Slide 1: FY 2023 Presentation
FY 2023 PRESENTATION FEBRUARY 22, 2024
Slide 2: CEO Introduction
CEO INTRODUCTION Antoine de Saint-Affrique Chief Executive Officer
Slide 3: Consistently Delivering on Renew Danone: 2023 Year in Review
CONSISTENTLY DELIVERING ON RENEW DANONE 2023 YEAR IN REVIEW +7.0% LFL MARGIN FROM 97 BPS OPERATIONS REINVESTMENTS SALES GROWTH +142 BPS Vol/mix turning positive Enabled by record A&P, Superiority, in Q4 at +0.8% vs LY productivity on COGS Capabilities RECURRING EPS +3.4% €2.6 BN FREE CASH FLOW AAA R
Slide 4: Improving Performance Across the Portfolio
IMPROVING PERFORMANCE ACROSS THE PORTFOLIO FOCUSING ON FUNDAMENTALS RESTORING FUNDAMENTALS SCIENCE & EXECUTION DRIVING DRIVING OCCASION-LED MARKETING IN YOGURT COMPETITIVE GROWTH IN IMF & BROADENING CHANNEL FOOTPRINT Europe Noram Market share Coffee & Breakfast focus Positive vol/mix in Q4 Resilient
Slide 5: Driving Accelerated Growth
DRIVING ACCELERATED GROWTH LEVERAGING SUPERIORITY AND DIFFERENTIATION MEDICAL NUTRITION COFFEE CREATIONS HIGH PROTEIN Expanding in hospitals & beyond Further expansion in the US Scaling in existing geographies Capacity investments Capacity investments Entering new markets 5
Slide 6: Addressing Underperforming Platforms
ADDRESSING UNDERPERFORMING PLATFORMS CONTINUOUSLY REVISITING OUR PORTFOLIO AS WE RAISE THE BAR TURNING AROUND 14.1% + Back to MIZONE IN CHINA FY23 LFL growth Competitive growth PROGRESSING ON Refocusing on Restoring BRAZIL & AFRICA’S added-value offerings profitability BUSINESS MODELS SHARPENING Por
Slide 7: Intentionally Rotating the Portfolio
INTENTIONALLY ROTATING THE PORTFOLIO ACCELERATED PORTFOLIO ROTATION OVER THE PAST 2 YEARS DECONSOLIDATING DILUTIVE / NON-CORE ASSETS ACCRETIVE TO ORGANIC GROWTH AND RECURRING US Organic Dairy EDP Russia OPERATING MARGIN Michel & Augustin Argentina Waters HIGHER FOCUS ON CORE, “ON STRATEGY” ASSETS IN
Slide 8: Financial Highlights
FINANCIAL HIGHLIGHTS Juergen Esser Chief Financial Officer
Slide 9: Renew Danone Is Yielding Results
RENEW DANONE IS YIELDING RESULTS Q4 2023: ANOTHER QUARTER OF CONSISTENT DELIVERY EUROPE +6.0% +4.5% NORTH AMERICA +3.1% +4.7% CHINA, NORTH ASIA & OCEANIA +7.4% +5.1% LATIN AMERICA +8.1% LFL sales growth +8.5% REST OF THE WORLD +3.5% Note: all data in like-for-like 9
Slide 10: Q4 2023 Sales Up +5.1% LFL
Q4 2023 SALES UP +5.1% LFL VOLUME/MIX BACK TO POSITIVE TERRITORY LFL GROWTH: +5.1% +4.3% -4.3% €7,007m +0.8% -5.8% of which -6.0% from currencies €6,655m : REPORTED GROWTH -5.0% Q4 2022 Volume/mix Price Currency Scope Q4 2023 Net Sales and others1 Net Sales 1. Includes IAS 29 and contribution of hyp
Slide 11: Europe
EUROPE SOLID GROWTH WITH POSITIVE VOLUME/MIX IN Q4; EDP PORTFOLIO TRANSFORMATION IN ACTION Q4 2023: LFL GROWTH +6.0% | VOL/MIX +0.3% FY 2023 KEY FIGURES Net sales €9.4bn • Sequential improvement of EDP performance Like-for-like sales growth +5.9% • Strong growth in Waters led by evian, Volvic, Zywie
Slide 12: North America
NORTH AMERICA VOL/MIX-LED GROWTH DRIVEN BY COFFEE CREATIONS AND YOGURT Q4 2023: LFL GROWTH +3.1% | VOL/MIX +2.8% FY 2023 KEY FIGURES Net sales €6.9bn • Solid quarter with volume/mix-led growth; pricing normalization Like-for-like sales growth +5.8% Volume-mix / price +0.2% / +5.6% • Growth led by In
Slide 13: China, North Asia & Oceania
CHINA, NORTH ASIA & OCEANIA STRONG COMPETITIVE PERFORMANCE Q4 2023: LFL GROWTH +7.4% | VOL/MIX +4.8% FY 2023 KEY FIGURES Net sales €3.5bn • Continued competitive momentum in Specialized Nutrition in China Like-for-like sales growth +10.1% Volume-mix / price +8.6% / +1.5% • Mizone confirming its turn
Slide 14: Latin America
LATIN AMERICA CONTINUED GROWTH AMID BUSINESS MODEL TRANSFORMATION Q4 2023: LFL GROWTH +8.1% | VOL/MIX -1.3% FY 2023 KEY FIGURES Net sales €2.8bn • Performance led by all geographies and categories Like-for-like sales growth +9.8% • Growth driven by Oikos, YoPro and Bonafont Volume-mix / price -1.3%
Slide 15: Rest of the World
REST OF THE WORLD RESILIENT LANDING TO THE YEAR Q4 2023: LFL GROWTH +3.5% | VOL/MIX -2.9% FY 2023 KEY FIGURES Net sales €5.1bn • Sustained momentum in Specialized Nutrition across Asia and Middle-East Like-for-like sales growth +7.2% Volume-mix / price -1.8% / +9.0% • Progress in fixing Dairy busine
Slide 16: Recurring Operating Margin Up +40 bps in 2023
RECURRING OPERATING MARGIN UP +40 BPS IN 2023 IMPROVEMENT DRIVEN BY MARGIN FROM OPERATIONS, WHILE CONSISTENTLY REINVESTING REPORTED: +40 BPS +142 bps 12.6% 12.2% +13 bps -97 bps -18 bps c. +590 bps Vol, mix and price c. -450 bps COGS effect net from efficiencies FY 2022 Scope, FX and Margin from Rei
Slide 17: Recurring EPS Up +3.4% in 2023
RECURRING EPS UP +3.4% IN 2023 STRONG OPERATIONAL PERFORMANCE PARTIALLY OFFSET BY NEGATIVE SCOPE +8.3% +0.9% €3.54 €3.43 -4.5% -0.4% -0.9% RECURRING EPS GROWTH : +3.4% FY 2022 Operational Scope Currency Financing Tax, Equity FY 2023 Recurring EPS Performance and others1 accounted Recurring EPS compa
Slide 18: Strong Focus on Value Creation
STRONG FOCUS ON VALUE CREATION DISCIPLINED CAPITAL ALLOCATION RECORD LEVEL OF DIVIDEND BACK TO IMPROVING ROIC FREE CASH FLOW 2019 LEVEL 1 +€500m +60bps +5% € 2.6bn 9.5% € 2.10 € 2.1bn 8.9% € 2.00 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 1. Subject to Shareholders’ approval at the 2024 AGM 18
Slide 19: 2024 Guidance
2024 GUIDANCE IN LINE WITH MID-TERM AMBITION LFL Sales Growth +3% to +5% Recurring Operating Margin Moderate improvement 19
Slide 20: CEO Conclusion
CEO CONCLUSION Antoine de Saint-Affrique Chief Executive Officer
Slide 21: Two Years of Significant Progress
TWO YEARS OF SIGNIFICANT PROGRESS ON GOVERNANCE, CULTURE, CAPABILITIES AND PORTFOLIO March 2022 April/May 2022 November 2022 January 2023 February 2023 September 2023 January 2024 Launch of Argentina Waters Announcement of Adaptation of ExCo Inauguration of Partner 4 Growth Organic Dairy Renew Danon
Slide 22: Strong Set of 2023 Results
STRONG SET OF 2023 RESULTS CONSISTENTLY DELIVERING ON THE RENEW AGENDA TO CAPITALIZE FURTHER 22
Slide 23: 2024 Priorities
2024 PRIORITIES CONSISTENT PREPARATION OF EXECUTION & DELIVERY THE NEXT CHAPTER Capital Market Event June 19-20, 2024 23
Slide 24: Appendix
APPENDIX WINNER YOGURT CATEGORY. SURVEY OF 8,000 PEOPLE IN UK AND ROIBY KANTAR fey DANONE!
Slide 25: Q4 2023 Sales by Geographical Zone
Q4 2023 SALES BY GEOGRAPHICAL ZONE EUROPE NORTH CHINA, NORTH LATIN REST OF COMPANY AMERICA ASIA & OCEANIA AMERICA THE WORLD Q4 net sales €2,313m €1,725m €822m €704m €1,092m €6,655m Like-for-like growth +6.0% +3.1% +7.4% +8.1% +3.5% +5.1% Volume/Mix +0.3% +2.8% +4.8% -1.3% -2.9% +0.8% Price +5.7% +0.
Slide 26: Q4 2023 Sales by Category
Q4 2023 SALES BY CATEGORY COMPANY Q4 net sales €3,462m €2,174m €1,019m €6,655m Like-for-like growth +4.5% +4.7% +8.5% +5.1% Volume/Mix +2.0% -1.3% +1.5% +0.8% Price +2.5% +6.1% +7.0% +4.3% 26
Slide 27: Q4 2023 Sales by Geographical Zone by Category
Q4 2023 SALES BY GEOGRAPHICAL ZONE BY CATEGORY EUROPE NORTH CHINA, NORTH AMEA, CIS & COMPANY AMERICA ASIA & OCEANIA LATIN AMERICA EDP Sales €1,081m €1,583m €89m €708m €3,462m LFL growth +5.6% +3.6% +13.1% +3.8% +4.5% SPECIALIZED NUTRITION Sales €795m €77m €652m €649m €2,174m LFL growth +4.6% -8.7% +
Slide 28: FY 2023 Sales by Geographical Zone
FY 2023 SALES BY GEOGRAPHICAL ZONE EUROPE NORTH CHINA, NORTH LATIN REST OF COMPANY AMERICA ASIA & OCEANIA AMERICA THE WORLD FY net sales €9,382m €6,889m €3,496m €2,794m €5,508m €27,619m Like-for-like growth +5.9% +5.8% +10.1% +9.8% +7.2% +7.0% Volume/Mix -3.3% +0.2% +8.6% -1.3% -1.8% -0.4% Price +9.
Slide 29: FY 2023 Sales by Category
FY 2023 SALES BY CATEGORY COMPANY FY net sales €14,322m €8,504m €4,793m €27,619m Like-for-like growth +6.6% +6.7% +9.1% +7.0% Volume/Mix -1.4% +0.6% +0.8% -0.4% Price +7.9% +6.1% +8.3% +7.4% 29
Slide 30: FY 2023 Sales by Geographical Zone by Category
FY 2023 SALES BY GEOGRAPHICAL ZONE BY CATEGORY EUROPE NORTH CHINA, NORTH AMEA, CIS & COMPANY AMERICA ASIA & OCEANIA LATIN AMERICA EDP Sales €4,300m €6,273m €360m €3,389m €14,322m LFL growth +5.8% +6.3% +15.3% +7.1% +6.6% SPECIALIZED NUTRITION Sales €3,079m €342m €2,445m €2,639m €8,504m LFL growth +3
Slide 31: Q4 and FY 2023 Sales by Geographical Zone
Q4 AND FY 2023 SALES BY GEOGRAPHICAL ZONE Q4 2023 CHINA, NORTH LATIN REST OF EUROPE NORTH AMERICA TOTAL ASIA & OCEANIA AMERICA THE WORLD Like-for-like sales growth +6.0% +3.1% +7.4% +8.1% +3.5% +5.1% Scope +0.1% +0.0% +0.0% -5.0% -23.7% -5.8% Currency and others1 +0.5% -5.1% -6.8% -24.4% -12.2% -6.7
Slide 32: Changes in Exchange Rates
CHANGES IN EXCHANGE RATES % total FY 2023 FY 23 vs FY 22 (avg) Q4 23 vs Q4 22 (avg) United States Dollar 23.1% -2.6% -4.8% Chinese Renminbi 10.0% -7.6% -6.3% Indonesian Rupiah 5.9% -5.0% -5.3% British Pound 5.3% -2.0% +0.2% Mexican Peso 5.3% +10.5% +6.6% Russian Ruble 3.1% -21.7% -21.7% Brazilian Re
Slide 33: Recurring Operating Margin
RECURRING OPERATING MARGIN FY 2022 FY 2023 Margin €m margin (%) €m margin (%) reported change Europe 1,084 12.2% 1,076 11.5% -75 bps North America 679 10.1% 699 10.1% +3 bps China, North Asia & Oceania 1,037 30.2% 1,052 30.1% -15 bps Latin America 55 1.9% 123 4.4% +247 bps Rest of the World 522 8.9%
Slide 34: Non-Recurring Items
NON-RECURRING NET INCOME € million FY 2022 FY 2023 Change 2023 vs 2022 Recurring net income 2,205 2,283 +78 Non-recurring net income (1,246) (1,401) (155) Operating income (1,234) (1,438) (204) NON-RECURRING ITEMS Total Financial expenses (20) (49) (29) Income tax 64 95 +31 Net income from associate
Slide 35: Balance Sheet
BALANCE SHEET € million ASSETS1 LIABILITIES 31/12/22 31/12/23 31/12/22 31/12/23 17 992 16 222 Shareholders’ equity Intangible assets 24 239 23 093 10 107 10 221 Net debt2 Other assets 9 076 8 822 3 932 3 787 Other liabilities Working capital 7 206 8 490 8 205 Working capital 6 519 40,521 38,434 40,5
Slide 36: Tax Rate Development
TAX RATE DEVELOPMENT € million 2022 2023 Total income tax (reported) (778) (768) Reported tax rate 42.4% 45.6% Non-current income tax(1) 64 95 Current income tax (841) (864) Underlying tax rate 27.3% 27.2% 36
Slide 37: Cash Flow Statement
CASH FLOW STATEMENT € million 2022 2023 Recurring operating income 3,377 3,481 Financial income (291) (308) Income tax on operating and financial income (841) (864) Non-current income net of tax (1,190) (1,392) Depreciation and amortization 1,863 1,611 Net change in provisions / Deferred taxes (201)
Slide 38: Cash Flow Statement
CASH FLOW STATEMENT € million 2022 2023 Cash flows provided by operating activities, excluding changes in net working capital 2,886 3,165 Change in working capital 77 277 Cash flows from operations 2,964 3,442 Capital expenditure (873) (847) Proceeds from the sale of industrial assets 30 15 Business
Slide 39: Cash Flow Statement
CASH FLOW STATEMENT € million 2022 2023 Cash flows used in investing activities and disposals (749) (834) Increase in capital and additional paid-in capital 51 69 Purchases of treasury stock (net of disposal) 0 0 Perpetual subordinated notes issued or repaid during the period (18) (768) Dividends pa
Slide 40: EBITDA Calculation
EBITDA CALCULATION € million 2022 2023 Operating income 2,143 2,042 Depreciation, amortization and impairment of property, plant and 1,863 1,611 equipment and intangible assets EBITDA 4,006 3,654 40
Slide 41: 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”, “guidanc