ANNUAL REPORT 2016-2017 Contents
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ANNUAL REPORT 2016-2017 Contents 1 Presentation 5 Financial of Vilmorin & Cie Information 1.1. Key figures 2 5.1. Consolidated Financial Statements 140 1.2. History and evolution of the Company 9 5.2. Corporate Financial Statements 209 1.3. The seed market 12 1.4. Activities 20 1.5. Development model 30 Vilmorin & Cie 1.6. Strategy and perspectives 33 6 and its Shareholders 1.7. Risk factors 45 6.1. Information on the Company 216 6.2. Capital stock and Shareholders 219 6.3. Vilmorin & Cie’s shares 223 2 Corporate 6.4. Relations with Shareholders 227 Governance 2.1. Corporate governance code of reference 56 2.2. The Board of Directors 57 7 Joint General Meeting 2.3. Specialized committees 70 of December 8, 2017 2.4. Management bodies 72 7.1. Meeting agenda 232 2.5. Agreements with corporate officers and 7.2. Draft resolutions of an ordinary nature 234 interest of the Management bodies 74 7.3. Draft resolutions of an extraordinary nature 238 2.6. Summary table of the recommendations of the Middlenext Code of corporate governance 7.4. Draft resolution of an ordinary nature 243 that have not been adopted 78 2.7. Chairman’s report on the functioning of the Board of Directors and internal control 79 8 Further information Management 8.1. Statutory Auditors 246 3 8.2. Documents available to the general public 247 report 8.3. Incorporation with reference Report of the Board of Directors to the Joint Annual Meeting to historical financial information 247 (Ordinary and Extraordinary) of December 8, 2017 86 8.4. Glossary 248 4 Social, environmental and societal information 4.1. The approach 98 4.2. Proposing innovative and responsible agri-food solutions 101 4.3. Conducting activities in an ethical, sustainable and effective manner 106 4.4. Building new patterns of relationship The document is accessible and creating value 124 and downloadable on 4.5. Methodology note 132 www.vilmorincie.com 4.6. Concordance table for social, environmental and societal information 134 The words followed by * are defined in the glossary. Vilmorin & Cie in brief Profile The 4th largest seed company in the world, Vilmorin & Cie develops vegetable and field seeds with high added value to better meet 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 seed business, and cooperation, in the fields of science, industry and commerce. A world leader in seeds No. 1 in Europe No.4 for straw cereals(1) SEED COMPANY IN THE WORLD No. 3 in North America for corn seeds(2) No. 2 No. 4 worldwide in Europe for vegetable seeds for corn seeds Sales More than 1,715 300 million euros(3) seed varieties created and launched Net income Worldwide 90.1 presence: million euros with subsidiaries in with a group share of 86.9 million euros 47 countries More than and sales in almost 7,000 150 permanent staff(3) countries throughout the world (1) Wheat and barley. (2) Through AgReliant. (3) Integrating 50% of AgReliant (North America. Field Seeds). Bearing in mind the application of the standard IFRS 11, certain companies have been recorded in the accounts using the equity method since fiscal year 2014-2015. Data for 2016-2017. Message from the Board of Directors From left to right: Sébastien VIDAL, Pascal VIGUIER, Miriam MAES, Philippe AYMARD, Joël ARNAUD, Jean-Yves FOUCAULT, Mary DUPONT-MADINIER In 2017-2018, we will pursue with perseverance and conviction the implementation of our strategy. VILMORIN & CIE ACHIEVES HIGH QUALITY PERFORMANCES AND CONFIRMS ITS STRATEGIC ORIENTATIONS WITHIN A COMPETITIVE ENVIRONMENT UNDER CONSOLIDATION Dear Shareholders, Vilmorin & Cie achieved a truly fine fiscal year 2016-2017, These performances are a reflection of dynamic business activity; confirming solid growth in terms of sales, as well as operating they are also the fruit of the tighter management of all the operating margin and income. charges and investments, implemented more than a year ago. The two main activities completed a high quality fiscal year: However, this orientation did not change Vilmorin & Cie’s strategic vision, which was resolutely rolled out during the fiscal year, Vegetable Seeds posted an increase in sales of more than particularly in terms of development and innovation, with a long- 6% on a like-for like basis, and thus, following on from term vision. previous fiscal years, confirms its strong, dynamic growth. This performance is all the more remarkable in that it concerns all of Vilmorin & Cie’s main strategic crops and major geographical Our competitive environment is indeed marked by consolidation regions. Further to this fiscal year, Vilmorin & Cie can reaffirm its operations, which are primarily driven by the agrochemicals sector, world leadership in vegetable seeds. but these movements in no way call into question Vilmorin & Cie’s ability to pursue its development on its markets. They do not alter Field Seeds achieved a strong increase in activity of more than our specific business model around a pure play seed business, 8% on a like-for-like basis, in spite of a difficult market context. our competitive positions or our strategy, which is based on three Indeed the market is still affected by the low price of agricultural major growth areas: vegetable seeds, corn seeds and wheat production as well as the drop in corn acreage, particularly seeds. in Western Europe. This environment clearly had a negative In 2017-2018, we will thus pursue with perseverance and influence on the commercial campaigns in Europe, in spite of a conviction the implementation of our strategy, with the ambition remarkable increase in the sale of sunflower seeds (Ukraine and of continuing to strengthen our market share and profitability on a Russia). Moreover, there was extremely strong growth in corn regular and sustainable basis. seeds in South America, highlighting Vilmorin & Cie’s increasing internationalization for this strategic crop. To achieve this, we can rely on the competence and dynamism of our teams, the constant support of Limagrain, our reference Consequently, the total net income for the year grew considerably, shareholder, as well as the faithful support of our Shareholders. reaching 90.1 million euros, also thanks to a high quality fiscal year The dividend of 1.60 euros per share proposed by your Board of for associated companies - mainly AgReliant in North America, Directors, which has risen sharply, is a token of thanks for your Seed Co in Africa and AGT in Australia. confidence. Vilmorin & Cie’s Board of Directors The main stages in development DEVELOPMENT ACCELERATION OF DEVELOPMENT 1993 IN VEGETABLE SEEDS 2007 AND INTERNATIONALIZATION 1996 2000 2006 VEGETABLE SEEDS VEGETABLE SEEDS VEGETABLE Clause (France) Kyowa (Japan) SEEDS Harris Moran (United States) Keygene (Netherlands), experts Mikado (Japan) in genomics* applied to vegetable plants 1998 2003 VEGETABLE SEEDS VEGETABLE SEEDS Nickerson Zwaan (Netherlands) Hazera Genetics (Israel) 1993 Listing on the Paris stock market SALES NET INCOME HEADCOUNT 171 6.5 Nearly million euros million euros 1,400 2007 Integration of Limagrain’s Field Seeds* SALES NET INCOME HEADCOUNT 939 57.3 Nearly million euros million euros 4,400 * Europe and North America Acquisitions Research partnerships ACCELERATION OF DEVELOPMENT AND INTERNATIONALIZATION 2017 2010 2013 2016 VEGETABLE SEEDS VEGETABLE SEEDS VEGETABLE SEEDS Mesa Maize (United States) Shamrock (United States) Genica Research Su Tarim (Turkey) FIELD SEEDS (United States) Bisco Bio Sciences (India) Link Seed (South Africa) 2008 2012 FIELD SEEDS VEGETABLE SEEDS 2015 Australian Grain Technologies (Australia) Campbells’ Seeds VEGETABLE SEEDS (United States) Tropdicorp (Vietnam) Century Seeds (India) FIELD SEEDS Hengji Limagrain Seeds (China) (minority stake) Canterra Seeds (Canada) 2011 2014 FIELD SEEDS FIELD SEEDS Brasmilho and Sementes Guerra (Brazil) Seed Co (Zimbabwe) Genective (France) (minority stake) Seed Asia (Thailand) 2017 No.4 SEED COMPANY IN THE WORLD SALES NET INCOME HEADCOUNT (1) 1,715 90.1 More than million euros(1) million euros 7,000 (1) Integrating in particular AgReliant (North America. Field Seeds). A specific development model Vilmorin & Cie’s development is rooted in a specific economic model, which focuses on three major and unique advantages: A single core business of seeds An organization very close to its markets A long-term vision of its development This development model draws strength from the fact it adheres to three founding values: progress, perseverance and cooperation. These values, shared with Limagrain, its reference shareholder, are related to its historical expertise in plant improvement since 1743, and its anchorage in the world of agriculture. A SINGLE CORE BUSINESS OF SEEDS Vilmorin & Cie is a pure play seed company, not involved in agro- chemicals. 7 to 10 years are Actively engaged throughout the full value chain, from research to distribution, Vilmorin & Cie controls all the stages in the seed necessary, business, proposing high quality seeds, perfectly adapted to each on average, of its target markets. to create a seed. ANALYZE THE NEEDS CREATE PRODUCE DISTRIBUTE MANAGE NEW SEED THE SEEDS THE SEEDS AND ENRICH VARIETIES GENETIC RESOURCES Vilmorin & Cie created and launched more than 300 new varieties of vegetable and field seeds during fiscal year 2016-2017. AN ORGANIZATION VERY CLOSE TO ITS MARKETS Vilmorin & Cie has chosen to organize its activities in Business Units, in order to give priority to its customers and its multiple markets. This organizational model, specific to Vilmorin & Cie, is a true strength: it provides excellent knowledge of a market that is highly segmented in terms of products and geographical influence.