Vilmorin & Cie - Annual report 2017-2018

3 Management REPORT Report of the Board of Directors to the Joint Annual General Meeting (Ordinary and Extraordinary) of December 7, 2018 ANNUAL REPORT Vilmorin & Cie 88 2017-2018 Report of the Board of Directors to the Joint Annual General Meeting (Ordinary and Extraordinary) of December 7, 2018 To the Shareholders, The present Joint Annual General Meeting (Ordinary and Extraordinary) was convened in accordance with the law and the by-laws of your Company: to submit for your approval the annual financial statements for the fiscal year closing on June 30, 2018, to appoint a new Member of the Board, and to delegate to your Board of Directors the necessary powers to proceed with the purchase of your Company’s own shares and the issue of securities through a public issue with or without pre- emptive rights, according to the best possible market conditions, and also to delegate to your Board of Directors the necessary powers to proceed with an increase of the capital stock through the incorporation of issue premiums, reserves, profits or any other items with a view to allocating free shares to shareholders. Notice to attend has been sent to all of you, and all the documents and relevant information have been made available under the conditions and deadlines stipulated according to the law. Activity for the fiscal year Corporate financial statements The corporate financial statements of Vilmorin & Cie have been set out in accordance with French regulations. Within the framework of its development and innovation strategy, over fiscal year 2017-2018 Vilmorin & Cie consolidated the internationalization of its business, and furthered its partnerships in research and the development of new technologies. Vilmorin & Cie’s sales reached 82.2 million euros in 2017-2018 as opposed to 78.3 million euros the previous fiscal year. These sales mainly correspond to services rendered by Vilmorin & Cie to its subsidiaries in the areas of general administration, human resource management, information systems and pooled upstream research programs. These services are invoiced as management fees according to real expenditure and shared out proportionately between the subsidiaries of Vilmorin & Cie according to keys based on objective economic criteria. Total operating charges came to 110.4 million euros, an increase of 7.1 million euros in relation to 2016-2017. The operating income showed a loss of 10.2 million euros, a reduction of 2.7 million euros compared to the previous fiscal year. The financial result showed a net income of 22.9 million euros compared to 39.6 million euros in 2016-2017. This figure takes into account the dividends received from the subsidiaries, with the total amount for fiscal year 2017-2018 standing at 71.6 million euros, compared with 55.8 million euros the previous fiscal year. It also includes net provisions on shares of 31.9 million euros and net currency exchange losses of 1.3 million euros. Finally, this financial result also includes 13.1 million euros of net interest charges, as opposed to 12.6 million euros the previous fiscal year. The extraordinary result showed a net income of 1.8 million euros as opposed to a net charge of 16.2 million euros in 2016-2017. Income tax takes into account the impact of the fiscal integration system adopted by the Group on July 1, 2000. This fiscal group comprises Vilmorin & Cie, Vilmorin SA, HM.CLAUSE SA, Vilmorin Jardin SA and, since fiscal year 2012-2013, Limagrain Europe SA and Limagrain Central Europe SE; for fiscal year 2017 2018 a net income of 21.4 million euros was posted for this line, including tax relief for research of 4 million euros. As a result of the above-mentioned considerations, the net corporate income came to 30.8 million euros on June 30, 2018, as opposed to a profit of 26.3 million euros for the previous fiscal year. The capital stock stood at 317,717,005.50 euros on June 30, 2018, corresponding to 20,833,902 shares each with a nominal value of 15.25 euros. On June 30, 2018 loans and financial debts showed a value of 780.5 million euros. Net of cash and investment securities, and also current accounts granted to subsidiaries as part of the group’s cash flow management system, net financial debts stood at 331.1 million euros. We remind our shareholders that during fiscal year 2013-2014, Vilmorin & Cie set up syndicated credit of 300 million euros, structured in the form of a revolving credit facility with maturity after five years, the due date being in May 2019, and involving two extension options, each for one year; a first option was exercised in May 2015 and a second in April 2016. On June 30, 2018, this credit was unused. It is accompanied with the commitment to respect two consolidated financial ratios (net financial debt/EBITDA, EBITDA/net financial charges); on June 30, 2018, Vilmorin & Cie complied fully with this commitment.