Slide 1: 2016 Results
2016 RESULTS February 15, 2017 Emmanuel Faber, CEO Cécile Cabanis, CFO
Slide 2: Disclaimer
DISCLAIMER This document contains certain forward-looking statements All references in this presentation to like-for-like changes, concerning Danone. recurring operating income, recurring operating margin, Although Danone believes its expectations are based on recurring net income, recurring income
Slide 3: 2016 Financial Results / Danone Progress Report
Cécile Cabanis Emmanuel Faber 2016 FINANCIAL RESULTS DANONE PROGRESS REPORT I3I
Slide 4: 2016 Financial Results
Cécile Cabanis 2016 FINANCIAL RESULTS
Slide 5: 2016: year of robust performance leading to very strong EPS growth
2016: year of robust performance leading to very strong EPS growth net sales recurring operating Profitable growth margin (1) +2.9% +70 bps (1) recurring free cash EPS flow Discipline on financial metrics (1) (2) +9.3% +16.8% (1) Like-for-like (2) Excluding exceptional items I5I
Slide 6: 2016: year of major progress in building profitable model of growth
2016: year of major progress in building profitable model of growth… LFL sales growth Recurring operating margin(1) +4.7% +4.4% +70 bps +2.9% +17 bps -12 bps FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016 GROWTH PROFIT AGILITY CONSISTENCY Priority to profitable growth Discipline on financial metric
Slide 7: Delivering on EPS and cash
… leading to very strong delivering on EPS and cash Recurring EPS FCF(2) +16.8% +9.3%(1) +6.5%(1) +9.2% 1,786 3.10 1,529 2.93 1,401 2.62 FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016 Ensure consistent EPS growth Convert profitable growth into cash (1) Like-for-like (2) Excluding exceptional items
Slide 8: 2016 key highlights
2016 key highlights recurring sales recurring growth operating margin EPS Reported -2.1% 13.77% €3.10 + 87 bps +5.6% Like-for-like +2.9% +70 bps +9.3% I8I
Slide 9: 2016 Like-for-like sales growth of +2.9%
2016 Like-for-like sales growth of +2.9% Reported -2.1% €22,412 mln Like-for-like +2.9% €21,944 mln (5.5)% 3.1% 0.5% (0.2)% Value Currency Scope & others Volume FY 2015 FY 2016 Q4 2016 like-for-like sales growth: +2.1% / reported growth: -0.5% I9I
Slide 10: Regional dynamics
Regional dynamics(1) NORAM EUROPE ALMA CIS AsiapacLatamMiddleEastAfrica USA+Canada+CIS 0.0% 5.7% 8.0% 6.8% 5.1% 4.8% 6.3% (0.2)% 5.4% (2.7% (2.9)% 2.8% Q1 16 Q2 16 Q3 16 Q4 16 Q1 16 Q2 16 Q3 16 Q4 16 Q1 16 Q2 16 Q3 16 Q4 16 FY 2016: -1.4% FY 2016: +4.6% FY 2016: +6.7% (1) Like-for-like sales growth
Slide 11: Fresh dairy products: continuous progress in anchoring profitable growth
Fresh dairy products: continuous progress in anchoring profitable growth Sales growth Recurring operating margin +3.0% +2.2% +0.7% + 82 bps since 2014 +2.3% (at constant exchange rate) +5.2% +4.5% +4.6% +4.4% Price/mix Volume (2.1)% (2.2)% (2.3)% 9.95% 10.09% (3.9)% FY 2015 FY 2016 Q1 16 Q2 16 Q3 16
Slide 12: Waters: sustained strong profitable growth, transition in China in progress
Waters: sustained strong profitable growth, transition in China in progress Sales growth Recurring operating margin +3.9% +6.3% +2.7% +6.4% +5.5% (0.1)% +6.7% Price/mix 0.0% 11.37% 11.38% Volume (2.5)% (2.8)% (0.1)% (0.4)% FY 2015 FY 2016 Q1 16 Q2 16 Q3 16 Q4 16 FY 2016: + 2.9% LFL +15 bps LFL w/o C
Slide 13: Early Life Nutrition: solid fundamentals of profitable growth
Early Life Nutrition: solid fundamentals of profitable growth, continued transition in China towards sustainable model of growth Sales growth Recurring operating margin +7.2% +4.8% +5.3% +3.5% +1.7% +0.6% 21.91% 19.32% Price/mix +1.3% +1.9% +2.1% +1.1% Volume (0.4)% (0.5)% FY 2015 FY 2016 Q1 16 Q2 1
Slide 14: Medical Nutrition: sustaining very strong profitable growth
Medical Nutrition: sustaining very strong profitable growth Sales growth Recurring operating margin +9.7% +7.1% +3.7% +6.6% +6.1% Price/mix +1.4% +2.9% +2.1% 19.71% Volume 17.95% +6.0% +5.2% +4.2% +4.0% FY 2015 FY 2016 Q1 16 Q2 16 Q3 16 Q4 16 FY 2016: +7.4% LFL +93 bps LFL > Very strong growth accro
Slide 15: 2016 key highlights
2016 key highlights recurring sales recurring growth operating margin EPS Reported -2.1% 13.77% €3.10 + 87 bps +5.6% Like-for-like +2.9% +70 bps +9.3% I 15 I
Slide 16: Very strong improvement in recurring operating margin
Very strong improvement in recurring operating margin Reported +87 bps Like-for-like +70 bps Margin from operations Efficiencies ≈ + 50 bps (88) bps +116 bps Portfolio management ≈ + 30 bps +43 bps +10 bps +6 bps Reinvest Others Input Costs ≈ + 40 bps Forex Margin Scope from operations 13.77% 12.91%
Slide 17: 2016 key highlights
2016 key highlights recurring sales recurring growth operating margin EPS Reported -2.1% 13.77% €3.10 + 87 bps +5.6% Like-for-like +2.9% +70 bps +9.3% I 17 I
Slide 18: Very strong Like for Like recurring EPS growth
Very strong Like for Like recurring EPS growth illustrating major progress in strengthening the model Reported +5.6% Like-for-like +9.3% +0.5% +0.3% Taxes FR + (5.2)% +5.5% Others +1.5% Forex Scope +2.9% Margin €3.10 Net Sales €2.93 2015 2016 Recurring Recurring EPS EPS I 18 I
Slide 19: FCF: very strong cash delivery
FCF: very strong cash delivery Cash delivery Free cash-flow excluding exceptional items (€ mln) +16.8% +9.2% 1,786 1,529 1,401 FY 2014 FY 2015 FY 2016 Strong level of Working Capital/Sales Continued rhythm of investment Working Capital/Sales (%) Capex/Sales (%) FY 2014 FY 2015 FY 2016 (7.0)% (7.1)%
Slide 20: Change of Net debt
Change of Net debt € bn (0.3) +0.3 (1.8) Others +1.1 +0.1 FCF M&A Dividends Puts 7.8 7.5 Net debt Net debt 2015 2016 I 20 I
Slide 21: Balance sheet
Balance sheet Assets (1) € bn Liabilities Dec. 2015 Dec. 2016 Dec. 2015 Dec. 2016 12,669 13,194 15,803 Intangible assets 15,779 Shareholders’ equity 7,799 7,472 Net debt(2) Other assets 9,022 9,372 2,772 2,960 Other liabilities 6,193 6,513 Working capital 4,632 4,964 Working capital 29,433 30,139 29
Slide 22: Dividend: +6.3% increase reflecting firm commitment to shareholders
Dividend: + 6.3% increase reflecting firm commitment to shareholders Dividend proposed at the next AGM on April 27, 2017 > €1.70 per share (+6.3% ; +10 cts vs. 2015) > Payment in either cash or shares at shareholders’ option €1.70 €1.60 €1.50 €1.39 €1.45 €1.45 €1.30 €1.20 €1.20 €1.10 €1.00 €0.85 200
Slide 23: 2017: decoupling growth and efficiency agenda
2017: decoupling growth and efficiency agenda 2015 2016 2017 … EPS >5%(1) Consistent EPS growth (1) Like-for-like I 23 I
Slide 24: Danone Progress Report
Emmanuel Faber DANONE PROGRESS REPORT
Slide 25: The revolution towards changing the way people eat and drink
The revolution towards changing the way people eat and drink I 25 I
Slide 26: We continue to assemble and grow an unparalleled portfolio of healthy diet categories
We continue to assemble and grow an unparalleled portfolio of healthy diet categories % CAGR 2011-2016 Global Retail Value Growth 8 Danone leader positions (in value) Organic 6 * #1 #3 Organic * Num 2 in volume 4 #2 #1 #1 2 0 Free Energy Organic Baby Enteral Bottled Organic Milk Aquadrinks(2) Fruits
Slide 27: Successes and still some challenges
Successes and still some challenges Challenges Successes Volatility in key Reignite growth emerging markets Build resilience & protect margin Inflation of raw materials Generate Strong Profitable Growth Dairy Europe turnaround Capture new consumer trends Develop a direct model Expand tailored nutr
Slide 28: 2016: a year of significant progress
2016: a year of significant progress 2014 2015 2016 net sales recurring operating margin +2.9% +70 bps (1) (1) +4.7% +4.4% LFL sales growth(1) FY 2014 FY 2015 recurring free cash EPS flow Recurring operating margin(1) +9.3% +16.8% (1) (2) FY 2014 FY 2015 (1) Like-for-like (2) Excluding exceptional i
Slide 29: WhiteWave: A perfect combination to strengthen Danone 2020 plan
WhiteWave A perfect combination to strengthen Danone 2020 plan 2016 + Changing the way the world eats for the better I 29 I
Slide 30: WhiteWave: A perfect combination to strengthen Danone 2020 plan
WhiteWave A perfect combination to strengthen Danone 2020 plan TAKING THE SUSTAINABILITY EQUATION DOUBLING THE SIZE OF DAIRY AND PLANT-BASED OF DANONE IN THE US TO THE NEXT LEVEL ABOVE $6 BN Combine world-class research on Dairy and Plant-based fermentation + Fastest growing food & beverage company
Slide 31: WhiteWave: strong value creation
WhiteWave A perfect match to accelerate strong sustainable profitable growth Strong Value Creation Superior growth categories in stable Like-for-like sales growth geographies Extra +0.5% to +1% Ebit margin Significant synergies Accretive year 2 EPS Accretive to Danone Solid accretion from Year 1 equ
Slide 32: Stronger empowerment and collaboration to enable speed, relevance and consistency
Stronger empowerment and collaboration to enable speed, relevance and consistency > Increased focus and speed A TIGHTER EXCOM 12 8 > Team work and integration > Delegation A NEW TEAM > Closer to markets, faster decisions > Empowered on global decisions MADE OF OUR 15 REGIONAL LEADERS > Regional alig
Slide 33: Step up our ability to seize consumer opportunities and work more efficiently
Step up our ability to seize consumer opportunities and work more efficiently 2 NEW ROLES > Drive seamless cooperation process among all topline and innovation functions EVP, growth > Provide framework and platforms for category growth and innovation & innovation > Identify and drive transversal / c
Slide 34: Decoupling Danone's mid term growth transformation agenda and efficiency agenda
Decoupling Danone’s mid term growth transformation agenda and our immediate efficiency agenda 2020 EFFICIENCY GROWTH 2017 Consistent EPS growth I 34 I
Slide 35: Alimentation Revolution calling for brands engaging in a new way
Alimentation Revolution calling for brands engaging in a new way with their communities of consumers DANONE PLEDGE FOR… NATURALITY & NON GMO I 35 I
Slide 36: Alimentation Revolution calling for a new marketing model
Alimentation Revolution calling for a new marketing model Proliferation of smaller brands I 36 I
Slide 37: Alimentation Revolution calling for a marketing and innovation transformation
Alimentation Revolution calling for a marketing and innovation transformation New Growth and Innovation board R&D – Marketing – Sales – Digital – Cycles & Ops. I 37 I
Slide 38: Danone: a unique position and culture to lead the Alimentation Revolution
Danone: a unique position and culture to lead the Alimentation Revolution Superior Healthier Community experience choice relevant > Danone B Corp 2015 partnership Zero net Trusted Sustainable > Danone & WhiteWave expected carbon origin agriculture to combine US-based activities > 45,000 Danoners int
Slide 39: Launching a company-wide program to maximize efficiency
Launching a comprehensive, company-wide program to maximize efficiency Disciplined Choices Maximize Efficiency… PROGRAM Sustainably PROTEIN BUY BETTER SCOPE SPEND BETTER professional services sales & marketing spendings WORK BETTER operations spendings Invest …To build muscle € 1 BN For Impact SAVIN
Slide 40: Delivering efficiency and resources for the short, mid and long term
Delivering efficiency and resources for the short, mid and long term Short term Mid term Long term Program PROTEIN Global procurement organization New CPO Role Strategic Resources Cycles & Operations I 40 I
Slide 41: Decoupling Danone's growth & efficiency agendas
Decoupling Danone’s growth & efficiency agendas 2020 EFFICIENCY GROWTH 2017 Consistent Fuel the growth EPS growth model I 41 I
Slide 42: Keep building a stronger model of growth
Keep building a stronger model of growth 2015 2016 2017 … Consistent EPS growth I 42 I
Slide 43: Innovation
a. cha INNOVATION
Slide 44: Questions & Answers
2016 RESULTS Questions & Answers 44