Presentation
Barclays Global Consumer Staples Conference September 8, 2015
Emmanuel FABER, CEO
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 materially from those anticipated in these forward-looking statements. For a detailed description of these risks and uncertainties, please refer to the section “Risk Factors” in Danone’s Registration Document (which is available on www.danone.com). 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 refers to financial indicators that are not defined by IFRS. For a detailed description of these indicators, please refer to the section "Financial indicators not defined in IFRS" of the press releases on its results published by Danone (which are available on www.danone.com). Due to rounding, the sum of values presented in this document may differ from totals as reported. Such differences are not material.
2
H1 2015 HIGHLIGHTS - SOLID FINANCIAL RESULTS TOPLINE
MARGIN
EPS
+8.8%
12.12%
€1.37
+4.6% Like-for-like
[1] Trading
operating margin fully diluted earnings per share
[2] Underlying
[1]
[2]
+85 bps
+18.5%
+53 bps
+6.8%
Like-for-like
Like-for-like
3
H1 2015 KEY ACHIEVEMENTS
OPTIMIZE o Dairy Europe continued portfolio optimization o CIS optimization
BUILD
INVEST o Dairy additional reinvestment o Innovations to develop categories
NURTURE
o New organization design o Stronger model in ELN China
4
2015 - A STEP TOWARDS 2020
2014
2015
…
5
GROW THE DANONE PLATFORM IN THE US Lead yogurt category development
US total sales evolution
Expand Evian
x2 € 1.9bn
€ 1.0bn
Develop medical business
> +5% growth in 2014
2007
2014
Share expertise to win together
6
US WATERS: A TRANSFORMATION JOURNEY TO EXPAND EVIAN ON THE IMPORTED PREMIUM WATER MARKET In a fast growing market driven by a shift towards healthier hydration…
… evian has set the conditions for regaining competitiveness,
2016:
Bottled Water* PCC > Carbonated Soft Drinks PCC *including bulk/jug water but not HOD
Premium water market: +17% a new distribution system leveraging our scale and city focused activation...
…to win selected key playgrounds To win in in selected key playgrounds and and channels channels
7
US MEDICAL NUTRITION: LEADING NICHE PLAYER IN MEDICAL FOOD Expand our business step by step
Acquisition of Nutricia North America
2007
Focus on disease-specific categories
Acquisition of Applied Nutrition
2010
2012
Acquisition of Medical Nutrition USA (MNI)
Strong sales evolution driven by innovations and new therapeutic areas x2 >50% of total sales 2008
2014
8
US EARLY LIFE NUTRITION: DEVELOP THE ORGANIC PLATFORM WITH HAPPY FAMILY Organic over-performing in the Weaning Baby Food category
Strengthen our uniqueness within the organic baby food market
Organic = 20% of total Weaning Food category
>+20%
CAGR 2010-2014 =
Fastest growing baby food brand in Q2
+22%
$ mln 400
200
#1
Brand in Natural Channel
>20%
Market share of Organic Weaning Food category
High single digit growth
0 2010
2014
Organic Weaning Food Sales
Develop a differentiated portfolio Brand refresh
Focus on innovations
9
GROW THE DANONE PLATFORM IN THE US Lead yogurt category development
US Total sales evolution
Expand Evian
x2 € 1.9bn
€ 1.0bn
2007
Develop medical business > +5% growth in 2014
2014
Share expertise to win together
10
FRESH DAIRY PRODUCTS: PILLARS FOR DANNON’S FUTURE GROWTH
Continue building the right portfolio
Leverage channel dynamics
Lead growth of the category
11
DANONE AS A STRONG LEADER Consolidated leadership of the yogurt category
Co-leadership of the Greek segment
Average value market shares
60%
Average value market shares
40%
Danone(1)
40%
Competitor 1 Danone
20%
Competitor 3 Competitor 2
0% 2011
2012
2013
2014
YTD 2015
Source: IRI Multi Outlet
30% Competitor 1
20%
Competitor 2
10% 2011 (1) Danone
2012
2013
: including Stonyfield and YoCrunch
2014
YTD 2015
Source: IRI Multi Outlet
12
INNOVATIONS : MEET NEW MOMENTS OF CONSUMPTION AND DEVELOP NEW SEGMENTS Light&Fit Protein Shake: Address untapped needs
Danimals Squeezables: Support kids segment
YoCrunch: Enjoy yogurt differently
13
OIKOS TRIPLE ZERO: KEEP GROWING THE GREEK CATEGORY New formula within the Greek segment
Greater differentiation transitioning Triple Zero to black packaging
> +15% increase
on velocities since last May
*not a low calorie food
14
STONYFIELD: DRIVE NATURALITY THROUGH ORGANIC Push Baby & Kids segment through innovations & partnerships
Benefit from the rise of the « whole milk » trend on Adults segment
Innovations
Large format development
Partnerships
New multi-layer product
Certified Organic
15
FRESH DAIRY PRODUCTS: PILLARS FOR DANNON’S FUTURE GROWTH
Continue building the right portfolio
Leverage channel dynamics
Lead growth of the category
16
ENGAGE RETAILERS IN OUR GROWTH AGENDA Grow category aisle space…
+10%
Average feet/aisle
Reinvent our retail approach
20% 20.0’ 19% 19.0’
Build a proximity model of the organization
18.0’ 18% 17.0’ 17% 16.0’
16% Q1 13
Central Division + Kroger Division West Division
East Division
Q1 14
Q1 15
…and optimize shelf • …and optimize shelf
South Division
Dannon
Yogurt category
2012
2013
Revenue per SKU
2014
YTD Ending Jun e 28, 2015
17
ENHANCE LOCAL US PARTNERSHIPS TO SUPPORT CATEGORY GROWTH From Starbucks stores to grocery stores
A breakthrough multi-brands platform for NFL sponsorship
Extend partnership to thousands of grocery stores nationwide
Dedicated digital advertising campaign
18
FRESH DAIRY PRODUCTS: PILLARS FOR DANNON’S FUTURE GROWTH
Continue building the right portfolio
Leverage channel dynamics
Lead growth of the category
19
YOGURT: A STILL PROMISING CATEGORY The food trend of the decade
Per Capita Consumption evolution
A continued growing category Yogurt $ sales (in Bn)
Kg/capita
8
7.2
7
CAGR 2010-2015 : +5%
6 5 4
4.9
7.2
7.6
8
8.3
8.4
2014
2015 E
6.6
3 2 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Euromonitor
2010
2011
Source: Euromonitor
2012
2013
20
DEVELOP THE YOGURT CATEGORY TO IMPROVE AMERICANS’ NUTRITIONNAL DIET
Encourage Americans to eat yogurt every day
21
GROW THE DANONE PLATFORM IN THE US Lead yogurt category development
US Total sales evolution
Expand Evian
x2 € 1.9bn
€ 1.0bn
2007
Develop medical business > +5% growth in 2014
2014
Share expertise to win together
22
Emmanuel FABER, CEO
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 materially from those anticipated in these forward-looking statements. For a detailed description of these risks and uncertainties, please refer to the section “Risk Factors” in Danone’s Registration Document (which is available on www.danone.com). 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 refers to financial indicators that are not defined by IFRS. For a detailed description of these indicators, please refer to the section "Financial indicators not defined in IFRS" of the press releases on its results published by Danone (which are available on www.danone.com). Due to rounding, the sum of values presented in this document may differ from totals as reported. Such differences are not material.
2
H1 2015 HIGHLIGHTS - SOLID FINANCIAL RESULTS TOPLINE
MARGIN
EPS
+8.8%
12.12%
€1.37
+4.6% Like-for-like
[1] Trading
operating margin fully diluted earnings per share
[2] Underlying
[1]
[2]
+85 bps
+18.5%
+53 bps
+6.8%
Like-for-like
Like-for-like
3
H1 2015 KEY ACHIEVEMENTS
OPTIMIZE o Dairy Europe continued portfolio optimization o CIS optimization
BUILD
INVEST o Dairy additional reinvestment o Innovations to develop categories
NURTURE
o New organization design o Stronger model in ELN China
4
2015 - A STEP TOWARDS 2020
2014
2015
…
5
GROW THE DANONE PLATFORM IN THE US Lead yogurt category development
US total sales evolution
Expand Evian
x2 € 1.9bn
€ 1.0bn
Develop medical business
> +5% growth in 2014
2007
2014
Share expertise to win together
6
US WATERS: A TRANSFORMATION JOURNEY TO EXPAND EVIAN ON THE IMPORTED PREMIUM WATER MARKET In a fast growing market driven by a shift towards healthier hydration…
… evian has set the conditions for regaining competitiveness,
2016:
Bottled Water* PCC > Carbonated Soft Drinks PCC *including bulk/jug water but not HOD
Premium water market: +17% a new distribution system leveraging our scale and city focused activation...
…to win selected key playgrounds To win in in selected key playgrounds and and channels channels
7
US MEDICAL NUTRITION: LEADING NICHE PLAYER IN MEDICAL FOOD Expand our business step by step
Acquisition of Nutricia North America
2007
Focus on disease-specific categories
Acquisition of Applied Nutrition
2010
2012
Acquisition of Medical Nutrition USA (MNI)
Strong sales evolution driven by innovations and new therapeutic areas x2 >50% of total sales 2008
2014
8
US EARLY LIFE NUTRITION: DEVELOP THE ORGANIC PLATFORM WITH HAPPY FAMILY Organic over-performing in the Weaning Baby Food category
Strengthen our uniqueness within the organic baby food market
Organic = 20% of total Weaning Food category
>+20%
CAGR 2010-2014 =
Fastest growing baby food brand in Q2
+22%
$ mln 400
200
#1
Brand in Natural Channel
>20%
Market share of Organic Weaning Food category
High single digit growth
0 2010
2014
Organic Weaning Food Sales
Develop a differentiated portfolio Brand refresh
Focus on innovations
9
GROW THE DANONE PLATFORM IN THE US Lead yogurt category development
US Total sales evolution
Expand Evian
x2 € 1.9bn
€ 1.0bn
2007
Develop medical business > +5% growth in 2014
2014
Share expertise to win together
10
FRESH DAIRY PRODUCTS: PILLARS FOR DANNON’S FUTURE GROWTH
Continue building the right portfolio
Leverage channel dynamics
Lead growth of the category
11
DANONE AS A STRONG LEADER Consolidated leadership of the yogurt category
Co-leadership of the Greek segment
Average value market shares
60%
Average value market shares
40%
Danone(1)
40%
Competitor 1 Danone
20%
Competitor 3 Competitor 2
0% 2011
2012
2013
2014
YTD 2015
Source: IRI Multi Outlet
30% Competitor 1
20%
Competitor 2
10% 2011 (1) Danone
2012
2013
: including Stonyfield and YoCrunch
2014
YTD 2015
Source: IRI Multi Outlet
12
INNOVATIONS : MEET NEW MOMENTS OF CONSUMPTION AND DEVELOP NEW SEGMENTS Light&Fit Protein Shake: Address untapped needs
Danimals Squeezables: Support kids segment
YoCrunch: Enjoy yogurt differently
13
OIKOS TRIPLE ZERO: KEEP GROWING THE GREEK CATEGORY New formula within the Greek segment
Greater differentiation transitioning Triple Zero to black packaging
> +15% increase
on velocities since last May
*not a low calorie food
14
STONYFIELD: DRIVE NATURALITY THROUGH ORGANIC Push Baby & Kids segment through innovations & partnerships
Benefit from the rise of the « whole milk » trend on Adults segment
Innovations
Large format development
Partnerships
New multi-layer product
Certified Organic
15
FRESH DAIRY PRODUCTS: PILLARS FOR DANNON’S FUTURE GROWTH
Continue building the right portfolio
Leverage channel dynamics
Lead growth of the category
16
ENGAGE RETAILERS IN OUR GROWTH AGENDA Grow category aisle space…
+10%
Average feet/aisle
Reinvent our retail approach
20% 20.0’ 19% 19.0’
Build a proximity model of the organization
18.0’ 18% 17.0’ 17% 16.0’
16% Q1 13
Central Division + Kroger Division West Division
East Division
Q1 14
Q1 15
…and optimize shelf • …and optimize shelf
South Division
Dannon
Yogurt category
2012
2013
Revenue per SKU
2014
YTD Ending Jun e 28, 2015
17
ENHANCE LOCAL US PARTNERSHIPS TO SUPPORT CATEGORY GROWTH From Starbucks stores to grocery stores
A breakthrough multi-brands platform for NFL sponsorship
Extend partnership to thousands of grocery stores nationwide
Dedicated digital advertising campaign
18
FRESH DAIRY PRODUCTS: PILLARS FOR DANNON’S FUTURE GROWTH
Continue building the right portfolio
Leverage channel dynamics
Lead growth of the category
19
YOGURT: A STILL PROMISING CATEGORY The food trend of the decade
Per Capita Consumption evolution
A continued growing category Yogurt $ sales (in Bn)
Kg/capita
8
7.2
7
CAGR 2010-2015 : +5%
6 5 4
4.9
7.2
7.6
8
8.3
8.4
2014
2015 E
6.6
3 2 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Euromonitor
2010
2011
Source: Euromonitor
2012
2013
20
DEVELOP THE YOGURT CATEGORY TO IMPROVE AMERICANS’ NUTRITIONNAL DIET
Encourage Americans to eat yogurt every day
21
GROW THE DANONE PLATFORM IN THE US Lead yogurt category development
US Total sales evolution
Expand Evian
x2 € 1.9bn
€ 1.0bn
2007
Develop medical business > +5% growth in 2014
2014
Share expertise to win together
22
