Danone Sa · EURONEXT:BN
Danone Sa — Deutsche Bank Conference 2019
21 slides from Danone Sa's conference presentation, Jun 13, 2019
Slide 1: On track and accelerating towards 2020 objectives and 2030 goals
On track and accelerating towards 2020 objectives and 2030 goals June 13, 2019 Cécile Cabanis CFO I 1 I
Slide 2: 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
Slide 3: Balanced Confidence: Driving portfolio transformation
Balanced Confidence Driving portfolio value creation towards 2020 transformation delivery acceleration I 3 I
Slide 4: Our long-term strategic roadmap
Our long-term strategic roadmap Leading the way to create and share sustainable value I 4 I
Slide 5: 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 fit to address the Food Revolution 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 local brands all markets B corpTM certification innovation
Slide 6: Driving transformation through accelerated innovation
Driving transformation through accelerated innovation Targeted innovation at speed and scale to enhance value MORE INNOVATIONS ~1/4 of net sales in 2018(1) +50% vs 2016 FASTER TIME TO MARKET 40% faster on recent innovations DRIVING VALUE +50% higher net sales/liter in Waters(2) +25% higher net sales
Slide 7: Building purpose-led lifestyle brands
Building purpose-led lifestyle brands A new world of purpose-driven consumers FASTER GROWTH gender equality transparency Purpose-led Manifesto brands growing 3X more ~2 out of 3 • Gender equality than average people choose, A POWERFUL JOURNEY switch, avoid Activated brands to date a brand based 25%
Slide 8: Transforming consumer reach and engagement
Transforming consumer reach and engagement Optimized brand models for digital era DIGITAL MEDIA SPENDING > 40 of total media % in 2020 vs. 30% today MASS OF NICHES PROVEN IMPACT ON TARGETING AT SCALE EFFICIENCY & EFFECTIVENESS DATA DRIVEN -30% cost per contact Superior sales uplift I 8 I
Slide 9: Transforming portfolio offerings to target fast-growing channels
Transforming portfolio offerings to target fast-growing channels as consumers increasingly seek immediacy Convenience Discounters E-commerce Adapting offerings growing 3x faster than hypermarkets Upscaling sales capabilities Source: Planet retail 2016 I 9 I
Slide 10: Taking the plant-based opportunity to the max
Taking the plant-based opportunity to the max Triple our plant-based business by 2025 MORE INGREDIENTS MORE CATEGORIES CHIA RICE SESAME PEA Performance Yogurts Ice cream Desserts nutrition CASHEW OAT COCONUT ALMOND SOY Coffee Ready-to- Cream Cheese Creamers Drink Coffee MORE COUNTRIES MORE BRANDS Ac
Slide 11: Disciplined capital allocation to support portfolio transformation
Disciplined capital allocation to support portfolio transformation Research Sustained capex & Innovation exploring the next Investing for organic frontiers growth and efficiencies > € 300 m / year ~4-5% of sales Start up portfolio Portfolio management investing in future growth businesses exiting no
Slide 12: Balanced Confidence: Driving portfolio transformation
Balanced Confidence Driving portfolio value creation towards 2020 transformation delivery acceleration I 12 I
Slide 13: Step changes in our operating model since 2014
We went through step changes in our operating model since 2014 Balanced value creation model, outperforming industry average Agile organization Like-for-like Recurring operating ▪ Growth and Innovation redesigned sales growth margin ▪ Mutualized business services ▪ Global procurement ▪ Rightsizing a
Slide 14: Accelerated cash conversion
Accelerated cash conversion Doubled free cash flow over 4 years 10% 9.1% 2,500 8.4% 8.0% 2,000 6.6% 6.0% 1,500 5% 1,000 500 Free cash flow Free cash flow/ in € million Net Sales (%) 2014 2015 2016 2017 2018 I 14 I
Slide 15: Committed to long term return to shareholders
Committed to long term return to shareholders Delivering consistent dividend increase €1.94 €1.90 €1.70 €1.60 €1.50 €1.45 €1.45 €1.39 €1.30 €1.20 €1.20 €1.10 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 I 15 I
Slide 16: Balanced Confidence: Driving portfolio transformation
Balanced Confidence Driving portfolio value creation towards 2020 transformation delivery acceleration I 16 I
Slide 17: 2020 objectives reaffirmed
2020 objectives reaffirmed Driving superior sustainable profitable growth Like-for-like sales growth Recurring operating margin 4 to 5% > 16% by 2020 by 2020 Net debt / EBITDA ROIC < 3.0X ~12% by 2020 by 2022 I 17 I
Slide 18: Sales growth acceleration towards 2020
Sales growth acceleration towards 2020 FY 2020 Multiple profitable growth engines 4-5% FY 2019 Like-for-like sales growth ~3% Like-for-like sales growth Q1 2019 0.8% ▪ Portfolio issues tackled: Europe stabilized, Brazil regaining momentum, Morocco back to growth from Q2 Like-for-like sales growth ▪
Slide 19: Maximizing efficiencies
Maximizing efficiencies Targeting recurring operating margin > 16% by 2020 2020 2019 > 16% Recurring operating margin 2018 > 15% Recurring operating margin 14.5% Recurring operating margin Cost savings Active portfolio Profitable growth and efficiencies management ▪ Value-added innovations ▪ Protein
Slide 20: Improving return on capital
Improving return on capital Targeting ~12% ROIC by 2022 ~12% Improve all operating levers to increase NOPAT ▪ Accelerate growth 9% ▪ Maximize efficiencies ▪ Favorable tax rate trend Disciplined capital allocation ▪ Focus on capital management ▪ Disciplined portfolio organic business development ▪ Wo
Slide 21: Danone on the move
Danone on the move On track and accelerating towards 2020 objectives and 2030 goals 4-5% Like-for-like sales growth Like-for-like Like-for-like 2.9% sales growth ~3% sales growth Recurring > 16% operating margin 14.5% Recurring > 15% Recurring < 3x operating margin operating margin Net debt/Ebitda ~