Slide 1: Q1 2016 Sales
Q1 2016 SALES April 19, 2016 Cécile CABANIS, CFO 1
Slide 2: Disclaimer
DISCLAIMER This document contains certain forward-looking statements concerning Danone. Although Danone believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, which could cause actual results to differ material
Slide 3: Q1 2016 Key Messages
Q1 2016 KEY MESSAGES Growth in line Progress on Challenging with expectations key priorities context Re-acceleration Return to profitable growth +3.5%(1) Mizone transition Another step towards sustainable growth Continue to re-balance Danone’s model of growth 3 (1) Like-for-like sales growth
Slide 4: Q1 2016 Like-for-Like Sales Growth at +3.5%
Q1 2016 LIKE-FOR-LIKE SALES GROWTH AT +3.5% Reported (3.0)% Like-for-like +3.5% (7.2)% +2.7% €5,471 mln +0.8% €5,306 mln +0.7% Q1 2015 Currency Scope & others Volume Value Q1 2016 ● Organic sales growth in line with company guidance ● Reported sales impacted by currencies 4
Slide 5: Q1 2016 Geographical Dynamics
Q1 2016 GEOGRAPHICAL DYNAMICS(1) NORAM ALMA EUROPE CIS USA+Canada+CIS AsiapacLatamMiddleEastAfrica +0.0% +5.1% +6.3% ● Unchanged underlying trend ● Confirmed successful ● Broad-based growth re-acceleration in the USA ● Sequential improvement in ● Resilient CIS platform in a ● Continued Mizone transi
Slide 6: Q1 2016 Divisional Dynamics
Q1 2016 DIVISIONAL DYNAMICS(1) +2.3% +3.9% +4.8% +6.6% 1.4% 1.4% 6.4% 3.5% 4.4% 5.2% 1.3% (2.1)% (2.5)% ● Continued progress in ● Strong growth ● Well-balanced ● Solid growth in all line with 2020 agenda excluding China growth between regions volume & mix ● Mizone transition on ● Progress towards tr
Slide 7: Fresh Dairy Products
FRESH DAIRY PRODUCTS 7
Slide 8: USA: Confirmed Successful Re-acceleration
USA: CONFIRMED SUCCESSFUL RE-ACCELERATION Strong recovery Q1 16 sales growth(1) Clear roadmap to fuel growth Mid-single digit ● Increase investments ● Winning the stores Strengthened leadership ● Accelerate innovations Average value market shares 40% Danone(1) 30% Competitor 1 20% Competitor 2 10% 2
Slide 9: Europe: Controlled Return to Profitable Growth
EUROPE: CONTROLLED RETURN TO PROFITABLE GROWTH 2014 2015 2016 PLAN FOR SAVINGS CONTINUOUS COST OPTIMIZATION & ADAPTATION STRUCTURAL PORTFOLIO OPTIMIZATION MILK MID-TERM / LONG-TERM STRATEGY BRAND REFOCUS RELAUNCH PLAN New recipe - New packaging - New emotional space PRIORITIZE VALUE- H1 16 H2 16 ADD
Slide 10: Waters
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Slide 11: Strong Growth Excluding China, Mizone Transition on Track
STRONG GROWTH EXCLUDING CHINA, MIZONE TRANSITION ON TRACK Leverage our platforms worldwide China: transition in line with agenda ● Plain bottled water > +9%(1) ● Nurture brand equity ● Leverage innovations ● Adjust distributor inventories ● Aquadrinks w/o China > +10 %(1) ● Adapt the cost base 11 (1
Slide 12: Early Life Nutrition
EARLY LIFE NUTRITION XXX 12
Slide 13: China: Towards a More Sustainable Model of Growth
CHINA: TOWARDS A MORE SUSTAINABLE MODEL OF GROWTH Solid underlying market trends Strong brand equities Mom & Baby specialized stores ≈ 50% of IMF market E-Commerce ≈ 30% of IMF market Modern Trade ≈ 20% of IMF market ● Leverage the international brands ● Continue to convert indirect to direct sales
Slide 14: Medical Nutrition
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Slide 15: Strong Dynamics in All Regions & Categories
STRONG DYNAMICS IN ALL REGIONS & CATEGORIES Innovations as fuel for sustainable Strong balanced growth… growth ● … across geographies Europe & CIS/Noram ALMA Establish advanced nutrition ● … across categories as an integral part of healthcare Pediatrics Adult 15
Slide 16: 2016 Guidance: Anchoring a Profitable & Sustainable Model
2016 GUIDANCE: ANCHORING A PROFITABLE & SUSTAINABLE MODEL (1) Trading operating Sales margin (1) Within a range Solid of +3% to +5% improvement (1) Like-for-like growth 16
Slide 17: 2016: The Transformation Continues Towards Our 2020 Ambition
2016: THE TRANSFORMATION CONTINUES TOWARDS OUR 2020 AMBITION 2015 2016 … Sales Within a 3-5% 7-10% range of > +5% growth(1) +3% to +5% 7-10% 6-8% > + 200bps(2) Trading operating Solid margin growth(1) improvement Yearly growth of: ● Trading operating margin ● Cash ● Recurring EPS (1) Like-for-like 1
Slide 18: Appendix
APPENDIX 18
Slide 19: Q1 2016 Impact of Currencies & Scope
Q1 2016 IMPACT OF CURRENCIES & SCOPE Fresh Dairy Early Life Medical Waters Total Products Nutrition Nutrition Reported sales growth (4.7)% (4.2)% +0.5% +1.2% (3.0)% Currency (8.5)% (7.9)% (4.5)% (3.8)% (7.2)% Scope of consolidation +1.5% (0.2)% +0.2% (1.6)% +0.7% Like-for-like sales growth +2.3% +3.
Slide 20: Changes in Exchange Rates: 28.2% of Sales Denominated in €
CHANGES IN EXCHANGE RATES 28.2% OF SALES DENOMINATED IN € Q1 16 vs Q1 15 % total Q1 16 sales (avg) US dollar 12.9% (0.2)% Indonesian rupiah 6.3% (3.8)% Russian ruble 6.1% (9.0)% British pound 5.7% (5.4)% Chinese yuan 5.4% (3.9)% Mexican peso 4.8% (14.4)% Argentine peso 4.5% (40.6)% Brazilian real 3.
Slide 21: Financial Indicators Not Defined in IFRS
FINANCIAL INDICATORS NOT DEFINED IN IFRS Like-for-like changes in Sales, Trading operating income, Trading operating margin, Recurring net income and recurring EPS reflect Danone's organic performance and essentially exclude the impact of: changes in consolidation scope with indicators related to