Slide 1: Q3 2018 Sales
Q3 2018 SALES October 17, 2018 Cécile Cabanis CFO I 1 I
Slide 2: 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,” “fores
Slide 3: Q3 2018 highlights
Q3 2018 highlights Rebalancing sales growth Further acceleration +1.4 % LFL sales growth Strong momentum in Europe Sharp contraction in ELN China All data in like-for-like I 3 I
Slide 4: Q3 2018 sales bridge: +1.4% like-for-like growth
Q3 2018 sales bridge: +1.4% like-for-like growth +2.2% like-for-like growth excluding Morocco €6,472 m Like-for-like growth: +1.4% -5.3% €6,186 m +3.3% -0.5% -1.9% +2.2% excluding Morocco Q3 2017 Currency(2) Scope Volume Value Q3 2018 Restated (1) Reported (1) Q3 2017 sales figures have been restate
Slide 5: Q3 2018 performance by reporting entity
+1.4% like-for-like sales growth Q3 2018 performance by reporting entity EDP EDP Specialized Noram International Nutrition Waters Net sales €1.3 bn €1.9 bn €1.7 bn €1.2 bn +0.0% LFL growth +2.7% excl. Morocco: -1.5% +6.4% +2.6% Volume +3.4% -5.9% -3.9% +2.2% Value -0.7% +5.9% +2.4% +4.2% I 5 I
Slide 6: EDP Noram
Slide 7: EDP Noram: +2.7% in Q3
EDP Noram: +2.7% in Q3 Performance step-up, a new growth engine Quarterly LFL sales growth Yogurt: solid growth, 34% market share ▪ Probiotics, kids and plant-based driv ing growth ▪ Top v elocity v alorized innov ations +2.7% +1.4% Plant-based: strong growth for Silk and So Delicious -0.2% -0.4% ▪
Slide 8: Focus on U.S. Yogurt
Focus on U.S. Yogurt Leading a category transformation Outperforming category and delivering growth in high value segments US Yogurt category Market share Growing Average by segment evolution Aisle Feet per Store 35% 23 Kids 30% Total Yogurt Indulgent 25% 18 Regular Probiotics 20% 13 Plant-based 15%
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Slide 10: EDP International: +0.0% in Q3
EDP International: +0.0% in Q3 Acceleration in all regions offsetting Morocco sales decline Quarterly LFL sales growth Europe: further progress towards stabilization CIS: confirming strong growth +2.6% +0.8 % +0.4% Latam: mid-single-digit growth -0.3% +0.0% -2.3% ▪ Progress in Brazil turnaround -2.4
Slide 11: Focus on EDP Europe
Focus on EDP Europe Progress towards stabilization EDP Europe net sales growth Activia: recovery on track ▪ Growing in many countries (40% of sales) Q1 2017 Q2 2017 Q3 2018 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Alpro: growing double-digit ▪ Nut-based bev erages, plant-based alternative to yogurts and ice-
Slide 12: Specialized Nutrition
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Slide 13: Specialized Nutrition: -1.5% in Q3
Specialized Nutrition: -1.5% in Q3 ELN China contracts, AMN keeps growing Quarterly LFL sales growth Advanced Medical Nutrition: solid growth ▪ Pediatric: Good performance ▪ A dult: Successful new OpTri bottle launch +17.8% +14.5% +8.4% +10.6% Early Life Nutrition: negative growth -1.5% ▪ China 1 :
Slide 14: ELN China
ELN China Sharp contraction after 12 months of exceptional growth ELN China sales and channel Unfavorable year-on-year basis of comparison: ~-20% mix evolution ▪ Q3 2017 growth > 50%, with significant restocking in indirect channels 500 450 Slower demand, first signs of change in market dynamics 400
Slide 15: Solid performance in Specialized Nutrition outside ELN China
Solid performance in Specialized Nutrition outside ELN China Great execution in US, Indonesia and France Happy Family Consolidating leadership in organic, fastest growing baby-food segment Americas Bledina Building ~10% market share in China organic baby food in < 12 months(2) Aspame and CIS Indones
Slide 16: Waters
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Slide 17: Waters: +6.4% in Q3
Waters: +6.4% in Q3 Broad-based growth driven by both volume and valorization Quarterly LFL sales growth Europe: strong momentum ▪ Hot summer supporting consumption ▪ Good performance of Aquadrinks innov ations +10.3% +7.6% Noram: steep double-digit growth +6.4% +4.2% +4.8% ▪ Further distribution ga
Slide 18: Focus on Aquadrinks innovations in Europe
Focus on Aquadrinks innovations in Europe Successful new products contributing to portfolio valorization Badoit bulles Volvic organic Żywiec Zdrój de fruits infusions Lemoniada Driving Aquadrinks growth in Europe Leading portfolio valorization (sales/liter: ~+50% vs core) I 18 I
Slide 19: Challenging environment
Challenging environment Continued strong headwinds in Q3 Macro Boycott IMF China environment ▪ Changing market ▪ Emerging currencies dynamics ▪ PET inflation ▪ US transportation costs I 19 I
Slide 20: Adoption of hyperinflationary accounting in Argentina from Q3 2018
Adoption of hyperinflationary accounting in Argentina from Q3 2018 Impact on financial reporting IAS 29 application with effect from January 1, 2018 Effect on “Like-for-like” ▪ 2018: no change ▪ 2019: from January 1st , exclusion of Argentina Guidance ▪ FY 2018: excluding any IAS 29 impact Argentina
Slide 21: FY2018 guidance confirmed
FY2018 guidance confirmed 2017 2018 2020 2018 objective DOUBLE-DIGIT RECURRING EPS GROWTH at constant exchange rate(1) excluding Yakult Transaction Impact Based on: ▪ Accelerated LFL sales growt h vs. FY2017 ▪ Recurring operating margin improvement LFL (1) Excluding IAS 29 accounting treatment I 21
Slide 22: Appendix
Appendix
Slide 23: Q3 2018 impact of currencies & scope
Q3 2018 impact of currencies & scope Q3 2018 EDP International EDP Noram Specialized Nutrition Waters Total Reported sales growth -8.1% +1.4% -6.2% -1.5% -4.4% Currency -8.0% +0.6% -4.8% -7.0% -5.2% IAS 29 impact -0.2% 0.0% -0.1% -0.3% -0.1% Scope of consolidation 0.0% -2.0% +0.1% -0.7% -0.5% « Like
Slide 24: Changes in exchange rates
Changes in exchange rates % total Q3 2018 Q3 18 vs Q3 17 (avg) United States Dollar 21.6% +1.0% Chinese Renminbi 7.6% -1.0% Russian Ruble 6.1% -9.1% British Pound 5.2% +0.6% Indonesian Rupiah 5.4% -7.8% Mexican Peso 4.5% -5.1% Brazilian Real 2.8% -19.1% Argentine Peso 2.1% -45.1% Turkish Lira 1.7% -