Slide 1: Corporate Governance Overview
Corporate Governance Overview November, 2018 I 1 I
Slide 2: Michel Landel, Lead Independent Director
Michel LANDEL Lead Independent Director Since Lead independent Director of Danone’s board April 2018 Appointment at last shareholders’ meeting (April 26, 2018) 2005 CEO of Sodexo 2018 Until January 23, 2018 2003 Sodexo Group Deputy General Manager 2005 In charge of North America, the United Kingdom,
Slide 3: Danone at a glance
Danone Danone Remuneration at a glance governance practices I 3 I
Slide 4: Danone at a glance
Danone Danone Remuneration at a glance governance practices I 4 I
Slide 5: Our shareholders
Our shareholders 10th largest market capitalization in France Total shareholder Institutional Institutional composition shareholders shareholders by geography by investment style 7% 6% 6% 14% 20% 6% 2% 4% 31% 10% 12% 17% 6% 77% 46% 18% 18% Institutional investors United States Value Individual Share
Slide 6: Our ambition: Healthier, Responsible, Sustainable
Our ambition Lead the way to create and share sustainable value Healthier Responsible Sustainable eating and drinking business stewardship value I 6 I
Slide 7: A €25bn sales, unique 100% health-focused on-trend portfolio
A €25bn sales, unique 100% health-focused on-trend portfolio > 88% of volumes sold recommended for daily consumption(1) 1996 H1 2018 European food conglomerate Global health-focused portfolio 3% Baby Food 7% Glass Packaging 18% Waters 10% Waters 26% Fresh Dairy Products 8% Beers 53% Essential Dairy
Slide 8: Our strategic roadmap: 9 integrated goals for 2030
Our strategic roadmap 9 integrated goals for 2030, contributing to the United Nations SDGs I 8 I
Slide 9: Our financial model
Our financial model Delivery and transformation towards long-term sustainable value creation 4-5% Like-For-Like Sales growth DOUBLE-DIGIT >16% Recurring operating margin RECURRING EPS GROWTH <3x Net debt/Ebitda ~12% ROIC at constant exchange rate(1) excluding Yakult transaction impact Consistent rec
Slide 10: Responsible business stewardship
Responsible business stewardship Continuously improving first-tier ESG ranking • Climate • Water • Forest I 10 I
Slide 11: Danone governance practices
Danone Danone Remuneration at a glance governance practices I 11 I
Slide 12: Our governance framework
Our governance framework Key corporate governance principles ✓ Independent oversight of management and corporate strategy ✓ Effective Board accountability ✓ Balanced distribution of powers ✓ Diverse and experienced Board leadership ✓ Appropriate Board refreshment I 12 I
Slide 13: Board of Directors at a glance
Board of Directors at a glance 2017 refreshment towards balance, efficiency, diversity and expertise Changes voted at last AGM on April, 26th 2018 16 members Emmanuel FABER Chairman & CEO Board leadership i Michel LANDEL Lead independent director i Guido BARILLA Frédéric BOUTTEBA 57% independent(1)
Slide 14: Directors skills and qualifications
Well-suited depth and breadth of Directors skills and qualifications A more diversified Board, focused on Consumer expertise Compensation Responsibility Nomination Committee Committee Committee Committee Strategy Social Board expertise around Audit and Emmanuel FABER ▪ Food and beverage industry M
Slide 15: Governance structure: a balanced distribution of powers
Governance structure A balanced distribution of powers Chairman Lead Independent Board and and CEO Director Committees Combined role In existence since 2013; enhanced 4 committees: Audit, Strategy, duties, resources and responsibilities Nomination and Compensation, since Dec. 2017(1) Social Responsi
Slide 16: Lead Independent Director
Lead Independent Director ▪ 6-month process started in May 2017 ▪ Led by Jean Laurent (LID and Chairman of the Nomination committee) ▪ Supported by Board secretary and external headhunter Recruiting ▪ More than 50 profiles screened according to Board’s key criteria process - senior international bus
Slide 17: Key learnings from 2018 AGM
Key learnings from 2018 AGM 100% resolutions voted with full support of main Proxy Advisors Resolutions Approved ? Favorable votes 1 Approval of the statutory financial statements for the fiscal year ended December 31, 2017 99.18% 2 Approval of the consolidated financial statements for the fiscal
Slide 18: Remuneration
Danone Danone Remuneration at a glance governance practices I 18 I
Slide 19: Management compensation structure
Management compensation structure(1) Overview of short-term and long-term incentives Components of Compensation components under performance conditions fixed compensation Fixed annual Variable annual Multi-annual GPUs(2) Long term GPS Economic Economic Economic Social and societal Social and societa
Slide 20: Performance incentives: short-term and long-term
Overview of short-term and long-term incentives Balancing economic, social and societal, and managerial criteria • Mix of economic, social and managerial KPIs for annual variable cash compensation - Economic (60%) – based on sales, operating margin and free cash flow; measured against guidance targe
Slide 21: Changes to align long-term incentives with strategic objectives
Changes to align long-term incentives with strategic objectives Shifting from growth to margin and cash 2015 2016 2017 2018 Margin LFL improvement 2017-2019 ≥ +100 bps (80%) Margin + GPU >16% in 2020 (80%) Sales growth Margin LFL Annual Carbon Footprint Performance ≥ 4.5% improvement reduction over
Slide 22: Appendix
DANONE ONE PLANET. ONE HEALTH Appendix
Slide 23: Board of Directors
Board of Directors • EMMANUEL FABER (55) Tenure: 16 years • MICHEL LANDEL (67) Tenure: 0.5 year L • GUIDO BARILLA (60) Tenure: 0.5 year I • FRÉDÉRIC BOUTEBBA (51) Tenure: 2 years E • Chairman & CEO, Danone • Lead Independent Director • Chairman of Barilla • Director representing employees • Former C
Slide 24: Overview of French governance standard practices
Overview of French governance standard practices Regulatory and standard practice framework for French companies • The French Commercial Code sets out the main corporate governance rules • The AFEP-MEDEF Code further outlines best practices in relation to matters of Board leadership and effectivenes
Slide 25: Our Nature commitments and achievements
Our Nature commitments and achievements The data provided on this page does not include WhiteWave entities and are based on constant scope of consolidation and constant methodology in comparison with 2016. (1) rPET : recycled PET.(2) Production Sites Environment Scope.(3) 96% of Danimals is Non-GMO
Slide 26: Accelerating the transition towards a circular economy of packaging
Accelerating the transition towards a circular economy of packaging New commitments and actions around three pillars PACKAGING DESIGNED FOR CIRCULARITY All Danone’s packaging will be 100% recyclable, reusable or compostable by 2025 REUSED, RECYCLED AND COMPOSTED IN PRACTICE By 2025, Danone will have
Slide 27: Forward-looking statements
• 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,” “believe,” “forecast,” “foresee,” “likely,” “may,” “