Danone Sa · EURONEXT:BN
Danone Sa — JP Morgan SRI Conference 2018
45 slides from Danone Sa's conference presentation, Mar 14, 2018
Slide 1: JP Morgan SRI Conference
JP MORGAN SRI CONFERENCE March 14th, 2018 I 1 I
Slide 2: Forward-looking statements
• 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,” “believe,” “forecast,” “foresee,” “likely,” “may,” “
Slide 3: Our unique business model
Our unique Our process Our business to societal achievements model accountability I 3 I
Slide 4: Our unique business model
Our unique Our process Our business to societal achievements model accountability I 4 I
Slide 5: Our ambition
Our ambition Healthier Responsible Sustainable eating and drinking business stewardship value I 5 I
Slide 6: Healthier eating and drinking
Healthier eating and drinking 54% 28% 18% Essential Dairy and Plant-Based Specialized Nutrition Waters Based on 2017 sales figures including 12 months of WhiteWave I 6 I
Slide 7: Responsible business stewardship
Responsible business stewardship … A Common Goal 2,100 companies around the world, across all sectors, unified by one common goal: USING BUSINESS AS A FORCE FOR GOOD … A Trustmark B Corps meet the highest standards of overall social and environmental performance, transparency and accountability … A
Slide 8: Entities certified to date
Responsible business stewardship 6 entities certified to date DanoneWave on track to get certified in 2018 €2bn syndicated credit loan with now Aguas Argentina environmental and social criteria impacting payable margin I 8 I
Slide 9: Responsible business stewardship
Responsible business stewardship • Climate • Water • Forest I 9 I
Slide 10: Sustainable value
Sustainable value 2020 journey 2020 financial objectives Recurring operating LFL sales growth margin 4 to 5% 2014 2017 2020 > 16% Efficiency Consistent Growth EPS Growth Net debt / EBITDA ROIC Strategic priorities 1. Accelerate growth < 3.0x ~ 12% 2. Maximize efficiencies 3. Allocate capital with di
Slide 11: A unique business model…
A unique business model… I 11 I
Slide 12: Embedded in our vision
Embedded in our vision 1972 2006 2014 Antoine Riboud Franck Riboud Emmanuel Faber 1973-1996 1996-2014 2014-... FOUNDATION OF THE DUAL PROJECT HEALTH MISSION MANIFESTO & DANONE 2020 “The frontiers of the company Bringing health through food “As CEO, I pledge to pursue Danone’s do not stop at the fact
Slide 13: Embedded in our history
Embedded in our history 1996 2017 European food conglomerate Global health-focused portfolio 3% Baby Food 7% Glass Packaging 18% Waters 10% Waters 26% Fresh Dairy Products 54% Essential Dairy 8% Beers & Plant Based 3% Pasta 5% Sauces 28% Specialized Nutrition 20% Biscuits 9% Italian Cheeses Prepared
Slide 14: Embedded in our governance
Embedded in our governance Changes submitted for vote at next AGM on April, 26th 2018 Emmanuel FABER i Michel LANDEL i Guido BARILLA Cécile CABANIS 16 members 64% Chairman & CEO Lead independent director independent(1) Franck RIBOUD Honorary Chairman Frédéric BOUTTEBA Gregg ENGLES i Clara GAYMARD 43
Slide 15: Embedded in our incentives
Embedded in our incentives • Mix of economic, social and managerial KPIs for annual variable compensation • Economic (60%) – measured against guidance targets communicated to market Short-term • Social and societal (20%) – based on Danone’s targets (development of human resources and organizations,
Slide 16: Our unique business model
Our unique Our process Our business to societal achievements model accountability I 16 I
Slide 17: Progressing against 2020 objectives, in a responsible way
Progressing against 2020 objectives, in a responsible way +14.2% 88% -10.5% OF VOLUME SOLD ARE SUITABLE FOR DAILY REDUCTION OF CARBON 2017 RECURRING EPS (1) CONSUMPTION (2) INTENSITY FULL SCOPE (3) (1) At constant exchange rate (2) This percentage refers to water, yogurt and other daily dairy produc
Slide 18: Our unique business model
Our unique business model ECONOMIC HEALTH • 2020 objectives • Healthier products • Accelerate growth • Healthier lifestyles • Maximize efficiencies • Responsible company practices • Allocate capital with discipline • Community relevant products NATURE SOCIAL • Climate • Social Dialogue • Water • Hea
Slide 19: Our unique business model
Our unique business model ECONOMIC HEALTH • 2020 objectives • Healthier products • Accelerate growth • Healthier lifestyles • Maximize efficiencies • Responsible company practices • Allocate capital with discipline • Community relevant products NATURE SOCIAL • Climate • Social Dialogue • Water • Hea
Slide 20: Progressing against strategic priorities, delivering results consistently
Progressing against strategic priorities, delivering results consistently 2014 2015 2016 2017 2018 2019 2020 2017 achievements 2018 guidance 2020 objectives LFL sales growth(1) 2.5% Double-digit recurring EPS growth LFL sales growth 4% to 5% Recurring operating margin 14.4% at constant exchange rate
Slide 21: Our unique business model
Our unique business model ECONOMIC HEALTH • 2020 objectives • Healthier products • Accelerate growth • Healthier lifestyles • Maximize efficiencies • Responsible company practices • Allocate capital with discipline • Community relevant products NATURE SOCIAL • Climate • Social Dialogue • Water • Hea
Slide 22: Continuously improving nutritional quality of products
Continuously Healthier Building our Leveraging Voluntary Marketing improving the alternatives expertise partnerships commitment even more nutritional that maintain in local to address to extensive responsibly, quality consumer nutrition local health Nutritional especially of our preference and publi
Slide 23: Healthy product categories data
The data provided on this page does not include WhiteWave entities. (1) In operational terms, “Healthy product categories” for Danone include: water, yogurt and other dairy products, baby milks & foods, milks and milk powders, beverages with 0% sugar, medical nutrition. (2) Nutrition and Health Scor
Slide 24: Our unique business model
Our unique business model ECONOMIC HEALTH • 2020 objectives • Healthier products • Accelerate growth • Healthier lifestyles • Maximize efficiencies • Responsible company practices • Allocate capital with discipline • Community relevant products NATURE SOCIAL • Climate • Social Dialogue • Water • Hea
Slide 25: Climate, water, circular economy and agriculture
Climate change is a systemic challenge Water is a precious and often scarce To create the circular economy for As a food company, agriculture is at that has a significant impact on the resource that must be used in harmony food, Danone is working to address the heart of Danone’s business. Today’s na
Slide 26: Environmental performance data
The data provided on this page does not include WhiteWave entities and are based on constant scope of consolidation and constant methodology in comparison with 2016. (1) rPET : recycled PET.(2) Production Sites Environment Scope.(3) 96% of Danimals is Non-GMO project certified(4) 79% of Dannon volum
Slide 27: Our unique business model
Our unique business model ECONOMIC HEALTH • 2020 objectives • Healthier products • Accelerate growth • Healthier lifestyles • Maximize efficiencies • Responsible company practices • Allocate capital with discipline • Community relevant products NATURE SOCIAL • Climate • Social Dialogue • Water • Hea
Slide 28: What we are doing, how we are doing
WHAT WE ARE DOING Dialogue with our employees is Our Work In Safe Environment (WISE) We fuel growth by attracting outside We firmly believe that we will make essential—a key driver for economic program takes a comprehensive talent—and with it, new passion, more of an impact on the issues we and soci
Slide 29: Danone supports four financial funds
Danone supports four financial funds: • Danone Communities, • The Danone Ecosystem fund • The Livelihoods Carbon Fund • The Livelihoods Fund for Family Farming These funds anchor the inclusion of sustainable development challenges in Danone’s strategy, thereby giving even more meaning to the company
Slide 30: Danone Communities: 10 businesses, 12 countries
10 BUSINESSES 12 COUNTRIES (Bangladesh, Cambodia, China, France, Haiti, India, Kenya, Madagascar, Mexico, Uganda, Rwanda, Senegal) SOCIAL 1 Million Beneficiaries in TOTAL. The indicator refers to the total number MEASURING of beneficiaries of the social businesses supported THE COMMITMENT SICAV by D
Slide 31: Danone Ecosystem Fund impact
SOCIAL IMPACT ECONOMIC IMPACT ENVIRONMENT IMPACT 8 42 active projects in 2017 120 7 7% 100 6 € 104M 6% 80 5 4,300 jobs created € 81M 4 60 55,437 people professionally empowered 40 3 2 4.2m indirect beneficiaries 20 1 0 0 33,745 women professionally empowered 2016 2017 2016 2017 Sales generated by Da
Slide 32: Livelihoods funds
THE LIVELIHOODS FUND THE LIVELIHOODS CARBON FUND FOR FAMILY FARMING 9 active projects: 5 active projects: • 3 ecosystem restoration projects • Cocoa in Ivory Coast • Watershed protection in Mexico and Brazil • 3 agroforestry projects • Coconut in Philippines • 3 rural energy projects • Vanilla in Ma
Slide 33: Our unique business model
Our unique Our process Our business to societal achievements model accountability I 33 I
Slide 34: Danone Way
Danone Way Danone Way Danone Way Danone Way is the engine of our has driven continuous now ubiquitous throughout sustainable development progress business • Implemented in 2001 to instill the • Annual, tailored programs for • Coverage rate is equal to 83.9 % dual project & sustainability subsidiarie
Slide 35: Danone Way: Health and Nature
Danone Way HEALTH NATURE of subsidiaries systematically consider three points in recommendations for new product launches: appropriate of subsidiaries have a concrete plan to deliver the carbon 74% 60% nutritional composition vs needs of target consumers; annual reduction target on each item of thei
Slide 36: Appendix 1: Deep dive into key sustainability achievements
Appendix 1: Deep dive into key sustainability 5) achievements @ DANONE ove puaner. ove Hearn
Slide 37: What we are doing, how we are doing
WHAT WE ARE DOING Offering our consumers ever healthier and Through education programs, we are Maintaining and building trust by Our Nutriplanet research programme helps us more affordable products, at every age of life promoting healthier drinking and eating habits communicating responsibly with ou
Slide 38: 2017 Performance Targets
2017 Performance Targets WE WILL FIGHT CLIMATE CHANGE BY REDUCING OUR FOOTPRINT AND HELPING NATURE SEQUESTER MORE CARBON Reduction in CO2 footprint 50% intensity reduction Full scope 2015-2030 10,5 % Intensity reduction Danone Full scope VS 2015 Intensity (g CO2equivalent/Kg product) Zero net Carbon
Slide 39: 2017 Performance Targets
2017 Performance Targets WE WILL CO-BUILD THE CIRCULAR ECONOMY OF PACKAGING BY SOURCING SUSTAINABLE MATERIALS AND CREATING A SECOND LIFE FOR ALL PLASTICS 25% rPET in Water Division where it is allowed By 2020 Develop the use of sustainable resources 14% rPET in Water division excluding Turkey & Chin
Slide 40: Appendix 2: Some inspiring sustainability examples
Appendix 2: Some inspiring sustainability examples 3 ry DANONE ONE PLANET. ONE HEALTH
Slide 41: Stand by Mums in Romania
With only one-third as many doctors per inhabitant as the average EU member nation, Romania is classified as a high-risk country by the World Health Organization (WHO). The rate of cesarean "STAND BY MUMS" WHY IT delivery is 36.9% higher than the EU average, and IN ROMANIA it’s hard for women to get
Slide 42: Becoming the first carbon-neutral and circular brand of Danone
Becoming the first carbon-neutral and circular brand of Danone By 2020: €280 million investment to expand carbon neutrality internationally • New production line in France certified as carbon neutral by Carbon Trust in 2017 Waste to be used Part of investment Plant converts by local farmers New line
Slide 43: Eyes Wide Open
In Mexico, 1.5 million blind or visually impaired people are the main breadwinners for their families, working a variety of jobs and earning less than 70 Mexican pesos (USD 4.50) a day. Around EYES WIDE OPEN WHY IT 300 are members of a Mexican non-profit association called ASOCIVE. The “Eyes Wide Op
Slide 44: Orisa organic rice helps protect water quality
Protecting its infiltration area is essential for Aqua to secure high-quality water for years to come, and demonstrate its commitment to preserving WHY IT water sources. The farming community is a key ORISA ORGANIC RICE HELPS MATTERS? partner in this initiative, and Aqua has invited PROTECT WATER QU
Slide 45: Investor relations and sustainability contacts
NADIA BEN-SALEM DANONE – VICE-PRESIDENT INVESTOR RELATIONS NADIA.BENSALEM-NICOLAS@DANONE.COM MARIE DE MUIZON SUSTAINABILITY INTEGRATION DIRECTOR MARIE.DE-MUIZON@DANONE.COM JESSICA JUGGANADUM SUSTAINABILITY REPORTING MANAGER JESSICA.JUGGANADUM@DANONE.COM