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Emmanuel FABERCo-COO
Danone:a living organization
Since 2008, we have transformed the company in many dimensions
People
• 50,000 persons trained to leadership
• Access to health insurance to 24,000 persons
• 51,000 jobs created or consolidatedthrough Ecosystem Fund
Since 2008, we have transformed the company in many dimensions
For all
• From 600 to approx.900mln Danone consumers
• danone.communitiesgrown to 10 projects
Since 2008, we have transformed the company in many dimensions
Nature
• -30% CO2 reduction
• SAP measuring process
• Creation of Livelihood Fund
Since 2008, we have transformed the company in many dimensions
• Leveraging local context: Nutriplanet in 38 countries
• Demonstrating our products nutritional superiority: Nutriprogress in 55 BUs
Health
For next 3 years, 3 key pillars to the Danone mission
MissionBringing HEALTH through foodto as many people as possible
Working along the whole foodchain
to build an EDGE
Securing access to resourcesat manageable price
Better use resourcesand reduce costs
Increase brand equity
Scarce resource, increasingly volatile costs
0
100
200
300
400
500
600
700
800
900
1000
GSCI Index
Egypt: Dan Farm Community
At the heart of our business: Developing & securing quality milk supply
Dairy farm 100% controlled by Danone to secure both volumes and quality
.Russia: Milk Business Academy
At the heart of our business: Developing & securing quality milk supply
Education program for Russian dairyfarmers
• Objective: ensure high quality and long-term supply of milk to Danone-Unimilk; increase productivity
• Purpose: a teaching farm to providepractical trainings and agricultural education
KlatenEvian’s impluvium
protection
At the heart of our business: Protecting natural water resources
Develop sustainable agriculture practices (and agroforestry to protect water resources on long term, empower farmers families in Pusur water shed in 4 years:
• CIRAD project to improve irrigated agriculture & empower farmers
• Agro forestry projects in up stream area (100.000 trees planted)
• Organic rice model close to AQUA village (already 20 Ha converted)
• > 15 years of filtration
• APIEME
• Classified Ramsar zone
Context
Create a safe, economical and socially focused recycling model in Mexico
At the heart of our business: Developing the recycling chain
Recycled PET is 60€/t (5%) cheaperthan virgin PET outside France
Only 20% of PET is recovered70% goes to China
Collection & sorting performed by wastepickers: the “pepenadores”:• Very low efficiency due to very hard
conditions• Social exploitation & poor life
conditions (220USD / month average)
Action
Lack of offer & “Rpet war” in Mexico:
€100 mln Ecosystem Fund:41 active projects in cooperation with NGOs
� 41 active projects� Consolidation/creation of 51 000 jobs
SOURCING (18)
DISTRIBUTION (7)
CARING SERVICES (7)
RECYCLING (4)
TERRITORY (5)
Dairy (23)
Waters(7)
Baby(7)
Medical(4)
Platinum roll out And much more potential
Beyond access: Making the most of our resources
Cheeseproducts
Excess CreamTo sell
Greek yoghurt
Lactose Whey to sell (low protein)
YoghurtsDrinksDesserts
Excess MilkTo sell
7 MillionTonnes Milk
+100 K Tons
DairyComponent
powders
Milk cracking
Beyond access: Making the most of our resources
600
100
Met
hane
(g/
d)
Lait C18 (%)10 70
Y=-8.72x + 729R² = 0.88
Improved feeding increase milk nutritional density while reducing methan emission
2008
-4.3%
2009
-10.5%
2010
-22%
2011
-27,5%
2012 Objective
-30%
CO2/kg group reduction
(1) Base scope all but agriculture, cumulated CO2 intensity reduction
Correlating CO 2 reduction and cost savings
Efficient & innovative foodchain management a key contributor to productivity
324
470516 528
2008 2009 2010 2011 2012
> 500
Danone Productivity 2008-2012 (€ mln)
… and a key contributor to brand equity
Danone ranks9 out of 50 global brands
Increase share of mind of our categories…
Competitors
NGOs & activists
KOLs
Health organizations
Regulators
Journalists & bloggers
Consumers are confused
… in a world of increasedaccess to exponentialamount of information
Investment
This revolution calls for significant changesin the way we interact with our environment
$
Mindset
Technology
Weight of digital:
Danone media investment
Average media consumption
2010
3%
2011
8%
40%
This revolution calls for significant changesin the way we interact with our environment
Adapt to mobile, to ecommerce, listening tools,
owning the data
Eg China e-tailing
Investment$
Mindset
Technology
This revolution calls for significant changesin the way we interact with our environment
360 vision of our business from
outside: nature, health, employment, affordability, etc…
Engaging all stakeholders
by involving them in decision making and innovation process
Investment$
Mindset
Technology
New ways of working
CO-designed with Barcelona Design Students
Crowdsourced among a select group of top talent in
collaboration with Poptent
2010Raise awareness
Milk AmountChecker
2011Partnership
PediatricAssociation
HCP MeetingsWith Ministry
of Health
Connectto Bloggers
TV Series
2012Education
Social Responsability
Project
HCP E-Meetings- 25% cvg.
Milk Centric Diet
WHOBabies need 500ml milk
after 6 months
290 ml
6-12 monthsactual milk
intake
Turkey: Educating on the need for milk intake after 6 mon ths(Breast milk completed by Follow on Formulae if necessary)
Breast Milk(+FOF)
(1) * Observational Study performed by pediatritions with 577 mothers of babies > 6 mth
New ways of working:Co-creation
Min 500 ml
More than 1 bnDanone consumers
in the world
15 years of pushing back the frontiers
17% 51%Emerging markets
77%Western Europe
17%Emergingmarkets
6%NorthAmerica
38%Western Europe
9%North America
51%Emergingmarkets
2%Japan + ANZ
Sales breakdown in 2011Sales breakdown in 1996
MICRUBs: 6 major countries as our flagships
Sales 40%
Sales growth 66%ROP 43%
H1 2012 weight on…
Increased capabilities to adapt for local relevance
Brazil: driving growth in Medical Nutrition
Medical Credibility
+2pt MS in 2 years
Increased capabilities to adapt for local relevance
Mizone China: unique sensory signature, unique positioning
0
50
100
150
200
250
300
350
400
450
500
2007 2008 2009 2010 2011 2012
CAGR
35%
Increased capabilities to adapt for local relevance
US: playing the right segments & channels
Increased capabilities to adapt for local relevance
Indonesia: Successful business model focusedon Indonesian kids’ needs
• Superior taste• Low cost recipe
• Vegetables protein• Target deficiency
• Iron & zinc focus
Sales x2.5 in 2 years
2010 2011 2012e
2012: new step in 2 key regions
• Number 2 player• National sales coverage• More that 30,000 HCPs /doctors coverage• +22% sales growth H1 2012
India: Acquisition of Wockhardt
2012: new step in 2 key regions
Morocco: Majority stake in CLM
Dairy – Value Market shares
Planting the seeds in Africa
Nutriplanet in 9 countries
• Phased entry (from export tu full operating business)
• Developing adapted portfolio
• Adapting Route To Market
Expanding Baby Nutrition reach
Planting the seeds in Africa:Example of Senegal
Senegal
� Laiterie du berger: mini-factory – nomadicpeul cattle risers
� Moss Tekki: co-creation
� Livelihood Fund: 100 mln mangrove trees
Building on long term partnerships
1998
1993
1997
20041955
1998
2010
20101998
2001
1997
Danone model for 15 years
Superior
Profitable
Sustainable
Growth
Increasingly contrasted equations
% Group SalesH112 LFL
Margin change9M12 LFLGrowth2012
EUROPE (ex CIS)
NORAM & CIS
GROWTHMARKETS
42%
21%
37%
- [200-250]
+ [100-150]
+ [50-100]
- 2%
+ 5%
+ 16%
TOTAL 100% - 60 bps+ 5.6%
H1 2012
Sales
2008
EBIT
Europe 57%
NORAM CIS14%
Growthmarkets
29%
Europe 42%
NORAM & CIS 21%
Growth markets
37%
Europe; 64%
NORAM & CIS 11%
Growth markets
25%Europe
46%
NORAM & CIS 13%
Growth markets
41%
A geographical transformation
Living ferment of this transformation
• Entrepreneurial and agile• Free-thinking and pragmatic• Co-creation and sharing
UNIQUE
Our culture
