Genus plc / AnnuAl RepoRt 2021
`
`INSPIRING
`INNOVATION
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`Genus plc / AnnuAl RepoRt 2021
`
`OUR PURPOSE
`
`SUSTAINABILIT Y
`THROUGH
`TECHNOLOGY
`
`DelI VeRInG MoRe eFFIcIent
`BReeDInG AnIMAls to FARMeRs, to nou RIsH
`tHe WoRlD MoRe sustAInABlY
`
`INVESTMENT CASE
`
`Genus is a world-leading
`animal genetic improvement
`company, with leadership
`positions in pork, beef
`and dairy genetics.
`
`LEADING INTERNATIONAL MARKET POSITIONS
`We supply elite breeding animals, semen and
`embryos to over 50,000 customers in over 80
`countries, including the majority of the world’s
`Top 100 pig and dairy farmers. Our international
`breadth and multi-species presence reduces
`our reliance on individual markets or segments.
`In contrast, many of our competitors are regional
`single-species cooperatives.
`
`READ MORE ON
`
`p.14
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`FOCUSED, MULTI-SPECIES,
`TECHNOLOGY-DRIVEN BUSINESS MODEL
`Genus is exclusively focused on pioneering animal
`genetic improvement, to increase the efficiency and
`sustainability of animal protein production. We employ
`advanced genomics to selectively breed elite animals
`in our proprietary herds. We are also pioneering
`the application of proprietary sexing technology,
`advanced reproductive techniques and gene editing in
`our product development programmes. Our technology
`and know-how can be applied across multiple species,
`leveraging our strength and R&D investment.
`
`READ MORE ON
`
`p.04
`
`POSITIVE LONG-TERM
`MARKET FUNDAMENTALS
`Our business benefits from positive long-term
`trends, including growing global demand for
`milk and meat, and the need to produce food
`more sustainably, to meet changing consumer
`expectations. Genus’s genetic improvement
`technologies help farmers to do more with
`less, reducing their resource utilisation and
`emissions, and maximising their profits.
`
`READ MORE ON
`
`p.14
`
`PEOPLE AND RELATIONSHIPS
`Our ability to serve our customers is
`underpinned by over 3,400 employees,
`including over 100 PhDs. We also have
`close relationships with leading research
`institutions and strategic partners, giving
`us access to cutting-edge technologies
`that can benefit our customers and
`further extend our leadership positions.
`
`READ MORE ON
`
`p.34
`
`SCALE AND FINANCIAL STRENGTH
`Genus is the largest, and the only listed,
`animal genetics company globally
`operating in pork, beef and dairy. We
`are profitable, cash-generative and
`growing, with a strong financial position
`and access to strategic capital, meaning
`we can invest in transformational
`technologies to further our genetic lead.
`
`READ MORE ON
`
`p.30
`
`01
`
`CONTENTS
`
`STRATEGIC REPORT
`02 2021 Highlights
`04 Genus at a Glance
`06 Chairman’s Statement
`08 Chief Executive’s Review
`10 Business Model
`12
`Stakeholder Engagement
`14 Market Overview
`16
`Strategic Framework and
`Key Performance Indicators
`18 Operating Reviews
`30 Financial Review
`34 People and Culture
`38 Sustainability Report
`44 Non-Financial Information
`Statement and Section 172
`Statement
`46 Principal Risks and
`Uncertainties
`49 Going Concern and
`Viability Statement
`
`CORPORATE GOVERNANCE
`
`50 Chairman’s Letter
`52 Board of Directors and
`Company Secretary
`54 Genus Executive
`Leadership Team
`56 Corporate Governance Statement
`56 The Board
`58 The Board’s Year in Review
`62 Nomination Committee Report
`65 Audit & Risk Committee Report
`70 Directors’ Remuneration Report
`94 Directors’ Report
`96 Directors’ Responsibilities
`
`FINANCIAL STATEMENTS
`
`Independent Auditor’s Report
`97
`104 Group Income Statement
`105 Group Statement of
`Comprehensive Income
`106 Group Statement of Changes
`in Equity
`107 Group Balance Sheet
`108 Group Statement of
`Cash Flows
`109 Notes to the Group
`Financial Statements
`167 Parent Company
`Balance Sheet
`168 Parent Company Statement
`of Changes in Equity
`169 Notes to the Parent Company
`Financial Statements
`
`ADDITIONAL INFORMATION
`
`179 Five-Year Record –
`Consolidated Results
`180 Alternative Performance
`Measures Glossary
`188 Glossary
`189 Advisers
`
`STRATEGIC REPORT
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`02
`
`Genus plc / AnnuAl RepoRt 2021
`
`2021 HIGHLIGHTS
`
`1
`
`3
`
`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 the APM Glossary.
`2 Constant currency percentage movements are
`calculated by restating the results for the year
`ended 30 June 2021 at the average exchange rates
`applied to adjusted operating profit for the year
`ended 30 June 2020.
`The Group has changed its accounting policy
`related to the capitalisation of certain software
`assets following the IFRIC Interpretation
`Committee’s agenda decision published in April
`2021. This change in accounting policy led to an
`increase in operating expenses of £2.7m in the
`current year and £5.2m for FY20. All FY20 results
`are restated and for details of the full impact see
`Note 2 Basis of Preparation. Profit before tax
`excluding SaaS impact is presented only this
`year to demonstrate the impact of our change
`in accounting policy, and will not be presented
`in future periods.
`4 The primary intensity ratio is a measure of the
`Group’s Scope 1 and 2 emissions per tonne of
`animal weight.
`
`GROUP REVENUE
`
`£574.3m
`
`2021
`2020
`2019
`2018
`2017
`
`0.0
`
`574.3
`551.4
`
`574.3
`
`488.5
`470.3
`459.1
`
`ADJUSTED BASIC EARNINGS PER SHARE 1, 3
`
`100.9p
`
`2021
`2020
`2019
`2018
`2017
`
`0.0
`
`77.3
`
`63.8
`
`72.3
`69.4
`
`100.9
`
`100.9
`
`REVENUE GROWTH OF 4% IN ACTUAL CURRENCY
`AND 10% IN CONSTANT CURRENCY2
` > Strong revenue growth of 11%2 in PIC, our porcine genetics business; royalty
`revenue up 11%2, with royalty revenue in China more than doubling and
`good growth in Latin America and Europe
` > Continued royalty growth and high breeding stock sales in China
`contributed to PIC volume growth of 11% (up 5% excluding China)
` > Excellent revenue growth of 13%2 in ABS, our bovine genetics business,
`particularly in Brazil, Russia, India and China; continued success with
`Sexcel® (sexed genetics) and NuEra® (beef genetics)
` > Record ABS volume growth of 15%, with sexed volumes up 29% and beef
`up 22%
`
`VERY STRONG ADJUSTED PROFIT BEFORE TAX (‘PBT’)1 GROWTH,
`UP 38% IN CONSTANT CURRENCY2; STATUTORY PBT AT £55.8M
` > Adjusted operating profit including joint ventures and excluding gene
`editing cost 1 up 37%2
` > Double-digit adjusted operating profit growth 1 in PIC (up 16%2) and ABS
`(up 21%2); R&D investment increased 2%2
` > Statutory PBT increased 21% to £55.8m, adversely impacted by a reduced
`net IAS 41 non-cash fair value biological asset valuation, offset by lower
`exceptional costs
` > Foreign currency translation adverse impact on adjusted PBT of £6.3m,
`primarily reflecting weakness in LATAM currencies
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`03
`
`STATUTORY PROFIT BEFORE TAX 3
`
`£55.8m
`
`ADJUSTED PROFIT BEFORE TAX 1, 3
`
`£84.8m
`
`2021
`2020
`2019
`2018
`2017
`
`4.0
`5.6
`
`0.0
`
`55.8
`
`46.3
`
`40.7
`
`2021
`2020
`2019
`2018
`2017
`
`84.8
`
`65.8
`
`55.1
`56.3
`56.4
`
`55.8
`
`0.0
`
`84.8
`
`FREE CASH FLOW 1
`
`£37.5m
`
`DIVIDEND PER SHARE32.0p
`
`2021
`2020
`2019
`2018
`2017
`
`0.0
`
`10.0
`
`24.3
`25.4
`
`37.5
`35.2
`
`2021
`2020
`2019
`2018
`2017
`
`32.0
`
`29.1
`27.7
`26.0
`
`23.6
`
`37.5
`
`0
`
`32
`
`STRONG CASH GENERATION, EARNINGS MOMENTUM
`AND INCREASED DIVIDEND
` > Strong free cash flow 1 of £37.5m, net debt 1 of £105.6m, net debt
`to EBITDA 1 ratio remains strong at 0.9x
` > Adjusted earnings per share 1 up 40% in constant currency2
` > Recommended final dividend up 10% with 3.2x adjusted
`earnings cover 1
`
` > GenusOne enterprise system successful roll-out continues,
`with North America completed and Spain now live
` > Significant capex investment underway, to support expansion
`of best -in -industry facilities for PIC and ABS
` > Good progress with carbon reduction with the primary
`intensity ratio4 reduced by 11% cumulative compared with
`FY19 baseline
`
`SIGNIFICANT STRATEGIC PROGRESS
` > Continued to win new customers globally, due to our
`leading porcine and bovine genetics; genetic improvements
`contributing to the reduction in use of energy, water and land
`in animal protein production
` > PIC China continues to win customers; five new key accounts
`in FY21; serving over one third of top Chinese producers
` > Continued shift in ABS’s product mix; 23% of global sales
`volume comprising sexed genetics and embryos reflecting
`Sexcel’s® continued success and 29% beef genetics reflecting
`the growing use of NuEra beef genetics in dairy herds
` > Acquisition in Spain of Sergal (total consideration £7.7m)
`expands supply chain and sireline market share in the world’s
`fourth largest pig market
`
`BUILDING R&D CAPABILITIES AND OPPORTUNITY PIPELINE
` > Good progress with the Porcine Reproductive Respiratory
`Syndrome virus (‘PRRSv’) resistance development programme,
`with two successful disease trials and a defined path to
`regulatory approval
` > Next generation of IntelliGen, Gen2 (‘Gen2’) sexing technology
`launched; more compact, effective and efficient than the
`previous generation technology
` > Rapidly built world class reproductive biology team
`and secured strategic partnerships with leading
`external collaborators
` > Strategic minority investment in Xelect (£2.4m), a genetic
`improvement consultancy in the fast-growing aqua
`genetics market
`
`STRATEGIC REPORT
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`04
`
`Genus plc / AnnuAl RepoRt 2021
`
`GENUS AT A GLANCE
`
`INNOVATION
`
`pRoDu cInG MoRe sustAInABle
`BReeDInG AnIMAls FoR FARMeRs
`
`HOW WE DO IT
`We analyse animals’ DNA
`and look for markers that
`we know are linked to
`desirable characteristics,
`which help farmers to
`raise healthier and more
`sustainable animals.
`
`WHAT WE DO
`Genus is a world-leading
`animal genetics company.
`
`We partner with farmers to nourish the
`world more efficiently and sustainably.
`
`We do this by breeding better pigs and
`cattle, so farmers can produce high-
`quality meat and milk more efficiently and
`sustainably. We accurately select animals
`with desirable characteristics and use
`them to breed subsequent generations.
`
`Examples of desirable characteristics
`include feed efficiency, disease resistance,
`growth rate, protein and fat content,
`and fertility.
`
`We then select 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 genetically
`superior animals to our customers in
`the form of breeding animals, semen
`or embryos.
`
`We also own technology that enables us
`to screen and process semen for desirable
`traits, such as producing female offspring
`for the dairy market, and license-in
`technology to make precise gene edits
`to animals’ DNA, which we are employing
`in our R&D programmes, for example
`to produce pigs which are resistant to
`fatal disease.
`
`Our focus is on progressive farmers, who
`are best placed to realise the benefits of
`superior genetics and technologies.
`
`INVESTING TO STRENGTHEN OUR POSITION1
`
`£m
`
`160
`
`140
`
`120
`
`100
`
`80
`
`60
`
`40
`
`20
`
`0
`
`FY13
`
`FY14
`
`FY15
`
`FY16
`
`FY17
`
`FY18
`
`FY19
`
`FY20
`
`FY21
`
`Research & Development2
`Capital Expenditure3
`Acquisitions & Investments
`
`1
`
`2
`3
`
`Restated following an April 2021 IFRIC Interpretation Committee agenda decision that resulted in previously
`capitalised software assets being expensed.
`Includes net investments in biological assets.
`Includes finance lease payments.
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`SERVING PORK, DAIRY AND BEEF FARMERS GLOBALLY
`Genus’s leading porcine and bovine animal breeding divisions, PIC and ABS,
`deliver genetically elite breeding animals to thousands of farmers globally.
`
`MARKET SHARE1, 2
`
`05
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`PORK
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`DAIRY & BEEF
`
`7
`
`1 PIC
`2 Competitor 1
`3 Competitor 2
`4 Competitor 3
`
`16%
`7%
`5%
`3%
`
`5 Competitor 4
`2%
`6 Competitor 5
`2%
`7 Internal programmes 9%
`8 Other
`56%
`
`1 Competitor 1
`2 ABS
`3 Competitor 2
`4 Competitor 3
`
`11%
`9%
`9%
`4%
`
`5 Competitor 4
`6 Competitor 5
`7 Other
`
`4%
`3%
`60%
`
`£315.6m
`£135.9m
`2,000+
`
`PIC, our global porcine genetics business, sells
`genetically superior breeding pigs and semen to
`farmers, so they can breed commercial pigs with
`desirable characteristics for pork production.
`We also provide technical services and advice
`to farmers, to maximise the performance of our
`breeding animals in their farms.
`
`PIC owns over ten elite pure-bred pig lines, housed
`in strategically located biosecure facilities. These
`pigs are bred out into much larger breeding
`herds in over 500 predominantly sub-contracted
`‘multiplication’ farms around the world, many of which
`are operated by customers themselves. PIC boars
`are also housed in over 400 boar studs globally,
`where semen is collected for distribution to
`customers and multiplication herds.
`
`PIC genetics are sold under the PIC brand through
`direct sales channels and strategic partners.
`
`£250.1m
`£36.4m
`50,000+
`
`ABS, our global bovine genetics business, sells dairy
`and beef bull semen and embryos from our superior
`cattle, which are sold to farmers to breed their cows
`through artificial insemination. The resulting calves
`will then exhibit desirable characteristics for milk
`and beef production. ABS’s highest-quality semen
`is often sold in sexed form, which greatly increases
`the probability of a female calf. ABS also provides
`technical services to farmers, to maximise the
`performance of their animals bred with our genetics.
`
`ABS breeds genetically elite bulls in the US, Europe,
`Latin America and India. The best bulls come to
`one of ABS’s six stud locations, where their semen is
`collected for distribution as a frozen ‘straw’ of semen
`or used to create embryos for sale.
`
`ABS genetics are sold through direct sales channels
`and strategic partners under the ABS brand. In the
`UK and France, they are sold under long-established
`Genus and Bovec brands.
`
`PIC divisional review can
`be read on p.18 – p.21
`
`ABS divisional review can
`be read on p.22 – p.25
`
`REVENUE3
`
`ADJUSTED
`OPERATING
`PROFIT3, 4
`
`CUSTOMERS
`GLOBALLY
`
`1
`
`Source: Government
`agencies, Eurostat,
`pork organisations,
`Genus estimates.
`Market shares
`represent the
`estimated share of
`pig production in
`top pig production
`markets.
`2 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 29 target
`markets for dairy and
`Top 8 target markets
`for beef.
`3 Revenue and
`Adjusted Operating
`Profit Including Joint
`Ventures exclude
`R&D revenues and
`costs.
`For more information
`on APMs see APM
`Glossary.
`
`4
`
`STRATEGIC REPORT
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`06
`
`Genus plc / AnnuAl RepoRt 2021
`
`CHAIRMAN’S STATEMENT
`
`PROGRESS
`
`posItIonInG tHe GRou p
`FoR FuRtHeR success
`
`the Group
`delivered a
`strong and
`balanced
`performance in
`2021, with both
`pIc and ABs
`contributing
`to growth.
`
`IAIN FERGUSON
`
`I am delighted to be
`reporting to you for the first
`time as Chairman of Genus.
`
`I want to thank my predecessor, Bob
`Lawson, for his outstanding stewardship
`of the business during his ten years as
`Chairman and for handing over a business
`in excellent shape. Bob was a strong
`advocate for investment in science and
`the application of that science to our
`world. The success Genus is enjoying
`today is the result of that accumulated
`investment over many years.
`
`PERFORMANCE AND DIVIDEND
`The Group delivered a strong and
`balanced performance in 2021, with
`both PIC and ABS contributing to growth.
`Almost all regions were ahead of the
`previous year and trading was particularly
`good in China, Brazil, Russia and India.
`The Group’s adjusted profit before tax was
`£84.8m, up by 38% in constant currency
`and 29% in actual currency. Statutory PBT
`was £55.8m (2020 restated: £46.3m).
`
`We recognise the importance of
`balancing our investment for the future
`with ensuring an attractive return for
`shareholders. The Board is therefore
`recommending a final dividend of 21.7p
`per share, which will give a total dividend
`of 32.0p, including the interim dividend
`of 10.3p per share paid in April 2021. This
`will result in growth in the total dividend
`of 10%. The final dividend will be paid on
`10 December 2021, to shareholders
`on the register at the close of business
`on 19 November 2021.
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`07
`
`STRATEGY
`Genus is a long-cycle business and
`one of the Board’s key jobs is to keep
`looking to the future. We continually
`scan the horizon, to ensure we identify
`developments in our industry and related
`sectors, understand our competition and
`have access to important new science
`and technology. This activity will underpin
`the Group’s continuing success over the
`next five to ten years.
`
`The Board held its annual strategy session
`during the year, which confirmed to us
`that the strategy remains appropriate.
`Our priorities are also unchanged. The
`Group will continue to invest, to protect
`and build on the strong positions of its
`bovine and porcine businesses, and we
`will seek opportunities to apply Genus’s
`science base to other species where
`they can add value for shareholders.
`
`Genus is purpose-led, with our vision
`clearly setting out our goal of using
`innovation to nourish the world. Our
`strategy is aligned to this purpose, as is
`our focus on sustainability, which I see
`as intrinsic to our licence to operate.
`Delivering improved outcomes for farmers,
`while reducing the amount of feed and
`other natural resources required, is a
`core part of our breeding programmes.
`We are also committed to improving
`our own environmental footprint.
`
`BOARD
`I joined the Board as a Non-Executive
`Director on 1 July 2020 and succeeded
`Bob Lawson as Chairman on his
`retirement, following the AGM on
`25 November 2020. There were two
`other changes to the Board during the
`year, with Professor Jason Chin being
`appointed as a Non-Executive Director
`from 1 April 2021 and Professor Ian Charles
`retiring from the Board on 31 May 2021.
`
`Jason has deep scientific expertise, as
`Head of the Centre for Chemical and
`Synthetic Biology at the Medical Research
`Council Laboratory for Molecular Biology,
`in Cambridge. He is therefore ideally
`positioned to act as scientific adviser to
`the Genus Portfolio Steering Committee,
`a role Ian Charles filled with distinction
`for more than three years. We thank Ian
`for his significant contribution during his
`time on the Board, which included helping
`us to understand the biome and the
`importance of reproductive biology.
`
`PEOPLE
`Genus employs over 3,400 talented and
`dedicated people around the world.
`They have shown real commitment
`and flexibility this year, helping us to
`successfully deliver for our customers and
`keep our research programmes on track
`during COVID-19. The pandemic has really
`underscored the strength of the working
`relationships across the Group, as well
`as our people’s ability to take on new
`challenges and adapt to new technology.
`While the situation in countries such as the
`UK and US has eased in recent months,
`we have significant businesses in India,
`Brazil and other countries that have
`continued to be hard hit. Unfortunately,
`we have lost two colleagues to COVID-19
`and our thoughts are with their families
`and friends.
`
`LOOKING FORWARD
`Genus has the platform and resources
`to invest for the future and maintain
`our virtuous cycle. We will continue to
`select the best technology, science and
`partners, and work to deliver continuous
`genetic improvement. By taking this to
`our customers and sharing in the value
`we create for them, we will continue to
`reinvest in R&D, our people and world-
`class facilities to further grow our market
`leadership. This consistent investment is
`the driver of our long-term success and
`our commitment to it gives us confidence
`in Genus’s future.
`
`Iain Ferguson CBE
`Chairman of the Board
`8 September 2021
`
`STRATEGIC REPORT
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`08
`
`Genus plc / AnnuAl RepoRt 2021
`
`CHIEF EXECUTIVE’S REVIEW
`
`SUCCESS
`
`sIGnI FIcAnt pRoGRess
`
`the Group’s financial
`performance was
`excellent, with
`Genus achieving
`its fastest profit
`before tax growth
`rate in over ten years.
`
`STEPHEN WILSON
`
`This was a very successful
`year for Genus.
`
`We delivered a very strong operational
`and financial performance, made further
`significant progress with our strategy and
`continued to drive our innovation agenda,
`as we strive to fulfil our vision of ‘Pioneering
`animal genetic improvement to help
`nourish the world’. Advancing sustainability
`has always been fundamental to our
`business and vision, and we have made
`good progress with our ESG agenda in
`the year.
`
`GROUP PERFORMANCE
`The Group’s financial performance was
`excellent, with Genus achieving its fastest
`profit before tax growth rate in over ten
`years despite the currency headwinds.
`Revenue rose by 4% and adjusted profit
`before tax of £84.8m was 29% higher, or
`38% in constant currency.
`
`Both businesses achieved growth in their
`key metrics. In constant currency, Genus
`PIC’s revenue increased by 11% and the
`strategically important porcine royalty
`revenue was 11% higher. This contributed
`to adjusted operating profit including joint
`ventures being 16% up in constant currency.
`All regions contributed to this growth, with
`China a key driver as producers restocked
`as a result of African Swine Fever. Russia
`and Brazil were also particularly strong.
`
`Genus ABS increased revenue and
`adjusted operating profit by 13% and 21%
`respectively, in constant currency. This was
`underpinned by a 15% increase in volumes.
`Sexed volumes grew by 29%, reflecting the
`ongoing success of Sexcel, and global
`beef volumes were 22% higher, supported
`by increased use of NuEra beef genetics
`in dairy herds. Again, growth was broadly
`spread geographically, with Brazil, Russia,
`India and China all performing well.
`
`We continued to invest significantly in R&D,
`so we can bring the benefits of the latest
`and best science to our customers. Net
`R&D expenditure was £62.5m in the year
`(up 2% in constant currency), with primary
`research expenditure in addition to gene
`editing increasing 42% in constant currency
`to £13.3m. We have further strengthened
`our differentiated and proprietary offerings
`and invested in key strategic initiatives,
`including gene editing, the next generation
`of IntelliGen technology (‘Gen2’), and
`reproductive biology, as well as further
`developing our R&D pipeline.
`
`STRATEGIC PROGRESS
`Our PRRSv-resistance programme is making
`pleasing progress, with the successful
`completion of two rounds of disease trials
`of our gene-edited pigs. We have a defined
`path to regulatory approval, including the
`timeline to complete our Food and Drug
`Administration (‘FDA’) submissions and the
`steps we need to take to achieve this.
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`OUR VALUES
`
`CUSTOMER CENTRIC
`We are one team, dedicated to helping
`customers thrive. We anticipate
`their needs and help them seize
`opportunities, acting as partners to
`improve quality, efficiency and output.
`If we’re not adding value for our
`customers, we stop and think again.
`
`Read more on p.2 – p.33
`
`RESULTS DRIVEN
`We are proactive, determined to be
`the best we can be and to exceed
`expectations. We redefine standards
`for ourselves, our customers and
`our industry. Every one of us takes
`pride in delivering the highest level
`of performance. If something can be
`improved, we find a simpler, better
`way to do it.
`
`Read more on p.2 – p.33
`
`PIONEERING
`We are an innovative, forward-thinking
`company. We have the courage and
`confidence to explore new ideas, and
`the energy and enthusiasm to deliver
`them. We are creative, tenacious and
`resourceful in every area of our work.
`
`Read more on p.2 – p.33
`
`PEOPLE FOCUSED
`We are a business rooted in science
`but built around our people. We inspire,
`challenge and support everyone to
`perform, develop and grow. We treat
`others with respect and we invite views
`and feedback to help us improve.
`
`Read more on p.34 – p.37
`
`RESPONSIBLE
`We are ethical to our core. We feel
`a deep sense of responsibility to
`our customers, colleagues, animals,
`communities and shareholders. We
`are honest, reliable and trustworthy. We
`mean what we say and do what we say.
`
`Read more on p.38 – p.43
`
`In China, we are collaborating successfully
`with our partner BCA, which is engaging
`positively with the Chinese regulatory
`authorities.
`
`We continue to drive innovation across
`the Group, including delivering further
`improvements to our IntelliGen technology.
`We have now launched Gen2 of IntelliGen,
`which is more compact, effective and
`efficient than the previous generation
`technology. It has been introduced in our
`Dekorra, Wisconsin facility and we plan to
`introduce it shortly to our new facility at
`Leeds, Wisconsin, which started to receive
`bulls in the summer of 2021. In addition,
`we have launched a major new R&D
`programme in reproductive biology and
`have established a new world-class
`team in this area.
`
`The implementation of GenusOne,
`our new enterprise system, is continuing.
`We completed the roll out in North
`America and in Spain during the year
`and are now working on the roll out
`to the remainder of the Group over
`the next two years. GenusOne will be
`a key enabler of leveraging our scale
`at a Group level and giving greater
`visibility of business data. As we roll out
`GenusOne, we are also introducing
`a new target operating model to
`standardise our procurement, and financial
`processes and reporting worldwide.
`
`Investing in our digital capabilities in our
`interactions with customers is another
`important theme. Our ABS business in
`Latin America has had great success
`through digital sales during COVID-19 and
`we will introduce more digital customer
`engagement across ABS, to enhance
`the customer experience. To support our
`scientific programmes, we are also investing
`in data science, to help us extract new
`insights from the rapidly expanding sources
`of data being generated by farmers.
`
`Spain is the world’s fourth largest porcine
`market and we have expanded our supply
`chain and market share in the male side
`of the business, through the acquisition
`of Sergal, a leading Spanish boar stud
`operator. In addition, we have taken a
`minority stake in Xelect, an aqua genetic
`improvement consultancy based in
`Scotland. We are pleased to have started
`a partnership in this space and look
`forward to the opportunities this may open
`up to gain a presence in the fast-growing
`aqua genetics market.
`
`Finally, we are investing at a record pace
`in new facilities to lay the foundations for
`continuing future growth, including new bull
`housing and IntelliGen production facilities,
`a major new porcine nucleus in Canada,
`a boar stud in Russia and new porcine
`capacity in China.
`
`09
`
`ADVANCING ESG
`Sustainability in particular, is at the core
`of our business. The ongoing genetic
`improvement we deliver helps farmers
`to produce more protein with fewer
`resources and a lower carbon footprint,
`whether that is through producing pigs
`which convert feed more efficiently into
`growth or enhancing the productivity of
`dairy cows. We have commitments to
`reduce our own carbon footprint by 25% by
`2030 and have a roadmap and planned
`investments to achieve this. In the year our
`carbon emissions reduced by 6.8% and our
`primary intensity ratio reduced by 0.2%,
`with a cumulative primary intensity ratio
`reduction against the 2019 base year of
`11.3% achieved towards the 2030 goal.
`
`PEOPLE
`To achieve our vision of pioneering
`animal genetic improvement to help
`nourish the world, we need to attract,
`develop and retain outstanding people.
`The Genus Executive Leadership Team
`was unchanged during the year and
`we continued to add to our strength in
`depth, hiring talented leaders to head up
`data science, reproductive biology and
`genomics. Our AWAKE programme, which
`aims to empower women to succeed in
`Genus, is gathering momentum, reflecting
`the importance we place on diversity. We
`have rolled out improvements in learning
`and development, to help our people
`thrive. Employee engagement measured
`through surveys remains high.
`
`While the Group has demonstrated its
`resilience in the face of COVID-19, we know
`that the pandemic has placed a significant
`strain on our people. We have consistently
`focused on protecting their health and
`well-being, and they in turn have risen to
`the challenge of serving our customers
`and keeping the business moving ahead.
`As a gesture of gratitude, I was pleased to
`announce a special additional payment
`of £500 to all employees around the world
`to thank them for their commitment and
`contribution this year.
`
`OUTLOOK
`Looking ahead, the outlook for the Group
`remains positive and we are confident in
`our strategy and the many opportunities
`for Genus. Group performance in FY20 and
`FY21 was very strong, with good growth
`across both ABS and PIC, led in particular
`by strong growth in PIC China, where the
`opportunity remains large. However, recent
`volatility in the Chinese porcine market is
`expected to continue for some months,
`creating a short-term headwind in FY22,
`primarily for PIC China. As a result of this
`headwind, and despite expected strong
`performance in the other areas of the
`business, we expect Genus’s growth to be
`lower than our medium-term goal in the
`current year before increasing again in FY23.
`
`Stephen Wilson
`Chief Executive
`8 September 2021
`
`STRATEGIC REPORT
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`10
`
`Genus plc / AnnuAl RepoRt 2021
`
`BUSINESS MODEL
`
`DELIVERING
`
`pRoDu cInG AnD DelIVeRInG MoRe
`sustAInABle AnIMAls to FARMeRs
`
`PRODUCE GENETICALLY
`SUPERIOR BREEDING ANIMALS
`
`OUR STRENGTHS
`AND RESOURCES
`
`SHARED PROPRIETARY
`TECHNOLOGY PLATFORM
`
`GLOBAL POSITION
`Genus is uniquely placed as a global
`player, with leading brands and market
`positions, which we strengthen through
`acquisitions and partnerships
`
`GENOME SCIENCE AND BIOINFORMATICS
`We understand the links between DNA
`and animals’ observable characteristics,
`and how we can influence them
`
`ELITE ANIMALS
`We own elite porcine and bovine herds,
`which produce animal protein more
`efficiently and have traits farmers value
`
`GENOMIC SELECTION
`We breed successive generations of
`animals by using DNA analysis to select
`superior parents in our breeding herds
`
`PROPRIETARY TECHNOLOGY
`We harness leading genetic and breeding
`technologies, which we develop in-house
`and through strategic partnerships
`
`BIOSYSTEMS ENGINEERING
`We use technology to interrogate and
`select cells, such as in our semen sexing
`technology
`
`CUSTOMER RELATIONSHIPS
`We serve over 50,000 customers globally,
`including most of both the Top 100 pig
`producers and dairies globally
`
`GENE EDITING
`We are developing more sustainable,
`disease-resistant breeding animals by
`making precise changes to their genes
`
`EXPERT PEOPLE
`We have over 3,400 employees, including
`over 100 PhD qualified employees, and
`relationships with leading research
`institutions
`
`REPRODUCTIVE BIOLOGY
`We have active R&D workstreams
`in multiple advanced reproductive
`technologies, such as IVF, which enable
`us to select both female and male parents
`for superior offspring
`
`GLOBAL SUPPLY CHAIN
`We have production facilities in key
`locations worldwide, coupled with sales
`forces and agents in over 80 countries
`
`FINANCIAL STRENGTH AND SCALE
`Our cash generative businesses and scale
`allow us to fund strategic investments and
`deliver improved returns
`
`Exhibit 1034
`Select Sires, et al. v. ABS Global
`
`

`

`11
`
`LINK TO STRATEGY
`
`Delivering a differentiated proprietary
`genetic offering
`Focusing on large and progressive
`protein producers globally
`
`Sharing in the value delivered
`
`Read more on p.16 – p.17
`
`PRICE ACCORDING
`TO THE VALUE DELIVERED
`
`DELIVERING FOR
`OUR STAKEHOLDERS
`
`CUSTOMERS
`We breed healthier, more productive
`animals for customers, which produce
`meat and milk more efficiently and
`sustainably. We build trust with customers
`by linking pricing to on-farm performance,
`such as piglets produced from our sows,
`and by running validation trials
`
`CONSUMERS
`We make nutritious animal protein more
`affordable and sustainable, to help feed
`the world
`
`COMMUNITIES AND ENVIRONMEN