Danone Sa · EURONEXT:BN
Danone Sa — Barclays Global Consumer Staples Conference 2017
24 slides from Danone Sa's conference presentation, Sep 6, 2017
Slide 1: Danone - One Planet. One Health
DANONE ONE PLANET. ONE HEALTH
Slide 2: Barclays Global Consumer Staples Conference
BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE September 6, 2017 Emmanuel Faber, CEO I 2 I
Slide 3: Forward-looking statements
• This document 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,” “shoul
Slide 4: Deliver start of transformation; accelerated transformation agenda
2014 – 2016 2017 – 2020 Deliver start of transformation Accelerated transformation agenda • New Governance • New Comex team Nutrition, agricultural policy 2014 2015 2016 2017 2020… I 4 I
Slide 5: Sustained improvement in sales growth, margin and EPS 2014-16
Sustained improvement in Consistent recurring Like-for-like sales growth recurring operating margin EPS growth 2014-16 2014-16 2014-16 CAGR +120bps CAGR +4.0% cumulative +8.8% +4.7% +4.4% 13.8% €2.93 €3.10 +2.9% 12.9% €2.62 12.6% 2014 2015 2016 2014 2015 2016 2014 2015 2016 GROWTH PROFIT AGILITY CON
Slide 6: Decoupling growth and efficiency agenda
Decoupling growth and efficiency agenda 2020 EFFICIENCY GROWTH 2017 Consistent EPS growth I 6 I
Slide 7: Prepare for strong, profitable, sustainable growth
LFL sales growth Recurring operating margin 4 to 5% Consistent > 16% EPS Net debt / EBITDA Growth ROIC < 3.0x ~ 12% Prepare for strong, profitable, sustainable growth I 7 I
Slide 8: On track to deliver guidance for double-digit recurring EPS growth
+0.4% +91bps +11.0% +24.4% (1) (1) (2) (3) Net Recurring Operating Recurring Free Cash Sales Margin EPS Flow On track to deliver guidance for double-digit recurring EPS growth in FY 2017 (2) (1) Like-for-like New Danone – please refer to financial indicators definition (2) At constant exchange rates
Slide 9: Efficiency: poised to deliver +300 bps margin improvement
EFFICIENCY 2020 1/ Poised to deliver +300 bps margin improvement… 2/ …and uniquely positioned to sequentially accelerate 2017 GROWTH growth I 9 I
Slide 10: Recurring operating margin +300 bps
Recurring Operating Margin +300 bps(1) > 16% • Protein efficiency program €1bn savings: €300m in recurring operating margin in 2020 (>€100m per year starting 2018) • WhiteWave synergies: $300m by 2020 • Structural efficiencies • Discipline in resource allocation 2016 2020 • Commitment of Dairy +200
Slide 11: Key enablers already in place
Key enablers already in place... NEW REGIONAL t oo wos, FOOTPRINT S P eG 3} od: = () tents SEYOND Sub4ET =» _Danirade ay Pa © DANONE One PLANET. ONE HEALTH
Slide 12: Pilots launched, ~€10M EBIT impact YTD
• Organization & processes in place 3 Pilots launched ~€10M EBIT • One-Sales Team in action impact YTD • First corporate costs elimination • Denver HQ closure in progress ~ -400bps • From 9 to 5 clusters Inflation Mix price • Brand management organization ~90% of inflation • R&D, Supply Chain, Quali
Slide 13: Growth: sequentially accelerate growth
2020 1/ Poised to deliver +300 bps EFFICIENCY margin improvement… 2/ …and uniquely positioned to sequentially accelerate 2017 GROWTH growth I 13 I
Slide 14: Moderate growth to new normal; self-disrupt organization
4 to 5% • Self-disrupt organization to fit growth opportunity 2020 New channels New ways Small / local & moments of engagement brands • Accelerated industry transformation of consumption for brands • Strengthen our profitable growth 2017 • Right rhythm vs. high speed MODERATE • Be ready for emerging
Slide 15: Future vs past category growth
Future growth (CAGR ‘17-19 in value) 13% 12% 11% Value MSP | $bn | Current Prices | Year-on-Year Exchange Rates 10% 9% 8% 7% 6% $ 25 bn 5% Danone categories 4% Other NAB categories 3% Other packaged food categories 2% 1% 0% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% Past growth (CAGR '06-16 in va
Slide 16: Early life nutrition, waters, advanced medical nutrition
* In Europe Early life nutrition Advanced medical nutrition Waters Number 2 Fresh dairy products in volume Plant-based food & beverages Coffee creamers & beverages I 16 I
Slide 17: Category growth drivers
* In Europe Early life nutrition Advanced medical nutrition Tailored Prevalence Healthcare Affluent 1,000 days Journey Ageing Importance of nutrition of chronic infrastructure middle-class awareness management population outpatient care needs diseases & budgets Waters Number 2 Fresh dairy products i
Slide 18: Consumer trends in health, local brands and transparency
89% of prosumers think that 58% of the FMCG growth 62% of consumers think that “food is as effective as medicine is driven by local brands “it’s essential for a company to in maintaining overall health” be completely transparent” Offering US 100% ~56% consumers the choice of non-GMO healthy of Danon
Slide 19: 7 reasons
7 reasons 1. Passion for Alimentation, concrete business impact and growth 2. Leading brands in 100% health-focused categories, well-balanced geographical footprint 3. Self-disrupted and reinvented DNA, agile and adaptive organization 4. Commitment for collective efficiency 5. Pioneer, innovative su
Slide 20: 2017 guidance and 2020 objectives
2015 2014 2016 2017 2017 2020 2017 guidance 2020 objectives Double-digit recurring LFL sales growth 4% to 5% EPS growth (at constant FX) Recurring operating margin > 16% Reduced leverage ratio(1) to < 3.0x ROIC(1) improved to ~ 12% (1) See definition of these indicators in Half year financial report
Slide 21: Appendix
fs \ DANONEe . ¥ ONE PLANET. ONE HEALTH je APPENDIX
Slide 22: Like-for-like New Danone indicator
Additional indicator of like-for-like changes: “like-for-like New Danone” changes Since completion of WhiteWave acquisition, WhiteWave and Danone’s activities have been combined and are generating synergies. Separate reporting of WhiteWave and Danone in their pre-acquisition forms thus no longer ref
Slide 23: Like-for-like methodology for Argentina
Since inflation in Argentina—already structurally high—accelerated further in 2014, in particular following the sharp, steep devaluation of the peso in January, using an identical exchange rate to compare 2014 figures with those for the prior year did not accurately reflect Danone's organic performa
Slide 24: Definition of recurring operating income
Recurring operating income is defined as Danone’s operating income excluding Other operating income and expenses. Other operating income and expenses is defined under Recommendation 2013-03 of the French ANC (format of consolidated financial statements for companies reporting under international rep
Danone — Barclays Global Consumer Staples Conference 2017 on 6ix