Danone Sa · EURONEXT:BN
Danone Sa — Non-Deal Roadshow (November 2019)
42 slides from Danone Sa's roadshow presentation, November 2019
Slide 1: Corporate Governance Overview
Corporate Governance Overview November, 2019 I 1 I
Slide 2: Today's attendees
Today’s attendees Michel LANDEL Lead Independent Director Since Lead independent Director of Danone’s board April 2018 Appointment at 2018 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, t
Slide 3: Agenda
Agenda One Planet Danone strategy Danone Remuneration at a glance embedded in governance practices our 2030 goals I 3 I
Slide 4: Danone at a glance
Agenda One Planet Danone strategy Danone Remuneration at a glance embedded in governance practices our 2030 goals I 4 I
Slide 5: Our long-term strategic roadmap
Our long-term strategic roadmap Leading the way to create and share sustainable value I 5 I
Slide 6: What makes us a unique investment proposition in the Food & Beverage space
What makes us a unique investment proposition in the Food & Beverage space Uniquely positioned to address the Food Revolution Healthier L o ca l Leader Re s p o n s i b l e Agile 89%(1) ~56% #1 or 2 ~30% ~25% of volumes sold of sales from position in of sales covered by of sales from recommended for
Slide 7: A unique 100% health-focused on-trend portfolio
A unique 100% health-focused on-trend portfolio Almost 90% of volume sold recommended for daily consumption(1) Specialized Nutrition Essential Dairy and Plant-Based Waters #2 #1 #1 #2 WORLDWIDE(2) EUROPE(2) WORLDWIDE(2) WORLDWIDE(2) in Early Life Nutrition in Advanced in Fresh Dairy Products & in Pa
Slide 8: Strong financial track record since 2014
Strong financial track record since 2014 Consistently delivering against our agenda of strong sustainable profitable growth Reported sales Recurring operating margin Free cash flow +4% +190 bps +15% 2014-18 CAGR 2014-18 2014-18 CAGR €2.2bn €24.7bn 14.5% €1.3bn €21.1bn 12.6% 2014 2018 2014 2018 2014
Slide 9: On track towards mid-term financial objectives
Deliver superior sustainable profitable growth On track towards mid-term financial objectives Like-for-like sales Recurring operating margin growth > 16% 4 to 5% in 2020 in 2020 Consistent EPS Growth Net debt / EBITDA ROIC < 3.0X ~12% in 2020 in 2022 I 9 I
Slide 10: Delivering superior ESG performance
Delivering superior ESG performance Recognized top performer, continuously improving 72/100 75/100 AAA + 4 points compared to 2018 Danone leader of the global +7 points compared to 2018 1/10 Best score ranking in Environmental and Social Reportings(1) Among #1 #1 Part of the FTSE4Good Index Series T
Slide 11: Be certified as a B Corp globally
Be certified as a B CorpTM globally Paving the way towards highest sustainability standards >1/3 of sales (20 entities) covered by B CorpTM certification to date Pioneer social bond in 2018 2 € bn syndicated credit loan with interest payment lowering as a function of Danone sales covered by B CorpTM
Slide 12: One Planet: our 2030 goals
Agenda One Planet Danone strategy Danone Remuneration at a glance embedded in governance practices our 2030 goals I 12 I
Slide 13: Preserve and renew the planet's resources
Preserve and renew the planet’s resources One Planet strategy based on four pillars Climate Water Circular Economy Regenerative (Packaging & Agriculture Food Waste) I 13 I
Slide 14: Climate change: committed to carbon neutrality by 2050
Climate change Committed to carbon neutrality by 2050 Reduction in CO2 footprint Emission intensity (g/CO2 equivalent/Kg product) 2018 TARGET 16% 50% Intensity reduction(1) full Reduction in emission intensity scope, baseline 2015 on Danone’s full scope by 2030 -30% ABSOLUTE REDUCTION (scope 1 & 2)
Slide 15: Waters
Waters Protect water, preserve its quality and give access to safe drinking water WATER RESOURCES & WATER IN WATER IN WATER ECOSYSTEMS AGRICULTURE OPERATIONS ACCESS We protect and restore our We work with farmers to watersheds and natural promote agricultural We reduce water use in We expand access
Slide 16: Circular economy
Circular economy Accelerating the transition towards a circular economy of packaging By 2025 All packaging will be 100% recyclable, reusable or compostable(1) and alternatives to plastic packaging or single-use packaging launched in all major water markets Collection and recycling initiatives launch
Slide 17: Accelerating the transition towards a circular economy of packaging
Circular economy Accelerating the transition towards a circular economy of packaging 100% rPET Q1 2018 Q2/Q3 2018 oct/2018 100% rPET Q1 2019 100% rPET aug/2018 fully recycled 100% rPET 100% rPET & refillable, Q2 2019 Q1 2019 Q2 2019 I 17 I
Slide 18: Regenerative Agriculture
Regenerative Agriculture Fostering regenerative agriculture practices Protect soils Empower farmers Respect animal welfare Sourcing 100% > 90% 43% of milk suppliers are smallholder farms (i.e. less than of fresh milk volumes worldwide assessed on animal ten cows) welfare(2) of ingredients produced i
Slide 19: Danone governance practices
Agenda One Planet Danone strategy Danone Remuneration at a glance embedded in governance practices our 2030 goals I 19 I
Slide 20: Our governance framework
Our governance framework Key corporate governance principles ✓ Independent oversight of management and corporate strategy ✓ Balanced distribution of powers ✓ Diverse and experienced Board leadership ✓ Appropriate Board refreshment I 20 I
Slide 21: April 2019 Shareholders' Meeting
April 2019 Shareholders’ Meeting 100% resolutions approved Resolutions Approved ? Favorable votes 1 Approval of the statutory financial statements for the fiscal year ended December 31, 2018 99.70% 2 Approval of the consolidated financial statements for the fiscal year ended December 31, 2018 99
Slide 22: April 2019 Shareholders' Meeting
April 2019 Shareholders’ Meeting 100% resolutions approved Resolutions Approved ? Favorable votes Delegation of authority to the Board of Directors to issue, without preferential subscription right of the shareholders but 12 96.87% with the obligation to grant a priority right, ordinary shares and
Slide 23: Governance structure
Governance structure A balanced distribution of powers Chairman and CEO Lead Independent Director Board and Committees Combined role In existence since 2013; enhanced duties, 3 committees: Audit, Governance, and resources and responsibilities since Dec. 2017 (1) newly created Purpose & Engagement ▪
Slide 24: Board of Directors at a glance
Board of Directors at a glance Balanced Board composition focused on efficiency, diversity and expertise Emmanuel FABER Chairman & CEO i Michel LANDEL Lead independent i Guido BARILLA Frédéric BOUTTEBA 16 members Board leadership director 57% independent(1) 43% Cécile CABANIS Gregg L. ENGLES i Clara
Slide 25: Directors skills and qualifications
Well-suited depth and breadth of Directors skills and qualifications A more diversified Board, focused on Consumer expertise General information Participation to board committees Directors expertise Core skills Sector-specific skills Audit Committee FMCG/Food and Finance/Audit/M listed companies Num
Slide 26: Board Assessment
Board Assessment Process and Findings from latest exercise Process 2018 Internal Assessment Main Findings: ▪ Conducted every two years (rotation of external and internal assessments) ▪ Board considered to be highly professional and involved ▪ Yearly Board discussion on Board operations ▪ Recognition
Slide 27: Entrust Danone's people to create new futures
Entrust Danone’s people to create new futures One Person, One Voice, One Share program April 2019: Digital consultation shareholders’ meeting on company and Fostering an local strategy ownership mindset ~75,000 participants One share in October 2018 granted to every Danone employee ~90,000 participa
Slide 28: One Person, One Voice, One Share
One Person, One Voice, One Share Our yearly routine INFORM LISTEN SHAPE DISCUSS Danone Day One Voice Strategic Plan Board of Directors Danone Day to share the roadmap Danone’s Taking into account 26 volunteers to bring employees to share employees’ voice for employees’ voice at One Planet. One input
Slide 29: Remuneration
Agenda One Planet Danone strategy Danone Remuneration at a glance embedded in governance practices our 2030 goals I 29 I
Slide 30: 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 31: Incentives supporting sustainable value creation
Incentives supporting sustainable value creation Balancing economic, social & societal, and managerial criteria Mix of economic, social and managerial KPIs for annual variable compensation • Economic (60%) Short-term • Social and societal (20%)(1) incentives • Managerial (20%) Three financial criter
Slide 32: 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 GPS Performance based shares(1) 2015 2016 2017 2018 2019 Sales growth Sales growth Sales growth Sales growth Sales growth > panel growth > panel growth > panel growth > panel growth over 3 > panel
Slide 33: Appendix 1: Governance considerations
Appendix 1 Governance considerations I 33 I
Slide 34: Board of Directors
Board of Directors • EMMANUEL FABER (55) Tenure: 16.5 years • MICHEL LANDEL (67) Tenure: 1.5 year L • GUIDO BARILLA (61) Tenure: 1.5 year I • FRÉDÉRIC BOUTEBBA (52) Tenure: 2.5 years E • Chairman & CEO, Danone • Lead Independent Director • Chairman of Barilla • Director representing employees • Form
Slide 35: Our shareholders
Our shareholders Among top-15 largest market capitalizations in France Total shareholder Institutional Institutional composition shareholders shareholders by geography by investment style 6% 6% 6% 13% 14% 1% 29% 11% 4% 43% 20% 6% 8% 78% 20% 17% 20% Institutional investors Value United States GARP In
Slide 36: Appendix 2: Performance indicators
Appendix 2 Performance indicators I 36 I
Slide 37: Nutritional commitments to provide health through food
Nutritional commitments to provide health through food Continuously Healthier Building our Leveraging Voluntary Marketing improving the alternatives expertise partnerships commitment even more nutritional that maintain in local to address to extensive responsibly, quality consumer nutrition local he
Slide 38: 2018 One Health achievements
2018 One Health achievements(1) Better products Better choices Better consumptions and a demanding governance compliance of registered of volumes sold are in healthy television advertising with Categories (2) the EU Pledge criteria(3) employees are trained in nutrition and/ or hydration in the last
Slide 39: 2018 Danone environmental strategy
2018 Danone environmental strategy Key commitments CLIMATE WATER CIRCULAR REGENERATIVE CHANGE STEWARDSHIP ECONOMY AGRICULTURE • 50% intensity reduction Full scope • 100% Waters division sites run PACKAGING FOOD WASTE • 100% animal welfare compliance in 2015-2030 Spring audit by 2020 for Ground ELN E
Slide 40: 2018 Nature achievements and targets
2018 Nature achievements and targets CLIMATE 2018 Performance Targets We are fighting climate change by reducing our carbon footprint and helping nature sequester more carbon Reduction in CO2 footprint 15.6 % Intensity reduction Danone Full scope vs 2015 50% intensity reduction Full scope 2015-2030
Slide 41: 2018 Nature achievements and targets
2018 Nature achievements and targets PACKAGING 2018 Performance Targets We are committed to playing our part in accelerating the transition towards a circular economy and to having all of our packaging recyclable, reusable or compostable by 2025. Use 100% recyclable, reusable or compostable packagin
Slide 42: 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