Vilmorin & Cie sales up 6.6% for the first semester of 2019-2020

• Sales for the 1st semester on December 31, 2019: 490.8 million euros, up by 6.6%*
• Net income for the 1st semester 2019-2020: -63.4 million euros
• Confirmation of the objectives for fiscal year 2019-2020
• * With current data

On average, sales for the first semester globally represent around only one third of the annual sales for Vilmorin & Cie. Because of this highly seasonal pattern, the consolidated financial statements for the first semester traditionally show very negative income.


The consolidated financial statements for the first semester 2019-2020, closed on December 31, 2019, were approved at the Vilmorin & Cie Board meeting of February 26, 2020. The Statutory Auditors have carried out a limited audit of the financial information for the first semester; in their conclusions they have not indicated any reservations or particular remarks.

Consolidated financial information is established in compliance with the IFRS referential (International Financial Reporting Standards) as endorsed by the European Union on December 31, 2019. It takes into account the application of IAS 29 with regard to the treatment of hyperinflation, applied to activities in Argentina and also by Seed Co¹ for its activities in Zimbabwe.

In addition, the accounting principles and methods adopted in the condensed consolidated financial statements for the first semester on December 31, 2019 have changed compared to June 30, 2019 to take into account the first application of IFRS 16, the impacts of which are presented in detail in appendix 6, as well as the first application of IFRIC 23, which had no impact on the financial statements of Vilmorin & Cie.

No other change in accounting methods or estimates with any impact on Vilmorin & Cie’s consolidated financial statements was applied by Vilmorin & Cie over the course of the semester.

Marked increase in sales for the first semester (+6.6% with current data), perfectly in line with the objectives for the fiscal year

Vilmorin & Cie’s consolidated sales for the first semester 2019-2020, closed on December 31, 2019, came to 490.8 million euros, an increase of 6.6% with current data, and 2.5% on a like-for-like basis.

Vegetable Seeds division: measured growth in business over the second quarter

Over the second quarter, the Vegetable Seeds division made sales of 139.8 million euros, an increase of 3% with current data, and 1.2% on a like-for-like basis.

All the geographical zones posted growth in business, with the exception of Asia, affected in particular by delays in carrot orders in China. Following on from the first quarter, the increase in sales was particularly dynamic in North America - both in the United States and Mexico - in South America and the Middle East, particularly in Turkey.

With regard to the different crops, tomato, onion, pepper and carrot achieved the best performances, demonstrating the high quality of Vilmorin & Cie's product portfolio.

Finally, it should be noted that the increase in sales posted over the quarter concerns all three Business Units - HM.CLAUSE, Hazera and Vilmorin-Mikado, allowing Vilmorin & Cie to cover the highly fragmented vegetable seed markets with efficiency.

Consequently, sales for the Vegetable Seeds division for the first semester came to 248.4 million euros, an increase of 3.9%. Restated on a like-for-like basis, they rose by 1.9%. This result means that Vilmorin & Cie can confirm its position as N°1 worldwide for vegetable seeds.

At the end of a first semester that represents, on average over the last few years, less than 40% of annual sales, Vilmorin & Cie confirms its sales growth target for this activity for 2019-2020, i.e. an increase of 3% on a like-for-like basis compared to 2018-2019.

Field Seeds division: an activity driven by the dynamic impetus of business in South America

Over the second quarter, Field Seeds posted sales that were virtually stable with current data (+0.2%) and down by 2.6% on a like-for-like basis.

• In Europe, Vilmorin & Cie posted a drop in business over the second quarter, largely as a result of a delay in sales of corn seed compared with December 31, 2018. After a first quarter posting significant growth in sales, this slow-down does not call into question the outlook for the 2020 sales campaign: the order books look promising and fuller than last year, with corn acreage that should slightly increase. With regard to orders for the sunflower seeds campaign, they are holding up well, in a context of lower acreage predicted for this crop.
  
  Furthermore, Vilmorin & Cie once again this year posted an excellent rapeseed campaign, with a very sharp increase in sales. This performance was all the more remarkable as it was achieved in the context of a strong drop in acreage devoted to this crop. As a result, Vilmorin & Cie has gained very significant market shares and is now positioned among the top European players for this crop.
  
  As for the first part of the straw cereal seed (wheat, barley) campaign, sales were down in the context of a slight drop in cultivated acreage. Similarly, sales of forage crop seeds, which complement the commercial offer in Europe, fell, particularly in Germany and the Netherlands. 
   

• In South America, sales were up significantly at the end of December, materializing Vilmorin & Cie's reinforced commercial presence on this continent of such great potential.
  
  In Brazil, sales for the first corn campaign (safra) were down compared with the previous year, whereas the second campaign (safrinha) has made a promising start, in a more favorable market environment this year. Sales of soybean seeds have experienced very high growth; as a consequence, Vilmorin & Cie is continuing to strengthen its positions for this major crop in South America.
  
  Finally, in Argentina, sales increased noticeably. Integration of the company Sursem, acquired in December 2018, has now been finalized and it has contributed significantly to the increase in sales in the country. 
   

• In the other development regions, business in South Africa was down slightly, whereas in Asia, sales showed strong growth, thanks to a very good performance on the Indian market.

Consequently, sales for the Field Seeds division for the first semester came to 228.9 million euros, an increase of 9.5% with current data, and 2.5% on a like-for-like basis compared with the first semester for 2018-2019.

On these bases, Vilmorin & Cie can confirm its objective for an increase in sales for Field Seeds for fiscal year 2019-2020, an increase of 2% on a like-for-like basis compared with the previous fiscal year.

Moreover, with regard to associated companies:

- On the North American market, in comparison to a campaign which had begun early the previous year, the start of the commercial campaign for corn and soybean seeds is slower. Nevertheless, orders for corn seed are currently higher than last year, in the context of fairly stable acreage expected for corn.

- On the African market, Seed Co's business² has been affected in Zimbabwe by a strong monetary impact, a direct consequence of the introduction of the RTGS dollar in the country, while on the other African markets, the company posted strong growth in sales³ .

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¹ On December 31, 2019, Vilmorin & Cie held 29.4% of Seed Co Limited's capital stock and 31% of Seed Co International's capital stock.
² At the end of the first semester (on September 30, 2019).
³ Cf. “Seed Co International Limited Abridged Group unaudited results for the half year ended 30 September 2019” available on the website www.seedcogroup.com.