Slide 1: Q3 2017 Sales
Q3 2017 SALES October 17, 2017 Cécile Cabanis, CFO I 1 I
Slide 2: Disclaimer
DISCLAIMER • This document is presented by Danone. It contains certain forward-looking statements concerning Danone. In some cases, you can identify these forward-looking statements by forward-looking words, such as “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “forecas
Slide 3: Danone Priorities: Executing on our Strategic Priorities
DANONE PRIORITIES EXECUTING ON OUR STRATEGIC PRIORITIES 2020 OBJECTIVES 1 Accelerate growth SALES • Execute competitive plans GROWTH 1: • Engage with consumers in new way 4% to 5% • Accelerate small & local brands 2 Maximize efficiencies MARGIN 2: >16% • Achieve synergies from WhiteWave • Deliver ‘P
Slide 4: Q3 Highlights: Sales Growth Momentum; FY Guidance Confirmed
Q3 HIGHLIGHTS SALES GROWTH MOMENTUM; FY GUIDANCE CONFIRMED IN MORE DETAIL 2017 THIRD-QUARTER DELIVERY 2017 FULL-YEAR GUIDANCE 1 +4.7% (1) LFL sales growth • Very strong performance in Specialized Nutrition, exceptional growth in ELN China • Strong acceleration in Waters, return to growth in China •
Slide 5: Q3 Highlights: Successful Product and Brand Execution, New Investment Models
Q3 HIGHLIGHTS SUCCESSFUL PRODUCT AND BRAND EXECUTION, NEW INVESTMENT MODELS I 5 I
Slide 6: Q3 Highlights: Successful Product and Brand Execution, New Investment Models
Q3 HIGHLIGHTS SUCCESSFUL PRODUCT AND BRAND EXECUTION, NEW INVESTMENT MODELS I 6 I
Slide 7: Q3 Highlights: Successful Product and Brand Execution, New Investment Models
Q3 HIGHLIGHTS SUCCESSFUL PRODUCT AND BRAND EXECUTION, NEW INVESTMENT MODELS I 7 I
Slide 8: Q3 Highlights: Successful Product and Brand Execution, New Investment Models
Q3 HIGHLIGHTS SUCCESSFUL PRODUCT AND BRAND EXECUTION, NEW INVESTMENT MODELS I 8 I
Slide 9: Q3 2017 Sales Bridge
Q3 2017 SALES BRIDGE LIKE-FOR-LIKE GROWTH DRIVEN BY PRICE/MIX VALUE ENHANCEMENT LFL New Danone(1): +4.7% €6,454 m -1.4% +0.4% +4.3% +17.0% -3.7% €5,537 m Q3 2016 WhiteWave Scope Currency Volume Value Q3 2017 Reported base effect (2) Reported (1) “Like-for-like New Danone” including end of special tr
Slide 10: Q3 2017 Market Dynamics: Navigating Different Regional Trends
Q3 2017 MARKET DYNAMICS NAVIGATING DIFFERENT REGIONAL TRENDS EUROPE & NORAM: -0.2% EUROPE & NORAM : +0.1% (1) REST OF WORLD : +10.7% • Consumer demand still weak • Deflationary environment • Challenging retail environment • Heightened competitive backdrop • Brexit impact • Rise of e-commerce DRIVE
Slide 11: Q3 2017 Sales by Reporting Lines
Q3 2017 SALES BY REPORTING LINES IMPROVED UNDERLYING PERFORMANCE DESPITE HEADWINDS Sales Volume and Price LFL sales (€m) /Mix growth growth(1) Specialized Nutrition €1,844m 9,0% 8,8% +17.8% Waters €1,272m 6,2% 1,4% +7.6% EDP Noram €1,290m -2,7% 0,5% -2.2% -2.3% EDP International €2,048m -7,4% 5,1% (
Slide 12: Specialized Nutrition: +17.8%
SPECIALIZED NUTRITION: +17.8%(1) PROVEN “CONSUMER-DRIVEN SCIENCE-LED” MODEL Advanced Medical Early Life Nutrition: > 20% growth Nutrition 25% (AMN) • China recovery as main growth engine (> 50% growth (2) ) • Solid growth outside China; double-digit growth in North and Latin America Early Life Nutri
Slide 13: Focus on ELN Total China
FOCUS ON ELN TOTAL CHINA BUILDING A LEADER IN THE #1 IMF(1) MARKET China Market demand rebound, solid execution of plans • ~ 40% of IMF global market • ~10% market growth YTD (vs ~1% in 2016) • Increase of resources allocated to serve a growing demand • Differentiated brand strategy: Aptamil and Nut
Slide 14: Waters: +7.6%
WATERS: +7.6%(1) SEQUENTIAL ACCELERATION; DELIVERING AGAINST STRATEGIC PRIORITIES Plain water segment fortified : mid single-digit growth ~20% • Positive trends across regions Europe + Noram ~40% • Inauguration of new Evian Factory Aspame ~40% Latam Step-up in Aquadrinks segment : double-digit growt
Slide 15: EDP Noram: -2.2%
EDP NORAM: -2.2%(1) INTEGRATION ON TRACK; EARLY SIGNS OF RECOVERY Yogurt ~10% Yogurt: US retail resilient Plant-based ~10% • Market share gains despite highly competitive category ~40% Coffee creamers • Strong growth in plant-based yogurts, Smart calories, Greek, Family nutrition 20% Premium Dairy ~
Slide 16: EDP International: -2.3%
EDP INTERNATIONAL: -2.3%(1) BACK TO FUNDAMENTALS; EXPAND YOUNG & LOCAL BRANDS Expand young and local brands: high single-digit growth Europe ~20% Latam ~40% ~20% Latam: strong growth outside Brazil CIS Aspame • Good performance in Mexico offset by steep decline in Brazil ~20% • Major transformation
Slide 17: Q3 Highlights: Key Take-aways and 2017 Guidance
Q3 HIGHLIGHTS KEY TAKE-AWAYS 2017 GUIDANCE Improved performance in the third quarter; RECURRING EPS GROWTH increase in like-for-like sales AT CONSTANT EXCHANGE RATE Continued execution against our strategic > 12% priorities • Accelerating growth Based on: • Maximizing efficiencies • Moderate LFL
Slide 18: Appendix
\ ‘ DANONE ¥ ONE PLANET. ONE HEALTH ™ / - #\ APPENDIX
Slide 19: Q3 Impact of Currencies & Scope
Q3 IMPACT OF CURRENCIES & SCOPE Q3 2017 EDP International EDP Noram Specialized Nutrition Waters Total Reported sales growth -0.3% +105.7% +13.9% +2.8% +16.6% Currency -3.2% -4.6% -3.3% -4.4% -3.7% WhiteWave base effect +6.2% +121.4% -0.6% -0.3% +17.0% Scope of consolidation -1.1% -8.9% +0.0% +0.0%
Slide 20: Changes in Exchange Rates
CHANGES IN EXCHANGE RATES FX Impact Q3 17 vs Q3 16 (avg) on Net Sales Q3 United States Dollar -1.0% -4.9% Argentine Peso -0.7% -17.7% Turkish Lira -0.5% -19.8% Indonesian Rupiah -0.4% -6.4% Chinese Renminbi -0.3% -5.0% British Pound -0.2% -5.4% Egyptian Pound -0.2% -52.5% Russian Ruble 0.1% 4.1% Jap
Slide 21: Additional indicator: like-for-like New Danone changes
Additional indicator of like-for-like changes: “like-for-like New Danone” changes Since completion of WhiteWave acquisition, WhiteWave and Danone’s activities have been combined and are generating synergies. Separate reporting of WhiteWave and Danone in their pre-acquisition forms thus no longer ref
Slide 22: Argentina inflation and like-for-like definition
Since inflation in Argentina—already structurally high—accelerated further in 2014, in particular following the sharp, steep devaluation of the peso in January, using an identical exchange rate to compare 2014 figures with those for the prior year did not accurately reflect Danone's organic performa
Slide 23: Recurring operating income definition
Recurring operating income is defined as Danone’s operating income excluding Other operating income and expenses. Other operating income and expenses is defined under Recommendation 2013-03 of the French ANC (format of consolidated financial statements for companies reporting under international rep