Danone Sa · EURONEXT:BN
Danone Sa — H1 2005 Earnings Presentation
28 slides from Danone Sa's earnings presentation, July 2005
Slide 1: Teel
Teel z Oo z <x QO
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements that reflect Danone's current views and estimates. These statements are based on many factors and assumptions. Changes in such factors or assumptions could produce significantly different results. 2
Slide 3: 1st Half Results
1st HALF RESULTS Estimated figures July 2005 IR : Nadine COULM : 33.1.44.35.20.73 Nadine.coulm@danone.com 3
Slide 4: Preliminary notes
Preliminary notes • All figures are under IFRS • 2004 and 2005 figures from Net sales to Operating income exclude the Sauce business • The net income of the Sauce business is reported on a separate line of the P&L, namely “Net income from discontinued operations“ 4
Slide 5: H1 2005 Key Figures
H1 2005 Key Figures +6.5% like-for-like Net Sales € 6,437 M +2.9% Trading operating income € 857 M +4.5% Vs 13.10% H1 ‘04 Trading operating margin 13.31 % + 21bp Underlying net income € 503 M +7.5% From From continuing continuing activities activities Underlying EPS (fully (fully diluted) diluted) €
Slide 6: H1 2005: Net Sales Evolution
H1 2005: Net Sales Evolution H1 2004 € Millions H1 2005 6,257 6,437 +2.9% CURRENCY LIKE-FO R-LIKE Scope of Conso. -0.4% +6.5% -3.2% +5.2% +1.3% VO LUM E VALUE 6
Slide 7: From Reported Net Sales to Like-For-Like Net Sales
From Reported Net Sales to Like-For-Like Net Sales Q 1 2005 Q 2 2005 H1 2005 Reported Net Sales +1.0% +4.7% +2.9% Currency -1.1% +0.4% -0.4% Scope of consolidation -3.2% -3.3% -3.2% Like-for-like Net Sales +5.3% +7.6% +6.5% 7
Slide 8: Major changes in exchange rates
Major changes in exchange rates % total H1 H1 ‘05 vs H1 ‘04 FY ‘04 vs FY ‘03 sales (average) average (average) Chinese Yuan 10% -4% -8% US Dollar 7% -4% -8% Total US & US- ≈ 17% pegged Sterling Pound 4% -2% +2% Mexican Peso 4% -2% -12% Indonesian Rupee 2% -11% -13% Polish Zloty 2% +16% -2% Brazilian
Slide 9: Major changes in scope of consolidation
Major changes in scope of consolidation* As of Jacob’s (UK) September 2004 & Irish Biscuits (Ireland) August 2004 - Biscuits Latin America (Brazil & Argentina) (1) January 2005 Italaquae January 2005 * Fully integrated cies (1) In associates as from January 2005 9
Slide 10: Acceleration of top line growth in Q2 2005
Acceleration of top line growth in Q2 2005 Like-for-like Q 1 2005 Q 2 2005 H1 2005 Fresh Dairy Products +6.4% +8.0% +7.2% Beverages +5.7% +11.0% +8.6% Biscuits & CerealProducts +1.3% +1.3% +1.3% Europe +1.9% +3.8% +2.9% Asia +8.3% +13.2% +10.8% Rest of W orld +15.3% +17.3% +16.4% GRO UP +5.3% +7.6%
Slide 11: Quarterly like-for-like sales growth by business line
Quarterly like-for-like sales growth by business line Fresh Dairy Products Beverages +15.3% +12.8% +11.4% +10.2% +11.0% +9.6% +10.1% +10.4% +9.4% +10.1% +9.5% +8.5% +9.5% +8.5% +8.0% +6.4% +6.6% +5.2% +5.7% +1.3% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 ‘03 ‘03 ‘03 ‘03 ‘04 ‘04 ‘04
Slide 12: Quarterly like-for-like sales growth by geographical area
Quarterly like-for-like sales growth by geographical area Asia Europe +17.2% +15.6% +13.2% +13.6% +12.6% +12.0% +8.1% +6.1% +7.5% +8.3% +7.8% +5.4% +6.8% +5.7% +5.0% +3.8% +3.0% +1.9% +2.1% +1.1% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 ‘03 ‘03 ‘03 ‘03 ‘04 ‘04 ‘04 ‘04 ‘05 ‘05 ‘03
Slide 13: Trading operating income and margin
Trading operating income and margin H1 2004 H1 2005 Trading operating income 820 857 Other operating items (20) (0) Operating income 800 857 Trading operating margin 13.10% 13.31% +21 bp 13
Slide 14: Operating margin change
Operating margin change ⌦ Reported Ebit margin up +21 bp to 13.3% ⌦ Changes in the scope of consolidation have contributed up to +48 bp ⌦ Marginal impact of currency translation ⌦ Like-for-like operating margin down -25 bp as anticipated, ⌦ negatively impacted, up to -75 bp (net), by Input costs (ma
Slide 15: Trading operating margin by business line
Trading operating margin by business line 16.4% 14.5% 14.2% 13.7% 13.2% 13.3% 13.1% 10.3% Fresh Dairy Beverages Biscuits Total Group Products H1 2004 H1 2005 15
Slide 16: Trading operating margin by geographical area
Trading operating margin by geographical area 15.5% 15.4% 13.3% 13.2% 13.1% 11.3% 11.4% 9.4% Europe Asia Rest of World Total Group H1 2004 H1 2005 16
Slide 17: From Operating income to Net income
From Operating income to Net income H1 2004 H1 2005 Operating income 820 857 Cost of net debt (56) (67) Other financial items 94 (17) Income tax (247) (219) Net income of consolidated companies 591 554 Share in net income of affiliates 22 (132) Net income of discontinued activities 23 23 Net Income
Slide 18: Underlying net income from continuing operations
Underlying net income from continuing operations H1 2004 H1 2005 Underlying net income from continuing operations 468 503 +7.5% Non current net income from continuing operations 56 (179) Net income from discontinued operations 23 23 Net income attributable to the parent 547 347 18
Slide 19: Underlying Earnings Per Share from continuing activities
Underlying Earnings Per Share from continuing activities H1 2004 H1 2005 Underlying net income fully diluted € Millions 474 474 508 508 from continuing activities Millions Shares 258.3 253.7 Fully diluted of Shares 258.3 253.7 Underlying EPS fully diluted from continuing activities €€ 1.83 1.83 €€ 2
Slide 20: Free Cash Flow from Operations
Free Cash Flow from Operations € Millions H1 2004 H1 2005 Cash flow from operations 757 776 Change in working capital (62) (63) Capital expenditure (210) (228) Free Cash Flow from Operations 485 485 20
Slide 21: Cash flow statement
Cash flow statement € Millions H1 2004 H1 2005 Free Cash Flow from Operations 485 485 Investments in sub. & affiliates (29) (156) Disposals 196 251 Dividends paid (442) (468) Share buyback (211) (529) Increase in capital 43 51 Others 126 86 Change in Net Debt 168 (280) 21
Slide 22: Financing
Financing 2004 2004 2005 June 30 Dec. 31 June 30 € Million Net debt 5,203 5,203 4,538 4,538 4,818 4,818 Of which Put options granted to minority interests 2,018 2,440 2,334 Equity 4,772 4,506 4,262 incl. minorities 4,772 4,506 4,262 22
Slide 23: 2005 Targets
2005 Targets In the upper part of Sales Saleslike-for-like like-for-like +6% [+5% toto +7% +7%] range Trading operating Operating margin Margin +20 bp to +40 bp EPS growth Underlying EPS * +10% 23 * From continuing activities
Slide 24: Back-up
Back-up 24
Slide 25: 2005 H1 Net Sales by business & geographical area
2005 H1 Net Sales by business & geographical area Like-for- € m illion H1 2004 H1 2005 like grow th Fresh Dairy Products 3,254 3,504 +7.2% Beverages 1,705 1,772 +8.6% Biscuits & CerealProducts 1,298 1,161 +1.3% Europe 4,100 4,120 +2.9% Asia 1,047 1,119 +10.8% Rest of W orld 1,110 1,198 +16.4% GRO UP
Slide 26: 2005 Q2 like-for-like sales growth Breakdown volume/value
2005 Q2 like-for-like sales growth Breakdown volume/value Like-for-like Volum e Value Total Fresh Dairy Products +6.6% +1.4% +8.0% Beverages +8.5% +2.5% +11.0% Biscuits & CerealProducts +1.4% -0.1% +1.3% Europe +2.3% +1.5% +3.8% Asia +11.4% +1.8% +13.2% Rest of W orld +16.4% +0.9% +17.3% GRO UP +6.2
Slide 27: Trading operating income by business & geographical area
Trading operating income by business & geographical area € m illion H1 2004 H1 2005 Fresh Dairy Products 463 507 Beverages 279 242 Biscuits & CerealProducts 134 153 Unallocated item s -56 -45 GRO UP 820 857 Europe 632 639 Asia 139 126 Rest of W orld 105 137 -56 -45 Unallocated item s 27
Slide 28: Share buy back program
Share buy back program H1 2005 Share Buyback Number of Shares 8,055,697 in % of outstanding capital at 06/30/05 3.0% Cost € 596 M* Treasury Stock as of 06/30/2005 • 19,591,486 shares after: • Cancellation of 4.6 million shares in April 2005 • 7.4% of the outstanding capital as of 06/30/05 28 Outstan