Vilmorin & Cie - Annual report 2017-2018

PRESENTATION of Vilmorin & Cie 1 ANNUAL REPORT Vilmorin & Cie 42 2017-2018 Over the course of fiscal year 2017-2018 , Vilmorin & Cie continued to accompany Seed Co in its development projects. In August 2018 (1) , Seed Co decided to reorganize its activities, through a partial demerger resulting in the separate listing of its holding Seed Co International (SCIL), based in Botswana, which groups all its international activities (except for Zimbabwe). Consequently, Vilmorin & Cie participated in the reserved capital stock increase of Seed Co International, which is now listed on the Stock Exchanges of Gaborone (Botswana) and Harare (Zimbabwe). Through this operation, Vilmorin & Cie is demonstrating its desire to significantly accelerate its expansion in Africa. This information is presented in detail on page 30. Vilmorin & Cie’s aim is to pursue its gradual development on this particularly high potential continent by continuing to rely on its direct facilities, partnerships and distribution agreements, while adapting to the specific nature of each country. 1.6.3. The capacity to combine targeted acquisitions and partnerships 1.6.3.1. Priority focuses for acquisitions Vilmorin & Cie runs a policy of targeted acquisitions aiming to anticipate market evolutions so that it can respond to major strategic opportunities: gain access to differentiating and/or complementary genetic resources* for strategic crops, acquire new production capacities, create new platforms for commercial development, penetrate and cover areas with high potential to provide new outlets and guarantee that the offer is adapted to local demand, ensure there is a better spread of risks (climate, industrial, logistics, etc.). Accordingly, the operations achieved in recent years concerned Vilmorin & Cie’s priority markets, for example North America and Asia. 1.6.3.2. A progressive integration model that respects existing identities Vilmorin & Cie’s external growth policy is to gradually integrate companies that are taken over, with the purpose of preserving the identity of the acquired company, and capitalizing on the existing assets and know-how of the teams already in place. Product development, local distribution networks and the brand policy are maintained in most cases, whereas the functions that can generate synergies (upstream research, administration, etc.) are pooled. Moreover, Vilmorin & Cie has made the choice of proximity management by organizing its structure into Business Units, combining respect for Vilmorin & Cie’s strategic choices and acknowledgement of local cultures and specificities. As a result of this highly specific model, Vilmorin & Cie is very much involved in the territories where it works. 1.6.3.3. The capacity to work in partnership Vilmorin & Cie has established numerous collaboration agreements all over the world, whether scientific, industrial or commercial. The Company thus relies on several scientific partnerships with public or private research laboratories, universities, start-ups, etc. These are presented in detail on page 40. For example, Vilmorin & Cie built a partnership with the University of California in Davis to create a start-up incubator and investigate new forms of open innovation. In addition to these partnerships, there have also been investments in companies or co-creations of companies, such as AgReliant, a joint venture created in 2000 with the German seed company KWS, which is now number 3 on the North American corn market, and Genective, a joint venture also founded with KWS, for the development of GMO* corn traits*. Vilmorin & Cie has also created joint ventures and acquired significant stakes throughout the world: Seed Co in Africa, Hengji Limagrain Seeds in China, AGT in Australia, Canterra Seeds in Canada, etc., which open up new avenues for the breeding*, production and distribution of seeds. 1.6.4. Three strategic priorities Vilmorin & Cie’s ambition is to accelerate its development in accordance with three strategic priorities, each at its own rhythm: consolidation of world leadership in vegetable seeds is an immediate priority; the objective of becoming a global player in corn seeds is a mid- term aim; internationalization of leadership in wheat seeds is on the long- term horizon. (1) The decision was approved by Seed Co’s Annual General Meeting held on August 9, 2018. 1.6. Strategy and perspectives