Slide 1: Full-Year 2021 Results
FULL-YEAR 2021 RESULTS February 23, 2022
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”, “guida
Slide 3: CEO Introduction
FY 2021 CEO INTRODUCTION Antoine de Saint-Affrique Chief Executive Officer CEO INTRODUCTION 3
Slide 4: Solid sales growth in 2021
SOLID SALES GROWTH IN 2021 With all categories contributing +3.4% +3.7% +1.0% +7.2% LFL sales growth in 2021 LFL sales growth in 2021 LFL sales growth in 2021 LFL sales growth in 2021 CEO INTRODUCTION 4
Slide 5: Further progress on some pockets of excellence
FURTHER PROGRESS ON SOME POCKETS OF EXCELLENCE Protein & Immunity, science-led Infant Nutrition innovation, Waters adjacencies CEO INTRODUCTION 5
Slide 6: The organization is in place
THE ORGANIZATION IS IN PLACE Important milestones achieved in 2021 NORTH AMERICA First tangible benefits are visible EUROPE Switched to the new model in Q4 GLOBAL CAPABILITIES CEO INTRODUCTION Core capabilities and functions strengthened 6
Slide 7: We build on a good base
WE BUILD ON A GOOD BASE But we have a lot to improve GROWTH MODEL QUALITY OF EXECUTION INVESTMENTS +2.4% mix contribution vs LY >5% productivity in H2 A&P maintained in absolute value BUT BUT BUT Market share challenges Service level Decreasing as a % and volume decrease issues of net sales CEO INTR
Slide 8: FY 2021 Financial Review
FY 2021 FINANCIAL REVIEW Juergen Esser Chief Financial Officer FINANCIAL REVIEW 8
Slide 9: Strong end to the year
STRONG END TO THE YEAR Q4 growing +6.7% on a like-for-like basis, with positive volume REPORTED GROWTH +10.9% +6.3% €6,242m +4.2% +0.0% +0.4% €5,628m LFL GROWTH: +6.7% of which +2.6% from currencies FINANCIAL REVIEW Q4 2020 Currency Scope Volume Value Q4 2021 Net Sales and others1 Net Sales 1 Includ
Slide 10: Solid FY set of growth, driven by mix and price
SOLID FY SET OF GROWTH, DRIVEN BY MIX AND PRICE Back to LFL sales growth as soon as Q2 BACK TO LFL GROWTH SINCE Q2 LFL GROWTH DRIVEN BY MIX AND PRICE +6.6% +6.7% +3.4% LFL sales growth in 2021 +2.4% +3.8% +3.4% -0.6% +1.6% FINANCIAL REVIEW Price Mix Volume -3.3% Shift from selective to more broad-ba
Slide 11: Essential Dairy & Plant-based
ESSENTIAL DAIRY & PLANT-BASED Another quarter of sustained solid growth 2021 KEY FIGURES Q4 DEVELOPMENTS FY21 NET SALES €13.1bn Sustained solid growth in Dairy LIKE-FOR-LIKE CHANGE +3.7% driven by Probiotics, Protein and Indulgence Volume / Value +0.7% / +3.0% FY21 RECURRING OPERATING MARGIN 9.8% So
Slide 12: Specialized Nutrition
SPECIALIZED NUTRITION Strong quarter led by Infant Nutrition 2021 KEY FIGURES Q4 DEVELOPMENTS FY21 NET SALES €7.2bn Very strong growth in Infant Nutrition LIKE-FOR-LIKE CHANGE +1.0% driven by China and Rest of the World Volume / Value -3.5% / +4.5% - Mid-teens growth in China underpinned by solid co
Slide 13: Waters
WATERS Broad-based acceleration 2021 KEY FIGURES Q4 DEVELOPMENTS FY21 NET SALES €4.0bn Product mix improvement led by Small formats recovery LIKE-FOR-LIKE CHANGE +7.2% Volume / Value +0.5% / +6.7% Continued strong momentum in Large formats FY21 RECURRING OPERATING MARGIN 8.9% Sequential recovery in
Slide 14: Navigating through a high inflationary context
NAVIGATING THROUGH A HIGH INFLATIONARY CONTEXT Stepping-up productivity and generalizing pricing actions through 2021 ~9% >5% +1.6% INFLATION1 PRODUCTIVITY PRICING in H2 2021 in H2 2021 in FY 2021 ~8% SEQUENTIAL FROM SELECTIVE ACCELERATION IN 2021 TO MORE BROAD-BASED INFLATION1 in FY 2021 1 Material
Slide 15: FY 2021 recurring operating margin
FY 2021 RECURRING OPERATING MARGIN 13.7% down -30 bps vs. last year REPORTED: -30 BPS Scope Margin from Investments Overheads Incremental Covid and FX1 operations and others costs below COGS 14.0% -21 bps -81 bps +18 bps 13.7% +31 bps +22 bps A&P in line with LY in Mostly driven by first absolute va
Slide 16: Zooming in on margin from operations
FY 2021 RECURRING OPERATING MARGIN ZOOMING IN ON MARGIN FROM OPERATIONS Price/Mix Volume Input cost inflation1 Productivities Margin from operations ~8% ~5% ~ +150 bps ~ -30 bps ~ -480 bps ~ +280 bps -81 bps ~ -€1.2bn ~ +€700m impact impact ~ -€500m net impact FINANCIAL REVIEW Topline Input cost inc
Slide 17: EPS bridge
EPS BRIDGE Reported EPS -1.7%, Recurring EPS -1.1% -1.7% -1.1% +0.7% +1.2% €3.34 -3.1% €3.31 €2.99 +4.3% €2.94 -4.1% FINANCIAL REVIEW FY 2020 FY 2020 Operational Financing Tax, associates Scope Currency FY 2021 FY 2021 Reported EPS Recurring EPS Performance and minorities and others1 Recurring EPS R
Slide 18: Reported EPS impacted by major non-recurring elements
REPORTED EPS IMPACTED BY 2 MAJOR NON-RECURRING ELEMENTS Local First and divestment of Mengniu participation LOCAL FIRST MENGNIU DISPOSAL RESTRUCTURING COSTS ~€ 0.7bn €0.6bn one-off in 2021 Net capital gain Out of ~ €1.4bn Project cost confirmed FINANCIAL REVIEW Project on track Savings Plan with €70
Slide 19: Focus on cash generation
FOCUS ON CASH GENERATION Free cash flow reaching €2.5bn in 2021 FREE CASH FLOW WORKING CAPITAL CAPEX €2.5bn -4.8% of Net Sales €1.0bn 4.3% Dynamic cash flow generation, vs. -3.1% in 2020 adapted phasing of Local First cash-out Normalization of channel mix of Net Sales FINANCIAL REVIEW 19
Slide 20: Disciplined capital allocation
DISCIPLINED CAPITAL ALLOCATION Proposed dividend of 1.94€ per share in cash, in line with last year NET DEBT ROIC PROPOSED DIVIDEND 3.0x Net debt / EBITDA 8.7% in 2021 €1.94 per share in cash €10.5bn vs. 8.5% in 2020 IN LINE WITH LAST YEAR Subject to the next AGM on April 26th, 2022 Net debt FINANCI
Slide 21: Another year of progress in ESG
ANOTHER YEAR OF PROGRESS IN ESG Across 4 key pillars: Health, Environment, Social and B Corp HEALTH & NUTRITION ENVIRONMENT SOCIAL B CORP Healthiest Portfolio AAA ranking for the 3rd year #1 of product profile ranking in a row 83% -3% 100% 62% of volumes with no CO2 emissions reduction2 FutureSkills
Slide 22: CEO Conclusion
FY 2021 CEO CONCLUSION Antoine de Saint-Affrique CEO CEO CONCLUSION 22
Slide 23: Moving into action
MOVING INTO ACTION CEO CONCLUSION 23
Slide 24: Appendix
APPENDIX 24
Slide 25: Q4 2021 sales by reporting entity
Q4 2021 SALES BY REPORTING ENTITY Breakdown volume/value By reporting entity By geographical area COMPANY ESSENTIAL DAIRY SPECIALIZED WATERS EUROPE REST OF & PLANT-BASED NUTRITION & NORAM THE WORLD Q4 net sales €6,242m €3,386m €1,931m €925m €3,480m €2,762m Like-for-like +6.7% +4.3% +6.4% +17.3% +4.3
Slide 26: Q4 2021 sales by reporting entity and geographical area
Q4 2021 SALES BY REPORTING ENTITY AND BY GEOGRAPHICAL AREA ESSENTIAL DAIRY SPECIALIZED WATERS COMPANY & PLANT-BASED NUTRITION EUROPE & NORAM Sales €2,313m €742m €424m €3,480m LFL growth +3.6% -1.0% +21.0% +4.3% REST OF THE WORLD Sales €1,073m €1,188m €501m €2,762m LFL growth +6.0% +11.8% +14.2% +10.
Slide 27: FY 2021 sales by reporting entity and geographical area
FY 2021 SALES BY REPORTING ENTITY AND BY GEOGRAPHICAL AREA ESSENTIAL DAIRY SPECIALIZED WATERS COMPANY & PLANT-BASED NUTRITION EUROPE & NORAM Sales €9,081m €2,889m €1,791m €13,762m LFL growth +3.5% -2.1% +8.9% +2.9% REST OF THE WORLD Sales €4,009m €4,340m €2,170m €10,520m LFL growth +4.1% +3.2% +5.8%
Slide 28: Q4 and FY 2021 sales by reporting entity and geographical area
Q4 AND FY 2021 SALES BY REPORTING ENTITY AND BY GEOGRAPHICAL AREA ESSENTIAL DAIRY SPECIALIZED WATERS TOTAL & PLANT-BASED NUTRITION Reported sales growth +8.1% +10.1% +24.5% +10.9% Contribution to growth from hyperinflation geographies +0.9% +0.5% +2.3% +1.0% Q4 2021 Currency and others1 +3.1% +2.7%
Slide 29: Changes in exchange rates
CHANGES IN EXCHANGE RATES % total FY 2021 FY 21 vs FY 20 (avg) Q4 21 vs Q4 20 (avg) United States Dollar 21.7% -3.5% +4.7% Chinese Renminbi 7.3% +3.3% +8.7% Indonesian Rupiah 5.7% -2.0% +5.0% British Pound 5.4% +3.5% +6.5% Russian Ruble 5.3% -4.7% +11.5% Mexican Peso 4.0% +2.2% +3.5% Polish Zloty 2.
Slide 30: Recurring operating margin
RECURRING OPERATING MARGIN € million FY 2020 FY 2021 Change €m Margin (%) €m Margin (%) Reported Like-for-like Essential Dairy & Plant-based 1,303 10.2% 1,287 9.8% -33 bps -37 bps Specialized Nutrition 1,763 24.5% 1,697 23.5% -105 bps -25 bps Waters 251 7.0% 353 8.9% +194 bps +189 bps Europe & Noram
Slide 31: Non-recurring net income
NON-RECURRING NET INCOME € million 2020 2021 Change 2021 vs 2020 Recurring net income 2,189 2,165 (24) Non-recurring net income (233) (241) (7) Costs related to Local First and Operating income (519) (1,080) (560) transformation of operations NON-RECURRING ITEMS Total Financial expenses 0 5 +5 Tax e
Slide 32: Balance sheet
BALANCE SHEET € million ASSETS(1) LIABILITIES 2020 2021 2020 2021 Intangible assets Shareholders’ equity 16 298 17 375 23 037 24 053 Net debt(2) 11 941 10 519 Other assets 9 733 9 450 4 443 Other liabilities 3 798 Working capital 5 448 5 850 6 181 7 016 Working capital APPENDIX 38,218 39,353 38,218
Slide 33: Tax rate development
TAX RATE DEVELOPMENT € million 2020 2021 Total income tax (reported) (762) (589) Reported tax rate 30.6% 29.5% Non-current income tax(1) 66 252 Current income tax (828) (841) Underlying tax rate 27.5% 27.4% APPENDIX (1) Tax related to non-current items 33
Slide 34: Cash-flow statement
CASH-FLOW STATEMENT € million 2020 2021 Recurring operating income 3,317 3,337 Financial income (310) (267) Income tax on operating and financial income (828) (841) Non-current income net of tax (453) (824) Depreciation and amortization 1,452 1,265 Net change in provisions / Deferred taxes (5) 419 D
Slide 35: Cash-flow statement
CASH-FLOW STATEMENT € million 2020 2021 Cash flows provided by operating activities, excluding changes in net working capital 3,198 3,123 Change in working capital (232) 351 Cash flows from operations 2,967 3,474 Capital expenditure (962) (1,043) Proceeds from the sale of industrial assets 43 46 Bus
Slide 36: Cash-flow statement
CASH-FLOW STATEMENT € million 2020 2021 Cash flows used in investing activities and disposals (610) 561 Increase in capital and additional paid-in capital 30 46 Purchases of treasury stock (net of disposal) 0 (801) Perpetual subordinated notes issued or repaid during the period (22) (43) Dividends p
Slide 37: EBITDA calculation
EBITDA CALCULATION € million 2020 2021 Operating income 2,798 2,257 Depreciation, amortization and impairment of property, plant and equipment and intangible assets 1,452 1,265 EBITDA 4,250 3,522 APPENDIX 37