Deutsche Bank Global Consumer Conference June 13, 2018 Cécile Cabanis Bernard Ducros I 1 I
Delivery and Transformation to Create Sustainable Value Cécile Cabanis CFO I 2 I
Our strategic ambition, our core philosophy Leading the way to create and share sustainable value Healthier Responsible eating and drinking business stewardship I 3 I
An unparalleled health-focused portfolio Fully aligned with the Food revolution throughout consumers’ lifespan 29% 52% 19% Specialized Nutrition Essential Dairy and Plant-Based Waters 7.1 bn € 4.5 bn € 8.4 bn € 4.6 bn € 88% of volume sold recommended for daily consumption (1) (1) Refers to water, yogurt and other daily dairy products, baby milks & foods, milks and milk powders, beverages with 0% sugar and medical nutrition. Based on official public health recommendation, these categories are generally suitable for daily consumption. I 4 I
Superior growth profile as consumers move to healthier food and nutrition Our categories outperform the industry average Growth profile by category – 10-year forecast to 2022 +9% +8% +8% +7% +7% +6% +6% Average +5% Food & +5% +4% Beverage +4% +4.5% +3% +2% +1% Water Flavored Organic Baby Plant-based Coffee Coffee Yoghurt Medical Chocolate Sugar Carbonates Cereals Frozen Confectionary Ready Water Food Beverages Creamers Meals # 3 # 1 # 2 # 1 # 2 # 1 # 1 in Europe Source: Euromonitor I 5 I
Unique brand portfolio, creating value in a responsible way Meeting consumer demand for more sustainable, authentic products -10.5% reduction 58% of clean in CO 2 emissions full water scope (1) returned to nature (2) 30 % 30% of of global global sales sales 2 US flagship dairy 14% recycled PET brands Non-GMO (3) used in Waters (4) The data provided on this page are as of end 2017, do not include WhiteWave entities and are based on constant scope of consolidation and constant methodology in comparison with 2016. (1) Intensity (g CO2equivalent/Kg product) Baseline 2015. Full scope (1,2,3) (2) % of wastewater discharged to nature compliant with Danone “Clean Water Standards” (3) 79% of Dannon and 96% of Danimals are Non-GMO project certified (4) Recycled PET in Waters division excluding Turkey and China I 6 I
New consumer preferences are transforming our industry Transition from mass volumes to lifestyle purchase decisions Our environment Our transformation ▪ Local, authentic, natural Products 58 % ▪ From multi-packs to single serve 1 / 3 ▪ Committed and accountable of growth driven of value consumption Brands ▪ Resonating messaging by local brands (2) from young (1) ▪ Targeted digital marketing model ▪ Convenience and on-the-go Channels + 16 % 55 % ▪ E-commerce ▪ Innovating locally in small scale e-commerce average buying decisions from Organization ▪ Cross-regional collaboration growth (3) brand advocacy (4) ▪ Partnerships with customers and suppliers (1) Source: Nielsen (2) Source: Kantar Worldpane (3) CAGR 2012-22; source: Planet Retail 2016; (4) Source: BCG Brand Advocacy Index I 7 I
Making strategic progress in every business unit Stronger capabilities in operational execution Q117 Q217 Q317 Q417 Q118 Q117 Q217 Q317 Q417 Q118 +17.8% +0.8% +10.3% +14.5% -0.2% -0.4% +7.6% +8.4% -0.3% +4.2% +5.2% +5.6% -2.2% -0.8% -2.8% -2.9% -1.7% +1.8% +0.3% -2.3% Q117 Q217 Q317 Q417 Q118 Q117 Q217 Q317 Q417 Q118 Direct Mizone Record and Gradual Ultra- market share Stabilization end of in yogurt premium transition $50m synergies Transition to Increased Tailored from Circular contribution from WhiteWave Innovations nutrition Plastics integration to date Sales growth figures in Like-for-like New Danone I 8 I
Growth model driven by value Premium innovations and resilient pricing contribute to enhanced value Like-for-like New Danone sales growth Portfolio valorization from premium innovations and resilient pricing Volume Value (Price/Mix) +3.9% +3.8% +3.5% +3.1% +0.9% +1.1% -0.2% -1.4% 2015 2016 2017 Q1 2018 I 9 I
Operational efficiency and financial discipline as key performance drivers Consistent EPS growth and balanced investment over the cycle Our financial track record How we delivered Organization and Efficiency Life-for-Like +4.7% +4.4% sales +2.9% +2.5% growth (1) 2014 2015 2016 2017 14.4% 13.8% Portfolio Recurring 12.9% 12.6% operating margin 2014 2015 2016 2017 €3.49 €3.10 Recurring €2.93 Vision and ambition €2.62 EPS growth 2014 2015 2016 2017 (1) Like-for-like New Danone I 10 I
Managing near-term regional trends Discipline and agility to navigate emerging markets volatility Political Regulation Boycott uncertainties I 11 I
Geared to accelerate towards 2020 objectives 2018: a year of execution and delivery 2020 2018 2020 Strategic priorities Like-For-Like 4-5% Sales Accelerate growth 1 growth 2018 objective Recurring operating DOUBLE-DIGIT >16% margin RECURRING EPS Maximize efficiencies 2 Consistent recurring GROWTH EPS EPS growth at constant exchange rate Net debt/Ebitda (2) <3x Allocate capital with 3 excluding Yakult transaction impact (1) discipline ~12% ROIC (2) (1) See definition on page 6 of Q1 2018 press release (2) See definition on page 64 of 2017 Registration document I 12 I
Creating value in Essential Dairy and Plant-Based Europe Bernard DUCROS Regional VP EDP Europe I 13 I
Essential Dairy and Plant-Based (EDP) in Europe Business at a glance #1 in Essential Dairy and Plant-Based in Europe ~ € 3.5 bn revenues Top-5 countries (1) 15 years at Danone, > 20 years at Unilever ~ 85 % Since Apr.17 Regional Vice President EDP Europe ~ 15 % 2014-17 GM Dairy - Russia 2009-14 GM Waters - Asia Portfolio of global and local brands 2007-09 GM Waters - Indonesia 2003-07 GM Bledina – France (1) As of Q1 2018 I 14 I I 14 I
Alpro: the plant-based leader in Europe Strong fundamentals at second largest brand in EDP Europe Attractive Unique Undisputed category growth reach and footprint leadership Market size > €500m sales X 2 (€ bn) 1.6 only player with pan-European reach > 40% in 5 years 0.8 ~75% of sales # 1 position 2012 2017 Penetration 6% rate 5% 3% ~15% of sales # 2 position Competitor Competitor Competitor 33 % 1 2 3 > 20 % I 15 I I 15 I
Longstanding know-how in plant-based products Unique expertise and technology 1899 1980 2009 2017 2018 Vandemoortele Creation Alpro sold Acquisition of Opening Pioneer of to Dean WhiteWave of Alpro new automated vegetal oils Foods by Danone warehouse and innovation pilot plant in Wevelgem I 16 I
The broadest plant-based offering Across products, ingredients and moments of consumption I 17 I
Strong product innovation supporting growth Growing consumer base and moments of consumption More organic . Adjacent indulging categories More fruits . Less sugar I 18 I I 18 I
A large, high-growth category Aligned with today’s consumers trends Balanced Minimally Convenient protein diet processed food healthy snacking Permissible Personalized Environmental & indulgence food Social I 19 I I 19 I
Driving Alpro’s geographical expansion Leverage Danone and Alpro’s complementary footprint Alpro - Top-4 markets in Europe #1 I 20 I
Expansion in France and Spain has started Accelerated step-change in execution After 6 months Innovation Awareness Distribution Position X 2 # 2 + 50 % > 50 % number brand awareness position (1) weighted of Alpro SKUs after 6 months in France distribution (1) (1) In plant-based alternatives to yogurts I 21 I
Complementary categories and footprint with Danone Leveraging the “flexitarian” momentum Plant-based French consumers buy Fresh Dairy products 25 % more vs. average Source: Kantar I 22 I
Accelerating Dairy transformation Engaging with a different consumer base Who buys Alpro? Know-how to Singles recruit Young fam young Older fam consumers Seniors Strong 360° marketing approach I 23 I
A multi-part strategy to drive value creation Unique combination of platforms and expertise to accelerate growth Consumer Multi-country demographic Supporting Accelerating expansion transformation Multi-product Product of Plant-based of Dairy innovation Multi-channel Channels distribution to market I 24 I
Combining goodness from Dairy and Plant-based Cross-fertilization to open unique opportunities Within next 12 months: + a plant-based World-class World-class offering Fermentation Plant-based = expertise expertise for all our Accelerated major brands innovation opportunities I 25 I I 25 I
Accelerating Dairy transformation From multipacks to more local, single serve and on-the-go I 26 I I 26 I
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