Vilmorin & Cie - Annual report 2017-2018

1 ANNUAL REPORT Vilmorin & Cie 25 2017-2018 1.4.1.4. Competitive position The competitive landscape of vegetable seeds is characterized by a great diversity of players: global companies active in both seeds and agrochemicals, regional or specialized companies, as well as a multitude of local players. Today the top five operators represent more than half of the world market for vegetable seeds. Within this highly concentrated competitive market, Vilmorin & Cie is clearly positioned as No. 2 worldwide. Companies Countries No. 1 Bayer-Monsanto Germany No. 2 Vilmorin & Cie France No. 3 Syngenta-Chemchina China No. 4 BASF Germany No. 5 Rijk Zwaan Netherlands Sources: internal estimates and corporate disclosures. 1.4.2. Field Seeds No. 6 worldwide in field seeds, Vilmorin & Cie creates, produces and distributes field seeds for farmers. Corn and wheat are the two s t r a t eg i c c rops de f i ned by Vilmorin & Cie worldwide. As a complement, the Company develops a portfolio of crops adapted to each region where it operates, and therefore proposes seeds for regional crops: sunflower, rapeseed and barley in Europe, rice in India, and soybean, which Vilmorin & Cie distributes in North and South America, and also in South Africa. Vilmorin & Cie’s field seeds activities cover Europe, North America, and, since 2010, new development zones. They are organized around two global functions (research and strategic marketing) and six Business Units with a regional vocation: field seeds in Europe, with the Business Unit Limagrain Europe; corn seeds – and soybean seeds – in North America, through AgReliant, a 50/50 joint venture with the German seed group KWS; corn seeds – supplemented with crops of a regional vocation – in new development zones, through three Business Units: Limagrain South America (South America - mainly Brazil), Limagrain Asia- Pacific (1) (India, China and Southeast Asia) and Limagrain Africa; wheat seeds in North America, grouped within the Business Unit Limagrain Cereal Seeds. In 2017-2018, the Field Seeds division posted sales of 623.3 million euros, up 2.3% on a like-for-like basis compared with fiscal year 2016-2017, demonstrating a solid performance of the business in a market context that remains difficult. If the seeds activities for corn and soybean in North America, grouped in AgReliant, are included, sales (2) came to 883.6 million euros, stable on a like-for-like basis compared with 2016-2017. 1.4.2.1. Field Seeds in Europe The field seeds activity – cereal and oilseed crops – located in Europe, focuses on farmers as customers, through distribution networks that vary according to the countries targeted and the crops distributed. A key advantage: a multi-crop strategy optimizing cover of the European market A product line segmented according to strategic interests A major player in Europe, Vilmorin & Cie is active on the main European agricultural markets, with clearly defined positioning for the different crops. To optimize its investments in research and marketing, Vilmorin & Cie has segmented its crops into three main categories: strategic crops for which it holds strong competitive positions, particularly corn and wheat. Sunflower, oilseed rape and barley are also among the main European crops for which Vilmorin & Cie develops specific research programs. For these crops, Vilmorin & Cie permanently pursues its upstream research programs and breeding*, thus guaranteeing its future development. support crops which provide commercial synergies as line complements when strategic crops are marketed. Research investment is limited and production is carried out by sub- contractors through partnerships such as that developed with DLF, a Danish company which is the world leader for the forage plant segment. so-called “local” crops (amenity grasses, cotton, sugar beet, etc.) distributed according to market opportunities, which complete the line-up. (1) On July 1, 2017, the Australian company Australian Grain Technologies, in which Vilmorin & Cie holds a minority stake, joined the Business Unit Limagrain Asia-Pacific. (2) Integrating 50% of AgReliant (North America. Field Seeds). After application of the standard IFRS 11, certain companies have been consolidated in the financial statements using the equity method since fiscal year 2014-2015. 883.6 million euros (-0.1% on a like-for-like basis) Field Seeds sales for 2017-2018 1.4. Activities PRESENTATION of Vilmorin & Cie