Vilmorin & Cie - Annual report 2017-2018

PRESENTATION of Vilmorin & Cie 1 ANNUAL REPORT Vilmorin & Cie 26 2017-2018 This multi-crop positioning means that all the farmers’ needs can be met. Corn, straw cereals (wheat and barley), sunflower and rapeseed, which represent the core products of Vilmorin & Cie’s portfolio in Europe, are powerful creators of value, in the short-, medium- and long-term. In spite of the current difficult situation, corn is potentially a highly profitable crop, given high-performance germplasm that is historically well-suited to the needs of the forage corn market in Northern Europe. Vilmorin & Cie is indeed well-positioned as the second largest player in Europe for forage corn seeds. This crop is liable to develop even further, particularly through the launch of new varieties developed for grain corn, the main corn market in Europe, meeting farmers’ needs even more extensively (higher yields, disease resistances). Straw cereals (wheat and barley), sold through two different distribution channels (long channel, from seed companies to farmers, and short channel, from seeds companies to agricultural cooperatives) have a life cycle that is longer than average. Their profitability, which is indirectly influenced by the prices of agricultural raw materials, is lower than for other strategic crops, and can vary from one year to the next. The objective is to develop varieties with higher and more consistent yields, better drought resistance and nitrogen uptake, while being adapted to different industrial outlets. Opportunities for the creation of value also involve the development of hybrid* wheat in the long term. This is a strategic development for Vilmorin & Cie and is presented on page 48. As far as barley is concerned, Vilmorin & Cie owns efficient germplasm which will enable it to become one of the reference breeders* for this crop. Sunflower, which is very similar to corn, benefits from very high- performance germplasm, and a solidly implanted European distribution network. Vilmorin & Cie's breeding program* focuses mainly on yield, stress resistance and the introduction of disease and pest resistance traits* (including broomrape, a parasite that is prevalent in Europe). Sunflower has been developing fast for several years, especially to the east of Europe (Ukraine and Russia). Rapeseed varieties, because of their agronomic profile, have a short lifespan. Moreover, the crop, already extremely profitable because it has switched to a hybrid* form, will further improve because of the adoption of varieties with improved technical performances. Research programs include yield, oil content, pod- shattering resistance and disease resistance. A distinctive marketing and sales approach The marketing strategy adopted by Vilmorin & Cie for the field seeds market in Europe is also one of the key factors in its success. In corn for example, the Company has fine-tuned the segmentation of its range according to two criteria: the market targeted (market for forage corn and industrial applications) and the qualities targeted (digestibility and starch content for forage corn, and varieties devoted to the production of agrofuels, etc.). Moreover, attentive to the needs of farmers, beyond the product Vilmorin & Cie provides them with agronomic expertise and tailor- made support to enhance the full genetic potential of the seeds. For example, under its LG brand, Vilmorin & Cie has developed customized management tools to assist farmers in managing their farms. These various tools guide farmers and advise them on the choice of varieties, sowing, irrigation and harvesting. Finally, Vilmorin & Cie’s multi-crop and multi-brand strategy clearly accounts for the central role of agricultural distribution to exploit the value of its brands and innovations. In this respect, privileged commercial partnerships with European cooperative distribution networks represent another advantage. Performances and highlights in 2017-2018: Fine business growth in spite of an environment that remains difficult For fiscal year 2017-2018 Vilmorin & Cie, posted a marked increase in its sales in Europe, which stood at 542 million euros on June 30, 2018, up 3.6 % on a like-for-like basis. Business grew well, in spite of a market context that remained difficult, characterized by a low level of prices for agricultural production. Furthermore, the spring campaign was late taking off this year because of the weather conditions in Western Europe. Advanta ® : brand registered by Advanta Netherlands Holdings BV. Field Seeds in Europe Main brands 1.4. Activities