Danone 2007 One more great year - library.corporate-ir.netlibrary.corporate-ir.net/library/13/131/131801/items/279719/2007FY... · Danone 2007 One more great ... or a solicitation

1

Danone 2007 One more great

year

Franck Riboud Paris, February 14th, 2008

2

DisclaimersDisclaimers

This document contains certain forward-looking statements concerning Groupe DANONE. Although Groupe DANONE believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks, which could cause actual results to differ materially from those anticipated in these forward-looking statements. For a detailed description of these risks and uncertainties, please see the sections “Risks Factors” in Groupe DANONE’s Annual Report (which is available on www.danone.com).

Groupe DANONE undertakes no obligation to publicly update or revise any of these forward-looking statements.

This document does not constitute an offer to sell, or a solicitation of an offer to buy, Danone shares.

This document does not constitute an (extension of any) offer or invitation to purchase any securities of Numico B.V (formerly Royal Numico N.V.) and nothing contained herein shall form the basis of any contract or commitment whatsoever.

3

2007 Significant events

Disposal of biscuits activities – settled on Nov 30th

Acquisition of Numico – change of control in early Nov.

Wahaha under equity accounting method as of July 1st

4

Fresh DairyFreshFresh DairyDairy

Waters (exc. Wahaha)Waters (exc. Waters (exc. WahahaWahaha ))

Wahaha H1WahahaWahaha H1H1

How to read our performance

OpeningOpening ScopeScope

ReportedReported LL--ff --LL

Wahaha H2 (est)WahahaWahaha H2 H2 (est)(est)

Numico Nov-DecNumicoNumico NovNov --DecDec

Biscuits Jan-NovBiscuits JanBiscuits Jan --NovNov

PublishedPublished ScopeScope ProformaProforma


: Full consolidation

5

2007 Sales and Trading Operating Marginprogression at high-end of our guidance

Like-for-like sales growth

Published Scope: Dairy and Beverages (with Wahaha H1 only)

Opening Scope: Dairy, Biscuits (11 months) and Beverages (with Wahaha FY)

Published + Wahaha FY: Dairy and Beverages (with Wahaha FY)

Q1 Q2 Q3 Q4 FYTrading Operating

Margin Progression

Published Scope 11.0% 7.5% 7.7% 13.1% 9.7% +45bp

Opening Scope 10.1% 7.3% 3.9% 7.7% 7.2% +59bp

Published + Wahaha FY 11.0% 7.5% 3.5% 7.4% 7.3% +74bp

6

6.0%7.0%

2.3%

4.6%

5.7%5.1%

7.2%7.8%

6.7%

9.7%

7.2%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Danone’s accelerating growthover the years

CAGR: +8.9% Without Biscuits

CAGR: +7.7% Including Wahaha


7

11.9%

9.6%

7.1%

10.7%11.9%

2003 2004 2005 2006 2007

Another strong year at Numico

CAGR: +9.1% BABY FOOD

CAGR: +11.7% MEDICAL NUTRITION

CAGR: +10.2% NUMICO


8

7.2%4.6%

9.8%7.8% 6.7%

9.3% 5.0%2.2%

3.4% 5.2%

Q1 Q2 Q3 Q4 FY

EBIT Marginprogression

+12.0%+11.2%

+11.9%

+90 bp +63 bp+35 bp

+13.9%

+12.2%

Danone: 2007 Volume & ValueFresh Dairy (incl. Bledina)

ValueVolume

9

2.7%6.4%4.9%

7.1%

-6.9%

3.5%

4.8% 1.9%

3.6%

4.4%

Q1 Q2 Q3 Q4 FY

Danone: 2007 Volume & ValueBeverages (excl. Wahaha)

+54 bpEBIT Marginprogression

+9.7% +9.0%

-3.3%

+10.8%

+6.2%

-23 bp+122 bp

ValueVolume

10

4.7%

-0.9%

5.4%

11.5%8.2%

4.9%

5.0%2.6%

3.5%

4.0%

Q1 Q2 Q3 Q4 FY

Sales impacted by managed

reduction of in-trade stock-levels

+8%

+15.0%

+12.2%

+4.0%

+9.7%

Numico: 2007 Volume & ValueBaby Food

Value

Volume

11

12.0%9.2%

12.6% 13.5%11.4%

1.5%2.0%

2.6%

1.0%

1.4%

Q1 Q2 Q3 Q4 FY

Numico: 2007 Volume & ValueMedical Nutrition

+14.1%

+15.5%

+14%

+10.2%

+13.4%

ValueVolume

12

Strategic journey to a 100% health portfolio

13

1997 – 2006: Total Shareholder Return(1) +17% exceeding our peer group(2) average of 10%

10 Years of Shareholder Value Creation

Business 1997-2006Yearly progression

(1) Source Bloomberg, in local currency(2) Nestlé, Unilever, Cadbury, General Mills, Pepsico, Coke, Kellogg, Danone(3) On like-for-like basis

Sales Growth CAGR(3) +6.2%

EBIT yearly average +42 bp

FCF CAGR +12%

ROIC yearly average +115bp

14

1997 – 2006: Total Shareholder Return(1) +17% exceeding our peer group(2) average of 10%

Strategy 1997-2006

10 Years of Shareholder Value Creation

(1) Source Bloomberg(2) Nestlé, Unilever, Cadbury, General Mills, Pepsico, Coke, Kellogg, Danone

Disposals +9.9 blnE

Dividends (3.6) blnE

Share Buy Back (5.8) blnE

Acquisitions (8.8) blnE

Net Financial Debt 2006 nil

15

Eastern Europe# 1 Fresh Dairy

Asia-Pacific# 1 Bottled Water

Africa & Middle East# 1 Fresh Dairy

Latin America

# 1 Dairy

# 1 Bottled Water

North America

# 1 Fresh DairyWestern Europe# 1 Fresh Dairy

To build a global leader leveraging local leading positions

Source: Euromonitor value share (Dairy 2006 values; Beverages 2007 values)

16

Key strategies foran active portfolio management

Eastern

Europe

11%

Asia

17%

Latin

America

11%

North

America

9%Other

2%France

21%

Rest

Western

Europe

29%

Rest

Western

Europe

39%

France

38%

Other

1%

North

America

6%

Latin

America

7%

Asia

7%

Eastern

Europe

2%

1996 2006

17

Key strategies foran active portfolio management

Healthy FoodHealthy Food

39% 84%

Baby Food

3%

Fresh Dairy

53%

Beverages

28%

Biscuits

16%

1996 2006

Fresh Dairy

Products

26%

Prepared

Food

9%

Biscuits

20%

Beer

8%

Water

10%

Glass

Container

7%Baby Food

3%

Italian

Cheese

9%

Pasta

3%

Sauces

5%

18

~1900M€ ~1100M€ ~500M€ ~500M€

Danone is the global expert in providing

Health through Food

2007 Sales

19

The unique capacity to be inspired by a powerful mission

To bring health through food to the largest number of people

20

Local Leadership positions

Broad-based geographic presence

Profitable growth

Fully aligned with 100% health positioning

The Danone – Numico Fit

21

Healthy FoodHealthy Food

84% 100%

2006 2007 Pro-Forma

Danone + Numico,100% Health Story

Baby Food

3%

Fresh Dairy

53%

Beverages

28%

Biscuits

16%

Baby Food

17%

Beverages

23%

Fresh Dairy

55%

Medical

Nutrition

5%

22

A top Baby management organization put in place, split equally between Numico and Danone/ Bledina resources

<10 regretted departures: already replaced

15 leadership teams created: 70 people directly involved – ~35 Danone, 25 Numico and ~10 Blédina

Cost: Already identified: ~€60M before 2011

~€45M in 2008

Revenues: Target (€120M-€140M) being refined and on-track

Numico Integration Update

People

Synergies

Science Danone is the best positioned player to unveil the synergies across Prebiotics, Probiotics and “Fermented Bioactives”

Alignment teams

Alignment Teams

23

2008The New Danone

24

Beverages

3.5 blnE

Fresh Dairy

8.3 blnE

Medical

Nutrition

0.8 blnE

Baby Food

2.4 blnE

2007 Pro-Forma

SalesSalesSales € 15 044 M

14.36%

€ 2.38

EBIT MarginEBIT EBIT MarginMargin

EPSEPSEPS

€ 14 468 M

14.56%

€ 2.38

2007 at 2008 Scope

Baby Food

2.4 blnE

17%

Medical

Nutrition

0.8 blnE

5%

Fresh Dairy

8.3 blnE

57%Beverages

3 blnE

21%

25

Sales growth*

Enhanced financial performance objectives

< 2006

2007

2008+

+6% to + 8%

+5% to +7%

+8% to +10%

*: On like-for-like basis

26

Trading Operating Profit *

For 2008 +30bp minimum

To grow faster than like-for-like sales growth

Trading Operating Margin *

To improve every year

Underlying EPS Growth

For 2008> +15%

vs 2007 Pro forma



2007 RESULTS2007 RESULTSFebruary 14 th, 2008

28

AGENDAAGENDA

1. Significant 2007 events

2. 2007 Operating performance by business-line (sales and operating results)

3. 2007 Operating performance of Numico portfolio

4. 2007 Groupe Danone published sales and operating results

5. 2007 Groupe Danone published income statement, balance sheet and cashflow

6. 2007 Groupe Danone Pro-forma accounts

7. New Danone mid-term financial guidance

8. Back-ups

29


2. 2007 Operating performance by business-line (sales and operating results)



5. 2007 Groupe Danone published income statement, balance sheet and cashflow



8. Back-ups

30

2007 Significant events

Disposal of Biscuits activities

Acquisition of Numico

Wahaha under equity accounting method as of July 1st

31

Disposal of biscuits activities to KraftDisposal of biscuits activities to Kraft

Scope reminder: Entire Business, except Bagley/Britannia

Key Dates: Settlement date: Nov 30st 2007

Final transaction: Cash-Free Debt-Free 5.3blnE

Sale of Papadopoulos -0.1blnE

Inter-co debt/debt -0.5blnE

Sale Price 4.7blnE

Deferred disposal of Mikado JV: -0.2blnE

Net Book Value: -1.2blnE

Taxes & fees -0.2blnE

Gain on disposal 3.1blnE

Impact on 2007 accounts: Under IFRS, discontinued activities as of Jan 1st 2007: no sales and no EBIT recorded

Contribution to earnings (11 months): 189mlnE

32

3.5%4.4%

0.3%

3.8% 4.3%

6.3% 6.6% 7%

Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007

BISCUITS & CEREAL PRODUCTSStrong 11 months growth: +6.5%

Europe growing at mid-single digits driven by Spain and France

Asia growing at mid-teens led by China and Indonesia

* Unconsolidated December is estimated

2007 sales figures do not appear in the group consolidated sales

*

33

Jan 21stSqueeze-out period started

Dec 28th98.9% owned by Group Danone & delisting from

Euronext Amsterdam

Nov 28thSettlement of shares tendered during post-acceptance period (including convertible bonds)

Oct 31stDeclaration of the offer « unconditional » and change of control

July 10/11thAcquisition of 29.6% of shares at 55E/share

Numico acquisitionNumico acquisition

Timeline

Accounting treatment: full consolidation as of Nov 1st 2007

349,495 mlnEGoodwill

(1) Of which 3,449 mlnE of nonamortised trademarks

275 mlnEChange in equity from Nov. to Dec. 07

2,783 mlnEFair value adjustments (1)

(1,717) mlnEOpening balance sheet adjustments

1,353 mlnENet assets before the acquisition

(12,189) mlnETotal puchase price at 31 dec 07

(48) mlnETransaction costs

(12,141) mlnEConsideration paid

NumicoNumico Acquisition Acquisition

Purchase price allocation

35

Post acquisition management decisions

Numico Acquisition

In underlying EBIT

In non current EBIT

Integration & restructuring

Termination of distributioncontracts & IT alignment

(39mlnE)

Synergy preparation (41mlnE)

Sales

Alignment of stocks policies at distributors level

Inventory step-up as per PPA EBIT impact: (50 mlnE)

Soft landing in Q4 Sales

36

WahahaBusiness Update

• The Wahaha brand continues to perform well on the Chinese market.

• JV consolidated sales -20% in 2007 as planned, as a result of parallelnetwork activity.

• Limited impact on Group Danone EPS (low profitability of non JV tradingactivity for JVs).

• FCF impacted due to change in year-end customer deposits

37

WahahaKey Recent Events

• Cease fire signed in presence of Chinese and French governments on December 21st

• All legal proceedings suspended on both sides on that date, in China and internationally

• Media and public communication restricted

• Peace talks to resume, with principles of equality and mutualbenefit

• Objective: both partners to grow together all the Wahahabeverage operating entities

December

• Following his appointment as Group Danone global co-COO, Emmanuel Faber resigns as chairman of a number of affiliates in Asia, including Wahaha joint venture companies• Chairman appointment to be part of the global discussions

January

Danone announces change in the consolidation method of Wahaha joint ventures

February

38

Wahaha under equity accounting method as of July 1stWahaha under equity accounting method as of July 1st

From global integration to equity accounting in H2:

Given the effect of the dispute over the level of effective control of Wahaha : the business is accounted for under the equity accounting method as of July 1st 2007

Impact on 2007 accounts:

No sales recorded in H2. 2007 FY sales are estimated at around 900 mlnE (-20% lfl)

No contribution to EBIT in H2 (this has had an unfavorable impact on Group Danone l-f-l operating margin improvement (-29bp).

No impact on net earnings

39




OpeningOpening scopescope





PublishedPublished IFRSIFRS ProformaProforma


: Full consolidation

How to read our performance

40


2. 2007 Operating performance by business-line (sale s and operating results)



5. 2007 Groupe Danone published income statement, b alance sheet and cashflow



8. Back-ups

41

FRESH DAIRY PRODUCTS

Q4: Strong volumes and full pricing impact

Outstanding end to the year with full effect of pri ce increases

Very solid Q4 volumes at +4.6% demonstrating the pr icing power of our brands

Eastern Europe (>+25%) and Latam (>+15%) remain the growth engines

Excellent growth in North America (>+15%) with an i ncreasing market share gap versus main competitor

Blockbusters growing at close to +20%

Full year like-for-like margin improvement of +62bp

FRESH DAIRY PRODUCTS

12.0%13.9%

11.9%11.2%9.6%9.2%8.5%

9.5%

Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007

42

11.8% 12.4%14.9%

21.7%

9.1%

0.9%

-3.3%

10.8%

Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007

BEVERAGESQ4: back to strong underlying growth

Q4 back to superior growth in underlying business a fter poor summer

Sustained momentum in LATAM with growth exceeding + 20%

Europe growing mid-single digit and gaining market shares in main geographies

Asia growing in the high-teens with Japan and Indon esia growing strongly

Without Wahaha +6.8% +5.8% +8.2% +10.5% +9.7% +9.0% -3.3% +10.8%

Full year like-for-like margin improvement of +1bp

(With Wahaha fully consolidated 12 months: +93bp)

43

ASIA

18.0%14.7%

-7.3%

8.3%

30.4%

20.1%17.7%17.9%

Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007

REST OF THE WORLD 19.8%16.6%16.2%16.9%17.2%

14.9%15.6%16.5%

Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007

EUROPE

4.3% 4.7% 5.3% 6.2%

9.3% 8.4%

2.9%

9.4%

Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007

Without Wahaha +13.6% +7.0% +6.4% +10.7% +8.6% +8.5% +14.7% +18.0%

Broad-based geographic growth

44

FY 2007 like-for-like sales growth Breakdown volume/value

Like-for-likeLike-for-like

Fresh Dairy Products +7.2% +5.0%Beverages +1.7% +2.3%

Europe +3.8% +3.6%

Asia +5.1% -0.4%Rest of World +9.6% +7.8%

VolumeVolume ValueValue

+12.2%+4.0%

+7.4%+4.7%

+17.4%

TotalTotal

45








8. Back-ups

46

Numico Q4 & FY 2007A very good year despite a soft Q4 landing

(Per previous Numico’s definition)

Q4 07Q4 07 Vs Q4 06Vs Q4 06

Baby Food +9.7%+4.0%Medical Nutrition +13.4%+10.2%

EuropeAsiaRest of World

YTD 12 YTD 12 monthsmonths

499203

Total

Vs Y nVs Y n --11

2,035786

+10.7%+5.7%702 2,821

+8.6%+6.5%+12.6%+5.1%

452158

1,768672

+17.7%+3.0%91 381

47

NumicoNumico

NumicoFY 2007 like-for-like sales growth Breakdown

volume/value


Baby Food +4.7% +5.0%Medical Nutrition +12.0% +1.4%

+6.7%+6.7% +4.0%+4.0%


+9.7%+13.4%

+10.7%+10.7%

TotalTotal

48

NumicoNumico

Numico EBITA per previous Numico’s definition

Baby Food 16.6%

Medical Nutrition 25.6%

17.4%17.4%

-160bp

-40bp

-100bp-100bp

LikeLike --forfor --likelikeprogressionprogression

FY 07FY 07reportedreported

18.6%

26.1%

18.8%18.8%

FY 06FY 06reportedreported

49








8. Back-ups

50

�record growth rate in Fresh Dairy with resilient volume growth

�strong growth in water division, recovering from poor su mmer

�broad-based growth across all major geographies

FY 2007 performance at opening scope: key take-aways

Core business growth is very healthy

Continued profitable growth despite significant inp ut cost headwinds

�Unfavorable milk price increase fully offset by pricing

Secured financing obtained for asset swap on favora ble terms

Underlying EPS at opening scope >+10%

Top line and margin performance in the upper part o f the guidance…

…despite loss of Wahaha co-packed sales, poor summer in Europe, and significant input cost headwinds

51




Another year of profitable growth

OpeningOpening scopescope


Net SalesNet SalesNet Sales € 14,579 M

Trading operating incomeTrading operating incomeTrading operating income

Trading operating marginTrading operating marginTrading operating margin

Numico FYNumicoNumico FYFY




14.0%

+7.2%

+11.9%€ 2,046 M

+59 bp

52




Net SalesNet SalesNet Sales

Trading operating incomeTrading operating incomeTrading operating income

Trading operating marginTrading operating marginTrading operating margin

Numico FYNumicoNumico FYFY




PublishedPublished IFRSIFRS


€ 12,776 M

13.27%

+9.7%

+13.4%€ 1,696 M

+45 bp

Published accounts as the basis of our analysis

53FY 2006IFRS, excl. biscuits

-4.7%

-2.9%

FY 2007

+4.2%

VALUE

12,776 M€

12,068 M€

+5.5%

VOLUME

CURRENCY

-4.6%SCOPE OF

CONSOLIDATION

Analysis of FY 2007 published Sales

+5.9%

+9.7%Like-for-like

+ HOD Mexico (01/07)+ Danone Japan (04/07)+ Danone Chili (09/07)

+3.7%

WAHAHA H2 07

OTHER

+0.1%

+3.7%

NUMICO

54

9.7%9.7%5.1% 6.0% 7.2% 7.8% 6.7% 7.2%

2001 2002 2003 2004 2005 2006 2007OpeningScope

2007

Top-line growth well within our targeted

range in FY 2007

+6%

+8%


IFRS

+7%

+5%

55

A healthy like-for-like margin progression in FY despite input costs headwinds: +45 bp

FY 2006

Scope of consolidation

FX rates+23bp

FY 2007

-4bp

13.24%13.27%

-61bp

Numicolanding

+ HOD Mexico+ Danone Japan- Wahaha

IFRS, excl. biscuits

+45bp+45bp

Operationalperformance

56

- 6bp

+249bp+249bp

Operational performance including pricing

- 198bp

Input costs

+45 bpLike-for-like

Country mix

A healthy like-for-like margin progression in FY despite input costs headwinds: +45 bp

57

Trading operating marginby business line & geographical area

Fresh Dairy Products 14.0%Beverages 13.6%

+ 62bp+1bp

LikeLike --forfor --likelikeprogressionprogression

FY 07FY 07reportedreported **

13.7%

12.5%

FY 06FY 06reportedreported **

* IFRS, excl. biscuits

Europe +37bp15.2%Asia +35bp11.5%Rest of World +83bp12.1%

15.0%

12.0%9.4%

58

Trading operating income by business & geographical area

GROUPGROUP 1,5971,597

1,0891,089494494

1,0241,024206206

FY 2006

Fresh Dairy ProductsBeveragesOthers

EuropeAsiaRest of World

1414

367367

€ million€ million

1,6961,696

1,2291,229480480

1,1221,122177177

FY 2007

22

412412

Numico -16-16

Numico -16-16

59








8. Back-ups

60

Trading operating income

Other operating items

Operating income

Trading operating margin

1,597

(37)

1,560

13.24%

1,696

(150)

1,546

13.27%

Trading operating income and margin

FY 2007€ million

FY 2006

61

From Operating income to Net income (IFRS)

Cost of net debt

Income tax

Other financial items

Net income (loss) of affiliates

Net income of discontinued activities

Operating income

Net Income

Minority interests

FY 2007

Net income of consolidated companies

€ million

Net Income attributable to the parent

(1)

(287)

(29)

(49)

366

1,560

1,560

(207)

1,243

1,353

1,546


(175)

(2)

(410)

959

87

3,292

4,338

(158)

4,180

FY 2006*

62

Tax rate evolution

FY 2007

Current income tax (447) (398)

€ million

Non current income tax 160 (11)

28.4% 27.0%Effective tax rate

18.8% 29.9%Apparent tax rate

Total income tax (287) (409)

FY 2006

63

Underlying net income impacted by the financing of Numico acquisition

Net income attributable to the parent

FY 2007

1,353 4,180

€ million

Of which underlying net income 1,194 1,185

Of which non current net income 159 2,995

FY 2006

64

Another year of increased dividends (to beproposed at the AGM)

1,1851,185

479.9479.9

1,1941,194

489.4489.4

Underlyingnet income fully diluted

Underlying EPS fully diluted € 2.47€ 2.47€ 2.44€ 2.44

€ Million

Millionsof SharesShares

Fully diluted

FY 2006 FY 2007

+1.2%+1.2%

Dividend Per Share* € 1.1€ 1.1€ 1.0€ 1.0 +10%+10%* Proposed to shareholders at the AGM

65

Underlying Net Income & EPS bridge 2007

2006Published

1,194 mln€

Lfl sales: +7.2%Margin: +59 bp

2.71€

-16 mln €

2007Opening Perimeter

Numico

Net Financing

Costs

+1.2%

2.47 €

2007 Published IFRS

2.44€

1,302 mln€

1,185 mln€

-102 mln €

+11.3%

66

FREE CASH FLOW FROM OPERATIONS

Cash Flow from Operations (incl. Biscuits)

FY 2007€ million

1,644 1,383

Working Capital Change 274 226

CAPEX (622) (725)

Disposal of assets 29 101

of which Wahaha 126 (57)

Exceptional financial proceeds (2006)and costs (Numico, 2007)

100 (100)

of which Biscuits 191 199

Free Cash Flow from Operations 1,516 1,184

Free Cash Flow from Operations (at Comparable Scope ) 1,099 1,142

Biscuits (12 months 2006, 11 months 2007) 191 199

FY 2006

67

SOURCES & APPLICATION OF FUNDS 2007

€ million

Free Cash Flow from Operations (inc. Biscuits) 1,184

Net proceeds from asset disposals 5,073

Capital increase 66

SOURCES (a) 6,323

Financial Investments 12,489

Share Buy Back 439

Dividends 622

APPLICATION (b) 13,550

CHANGE IN DEBT (b-a) 7,227Scope and FX 936

TOTAL CHANGE IN DEBT 8,163

68

Net debt

Equityincl. minorities

€ Million

Balance Sheet Structure

11,26111,261

2007Dec 31

9,1009,100

2,9022,902

2006Dec 31

6,0696,069

2,700Of which minorities’ puts 2,504

Of which net financial debt 8,561398

69

Total debt 8.6blnE

Average financing costs<5%

Outstanding debt as of Dec. 31st 2007

Variable interest rates covered by swaps & options

80% of debt capped at 5%60% of total debt with full exposure to reduction in rates

30% CP / EMTN

Euribor + <30bp (2.6blnE)

61% SYNDICATED

LOAN & OTHER BANK DEBT

Euribor + <30bp (5.2blnE)

5% EXTERNAL DEBT $ NUMICO USD debt (US PP)

(0.4blnE)

2% OTHERS (0.2blnE)

2% EXTERNAL DEBT NUMICO (Euro)

(0.2blnE)

70








8. Back-ups

71

Pro Forma 2007

(M€)

Groupe

Danone at

31/12/2007

Total

Proforma at

12/31/2007

Total Proforma

(ex. Wahaha) at

12/31/2007Net sales 12 776 15 044 14 468

Operating income 1 696 2 162 2 108

13.27% 14.37% 14.56%

Cost of net debt (175) (424)

other financial (expense) income (44) (46)

Income before tax 1477 1 692

Income tax (398) (466)

Net income from associates 91 91

Net income before discontinued operations 1 170 1 317

Net income from discontinued operations 189 -

Net income 1 359 1 317

Underlying Net Income Group Share 1 185 1 142Minority Interests (175) (175)

Underlying EPS 2.47 2.38

72








8. Back-ups

73

Sales growth*


< 2006

2007

2008+

+6% to + 8%

+5% to +7%

+8% to +10%


74

Trading Operating Profit *

For 2008 +30bp minimum

To grow faster than like-for-like sales growth

Trading Operating Margin *

To improve every year

Underlying EPS Growth

For 2008



> +15%vs 2007 Pro forma

75








8. Back-ups

76

Major changes in exchange rates

44% of sales* denominated in €

% total FY% total FYsalessales

Q4 Q4 ‘‘06 vs 06 vs Q4 Q4 ‘‘0505 ((avgavg)

FY FY ‘‘06 vs 06 vs FY FY ‘‘0505 ((avgavg)

Chinese Yuan 6%

US Dollar 8%

% total FY% total FYsalessales

Polish Zloty 4%

2%Indonesian Rupee

3%Brazilian Real

2%Canadian Dollar

5%Russian Rouble

4%Argentinian Peso

7%Mexican Peso

1%South African Rand

Q4 Q4 ‘‘07 vs 07 vs Q4 Q4 ‘‘0707 ((avgavg)

4%Pound Sterling

FY FY ‘‘07 vs 07 vs FY FY ‘‘0606 ((avgavg)

- 6%

- 11%

+ 6%

- 13%

+ 8%

+ 4%

- 4%

- 13%

- 11%

- 4%

- 6%

1%Saudi Ryial - 11%

1%NZ Dollar - 0%

2%Turkish Lira + 9%

- 2%

- 5%

+ 1%

- 6%

+ 6%

+ 4%

- 1%

- 6%

- 5%

- 5%

+ 2%

- 4%

+ 1%

+ 5%

*: IFRS, excl. biscuits

77

++9,7% like9,7% like --forfor --likelike+5.9% +5.9% reportedreportedNet SalesNet SalesNet Sales € 12,776 M

Trading operating incomeTrading operating incomeTrading operating income +6.2%+6.2%€ 1,696 M

Trading operating marginTrading operating marginTrading operating margin 13.27 %

Underlying net incomeUnderlying net incomeUnderlying net income Vs €1,194 M FY ‘06€ 1,185 M

Underlying EPS (fully diluted)From continuing activities

Underlying EPS Underlying EPS (fully diluted)(fully diluted)From continuing activitiesFrom continuing activities

Vs €2.44 FY ‘06+ 1.2%+ 1.2%€ 2.47

Free Cash Flow Incl. Biscuits (1)Free Cash Flow Free Cash Flow Incl. BiscuitsIncl. Biscuits (1)(1) € 1,184 M Vs € 1,516 M FY ’06--21.9%21.9%

FY 2007 Key Figures

+ 45 + 45 bpbp likelike --forfor --likelike+ 3 + 3 bpbp reportedreported

(1): Free Cash Flow: Cash flow from operations less ca pital expenditure (net of disposals) and change in w orking capital

78

9.0%13.1%

7.7%7.5%11.0%11.5%

9.5%8.9%

Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007

Exceptional Top-line growth in Q4 driven by dairy and underlying beverages

Like-for-like IFRS sales growthFY 2007 +9.7%

79GROUPGROUP

Q4 Top line growth accelerating vs 9M

+9.7%+9.7%

9M 20079M 2007 Q4 2007Q4 2007

Fresh Dairy Products +12.2%+13.9%Beverages +4.0%+10.8%

Europe +7.4%+9.4%

Asia +4.7%+18.0%

+13.1%+13.1%

Rest of World +17.4%+19.8%

FY 2007FY 2007Like-for-likeLike-for-like

+11.7%+2.5%

+5.5%+2.3%

+16.5%

+7.4%+7.4%

80GROUPGROUP

Q4 2007 like-for-like sales growth Breakdown volume/value



Europe +2.6% +6.8%

Asia +17.4% +0.6%Rest of World +6.9% +12.9%

+5.0%+5.0% +8.1%+8.1%


+13.9%+10.8%

+9.4%+18.0%+19.8%

+13.1%+13.1%

TotalTotal

81GROUPGROUP

Q4 2007 Net Sales by business & geographical area


+13.1%+13.1%

LikeLike --forfor --like growthlike growth

Q4 2007Q4 2007ReportedReported **

Fresh Dairy Products +13.9%2,219

Beverages +10.8%667

Europe +9.4%1,795

Asia +18%234

3,3363,336

Rest of World +19.8%857

8301,976

1,637

754415

2,8062,806

Numico

Numico 450

450

N/A

N/A


Q4 2006Q4 2006ReportedReported **

82GROUPGROUP

FY 2007 Net Sales by business & geographical area


+9.7%+9.7%

LikeLike --forfor --like growthlike growth

Fresh Dairy Products +12.2%8,791

Beverages +4%3,535

Europe +7.4%7,370

Asia +4.7%1,539

12,77612,776

Rest of World +17.4%3,417

3,9427,933

6,815

3,0482,206

12,06812,068

Numico

Numico 450

450 N/A

N/A

FY 2007FY 2007ReportedReported **

FY 2006FY 2006ReportedReported **


Others 193 0

83

GROUPGROUP

FY 2007 like-for-like sales growth Breakdown volume/value



Europe +3.8% +3.6%

Asia +5.1% -0.4%Rest of World +9.6% +7.8%

+5.5%+5.5% +4.2%+4.2%


+12.2%+4.0%

+7.4%+4.7%

+17.4%

+9.7%+9.7%

TotalTotal

84Q4 2006IFRS, excl. biscuits

-8.3%

-3.8%

Q4 2007

+8.1%

VALUE

3,336 M€

2,805 M€ +5%

VOLUME

CURRENCY

-6.4%SCOPE OF

CONSOLIDATION

Group Q4 2007 Net Sales Growth

+18.9%

+13.1%Like-for-like

+16%

NUMICO

WAHAHA Q4 07

OTHER

+16%

+ HOD MEXICO (01/07)+ Danone Japan (04/07)+ Danone Chili (09/07)

NUMICO

+1.9%

85

H1 2007H1 2007 FY 2007FY 2007

Currency -3.1% -2.9%-2.9%-2.6%

Scope of consolidation -0.2% -0.9%-0.9%-1.8%

Like-for-like Net Sales +10.3% +9.7%+9.7%+9.2%

Reported Net Sales +4.8% +5.9%+5.9%+6.9%

H2 2007H2 2007

Balanced growth between H1 & H2

86

H1 H1 FY FY

12.69% 13.27%13.27%13.84%

Margin progression

-76 bp +3 bp+3 bp+81 bp

Operating margin 2006 13.03% 13.24%13.24%13.45%

H2 H2

Margin progression H1 & H2

Reported

+22 bp +45 bp+45 bp+67 bpLike-for-Like

Operating margin 2007

87

NumicoNumico

Numico 9M, Q4 & FY 2007

+10.7%+10.7%

9M 20079M 2007 Q4 2007Q4 2007

Baby Food +9.7%+4.0%Medical Nutrition +13.4%+10.2%

Europe +8.6%+6.5%

Asia +12.6%+5.1%

+5.7%+5.7%

Rest of World +17.7%+3.0%

FY 2007FY 2007Like-for-likeLike-for-like

+11.7%+14.5%

+11%+18.6%+16.8%

+12.5%+12.5%

88

9M 20079M 2007 FY 2007FY 2007

Currency +2.2% +1.3%+1.3%+1.9%

Scope of consolidation +1.8% +1.6%+1.6%+1.0%

Like-for-like Net Sales +5.7% +10.7%+10.7%+12.5%

Reported Net Sales +9.6% +7.8%+7.8%+1.7%

Q4 2007Q4 2007

Numico

89

NumicoNumico

NumicoQ4 2007 like-for-like sales growth Breakdown

volume/value


Baby Food -0.9% +4.9%Medical Nutrition +9.2% +1.0%

+1.9%+1.9% +3.8%+3.8%


+4.0%+10.2%

+5.7%+5.7%

TotalTotal

90

Balance Sheet

Working Capital (1 228)

Tangible & intangible assets 3 436

Financial Assets 302

Goodwill and Tradermarks 16 830

Assets held for sale 138

Investments in non consolidated companies 772

Investments in affiliates 1 263

Long term provisions and deferred tax assets (1 152)

Invested Capital 20 361

Shareholder's equity 9 100

Net Debt 11 261

Puts on minority 2 700

Others interests 8 561

Financing 20 361

91

From Numico operational peformance toNumico contribution to Danone

Pro forma adjustments:

Sales (-54) and EBITA (3): disposal of Baby Food assets in France and Belgium.

Trading Operating (128): exceptional costs linked to the offer and impact of inventory step-up

Numico 10

months

Numico 2

months Numico FYPro forma

adjustments Pro-forma

Sales Danone definition inc France 2 322 449 2 771 -54 2 717

EBITA 423 36 459 3 462

Trading operating profit 339 -17 322 128 450

% of Sales 14.6% -3.8% 11.6% 16.6%

Net income (current) 189 -17 172 91 263

92

FREE CASH FLOW FROM OPERATIONS

FY 2006

Cash from operations

FY 2007€ million

1 418 1 525

CAPEX (589) (666)

Disposal of assets 29 94

Wahaha 126 (57)

Exceptional financials 100 (103)

Biscuits 191 199

Free Cash Flow from Operations 1 099 1 142

Free Cash Flow from Operations 1 516 1 184

Working Capital change 241 189

Numico 0 3

93

Share buy-back program

Treasury Stock as of 31/12/2007

• 37,395,559 shares

• 7.29% of the outstanding capital*

Number of Sharesin % of outstanding capital at 31/12/07 1.68%

Investment

8,618,954

2007 2007 ShareShare buybuy --backback

*Outstanding capital as of 31/12/2007: 512,851,460

€ 507.90 M

Documents

Danone 2007 One more great year - library.corporate-ir.netlibrary.corporate-ir.net/library/13/131/131801/items/279719/2007FY... · Danone 2007 One more great ... or a solicitation