Danone Sa · EURONEXT:BN
Danone Sa — Q3 2007 Earnings Presentation
36 slides from Danone Sa's earnings presentation, October 2007
Slide 1: \ a DECI TS
\ a DECI TS
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements that reflect Danone's current views and estimates. These statements are based on many factors and assumptions. Changes in such factors or assumptions could produce significantly different results. 2
Slide 3: Update on Recent Strategic Moves
Update on Recent Strategic Moves Disposal of Biscuits activities is on-track: • EU approval expected for end of October • Closing date expected for year-end Offer for Numico is on-track: • EU approval still expected for end of October • Settlement date expected in November 3
Slide 4: Accounting treatment of the biscuits disposal
As the disposal of the biscuits activities will most probably take place at 2007 year-end, the activity will remain consolidated in the Groupe Danone accounts until the closing of the transaction. Specifically: – Under IFRS, the sold activities will be accounted for as « discontinued operations » as
Slide 5: Q3 2007 Highlights
Q3 2007 HIGHLIGHTS Continued excellent double-digit growth in Fresh Dairy for third consecutive quarter Bledina double-digit growth: growing the BBF category through innovation and export Beverages: double-digit growth in Latam; market share gains in key European markets impacted by poor weather
Slide 6: Fresh Dairy Products
FRESH DAIRY PRODUCTS FRESH DAIRY PRODUCTS 12% 11.2% 11.9% 9.5% 9.2% 9.6% 8.5% Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Excellent growth in all major geographies Across-the-board price increases improving value component of growth with little volume impact Top line growth continues
Slide 7: Q3 Launches Update
Q3 LAUNCHES UPDATE Essensis Frambuesa Canary Islands Les Petits Grands DanActive Saumon Canada France Tikvesli Kefir Danette Duo Turkey Danette Finland 7 Finland & Sweden
Slide 8: Beverages
BEVERAGES BEVERAGES 21.7% 14.9% 11.8% 12.4% 9.1% 0.9% -11.7% Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Without Wahaha +6.8% +5.8% +8.2% +10.5% +9.7% +9% -3.3% Sustained momentum in Latam with growth exceeding +20% Japan and greater export showing strong growth Poor weather in Europe
Slide 9: Q3 Launches Update
Q3 LAUNCHES UPDATE Volvic Quinze Ser Sport Evian Palace Rafraîchissement 9 Argentina Canada, USA France
Slide 10: Biscuits & Cereal Products
BISCUITS & CEREAL PRODUCTS BISCUITS & CEREAL PRODUCTS 6.3% 6.6% 4.4% 3.8% 4.3% 3.5% 0.3% Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Another excellent quarter Western Europe growing mid-single digits with continued superior growth in Spain Eastern Europe back to growth, with all count
Slide 11: Q3 Launches Update
Q3 LAUNCHES UPDATE Soda Sesame China DMP Chocolate Fanipala Strawberry Asia Finland 11
Slide 12: Sales by geographical area
Sales by geographical area EUROPE 8% 7.7% 6.2% 4.7% 5.3% 4.3% 3.2% ASIA Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 30.4% 17.9% 20.1% 17.7% 8.4% -5.6% -9.7% Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Without Wahaha +13.5% +7.3% +7.3% +7.9% +8.9% +9.2% +14.5% REST OF WORLD 16
Slide 13: Excluding Wahaha Q3 top-line growth in line with prior year
Excluding Wahaha Q3 top-line growth in-line with prior year performance Like-for-like sales growth 11.5% 9.5% 10.1% 9% 8.9% +8.0% 7.3% +6.0% 3.9% Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Without Wahaha +7.8% +7.1% +7.5% +8.8% +10.3% +9.9% +7.5% For purposes of this presentation, all f
Slide 14: Group Q3 2007 Net Sales Growth
Group Q3 2007 Net Sales Growth +3.9% Like-for-like + HOD MEXICO (01/07) + Danone Japan (04/07) + Danone Chili (09/07) -Papadopoulos (08/07) +3.2% + 3.7% 3,688 M€ SCOPE OF CONSO +0.7% VOLUME -1.8% +1.6% VALUE 3,555 M€ CURRENCY Q3 2006 Q3 2007 14
Slide 15: Impact of currency and scope
Impact of currency and scope H1 2007 Q3 2007 9M 2007 Reported Net Sales +4.7% +3.7% +4.4% Currency -2.2% -1.8% -2% Scope of consolidation-1.7% +1.6% -0.6% Like-for-like Net +8.6% +3.9% +7% Sales 15
Slide 16: Sales 9M 2007
SALES 9M 2007 16
Slide 17: 9M 2007: solid growth despite exceptional circumstances
9M 2007: solid growth despite exceptional circumstances Sales growth (like-for-like) within our guidance (+7%), despite Wahaha and beverages in Europe Fresh Dairy division: steady double-digit growth Underlying beverages business very healthy with market share improvements in key geographies Bi
Slide 18: Analysis of 9M 2007 Net Sales Growth
Analysis of 9M 2007 Net Sales Growth +7% Like-for-like + Djurdjura (07/06) VOLUME + HOD Mexico (01/07) + Danone Japan (04/07) +2.4% + Danone Chili (09/07) - Papadopoulos (08/07) - DWOC (08/06) +4.4% - Griffins (06/06) - Britannia (07/06) VALUE +4.6% -2% 11,241 M€ CURRENCY -0.6% 10,772 M€ SCOPE OF CO
Slide 19: Raw Materials and Pricing Update
Raw Materials and Pricing Update Milk is the main input affected by recent cost increases. • Impact of approx. 300mlnE vs. 2006 expected in 2007 • Entire amount to be offset by pricing, productivities and operating leverage. • Price increases taken throughout the year in all major geographies 19
Slide 20: 2007 Outlook
2007 OUTLOOK Full-year 2007 objectives are confirmed: • Like-for-like growth between +6% and +8% • Trading operating margin progression of at least +20bp on a like-for-like basis. 20
Slide 21: IFRS Accounts (Biscuits as Discontinued Operations)
IFRS ACCOUNTS (BISCUITS AS DISCONTINUED OPERATIONS) 21
Slide 22: Analysis of 9M 2007 Net Sales Growth (IFRS)
Analysis of 9M 2007 Net Sales Growth (IFRS) +7.2% Like-for-like + Djurdjura (07/06) + HOD Mexico (01/07) VOLUME + Danone Japan (04/07) +2.6% + Danone Chili (09/07) - DWOC (08/06) +4.4% - Griffins (06/06) VALUE 9,672 M€ +4.6% -2.3% CURRENCY -0.5% 9,263 M€ SCOPE OF CONSO 22 9M 2006 9M 2007
Slide 23: Impact of currency and scope (IFRS)
Impact of currency and scope (IFRS) H1 2007 Q3 2007 9M 2007 Reported Net Sales +4.8% +3.6% +4.4% Currency -2.6% -1.9% -2.3% Scope of consolidation-1.8% +2.1% -0.5% Like-for-like Net +9.2% +3.4% +7.2% Sales 23
Slide 24: 9M 2007 like-for-like sales growth, volume/value (IFRS)
9M 2007 like-for-like sales growth Breakdown volume/value (IFRS) Like-for-like Volume Value Total Fresh Dairy Products +8% +3.7% +11.7% Beverages -1.8% +0.7% -1.1% Europe +4.2% +2.6% +6.8% Asia -2% -2.3% -4.3% Rest of World +10.5% +6.1% +16.6% GROUP +4.6% +2.6% +7.2% 24
Slide 25: 9M 2007 Net Sales by business & geographical area (IFRS)
9M 2007 Net Sales by business & geographical area (IFRS) Like-for- like € million 9M 2006 9M 2007 growth Fresh Dairy Products 5,957 6,572 +11.7% Beverages 3,112 3,100 -1.1% Britannia, Griffins… 193 0 N/A Europe 5,178 5,575 +6.8% Asia 1,792 1,537 -4.3% Rest of World 2,293 2,560 +16.6% GROUP 9,263 9,6
Slide 26: Analysis of Q3 2007 Net Sales Growth (IFRS)
Analysis of Q3 2007 Net Sales Growth (IFRS) +3.4% Like-for-like + HOD MEXICO (01/07) + Danone Japan (04/07) + Danone Chili (09/07) +3.3% + 3.6% SCOPE OF VOLUME CONSO 3,164 M€ +0.1% VALUE +2.1% -1.9% 3,055 M€ CURRENCY Q3 2006 Q3 2007 26
Slide 27: Q3 2007 like-for-like sales growth, volume/value (IFRS)
Q3 2007 like-for-like sales growth Breakdown volume/value (IFRS) Like-for-like Volume Value Total Fresh Dairy Products +6.7% +5.2% +11.9% Beverages -11.7% 0.0% -11.7% Europe -0.1% +3% +2.9% Asia -8.3% -4% -12.3% Rest of World +7.1% +9.5% +16.6% GROUP +0.1% +3.3% +3.4% 27
Slide 28: Back-ups
Back-ups 28
Slide 29: Top line growth by business line & geographical area (IFRS)
Top line growth by business line & geographical area (IFRS) Like-for-like H1 2007 Q3 2007 9M 2007 Fresh Dairy Products +11.6% +11.9% +11.7% Beverages +4.7% -11.7% -1.1% Europe +8.9% +2.9% +6.8% Asia +0.0% -12.3% -4.3% Rest of World +16.5% +16.6% +16.6% GROUP +9.2% +3.4% +7.2% 29
Slide 30: Major changes in exchange rates
Major changes in exchange rates 47% of sales denominated in € % total Q2 ‘07 vs Q3 ’07 vs Q3 07sales Q2 ‘06 (avg) (avg Q3 ‘06 (avg) (avg Chinese Yuan 9% - 2% - 3% US Dollar 7% - 6% - 8% Mexican Peso 6% - 2% - 8% Argentinian Peso 3% - 6% - 9% Russian Rouble 4% - 1% - 3% Polish Zloty 3% + 4% + 4% Ster
Slide 31: Q3 2007 Net Sales by business & geographical area
Q3 2007 Net Sales by business & geographical area Reported Like-for- like € million Q3 2006 Q3 2007 growth Fresh Dairy Products 1,990 2,203 +11.9% Beverages 1,067 961 -11.7% Biscuits & Cereal Products 498 524 +6.6% Europe 2,182 2,266 +3.2% Asia 609 557 -9.7% Rest of World 762 865 +17.1% GROUP 3,555
Slide 32: Q3 2007 like-for-like sales growth, volume/value
Q3 2007 like-for-like sales growth Breakdown volume/value Like-for-like Volume Value Total Fresh Dairy Products +6.8% +5.1% +11.9% Beverages -11.7% 0% -11.7% Biscuits & Cereal Products +4.2% +2.4% +6.6% Europe +0.4% +2.8% +3.2% Asia -6.5% -3.2% -9.7% Rest of World +7.5% +9.6% +17.1% GROUP +0.7% +3.2
Slide 33: 9M 2007 like-for-like sales growth, volume/value
9M 2007 like-for-like sales growth Breakdown volume/value Like-for-like Volume Value Total Fresh Dairy Products +8% +3.7% +11.7% Beverages -1.8% +0.7% -1.1% Biscuits & Cereal Products +4.3% +1.4% +5.7% Europe +3.9% +2.4% +6.3% Asia -0.9% -1.8% -2.7% Rest of World +10.9% +6.1% +17% GROUP +4.6% +2.4%
Slide 34: Q3 & 9M Top line growth
Q3 & 9M Top line growth Like-for-like H1 2007 Q3 2007 9M 2007 Fresh Dairy Products +11.6% +11.9% +11.7% Beverages +4.7% -11.7% -1.1% +5.3% Biscuits & Cereal Products +6.6% +5.7% Europe +7.8% +3.2% +6.3% Asia +1.1% -9.7% -2.7% Rest of World +16.9% +17.1% +17% GROUP +8.6% +3.9% +7% 34
Slide 35: 9M 2007 Net Sales by business & geographical area
9M 2007 Net Sales by business & geographical area Like-for- € million 9M 2006 9M 2007 like growth Fresh Dairy Products 5,957 6,572 +11.7% Beverages 3,112 3,100 -1.1% Biscuits & Cereal Products 1,703 1,569 +5.7% Europe 6,504 6,937 +6.3% Asia 1,965 1724 -2.7% Rest of World 2,303 2580 +17% GROUP 10,772
Slide 36: Share buy-back program
Share buy-back program 2007 Share buy-back Number of Shares 8,618,954 in % of outstanding capital at 30/09/07 1.68% Investment € 507.90 M Treasury Stock as of 09/30/2007 • 38,048,592 shares • 7.42% of the outstanding capital* *Outstanding capital as of 30/09/2007: 512,851,460 36