Vilmorin & Cie - Annual report 2017-2018

1 ANNUAL REPORT Vilmorin & Cie 55 2017-2018 in order to demonstrate, through external audits, its responsible management of GMOs* by implementing the requirements of the ETS quality management system throughout the life stages of GM* products: research, production, marketing, launch, distribution, crisis management and product stoppage. Vilmorin & Cie is audited once every three years by independent, external auditors on the implementation of this program. Vilmorin & Cie’s ETS qualification was renewed in 2018. 1.7.3.2. Risks related to procurement Identification of the risk Vilmorin & Cie’s activities are highly seasonal, and sensitive to climate risks and supply hazards. Whether the reasons are climate- related, technical, geopolitical, contractual, etc., the consequences of risks related to seed procurement may have a strong impact on Vilmorin & Cie. Managing the risk The production plan (1) plays a major role in limiting risks related to procurement. As a vital aspect in the appropriate supply of markets, and also control over inventory levels, the production plan is set up with regard to different factors: market needs, harvest results, commercial lifespan of the variety, preservation quality of each seed lot, and also each production zone. Coordinated by the production managers, this plan is confirmed by the General Management in each company. In terms of climate, weather and geopolitical risks, the varied international locations of production areas and research stations make it possible to share out and limit these risks, and ensure regular high-quality seed production. As far as production is concerned, the highly seasonal nature of the business, the specific needs of the different crops, and variations in demand, all mean that sites need to be established all over the world. These sites are either owned directly by the Company, by the network of seed multiplication farmers* or indeed by sub-contractors. There are about twenty production basins spread out over five continents, both in the northern and southern hemispheres, to ensure this risk is under control. 1.7.3.3. Risks related to image Identification of the risk Through its business activities, Vilmorin & Cie is exposed to public attacks of all kinds and all origins, in particular in France, whether well-founded or not, sincere or in bad faith, which might damage its image and reputation. Such events could have negative effects on Vilmorin & Cie’s sales, income, image, attractiveness and development perspectives. Managing the risk In order to limit the proliferation, range and impact of criticisms and attacks against the group, in liaison with its reference shareholder Limagrain, Vilmorin & Cie has implemented measures to prevent this risk and be in a position to react in the case of a media crisis. The Communication and Institutional Affairs Department, which is more specifically in charge of crisis communication, has organized its approach around several action plans: The strengthening of relations with national, regional and local administrations, by presenting the group, its activities and its installations, its challenges and potential risks. This preventative action means there is already greater comprehension and proximity in times of crisis, in situations where the intervention of these services is required. The development of regular communication with the media to facilitate their understanding of the group and initiate quality dialogue. Awareness development and training for the Top Executives, communicators and spokespersons of the group. They each have two crisis communication guidebooks and specific media-training programs are organized preventively to prepare for certain sensitive subjects, and to prepare statements when confronted with a crisis situation. The dissemination of a press procedure for the subsidiaries, to provide a framework for speaking to the media. The organization of a crisis communication unit at Group level in charge of recommending the communication strategy and deploying the communication plan as soon as possible in times of crisis. Conducting crisis management exercises (this information is presented in detail on page 62, section 1.7.5. “The crisis management system”). Specific web monitoring, flexible and multi-lingual (social media, websites, blogs, the press, etc.), focused on the anticipation and identification of image risks, is also part of this system. (1) Depending on crops and varieties, the production plan is built up on the basis of sales forecasts for the following year. These forecasts are made with regard to inventories, customer opportunities and market trends. The function of the production plan is to define the crops and varieties to be produced, the places and quantities for production, depending on climate risks, production sites, earliness, average yields and producers. 1.7. Risk factors PRESENTATION of Vilmorin & Cie