Danone Sa · EURONEXT:BN
Danone Sa — Exane BNP Paribas 5th Annual SRI Conference 2017
44 slides from Danone Sa's conference presentation, Nov 22, 2017
Slide 1: Exane BNP Paribas 5th Annual SRI Conference
EXANE BNP PARIBAS 5TH ANNUAL SRI CONFERENCE November 22nd, 2017 I 1 I
Slide 2: Agenda
1 OVERVIEW 2 DEEP DIVE IN OUR UNIQUE BUSINESS MODEL 3 GOVERNANCE 4 INSPIRING SUSTAINABILITY EXAMPLES 5 CONCLUSION – DRIVING VALUE I 2 I
Slide 3: Overview
= uu > [a4 Lu > O 1. . " ry) DANONE ONE PLANET. ONE HEALTH
Slide 4: Danone at a glance
DANONE AT A GLANCE ~100 ~ €25bn ~ €45bn ~100,000 Years in business in 2019 2016 Net sales Market capitalization Employees Incl. 2016 WhiteWave sales As of November 7th, 2017 As of December 31, 2016; before WW acquisition 4 ~20 120 #1 Business lines Brands over €500 mln sales Countries in most catego
Slide 5: Danone at a glance: 2020 objectives
DANONE AT A GLANCE 2020 OBJECTIVES 100% 50% 60% 50% Volume compliant with Danone Carbon intensity reduction for Reduction of frequency rate Energy reduction 2020 nutritional targets (1) Danone’s Direct Responsibility of workplace accidents by 2020 2017 ACHIEVEMENTS: ON TRACK 67% Volume compliant wit
Slide 6: External evaluations
EXTERNAL EVALUATIONS On January, 2016, the second edition In 2016, Danone was recognized by the Dow Danone has been included in the ESI Excellence Score B for palm oil of the global Access to Nutrition Index (ATNI) Jones Sustainability Index, which each year Europe, ESI Excellence Global, NYSE Euron
Slide 7: External evaluations
EXTERNAL EVALUATIONS In June 2016, Danone entered the FTSE4Good In 2016, Danone was rated AAA by the MSCI ESG In March 2017, Danone was awarded “Prime” In 2016, Danone received Index, a global responsible investment index Research according to its outstanding status by the OEKOM Corporate Rating, wh
Slide 8: Our mission and ambition
OUR MISSION AND AMBITION A company that is aligned with consumer values, creates value… …at the core of Danone’s growth model Healthier eating and drinking… … in a responsible way Bringing health through food to as many people as possible DanoneWave CBUs certified in 2017 US entity, largest • Happy
Slide 9: B Corp as a natural next step
B CORP AS A NATURAL NEXT STEP A COMMON GOAL: 2,100 companies around the world, across all sectors, unified by one common goal: USING BUSINESS AS A FORCE FOR GOOD A TRUSTMARK: B Corps meet the highest standards of overall social and environmental performance, transparency and accountability A BUSINES
Slide 10: Deep dive in our unique business model
2. DEEP DIVE IN OUR UNIQUE BUSINESS MODEL I 10 I
Slide 11: We have always been driven by a purpose
WE HAVE ALWAYS BEEN DRIVEN BY A PURPOSE 1972 2006 2014 Antoine Riboud Franck Riboud Emmanuel Faber 1973-1996 1996-2014 2014-... FOUNDATION OF THE DUAL PROJECT HEALTH MISSION MANIFESTO & DANONE 2020 “The frontiers of the company Bringing health through food “As CEO, I pledge to pursue Danone’s do not
Slide 12: A story of constant reinvention
A STORY OF CONSTANT REINVENTION 1996 2016 European food conglomerate Global health-focused portfolio 3% Baby Food 7% Glass Packaging 7% Advanced Medical Nutrition 10% Waters 26% Fresh Dairy Products 49% Fresh Dairy 8% Beers Products 23% Early 3% Pasta Life Nutrition 5% Sauces 20% Biscuits 9% Italian
Slide 13: Our unique business model
OUR UNIQUE BUSINESS MODEL ECONOMIC HEALTH • Unique portfolio of brands & categories • Healthier products • Structural efficiencies on a sustainable manner • Healthier Lifestyles • Value creation from WhiteWave acquisition • Responsible company practices • Agile and efficient organization • Community
Slide 14: Our unique business model
OUR UNIQUE BUSINESS MODEL ECONOMIC HEALTH • Unique portfolio of brands & categories • Healthier products • Structural efficiencies on a sustainable manner • Healthier Lifestyles • Value creation from WhiteWave acquisition • Responsible company practices • Agile and efficient organization • Community
Slide 15: 2017-2020: Shaping the growth model to make it more resilient
2017-2020: SHAPING THE GROWTH MODEL TO MAKE IT MORE RESILIENT 2014 2015 2016 2017 2018 2019 2020 2017 objectives 2020 objectives Recurring EPS growth at constant LFL sales growth > 4% to 5% exchange rate > 12% Recurring operating margin > 16% Reduced leverage ratio(1) to < 3.0x ROIC(1) improved to ~
Slide 16: Our unique business model
OUR UNIQUE BUSINESS MODEL ECONOMIC HEALTH • Unique portfolio of brands & categories • Healthier products • Structural efficiencies on a sustainable manner • Healthier Lifestyles • Value creation from WhiteWave acquisition • Responsible company practices • Agile and efficient organization • Community
Slide 17: Continuously improving the nutritional quality of our products
Continuously improving Healthier alternatives Building our expertise the nutritional quality that maintain consumer in local nutrition of our products preference and public health Leveraging partnerships Voluntary commitment Marketing even more to address local health to extensive Nutritional respon
Slide 18: What we are doing, how we are doing: health
WHAT WE ARE DOING Offering our consumers ever healthier and Through education programs, we are Maintaining and building trust by Our Nutriplanet research programme helps us more affordable products, at every age of life promoting healthier drinking and eating communicating responsibly with our to un
Slide 19: What we are doing: nature
WHAT WE ARE DOING We have committed to a climate We are committed to preserving We have an ambition to co-build In agriculture, we’re looking for ways policy with a long-term goal of zero this vital resource and to respecting the circular economy of packaging. to source sustainably, promoting net ca
Slide 20: Our unique business model
OUR UNIQUE BUSINESS MODEL ECONOMIC HEALTH • Unique portfolio of brands & categories • Healthier products • Structural efficiencies on a sustainable manner • Healthier Lifestyles • Value creation from WhiteWave acquisition • Responsible company practices • Agile and efficient organization • Community
Slide 21: 2016 Performance Targets: climate
2016 Performance Targets WE WILL FIGHT CLIMATE CHANGE BY REDUCING OUR FOOTPRINT AND HELPING NATURE SEQUESTER MORE CARBON 50,1% Intensity reduction Danone Direct Responsibility (DDR) scope 50% intensity reduction DDR 2007-2020 Reduction in CO2 footprint VS 2007 50% intensity reduction Full scope 2015
Slide 22: 2016 Performance Targets: packaging and agriculture
2016 Performance Targets WE WILL CO-BUILD THE CIRCULAR ECONOMY OF PACKAGING BY SOURCING SUSTAINABLE MATERIALS AND CREATING A SECOND LIFE FOR ALL PLASTICS 25% rPET in Water Division where it is allowed By 2020 Develop the use of sustainable resources 11% rPET in Water division excluding Turkey & Chin
Slide 23: What we are doing, how we are doing: social
WHAT WE ARE DOING Dialogue with our employees is Our Work In Safe Environment (WISE) We fuel growth by attracting outside We firmly believe that we will make essential—a key driver for economic program takes a comprehensive talent—and with it, new passion, more of an impact on the issues and social
Slide 24: Our unique business model
OUR UNIQUE BUSINESS MODEL ECONOMIC HEALTH • Unique portfolio of brands & categories • Healthier products • Structural efficiencies on a sustainable manner • Healthier Lifestyles • Value creation from WhiteWave acquisition • Responsible company practices • Agile and efficient organization • Community
Slide 25: Danone supports four financial funds
Danone supports four financial funds: • Danone communities, • The Danone Ecosystem fund • The Livelihoods carbon fund • The Livelihoods fund for family farming These funds anchor the inclusion of sustainable development challenges in Danone’s strategy, thereby giving even more meaning to the company
Slide 26: danone communities: 10 businesses, 12 countries
10 BUSINESSES 12 COUNTRIES (Mexico, Haiti, France, Senegal, Bangladesh, India, Cambodia, China, Madagarscar, Kenya, Ouganda, Rwanda) SOCIAL 1 Million Beneficiaries in TOTAL. The indicator refers to the total number MEASURING of beneficiaries of the social businesses supported THE COMMITMENT SICAV by
Slide 27: Danone Ecosystem Fund impact
SOCIAL IMPACT ECONOMIC IMPACT ENVIRONMENT IMPACT 67 Projects 29 Countries 4,650 jobs created 40,912 people professionally empowered 2.9m indirect beneficiaries 22,500 women professionally empowered € 139M funding Sales generated by Danone Ecosystem Fund Percentage of milk from Danone Ecosystem Fund
Slide 28: The Livelihoods Funds
THE LIVELIHOODS FUND THE LIVELIHOODS CARBON FUND FOR FAMILY FARMING 9 active projects: • 3 ecosystem restoration projects First project on resilient vanilla supply chain • 3 agroforestry projects with farmers in Madagascar. • 3 rural energy projects Objective of 200,000 farms SOCIAL IMPACT ENVIRONME
Slide 29: Governance
3. GOVERNANCE I 29 I
Slide 30: Board governance benchmarks
Compliant with substantial majority of the AFEP-MEDEF recommendations Danone’s governance benchmarks strongly against CAC 40 peers Lead independent 71% 43% 36% 2 directors director of directors of directors of directors representing independent female non French employees Note: As of November 2017.
Slide 31: Compliance organization and policies
• Chief Compliance Officer oversees Compliance Department & reports directly to General Secretary and Audit Committee. ORGANIZATION • Supported by compliance teams and local compliance committees, reporting to the Chief Compliance Officer. • Clear Corporate Compliance policies and Code of Business C
Slide 32: RESPECT
RESPECT: • Launched in 2005, RESPECT program extends Danone’s dual commitment to business success and social progress throughout our entire supply chain • Suppliers* undergo a rigorous process of assessment of social, environmental and ethical performance • Member of the AIM-Progress forum and Consu
Slide 33: Compliance in action
COMPLIANCE IN ACTION Danone includes the following seven rights in supplier contracts to ensure suppliers uphold workers’ fundamental rights and freedom: • CHILD LABOR: No children below the age 15 employed • WORKPLACE HEALTH AND SAFETY: safe workplace and environment that does not endanger the phys
Slide 34: Danone Way
DANONE WAY DANONE WAY DANONE WAY DANONE WAY IS THE ENGINE OF OUR HAS DRIVEN CONTINUOUS NOW UBIQUITOUS THROUGHOUT SUSTAINABLE DEVELOPMENT PROGRESS BUSINESS • Implemented in 2001 to instill the dual • Annual, tailored programs for subsidiaries • Coverage has expanded to 94.1% project & sustainability
Slide 35: Danone Way: health, nature, social
DANONE WAY HEALTH NATURE of subsidiaries systematically consider three points in recommendations for new product launches: appropriate of subsidiaries have adopted a one or two year roadmap nutritional composition vs needs of target consumers; 73% comparison of nutritional composition to alternative
Slide 36: From Danone Way to B Corp
FROM DANONE WAY TO B CORP 2016 2015 Danone joins B Lab’s MPMAC B Corp – Danone partnership (Multinationals & Public Markets • Danone Way opensource Advisory Council) • Board member of B Lab EU 14 pilot subsidiaries have begun the B Impact Assessment process 2001 Danone Way • 250 business-processes-
Slide 37: Inspiring sustainability examples
4. INSPIRING SUSTAINABILITY EXAMPLES I 37 I
Slide 38: Stand by Mums in Romania
With only one-third as many doctors per inhabitant as the average EU member nation, Romania is classified as a high-risk country by the World Health Organization (WHO). The rate of cesarean delivery "STAND BY MUMS" is 36.9% higher than the EU average, and it’s hard for IN ROMANIA WHY IT women to get
Slide 39: Orisa organic rice helps protect water quality
Protecting its infiltration area is essential for Aqua to secure high-quality water for years to come, and demonstrate its commitment to preserving water sources. The farming community is a key partner in this ORISA ORGANIC RICE HELPS initiative, and Aqua has invited members to implement PROTECT WAT
Slide 40: Evian
EVIAN • New production line in France certified as carbon neutral by Carbon Trust in 2017 • €280 million investment by 2020 to expand carbon neutrality internationally Waste to be used Part of investment Plant converts by local farmers New line produces 60% of the to offset emissions 40,000 tonnes o
Slide 41: Eyes Wide Open
In Mexico, 1.5 million blind or visually impaired people are the main breadwinners for their families, working a variety of jobs and earning less than 70 Mexican pesos (USD 4.50) a day. Around 300 are members of a Mexican EYES WIDE OPEN non-profit association called ASOCIVE. WHY IT The “Eyes Wide Op
Slide 42: Conclusion – Driving value
5. CONCLUSION – DRIVING VALUE I 42 I
Slide 43: Our purpose drives value
OUR PURPOSE DRIVES VALUE ALIGNED TO BUILDING PROTECTING MANAGING DRIVING LONG- MARKET TRENDS TRUST FOOD CYCLE RISK TERM GROWTH We have long been We are building brand We believe that food Our deeply embedded We are encouraging pioneers of healthy, equity that leverages produced and packaged strategi
Slide 44: Investor relations and sustainability contacts
NADIA BEN-SALEM DANONE - HEAD OF IR NADIA.BENSALEM-NICOLAS@DANONE.COM LAURA PALMEIRO SUSTAINABILITY INTEGRATION DIRECTOR LAURA.PALMEIRO@DANONE.COM JESSICA JUGGANADUM SUSTAINABILITY REPORTING MANAGER JESSICA.JUGGANADUM@DANONE.COM
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