Annual Report
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ANNUAL REPORT 2015-2016 WorldReginfo - a06bd56e-b534-4ea6-bce2-daafb5b9d55e CONTENTS 1 5 PRESENTATION FINANCIAL OF VILMORIN & CIE INFORMATION 1.1. Key figures 2 5.1. Consolidated Financial Statements 128 1.2. History and Evolution of the Company 9 1.3. The seed market 12 1.4. Activities 19 6 1.5. Development model 29 VILMORIN & CIE 1.6. Strategy and perspectives 32 AND ITS SHAREHOLDERS 1.7. Risk factors 45 6.1. Information on the Company 198 6.2. Capital stock and shareholders 201 2 6.3. Vilmorin & Cie’s shares 205 CORPORATE GOVERNANCE 6.4. Relations with shareholders 209 2.1. The Board of Directors 56 2.2. Specialized Committees 68 7 2.3. Management bodies 70 ANNUAL GENERAL MEETING 2.4. Agreements with Corporate Officers OF DECEMBER 9, 2016 and interests of the Management Bodies 72 2.5. Summary table of the recommendations 7.1. Meeting agenda 214 of the AFEP-MEDEF Code that are not adopted 77 7.2. Resolutions of an ordinary nature 216 2.6. Chairman’s Report on the functioning 7.3. Resolutions of an extraordinary nature 219 of the Board of Directors and internal control 78 7.4. Resolution of an ordinary nature 224 3 8 MANAGEMENT REPORT FURTHER INFORMATION Report of the Board of Directors to the Joint Annual Meeting (Ordinary and Extraordinary) of December 9 , 2016 84 8.1. Statutory Auditors 226 8.2. Publicly available documents 227 8.3. Incorporation with reference to historical financial information 227 4 8.4. Glossary 228 SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION 4.1. Report of the Board of Directors concerning social, environmental and societal information 96 4.2. Concordance tables for social, environmental and societal information 124 WorldReginfo - a06bd56e-b534-4ea6-bce2-daafb5b9d55e VILMORIN & CIE IN BRIEF WorldReginfo - a06bd56e-b534-4ea6-bce2-daafb5b9d55e The 4th largest seed company in the world, Vilmorin & Cie develops vegetable and field seeds with high added value contributing to meeting global food requirements. Accompanied by its reference shareholder Limagrain, an international agricultural cooperative group, Vilmorin & Cie’s strategy for growth relies on sustained investments in research and international development to durably strengthen its market shares on promising world markets. True to its vision of sustainable development, Vilmorin & Cie ensures its achievements fully respect its three founding values: progress, at the heart of its beliefs and its mission, perseverance, inherent to farming and the seeds business, and cooperation, in the fields of science, industry and commerce. Sales 2015-2016 Net income 2015-2016 More than 1,627 60.8 6,900 million Euros(1) million Euros permanent staff(1) with a group share throughout the world of 59.3 million Euros (1) Taking into account application of the standard IFRS 11, certain companies have been accounted for using the equity method since fiscal year 2014-2015. WorldReginfo - a06bd56e-b534-4ea6-bce2-daafb5b9d55e A WORLD LEADER IN SEEDS th LARGEST SEED COMPANY 4 IN THE WORLD VEGETABLE SEEDS WORLDWIDE FOR VEGETABLE No. 2 SEEDS MORE THAN 30 CROPS FOR PROFESSIONAL VEGETABLE In particular those that are most widely PRODUCTION PLAYERS consumed throughout the world: Growers and canners. tomato, pepper, carrot, melon, etc. FIELD SEEDS IN EUROPE IN NORTH AMERICA IN EUROPE FOR STRAW FOR CORN FOR CORN No1. CEREALS(1) No.3 SEEDS No. 4 SEEDS 2 STRATEGIC WORLD CROPS: FOR FARMERS CORN AND WHEAT On the main world markets: Supplemented by regional crops: Europe, Americas, Asia and Africa. sunflower, rapeseed and barley (Europe), rice (India) and soybean, distributed in North and South America. (1) Wheat and barley. WorldReginfo - a06bd56e-b534-4ea6-bce2-daafb5b9d55e MESSAGE FROM THE BOARD OF DIRECTORS VILMORIN & CIE ACHIEVES NEW MILESTONES IN ITS DEVELOPMENT STRATEGY WITHIN A MARKET ENVIRONMENT THAT REMAINS TENSE Dear Shareholders, At the end of fiscal year 2015-2016, Vilmorin & Cie achieved ❚ In vegetable seeds, Vilmorin & Cie reinforced its world significant growth of almost 5% in its sales on a like-for-like leadership through the acquisition of the company Genica basis; these now stand at 1.6 billion Euros(1). Research in the United States, thus pursuing its strategy Nevertheless, once again this year, this performance is the combining innovation and proximity to markets. result of very varied situations for its two strategic activities. ❚ In the corn seeds, the performances achieved in North ❚ The Vegetable seeds activity achieved another excellent America and in the new development zones were of a fiscal year, pursuing its strong, dynamic growth: business very high level, demonstrating further globalization of our increased by almost 10% on a like-for-like basis. business. Furthermore, the agreements signed with Syngenta Accordingly, Vilmorin & Cie repeatedly continues to win opening up access to new GMO corn technologies represent market shares. a major breakthrough towards the development of our proprietary line-up of genetically modified varieties. ❚ The Field seeds activity held up well, with sales virtually stable on a like-for-like basis, in spite of a market environment that ❚ Finally, on the wheat seeds market, Vilmorin & Cie is remains very difficult, globally marked by the persistent low continuing its international deployment and aims to become level of agricultural production prices and the drop of cultivated the world reference for the most widely grown crop in the acreage for corn in Europe. world. Consequently the total net income of 60.8 million Euros was lower than our ambition. Moreover it was affected by Over and beyond current disturbances, our markets exceptional extra procurement costs in Western Europe for fundamentally remain promising, and we are fully confident the Field seeds activity, by reorganization costs in the Garden in our capacity to reinforce our market shares and our products activity and by financial provisions on minority profitability. As our competitive environment goes through participations. Consequently, the dividend proposed is lower, a period of restructuring, we are more than ever convinced yet demonstrates our effort to offer a pay-out rate similar to that our specific development model, based on a single, core that of previous years. business of seed, our agile organization working in proximity to our markets and our long-term vision, represents a major advantage in attaining our strategic ambitions and offering For the third consecutive year, Vilmorin & Cie’s financial regular and sustainable perspectives for growth. performances have therefore been affected by the unfavorable market conditions for field seeds. For this reason we have And we can count on the expertise and commitment of our decided to set up an operational action plan, in order once teams, the unwavering support of Limagrain, our reference again to achieve a financial profile that corresponds more shareholder, and all our Shareholders, faithful and committed to to our expectations. However, this plan in no way calls into the long-term. We thank you all for your support and your trust. question our strategic fundamentals, which continued to be applied in fiscal year 2015-2016: Your Board of Directors (1) Integrating 50% of the sales of AgReliant (North America. Field seeds). Sales disclosed for 2015-2016 came to 1,325 million Euros. WorldReginfo - a06bd56e-b534-4ea6-bce2-daafb5b9d55e From the left to the right: Miriam MAES, Jean-Yves FOUCAULT, Philippe AYMARD, Pascal VIGUIER, Mary DUPONT-MADINIER, Joël ARNAUD, Sébastien VIDAL “ Our specific development model represents a major advantage in attaining our strategic ambitions. ” WorldReginfo - a06bd56e-b534-4ea6-bce2-daafb5b9d55e THE MAJOR PHASES OF DEVELOPMENT DEVELOPMENT IN VEGETABLE SEEDS 2007 Integration of 1993 Limagrain Field seeds Introduction of Vilmorin & Cie (Europe and North America) to the Paris stock market SALES SALES 171 million Euros 939 million Euros NET INCOME NET INCOME 6.5 million Euros 57.3 million Euros HEADCOUNT HEADCOUNT Almost 1,400 Almost 4,400 1996 2000 2006 2010 Vegetable seeds Vegetable seeds Vegetable seeds Vegetable seeds ❚ Clause (France) ❚ Kyowa (Japan) ❚ Mikado (Japan) ❚ Mesa Maize (United States) ❚ Harris Moran ❚ Su Tarim (Turkey) Vegetable seeds (United States) ❚ Keygene Field seeds (Netherlands), ❚ Arcadia Biosciences experts in genomics* (United States) applied to vegetable plants 1998 2003 2008 Vegetable seeds Vegetable seeds Field seeds ❚ Nickerson Zwaan (Netherlands) ❚ Hazera Genetics (Israel) ❚ Australian Grain Technologies (Australia) ❚ Acquisitions ❚ Research partnerships WorldReginfo - a06bd56e-b534-4ea6-bce2-daafb5b9d55e ACCELERATION OF DEVELOPMENT 2016 AND INTERNATIONALIZATION th LARGEST SEED COMPANY 4 IN THE WORLD SALES 1,627 million Euros(1) NET INCOME 60.8 million Euros HEADCOUNT (1) More than 6,900 2012 2014 2016 Vegetable seeds Field seeds Vegetable seeds ❚ Campbells’ Seeds ❚ Seed Co ❚ Genica Research (United States) (United States) (Zimbabwe) ❚ Century Seeds (minority stake) (India) ❚ Seed Asia (Thailand) 2011 2013 2015 Field seeds Vegetable seeds Vegetable seeds ❚ Brasmilho and Sementes Guerra ❚ Shamrock (United States) ❚ Tropdicorp (Vietnam) (Brazil) Field seeds Field seeds Field seeds ❚ Bisco Bio Sciences (India) ❚ Canterra Seeds (Canada) ❚ Genective (France) ❚ Link Seed (South Africa) ❚ Hengji Limagrain Seeds (China) (minority stake) (1) AgReliant (North America. Field seeds), in particular, is included. WorldReginfo - a06bd56e-b534-4ea6-bce2-daafb5b9d55e A SPECIFIC DEVELOPMENT MODEL Vilmorin & Cie focuses its development on a specific economic