Slide 1: CAGNY
CAGNY February 23, 2017 Emmanuel Faber, CEO 1
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: Emmanuel Faber, CEO
Emmanuel Faber CEO 3
Slide 4: 2016 key highlights
blows 2016 key highlights
Slide 5: 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 (1) (2) margin(1) FY 2014 FY 2015 +9.3% +16.8% (1) Like-for-like (2) Excluding exceptional it
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 metrics
Slide 7: 2017: another step in Danone's transformation
2017: another step in Danone’s transformation I7I
Slide 8: Decoupling Danone's mid term growth transformation agenda and our immediate efficiency agenda
Decoupling Danone’s mid term growth transformation agenda and our immediate efficiency agenda 2020 EFFICIENCY GROWTH 2017 Consistent EPS growth I8I
Slide 9: Launching a comprehensive, 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 Reinv
Slide 10: 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 10 I
Slide 11: Decoupling Danone's growth & efficiency agendas
Decoupling Danone’s growth & efficiency agendas 2020 EFFICIENCY GROWTH 2017 Consistent Fuel the growth EPS growth model I 11 I
Slide 12: Keep building a stronger model of growth
Keep building a stronger model of growth 2015 2016 2017 … Consistent EPS growth I 12 I
Slide 13: US: a major platform to reinforce Danone's growth resilience
US: a major platform to reinforce Danone’s growth resilience I 13 I
Slide 14: US: a major platform to reinforce Danone's growth resilience
US: a major platform to reinforce Danone’s growth resilience Expand evian Develop medical business 40% 39% ALMA Based on 2016 Europe Net Sales 100% organic platform 8% 13% CIS NORAM > $3 bn Lead yogurt category development ALMA: Asia Pacific, Latin America, Middle East and Africa CIS: Commonwealth o
Slide 15: US: a major platform to reinforce Danone's growth resilience
US: a major platform to reinforce Danone’s growth resilience Expand evian 40% 39% ALMA Based on 2016 Europe Net Sales 8% 13% CIS NORAM > $3 bn ALMA: Asia Pacific, Latin America, Middle East and Africa CIS: Commonwealth of Independent States NORAM : North America > USA and Canada I 15 I
Slide 16: evian is positioned on fastest growing segments: still and premium
evian is positioned on fastest growing segments: still and premium Switch towards healthier options Premium water is the fastest growing segment +18% +10% Premium Other US sales evolution 2010 -2015 Source(s): http://issuu.com/ibwa/docs/final_bwr_feb-mar2014 , IBWA DGA Presentation / Canadean I 16 I
Slide 17: evian US: delivering strong results leveraging unique evian attributes
evian US: delivering strong results leveraging unique evian attributes Winning in strategic channels Pioneering on unique innovations and selected cities while leveraging unique sales partnerships sales evolution 2015 -2016 Re-gaining strong category +25% Re-engaging on our origin momentum in retail
Slide 18: US medical nutrition: Nutricia leading player in niche medical food
US medical nutrition: Nutricia leading player in niche medical food Expand the business by acquisitions Focus on disease-specific categories and innovations (mostly paediatrics) 2007 – 2012: development through acquisitions since 2015: innovative product launches >80% of total sales Strong sales evo
Slide 19: US Early Life Nutrition = 100% organic platform: Happy Family
US Early Life Nutrition = 100% organic platform : Happy Family Organic continues to over-perform >+30% Fastest growing baby food in the baby food category brand in 2016 (1) CAGR 2010-2016: +22% Happy Family drove the growth in the organic baby $ mln 600 food category in 2016 400 #1 Organic Brand (ex
Slide 20: US: a major platform to reinforce Danone's growth resilience
US: a major platform to reinforce Danone’s growth resilience Expand evian Develop medical business 40% 39% ALMA Based on 2016 Europe Net Sales 100% organic platform 8% 13% CIS NORAM > $3 bn Lead yogurt category development ALMA: Asia Pacific, Latin America, Middle East and Africa CIS: Commonwealth o
Slide 21: #1 Overall Refrigerated Manufacturer, #1 in Category Development
Danone recognized for its Category Leadership and Partnership Manufacturers Overall performance Dannon 1 Chobani 1 WhiteWave 3 General Mills 4 Sargento 5 Unilever 6 The Kraft Heinz Company 7 #1 Overall Refrigerated Manufacturer Hood 8 Nestlé USA 9 #1 in Category Development Organic Valley 10 Califia
Slide 22: Total Yogurt space continues to grow
Total Yogurt space continues to grow Avg Aisle Feet - YOGURT 25 +12% 22.4 19.4 20.0 20 18.6 17.3 16.5 15 10 5 2011 2012 2013 2014 2015 2016 Source: IRI Q4 AUDIT DATA - Grocery 2011-2016 I 22 I
Slide 23: A wide portfolio positioned in all sub categories
A wide portfolio positioned in all sub categories Proactive Every Day Every Day Health Regular Light Greek Baby/Kids Organic Indulgent Dollar Share of Sub category 90 10 45 24 53 68 33 Ranking #1 #2 #1 #2 #1 #1 #1 Source: IRI total US Mulo L52w ending 1/29/2017 I 23 I
Slide 24: Danone: sustained leadership driven by innovation across the range
Danone: sustained leadership driven by innovation across the range Total US 36.0% 38.5% 19.8% 17.6% 17.5% Comp 1 17.2% Comp 2 2011 2011 2013 2012 2013 2015 2014 2015 2016 jan 2016 mar 2016 may 2016 jul 2016 sept 2016 nov 2016 jan 2017 Source: IRI InfoScan; Total US - MULO, Latest Quad Week Ending 1/
Slide 25: Opportunity to anticipate evolving consumer landscape
Opportunity to anticipate evolving consumer landscape Changing Consumer Fast growing awareness Behaviors The Millennial Effect #2m readers in Germany #2.5m viewers on videos related to the book I 25 I
Slide 26: 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 26 I
Slide 27: Consumers piercing the corporate veil behind brands
Consumers piercing “the corporate veil” behind brands Transparency & Fairness > Danone B-Corp 2015 partnership > Happy Family (USA) accredited B-Corp > Danone Spain accredited B-Corp > Danone & WhiteWave expected to combine US- based activities into a public B-Corp I 27 I
Slide 28: WhiteWave
WhiteWave a perfect combination to strengthen Danone 2020 plan I 28 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: US & EU plant-based foods and beverages
US & EU plant-based foods and beverages US & EU PLANT-BASED FOODS AND BEVERAGES Household penetration US plant-based Europe plant- beverages based beverages US plant-based EU plant-based foods and foods and beverages beverages 2013-2016 CAGR +9% +17% 33% 20% #1 #1 Position Position Source: Household
Slide 32: Plant-based categories outperforming conventional
Plant-based categories outperforming conventional $ Sales % change vs. LY Nielsen xAOC 52 weeks ended 12.31.2016 US & EU PLANT-BASED FOODS AND BEVERAGES I 32 I
Slide 33: Silk: addressing brand execution during Q4
Silk: addressing brand execution during Q4 New Silk brand marketing to Plant-Based Beverages – Rfg Almond & support new packaging & recent Nut Based Blends innovations $ Share %, Nielsen xAOC Silk Competitor 1 Packaging New packaging 42 change rollout begins 41 39.2 +3 pts 37 37.3 36 34 07/30 08/27
Slide 34: Alpro positioned in a booming category
Alpro positioned in a booming category Category performance Alpro is the largest plant-based market Core beverage category: +15% behind continued expansion participant with a pan European of new ingredient beverages (e.g. almond) and multi-category reach Sales X2 Since 2012 43 7x Alpro’s % age of gr
Slide 35: US organic foods & beverages
US organic foods & beverages US ORGANIC FOODS & BEVERAGES Household penetration US organic US organic milk salad US US organic organic dairy salad 2013-2016 CAGR +9% +10% 45% #1 15% Position Source: Household penetration is Nielsen Panel Data as of last 52 weeks ended 12.31.2016; Narrow category def
Slide 36: Earthbound Farm leading organic salad category
Earthbound Farm leading organic salad category Organic salad category remains healthy Earthbound: leading organic salad player Salad Category, $BN Total Branded Organic Salad Category Share Nielsen xAOC, L52 Wks WE 12/31/2016 Nielsen xAOC, L52 WE 12/31/2016 +8% CAGR % % 40% 36% 5.5 13-16 16 5.3 30%
Slide 37: Earthbound Farm: 2016 execution challenges
Earthbound Farm: 2016 execution challenges 2016 sales by quarter in m$ Q4 2016 additional extra costs in m$ 2015 2016 -2% -13% 0% -25 m$ Additional Q4 costs related to elevated -1% supply chain and other higher costs due to excess supply of organic leafy greens and produce Q1 Q2 Q3 Q4 > Lower distri
Slide 38: US nutritionals
US nutritionals US NUTRITIONALS Household penetration US total protein US plant-based powders protein powders US US protein protein powders bars 2013-2016 CAGR +13% +10% 14% plant-based 5% #1 protein powders Position Source: Household penetration is Nielsen Panel Data as of last 52 weeks ended 12.31
Slide 39: Vega: continued growth opportunities for plant-based nutritionals
Vega: continued growth opportunities for plant-based nutritionals Continued growth opportunities Vega outperforming category Plant-based Conventional channel $ Sales % change vs. LY Nielsen US grocery L52 weeks ended January 28, 2017 channel penetration growth rate (% share) ($ growth) 206% 120% Pla
Slide 40: US coffee creamers and beverages
US coffee creamers and beverages Creamers US COFFEE & Simple COFFEE CREAMERS Flavored Half-n-half US refrigerated coffee US ready-to-drink creamers beverages US coffee creamers & Premium Organic beverages Plant-based Half-n-half 2013-2016 CAGR Ready-to-drink +6% 41% Cold-Brew 22% Flavored #2 #1 Posi
Slide 41: WhiteWave's Q4 2016 results
WhiteWave’s Q4 2016 results LfL Sales growth (1) : +4% +5% excluding Fresh Foods Q4 LfL Americas +3% Plant-based Foods & Beverages +3% Premium Dairy -1% Category: +11% Category: -2% Fresh Foods -1% Coffee Creamers & Beverages +7% Category: +1% Category: +3% Q4 LfL Europe +11% Plant-based Foods & Bev
Slide 42: Danone continues to assemble an unparalleled portfolio of healthy diet categories
Danone continues to assemble and grow an unparalleled portfolio of healthy diet categories % CAGR 2011-2016 Global Retail 8 Value Growth Danone leader positions (in value) Organic 6 #3* Organic #1 * Num 2 in volume 4 #2 #1 #1 2 0 Free Energy Organic Baby Enteral Bottled Organic Milk Aquadrinks(2) Fr
Slide 43: Rebalancing Danone geographies for more resilient growth
Rebalancing Danone geographies for more resilient growth + 40% 39% ALMA 35% 35% Europe ALMA Based on 2016 Europe Based on 2016 Net Sales Net Sales 6% 8% 13% CIS 25% CIS NORAM ≈ $3 bn NORAM ≈ $6.5 bn ALMA: Asia Pacific, Latin America, Middle East and Africa CIS: Commonwealth of Independent States NOR
Slide 44: 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