Danone Sa · EURONEXT:BN
Danone Sa — Deutsche Bank Global Consumer Conference 2012
31 slides from Danone Sa's conference presentation, Jun 20, 2012
Slide 1: Deutsche Bank Global Consumer Conference
Emmanuel Faber Deutsche Bank Global Consumer Conference Paris - June 20th, 2012
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: Unique Mission, Unique Portfolio
Unique Mission, Unique Portfolio FRESH DAIRY PRODUCTS WATERS Hydratation and Developing a well being elimination category worldwide Bring health through food to the largest number of people BABY NUTRITION MEDICAL NUTRITION Supporting growing children Nutritional support Every step of the way for per
Slide 4: A Fast Geographical Transformation
A Fast Geographical Transformation Sales by region 1997 2007 2011 Emerging Markets Emerging North Markets Emerging America Western 16% Markets 6% Western 38% Europe Western Japan + NZ Europe Europe 38% 51% 51% 78% 2% 4 2% 9% 9% 4 Japan + NZ North North Japan America America + NZ 4
Slide 5: Well-positioned in fastest-growing food categories
Well-positioned in fastest-growing food categories Faster growing food categories Growth focused portfolio 5-year industry volume CAGR as of 2010 2011 like-for-like 2011 trading Medical* 8,8% FY 2011 sales growth operating margin Sales breakdown Waters 6,5% Baby Food 5,2% 6% Medical Nutrition +9.4%
Slide 6: Managing a complex environment since 2008
Managing a complex environment since 2008 6
Slide 7: A Complex Environment
A Complex Environment 25 Commodities (GSCI Index) Unemployment rate 1000 20 900 800 15 700 600 10 500 400 300 5 200 100 0 0 2006 2007 2008 2009 2010 2011 04 05 06 07 08 09 10 11 12 Spain USA Brazil BRIC EuroZone Source : Euromonitor Source : The economist Source : Bloomberg Consumption under pressur
Slide 8: Complex Equation – Clear Priorities
Complex Equation – Clear Priorities 800 SPGSCI Index INFLATION 700 +10% per year 600 between 2010 and 2011 500 400 D-09 D-10 D-11 EUROPE EMERGING Sluggish growth Categories’ development Competitive price management Positive mix Operational leverage 8
Slide 9: Countering inflation with Productivity and Mix more than Pricing
Countering inflation with Productivity and Mix more than Pricing Inflationary raw material Boosted Limited inflation transfer environment Productivity (€ mln) to the consumer GSCI Index Danone productivity (€ mln) 1000 528 900 516 470 >10% 800 700 600 324 Average 500 Dairy price 400 index kept at 12
Slide 10: 2008-2011: Sales growth, Margin, FCF
2008-2011 : Sales growth, Margin, FCF Like-for-like sales growth 8,4% 7,8% 6,9% 3,2% 2008 2009 2010 2011 Trading Operating Margin and like-for-like growth Free cash flow (€ mln) +53bps +61bps +3bps +20bps +9.4% CAGR +17% 1 874 1 713 15,31% 15,16% 1 427 14,91% 14,72% 1 183 2008 2009 2010 2011 2008 20
Slide 11: Geographical Equation
Geographical Equation Like-for-like Trading +276bps Operating margin evolution +26bps +109bps 2008 – 2011 Europe Asie ROW Like-for-like sales growth - 14,5% CAGR 2008/2011 12,6% 4,2% Europe Asia ROW 11
Slide 12: Managing 2012
DANONE Managing 2012 12
Slide 13: Southern Europe deteriorating: Focus on Spain
Southern Europe deteriorating Focus on Spain Unemployment vs Consumption Variance Unemployment rate in Spain by region 5% 0% Asturies Navarre -5% Var°of consumption Rioja Pais Vasco Extremadura Galice Manche Castille -10% Cantabria Espagne Aragon Madrid Andalousie -15% Castilla y Leon Communidad Val
Slide 14: Dairy Spain: Dominant brand in a changing environment
Dairy Spain : Dominant brand in a changing environment Food Retail – Value Market shares Fresh Dairy Products – Value Market shares Retailer #1 Retailer #2 Retailer #3 DANONE Other Brands Private Label 53,6 28,0 51,2 26,8 25,5 24,6 38,4 17,7 36,2 17,3 17,2 17,3 10,9 10,4 10,5 10,3 10,3 10,4 2009 201
Slide 15: Dairy Spain requiring specific response
Dairy Spain requiring specific response Support and differentiate Increase competitiveness Innovate Continued productivity 15
Slide 16: 2012 Parameters evolving – Managing with same Priorities
2012 Parameters evolving – Managing with same Priorities H1 inflation above expectations higher productivities INFLATION EUROPE EMERGING Deterioration in Southern Continued strong growth & Europe operational leverage Specific Support & Adjustments No compromise vs LT building Investment maintained 1
Slide 17: Continued performance in Emerging markets
Continued performance in Emerging markets 2011 sales breakdown Platform(s) for growth Western Emerging Europe countries 38% 51% 2% Dairy - CIS 9% 17 Japan + NZ North Aquadrinks – Asia America Dairy – Americas & AME Baby Nutrition – Asia & AME Like-for-like sales growth Medical Nutrition – China / Tu
Slide 18: Fresh Dairy CIS - From Integration to Growth
Fresh Dairy CIS - From Integration to Growth 2012 agenda: Activating the key brands Danone-Unimilk CIS % volume growth A rolling activation plan e.g. : key activities Q1 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 • 360° support on Prostokvashino Good consumer receptiveness, with • 360° support on Danonino Prosto
Slide 19: Leveraging the Prostokvashino brand
Leveraging the Prostokvashino brand New identity in 2012 19
Slide 20: Fresh Dairy US - Consolidating leadership while progressing in Greek segment
Fresh Dairy US - Consolidating leadership of the total category while progressing in the Greek segment x 2.2 Oikos $ sales Q1 11 Q1 12 33,0 Total Danone* 25,0 Competitor 1 MS Value Source : IRI 15,8 Competitor 2 6,9 Oikos* * Dannon + Stonyfield janv.-12 févr.-12 mars-12 avr.-12 mai-12 20
Slide 21: Fresh Dairy – Brazil: Building undisputed leadership
Fresh Dairy – Brazil Building undisputed leadership Value market shares Internal Market 37,1 35,8 Huge emerging middle class 32,9 32,6 33,2 34,1 Danone 29,8 30,5 26,9 25,9 22,9 22,4 22,4 Competitor 1 21,4 21,1 19,8 13,3 13,4 13,6 13,9 13,7 Competitor 2 12,4 2003 2014 11,0 11,0 AB C DE 2004 2005 2006
Slide 22: Fresh Dairy - Egypt
Fresh Dairy - Egypt Building the role of Yogurt as part of a healthy diet Launch Danone Mixy Flavor Yog 2008. 1,5 110gr – Urban Areas 80gr – Rural Areas 25 1,1 10 0,7 0,8 1 5 A Plain Yogurt 95 Market 76 Danone #1 player 55 56 after 3 years 2008 2009 2010 2011 Vol Adults Vol Kids PCC Kg 22
Slide 23: Waters - Indonesia: Bringing facts & benefits behind hydration
Waters - Indonesia: Bringing concrete facts & benefits behind hydration Volume CAGR > 9 bn +13% liters 2009 2010 2011 Bogor University University Agriculture Institute of Airlangga of Hasanudin The First Hydration Study in Indonesia - 4 regions, 1,200 subjects Several congresses across Indonesia Dri
Slide 24: Waters - Aquadrinks
Waters - Aquadrinks Segment weight - 2011 value Sparkling 7% HOD 12% Aquadrinks Plain Still 26% 55% Aquadrinks - volumes CAGR +15% 2008 2009 2010 2011 24
Slide 25: Baby Nutrition – Continuous outstanding growth in Asia
Baby Nutrition – Continuous outstanding growth in Asia Sales CAGR +15% Agreement for the acquisition of Wockhardt Nutrition FY2009 FY2010 FY2011 Super Dumex Gold premium 14.2 % Market share Premium Bebelac (value – MAT April 2012) Standard Dumex Standard Super Nutrilon 33.2 % Market share premium (v
Slide 26: Baby Nutrition - Turkey
Baby Nutrition - Turkey Building awareness on the role of Early Nutrition for health Category 10-year Overall Danone Danone Total milk HCP preference Market shares CAGR +26% 87% 80% WHO Pediatric Association educational WHO Meetings 6-12 months HCP Meetings Babies need with Ministry Social actual mi
Slide 27: Medical Nutrition - China
Medical Nutrition - China Medical division in China - 2011 Example : Neocate in China Like-for-like sales growth + 30% Parents Meetings Increase Allergy KOL Round Table Awareness to HCP elearning fasten diagnostic & 1st contributor to division growth Treatment Clear leader in China Demonstrate Neoca
Slide 28: Outstanding geographical footprint for growth
Outstanding geographical footprint for growth Q1 2012: sales in Emerging Countries = 52% Top 6 priority countries contributing around 60% of sales growth and more than 3/4 of EBIT growth in 2011 Emerging countries Western Europe 35% 52% 3% 28 10% Japan + NZ North America 28
Slide 29: Outstanding Geographical Profile
Outstanding Geographical Profile % Group Sales* Margin* Growth Prospects Close to EUROPE excl. CIS 45% Flat Average Below CIS + NORAM 20% High-Single-Digit Average Above REST of WORLD 35% Double-Digit Average * FY 2011 29
Slide 30: Conclusion
Conclusion • Continuous investment in the well-performing growth markets • Specific situation addressed in Southern Europe • 2012: Sales growth & FCF target reiterated / Margin target adjusted • Value creation agenda adapted to the current environment • Danone Vision & Strategic priorities unchanged
Slide 31: Slide 31
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