Vilmorin & Cie - Annual report 2017-2018

PRESENTATION of Vilmorin & Cie 1 ANNUAL REPORT Vilmorin & Cie 40 2017-2018 Vilmorin & Cie will use these techniques in strict compliance with the laws and regulations applicable in various countries. In Europe, the decision of the European Court of Justice made in July 2018 on the regulatory status of plants obtained with new directed mutagenesis techniques (CRISPR type) considers that varieties resulting from these new methods should be subject to the same European legal regulations as GMOs*. This legal status governs the possibilities of using these technologies for products intended for European markets. Vilmorin & Cie will continue to invest in these technologies and continue to develop its research programs in this field, in accordance with each local regulatory context. Developing strategic partnerships to enrich upstream research Strategic partnerships, permanently pursued and strengthened, constitute a complement to Vilmorin & Cie’s research organization. They provide access to new skills and technologies, extending existing genetic bases and enriching upstream research: Genective (France) – a 50/50 joint venture with the German seed company KWS: through this upstream research agreement initiated during the course of fiscal year 2011-2012, Vilmorin & Cie and KWS have pooled resources in order to develop GM* traits* intended for corn seeds. Vilmorin & Cie will thus eventually have a proprietary line-up of genetically modified corn seed varieties. Keygene (Netherlands) – experts in genomics* applied mainly to vegetable plants, and in which Vilmorin & Cie has held a stake of 25% since 2001, in partnership with the Dutch seed companies Enza Zaden and Rijk Zwaan, and the Japanese seed company Takii. Biogemma (France) – specialists in field seed plant biotechnology*, which is held 55%, in partnership with the seed companies Euralis and RAGT, and the financial institutes for the French oilseed and protein chain (Sofiprotéol - Avril group) and cereal chain (Arvalis). Biogemma has announced a plan to split its oilseeds (rape and sunflower) and cereals (wheat and corn) businesses. According to this plan, oilseed research will be integrated into a new structure with Vilmorin & Cie, Euralis, RAGT and Sofiprotéol (Avril group) all being equal shareholders; wheat and corn research will be exclusively held by Vilmorin & Cie. This plan, which is subject to all the social and legal procedures and approvals, should be implemented by the end of 2018. Australian Grain Technologies (Australia) – Australian leader for breeding*, developing and distributing novel cereal varieties. Vilmorin & Cie holds a stake of almost 33% in the company’s capital stock, and can therefore benefit from broad access to Australian public genetic resources*, technologies and research, and be present on the major straw cereal markets. Soltis (France) – 50/50 joint venture between Vilmorin & Cie and Euralis, specialized in sunflower research. Vilmorin & Cie’s researchers also work in association with public and private research institutes throughout the world: INRA and IRSTEA (France), University of Davis (United States), Volcani Center (Israel), CSIRO (Australia), University of Wageningen (Netherlands), University of Chiba (Japan), etc. Through this research organization, every year Vilmorin & Cie is able to create several hundred new varieties, and thus achieve a significant share of its sales from products that come out of its own research programs: in 2017-2018, more than 95% of Vegetable Seed sales and more than 50% of Field Seeds sales originated in seed varieties created by Vilmorin & Cie. 1.6.2. Strong internationalization of activities In a global seed market, the internationalization of Vilmorin & Cie's activities is the driving force behind its development. All stages of seed development have an international dimension: research sites are distributed worldwide; seed production takes place in both hemispheres, while product distribution is carried out in the main areas of seed use. In line with a strong segmentation strategy, targeted by region and crop, internationalization of the business combines organic and external growth and involves acquisitions, strategic alliances and partnerships on a recurring basis. Based on a solid financial structure, Vilmorin & Cie is pursuing its development plan in both the vegetable seeds and field seeds markets. 1.6.2.1. Significant business outside Europe Analysis of sales by geographical area compared to 2016-2017 Europe Americas Africa/Middle East Asia/Oceania 10 % 10 % 20 % 60 % (-1 pt) (=) (-3 pts) (+4 pts) 1.6. Strategy and perspectives