Vilmorin & Cie - Annual report 2017-2018

PRESENTATION of Vilmorin & Cie 1 ANNUAL REPORT Vilmorin & Cie 28 2017-2018 The seeds offered by AgReliant thus combine yield and adaptation to their environment. This offer is accompanied by a personalized agronomic roadmap, adapted to the genetic characteristics of each seed variety. A distinctive sales policy By devoting more than half of its staff to a highly qualified sales team, AgReliant can cover the three distribution networks in North America: direct sales to the farmer, which is the most widespread form of distribution, farmer-dealer networks, and sales through distributors. Farmers can thus have access to AgReliant's seeds, regardless of their location or the size of their farm, allowing the company to penetrate most of the North American market. In addition, during this past fiscal year AgReliant initiated its new commercial strategy, with a reorganization of its brands. In the United States, AgReliant will now be supported by two strong brands with a national focus: a brand for direct sales to farmers (AgriGold), and a brand dedicated to distributors and farmer-dealer networks (LG Seeds) bringing together the six regional brands. The Pride Seeds brand is retained for the Canadian market. AgReliant will continue as follows to provide very broad coverage of the Corn Belt, the heart of the North American market, as well as the Canadian market. The objective of this strategy, which will be finalized in fiscal year 2018-2019, is to encourage innovation, optimize efficiency while fostering a strong relationship of proximity with customers, with the deployment of new tools to support their development, foremost among which is the “Advantage Acre ® ” platform. “Advantage Acre ® ” is a novel tool for precision farming, developed in conjunction with Spensa Technologies (1) . This digital platform will allow farmers to fill in their own data from their farms, plot by plot, and combine them with information concerning AgReliant hybrids*. The objective is to allow growers to optimize sowing conditions, to follow the state of their crops with precision and thus overall improve agricultural production. Performances and highlights in 2017-2018: a year in decline in an unfavorable market environment For fiscal year 2017-2018, AgReliant posted sales of 520.5 million euros (100% data), a drop of 5.7% on a like-for-like basis. Volumes of marketed corn seeds were down, in an environment marked by a slight drop in cultivated acreage for this crop (-1%. Source: USDA) and persistent pressure on prices. At the end of the fiscal year, AgReliant remained in No. 3 position on the North American market for corn seeds. At the same time, volumes of marketed soybean seeds increased significantly, while the acreage devoted to this crop dropped slightly (-1%. Source: USDA) . They also benefitted from the introduction, during the previous fiscal year, from soybean seeds sold under the AgriGold brand. Competitive position With a particularly concentrated competitive environment (80% of the market being held by four players), AgReliant is positioned as the 3 rd largest player on the corn market in North America. 1.4.2.3. Field seeds in new development zones To go beyond its positions in Europe and North America, Vilmorin & Cie made the strategic choice in 2010 to internationalize its corn activities on new markets with strong potential for development: South America, Asia and Africa. (1) American company specialized in the development of precision farming systems. 1.4. Activities Field Seeds in North America Main brands Source: internal estimates. Estimate of market shares in corn seeds in North America (Spring 2018) 5 % 6 % 34 % 35 % 20 % Syngenta Chemchina AgReliant Corteva Agriscience Bayer-Monsanto Others