Vilmorin & Cie - Annual report 2017-2018

1 ANNUAL REPORT Vilmorin & Cie 23 2017-2018 1.4.1. Vegetable Seeds No. 2 worldwide for vegetable seeds, Vilmorin & Cie creates, produces and sells novel seeds for professional vegetable production. Growers, who produce vegetables for fresh markets, and indirectly processors, specialists in canning and deep- freezing, make up its customers. Extremely diversified, Vilmorin & Cie’s product line-up comprises about thirty different crops, and in particular those that are most widely consumed throughout the world: tomato, sweet and hot pepper, onion, watermelon, carrot, cucumber, melon, lettuce, cabbage, cauliflower, sweet corn, bean, summer squash, etc. For some of these crops Vilmorin & Cie holds leading world positions: No. 1 in tomato, the top vegetable crop in the world in terms of value, but also in carrot, melon and cauliflower and summer squash, No. 2 in bean, No. 3 in sweet pepper. 1.4.1.1. Key advantages: innovation and proximity to markets A strong capacity for innovation Vilmorin & Cie is positioned as a world leader in terms of innovation and market shares. Indeed, Vilmorin & Cie continuously invests heavily in research to develop seeds that meet the performance demands of vegetable growers and processors: increase in productivity, resistance to diseases and insects, tolerance to climatic stress, perfect adaptation to growing and processing conditions, preservation, etc. The varieties sold must also anticipate and meet consumer expectations (nutritional qualities, taste, appearance, etc.), taking their cultural diversity into account, while optimizing added value for professional vegetable producers. A diversified market approach In order to cover highly segmented markets efficiently, the Vegetable Seeds activity is structured around three Business Units with a global vocation: HM.CLAUSE, Hazera and Vilmorin-Mikado. The global strategy for Vegetable Seeds is defined by the divisional management, particularly through two global functions: - research, which defines and manages upstream research projects (genetic resources management*, development of breeding* tools); these shared resources and tools are made available to the Business Units; - strategic marketing, which provides global analysis and a forward- looking view of crops and markets. Each of the Business Units is responsible for its own operational management. Structured around international and multicultural teams, each division has a sales organization specifically adapted to its areas of influence. This structure thus promotes close proximity to world markets, from research to distribution. The Business Units work in close coordination to best combine their product portfolios, brands, sales forces and distribution networks. Set up ten years ago, this organization, which combines a global vision and a local approach, makes it possible to adapt to the specificity of vegetable markets, which are extremely fragmented. It also makes it possible to cover a large number of highly profitable local markets, or niches, and to be very responsive to the needs of growers and consumers, thereby maximizing market share. 1.4.1.2. Performances for 2017-2018: stable activity in a temporarily weaker market context Sales for the Vegetable Seeds activity on June 30, 2018 stood at 673.1 million euros, a decrease of 8.5% with current data and 0.4% on a like-for-like basis compared with fiscal year 2016-2017. Vegetable Seeds, which in recent years had repeatedly recorded sustained growth in activity, had a more difficult year. This is directly linked to more contrasting markets this year, due to several temporary difficulties: high inventory levels among distributors, particularly in North America, logistical problems related to phytosanitary regulations, and a one-off decline in certain market segments. 673.1 million euros (-0.4% on a like-for-like basis) Vegetable Seeds sales in 2017-2018 Vegetable Seeds Main brands 1.4. Activities PRESENTATION of Vilmorin & Cie