Slide 1: H1 2023 Results
DANONe@ ONE PLANET. ONE HEALTH H1 2023 RESULTS July 26, 2023
Slide 2: CEO Introduction
CEO INTRODUCTION Antoine de Saint-Affrique Chief Executive Officer 2
Slide 3: A Solid First Half of the Year
A SOLID FIRST HALF OF THE YEAR CONSISTENTLY DELIVERING ON STRATEGY STRONG LIKE-FOR-LIKE IMPROVEMENT IN MARGIN STEP-UP IN MODERATE IMPROVEMENT IN SALES GROWTH FROM OPERATIONS REINVESTMENTS RECURRING OPERATING MARGIN +8.4% +93 bps -99 bps +14 bps vol/mix -1.1% vs LY vs LY vs LY price +9.4% CEO INTRODU
Slide 4: Making Progress on the Core
MAKING PROGRESS ON THE CORE BACK TO CATEGORY FUNDAMENTALS IN EDP EUROPE PRIORITIZED SHARPER AND HIGHER AND RETURN-ORIENTED DEMAND SPACES MORE FOCUSED PORTFOLIOS INVESTMENTS, DISCIPLINED EXECUTION HEALTH THROUGH FUNCTIONALITY INDULGENCE CEO INTRODUCTION KIDS CORE & ESSENTIALITY 4
Slide 5: Rebuilding the Essentiality of the Danone Brand
MAKING PROGRESS ON THE CORE REBUILDING THE ESSENTIALITY OF THE DANONE BRAND EVERYDAY NUTRITION VALUE-ADDED PROPOSITIONS Executed in Spain early 2023 Ongoing sequential ramp up CEO INTRODUCTION Launching in France in July 2023 Renovation and innovation pipeline DANONE BRAND IN SPAIN: MONTHLY PENETRAT
Slide 6: Further Boosting Our Winners
FURTHER BOOSTING OUR WINNERS LEVERAGING SCIENCE, DRIVING BRAND POWER, EXECUTING AND INVESTING COFFEE CREATIONS EVIAN HIGH PROTEIN SPECIALIZED NUTRITION Roll- out in Q3 2023 CEO INTRODUCTION STEEP DOUBLE-DIGIT LFL GROWTH IN H1 +8% LFL GROWTH IN H1 6
Slide 7: Addressing Our Underperformers: Turning Around Mizone
ADDRESSING OUR UNDERPERFORMERS TURNING AROUND MIZONE Drivers of the turnaround +15.9% LFL growth in H1 – Volume driven Portfolio simplification Market share gains Product formulation Core restored around 2 SKUs In-store execution Piloting 2 innovations: Zero and Electrolytes Activation and investmen
Slide 8: Investing for Today and Tomorrow
INVESTING FOR TODAY AND TOMORROW DRIVING END-TO-END BIGGER AND BETTER A&P RELEVERAGING SCIENCE VALUE CREATION DESIGN TO SUPERIOR VALUE EVERYDAY CHILDREN’S IMMUNITY & GUT HEALTH NUTRITION & GROWTH ALLERGY HYDRATION LEVERAGING SUPPPLIERS CEO INTRODUCTION PHYSICAL ENERGY MENTAL WELLBEING RECOVERY & PER
Slide 9: Financial Review
FINANCIAL REVIEW Juergen Esser Chief Financial Officer FINANCIAL REVIEW 9
Slide 10: Q2 Highlights
Q2 HIGHLIGHTS SOLID GROWTH LED BY ALL GEOGRAPHIES AND CATEGORIES Europe +6.5% +6.2% North America +5.0% China, North Asia & Oceania +9.6% +4.9% +6.4% Latin America +10.8% LFL sales growth in Q2 23 +9.6% FINANCIAL REVIEW Rest of the World +3.9% Note: all data in like-for-like 10
Slide 11: Q2 Sales Bridge
Q2 SALES BRIDGE +6.4% LFL SALES GROWTH REPORTED GROWTH +2.4% +9.0% €7,235m €7,067m -3.7% -0.4% -0.2% -2.4% of which -4.3% from currencies TOTAL LFL GROWTH: +6.4% FINANCIAL REVIEW -2.3% VOL/MIX | +8.7% PRICE Q2 2022 Currency Scope EDP Russia Volume/mix Price Q2 2023 Net Sales and others1 LFL growth2
Slide 12: Europe
EUROPE PRICE-LED GROWTH DRIVEN BY ALL CATEGORIES Q2 2023: LFL GROWTH +6.5% | VOL/MIX -5.1% H1 2023 KEY FIGURES • Growth led by France, Poland, Spain while Germany progressively recovers H1 23 NET SALES €4.7bn LIKE-FOR-LIKE SALES GROWTH +6.4% • Resilient growth in Specialized Nutrition and Waters Vol
Slide 13: North America
NORTH AMERICA SOLID GROWTH LED BY YOGURT AND BEVERAGES Q2 2023: LFL GROWTH +5.0% | VOL/MIX -2.7% H1 2023 KEY FIGURES • Resilient growth led by Yogurt, Coffee Creations and Waters H1 23 NET SALES €3.4bn LIKE-FOR-LIKE SALES GROWTH +8.3% • Strong growth in Oikos, International Delight, Stok and evian V
Slide 14: China, North Asia and Oceania
CHINA, NORTH ASIA AND OCEANIA QUALITY GROWTH LED BY ALL CATEGORIES Q2 2023: LFL GROWTH +9.6% | VOL/MIX +8.8% H1 2023 KEY FIGURES • Continued solid growth of Aptamil in China with further market share gains H1 23 NET SALES €1.8bn LIKE-FOR-LIKE SALES GROWTH +12.4% • Strong performance of Nutrison in A
Slide 15: Latin America
LATIN AMERICA DOUBLE-DIGIT GROWTH LED BY EDP AND SPECIALIZED NUTRITION Q2 2023: LFL GROWTH +10.8% | VOL/MIX -2.0% H1 2023 KEY FIGURES • Performance driven by EDP and Specialized Nutrition in all countries H1 23 NET SALES €1.5bn LIKE-FOR-LIKE SALES GROWTH +11.7% • Strong growth in Danonino, Danette,
Slide 16: Rest of the World
REST OF THE WORLD Q2 GROWTH SEQUENTIALLY NORMALIZING Q2 2023: LFL GROWTH +3.9% | VOL/MIX -4.3% H1 2023 KEY FIGURES • Q2 performance normalizing after Q1 one-offs H1 23 NET SALES €2.8bn LIKE-FOR-LIKE SALES GROWTH +7.7% • Growth continuing to be led by key Specialized Nutrition platforms Volume-Mix /
Slide 17: H1 2023 Recurring Operating Margin
H1 2023 RECURRING OPERATING MARGIN MODERATE IMPROVEMENT LED BY MARGIN FROM OPERATION; STEP-UP IN REINVESTMENTS REPORTED: +14 BPS +93 bps 12.1% +13 bps +7 bps 12.2% -99 bps c. +630 bps Vol, mix and price c. -540 bps COGS effect net from efficiencies FINANCIAL REVIEW H1 2022 Scope, FX and others1 Marg
Slide 18: EPS Bridge and Free Cash Flow
EPS BRIDGE AND FREE CASH FLOW RECURRING EPS UP +7.6% VS LY; €1.1 billion FCF EPS FREE CASH FLOW +7.6% +0.2% +0.5% €1.76 €1.1bn in H1 €1.70 -0.7% -0.1% €1.63 +0.4bn vs LY €1.14 Disciplined capex and working +7.6% capital management FINANCIAL REVIEW RECURRING EPS H1 2022 H1 2022 Operational Financing
Slide 19: 2023 Moving Forward
2023 MOVING FORWARD ▪ EDP Russia financial deconsolidation as of July 2023 ACCOUNTING TREATMENT OF EDP RUSSIA ▪ As of 31/12/2023: c. -€0.2bn of cash impairment and recognition of c. -€0.5bn non-cash RUB/EUR FX translation difference ▪ SEQUENTIAL VOLUME RECOVERY CONNECTING WITH OUR ▪ GROSS MARGIN EXP
Slide 20: 2023 Outlook and Guidance
2023 OUTLOOK AND GUIDANCE LFL Sales Growth +4 to +6% Recurring Operating Margin Moderate improvement FINANCIAL REVIEW 20
Slide 21: CEO Conclusion
CEO CONCLUSION Antoine de Saint-Affrique Chief Executive Officer 21
Slide 22: Driving Sustainable Value Creation
DRIVING SUSTAINABLE VALUE CREATION Starting to Significant impact progress on Danone’s Renew Danone performance enablers since and delivering March 2022 on the target business model CEO CONCLUSION 22
Slide 23: Appendix
APPENDIX We = ae tala OFFICIAL i 106 AMORE INFINITO \! a. INSIEME | { TAPPA DOPO TAPPA. 23
Slide 24: Q2 2023 Sales by Geographical Zone
Q2 2023 SALES BY GEOGRAPHICAL ZONE EUROPE NORTH CHINA, NORTH LATIN REST OF COMPANY AMERICA ASIA & OCEANIA AMERICA THE WORLD €2,429m €1,704m €954m €779m €1,369m €7,235m Q2 net sales Like-for-like growth +6.5% +5.0% +9.6% +10.8% +3.9% +6.4% Volume/Mix -5.1% -2.7% +8.8% -2.0% -4.3% -2.3% Price +11.7% +
Slide 25: Q2 2023 Sales by Category
Q2 2023 SALES BY CATEGORY COMPANY €3,731m €2,142m €1,362m €7,235m Q2 net sales Like-for-like growth +6.2% +4.9% +9.6% +6.4% Volume/Mix -3.3% -1.7% 0.0% -2.3% Price +9.6% +6.6% +9.6% +8.7% 25
Slide 26: Q2 2023 Sales by Geographical Zone by Category
Q2 2023 SALES BY GEOGRAPHICAL ZONE BY CATEGORY EUROPE NORTH CHINA, NORTH AMEA, CIS & COMPANY AMERICA ASIA & OCEANIA LATIN AMERICA EDP Sales €1,085m €1,539m €96m €1,012m €3,731m LFL growth +5.8% +5.2% +14.9% +7.6% +6.2% SPECIALIZED NUTRITION Sales €766m €87m €611m €677m €2,142m LFL growth +3.4% -9.0%
Slide 27: H1 2023 Sales by Geographical Zone
H1 2023 SALES BY GEOGRAPHICAL ZONE EUROPE NORTH CHINA, NORTH LATIN REST OF COMPANY AMERICA ASIA & OCEANIA AMERICA THE WORLD €4,677m €3,418m €1,778m €1,466m €2,828m €14,167m H1 net sales Like-for-like growth +6.4% +8.3% +12.4% +11.7% +7.7% +8.4% Volume/Mix -4.6% -1.0% +11.2% -1.1% -2.8% -1.1% Price +
Slide 28: H1 2023 Sales by Category
H1 2023 SALES BY CATEGORY COMPANY €7,503m €4,250m €2,413m €14,167m H1 net sales Like-for-like growth +7.7% +8.3% +10.6% +8.4% Volume/Mix -3.3% +1.7% +1.1% -1.1% Price +11.0% +6.6% +9.5% +9.4% 28
Slide 29: H1 2023 Sales by Geographical Zone by Category
H1 2023 SALES BY GEOGRAPHICAL ZONE BY CATEGORY EUROPE NORTH CHINA, NORTH AMEA, CIS & COMPANY AMERICA ASIA & OCEANIA LATIN AMERICA EDP Sales €2,152m €3,106m €180m €2,065m €7,503m LFL growth +5.5% +8.4% +16.9% +8.1% +7.7% SPECIALIZED NUTRITION Sales €1,518m €173m €1,220m €1,340m €4,250m LFL growth +3.
Slide 30: Q2 and H1 2023 Sales by Geographical Zone
Q2 AND H1 2023 SALES BY GEOGRAPHICAL ZONE CHINA, NORTH LATIN REST OF EUROPE NORTH AMERICA TOTAL ASIA & OCEANIA AMERICA THE WORLD Like-for-like sales growth +6.5% +5.0% +9.6% +10.8% +3.9% +6.4% Scope +0.1% +0.0% +0.0% -3.9% -0.0% -0.4% Q2 2023 Currency and others1 -0.5% -2.6% -7.8% -5.7% -11.5% -4.6%
Slide 31: Changes in Exchange Rates
CHANGES IN EXCHANGE RATES % total H1 2023 H1 23 vs H1 22 (avg) Q2 23 vs Q2 22 (avg) United States Dollar 22.5% +1.1% -1.9% Chinese Renminbi 10.0% -5.4% -7.3% Indonesian Rupiah 5.9% -2.6% -3.7% Russian Ruble 5.3% +0.9% -17.0% British Pound 5.2% -3.9% -2.6% Mexican Peso 5.2% +12.9% +11.6% Brazilian Re
Slide 32: Recurring Operating Margin
RECURRING OPERATING MARGIN € million H1 2022 H1 2023 Change €m Margin (%) €m Margin (%) Reported Like-for-like Europe 574 12.9% 497 10.6% -232 bps -290 bps North America 254 8.1% 353 10.3% +222 bps +229 bps China, North Asia & Oceania 534 32.0% 549 30.9% -107 bps -156 bps Latin America -1 -0.1% 42 2
Slide 33: Non-Recurring Net Income
NON-RECURRING NET INCOME € million H1 2022 H1 2023 Change 2023 vs 2022 Recurring net income 1,051 1,133 +82 Non-recurring net income (314) (40) 273 Operating income (233) (53) 180 NON-RECURRING ITEMS Total Financial expenses 6 (15) (21) Income tax 28 6 (22) Net income from associates (114) 19 133 No
Slide 34: Balance Sheet
BALANCE SHEET € million ASSETS(1) LIABILITIES 31/12/22 30/06/23 31/12/22 30/06/23 Intangible assets Shareholders’ equity 17 992 16 537 24 239 23 930 Net debt(2) 10 107 11 180 Other assets 9 076 8 781 3 932 3 747 Other liabilities 7 206 7 409 8 490 8 656 Working capital Working capital APPENDIX 40,52
Slide 35: Disclaimer
DISCLAIMER - This presentation 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”, “objective”, “believe”, “forecast”, “guida