Slide 1: Q1 2020 Sales: Resilience amid COVID-19
Q1 2020 SALES Resilience amid COVID-19 April 21, 2020 Emmanuel Faber, Chairman and CEO 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”, “guid
Slide 3: Q1 2020 Sales: Resilience amid COVID-19
Q1 2020 SALES Resilience amid COVID-19 April 21, 2020 I 3 I
Slide 4: Fast-changing market backdrop
Fast-changing market backdrop Unprecedented times, significant impact on food and beverage COVID-19: from China Fast-changing demand Challenged supply chain Growing loyalty to and to the whole world patterns Decreased efficiency expectations from brands(2) Portion of Danone’s ▪ Country-by-country ch
Slide 5: Committed, Responsible, Resilient: Our guiding principles and actions
Our guiding principles and actions One Planet. One Health. vision serving our entire value chain’s resilience Committed to our employees and consumers to ensure safety and food supply continuity Responsible to protect our entire value chain and wider community, at country and local level Resilient b
Slide 6: Our messages around Q1
Our messages around Q1 Resilience established, adapting to ongoing changes +3.7% LFL sales growth, ahead of expectations Q1 2020: ▪ Sharp rise in March ▪ Boost from short-term effects, including cumulated effect of shift to at-home and a solid quarter pantry loading ▪ Resilience of SN and EDP well-c
Slide 7: Our messages around Q1
Our messages around Q1 Resilience established, adapting to ongoing changes +3.7% LFL sales growth, ahead of expectations Q1 2020: ▪ Sharp rise in March ▪ Boost from short-term effects, including cumulated effect of shift to at-home and a solid quarter pantry loading ▪ Resilience of SN and EDP well-c
Slide 8: Q1 2020 sales bridge
Q1 2020 sales bridge Like-for-like sales growth driven by strong rise in EDP and Specialized Nutrition volumes Reported growth +1.7% +0.5% +0.8% -1.7% -0.9% €6,242m +2.9% €6,138m Like-for-like growth: +3.7% Q1 2019 Volume Value Argentina organic Scope Currency Q1 2020 contribution to growth(1) and o
Slide 9: Q1 2020 sales by business and geography
Q1 2020 sales by business and geography Experiencing different regional and category trends By reporting entity By geographical area Company Essential Dairy Specialized Waters Europe Rest of & Plant-based Nutrition & Noram the World Q1 net sales €6,242m €3,364m €1,949m €928 €3,469m €2,772m Like-for-
Slide 10: Specialized Nutrition: +7.9% like-for-like sales growth
Specialized Nutrition: +7.9% like-for-like sales growth Strong growth globally, favored by stock-piling behaviors Quarterly LFL sales growth China(1): solid sales growth ▪ Sustained market demand, accelerated due to stock-loading ▪ Share gains in direct channels from strong position in e-commerce ▪
Slide 11: Essential Dairy and Plant-based: +4.6% like-for-like sales growth
Essential Dairy and Plant-based: +4.6% like-for-like sales growth Volumes boosted by lockdown in Europe and North America Quarterly LFL sales growth Europe: mid-single digit growth ▪ Broad-based growth across countries ▪ Strong sales in March (double-digit growth rate) ▪ Growing at-home Dairy consum
Slide 12: Waters: -6.8% like-for-like sales growth
Waters: -6.8% like-for-like sales growth Out-of-home, small formats and Aquadrinks penalized Quarterly LFL sales growth China: steep double-digit decline at around -40% ▪ Significant sales loss in line with expectations +3.9% ▪ New Mizone on shelf from end April; relaunch campaign adapted +2.1% +1.4
Slide 13: Our messages around Q1
Our messages around Q1 Resilience established, adapting to ongoing changes +3.7% LFL sales growth, ahead of expectations Q1 2020: ▪ Sharp rise in March ▪ Boost from short-term effects, including cumulated effect of shift to at-home and a solid quarter pantry loading ▪ Resilience of SN and EDP well-c
Slide 14: 2020 guidance withdrawn
Operating in a dramatically changed environment Increased uncertainty from COVID-19 on our 2020 outlook Multi and complex impacts Uncertain length Large currency of COVID-19 on value chain and depth macro scenario fluctuations Evolution of EUR vs key currencies since Feb 26th V curve U curve Volumes
Slide 15: Reassessing resource allocation priorities
Reassessing resource allocation priorities Adapting to new short-term reality ▪ Innovation pipeline review Areas of focus ▪ Transition to rPET delayed by disrupted supply Portfolio flexibility ▪ Delay in price increase ▪ People safety ▪ Focus on the core range to maximize industrial output ▪ Busines
Slide 16: Confidence that resilience is established
Confidence that resilience is established Relying on strong balance sheet going forward Strong ▪ 2.8x Net debt / EBITDA as of end 2019 1 investment grade ▪ BBB+ stable outlook (S&P), Baa1 stable outlook (Moody’s) ▪ €800m bond issuance on March 2020 Successful 2 refinancing ▪ 7-year maturity ▪ Attrac
Slide 17: Our messages around Q1
Our messages around Q1 Resilience established, adapting to ongoing changes +3.7% LFL sales growth, ahead of expectations Q1 2020: ▪ Sharp rise in March ▪ Boost from short-term effects, including cumulated effect of shift to at-home and a solid quarter pantry loading ▪ Resilience of SN and EDP well-c
Slide 18: Beyond COVID-19
Beyond COVID-19 Increased relevance of our frame of action, committed to strategic transformation roadmap 2020 COVID-19 Status vs new normal Impact on F&B industry Trust, inside and outside Efficiency and discipline Planetary diets Natural, local Climate change Packaging Omni-channel End-to-end valu
Slide 19: Beyond COVID-19: uniquely fit to emerge as the most attractive food platform
Beyond COVID-19: uniquely fit to emerge as the most attractive food platform Lead the way to create and share sustainable value I 19 I
Slide 20: Appendix
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Slide 21: Q1 2020 sales by reporting entity and by geographical area
Q1 2020 sales by reporting entity and by geographical area Essential Dairy Specialized Waters Company & Plant-based Nutrition Europe and Noram €2,275m €817m €378m €3,469m Sales LFL growth +5.3% +7.3% -3.6% +4.7% Rest of the world €1,090m €1,132m €550m €2,772m Sales LFL growth +3.3% +8.3% -9.0% +2.6%
Slide 22: Q1 2020 impact of currencies & scope
Q1 2020 impact of currencies & scope Q1 2020 Essential Dairy Specialized Waters Company & Plant-based Nutrition Like-for-like sales growth +4.6% +7.9% -6.8% +3.7% Argentina organic contribution to growth +0.5% +0.4% +0.9% +0.5% Currency and others(1) -0.5% -1.8% -1.7% -1.0% IAS 29 impact +0.1% +0.0%
Slide 23: Changes in exchange rates
Changes in exchange rates % total Q1 2020 Q1 20 vs Q1 19 (avg) United States Dollar 20.8% +3.0% Russian Ruble 6.6% +1.3% Indonesian Rupiah 6.2% +2.4% British Pound 5.4% +1.2% Chinese Renminbi 5.1% -0.5% Mexican Peso 4.5% -1.2% Brazilian Real 2.6% -13.1% Polish Zloty 2.6% -0.5% Hong Kong Dollar 2.3%