Investors presentation. January, Investors presentation

Transcription

1 Investors presentation January, 2017

2 Some of the statements contained in this document may be forwardlooking 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 2

3 AGENDA VILMORIN & CIE AT A GLANCE s. 04 VILMORIN & CIE GROWTH STRATEGY s. 11 SALES AT THE END OF THE 1 ST QUARTER s. 22 OUTLOOK AND MID-TERM AMBITIONS s. 31 VILMORIN & CIE ON THE STOCK EXCHANGE s. 37 SCHEDULE AND CONTACTS s. 40 APPENDICES s. 43 3

4 VILMORIN & CIE AT A GLANCE 4

5 VILMORIN & CIE, 4 TH LARGEST SEEDS COMPANY IN THE WORLD Fourth largest seeds company in the world with leading positions on its core activities Europe for straw N 1in cereals (1) for vegetable N 2worldwide seeds N 3in North America for corn seeds Europe for corn N 4in 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, an international agricultural cooperative group (1) Wheat and barley 5

6 A FULL CONTROL OF ALL THE STAGES IN THE SEEDS BUSINESS ANALYZING NEEDS COLLECTING GENETIC RESOURCES CREATING NEW SEEDS PRODUCING SEEDS DISTRIBUTING AND SELLING SEEDS A 7 TO 10 YEARS CYCLE AROUND 300 VARIETIES LAUNCHED PER YEAR 6

7 TRACK RECORD OVER 10 YEARS In M Vegetable seeds acquisition Link Seed / South Africa Eureka Seed / USA Canterra Seeds / Canada (*) Field seeds acquisition Bisco Bio Sciences / India Seed Co / Africa (*) Hengji Limagrain Seeds / China (JV) Century Seeds / India Seed Asia / Thailand Golden Acres / USA BSF/Genesis/Trigen/ Trio Research / USA Shamrock / USA and Mexico Tropdicorp /Vietnam Genica Research / USA ,8 Integration of European and US field seeds , ,3 Su Tarim / Turkey Mesa Maize / USA ,0 54,1 Brasmilho Sementes Guerra / Brazil , ,6 84,1 72,9 61,7 59,

8 A BUSINESS ORGANIZATION CLOSE TO THE MARKETS: KEY FOR SUCCESS VEGETABLE SEEDS FIELD SEEDS VEGETABLE GROWERS FARMERS 3 BUSINESS UNITS Key leading brands: 6 BUSINESS UNITS Key leading brands: Garden products business for market gardeners 1 BUSINESS UNIT Key leading brand: 8

9 A LONG TERM REFERENCE SHAREHOLDER Groupe Limagrain: BREAKDOWN OF THE CAPITAL ON JUNE 30 th 2016 Individual shareholders 6,16% An international agricultural cooperative group, founded and managed by French farmers A seed group involved in the development of integrated agricultural chains Groupe Limagrain* 73,81% 20,03% Investors (of which ~53% internationally based: USA, UK, Singapore, Belgium ) Vegetable seeds and field seeds Cereal products (cereal ingredients and bakery products) * of which BPI France as a strategic shareholder of Limagrain Total number of shares: Sources: Euroclear and Euronext 9

10 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 Moving agriculture forward to meet food challenges STRATEGY To provide farmers throughout the world with sustainable solutions to improve their farms' profitability KEY FIGURES* Nearly 2,000 farmer members Close to 2.5 billion Euros in sales More than 10,000 employees * Figures for the overall scope of activity worldwide, taking into account data from the companies AgReliant, AGT, Genective, Seed Co and Soltis. 10

11 VILMORIN & CIE GROWTH STRATEGY 11

12 1/ A FUNDAMENTALLY POSITIVE SEEDS MARKET POWERFUL GROWTH FACTORS: Increase in seeds demand Growth in the world population (10 bn in 2050) Improvement in the standards of living WORLD MARKET FOR COMMERCIAL SEEDS (2015) Field Seeds GM seeds 53,2 % Vegetable seeds (Conventional seeds) 13,9 % Increase in the use of commercial seeds Field Seeds Conventional seeds 32,9 % Ever greater use of genetically modified ( GM ) seeds worldwide MARKET VALUE 2015: $37.2 BN. GLOBAL CAGR: +3,8% / YEAR (CAGR between 2010 and 2015) Sources: Phillips McDougall 2016 and ISAAA

13 1/ MARKET FOR SEEDS: SLIGHT SLOWDOWN FOR GMO IN 2015 World market acreage million hectares (around 10% of arable land), -1% / 2014, grown by 18 million farmers in 28 countries GMO: ACREAGE PER COUNTRY million ha Others China India Canada Argentina Brazil USA World market value $20 billion in 2015 (i.e. 53% of the world market for seeds), -6% / 2014 Sources: ISAAA Philips McDougall

14 1/ MARKET FOR SEEDS: HIGH BARRIERS TO ENTRY A concentrated competitive environment High barriers to entry: Width and depth of the genetic resources R&D investment (conventional breeding and biotechnologies) International coverage WORLDWIDE COMPETITIVE ENVIRONMENT FOR SEEDS Monsanto Dupont Pioneer Syngenta Vilmorin & Cie KWS Dow Bayer DLF Rijk Zwaan Desprez Semences Vegetable potagères seeds ChemChina Semences Field seeds de grandes cultures Seeds companies Sales* in millions of Euros (KWS, Monsanto and Vilmorin & Cie : data) (Vilmorin & Cie : excluding Garden products) Others Bayer Dow KWS 30% 4% 4% 4% 5% Vilmorin & Cie 8% Syngenta 27% Monsanto 18% Dupont Pioneer 14 * Without IFRS11 impact Sources: company publications and internal. 2016

15 2/ ACCELERATING THE GROWTH An ambitious strategy: INNOVATION TARGETED POLICY OF EXTERNAL GROWTH INTERNATIONALIZATION Three strategic priorities: VEGETABLE SEEDS CORN SEEDS WHEAT SEEDS REINFORCE WORLD LEADERSHIP BECOME A GLOBAL ACTOR BECOME THE WORLD REFERENCE 15

16 3/ VEGETABLE SEEDS DIVISION PROFILE A very strong competitive position addressing worldwide vegetable growers and food processors An extremely diversified product line-up with more than 30 species (tomato, carrot, melon, pepper, bean, etc.) SALES OF VEGETABLE SEEDS PER CROP Others Tomato 1 Sweet and hot pepper 3 KEY FIGURES N 2 31 IN THE WORLD SALES OF VEGETABLE SEEDS PER GEOGRAPHICAL AREA % Africa / Middle East 17% Asia / Oceania COUNTRIES WITH LOCATIONS % M SALES OPERATING MARGIN Current operating margin : 16.2% 34% Europe Carrot 1 Onion Melon 1 Squash 1 Bean 2 1, 2, 3 : worldwide competitive positions 32% Americas 16

17 3/ VEGETABLE SEEDS. STRATEGY Reinforce world leadership Make full use of the virtuous circle of innovation and proximity to continue to win market shares Close targeted operations for acquisitions or partnerships to strengthen positions on certain crops and/or certain geographical zones (particularly in Asia) LATEST ACQUISITIONS: CENTURY SEEDS (October 2012) 10 local crops India Sales: 4 M SHAMROCK SEED (October 2013) Lettuce, greens, melon, water melon, pepper United States Sales: 20 M$ TROPDICORP (March 2015) Bitter gourd, pumpkin, wax gourd Vietnam Sales: 6 M$ GENICA RESEARCH (February 2016) Sweet and hot peppers, cucumber, summer squash United States Sales: more than 25 M$ 17

18 4/ FIELD SEEDS DIVISION PROFILE One of the top players in strategic crops targeting farmers 2 worldwide strategic crops: corn and wheat And regional strategic crops: sunflower, rapeseed and barley in Europe, rice in India, and soybean, which Vilmorin & Cie distributes in North and South America595 KEY FIGURES N 1 IN EUROPE FOR STRAW CEREALS (1) N 3 IN NORTH AMERICA And N 4 IN EUROPE FOR CORN SEEDS % 33 M SALES (884 M *) OPERATING MARGIN Current operating margin : 2.8% COUNTRIES WITH LOCATIONS* SALES OF FIELD SEEDS* PER SPECIE Other field seeds 10% Rapeseed 3% Feed grains 4% Sunflower 14% Cereals (corn, wheat, barley) 69% (1) Wheat and barley SALES OF FIELD SEEDS* PER GEOGRAPHICAL AREA Africa / Middle East Asia / Oceania 4% 2% Americas 40% 54% Europe * Without the application of the standard IFRS 11 ( Joint arrangements ) resulting in certain activities being consolidated using the Equity method since (in particular AgReliant. North America. Field seeds) 18

19 4/ CORN SEEDS. STRATEGY Corn seeds: become a global actor Worldwide corn acreage in 2015: 196 Mha* INTERNATIONALIZE ACTIVITIES further afield from European and North American activities DEVELOP A PROPRIETARY PORTFOLIO OF GM SEEDS LATEST ACQUISITIONS: SEED CO (Minority stake. 2014) #1 African seeds company Sales: 96 M$ 5 factories & 6 research stations in south east Africa SEED ASIA (March 2014) Hybrid tropical corn Thailand Sales: 9 M$ HENGJI LIMAGRAIN SEEDS (JV. September 2015) Corn China Production and distribution Technological strategic partnership between Vilmorin & Cie and KWS GM corn traits licensing agreements with Syngenta (October 2015) *Source: ISAAA

20 4/ WHEAT SEEDS. STRATEGY Wheat seeds: become the world reference Consolidate position of leader in Europe and become the world reference of the first worldwide crop Develop more efficient seeds and contributing to converting the market to high yield seeds Gradually extend the positions to other major wheat markets and develop strong partnerships internationally NORTH AMERICA Arcadia Bio Sciences Canterra Seeds Colorado Wheat Research Foundation AUSTRALIA Australian Grain Technologies OTHER ZONES South America Asia 20

21 5/ R&D: INNOVATE TO INSURE TOMORROW S GROWTH Maintain regular investment in research (breeding and biotechnologies) and broaden the partnerships % 19.1% 17.4% 17.4% 14.2% 14.6% 15.3% 15.2% 1,036 1,086 1,120 1, Investment Effort de recherche in research AgReliant Chiffre d'affaires sales of semences seeds (50%) AgReliant (à 50%) Sales Chiffre of d'affaires seeds semences Investment Effort de recherche/chiffre in research/sales d'affaires of seeds (incl. semences 50% AgReliant) (yc AgReliant 50%) Investment Effort de recherche/chiffre in research/sales d'affaires of seeds (IFRS semences 11) (IFRS 11) More than 14% 300 invested in biotechnologies million research investment integrating partnerships* *of which 225m research investments without integrating partnerships 21

22 SALES AT THE END OF THE 1 ST QUARTER (on September 30, 2016) 22

23 Strong progression in activity: 232 million which is +11.3%* Vegetable seeds (+12.3%*): an excellent first quarter Field seeds (+11%*): a high quality start to the fiscal year at the end of a 1 st quarter not very representative however The 1 st quarter in recent years has represented on average almost 15% of sales for the year Confirmation of objectives for In market conditions that still remain tense for field seeds in Europe and marked by consolidation operations in the agrochemicals sector *On a like-for-like basis 23

24 août-12 oct.-12 déc.-12 févr.-13 avr.-13 juin-13 août-13 oct.-13 déc.-13 févr.-14 avr.-14 juin-14 août-14 oct.-14 déc.-14 févr.-15 avr.-15 juin-15 août-15 oct.-15 déc.-15 févr.-16 avr.-16 juin-16 août-16 oct.-16 août-12 oct.-12 déc.-12 févr.-13 avr.-13 juin-13 août-13 oct.-13 déc.-13 févr.-14 avr.-14 juin-14 août-14 oct.-14 déc.-14 févr.-15 avr.-15 juin-15 août-15 oct.-15 déc.-15 févr.-16 avr.-16 juin-16 août-16 oct.-16 TRENDS FOR FIELD SEEDS Low price levels of agricultural raw materials Corn price. Bordeaux: 159 /tn Wheat price. Rouen: 161 /tn November 2016 Corn, soybean and wheat prices. Chicago Corn: 134 $/t Soybean: 360 $/t Wheat: 148 $/t November Blé rendu Rouen Maïs rendu Bordeaux Blé US Chicago Maïs US Chicago Soja Chicago Sources: Cereals market - FranceAgriMer, IGC, La dépêche. November

25 REFERENCES Accounting reference IFRS on September 30, 2016 Consolidation scope Acquisition of Genica Research (United States. Vegetable seeds), in February 2016, not restated for the impact of scope for fiscal year Average rate of the main currencies on Sept. 30, 2016 (and Sept. 30, 2015) average $ TRY ILS BRL INR MXN UAH RUB

26 CONSOLIDATED SALES* In M +10.6% +11.3% 23,6-1,4 SALES FOR THE 1 st QUARTER PER DIVISION 3% % 60% Vegetable seeds Field seeds Garden products and holdings sept.-15 Impact of currency devises Business Activité sept.-16 Contribution to consolidated sales * Revenue from ordinary activities 26

27 SALES* VEGETABLE SEEDS In M +13.3% +12.3% Performance of excellent quality, following on from the previous fiscal year, confirming the market share gains of the Vegetable seeds division, and fully benefitting from the global dynamic market Promising growth in business for the three Business Units (HM.CLAUSE, Hazera and Vilmorin-MKS): in all the geographical zones, with progression particularly marked in North America, Latin America and Asia (China, India); sept.-15 Impact of currency devises Business Activité sept.-16 for all the strategic crops: particularly carrot, tomato, watermelon, pepper and bean. * Revenue from ordinary activities 27

28 SALES* FIELD SEEDS In M -2,5 +7.5% 8,5 +11% Europe: Rapeseed: sustained growth in sales, with particularly marked progression in Central Europe and Germany, allowing Vilmorin & Cie to confirm its position as a top-rate European player on a market where hybrid seeds continue to be adopted. Straw cereals: sharp drop in sales, on a depressed market. Forage seeds: slip in activity, as in the previous fiscal year, particularly in France, related to the livestock breeding crisis. 79 sept.-15 Impact Impact of currency devises 85 Business Activité sept.-16 South America: Very strong progression (> +100% (1) ) for the first corn campaign in Brazil (safra), in a context of significant increases in cultivated acreage for this crop. Order books looking good (> +350%) for the second corn campaign (safrinha). Europe and North America: Procurement of corn seeds is nearly complete and, according to the latest estimates, is globally in line with production plans objectives. 28 * Revenue from ordinary activities (1) Evolution in sales

29 BREAKDOWN AND EVOLUTION OF SALES* PER GEOGRAPHICAL AREA Americas 24% Europe Africa/ Middle East 11% 49% Americas 56 M %** Europe 113 M. -2.0%** Asia / Oceania 16% Africa/Middle East 24 M. +0.4% ** Asia/Oceania 37 M %** * Sales of goods ** Current data compared with

30 Disclosure February 15, 2017 Disclosure April 25, 2017 Disclosure July 31, 2017 BREAKDOWN PER QUARTER SALES* PER QUARTER 533 In M Vegetable seeds Field seeds Europe Field seeds other areas Garden products and Holdings Q Q Q Q Q Q Q Q * Revenue from ordinary activities 30

31 OUTLOOK AND MID-TERM AMBITIONS 31

32 CONFIRMATION OF OBJECTIVES* VEGETABLE SEEDS Continuing on from previous fiscal years, achieve growth in sales higher than the estimated trend for the market of vegetable seeds Objective : Sales Vegetable seeds > 7% FIELD SEEDS Strengthen positions in regions where facilities have been established, in market conditions that remain tense in Europe Objective : Sales Field seeds > 2% As part of the operational action plan announced in April Moderation of the increase in research investments - In terms of external growth, priority to the integration of recently acquired structures - Tight control of operating charges and investments *On a like-for-like basis. Objectives as announced in October 2016 for disclosure of the annual results. 32

33 CONFIRMATION OF OBJECTIVES* Achieve significant growth in sales Relying on the dynamism of the Vegetable seeds activity In spite of persistent pressure on agricultural prices affecting the Field seeds activity In an environment marked by the consolidation operations in the agrochemicals sector Consolidated sales +5% Current operating margin rate at the same level as in Aim for a contribution from associated companies, at least equivalent to Further deployment of the development and innovation strategy, in a long-term vision 33 taking into account investment in research of > 240 million *On a like-for-like basis. Objectives as announced in October 2016 for disclosure of the annual results.

34 STRATEGIC ORIENTATIONS Strategic ambition for 2020 Accelerate development to reach business growth higher than market trends and increase operating margins, both in Vegetable seeds and Field seeds Consolidate the financial profile, in terms of leverage (aiming a level of between 1.5 and 2) and indebtedness (with gearing lower than 40%), and in particular make sure there is an increase in cash generation Materialize the 3 strategic priorities: VEGETABLE SEEDS CORN SEEDS WHEAT SEEDS REINFORCE WORLD LEADERSHIP BECOME A GLOBAL PLAYER ULTIMATELY BECOME THE WORLD REFERENCE 34

35 REMINDER OF THE AMBITIONS LOOKING TO VEGETABLE SEEDS Another fiscal year of dynamic and profitable growth in activity, demonstrating the pertinence of the strategy Pursue the strategy of combining organic growth and external growth > Regular renewal and optimization of the product portfolio > Reinforcement of proximity to the markets > Targeted external growth operations Continue to increase value in emerging markets AMBITION FOR 2020 Average growth in sales of more than 5% per year Reach an operating margin level of 18% 35

36 REMINDER OF THE AMBITIONS LOOKING TO FIELD SEEDS > Fine resistance of the activity in an unfavorable market, particularly in Europe, and structuring of the organization in new zones affecting business and the operational performance > Further internationalization of business and progress in the development of a proprietary range of genetically modified varieties Continue the strategy of innovation and internationalization > Quality of product pipeline > International deployment > Development of a proprietary range of genetically modified varieties AMBITION FOR 2020 Reach sales of around 1 billion Euros with an operating margin of 10% (including AgReliant at 50%) 36

37 VILMORIN & CIE ON THE STOCK EXCHANGE 37

38 EVOLUTION OF THE SHARE PRICE Vilmorin & Cie Share price on December 30 th, 2016 CAC % 10 Years -1.7% 5 Years -8.4% 1 Year Source : Euronext.com 38

39 DIVIDENDS (1) In 4,37 1,40 * 3,87 4,77 4,04 3,50 2,85 1,24 1,36 1,50 1,50 1,57 1, Profit (group share) per share Dividend Pay-out 28.4% 35.3% 31.4% 37.2% 44.8% 38,6% * capital gain from the disposal of a minority stake in China (1) Data restated for the allotment of free shares of January 2013 and January

40 SCHEDULE AND CONTACTS 40

41 WEDNESDAY FEBRUARY 15, 2017 AFTER TRADING Disclosure of sales and results for the first semester (on December 31, 2016) TUESDAY APRIL 25, 2017 AFTER TRADING Disclosure of sales at the end of the third quarter (on March 31, 2017) MONDAY JULY 31, 2017 AFTER TRADING Disclosure of sales for fiscal year (on June 30, 2017) WEDNESDAY OCTOBER 18, 2017 AFTER TRADING Disclosure of results for fiscal year (on June 30, 2017) 41

42 FOR ANY FURTHER INFORMATION: Daniel JACQUEMOND Chief Financial Officer Clémence DATURI Financial Communication Officer and Individual Shareholders Relations Valérie MONSERAT Head of Financial Communication and Investor Relations Vilmorin & Cie Head Office: 4 quai de la Mégisserie F PARIS Postal address: CS Saint-Beauzire F GERZAT Tel: +33 (0) All our financial information on: 42

43 APPENDICES Key financial data for fiscal year Organization chart 43

44 APPENDICES KEY FINANCIAL DATA 44

45 INCOME STATEMENT FOR FISCAL YEAR (CLOSING JUNE) In M Variation Sales % Sales margin M Sales margin rate 47.5% 47.7% +0.2 pt Operating income M Operating margin rate 7.9% 7.6% -0.3 pt Current operating margin rate (1) 8.0% 8.4% +0.4 pt Financial income (2.7) M Income from associated companies M Income taxes (19.3) M Net income M Net income Group share M (1) The current operating margin is defined as the operating margin in the accounts restated for impairments, reorganization costs and certain items of an extraordinary nature (additional procurement costs and partial allocation of goodwill in ). 45

46 KEY FIGURES CONTRIBUTED TO CONSOLIDATED SALES PER DIVISION FOR FISCAL YEAR In M Sales* Operating income Net income Vegetable seeds Field seeds Garden products Holdings Consolidated 1, , * Revenue from ordinary activities 46

47 FREE CASH-FLOW In M Net indebtedness at the beginning of the FY EBITDA (1) Variation of working capital needs (44) 20 Other operating items (41) (28) Net industrial investments (62) (46) Activated development costs (148) (157) Operating cash-flow (32) 68 Net financial investments (62) (116) Capital and other equity contributions - (1) Dividends (21) (10) Net financial charges (28) (23) Free cash-flow (142) (83) Other restatements (IFRS/ Currency, etc.) (4) 1 Net indebtedness at the end of FY (1) EBITDA is defined as follows: Operating income + Net depreciation & amortization + Net impairment 47

48 BALANCE SHEET STRUCTURE In M 1,563 1, Assets Net fixed assets Net working capital needs 1,272 1, Liabilities Equity Provisions Net deferred taxes Net indebtedness Total balance sheet 2,064 2,159 * of which cash Gearing 59% Leverage

49 APPENDICES ORGANIZATION CHART 49

50 FIELD SEEDS Limagrain Europe VEGETABLE SEEDS HM.CLAUSE AgReliant (corn, soybean) Limagrain Asia Hazera Limagrain Cereal Seeds (wheat) Limagrain South America Vilmorin-MKS Limagrain Africa 50

51 THANK YOU VILMORIN & CIE Head Office: 4 Quai de la Mégisserie F PARIS Postal address : CS Saint Beauzire GERZAT Tel: + 33 (0)