INVESTORS PRESENTATION
SEPTEMBER 2020
1 INVESTORS PRESENTATION SEPTEMBER 2020 DISCLAIMER
Some of the statements contained in this document may be forward- looking statements concerning Vilmorin & Cie SA's financial position, results, businesses, strategy or projects. Vilmorin & Cie SA considers that such statements are based on reasonable assumptions but cannot and does not give any assurance that the Group's future performance will be consistent with those statements. Actual results could differ from those currently anticipated in such statements due to a certain number of inherent risks and uncertainties, most of which are beyond Vilmorin & Cie SA's control, such as those described in the documents filed or to be filed by Vilmorin & Cie SA with the French securities regulator (Autorité des marchés financiers) and made available for downloading from the Company's website: www.vilmorincie.com
2 INVESTORS PRESENTATION SEPTEMBER 2020 AGENDA
VILMORIN & CIE AT A GLANCE s. 04 VILMORIN & CIE GROWTH STRATEGY s. 11 CSR PROGRAM s. 22 SALES FOR FISCAL YEAR 2019-2020 s. 26 OUTLOOK FOR THE END OF FISCAL YEAR 2019-2020 s. 38 NEWS s. 41 APPOINTMENT s. 46 VILMORIN & CIE ON THE STOCK EXCHANGE s. 48 SCHEDULE AND CONTACTS s. 51 GLOSSARY s. 54 APPENDICES s. 57
3 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE AT A GLANCE
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4 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE AT A GLANCE VILMORIN & CIE, 4TH LARGEST SEEDS COMPANY IN THE WORLD
Fourth largest seeds company in the world with leading positions on its core activities N°1 N°6 worldwide worldwide for vegetable seeds for field seeds
Pure player built up on historical expertise in botany since 1743 and on the basis of real proximity with the agricultural world
A long-term vision of the development, strengthened by the consistent support of its reference shareholder, Limagrain, both an agricultural cooperative owned by French farmers and an international seed group
5 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE AT A GLANCE A FULL CONTROL OF ALL STAGES IN SEEDS BUSINESS
ANALYZING NEEDS A 7 TO 10 YEARS CYCLE
COLLECTING CREATING GENETIC NEW SEEDS RESOURCES
PRODUCING SEEDS 255 VARIETIES LAUNCHED IN 2018-2019
DISTRIBUTING AND SELLING SEEDS
6 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE AT A GLANCE
A TRACK RECORD COMBINING ORGANIC Eureka Seed / USA AND EXTERNAL GROWTH Link Seed / South Africa Seed Co / Africa (*) Canterra Seeds / Canada(*) In M€ BSF/Genesis/Trigen/ Bisco Bio Sciences / India Hengji Limagrain Seeds / Trio Research / USA Seed Asia / Thailand China (JV) Shamrock / USA and Sursem and Geneze / Su Tarim / Turkey Century Seeds / India Mexico Golden Acres / USA South America Brasmilho Sementes Meza Maize / USA Tropdicorp/Vietnam Genica Research / USA AdvanSeed / Denmark Guerra / Brazil 2000 140
Field Seeds acquisition 1800 1715 1627 1606 1634 120 1600 1531 1472 1500 1414 1391 1346 1400 1338 1325 100 1192 99,4 1269
1200 1064 29.3 86,9 84,1 80 1002 80,6 Vegetable Seeds acquisition 77,9 61.7 1000 76,9 72,9 60 800 61,7 59,3 53 54,1 600 40
(*) Share of profit of associates. 400 Acquisitions examples are not exhaustive. 20 Net income (Groupe share) 200 Sales Sales (IFRS 11) 0 0 Capital gains from sale of minority stakes in China 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
7 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE AT A GLANCE A BUSINESS ORGANIZATION CLOSE TO THE MARKETS : KEY FOR SUCCESS
VEGETABLE SEEDS FIELD SEEDS GARDEN PRODUCTS
VEGETABLE GROWERS FARMERS MARKET GARDENERS
3 BUSINESS UNITS 6 BUSINESS UNITS 1 BUSINESS UNIT
Key leading brands: Key leading brands: Key leading brands:
8 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE AT A GLANCE A LONG TERM REFERENCE SHAREHOLDER
Groupe Limagrain: BREAKDOWN OF THE CAPITAL ON JUNE 30, 2020
Individual shareholders Institutional (of which ~50% 6.33% investors internationally 17.75% based: USA, UK, Singapore, An agricultural cooperative owned by French farmers Germany, etc.)
Groupe An international seed group involved in the development of Limagrain* 75.92% integrated agricultural chains
Vegetable Seeds and Field Seeds * of which BPI France as a strategic shareholder of Limagrain
Cereal Products TOTAL NUMBER OF SHARES: (Cereal Ingredients and Bakery Products) 22,917,292
Sources: Euroclear, Internal
9 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE AT A GLANCE A LONG TERM REFERENCE SHAREHOLDER
Groupe Limagrain, a reference shareholder guaranteeing:
Stable corporate governance Long term strategy A perfect knowledge of agriculture, customers and their needs
LIMAGRAIN IN BRIEF
MISSION Cooperating for the progress of agriculture everywhere, for everyone
STRATEGY Serving all types of agriculture, taking into account their diversity Helping to meet the food needs in terms of nutrition, health and consumption patterns
KEY FIGURES Nearly 1,500 farmer members 1,883 million euros in sales + 678 million euros in sales from strategic partnerships* More than 10,000 employees * Strategic partnerships: AgReliant, AGT, Genective, Seed Co, Soltis, Canterra Seeds, Hengji Limagrain Seeds, Carthage Génétique and Prime Seed Co. 2018-2019.
10 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE GROWTH STRATEGY
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11 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE GROWTH STRATEGY 1/ PROMISING WORLD SEEDS MARKETS
WORLD MARKET POWERFUL GROWTH FACTORS: FOR COMMERCIAL SEEDS (2019)
14.2% Vegetable seeds Increase in seeds demand (Conventional seeds)
51.1% Growth in the world population (10 bn in 2050) Field seeds – Improvement in the standards of living GM seeds 34.7% Field seeds – Conventional seeds Increase in the use of commercial seeds
MARKET VALUE 2019: Adoption of genetically modified (“GM”) seeds worldwide $39.8 BN.
Source: AgbioInvestor 2018 and 2019
12 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE GROWTH STRATEGY 1/ MARKET FOR SEEDS: SLIGHT INCREASE FOR GMO IN 2018
WORLD MARKET ACREAGE 191.7 million hectares (more than 10% of arable land), +1% / 2017, grown by 17 million farmers in 26 countries 191,7 190 GMO : 170 ACREAGE PER COUNTRY 150 million ha 130
110
90 Others 70 China
50 Canada India 30 Argentina 10 Brazil USA -10 WORLD MARKET VALUE 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Nearly $22 billion in 2018 (i.e. 55.5% of the world market for seeds), +2% / 2017
Sources: ISAAA 2019. AgbioInvestor 2018 13 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE GROWTH STRATEGY 1/ MARKET FOR SEEDS: HIGH BARRIERS TO ENTRY
A concentrated competitive environment WORLDWIDE COMPETITIVE ENVIRONMENT FOR SEEDS
High barriers to entry: Bayer (DEU)
Width and depth of the genetic resources Corteva Agriscience (USA) R&D investment (conventional breeding and biotechnologies) Syngenta (CHN) International coverage Vilmorin & Cie (FRA)
BASF (DEU)
KWS (DEU)
DLF (DNK)
Rijk Zwaan (NLD)
LPHT (CHN)
Sakata (JPN)
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 Field Seeds Vegetable Seeds
In M€. Sources: company release and internal est. sales for 2019. KWS sales for 2018-2019. Vilmorin & Cie and KWS sales before IFRS11 Bayer seed sales = soybean, corn and vegetables sales only - Other field seed sales are est. between 0.5B€ and 1B€ Exchange rate: EUR 1 = USD 1.14
14 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE GROWTH STRATEGY 2/ A STRATEGY OF WINNING MARKET SHARES
3 STRATEGIC FOUNDATIONS 3 STRATEGIC PRIORITIES
OBJECTIVE 1 Reinforce world Strong, continuous Vegetable seeds leadership investment in research
OBJECTIVE 2 Become a global Strong Corn seeds player internationalization of the activities
OBJECTIVE Ultimately 3 become the Capacity to combine Wheat seeds world reference targeted acquisitions and partnerships
15 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE GROWTH STRATEGY 3/ VEGETABLE SEEDS. DIVISION PROFILE
KEY FIGURES 2018-2019
- A very strong competitive position addressing M€ COUNTRIES 687.5 SALES WITH N°1 worldwide vegetable growers and food processors 36 LOCATIONS worldwide - An extremely diversified product line-up with OPERATING for vegetable more than 30 species (tomato, carrot, melon, 14.9% MARGIN seeds pepper, bean, etc.) Current operating margin: 14.9%
SALES OF VEGETABLE SEEDS SALES OF VEGETABLE SEEDS PER CROP. 2018-2019 PER GEOGRAPHICAL AREA. 2018-2019
Africa/Middle East Tomato (1) 16% Europa Others 37% Asia/Oceania 15% Carrot (1)
Sweet and hot Onion pepper (3) Americas Bean (2) Melon (1) Squash (1) 32% (1),(2),(3): worldwide competitive positions
16 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE GROWTH STRATEGY 3/ VEGETABLE SEEDS. STRATEGY
Reinforce world leadership Make full use of the virtuous circle of innovation and proximity to the markets to continue to win market shares
Close targeted operations for acquisitions or partnerships to strengthen positions on certain crops and/or certain geographical zones
Develop business on complementary crop/territory segments and become a leader on all markets, with strong ambitions in Asia, and all the strategic crops Examples of acquisitions:
CENTURY SEEDS TROPDICORP GENICA RESEARCH ADVANSEED October 2012 March 2015 February 2016 July 2018
10 local crops Bitter gourd, pumpkin, Sweet and hot peppers, Spinach and leafy India wax gourd cucumber, summer squash vegetables Sales: 4 M€ Vietnam United States Denmark Sales: 6 M$ Sales: more than 25 M$ Sales: 3 M€
17 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE GROWTH STRATEGY 4 / FIELD SEEDS. DIVISION PROFILE
- One of the top players in strategic crops targeting KEY FIGURES 2018-2019 - One of the top players in strategic crops targeting farmers N° farmers M€ 6 - 2 worldwide strategic crops: corn and wheat 649.9 SALES worldwide - 4 strategic crops: corn, wheat, sunflower and (892.6 M€)* OPERATING for field seeds - Andrapeseed regional - 2 ofstrategic which are crops: worldwide: sunflower, corn rapeseedand wheat 4.2% MARGIN and- And barley regional in Europe, crops adaptedrice in India, to each and region: soybean, barley, COUNTRIES Current operating margin: 5.1% which Vilmorin & Cie distributes in North and South WITH soybean, millet, rice, and pulses 35 LOCATIONS* America and in South Africa
SALES OF FIELD SEEDS* SALES OF FIELD SEEDS* PER GEOGRAPHICAL AREA. 2018-2019 PER CROP. 2018-2019 Africa/Middle East 3% 2% Asia/Oceania 10% Other field seeds 6% Rapeseed
5% Feed grains Americas Europe Cereals (corn, 36% 59% wheat, barley) 16% Sunflower 63%
* Without the application of the standard IFRS 11 (“Joint arrangements”) resulting in certain activities being consolidated using the “Equity method” since 2014-2015 (in particular AgReliant. North America. Field Seeds)
18 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE GROWTH STRATEGY 4/ CORN SEEDS. STRATEGY
CORN SEEDS: BECOME A GLOBAL PLAYER on the largest world seed market in terms of value (nearly $17 bn in 2019*) Reinforce leading positions in Europe and North America Develop activities in South America, Asia and Africa
Recent acquisitions:
SEED CO Hengji Limagrain Seeds SURSEM and GENEZE Minority stake. 2014 JV. September 2015 December 2018
#1 African seeds company Corn Corn Sales: 114 M$ in 2019-2020 China Argentina and Brazil 6 factories & 9 research stations in south Production and Sales: more than 40 M$ in east Africa distribution 2017
Develop a proprietary portfolio of GM seeds
Technological strategic partnership between GM corn traits licensing agreements with Vilmorin & Cie and KWS Syngenta (October 2015)
*Source: AgbioInvestor 2019
19 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE GROWTH STRATEGY 4 / WHEAT SEEDS. STRATEGY
WHEAT SEEDS: ULTIMATELY BECOME THE WORLD REFERENCE
Consolidate a position of leader in Europe AUSTRALIA and Australia and become the world (Australian Grain Technologies) reference of the first worldwide crop in terms of cultivated surface areas (215 million hectares in 2018*) NORTH AMERICA United States Develop more efficient seeds and contribute Canada to converting the market to high value seeds
OTHER ZONES Gradually extend the positions to other major wheat markets and develop strong South America partnerships internationally Asia Africa
*Sources: AgbioInvestor 2018, USDA.
20 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE GROWTH STRATEGY 5/ R&D: INNOVATE TO INSURE TOMORROW’S GROWTH
Maintain regular investment in research (breeding and biotechnologies) and broaden the partnerships 2018-2019
1,380 1,482 1,576 1,494 1,523
301 243 14% 302 260 261 INVESTED IN BIOTECHNOLOGIES 19,6% 18,9% 19,1% 18,8% 18,9%
16,2% 15,3% 15,2% 15,2% 15,9% MILLION 1 274 1 234 1 280 €300 1 180 1 119 RESEARCH INVESTMENT INTEGRATING PARTNERSHIPS*
211 225 240 241 242241 *of which €242 million research investments without integrating partnerships 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
Sales of seeds AgReliant’ sales of seeds (50%) Investment in research Investment in research /Sales of seeds (incl. 50% AgReliant)
21 INVESTORS PRESENTATION SEPTEMBER 2020 CSR PROGRAM
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22 INVESTORS PRESENTATION SEPTEMBER 2020 CSR PROGRAM VILMORIN & CIE’S BUSINESS MODEL
23 INVESTORS PRESENTATION SEPTEMBER 2020 CSR PROGRAM A CSR PROGRAM ANCHORED IN VILMORIN & CIE’s DNA
The foundations of the program: - 3 founding values: progress, perseverance and cooperation - The standard ISO 26000 and the 10 principles of United Nations Global Compact which the Group has signed - Vilmorin & Cie’s specific development model: A single core business of seed Organization very close to its markets A long-term vision
The CSR program is deployed around 3 priorities:
Contribute to lasting progress in Act responsibly FavoriserEncourage la cooperation coopération agriculture through seed
A program truly anchored in Vilmorin & Cie’s DNA, with the challenges that Vilmorin & Cie was already meeting in its daily actions
24 INVESTORS PRESENTATION SEPTEMBER 2020 CSR PROGRAM A CSR PROGRAM ANCHORED IN VILMORIN & CIE’s DNA
Particularly through: Contribute to lasting progress in Innovative and responsible solutions originating in plant genetics, agriculture through seed for all forms of agriculture Almost 5,000 varieties marketed worldwide E.g. LG Architect covering more than 60 Access to quality seeds for all farmers plant species E.g. partnership with Fair Planet 255 new varieties The preservation of the genetic diversity of the crops worked on launched in 2018-2019 Every year Vilmorin & Cie devotes more than 20 M€
Act responsibly Encourage the professional fulfilment of employees Among objectives with regard to the environment: Act according to the ethical principles of the Code of Conduct reduce energy consumption by 10% by Limit the environmental impact of activities 2022 (vs 2015-2016)
Particularly through: Encourage cooperation A societal commitment framework that aims to develop sustainable, efficient integrated chains with local 150 measures devoted to societal actions stakeholders in 2018-2019 Commitment in regions where Vilmorin & Cie has sites with respect to local cultures and specificities, fostered by its organization and management model
25 INVESTORS PRESENTATION SEPTEMBER 2020 SALES FOR FISCAL YEAR 2019-2020 (ON JUNE 30, 2020)
26 INVESTORS PRESENTATION SEPTEMBER 2020 KEY POINTS
Significant growth in sales for the fiscal year: +3.2%*, in spite of a fourth quarter down moderately
Outlook for the end of fiscal year 2019-2020: Good resistance of the current operating margin rate Forecast of a higher net income compared to 2018-2019, excluding non-recurring items
Vilmorin & Cie continues its growth after a fiscal year that revealed the strategic nature of its business, the first link in the food chain
* With current data
27 INVESTORS PRESENTATION SEPTEMBER 2020 SALES FOR FISCAL YEAR 2019-2020 REFERENCES
Accounting reference IFRS on June 30, 2020
Scope Acquisition of the companies Sursem and Geneze (South America. Field Seeds), finalized in December 2018 Sale of the company Van Den Berg (Netherlands. Garden Products) in June 2019
Rates of the main currencies on June 30, 2020 (and June 30, 2019) average close June 2019 June 2020 June 2019 June 2020 $ 1.14 1.10 1.14 1.12 ¥ 127 119.51 123 120.66 £ 0.88 0.88 0.90 0.91 TRY 6.40 6.76 6.57 7.68 ILS 4.16 3.88 4.06 3.88 BRL 4.41 4.95 4.35 6.11 INR 80.53 80.13 78.52 84.62 MXN 22.00 22.66 21.82 25.95 UAH 31.13 28.05 29.79 29.98 RUB 74.93 73.94 71.60 79.63 ARS 48.27 66.06 48.27 79.13
28 INVESTORS PRESENTATION SEPTEMBER 2020 SALES FOR FISCAL YEAR 2019-2020 CONSOLIDATED SALES*
In M€ SALES FOR FISCAL YEAR SALES* 2019-2020 BY DIVISION
+3.2% +2.7% Garden Products and Holdings 4%
Field Vegetable Seeds Seeds 49% 47%
* Revenue from ordinary activities
29 INVESTORS PRESENTATION SEPTEMBER 2020 SALES FOR FISCAL YEAR 2019-2020 CONSOLIDATED SALES*
In M€ rd FOURTH QUARTER Business growth had been very strong over the 3 quarter – particularly in March – partly due to the anticipated orders of -4.1% certain clients who were concerned to secure their supplies as the -1.4% context of the health crisis emerged.
(1) ⇒ Sales temporarily fell back at the beginning of the 4th quarter, before growing again towards the end of this period.
Confirmation of the resilience of business, both in Vegetable Seeds and Field Seeds
(1) of which: Vegetable Seeds: 241 Field Seeds: 115
* Revenue from ordinary activities
30 INVESTORS PRESENTATION SEPTEMBER 2020 SALES FOR FISCAL YEAR 2019-2020 SALES* OF VEGETABLE SEEDS
In M€
SALES FOR THE FISCAL YEAR
FOURTH QUARTER +2.6% +2.5% -3.3% -1.6%
0
* Revenue from ordinary activities
31 INVESTORS PRESENTATION SEPTEMBER 2020 SALES FOR FISCAL YEAR 2019-2020 SALES OF VEGETABLE SEEDS
rd th ANALYSIS OF VEGETABLE SEED SALES* After a very strong 3 quarter, decrease in business over the 4 quarter. PER GEOGRAPHICAL ZONE At the end of the fiscal year, particularly dynamic business in North America, both in Mexico and the United States, and in Turkey too.
Africa/Middle East In Asia, the situation varied depending on the country, with significant progress in India in an upbeat market, but the fiscal year was more difficult in 17% China, where the market was under pressure as of January because of the health crisis and in spite of a good quality 4th quarter. 36% Europe Truly fine performances for several strategic global crops: tomato (market Asia/Oceania 15% share gains in Europe and in North America), sweet pepper, hot pepper, cauliflower and carrot. Marked growth for several crops grown for canning and freezing, such as 32% sweet corn, bean and pea.
Americas ⇒ * Sales of products In spite of a context made uncertain by the health crisis, business was not in fact significantly affected taking the fiscal year as a whole, thus showing its resilience.
Vilmorin & Cie managed to post marked business growth at the end of the fiscal year, and was able to confirm its position as No. 1 worldwide for vegetable seeds
32 INVESTORS PRESENTATION SEPTEMBER 2020 SALES FOR FISCAL YEAR 2019-2020 SALES* OF FIELD SEEDS
In M€
SALES FOR THE FISCAL YEAR
+4.2% FOURTH QUARTER +2.9% -6.9%
-2.7%
* Revenue from ordinary activities, after application of IFRS 11 (i.e. excluding AgReliant)
33 INVESTORS PRESENTATION SEPTEMBER 2020 SALES FOR FISCAL YEAR 2019-2020 TRENDS FOR FIELD SEEDS MARKETS
Corn acreage on the increase on the main markets
Brazil United States Greater Europe ↗ ↗ Acreage ↗ Acreage Safrinha acreage
34 INVESTORS PRESENTATION SEPTEMBER 2020 Sources: USDA, CONAB, internal. June 2020 SALES FOR FISCAL YEAR 2019-2020 SALES OF FIELD SEEDS
Europe TOTAL SALES A satisfactory commercial campaign: For corn, a fine performance, with growth in commercial volumes, particularly in Russia, France, (including AgReliant): 919 M€ Germany and Turkey. For sunflower, sales fell back because of a drop in business in Ukraine and in spite of a good increase in volumes sold in Russia. Other zones For rapeseed, strong growth in volumes sold, thanks to an extremely efficient product portfolio (+15.5%) reflecting significant gains in market share, in a market temporarily experiencing a very sharp decrease. At the end of the 4th quarter, excellent level of sales for the start of the new rapeseed 106 campaign. North For cereal seeds (wheat and barley), increase in the royalties received. America Other zones (South America, Asia) (AgReliant) 242 Europe In South America, a strong increase in activity posted over the fiscal year: (-3.6%) (+0.9%) Solid performances both in corn and soybean. Strengthening of commercial positions both in Brazil and Argentina. 571 In Asia, a good level of growth, especially in India, with overall confirmation of a quality fiscal year, even though business was impacted by drought in certain countries.
Solid business performance over the fiscal year ANALYSIS PER GEOGRAPHICAL ZONE Associated companies (evolution on a like-for-like basis, North America (AgReliant): last part of the commercial campaign disappointing in terms of before application of IFRS 11) volumes sold and marked by higher returns of seeds than anticipated. In M€ Africa (Seed Co): strong business growth outside Zimbabwe and, in Zimbabwe, good control of the impacts of the local economic crisis. At the end of the fiscal year, Seed Co confirmed its position as the No. 1 seed company in Africa.
35 INVESTORS PRESENTATION SEPTEMBER 2020 SALES FOR FISCAL YEAR 2019-2020 CONSOLIDATED SALES* PER GEOGRAPHICAL ZONE
Asia / Oceania
Africa / 9% Middle East 10% 60 % Europe
10 % 59% Americas 22% Europe Americas 806 M€. +0.3%** 302 M€. +6.4%**
Africa/Middle East 138 M€. +4.7% ** Asia/Oceania 126 M€. +3.1%**
* Sales of products ** On a like-for-like basis compared with 2018-2019 36 INVESTORS PRESENTATION SEPTEMBER 2020 SALES FOR FISCAL YEAR 2019-2020
CONSOLIDATED SALES* PER QUARTER 571
SALES* 541 In M€ PER QUARTER
Vegetable Seeds 216 Field Seeds Europe 199 Field Seeds other zones 389 Garden Products and Holdings 373
259 253 250 232 241 208 312 140 301 109 136 103
104 84 80 72 103 80 16 21 32 32 41 20 12 16 25 22 * Revenue from ordinary activities 8 7 5 6 16 17 Q1 18-19 Q1 19-20 Q2 18-19 Q2 19-20 Q3 18-19 Q3 19-20 Q4 18-19 Q4 19-20 37 INVESTORS PRESENTATION SEPTEMBER 2020 OUTLOOK FOR THE END OF FISCAL YEAR 2019-2020
38 INVESTORS PRESENTATION SEPTEMBER 2020 OUTLOOKPERSPECTIVES FOR THE 2017 END-2018 OF FISCAL YEAR 2019-2020 ESTIMATED TRENDS
Good resistance of the current operating margin rate, which should be close to 8%, after accounting for research investment of around 260 million euros • In 2018-2019, the current operating margin rate came to 8.4%, accounting for several non-recurring operating items(1) for a net total estimated at 7 million euros, i.e. +0.5 percentage points.
A contribution from associated companies standing at a little less than 20 million euros • In 2018-2019, it came to 26 million euros and included a revaluation profit of 11 million euros, resulting from the financial and legal reorganization of the international activities of Seed Co (Africa. Field Seeds).
Net income lower than that of the previous fiscal year. Nevertheless, excluding non-recurring operating items for 2018-2019 and the above-mentioned revaluation profit, it should show a marked increase. • In 2018-2019, total net income for the fiscal year came to 77.9 million euros, of which a group share of 73.9 million euros.
(1) Cf. Vilmorin & Cie's press release of October 15, 2019. Non-recurring operating items for fiscal year 2018-2019 mainly concerned capital gains from the reorganization of the biotechnology research company Biogemma, and profit from the disposal of an industrial plant devoted to the production of corn seeds in Hungary. 39 INVESTORS PRESENTATION SEPTEMBER 2020 OUTLOOKPERSPECTIVES FOR THE 2017 END-2018 OF FISCAL YEAR 2019-2020
A FISCAL YEAR THAT REVEALED THE STRATEGIC NATURE OF SEEDS
A seed market relatively unaffected Thanks to the full mobilization of its teams, Vilmorin & Cie has been able to ensure the continuity of its activities, contributing by the health crisis, because of its to the security of food production strategic nature, even though there remain a number of uncertainties Vilmorin & Cie should manage to preserve its level of for the coming fiscal year profitability and post solid financial performances in 2019-2020
These performances are also the fruit of the measures taken to cushion the additional costs linked to the crisis (control over operating expenses and industrial investments)
A fiscal year which demonstrates the robustness of Vilmorin & Cie’s development model and the relevance of its strategic foundations combining research and international development, with a long-term vision
40 INVESTORS PRESENTATION SEPTEMBER 2020 NEWS
41 INVESTORS PRESENTATION SEPTEMBER 2020 CREATION OF A FIELD SEEDS JOINT VENTURE IN SOUTH AFRICA VILMORIN & CIE AND AFRICA
Presence in Field Seeds initiated at the beginning of 2013
Acquisition of the seed company Link Seed (South Africa) in January 2013 A portfolio of corn seeds, supplemented by soybean seeds Sales of 4.1 million euros on June 30, 2020 and a headcount of around 70
Purchase of a minority stake in Seed Co during fiscal year 2013-2014 Seed Co, the No. 1 African seed company, with leading positions in Sub-Saharan Africa in corn and high quality genetic resources Sales (on March 31, 2020): 114 M$ 6 production sites and 18 research centers
⇒ Permanent reinforcement in the deployment of this partnership since 2013-2014 ⇒ Today Vilmorin & Cie is Seed Co’s reference shareholder(1)
A strategy of progressive development in Africa Continue to rely simultaneously on direct locations, partnerships and distribution agreements, while adapting to the specific features of the different countries
(1) On June 30, 2020, Vilmorin & Cie held 29.2% of the capital stock of Seed Co Limited and 30.9% of the capital stock of Seed Co International.
42 INVESTORS PRESENTATION SEPTEMBER 2020 CREATION OF A FIELD SEEDS JOINT VENTURE IN SOUTH AFRICA THE SOUTH AFRICAN SEED MARKET
Corn, an essential crop in South Africa Africa, considerable growth potential The largest African market in terms of value and the 2nd largest in A market destined for very strong acreage (after Nigeria) development, due in particular to extremely dynamic demographic growth Almost 3 million hectares grown ⇒ Africa will be home to nearly a quarter of the world’s population by 50% white corn and 50% yellow corn 2050
(Source: United Nations Food and Agriculture A market dominated 96% by hybrid seeds Organization/FAO).
A market with a value of approximately 220 M€ (90% GMO)
The other crops present on the market: soybean (around 800 kha), sunflower (around 600 kha) and wheat
A market with high added value
43 INVESTORS PRESENTATION SEPTEMBER 2020 CREATION OF A FIELD SEEDS JOINT VENTURE IN SOUTH AFRICA THE JOINT VENTURE IN BRIEF
A joint venture named Limagrain Zaad South Africa, Some key facts regarding dedicated to field seeds, particularly corn, and grouping the joint venture together all the field seeds activities in South Africa of the companies: • A joint venture controlled by Vilmorin & Cie, and Vilmorin & Cie (through Link Seed) operational since July 2020 Klein Karoo Seed Marketing(1), a South African seed company • Around 300 employees firmly established in the country since its creation in 2002 Seed Co • Sales of more than 20 million euros ⇒ Combining the strengths of the three companies and • A joint venture covering capitalizing on a high level of synergies and strong South Africa, as well as complementarities in terms of: Lesotho, Eswatini and - research, Namibia, which also require - production, temperate genetics for corn - product portfolio, - sales organization, - marketing, with in particular three well-known brands.
(1) Klein Karoo Seed Marketing is a subsidiary of the South African group Zaad, which in turn belongs to the Zeder Investment group, an investment company specializing in the agricultural sector and listed on the Johannesburg Stock Exchange. 44 INVESTORS PRESENTATION SEPTEMBER 2020 CREATION OF A FIELD SEEDS JOINT VENTURE IN SOUTH AFRICA THE OBJECTIVES OF THE JOINT VENTURE
Create a major player in South Africa By proposing a specific multi-crop approach standing out on the market by offering soybean, sunflower, wheat, sorghum and forage as a complement to corn By benefiting from critical mass in an already highly consolidated field seed market in the country Fully integrated into Vilmorin & Cie’s worldwide field seeds research organization
⇒ Ambition of reaching 10% corn market share in South Africa within three years
A joint venture that is perfectly in line with Vilmorin & Cie’s field seeds strategy, and is a concrete demonstration of the strengthening of its collaboration with Seed Co
=> A new major stage in Vilmorin & Cie’s development in Africa
45 INVESTORS PRESENTATION SEPTEMBER 2020 APPOINTMENT
46 INVESTORS PRESENTATION SEPTEMBER 2020 APPOINTMENT APPOINTMENT OF OLIVIER FALUT AS CHIEF FINANCIAL OFFICER, FOLLOWING THE FORTHCOMING DEPARTURE OF VINCENT SUPIOT
Appointment, as of September 1, 2020, of Olivier FALUT as Vilmorin & Cie’s Chief Financial Officer. In this capacity he has also joined the Executive Committee.
Expertise and experience:
- Olivier FALUT has combined higher education in finance and business law. - He has built up solid experience in all areas of finance, in different French companies of international dimension, particularly in the agri-food sector (Bel, Lactalis, Sodiaal cooperative group). - Before joining Vilmorin & Cie, Olivier FALUT was Corporate CFO at Segula Technologies.
This appointment is the consequence of the forthcoming departure of Vincent SUPIOT, CFO of Vilmorin & Cie since September 2017. Vincent SUPIOT has expressed the desire to pursue another professional project, after more than 20 years of career within the Group. He will leave his position mid-September 2020, at the end of a transition period with his successor.
47 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE ON THE STOCK EXCHANGE
48 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE ON THE STOCK EXCHANGE
EVOLUTION OF THE SHARE PRICE (over 1 year)
From: 2019-09-01 to: 2020-09-01 Disclosure of Disclosure of sales annual sales 19-20 for the 1st quarter 19-20 €48.35 CAC 40 SHARE PRICE Disclosure of sales for the 1st semester 19-20 ON SEPTEMBER 01, 2020
Vilmorin & Cie MARKET CAPITALIZATION ON SEPTEMBER 01, 2020 Disclosure of annual results 18-19 €1.1BN.
Sources: Euronext.com; internal.
Disclosure of sales for the 3rd quarter 19-20
Vilmorin & Cie : +80.02% 15 years +6.37% 10 years +1.68% 1 year
49 INVESTORS PRESENTATION SEPTEMBER 2020 VILMORIN & CIE ON THE STOCK EXCHANGE DIVIDENDS
In €
Pay-out 44.8% 38.6% 38.4% 38.0% 41.9%
* calculated on the basis of 20,833,902 shares ** calculated on the basis of 22,917,292 shares
50 INVESTORS PRESENTATION SEPTEMBER 2020 SCHEDULE AND CONTACTS
51 INVESTORS PRESENTATION SEPTEMBER 2020 SCHEDULE
WEDNESDAY OCTOBER 14, 2020(1) MONDAY NOVEMBER 2, 2020(1) Disclosure of results for fiscal year Disclosure of sales at the end of 2019-2020 the 1st quarter 2020-2021
FRIDAY DECEMBER 11, 2020 Annual General Meeting of Shareholders in Paris
(1) Disclosure after trading on the Paris stock market. Dates provided as an indication only, and liable to be changed.
52 INVESTORS PRESENTATION SEPTEMBER 2020 CONTACTS
For any further information:
Olivier FALUT Valérie MONSERAT Chief Financial Officer Head of Financial Communication and Investor Relations [email protected] [email protected]
Vilmorin & Cie Head office: 4 quai de la Mégisserie – F-75001 PARIS Postal address: CS 20001 Saint-Beauzire – F-63360 GERZAT Tel: + 33 473 634 485 - Fax: +33 473 634 180
Consult all the financial information on: www.vilmorincie.com
53 INVESTORS PRESENTATION SEPTEMBER 2020 GLOSSARY
54 INVESTORS PRESENTATION SEPTEMBER 2020 GLOSSARY
Current data: Current data is data expressed at the historical currency exchange rate for the period, and without adjustment for any changes in scope.
Current operating margin: The current operating margin is defined as the accounting operating margin restated for any impairment and reorganization costs.
EBITDA: The EBITDA is defined as the operating result to which are added any provisions for depreciation, amortization and impairment.
55 INVESTORS PRESENTATION SEPTEMBER 2020 GLOSSARY
Financial indebtedness: Financial indebtedness corresponds to the financial debts less cash and cash equivalents.
Like-for-like data: Like-for-like data is data that is restated for constant scope and currency translation. Therefore, financial data for 2018-2019 is restated with the average rate for fiscal year 2019-2020, and any other changes to the scope, in order to be comparable with data for fiscal year 2019-2020. Variations in the consolidated scope come from the acquisition of the companies Sursem and Geneze (South America. Field Seeds) finalized in December 2018 and from the sale of the company Van Den Berg (Netherlands. Garden Products) in June 2019.
Research investment: Research investment corresponds to gross research expenditure before recording as fixed assets any research costs and research tax relief.
56 INVESTORS PRESENTATION SEPTEMBER 2020 APPENDICES
57
57 INVESTORS PRESENTATION SEPTEMBER 2020 APPENDICES
KEY FINANCIAL DATA FOR FISCAL YEAR 2018-2019
58 INVESTORS PRESENTATION SEPTEMBER 2020 RESULTS FOR FISCAL YEAR 2018-2019 INCOME STATEMENT
In M€ 2017-2018 2018-2019 Variation
Sales 1,346.0 1,390.7 +3.3% Sales margin 658.7 678.7 +20.0 M€ Sales margin rate 48.9% 48.8% -0.1 pt Operating income 97.1 111.0 +13.9 M€ Operating margin rate 7.2% 8.0% +0.8 pt Current operating margin rate 7.2% 8.4% +1.2 pt Income from associated companies 23.3 26.0 +2.7 M€ Financial income -38.0 -45.0 -7.0 M€ Income taxes -5.5 -14.1 -8.6 M€ Net income 76.9 77.9 +1.0 M€ Net income group share 74.1 73.9 -0.2 M€
59 INVESTORS PRESENTATION SEPTEMBER 2020 RESULTS FOR FISCAL YEAR 2018-2019 KEY FIGURES FOR EACH ACTIVITY’S CONTRIBUTION TO CONSOLIDATED SALES
Sales* Operating income Net income
In M€ 2017-2018 2018-2019 2017-2018 2018-2019 2017-2018 2018-2019
Vegetable Seeds 673.1 687.5 114.8 102.7 80.7 71.7 Field Seeds 623.3 649.9 2.3 27.4 20.4 32.8 Garden Products and Holdings 49.6 53.4 -20.0 -19.1 -24.2 -26.6 Consolidated 1,346.0 1,390.7 97.1 111.0 76.9 77.9
* Revenue from ordinary activities
60 INVESTORS PRESENTATION SEPTEMBER 2020 RESULTS FOR FISCAL YEAR 2018-2019 FREE CASH-FLOW
In M€ 2017-2018 2018-2019
Net indebtedness at the beginning of the FY 714 766 EBITDA 297 322 Variation of working capital needs -68 -2 Other operating items -15 -61 Net industrial investments -46 -17 Activated development costs -171 -171 Operating cash-flow -3 70 Net financial investments -8 -151 Capital and other equity contributions -3 -3 Dividends -18 -24 Net financial charges -25 -30 Free cash-flow -57 -138 Other restatements (IFRS/Currency, etc.) 5 -8 Net indebtedness at the end of the FY 766 912 61 INVESTORS PRESENTATION SEPTEMBER 2020 RESULTS FOR FISCAL YEAR 2018-2019 BALANCE SHEET STRUCTURE
In M€
Gearing 68.9% Leverage 2.8
06.30.2018 06.30.2019
Total balance sheet 2,218 2,388 of which cash 197 249 62 INVESTORS PRESENTATION SEPTEMBER 2020 APPENDICES VILMORIN & CIE ORGANIZATION CHART
63
63 INVESTORS PRESENTATION SEPTEMBER 2020 ORGANIZATION CHART
FIELD SEEDS VEGETABLE SEEDS Limagrain Europe HM.CLAUSE
AgReliant (corn, soybean)
Limagrain Asia-Pacific Hazera
Limagrain Cereal Seeds (wheat)
Limagrain South America Vilmorin-Mikado
Limagrain Africa
64 INVESTORS PRESENTATION SEPTEMBER 2020 THANK YOU VILMORIN & CIE Head office: 4 quai de la Mégisserie – F-75001 PARIS Postal address: CS 20001 Saint-Beauzire – F-63360 GERZAT Tel: +33 473 634 485 www.vilmorincie.com
65 INVESTORS PRESENTATION SEPTEMBER 2020