Slide 1: CAGNY
CAGNY February 23, 2018 Emmanuel Faber Chairman and CEO I 1 I
Slide 2: Disclaimer
Disclaimer • This press release 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,” “likel
Slide 3: Agenda
Agenda Danone Accelerating our A Food uniquely fit transformation revolution is to lead the journey cooking revolution towards 2020 I 3 I
Slide 4: Agenda
Agenda Danone Accelerating our A Food uniquely fit transformation revolution is to lead the journey cooking revolution towards 2020 I 4 I
Slide 5: Global brands are failing to address consumer needs
A time in which… Global brands are failing to address consumer needs 2013 2014 2015 2016 Global FMCG 55.5 brands 54.5 53.8 52.8 % share value 58% of growth driven by local brands 47.2 Local / 46.2 regional 45.5 FMCG 44.5 brands |5 Source: Kantar Worldpanel - Packaged food & drinks evolution 2013-201
Slide 6: Future growth is shifting towards small grocery and online
A time in which … Future growth is shifting towards small grocery and online CAGR 2012-2022 % estimate growth in value per channel +0.9% +2.8% 2.1% 4.1% 15.6% Hypermarkets Small stores* Discount E-commerce Notes: 1. Date relates to retailers within the planet retail database only: e – estimate / f –
Slide 7: Millennials account for 1/3 of value consumption
A time in which… Millennials account for 1/3 of value consumption A new set of values and supporting products Hyper-Fluid Lives Creativity Trust & & Collaboration Authenticity Next Gen The Value New Health Seeking committed brands and authentic products Discovery & Engaging with brands if and when t
Slide 8: New consumer preferences emerging in Food and Beverage
New consumer preferences emerging in Food and Beverage Aspiring for better, more sustainable and authentic products Natural and simple Local Accountable I 8 I
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Slide 10: Our ambition: to embrace and lead the Food revolution
Our ambition: to embrace and lead the Food revolution Healthier Responsible Sustainable eating and drinking business stewardship value I 10 I
Slide 11: Agenda
Agenda Danone Accelerating our A Food uniquely fit transformation revolution is to lead the journey cooking revolution towards 2020 I 11 I
Slide 12: A 25bn€ sales, unique 100% health-focused portfolio
A 25bn€ sales, unique 100% health-focused portfolio… … fully aligned with the Food revolution paradigm ~ ¼ of EDP revenues from former WhiteWave 54% 28% 18% Essential Dairy and Plant-Based Specialized Nutrition Waters Based on 2017 sales figures including 12 months of WhiteWave I 12 I
Slide 13: … embedding powerful growth drivers
… embedding powerful growth drivers * In Europe Early life nutrition Advanced medical nutrition Tailored Prevalence Healthcare Affluent 1,000 days Journey Aging Importance of nutrition of chronic infrastructure middle-class awareness management population outpatient care needs diseases & budgets Wat
Slide 14: An unparalleled portfolio of brands
An unparalleled portfolio of brands… … resonating with today’s consumers aspirations Naturality Local Responsibility I 14 I
Slide 15: A unique social culture to load brands with purpose
A unique social culture to load brands with purpose … as activists of critical consumer issues and social causes CIRCULAR GENDER EQUALITY ECONOMY TRANSPARENCY I 15 I
Slide 16: Significant progress on B-Corp roadmap
Paving the way to Societal accountability as a Food revolution leader Significant progress on B-Corp roadmap 5 entities certified to date DanoneWave on track to get certified in 2018 €2bn syndicated credit loan with now environmental and social Aguas Argentina criteria impacting payable margin I 16
Slide 17: A strengthened model at every level of the organization
A strengthened model at every level of the organization 100,000 Danoners Streamlined ExCom Board refreshment 86 Focus 64% independent +% + Diversity +3 Adding new members of employee engagement (1) Speed + 4pts vs. 2015 + 8pts vs. FMCG norm. (2) + 1pt vs. High Perf. norm. (2) Michel LANDEL Lead inde
Slide 18: Our ambition is to lead the way in creating and sharing sustainable value
As a result our ambition is to lead the way in creating and sharing sustainable value I 18 I
Slide 19: 2017: another year of progress against strong, sustainable, profitable growth
2017: another year of progress against strong, sustainable, profitable growth… A solid execution RECURRING NET SALES OPERATING MARGIN FREE CASH FLOW +2.5% +70bps +18.4% (1) (1) (2) € 24.7 bn 14.36% € 2.1 bn (1) Like-for-like New Danone (2) On a reported basis I 19 I
Slide 20: Creating value for all stakeholders
… in a responsible way Creating value for all stakeholders +14.2% 88% -10.5% 5 OF VOLUME SOLD ARE SUITABLE FOR DAILY REDUCTION OF CARBON 2017 RECURRING EPS (1) CONSUMPTION (2) INTENSITY FULL SCOPE (3) B CORP ENTITIES A- (1) At constant exchange rate (2) This percentage refers to water, yogurt and ot
Slide 21: Agenda
Agenda Danone Accelerating our A Food uniquely fit transformation revolution is to lead the journey cooking revolution towards 2020 I 21 I
Slide 22: Managing the transformation with a strong track record
Managing the transformation with a strong track record in delivering solid results consistently Like-for-like Sustained improvement Consistent recurring sales growth in recurring operating margin EPS growth 2014-17 2014-17 2014-17 Average Cumulative CAGR +3.6% +180bps +10% €3.49 14.4% €2.93 €3.10 13
Slide 23: Preparing for the Food revolution with step changes
Preparing for the Food revolution with step changes Our Revolution journey since 2014 Organization Vision and Efficiency Portfolio and Ambition More agility, more resilience One Planet. One Health. I 23 I
Slide 24: Embedding the revolution into our products
Embedding the revolution into our products Accelerated new paradigm innovation pipeline Neocate Relaunch Syneo Mizone Pro of flagship From Prebiotics Adjacent categories Young Danone brand Lemonades + Probiotics Plant-based through new brands and local to Coconades premiumization brands Reinvent sma
Slide 25: Accelerating strategic partnerships and investments in e-commerce
Accelerating strategic partnerships and investments in e-commerce Superior Growing online shopping e-commerce presence Efficient Optimized precision marketing supply chain I 25 I
Slide 26: Incubating the next business models
Incubating the next business models 7 Danone Manifesto Ventures investments to date Leading French F&B revolution Increasing fresh food accessibility Drive growth and pioneer sustainability Leading ‘Harmless’, Fair for Life with unconventional via vending / connected fridge in new deep ocean water c
Slide 27: WhiteWave synergies, chapter one
WhiteWave synergies, chapter one Delivery on track, ahead of plan 2017 2018 2020 Onboarding phase Second wave Synergies confirmed 2017 OBJECTIVE 2017 DELIVERY 2018 OBJECTIVE 2020 OBJECTIVE > 10% > $50m > 60% $300m of run-rate synergies above objective of run-rate synergies ▪ HQ consolidation Major p
Slide 28: Preparing for Protein delivery
Preparing for Protein delivery €1bn sustainable savings through efficiencies 2017 2018 2020 Foundations in place 1 st year of delivery Objective confirmed ▪ 10 clusters activated out of 30 clusters Priority to efficiency in 2018 Objective confirmed ▪ Process in place: 15 playbooks created Objective
Slide 29: Starting a new partnership phase with Yakult in probiotics
Active portfolio management Continued discipline in capital allocation Starting a new partnership phase with Yakult in probiotics ENHANCED OPTIMIZED strategic collaboration stake in line with capital to promote probiotics allocation discipline Strategic partnership Financial discipline I 29 I
Slide 30: Acceleration towards 2020
Acceleration towards 2020 2017 2020 Sales +2.5% Acceleration towards 2020 4-5% Growth(1) Recurring 14.4% Sustained margin improvement(1) >16% op. margin FCF €2.1bn Consistent pace of deleverage <3x Net debt/Ebitda(3) Recurring Consistent recurring +14.2% Consistent recurring EPS growth EPS EPS growt
Slide 31: 2018: a year of execution and delivery
2018: a year of execution and delivery 2017 2018 2020 2018 objective DOUBLE-DIGIT RECURRING EPS GROWTH at constant exchange rate excluding Yakult transaction impact(1) (1) See definition on page 13 of 2017 Full Year Results Press release I 31 I