCUS AREAS FOR FY23
Last year’s internal evaluation identified the following priorities for FY23:
Priority
Progress
Enhanced engagement from the Board in shaping the Board’s
agenda, including the preparation of a balanced score card
of actions from the annual strategy session, to ensure that
the Board is able to spend its time discussing and challenging
management on its highest priority strategic topics.
The Board now has a balanced score card in place, which is
used to track progress with key issues and initiatives at each
scheduled Board meeting. All Directors are consulted in advance
on the meeting agendas, to ensure that priority themes and
topics are identified.
Using time around Board meetings, such as at Board dinners,
to discuss key themes emerging from management briefings by
the Chief Executive Officer, Chief Financial Officer, and General
Counsel and Company Secretary, allowing the Board more
time during its meetings for discussion of its highest priority
strategic topics.
Ensuring an ongoing focus on succession issues including Board
succession, Board size and skills, and executive team succession.
The Board has taken a structured approach to using time around
meetings, for example, by using the dinner the night before each
meeting as a forum for discussing strategic issues.
The Board has continued to focus on succession, including
the appointment of an internal candidate (Matt Culbertson) as
Chief Operating Officer of Genus PIC, following Bill Christianson’s
retirement. The Nomination Committee’s remit includes the
Board’s size and balance of skills, which remain appropriate.
ELECTION AND RE-ELECTION OF DIRECTORS
As noted above, Stephen Wilson stepped down as Chief Executive at the end of June 2023 and will step down from the Board on
30 September 2023. Having completed nine years on the Board, Lykele van der Broek will retire as a Non-Executive Director at the
AGM in November 2023.
All the other Directors will offer themselves for re-election (or election for Jorgen Kokke) at the next AGM, as required by the Code.
Details can be found in the Notice of AGM. The Board considered the effectiveness of each individual Director through the performance
evaluation described above. This included specific consideration of each Director’s other commitments and their ability to discharge
their duties to the Company.
The Board recognises and is cognisant of shareholders’ guidelines regarding the number of external mandates held by Directors,
and has observed that a minority of shareholders voted against the re-election of Iain Ferguson at the 2022 Annual General Meeting.
The Board, through the Senior Independent Director, has engaged with those shareholders to understand their concerns. Iain is a highly
experienced public company Chairman, Non-Executive Director and former FTSE 100 CEO with extensive and diverse leadership
experience and a sound and practical understanding of corporate governance. Iain has a deep appreciation of capital markets
and investor sentiment which he brings to Board deliberations, in addition to financial expertise and food industry experience.
Iain is Chairman of the Company, and also chairs the boards of Crest Nicholson plc and Personal Assets Trust plc. The Board explored
Iain’s capacity as part of the Board effectiveness review and remains satisfied that, Iain has sufficient time to dedicate to Genus.
This review takes into account the externally managed nature of Personal Assets Trust plc and the corresponding reduction in
time commitment required as compared to FTSE 250 appointments. The Board further remains satisfied that Iain has consistently
demonstrated his ability to dedicate a significant and appropriate portion of his time to meet the Company’s requirements.
The Board is further satisfied that Iain’s external appointments neither result in overboarding nor do they count as conflicts of interest.
The Board confirms that all the Directors continue to be effective in their roles and recommends their re-election as set out in the
Notice of AGM.
CORPORATE GOVERNANCE 80
GENUS PLC / ANNUAL REPORT 2023
NOMINATION COMMITTEE REPORT
Dear Shareholder
The Committee’s primary focus this
year was on managing the Chief
Executive succession, following Stephen
Wilson’s decision to retire, which we
announced in February 2023. We were
delighted to recruit a high-calibre
replacement in Jorgen Kokke. As noted
on page 66, Lykele van der Broek will
retire as a Non-Executive Director
at the next AGM and the process for
recruiting a new NED is under way.
More generally, the Committee has
remained focused on succession planning
and talent management, reflecting the
critical importance to Genus’s success
of having the right leadership in place
and ensuring we bring through the
next generation of talented people.
Iain Ferguson CBE
Chair of the Nomination Committee
6 September 2023
IAIN FERGUSON CBE
Chair of the Nomination Committee
Iain Ferguson CBE (Chair)
Jason Chin
Lysanne Gray
Lesley Knox
Lykele van der Broek
Stephen Wilson1
Meetings
2/2
2/2
2/2
2/2
2/2
0/2
1 Stephen did not attend Committee meetings
dealing with his own succession
THE COMMITTEE’S ROLE AND
RESPONSIBILITIES
Jorgen Kokke and Alison Henriksen also
attended the Committee’s meetings
by invitation.
The Committee has written terms
of reference, which set out the
authority delegated to it by the
Board. These are available from
our website:
www.genusplc.com
The Committee is responsible for:
• making recommendations to the Board
on the structure, size and composition
of the Board and its Committees;
• evaluating the balance of skills,
experience, independence, knowledge
and diversity on the Board;
• succession planning for the Non-
•
Executive and Executive Directors
and other senior executives; and
identifying and recommending suitable
candidates to become Directors, based
on merit.
FOCUS AREAS FOR FY23
In last year’s report, we identified two
focus areas for the Committee in FY23.
These were to continue to focus on talent
development and succession planning,
and ensuring we remain cognisant
of the Financial Conduct Authority’s
(‘FCA’) targets for Board diversity.
As part of our succession planning for
the Chief Executive role, we conducted
an external search and had developed
relationships with leading search firms,
which supported our recruitment of
Jorgen Kokke, as described below.
Our consideration of other critical roles
highlighted that Dr Matt Culbertson was a
strong internal candidate to succeed Bill
Christianson as COO of Genus PIC, and we
were pleased that Matt has taken on this
role following Bill’s retirement in June 2023.
Information on Matt’s skills and experience
can be found in his biography on page 70.
The Committee supports the FCA’s
targets for Board diversity and more
information can be found in the Diversity
section opposite.
RECRUITMENT OF A NEW CHIEF
EXECUTIVE OFFICER
On 23 February 2023, the Company
announced Stephen Wilson’s decision to
retire as Chief Executive. The Committee
began a formal search for Stephen’s
successor, using the services of Russell
Reynolds Associates, a leading executive
search and advisory firm. Russell Reynolds
has no other connection with the
Company or with individual Directors.
As Chair of the Committee, I led the search
process, with the support of Senior
Independent Director Lesley Knox and our
Group Human Resources Director, Angelle
Rosata. Our key criteria included:
• proven international leadership
capability;
• a background in businesses where
research and development and
developing differentiated products are
key; and
• a deep understanding of the
environments our customers operate in.
Russell Reynolds conducted a thorough
international search, which generated
a strong shortlist of candidates
for the role. Following a rigorous
selection process, we concluded that
Jorgen Kokke was the outstanding
candidate and the Committee
recommended his appointment to the
Board. More information on Jorgen’s
skills and experience can be found
in his biography on page 68.
Jorgen joined the Board as Chief
Executive Designate on 2 May 2023 and
became Chief Executive on 1 July 2023.
INDUCTION FOR JORGEN KOKKE
Since joining Genus, Jorgen has
undergone an intensive induction process
supported by Stephen Wilson to ensure
the smooth transition of responsibility.
Jorgen has visited key sites in the US
and the UK including: ABS sites at
DeForest, Leeds, Dekorra and Ruthin;
R&D and IntelliGen sites at Pepsi Way;
and PIC sites including Hendersonville
for an introduction to pig production.
In addition, Jorgen has attended a
meeting of the GPSC, and visited ABS
and customer sites in Brazil with the
Board. Jorgen has met key customers
in the Netherlands, the US and China.
CORPORATE GOVERNANCE 81
GENUS PLC / ANNUAL REPORT 2023
SUCCESSION PLANNING
The Committee has a formal three-phase succession planning process:
ASSESSMENT
APPROACH
EXECUTION
The Committee reviews the
Board’s current skills and
experiences across a range
of relevant areas.
This results in a skills matrix
(see below), which identifies
the skills coverage across all
Board members.
Potential skills gaps are identified,
so they can be incorporated into
future succession planning at
Board and Executive level.
Areas for ongoing
Board upskilling
are identified
and discussed.
1
The Committee applies
engagement rules for succession
planning, including
• ensuring succession planning
is in line with the Committee’s
terms of reference;
• considering the need to
replace the skills of any
departing NED; and
• filling any missing skills
required for the Company’s
strategic direction.
Job specifications
for the Non-Executives
and Executives are
kept up to date.
2
The Committee identifies the
desired skills for any new NED, for
use in filling any future vacancies
on the Board.
Potential internal candidates for
promotion to Executive Director
are identified.
3
Management succession planning is one of the business’s top priorities and the Committee has continued to assess the succession
plans for GELT members. The Group HR Director engaged with the Board during the year to discuss these plans.
BOARD SKILLS MATRIX
The table below shows the key experience and skills the Committee has identified as desirable and indicates their depth on the Genus
Board, as at the date of this report.
Competence
Board and corporate governance
Strategy
Finance, banking and capital markets
Risk, culture change and change management
Politics and public affairs
Stakeholder and customer communications
Sustainability implementation and communications
Human resources
IT systems, transformation and data/cyber security
Science and biotechnology
Food sector
Review, launch and marketing of FDA regulated products
International business
North America market
EMEA market
Asia market
LATAM market
Low/medium
Good/high
0%
0%
38%
0%
38%
13%
50%
0%
50%
38%
0%
87%
13%
25%
25%
38%
62%
100%
100%
62%
100%
62%
87%
50%
100%
50%
62%
100%
13%
87%
75%
75%
62%
38%
The Committee believes the Board has an appropriate balance of skills and experience and will keep the skills matrix in mind in any
future recruitment to the Board.
CORPORATE GOVERNANCE 82
GENUS PLC / ANNUAL REPORT 2023
NOMINATION COMMITTEE REPORT CONTINUED
BOARD TRAINING AND DEVELOPMENT
The Group provides continuing education
to its leaders, including Board members,
whose training needs are identified
through the Board effectiveness review
described on page 79. The Committee is
currently reviewing options for providing
training for Non-Executive Directors
when they join the Board, to help them
carry out a company director’s duties.
The Group General Counsel and
Company Secretary plays an important
role in keeping the Board up to date
with any changes to corporate
governance requirements.
DIVERSITY
The Committee believes that the
different viewpoints represented on
a diverse Board can help Genus to
maintain its competitive advantage.
Diversity also links to our values, by being
people-focused and responsible, and
to our strategy by encouraging new
ideas which deliver for our customers
and ultimately drive our results.
We therefore look to ensure that our
recruitment and leadership development
programmes support inclusivity in
our succession planning and talent
development, including appropriate
representation from female and ethnic
minority candidates. The Group has
an employee-led forum called AWAKE
(Advancing Women’s Advocacy,
Knowledge and Empowerment), which
brings together female leaders and
a cross-section of other women to
develop ideas for increasing diversity
and improving working practices.
At the year end, three of the eight
Directors were female (37.5%), ahead of the
33% target set by the Hampton-Alexander
Review. From October 2023, the proportion
of female Directors will revert to 43%,
following Stephen Wilson stepping down
from the Board on 30 September 2023.
There were also three female members
of GELT, comprising 33% of the total. The
direct reports to GELT, excluding support
staff, were 23.5% female and 76.5% male.
The FCA reporting requirements on
diversity have come into force this year.
The Company already exceeds the FCA’s
targets of 40% female representation
on the Board and that at least one
of the Chair, Chief Executive, CFO
or SID should be female, with both
our CFO and SID being women.
The FCA has also set a target for at
least one Board member to be from an
ethnic minority background. We support
this and amended our Diversity Policy in
FY22 to ensure we fully consider ethnic
diversity in any recruitment to the Board.
The Board currently has one Director
from a minority ethnic background.
DIVERSITY POLICY
Our Board diversity policy aims to ensure
that we consider diversity in its broadest
sense. A diverse Board has members
with different skills, backgrounds,
regional and industry experiences,
races, genders and other qualities.
The Board, with the support of the
Nomination Committee:
• considers all aspects of diversity when
reviewing the Board’s composition and
when conducting the annual Board
effectiveness evaluation;
• encourage development of internal
high-calibre people, to help develop a
pipeline of potential Executive Directors;
• considers a wide pool of candidates for
appointment as Non-Executive
Directors, including those with little or
no listed company board experience;
• ensures a significant portion of the
long list for Non-Executive Director
positions are women and candidates
from a minority ethnic background;
• considers candidates against objective
criteria and with regard to the benefits
of Board diversity; and
• only engages executive search firms
who have signed up to the voluntary
Code of Conduct on gender and ethnic
diversity and best practice.
The Board complied with the policy
throughout the period. A copy of the
policy can be found on our website:
www.genusplc.com. The Committee
reviewed the policy during the year and
concluded that it remained appropriate.
WORKFORCE GENDER BREAKDOWN
M = Male
F = Female
M
1,228 (34.57%)
2,308 (64.98%)
F
More information about diversity
across Genus can be found in the
Strategic Report on pages 34 to 35.
SERVICE CONTRACTS AND LETTERS
OF APPOINTMENT
Copies of service contracts and letters
of appointment between the Directors
and the Company will be available
for inspection at the Company’s
registered office during normal business
hours until the conclusion of the AGM
on 22 November 2023, and at the
AGM from at least 15 minutes prior
to the meeting until its conclusion.
FOCUS AREAS FOR FY24
For FY24, the Committee will focus on the
following areas:
• supporting the transition from Stephen
Wilson to Jorgen Kokke as Chief
Executive; and
• recruiting a Non-Executive Director to fill
the vacancy created by Lykele van der
Broek’s forthcoming retirement, seeking
a candidate with Lykele’s skills and
experience in science-based
agricultural businesses.
BOARD AND EXECUTIVE MANAGEMENT GENDER BREAKDOWN
Number of
Board
members
Percentage
of the
Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage
of executive
management
5
3
–
63%
37%
–
2
2
–
6
3
–
67%
33%
–
Men
Women
Not specified/prefer not to say
BOARD AND EXECUTIVE MANAGEMENT ETHNICITY
Number of
Board
members
Percentage
of the
Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage
of executive
management
White British or
other White (including
minority-white groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/
Black British
Other ethnic group,
including Arab
Not specified/prefer not to say
7
1
–
–
–
–
87%
13%
–
–
–
–
4
–
–
–
–
–
8
–
–
–
–
–
100%
–
–
–
–
–
Gender and ethnicity data has been self-reported by Directors and Executives.
CORPORATE GOVERNANCE 83
GENUS PLC / ANNUAL REPORT 2023
AUDIT & RISK COMMITTEE REPORT
LYSANNE GRAY
Chair of the Audit & Risk Committee
Lysanne Gray (Chair)
Jason Chin
Lesley Knox
Lykele van der Broek
Meetings
5/5
5/5
4/5
5/5
Iain Ferguson, Jorgen Kokke,
Stephen Wilson and Alison Henriksen
also attended the Committee’s
meetings by invitation.
An external cyber security review was
carried out in December 2022 to validate
that the IT security improvement plan
put in place after the June 2022 security
incident was effective. The review
identified some areas of improvement
which are being addressed to further
strengthen our cyber security controls. The
Committee is satisfied with the progress
made on cyber security, but recognises
the need to continue to focus on this area.
We reviewed the progress being made
with regard to the implementation of the
GenusOne enterprise management
system, having reached an important
milestone this year with over half of our
operations on GenusOne. This included
updates on the approach being taken to
realise opportunities to standardise and
strengthen the Group’s processes and
controls as the system rollout continues
to progress.
We have carefully considered the critical
accounting policies and judgements and
assessed the quality of disclosures and
compliance with financial reporting
standards, including responding to the
FRC correspondence, and reviewed the
half-year and Annual Report, together
with the related management and
external audit reports. We also supported
the Board in reviewing the going concern
and viability statements and supporting
analysis and disclosure.
We have assessed the effectiveness of
internal and external audit during the year
by reviewing the work done, interviews,
and questionnaires. We continue to
focus on improving communication and
leveraging learnings. The Committee was
satisfied with the performance of both the
internal and external auditors.
Lysanne Gray
Chair of the Audit & Risk Committee
6 September 2023
Dear Shareholder
The Audit & Risk Committee acts on
behalf of the Board and shareholders, to
ensure the integrity of the Group’s
financial reporting, evaluate its system of
risk management and internal control,
and oversee the performance of the
internal and external auditors. We have
an annual work programme that is
designed to deliver these commitments,
which we followed during the year.
There were no changes to the Committee’s
membership this year and I am happy to
report that the membership continues to
comply with the UK Corporate Governance
Code and related guidance. All members
are independent NEDs, who bring a
sound range of financial, commercial and
scientific expertise to the Committee. This
year we welcomed Jorgen Kokke to the
Board as Chief Executive. Jorgen is invited
to attend all of the Committee’s meetings.
All members received regular updates
from the external auditor, to ensure they
continue to have current knowledge of
the accounting and financial reporting
standards relevant to the Group and
the regulatory changes and revisions
to auditing standards relevant to the
provision of external audit services.
The Committee was also briefed on the
Financial Reporting Council’s (‘FRC’)
UK Corporate Governance Code
consultation document and changes
related to internal controls, fraud and
audit and assurance policy. We continue
to prepare for the changes to ensure
compliance when they potentially
become effective after January 2025.
Our focus on risk management continued
throughout the year, with regular reviews
and assessment of the Group’s existing
and emerging risks. During the year, we
received and discussed detailed input
from management on key risks and
mitigation plans. In particular, we focused
on the risks associated with cyber security,
biosecurity and animal wellbeing, and
TCFD reporting requirements, the impacts
of the Russia-Ukraine conflict, and a deep
dive on our growth markets, as well as the
developing macroeconomic conditions
and their impact on our global operations.
CORPORATE GOVERNANCE 84
GENUS PLC / ANNUAL REPORT 2023
AUDIT & RISK COMMITTEE REPORT CONTINUED
COMMITTEE COMPOSITION
COMMITTEE EFFECTIVENESS
The Committee has formal terms of
reference, approved by the Board,
that comply with the UK Corporate
Governance Code. These are
available from our website:
www.genusplc.com
The Committee’s annual review of these
terms took place during the year.
Every three years the Board appoints
an external consultant to independently
evaluate its performance, and that
of its Committees. The last external
review was performed in 2022. The next
external evaluation will be in 2025.
In 2023, the Committee’s effectiveness
was assessed through a structured
questionnaire issued by Gould Consulting,
and concluded that the Committee
continued to operate effectively,
independently and with a strong focus
on risk identification and management.
THE COMMITTEE’S MAIN ACTIVITIES
DURING THE YEAR
During the year, the Committee held
five meetings and invited the Group’s
Chairman, Chief Executive, the Chief
Financial Officer, the Group Financial
Controller, the Head of Financial
Reporting, the Head of Financial Control,
the Head of Risk Management and
Internal Audit, and senior representatives
of the external auditor to attend these
meetings. The Committee also held
separate private sessions during the year
with the Head of Risk Management and
Internal Audit and the external audit lead
partner. At its meetings, the Committee
focused on the following topics:
The Committee members’ biographies,
along with information on Genus’s other
Board members, can be found on pages
68 to 69.
The Board has confirmed that it is
satisfied that Committee members
possess an appropriate level of
independence and relevant financial and
commercial experience across various
industries relevant to the Company.
The Committee has formal terms of
reference, approved by the Board,
that comply with the UK Corporate
Governance Code. These are available
from our website: www.genusplc.com.
The Committee’s annual review of these
terms took place during the year.
COMMITTEE ROLE AND RESPONSIBILITIES
The Committee’s role and responsibilities
include reviewing and monitoring:
• the financial reporting process
and any significant financial
reporting judgements;
• the integrity of the Group’s
financial statements and any
formal announcements relating
to financial performance;
• the Annual Report, to ensure it is fair,
balanced and understandable;
• the Group’s reporting to shareholders;
• the effectiveness of the Group’s
accounting and financial
reporting systems;
• the effectiveness of the Group’s
system of risk management and
internal controls;
• the effectiveness of the internal
audit function; and
• the effectiveness, independence
and objectivity of the Group’s external
auditor, including any non-audit
services it provides to the Group.
The Committee also:
• ensures that the Group maintains
suitable confidential arrangements
for employees to raise concerns; and
• reviews the Group’s systems and
controls for preventing bribery.
The Committee reports its findings
to the Board, identifying any matters
that require action or improvement,
and making recommendations
about the steps to be taken.
CORPORATE GOVERNANCE 85
GENUS PLC / ANNUAL REPORT 2023
FINANCIAL REPORTING
The main areas of focus and matters where the Committee specifically considered and challenged management’s judgements are set
out below:
Financial reporting area
Judgements and assumptions considered
IMPACT OF RUSSIAN
SANCTIONS ON
FINANCIAL REPORTING
The Committee has reviewed the Group’s assessment of the impact of Russian sanctions on the year-end
financial reporting.
In assessing the impact the Committee considered whether the Group still has control, as defined under
IFRS 10 ‘Consolidated financial statements’, over the assets and operations of the Russian entities and
whether it is still appropriate to consolidate the entities in the Group’s financial statements. In addition, the
Committee considered whether any impairment of assets held in those entities is required and whether the
Russian entities have sufficient cash resources to allow for day-to-day operations to continue. In making
their assessment the Committee debated and considered management assumptions on whether it has
control, as defined under IFRS 10 ‘Consolidated financial statements’, over the operations and assets,
given the current international sanctions in place on Russia, reviewed management’s impairment analysis
and discussed the FY24 plans and cash flow projections over a period of 18 months.
The Committee was satisfied with management’s conclusion that it is still appropriate to consolidate the
Russian entities, as defined under IFRS 10 ‘Consolidated financial statements’, that there is no impairment
of assets required at the year end and that the entities have sufficient cash flow to enable the businesses
to operate on a day-to-day basis and be able to meet their liabilities as they fall due.
The Committee also reviewed the disclosures in note 4 – Critical Accounting Judgements, relating
to restricted cash balances held in Russia, the judgements that management has made in applying
the accounting policies and the key assumptions and sources of estimation that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year.
Following this detailed review and discussion with management the Committee has concluded that
the presentation of the financial statements and the associated disclosures is appropriate.
BIOLOGICAL ASSETS
VALUATION
In compliance with IAS 41, Genus records its biological assets at fair value in the Group Balance Sheet
(£342.0m), with the net valuation movement shown in the Income Statement.
The Committee has reviewed the methodology, which has remained unchanged, and outcomes of the
biological assets valuation. The Committee debated and considered management’s assumptions and
estimates, through the current period, and discussed and reviewed the external auditor’s report on this
area, before concurring with management’s proposals. The Committee also received updates on
management’s streamlining and automation of the models which are used for the valuation process
including control improvements identified to strengthen both the model and the review of its output.
The Committee was satisfied with management’s accounting treatment, including the Income Statement
decrease of £24.9m in the value of porcine biological assets and the increase of £8.0m in the value of
bovine biological assets.
GOING CONCERN AND
VIABILITY STATEMENT
The Committee has reviewed the Group’s assessment of going concern over a period of 12 months and
viability over a period of three years.
PRESENTATION AND
DISCLOSURE OF
EXCEPTIONAL AND
ADJUSTING ITEMS
In assessing viability, the Committee has considered the Group’s budget and strategic plan, its credit
facility agreement, its principal risks and uncertainties, as detailed on pages 43 to 46, and the liquidity
and capital projections over the period and is satisfied that this is appropriate in supporting the Group
as a Going Concern.
The Committee has concluded that the assumptions are appropriate and that the viability statement
could be provided, and advised the Board that three years was a suitable period of review. The
Committee was also satisfied with the disclosures in relation to the appropriateness of the assessment
period selected, the assumptions made and how the underlying analysis was performed. The going
concern and viability statement is disclosed on page 65 of the report.
Genus had £30.6m of adjusting items, including £3.5m of net exceptional items in the Group Income
Statement. The Committee considered the presentation of these items in the financial statements,
due to the nature of these items and the guidelines on the use of alternative performance measures,
issued by the European Securities and Markets Authority. The Committee received detailed reports from
management outlining the judgements applied in relation to the disclosure of adjusting items, which
include net IAS 41 valuation movement on biological assets, amortisation of acquired intangible assets,
share-based payment expense and exceptional items. For adjusting items, the Committee took into
consideration their volatility and lack of correlation to the core operational progress and performance
of the business. Specifically, for exceptional items, the Committee took into consideration the materiality,
frequency and nature of the items. Following this detailed review and active discussion with management,
the Committee has concluded that the presentation of the financial statements is appropriate.
CORPORATE GOVERNANCE 86
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AUDIT & RISK COMMITTEE REPORT CONTINUED
The Committee conducted its annual
review of the effectiveness of the Group’s
internal controls and disclosures. The
Committee’s review of the effectiveness of
internal controls has encompassed a
review of various reports provided by
management, Risk and Internal Audit,
Internal Control and External Audit. The
Committee reviewed the results of the key
financial controls self-assessment process,
which is performed every six months;
internal audit’s findings at each scheduled
meeting, including updates on the
implementation of management’s actions;
and the Group’s Whistleblowing Policy and
bribery prevention procedures.
The review did not identify any significant
financial reporting control failings. All
control issues have been remediated
and discussed with the Committee.
However, Genus routinely identifies
and implements control improvement
opportunities and the Committee
discussed with management various
opportunities to further strengthen the
Group’s system of internal control.
OVERSIGHT OF INTERNAL AUDIT
AND EXTERNAL AUDIT
Internal audit
The Committee reviewed and approved
the internal audit function’s scope, terms
of reference, resources and activities.
This year with the end of the COVID-19
travel restrictions the internal audit team
was able to travel to audit locations.
The Committee was satisfied that the
coverage and quality of the internal
audit process remained appropriate. The
Head of Risk Management and Internal
Audit provided regular reports to the
Committee on the work undertaken and
management’s responses to proposals
made in the internal audit reports issued
during the year. The Committee continued
to meet the Head of Risk Management
and Internal Audit without management
being present. The Committee reviewed
and was satisfied with the internal
audit function’s performance.
External audit
Deloitte LLP was first appointed as the
Company’s external auditor for the
period ended 30 June 2006. Following
a formal tender process, Deloitte
was reappointed for the audit of the
financial year ended 30 June 2016.
In accordance with the current audit firm
rotation timeline, the Committee is in the
process of conducting a competitive
external audit tender process for our FY25
audit and is satisfied with the progress
to date. The Company has complied
with the Statutory Audit Services Order
for the financial year under review.
The Committee reviewed and agreed
the external auditor’s scope of work
and fees, held detailed discussions of
the results of its audit and continued
to meet the external auditor without
management being present. The
Committee reviewed the external auditor’s
objectivity and independence and the
Group’s policy on engaging the external
auditor to supply non-audit services.
The Committee assessed the external
auditors performance in conducting
the audit for the June 2022 year end.
The Committee considered the quality,
effectiveness, independence, and
objectivity of the external auditors
through the review of all reports provided,
regular contact and dialogue both during
Committee meetings and separately
without management. Continuing from
the process in the previous year, the
Committee conducted an audit quality
and effectiveness review through a
questionnaire to Committee members,
management, and members of the
finance team, which delivered focused
insight into Deloitte’s effectiveness.
The Committee considered the audit
quality reviews on the firm and sought
confirmation that recommendations
were appropriately actioned where
relevant to the audits of our Company.
MONITORING BUSINESS RISKS
The Committee discussed the principal
risks identified with management and the
external and internal auditors, along with
management’s plans to mitigate them,
and received regular detailed updates
from the risk owners and their direct
reports. In addition to reviewing the
principal risks, the Committee received
detailed updates on the following:
• Sustainability matters: the related
current and emerging risks and the
roadmap of actions identified in support
of the climate change action plan and
TCFD reporting requirements and
improvements in the disclosures from
the FRC review letter.
• Biosecurity and continuity of supply: the
risk of losing key livestock or losing our
ability to move animals and/or semen
freely (including across borders), due to
disease outbreak.
• Cyber security: the cyber security risk
faced by the Group and the actions
being taken to strengthen infrastructure
and systems security.
• Russia-Ukraine conflict: regular updates
provided to the Board to understand
the impact on our operations and
people in these regions and report
on how compliance with sanctions
are ensured.
• Growth markets: a review of our growth
markets was held to better understand
the varying risks and opportunities,
with a focus on China and Brazil.
• Regular updates on the project to
implement GenusOne, a Group-wide
enterprise management system,
which now operates in over fifty percent
of our operations.
INTERNAL CONTROL SYSTEM
Management is responsible for identifying
and managing risks, and for maintaining
a sound system of internal control. The
internal control framework is intended
to effectively manage rather than
eliminate entirely the risks to achieving
our business objectives. The key
elements of the Group’s internal control
framework are monitored throughout
the year and the Committee has
conducted a review of the effectiveness
of the Group’s risk management and
internal control systems on behalf of the
Board. Our risk management process
and system of internal control are
described in detail on pages 61 to 64.
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GENUS PLC / ANNUAL REPORT 2023
External Auditor Independence
Maintaining the objectivity and
independence of the external auditors
is essential. The Committee has taken
appropriate steps to ensure that the
Company’s external auditors are
independent of the Company and
obtained written confirmation from them
that they comply with guidelines on
independence issued by the relevant
accountancy and auditing bodies.
Additional non-audit services provided
by the auditors may impair their
independence or give rise to a perception
that their independence may be impaired.
The Group has a policy in relation to
the provision of non-audit services that
is aligned with the EU Regulation and
Statutory Audit Directive to provide
further clarity over the type of work
that is acceptable for the external
auditors to carry out. The policy sets
out the process required for approval
and a cap to the total non-audit fees
for permitted services (at 70% of the
audit fee). The policy was last reviewed
in the year ended 30 June 2023.
Audit and non-audit fees paid to Deloitte
in the year were £1.0m and an analysis is
presented in note 8 to the consolidated
financial statements. Non-audit fees
represent 2% of the audit fee. Non-
audit services provided by the external
auditors during the 2023 financial year
comprised audit related assurance
services. The Committee concluded
that the provision of such services
was appropriate given that they were
closely related to the work performed
in the external audit process and, for
reasons of effectiveness and efficiency,
it was considered advantageous to
engage the external auditors due to their
knowledge and expertise. Resolutions
to reappoint Deloitte as auditors and
to authorise the Directors to agree their
remuneration will be put to shareholders
at the Annual General Meeting that
will take place on 22 November 2023.
Financial Reporting Council
correspondence
During the year the FRC Corporate
Review team carried out a review of
our Annual Report and Accounts for
the year ended 30 June 2022. The
review was based solely on the Group’s
Annual Report and Accounts and did
not benefit from detailed knowledge
of our business or an understanding
of the underlying transactions entered
into. The review highlighted questions
requiring a response on TCFD disclosures.
The FRC noted that the Group’s Annual
Report did not include a clear statement
explaining whether the report included
climate-related financial disclosures
consistent with the Recommendations
and Recommended Disclosures of the
TCFD, as required by the Listing Rules,
and also identified a number of areas
where improvements could be made to
the Company’s TCFD disclosures. As a
result of the FRC’s review the Company
has provided a clearer statement in this
report including providing explanations
about TCFD recommendations and
recommended disclosures as required
by the Listing Rules and made a number
of improvements to the TCFD disclosures
consistent with the recent thematic
review. These enhancements are
included in the company’s sustainability
report within this Annual Report and
Accounts (see pages 36-59). There were
also a number of matters raised for
our attention which we considered in
relation to our 2023 Annual Report and
Accounts. As a result of the FRC’s review,
we have considered and enhanced the
clarity of disclosures in relation to:
• Alternative Performance Measures
(‘APMs’) glossary on pages 200-207
regarding the exclusion of amortisation
of acquired intangibles; and
IFRS 13 Fair Value Measurement
disclosures in note 4 and note 16.
•
We have responded to and thanked
the FRC for their observations.
RISK MANAGEMENT AND
INTERNAL CONTROLS
RISK MANAGEMENT
The Board is responsible for our risk
management system, which is designed to
identify, evaluate and prioritise the risks
and uncertainties we face. The Board sets
our risk appetite, monitors the Group’s risk
exposure for our principal risks and ensures
appropriate executive ownership for all
risks. This ongoing risk management
process for the Group’s significant risks
was in place for the year under review and
up to the date of approval of the Annual
Report and Accounts. Our principal risks
and how we mitigate them are
summarised on pages 62 to 64.
To further assist its understanding of risk,
the Board has restarted its programme of
visits to our local operations as COVID-19
travel restrictions have eased, visiting
our ABS operations in Brazil. The Board
received regular political, economic and
industry risk updates from the relevant
business groups. The Board performed
its annual risk review in May 2023. This
involved a fresh review of the types and
levels of risk facing Genus as it executes
its strategy and was designed to identify
and evaluate any new or emerging risks
and ascertain whether the risk register
covered all relevant risks. No changes
to the principal risks were identified,
however the Board recognises the impact
of the continued Russia-Ukraine conflict,
and increasing global macroeconomic
conditions has had on our operations.
INTERNAL CONTROL
The key elements of our internal control
system are set out below. An internal
control system cannot completely
eliminate the risks we face or ensure we do
not have a material misstatement or loss.
CORPORATE GOVERNANCE 88
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AUDIT & RISK COMMITTEE REPORT CONTINUED
MANAGEMENT STRUCTURE
INVESTMENT APPRAISAL
EFFECTIVENESS OF INTERNAL CONTROLS
The Board, with the help of the Audit & Risk
Committee, reviewed the effectiveness of
our internal control system, as well as our
financial, operational and compliance
controls and our risk management. The
review considered our internal control
self-assessment process, which is
designed to assess compliance with our
minimum control standards, the
independent internal audit programme,
and the reports management prepared
when the Board approved the interim and
final results and financial statements.
It also assessed:
• whether we had identified, evaluated,
managed and controlled significant
risks; and whether any significant
weaknesses had arisen, and
if so, whether we had addressed them.
•
The assessment also took into account
any risk or control issues we identified
through our divisional business reviews,
Board and GELT meetings, and insurers’
reviews.
We have an internal control continuous
improvement work programme and
routinely identify opportunities to
strengthen our control environment and
improve our risk management capabilities.
However, the Board has not identified or
been told of any significant failings in our
internal controls.
We control our capital expenditure
through our budget process and by having
clear authorisation levels, above which our
businesses must submit detailed written
proposals to the Board for approval.
We carry out due diligence for business
acquisitions and material licences, and
conduct post-completion reviews of major
projects, to ensure we identify areas for
improvement and correct any areas of
underperformance or overspend.
INTERNAL AUDIT
Our internal audit activities are provided
by in-house and external resources,
under the leadership of our Head of Risk
Management and Internal Audit. During
the year, Internal Audit completed a risk-
based audit programme agreed by the
Audit & Risk Committee. The Committee
reviews the results of these audits and the
subsequent actions we take, which we
also communicate to the external auditor.
All business units complete risk and
control self-assessments twice a
year. Internal audit, as part of its work
programme, performs independent
reviews of these assessments to identify
any deficiencies in our controls and how
we should address them. An annual
Fraud Risk Assessment is carried out by
internal audit with all the business units;
the results and mitigation actions were
presented to the Committee in February
2023. The external auditor also provides
observations on the control environment
arising from its audit work. The results are
communicated to senior management
and the Audit & Risk Committee.
The Board sets formal authorisation levels
and other controls that allow it to
delegate authority to run our businesses
to the Chief Executive, GELT and their
management teams. Our management
supplements these controls by setting the
operating standards that each subsidiary
needs for its business and location.
GELT regularly reviews our performance
against strategy, budget and a defined
set of operational key performance
indicators. The Chief Executive, Group
Finance Director, Group General Counsel
and Company Secretary, and Group
Financial Controller also hold monthly
reviews with each business unit.
QUALITY AND INTEGRITY OF OUR PEOPLE
We strive to operate with high integrity in
everything we do. Our control environment
depends on high-quality people who
maintain our ethical standards. We ensure
our people’s ability and integrity through
our recruitment standards, training and
consistent performance management.
The Board is informed of appointments to
our most senior management positions.
INFORMATION AND FINANCIAL
REPORTING SYSTEMS
We create detailed operational budgets
for the year ahead, along with five-year
strategic plans, which the Board reviews
and approves. We then monitor our
performance throughout the year, so we
can address any issues. The information
we consider includes our monthly financial
results, key performance indicators and
variances, updated full-year forecasts
and key business risks.
The main internal control and risk
management processes relating to our
preparation of consolidated accounts
are our Group-wide accounting policies
and procedures, segregation of duties,
system access controls, a robust
consolidation and reporting system,
various levels of management review
and centrally defined process control
points and reconciliation processes.
CORPORATE GOVERNANCE 89
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT
SECTION A – ANNUAL STATEMENT
On behalf of the Board, I am
pleased to present the Directors’
Remuneration Report for 2023.
We were pleased with the Shareholder
response to our Remuneration Policy
at the 2022 AGM, with over 93% of
shareholders voting for the new Policy,
including the changes we had proposed
following extensive consultation
across our shareholder base.
TRANSITION OF LEADERSHIP/
APPOINTMENT OF NEW CHIEF EXECUTIVE
On 3 April 2023 we announced that Jorgen
Kokke would join the Board as Chief
Executive Designate on 2 May 2023, and
become Chief Executive Officer on 1 July
2023. Stephen Wilson has supported this
transition of responsibilities, stepping
down from the CEO role but remaining
an active Executive Director through to
his retirement on 30 September 2023
to support effective transition. I would
like to extend my thanks to Stephen
for his significant contribution to the
business since joining in 2013 as Chief
Finance Officer and his subsequent
appointment as Chief Executive in 2019.
Jorgen is an exceptional successor for
Stephen, with an established track record
of working across global organisations
to create shareholder value.
As highlighted during our consultation,
there continues to be significant and
often growing differences between
remuneration structures for senior
leadership in the US compared to the
UK, where Genus is listed. In particular
this focuses on the quantum available
under variable plans and the range of
incentive vehicles utilised within typical
US-based organisations. Indeed, we
identified these differences early into
our succession planning discussions.
In making Jorgen’s appointment we
operated fully within the Remuneration
Policy approved by over 93% of
shareholders in November 2022.
We focused on how we could transition
Jorgen successfully onto our reward
structure, while recognising that the
composition and quantum of reward
available within the US market does
differ from that typically seen within
the UK FTSE 250 landscape.
REMUNERATION
COMMITTEE REPORT
CONTENTS
A. Annual Statement
Transition of leadership/
appointment of new
Chief Executive
Other leadership changes
Reward outcomes for 2023
Looking forward to 2024
Wider workforce and
employee engagement
Page(s)
89-91
89
90
90
91
91
B. At a Glance 2023 & 2024
92-95
What Executive Directors
were paid in 2023
What Executive Directors
can earn in 2024
Appointment of New Chief
Executive: Jorgen Kokke
C. Remuneration and
Performance Statement
Genus’s Strategy
and its link to
Performance-Related Pay
Executive Directors’
alignment to Share Price
D. Annual Report on
Remuneration
1. Reward outcomes for
Executive Directors for 2023
92
93
94
96
96
96
97-111
97-100
2. Forward looking policy
and implementation in 2024
101-104
3. The Process the
Committee followed
4. How the CEO’s pay
compares to shareholder
returns over the past 10
years and to employees’
pay
5. The Chairman and
Non-Executive Directors’
Fees
6. Details of the Directors’
shareholding and rights
to shares
E. Wider Workforce
Remuneration
105-106
106-107
107-108
108-111
112-113
CEO pay ratios
112-113
LESLEY KNOX
Senior Independent Non-Executive
Director and Chair of the
Remuneration Committee
KEY MESSAGES
•
Strong endorsement from
shareholders for our updated
Remuneration Policy at last AGM
•
•
•
•
Modest awards under annual bonus
and Performance Share Plan (‘PSP’)
reflecting challenging external
market conditions
Transition of leadership completed
with key external hire
Adjustment to CFO salary to reflect
changed responsibilities following
CEO recruitment
Some changes to the way we will
assess performance within incentive
plans from 2024, aligned to our
business strategy
Terms of Reference
The terms of reference for the Committee are in line
with the 2018 UK Corporate Governance Code and
available to view at www.genusplc.com.
Committee attendance
Lesley Knox (Chair)
Iain Ferguson
Jason Chin
Lykele van der Broek
Lysanne Gray
Meetings1
6/72
7/7
7/7
7/7
7/7
1 The Committee had five scheduled and two
ad hoc meetings during the year
2 Lesley Knox was unable to attend one
scheduled meeting due to a prior commitment.
The meeting was chaired by the Company
Chairman in her absence
Jorgen Kokke, Stephen Wilson and
Alison Henriksen also attended the
Committee’s meetings by invitation.
CORPORATE GOVERNANCE 90
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION A – ANNUAL STATEMENT
The full details of his buyout of previous
incentive awards from Ingredion,
determination of base salary and
his ongoing reward structure are
outlined in the report. We wanted a
structure that was sufficient to attract,
but which also aligned Jorgen to
future Genus performance through
high levels of share ownership.
Some key aspects of the design
of the arrangements are:
• Annual base salary of $825k
• Buyout of legacy awards from his former
employer (Ingredion Inc.) totalling
c$4.5m, with conversion into awards
over Genus shares with similar vesting
timelines. This includes conversion into
Genus shares of multiple reward
elements, covering market priced share
options, performance shares and
restricted stock units
• A guaranteed bonus payment payable
in cash in September 2023 of $412.5k
(recognising the forfeiting of eligibility for
annual bonus at his previous employer)
• An exceptional award under PSP plan of
400% of salary for award to be granted
in September 2023 only (with
performance based on Genus
performance over the period 2023-26)
• Ongoing variable opportunity of 200%
of salary for annual bonus (for year
ending June 2024) and 200% of salary
for PSP awards (for grants scheduled for
September 2024 and beyond)
• Shareholding requirement of 2x salary
as per existing Remuneration Policy
Jorgen will operate in a global capacity,
and be initially based in the US. To
fulfil his role he will travel as required,
including to attend Board meetings of
Genus plc (of which he is a Director).
OTHER LEADERSHIP CHANGES
Stephen stepped down from his role as
Chief Executive on 1 July 2023 and will
retire from the business on 30 September
2023. He was determined to be a good
leaver from the business due to retirement
and will be eligible for future vestings
from in-flight share awards, subject to
Company performance and prorated
for the period he was employed during
each respective performance period.
He will additionally have eligibility for
an annual bonus for 2024, prorated for
his period in employment during the
respective financial year. In line with our
Policy, he will have a post-cessation
shareholding obligation for the period
of two years following retirement. Full
details of his agreed arrangements
are provided within the report.
We evaluated the role of the CFO in light
of the appointment of Jorgen to the
business. In particular, we noted that
Alison would become the sole permanent
Executive Director based in the UK, and
with a broadened set of responsibilities
which represented an extension to her
previous role. We agreed to a change of
her base salary to £480,930 (+15%) effective
1 July 2023, which is not expected to be
reviewed again until September 2025.
REWARD OUTCOMES FOR 2023
Overall profit outcomes were just below
the threshold of the range previously
set by the Committee, resulting in nil
awards under this metric. This was due
to a number of factors during the year
as discussed within the wider Annual
Report, and the impact of interest rate
costs which were higher in practice than
that forecast where budgets were set.
Wider cash performance was good
with high levels of cash conversion
achieved. Final cash flow performance
was slightly below the free cash flow
budget set, with a corresponding
award level of 21% of maximum.
We discussed the broader strategic
progress made during the year and
performance against the strategic
targets set for each Executive Director.
We saw clear evidence of progress in key
areas in support of our agreed long term
strategy for the business and accordingly
made awards under this element of
the bonus reflecting this attainment.
This included the rate of progress of
genetic gain achieved during the year,
and submissions towards gaining FDA
approval for our gene editing activities.
Overall bonus awards for the CEO and
CFO were 23% and 20% of maximum
respectively. In line with our agreed
policy, one-third of these awards will
be delivered in Genus shares that
will vest after three years subject to
continued employment (or on the third
anniversary reflecting the agreed
leaver treatment for Stephen Wilson).
The Committee determined that while
material progress had been made across
parts of the business (and through
enhanced cash flow) the formulaic
outcomes under the bonus were a fair
reflection of underlying performance.
Awards under the Performance Share
Plan granted in September 2020 were
subject to our EPS performance over
the three financial years ending 30 June
2023. Against a performance range of
5% to 15% annual EPS growth the actual
annual growth achieved (of 7%) equates
to a vesting level of 36% of maximum.
The Committee also confirmed that
the overall vesting level was consistent
with the business performance
achieved over the three year period.
Overall we confirmed that the Policy
has operated as expected during
the past year, and that the formulaic
outcomes generated through the
bonus are a fair reflection of underlying
business attainment. No discretion
was applied to performance outcomes
during the year by the Committee.
CORPORATE GOVERNANCE 91
GENUS PLC / ANNUAL REPORT 2023
We remain committed to our stated
double-digit medium term growth
aspirations and will continue to assess
the majority of the PSP award linked to
our EPS performance over a three-year
period, rewarding sustained long-term
growth of the business. We have agreed
to use the same EPS range as for awards
made in 2022, requiring annual EPS
growth over the three year performance
period of 4% at threshold through to
12% or above for maximum vesting.
WIDER WORKFORCE AND
EMPLOYEE ENGAGEMENT
We have provided insights on our people
and culture elsewhere within the Annual
Report, including the role played by our
designated Non-Executive Directors
(Lykele van der Broek and myself) in
understanding the overall employee
experience and satisfaction with
reward. As a Committee we spent time
reviewing the progress on our gender
pay position within Genus Breeding
Limited, our largest UK subsidiary.
We additionally received updates on
enhancements to family leave policies
globally, and the launch of our new
employee share plan ‘TakeStock’ which
is global in design and was launched
in the UK and the US during the year.
Lesley Knox
Chair of the Remuneration Committee
6 September 2023
LOOKING FORWARD TO 2024
We have agreed some changes to
the way we will assess performance
under the Annual Bonus for 2024. These
are all consistent with our agreed
Remuneration Policy and reflect the
evolution of our agreed strategy.
We will move to assess profit performance
based on Operating Profit. This drives
alignment with the way we assess
performance at a business unit level
for other participants in the annual
bonus plan across the business,
and the desire to cascade and
standardise incentive structures.
We will also separate out profit
assessment, so that part is linked
to PIC China performance, and the
majority linked to the wider Group
performance excluding PIC China.
This change recognises the role of
PIC China within our strategic plan as
referred to in the Chairman’s report,
and is designed to align reward to both
this business unit performance and the
performance of the rest of the Group.
We will continue to exclude gene
editing costs for 2024, consistent
with our approach in previous years
but anticipate this will be the last
year we do this as we move closer
toward commercialisation of PRRSv.
Profit targets for each metric will be
set in advance by the Committee
and disclosed retrospectively in line
with prevailing market practice.
We will move to an alternative metric to
measure cash performance, moving from a
free cash flow metric to one based on cash
conversion. This change is designed to
drive focus on effective cash performance
across inventory management and
prioritisation of capital expenditure.
CORPORATE GOVERNANCE 92
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION B – AT A GLANCE 2023 (YEAR ENDING 30 JUNE 2023)
For more detail please see pages 97 to 100
WHAT EXECUTIVE DIRECTORS WERE PAID IN 2023:
1 BASE SALARY AND BENEFITS
• Benefits include a car
allowance for each
Executive Director
• The pension allowance for
Stephen Wilson was reduced
from 10% of salary to 6% of
salary from 1 January 2023
(in line with our stated
commitment to shareholders)
• The allowance payable for
Alison Henriksen and Jorgen
Kokke is 6% of salary
2 ANNUAL BONUS 2023
• Metrics used and weighting:
Adjusted profit before tax
(60%), Cash generation (15%),
Strategic measures (25%)
• Overall award 23% of
maximum for Stephen Wilson
and 20% of maximum for
Alison Henriksen
• One third of the total award
under this element made
in shares deferred for
three years
3 PSP
Awards granted linked to
3-year performance ending on
30 June 2023 vested at 36% of
maximum based on average
annual adjusted earnings per
share growth achieved of 7%
per annum
4 REMUNERATION BREAKDOWN
CHIEF EXECUTIVE
STEPHEN WILSON
(Stephen ceased to be CEO on
1 July 2023 and will step down from
the Board on 30 September 2023)
CHIEF FINANCIAL OFFICER
ALISON HENRIKSEN
CHIEF EXECUTIVE
DESIGNATE
JORGEN KOKKE
(Jorgen joined on 2 May 2023 as
CEO Designate and was appointed
as CEO effective 1 July 2023)
1
2
£616,900
£62,068
1
2
£418,200
£37,783
1
2
$119,523
$11,136
1 Salary
2 Pension and Benefits
1 Salary
2 Pension and Benefits
1 Salary
2 Pension and Benefits
Maximum Opportunity
175% of salary
Maximum Opportunity
175% of salary
N/A
MAXIMUM
£1,079,575
MAXIMUM
£731,850
23%
20%
FINAL OUTCOME = 23% OF MAXIMUM
FINAL OUTCOME = 20% OF MAXIMUM
(£244,524)
(£149,297)
Jorgen did not participate
in the Genus annual bonus
plan for year ended
30 June 2023
PERFORMANCE METRIC
Profit before tax
Cash generation
Strategic objectives (CEO)
Strategic objectives (CFO)
0%
21%
0%
0
78%
69%
% OF MAXIMUM AWARD
100%
Indicative value1
Indicative value1
100
N/A
MAXIMUM
£794,156
MAXIMUM
£471,113
TOTAL £285,896
TOTAL £169,601
1 £1,209,348
1 £774,881
2
3
4
5
£285,896
£244,524
£62,028
£616,900
2
3
4
5
£169,601
£149,297
£37,783
£418,200
1
2
3
4
5
$130,659
$0
$0
$11,136
$119,523
1 Total
2 Performance share plan
3 Annual bonus
4 Pension and benefits
5 Base salary
1 Calculated based on the average share price for the final quarter of the year ending 30 June 2023 (2,572p)
CORPORATE GOVERNANCE
93
GENUS PLC / ANNUAL REPORT 2023
WHAT EXECUTIVE DIRECTORS CAN EARN IN 2024 (AND HOW):
CHIEF EXECUTIVE
STEPHEN WILSON
(Stephen ceased to be CEO
on 1 July 2023 and will step
down from the Board on
30 September 2023)
Annual Salary £616,900
(no change)
CHIEF EXECUTIVE
(CEO FROM 1 JULY 2023)
JORGEN KOKKE
CHIEF FINANCIAL
OFFICER
ALISON HENRIKSEN
Salary $825,000
Salary £480,930
Maximum Bonus
opportunity = 200%
of salary
Maximum Bonus
opportunity = 175%
of salary
Maximum Bonus
opportunity = 175%
of salary
Salary (prorated for
employment between
1 July 2023 and
30 September 2023)
Awards over 21,979
Genus shares
Not applicable
Awards over 13,037
Genus shares
Not applicable
400% of salary
200% of salary
(Note this uses the
exceptional limit
permissible within
the Policy to support
recruitment of Jorgen
to the business
as outlined within
this disclosure)
1 BASE SALARY AND BENEFITS
•
• Benefits include a car allowance for
each Executive Director
Increase in salary for Alison Henriksen
effective 1 July 2023 with next scheduled
review September 2025
2 ANNUAL BONUS
• Metrics used and weighting: Genus
Group Operating Profit exc. PIC China
(50%), PIC China (10%), Cash conversion
(15%), Strategic measures (25%)
• One-third of the total award under this
element made in shares deferred for
three years
3 PSP FROM SEPTEMBER 2020
• Vesting of these awards depends on the
adjusted earnings per share (excluding
gene editing costs) achieved in the three
financial years ending 30 June 2024
4 PSP (AWARDED SEPTEMBER 2023)
performance against identified metrics
• 80% of the awards is linked to adjusted
• These awards will vest subject to
earnings per share with the 2026
adjusted earnings per share compared
to the 2023 adjusted earnings per share
(including gene editing costs)
• This will be assessed based on a scale
of 4% annual growth (threshold with
20% vesting) through to full vesting
at 12% annual growth or above
(straight-line basis)
• Remainder linked to metrics core to our
strategy (greenhouse gas reduction and
genetic improvement)
Salaries are normally reviewed annually and any changes made in September. Salaries for Stephen Wilson and Jorgen Kokke will be
unchanged for the year ahead. Following review by the Committee (discussed later in this disclosure) of salary for Alison Henriksen was
increased as shown, effective 1 July 2023. No further increases of salary for Alison is scheduled until September 2025.
Stephen Wilson
Jorgen Kokke
Alison Henriksen
Annual Salary
to 1 Sep
2023
Revised
Annual Salary
£616,900
£616,900
$825,000
$825,000
Effective Date
n/a
n/a
£418,200
£480,930
1 July 2023
Change
%
Nil
Nil
15
Note – the salary for Jorgen Kokke is denominated in USD$ and he is paid in USD. A currency conversion is completed ahead of making any share awards to convert a USD$
denominated value into GBP£ to determine the number of Genus shares to be awarded. Other Executive Directors are paid in GBP.
CORPORATE GOVERNANCE 94
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION B – AT A GLANCE 2023 (YEAR ENDING 30 JUNE 2023)
APPOINTMENT OF NEW CHIEF EXECUTIVE OFFICER: JORGEN KOKKE
BUYOUT DETERMINATION
Jorgen joined the business on 2 May 2023
from Ingredion Incorporated. We followed
our core policy to allow us to recognise
that certain awards in place at Ingredion
would be forfeited as a result of joining
Genus. This included reward elements
under incentive vehicles which are
typically offered within the US, but not
currently offered within the Genus Policy,
such as market priced share options.
Our approach was to place a fair value on
Ingredion awards, replicate expected
vesting timings where possible, to ensure
Jorgen was aligned to Genus
performance from appointment and to
mitigate or remove any future financial
exposure for Genus that could be created
by changes in Ingredion performance
(positive or negative) after hire.
All elements were denominated in USD,
and we agreed as part of contractual
discussions to base any exchange of
value into Genus shares using a 60-day
average of the Genus and Ingredion share
prices immediately prior to appointment,
and the average exchange rate between
the GBP and USD over the same period.
The final approach for each element
is outlined below.
Ingredion reward element
Calculation and approach (where applicable)
Genus shares awarded1
Vesting details
Restricted Stock Units
Unvested awards from Ingredion were converted into Genus shares
with vesting timing designed to replicate intended vesting at Ingredion.
26,226 shares
Performance Share Awards
Unvested awards were in place with performance linked to performance
conditions focused on relative Total Shareholder Return (‘TSR’) and
Adjusted Return On Invested Capital (‘ROIC’). A performance estimate
for each metric was obtained and validated against publicly available
data for reasonableness. This value was then converted into GBP and
an award made over Genus shares with vesting dates designed to
mirror the awards that were previously held at Ingredion.
This approach was designed to provide certainty to Genus and avoid
ongoing linkage to Ingredion performance beyond the point of hire.
77,762 shares
Market Priced Share Options Various unvested market priced options were held, with a range of
option prices in place. An independent Black-Scholes calculation
was performed to determine the fair value of these options, with a
subsequent award made over Genus Shares which will vest equally
on the first three anniversaries of employment.
22,947 shares
15,435 shares
23 February 2024
10,791 shares
28 February 2025
43,620 shares
23 February 2024
34,142 shares
28 February 2025
7,649 shares
2 May 2024
7,649 shares
2 May 2025
7,649 shares
4 May 2024
Total
126,935 shares
1 Genus shares were derived based on a Ingredion stock price of $100.62, a Genus share price of £28.78 and a GBP:USD exchange rate of £1:$1.23
TRANSITIONAL ELEMENTS
We agreed two transitional elements to support transition to the ongoing Genus reward structure as follows:
Annual Bonus
(payable
September 2023)
PSP Award
(to be made
September 2023)
Amount
$412,500
Detail
Cash bonus payable in September 2023. This is in recognition of eligibility to participate in the annual
bonus plan at Ingredion for 2023 that was forfeited through resignation. This award recognised that there
was a period of six months where eligibility to an annual bonus would be forfeited (January to June 2023)
with Jorgen participating in the Genus Annual Bonus Plan from July 2023.
400% of salary
Use of exceptional limit within existing Policy to make an award of 400% of salary under the PSP plan in
September 2023. These awards will vest after three years subject to achievement against Company
performance targets, and will be subject to a further two year holding period following vesting.
ONGOING REWARD STRUCTURE
Base Salary
Value
$825k
Benefits
$20k car allowance
Benefits (Retirement) 6% of salary
Detail
Reviewed annually with any changes expected in September each year, commencing September 2024.
This is set at a level consistent with other Executive Directors and is consistent with the wider workforce
rate for UK employees as outlined within our Policy.
Benefits
In accordance with our
Remuneration Policy
Participation in our core benefits offering for eligible US employees, including healthcare, life insurance
and disability cover.
Annual Bonus
Up to 200% of salary
The first participation would be for the year commencing 1 July 2023. One-third of any award is made
in deferred shares which vest after three years subject to continued employment.
PSP
Up to 200% of salary
From September 2024 Jorgen will be eligible to participate in the Genus Performance Share Plan,
with awards in line with the standard level permissible under our Remuneration Policy (currently 200%).
CORPORATE GOVERNANCE 95
GENUS PLC / ANNUAL REPORT 2023
SECTION B – AT A GLANCE 2024 (YEAR ENDING 30 JUNE 2024)
For more detail please see pages 101 to 104
1 YEAR — ANNUAL BONUS
Element/Weighting
Description of target
Alignment to strategy
Profit Growth (60%)
Delivery of year-on-year profit growth
• Sharing in value created to deliver
Cash (15%)
Cash conversion
returns for shareholders
• Generation of cash for reinvestment
and dividends
Strategic Objectives (25%)
Delivery of strategic objectives in pursuit of
stated business strategy
• Building foundations for future growth
LONG TERM — PERFORMANCE SHARE PLAN
Element/Weighting
Description of target
Alignment to strategy
EPS Performance (80%)
Average annual growth in adjusted earnings
per share
• Alignment to our stated medium-term
growth aspirations
Genetic Improvement (10%)
Improvement (expressed in standard
deviations of improvement per generation) of
genetics in Porcine, Bovine and Dairy
Greenhouse Gas Reduction (10%)
Reduction in overall primary intensity ratio of
our operations in pursuit of our stated 25%
reduction by 2030 against our 2019 baseline
• Helping farmers produce more output
with fewer inputs
• At the heart of our business:
‘Pioneering animal genetic
improvement to help nourish the world’
• Driving reduction in carbon intensity
of our operations
• Alignment to our stated target of
25% reduction by 2030 against our
2019 baseline
CORPORATE GOVERNANCE 96
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION C – REMUNERATION AND PERFORMANCE STATEMENT
GENUS’S STRATEGY AND ITS LINK TO PERFORMANCE-RELATED PAY
Our strategy and the way this is linked to variable reward is shown below.
INCREASE GENETIC
CONTROL AND PRODUCT
DIFFERENTIATION
R&D and business innovation
Proprietary genetic improvement
and dissemination positions
TARGETING KEY MARKETS
AND SEGMENTS
SHARING IN THE
VALUE DELIVERED
S
u
c
c
e
s
s
m
e
a
s
u
r
e
d
b
y
Volume growth
Operating profit
Cash conversion
Strategic measures within
the Annual Bonus focus on
key activities in pursuit of our
defined longer-term strategy
Strategic objectives
recognise wider progress than
financial measures alone
Measured through the profit
element of the Annual Bonus
Over the longer term will
flow into EPS and Genetic
Improvement, both used to
determine vesting under the PSP
Measured through the cash
element of the Annual Bonus
L
i
n
k
t
o
r
e
m
u
n
e
r
a
t
i
o
n
p
o
l
i
c
y
PERFORMANCE COMPONENTS AND THEIR IMPACT ON REMUNERATION
2022
2023 Movement %
Impact on remuneration
Adjusted results
Revenue
£593.4m
£689.7m
16% Input to Annual Bonus profit and earnings per share in PSP
Adjusted profit before tax
£71.5m
£71.5m
0% Annual Bonus measure
Generation of free cash flow
£(13.5)m
£18.2m
n/a
Annual Bonus measure
Adjusted earnings per share
Dividend per share
82.7p
32.0p
84.8p
32.0p
3% PSP performance condition
0% Executives rewarded via dividends on shares held post vesting
Share price at year end
2,508p
2,166p
(14)% Determines the value of deferred bonuses and PSP awards
Values in the table are in actual currency as shown in the Annual Report. A number of adjustments are made to these for the purposes of
calculating awards under our incentive plans as described in this report and in line with our Remuneration Policy.
EXECUTIVE DIRECTORS’ ALIGNMENT TO SHARE PRICE
The table below shows the value of shares currently held by the Executive Directors and those awarded under the Deferred Share Bonus
Plan (‘DSBP’), but not yet released (on a post-tax basis). It does not include those awards under the PSP which are scheduled to vest in
the future subject to Company performance, which have the potential to significantly increase the alignment of the Executives, subject
to the resulting level of vesting.
Shares
awarded
under the
DSBP
(post-tax)
Shares
owned
Total share
exposure
Indicative
value on 30
June 2023 (£)1
Consequence
of a +/- 10%
share price
change (£)
Conclusion
Stephen Wilson
76,757
8,618
85,375
2,195,853
219,585 Outgoing CEO is aligned to share price
Jorgen Kokke
Nil
Nil
Nil
Nil
N/A
movement through post-cessation
shareholding requirement
Incoming CEO has significant alignment to
Genus through share awards made on
appointment (buying out awards from
previous employer) and through ongoing
incentive opportunity available
Alison Henriksen
10,298
4,709
15,006
385,958
38,596 CFO aligned to share price movement
through existing ordinary shareholding and
in-flight incentive awards
1 Value calculated using the average share price for the final quarter of the financial year ended 30 June 2023 (2,572p)
CORPORATE GOVERNANCE
97
GENUS PLC / ANNUAL REPORT 2023
SECTION D – ANNUAL REPORT ON REMUNERATION
INTRODUCTION
This section of the Directors’ Remuneration Report is subject to an advisory vote at the 2023 AGM. Remuneration in respect of 2023 is
determined by our Remuneration Policy agreed by over 93% of shareholders at the 2022 AGM. The detailed Policy can be found in our
2022 Annual Report which is available from our website at www.genusplc.com.
We have split this section into the following chapters to balance our formal disclosure obligations with our desire to have a clear and
understandable report:
1. Reward outcomes for Executive Directors for 2023.
2. Forward Looking Policy and Implementation in 2024.
3. The Process the Committee Followed to Arrive at These Decisions.
4. How the Chief Executive’s Pay Compares to Shareholder Returns Over the Past Ten Years and to Employees’ Pay.
5. The Chairman and Non-Executive Directors’ Fees.
6. Details of the Directors’ Shareholdings and Rights to Shares.
7. Details of the Executive Directors’ Contracts and Non-Executive Directors’ Letters of Appointment.
1. REWARD OUTCOMES FOR EXECUTIVE DIRECTORS FOR 2023
EXECUTIVE DIRECTORS’ SINGLE TOTAL REMUNERATION FIGURE (AUDITED)
The following table shows a single total figure of remuneration for the 2023 financial year for each of the Executive Directors and
compares this figure to the prior year.
Stephen Wilson
Alison Henriksen
Salary
and fees
£000s
Benefits1
£000s
Pension2
£000s
Subtotal for
fixed pay
£000s
617
614
418
417
13
13
13
13
49
61
25
25
679
689
456
454
Annual
bonus
£000s
245
1923
149
192
PSP
£000s
Subtotal for
variable pay
£000s
2864
4995
1704
2694
531
691
319
461
Year
2023
2022
2023
2022
Total
£000s
1,210
1,380
775
915
1 Benefits included an annual car allowance of £12,000 for Stephen Wilson and Alison Henriksen respectively. Insured benefits include life assurance, private medical insurance
and a medical screen
2 Executive Directors receive a cash allowance in lieu of pension, which is shown in the Pension column. The percentage contribution payable to Stephen Wilson was reduced
from 10% to 6% of salary effective 1 January 2023, as previously confirmed through our Remuneration Policy. Alison Henriksen receives a pension contribution of 6% of salary
3 Bonus earned includes the part of the award which is deferred into Company shares. The value shown for Stephen Wilson in 2022 is after the application of downward
discretion to align the bonus value to that for the CFO
4 The value of the PSP is determined by the number of awards vesting in relation to performance in the period ended 30 June 2023. Dividend equivalents are not added to
awards made under the PSP. The value shown for 2023 is based on the average share price for the final three months of the 2023 financial year (which was 2,572p). This
compares to the share price at grant of 3,898p (-34%)
5 The 2022 values shown as estimated in the previous Annual Report have been restated to reflect the actual value at point of vesting. The share price was £28.94 on
12 September 2022 when awards vested for Stephen Wilson and Alison Henriksen
Executive Directors with Pay denominated in USD:
Jorgen Kokke
Salary
and fees
$000s
120
Year
2023
Benefits
$000s
Pension
$000s
Subtotal for
fixed pay
$000s
5
6
131
Annual
bonus
$000s
Nil
PSP
$000s
Nil
Subtotal for
variable pay
$000s
Nil
Total
$000s
131
HOW THE BONUSES FOR 2023 WERE CALCULATED
Annual Bonus
Both Stephen Wilson and Alison Henriksen were eligible to participate in the Annual Bonus for 2023. Jorgen Kokke did not participate
and his eligibility for the Genus annual bonus plan commenced from 1 July 2023. Awards were calculated by reference to performance
against a challenging sliding scale of profit, cash flow and strategic measures. Targets were set by the Committee to exclude the costs
of gene editing. This was a decision by the Committee (as was the case in prior years) to ensure that management’s reward was not
unfairly affected by decisions to make the right long-term investment decisions on behalf of the business.
The following results were achieved for each element of the annual bonus incentive.
Bonus target1
Strategic objective
Weighting
Actual 2023
performance
Threshold
(0% award)
Target
(50% award)
Stretch
(full award)
Extent to
which targets
were met (%)
Adjusted profit before tax
Year-on-year profit growth
60%
£79.2m2
£79.4m
£84.7m
£88.9m
0%
Generation of free cash flow Generate cash for
reinvestment and dividends
15%
£18.2m
£15.7m
£21.7m
£24.7m
21%
Strategic measures
To build the foundation for
future growth
25% See table
Stephen Wilson 78%
Alison Henriksen 69%
1 The financial elements of the bonus are payable on a straight-line basis between each threshold, target and stretch level
2 Bonuses are calculated in constant currency and excludes gene editing costs. This explains the difference between the value shown and the Adjusted profit before tax number
on page 96
CORPORATE GOVERNANCE 98
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION D – ANNUAL REPORT ON REMUNERATION
STRATEGIC MEASURES
The Committee reviewed and discussed achievement against targets set for strategic measures for each Executive Director in
determining overall award levels. Performance against these targets is disclosed retrospectively, as follows:
Theme
Objective
Key achievements in year
Stephen Wilson
Strategy
Development
and Execution
Maintain/grow genetic
leadership in dairy, beef
and porcine
• Genetic gain ahead of target in each
species with rate of progress accelerating
vs prior years
Payout
against
maximum
78%
Grow PIC Key accounts globally
• Grew share in key regions – exceeded
goal for key new porcine customer wins
Drive growth of Gene Advance
and digital sales in ABS
• Gene Advance targets exceeded.
Overall digital sales behind plan
Leverage technology/genetics
across bovine sector
• Global sexing deal with CRV signed,
expansion of IntelliGen footprint
Optimise ABS sales delivery
and supply chain model
• Go to market (‘GTM’) activity identified future
benefits and will continue into FY24
Sustain leadership effectiveness
• Internal promotion of Matt Culbertson to
GELT to lead PIC business following retirement
of Bill Christianson
• Smooth transition to incoming CEO
Improve gender diversity at
Manager level
• Increase in proportion of new manager
appointment who were female in line
with goal
Maintain strong health and
safety culture
• 13% reduction in vehicle incidents. Recordable
injury rate decreased 5% and was better than
set goal
Leadership
and culture
Innovation
Gene editing
• Completion of FDA submissions ahead
of target date and good progress with
international regulatory agencies
Lead industry in reproductive
biology
• Implementing new IVF technologies
with better outcomes. Good progress
with other research programmes
Improve technology and
process performance
within IntelliGen
Deliver positive user adoption
of GenusOne globally
Sustainability
Drive adoption and
implementation of ‘Delta C’
• Strong delivery on IntelliGen
technology roadmap
• Successful deployment in most European
countries. Positive user feedback and
many stated adoption and optimisation
goals achieved
• 15% improvement in primary intensity ratio
during year
• Absolute carbon emissions reduced by 5%
(and 16% below 2019 levels), exceeding goal
CORPORATE GOVERNANCE
99
GENUS PLC / ANNUAL REPORT 2023
Theme
Objective
Key achievements in year
Alison Henriksen
Strategy
Development
and Execution
Maintains strong investor
relations activity, expanding
knowledge of Genus outside
of the UK and growing
understanding of ESG progress
• Positive reaction to investor interactions,
including following site visits to facilities
Strengthen BCA relationship
• Strong relationship in place with BCA
and robust collaboration and alignment
Payout
against
maximum
69%
Drive strategy development
and execution
• Active partnering with ABS to shape
and evolve their go to market strategy,
implementing instrumental changes in FY24
• Active partnering with IntelliGen to achieve
bull efficiency, implemented at Leeds
doubling straws per billion cells
• Procurement initiatives supporting the
businesses, IT and HR led to significant
incremental costs savings and cost
inflation avoidance
• Enhanced the processes to manage
working capital across the Group leading
to good improvements in cash outflows
through reductions in DSO and ABS’s
inventory holdings
Leadership and
culture
Rollout of Finance Target
Operating Model (‘FTOM’) –
people and org design, process
rollout, reporting and
performance management,
finance technology
• Step change in insights from real time
reporting delivered through Reporting Centre
of Expertise (‘COE’)
• Rollout of standardised accounting
processes in North America and Europe and
shift of repeatable processes to Asia,
resulting in efficiencies
Build on career development for
finance team, taking account
of changes linked to FTOM
• Created key new hires and roles within
finance team driving strength and enhanced
clarity of roles and responsibilities
Innovation
Deliver positive user adoption
of GenusOne globally
Sustainability
Drive adoption and
implementation of ‘Delta C’
• Successful deployment in most European
countries. Positive user feedback and
many stated adoption and optimisation
goals achieved
• 15% improvement in primary intensity ratio
during year
• Absolute carbon emissions reduced by 5%
(and 16% below 2019 levels), exceeding goal
As a result of this performance, the total Annual Bonus awarded to the Executive Directors was:
Stephen Wilson
Alison Henriksen
Annual Bonus
Extent to
which overall
targets
were met
Annual Bonus
– cash
Annual Bonus
– deferred
shares1
23%
£163,016
£81,508
20%
£99,532
£49,766
1 The number of shares awarded will be calculated in September 2023 when bonuses are paid. One-third of bonus payable is deferred into Genus shares for three years
HOW THE PSP FIGURE WAS CALCULATED IN THE SINGLE TOTAL REMUNERATION TABLE
PSP awards granted to Stephen Wilson and Alison Henriksen on 14 September 2020 were subject to a performance condition, based on
the growth in adjusted earnings per share from 2020 to 2023. The range of targets applicable to the award, which had a value of 200%
and 175% of salary at grant for Stephen and Alison respectively was as follows:
Average annual growth in adjusted earnings per share
Less than 5% per annum
5% per annum
15% per annum
1 Straight-line vesting between the points in the above table
% of award
vesting1
Nil
20%
100%
CORPORATE GOVERNANCE
100
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION D – ANNUAL REPORT ON REMUNERATION
The Committee set targets to calculate the long-term award after excluding gene editing costs incurred during the performance
period, to avoid an unintended impact on the Executives’ remuneration whilst making long-term decisions in support of value creation.
This is consistent with the approach previously communicated to shareholders within our Policy and as taken in each of the last
three years.
The adjusted 2023 earnings per share after the cost of share-based payments and adjusting1 for costs relating to gene editing was
94.7p. This represents an average annual growth in adjusted earnings per share of 7% compared to the comparable 2020 adjusted
earnings per share figure (after the cost of share-based payments). The resulting level of vesting is 36% of maximum. Therefore, the
number of shares that will vest will be 11,115 for Stephen Wilson and 6,594 for Alison Henriksen, and these will vest on 14 September 2023.
The Company’s average share price for the period from 1 April 2023 to 30 June 2023 (the final three months of the financial year) was
2,572p, meaning that the value shown for these awards within the single figure table is £285,896 for Stephen Wilson and £169,601 for
Alison Henriksen.
£1,203,585
£
1,400k
1,200k
1,000k
800k
600k
400k
200k
0
£433,291
£770,295
£(147,394)
Breakdown of value of PSP for
Outgoing CEO
(2020–2023 Performance)
Share price on award = £38.98
Share price (three months ending
30 June 2023) = £25.72
£285,896
Share price change over period = (34)%
Value at award
Value of
shares lapsed
Value of
shares vesting
Share price
reduction
Final value at
30 June 2023
1 The average annual earnings per share growth including gene editing costs after share-based payments was 3% and the associated vesting level would have been nil
(below threshold level of 5%)
JOINING AWARD
Joining awards were made to our incoming CEO – Jorgen Kokke – as detailed elsewhere within this disclosure.
MATERIAL CONTRACTS
There were no other contracts or arrangements during the financial year in which a Director of the Company was materially interested
and/or which were significant in relation to the Group’s business.
PAYMENTS FOR LOSS OF OFFICE AND PAYMENTS TO FORMER DIRECTORS (AUDITED)
There were no payments for loss of office in the year or to any former Directors of the business. Stephen Wilson will retire on
30 September 2023 and details of his leaver arrangements are outlined elsewhere in this report.
DISCRETION
No discretion was applied by the Committee during the year.
EXTERNAL DIRECTORS’ EXTERNAL APPOINTMENTS
Executive Directors are permitted to accept an external non-executive position, with the Board’s approval. Any fees received in respect
of these appointments may be retained by the Executive. Stephen Wilson is a Non-Executive Director of Renishaw plc and he received
fees totalling £75,000 during the year.
CORPORATE GOVERNANCE 101
GENUS PLC / ANNUAL REPORT 2023
2. FORWARD LOOKING POLICY AND IMPLEMENTATION IN 2024
We gained shareholder approval for our new Directors’ Remuneration Policy at the 2022 AGM. The full Policy as agreed by Shareholders
can be found in the 2022 Annual Report or at our website at www.genusplc.com.
KEY DESIGN/PHILOSOPHY OF OUR FUTURE REMUNERATION POLICY
What we are trying to achieve
How we are looking to achieve it
• Continued transformation into a global agricultural
biotechnology pioneer
• Draw upon the aspects of our current Policy that are working
• Include strategic/ESG measures within PSP assessment, linked
• Pursuit of leading-edge technology and focus on long-term
innovation and opportunity to enable future value creation
for shareholders
• Sustainable robust short-term delivery of financial performance
as we invest in the future
• Ability to recognise innovation and progress, which are crucial
to securing long-term bottom-line performance
• Ability to attract and motivate a high-quality leadership team
and drive focus and behaviours on long-term achievement
in a global market for talent
• Recognise expectations of shareholders on reward
and governance
to core strategy
• Enable an increase in the level of exceptional awards
permissible under the PSP (with no change to the standard
award level) – designed primarily to support recruitment
if needed
We are confident that our Policy provides strong alignment against Section 40 the Provisions of the 2018 Code as summarised below:
ALIGNMENT OF OUR REMUNERATION POLICY TO THE 2018 CODE
CLARITY
SIMPLICITY
Implementation of the strategy is
monitored through KPIs including
those used within the Annual Bonus
and PSP. This ensures alignment
between strategy execution and
reward outcomes.
We look to describe the structure of
reward clearly to both participants
and shareholders through effective
disclosures, so all stakeholders
are clear on the underlying reward
principles and the way reward
outcomes are determined.
ALIGNMENT TO CULTURE
The Policy aligns to our business
model and focus on the experience
of customers and employees. Metrics
linked to culture are used within
variable plans, alongside delivery of
long-term sustainable performance.
PREDICTABILITY
PROPORTIONALITY
RISK
Examples of the range of outcomes
under the Policy are shown
within the scenario graphs.
This demonstrates the way that
different performance levels change
reward outcomes for individuals and
the associated impact of changes
in the Company share price.
A significant proportion of the total
reward opportunity is performance
driven, with clear linkage between
business metrics and reward outcomes
through clear targets and use of KPIs.
The Committee retain ultimate
discretion to vary outcomes from
formulaic results if they do not
judge this to accurately reflect
underlying business performance.
Shares form the majority of variable
reward and Executives are required
to develop and maintain a material
shareholding in the business to fully
align to the shareholder experience.
Malus and clawback provisions apply
to all awards and we operate post-
cessation shareholding requirements
to further align Executives to long-
term business performance.
CORPORATE GOVERNANCE 102
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION D – ANNUAL REPORT ON REMUNERATION
POLICY IMPLEMENTATION – EXECUTIVE DIRECTORS
A summary of this section is given on page 93.
Policy Area
2024 Implementation
Base Salary
Key features
• To provide competitive fixed remuneration that
Following review by the Committee the salary for Alison Henriksen was increased
as shown, effective 1 July 2023. No further increases of this salary are scheduled
until September 2025.
will attract and retain employees with the
experience necessary to develop and execute
our strategy
• Normally reviewed annually effective
1 September
• Factors used to review include
– Wider workforce changes in country where
individual is based
– Comparable salaries when benchmarked
against relevant market comparators
– Experience of the individual and the
contribution they are making
– Overall group performance and wider
economic conditions
Benefit Provision
Key features
• To provide a competitive range of benefits to
drive engagement and commitment to Genus
• Benefits generally include a car allowance and
insured benefits (e.g. life assurance and private
medical insurance)
• Where Executive Directors are recruited from
overseas or required to relocate (including on
an international assignment), benefits such as
travel and relocation costs and tax equalisation
arrangements may be provided
Pension/Retirement Benefits
Key features
• To provide a competitive Company contribution
Stephen Wilson
Jorgen Kokke
Alison Henriksen
Annual Salary to
1 Sep 2023
Revised
Annual Salary
Effective Date
£616,900
$825,000
£418,200
£616,900
$825,000
n/a
n/a
£480,930
1 July 2023
The Executive Directors receive benefits including a car allowance, life assurance,
an annual medical screen and private medical insurance. The Company will also
provide tax support assistance for preparation of foreign tax returns for Jorgen
Kokke as required, as well as tax equalisation provision as required for any
employment income taxable outside of the US.
Executive Directors receive a pension allowance worth 6% of salary, consistent with
our stated Policy to align rates for new hires to the wider workforce.
that enables effective retirement planning
• To provide a benefit in line with the rate
available to the wider workforce
Executive Directors can participate in Company-wide arrangements as may exist
(including the benefit of a Company provided match on employee contributions)
and/or receive a cash allowance of equivalent value.
Annual Bonus
Key features
• To motivate and incentivise delivery of annual
performance targets covering a combination of
financial and strategic measures
• One third of the annual bonus is deferred into
Company shares for a period of three years,
subject to continued service. The remaining
award is payable in cash
• Malus and clawback provisions exist for
awards made under the Annual Bonus
Annual Bonus
Value of bonus
A maximum of 200% of salary for Jorgen Kokke and 175% for
Alison Henriksen. Stephen Wilson will be eligible for a bonus of
up to 175% of salary, prorated for the period of employment
from 1 July 2023 to 30 September 2023.
Performance
measures
Assessed across the following metrics:
• Genus Group Operating Profit (exc PIC China) –
50% of opportunity
• PIC China Operating Profit – 10% of opportunity
• Cash Conversion – 15% of opportunity
• Strategic measures – 25% of opportunity
Calibration of
profit and cash
targets
Calibration of
strategic
measures
The targets for the coming year have been determined and will
be disclosed on a retrospective basis. The targets have been
set considering agreed budgets and represent stretching
business performance. The Committee considered analyst
expectations and market conditions in our key countries in
determining the range and is comfortable that the range set
is stretching.
Group targets will exclude gene editing costs in line with prior
years, as we move towards PRRSv commercialisation.
Specific measurable targets have been set against this
category linked to our strategic priorities identified by the
Board for the year ahead. It would be commercially sensitive to
disclose these targets in advance and we will retrospectively
disclose the targets and associated performance against them
in the subsequent Annual Report.
Bonus deferral
One-third of any bonus award will be deferred by way of shares
for three years and will vest subject to continued employment,
other than in certain leaver circumstances.
CORPORATE GOVERNANCE 103
GENUS PLC / ANNUAL REPORT 2023
Policy Area
2024 Implementation
Performance Share Plan (‘PSP’)
Key features
• To incentivise Executives
to achieve superior returns
to shareholders over a
three-year period, to retain
key individuals and align
with shareholder interests
• Awards scheduled to vest three
years from grant, subject to
continued employment and
satisfaction of challenging
three-year performance targets
• Following vesting the post-tax
number of vested shares must
be held for at least a further
two-year period.
• Malus and clawback provisions
may apply for a period of
three years
Awards to be granted in September 2023 will be granted under the 2019 PSP approved
by shareholders on 14 November 2019. Alison Henriksen will be granted awards over 200%
of salary in line with that permitted under the Policy. The award for Jorgen Kokke will be
worth 400% of salary, using the exceptional limit within the agreed Remuneration Policy,
as outlined within this disclosure. Grants will be determined in line with the Plan Rules, using
annual salary as at the point of grant to determine awards. Awards granted will continue
to require the Executive to retain the after-tax number of shares vesting in September
2026 for two years. Enhanced clawback and malus provisions will apply to these awards
as outlined within our Remuneration Policy, including for reputational damage and
corporate failure.
Three performance targets will be used for the awards to be granted in September 2023
as shown below will be assessed independently of each other.
Metric
Weighting Metric detail
Target for 2023 awards
Earnings
Per Share
80%
Genetic
Improvement
10%
Average annual growth
in adjusted earnings per
share, measured over
three years, inclusive of
gene editing costs in the
base year and final year
of calculation.
Improvement (expressed
in standard deviations
of improvement per
generation) of genetics in
Porcine, Bovine and Dairy.
Target of one standard
deviation of genetic
improvement per
generation across Dairy
and Bovine, and 0.75
standard deviations
of improvement per
generation in Porcine.
Average annual growth in
adjusted earnings per share1
Vesting %
Less than 4% per annum
4% per annum
12% per annum
0%
20%
100%
Indicative
award
(max 10%)
8–10%
Straight-line vesting between
performance points shown above.
Overall assessment guidelines
(Final award will be determined
by Committee having reviewed
progress in each of the
respective species)
Performance at or
exceeding target
over period across all
species or significant
outperformance in one
or more species with
no ‘weak’ progress
Progress overall in line
with stated target
Robust performance
in one or two species,
slower progress
elsewhere
Progress below target
each year in all species
5–7%
2–4%
No award
10%
Greenhouse
Gas
Reduction
Reduction in overall
primary intensity ratio of
our operations for the
three-year period
commencing 1 July 2023
and ending 30 June 2026.
Cumulative % reduction across
three years ending June 2025
Below 3%
3% (threshold)
10% (stretch)
Vesting %
Nil
20%
100%
Straight-line vesting between
threshold and stretch values in
the above table
1 Growth in adjusted earnings per share over the three-year performance period will be calculated on a simple
average annual growth rate after the cost of share-based payments
The Committee retains the discretion to be able to scale back overall vesting if it does not consider the vesting
result to be consistent with the progress achieved against the Company’s strategy during the performance
period. This is considered appropriate to broaden the Executive team’s focus beyond financial performance.
The Committee also recognise that material changes in the Company share price can materially change the
number of shares that are awarded through PSP grants. The Committee will make these awards in the usual
way in September 2023 and will review the ultimate level of vesting and associated business performance.
In the event that the share price used to determine awards was not felt to be representative (or gave rise to
what were deemed to be any unjustified gains by recipients having considered the overall reward experience
for Executives and Shareholders) then the Committee has the ability to adjust ultimate vesting levels.
Shareholding
Key features
• To align executives and shareholders, executives are required to achieve a shareholding of 200% of salary. It is expected
that this is achieved within five years of appointment, and that this shareholding is generated through retention of at least
half of the shares that vest under the Deferred Share Bonus Plan and Performance Share Plans
CORPORATE GOVERNANCE 104
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION D – ANNUAL REPORT ON REMUNERATION
POLICY IMPLEMENTATION – NON-EXECUTIVE DIRECTORS
Policy Area
2024 Implementation
No changes to core fees payable to Non-Executive Directors fees will be
implemented for 2024
Fees
Key features
• To provide compensation that attracts high-
calibre individuals and reflects their experience
and knowledge
• The Board periodically reviews Non-Executive
Directors’ fees
• Additional fees are paid to Non-Executive
Directors who chair a Board Committee and
to the Senior Independent Director (‘SID’)
• No Directors take part in meetings where
their own remuneration is discussed
• Fees are based on the time commitments
involved in each role and set with reference
to the fees paid in other similarly sized UK
listed companies
REWARD FOR OUTGOING CHIEF EXECUTIVE OFFICER (STEPHEN WILSON)
REWARD ARRANGEMENTS AND FUTURE LEAVER TREATMENT FOR STEPHEN WILSON
On 23 February 2023 we announced that Stephen Wilson would be retiring from Genus after ten years with the business. In line with
a request from the Board, and to facilitate a smooth period of transition, he will work through to 30 September 2023. The Committee
determined the following in relation to his reward:
REWARD FOR 2024 (PERIOD BEGINNING 1 JULY 2023 TO 30 SEPTEMBER 2023)
• Continuing salary payments and ongoing eligibility to benefits
• Eligibility for annual bonus for period 1 July to 30 September 2023. (This will be determined based on combination of strategic and
financial targets, with financial targets consistent with those used for other Executive Directors). Awards will be determined after the
conclusion of the financial year ending 30 June 2024, and awards will be delivered partly in cash and partly in deferred shares that will
vest after three years (in line with our Policy)
TREATMENT OF IN-FLIGHT SHARE AWARDS UPON LEAVING
Upon retirement from Genus on 30 September 2023, Stephen has been determined to be a good leaver and the Committee have
determined that treatment of awards should be consistent with the approach within our agreed Policy. In-flight awards under our PSP
plan will be prorated (based on the period employed within the respective performance period) with vesting determined at the end of
the three year period. Stephen will have a six month window to exercise any nil cost options that vest. Previously awarded share awards
under the Deferred Bonus share plan will vest in full at their scheduled vesting dates.
Stephen will have a post cessation shareholding Policy requiring him to hold onto shares for 24 months following cessation of
employment on the terms described in our agreed Remuneration Policy. The Committee have discussed and agreed which shares
this relates to and how this will be operationalised.
Any further payments made to Stephen will be disclosed in future Annual Reports as we are required to disclose.
SALARY LEVEL FOR CHIEF FINANCIAL OFFICER (ALISON HENRIKSEN)
ADJUSTMENT TO SALARY LEVEL
The Committee discussed the future role and responsibilities for Alison following the appointment of Jorgen to the business. We
determined that the future scope of the role was broader, in particular reflecting the fact that she will be the sole Executive Director
based primarily in the UK following change of CEO. We viewed this as an extension of her current role, and following wider review of
her responsibilities, agreed an increase in base salary to £480,930 (+15%) effective 1 July 2023. No further increases will be made in
September 2023 or September 2024 with next scheduled review in September 2025.
CORPORATE GOVERNANCE 105
GENUS PLC / ANNUAL REPORT 2023
3. THE PROCESS THE COMMITTEE FOLLOWED TO ARRIVE AT THESE DECISIONS
The Committee complies with the UK Corporate Governance Code. It makes recommendations to the Board, within agreed terms of
reference, on remuneration for the Executive Directors and other members of GELT. The Committee’s full terms of reference are available
on the Company’s website at www.genusplc.com.
During 2023, the Committee comprised:
Director
Lesley Knox (Chair)
Iain Ferguson
Jason Chin
Lykele van der Broek
Lysanne Gray
Independent
Attendance
at meetings1
Yes
Yes
Yes
Yes
Yes
6/7
7/7
7/7
7/7
7/7
1 The Committee had five scheduled and two ad hoc meetings during the year
None of the Committee members has any personal financial interest (other than as shareholders), conflicts of interests arising from
cross-directorships or day-to-day involvement in running the business. The Chief Executive and the Chief Financial Officer attend
meetings at the Committee’s invitation but are not present when their own remuneration is being discussed. The Committee is
supported by the Group HR Director, Group Reward Director, Finance and Company Secretariat functions.
During the year, the Committee continued to use PricewaterhouseCoopers (‘PwC’) for advice it considers is of value, objective and
independent. PwC’s fees were £50k for its remuneration advice to the Committee. PwC were appointed by the Committee following
a competitive tender process and their performance and independence as advisers is regularly reviewed. PwC is a member of the
Remuneration Consultants Group and complies with its Code of Conduct. Separate teams within PwC provide unrelated advisory
service to the Group, including taxation and actuarial advice to the Group.
During the year to 30 June 2023, the Committee met seven times and considered the following matters:
July 20221
• Proposed objectives for CEO
September 20221
• Approve vesting of
for FY22
• Review draft DRR disclosure
• Market Update on reward
Performance Share Plan
for 2018 awards
• Approve DRR
• Review GELT shareholding
at year end
• Approve future long-term
incentive awards (for GELT
and below)
January 20232
• CEO Leaver treatment
• Future CEO recruitment
and reward approach
April 20231
• Gender Pay insight
(Genus Breeding)
• Wider reward landscape
across Genus
• CFO Remuneration
August 20221
• Targets for Annual bonus
November 20221
• Review of shareholder vote
for 2023
post AGM
• EPS target range for
• Spotlight on reward
February 20232
• Reward review across GELT
• Future CEO recruitment
within R&D
PSP award to be made
in September
• 2022 Annual Bonus
outcomes for GELT
1 Scheduled meeting
2 Ad hoc meeting
HOW SHAREHOLDERS’ VIEWS ARE TAKEN INTO ACCOUNT
We consulted with shareholders ahead of proposing our existing Remuneration Policy to shareholders at our 2022 AGM which received
high levels of shareholder support. The results of the most recent votes were as follows:
For
Against
48,707,946
98.3 46,353,666
876,515
1.7
3,433,110
Total number of shares in respect of which votes were validly made
49,584,461
100 49,786,776
Votes withheld
211,121
8,806
93.1
6.9
100
Vote on Directors’
Remuneration Report
2022 AGM (advisory)
Vote on Directors’
Remuneration Policy
2022 AGM (binding)
Total number
of votes
% of votes
cast
Total number
of votes
% of votes
cast
CORPORATE GOVERNANCE 106
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION D – ANNUAL REPORT ON REMUNERATION
HOW EMPLOYEES’ PAY IS TAKEN INTO ACCOUNT
While the Company does not consult employees on matters of Directors’ remuneration, the Committee does take account of the policy
for employees across the workforce when determining the Remuneration Policy for Directors.
The Group Reward Director facilitates this process, presenting to the Committee reward structures and approach across the
organisation including the way reward levels are set with reference to internal and external factors, and how performance metrics align
with those used for GELT members (including Executive Directors). The process also includes sharing feedback received through staff
engagement surveys that include questions on pay, as well as consulting employees informally on their views of the current overall
Remuneration Policy. Additionally, discussions on reward have formed part of dialogue between the nominated Non-Executive Directors
and employees as part of wider engagement activity as outlined elsewhere in the Annual Report. This forms part of the feedback
provided to the Committee and is used to assess the Remuneration Policy’s ongoing effectiveness and any changes that should
be made.
When setting the Executive Directors’ base salaries, the Committee compares the salary increases proposed for each Executive
Director with those proposed for employees in their geographical location, as well as considering the typical increase proposed across
our UK business and the wider Group.
4. HOW THE CHIEF EXECUTIVE’S PAY COMPARES TO SHAREHOLDER RETURNS OVER THE PAST TEN YEARS AND TO EMPLOYEES’ PAY
TOTAL SHAREHOLDER RETURN
The following graph shows the Company’s performance measured by total shareholder return (‘TSR’), compared with the TSR
performance of the FTSE 250 Index. The FTSE 250 Index was selected as it represents a broad equity market of which the Company
is a member.
Ten years of total shareholder return
)
£
(
)
d
e
s
a
b
e
r
(
R
S
T
500
450
400
350
300
250
200
150
100
50
0
June 13
June 14
June 15
June 16
June 17
June 18
June 19
June 20
June 21
June 22
June 23
Genus
FTSE 250
As required under the reporting regulations, the table below shows the ‘single figure’ pay for the Chief Executive over the same period,
to allow comparison between variability in reward and the shareholder experience over the same period.
2013
2014
2015
2016
2017
2018
2019
2020
2020
2021
2022
2023
Karim Bitar
Stephen Wilson
Total remuneration (£000s)
£868
£877
£1,622
£1,704 £2,856
£2,549
£815
£183
£2,161 £2,888 £1,380 £1,210
Annual Bonus (% of max)
31%
32%
99%
78%
59%1
64%1
Nil2
Nil2
91%
95%
18%
23%
Total PSP vesting
(% of max)
–
–
26%
34%
79%
56%
Nil3
Nil3
44.9%
81.2%
41.4%
36%
Includes the award under the Company Milestone element of the Annual Bonus under the previous Remuneration Policy
1
2 No awards were payable following the decision of Karim to resign from the business
3 Vesting was nil as Karim’s employment cessation date was before scheduled vesting of PSP awards
CORPORATE GOVERNANCE
107
GENUS PLC / ANNUAL REPORT 2023
DIRECTOR REMUNERATION COMPARED TO GENUS EMPLOYEES
Change in remuneration received
The table below shows the percentage change in the annual remuneration of Directors from 2019 onwards. Also provided for comparison
is a UK comparator number for each respective time period which considers all employees of Genus plc on 30 June 2023 (excluding
Directors) and calculating on an FTE basis changes in salary, benefits and bonus compared to the previous year.
Stephen Wilson1
Alison Henriksen2
Jorgen Kokke
Iain Ferguson
Lykele van der Broek
Lysanne Gray
Lesley Knox
Jason Chin
UK comparators
Salary/fees (% change)
Benefits (% change)
Bonus (% change)
2022 to
2023
2021 to
2022
2020 to
2021
2019 to
2020
2022 to
2023
2021 to
2022
2020 to
2021
2019 to
2020
2022 to
2023
2021 to
2022
2020 to
2021
2019 to
2020
0
0
n/a
0
0
8
8
15
5.1
2
2
n/a
46
0
0
0
0
2.5
9
2
n/a
n/a
0
0
(5)
n/a
2.6
41
n/a
n/a
n/a
0
0
153
n/a
2.3
(17)
0
n/a
0
0
0
0
0
0
2
3
n/a
0
(100)
0
0
0
0
0
0
n/a
n/a
(60)
0
0
n/a
0
0
n/a
n/a
n/a
25
0
0
n/a
0
27
(22)
n/a
n/a
n/a
n/a
n/a
n/a
51
(81)
(72)
n/a
n/a
n/a
n/a
n/a
n/a
(66)
6
7
n/a
n/a
n/a
n/a
n/a
n/a
24
158
n/a
n/a
n/a
n/a
n/a
n/a
n/a
124
1 Stephen was appointed into the CEO role on 13 September 2019. The 2020 year (July 2019 to June 2020) includes part year of salary as CFO through to 13 September 2019 and
part year as CEO. Salary increase received in September 2020 was 2%
2 Amounts have been annualised for 2020 for Alison to reflect her joining date of 13 January 2020
Includes back payments for membership of respective Committees not received during 2019
3
DISTRIBUTION STATEMENT
Employee costs (£m)
Distributions to shareholders1
1
Includes dividends and share buy-backs
2022
2023
% change
£197m
£230m
£20.9m
£21m
17%
0%
5. THE CHAIRMAN AND NON-EXECUTIVE DIRECTORS’ FEES
Fees payable to the Non-Executive Directors per annum effective from 1 July 2023 are as follows:
Position
Chairman
Base Non-Executive Director fee
Additional fee for Chair of Audit & Risk Committee/Remuneration Committee
2021
fees
2022
fees
2023
fees
£230,0001 £230,000
£230,000
£55,000
£55,000
£55,000
£5,000
£10,000
£10,000
Additional fee for Scientific Adviser to R&D Global Portfolio Steering Committee (‘GPSC’)
£10,000
£10,000
£10,000
Additional fee for Chair of Scientific Advisory Board2
n/a
£10,000
£10,000
1 The Chairman fee was reviewed prior to the appointment of Iain Ferguson and was determined following a review of market data, as disclosed in the 2020 Annual Report. This
fee level was applied following appointment to Iain Ferguson as Chairman effective 25 November 2020
2 Role held by Jason Chin
CORPORATE GOVERNANCE 108
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION D – ANNUAL REPORT ON REMUNERATION
Total single figure of remuneration (audited) for 2022 and 2023 are as follows:
Non-Executive Directors
Iain Ferguson
Lykele van der Broek
Lysanne Gray
Lesley Knox
Jason Chin
Total
Fees
£000s
230
230
55
55
65
60
65
60
75
65
490
470
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Taxable
expenses
£000s
Benefits
£000s
–
–
1
–
–
–
3
–
1
–
5
–
–
–
2
–
–
–
–
–
–
–
2
–
Total
£000s
230
230
58
55
65
60
68
60
76
65
497
470
The Non-Executive Directors’ taxable expenses are travel expenses related to their role and have been grossed up for tax where
applicable, in line with HMRC rules.
6. DETAILS OF THE DIRECTORS’ SHAREHOLDINGS AND RIGHTS TO SHARES
DIRECTORS’ SHAREHOLDINGS (AUDITED)
At the year end, the Directors had the following interests in the Company’s shares:
Iain Ferguson
Stephen Wilson
Jorgen Kokke
Alison Henriksen
Jason Chin
Lesley Knox
Lykele van der Broek
Lysanne Gray
Total
Ordinary
shares as at
30 June 2023
Number
% of
salary held1
Shareholding
guideline2
10,000
76,757
–
5,375
–
2,000
3,750
–
97,882
n/a
356%
0%
92%
n/a
n/a
n/a
n/a
n/a
200%
200%
200%
n/a
n/a
n/a
n/a
Unvested
DSBP
awards at
30 June 2023
Number
Unvested
PSP awards
or nil-cost
options held
at
30 June 2023
Number
Ordinary
shares as at
30 June 2022
Number
n/a
n/a
9,000
16,261
96,360
64,047
n/a
126,935
8,884
60,846
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
–
–
–
2,000
3,750
–
25,145
157,206
78,797
1 Based on the combined number of beneficially held shares and the net of tax DSBP awards held and the average closing share price over the three months to 30 June 2023
of 2,572p
2 Executive Directors are expected to work towards achieve a shareholding of 200% of salary as set out in our Remuneration Policy
There were no changes in the Directors’ interests between 30 June 2023 and the date of this report.
COMPANY SHARE PRICE
The market price of the Company’s shares on 30 June 2023 was 2,166p and the lowest and highest share prices during the financial year
were 2,132p and 3,272p respectively.
CORPORATE GOVERNANCE 109
GENUS PLC / ANNUAL REPORT 2023
PERFORMANCE SHARE AWARDS GRANTED IN 2023 (AUDITED)
The awards granted under the 2019 PSP were as follows:
Executive
Stephen Wilson
Alison Henriksen
Number of
shares
comprising
award
43,504
29,492
Face/maximum value of
awards at grant date
(% salary)1
% of award
vesting at
threshold
£1,233,800 (200%)
£836,400 (200%)
20
20
Performance period
01.07.22–30.06.25
01.07.22–30.06.25
1 The closing average share price over the three days prior to the award being granted has been used to determine the maximum face value of the awards which was 2,836p
(award granted on 14 September 2022)
The awards were granted as nil-cost share options and vesting will be subject to achievement against Company performance targets
and operate with a broader strategic underpin, consistent with our Remuneration Policy. The targets are based on:
Earnings per share (weighting 80% of the total award)
The adjusted earnings per share growth performance target for the above awards is:
Average annual growth in adjusted earnings per share1
Less than 4% per annum
4% per annum
12% per annum
Straight-line vesting between performance points.
Vesting
(% award)
0%
20%
100%
1 Growth in adjusted earnings per share over the three-year performance period will be calculated on a simple average annual growth rate after the cost of
share-based payments
Genetic Improvement (weighting 10% of the total award)
Measured using standard deviations of genetic improvement per generation of genetics in Porcine, Bovine and Dairy. Assessment
determined by the Committee having reviewed progress in each of the respective species against a target of 1 standard deviation
of improvement per generation in Dairy and Bovine, and 0.75 standard deviations of improvement per generation in Porcine.
Greenhouse Gas Reduction (weighting 10% of the total award)
Measured using cumulative reduction in overall primary intensity ratio of our operations for the three years ending 30 June 2025 against
the following scale:
The adjusted earnings per share growth performance target for the above awards is:
Cumulative % reduction across three years ending 30 June 20251
Below 3%
3% (Threshold)
10% (Stretch)
Straight-line vesting between performance points.
1 Scope 1 and Scope 2 emissions based on tCO2e/tonne animal weight
DEFERRED BONUS AWARDS GRANTED IN 2023 (AUDITED)
The following DSBP awards were granted in relation to the 2022 annual bonus:
Executive
Stephen Wilson
Alison Henriksen
Vesting
(% award)
0%
20%
100%
Number of
shares
comprising
award
Face value of
awards at
grant date1
2,257
£64,037
2,257
£64,037
These awards are not subject to any further performance conditions and will normally vest in full on 14 September 2025 subject to
continued service.
1 The closing average share price over the three days prior to the award being granted has been used to determine the maximum face value of the awards. This was 2,836p
(award granted on 14 September 2022)
CORPORATE GOVERNANCE 110
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION D – ANNUAL REPORT ON REMUNERATION
SUMMARY OF SCHEME INTERESTS (AUDITED)
As at 30 June 2023, the Executive Directors had the following beneficial interests in share awards and share options:
Stephen Wilson
Grant date
Award
Vesting period
11 September 2019
PSP
11 September 2019 DSBP
14 September 2020 PSP
14 September 2020 DSBP
15 September 2021
PSP
15 September 2021 DSBP
14 September 2022 PSP
14 September 2022 DSBP
Total
Alison Henriksen
11 September 2019 to
11 September 2022
11 September 2019 to
11 September 2022
14 September 2020 to
14 September 2023
14 September 2020 to
14 September 2023
15 September 2021 to
15 September 2024
15 September 2021 to
15 September 2024
14 September 2022 to
14 September 2025
14 September 2022 to
14 September 2025
Share price
at grant
At
30 June 2022
Number
Granted
in year
Number
Lapsed
in year
Number
Exercised
in year
Number
At
30 June 2023
Number
–
–
2,832p
41,666
2,832p
7,382
3,898p
30,877
3,898p
8,079
5,613p
21,979
5,613p
5,925
2,836p
2,836p
0
0
43,504
2,257
(24,417)
(17,249)
–
–
–
–
–
(7,382)
–
–
–
–
0
0
30,877
8,079
21,979
5,925
43,504
2,257
115,908
45,761
(24,417)
(24,631)
112,621
Grant date
Award
Vesting period
Share price
at grant
At
30 June 2022
Number
Granted
in year
Number
Lapsed
in year
Number
Exercised
in year
Number
At
30 June 2023
Number
7 April 2020
PSP
14 September 2020 PSP
14 September 2020 DSBP
15 September 2021
PSP
15 September 2021 DSBP
14 September 2022 PSP
14 September 2022 DSBP
7 April 2020 to
11 September 2022
14 September 2020 to
14 September 2023
14 September 2020 to
15 September 2021
15 September 2021 to
15 September 2024
15 September 2021 to
15 September 2024
14 September 2022 to 14
September 2025
14 September 2022 to 14
September 2025
3,120p
22,435
–
(13,147)
–
–
3,898p
18,317
3,898p
2,536
5,613p
13,037
5,613p
4,091
2,836p
2,836p
0
0
29,492
2,257
0
–
–
9,288
18,317
2,536
13,037
4,091
29,492
2,257
Total
60,416
31,749
(13,147)
0
79,018
For the share awards to Stephen Wilson and Alison Henriksen granted on 14 September 2022, the closing average share price over the
three trading days prior to 14 September 2022 (the grant date for the PSP awards) of 2,836p was used to determine the number of shares
comprising individual awards.
The performance targets applying to the PSP awards made during the year are as described above. An earnings per share range also
applied to awards made in previous years to recipients. No further performance conditions apply to DSBP awards other than continued
employment with the business.
CORPORATE GOVERNANCE 111
GENUS PLC / ANNUAL REPORT 2023
Jorgen Kokke
Grant date
Award1
Vesting period
2 May 2023
2 May 2023
2 May 2023
2 May 2023
2 May 2023
Total
Nil-Cost
Options
2 May 2023 to
23 February 2024
Nil-Cost
Options
2 May 2023 to
2 May 2024
Nil-Cost
Options
2 May 2023 to
28 February 2025
Nil-Cost
Options
2 May 2023 to
2 May 2025
Nil-Cost
Options
2 May 2023 to
4 May 2026
Share price
at grant2
2,878p
2,878p
2,878p
2,878p
2,878p
At
30 June 2022
Number
0
0
0
0
0
0
Granted
in year
Number
59,055
7,649
44,933
7,649
7,649
126,935
Lapsed
in year
Number
Exercised
in year
Number
At
30 June 2023
Number
–
–
–
–
–
–
–
59,055
7,649
44,933
7,649
7,649
–
126,935
1 These awards have been granted pursuant to Listing Rule 9.4.2R as nil-cost share options over ordinary shares on substantially similar terms to the Genus 2019 Performance
Share Plan (‘PSP’), but without further Genus company performance conditions and have been determined to be a fair value for awards that have been forfeited at Ingredion,
with vesting dates designed to mirror the operation of those awards where applicable
2 The share price was based on the average of the Genus share price for the 60 days prior to appointment, as agreed with Jorgen Kokke as part of the recruitment process.
More detail on the calculation of these joining awards is provided elsewhere in this disclosure
DILUTION
The aggregate dilution of all relevant share incentives is 3.6% as at 30 June 2023, which is less than the permissible 10% in ten years
dilution limit.
7. DETAILS OF THE EXECUTIVE DIRECTORS’ CONTRACTS AND NON-EXECUTIVE DIRECTORS’ LETTERS OF APPOINTMENT
Director
Executives
Appointment date
Current contract date
Expiry date
Notice period (months)
Stephen Wilson
12 December 2012
13 September 2019
Jorgen Kokke
2 May 2023
2 April 2023
Alison Henriksen
13 January 2020
14 November 2019
n/a
n/a
n/a
12 (from Company),
6 (from Executive)
12 (from Company),
6 (from Executive)
12 (from Company),
6 (from Executive)
Non-Executives
Iain Ferguson
Jason Chin
Lesley Knox
1 July 2020
1 April 2021
1 June 2018
1 July 2020
1 April 2021
1 June 2021
1 July 2026
1 April 2024
1 June 2024
Lykele van der Broek
1 July 2014
4 September 2020
1 July 2024
Lysanne Gray
1 April 2016
1 April 2022
1 April 2025
6
1
1
1
1
Non-Executive Directors’ service contracts, which include details of remuneration, will be available for inspection at the AGM or at the
Company’s registered office.
CORPORATE GOVERNANCE 112
GENUS PLC / ANNUAL REPORT 2023
REMUNERATION COMMITTEE REPORT CONTINUED
SECTION E – WIDER WORKFORCE REMUNERATION
The Committee developed the Remuneration Policy agreed by shareholders in 2022 having reviewed the wider framework for reward
across the organisation and the way that this drives alignment of individuals towards organisational goals. It receives updates annually
on any material changes to wider workforce arrangements and additionally considers employee feedback on reward matters.
This is from Group-wide mechanisms (such as our Your Voice survey) but additionally from direct interaction between designated
Non-Executive Directors and employees.
Our reward principles apply to all employees within the business and are designed to ensure we can attract, motivate and retain people
fundamental to achieving our vision, and be part of a global organisation. We want people within the business engaged and delivering
because they are excited by our vision, the part they can play in this, and the difference they can make.
These principles are applied as consistently as we can, such that reward is standardised wherever possible, and delivered in line with our
values. While the quantum may vary between roles, the principle of aligning reward outcomes with performance is fundamental to the
way we operate.
Reward element
Base salary
Benefits
Variable pay
Our approach
Pay rates are determined with reference to the skill set and experience of the individual.
Most pay rates are reviewed annually across the Group, with adjustments with
reference to individual performance levels, market pay competitiveness and overall
business affordability.
The countries we operate in display different practices in terms of benefit provision.
Typical benefits include access to life insurance, pension or retirement provision and may
include medical cover. Our approach is typically driven by local market factors (which
may include legislative requirements) rather than a single common benefit offering
globally. On some People Policies we have established global minimum levels of benefit
provision that should apply (e.g. our Family Leave Policy) to Genus employees.
We operate a range of annual variable reward schemes and most of our employees
participate in one of these arrangements. These include:
Annual Bonus
• Based on a combination of financial performance and non-financial metrics assessed
through our performance management processes (which all employees participate in).
• Financial metrics based around profitability and cash performance.
• Where metrics are consistent with those used for Executive Directors or GELT members,
then the same target/performance scale is used for everyone to drive alignment.
Production facilities – KPI plans
• Linked to the balanced scorecard of local KPIs for facility, covering metrics such
as production output levels and health and safety.
Commissions
• Derived from individual sales performance of the individual.
In addition, we make discretionary awards of shares across the business annually,
reflecting the contribution of the individual and to drive future alignment with
our performance.
OUR CEO PAY RATIO FOR 2023
Our CEO pay ratio is shown below.
Year ended
30 June 2023
CEO single
figure £k
FTE
reward
1,210
£30,345
Ratio
40:1
FTE
reward
£35,924
Ratio
34:1
FTE
reward
£50,199
25th percentile
Median
75th percentile
Median ratio
vs CEO
target
remuneration
51:1
Ratio
24:1
No elements of pay have been omitted from the calculation and pay quartiles determined as at 30 June 2023 and values are calculated
based on those employed at this date. Where required, actual levels of remuneration were adjusted to create full-time equivalent (‘FTE’)
values by considering both the employees full-time equivalent hours and (where applicable) the proportion of the year that the
individual was employed. The quartile values, split between salary and benefits are as follows:
Salary (FTE)
Total pay and benefits
25th
percentile
Median
75th
percentile
£27,379
£31,950
£41,208
£30,345
£35,924
£50,199
The median ratio is consistent with pay and reward policies in operation within the business. Salaries are set with reference to market
levels of pay, with progression linked to experience and performance in role. The structure of reward in operation means that a greater
proportion of pay is linked to variable pay in more senior roles and will therefore fluctuate linked to business and individual performance
outcomes against targets set, and to changes in the Genus share price.
CORPORATE GOVERNANCE 113
GENUS PLC / ANNUAL REPORT 2023
OUR CEO PAY RATIO HISTORY
To provide additional context we have also shown the ratio for the previous four years. For illustration we have also shown the ratios
against the target level of reward we disclosed within our Remuneration Policies as agreed by shareholders and provided
commentary below.
60
55
50
45
40
35
30
25
20
83:1
2018
91:1
71:1
26:1
2019
39:1
2020
2021
2022
34:1
2023
CEO to median pay ratio (to 1)
Share price £ (three-month closing average)
The CEO ratio (the ratio of CEO pay as shown within the single figure) to the median full-time equivalent (‘FTE’) level of pay in the UK fell
from 39:1 in 2022 to 34:1 in 2023. This can be attributed to a number of factors outlined below:
CEO PAY
Reward structure – That the overall CEO package is more highly geared towards variable pay than most other employees within the UK.
Business performance – Overall the single figure for the year was a reduction on 2022 levels. This is the combined impact of slightly
higher Annual Bonus awards offset by a lower vesting level for the PSP award vesting for 2023 (36% of maximum) compared to 41.4%
for the award that vested in 2022.
COMPARATOR PAY
Median total pay and benefits – Total Median reward (calculated on the same basis as the single figure within the CEO disclosure)
increased by just over 5.5% between 2022 and 2023.
Total pay and benefits
Year ended
30 June 23
30 June 22
30 June 21
30 June 20
30 June 19
30 June 18
CEO single
figure
25th percentile
Median
75th percentile
CEO
FTE reward
Ratio
FTE reward
Ratio
FTE reward
£1,210k
£30,345
£1,327k
£27,774
40:1
48:1
£35,924
£33,999
£2,948k2
£27,374
108:1
£32,464
£2,257k2
£25,230
£815k
£24,638
89:1
33:1
£31,748
£31,867
£2,549k
£24,204
105:1
£30,759
34:1
39:1
91:1
71:1
26:1
83:1
£50,199
£44,818
£43,796
£42,426
£41,792
£40,203
Median ratio vs
target CEO
single figure
Ratio
24:1
30:1
67:1
53:1
20:1
63:1
Ratio
51:1
54:1
54:1
56:1
57:1
59:1
1 The CEO single figure has been restated to reflect the actual value of PSP awards at the point they vested (see page 97 for further detail)
2 This value reflects the change in CEO during the year and includes salary and benefits for Karim Bitar through to his resignation and all applicable reward elements for
Stephen Wilson from the date of his appointment as CEO (13 September 2019) to 30 June 2020
METHOD OF CALCULATION AND RATIONALE
We have elected to use calculation Method A as outlined within the legislation. We have done this to get as accurate a picture as
possible for the reward of all our UK employees compared to the CEO. This contrasts with our disclosure on gender pay which focuses
on our largest UK subsidiary (Genus Breeding Limited) only as required by the respective legislation.
Approved by the Board and signed on its behalf by:
Lesley Knox
Chair of the Remuneration Committee
6 September 2023
CORPORATE GOVERNANCE DAN HARTLEY
Group General Counsel and
Company Secretary
114
GENUS PLC / ANNUAL REPORT 2023
DIRECTORS’ REPORT
INFORMATION INCORPORATED
BY REFERENCE
The following information required to be
included in an Annual Financial Report
in accordance with the UK Financial
Conduct Authority’s Listing Rule 9.8.4R
and in a Directors’ Report is provided
elsewhere in the Annual Report and is
incorporated into the Directors’ Report
by cross reference as appropriate.
Content
Location
Business Model
Pages 2 to 11
Key Performance Indicators
Directors
Dividends
Principal risks
Financial results
Audit and Risk Committee
Greenhouse gas emissions
and energy consumption
Research and
development activities
Financial risk management
Future developments in the
business
Going concern and
viability statement
Directors’ interests
Engagement with
employees, customers,
suppliers and others
Long-term incentive
schemes
Pages
22 to 23
Pages
68 to 69
Page 33
Pages
62 to 64
Pages
30 to 33
Pages
83 to 88
Pages
36 to 57
Pages
28 to 29
Pages
30 to 33
Pages
24 to 29
Page 65
Pages
108 to 111
Pages
58 to 59
Note 30
EQUAL OPPORTUNITIES/EMPLOYEES
WITH DISABILITIES
Genus values diversity and aims to
make best use of everyone’s skills and
abilities. We are therefore committed
to equal opportunities at every
stage of our employees’ careers. Our
policy on employees with disabilities
is to fully and fairly consider people
with disabilities for all vacancies.
We interview and recruit people with
disabilities and endeavour to retain
employees if they become disabled while
they work for us. Where possible, we will
retrain employees who become disabled
and adjust their working environment,
so they can maximise their potential.
POLITICAL CONTRIBUTIONS
The Group does not make political
contributions.
SHARE CAPITAL
Note 31 gives details of the Company’s
issued share capital and any movements
in the issued share capital during the year.
The Directors may only issue shares to the
extent authorised by the shareholders in
general meeting. The current power to
allot shares was granted by shareholder
resolution at the 2022 AGM and a new
authority is being sought at the 2023 AGM,
within the limits set out in the notice of
meeting, that is up to a nominal value of
£4,401,814 (representing two-thirds of the
Company’s current issued share capital).
The Company has one class of ordinary
share, with the rights set out in the
Articles of Association. All issued shares
are fully paid and each share has the
right to one vote at the Company’s
general meetings. There are no specific
restrictions either on the size of a holding
or on the transfer of shares, which
are both governed by our Articles of
Association and prevailing legislation.
No person has any special rights of control
over the Company’s share capital.
Details of the Company’s employee
share schemes are set out in note 30.
In connection with these schemes,
the Genus plc Employee Benefit Trust
holds shares in the Company from
time to time and abstains from voting
in respect of any such shares.
For additional information on
capital risk management including
financial instruments, see note 26.
CORPORATE GOVERNANCE 115
GENUS PLC / ANNUAL REPORT 2023
AUTHORITY TO ACQUIRE THE COMPANY’S
OWN SHARES
PROVISION OF INFORMATION TO THE
COMPANY’S AUDITOR
The Directors may only buy back
shares to the extent authorised by the
shareholders in general meeting. The
current power to buy back shares was
granted by shareholder resolution at the
2022 AGM and a new authority is being
sought at the 2023 AGM within the limits
set out in the notice of meeting, that
is up to a nominal value of £660,272.10
(representing 10% of the Company’s
current issued share capital).
The Company did not buy back any
shares under the authority granted at
the 2022 AGM, from the date of that
AGM up to the date of this report.
SUBSTANTIAL SHAREHOLDINGS
As at 1 September 2023, we were aware of
the following material interests in the
Company’s ordinary shares:
Fund Manager
Shareholding
%
Baillie Gifford
& Co
Abrdn
Wellington
Management
5,682,186
4,178,431
4,103,996
Capital Group
3,285,610
BlackRock
3,623,952
Columbia
Threadneedle
Investment
3,230,061
Vanguard Group
3,040,575
8.61
6.33
6.22
4.98
5.49
4.89
4.60
Devon Equity
Management
2,785,248
4.22
There have been no material changes
in shareholding since 30 June 2023. No
other person has notified an interest in
the Company’s ordinary shares, which
is required to be disclosed to us.
Each of the Directors at the date of
approval of this Annual Report
confirms that:
• so far as the Director is aware, there is
no relevant audit information of which
the Company’s auditor is unaware; and
• the Director has taken all the steps that
he or she ought to have taken as a
Director in order to make himself or
herself aware of any relevant audit
information and to establish that the
Company’s auditor is aware of that
information.
This confirmation is given and should
be interpreted in accordance with the
provisions of section 418 Companies
Act 2006.
APPOINTMENT OF AUDITOR
Deloitte LLP has expressed its willingness
to continue in office as auditor and
a resolution to reappoint it will be
proposed at the forthcoming AGM.
DIRECTORS’ INDEMNITIES
The Company has made qualifying
third-party indemnity provisions for
the benefit of its Directors which were
made during the year and remain in
force at the date of this report.
CONFLICTS OF INTEREST
The Company has procedures for
managing conflicts of interest. If a Director
becomes aware that they or any of their
connected parties have an interest in
an existing or proposed transaction with
Genus, they should notify the Chairman
and the Company Secretary in writing
or at the next Board meeting. Controls
are in place to ensure that any related-
party transactions involving Directors, or
their connected parties, are conducted
on an arm’s length basis. Directors have
an ongoing duty to update the Board
on any changes to these conflicts.
Approved by the Board and signed on its
behalf by:
Dan Hartley
Group General Counsel and
Company Secretary
6 September 2023
CORPORATE GOVERNANCE 116
GENUS PLC / ANNUAL REPORT 2023
DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing
the Annual Report and the Financial
Statements in accordance with applicable
law and regulations.
Company law requires the Directors to
prepare financial statements for each
financial year. Under that law the Directors
are required to prepare the Group
Financial Statements in accordance with
the international accounting standards
in conformity with the requirements
of the Companies Act 2006.
The Directors are responsible for keeping
adequate accounting records that
are sufficient to show and explain the
Company’s transactions and disclose
with reasonable accuracy at any time
the financial position of the Company
and enable them to ensure that the
Financial Statements comply with the
Companies Act 2006. They are also
responsible for safeguarding the assets
of the Company and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors have chosen to prepare the
Parent Company Financial Statements
in accordance with Financial Reporting
Standard 101 ‘Reduced Disclosure
Framework’. Under company law, the
Directors must not approve the financial
statements unless they are satisfied that
they give a true and fair view of the state
of affairs of the Company and of the profit
or loss of the Company for that period.
In preparing the Parent Company
Financial Statements, the Directors
are required to:
• select suitable accounting policies
and then apply them consistently;
• make judgements and accounting
estimates that are reasonable
and prudent;
• state whether Financial Reporting
Standard 101 ‘Reduced Disclosure
Framework’ has been followed, subject
to any material departures disclosed
and explained in the Financial
Statements; and
• prepare the Financial Statements on
the going concern basis, unless it is
inappropriate to presume that the
Company will continue in business.
In preparing the Group Financial
Statements, International Reporting
Standard 1 requires that Directors:
• properly select and apply
accounting policies;
• present information, including
accounting policies, in a manner that
provides relevant, reliable, comparable
and understandable information;
• provide additional disclosures when
compliance with the specific
requirements in IFRSs are insufficient to
enable users to understand the impact
of particular transactions, other events
and conditions on the entity’s financial
position and financial performance; and
• make an assessment of the Company’s
ability to continue as a going concern.
The Directors are responsible for the
maintenance and integrity of the
corporate and financial information
included on the Company’s website.
Legislation in the UK governing the
preparation and dissemination of
Financial Statements may differ from
legislation in other jurisdictions.
DIRECTORS’ RESPONSIBILITY STATEMENT
We confirm that to the best of our
knowledge:
• the Financial Statements, prepared in
accordance with the relevant financial
reporting framework, give a true
and fair view of the assets, liabilities,
financial position and profit or loss of
the Company and the undertakings
included in the consolidation taken
as a whole;
• the Strategic Report includes a fair
review of the development and
performance of the business and
the position of the Company and
the undertakings included in the
consolidation taken as a whole,
together with a description of the
principal risks and uncertainties that
they face; and
• the Annual Report and Financial
Statements, taken as a whole, are fair,
balanced and understandable, and
provide the information necessary for
shareholders to assess the Company’s
position, performance, business model
and strategy.
Approved by the Board and signed on its
behalf by:
Jorgen Kokke
Chief Executive
6 September 2023
Alison Henriksen
Chief Financial Officer
6 September 2023
CORPORATE GOVERNANCE 117
GENUS PLC / ANNUAL REPORT 2023
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF GENUS PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
1. Opinion
In our opinion:
• the financial statements of Genus plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) give a true and fair view of the state
of the Group’s and of the Parent Company’s affairs as at 30 June 2023 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with United Kingdom adopted International
Accounting Standards and International Financial Reporting Standards (IFRSs) as issued by the International Accounting
Standards Board (IASB);
• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
• the Group Income Statement;
• the Group Statement of Comprehensive Income;
• the Group and Parent Company Statements of Changes in Equity;
• the Group and Parent Company Balance Sheets;
• the Group Statement of Cash Flows; and
• the related notes 1 to 40 and C1 to C19.
The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law, United
Kingdom adopted International Accounting Standards and IFRSs as issued by the IASB. The financial reporting framework that has been
applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards,
including FRS 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our
report.
We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services
provided to the Group and Parent Company for the year are disclosed in note 8 to the financial statements. We confirm that we have
not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Group or the Parent Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters
The key audit matter that we identified in the current year was the valuation of Biological Assets under
IAS 41 ‘Agriculture’.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
Scoping
The materiality that we used for the Group financial statements was £3.2m and was determined on the
basis of 5% of forecast profit before tax excluding the impact of certain exceptional items and the net
IAS 41 valuation movement on biological assets. Our determined materiality equates to 5.4% of this
measure at year end.
Our audit scope covered 13 components. Of these, 8 were subject to a full scope audit, and 5 were
subject to specified procedures. Our testing achieved coverage of 76% of Group revenue, 87% of Group
net assets and 86% of Group profit before tax, excluding the impact of exceptional items and the net IAS
41 valuation movement on biological assets.
Significant changes in
our approach
The key audit matter identified is consistent with the prior year. No significant changes are noted
in the scope of our group audit with reference to number of components identified and audit
procedures performed.
FINANCIAL STATEMENTS
118
GENUS PLC / ANNUAL REPORT 2023
INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF GENUS PLC
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and Parent Company’s ability to continue to adopt the going concern basis
of accounting included:
• Obtaining an understanding the Group’s process for assessing the going concern assumption including the relevant management
review controls underpinning this assessment;
• Gaining an understanding as to the relevant assumptions used in the going concern models, including the Strategic Plan, and
challenging these assumptions through comparison with our own understanding of the business, external information, and evidence
gathered over the course of our audit, including:
– Reading analyst reports, industry data and other external information and inspecting them for both corroborative and
contradictory evidence in relation to these assumptions;
– Challenging forecasted profit by comparison to recent historical financial information;
– Challenging the key underlying data used in forecast scenarios by assessing it for consistency with our understanding of the
business model and risks; and
– Evaluating the accuracy of current and forecast covenant calculations and performing additional analysis to determine the level of
sensitivity in forecast headroom in relation to cash and covenants.
• Assessing the mechanical accuracy of the Group’s models;
• Reviewing the terms of the Group’s financing arrangements as at the balance sheet date, comprising a £190m multi-currency RCF, a
US$150m RCF and a US$20m bond and guarantee facility; reperforming debt covenant computations over the going concern period;
and evaluating the associated disclosures; and
• Evaluating the Group’s disclosures against the requirements of IAS 1 ‘Presentation of Financial Statements’.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and Parent Company’s ability to continue as a going concern for
a period of at least twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the group has applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
Valuation of Biological Assets under IAS 41 ‘Agriculture’
Key audit matter
description
The Group carries biological assets at fair value in line with the requirements of IAS 41 ‘Agriculture’. Discounted
cash flow analyses are performed in determining the valuation. As at 30 June 2023, the Group held total
biological assets (excluding those recognised in inventory) of £342.0m (2022: £366.8m).
Certain of the assumptions included within the valuation models are subject to estimation uncertainty, and
accordingly, require the exercise of a significant degree of judgement. In planning our audit, we identified the
following assumptions as being the most significant in the determination of the valuation of each species:
Bovine: the growth rates over the strategic outlook period of proven and genomic semen sales, and the
discount rate applied to the forecast cash flows in respect of the Bovine herd.
Porcine: the discount rates applied to the forecast cash flows in respect of the Pureline herd.
Details of the key sources of estimation uncertainty identified, the Group’s accounting policy, and the
biological assets held are disclosed in notes 4 and 16 to the financial statements. The Audit & Risk Committee
set out within their areas of focus on page 85 how they have considered the Group’s judgements.
FINANCIAL STATEMENTS 119
GENUS PLC / ANNUAL REPORT 2023
How the scope of our
audit responded to the
key audit matter
In responding to the identified key audit matter, we completed the following audit procedures:
• Obtained an understanding of controls relevant to the review and approval of the valuation of biological
assets;
• Assessed the appropriateness of the logic and mechanical accuracy of the valuation models prepared and
the methodology applied by the Group for compliance with the requirements of IAS 41 ‘Agriculture’;
• Made enquiries of management to understand the rationale applied in the determination of key
assumptions and any changes year on year;
• Challenged the appropriateness of key assumptions applied within the underlying forecasts, with
consideration given to historical forecasting accuracy and third-party benchmarking data, historical
transactional data or other comparable sources, and performed a retrospective review of key assumptions
applied;
Involved our valuation specialists in our consideration as to the appropriateness of the discount rates
applied by the directors in determining the fair value of biological assets;
•
• Performed independent ‘stand-back’ analysis to assess whether the valuation determined by the directors
was consistent with expectation and that any variations on prior year were supportable; and
• Assessed the completeness and accuracy of disclosures made within the financial statements in
accordance with IAS 41 ‘Agriculture’, and IAS 1 ‘Presentation of Financial Statements’.
Key observations
We are satisfied that the valuation of biological assets and the related disclosures are appropriate.
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions
of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit
work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Materiality
£3.2m (2022: £3.1m)
£2.6m (2022: £2.6m)
Group financial statements
Parent company financial statements
Basis for determining materiality
Rationale for the benchmark applied
We determined materiality on the basis of
5% (2022: 5%) of forecast profit before tax
excluding exceptional items (as defined in
note 7) and changes in net IAS 41 valuation
movement on biological assets. Our
determined materiality equates to 5.4%
(2022: 5.6%) of this measure at year end.
We determined adjusted profit before tax
as an appropriate benchmark for
determining materiality so as to avoid
distortion that could otherwise arise from
non-recurring or highly volatile items
including the IAS 41 fair value movements.
1% (2022: 1%) of Net Assets
Net Assets were selected as an appropriate
benchmark for determining materiality, as
the Parent Company acts primarily as a
holding company.
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Performance materiality
70% (2022: 70%) of Group materiality
70% (2022: 70%) of Parent Company
materiality
Group financial statements
Parent company financial statements
Basis and rationale for determining
performance materiality
In determining performance materiality, we considered the following factors:
• Our cumulative knowledge of the Group and its control environment;
• The low turnover in key management personnel;
• The high degree of centralisation in the Group’s financial reporting controls and
processes; and
• The low number of corrected and uncorrected misstatements identified in
prior periods.
FINANCIAL STATEMENTS
120
GENUS PLC / ANNUAL REPORT 2023
INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF GENUS PLC
6.3. Error reporting threshold
We agreed with the Audit & Risk Committee that we would report to the Committee all audit differences in excess of £160k (2022: £155k),
as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit &
Risk Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and assessing
the risks of material misstatement at the Group level.
The Group operates globally with PIC and ABS segments operating under different reporting lines in each country, and aggregated into
regions. We determined that each segment within a country represents a component to our audit; for example ABS in the United
Kingdom is an audit component.
Components were selected to provide an appropriate basis for undertaking audit work to address the risks of material misstatement
identified. Based on that assessment, we identified 13 components of interest for the purposes of the group audit (2022: 13). Of these
components, 8 were designated as subject to full scope audit procedures (2022: 8), with the remaining 5 subject to specified procedures
(2022: 5). Excluding the Parent Company, our component audits were performed using materiality between £1.1m and £1.3m (2022: £1.1m
and £1.4m). These components represent the principal business units and account for 76% of the Group’s revenue (2022: 73%), 87% of the
Group’s net assets (2022: 84%) and 86% of the Group’s profit before tax, excluding the impact of exceptional items and the net IAS 41
valuation movement on biological assets (2022: 84%).
At the Group level, we evaluated the consolidation process and carried out analytical procedures to confirm our conclusion that there
were no significant risks of material misstatement within the aggregated financial information of the remaining components not subject
to full scope audit or specified procedures.
REVENUE
PROFIT BEFORE TAX
NET ASSETS
3
2
1
3
2
3
2
1
1
1 Full audit scope
65%
2 Specified audit procedures 11%
24%
3 Review at Group level
1 Full audit scope
75%
2 Specified audit procedures 11%
14%
3 Review at Group level
1 Full audit scope
77%
2 Specified audit procedures 10%
13%
3 Review at Group level
7.2. Our consideration of the control environment
The Group is currently undergoing continued significant investment in its IT and core business processes, with the ongoing roll out of its
global standardisation template, utilising Microsoft D365 technology. That investment, together with the comparative diverse
infrastructure that remains across certain components of the Group, led us to an audit strategy that is principally driven by substantive
audit procedures.
With the involvement of our IT specialists, we have expanded the scope of our IT procedures in the current year. Specifically, we
obtained an understanding of, and tested general IT controls operating within the Microsoft Dynamics 365 platform.
For all components we obtained an understanding of the relevant controls associated with the financial reporting process, areas of
significant risk, and in relation to significant accounting estimates.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of climate change on the Group’s business and its financial statements.
As discussed on page 46, the Group has assessed the risks and opportunities associated with various future climate-related scenarios
and its own commitment to transition to an operating model that has a reduced level of GHG emissions. As a part of our audit
procedures, we have obtained management’s climate-related risk assessment and held discussions with those charged with
governance to understand the process of identifying climate-related risks, the determination of mitigating actions and the impact on
the Group’s financial statements. We have considered the Group’s assessment of the impact of these risks and opportunities on the
financial statements and their conclusion that there is no material impact on the Group’s carrying value of assets and liabilities at the
balance sheet date. We have also evaluated the appropriateness of disclosures included in the financial statements in notes 1 to 40,
and have read the climate related disclosure in the Sustainability report to consider whether they are materially consistent with the
financial statements and our knowledge obtained in the audit.
FINANCIAL STATEMENTS 121
GENUS PLC / ANNUAL REPORT 2023
7.4. Working with other auditors
Where appropriate, the group audit team engaged component audit teams to perform the audit procedures as set out in section 7.1.
We engaged component audit teams in the UK, US, China, Brazil and Mexico; the group audit team performed specified audit
procedures directly on components in Chile, Canada, and Spain.
The group audit team held regular communication with the component auditors in planning for, and throughout, the year-end audit
process. Oversight of the component auditors included attending internal planning and status meetings, attending close meetings held
with local management, and reviewing relevant audit documentation. We visited the UK components, (ABS & PIC), held in-person
discussions and reviewed on site. For the rest of the components, our oversight was remote and we enhanced this oversight through a
number of measures (as appropriate to each component), including accessing and directly reviewing their audit files, more frequent
dialogue and use of video conferencing and screen-sharing facilities.
8. Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic
alternative but to do so.
10. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s report.
11. Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and
regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance including the design of the Group’s
remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
• the Group’s own assessment of the risks that irregularities may occur either as a result of fraud or error as approved by the board;
• results of our enquiries of management, internal audit, and the Audit & Risk Committee about their own identification and assessment
of the risks of irregularities, including those that are specific to the Group’s sector;
• any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance,
including in relation to Russian Sanctions (described in the Audit & Risk Committee report on page 85 and in note 4 to the financial
statements);
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
• the matters discussed among the audit engagement team including significant component audit teams and relevant internal
specialists, including valuation and IT specialists, regarding how and where fraud might occur in the financial statements and any
potential indicators of fraud.
FINANCIAL STATEMENTS 122
GENUS PLC / ANNUAL REPORT 2023
INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF GENUS PLC
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the area of unusual adjustments to revenue. In common with all audits under ISAs (UK), we
are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions of those
laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The
key laws and regulations we considered in this context included the UK Companies Act, Listing Rules, pensions legislation, and global
tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but
compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. These included the Group’s
compliance with health and safety regulations, environmental regulations, and the Russian Sanctions.
11.2. Audit response to risks identified
As a result of performing the above, we did not identify any key audit matters related to the potential risk of fraud or non-compliance
with laws and regulations.
Our procedures to respond to risks identified included the following:
• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of
relevant laws and regulations described as having a direct effect on the financial statements;
• enquiring of management, the Audit & Risk Committee and in-house and external legal counsel concerning actual and potential
litigation and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement
due to fraud;
• reading minutes of meetings of those charged with governance, reviewing internal audit reports;
•
in addressing the risk of non-compliance with the Russian Sanctions, enquiring of internal legal counsel and evaluating
correspondence with external legal counsel;
in addressing the risk of fraud through unusual adjustments to revenue, leveraging bespoke analytics to identify revenue entries with
characteristics that appeared unusual, and testing the appropriateness of these entries by tracing to supporting documentation and
evaluating the business rationale; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other
adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
•
•
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including
internal specialists and significant component audit teams, and remained alert to any indications of fraud or non-compliance with laws
and regulations throughout the audit.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of
the audit, we have not identified any material misstatements in the strategic report or the directors’ report.
13. Corporate Governance Statement
The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 65;
• the directors’ explanation as to its assessment of the group’s prospects, the period this assessment covers and why the period is
appropriate set out on page 65;
• the directors’ statement on fair, balanced and understandable set out on page 116;
• the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 61;
• the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on
page 87; and
• the section describing the work of the Audit & Risk Committee set out on pages 83-88.
FINANCIAL STATEMENTS 123
GENUS PLC / ANNUAL REPORT 2023
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received
from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration have not
been made or the part of the Directors’ Remuneration Report to be audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit & Risk Committee, we were appointed by the Board of Directors on 8 June 2006 to audit the
financial statements for the year ending 30 June 2006 and subsequent financial periods. The period of total uninterrupted engagement
including previous renewals and reappointments of the firm is 18 years, covering the years ending 30 June 2006 to 30 June 2023.
15.2. Consistency of the audit report with the additional report to the Audit & Risk Committee
Our audit opinion is consistent with the additional report to the Audit & Risk Committee we are required to provide in accordance with
ISAs (UK).
16. Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have
formed.
As required by the Financial Conduct Authority (‘FCA’) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R, these financial
statements form part of the European Single Electronic Format (‘ESEF’) prepared Annual Financial Report filed on the National Storage
Mechanism of the UK FCA in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditor’s report provides no
assurance over whether the annual financial report has been prepared using the single electronic format specified in the ESEF RTS.
Mark Tolley FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Reading, United Kingdom
6 September 2023
FINANCIAL STATEMENTS 124
GENUS PLC / ANNUAL REPORT 2023
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
REVENUE
Adjusted operating profit
Adjusting items:
– Net IAS 41 valuation movement on biological assets
– Amortisation of acquired intangible assets
– Share-based payment expense
Exceptional items (net)
Total adjusting items
OPERATING PROFIT
Share of post-tax profit of joint ventures and associates retained
Other gains and losses
Finance costs
Finance income
PROFIT BEFORE TAX
Taxation
PROFIT FOR THE YEAR
ATTRIBUTABLE TO:
Owners of the Company
Non-controlling interest
EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
Alternative Performance Measures
Adjusted operating profit
Adjusted operating loss/(profit) attributable to non-controlling interest
Pre-tax share of profits from joint ventures and associates excluding net IAS 41 valuation movement
Gene editing costs
Adjusted operating profit including joint ventures and associates, excluding gene editing costs
Gene editing costs
Adjusted operating profit including joint ventures and associates
Net finance costs
Adjusted profit before tax
Adjusted earnings per share
Basic adjusted earnings per share
Diluted adjusted earnings per share
Note
5, 6
5
16
15
30
7
8
18
26
10
10
11
2023
£m
689.7
74.6
(16.9)
(7.7)
(6.0)
(30.6)
(3.5)
(34.1)
40.5
10.5
2.7
(15.4)
1.1
39.4
(7.6)
31.8
33.3
(1.5)
31.8
2022
£m
593.4
68.8
(5.4)
(8.3)
(3.7)
(17.4)
(2.0)
(19.4)
49.4
5.2
–
(6.6)
0.4
48.4
(11.7)
36.7
40.9
(4.2)
36.7
12
12
50.8p
50.5p
62.5p
62.2p
Note
2023
£m
2022
£m
74.6
0.4
10.8
14.3
100.1
(14.3)
85.8
(14.3)
71.5
68.8
(0.3)
9.2
7.9
85.6
(7.9)
77.7
(6.2)
71.5
84.8p
84.2p
82.7p
82.3p
10
12
12
Adjusted results are the Alternative Performance Measures (‘APMs’) used by the Board to monitor underlying performance at a Group
and operating segment level, which are applied consistently throughout. These APMs should be considered in addition to statutory
measures, and not as a substitute for or as superior to them. For more information on APMs, see APM Glossary.
FINANCIAL STATEMENTS 125
GENUS PLC / ANNUAL REPORT 2023
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
PROFIT FOR THE YEAR
Items that may be reclassified subsequently to profit or loss
Foreign exchange translation differences
Fair value movement on net investment hedges
Fair value movement on cash flow hedges
Tax relating to components of other comprehensive expense/(income)
Items that may not be reclassified subsequently to profit or loss
Actuarial (loss)/gains on retirement benefit obligations
Movement on pension asset recognition restriction
Release of additional pension liability
Gain/(loss) on equity instruments measured at fair value
Tax relating to components of other comprehensive expense/(income)
OTHER COMPREHENSIVE (EXPENSE)/INCOME FOR THE YEAR
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
ATTRIBUTABLE TO:
Owners of the Company
Non-controlling interest
Note
2023
£m
26
11
29
29
29
11
(27.2)
–
0.8
3.1
(40.4)
38.3
3.0
1.7
(1.2)
2022
£m
66.6
(0.7)
1.9
(8.2)
27.3
(69.8)
43.7
(6.1)
1.1
2023
£m
31.8
(23.3)
1.4
(21.9)
9.9
2022
£m
36.7
59.6
(3.8)
55.8
92.5
11.1
(1.2)
97.3
(4.8)
9.9
92.5
FINANCIAL STATEMENTS 126
GENUS PLC / ANNUAL REPORT 2023
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Called up
share
capital
£m
Share
premium
account
£m
Note
Own
shares
£m
6.6
179.1
(0.1)
Hedging
reserve
£m
Retained
earnings
£m
Total
£m
Non-
controlling
interest
£m
Total
equity
£m
320.4
498.1
(1.5)
496.6
59.4
(0.6)
58.8
Trans-
lation
reserve
£m
(7.9)
59.4
(0.6)
–
–
–
–
–
–
–
–
1.4
–
–
–
–
–
–
–
(0.6)
1.4
(4.6)
(4.6)
19.5
19.5
(49.7)
(49.7)
31.0
31.0
–
–
–
–
–
–
(0.6)
1.4
(4.6)
19.5
(49.7)
31.0
BALANCE AT 30 June 2021
Foreign exchange translation differences,
net of tax
Fair value movement on net investment
hedges, net of tax
Fair value movement on cash flow hedges,
net of tax
Loss on equity instruments measured at fair
value, net of tax
Actuarial gains on retirement benefit
obligations, net of tax
Movement on pension asset recognition
restriction, net of tax
Recognition of additional pension liability,
net of tax
Other comprehensive income/(expense)
for the year
Profit/(loss) for the year
Total comprehensive income/(expense)
for the year
Recognition of share-based payments,
net of tax
Dividends
Adjustment arising from change in non-
controlling interest and written put option
BALANCE AT 30 June 2022
Foreign exchange translation differences,
net of tax
Fair value movement on net investment
hedges, net of tax
Fair value movement on cash flow hedges,
net of tax
Gain on equity instruments measured at fair
value, net of tax
Actuarial loss on retirement benefit
obligations, net of tax
Movement on pension asset recognition
restriction, net of tax
Recognition of additional pension liability,
net of tax
Other comprehensive (expense)/income
for the year
Profit/(loss) for the year
Total comprehensive income/(expense)
for the year
Recognition of share-based payments,
net of tax
Dividends
Adjustment arising from change in non-
controlling interest and written put option
13
13
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6.6
179.1
(0.1)
50.9
1.4
340.6
578.5
(6.4)
572.1
(24.2)
0.3
(23.9)
58.8
–
1.4
–
(3.8)
40.9
56.4
40.9
(0.6)
(4.2)
55.8
36.7
58.8
1.4
37.1
97.3
(4.8)
92.5
–
–
–
–
–
–
4.0
(20.9)
4.0
(20.9)
–
–
4.0
(20.9)
–
–
(0.1)
(0.1)
(24.2)
–
–
–
–
–
–
–
–
0.6
–
–
–
–
–
–
–
0.7
–
0.6
0.7
(30.3)
(30.3)
28.7
28.7
2.3
2.3
–
–
–
–
–
–
–
0.6
0.7
(30.3)
28.7
2.3
(24.2)
–
0.6
–
1.4
33.3
(22.2)
33.3
0.3
(1.5)
(21.9)
31.8
(24.2)
0.6
34.7
11.1
(1.2)
9.9
–
–
–
–
–
–
6.3
(21.0)
6.3
(21.0)
–
–
6.3
(21.0)
–
–
(0.1)
(0.1)
BALANCE AT 30 June 2023
6.6
179.1
(0.1)
26.7
2.0
360.6
574.9
(7.7)
567.2
FINANCIAL STATEMENTS 127
GENUS PLC / ANNUAL REPORT 2023
GROUP BALANCE SHEET
AS AT 30 JUNE 2023
ASSETS
Goodwill
Other intangible assets
Biological assets
Property, plant and equipment
Interests in joint ventures and associates
Other investments
Derivative financial assets
Other receivables
Deferred tax assets
TOTAL NON-CURRENT ASSETS
Inventories
Biological assets
Trade and other receivables
Cash and cash equivalents
Income tax receivable
Derivative financial assets
Asset held for sale
TOTAL CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
Trade and other payables
Interest-bearing loans and borrowings
Provisions
Deferred consideration
Obligations under leases
Tax liabilities
Derivative financial liabilities
TOTAL CURRENT LIABILITIES
Trade and other payables
Interest-bearing loans and borrowings
Retirement benefit obligations
Provisions
Deferred consideration
Deferred tax liabilities
Derivative financial liabilities
Obligations under leases
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Called up share capital
Share premium account
Own shares
Translation reserve
Hedging reserve
Retained earnings
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY
Non-controlling interest
Put option over non-controlling interest
TOTAL NON-CONTROLLING INTEREST
TOTAL EQUITY
Note
2023
£m
2022
£m
14
15
16
17
18
19
26
21
11
20
16
21
22
26
23
27
25
38
28
26
23
27
29
25
38
11
26
28
31
31
31
31
39
39
107.8
66.2
318.2
164.4
53.5
8.8
4.9
8.2
16.5
748.5
61.3
23.8
132.1
36.3
4.0
1.5
–
259.0
111.0
72.0
333.7
171.4
41.2
10.2
2.2
8.6
10.1
760.4
50.9
33.1
129.5
38.8
4.0
1.0
0.2
257.5
1,007.5
1,017.9
(122.0)
(4.2)
(1.8)
–
(10.0)
(7.4)
(1.8)
(147.2)
–
(196.0)
(6.9)
(10.3)
(0.6)
(51.2)
(6.2)
(21.9)
(293.1)
(440.3)
567.2
6.6
179.1
(0.1)
26.7
2.0
360.6
574.9
(2.2)
(5.5)
(7.7)
567.2
(124.7)
(7.1)
(1.9)
(0.8)
(10.1)
(4.9)
(1.8)
(151.3)
(0.2)
(182.1)
(8.3)
(12.0)
(0.7)
(60.3)
(6.4)
(24.5)
(294.5)
(445.8)
572.1
6.6
179.1
(0.1)
50.9
1.4
340.6
578.5
(0.7)
(5.7)
(6.4)
572.1
The Financial Statements were approved and authorised for issue by the Board of Directors on 6 September 2023.
Signed on behalf of the Board of Directors
Jorgen Kokke
Chief Executive
Alison Henriksen
Chief Financial Officer
FINANCIAL STATEMENTS
128
GENUS PLC / ANNUAL REPORT 2023
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Note
32
18
18
18
38
NET CASH FLOW FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Dividends received from joint ventures and associates
Joint venture and associate loan investment
Acquisition of joint venture and associate
Acquisition of trade and assets
Acquisition of Olymel AlphaGene assets
Sale of other investments
Acquisition of other investments
Payment of deferred consideration
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of property, plant and equipment
NET CASH OUTFLOW FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Drawdown of borrowings
Repayment of borrowings
Payment of lease liabilities
Equity dividends paid
Dividend to non-controlling interest
Debt issue costs
Issue of ordinary shares
NET CASH (OUTFLOW)/INFLOW FROM FINANCING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at start of the year
Net increase/(decrease) in cash and cash equivalents
Effect of exchange rate fluctuations on cash and cash equivalents
TOTAL CASH AND CASH EQUIVALENTS AT 30 JUNE
22
2023
£m
50.4
2.6
(1.9)
(1.0)
–
–
3.4
(0.4)
(0.8)
(25.9)
(9.3)
2.4
(30.9)
126.8
(111.7)
(11.1)
(21.0)
(0.1)
(1.1)
–
(18.2)
1.3
38.8
1.3
(3.8)
36.3
2022
£m
34.3
3.2
–
(2.2)
(0.8)
(14.5)
–
(1.0)
(1.0)
(42.1)
(8.8)
–
(67.2)
138.7
(83.9)
(11.3)
(20.9)
(0.1)
(0.6)
–
21.9
(11.0)
46.0
(11.0)
3.8
38.8
FINANCIAL STATEMENTS 129
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
1. REPORTING ENTITY
Genus plc (the ‘Company’) is a public company limited by shares and incorporated in England, United Kingdom under the Companies
Act 2006. Its company number is 02972325 and its registered office is Matrix House, Basing View, Basingstoke, Hampshire RG21 4DZ.
The Group Financial Statements for the year ended 30 June 2023 comprise the Company and its subsidiaries (together referred to as
the ‘Group’). We have used the equity method to account for the Group’s interests in joint ventures and associates. Our business model
on pages 12 to 13 explains the Group’s operations and principal activities.
2. BASIS OF PREPARATION
We have prepared the Group Financial Statements in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006. The Group Financial Statements have also been prepared in accordance with International
Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’).
Unless otherwise stated, we have consistently applied the significant accounting policies set out below to all periods presented in these
Group Financial Statements.
The going concern statement has been included in the Strategic Report on page 65 and forms part of these statements.
Functional and presentational currency
We present the Group Financial Statements in Sterling, which is the Company’s functional and presentational currency. All financial
information presented in Sterling has been rounded to the nearest £0.1m.
Use of estimates
Preparing financial statements requires management to make judgements, estimates and assumptions that affect our application
of accounting policies and our reported assets, liabilities, income and expenses. Our actual results may differ from these estimates.
We review our estimates and underlying assumptions on an ongoing basis, and recognise revisions to accounting estimates in the
period in which we revise the estimate and in any future periods affected.
Note 4 provides information about significant areas of estimation uncertainty and the critical judgements we made in applying
accounting policies that have the most effect on the amounts recognised in the Financial Statements.
Alternative Performance Measures (‘APMs’)
In reporting financial information, the Group presents APMs, which are not defined or specified under the requirements of IFRS and
which are not considered to be a substitute for, or superior to, IFRS measures.
The Group believes that these APMs provide stakeholders with additional helpful information on the performance of the business.
The APMs are consistent with how we plan our business performance and report on it in our internal management reporting to the
Board and GELT. Some of these measures are also used for the purpose of setting remuneration targets.
For a full list of all APMs please see the Alternative Performance Measures section of the Annual Report on pages 200 to 207.
Change in trade and other receivables
It was identified that certain contract assets were previously incorrectly classified as current trade receivables. The prior periods have
been restated, reducing current trade receivables by £9.6m in June 2022, with a corresponding increase in current contract assets.
3. SIGNIFICANT ACCOUNTING POLICIES APPLIED IN THE CURRENT REPORTING PERIOD THAT RELATE TO THE FINANCIAL STATEMENTS
AS A WHOLE
This section sets out our significant accounting policies that relate to the Financial Statements as a whole. Where an accounting policy
is generally applicable to a specific note to the Financial Statements, the policy has been described in that note. We have also detailed
below the new accounting pronouncements that we will adopt in future years and our current view of the impact they will have on our
financial reporting.
Accounting convention
We prepare the Group Financial Statements under the historical cost convention, except for our biological assets, share-based
payment expense, pension liabilities and derivative financial instruments. In accordance with IFRS, we measure biological assets at fair
value less point-of-sale costs, which represent distribution costs and selling expenses, and share-based payment expense, pension
liabilities, and certain financial instruments at fair value.
Basis of consolidation
Subsidiaries are entities the Group controls. We have control of an entity when we are exposed, or have the rights, to variable returns
from the entity and have the ability to affect the returns through power over the entity. In assessing control, we take into account
potential voting rights that we can currently exercise or convert. We fully consolidate the results of subsidiaries we acquire from the date
that control transfers to the Group. We cease consolidating the results of subsidiaries that we cease to control from the date that
control passes.
In preparing the Group Financial Statements, we eliminate intra-Group balances and any unrealised income and expenses arising from
intra-Group transactions. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the
investment, to the extent of our interest in the investee. We eliminate unrealised losses in the same way as unrealised gains, but only
to the extent that there is no evidence of impairment.
Foreign currencies
We record foreign currency transactions in the relevant Group entity’s functional currency, at the exchange rate on the transaction date.
At each balance sheet date, we retranslate monetary assets and liabilities denominated in foreign currencies at the exchange rate on
the balance sheet date. We recognise the foreign exchange differences arising on retranslation in the Group Income Statement.
FINANCIAL STATEMENTS 130
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
3. SIGNIFICANT ACCOUNTING POLICIES APPLIED IN THE CURRENT REPORTING PERIOD THAT RELATE TO THE FINANCIAL STATEMENTS
AS A WHOLE CONTINUED
When non-monetary assets and liabilities are measured at historical cost in a foreign currency, we translate them at the exchange rate
at the transaction date. When non-monetary assets and liabilities are stated at fair value in a foreign currency, we translate them at the
prevailing exchange rate on the date we determined the fair value. We recognise the foreign exchange differences arising on
retranslation in the Group Statement of Comprehensive Income.
The assets and liabilities of foreign operations, including goodwill arising on consolidation, are translated into Sterling at the prevailing
exchange rates at the balance sheet date. The resulting exchange differences are booked into foreign currency translation reserves
and reported in the Group Statement of Comprehensive Income. We translate these operations’ revenues and expenses using an
average rate for the period.
When exchange differences arise from the fair value movement of related effective hedges, we take them to the foreign currency
translation reserve. When we dispose of a foreign operation, we release these differences to the Income Statement. Exchange
movements on inter-company loans considered to be permanent equity are recognised in the Group Statement of Comprehensive
Income, together with any related taxation.
The principal exchange rates were as follows:
US Dollar/£
Euro/£
Brazilian Real/£
Mexican Peso/£
Chinese Yuan/£
Russian Rouble/£
Average
Closing
2023
1.21
1.15
6.20
22.84
8.44
86.29
2022
1.32
1.18
6.94
26.97
8.55
98.75
2021
2023
1.36
1.13
7.33
28.15
8.94
102.04
1.27
1.16
6.08
21.74
9.21
112.79
2022
1.22
1.16
6.39
24.45
8.15
66.73
2021
1.38
1.17
6.87
27.57
8.93
101.10
Research and development
We undertake research with the aim of gaining new scientific or technical knowledge, and recognise this expenditure in the Income
Statement as it is incurred.
The Group constantly monitors its research activities. When research projects achieve technical feasibility and are commercially viable,
our policy is to capitalise further development costs within intangible assets, in accordance with IAS 38.
Our development activities include developing and maintaining our porcine genetic nucleus herd and our bovine pre-stud herds. We do
not capitalise development expenditure separately for these herds, as their fair value is included in the fair value of the Group’s
biological assets, in accordance with IAS 41.
We disclose the costs of research and development activities, as required by IAS 38 (see note 8).
Other income and deferred income
During the year ended 30 June 2019, the Company entered into a strategic collaboration with Beijing Capital Agribusiness (‘BCA’) under
which BCA will establish and fund a collaboration specific entity (‘BCA Future Bio-Tech’) which will use Genus’s intellectual property and
know-how to pursue the PRRSv resistance regulatory and development work in China. Genus will receive consideration after meeting
certain milestones in the development programme.
Each milestone is considered to be either a separate performance obligation, or a set of groups of separate performance obligations,
under this agreement and are unbundled in the contractual arrangement as if they are distinct from one another.
We assess each separate performance obligation relating to the milestone payments, and upon completion of those performance
obligations recognise the fair value of amounts earned in other income. Some performance obligations, such as the transfer of know-
how, are recognised at a point in time whereas others, such as the provision of technical services, are recognised over time. We
recognise any received but unearned consideration as deferred income.
We will apply the same accounting policy to any other comparable agreements.
Reversals of impairment
We reverse an impairment loss in respect of assets other than goodwill when the impairment loss may no longer exist and we have
changed the estimates we used to determine the recoverable amount.
We only reverse an impairment loss to the extent that the asset’s carrying amount does not exceed the carrying amount it would have
had, net of depreciation or amortisation, if we had not recognised the impairment loss.
Climate change
In preparing these consolidated financial statements we have considered the impact of both physical and transition climate change
risks on the current valuation of our assets and liabilities. We do not believe that there is a material impact on the financial reporting
judgements and estimates arising from our considerations and as a result the valuations of our assets or liabilities have not been
significantly impacted by these risks as at 30 June 2023. In concluding, we specifically considered the impact of climate change on the
growth rates and projected cash flows as part of our goodwill impairment testing (see note 14). As government policies evolve as a result
of commitments to limit global warming to 1.5°C, we will continue to monitor implications on the valuations of our assets and liabilities
that could arise in future years.
FINANCIAL STATEMENTS 131
GENUS PLC / ANNUAL REPORT 2023
3. SIGNIFICANT ACCOUNTING POLICIES APPLIED IN THE CURRENT REPORTING PERIOD THAT RELATE TO THE FINANCIAL STATEMENTS
AS A WHOLE CONTINUED
New standards and interpretations
In the current year, the Group has applied a number of amendments to IFRS issued by the International Accounting Standards Board
that are mandatorily effective for an accounting period that begins after 1 January 2022 and have been implemented with effect from
1 July 2022. These are:
• Amendments to IFRS 3 – ‘Business Combinations’ – References to the Conceptual Framework;
• Amendments to IAS 12 – ‘Income Taxes’ – International tax reform – Pillar two model rules;
• Amendments to IAS 16 – ‘Property, Plant and Equipment’ – Proceeds before Intended Use;
• Amendments to IAS 37 – ‘Onerous Contracts’ — Cost of Fulfilling a Contract; and
• Annual Improvements 2018-2020 Cycle.
Their addition has not had any material impact on the disclosures, or amounts reported in the Group Financial Statements.
New standards and interpretations not yet adopted
At the date of the Annual Report, the following standards and interpretations which have not been applied in the report were in issue
but not yet effective (and in some cases had not yet been adopted by the UK). The Group will continue to assess the impact of these
amendments prior to their adoption. These are:
• Amendments to IFRS 16 – ‘Lease Liability in a Sale and Leaseback’;
• Amendments to IAS 1 – ‘Classification of Liabilities as Current or Non-Current’;
• Amendments to IAS 1 and IFRS Practice Statement 2 – ‘Disclosure of Accounting Policies’;
• Amendments to IAS 7 and IFRS 7 – ‘Disclosures: Supplier Finance Arrangements’;
• Amendments to IAS 8 – ‘Definition of Accounting Estimates’; and
• Amendments to IAS 12 – ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction’.
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of Consolidated Financial Statements requires the Group to make estimates and judgements that affect the
application of policies and reported amounts.
Critical judgements represent key decisions made by management in the application of the Group’s accounting policies, where a
significant risk of materially different outcomes exists due to management assumptions or sources of estimation uncertainty. Estimates
and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
The estimates which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the
next 12 months are discussed below.
Critical accounting judgements
Adjusting items
The Directors believe that the adjusted profit and earnings per share measures provide additional information to shareholders on the
performance of the business. These measures are consistent with how business performance is measured internally by the Board
and GELT.
The profit before tax and adjusting items measures are not recognised profit measures under IFRS and may not be directly comparable
with adjusted profit measures used by other companies. The classification of adjusting items requires significant judgement, after
considering the nature and intentions of a transaction. The Group’s definitions of adjusting items are outlined within the Group
accounting policies and have been applied consistently year-on-year.
Key sources of estimation uncertainty
Determination of the fair value of biological assets including those held in equity-accounted investees (note 16) and (note 18)
Determining the fair values of our bovine and porcine biological assets requires the application of a number of estimates and assumptions.
Below is a list of these estimates and assumptions, showing whether we consider them to be observable or unobservable inputs to the
fair value determination. In addition, we identify those inputs that are ‘readily obtainable’ transactional data or ‘open market prices’.
Sensitivities of the estimates and assumptions given below are disclosed in note 16.
FINANCIAL STATEMENTS 132
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY CONTINUED
Estimates and assumptions
Observable/unobservable
Source
Bovine
Long-term dairy volume growth rate
Short-term dairy volume growth rate
Value at point of production1
Current unit prices
Growth in unit prices1
Animals’ useful lifespan
Percentage of new dairy bulls to be produced internally each year1 Unobservable
Unobservable
Age profile of bulls1
Unobservable
Risk-adjusted discount rate1
Unobservable
Unobservable
Unobservable
Observable
Unobservable
Observable
Porcine
(non pure line herds) Animals’ useful lifespan
Porcine
(pure line herds)
The proportion of animals that go to slaughter
The mix of boars and gilts
Risk-adjusted discount rate
Number of future generations attributable to the current herds
Fair value prices achieved on sales
Animals’ expected useful lifespan and productivity
The proportion of animals that go to breeding sales1
Risk-adjusted discount rate1
Observable
Observable
Observable
Unobservable
Observable
Observable
Observable
Observable
Unobservable
1 Key sources of estimation uncertainty
n/a
n/a
n/a
Readily obtainable
n/a
Readily obtainable
n/a
n/a
n/a
Readily obtainable
Readily obtainable
Readily obtainable
n/a
Readily obtainable
Open market prices
Readily obtainable
Readily obtainable
n/a
Impact of Russian Sanctions
The Group has two group operating companies that are incorporated in Russia – Limited Liability Co. Genus ABS Russia and PIC
Genetics LLC (‘Russian-based subsidiaries/entities’). Following the sanctions that have been put in place by the UK and other
governments, the Group implemented a comprehensive screening process with external counsel to ensure that its Russian entities
do not trade with sanctioned individuals or entities controlled by them. The main impact of the sanctions regime on our business has
been to categorise the banks in Russia into sanctioned and non-sanctioned banks. Where we receive money from sanctioned banks we
are unable to use the cash without a licence from His Majesty’s Treasury (‘HMT’). For cash receipts from non-sanctioned banks into the
entities’ non-sanctioned banks we are able to use the cash in Russia for day-to-day operations.
The Group applied to HMT for a licence on 25 April 2022, to allow the use of payments from sanctioned banks by non-sanctioned
Russian customers for the delivery of porcine and bovine genetics; to allow the use of money in a non-sanctioned Russian bank account
in the name of Genus Russia to pay Russian suppliers who continue to use sanctioned Russian bank accounts; and to remit any excess
money in Genus Russia’s non-sanctioned Russian bank account (regardless of whether it was received from a sanctioned or non-
sanctioned Russian bank account) to other Genus Group company UK bank accounts.
The UK Office of Financial Sanctions Implementation (‘OFSI’) issued a general licence for trading in agricultural commodities in Russia
effective on the 4 November 2022 which provides exemptions to the sanctions regime in connection with the export, production and
transport of agricultural commodities. This definition includes reproductive materials such as are supplied by Genus. Under this general
licence, receipts from non-sanctioned customers received from and before 4 November 2022 from sanctioned banks no longer need to
be frozen and can be freely used. Also receipts from a sanctioned customer, if made through a non-sanctioned bank, no longer need to
be frozen and can be freely used. If any customer is or becomes sanctioned and pays through a sanctioned bank, these funds would still
need to be frozen even after 4 November 2022.
Under the requirements of IAS 7, where there is cash that is not available to be used by the rest of the Group this needs to be disclosed.
On 24 February 2023, the UralSib bank was put on the UK financial sanctions list and as such ABS and PIC Russia subsequently opened
new bank accounts with the OTP Bank on 21 March 2023 and on 16 May 2023 respectively. Any receipts from sanctioned banks into the
sanctioned UralSib account have been frozen and are not used for business disbursements.
As at 30 June 2023, we had a cash balance of £3.1m (30 June 2022 £4.5m) in the Russian entities of which £0.8m (30 June 2022: £0.2m) is
not currently available to be used by the Group due to being received from sanctioned banks and held in a sanctioned bank.
Management has reviewed the operations and cash flow over a period of 18 months from 30 June 2023 to 31 December 2024, based
upon the 2024 plans, to determine whether the Russian entities have sufficient non-sanctioned cash flow to enable them to continue
day-to-day operations and to meet liabilities as they fall due. The analysis indicates they do have sufficient non-sanctioned cash flow
to enable them to meet their day-to-day operational needs.
Critical accounting judgement – exercise of control
Management has assessed whether the actions of the UK and Russian Governments have caused the Group to lose control of these
Russian-based subsidiaries.
FINANCIAL STATEMENTS 133
GENUS PLC / ANNUAL REPORT 2023
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY CONTINUED
Genus PLC applied for a licence to the Department for International Trade (‘DIT’) on 22 September 2022, to allow for UK-based
employees within the Genus group to provide accounting, business and management consulting services to the Russian-based
subsidiaries, for the purpose of helping them carry out business operations in Russia, delivery of humanitarian assistance activity
and for the production or distribution of food, provided that it is for the benefit of the civilian population.
The licence was authorised by the DIT and came into force on 11 January 2023. It authorises the following services:
• The fullest possible range of accounting services, business and management consulting services, to include advisory, guidance
and operational assistance services provided for business policy and strategy, and the overall planning, structuring, and control
of the organisation.
• The oversight that a parent company would typically provide to its subsidiaries in the areas of accounting, financial controls, tax,
treasury, finance and human resources, along with similar oversight in the areas of information technology, supply chain and other
types of technology.
The licence expires on 11 January 2025 and, provided the facts and circumstances surrounding the issuance of the licence currently
in place do not change materially we do not foresee any reasons why the licence could not be renewed.
We have concluded that we do have control over the Russian-based subsidiaries for the year ended 30 June 2023, as defined under
IFRS 10 ‘Consolidated financial statements’, and we are still able to consolidate them despite short-term restrictions on extracting cash.
We have also assessed each of the asset balances for impairment. The material areas that could give rise to impairment are:
• PIC Russia farm: £2.4m (30 June 2022: £3.7m) – the value of the farm is predicated on the future economic benefit of the animals
that are being reared there. We would need to assess if the property’s open market price (less cost to sell) would support the
carrying value.
• Trade receivables: £2.7m (30 June 2022: £6.0m) – the ongoing financial sanctions may affect our customers’ ability to pay us for their
•
goods. If determined that our customers are unlikely to repay these amounts, then they should be provided for.
IAS 41 valuation: £3.9m (30 June 2022: £2.8m) – the ongoing impacts of both the local economic outlook and our customers’ ability
to pay us could result in a reversal of the fair value of the Russian biological assets in the June valuation.
Management’s impairment analysis indicates that, under the current business environment and based on the plans for the Financial
Year 2024 no impairment is required as at 30 June 2023.
Management will continue to monitor the situation closely to see if any further changes require additional analysis that may result
in a different conclusion.
In the event of changes in legislation, such as more restrictive sanctions imposed by the UK Government or actions taken by the Russian
Government, we may determine that we do not exercise control, as defined under IFRS 10 ‘Consolidated financial statements’, over the
assets and operations of the Russian entities and we would not be able to consolidate these companies into the Financial Statements.
The deconsolidation would mean that we would reclassify the Russian entities as investments and we would need to assess for
impairment. A charge of up to £11.7m (2022: £16.6m) may need to be recognised in the Income Statement, representing the total net
assets of the two Russian entities. Dependent on the nature of the events leading to the decision to deconsolidate the entities, there
may be additional expenses incurred which we are unable to estimate at this time. In addition, revenues would not be consolidated into
the Financial Statements from the date of any deconsolidation. Revenues from the Russian entities were £21.7m in the year ended
30 June 2023 (2022: £14.6m).
5. SEGMENTAL INFORMATION
IFRS 8 ‘Operating Segments’ requires operating segments to be identified on the basis of internal reports about components of the
Group that are regularly reviewed by the Chief Executive and the Board, to allocate resources to the segments and to assess their
performance. The Group’s operating and reporting structure comprises three operating segments: Genus PIC, Genus ABS and Genus
Research and Development. These segments are the basis on which the Group reports its segmental information. The principal activities
of each segment are as follows:
• Genus PIC – our global porcine sales business;
• Genus ABS – our global bovine sales business; and
• Genus Research and Development – our global spend on research and development.
A segmental analysis of revenue, operating profit, depreciation, amortisation, non-current asset additions, segment assets and
liabilities and geographical information is provided below. We do not include our adjusting items in the segments, as we believe these
do not reflect the underlying performance of the segments. The accounting policies of the reportable segments are the same as the
Group’s accounting policies, as described in the Financial Statements.
Revenue
Genus PIC
Genus ABS
Genus Research and Development
Porcine product development
Bovine product development
Gene editing
Other research and development
2023
£m
349.5
318.8
18.5
2.8
0.1
–
21.4
2022
£m
306.6
272.0
12.4
1.7
0.7
–
14.8
689.7
593.4
FINANCIAL STATEMENTS 134
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
5. SEGMENTAL INFORMATION CONTINUED
Adjusted operating profit by segment is set out below and reconciled to the Group’s adjusted operating profit. A reconciliation of
adjusted operating profit to profit for the year is shown on the face of the Group Income Statement.
Adjusted operating profit
Genus PIC
Genus ABS
Genus Research and Development
Porcine product development
Bovine product development
Gene editing
Other research and development
Adjusted segment operating profit
Central
Adjusted operating profit
2023
£m
135.0
43.4
(29.7)
(25.6)
(14.3)
(17.4)
(87.0)
91.4
(16.8)
74.6
2022
£m
112.3
40.5
(22.4)
(22.8)
(7.9)
(14.0)
(67.1)
85.7
(16.9)
68.8
Our business is not highly seasonal and our customer base is diversified, with no individual customer generating more than 2%
of revenue.
Exceptional items of £3.5m net expense (2022: £2.0m net expense) relate to Genus ABS (£2.7m net expense) (2022: £4.2m net expense),
Genus PIC (£nil ) (2022: £0.6m net expense) and our central segment (£0.8m net expense) (2022: £2.8m net credit). Note 7 provides details
of these exceptional items.
We consider share-based payment expenses on a Group-wide basis and do not allocate them to reportable segments.
Other segment information
Genus PIC
Genus ABS
Genus Research and Development
Research
Porcine product development
Bovine product development
Segment total
Central
Total
Genus PIC
Genus ABS
Genus Research and Development
Research
Porcine product development
Bovine product development
Segment total
Central
Total
Depreciation
Amortisation
Additions to non-current
assets (excluding deferred
taxation and financial
instruments)
2023
£m
5.0
16.0
1.3
4.5
1.7
7.5
28.5
1.7
30.2
2022
£m
4.5
14.3
1.0
2.2
2.0
5.2
24.0
2.4
26.4
2023
£m
6.8
4.4
–
–
0.4
0.4
11.6
1.8
13.4
2022
£m
7.4
3.4
–
–
0.2
0.2
11.0
1.6
12.6
2023
£m
6.8
21.8
1.6
1.2
4.9
7.7
36.3
7.0
43.3
2022
£m
45.2
25.4
3.3
1.3
2.7
7.3
77.9
5.8
83.7
Segment assets
Segment liabilities
2023
£m
265.4
281.7
11.4
269.1
125.0
405.5
952.6
54.9
2022
£m
305.4
261.4
14.7
275.0
119.6
409.3
976.1
41.8
1,007.5
1,017.9
2023
£m
(66.0)
(72.5)
(4.5)
(55.3)
(19.6)
(79.4)
(217.9)
(222.4)
(440.3)
2022
£m
(73.4)
(78.9)
(4.4)
(57.7)
(16.7)
(78.8)
(231.1)
(214.7)
(445.8)
FINANCIAL STATEMENTS 135
GENUS PLC / ANNUAL REPORT 2023
5. SEGMENTAL INFORMATION CONTINUED
Geographical information
The Group’s revenue by geographical segment is analysed below. This analysis is stated on the basis of where the customer is located.
Revenue
North America
Latin America
UK
Rest of Europe, Middle East, Russia and Africa
Asia
Total revenue
2023
£m
288.5
105.6
93.1
109.6
92.9
689.7
Non-current assets (excluding deferred taxation and financial instruments)
The Group’s non-current assets by geographical segment are analysed below and are stated on the basis of where the assets
are located.
2023
£m
508.6
69.6
71.5
43.8
33.6
727.1
North America
Latin America
UK
Rest of Europe, Middle East, Russia and Africa
Asia
Non-current assets (excluding deferred taxation and financial instruments)
6. REVENUE
Accounting policy
The Group recognises revenue from the following sources:
• sale of bovine and porcine semen, porcine breeding animals, embryos and ancillary products;
• royalties;
• consulting;
• technical services and advice revenues;
•
•
• slaughter animal sales; and
• bovine partnership contracts.
installation and maintenance of IntelliGen technology;
licensing of IntelliGen technology;
2022
£m
238.5
94.6
88.7
88.3
83.3
593.4
2022
£m
529.6
56.7
69.8
45.7
46.3
748.1
Revenue is measured based on the consideration the Group expects to be entitled to under a contract with a customer and
excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service
to a customer.
The sale of bovine and porcine semen, porcine breeding animals, embryos and ancillary products
Revenue from the sale of bovine and porcine semen, porcine breeding animals, embryos and ancillary products is recognised when the
control of the goods has transferred to the customer or distributor. This is either when we ship to customers or on delivery, depending on
the terms of sale. Payment of the transaction price is due immediately, or within a short period of time, from the point the customer or
distributor controls the goods.
Royalties
Royalties are recognised when the performance obligation is met. We receive royalty payments from certain porcine customers based
on key performance variables, such as the number of pigs born per litter, the number of litters born per sow and the average slaughter
weight of the animals born. This amount is confirmed directly to Genus by the customer. Payment of the transaction price is due
immediately from the customer, or within a short period of time, once the performance obligation is satisfied.
Consulting
Revenue from consulting represents the amounts we charged for services we provided during the year, including recoverable expenses.
We recognise consulting services provided but not yet billed as revenue, based on a fair value assessment of the work we have
delivered and our contractual right to receive payment. Where unbilled revenue is contingent on a future event, we do not recognise
any revenue until the event occurs.
Technical services and advice revenues
Revenue from technical services and advice revenues represents the amounts we charged for services we provided during the year,
including recoverable expenses. We recognise technical services and advice revenues provided but not yet billed as revenue, based
on a fair value assessment of the work we have delivered and our contractual right to receive payment. Where unbilled revenue is
contingent on a future event, we do not recognise any revenue until the event occurs. Technical services and advice revenues are
presented in ancillary services in the table on the following page.
FINANCIAL STATEMENTS 136
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
6. REVENUE CONTINUED
Installation and maintenance of IntelliGen technology
Revenue from the installation of IntelliGen technology is recognised by reference to the stage of completion of the installation and is
based on milestones being met. Maintenance is provided as a distinct service to customers and is recognised over the period of the
service agreement. These revenues are presented in ancillary services in the following table.
Licensing of IntelliGen technology
Revenue from the licensing of IntelliGen technology is recognised at a point in time when the licence is granted. In determining the
transaction price, any minimum royalties due under the contracts are included in the value apportioned to the grant of the licence,
excluding any royalties that arise on units produced in excess of the guaranteed minimums. These additional royalties have been
determined to be a usage-based royalty and are recognised as revenue at the point in time that the units are produced. These
revenues are presented in ancillary services in the following table.
Slaughter of animals
Revenue from the slaughter of animals is recognised when control of the goods has transferred to the slaughterhouse, which is generally
on the delivery of animals to the slaughterhouse. Payment of the transaction price is due immediately, or within a short period of time,
from the point the slaughterhouse controls the goods.
Bovine partnership contracts
Partnership contracts include the provision of multiple bovine products and services for a single price. The contract price is allocated to
the individual performance obligations based on their standalone selling prices. The expected revenue is recognised for the products
and services once the individual performance obligation has been satisfied. Revenues from partnership contracts are presented in sale
of animals, semen, embryos and ancillary products and services.
Genus PIC
Genus ABS
Genus Research and Development
Sale of animals, semen, embryos and ancillary products and services
Genus PIC
Genus ABS
Genus Research and Development
Royalties
Genus PIC
Genus ABS
Genus Research and Development
Consulting services
Total revenue
Revenue from contracts with customers
The Group’s revenue is analysed below by the timing at which it is recognised.
Genus PIC
Genus ABS
Genus Research and Development
Recognised at a point in time
Genus PIC
Genus ABS
Genus Research and Development
Recognised over time
Total revenue
An analysis of contract assets and contract liabilities is provided in note 24.
2023
£m
173.5
307.8
21.4
502.7
176.0
1.4
–
177.4
–
9.6
–
9.6
2022
£m
158.4
262.5
14.8
435.7
148.2
1.1
–
149.3
–
8.4
–
8.4
689.7
593.4
2023
£m
343.7
293.0
21.3
658.0
5.8
25.8
0.1
31.7
2022
£m
303.2
247.2
14.1
564.5
3.4
24.8
0.7
28.9
689.7
593.4
FINANCIAL STATEMENTS 137
GENUS PLC / ANNUAL REPORT 2023
7. EXCEPTIONAL ITEMS
Accounting policy
We present exceptional items separately, as we believe it helps to improve the understanding of the Group’s underlying performance.
In determining whether an item should be presented as exceptional, we consider items which are material either because of their size
or their nature, and those which are non-recurring. For an item to be considered as exceptional, it must initially meet at least one of
the following criteria:
•
•
•
•
it is a one-off material item;
it has been directly incurred as the result of either an acquisition, integration or other major restructuring programme;
it has been previously classified as an exceptional item, and as such consistent accounting treatment is being applied; or
it is unusual in nature, e.g. outside the normal course of business.
If an item meets at least one of the criteria, we then exercise judgement as to whether the item should be classified as exceptional.
For the tax and cash impact of exceptional items see notes 11 and 32, respectively.
Operating (expense)/credit
Litigation
Acquisition and integration
Pension related
Legacy legal claim
ABS production restructuring
Other
Net exceptional items
2023
£m
(4.5)
(0.4)
–
–
1.7
(0.3)
(3.5)
2022
£m
(1.4)
(0.3)
(0.4)
3.3
(2.8)
(0.4)
(2.0)
Litigation
Litigation includes legal fees and related costs of £4.5m (2022: £1.4m) related to the actions between ABS Global, Inc. and certain
affiliates (‘ABS’) and Inguran, LLC and certain affiliates (also known as STgenetics (‘ST’)). The net expense comprises £5.4m of legal costs
and a £0.9m settlement credit (see below for further details).
Material litigation activities to 31 August 2023
In July 2014, ABS launched a legal action against ST in the US District Court for the Western District of Wisconsin and initiated anti-trust
proceedings, which ultimately enabled the launch of ABS’s IntelliGen sexing technology in the US market (‘ABS I’). In June 2017, ST filed
proceedings against ABS in the same District Court, where ST alleged that ABS infringed seven patents and asserted trade secret and
breach of contract claims (‘ABS II’). The ABS I and ABS II proceedings in the periods before the year ended 30 June 2021 are more fully
described in the Notes to the Financial Statements in previous Annual Reports.
On 29 January 2020, ST filed a new US complaint against ABS (‘ABS III’). ABS has prepared and filed a response to the ABS III complaint,
including a motion to dismiss, on the basis that all these issues were fully resolved in either the ABS I or ABS II litigations.
On 10 March 2020, the United States Patent and Trademark Office (‘USPTO’) issued patent 10,583,439 (the ‘’439 patent’), and
subsequently ST asked the court for permission to file a supplemental complaint in ABS III asserting infringement of the ’439 patent. On
15 April 2020, ST filed a new complaint (‘ABS IV’), asserting the same claim of infringement of the ’439 patent alleged in its supplemental
complaint and then moved to consolidate the ABS IV and ABS III litigation. ABS opposed this action and has filed a motion for summary
dismissal. On 23 June 2020, the USPTO issued patent 10,689,210 (the ‘’210 patent’), and on 6 July 2020, ST sought a second supplement
of ABS III by adding a claim of ’210 patent infringement. ABS opposed this action. On 20 September 2022 the USPTO issued patent
11,446,665 (the ‘’665 patent’) and ST subsequently sought a third-party supplement of ABS III by adding a claim of infringement of the
’665 patent. ABS has opposed this action as well, and sought dismissal of all infringement claims.
On 26 October 2020 and 10 December 2020, ABS filed Inter Partes Reviews (‘IPR’) against the ’439 and ’210 patents with the USPTO. On
4 May 2021, the Patent Trial and Appeal Board (‘PTAB’) instituted the ’439 patent IPR, and the hearing was completed on 2 February 2022.
On 7 June 2021, PTAB declined to institute the ’210 patent IPR and on 28 April 2022, PTAB issued its decision and declined to invalidate
the claims of the ’439 patent. ABS has appealed the ’439 patent decision (the ‘’439 Appeal’).
On 20 December 2021, the Wisconsin Federal Court reached a decision on the ABS III and IV motions, granting ABS’s motion to dismiss
all claims relating to US patent 8,206,987 (the ‘’987 patent’), and denying ST’s motion to amend ABS III to add the ’439 and ’210 patents.
The court dismissed ABS III in its entirety and entered judgment in favour of ABS. ST appealed certain aspects of the decision relating
to technology transfer to third parties, one of the three arguments put forward by ST in ABS III (the ‘ABS III Appeal’). On 5 July 2023,
the Court of Appeals accepted ST’s argument that claim preclusion from the ABS I decision did not apply against ABS III in
relation to technology transfer, and that the Federal court improperly broadened the scope of the ABS I judgment to address
induced infringement.
On 1 July 2022, the court reached a decision on the ABS II post-judgment motions as well as the pending motions in ABS IV. The court
deferred to the jury’s verdict in ABS II confirming the validity and infringement of US patents 7,311,476, and 7,611,309 (the ‘’476 and ’309
patents’ respectively) and the ’987 patent, and further confirmed the award of costs to ABS of $5.3m in connection with ABS I. In relation
to ABS IV, the Court denied ABS’s motion to dismiss the ’439 and ‘210 patent claims on the basis that the challenges were too fact-
based to be resolved at this stage. ABS filed counterclaims alleging, among other things, anti-competitive conduct and infringement
of four ABS patents, later narrowed to three ABS patents. The hearing date of 15 July 2024 has been confirmed for ABS IV. Appeals
were filed by ABS on the validity and infringement of the ’987 patent (the ‘987 Appeal’), the ’476 and the ’309 patents (the ‘ABS II Appeal’)
and ST has appealed the award of the $5.3m costs (the ‘Fee Award Appeal’).
FINANCIAL STATEMENTS
138
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
7. EXCEPTIONAL ITEMS CONTINUED
On 27 December 2022, ABS and ST settled the 987 Appeal, the Fee Award Appeal and the Indian Patent Proceedings (along with related
patent oppositions in India), delivering lower patent royalty payments for ABS and a settlement exceptional credit of £0.9m. The ABS II
Appeal, the ABS III Appeal, the ABS IV litigation, the 439 Appeal, and the CCI Appeal remain ongoing. The 439 Appeal is scheduled for
hearing on 5 September 2023 and the ABS II appeal is likely to be heard before the end of the year.
Indian Litigation: In September 2019, ST also filed parallel patent infringement proceedings against ABS in India, alleging infringement
of the Indian patent 240790 (‘’790 patent’). The ’790 patent is the equivalent of the US ‘476, ‘309 patents and US patent 7, 311,476
asserted in ABS II. ABS had already sought the revocation of the ’790 patent in April 2017 before the Indian Patent Office and has now
consolidated the revocation petition as a counterclaim in the Indian court proceedings (the ‘Indian Patent Proceedings’). In June 2021,
ST appealed the decision of the Competition Commission of India (‘CCI’) which had confirmed that ABS India had not breached the
Indian Competition Act in relation to its participation in a sexed semen tender offered by the Utter Pradesh Livestock Development
Board (the ‘CCI Appeal’). The CCI Appeal is scheduled for 11 October 2023.
NZ litigation: On 14 June 2023, ST initiated proceedings against ABS, Genus, ABS Genus (NZ) Limited, CRV International BV and CRV
Limited (together ‘CRV’) in New Zealand, alleging patent infringement and seeking a preliminary injunction. ABS had previously been
awarded the semen sexing services for CRV’s bovine semen in New Zealand and other jurisdictions. ABS has sought a stay of the New
Zealand proceedings while the US court’s consider whether the settlement agreement between ABS and ST dated 27 December 2022
precludes the New Zealand proceedings. The hearing of the ABS’s stay application and ST’s preliminary injunction application is
scheduled for 27 November 2023.
Acquisitions and integration
During the year, £0.4m (2022: £0.3m) of expenses were incurred in relation to potential acquisitions.
ABS production restructuring
A one-off credit of £1.7m primarily related to the sale of our Canadian ABS facilities as part of a production restructuring. The cash inflow
of £1.8m is included in investing activities.
Other
Included in Other is an expense of £0.3m relating to the sign-on bonus of the newly appointed CEO, a £0.2m credit resulting from a
share forfeiture exercise and £0.2m in relation to the prior year IT incident. In the prior year, a £0.5m expense relating to legal advice,
IT consultancy and one-time costs was incurred as the direct result of an IT security incident in June 2022.
8. OPERATING PROFIT
Operating costs comprise:
Cost of sales excluding net IAS 41 valuation movement on biological assets and amortisation of multiplier
contract intangible assets
Net IAS 41 valuation movement on biological assets
Amortisation of multiplier contract intangible assets
Cost of goods sold
Other cost of sales (excluding amortisation of acquired intangibles)
Amortisation of customer relationship intangible assets
Other cost of sales
Research and Development expenditure
Amortisation and impairment of technology, software and licences and patents
Research and Development costs
Administrative expenses (excluding exceptional items)
Share-based payment expense
Amortisation of software, licences and patents
Net exceptional items within administrative expenses
Total administrative expenses
Total operating costs
2023
£m
2022
£m
(299.0)
(252.7)
(16.9)
(1.2)
(317.1)
(130.1)
(3.2)
(133.3)
(87.1)
(6.2)
(93.3)
(93.1)
(6.0)
(2.9)
(3.5)
(105.5)
(649.2)
(5.4)
(0.6)
(258.7)
(114.7)
(4.8)
(119.5)
(67.3)
(5.6)
(72.9)
(85.5)
(3.7)
(1.7)
(2.0)
(92.9)
(544.0)
FINANCIAL STATEMENTS 139
GENUS PLC / ANNUAL REPORT 2023
8. OPERATING PROFIT CONTINUED
Profit for the year is stated after charging/(crediting):
Net foreign exchange losses
Depreciation of owned fixed assets (see note 17)
Depreciation of right-of-use assets (see note 17)
(Profit)/loss on disposal of fixed assets and right-of-use assets
Impairment of owned fixed assets
Rental expense for short-term leases
Employee costs (see note 9)
Net decrease in expected credit losses (see note 21)
Increase/(release) of inventory impairment
Cost of inventories recognised as an expense
Auditor’s remuneration is as follows:
Fees payable to the Company’s auditor and its associates for the audit of the Company’s Annual Report and
Financial Statements
Fees payable to the Company’s auditor and its associates for the audit of the Company’s subsidiaries
Total audit fees
Total fees to the Group’s auditor
Fees payable to other auditors of Group companies
2023
£m
0.8
18.4
11.8
(1.4)
–
0.1
227.9
(0.5)
0.6
105.8
2023
£m
0.5
0.5
1.0
1.0
–
2022
£m
0.8
14.8
11.6
0.4
0.9
0.1
196.8
(0.9)
(0.2)
105.7
2022
£m
0.4
0.6
1.0
1.0
–
Non-audit services of £22,000 (2022: £20,000) principally comprise of agreed upon procedures in relation to half-year reporting. These
services fall within the non-audit services policy approved by the Company’s Audit & Risk Committee at the time of engagement.
9. EMPLOYEE COSTS
This note shows the total employment costs and the average number of people employed by segment during the year.
Employee costs, including Directors’ remuneration, amounted to:
Wages and salaries (including bonuses and sales commission)
Social security costs
Contributions to defined contribution pension plans
Share-based payment expense (excluding National Insurance)
2023
£m
198.1
18.1
7.1
6.4
229.7
2022
£m
170.9
16.5
6.2
3.6
197.2
The employee costs above include £1.8m (2022: £0.4m) which has been capitalised into intangible assets as part of the development of
GenusOne and other digital projects.
The average monthly number of employees and full-time equivalent employees, including Directors, was as follows:
Genus PIC
Genus ABS
Research and Development
Central
Included in the totals above:
UK
Number of employees
Full-time equivalent
2023
Number
2022
Number
2023
Number
2022
Number
646
2,430
472
80
3,628
602
2,362
446
80
3,490
627
2,334
447
68
3,476
580
2,255
422
68
3,325
889
909
798
818
The Directors’ Remuneration Report sets out details of the Directors’ remuneration, pensions and share options.
FINANCIAL STATEMENTS 140
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
10. NET FINANCE COSTS
Net finance costs mainly arise from interest due on bank loans, pension scheme liabilities, amortisation of debt issue costs, unwinding
of discounts on put options and the results of hedging transactions used to manage foreign exchange and interest rate movements.
Accounting policy
We recognise interest income and interest expense in the Income Statement, as they accrue, based on the effective interest rate method.
Interest income includes income on cash and cash equivalents, and income on other financial assets. Finance costs include interest
costs in relation to financial liabilities. This includes interest on lease liabilities, which represents the unwinding of the discount rate
applied to lease liabilities.
Interest payable on bank loans and overdrafts
Amortisation of debt issue costs
Other interest payable
Unwinding of discount on put options
Net interest cost in respect of pension scheme liabilities
Interest on lease liabilities
Total interest expense
Interest income on bank deposits
Net interest income on derivative financial instruments
Total interest income
Net finance costs
2023
£m
(12.3)
(1.1)
(0.3)
(0.3)
(0.2)
(1.2)
(15.4)
0.1
1.0
1.1
(14.3)
2022
£m
(4.1)
(0.9)
(0.1)
(0.2)
(0.2)
(1.1)
(6.6)
0.4
–
0.4
(6.2)
11. TAXATION AND DEFERRED TAXATION
This note explains how our Group tax charge arises. The deferred tax section of the note also provides information on our expected
future tax charges and sets out the tax assets and liabilities held across the Group, together with our view on whether or not we expect
to be able to make use of them in the future.
Accounting policies
Tax on the profit or loss for the year comprises current and deferred tax. We recognise tax in the Income Statement, unless:
•
•
it relates to items we have recognised directly in equity, in which case we recognise it in equity; or
it arises as a fair value adjustment in a business combination.
We provide for current tax, including UK corporation tax and foreign tax, at the amounts we expect to pay (or recover), using the tax
rates and the laws enacted or substantively enacted at the balance sheet date, together with any adjustments to tax payable in
respect of previous years.
Deferred tax is tax we expect to pay or recover due to differences between the carrying amounts of our assets and liabilities in our
Financial Statements and the corresponding tax bases used in calculating our taxable profit. We account for deferred tax using the
balance sheet liability method.
We generally recognise deferred tax liabilities for all taxable temporary differences, and deferred tax assets to the extent that we will
probably have taxable profits to utilise deductible temporary differences against. We do not recognise these assets and liabilities if
the temporary difference arises from:
• our initial recognition of goodwill; or
• our initial recognition of other assets and liabilities in a transaction (other than a business combination) that affects neither our
taxable profit nor our accounting profit.
We recognise deferred tax liabilities for taxable temporary differences arising on our investments in subsidiaries, and interests in joint
ventures and associates, except where we can control the reversal of the temporary difference and it is probable that it will not reverse
in the foreseeable future.
We calculate deferred tax at the tax rates we expect to apply in the period when we settle the liability or realise the asset. We charge
or credit deferred tax in the Income Statement, except when it relates to items we have charged or credited directly to equity, in which
case the deferred tax is also dealt with in equity.
FINANCIAL STATEMENTS 141
GENUS PLC / ANNUAL REPORT 2023
11. TAXATION AND DEFERRED TAXATION CONTINUED
Income tax expense
Current tax expense
Current period
Adjustment for prior periods
Total current tax expense in the Group Income Statement
Deferred tax expense
Origination and reversal of temporary differences
Adjustment for prior periods
Total deferred tax credit in the Group Income Statement
Total income tax expense excluding share of income tax of equity-accounted investees
Share of income tax of equity-accounted investees (see note 18)
Total income tax expense in the Group Income Statement
Reconciliation of effective tax rate
Profit before tax
Add back share of income tax of equity-accounted investees
Profit before tax excluding share of income tax of equity-accounted investees
Income tax at UK corporation tax of 20.5% (2022: 19.0%)
Effect of tax rates in foreign jurisdictions
Non-deductible expenses
Tax exempt income and incentives
Change in tax rate
Movements in recognition of tax losses
Change in unrecognised temporary differences
Tax over / (under) provided in prior periods
Change in provisions
Tax on undistributed reserves
Total income tax expense in the Group Income Statement
2023
%
20.5
13.6
6.7
(3.0)
(1.2)
(5.0)
(7.8)
1.8
0.5
0.5
26.6
2023
£m
39.4
3.9
43.3
8.9
5.9
2.9
(1.3)
(0.5)
(2.2)
(3.4)
0.8
0.2
0.2
11.5
2023
£m
20.6
0.9
21.5
(9.2)
(4.7)
(13.9)
7.6
3.9
11.5
2022
%
19.0
9.2
4.3
(1.8)
2.5
0.2
(3.7)
(2.1)
(0.2)
0.6
28.0
2022
£m
13.6
1.8
15.4
(0.5)
(3.2)
(3.7)
11.7
2.6
14.3
2022
£m
48.4
2.6
51.0
9.7
4.7
2.2
(0.9)
1.3
0.1
(1.9)
(1.1)
(0.1)
0.3
14.3
The tax rate for the year depends on our mix of profits by country and our ability to recognise deferred tax assets in respect of losses
in some of our smaller territories. Tax is calculated using prevailing tax legislation, reliefs and existing interpretations and practice.
Included in ‘Movements in recognition of tax losses’ in the year is a credit of £4.5m in respect of the recognition of previously
unrecognised losses in the Group’s subsidiaries in Australia and France, as these companies have delivered profits and utilised tax losses
in each of the last two years and are forecast to continue to be profitable in the future.
The Group has also reassessed the deferred tax attributes of its UK subsidiaries in the light of updated forecast information in respect
of future profitability, resulting in a £2.4m credit recognised in changes in unrecognised temporary differences, from the recognition
of additional timing differences in respect of fixed assets and a £2.0m charge included in movements in recognition of tax losses,
in respect of certain company specific losses that are not capable of being group relieved against profits in other UK entities.
The Group’s future tax charge and effective tax rate could be affected by factors such as countries reforming their tax legislation
to implement the OECD’s BEPS recommendations and by European Commission initiatives including state aid investigations.
During prior periods, the Group provided £1.6m in total for its exposure to the challenge by the European Commission to the UK’s
Finance Company (‘FinCo’) exemption from its Controlled Foreign Companies (‘CFC’) taxing regime. As at 30 June 2023, Genus had
been charged and paid £1.4m (30 June 2022: £1.4m) by HMRC under various charging notices in respect of its assessment of our liability
under this judgment, leaving a remaining provision balance at 30 June 2023 of £0.2m (30 June 2022: £0.2m).
The Group has appealed the amounts paid to HMRC on the following grounds:
• the amount charged is not state aid (i.e. the original EU Commission decision is unsound in law); and
• the amount charged is not wholly attributable to UK significant people functions (and therefore either partly or wholly outside the
circumstances described by the EU Commission as state aid).
HMRC and several other large taxpayers have also appealed against the original EU Commission decision. On 8 June 2022, the
EU General Court dismissed HMRC’s application to annul the European Commission decision concerning the CFC Group financing
exemption. We understand that HMRC has lodged an appeal against the judgment to the Court of Justice of the European Union.
As there are many appeals to be considered, it may be a number of years before the full court/appeal process is exhausted and this
matter is finally resolved.
The tax credit attributable to exceptional items is a credit of £0.9m (2022: credit of £0.8m).
FINANCIAL STATEMENTS 142
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
11. TAXATION AND DEFERRED TAXATION CONTINUED
Income tax recognised directly in the Statement of Comprehensive Income and Statement of Changes in Equity
Financial instruments
Foreign exchange differences on long-term intra-Group currency loans and balances
Gain on equity instruments measured at fair value
Actuarial movement on retirement benefit obligations
Foreign exchange differences on translation of biological assets, intangible assets and leases
Income tax recognised directly in the Statement of Comprehensive Income and Statement of Changes in
Equity
Income tax recognised directly to the Statement of Changes in Equity
Share-based payment expense
Income tax recognised directly to the Statement of Changes in Equity
2023
£m
(0.5)
0.4
(1.0)
(0.2)
3.2
1.9
(0.1)
(0.1)
2022
£m
(0.5)
0.1
1.5
(0.4)
(7.8)
(7.1)
(0.4)
(0.4)
Unrecognised deferred tax assets and liabilities
At the balance sheet date, the Group had unused tax losses which were available for offset against future profits, with a potential
tax benefit of £18.1m (2022: £19.3m). We have recognised a deferred tax asset in respect of £12.6m (2022: £11.6m) of these benefits,
as we expect these losses to be offset against future profits of the relevant jurisdictions in the near term. We have not recognised
a deferred tax asset in respect of the remaining £5.5m (2022: £7.7m), due to uncertainty about the availability of future taxable profits
in the relevant jurisdictions.
At 30 June 2023, the expiry dates of deferred tax assets in respect of losses available for the carry forward were as follows:
Losses for which a deferred tax asset is recognised
Losses for which no deferred tax asset is recognised
Total tax losses
Expiring within
1–10 years
£m
11–20 years
£m
Unlimited
£m
0.2
0.2
0.4
–
–
–
12.4
5.3
17.7
Total
£m
12.6
5.5
18.1
In addition, at the balance sheet date, the Group had an unrecognised deferred tax asset in respect of fixed asset timing differences of
nil (2022: £2.4m) and other timing differences of £2.3m (2022: £1.3m). These unrecognised timing differences have an unlimited expiry date.
At 30 June 2022, the expiry dates of deferred tax assets in respect of losses available for the carry forward were as follows:
Losses for which a deferred tax asset is recognised
Losses for which no deferred tax asset is recognised
Total tax losses
Expiring within
1–10 years
£m
11–20 years
£m
Unlimited
£m
0.6
0.1
0.7
0.4
–
0.4
10.6
7.6
18.2
Total
£m
11.6
7.7
19.3
The gross value of losses for which deferred tax assets are recognised is £49.7m (2022: £45.2m). The gross value of losses for which
deferred tax assets are not recognised is £19.3m (2022: £24.8m).
We have not recognised deferred tax liabilities totalling £4.0m (2022: £3.6m) for the withholding tax and other taxes that would be
payable on the unremitted earnings of certain overseas subsidiaries. This is because we can control the timing and reversal of these
differences and it is probable that the differences will not reverse in the foreseeable future.
Recognised deferred tax assets and liabilities
We have offset deferred tax assets and liabilities, to the extent that they arise in the same tax jurisdiction.
The analysis of deferred tax balances is set out below:
Deferred tax assets
Deferred tax liabilities
Net deferred tax assets
2023
£m
(16.5)
51.2
34.7
2022
£m
(10.1)
60.3
50.2
The UK Finance (No. 2) Act 2023, which contains the UK’s provisions addressing the implementation of BEPS Pillar Two, was substantively
enacted on 20 June 2023. This legislation implements domestic and multinational top-up taxes, designed to achieve a global minimum
effective tax rate of 15% and is expected to first apply to Genus in the year ended 30 June 2025. In the current year, the Group has
applied the exception under the related IAS 12 amendment to recognising and disclosing information about deferred tax assets and
liabilities related to Pillar 2 income taxes.
FINANCIAL STATEMENTS 143
GENUS PLC / ANNUAL REPORT 2023
11. TAXATION AND DEFERRED TAXATION CONTINUED
Movement in net deferred tax liabilities during the year
As at 1 July
2022
£m
Recognised
in Income
Statement
£m
Changes in
tax rate
recognised in
Income
Statement
£m
Prior year
adjustments
recognised in
Income
Statement
£m
Recognised
in equity
£m
Foreign
exchange
difference
£m
As at 30 June
2023
£m
3.5
6.7
73.0
(1.3)
(2.4)
(17.7)
(11.6)
50.2
2.6
(0.6)
(3.0)
0.2
(0.1)
(9.1)
1.2
(8.8)
0.4
–
(0.2)
–
–
(0.8)
0.1
(0.5)
(2.4)
(0.9)
1.6
(0.4)
0.1
(0.6)
(2.1)
(4.7)
(0.1)
(0.2)
(3.5)
0.2
0.1
1.8
–
(1.7)
(0.3)
–
(0.2)
–
0.1
0.8
(0.2)
0.2
3.7
5.0
67.7
(1.3)
(2.2)
(25.6)
(12.6)
34.7
As at 1 July
2021
£m
Recognised
in Income
Statement
£m
Changes in
tax rate
recognised in
Income
Statement
£m
Prior year
adjustments
recognised in
Income
Statement
£m
Recognised
in equity
£m
Foreign
exchange
difference
£m
As at 30 June
2022
£m
3.6
8.2
63.7
(2.1)
(4.7)
(16.4)
(7.3)
45.0
(1.9)
(0.6)
0.1
0.3
(0.4)
1.6
(2.4)
(3.3)
(0.3)
(0.3)
2.2
0.2
0.9
0.7
(0.6)
2.8
1.4
(1.3)
(1.3)
–
–
(0.9)
(1.1)
(3.2)
–
0.4
7.9
0.4
1.9
(1.5)
–
9.1
0.7
0.3
0.4
(0.1)
(0.1)
(1.2)
(0.2)
(0.2)
3.5
6.7
73.0
(1.3)
(2.4)
(17.7)
(11.6)
50.2
Property, plant and equipment
Intangible assets
Biological assets
Retirement benefit obligations
Share-based payment expense
Short-term timing differences
Tax loss carry-forwards
Net deferred tax assets / (liabilities)
Property, plant and equipment
Intangible assets
Biological assets
Retirement benefit obligations
Share-based payment expense
Short-term timing differences
Tax loss carry-forwards
Net deferred tax assets / (liabilities)
12. EARNINGS PER SHARE
Basic earnings per share is the profit generated for the financial year attributable to equity shareholders, divided by the weighted
average number of shares in issue during the year.
Basic earnings per share from continuing operations
Basic earnings per share
2023
(pence)
50.8
2022
(pence)
62.5
The calculation of basic earnings per share from continuing operations is based on the net profit attributable to owners of the Company
from continuing operations of £33.3m (2022: £40.9m) and a weighted average number of ordinary shares outstanding of 65,557,000
(2022: 65,395,000), which is calculated as follows:
Weighted average number of ordinary shares (basic)
Issued ordinary shares at the start of the year
Effect of own shares held
Shares issued on exercise of stock options
Shares issued in relation to Employee Benefit Trust
Weighted average number of ordinary shares in year
Diluted earnings per share from continuing operations
Diluted earnings per share
2023
000s
65,774
(468)
1
250
2022
000s
65,761
(373)
7
–
65,557
65,395
2023
(pence)
50.5
2022
(pence)
62.2
FINANCIAL STATEMENTS
144
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
12. EARNINGS PER SHARE CONTINUED
The calculation of diluted earnings per share from continuing operations is based on the net profit attributable to owners of the
Company from continuing operations of £33.3m (2022: £40.9m) and a weighted average number of ordinary shares outstanding,
after adjusting for the effects of all potential dilutive ordinary shares, of 65,988,000 (2022: 65,714,000), which is calculated as follows:
Weighted average number of ordinary shares (diluted)
Weighted average number of ordinary shares (basic)
Dilutive effect of share awards and options
Weighted average number of ordinary shares for the purposes of diluted earnings per share
Adjusted earnings per share from continuing operations
Adjusted earnings per share
Diluted adjusted earnings per share
2023
000s
65,557
441
65,998
2023
(pence)
84.8
84.2
2022
000s
65,395
319
65,714
2022
(pence)
82.7
82.3
Adjusted earnings per share is calculated on profit before the net IAS 41 valuation movement on biological assets, amortisation of
acquired intangible assets, share-based payment expense, other gains and losses and exceptional items, after charging taxation
associated with those profits, of £55.6m (2022: £54.1m), which is calculated as follows:
Profit before tax from continuing operations
Add/(deduct):
Net IAS 41 valuation movement on biological assets (see note 16)
Amortisation of acquired intangible assets (see note 15)
Share-based payment expense (see note 30)
Exceptional items (see note 7)
Other gains and losses (see note 26)
Net IAS 41 valuation movement on biological assets in joint ventures (see note 18)
Tax on joint ventures and associates (see note 18)
Attributable to non-controlling interest
Adjusted profit before tax
Adjusted tax charge
Adjusted profit after tax
Effective tax rate on adjusted profit
Reconciliation of effective tax rate
Profit before tax excluding share of income tax of equity-accounted investees
Net IAS 41 valuation movement on biological assets
Amortisation of acquired intangible assets
Share-based payment expense
Other gains and losses
Exceptional items (see note 7)
Net IAS 41 valuation movement on biological assets in joint ventures
Attributable to non-controlling interest
Adjusted profit before tax
Profit before tax excluding share of income tax of equity-accounted investees
Net IAS 41 valuation movement on biological assets
Amortisation of acquired intangible assets
Share-based payment expense
Exceptional items (see note 7)
Net IAS 41 valuation movement on biological assets in joint ventures
Attributable to non-controlling interest
Adjusted profit before tax
2023
£m
39.4
16.9
7.7
6.0
3.5
(2.7)
(3.6)
3.9
0.4
71.5
(15.9)
55.6
2022
£m
48.4
5.4
8.3
3.7
2.0
–
1.4
2.6
(0.3)
71.5
(17.4)
54.1
22.2%
24.3%
2023
Profit
£m
43.3
16.9
7.7
6.0
(2.7)
3.5
(3.6)
0.4
71.5
2022
Profit
£m
51.0
5.4
8.3
3.7
2.0
1.4
(0.3)
71.5
2023
Tax
£m
11.5
1.5
1.9
0.8
(0.7)
0.9
–
–
15.9
2022
Tax
£m
14.3
(1.5)
3.3
0.5
0.8
–
–
17.4
2023
%
26.6
8.9
24.7
13.0
25.0
25.7
–
–
22.2
2022
%
28.0
(27.8)
39.8
13.5
40.0
–
–
24.3
FINANCIAL STATEMENTS 145
GENUS PLC / ANNUAL REPORT 2023
13. DIVIDENDS
Dividends are one type of shareholder return, historically paid to our shareholders in late November/early December and late March.
Amounts recognised as distributions to equity holders in the year
Final dividend
Final dividend for the year ended 30 June 2022 of 21.7 pence per share
Final dividend for the year ended 30 June 2021 of 21.7 pence per share
Interim dividend
Interim dividend for the year ended 30 June 2023 of 10.3 pence per share
Interim dividend for the year ended 30 June 2022 of 10.3 pence per share
Total dividend
2023
£m
2022
£m
14.3
–
6.7
–
21.0
–
14.2
–
6.7
20.9
The Directors have proposed a final dividend of 21.7 pence per share for 2023. This is subject to shareholders’ approval at the AGM and
we have therefore not included it as a liability in these Financial Statements. The total proposed and paid dividend for year ended
30 June 2023 is 32.0 pence per share (2022: 32.0 pence per share).
14. GOODWILL
Accounting policies
When we acquire a subsidiary, associate or joint venture, the goodwill arising is the excess of the acquisition cost, excluding transaction
costs, over our interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. Identifiable assets
include intangible assets which could be sold separately, or which arise from legal rights, regardless of whether those rights are separable.
We state goodwill at cost less any accumulated impairment losses. We allocate goodwill to cash-generating units (‘CGUs’), which are
the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets
or groups of assets. We do not amortise goodwill but we do test it annually for impairment.
IAS 21 ‘The Effects of Changes in Foreign Exchange Rates’ requires us to treat the following as assets and liabilities of the acquired entity,
rather than of the acquiring entity:
• goodwill arising on acquisition of a foreign operation; and
• any fair value adjustments we make on acquisition to the carrying amounts of the acquiree’s assets and liabilities.
We therefore express them in the foreign operation’s functional currency and retranslate them at the balance sheet date.
Impairment
We review the carrying amounts of our tangible and intangible assets at each balance sheet date, to determine whether there is any
indication of impairment. If any indication exists, we estimate the asset’s recoverable amount.
For goodwill, and tangible and intangible assets that are not yet available for use, we estimate the recoverable amount at each balance
sheet date. The recoverable amount is the greater of their fair value less cost to sell and value in use. In assessing value in use, we discount
the estimated future cash flows to their present value, using a pre-tax discount rate, which is derived from the Group’s weighted average
cost of capital (‘WACC’). For some countries we add a premium to this rate, to reflect the risk attributable to that country. If the asset does
not generate largely independent cash inflows, we determine the recoverable amount for the CGU that the asset belongs to.
We recognise an impairment loss in the Income Statement whenever the carrying amount of an asset or its CGU exceeds its
recoverable amount.
When we recognise an impairment loss in respect of a CGU, we first allocate it to reduce the carrying amount of any goodwill allocated
to the CGU, and then apply any remaining loss to reduce the carrying amount of the unit’s other assets on a pro rata basis.
The aggregate carrying amounts of goodwill allocated to each operating segment are as follows:
Cost
Balance at 1 July 2021
Business combinations
Effect of movements in exchange rates
Balance at 30 June 2022
Effect of movements in exchange rates
Balance at 30 June 2023
Impairment losses
Balance at 1 July 2021, 30 June 2022 and 30 June 2023
Carrying amounts
At 30 June 2023
At 30 June 2022
Genus PIC
£m
Genus ABS
£m
Total
£m
72.5
–
5.8
78.3
(2.1)
76.2
29.0
0.3
3.4
32.7
(1.1)
31.6
101.5
0.3
9.2
111.0
(3.2)
107.8
–
–
–
76.2
78.3
31.6
32.7
107.8
111.0
FINANCIAL STATEMENTS 146
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
14. GOODWILL CONTINUED
To test impairment, we allocate goodwill to our CGUs, which are in line with our operating segments. These are the lowest level within
the Group at which we monitor goodwill for internal management purposes.
We test goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. We determine the
recoverable amount of our CGUs by using value in use calculations. The key assumptions for these calculations relate to discount rates,
long-term growth rates and short-term growth rates (which includes consideration of expected changes to selling prices, cost savings
derived from the IntelliGen technologies, and changes in product mix).
We have estimated the pre-tax discount rate using the Group’s WACC. We risk-adjusted the discount rate for risks specific to each
market, adding between nil and 27% (2022: nil and 17%) to the WACC as appropriate. The pre-tax discount rate of 11.9% (2022: 11.2%)
we applied to our cash flow projections equates to a post-tax rate of 9.8% (2022: 9.3%). Our estimates of changes in selling prices and
direct costs are based on past experience and our expectations of future changes in the market.
The annual impairment test is performed on 31 March (2022: 31 March). There have been no additional indicators of impairment identified
after this date that would require the impairment test to be reperformed. It is based on cash flows derived from our most recent financial
and strategic plans approved by management, over the next five years taking into account the impact of climate change. A growth rate
of 2.5% (2022: 2.5%) has been used to extrapolate cash flows beyond this period. Short-term profitability and growth rates are based on
past experience, current trading conditions (including the impact of inflation) and our expectations of future changes in the market.
The Genus PIC and Genus ABS CGUs are deemed to be significant. The individual country assumptions used to determine value in use
for these CGUs are:
Genus PIC
Genus ABS
Genus PIC
Genus ABS
Risk premium used to adjust
discount rate
Short-term growth rates
(CAGR)
Long-term growth rates
2023
2022
2023
2022
nil–19%
nil–27%
nil–15%
nil–17%
nil–64%
nil–52%
nil–44%
1%–42%
2023
2.5%
2.5%
2022
2.5%
2.5%
Weighted average risk adjusted
pre-tax discount rate
Weighted average risk adjusted
post-tax discount rate
Weighted average short-term
growth rates (CAGR)
2023
2022
11.4%
12.4%
11.0%
11.3%
2023
9.3%
10.3%
2022
9.0%
9.5%
2023
12%
16%
2022
12%
22%
The rates towards the higher end of the range above represent those which are applied to our smaller entities and those in emerging
markets and hence appear high relative to others.
Sensitivity to changes in assumptions
Management has performed the following sensitivity analysis:
• changing the key assumptions, with other variables held constant;
• simultaneously changing the key assumptions; and
•
incorporating the potential impact of the principal risks and uncertainties outlined on pages 62 to 64, in particular the impacts of
biosecurity, market downturns, continuity of supply, increased competition and the impact of a global pandemic, taking into account
the likely degree of available mitigating actions.
Management has concluded that there are no reasonably possible changes in any one of the key assumptions that would cause the
carrying amounts of goodwill to exceed the value in use of PIC and ABS.
15. INTANGIBLE ASSETS
Our Group Balance Sheet contains significant intangible assets, including acquired technology, customer relationships, software and
our IntelliGen development project.
Accounting policies
Identifiable intangible assets are recognised when the Group controls the asset, it is probable that future economic benefits attributed
to the asset will flow to the Group and the cost of the asset can be reliably measured.
For ‘Software as a Service‘ (‘SaaS‘) arrangements, we do not capitalise costs relating to the configuration and customisation of SaaS
arrangements as intangible assets except where control of the software exists.
Intangible assets that we have acquired in a business combination since 1 April 2005 are identified and recognised separately from
goodwill, where they meet the definition of an intangible asset and we can reliably measure their fair values. Their cost is their fair value
at the acquisition date.
After their initial recognition, we report these intangible assets at cost less accumulated amortisation and accumulated impairment
losses. This is the same basis as for intangible assets acquired separately.
FINANCIAL STATEMENTS 147
GENUS PLC / ANNUAL REPORT 2023
15. INTANGIBLE ASSETS CONTINUED
The estimated useful lives for intangible assets are as follows:
• Porcine and bovine genetics technology
• Multiplier contracts
• Brands
• Customer relationships
•
• Patents and licences
• Software
20 years
15 years
10 to 15 years
10 to 17 years
10 years
term of agreement (4 years)
2 to 10 years
IntelliGen
Intangible assets acquired separately
We carry intangible assets acquired other than through a business combination at cost less accumulated amortisation and any
impairment loss. We charge amortisation on a straight-line basis over their estimated useful lives and review the useful life and
amortisation method at the end of each financial year, accounting for the effect of any changes in estimate on a prospective basis.
Brands,
multiplier
contracts
and
customer
relationships
£m
Porcine
and bovine
genetics
technology
£m
Separately
identified
acquired
intangible
assets
£m
Software
£m
Assets under
construction
£m
IntelliGen
£m
Patents,
licences and
other
£m
Cost
Balance at 1 July 2021
Additions
Acquisition
Transfers
Effect of movements in
exchange rates
Balance at 30 June 2022
Additions
Transfers
Effect of movements in
exchange rates
Balance at 30 June 2023
Amortisation and impairment losses
Balance at 1 July 2021
Amortisation for the year
Effect of movements in
exchange rates
Balance at 30 June 2022
Amortisation for the year
Effect of movements in
exchange rates
Balance at 30 June 2023
Carrying amounts
At 30 June 2023
At 30 June 2022
At 30 June 2021
51.7
4.2
–
–
0.6
56.5
–
–
(0.2)
56.3
36.0
3.0
0.1
39.1
3.3
0.1
42.5
13.8
17.4
15.7
81.6
10.3
0.4
–
10.6
102.9
–
–
(4.0)
98.9
66.2
5.3
8.6
80.1
4.4
(3.3)
81.2
17.7
22.8
15.4
133.3
14.5
0.4
–
11.2
159.4
–
–
(4.2)
155.2
102.2
8.3
8.7
119.2
7.7
(3.2)
123.7
31.5
40.2
31.1
20.0
0.2
–
7.7
1.0
28.9
–
5.9
(0.3)
34.5
13.0
1.7
0.8
15.5
2.9
(0.2)
18.2
16.3
13.4
7.0
2.7
8.6
–
(7.7)
0.1
3.7
9.3
(5.9)
(0.1)
7.0
–
–
–
–
–
–
–
7.0
3.7
2.7
23.6
–
–
–
3.2
26.8
–
–
(1.1)
25.7
8.4
2.5
1.4
12.3
2.7
(0.6)
14.4
11.3
14.5
15.2
Total
£m
183.9
23.3
0.4
–
15.6
223.2
9.3
–
(5.7)
4.3
–
–
–
0.1
4.4
–
–
–
4.4
226.8
4.0
0.1
0.1
4.2
0.1
–
4.3
0.1
0.2
0.3
127.6
12.6
11.0
151.2
13.4
(4.0)
160.6
66.2
72.0
56.3
Included within brands, multiplier contracts and customer relationships are carrying amounts for brands of £0.6m (2022: £0.5m),
multiplier contracts of £9.2m (2022: £11.1m) and customer relationships of £7.9m (2022: £11.2m).
Included within the software class of assets is £9.5m (2022: £6.9m) and included in assets in the course of construction is £2.3m
(2022: £2.7m) that relate to the ongoing development costs of GenusOne, our single global enterprise system and £1.6m (2022: £nil)
that relate to IntelliGen.
FINANCIAL STATEMENTS
148
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
16. BIOLOGICAL ASSETS
The Group applies quantitative genetics and biotechnology to animal breeding. We use these techniques to identify and select
animals with the genes responsible for superior milk and meat, high health and performance traits. We sell breeding animals, semen
and embryos to customers, who use them to produce offspring which yield greater production efficiency and milk and meat quality,
for the global dairy and meat supply chain. We recognise that accounting for biological assets is an area which includes key sources
of estimation uncertainty. These are outlined in note 4 and sensitivities are provided below.
Accounting policies
Biological assets and inventories
In bovine, we use research and development to identify genetically superior bulls in a number of breeds, primarily the Holstein dairy
breed. Each selected bull has its performance measured against its peers, by using genomic evaluations and progeny testing of its
daughters’ performance. We collect and freeze semen from the best bulls, to satisfy our customers’ demand. Farmers use semen from
dairy breeds to breed replacement milking stock. They use the semen we sell from beef breeds in either specialist beef breeding herds,
for multiplying breeding bulls for use in natural service, or on dairy cows to produce animals to be reared for meat.
Our research and development also enables us to produce and select our own genetically superior females, from which we will breed
future bulls.
We hold our bovine biological assets for long-term internal use and classify them as non-current assets. We transfer bull semen to
inventory at its fair value at the point of harvest, which becomes its deemed cost under IAS 2. We state our inventories at the lower
of this deemed cost and net realisable value.
Sorting semen is a production process rather than a biological process. As a result, we transfer semen inventory into sexed semen
production at its fair value at the point of harvest, less the cost to sell, and it becomes a component of the production process.
We carry sexed semen in finished goods at production cost.
In porcine, we maintain and develop a central breeding stock (the ‘nucleus herd’), to provide genetically superior animals. These
genetics help make farmers and food processors more profitable, by increasing their output of consistently high-quality products,
which yield higher value. So we can capitalise on our intellectual property, we outsource the vast majority of our pig production to our
global multiplier network. We also sell the offspring or semen we obtain from animals in the nucleus herd to customers, for use in
commercial farming.
Pig sales generally occur in one of two ways: ‘upfront’ and ‘royalty’. Under upfront sales, we receive the full fair value of the animal at the
point we transfer it to the customer. Under royalty sales, the pig is regarded as comprising two separately identifiable components: its
carcass and its genetic potential. We receive the initial consideration, which is approximately the animal’s carcass value, at the point we
transfer the pig to the customer. We retain our interest in the pig’s genetic potential and receive royalties for the customer’s use of this
genetic potential.
The breeding animal biological assets we own, and our retained interest in the biological assets we have sold under royalty contracts,
are recognised and measured at fair value at each balance sheet date. We recognise changes in fair value in the Income Statement,
within operating profit for the period.
We classify the porcine biological assets we are using as breeding animals as non-current assets and carry them at fair value. The
porcine biological assets we are holding for resale, which are the offspring of the breeding herd, are carried at fair value and classified
as current assets.
Determination of fair values – biological assets
IAS 41 ‘Agriculture’ requires us to show the carrying value of biological assets in the Group Balance Sheet. We determine this carrying
value according to IAS 41’s provisions and show the net valuation movement in the Income Statement. There are important differences
in how we value our bovine and porcine assets, as explained below.
Bovine – we base the fair value of all bulls on the net cash flows we expect to receive from selling their semen, discounted at a current
risk-adjusted market-determined rate. The significant assumptions determining the fair values are the expected future demand for
semen, the estimated biological value and the marketable life of bulls. The biological value is the estimated value at the point of
production. We adjust the fair value of the bovine herd and semen inventory where a third party earns a royalty from semen sales
from a particular bull. Females are valued by reference to market prices and published independent genetic evaluations.
Porcine – the fair value of porcine biological assets includes the animals we own entirely and our retained interest in the genetics
of animals we have sold under royalty arrangements. The fair value of animals we own is calculated using the animals’ average live
weights, plus a premium where we believe that their genetics make them saleable. We base the live weight value and the genetic
premium on recent transaction prices we have achieved. The significant assumptions in determining fair values are the breeding
animals’ expected life, the percentage of production animals that are saleable as breeding animals and the expected sales prices.
For our retained interest in the genetics of animals sold under royalty contracts, we base the initial fair value on the fair values we
achieved in recent direct sales of similar animals, less the amount we received upfront for the carcass element. We then remeasure the
fair value of our retained interest at each reporting date. The significant assumption in determining the fair value of the retained interest
is the animals’ expected life.
We value the pigs in our pure line herds, which are the repository of our proprietary genetics, as a single unit of account. We do this
using a discounted cash flow model, applied to the herds’ future outputs at current prices. The significant assumptions we make are
the number of future generations attributable to the current herds, the fair value prices we achieve on sales, the animals’ expected
useful lifespan and productivity, and the risk-adjusted discount rate.
FINANCIAL STATEMENTS 149
GENUS PLC / ANNUAL REPORT 2023
16. BIOLOGICAL ASSETS CONTINUED
Non-recognition of porcine multiplier contracts where the Group does not retain a contractual interest
To manage commercial risk, a very large part of our porcine business model involves selling pigs to farmers (‘multipliers’) who produce
piglets on farms we neither manage nor control. We have the option, but not the obligation, to buy the offspring at slaughter market
value plus a premium. Because the offspring have superior genetics, we can then sell them to other farmers at a premium.
We do not recognise the right to purchase offspring on the Group Balance Sheet, as we enter into the contracts and continue to hold
them for the purpose of receiving non-financial items (the offspring), in accordance with our expected purchase requirements. This
means the option is outside the scope of IFRS 9. We do not recognise the offspring as biological assets under IAS 41, as we do not own
or control them.
Fair value of biological assets
Non-current biological assets
Current biological assets
Balance at 30 June 2021
Increases due to purchases
Decreases attributable to sales
Decrease due to harvest
Changes in fair value less estimated sale costs
Effect of movements in exchange rates
Balance at 30 June 2022
Non-current biological assets
Current biological assets
Balance at 30 June 2022
Increases due to purchases
Decreases attributable to sales
Decrease due to harvest
Changes in fair value less estimated sale costs
Effect of movements in exchange rates
Balance at 30 June 2023
Non-current biological assets
Current biological assets
Balance at 30 June 2023
Bovine
£m
92.0
–
92.0
23.3
–
(17.7)
(19.6)
10.0
88.0
88.0
–
88.0
23.2
–
(14.6)
6.6
(3.9)
99.3
99.3
–
99.3
Porcine
£m
187.9
39.6
227.5
225.8
(234.8)
(26.3)
61.2
25.4
278.8
245.7
33.1
278.8
228.9
(259.4)
(31.4)
38.2
(12.4)
242.7
218.9
23.8
242.7
Total
£m
279.9
39.6
319.5
249.1
(234.8)
(44.0)
41.6
35.4
366.8
333.7
33.1
366.8
252.1
(259.4)
(46.0)
44.8
(16.3)
342.0
318.2
23.8
342.0
Bovine
Bovine biological assets include £8.9m (2022: £6.9m) representing the fair value of bulls owned by third parties but managed by the
Group, net of expected future payments to such third parties, which are therefore treated as assets held under leases.
There were no movements in the carrying value of the bovine biological assets in respect of sales or other changes during the year.
A risk-adjusted rate of 13.2% (2022: 12.5%) has been used to discount future net cash flows from the sale of bull semen.
Decreases due to harvest represent the semen extracted from the biological assets. Inventories of such semen are shown as biological
asset harvest in note 20.
Porcine
Included in increases due to purchases is the aggregate increase arising during the year on initial recognition of biological assets in
respect of multiplier purchases, other than parent gilts, of £91.5m (2022: £101.2m).
Decreases attributable to sales during the year of £259.4m (2022: £234.8) include £104.6 (2022: £74.0m) in respect of the reduction in fair
value of the retained interest in the genetics of animals, other than parent gilts, transferred under royalty contracts.
Also included is £96.5m (2022: £119.0m) relating to the fair value of the retained interest in the genetics in respect of animals, other than
parent gilts, sold to customers under royalty contracts in the year.
Total revenue in the year, including parent gilts, includes £281.9m (2022: £231.4m) in respect of these contracts, comprising £105.9m
(2022: £83.2m) on initial transfer of animals and semen to customers and £176.0m (2022: £148.2m) in respect of royalties received.
A risk-adjusted rate of 12.9% (2022: 10.3%) has been used to discount future net cash flows from the expected output of the pure line
porcine herds. The number of future generations which have been taken into account is seven (2022: seven) and their estimated useful
lifespan is 1.4 years (2022: 1.4 years).
FINANCIAL STATEMENTS 150
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
16. BIOLOGICAL ASSETS CONTINUED
Year ended 30 June 2023
Changes in fair value of biological assets
Inventory transferred to cost of sales at fair value
Biological assets transferred to cost of sales at fair value
Fair value movement in related financial derivative
Net IAS 41 valuation movement on biological assets1
Year ended 30 June 2022
Changes in fair value of biological assets
Inventory transferred to cost of sales at fair value
Biological assets transferred to cost of sales at fair value
Fair value movement in related financial derivative
Net IAS 41 valuation movement on biological assets1
Bovine
£m
Porcine
£m
Total
£m
6.6
1.4
–
8.0
–
8.0
38.2
(31.4)
(31.4)
(24.6)
(0.3)
(24.9)
Bovine
£m
Porcine
£m
(19.6)
(10.3)
–
(29.9)
–
(29.9)
61.2
(26.3)
(10.3)
24.6
(0.1)
24.5
44.8
(30.0)
(31.4)
(16.6)
(0.3)
(16.9)
Total
£m
41.6
(36.6)
(10.3)
(5.3)
(0.1)
(5.4)
1 This represents the difference between operating profit prepared under IAS 41 and operating profit prepared under historical cost accounting, which forms part of the
reconciliation to adjusted operating profit (see APMs)
Fair value measurement
All of the biological assets inputs fall under Level 3 of the hierarchy defined in IFRS 13. Significant increases/(decreases) in any of these
inputs in isolation would result in a significantly lower or higher fair value measurement.
FINANCIAL STATEMENTS
151
GENUS PLC / ANNUAL REPORT 2023
16. BIOLOGICAL ASSETS CONTINUED
Unobservable inputs and key sources of estimation uncertainty
Bovine
Risk-adjusted
discount rate1
Value at point of
production1
Percentage of new
dairy bulls to be
produced internally
in future years1
Age profile of Holstein
bulls generating
future sales1
Age profile of US
beef-on-dairy bulls
generating
future sales1
Long-term dairy
volume growth rate
Short-term dairy
volume growth rate
Growth in unit prices1
Porcine
Risk-adjusted discount
rate – pure line herd1
Proportion of animals
that go to breeding
sales1
2023
13.2%
32.7%
2022 Sensitivity
12.5% 1 percentage point increase in the discount rate would
result in approximately a £2.7m (2022: £2.3m) reduction
in value.
32.1% 1 percentage point decrease in the rate would result in
approximately a £6.2m (2022: £5.1m) reduction in value.
FY24 76%
FY25 81%
FY26 84%
FY27 and thereafter 85%
FY23 71%
FY24 81%
FY25 86%
FY26 and thereafter 87%
If percentage remained at FY23 level of 79% (2022:
61%) there would be a decrease in value of
approximately £0.4m (2022: £3.6m).
FY24 – avg age 4.0 yrs
FY25 – avg age 4.0 yrs
FY26 – avg age 4.0 yrs
FY27 and thereafter –
avg age 4.0 yrs
FY24 – avg age 4.5 yrs
FY25 – avg age 4.5 yrs
FY26 – avg age 4.5 yrs
FY27 and thereafter –
avg age 4.3 yrs
FY23 – avg age 4.0 yrs
FY24 – avg age 4.0 yrs
FY25 – avg age 4.0 yrs
FY26 and thereafter –
avg age 4.0 yrs
FY23 – avg age 5.1 yrs
FY24 – avg age 4.8 yrs
FY25 – avg age 4.8 yrs
FY26 and thereafter –
avg age 4.8 yrs
If age profile remains at FY23 average age of 4.1 years
(2022: 4.2 years), there would be an increase in value of
approximately £0.5m (2022: £1.4m).
If age profile remains at FY23 average age of 3.9 years
(2022: 5.7 years), there would be a decrease in value of
approximately £1.2m (2022: £3.0m increase).
1.8%
1.9%
4.3%
12.9%
2.4% 1 percentage point decrease in the growth rate would
result in approximately a £0.2m (2022: £0.2m) reduction
in value.
3.7% 1 percentage point decrease in the growth rate would
result in approximately a £1.4m (2022: £1.2m) reduction
in value.
1.2% 1 percentage point increase in the forecasted unit price
growth would result in approximately £5.0m increase in
value (2022: £4.5m).
10.3% 1 percentage point increase in the discount rate would
result in approximately a £3.1m (2022: £3.5m) reduction
in value. Any additional increase in the percentage
would lead to a linear impact.
Gilts – 10.7%
Gilts – 7.9% 1 percentage point increase in the go to breeding sales
would result in approximately £6.7 (2022: £10.5m)
increase in value.
Boars – 10.6%
Boars – 8.2% 1 percentage point increase in the go to breeding sales
would result in approximately £7.5m (2022: £12.0m)
increase in value.
1 Key sources of estimation uncertainty
Additional information
Bovine
Quantities at period end
Number of bulls in production
Number of bulls under development (including calves)
Total number of bulls
Number of doses of semen valued in inventory
Amounts during the year
Fair value of agricultural produce – semen harvested during the period
Porcine
Quantities at period end
Number of pigs (own farms)
Number of pigs, excluding parent gilts, despatched on a royalty basis and valued at fair value
Amounts during the year
Fair value of agricultural produce – semen harvested during the period
2023
2022
953
749
1,702
16.1m
1,015
696
1,711
17.2m
£14.6m
£17.7m
81,846
65,407
95,050
91,591
£31.3m
£26.3m
FINANCIAL STATEMENTS 152
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
17. PROPERTY, PLANT AND EQUIPMENT
We make significant investments in our property, plant and equipment. All assets are depreciated over their useful economic lives.
Accounting policies
We state property, plant and equipment at cost, together with any directly attributable acquisition expenses, or at their latest
valuation, less depreciation and any impairment losses. Where parts of an item of property, plant and equipment have different useful
lives, we account for them separately.
We charge depreciation to the Income Statement on a straight-line basis, over the estimated useful lives of each part of an asset.
The estimated useful lives are as follows:
• Freehold buildings
• Leasehold buildings
• Plant and equipment
• Motor vehicles
10 to 40 years
over the term of the lease
3 to 20 years
3 to 5 years
We do not depreciate land or assets under construction.
Right-of-use assets
Right-of-use assets are measured initially at cost, based on the value of the associated lease liability, adjusted for any payments
made before inception, initial direct costs and an estimate of the dismantling, removal and restoration costs required in the terms of the
lease. Subsequent to initial recognition, we record an interest charge in respect of the lease liability. The related right-of-use asset is
depreciated over the term of the lease or, if shorter, the useful economic life of the leased asset. The lease term shall include the period
of an extension option where it is reasonably certain that the option will be exercised. Where the lease contains a purchase option,
the asset is written off over the useful life of the asset when it is reasonably certain that the purchase option will be exercised.
Land and
buildings
£m
Plant, motor
vehicles and
equipment
£m
Assets under
construction
£m
Total
owned
assets
£m
Land and
buildings
£m
Plant, motor
vehicles and
equipment
£m
Total
right-of-use
assets
£m
Cost or deemed cost
Balance at 1 July 2021
Additions
Transfers
Disposals
Effect of movements in exchange rates
66.6
0.2
23.5
(1.4)
11.3
88.0
3.9
12.8
(2.0)
10.9
Balance at 30 June 2022
100.2
113.6
Additions
Transferred from assets held for sale
Transfers
Disposals
Effect of movements in exchange rates
0.2
0.2
18.3
(1.3)
(6.4)
3.1
–
12.1
(3.7)
(5.4)
Balance at 30 June 2023
111.2
119.7
Depreciation and impairment losses
Balance at 1 July 2021
Depreciation for the year
Disposals
Impairment
Effect of movements in exchange rates
Balance at 30 June 2022
Depreciation for the year
Disposals
Impairment
Effect of movements in exchange rates
Balance at 30 June 2023
Carrying amounts
At 30 June 2023
At 30 June 2022
24.5
3.8
(1.3)
0.8
4.4
32.2
5.6
(1.1)
–
(2.2)
34.5
76.7
68.0
56.9
11.0
(1.8)
0.1
7.1
73.3
12.8
(2.7)
–
(3.6)
79.8
39.9
40.3
22.1
40.3
(36.3)
–
3.5
29.6
19.8
–
(30.4)
(0.3)
(1.8)
16.9
–
–
–
–
–
–
–
–
–
–
–
176.7
44.4
–
(3.4)
25.7
243.4
23.1
0.2
–
(5.3)
(13.6)
247.8
81.4
14.8
(3.1)
0.9
11.5
105.5
18.4
(3.8)
–
(5.8)
114.3
16.9
29.6
133.5
137.9
20.7
9.2
–
(0.5)
2.1
31.5
2.0
–
–
–
(1.8)
31.7
6.5
4.8
(0.5)
–
0.6
11.4
4.6
–
–
(0.7)
15.3
16.4
20.1
26.0
6.1
–
(6.0)
2.3
28.4
8.9
–
–
(4.9)
(0.8)
31.6
12.5
6.8
(5.9)
–
1.6
15.0
7.2
(4.7)
–
(0.4)
17.1
14.5
13.4
46.7
15.3
–
(6.5)
4.4
59.9
10.9
–
–
(4.9)
(2.6)
63.3
19.0
11.6
(6.4)
–
2.2
26.4
11.8
(4.7)
–
(1.1)
32.4
30.9
33.5
Total
£m
223.4
59.7
–
(9.9)
30.1
303.3
34.0
0.2
–
(10.2)
(16.2)
311.1
100.4
26.4
(9.5)
0.9
13.7
131.9
30.2
(8.5)
–
(6.9)
146.7
164.4
171.4
FINANCIAL STATEMENTS
153
GENUS PLC / ANNUAL REPORT 2023
18. EQUITY-ACCOUNTED INVESTEES
We hold interests in several joint ventures and associates where we have significant influence.
Accounting policies
Joint ventures are entities over whose activities we have joint control, under a contractual agreement. The Group Financial Statements
include the Group’s share of profit or loss arising from joint ventures.
Associates are entities in which the Group has significant influence, but not control, over the financial and operating policies. The Group
Financial Statements include the Group’s share of the total recognised income and expense of associates on an equity-accounted
basis, from the date that significant influence commences until the date it ceases. When our share of losses exceeds our interest in an
associate, we reduce the carrying amount to nil and stop recognising further losses, except to the extent that the Group has incurred
legal or constructive obligations or made payments on an associate’s behalf.
Under the equity method, investments in joint ventures or associates are initially recognised in the Group Balance Sheet at cost and
adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive income of the joint ventures and
associates. Related-party transactions with the Group’s joint ventures and associates primarily comprise the sale of products and
services. As each arrangement is a separate legal entity and control rights are substantially equal with the other parties, no significant
judgements are required.
The Group’s share of profit after tax in its equity-accounted investees for the year was £10.5m (2022: £5.2m).
The carrying value of the investments is reconciled as follows:
Balance at 1 July
Share of post-tax retained profits of joint ventures and associates
Additions
Long-term loan investment
Dividends received from Agroceres – PIC Genética de Suínos Ltda (Brazil)
Dividends received from Società Agricola GENEETIC S.r.l (Italy)
Effect of other movements including exchange rates
Balance at 30 June
2023
£m
41.2
10.5
1.0
1.9
(2.4)
(0.2)
1.5
53.5
2022
£m
34.1
5.2
2.2
–
(3.1)
(0.1)
2.9
41.2
The additions in the year solely relate to cash injections made to Inner Mongolia Haoxiang Pig Breeding Co. Ltd. to fund their operation.
There are no significant restrictions on the ability of the joint ventures and associates to transfer funds to the Parent, other than those
imposed by the Companies Act 2006 or equivalent government rules within the joint venture’s jurisdiction.
Related-party transactions with joint ventures and associates
Sale of goods and services to joint ventures and associates
Purchase of goods and services from joint ventures and associates
Transaction value
Balance outstanding
2023
£m
–
4.1
2022
£m
–
6.5
2023
£m
–
–
2022
£m
0.3
–
All outstanding balances with joint ventures and associates are priced on an arm’s length basis and are to be settled in cash within
six months of the reporting date. None of the balances are secured.
Summary financial information for equity-accounted investees, adjusted for the Group’s percentage ownership, is shown on the
following page.
FINANCIAL STATEMENTS 154
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
18. EQUITY-ACCOUNTED INVESTEES CONTINUED
Joint ventures and associates – year ended 30 June 2023
Net assets
Ownership
Cash and
cash
equivalent
£m
Other
current
assets
£m
Non-current
assets
£m
Biological
assets
£m
Total
assets
£m
Current
liabilities
£m
Total
liabilities
£m
Net
assets
£m
Agroceres – PIC Genética
de Suínos Ltda (Brazil)
Inner Mongolia Haoxiang
Pig Breeding Co. Ltd.
(China)1
Chitale Genus ABS (India)
Private Limited (India)
Avlscenter Møllevang A/S1
Yan’an Xinyongxiang
Technology Co., Ltd
(China)1
Xelect Limited (United
Kingdom)1
Società Agricola GENEETIC
S.r.l. (Italy)1
Società Agricola GENEETIC
Service S.r.l. (Italy)1
Net assets
49%
49%
50%
49%
49%
39%
33%
33%
3.1
10.9
40.2
9.8
64.0
(19.5)
(19.5)
44.5
0.2
0.3
–
2.0
0.1
0.1
–
5.8
1.0
1.0
–
1.4
0.2
0.6
–
5.0
–
–
0.7
2.3
–
–
(0.1)
0.2
–
(0.3)
–
0.4
0.1
15.1
48.2
10.1
6.1
1.5
–
3.8
2.6
1.1
0.1
79.2
(0.2)
–
–
(0.3)
(0.1)
(0.6)
–
(5.1)
(0.1)
–
(0.3)
(0.1)
(0.6)
–
1.0
1.4
–
3.5
2.5
0.5
0.1
(20.7)
(25.7)
53.5
1 Classified as an associate. All other investments are classified as joint ventures
Income Statement
Ownership
Agroceres – PIC Genética de Suínos Ltda (Brazil)
Inner Mongolia Haoxiang Pig Breeding Co. Ltd.
(China)1
Yan’an Xinyongxiang Technology Co., Ltd (China)1
Chitale Genus ABS (India) Private Limited (India)
Avlscenter Møllevang A/S1
Xelect Limited (United Kingdom)1
Società Agricola GENEETIC S.r.l. (Italy)1
Società Agricola GENEETIC Service S.r.l. (Italy)1
Profit / (loss)
49%
49%
49%
50%
49%
39%
33%
33%
1 Classified as an associate. All other investments are classified as joint ventures
Net IAS 41
valuation
movement on
biological
assets
£m
2.5
1.1
–
–
–
–
–
–
3.6
Revenue
£m
38.8
1.8
5.2
0.5
–
0.7
1.0
0.1
48.1
Expenses
£m
Operating
profit / (loss)
£m
Taxation
£m
Profit / (loss)
after tax
£m
(25.7)
15.6
(3.9)
11.7
(4.4)
(5.3)
(0.3)
–
(0.6)
(0.9)
(0.1)
(1.5)
(0.1)
0.2
–
0.1
0.1
–
–
–
–
–
–
–
–
(1.5)
(0.1)
0.2
–
0.1
0.1
–
(37.3)
14.4
(3.9)
10.5
Joint ventures and associates have a December year end, except Chitale Genus ABS (India) Private Limited, which has a March year
end, and Xelect Limited, which has a June year end. Where the year end differs from the year of the Group this is due to local
regulatory requirements.
FINANCIAL STATEMENTS 155
GENUS PLC / ANNUAL REPORT 2023
18. EQUITY-ACCOUNTED INVESTEES CONTINUED
Joint ventures and associates – year ended 30 June 2022
Net assets
Ownership
Cash and
cash
equivalent
£m
Other
current
assets
£m
Non-current
assets
£m
Biological
assets
£m
Total
assets
£m
Current
liabilities
£m
Total
liabilities
£m
Net
assets /
(liabilities)
£m
Agroceres – PIC Genética
de Suínos Ltda (Brazil)
Inner Mongolia Haoxiang
Pig Breeding Co. Ltd.
(China)1
Chitale Genus ABS (India)
Private Limited (India)
Avlscenter Møllevang A/S1
Yan’an Xinyongxiang
Technology Co., Ltd
(China)1
Xelect Limited (United
Kingdom)1
Società Agricola GENEETIC
S.r.l. (Italy)1
Società Agricola GENEETIC
Service S.r.l. (Italy)1
Net assets
49%
49%
50%
49%
49%
39%
33%
33%
0.2
–
0.3
–
2.7
0.1
–
–
3.3
17.6
23.6
6.9
48.3
(15.2)
(15.2)
33.1
0.4
0.3
–
1.3
0.2
0.6
–
1.4
1.1
–
0.8
2.2
0.4
–
(1.2)
–
–
(0.5)
–
–
–
0.6
1.7
–
4.3
2.5
1.0
–
(0.8)
(0.1)
–
(0.3)
(0.1)
(0.4)
–
(0.8)
(0.4)
–
(0.3)
(0.1)
(0.4)
–
(0.2)
1.3
–
4.0
2.4
0.6
–
20.4
29.5
5.2
58.4
(16.9)
(17.2)
41.2
1 Classified as an associate. All other investments are classified as joint ventures
Income Statement
Ownership
Agroceres – PIC Genética de Suínos Ltda (Brazil)
Inner Mongolia Haoxiang Pig Breeding Co. Ltd.
(China)1
Yan’an Xinyongxiang Technology Co., Ltd (China)1
Chitale Genus ABS (India) Private Limited (India)
Avlscenter Møllevang A/S1
Xelect Limited (United Kingdom)1
Società Agricola GENEETIC S.r.l. (Italy)1
Società Agricola GENEETIC Service S.r.l. (Italy)1
Profit / (loss)
49%
49%
49%
50%
49%
39%
33%
33%
1 Classified as an associate. All other investments are classified as joint ventures
Net IAS 41
valuation
movement on
biological
assets
£m
(0.7)
(1.2)
0.5
–
–
–
–
–
(1.4)
Revenue
£m
31.6
–
5.5
0.3
–
0.6
1.9
–
39.9
Expenses
£m
(21.7)
(1.0)
(5.6)
(0.2)
–
(0.5)
(1.7)
–
(30.7)
Operating
profit / (loss)
£m
9.2
(2.2)
0.4
0.1
–
0.1
0.2
–
7.8
Taxation
£m
(2.6)
–
–
–
–
–
–
–
(2.6)
Profit /(loss)
after tax
£m
6.6
(2.2)
0.4
0.1
–
0.1
0.2
–
5.2
19. OTHER INVESTMENTS
We hold a number of unlisted and listed investments, mainly comprising shares in listed entity National Milk Records plc (‘NMR’).
Accounting policies
Financial assets at fair value through other comprehensive income (‘FVOCI’) comprise equity securities which are not held for trading,
and which the Group has irrevocably elected at initial recognition to recognise as FVOCI. The Group considers this classification relevant
as these are strategic investments.
Financial assets at FVOCI are adjusted to the fair value of the asset at the balance sheet date, with any gain or loss being recognised in
other comprehensive income and held as part of other reserves. On disposal any gain or loss is recognised in other comprehensive income.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through
income statement, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial
assets carried at fair value through income statement are expensed in the Income Statement.
FINANCIAL STATEMENTS 156
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
19. OTHER INVESTMENTS CONTINUED
Other investments may include equity investments (where the Group does not have control, joint control or significant influence in the
investee), short-term deposits with banks and other investments with original maturities of more than three months. Any dividends
received are recognised in the Income Statement.
Investments carried at fair value
Listed equity shares – Caribou Biosciences, Inc.
Unlisted equity shares – Dairy LLC (‘BoviSync’)
Listed equity shares – NMR
Unlisted equity shares – Other
Other investments
2023
£m
0.4
2.4
4.4
1.6
8.8
2022
£m
4.4
2.2
2.1
1.5
10.2
Caribou Biosciences Inc shares are measured at fair value using the valuation basis of a Level 1 classification. Caribou shares are
publicly traded on the NASDAQ.
We hold a strategic non-controlling interest in BoviSync, a herd management software company. The investment is measured at fair
value and the valuation basis of a Level 3 classification.
NMR ordinary shares were acquired as part of the NMR pension agreement, and are measured at fair value. The valuation basis is Level 1
classification, where fair value techniques are quoted (unadjusted) prices in active markets for identical assets and liabilities.
Other unlisted equity investments primarily consist of strategic non-controlling interests in bovine technology companies, which are
measured at fair value and the valuation basis is Level 3 classification, where fair value techniques use inputs which have a significant
effect on the recorded fair value and are not based on observable market data.
20. INVENTORIES
Our inventory primarily consists of bovine semen, raw materials and ancillary products.
Accounting policies
Inventory (excluding biological assets’ harvest) is stated at the lower of cost and net realisable value. Cost is determined on the basis
of weighted average costs and comprises direct materials and, where appropriate, direct labour costs and those overheads that have
been incurred in bringing the inventories to their present location and condition.
For our biological assets accounting policies, see note 16.
Biological assets’ harvest classed as inventories
Raw materials and consumables
Goods held for resale
Inventories
21. TRADE AND OTHER RECEIVABLES
2023
£m
22.7
3.9
34.7
61.3
2022
£m
20.9
3.6
26.4
50.9
Our trade and other receivables mainly consist of amounts owed to us by customers and amounts we pay to our suppliers in advance.
Accounting policies
We state trade and other receivables at their amortised cost less any impairment losses.
Trade receivables (restated1)
Less expected credit loss allowance
Trade receivables net of impairment
Other debtors
Prepayments
Contract assets (restated1) (note 24)
Other taxes and social security
Current trade and other receivables
Other debtors
Contract assets (note 24)
Non-current other receivables
Trade and other receivables
1 See note 2 for details of the prior period restatement
2023
£m
95.4
(3.9)
91.5
8.1
7.7
22.4
2.4
(restated1)
2022
£m
95.7
(4.3)
91.4
10.7
8.5
17.3
1.6
132.1
129.5
3.0
5.2
8.2
3.7
4.9
8.6
140.3
138.1
FINANCIAL STATEMENTS 157
GENUS PLC / ANNUAL REPORT 2023
21. TRADE AND OTHER RECEIVABLES CONTINUED
Trade receivables
The average credit period our customers take on the sales of goods is 48 days (2022 (restated1): 56 days). We do not charge interest
on receivables for the first 30 days from the date of the invoice.
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime expected credit losses (‘ECLs’).
The ECLs on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an
analysis of the debtor’s current financial position, adjusted for factors that are specific to the general economic conditions of the
industry and country in which the debtor operates and an assessment of both the current and the forecast direction of conditions at
the reporting date. The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery, such as when the debtor has been placed under liquidation or has entered into
bankruptcy proceedings.
The Group recognises ECLs with reference to the following matrix, in accordance with the simplified approach permitted in IFRS 9.
There has been no change in the estimation techniques during the current reporting period. A component of the calculation is the risk
premium of the countries in which our customers operate. The risk premiums are updated on each reporting date, to reflect changes in
the global economy.
2023
2022
Risk premium (%)
Trade receivables (£m)
Risk premium (%)
Trade receivables (£m) (restated*)
North
America
Latin
America
1.0%
19.8
1.0%
23.2
5.6%
23.6
5.1%
22.3
EMEA
3.1%
34.5
3.5%
37.6
The following table shows the movement in lifetime ECLs that has been recognised for trade receivables, in accordance with the
simplified approach set out in IFRS 9.
Balance at the start of the year
Change in loss allowance due to new trade and other receivables originated net of those derecognised
due to settlement
Amounts written off as uncollectable
Impairment losses reversed
Effect of movements in exchange rates
Balance at the end of the year
The aging of trade receivables is presented below:
2023
£m
4.3
3.4
–
(3.9)
0.1
3.9
Asia
2.6%
17.5
3.7%
12.6
2022
£m
5.0
2.3
–
(3.2)
0.2
4.3
Days past due
Not yet due
0–30 days
31–90 days
91–180 days
Over 180 days
Trade receivables
Trade receivables
net of impairment
2023
£m
69.3
13.2
8.1
3.7
1.1
95.4
2022
£m
72.1
11.7
7.4
3.0
1.5
95.7
2023
£m
67.1
12.8
7.7
3.1
0.8
91.5
2022
£m
69.7
11.4
7.2
2.5
0.6
91.4
No customer represents more than 5% of the total balance of trade receivables (2022: no more than 5%).
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
Trade and other receivables denominated in currencies other than Sterling comprise £42.3m denominated in US Dollars (2022: £44.1m),
£15.5m denominated in Euros (2022: £13.3m) and £49.8m denominated in other currencies (2022: £49.7m).
Other debtors
Included in other debtors is an amount of £2.3m (2022: £3.5m) which comprises security deposits held over farms being constructed.
FINANCIAL STATEMENTS 158
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
22. CASH AND CASH EQUIVALENTS
We hold cash and bank deposits which have a maturity of three months or less, to enable us to meet our short-term liquidity requirements.
Accounting policies
Cash and cash equivalents comprise cash balances. Bank overdrafts that are repayable on demand form an integral part of our cash
management and are included in interest-bearing loans and borrowings less than one year.
Cash at bank and in hand
The carrying amount of these assets approximates to their fair value.
2023
£m
36.3
2022
£m
38.8
The credit quality of cash and cash equivalents can be assessed by reference to external credit ratings of the counterparty where the
account or deposit is placed.
Counterparties with external credit ratings
A to AA-
BBB- to BBB
B- to BB+
CCC to CCC-
No ratings
Cash at bank and in hand
2023
£m
25.8
8.0
1.1
0.6
0.8
36.3
2022
£m
24.1
8.0
1.9
0.3
4.5
38.8
Within our cash and cash equivalents there is a cash balance of £3.1m (2022: £4.5m) in our Russian entities of which £0.8m (2022: £0.2m)
is not currently available to be used by the Group due to being received from and held in sanctioned banks.
23. TRADE AND OTHER PAYABLES
Our trade and other payables mainly consist of amounts we owe to our suppliers that have been invoiced or are accrued. They also include
taxes and social security amounts due in relation to our role as an employer.
Accounting policies
Trade payables are not interest bearing and are stated at their nominal value.
Trade payables
Other payables
Accrued expenses
Contract liabilities (note 24)
Other taxes and social security
Current trade and other payables
Contract liabilities (note 24)
Non-current trade and other payables
2023
£m
34.8
11.6
58.1
9.8
7.7
2022
£m
36.0
8.2
61.4
10.1
9.0
122.0
124.7
–
–
0.2
0.2
The average credit period taken for trade purchases is 32 days (2022: 39 days).
Other payables include an amount of £7.5m (2022: £5.1m) being repayable on demand with a third-party business partner.
Payables denominated in currencies other than Sterling comprise £52.9m denominated in US Dollars (2022: £55.9m), £14.9m denominated
in Euros (2022: £11.8m) and £30.3m denominated in other currencies (2022: £33.7m).
The carrying values of these liabilities are a reasonable approximation of their fair values.
24. CONTRACT BALANCES
Accounting policy
A contract asset is recognised when the Group’s right to consideration is conditional on something other than the passage of time, for
example the completion of future performance obligations under the terms of the contract with the customer. In some instances, the
Group receives payments from customers based on a billing schedule, as established in the contract, which may not match the pattern
of performance under the contract.
Where payment is received ahead of performance a contract liability will be created, and where performance obligations are satisfied
ahead of billing, then a contract asset will be recognised.
FINANCIAL STATEMENTS 159
GENUS PLC / ANNUAL REPORT 2023
24. CONTRACT BALANCES CONTINUED
Current contract assets (restated1)
Non-current contract assets
Contract assets (note 21)
Current contract liabilities
Non-current contract liabilities
Contract liabilities (note 23)
Balance at 1 July 2021
Increases as a result of performance in advance of billing
Transfers to receivables during the year
Increases as a result of billing ahead of performance
Decreases as a result of revenue recognised in the year
Effect of movements in exchange rates
Balance at 30 June 2022
Increases as a result of performance in advance of billing
Transfers to receivables during the year
Increases as a result of billing ahead of performance
Decreases as a result of revenue recognised in the year
Effect of movements in exchange rates
Balance at 30 June 2023
1 See note 2 for details of the prior period restatement
2023
£m
22.4
5.2
27.6
(9.8)
–
(9.8)
(restated1)
2022
£m
17.3
4.9
22.2
(10.1)
(0.2)
(10.3)
(restated1)
Contract
assets
£m
Contract
liabilities
£m
16.2
159.0
(153.3)
–
–
0.3
22.2
175.5
(169.2)
–
–
(0.9)
27.6
(12.0)
–
–
(80.8)
83.4
(0.9)
(10.3)
–
–
(63.8)
63.6
0.7
(9.8)
In some cases, the Group receives payments from customers based on a billing schedule, as established in our contracts. The contract
assets relate to revenue recognised for performance in advance of scheduled billing and have increased, as the Group has provided
more services ahead of the agreed payment schedules for certain contracts. The contract liability relates to payments received in
advance of performance under contract and varies based on performance under these contracts.
The transaction price allocated to partially unsatisfied performance obligations at 30 June 2023 is £15.0m (2022: £12.1m). It is expected
that the Group will recognise this revenue over the next six years.
25. PROVISIONS
A provision is a liability recorded in the Group Balance Sheet, where there is uncertainty over the timing or amount that will be paid, and
is therefore estimated. The main provisions we hold relate to litigation damages, legal provisions, customer claims and share forfeiture.
Accounting policies
We recognise a provision in the Balance Sheet when an event results in the Group having a current legal or constructive obligation, and
it is probable that we will have to settle the obligation through an outflow of economic benefits. If the effect is material, we discount
provisions to their present value.
Balance at 1 July 2021
Additional provision in the year
Utilisation of provision
Release of provision
Effect of movement in exchange rates
Balance at 30 June 2022
Additional provision in the year
Utilisation of provision
Release of provision
Effect of movement in exchange rates
Balance at 30 June 2023
ST
litigation
£m
Share
forfeiture
£m
Other
provisions
£m
9.4
–
(0.4)
(0.1)
1.2
10.1
0.1
(0.1)
–
(0.4)
9.7
0.3
0.2
–
–
–
0.5
–
–
(0.2)
–
0.3
2.7
0.5
(0.1)
(0.1)
0.3
3.3
0.5
(1.1)
(0.4)
(0.2)
2.1
Total
£m
12.4
0.7
(0.5)
(0.2)
1.5
13.9
0.6
(1.2)
(0.6)
(0.6)
12.1
FINANCIAL STATEMENTS 160
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
25. PROVISIONS CONTINUED
Current
Non-current
2023
£m
1.8
10.3
12.1
2022
£m
1.9
12.0
13.9
ST litigation relates specifically to our litigation only with Sexing Technologies, as described in note 7.
The share forfeiture provision of £0.3m relates to potential claims that could be made by untraced members over the next three years,
relating to the resale proceeds of shares that were identified during the prior year as being forfeited.
Other provisions mainly relate to legal provisions (excluding ST litigation) and customers’ claims. The timing and cash flows associated
with the majority of legal claims are expected to be less than one year. However, for some legal claims the timing of cash flows may be
long term in nature and are disclosed as such.
26. FINANCIAL INSTRUMENTS
This note details our treasury management and financial risk management objectives and policies, as well as the Group’s exposure
and sensitivity to credit, liquidity, interest and foreign exchange rate risk, and the policies in place to monitor and manage these risks.
Financial risk management objectives
The Group’s corporate treasury function provides services to the business, coordinates our access to domestic and international
financial markets, and monitors and manages the financial risks relating to the Group’s operations, through internal risk reports that
analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk
and price risk), credit risk, liquidity risk and cash flow interest rate risk.
We seek to minimise the effects of these risks by hedging them using derivative financial instruments. Our use of financial derivatives
is governed by policies approved by the Board of Directors, which provide written principles on foreign exchange risk, interest rate risk,
credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. The Board of
Directors regularly reviews our compliance with policies and exposure limits. The Group does not enter into or trade financial instruments,
including derivative financial instruments, for speculative purposes.
Key financial risks and exposures are monitored through a monthly report to the Board of Directors, together with an annual Board
review of corporate treasury matters.
Financial risk
The principal financial risks our activities expose us to are the risks of changes in foreign currency exchange rates, interest rates and
commodity prices. We use derivative financial instruments to manage our exposure to interest rate, foreign currency and commodity
price risks, including:
• forward foreign exchange contracts, to hedge the exchange rate risk arising on the sale of goods and purchase of supplies in
foreign currencies;
interest rate swaps, to mitigate the risk of rising interest rates; and
•
• forward commodity contracts, to hedge commodity price risk.
Accounting policies
Financial instruments
Financial assets and liabilities in respect of financial instruments are recognised on the Group Balance Sheet when the Group becomes
a party to the instrument’s contractual provisions.
Financial liabilities and equity instruments
Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual
arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that
provides a residual interest in the Group’s assets after deducting all of its liabilities and includes no obligation to deliver cash or other
financial assets. The accounting policies adopted for specific financial liabilities and equity instruments are set out below.
Put option arrangements over non-controlling interest
The potential cash payments related to put options issued by the Group over the equity of subsidiary companies are accounted for
as financial liabilities.
The amount that may become payable under the option on exercise is initially recognised at present value within financial liabilities,
with a corresponding charge directly to equity. The charge to equity is recognised separately as written put options over non-controlling
interest, adjacent to non-controlling interest in the net assets of consolidated subsidiaries.
Such options are subsequently measured at amortised cost, using the effective interest rate method, in order to accrete the liability up
to the amount payable under the option at the date at which it first becomes exercisable. The charge arising is recorded as a financing
cost. If the option expires unexercised, the liability is derecognised, with a corresponding adjustment to equity.
Derivative financial instruments
Derivatives are recognised initially at fair value at the date a derivative contract is entered into and are subsequently remeasured to
their fair value at each reporting date. The resulting gain or loss is recognised in the Income Statement immediately, unless the
derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in the Income Statement
depends on the nature of the hedge relationship.
FINANCIAL STATEMENTS 161
GENUS PLC / ANNUAL REPORT 2023
26. FINANCIAL INSTRUMENTS CONTINUED
A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised
as a financial liability. Derivatives are not offset in the financial statements, unless the Group has both a legally enforceable right and
intention to offset. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument
is more than 12 months and it is not due to be realised or settled within 12 months. Other derivatives are presented as current assets or
current liabilities.
The fair value of interest rate swaps is the estimated amount that we would receive or pay to terminate the swap at the balance sheet
date, taking into account current interest rates and the creditworthiness of the swap counterparties.
The fair values of forward exchange contracts and forward commodity contracts are their quoted market price at the balance sheet
date, which is the present value of the quoted forward price.
Hedging activities
The Group designates certain derivatives as hedging instruments in respect of foreign exchange risk, interest rate risk and commodity
risk in fair value hedges, cash flow hedges, or hedges of net investments in foreign operations.
At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged
item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the
inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is effective in offsetting
changes in fair values or cash flows of the hedged item attributable to the hedged risk, which is when the hedging relationship meets
all of the following hedge effectiveness requirements:
• there is an economic relationship between the hedged item and the hedging instrument;
• the effect of credit risk does not dominate the value changes that result from that economic relationship; and
• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually
hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk management
objective for that designated hedging relationship remains the same, the Group adjusts the hedge ratio of the hedging relationship
(i.e. rebalances the hedge) so that it meets the qualifying criteria again.
The Group designates the full change in the fair value of a forward contract (i.e. including the forward elements) as the hedging
instrument for all of its hedging relationships involving forward contracts.
The Group designates only the intrinsic value of option contracts as a hedged item, i.e. excluding the time value of the option. The
changes in the fair value of the aligned time value of the option are recognised in Other Comprehensive Income and accumulated in
the cost of hedging reserve. If the hedged item is transaction related, the time value is reclassified to the Income Statement when the
hedged item affects the Income Statement. If the hedged item is time-period related, then the amount accumulated in the cost of
hedging reserve is reclassified to the Income Statement on a rational basis, applying straight-line amortisation. Those reclassified
amounts are recognised in the Income Statement in the same line as the hedged item. If the hedged item is a non-financial item, then
the amount accumulated in the cost of hedging reserve is removed directly from equity and included in the initial carrying amount of the
recognised non-financial item. Furthermore, if the Group expects that some or all of the loss accumulated in the cost of hedging reserve
will not be recovered in the future, that amount is immediately reclassified to the Income Statement.
Cash flow hedges
The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and
qualify as cash flow hedges is recognised in Other Comprehensive Income and accumulated under the heading of cash flow hedging
reserve, and limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating to
the ineffective portion is recognised immediately in the Income Statement and is included in the ‘other gains and losses’ line item.
Amounts previously recognised in Other Comprehensive Income and accumulated in equity are reclassified to the Income Statement in
the periods when the hedged item affects the Income Statement, in the same line as the recognised hedged item. However, when the
hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously
recognised in other comprehensive income and accumulated in equity are removed from equity and included in the initial measurement
of the cost of the non-financial asset or non-financial liability. This transfer does not affect Other Comprehensive Income. Furthermore, if
the Group expects that some or all of the loss accumulated in the cash flow hedging reserve will not be recovered in the future, that
amount is immediately reclassified to the Income Statement.
The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria
(after rebalancing, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised. The
discontinuation is accounted for prospectively. Any gain or loss recognised in Other Comprehensive Income and accumulated in cash
flow hedge reserve at that time remains in equity and is reclassified to the Income Statement when the forecast transaction occurs.
When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the cash flow hedge reserve is reclassified
immediately to the Income Statement.
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts
calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the
fair value of issued fixed-rate debt held and the cash flow exposures on the issued variable-rate debt held. The fair value of interest rate
swaps at the reporting date is determined by discounting the future cash flows using the yield curves at the reporting date and the
credit risk inherent in the contract. The average interest rate is based on the outstanding balances at the end of the financial year.
FINANCIAL STATEMENTS 162
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
26. FINANCIAL INSTRUMENTS CONTINUED
If the critical terms of the interest rate swap contracts and their corresponding hedged items are the same, the Group performs a
qualitative assessment of effectiveness and it is expected that the value of the interest rate swap contracts and the value of the
corresponding hedged items will systematically change in opposite directions, in response to movements in the underlying interest rates.
The main source of hedge ineffectiveness in these hedge relationships is the effect of the counterparty and the Group’s own credit risk
on the fair value of the interest rate swap contracts, which is not reflected in the fair value of the hedged item attributable to the change
in interest rates. No other sources of ineffectiveness emerged from these hedging relationships.
Net investment hedges
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the foreign currency
forward contracts relating to the effective portion of the hedge is recognised in Other Comprehensive Income and accumulated in the
foreign currency translation reserve. The gain or loss relating to the ineffective portion is recognised immediately in the Income
Statement, and is included in the ‘other gains and losses’ line item.
Gains and losses on the hedging instrument accumulated in the foreign currency translation reserve are reclassified to the Income
Statement on the disposal or partial disposal of the foreign operation.
We only apply net investment hedge accounting in the Group Financial Statements.
Other gains and losses
Included with other gains and losses is a £2.7m gain on the mark to market valuation (‘MTM’) in relation to £60m of SONIA interest rate
swaps executed in April 2023. Whilst the interest rate swaps are a perfect commercial hedge of a similar amount of our GBP borrowings
for at least a three-year period, as the executing banks have a written option at the three-year point to unilaterally terminate the swaps
at no cost, the transaction does not qualify for hedge accounting treatment. Accordingly the MTM gain on the valuation of these swaps
as at 30 June 2023 is recognised in the Group Income Statement.
Gain on derivative
Other gains and losses
2023
£m
2.7
2.7
2022
£m
–
–
Capital risk management
The Group manages its capital to ensure that Group entities can continue as going concerns, while maximising the return to
shareholders by optimising our debt and equity balance. The Group’s capital structure consists of debt, which includes the borrowings
disclosed in note 27, cash and cash equivalents, and equity attributable to equity holders of the Parent, comprising issued capital,
reserves and retained earnings, as disclosed in note 31.
Gearing ratio
The Group keeps its capital structure under review and monitors it monthly to ensure the gearing ratio remains below 60%. The Group
is not subject to externally imposed capital requirements. The gearing ratio at the year end was as follows:
Debt (see note 27)
Cash and cash equivalents (see note 22)
Net debt (see note 32)
Equity
Net debt to equity ratio
Debt is defined as long and short-term borrowings, including lease obligations as detailed in note 27.
Equity includes all capital and reserves of the Group attributable to equity holders of the Parent.
2023
£m
232.1
(36.3)
195.8
567.2
35%
2022
£m
223.8
(38.8)
185.0
572.1
32%
FINANCIAL STATEMENTS 163
GENUS PLC / ANNUAL REPORT 2023
26. FINANCIAL INSTRUMENTS CONTINUED
Categories of financial instruments
We have categorised financial instruments held at valuation into a three-level fair value hierarchy, based on the priority of the inputs
to the valuation technique in accordance with IFRS 13. The hierarchy gives the highest priority to quoted prices in active markets for
identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall
within different levels of the hierarchy, we base the category level on the lowest priority level input that is significant to the fair value
measurement of the instrument in its entirety. We have estimated the fair values of the Group’s outstanding interest rate swaps by
calculating the present value of future cash flows, using appropriate market discount rates, representing Level 2 fair value
measurements as defined by IFRS 13.
2023 Carrying value
2022 Carrying value
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Financial assets
Other investments
Trade receivables and other debtors,
excluding prepayments
Cash and cash equivalents
Derivative instruments in non-
designated hedge accounting
relationships
Derivative instruments in designated
hedge accounting relationships
Financial liabilities
Trade and other payables, excluding
other taxes and social security
(see note 23)
Loans and overdrafts (see note 27)
Leasing obligations (see note 28)
Derivative instruments in
non-designated hedge
accounting relationships
Derivative instruments in designated
hedge accounting relationships
Put option over non-controlling interest
Deferred consideration (see note 38)
4.8
–
4.0
8.8
6.5
–
3.7
10.2
–
–
–
–
132.6
36.3
0.8
5.6
–
–
–
–
132.6
36.3
0.8
5.6
–
–
–
–
129.6
38.8
1.0
2.2
–
–
–
–
129.6
38.8
1.0
2.2
4.8
175.3
4.0
184.1
6.5
171.6
3.7
181.8
–
–
–
–
–
–
–
–
(114.3)
(200.2)
(31.9)
(0.9)
–
(7.1)
–
(354.4)
–
–
–
–
–
–
(0.6)
(0.6)
(114.3)
(200.2)
(31.9)
(0.9)
–
(7.1)
(0.6)
(355.0)
–
–
–
–
–
–
–
–
(115.9)
(189.2)
(34.6)
(0.9)
(0.3)
(7.0)
–
(347.9)
–
–
–
–
–
–
(1.5)
(1.5)
(115.9)
(189.2)
(34.6)
(0.9)
(0.3)
(7.0)
(1.5)
(349.4)
Foreign currency risk management
We undertake transactions denominated in foreign currencies.
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (excluding short-term
amounts related to our ongoing trade, recognised as trade receivables and trade payables) at the reporting date were as follows:
US Dollar
Euro
Canadian Dollar
Liabilities
Assets
2023
£m
(87.7)
(30.5)
(0.1)
2022
£m
(88.0)
(11.3)
(0.4)
2023
£m
3.5
0.7
–
2022
£m
2.2
0.5
–
FINANCIAL STATEMENTS 164
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
26. FINANCIAL INSTRUMENTS CONTINUED
Foreign currency Income Statement sensitivity analysis
The Group is mainly exposed to movements in the US Dollar, Euro, Brazilian Real, Mexican Peso, Chinese Yuan and Russian Rouble
exchange rates.
The following table details the Group’s profit sensitivity to a 10% and 20% increase and decrease in Sterling against these currencies.
10% is the sensitivity rate used when reporting foreign currency risk internally to key management and represents our assessment of a
significant change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary
items and adjusts their translation at the period end for a 10% or 20% change in foreign currency rates. It includes external loans, as well
as loans to foreign operations within the Group where the loan is denominated in a currency other than the lender or borrower’s currency.
A positive number below indicates an increase in profit when Sterling weakens against the relevant currency. A strengthening of Sterling
against the relevant currency would produce an equal but opposite reduction in profit, and the balances below would be negative.
Euro
US Dollar
Brazilian Real
Mexican Peso
Chinese Yuan
Russian Rouble
20% currency movement
10% currency movement
2023
£m
2022
£m
2023
£m
2022
£m
3.2
1.5
3.0
3.9
3.2
2.1
2.8
1.2
2.7
3.1
2.3
1.5
1.6
0.7
1.5
2.0
1.6
1.1
1.4
0.6
1.3
1.5
1.2
0.7
Forward foreign exchange contracts
The Group’s policy is to enter into forward foreign exchange contracts, to cover specific foreign currency payments and receipts.
The following table details the forward foreign currency contracts outstanding as at the year end:
Outstanding contracts
Buy CHF
Sell CNY
Buy AUD
Buy PHP
Buy EUR
Buy MXN
Buy USD
Sell BRL
Sell INR
Sell CAD
Buy CHF/Sell EUR
Buy USD/Sell UAH
Buy USD/Sell BRL
Buy USD/Sell CNY
Buy PHP/Sell USD
Buy CAD/Sell USD
Buy USD/Sell CAD
Buy USD/Sell EUR
Buy USD/Sell RUB
Buy USD/Sell INR
Buy USD/Sell ZAR
Buy USD/Sell ARS
Buy MXN/Sell USD
Average exchange rate
Contract value
Fair value
2023
2022
Foreign
currency
2023
£m
2022
£m
2023
£m
2022
£m
0.88
9.02
1.91
70.39
1.16
22.03
1.26
6.17
102.79
1.67
–
37.84
4.94
7.19
55.57
–
1.33
1.10
–
82.49
18.44
–
17.31
1.18
8.24
1.76
67.01
0.86
24.74
1.23
–
–
–
1.01
33.06
4.90
6.69
53.53
1.29
–
1.06
56.85
78.76
16.09
129.69
–
CHF
CNY
AUD
PHP
EUR
MXN
USD
BRL
INR
CAD
CHF
UAH
BRL
CNY
PHP
CAD
CAD
EUR
RUB
INR
ZAR
ARS
MXN
0.5
0.3
2.3
–
6.6
14.7
3.4
0.2
0.3
0.1
–
0.7
3.0
2.9
7.1
–
6.8
0.1
–
4.0
0.4
–
0.2
0.9
1.2
1.8
0.3
7.2
2.9
1.1
–
–
–
3.4
0.3
1.8
3.7
7.4
0.4
–
0.3
1.2
1.3
3.4
0.3
–
–
–
–
–
–
0.2
0.2
–
–
–
–
–
(0.2)
–
–
–
(0.1)
–
–
–
–
–
–
0.1
–
–
–
–
–
0.1
(0.1)
–
–
–
–
–
0.1
–
(0.2)
–
–
–
(0.1)
–
–
–
–
(0.2)
Interest rate risk management
The Group is exposed to interest rate risk, as Group entities borrow funds at both fixed and floating interest rates. We manage this risk
centrally, by maintaining an appropriate mix between fixed and floating rate borrowings, using interest rate swaps. We regularly review
our hedging activities, to align with our interest rate views and defined risk appetite, thereby ensuring we apply optimal hedging
strategies to minimise the adverse impact of fluctuations in interest expense through different interest rate cycles.
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section
of this note.
FINANCIAL STATEMENTS 165
GENUS PLC / ANNUAL REPORT 2023
26. FINANCIAL INSTRUMENTS CONTINUED
Interest rate sensitivity analysis
We have determined the sensitivity analyses below, based on the Group’s exposure to interest rates for both derivatives and
non-derivative instruments, at the balance sheet date. For floating rate liabilities, we prepared the analysis assuming the liability
outstanding at the balance sheet date was outstanding for the whole year. A 1.0 percentage point increase or decrease is used
when reporting interest rate risk internally to key management and is our assessment of a significant change in interest rates.
If interest rates had been 1.0 percentage point higher or lower and all other variables were held constant, the Group’s profit would have
decreased or increased by £1.6m (2022: decrease/increase by £1.8m). This impact is smaller than would otherwise be the case, due to
our fixed-rate hedging.
Interest rate swap contracts
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts,
calculated on agreed notional principal amounts. These contracts enable us to mitigate the risk of changing interest rates on the
cash flow exposures on the variable-rate debt we hold. We determine the fair value of interest rate swaps at the reporting date by
discounting the future cash flows, using the yield curves at the reporting date and the credit risk inherent in the contract. This fair value
is disclosed on the following pages. The average interest rate is based on the outstanding balances at the end of the financial year.
Cash flow hedges
The following table details the notional principal amounts and remaining terms of interest rate swap contracts outstanding, as at the
reporting date:
Outstanding receive floating pay fixed contracts
USD interest rate swaps
One to five years
EUR interest rate swaps
One to five years
GBP interest rate swaps
One to five years
Average contract
fixed interest rate
Notional principal amount
Fair value
2023
%
2022
%
2023
£m
2022
£m
2023
£m
3.43
3.32
66.9
37.0
0.36
0.36
21.4
21.5
3.45
–
60.0
–
1.3
1.2
2.8
2022
£m
(0.3)
0.6
–
The interest rate swaps settle on a quarterly basis. The corresponding floating rate on the interest rate swaps is three months. We settle
the difference between the fixed and floating interest rate on a net basis.
Interest rate swap contracts that exchange floating-rate interest amounts for fixed-rate interest amounts are designated as cash flow
hedges, to reduce our cash flow exposure resulting from variable interest rates on borrowings. The interest rate swaps and the interest
payments on the loan occur simultaneously and we recognise the amount deferred in equity in the Income Statement, over the period
that the floating rate interest payments on debt affect the Income Statement.
Commodity hedges
The Group hedges both feed and slaughter exposures using Chicago Mercantile Exchange lean hog, corn and soybean meal
commodity futures contracts.
Average price
Notional principal amount
Fair value
Commodity hedge
Open commodity contracts as at June
Lean hog
Corn
Soybean meal
2023
US$
2022
US$
0.97
5.68
402
0.92
6.87
390
2023
£m
8.5
(6.4)
(4.6)
(2.5)
2022
£m
10.2
(4.9)
(3.0)
2.3
2023
£m
0.6
(0.6)
(0.1)
(0.1)
2022
£m
(0.1)
0.1
0.1
0.1
Net investment hedges
The Group’s Net Investment Policy is to hedge up to 90% of the net investment value of its wholly owned subsidiaries in a particular
currency. At the beginning of the year the Group had a net investment hedge designating the first EUR 12.5 million of the net assets of
Pig Improvement Company España S.A. as a hedged item, using EUR 12.5 million of borrowings. On 31 May 2023, the Group designated
a further EUR 3 million of the net assets of Pig Improvement Company España S.A. as a hedged item, using EUR 3 million of borrowings
as an additional net investment hedge.
In February 2022, the Group entered into a second net investment hedge designating the first EUR 25 million Net Assets of its subsidiary
Fyfield Holland BV as the hedged item in a net investment hedge using USD 28m of borrowings converted to a EUR 25m liability, using
a cross currency swap as the related hedging instrument. On 28 November 2022, USD 14.1m/EUR 12.5m of the cross currency swap was
closed out and replaced in the net investment hedge designation by a new EUR 12.5 million borrowing, maintaining the existing hedge
amount. On 31 May 2023, the Group designated a further EUR 7 million of the net assets of Fyfield Holland BV as a hedged item using
EUR 7 million of borrowings as an additional net investment hedge.
In summary, as at 30 June 2023 the Group has designated EUR 15.5m (GBP £13.4m) of the net assets of its subsidiary Pig Improvement
Company España S.A. and EUR 32m (GBP £27.6m) of the net assets of its subsidiary Fyfield Holland B.V. as net investment hedges.
These Net Investment Hedges represent 69% of the Group’s Euro net assets as at this date.
FINANCIAL STATEMENTS 166
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
26. FINANCIAL INSTRUMENTS CONTINUED
The table below shows a reconciliation of the gains or loss deferred in equity:
Loss at the start of the year
Effective (losses)/gains recognised in equity in period
Balance carried forward in equity as effective losses
2023
£m
(0.8)
0.3
(0.5)
2022
£m
(0.1)
(0.7)
(0.8)
Credit risk management
Credit risk is the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the Group. We have a
policy of only dealing with creditworthy counterparties. We regularly monitor our exposure and the credit ratings of our counterparties,
and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure on financial
instruments is controlled by counterparty limits that the Board reviews and approves annually.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. We carry out
ongoing credit evaluation of the financial condition of accounts receivable.
Liquidity risk management
The Board of Directors has ultimate responsibility for managing liquidity risk. We manage this risk by maintaining adequate reserves and
banking facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets
and liabilities.
Liquidity and interest risk tables
For non-derivative financial liabilities, see notes 27, 28 and 38.
The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities, excluding trade
payables and other creditors which are short term and, as disclosed in note 23, have an average credit period of 32 days (2022: 39 days).
We have drawn up the table based on the undiscounted cash flows of financial liabilities, using the earliest date on which we can be
required to pay. The table includes both interest and principal cash flows.
2023
Loans and borrowings
Lease liabilities
Deferred consideration
Variable interest rate instruments
2022
Loans and borrowings
Lease liabilities
Deferred consideration
Variable interest rate instruments
Weighted
average
effective
interest rate
%
5.48
3.74
–
5.23
2.31
2.91
–
2.41
Less than
1 month
£m
1–3 months
£m
3 months–
1 year
£m
1–5 years
£m
5+ years
£m
Total
£m
6.6
1.0
–
7.6
8.4
1.0
–
9.4
1.7
2.5
–
4.2
1.2
3.0
–
4.2
9.4
7.3
–
16.7
4.6
6.8
–
11.4
197.9
20.2
0.6
218.7
183.0
20.7
0.5
204.2
–
3.7
–
3.7
–
6.1
–
6.1
215.6
34.7
0.6
250.9
197.2
37.6
0.5
235.3
The following table details the Group’s expected maturity for other non-derivative financial assets, excluding trade receivables and
other debtors. We have drawn up this table based on the undiscounted contractual maturities of the assets, including interest we will
earn on them, except where we expect the cash flow to occur in a different period.
2023
Variable interest rate instruments
2022
Variable interest rate instruments
Weighted
average
effective
interest rate
%
Less than
1 month
£m
1–3 months
£m
3 months–
1 year
£m
1–5 years
£m
5+ years
£m
0.42
36.3
1.12
38.8
–
–
–
–
–
–
–
–
Total
£m
36.3
38.8
The Group has financing facilities with a total unused amount of £118.7m (2022: £77.8m) at the balance sheet date. We expect to meet
our other obligations from operating cash flows and the proceeds of maturing financial assets. We expect to reduce the debt to equity
ratio, as borrowings decrease through repayment from operating cash flows.
FINANCIAL STATEMENTS 167
GENUS PLC / ANNUAL REPORT 2023
26. FINANCIAL INSTRUMENTS CONTINUED
The following table details the Group’s liquidity analysis for its derivative financial instruments. We have drawn up the table based
on the undiscounted net cash outflows on derivative instruments that settle on a net basis and the undiscounted gross outflows
on derivatives that require gross settlement. When the amount payable or receivable is not fixed, we have determined the amount
disclosed by reference to the projected interest and foreign currency rates, as illustrated by the yield curves at the reporting date.
2023
Foreign exchange contracts
Commodity swaps
Interest rate swaps
2022
Foreign exchange contracts
Commodity swaps
Interest rate swaps
Less than
1 month
£m
1–3 months
£m
3 months–
1 year
£m
1–5 years
£m
5+ years
£m
0.1
–
0.2
(0.2)
–
–
–
–
0.5
–
–
0.1
–
(0.1)
2.6
–
0.1
0.2
–
–
2.3
–
–
0.1
–
–
–
–
–
–
Total
£m
0.1
(0.1)
5.6
(0.2)
0.1
0.4
Commodity swaps and interest rate swaps are always settled on a net basis. Foreign exchange contracts can be settled on a net or
gross basis; the net cash flows presented in the table above reflect an inflow of £110.6m and outflow of £110.5m (2022: inflow of £73.7m
and outflow of £73.9m).
27. LOANS AND BORROWINGS
The Group’s borrowing for funding and liquidity purposes comes from a range of committed bank facilities.
Interest-bearing loans and borrowings
We initially recognise interest-bearing loans and borrowings at their fair value, less attributable transaction costs. After this initial
recognition, we state them at amortised cost and recognise any difference between the cost and redemption value in the Income
Statement over the borrowings’ expected life, on an effective interest rate basis. The carrying values of these liabilities are a reasonable
approximation of their fair values.
Non-current liabilities
Unsecured bank loans
Obligations under leases
Current liabilities
Unsecured bank loans and overdrafts
Obligations under leases
Total interest-bearing liabilities
2023
£m
2022
£m
196.0
21.9
217.9
4.2
10.0
14.2
182.1
24.5
206.6
7.1
10.1
17.2
232.1
223.8
Terms and debt repayment schedule
Terms and conditions of outstanding loans and overdrafts were as follows:
Revolving credit facility and overdraft
Revolving credit facility, term loan and overdraft
Revolving credit facility and overdraft
Obligations under leases
Other unsecured bank borrowings
Total interest-bearing liabilities
Currency
Interest rate
2023
GBP
USD
EUR
USD
Other
6.4%
6.9%
5.0%
3.7%
5.7%
2023
£m
91.6
78.0
30.1
31.9
0.5
2022
£m
95.9
77.3
10.8
34.6
5.2
232.1
223.8
The above revolving credit facilities are unsecured. Information about the Group’s exposure to interest rate and foreign currency risks is
shown in note 26.
FINANCIAL STATEMENTS 168
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
27. LOANS AND BORROWINGS CONTINUED
Loans and borrowings (excluding leases) comprise amounts falling due:
In one year or less or on demand
In more than one year but not more than two years
In more than two years but not more than five years
Less: unamortised issue costs
Current liabilities
Non-current liabilities
2023
£m
5.3
–
196.0
201.3
(1.1)
200.2
(4.2)
196.0
2022
£m
8.0
–
182.3
190.3
(1.1)
189.2
(7.1)
182.1
At the balance sheet date, the Company’s credit facilities comprised a £190m multi-currency revolving credit facility (‘RCF’), a USD 150
million RCF and a USD 20 million bond and guarantee facility. The original term of the facility was for three years to 24 August 2023. On
24 August 2021 and 26 August 2022, the Company and its lenders extended the maturity date of the total facilities to 24 August 2024
and 24 August 2025 respectively. The Company’s credit facility also includes an uncommitted £100m accordion option, £60m of which
was exercised in August 2022 to increase the facilities to their current size, leaving a remaining unsecured accordion facility of £40m,
which can be requested on a maximum of two further occasions over the lifetime of the facility to fund the Group’s business
development plans.
As part of its interest rate hedging strategy, the Company has entered into interest rate swaps to hedge variable interest rates.
At the balance sheet date, bank loans and overdrafts include borrowings of USD 85m fixed at 3.48%, borrowings of £60m fixed at 3.45%,
borrowings of EUR 12.5m fixed at 0.37%, and borrowings of USD 13.9m, swapped via a cross currency swap into EUR 12.5m, fixed at 0.36%,
excluding applicable bank margins. Approximately 76% of total facility borrowings are covered by these interest rate swaps as at
30 June 2023.
28. OBLIGATIONS UNDER LEASES
A lease is a commitment to make a payment in the future, primarily in relation to property, plant and machinery and motor vehicles.
Accounting policies
In accordance with IFRS 16, we recognise as an expense any payments made in respect of short-term leases (those with a term of less
than 12 months) and leases for low-value items, on a straight-line basis over the life of the lease.
For all other leases we recognise a liability at the date at which the leased asset is made available for use, and a corresponding
right-of-use asset is recognised and depreciated over the term of the lease (see note 17).
Lease liabilities are measured at the present value of the future lease payments, excluding any payments relating to non-lease
components. Future lease payments include fixed payments, in-substance fixed payments, and variable lease payments that are
based on an index or a rate, less any lease incentives receivable. Lease liabilities also take into account amounts payable under residual
value guarantees and payments to exercise options, to the extent that it is reasonably certain that such payments will be made.
The payments are discounted at the rate implicit in the lease or, where that cannot be measured, at an incremental borrowing rate.
We remeasure the lease liability (and make a corresponding adjustment to the related right-of-use asset) whenever:
• The lease term has changed or there is a change in the assessment of the exercise of a purchase option, in which case the lease
liability is remeasured by discounting the revised lease payments using a revised discount rate.
• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual
value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate
(unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
• A lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease liability
is remeasured by discounting the revised lease payments using a revised discount rate.
The Group did not make any such adjustments during the periods presented.
The changes in the lease liabilities are as follows:
Balance at the start of the year
Leases entered into during the year
Leases terminated early
Payments made
Interest
Effect of movements in exchange rates
Balance at the end of the year
Current
Non-current
At 30 June 2023, the Group is committed to £nil (2022: £0.1m) for short-term leases.
2023
£m
34.6
10.4
(0.7)
(12.3)
1.2
(1.3)
31.9
10.0
21.9
31.9
2022
£m
28.3
15.7
(0.3)
(12.4)
1.1
2.2
34.6
10.1
24.5
34.6
FINANCIAL STATEMENTS 169
GENUS PLC / ANNUAL REPORT 2023
28. OBLIGATIONS UNDER LEASES CONTINUED
We have drawn up the table based on the undiscounted cash flows of the obligations under leases, using the earliest date on which
we can be required to pay
FY23
FY24
FY25
FY26
FY27
FY28
FY29
FY30
After FY31
Presented as:
Current
Non-current
2023
£m
2022
£m
–
10.8
8.2
5.9
3.9
2.2
1.6
1.1
1.0
34.7
10.8
23.9
34.7
10.8
8.2
5.7
4.1
2.7
2.0
1.8
1.2
1.1
37.6
10.8
26.8
37.6
Lease obligations denominated in currencies other than Sterling comprise £15.3m denominated in US Dollars (2022: £16.0m), £3.5m
denominated in Euros (2022: £4.0m) and £9.4m denominated in other currencies (2022: £10.6m).
29. RETIREMENT BENEFIT OBLIGATIONS
The Group operates a number of defined contribution and defined benefit pension schemes, covering many of its employees. The
principal funds are the Milk Pension Fund (‘MPF’) and the Dalgety Pension Fund (‘DPF’) in the UK, which are defined benefit schemes.
The assets of these funds are held separately from the Group’s assets, are administered by trustees and managed professionally.
Accounting policies
Defined contribution pension schemes
A number of our employees are members of defined contribution pension schemes. We charge contributions to the Income Statement
as they become payable under the scheme rules. We show differences between the contributions payable and the amount we have
paid as either accruals or prepayments in the Balance Sheet. The schemes’ assets are held separately from the Group’s assets.
Defined benefit pension schemes
The Group operates defined benefit pension schemes for some of its employees. These schemes are closed to new members and to
further accrual. We calculate our net obligation separately for each scheme, by estimating the amount of future benefit that employees
have earned, in return for their service to date. We discount that benefit to determine its present value and deduct the fair value of the
plan’s assets (at bid price). The liability discount rate we use is the market yield at the balance sheet date on high-quality corporate
bonds, with terms to maturity approximating our pension liabilities. Qualified actuaries perform the calculations, using the projected
unit method.
We recognise actuarial gains and losses in equity in the period in which they occur, through the Group Statement of Comprehensive
Income. Actuarial gains and losses include the difference between the expected and actual return on scheme assets and experience
gains and losses on scheme liabilities.
Genus and the other participating employers are jointly and severally liable for the MPF’s obligations. We account for our section of the
scheme and our share of any orphan assets and liabilities, and provide for any amounts we believe we will have to pay under our joint
and several liability. The joint and several liability also means we have a contingent liability for the scheme’s obligations that we have
not accounted for.
Under the joint and several liability, we initially recognise any changes in our share of orphan assets and liabilities in the Income
Statement. After this initial recognition, any actuarial gains and losses on the orphan assets and liabilities are recognised directly
in equity through the Group Statement of Changes in Equity, in the period in which they occur.
During the year, the DPF defined benefit pension scheme purchased annuities in order to hedge longevity risk for pensioners within the
scheme. As permitted by IAS 19, the Group has opted to recognise the difference between the fair value of the plan assets and the cost
of the policy as an actuarial loss in Other Comprehensive Income.
We measure the fair value our qualifying insurance policy assets to be the deemed present value of the related obligation.
FINANCIAL STATEMENTS 170
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
29. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
Retirement benefit obligations
The financial positions of the defined benefit schemes, as recorded in accordance with IAS 19 and IFRIC 14, are aggregated for
disclosure purposes. The liability/(asset) split by principal scheme is set out below.
The Milk Pension Fund – Genus’s share
The Dalgety Pension Fund
National Pig Development Pension Fund
Post-retirement healthcare
Other unfunded schemes
Overall net pension liability
2023
£m
–
–
(0.2)
0.5
6.6
6.9
2022
£m
–
–
0.1
0.6
7.6
8.3
Overall, we expect to pay £0.9m (2022: £1.0m) in contributions to defined benefit plans in the 2024 financial year.
The defined benefit plans are administered by trustee boards that are legally separated from the Group. The trustee board of each
pension fund consists of representatives who are employees, former employees or are independent from the Company. The boards of
the pension funds are required by law to act in the best interest of the plan participants and are responsible for setting certain policies,
such as investment and contribution policies, and for the governance of the fund.
The defined benefit pension schemes expose the Group to actuarial risks such as greater than expected longevity of members, lower
than expected return on investments and higher than expected inflation, which may increase the plans’ liabilities or reduce the value
of their assets.
UK pensions are regulated by The Pensions Regulator, a non-departmental public body established under the Pensions Act 2004
and sponsored by the Department for Work and Pensions, operating within a legal regulatory framework set by the UK Parliament.
The Pensions Regulator has statutory objectives set out in legislation, which include promoting and improving understanding
of the good administration of work-based pensions, protecting member benefits and regulating occupational defined benefit
and contribution schemes. The Pensions Regulator’s statutory objectives and regulatory powers are described on its website at
www.thepensionsregulator.gov.uk.
All defined benefit schemes are registered as an occupational pension plan with HMRC and are subject to UK legislation and oversight
from The Pensions Regulator. UK legislation requires that pension schemes are funded prudently and valued at least every three years.
Separate valuations are required for each scheme. Within 15 months of each valuation date, the plan trustees and the Group must
agree any contributions required to ensure that the plan is fully funded over time, on a suitably prudent measure.
Funding plans are individually agreed with the respective trustees for each of the Group’s defined benefit pension schemes, taking into
account local regulatory requirements.
The Milk Pension Fund (‘MPF’)
The MPF was previously operated by the Milk Marketing Board and was also open to staff working for Milk Marque Ltd (the principal
employer, now known as Community Foods Group Limited), National Milk Records plc, First Milk Ltd, hauliers associated to First Milk Ltd,
Dairy Farmers of Britain Ltd (which went into receivership in June 2009) and Milk Link Ltd.
We have accounted for our section of the scheme and our share of any orphan assets and liabilities, which together represent
approximately 86% of the MPF (2022: 86%). Although the MPF is managed on a sectionalised basis, it is a ‘last man standing scheme’,
which means that all participating employers are jointly and severally liable for all of the fund’s liabilities. With effect from 30 June 2013,
Genus’s remaining active members ceased accruing benefits in the fund and became deferred pensioners.
The most recent actuarial triennial valuation of the MPF was at 31 March 2021 and was carried out by qualified actuaries. The valuation
has been agreed by the trustees.
The principal actuarial assumptions adopted in the 2021 valuation were that:
•
investment returns on existing assets would exceed fixed-interest gilt yields by 1.6% per annum until 31 March 2030, then by 0.5% per
annum thereafter;
• Consumer Price Index (‘CPI’) price inflation is expected to be 0.7% per annum lower than Retail Price Index (‘RPI’) price inflation until
31 March 2030, then less 0.1% per annum thereafter; and
• pensions in payment and pensions in deferment would increase in future in line with CPI price inflation, subject to various minimum
and maximum increases.
At 31 March 2021, the market value of the fund’s assets was £492m. This represented approximately 103% of the value of the uninsured
liabilities, which were £480m at that date.
FINANCIAL STATEMENTS 171
GENUS PLC / ANNUAL REPORT 2023
29. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
The surplus in the fund as a whole, by reference to the 31 March 2021 valuation, was £12m (of which Genus’s notional share was £10m).
Reflecting the improvement in the funding position, with effect from 1 September 2021 no deficit repair contributions are payable
but funding the scheme’s operating expenses of £1.1m per annum were agreed, rising thereafter by 3.4% per annum until
30 September 2026.
The disclosures required under IAS 19 have been calculated by an independent actuary, based on accurate calculations carried out
as at 31 March 2021 and updated to 30 June 2023.
At 30 June 2023, the MPF was in an overall net pension asset position of £34.6m (2022: £71.4m). However, the Company does not have
the unilateral right to this surplus and therefore in line with IFRIC 14, the recognition of this asset is restricted.
Dalgety Pension Fund (‘DPF’)
The most recent actuarial valuation of the DPF was at 31 March 2021 and was carried out by qualified actuaries.
The principal actuarial assumptions adopted in the 2021 valuation were that:
•
investment returns on existing assets are gilt yields less 0.35% per annum;
• CPI price inflation is expected to be 0.7% per annum lower than RPI price inflation until 2030, then utilising the RPI curve from 2030
onwards; and
• pensions in payment and pensions in deferment would increase in future in line with CPI price inflation, subject to various minimum
and maximum increases.
The market value of the available assets at 31 March 2021 was £938m. The value of those assets represented approximately 100% of the
value of the uninsured liabilities, which were £937m at 31 March 2021. Under the funding agreement, the Company will not have to make
deficit repair contributions.
The disclosures required under IAS 19 have been calculated by an independent actuary, based on accurate calculations carried out
as at 31 March 2021 and updated to 30 June 2023.
At 30 June 2023, the DPF, which includes a £20.5m separate reserve held against future unknown liabilities materialising, was in an
overall net pension asset position of £5.7m (2022: £6.6m). However, the Company does not have the unilateral right to this surplus and
therefore in line with IFRIC 14, the recognition of this asset is restricted.
The primary bulk annuity policy was secured with an insurance company in July 1999, which matched the benefit entitlement of almost
all of the fund’s current and deferred pension liabilities at that time. The value of the policy and related liabilities at 30 June 2023 was
£463m (2022: £528m). We do not have any legal rights to any surplus relating to these bulk annuity policies.
National Pig Development Company Pension Fund (‘NPD’)
The Group operates a closed defined benefit scheme for a small number of former employees of the National Pig Development
Company Limited. The total market value of scheme assets and liabilities at 30 June 2023, under the provisions of IAS 19, were £5.0m
(2022: £5.4m) and £4.8m (2022: £5.5m), respectively.
The most recent actuarial triennial valuation of the NPD was at 30 June 2020 and was carried out by qualified actuaries. The valuation
has been agreed by the trustees.
The principal actuarial assumptions adopted in the 2020 valuation were that:
•
investment returns on existing assets are gilt yields less 0.35% per annum;
• CPI price inflation is expected to be 0.5% per annum lower than RPI price inflation; and
• pensions in payment and pensions in deferment would increase in future in line with CPI price inflation, subject to various minimum and
maximum increases.
The market value of the available assets at 30 June 2020 was £6.1m. The value of those assets represented approximately 68% of the
value of the uninsured liabilities, which were £9.0m at 30 June 2020. Under the trustee prepared schedule of contributions, Genus is
required to make deficit repair contributions of £500,000 per annum commencing 1 July 2021.
The disclosures required under IAS 19 have been calculated by an independent actuary, based on accurate calculations carried out as
at 30 June 2020 and updated to 30 June 2023.
Other unfunded schemes
When the Group acquired Sygen International plc in 2005, it also acquired three unfunded defined benefit schemes and an unfunded
retirement health benefit plan, which it now operates for the benefit of the previous Group’s senior employees and Executives.
Unfunded defined benefits schemes
The scheme liabilities for the three unfunded defined benefit schemes amounted to £4.6m (2022: £6.1m), based on IAS 19’s methods and
assumptions. This amount is included within pension liabilities in the Group Balance Sheet. It also operates several unfunded defined
benefits which amounted to £2.0m (2022: £1.6m). Interest on pension scheme liabilities amounted to £0.2m (2022: £0.2m). The disclosures
required under IAS 19 have been calculated by an independent actuary, using the principal assumptions used to calculate the scheme
liabilities as for the defined benefit schemes.
FINANCIAL STATEMENTS 172
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
29. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
Post-retirement healthcare
The scheme liabilities for the unfunded retirement health benefit plan amounted to £0.5m (2022: £0.6m), based on IAS 19’s methods
and assumptions. This amount is included within retirement benefit obligations in the Group Balance Sheet. Interest on plan liabilities
amounted to £nil (2022: £nil).
The principal assumptions used to calculate the plan liabilities were that the discount rate would be 5.25% (2022: 3.90%) and that the
long-term rate of medical expense inflation would be 7.05% (2022: 6.90%).
Aggregated position of defined benefit schemes
Present value of funded obligations (includes Genus’s 86% share of MPF (2022: 86%))
Present value of unfunded obligations
Total present value of obligations
Fair value of plan assets (includes Genus’s 86% share of MPF (2022: 86%))
Restricted recognition of asset (MPF and DPF)
Recognition of additional liability (MPF)
Recognised liability for defined benefit obligations
2023
£m
746.8
7.4
754.2
(787.6)
40.3
–
6.9
2022
£m
857.6
8.4
866.0
(936.3)
78.6
–
8.3
Each of the defined benefit schemes manages risks through a variety of methods and strategies, including equity protection, to limit
the downside risk of falls in equity markets, as well as inflation and interest rate hedging. By funding its defined benefits schemes, the
Group is exposed to the risk that the cost of meeting its obligations is higher than anticipated. This could occur for several reasons,
for example:
•
Investment returns on the schemes’ assets may be lower than anticipated, especially if falls in asset values are not matched by similar
falls in the value of the schemes’ liabilities.
• The level of price inflation may be higher than that assumed, resulting in higher payments from the schemes.
• Scheme members may live longer than assumed, for example due to advances in healthcare. Members may also exercise (or not exercise)
options in a way that leads to increases in the schemes’ liabilities, for example through early retirement or commutation of pension
for cash.
• Legislative changes could also lead to an increase in the schemes’ liabilities.
Aggregated position of defined benefit schemes
The fair value of the total plan assets at the end of the reporting period for each category is as follows:
Equities
Diversified growth funds
Liability driven investments
Gilts and corporate bonds
Cash
Property
Direct lending
Bulk annuity policy
Level 1
£m
Level 2
£m
Level 3
£m
2023
£m
–
–
–
–
1.6
2.4
–
–
4.0
16.3
46.1
108.4
73.0
3.6
–
2.9
–
250.3
–
–
–
–
–
22.8
34.3
476.1
533.2
16.3
46.1
108.4
73.0
5.2
25.3
37.2
476.1
787.6
Level 1
£m
–
–
–
–
4.3
2.7
–
–
7.0
Level 2
£m
Level 3
£m
2022
£m
28.1
59.5
122.3
100.5
4.3
–
2.5
–
317.2
–
–
–
–
–
35.4
32.8
543.9
612.1
28.1
59.5
122.3
100.5
8.6
38.1
35.3
543.9
936.3
Note:
Level 1: valued using unadjusted quoted prices in active markets for identical financial instruments.
Level 2: valued using techniques based on information that can be obtained from observable market data.
Level 3: valued using techniques incorporating information other than observable market data.
Movement in the liability for defined benefit obligations
Liability for defined benefit obligations at the start of the year (including the bulk annuity policy (DPF))
Benefits paid by the plans
Current service costs and interest
Actuarial (gains)/losses recognised on fund liabilities arising from changes in demographic assumptions
Actuarial gains recognised on fund liabilities arising from changes in financial assumptions
Actuarial losses recognised on fund liabilities arising from experience (other)
Past service cost
Exchange rate adjustment
Liability for defined benefit obligations at the end of year
2023
£m
866.0
(56.3)
32.6
(15.2)
(104.0)
31.0
–
0.1
754.2
2022
£m
1,106.6
(55.7)
20.7
7.0
(220.0)
6.1
0.4
0.9
866.0
FINANCIAL STATEMENTS 173
GENUS PLC / ANNUAL REPORT 2023
29. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
Movement in plan assets
Fair value of plan assets at the start of the year (including the bulk annuity policy (DPF))
Administration expenses
Contributions paid into the plans
Benefits paid by the plans
Interest income on plan assets
Actuarial losses recognised in equity
Fair value of plan assets at the end of the year
Aggregated position of defined benefit schemes
Summary of movements in Group deficit during the year
Deficit in schemes at the start of the year
Administration expenses
Exceptional cost
Contributions paid into the plans
Net pension finance cost
Actuarial (losses)/gains recognised during the year
Movement in restriction of assets
Release of additional liability
Exchange rate adjustment
Deficit in schemes at the end of the year
Amounts recognised in the Group Income Statement
Administrative expenses
Interest obligation
Interest income on plan assets
Interest on additional liability
Exceptional cost
The expense is recognised in the following line items in the Group Income Statement
Administrative expenses
Exceptional cost
Net finance charge
Actuarial losses/(gains) recognised in the Group Statement of Comprehensive Income
Cumulative loss at the start of the year
Actuarial losses/(gains) recognised during the year
Movement in restriction of assets
Release of additional liability
Exchange rate adjustment
Cumulative loss at the end of the year
2023
£m
936.3
(0.7)
1.5
(56.3)
35.4
(128.6)
2022
£m
1,147.2
(0.4)
3.5
(55.7)
21.3
(179.6)
787.6
936.3
2023
£m
(8.3)
(0.7)
–
1.5
(0.2)
(40.4)
38.3
3.0
(0.1)
(6.9)
2023
£m
0.7
32.6
(35.4)
3.0
–
0.9
2023
£m
0.7
–
0.2
0.9
2023
£m
60.0
40.4
(38.3)
(3.0)
0.1
59.2
2022
£m
(11.1)
(0.4)
(0.4)
3.5
(0.2)
27.3
(69.8)
43.7
(0.9)
(8.3)
2022
£m
0.4
20.7
(21.3)
0.8
0.4
1.0
2022
£m
0.4
0.4
0.2
1.0
2022
£m
60.3
(27.3)
69.8
(43.7)
0.9
60.0
FINANCIAL STATEMENTS 174
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
29. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
Actuarial assumptions and sensitivity analysis
Principal actuarial assumptions (expressed as weighted averages) are:
Discount rate
Consumer Price Index
Retail Price Index
2023
2022
5.25%
2.65%
3.05%
3.90%
2.40%
2.90%
The mortality assumptions used are consistent with those recommended by the schemes’ actuaries and reflect the latest
available tables, adjusted for the experience of the scheme where appropriate. For 2023, the mortality tables used are 100% of the
S3PMA (males)/S3PFA_M (females) all lives tables, with birth year and CMI 2022 projections with parameters of Sk=7.0 and A=0.5% and
weighting parameters of w2020=0%, w2021=0% and w2022=25%, subject to a long-term rate of improvement of 1.50% per annum for
males and females and for 2022, the mortality tables used are 100% of the S3PMA (males)/S3PFA_M (females) all lives tables, with birth
year and 2021 CMI projections with a smoothing parameter of Sk=7.0 and A=0.5%, subject to a long-term rate of improvement of 1.5%
per annum for males and females.
Aggregated position of defined benefit schemes
The following table shows the assumptions used for all schemes and illustrates the life expectancy of an average member retiring
at age 65 at the balance sheet date and a member reaching age 65 in 20 years’ time.
Retiring at balance sheet date at age 65
Retiring at age 65 in 20 years’ time
Duration of benefit obligations
Weighted average duration of the defined benefit obligations
Weighted average duration of the defined benefit obligations,
excluding defined benefit obligations backed by purchased annuities
Male
Female
Male
Female
2023
Years
22.1
24.0
23.7
25.8
2023
Years
10.1
12.4
2022
Years
22.6
24.4
24.2
26.2
2022
Years
11.4
14.3
Sensitivity analysis
Measurement of the Group’s defined benefit obligation is sensitive to changes in certain key assumptions. The sensitivity analysis below
shows how a reasonably possible increase or decrease in a particular assumption would, in isolation, result in an increase or decrease
in the present value of the defined benefit obligation as at 30 June 2023. We have included additional sensitivity analysis, which
excludes the value of our defined benefit obligations backed by purchased annuities, as the asset value is the deemed present value
of obligations, with no movement to the overall scheme deficits. Given recent market volatility due to the impact of COVID-19 and the
conflict in Ukraine, we continue to use a sensitivity analysis of 0.5%.
Discount rate
Rate of inflation
Life expectancy
Decrease
by 0.5%
£m
Increase
by 0.5%
£m
Decrease
by 0.5%
£m
Increase
by 0.5%
£m
Decrease
by 1 year
£m
Increase
by 1 year
£m
Increase/(decrease) in present value of defined obligation
44.1
(41.7)
(35.3)
30.6
(28.5)
28.5
Excluding purchased annuity obligations
increase/(decrease) in present value of defined obligation
16.3
(15.4)
(13.0)
11.3
(10.5)
10.5
The sensitivity analysis may not be representative of an actual change in the defined benefit obligation, as it is unlikely that changes
in assumptions would occur in isolation from one another.
The sensitivities assume the funds’ assets remain unchanged. However, in practice changes in interest rates and inflation will also affect
the value of the funds’ assets. The funds’ investment strategy is to hold matching assets with values that move in line with the liabilities
of the fund, to protect against changes in interest rates and inflation.
This sensitivity analysis has been prepared using the same method adopted when adjusting results of the latest funding valuation to the
balance sheet date. This is the same approach adopted in previous periods.
The history of experience adjustment is as follows:
Present value of the defined benefit obligation
Fair value of plan assets
Restrict recognition of asset and recognition of additional liability
Deficit in the plans
Experience adjustments arising on plan liabilities (%)
Experience adjustments arising on plan assets (%)
2023
£m
754.2
(787.6)
40.3
6.9
17.2
16.3
2022
£m
866.0
(936.3)
78.6
8.3
21.0
19.3
2021
£m
2020
£m
2019
£m
1,106.6
(1,147.2)
51.7
1,169.3
(1,182.5)
31.3
1,179.5
(1,201.1)
45.8
11.1
2.1
2.4
18.1
1.8
1.6
24.2
4.8
2.5
FINANCIAL STATEMENTS 175
GENUS PLC / ANNUAL REPORT 2023
30. SHARE-BASED PAYMENTS
We have a number of share plans used to award shares to Directors and senior management as part of their remuneration. To record
the cost of these, a charge is recognised over the vesting period in the Group Income Statement, based on the fair value of the award
on the date of grant.
Accounting policies
We recognise the fair value of share awards and options granted as an employee expense, with a corresponding increase in equity.
We measure the fair value at the grant date and spread it over the vesting period of each option. We use a binomial valuation model to
measure the fair value of options and a Black-Scholes valuation model to measure the fair value of share awards. We adjust the amount
we recognise as an expense, to reflect the estimated performance against non-market related conditions and the number of share
awards and options that actually vest at the end of the vesting period.
The Group recognised a total share-based payment expense of £6.0m (2022: £3.7m), including National Insurance contributions credit
of £0.4m (2022: £0.1m charge).
Share awards
There were 821,681 conditional share awards outstanding at 30 June 2023. These conditional shares were awarded to Executive
Directors and senior management under the 2014 and 2019 Performance Share Plans. In accordance with the plan’s terms, participants
have received a conditional annual award of shares or nil cost option awards, which will normally vest after three years, with the
proportion of the award vesting depending on growth in the Group’s adjusted earnings per share. Further details of the plan’s
performance conditions are given in the Directors’ Remuneration Report.
During the year ended 30 June 2023:
• 409,595 awards were granted on 14 September 2022, 28 September 2022, 10 October 2022, 11 November 2022 and 12 December 2022
with an aggregate fair value of £10,565,000. The fair value of services received in return for share awards granted is based on the fair
value of share awards granted, measured using a Black-Scholes valuation model. At the date of grant, the fair value of a share
awarded was £25.79, based on an expected dividend yield of 1.51%.
• 126,935 awards in total were granted on 2 May 2023, with an aggregate fair value of £3,346,000. The fair value of services received in
return for share awards granted is based on the fair value of share awards granted, measured using a Black-Scholes valuation model.
At the date of grant, the aggregate fair value of a share awarded was £26.36, based on an expected dividend yield of 1.16%.
Outstanding at the start of year
Exercised during the year
Forfeited during the year
Granted during the year
Outstanding at 30 June
Exercisable at 30 June
Number of
awards
2023
Number of
awards
2022
560,511
(137,998)
(137,362)
536,530
821,681
13,764
665,522
(205,010)
(37,819)
137,818
560,511
17,605
Bonus and restricted stock share awards
In addition to the outstanding share awards above, there were 48,728 bonus and restricted stock share awards outstanding at 30 June
2023. The bonus shares were awarded to Executive Directors and senior management as part of the compulsory deferred bonus, and
restricted stock share awards were granted to senior management in connection with recruitment. In accordance with the awards’
terms, participants have received a conditional annual bonus award of shares or nil cost option awards, which will normally vest
between one and three years after award, providing the participant is employed by the Group at that time.
In the year ended 30 June 2023, 8,153 bonus share awards were granted on 14 September 2022, with an aggregate fair value of £209,000.
Outstanding at the start of year
Exercised during the year
Forfeited during the year
Granted during the year
Outstanding at 30 June
Exercisable at 30 June
Number of
awards
2023
Number of
awards
2022
61,313
(20,738)
–
8,153
48,728
–
72,466
(29,345)
–
18,192
61,313
–
FINANCIAL STATEMENTS 176
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
30. SHARE-BASED PAYMENTS CONTINUED
Share options
On 12 August 2004, the Group established a share option programme that entitles key management and other senior employees to
purchase shares in the Company. Further grants on similar terms were offered to these employee groups as set out below. The terms
and conditions of the grants are as set out below. All options are to be settled by physical delivery of shares and meet the criteria for
being treated as equity settled.
Employees entitled
Grant date
Number of instruments Vesting conditions
Option exercise price
Contractual life of options
2004 Company share plan
26 September 2013
Total share options
3,884
3,884
Exercisable
1,413.00p
10 years
Share options
The number and weighted average exercise prices of share options are as follows:
Outstanding at the start of year
Forfeited during the year
Share appreciation rights effected during the year
Exercised during the year
Outstanding at 30 June
Exercisable at 30 June
Weighted
average
exercise
price
2023
1,400p
1,413p
1,386p
1,387p
1,413p
1,413p
Number of
options
2023
11,430
(1,975)
(2,618)
(2,953)
3,884
3,884
Weighted
average
exercise
price
2022
1,331p
1,374p
1,312p
1,265p
1,400p
1,400P
Number of
options
2022
32,633
(2,755)
(6,328)
(12,120)
11,430
11,430
The options at 30 June 2023 had a weighted average remaining contractual life of 0.2 years (2022: 1.1 years). No share options were
granted during the year (2022: nil). The weighted average share price at the date of exercise during the year was £29.56p (2022: £44.18p).
31. CAPITAL AND RESERVES
Called up share capital is the number of shares in issue at their par value. A number of shares were issued in the year, in relation the
employee share schemes.
Accounting policies
Equity instruments issued by the Group are recorded at the amounts of the proceeds received, net of direct issuance costs.
Own shares
We include the transactions, assets and liabilities of the Group-sponsored Qualifying Employee Share Ownership Trust (‘QUEST’) in the
Group Financial Statements. In particular, the trust’s purchases of the Company’s shares are deducted from shareholders’ funds until
they vest unconditionally with employees.
Share capital
Issued and fully paid
Ordinary shares of 10 pence
There is no authorised share capital limit.
2023
Number
2022
Number
2023
£m
2022
£m
66,027,210
65,773,620
6.6
6.6
The holders of ordinary shares are entitled to receive dividends, as declared from time to time.
The movement in share capital for the period was as follows:
Issued under the Executive Share Option Plan
Issued to Employee Benefit Trust
Issued to Genus plc Share Incentive Plan
2023
Number
2022
Number
2023
£m
2022
£m
2,953
250,000
637
253,590
12,120
–
–
12,120
–
–
–
–
–
–
–
–
Shares issued under the Executive Share Option Plan were issued at option prices as follows:
Executive Share Option Plan
2023
Number
2023
Option price
2022
2022
Number
Option price
–
983
1,970
2,953
–
1334.00p
1413.00p
2,837
7,027
2,256
977.83p
1334.00p
1413.00p
12,120
FINANCIAL STATEMENTS 177
GENUS PLC / ANNUAL REPORT 2023
31. CAPITAL AND RESERVES CONTINUED
Reserve for own shares
The Company’s shares are held by a QUEST, which is an employee benefit trust established to facilitate the operation of our long-term
incentive scheme for senior management. The reserve amount represents the deduction in arriving at shareholders’ funds for the
consideration the trust paid for the Company’s shares, which had not vested unconditionally at the balance sheet date. The number
and market value of the ordinary shares held by the Employee Benefit Trust and the QUEST were:
Shares allocated but not vested
Unallocated shares
2023
Number
2022
Number
375,998
92,334
280,803
92,334
468,332
373,137
2023
£m
8.1
2.0
10.1
2022
£m
7.1
2.3
9.4
The shares have a nominal value of £46,833 (2022: £37,314).
Translation reserve
The translation reserve comprises all foreign currency differences arising from translating the financial statements of our foreign operations.
The Group uses foreign currency denominated borrowings of £41.0m (2022: £32.3m) as a hedge against the translation exposure on
the Group’s net investment in overseas companies. Where the hedge is fully effective at hedging the variability in the net assets of
such companies caused by changes in exchange rates, the changes in value of the borrowings are recognised in the Consolidated
Statement of Comprehensive Income and accumulated in the hedging and translation reserves. The ineffective part of any change
in value caused by changes in exchange rates is recognised in the Consolidated Income Statement.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments,
net of taxation.
Hedging and translation reserves
Balance at 30 June 2021
Exchange differences on translation of overseas operations
Gain recognised on net investment hedges
Loss recognised on cash flow hedges – interest rate swaps and cross currency swaps
Income tax related to net losses recognised in other comprehensive income
Balance at 30 June 2022
Exchange differences on translation of overseas operations
Gain recognised on net investment hedges
Loss recognised on cash flow hedges – interest rate swaps and cross currency swaps
Income tax related to net losses recognised in other comprehensive income
Balance at 30 June 2023
Hedging
reserve
Translation
reserve
£m
–
–
–
1.9
(0.5)
1.4
–
–
0.8
(0.2)
2.0
£m
(7.9)
67.2
(0.7)
–
(7.7)
50.9
(27.5)
–
–
3.3
26.7
FINANCIAL STATEMENTS 178
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
32. NOTES TO THE CASH FLOW STATEMENT
Profit for the year
Adjustment for:
Net IAS 41 valuation movement on biological assets
Amortisation of acquired intangible assets
Share-based payment expense
Share of profit of joint ventures and associates
Other gains and losses
Finance costs (net)
Income tax expense
Exceptional items (net)
Adjusted operating profit from continuing operations
Depreciation of property, plant and equipment
Loss on disposal of plant and equipment
Amortisation and impairment of intangible assets
Adjusted earnings before interest, tax, depreciation and amortisation
Cash impact of exceptional items relating to operating activities
Other movements in biological assets and harvested produce
Decrease in provisions
Additional pension contributions in excess of pension charge
Other
Operating cash flows before movement in working capital
Increase in inventories
Increase in receivables
Increase in payables
Cash generated by operations
Interest received
Interest and other finance costs paid
Interest on leased assets
Cash flow from derivative financial instruments
Income taxes paid
Net cash from operating activities
Analysis of net debt
Total changes in liabilities due to financing activities are as follows:
Cash and cash equivalents (see note 22)
Interest-bearing loans – current (see note 27)
Lease liabilities – current (see note 28)
Interest-bearing loans – non-current (see note 27)
Lease liabilities – non-current (see note 28)
Total debt financing
Net debt
2023
£m
31.8
16.9
7.7
6.0
(10.5)
(2.7)
14.3
7.6
3.5
74.6
30.2
0.1
5.7
110.6
(7.1)
(11.1)
(1.0)
(0.6)
0.2
91.0
(9.6)
(9.3)
6.6
78.7
0.1
(10.7)
(1.2)
1.3
(17.8)
50.4
2022
£m
36.7
5.4
8.3
3.7
(5.2)
–
6.2
11.7
2.0
68.8
26.4
0.4
4.3
99.9
1.1
(19.1)
–
(3.1)
0.2
79.0
(6.1)
(18.5)
2.2
56.6
0.4
(4.0)
(1.1)
(0.1)
(17.5)
34.3
At 1 July
2022
£m
38.8
(7.1)
(10.1)
(17.2)
(182.1)
(24.5)
(206.6)
(223.8)
(185.0)
Net
cash flows
£m
1.3
3.8
11.1
14.9
(17.8)
–
(17.8)
(2.9)
(1.6)
Foreign
exchange
£m
(3.8)
0.2
0.5
0.7
3.9
0.8
4.7
5.4
1.6
Other
non-cash
movements
£m
At 30 June
2023
£m
–
(1.1)
(11.5)
(12.6)
–
1.8
1.8
(10.8)
(10.8)
36.3
(4.2)
(10.0)
(14.2)
(196.0)
(21.9)
(217.9)
(232.1)
(195.8)
Included within non-cash movements is £9.7m in relation to net new leases and £1.1m in the unwinding of debt issue costs.
FINANCIAL STATEMENTS 179
GENUS PLC / ANNUAL REPORT 2023
32. NOTES TO THE CASH FLOW STATEMENT CONTINUED
Cash and cash equivalents (see note 22)
Interest-bearing loans – current (see note 27)
Lease liabilities – current (see note 28)
Interest-bearing loans – non-current (see note 27)
Lease liabilities – non-current (see note 28)
Total debt financing
Net debt
At 1 July
2021
£m
46.0
(13.9)
(9.0)
(22.9)
(109.4)
(19.3)
(128.7)
(151.6)
(105.6)
Net
cash flows
Foreign
exchange
Other
non-cash
movements
£m
(11.0)
8.9
11.3
20.2
(63.1)
–
(63.1)
(42.9)
(53.9)
£m
3.8
(1.2)
(0.7)
(1.9)
(9.6)
(1.6)
(11.2)
(13.1)
(9.3)
£m
–
(0.9)
(11.7)
(12.6)
–
(3.6)
(3.6)
(16.2)
(16.2)
At 30 June
2022
£m
38.8
(7.1)
(10.1)
(17.2)
(182.1)
(24.5)
(206.6)
(223.8)
(185.0)
Included within non-cash movements is £15.3m in relation to net new leases and £0.9m in the unwinding of debt issue costs.
33. OPERATING LEASES
Accounting policies
For short-term leases (those with a term of less than 12 months) and low-value items, we charge the rentals payable to the Income
Statement on a straight-line basis over the lease term.
The Company has elected not to apply IFRS 16 to contracts where the right-of-use asset would be recognised as an intangible asset
(e.g. software licences).
Total of future minimum lease payments under non-cancellable operating leases which expire:
In less than one year
Between one and five years
In more than five years
2023
£m
1.2
1.2
–
2.4
2022
£m
–
–
–
–
34. CAPITAL AND OTHER COMMITMENTS
At 30 June 2023, outstanding contracted capital expenditure amounted to £nil (2022: £nil).
35. CONTINGENCIES AND BANK GUARANTEES
Contingent liabilities are potential future cash outflows, where the likelihood of payments is considered more than remote but is not
considered probable or cannot be measured reliably. Assessing the amount of liabilities that are not probable is highly judgemental.
The retirement benefit obligations referred to in note 29 include obligations relating to the MPF defined benefit scheme. Genus, together
with other participating employers, is joint and severally liable for the scheme’s obligations. Genus has accounted for its section and its
share of any orphan assets and liabilities, collectively representing approximately 86% (2022: 86%) of the MPF. As a result of the joint and
several liability, Genus has a contingent liability for the scheme’s obligations that it has not accounted for. The total deficit of the MPF
from the most recent triennial valuation can be found in note 29.
As described in note 7, the Group is involved in ongoing litigation proceedings and investigations with ST that are at various legal
stages. The Group makes a provision for amounts to the extent where an outflow of economic benefit is probable and can be reliably
estimated. However, there are specific claims identified in the litigation where the Group considers the outcome of the claim is not
probable and will not result in the outflow of economic benefit.
The Group’s future tax charge and effective tax rate could be affected by factors such as countries reforming their tax legislation to
implement the OECD’s BEPS recommendations and by European Commission initiatives including state aid investigations. Further
information can be found in note 11.
At 30 June 2023, we had entered into bank guarantees totalling £12.6m (2022: £20.2m).
FINANCIAL STATEMENTS 180
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
36. DIRECTORS AND KEY MANAGEMENT COMPENSATION
In accordance with IAS 24 ‘Related Party Disclosures’, key management personnel are those having authority and responsibility for
planning, directing and controlling the activities of the Group, directly or indirectly. Key management personnel comprise the Directors
and the other members of GELT.
Salaries and short-term employee benefits
Post-employment benefits
Share-based payment expense
Directors
Further details of Directors’ compensation are included in the Directors’ Remuneration Report.
Other transactions with key management personnel
Other than remuneration, there were no transactions with key management personnel.
2023
£m
5.4
0.2
3.0
8.6
2022
£m
4.9
0.2
1.2
6.3
37. GROUP ENTITIES
In accordance with section 409 of the Companies Act 2006, a list of subsidiaries and joint ventures and associates as at 30 June 2023 is
set out below. All subsidiary undertakings are subsidiary undertakings of their immediate parent undertaking(s), unless otherwise indicated.
Nature of business
Bovine
Name of undertaking
Registered address
ABS (Beijing) International
Trade Co., Ltd.
B1608, Lucky Tower, East5 3rd Ring Road,
Chaoyang District, Beijing, 100027, China
Country of
incorporation
Direct/
indirect
Group
interest
China
Indirect
% of share
capital/
voting rights
held by
Group
companies
100%
Share class
No Par Value
Common
Stock
ABS Argentina S.A.
ABS Chile Limitada
A. Castellanos 1169, (3080) Esperanza,
Sante Fe, Argentina
Argentina
Direct ARS1 Ordinary
100%
Avenida del Parque #4161 office #601, Huechuraba,
Santiago, Chile
Chile
Direct
CLP1
Common
Stock
100%
ABS Genetics South Africa
(Pty) Ltd
Prestige Park Block B, Unit No. 5B, Pastorale Street,
Durbanville Industrial Park, Durbanville, 7550,
South Africa
South Africa
Indirect ZAR1 Ordinary
100%
ABS Global (Canada) Inc.
1525 Floradale Road, Elmira ON N3B 2Z1, Canada
Canada
Indirect
ABS Global, Inc.
1525 River Road, De Forest WI 53532, United States
United States
Indirect
CAD1
Ordinary
USD0.01
Common
100%
100%
ABS Italia S.r.l.
ABS México, S.A. de C.V.
Via Bastida nr. 6, loc. Cavatigozzi, 26020,
Cremona, Italy
Kansas No. 2028, Quintas Campestre, 31214,
Chihuahua, Chih., Mexico
Italy
Indirect
€1 Quota
100%
Mexico
Direct
ABS Polska Sp. z o.o.
Szafirowa 22A, 82-300 Gronowo Górne, Poland
Poland
Indirect
Bovec SASU
69 Chemin des Molières, PA du Charpenay, 69210,
Lentilly, France
France
Indirect
€10 Ordinary
100%
Chitale Genus ABS (India)
Private Limited
Gat No 29, Bramha Facility, Burungwadi Near
Bhilawadi Railway Station, Taluka Palus,Maharashtra,
Sangli, 416303, India
India
Indirect
INR100
Ordinary
50%1
De Novo Genetics LLC
1286 Oriole Drive, New Albin IA 52160, United States
United States
Indirect
Genus ABS (NZ) Limited
Generate Accounting Group Limited, Level 2, 22
Dundonald Street, Eden Terrace, Auckland, 1021,
New Zealand
New Zealand
Indirect
Genus ABS Colombia SAS
Avenida Carrera 70, No. 105 – 51, Bogota, Colombia
Colombia
Indirect
No Par Value
LLC Units
NZD1
Ordinary
COP10,000
Ordinary
51%
100%
100%
MXN10
Class 1
MXN10
Class 2
PLN1,000
Ordinary
100%
100%
FINANCIAL STATEMENTS 181
GENUS PLC / ANNUAL REPORT 2023
37. GROUP ENTITIES CONTINUED
Nature of business
Bovine
Name of undertaking
Registered address
Country of
incorporation
Direct/
indirect
Group
interest
Share class
Genus ABS Netherlands B.V.
Hoogoorddreef 15, Amsterdam, 1101BA, Netherlands
Netherlands
Indirect EUR1 Ordinary
Genus Australia Pty Ltd
15 Scholar drive, Bundoora VIC 3063, Australia
Australia
Indirect
AUD1.388
Ordinary
% of share
capital/
voting rights
held by
Group
companies
100%
100%
Genus Breeding India Private
Limited
5th FLOOR, C WING, ETERNIA PREMISES CO-OP SOC,
NEAR DA UNIT NO 505, 506, DAGDI BUNGLOW,
WAKDEWADI,Maharashtra, Pune, 411005, India
India
Indirect
INR1 Ordinary
100%
Genus Breeding Limited
(01192037)2
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
UK
Direct
£1 Ordinary
100%
‘Genus Ukraine’ LLC
Pidlisna str., 1, KYIV 03164, Ukraine
Ukraine
Indirect
JBI Genetics LLC
130 North Kelsey Street, Visalia CA 93291,
United States
United States
Indirect
LLC Genus ABS Rus
Zheleznodorozhnaya Street, House 51, Letter Zh,
Premises 2, 300062, Tula, Russian Federation
Russia
Indirect
No Par Value
Common
Stock
No Par Value
Common
Stock
RUB1
Ordinary
100%
100%
100%
Millwood Products Ltd
(08662101)2
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
United
Kingdom
Indirect
£1 Ordinary
100%
Pecplan ABS Imp. e Exp. Ltda. Rod. BR 050 Km 196 + 150metros, Zona Rural, Delta,
Brazil
Indirect BRL1 Ordinary
100%
MG – 38108-000, Brazil
St Jacobs Animal
Breeding Corp.
1525 River Road, De Forest WI 53532, United States
United States
Indirect
Zitery S.A.
Maximo Tajes 7189, Uruguay
Uruguay
Indirect
No Par Value
Common
No Par Value
Common
100%
100%
Nature of business
Porcine
Name of undertaking
Registered address
Agroceres PIC Genética
de Suínos Ltda
Rua 1 JN, n˚ 1411, Sala 16 – Jardim Novo, Rio Claro/SP
– CEP, 13.502-741, Brazil
Agroceres PIC Suínos Ltda
Rua 1 JN, n˚ 1411, Sala 17 – Jardim Novo, Rio Claro/SP
– CEP, 13.502-741, Brazil
Country of
incorporation
Direct/
indirect
Group
interest
Brazil
Indirect
Brazil
Indirect
Share class
BRL1
Ordinary
BRL1
Ordinary
GENEETIC Service S.R.L.
Viale Europa 71, 32100, Belluno, Italy
Italy
Indirect
€1 Ordinary
Inner Mongolia Genus
Biotechnology Co., Ltd
3rd Floor, Building A-15 North, Intelligent
Manufacturing Industrial Park, Inner Mongolia,
Helinger New Area, China
Inner Mongolia Haoxiang Pig
Breeding Co. Ltd
Jintang Village, Jinding Town, Zhidan County,
Yan An Municipality, Shaanxi Province, China
Gunzigou Village, Gao Guan Town, Benxi County,
Benxi City, Liaoning Province, China
China
Indirect
CNY1
Ordinary
China
Indirect No Par Value
Common
China
Indirect
CNY1
Ordinary
Liao Ning PIC Agriculture
Science and Technology
Co., Ltd
PIC (Shanghai) Agriculture
Science and Technology
Company Limited
PIC (Zhangjiagang) Pig
Improvement Co., Ltd.
Room 702-5, No. 719 Shen Gui Road,
Min Hang District, Shangha, China
China
Indirect No Par Value
Common
Office 1210, International Finance Tower,
20 Jingang Road, Zhangjiagang Bonded Zone,
Zhangjiagang City, Jiangsu Province, China
China
Indirect
USD1
Ordinary
PIC Andina SpA
Avenida del Parque #4161 office #601, Huechuraba,
Santiago, Chile
Chile
Indirect
CLP1
100%
Ordinary
% of share
capital/voting
rights held by
Group
companies
49%1
49%1
33%1
100%
49%1
100%
100%
100%
FINANCIAL STATEMENTS 182
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
37. GROUP ENTITIES CONTINUED
Nature of business
Porcine
Name of undertaking
Registered address
Country of
incorporation
Direct/
indirect
Group
interest
PIC Ankang Agriculture Science
and Technology Co., Ltd.
Shishubian village, Hanbin District, Shaanxi Province,
Ankang, China
China
Indirect
PIC Canada Ltd.
Borden Ladner Gervais LLP, 1900-520, 3rd Avenue,
S.W., Calgary, Alberta T2P OR3, Canada
Canada
Indirect
Share class
CNY1
Ordinary
CAD1
Ordinary
PIC France SA
69 Chemin des Molières, 69210, Lentilly, France
France
Indirect €17 Ordinary
PIC Genetics Designated
Activity Company
Riverside One, Sir John Rogerson’s Quay,
Dublin 2, Ireland
Ireland
Indirect
PIC Genetics LLC
79 Narodnyy Boulevard, 308000, Belgorod,
Russian Federation
Russia
Indirect
€1.27
Ordinary
€1.27
Redeemable
preference
shares
RUB1
Ordinary
Pig Improvement Company
de México, S. de R.L. de C.V.
Wenceslao de la Barquera No.7, Col. Villas del Sur,
76040 Queretaro, Queretaro, Mexico
Mexico
PIG Improvement Company
Deutschland GmbH
Jathostraße 11a, D-30163 Hannover, Germany
Germany
Indirect No Par Value
Common
Stock
Indirect No Par Value
Common
Stock
% of share
capital/voting
rights held by
Group
companies
100%
100%
100%
100%
100%
100%
100%
Pig Improvement Company
España, S.A.
C/Pau Vila, 22 20 puerta 6, 08174 Sant Cugat del
Valles, Barcelona, Spain
Spain
Indirect €25 Ordinary
100%
Pig Improvement Company
UK Limited (00716304)2
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
UK
Indirect
£0.10
Ordinary
100%
Strada dei Loggi 22, 06135, Ponte San Giovanni,
Perugia, Italy
Italy
Indirect
€1 Ordinary
85%
PIC Italia S.r.l.
PIC Philippines, Inc.
PIC USA, Inc.
Unit 2101-2103 and 2203, Jollibee Plaza, F. Ortigas,
Jr. Rd., Ortigas Center, Pasig City, 1605, Philippines
Philippines
Indirect
100 BlueGrass Commons Blvd, Suite 2200,
Hendersonville, TN 37075, United States
United States
Indirect
RenOVAte Biosciences, Inc.
6874 Caravan Ct, Columbia MD 21044, United States United States
Direct
PHP100
Ordinary
USD1
Ordinary
USD0.001
Series Seed
Preferred
100%
100%
33%1
100%
Reprodutores PIC, Lda
Av. Eng. Duarte Pacheo, Amoreiras, Torre 2 – 140A,
1070-102 Lisboa, Portugal
Portugal
Indirect No Par Value
Common
Stock
Società Agricola GENEETIC
S.R.L.
Shaanxi PIC Pig Improvement
Co., Ltd.
Yan’an Xinyongxiang
Agriculture Technology
Co., Ltd.
Nature of business
Other
Via Marche n. 2, 42122, Reggion Emilia, Italy
Italy
Indirect
€1 Ordinary
33%1
12105, 21st floor, Yun tian Building, 12 Feng Cheng
Second Street, Xian Economic Development District,
Xian City, Shaanxi Province, China
Jintang Village, Jianjun Town Zhidan County, Yan An
Municipality, in Shaanxi Province, China
China
China
Indirect No Par Value
Common
Stock
Indirect No Par Value
Common
Stock
100%
49%1
Name of undertaking
Registered address
Accounting & Managerial
Services S. de R.L. de C.V.
Kansas No. 2028, Quintas Campestre, 31214,
Chihuahua,Chih., Mexico
Country of
incorporation
Direct/
indirect
Group
interest
% of share
capital/voting
rights held by
Group
companies
Share class
Mexico
Indirect MXN1 Class 1
96%
ABS International, Inc.
1525 River Road, De Forest WI 53532, United States
United States
Indirect
USD1
Ordinary
100%
FINANCIAL STATEMENTS 183
GENUS PLC / ANNUAL REPORT 2023
37. GROUP ENTITIES CONTINUED
Nature of business
Other
Name of undertaking
Registered address
Country of
incorporation
Direct/
indirect
Group
interest
Brazil
Direct
Share class
BRL1
Ordinary
% of share
capital/voting
rights held by
Group
companies
100%
100%
ABS Pecplan Ltda.
Agence Spillers N.V.
Rod. BR 050 Km 196 + 150metros, Zona Rural, Delta,
MG – 38108-000, Brazil
Place Saint-Lambert 14, 1200 Woluwe-Saint-Lambert,
Belgium
Belgium
Indirect No Par Value
Common
Stock
Brazilian Holdings Limited
(00479048)2
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
Brazilian Properties Limited
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
Busby Participações Ltda.
Av. Leopoldino de Oliveira, 4.113, Sala 303, Centro,
CEP: 38010-000, UBERABA-MG
Cannavarro Participações
Ltda.
Av. Leopoldino de Oliveira, 4.113, Sala 303, Centro,
CEP: 38010-000, UBERABA-MG
Dalco Exportadora Ltda.
Av. Leopoldino de Oliveira, 4113 – Sala 303, Uberaba,
Minas Gerais, CEP 38010-000, Brazil
UK
Indirect
£1 Ordinary
100%
UK
Direct
£1 Ordinary
100%
Brazil
Indirect
Brazil
Indirect
Brazil
Indirect
BRL1
Ordinary
BRL1
Ordinary
BRL1
Ordinary
100%
100%
100%
Dalgety Pension Trust Limited Matrix House, Basing View, Basingstoke, Hampshire,
UK
Indirect
£1 Ordinary
100%
RG21 4DZ, United Kingdom
Fyfield (SM) Limited (01026475)2 Matrix House, Basing View, Basingstoke, Hampshire,
UK
Indirect
£1 Ordinary
100%
RG21 4DZ, United Kingdom
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
UK
Indirect
£1 Ordinary
100%
Fyfield Dormant
Fyfield Holland B.V.
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
Netherlands
Indirect
Fyfield Ireland Limited
Riverside One, Sir John Rogerson’s Quay,
Dublin 2, Ireland
Ireland
Indirect
100%
100%
NLG100
Ordinary
€1.25 ‘A’
Ordinary
€1.25 ‘B’
Ordinary
Genus Investments Limited
(02028517)2
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
Genus Quest Trustees Limited Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
UK
UK
Direct
£1 Ordinary
100%
Direct
£1 Ordinary
100%
Genus R&D, Inc.
1525 River Road, De Forest WI 53532, United States
United States
Indirect
US$0.01
Common
100%
Genus Trustees Limited
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
UK
Direct
£1 Ordinary
100%
GIL Finance S.à.r.l.
121 Avenue de la Faiencerie, L – 1511, Luxembourg
Luxembourg
Indirect
PIC Do Brasil Empreendimentos
e Participações Ltda.
Rua 1 JN, no. 1411, Sala 13, Jardim Novo, Rio Claro,
Estado De São Paulo, CEP 13.502.741, Brazil
Brazil
Indirect
USD1
Ordinary
BRL0.01
Ordinary
100%
100%
PIC Fyfield Limited (00019739)2 Matrix House, Basing View, Basingstoke, Hampshire,
UK
Indirect
£1 Ordinary
100%
RG21 4DZ, United Kingdom
Pig Improvement Company
Overseas Limited (01583814)2
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
Pigtales Limited (00723762)2
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
Promar International Limited
(03004562)2
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
UK
Indirect
£1 Ordinary
100%
UK
Indirect
£1 Ordinary
100%
UK
Direct
£1 Ordinary
100%
Skogluno Participações Ltda.
Av. Leopoldino de Oliveira, 4.113, Sala 303, Centro,
CEP: 38010-000, UBERABA-MG
Brazil
Indirect
Spillers Limited
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
Spillers Overseas Limited
(00069723)2
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
UK
Indirect
UK
Indirect
BRL1
Ordinary
£0.25
Ordinary
£0.25
Ordinary
100%
100%
100%
FINANCIAL STATEMENTS 184
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
37. GROUP ENTITIES CONTINUED
Nature of business
Other
Name of undertaking
Registered address
Sygen, Inc.
100 BlueGrass Commons Blvd, Suite 2200,
Hendersonville, TN 37075 United States
Country of
incorporation
Direct/
indirect
Group
interest
United States
Indirect
Sygen International Limited
(03215874)2
Matrix House, Basing View, Basingstoke, Hampshire,
RG21 4DZ, United Kingdom
Sygen Investimentos Ltda.
Av. Leopoldino de Oliveira, 4113 – Sala 303, Uberaba,
Minas Gerais, CEP 38010-000, Brazil
UK
Direct
Brazil
Indirect
Usicafé SA
Xelect Limited
c/o Cabinet Mayor, avocats, Rue Jean-Gabriel
Eynard 6, 1205 Genève
Switzerland
Indirect
Horizon House, Abbey Walk, St Andrews, Fife,
Scotland, KY16 9LB
UK
Indirect
1 Associated undertakings including joint venture interests
2 UK subsidiaries taking advantage of the audit exemption within section 479A of the Companies Act 2006
% of share
capital/voting
rights held by
Group
companies
100%
100%
100%
100%
39%1
Share class
USD1
Common
£0.10
Ordinary
BRL0.63
Ordinary
CHF1,000
Ordinary
£0.001
Ordinary
38. DEFERRED CONSIDERATION
Accounting policies
We recognise deferred consideration on the Balance Sheet when a business combination contains a contractual clause that defers
a portion of the purchase price. When the consideration transferred by the Group in a business combination includes a contingent
consideration arrangement, the contingent consideration is measured at its acquisition date fair value and included as part of the
consideration transferred in a business combination. Changes in fair value of the contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments
are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from
the acquisition date) about facts and circumstances that existed at the acquisition date.
Subsequent contingent consideration fair value remeasurements that do not qualify as measurement period adjustments are
recognised in the Income Statement.
Contingent deferred consideration is measured at fair value and the valuation basis is Level 3 classification, where fair value techniques
use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
Balance at 1 July 2021
Business combination
Payment of consideration
Transfer
Effect of movement in exchange rates
Balance at 30 June 2022
Business combination
Payment of consideration
Transfer
Effect of movement in exchange rates
Balance at 30 June 2023
Current
Non-current
Balance at 30 June 2023
Current
Non-current
Balance at 30 June 2022
Contingent
deferred
consideration
£m
Deferred
consideration
£m
1.7
0.1
(0.6)
(0.8)
0.1
0.5
–
–
–
(0.1)
0.4
–
0.4
0.4
–
0.5
0.5
0.4
0.2
(0.4)
0.8
–
1.0
–
(0.8)
–
–
0.2
–
0.2
0.2
0.8
0.2
1.0
Total
£m
2.1
0.3
(1.0)
–
0.1
1.5
–
(0.8)
–
(0.1)
0.6
–
0.6
0.6
0.8
0.7
1.5
FINANCIAL STATEMENTS 185
GENUS PLC / ANNUAL REPORT 2023
38. DEFERRED CONSIDERATION CONTINUED
The balance at 30 June 2023 relates to the following transactions:
Dairy LLC (also known as BoviSync)
T.A.C. – Laboratório de Reprodução Animal Ltda.
Balance at 30 June 2023
39. NON-CONTROLLING INTEREST
Non-controlling interest
Put option over non-controlling interest at inception
Total non-controlling interest
Fiscal year of
transaction
2019
2022
Contingent
deferred
consideration
£m
Deferred
consideration
£m
0.4
–
0.4
–
0.2
0.2
2023
£m
(2.2)
(5.5)
(7.7)
Total
£m
0.4
0.2
0.6
2022
£m
(0.7)
(5.7)
(6.4)
Summarised financial information in respect of each of the Group’s subsidiaries that has a material non-controlling interest is set out
below before intra-Group eliminations.
Revenue
Expenses
Total comprehensive (expense)/income for the year
Total comprehensive (expense)/income attributable to owners of the Company
Total comprehensive (expense)/income attributable to the non-controlling interest
Biological assets
Current assets
Other non-current assets
Current liabilities
Net (liabilities)/assets
Equity attributable to owners of the Company
Non-controlling interest
Dividends of £0.1m were paid to non-controlling interests (2022: £0.1m).
Revenue
Expenses
Total comprehensive (expense)/income for the year
Total comprehensive (expense)/income attributable to owners of the Company
Total comprehensive (expense)/income attributable to the non-controlling interest
Biological assets
Current assets
Other non-current assets
Current liabilities
Net (liabilities)/assets
Equity attributable to owners of the Company
Non-controlling interest
De Novo
Genetics LLC
£m
PIC Italia
S.r.l.
£m
4.1
(7.4)
(3.3)
(1.7)
(1.6)
15.6
–
0.8
(22.9)
(6.5)
4.1
(2.4)
5.1
(4.6)
0.5
0.4
0.1
–
1.7
1.4
(2.0)
1.1
(0.9)
0.2
De Novo
Genetics LLC
£m
PIC Italia
S.r.l.
£m
3.7
(12.6)
(8.9)
(4.5)
(4.4)
15.2
0.9
0.8
(19.6)
(2.7)
1.8
(0.9)
3.4
(2.6)
0.8
0.6
0.2
–
1.0
2.3
(1.8)
1.5
(1.3)
0.2
2023
£m
9.2
(12.0)
(2.8)
(1.3)
(1.5)
15.6
1.7
2.2
(24.9)
(5.4)
3.2
(2.2)
2022
£m
7.1
(15.2)
(8.1)
(3.9)
(4.2)
15.2
1.9
3.1
(21.4)
(1.2)
0.5
(0.7)
FINANCIAL STATEMENTS 186
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
40. RELATED-PARTY TRANSACTIONS
Bomaz, Inc. and Bogz Dairy, LLC, are well-recognised breeders in the industry, and are related parties to the Group as these entities
are under the control of relatives of Nate Zwald, our ABS Dairy COO.
We transact with Bomaz, Inc. and Bogz Dairy, LLC as part of our bull product development effort, under a variety of contracts and
agreements. Payments in 2023 amounted to £1.3m (2022: £1.3m). As at 30 June 2023, the balance owing to these entities was £0.1m
(2022: £nil). All amounts were settled in cash.
These related-party transactions were made on terms equivalent to those that prevail in arm’s length transactions.
FINANCIAL STATEMENTS 187
GENUS PLC / ANNUAL REPORT 2023
PARENT COMPANY BALANCE SHEET
AS AT 30 JUNE 2023
Non-current assets
Intangible assets
Property, plant and equipment
Investments in subsidiaries
Other investments
Other receivables
Derivative financial asset
Deferred tax asset
Current assets
Other receivables
Cash and cash equivalents
Current liabilities
Current payables
Provisions
Net current assets
Total assets less current liabilities
Non-current liabilities
Non-current payables
Provisions
Net assets
Equity
Called up share capital
Share premium account
Own shares
Retained earnings
Hedging reserve
Total equity
Note
C3
C4
C5
C6
C7
C15
C8
C7
C9
C11
C10
C11
C16
2023
£m
2022
£m
11.8
0.9
319.4
4.4
70.9
4.9
6.8
419.1
103.3
1.3
104.6
(59.0)
(0.3)
(59.3)
45.3
9.6
0.9
345.5
2.1
74.0
2.2
2.9
437.2
69.3
1.9
71.2
(65.0)
(0.4)
(65.4)
5.8
464.4
443.0
(196.6)
(0.1)
(196.7)
267.7
6.6
179.1
(0.1)
80.3
1.8
267.7
(183.3)
(0.3)
(183.6)
259.4
6.6
179.1
(0.1)
73.5
0.3
259.4
The Company recognised profit for the year of £20.1m (2022: £31.3m profit).
The Financial Statements were approved and authorised for issue by the Board of Directors on 6 September 2023.
Signed on behalf of the Board of Directors.
Jorgen Kokke
Chief Executive
Alison Henriksen
Chief Financial Officer
Company number: 02972325
FINANCIAL STATEMENTS
188
GENUS PLC / ANNUAL REPORT 2023
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Balance at 1 July 2021
Fair value of movement on cash flow hedges, net of tax
Actuarial gain on retirement benefits obligations, net of tax
Movement on pension asset recognition restriction, net of tax
Other comprehensive income for the year
Total profit for the financial year
Total comprehensive income for the financial year
Dividends paid
Share-based payment expense, net of tax
Balance at 30 June 2022
Fair value of movement on cash flow hedges, net of tax
Gain on equity instruments measured at fair value, net of tax
Actuarial loss on retirement benefits obligations, net of tax
Movement on pension asset recognition restriction, net of tax
Other comprehensive income for the year
Total profit for the financial year
Total comprehensive income for the financial year
Dividends paid
Share-based payment expense, net of tax
Called up
share capital
£m
6.6
–
–
–
–
–
–
–
–
6.6
–
–
–
–
–
–
–
–
–
Share
premium
account
£m
179.1
–
–
–
–
–
–
–
–
179.1
–
–
–
–
–
–
–
–
–
Own
shares
£m
Retained
earnings
£m
Hedging
reserve
£m
(0.1)
–
–
–
–
–
–
–
–
(0.1)
–
–
–
–
–
–
–
–
–
60.2
–
2.8
(2.8)
–
31.3
31.3
(20.9)
2.9
73.5
–
1.2
(3.6)
3.6
1.2
20.1
21.3
(21.0)
6.5
80.3
–
0.3
–
–
0.3
–
0.3
–
–
0.3
1.5
–
–
–
1.5
–
1.5
–
–
1.8
Total
equity
£m
245.8
0.3
2.8
(2.8)
0.3
31.3
31.6
(20.9)
2.9
259.4
1.5
1.2
(3.6)
3.6
2.7
20.1
22.8
(21.0)
6.5
267.7
Balance at 30 June 2023
6.6
179.1
(0.1)
For information on dividends see note 13, cash flow hedges see note 26 and share-based payment expense see note 30.
FINANCIAL STATEMENTS 189
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
C1. ACCOUNTING INFORMATION AND POLICIES
Basis of preparation
The Parent Company Financial Statements have been prepared in accordance with Financial Reporting Standard 101 ‘Reduced
Disclosure Framework’ (‘FRS 101’) and the Companies Act 2006 (the ‘Act’). FRS 101 sets out a reduced disclosure framework for a
‘qualifying entity’ as defined in the standard, which addresses the financial reporting requirements and disclosure exemptions in the
individual financial statements of qualifying entities that otherwise apply the recognition, measurement and disclosure requirements
of the Companies Act 2006. The Group Financial Statements have also been prepared in accordance with International Financial
Reporting Standards as issued by the IASB.
The Company Financial Statements have been prepared using the historical cost convention, as modified by the revaluation of certain
financial assets and financial liabilities and in accordance with the Act. The Financial Statements have been prepared on a going
concern basis, as set out in note 2 of the Consolidated Financial Statements of Genus plc. The accounting policies set out below and
stated in the relevant notes have been applied consistently to all periods presented in these Financial Statements.
The Company has taken advantage of the disclosure exemptions available under FRS 101 in relation to share-based payments, business
combinations, financial instruments, presentation of comparative information in respect of certain assets, presentation of a cash flow
statement, standards issued not yet effective, impairment of assets and related-party transactions. Where required, equivalent
disclosures are given in the Consolidated Financial Statements of Genus plc.
As permitted by section 408 of the Act, the Company has not presented its own Income Statement in this Annual Report.
The functional currency of the Company is Sterling.
Critical accounting judgements and key sources of estimation uncertainty
Preparing company financial statements in conformity with FRS 101 requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date
and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods,
if the revision affects both current and future periods.
Management has not identified any critical accounting judgements or key sources of estimation uncertainty.
Significant accounting policies applied in the current reporting period that relate to the Financial Statements as a whole
This section sets out our significant accounting policies that relate to the Financial Statements as a whole. Where an accounting policy
is generally applicable to a specific note to the Financial Statements, the policy has been described in that note.
Other income and deferred income
The Company has entered into a strategic collaboration with Beijing Capital Agribusiness (‘BCA’) under which BCA will establish and
fund a collaboration specific entity (‘BCA Future Bio-Tech’) which will use Genus’s intellectual property and know-how to pursue the
PRRSv resistance regulatory and development work in China. Genus will receive consideration after meeting certain milestones in the
development programme.
Each milestone is considered to be either a separate performance obligation, or a set of groups of separate performance obligations,
under this agreement and are unbundled in the contractual arrangement as if they are distinct from one another.
We assess each separate performance obligation relating to the milestone payments, and upon completion of those performance
obligations recognise the fair value of amounts earned in other income. Some performance obligations, such as the transfer of
know-how, are recognised at a point in time whereas others, such as the provision of technical services, are recognised over time.
We recognise any received but unearned consideration as deferred income.
We will apply the same accounting policy to any other comparable agreements.
Pensions
A number of our employees are members of defined contribution pension schemes. We charge contributions to profit and loss as they
become payable under the schemes’ rules. We show differences between the contributions payable and the amounts actually paid
as either accruals or prepayments in the Balance Sheet. The schemes’ assets are held separately from those of the Company.
Certain former employees of the Company are members of one of the Group’s defined benefit pension schemes, details of which are
given in note 29 to the Group Financial Statements. The schemes are all multi-employer defined benefit schemes, whose assets and
liabilities are held independently from the Group but within their sponsored Group company.
Taxation
We provide for current tax, including UK corporation tax and foreign tax, at the amounts we expect to pay or recover, using the tax rates
and the laws enacted or substantively enacted at the balance sheet date.
Foreign currencies
We record transactions in foreign currencies at the rate ruling at the transaction date. We retranslate monetary assets and liabilities
denominated in foreign currencies at the prevailing rate of exchange at the balance sheet date. All differences are taken to the
Income Statement.
FINANCIAL STATEMENTS 190
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
C1. ACCOUNTING INFORMATION AND POLICIES CONTINUED
Own shares
The Company has adopted FRS 101, which requires us to recognise the assets and liabilities associated with the Company’s investment
in its own shares in the Company’s Financial Statements, where there is de facto control of the assets and liabilities.
The Company’s own shares held by a Qualifying Employee Share Ownership Trust remain deducted from shareholders’ funds until
they vest unconditionally with employees.
Employee share schemes
The Company’s Executive Directors and Chief Operating Officers receive part of their remuneration in the form of share awards,
which vest upon meeting performance criteria over a three-year period.
We measure the cost of these awards by reference to the shares’ fair value at the award date. At the end of each financial reporting
period, we estimate the extent to which the performance criteria will be met at the end of three years and record an appropriate charge
in the profit and loss account, together with a corresponding credit to profit and loss reserves. Changes in estimates of the number of
shares vesting may result in charges or credits to the profit and loss account in subsequent periods.
Share-based payments
We have implemented the generally accepted accounting principle for accounting for share-based payments with subsidiary
undertakings under FRS 101, whereby the Company has granted rights to its shares to employees of its subsidiary undertakings under
an equity-settled arrangement, and the subsidiaries have not reimbursed the Company for these rights. Under this arrangement, the
Company treats the share-based payment recognised in the subsidiary’s financial statements as a cost of investment in the subsidiary
and credits equity with an equal amount.
Derivative financial instruments and hedging
Our activities expose us primarily to the financial risks of changes in foreign currency exchange rates and interest rates.
We use interest rate swaps to hedge interest rate risk. We also use forward foreign currency contracts, implemented through a medium-
term US Dollar cross-currency borrowing and related interest rate swap, to hedge exposure to translation risk associated with US Dollar
net assets of subsidiaries. Forward foreign currency contracts do not qualify for hedge accounting in the Parent Company Financial
Statements, as the hedged item is not in its Balance Sheet.
Our use of financial derivative instruments is governed by the Group’s policies, which are approved by the Board of Directors. The notes
to the Group Financial Statements include information about the Group’s financial risks and their management, and its use of financial
instruments and their impact on the Group’s risk profile, performance and financial condition.
The fair value of the US Dollar and interest rate swaps is the estimated amount that we would receive or pay to terminate the swap
at the balance sheet date, taking into account current interest rates and the creditworthiness of the swap counterparties.
The fair value of forward exchange contracts is their quoted market price at the balance sheet date, which is the present value of the
quoted forward price.
Cash flow hedges
The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and
qualify as cash flow hedges is recognised in Other Comprehensive Income and accumulated under the heading of cash flow hedging
reserve, and limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating
to the ineffective portion is recognised immediately in the Income Statement, and is included in the ‘other gains and losses’ line item.
Amounts previously recognised in Other Comprehensive Income and accumulated in equity are reclassified to the Income Statement
in the periods when the hedged item affects the Income Statement, in the same line as the recognised hedged item. However, when
the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability, the gains and losses
previously recognised in Other Comprehensive Income and accumulated in equity are removed from equity and included in the initial
measurement of the cost of the non-financial asset or non-financial liability. This transfer does not affect Other Comprehensive Income.
Furthermore, if the Company expects that some or all of the loss accumulated in the cash flow hedging reserve will not be recovered
in the future, that amount is immediately reclassified to the Income Statement.
The Company discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying
criteria (after rebalancing, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised.
The discontinuation is accounted for prospectively. Any gain or loss recognised in Other Comprehensive Income and accumulated
in cash flow hedge reserve at that time remains in equity and is reclassified to the Income Statement when the forecast transaction
occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the cash flow hedge reserve
is reclassified immediately to the Income Statement.
Under interest rate swap contracts, the Company agrees to exchange the difference between fixed and floating rate interest amounts
calculated on agreed notional principal amounts. Such contracts enable the Company to mitigate the risk of changing interest rates on
the fair value of issued fixed-rate debt held and the cash flow exposures on the issued variable-rate debt held. The fair value of interest
rate swaps at the reporting date is determined by discounting the future cash flows using the yield curves at the reporting date and the
credit risk inherent in the contract. The average interest rate is based on the outstanding balances at the end of the financial year.
FINANCIAL STATEMENTS 191
GENUS PLC / ANNUAL REPORT 2023
C1. ACCOUNTING INFORMATION AND POLICIES CONTINUED
As the critical terms of the interest rate swap contracts and their corresponding hedged items are the same, the Company performs
a qualitative assessment of effectiveness and it is expected that the value of the interest rate swap contracts and the value of the
corresponding hedged items will systematically change in opposite directions, in response to movements in the underlying interest rates.
The main source of hedge ineffectiveness in these hedge relationships is the effect of the counterparty and the Company’s own credit
risk on the fair value of the interest rate swap contracts, which is not reflected in the fair value of the hedged item attributable to the
change in interest rates. No other sources of ineffectiveness emerged from these hedging relationships.
C2. EMPLOYEES
Staff costs including Directors’ remuneration during the year amounted to:
Wages and salaries
Social security costs
Pension costs
Share-based payment expense
The Directors’ Remuneration Report sets out details of the Directors’ remuneration, pensions and share options.
The average monthly number of employees including Directors during the year was as follows:
Administration
C3. INTANGIBLE ASSETS
2023
£m
7.4
0.7
0.2
2.2
2022
£m
9.0
1.1
0.2
1.4
10.5
11.7
2023
Number
2022
Number
45
44
Accounting policies
Patents, licences and software are stated at acquisition cost less accumulated amortisation. The amortisation period is determined by
reference to expected useful life, which is reviewed at least annually. Amortisation is charged to the Income Statement on a straight-line
basis over the estimated useful life. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated
as changes in accounting estimates.
See note 15 for useful economic life. We do not amortise assets under construction.
Cost
Balance at 1 July 2021
Additions
Transfers
Balance at 30 June 2022 and 1 July 2022
Additions
Transfers
Balance at 30 June 2023
Amortisation
Balance at 1 July 2021
Amortisation for the year
Balance at 30 June 2022 and 1 July 2022
Amortisation for the year
Balance at 30 June 2023
Carrying amounts
At 30 June 2023
At 30 June 2022
At 30 June 2021
Software
£m
Patents and
licences
£m
Assets under
construction
£m
7.1
–
2.3
9.4
–
3.7
13.1
1.7
0.8
2.5
1.1
3.6
9.5
6.9
5.4
3.7
–
–
3.7
–
–
3.7
3.7
–
3.7
–
3.7
–
–
–
1.1
3.9
(2.3)
2.7
3.3
(3.7)
2.3
–
–
–
–
–
2.3
2.7
1.1
Total
£m
11.9
3.9
–
15.8
3.3
–
19.1
5.4
0.8
6.2
1.1
7.3
11.8
9.6
6.5
Included within the software class of assets is £9.5m (2022: £6.9m) and included in assets in the course of construction is £2.3m
(2022: £2.7m) that relate to the ongoing development costs of GenusOne, our single global enterprise system.
FINANCIAL STATEMENTS
192
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
C4. PROPERTY, PLANT AND EQUIPMENT
Accounting policies
We state property, plant and equipment at cost, together with any incidental acquisition expenses, or at their latest valuation, less
depreciation and any provision for impairment. We calculate depreciation on a straight-line basis, to write the assets down to their
estimated residual values over their estimated useful lives. The rates of annual depreciation on tangible fixed assets are as follows:
• Leasehold improvements
• Leased buildings
• Equipment
period of lease
period of lease
3 to 10 years
We review the carrying value of fixed assets for impairment, if events or changes in circumstances indicate that the carrying value may
not be recoverable.
Right-of-use assets
Right-of-use assets are measured initially at cost based on the value of the associated lease liability, adjusted for any payments made
before inception, initial direct costs and an estimate of the dismantling, removal and restoration costs required in the terms of the lease.
Subsequent to initial recognition, we record an interest charge in respect of the lease liability. The related right-of-use asset is
depreciated over the term of the lease or, if shorter, the useful economic life (‘UEL’) of the leased asset. The lease term shall include the
period of an extension option where it is reasonably certain that the option will be exercised. Where the lease contains a purchase
option, the asset is written-off over the useful life of the asset when it is reasonably certain that the purchase option will be exercised.
Cost
Balance at 1 July 2022
Additions
Balance at 30 June 2023
Depreciation
Balance at 1 July 2022
Depreciation for the year
Balance at 30 June 2023
Carrying amounts
At 30 June 2023
At 30 June 2022
Leasehold
improvements
£m
Equipment
£m
Owned
assets
£m
Right-of-use
leased
buildings
£m
0.5
–
0.5
0.3
–
0.3
0.2
0.2
0.3
–
0.3
0.3
–
0.3
–
–
0.8
–
0.8
0.6
–
0.6
0.2
0.2
1.0
0.2
1.2
0.3
0.2
0.5
0.7
0.7
Total
£m
1.8
0.2
2.0
0.9
0.2
1.1
0.9
0.9
C5. INVESTMENTS IN SUBSIDIARIES
Accounting policies
Shares in subsidiary undertakings are stated at cost less any provision for impairment.
The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an
investment may not be recoverable. If any such indication of impairment exists, then we estimate the recoverable amount. If the
recoverable amount of the cash-generating unit is less than the value of the investment, it is considered to be impaired and we write it
down to its recoverable amount. An impairment loss is recognised immediately in the profit and loss account.
Cost
Balance at 1 July 2022
Additions
Disposals
Balance at 30 June 2023
Provision for impairment
Balance at 1 July 2022
Provided during the year
Balance at 30 June 2023
Carrying amounts
At 30 June 2023
At 30 June 2022
Additions relate to increasing our investments in Genus Investments Limited and ABS Argentina S.A..
Shares in
subsidiary
undertakings
£m
543.6
5.7
(21.4)
527.9
198.1
10.4
208.5
319.4
345.5
FINANCIAL STATEMENTS
193
GENUS PLC / ANNUAL REPORT 2023
C5. INVESTMENTS IN SUBSIDIARIES CONTINUED
The Company considers the relationship between its invested capital and the carrying value of its investments, among other factors,
when reviewing for indicators of impairment. As at 30 June 2023, the net investment in five of the Company’s subsidiary undertakings
exceeded the Company’s share of the net assets. Each of these subsidiaries are denominated in Latin American currencies, all of which
have seen significant weakening against Sterling during the year ended 30 June 2023. For each of these undertakings, the recoverable
value has been estimated using the Board-approved Strategic Plan. There were no indicators of impairment for the Company’s other
subsidiary undertakings.
The key assumptions for the value in use calculation are those regarding the discount rate, growth rates and expected trading performance.
Management estimates discount rates that reflect current market assessments of the time value of money and the risks specific to the
Group. The pre-tax discount rates are derived from the Group’s post-tax weighted average cost of capital (‘WACC’), which has been
calculated using the capital asset pricing model, the inputs of which include a country risk-free rate, equity risk premium, Group size
premium and a risk adjustment (beta). This equates to a pre-tax discount rate of 11.2% (2022: 11.2%). Cash flows beyond the five-year
period are extrapolated using a long-term growth rate of 2.5% (2022: 2.5%).
During the year, £7.8m was provided against the investment held in ABS Argentina S.A. and £2.6m against the investment held in ABS
Pecplan Ltda. to reflect a reduction in the net assets of those companies and expected future trading performance.
Principal subsidiary undertakings
The Company’s principal subsidiaries and their main activities are given in note 37 to the Group Financial Statements.
C6. OTHER INVESTMENTS
Accounting policies
Listed equity investments are stated at fair value.
Listed investment – NMR
2023
£m
4.4
2022
£m
2.1
NMR ordinary shares were acquired as part of the NMR pension agreement, and are measured at fair value. The valuation basis is Level 1
classification, where fair value techniques are quoted (unadjusted) prices in active markets for identical assets and liabilities.
C7. OTHER RECEIVABLES
Accounting policies
We state other receivables at their amortised cost less any impairment losses.
Amounts due within one year
Amounts owed by Group undertakings
Corporation tax recoverable
Prepayments
Other receivables
Deferred taxation
Derivative financial asset
Amounts due after one year
Amounts owed by Group undertakings
Note
C8
C15
2023
£m
97.1
1.7
1.5
1.5
–
1.5
103.3
70.9
70.9
2022
£m
61.8
1.6
2.0
2.0
0.9
1.0
69.3
74.0
74.0
At the balance sheet date, the total amounts owed by Group undertakings were £168.0m (2022: £135.8m). The carrying amount of these
assets approximates their fair value. Of the amounts owed by Group undertakings, £163.6m (2022: £133.5m) is interest-bearing and any
interest charged is at current market rates.
FINANCIAL STATEMENTS 194
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
C8. DEFERRED TAXATION
Accounting policies
We recognise deferred taxation in respect of all timing differences that have originated but not reversed at the balance sheet date,
where transactions or events that result in an obligation to pay more tax in future or a right to pay less tax in future have occurred at the
balance sheet date.
We only recognise deferred taxation assets if we consider it more likely than not that we will have suitable profits from which we can deduct
the future reversal of the underlying timing differences. Timing differences are differences arising between the Company’s taxable profits
and its results as stated in the Financial Statements, and which are capable of reversing in one or more subsequent periods.
We only recognise deferred taxation in respect of the future remittance of retained earnings of overseas subsidiaries to the extent that,
at the balance sheet date, dividends have been accrued as receivable.
We measure deferred taxation on a non-discounted basis, at the tax rates we expect to apply in the periods in which we expect the
timing differences to reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Deferred tax asset due within one year
Deferred tax asset due after more than one year
The movements in deferred taxation are as follows:
At the start of the year
Recognised in the Income Statement
Recognised in equity
At the end of the year
The amounts provided are as follows:
Share-based payment expense
Other timing differences
Losses
2023
£m
–
6.8
6.8
2023
£m
3.8
4.3
(1.3)
6.8
2023
£m
1.0
5.0
0.8
6.8
2022
£m
0.9
2.9
3.8
2022
£m
4.2
0.6
(1.0)
3.8
2022
£m
1.1
1.6
1.1
3.8
At the balance sheet date, the Company had unused tax losses available for offset against future profits, with a potential tax benefit of
£0.8m (2022: £1.1m). We have recognised a deferred tax asset in respect of this benefit, as we expect these losses to be offset against
future profits of the UK tax group in the near term.
C9. CURRENT PAYABLES
Accounting policies
Trade payables are not interest bearing and are stated at their nominal value.
Bank loans and overdrafts
Trade payables
Other payables
Amounts owed to Group undertakings
Accruals
Deferred income
Obligations under leases
Derivative financial liabilities
Note
C12
C13
C15
2023
£m
4.2
1.2
0.4
48.2
3.4
0.5
0.2
0.9
59.0
2022
£m
7.1
1.7
0.7
51.9
2.5
0.1
0.1
0.9
65.0
Included within amounts owed to Group undertakings are amounts of £24.2m (2022: £26.2m) which are unsecured, repayable on
demand and any interest charged is at current market rates.
There are no outstanding contributions due to defined contribution pension schemes for the benefit of the employees (2022: £nil).
FINANCIAL STATEMENTS 195
GENUS PLC / ANNUAL REPORT 2023
C10. NON-CURRENT PAYABLES
Bank loans and overdrafts
Obligations under leases
Derivative financial liabilities
Deferred income
C11. PROVISIONS
Provisions due within one year
Provisions after more than one year
Note
C12
C13
C15
2023
£m
196.0
0.6
–
–
196.6
2023
£m
0.3
0.1
0.4
2022
£m
182.1
0.5
0.3
0.4
183.3
2022
£m
0.4
0.3
0.7
The provisions primarily consist of a share forfeiture provision of £0.3m, which relates to potential claims that could be made by untraced
members over a period of three years, relating to the resale proceeds of shares that were identified during prior years as being forfeited
(see note 25).
C12. LOANS AND BORROWINGS
Accounting policies
We initially state debt at the amount of the net proceeds, after deducting issue costs. The carrying amount is increased by the finance
cost in respect of the accounting period and reduced by payments made in the period.
We charge the finance costs of debt to the profit and loss account over the debt term, at a constant rate on the carrying value of the
debt to which they relate.
Loans and borrowings comprise amounts falling due:
In one year or less or on demand
In more than one year but not more than two years
In more than two years but not more than five years
Less: unamortised issue costs
Amounts falling due within one year
Amounts falling due after more than one year
2023
£m
2022
£m
5.3
–
196.0
201.3
(1.1)
200.2
(4.2)
196.0
8.0
–
182.3
190.3
(1.1)
189.2
(7.1)
182.1
At the balance sheet date, the Company’s credit facilities comprised a £190m multi-currency revolving credit facility (‘RCF’),
a USD 150 million RCF and a USD 20 million bond and guarantee facility. The original term of the facility was for three years to
24 August 2023. On 24 August 2021 and 26 August 2022, the Company and its lenders extended the maturity date of the total facilities
to 24 August 2024 and 24 August 2025 respectively. The Company’s credit facility also includes an uncommitted £100m accordion
option, £60m of which was exercised in August 2022 to increase the facilities to their current size, leaving a remaining unsecured
accordion facility of £40m, which can be requested on a maximum of two further occasions over the lifetime of the facility to fund
the Group’s business development plans.
As part of its interest rate hedging strategy, the Company has entered into interest rate swaps to hedge variable interest rates.
At the balance sheet date, bank loan and overdrafts include borrowings of USD85m fixed at 3.48%, borrowings of £60m fixed at 3.45%,
borrowings of EUR12.5m fixed at 0.37%, and borrowings of USD 13.9m, swapped via a cross currency swap into EUR12.5m, fixed at 0.36%,
excluding applicable bank margins. Approximately 76% of total Facility Borrowings are covered by these interest rate swaps as at
30 June 2023.
Terms and debt repayment schedule
The terms and conditions of outstanding loans and overdrafts were as follows:
RCF and overdraft
RCF, term loan and overdraft
RCF and overdraft
Other unsecured bank borrowings
Total interest-bearing liabilities
The above RCFs are unsecured.
Currency
Interest rate
GBP
USD
EUR
Other
6.4%
6.9%
5.0%
5.7%
2023
£m
91.6
78.0
30.1
0.5
2022
£m
95.9
77.3
10.8
5.2
200.2
189.2
FINANCIAL STATEMENTS 196
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
C13. OBLIGATIONS UNDER LEASES
A lease is a commitment to make a payment in the future, primarily in relation to property, plant and machinery and motor vehicles.
Accounting policies
In accordance with IFRS 16, we recognise as an expense any payments made in respect of short-term leases (those with a term of less
than 12 months) and for low-value items on a straight-line basis over the life of the lease.
For all other leases we recognise a liability at the date at which the leased asset is made available for use, and a corresponding
right-of-use asset is recognised and depreciated over the term of the lease (see note C4).
Lease liabilities are measured at the present value of the future lease payments, excluding any payments relating to non-lease
components. Future lease payments include fixed payments, in-substance fixed payments, and variable lease payments that are
based on an index or a rate, less any lease incentives receivable. Lease liabilities also take into account amounts payable under
residual value guarantees and payments to exercise options, to the extent that it is reasonably certain that such payments will
be made. The payments are discounted at the rate implicit in the lease or, where that cannot be measured, at an incremental
borrowing rate.
We remeasure the lease liability (and make a corresponding adjustment to the related right-of-use asset) whenever:
• The lease term has changed or there is a change in the assessment of the exercise of a purchase option, in which case the lease
liability is remeasured by discounting the revised lease payments using a revised discount rate.
• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual
value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate
(unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
• A lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease liability
is remeasured by discounting the revised lease payments using a revised discount rate.
The Company did not make any such adjustments during the periods presented.
The changes in the lease liabilities are as follows:
Balance at the start of the year
Payments made
Leases entered into during the year
Balance at the end of the year
2023
£m
0.6
(0.1)
0.3
0.8
2022
£m
0.8
(0.2)
–
0.6
In accordance with the reduced disclosure exemptions included in FRS 101, a maturity analysis has not been presented. The maturity
analysis of the Group’s lease obligations is included in note 28 to the Group Financial Statements.
C14. OPERATING LEASES
Accounting policies
For short-term leases (those with a term of less than 12 months) and low-value items, we charge the rentals payable to the Income
Statement on a straight-line basis over the lease term.
The Company has elected not to apply IFRS 16 to contracts where the right-of-use asset would be recognised as an intangible asset
(e.g. software licences).
Total of future minimum lease payments under non-cancellable operating leases which expire:
In less than one year
Between one and five years
In more than five years
Operating lease rentals charged in the year:
Other
C15. DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS
Additional disclosures on financial instruments can be found in note 26 to the Group Financial Statements.
2023
£m
1.2
1.2
–
2.4
2023
£m
1.2
2022
£m
–
–
–
–
2022
£m
0.8
FINANCIAL STATEMENTS 197
GENUS PLC / ANNUAL REPORT 2023
C16. CAPITAL AND RESERVES
Share capital
Issued and fully paid
Ordinary shares of 10 pence
There is no authorised share capital limit.
2023
Number
2022
Number
2023
£m
2022
£m
66,027,210
65,773,620
6.6
6.6
The holders of ordinary shares are entitled to receive dividends, as declared from time to time.
The movement in share capital for the period was as follows:
Issued under the Executive Share Option Plan
Issued to Employee Benefit Trust
Issued to Genus plc Share incentive Plan
2023
Number
2022
Number
2023
£m
2022
£m
2,953
250,000
637
253,590
12,120
–
–
12,120
–
–
–
–
–
–
–
Shares issued under the Executive Share Option Plan were issued at option prices as follows:
Executive Share Option Plan
2023
2022
Number Option price
Number
Option Price
–
983
1,970
2,953
–
1334.00p
1413.00p
2,837
7,027
2,256
977.83p
1334.00p
1413.00p
12,120
Reserve for own shares
The Company’s shares are held by a QUEST, which is an employee benefit trust established to facilitate the operation of our long-term
incentive scheme for senior management. The reserve amount represents the deduction in arriving at shareholders’ funds for the
consideration the trust paid for the Company’s shares, which had not vested unconditionally at the balance sheet date. The number
and market value of the ordinary shares held by the Employee Benefit Trust and the QUEST were:
Shares allocated but not vested
Unallocated shares
2023
Number
2022
Number
375,998
92,334
280,803
92,334
468,332
373,137
2023
£m
8.1
2.0
10.1
2022
£m
7.1
2.3
9.4
The shares have a nominal value of £46,833 (2022: £37,314).
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments net
of taxation – see note 26.
C17. RELATED PARTY TRANSACTIONS
The Company is exempt under FRS 101 from disclosing transactions with other members of the Group.
C18. CAPITAL AND OTHER COMMITMENTS
At 30 June 2023, outstanding contracted capital expenditure amounted to £nil (2022: £nil).
FINANCIAL STATEMENTS 198
GENUS PLC / ANNUAL REPORT 2023
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023
C19. PENSIONS, GUARANTEES AND CONTINGENCIES
The NMR pension assigned to Genus plc under the Flexible Apportionment Agreement, recorded an actuarial loss of £4.8m, which has
decreased the asset restriction made in previous years. As the Company does not have unilateral right to this surplus, as required in
accordance with IFRIC 14 it is restricted to £nil. For additional information on the MPF pension scheme, of which NMR was one of the
participating employers, please see note 29.
The retirement benefit obligations referred to in note 29 to the Group Financial Statements include obligations relating to the MPF
defined benefit scheme. Genus, together with other participating employers, is joint and severally liable for the scheme’s obligations.
Genus has accounted for its section and its share of any orphan assets and liabilities, collectively representing approximately 86%
(2022: 86%) of the MPF. As a result of the joint and several liability, Genus has a contingent liability for the scheme’s obligations that
it has not accounted for. The total deficit of the MPF scheme from the most recent triennial valuation can be found in note 29.
Certain UK subsidiaries, which are detailed in note 37 to the Group Financial Statements, will take advantage of the audit exemption
set out within section 479A of the Companies Act 2006 for the year ended 30 June 2023. The Company has given a statutory guarantee
over all of the liabilities held by those UK subsidiaries for the year ended 30 June 2023. The Company has assessed the probability
of loss under the guarantee as remote.
At 30 June 2023, the Company had entered into bank guarantees totalling £10.3m (2022: £15.8m).
FINANCIAL STATEMENTS 199
GENUS PLC / ANNUAL REPORT 2023
FIVE-YEAR RECORD – CONSOLIDATED RESULTS
The information included in the five-year record below is in accordance with IFRS as adopted for use under the Companies Act 2006.
Financial results
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
Revenue from continuing operations
689.7
593.4
574.3
551.4
488.5
Adjusted operating profit from continuing operations1
Adjusted operating profit including joint ventures and associates1
Adjusted profit before tax1
Basic adjusted earnings per share1
Diluted adjusted earnings per share1
Operating profit from continuing operations
Profit before tax from continuing operations
Profit after tax from continuing operations
Net profit attributable to owners of the Company
Basic earnings per share
Diluted earnings per share
Net assets
Net debt
74.6
85.8
71.5
84.8p
84.2p
40.5
39.4
31.8
33.3
50.8p
50.5p
567.2
195.8
68.8
77.7
71.5
76.9
89.8
84.8
82.7p
82.3p
100.9p
100.1p
49.4
48.4
36.7
40.9
62.5p
62.2p
572.1
185.0
47.7
55.8
46.8
47.3
72.6p
72.0p
496.6
105.6
60.1
70.8
65.8
77.3p
76.7p
42.4
46.3
35.7
35.3
54.4p
54.0p
494.5
102.6
51.8
59.0
55.1
63.8p
61.7p
2.8
4.0
0.8
1.9
3.0p
2.9p
479.0
79.6
1 Adjusted operating profit, adjusted profit before tax and adjusted basic and diluted earnings per share are before net IAS 41 valuation movement on biological assets,
amortisation of acquired intangible assets, share-based payment expense, exceptional items and other gains and losses
ADDITIONAL INFORMATION 200
GENUS PLC / ANNUAL REPORT 2023
ALTERNATIVE PERFORMANCE MEASURES GLOSSARY
The Group tracks a number of
APMs in managing its business, which
are not defined or specified under the
requirements of IFRS because they
exclude amounts that are included in,
or include amounts that are excluded
from, the most directly comparable
measure calculated and presented in
accordance with IFRS, or are calculated
using financial measures that are not
calculated in accordance with IFRS.
The Group believes that these APMs, which
are not considered to be a substitute
for or superior to IFRS measures, provide
stakeholders with additional helpful
information on the performance of the
business. These APMs are consistent
with how the business performance
is planned and reported within the
internal management reporting to
the Board and GELT. Some of these
APMs are also used for the purpose
of setting remuneration targets.
These APMs should be viewed as
supplemental to, but not as a substitute
for, measures presented in the
consolidated financial information relating
to the Group, which are prepared in
accordance with IFRS. The Group believes
that these APMs are useful indicators of its
performance. However, they may not be
comparable to similarly-titled measures
reported by other companies, due to
differences in the way they are calculated.
The key APMs that the Group uses include:
Alternative Performance
Measures
Calculation methodology and closest equivalent IFRS measure
(where applicable)
Reasons why we believe the
APMs are useful
Income Statement measures
Adjusted operating profit
exc JVs
Adjusted operating profit is operating profit with the net IAS 41
valuation movement on biological assets, amortisation of
acquired intangible assets, share-based payment expense
and exceptional items added back and excludes JV and
associate results.
Closest equivalent IFRS measure: Operating profit1
See reconciliation on page 203.
Adjusted operating profit
inc JVs
Including adjusted operating profit from JV and associate results.
See reconciliation on page 203.
Adjusted operating profit
inc JVs exc gene editing
costs
Including adjusted operating profit from JV and associate results
but excluding gene editing costs.
See reconciliation on page 203.
Adjusted operating profit
inc JVs after tax
Adjusted operating profit including JV less adjusted effective tax.
See reconciliation on page 203.
Adjusted profit inc JVs
before tax
Adjusted operating profit including JVs less net finance costs.
See reconciliation on page 203.
Adjusted profit inc JVs
after tax
Adjusted profit including JVs before tax less adjusted
effective tax.
See reconciliation on page 203.
Allows the comparison of underlying
financial performance by excluding
the impacts of exceptional items and
is a performance indicator against
which short-term and long-term
incentive outcomes for our senior
executives are measured:
• net IAS 41 valuation movements
on biological assets – these
movements can be materially
volatile and do not directly
correlate to the underlying trading
performance in the period.
Furthermore, the movement is
non-cash related and many
assumptions used in the valuation
model are based on projections
rather than current trading;
• amortisation of acquired intangible
assets – excluding this improves the
comparability between acquired
and organically grown operations,
as the latter cannot recognise
internally generated intangible
assets. Adjusting for amortisation
provides a more consistent basis for
comparison between the two but
it is also a measure excluded from
our managements remuneration
assessment, as well as our
debt agreements and banking
covenants. It is also one requested
and used by our investor group to
evaluate our performance.;
• share-based payments – this
expense is considered to be
relatively volatile and not fully
reflective of the current period
trading, as the performance criteria
are based on EPS performance
over a three-year period and
include estimates of future
performance; and
• exceptional items – these are items
which due to either their size or their
nature are excluded, to improve
the understanding of the Group’s
underlying performance.
ADDITIONAL INFORMATION
201
GENUS PLC / ANNUAL REPORT 2023
Alternative Performance
Measures
Calculation methodology and closest equivalent IFRS measure
(where applicable)
Reasons why we believe the
APMs are useful
Adjusted effective
tax rate
Total income tax charge for the Group excluding the tax impact
of adjusting items, divided by the adjusted operating profit.
Closest equivalent IFRS measure: Effective tax rate
See reconciliation on page 204.
Adjusted basic earnings
per share
Adjusted profit after tax profit divided by the weighted basic
average number of shares.
Closest equivalent IFRS measure: Earnings per share
See calculation on page 204.
Adjusted diluted earnings
per share
Underlying attributable profit divided by the diluted weighted
basic average number of shares.
Closest equivalent IFRS measure: Diluted earnings per share
See calculation on page 204.
Provides an underlying tax rate to
allow comparability of underlying
financial performance, by excluding
the impacts of net IAS 41 valuation
movement on biological assets,
amortisation of acquired intangible
assets, share-based payment
expense and exceptional items.
On a per share basis, this allows the
comparability of underlying financial
performance by excluding the
impacts of adjusting items.
Adjusted earnings cover
Adjusted earnings per share divided by the expected dividend
for the year.
The Board’s dividend policy targets
adjusted earning cover to be
between 2.5–3 times.
See calculation on page 204.
Adjusted EBITDA –
calculated in accordance
with the definitions used
in our financing facilities
This is adjusted operating profit, adding back cash received
from our JVs, depreciation of property, plant and equipment,
depreciation of the historical cost of biological assets,
operational amortisation (i.e. excluding amortisation of
acquired intangibles) and deducting the amount attributable
to minority interest.
This APM is presented because it is
used in calculating our ratio of net
debt to EBITDA and our interest cover,
which we report to our banks to
ensure compliance with our
bank covenants.
Adjusted operating
margin
Adjusted operating
margin (exc JVs)
Constant currency basis
Closest equivalent IFRS measure: Operating profit1
See reconciliation on page 204.
Adjusted operating profit (including JVs) divided by revenue.
Adjusted operating profit divided by revenue.
The Group reports certain financial measures, on both a reported
and constant currency basis and retranslates the current year’s
results at the average actual exchange rates used in the previous
financial year.
Allows for the comparability of
underlying financial performance
by excluding the impacts of
exceptional items.
The Group’s business operates in
multiple countries worldwide and its
trading results are translated back
into the Group’s functional currency of
Sterling. This measure eliminates the
effects of exchange rate fluctuations
when comparing year-on-year
reported results.
Balance Sheet measures
Net debt
Net debt is gross debt, made up of unsecured bank loans and
overdrafts and obligations under finance leases, with a deduction
for cash and cash equivalents.
This allows the Group to monitor its
levels of debt.
See reconciliation on page 205.
Net debt – calculated in
accordance with the
definitions used in our
financing facilities
Net debt excluding the impact of adopting IFRS 16 and adding
back guarantees and deferred purchase arrangements.
This is a key metric that we report to
our banks to ensure compliance with
our bank covenants.
See reconciliation on page 205.
ADDITIONAL INFORMATION
202
GENUS PLC / ANNUAL REPORT 2023
ALTERNATIVE PERFORMANCE MEASURES GLOSSARY CONTINUED
Alternative Performance
Measures
Calculation methodology and closest equivalent IFRS measure
(where applicable)
Reasons why we believe the
APMs are useful
Cash flow measures
Cash conversion
Cash generated by operations as a percentage of adjusted
operating profit excluding JVs.
See calculation on page 206.
Free cash flow
Cash generated by the Group before debt repayments,
acquisitions and investments, dividends and proceeds from
share issues.
Closest IFRS measure: Net cash flow from operating activities
See reconciliation on page 206.
This is used to measure how
much operating cash flow we are
generating and how efficient we are
at converting our operating profit
into cash.
Shows the cash retained by the Group
in the year.
Other measures
Interest cover
Ratio of net debt to
adjusted EBITDA
Return on adjusted
invested capital
The ratio of adjusted net finance costs, calculated in accordance
with the definitions used in our financing facilities, is net finance
costs with a deduction for pension interest, interest from adopting
IFRS 16, unwinding of discount on put options and amortisation of
refinancing fees, to adjusted EBITDA.
This APM is used to understand our
ability to meet our interest payments
and is also a key metric that we report
to our banks to ensure compliance
with our bank covenants.
Closest equivalent IFRS components for the ratio: The equivalent
IFRS components are finance costs, finance income and
operating profit
See calculation and reconciliation on page 206.
The ratio of net debt, calculated in accordance with the
definitions used in our financing facilities, is gross debt, made up
of unsecured bank loans and overdrafts and obligations under
finance leases, with a deduction for cash and cash equivalents
and adding back amounts related to guarantees and deferred
purchase arrangements, to adjusted EBITDA.
Closest equivalent IFRS components for the ratio: The equivalent
IFRS components are gross debt, cash and cash equivalents and
operating profit
See calculation on page 206.
The Group’s return on adjusted invested capital is measured on
the basis of adjusted operating profit including JVs after tax,
which is operating profit with the pre-tax share of profits from JVs
and associates, net IAS 41 valuation movement on biological
assets, amortisation of acquired intangible assets, share-based
payment expense and exceptional items added back, net of
amounts attributable to non-controlling interest and tax.
The adjusted operating profit including JVs after tax is divided by
adjusted invested capital, which is the equity attributable to
owners of the Company adding back net debt, pension liability
net of related deferred tax and deducting biological assets
(less historical cost) and goodwill, net of related deferred tax.
Closest equivalent IFRS components for the ratio:
Return on invested capital
See calculation and reconciliation on page 207.
This APM is used as a measurement of
our leverage and is also a key metric
that we report to our banks to ensure
compliance with our bank covenants.
This APM is used to measure our
ability to efficiently invest our
capital and gives us a sense of
how well we are using our resources
to generate returns.
1 Operating profit is not defined per IFRS. It is presented in the Group Income Statement and is shown as profit before tax, finance income/costs and share of post-tax profit of
JVs and associates retained
ADDITIONAL INFORMATION
203
GENUS PLC / ANNUAL REPORT 2023
THE TABLES BELOW RECONCILE THE CLOSEST EQUIVALENT IFRS MEASURE TO THE APM OR OUTLINE THE CALCULATION OF THE APM
INCOME STATEMENT MEASURES
Adjusted operating profit exc JVs
Adjusted operating profit inc JVs
Adjusted operating profit inc JVs and exc gene editing costs
Operating profit
Add back:
Net IAS 41 valuation movement on biological assets
Amortisation of acquired intangible assets
Share-based payment expense
Exceptional items
Adjusted operating profit exc JVs
Amounts attributable to non-controlling interest
Operating profit from JVs and associates
Tax on JVs and associates
Net IAS 41 valuation movement
Adjusted operating profit from JVs
Adjusted operating profit inc JVs
Gene editing costs
2023
£m
16.9
7.7
6.0
3.5
10.5
3.9
(3.6)
£m
40.5
74.6
0.4
10.8
85.8
14.3
2022
£m
£m Reference
5.4
8.3
3.7
2.0
5.2
2.6
1.4
49.4 Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
68.8 Group Income Statement
(0.3) Group Income Statement
Group Income Statement
Note 11 – Income tax expense
Note 18 – Equity-accounted
investees
9.2
77.7
7.9 Note 5 – Segmental
information
Adjusted operating profit inc JVs and exc gene editing
costs
100.1
85.6
Adjusted operating profit inc JVs after tax
Adjusted operating profit inc JVs
Effective Tax Rate
Adjusted tax
Adjusted operating profit inc JVs after tax
Adjusted profit inc JVs before tax
Adjusted profit inc JVs after tax
Adjusted operating profit inc JVs
Less net finance costs
Adjusted profit inc JVs before tax
Adjusted tax
Adjusted profit inc JVs after tax
2023
2022
22.2%
£m
85.8
(19.0)
66.8
£m Reference
77.7 See APM
24.3%
Note 12 – Earnings per share
(18.9) No direct reference
58.8
2023
2022
£m
85.8
(14.3)
71.5
(15.9)
55.6
£m Reference
77.7 See APM
(6.2) Note 10 – Net finance costs
71.5
(17.4) Note 12 – Earnings per share
54.1
ADDITIONAL INFORMATION 204
GENUS PLC / ANNUAL REPORT 2023
ALTERNATIVE PERFORMANCE MEASURES GLOSSARY CONTINUED
Adjusted effective tax £m/rate
2023
2022
Adjusted effective tax £m/rate
Exceptional items
Share-based payment expense
Other gains and losses
Amortisation of acquired intangible assets
Net IAS 41 valuation movement on biological assets
Effective tax £m/rate
Adjusted basic earnings per share
Adjusted profit inc JVs after tax (£m)
Weighted average number of ordinary shares (000s)
Adjusted basic earnings per share (pence)
Adjusted diluted earnings per share
Adjusted profit inc JVs after tax (£m)
Weighted average number of diluted ordinary shares (000s)
Adjusted diluted earnings per share (pence)
Adjusted earnings cover
Adjusted earnings per share
Dividend for the year
Adjusted earnings cover
Adjusted EBITDA – as calculated under our financing facilities
Operating profit
Add back:
Net IAS 41 valuation movement on biological assets
Amortisation of acquired intangible assets
Share-based payment expense
Exceptional items
Adjusted operating profit exc JVs
Adjust for:
Cash received from JVs (dividend and loan investment)
Depreciation: property, plant and equipment
Operational lease payments
Depreciation: historical cost of biological assets
Amortisation and impairment (excluding separately
identifiable acquired intangible assets)
Amounts attributable to non-controlling interest
Adjusted EBITDA – as calculated under our financing
facilities
£m
15.9
(0.9)
(0.8)
0.7
(1.9)
(1.5)
11.5
%
22.2
(25.7)
(14.5)
25.0
(24.7)
(8.8)
26.6
2023
55.6
65.557
84.8
2023
55.6
65.998
84.2
£m
17.4
(0.8)
(0.5)
–
(3.3)
1.5
14.3
% Reference
24.3 Note 12 – Earnings per share
(40.0) Note 12 – Earnings per share
(13.5) Note 12 – Earnings per share
– Note 12 – Earnings per share
(39.8) Note 12 – Earnings per share
27.8 Note 12 – Earnings per share
28.0 Note 11 – Taxation and
deferred taxation
2022 Reference
54.1 See APM
65.395 Note 12 – Earnings per share
82.7
2022 Reference
54.1 See APM
65.714 Note 12 – Earnings per share
82.3
2023
2022
times
pence
times Reference
pence
84.8
32.0
2.7
£m
40.5
2023
£m
16.9
7.7
6.0
3.5
74.6
0.7
30.2
(12.3)
13.4
5.7
0.4
82.7
32.0
See APM
Note 13 – Dividends
2.6
2022
£m
£m Reference
49.4 Group Income Statement
5.4
8.3
3.7
2.0
68.8
3.2
26.4
(12.4)
10.7
4.3
(0.3)
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Statement of
Cash Flows
Note 17 – Property, plant
and equipment
Note 28 – Obligations
under leases
See Financial Review
Note 15 – Intangible assets
Group Income Statement
112.7
100.7
ADDITIONAL INFORMATION 205
GENUS PLC / ANNUAL REPORT 2023
BALANCE SHEET MEASURES
Net debt
Net debt as calculated under our financing facilities
2023
2022
Current unsecured bank loans and overdrafts
Non-current unsecured bank loans and overdrafts
Unsecured bank loans and overdrafts
Current obligations under finance leases
Non-current obligations under finance leases
£m
4.2
196.0
10.0
21.9
Obligations under finance leases
Total debt financing
Deduct:
Cash and cash equivalents
Net debt
Deduct:
Lower of obligations under finance leases or £30m
Add back:
Guarantees
Cash not available
Net debt – as calculated under our financing facilities
£m
7.1
182.1
10.1
24.5
£m
200.2
31.9
232.1
(36.3)
195.8
(30.0)
12.6
0.8
179.2
£m Reference
189.2 Group Balance Sheet
34.6 Group Balance Sheet
223.8 Note 32 – Notes to the cash
flow statement
(38.8) Group Balance Sheet
185.0
(30.0)
20.2 Note 35 – Contingencies and
bank guarantees
– Note 22 – Cash and
cash equivalents
175.2
ADDITIONAL INFORMATION
206
GENUS PLC / ANNUAL REPORT 2023
ALTERNATIVE PERFORMANCE MEASURES GLOSSARY CONTINUED
CASH FLOW MEASURES
Cash conversion
Cash generated by operations
Operating profit
Add back:
Net IAS 41 valuation movement on biological assets
Amortisation of acquired intangible assets
Share-based payment expense
Exceptional items
Adjusted operating profit exc JVs
Cash conversion (%)
Free cash flow
Cash generated by operations
Net interest and tax paid
Capital expenditure
Dividends received from JV and associates
Joint venture and associate loan investment
Proceeds from sale of property, plant and equipment
Dividend to non-controlling interest
Free cash flow
OTHER MEASURES
Interest cover
Finance costs
Finance income
Net finance costs
Deduct:
Pension interest
Interest on lease liabilities
Unwinding discount on put options
Amortisation of refinancing fees
Adjusted net finance costs
Adjusted EBITDA – as calculated under our
financing facilities
Interest cover
Ratio of net debt to adjusted EBITDA
2023
£m
£m
78.7
40.5
16.9
7.7
6.0
3.5
2023
£m
74.6
105%
£m
78.7
(28.3)
(35.2)
2.6
(1.9)
2.4
(0.1)
18.2
2022
£m
£m Reference
49.4
5.4
8.3
3.7
2.0
56.6 Note 32 – Notes to the
cash flow statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
68.8 Group Income Statement
82%
2022
£m
£m Reference
56.6 Note 32 – Notes to the
cash flow statement
(22.3) Note 32 – Notes to the
cash flow statement
(50.9) Group Statement of
Cash Flows
3.2 Group Statement of
Cash Flows
– Group Statement of
Cash Flows
– Group Statement of
Cash Flows
(0.1) Group Statement of
Cash Flows
(13.5)
2023
2022
£m
Times
15.4
(1.1)
14.3
(0.2)
(1.2)
(0.3)
(1.1)
11.5
£m
6.6
(0.4)
6.2
(0.2)
(1.1)
(0.2)
(0.9)
3.8
Times Reference
Group Income Statement
Group Income Statement
Note 10 – Net finance costs
Note 10 – Net finance costs
Note 10 – Net finance costs
Note 10 – Net finance costs
Note 10 – Net finance costs
112.7
100.7
See APM
10
27
2023
2022
£m
Times
£m
Times Reference
Net debt – as calculated under our financing facilities
Adjusted EBITDA – as calculated under our
financing facilities
Ratio of net debt to EBITDA
179.2
112.7
175.2
100.7
See APM
See APM
1.6
1.7
ADDITIONAL INFORMATION 207
GENUS PLC / ANNUAL REPORT 2023
Return on adjusted invested capital
2023
2022
Adjusted operating profit inc JVs after tax
Equity attributable to owners of the Company
Add back:
Net debt
Pension liability
Related deferred tax
Adjust for:
Biological assets – carrying value
Biological assets’ harvest classed as inventories
Biological assets – historic cost
Goodwill
Related deferred tax
Adjusted invested capital
Return on adjusted invested capital
Return on invested capital
Return on adjusted invested capital
Adjusted operating profit inc JVs after tax
Tax rate
Adjusted operating profit inc JVs
Adjusted operating profit attributable
to non-controlling interest
Pre-tax share of profits from JVs exc net IAS 41
valuation movement
Adjusted operating profit exc JVs
Fair value movement on biological assets
Amortisation of acquired intangibles
Share-based payment expense
Exceptional items
Share of post-tax profit of JVs
Other gains and losses
Finance costs
Profit before tax
Tax
Profit
Equity attributable to owners of the Company
Return on invested capital
£m
66.8
574.9
195.8
6.9
(1.2)
(342.0)
(22.7)
83.4
(107.8)
67.7
455.0
%
£m
% Reference
58.8
578.5
185.0
8.3
(1.3)
(366.8)
(20.9)
77.2
(111.0)
73.0
422.0
See APM
Group Balance Sheet
Note 32 – Notes to the cash
flow statement
Group Balance Sheet
Note 11 – Taxation and
deferred taxation
Note 16 – Biological assets
Note 20 – Inventories
See Financial Review
Group Balance Sheet
Note 11 – Taxation and
deferred taxation
14.7%
13.9%
2023
£m
2022
%
£m
% Reference
14.7%
22.2%
66.8
19.0
85.8
(0.4)
(10.8)
74.6
(16.9)
(7.7)
(6.0)
(3.5)
10.5
2.7
(14.3)
39.4
(7.6)
31.8
574.9
58.8
18.9
77.7
0.3
(9.2)
68.8
(5.4)
(8.3)
(3.7)
(2.0)
5.2
–
(6.2)
48.4
(11.7)
36.7
578.5
13.9% See APM
See APM
24.3% Note 12 – Earnings per share
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Income Statement
Group Balance Sheet
5.5%
6.3%
ADDITIONAL INFORMATION 208
GENUS PLC / ANNUAL REPORT 2023
GLOSSARY
AGM – Annual General Meeting.
Artificial insemination (‘AI’) – Using semen
collected from a bull or boar to impregnate
a cow or sow when in estrus. Artificial
insemination allows a genetically superior
male to be used to mate with many more
females than would be possible with
natural mating.
ASF – African Swine Fever.
Biosecurity – The precautions taken to
reduce the chance of transmitting disease
agents from one livestock operation
to another.
Boar – A male pig.
GMS – ABS’s Genetic Management
System, which creates a genetic solution
tailored to each individual dairy producer
to obtain improved herd genetics.
Grandparent – The relationship of a
breeding pig to the generation of terminal
market pigs. A grandparent produces
parents, who in turn produce the
commercial generation of terminal pigs.
Group – Genus plc and its subsidiary
companies.
In vitro fertilisation (‘IVF’) – The fertilisation
of an oocyte with semen (outside an
animal) in a laboratory for transfer into
a surrogate.
BRD – Bovine Respiratory Disease,
a complex, bacterial and viral infection
that causes lung disease in cattle
(particularly calves) and is often fatal.
Index/Indices – A formula incorporating
economically important traits for ranking
the genetic potential of animals as parents
of the next generation.
CPI – Consumer Price Index.
CRISPR-Cas 9 – Technology which
accurately targets and cuts DNA to
produce precise and controllable changes
to the genome.
DSBP – Deferred Share Bonus Plan.
EPS – Earnings per share.
Integrated pork producer – Producers of
pork typically involved in raising animals
to slaughter weight all the way through to
packaged and/or branded pork products.
IntelliGen – The technology platform
used to process sexed bovine semen
for ABS and third-party customers and
commercialised by ABS globally as Sexcel.
IP – Intellectual property.
Farrow – When a sow gives birth to piglets.
GELT – Genus Executive Leadership Team.
IPR – Inter Partes Review before the US
Patent and Trademarks Office.
Gender skew – The ability to influence
the proportion of offspring being of
a particular sex.
Genetic gain – The change of the
genetic make up of a particular animal
population in response to having selected
parents that excelled genetically for
important traits.
Genetic lag – The amount of time required
to disseminate genetic gain from a nucleus
herd to the commercial customer.
JV – Joint venture.
Line – Multiple animals that have been
mated together in a closed breeding
population. Pure lines can have their origins
in one founding breed or in several breeds.
Market pig equivalents (‘MPE’) – Refers to
a standardised measure of our customers’
production of slaughter animals that
contain our genetics with genes from each
of the sow and boar counting for half of
the animal.
Genetic nucleus – A specialised pig herd,
where Genus PIC keeps its pure lines. Pigs
are genetically tested at the nucleus to
select the best animals to produce the
next generation.
Genomic bull – A bull which has been
assessed through genomic testing. This
typically refers to bulls which have not
been progeny-tested.
Genomically tested – An animal that has
been DNA profiled.
Genomics – The study of the genome,
which is the DNA sequence of
an animal’s chromosomes.
Gilt – A young female pig, which has not
yet given birth.
Multiplier – A producer whose farm
contains grandparent sows. The
farm crosses together two lines of
grandparents, multiplying the number
of genetically improved parents that
are available for sale.
Net Present Value (NPV) – a financial tool
that helps to assess future value in today’s
terms. NPV is calculated with an assumed
discount rate over a given amount of time
and the calculation considers the amount
and timing of the free cash flows.
NuEra – The ABS beef breeding
programme and index designed to drive
the customer’s genetic improvement and
deliver total system profitability for the
beef supply chain.
PQA – Pork Quality Assurance.
Progeny tested – Elite animals whose
genetic value as a parent has been tested
and validated through the performance
of their offspring.
PRRSv – Porcine Reproductive and
Respiratory Syndrome Virus.
PSP – Performance Share Plan.
PTAB – Patent Trial and Appeal Board
before the US Patent and Trademarks Office.
R&D – Research and development.
RMS – ABS’s Reproductive Management
System, which is a systematic approach to
maximising pregnancy production and its
contribution to herd profitability.
RPI – Retail Price Index.
RWD – ABS’s Real World Data System of
observed performance data from many
dairy herds.
Russian Sanctions – legislation introduced
by the UK, EU or US (as appropriate)
which impose financial, trade, transport,
immigration or other sanctions for the
purposes of encouraging Russia to cease
actions which destabilise Ukraine, or
undermine or threaten the territorial
integrity, sovereignty or independence
of Ukraine.
Sexcel – The ABS brand of sexed bovine
genetics produced using IntelliGen.
Sire – The male parent of an animal.
Sire line – The male line selected for traits
desirable for the market.
Sow – A female pig which has given birth
at least once.
Straw – A narrow tube used to package
frozen bull semen.
Stud – Locations where bulls or boars
are housed and their semen collected,
evaluated, diluted into multiple doses/
straws and packaged, ready for shipping
to farms.
Terminal boars – The male pig that is used
to mate with a parent female to produce a
terminal pig.
Trait – A measurable characteristic that
may be a target for genetic selection.
TransitionRight – Genus ABS’s patent-
pending genetic selection tool to help
prevent multiple post calving metabolic
disorders that occur during transition.
Unit – A straw of frozen bull semen or
tube/bag of fresh boar semen sold to
a customer.
ADDITIONAL INFORMATION 209
GENUS PLC / ANNUAL REPORT 2023
ADVISERS
SECRETARY AND REGISTERED OFFICE
SOLICITOR
Dan Hartley
Matrix House
Basing View
Basingstoke
Hampshire RG21 4DZ
Registered Number 02972325
FINANCIAL ADVISER
HSBC Bank plc
8 Canada Square
Canary Wharf
London E14 5HQ
AUDITOR
Deloitte LLP
Abbots House
Abbey Street
Reading RG1 3BD
STOCKBROKERS
Peel Hunt
100 Liverpool Street
London EC2M 2AT
Liberum Capital Limited
Ropemaker Place Level 12
25 Ropemaker Street
London EC2Y 9LY
HSBC Bank plc
8 Canada Square
Canary Wharf
London E14 5HQ
Herbert Smith Freehills LLP
Exchange House
Primrose Street
London EC2A 2EG
BANKERS
Barclays Bank PLC
2nd Floor
90–92 High Street
Crawley
West Sussex RH10 1BP
COMPANY REGISTRAR
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Telephone: +44 (0) 371 384 2290
Please use the country code when calling
from outside the UK
Lines open 8:30am to 5:30pm (UK time),
Monday to Friday (excluding public
holidays in England and Wales).
You can also contact Equiniti by using the
Relay UK website at www.relayuk.bt.com
Please see www.help.shareview.co.uk for
additional information
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GENUS PLC
Matrix House, Basing View, Basingstoke, Hampshire RG21 4DZ
T: +44 (0)1256 347100 F: +44 (0)1256 477385
www.genusplc.com