SG Premium Review 2012
Pierre-André Térisse The Premium Review Conference Paris – Novembre 29th, 2012
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 Annual Report (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.
2
Danone 2008-2012:
3
Our geographies: A different view
4
Our geographies: A different view
EUROPE (ex CIS)
NORAM & CIS
GROWTH MARKETS
5
A geographical transformation 2008 Growth markets 29%
H1 2012 Growth markets 37% Europe 42%
Europe 57% NORAM CIS 14%
NORAM & CIS 21%
Growth markets 41%
Growth markets 25%
Europe 46%
Europe; 64%
NORAM & CIS 11%
NORAM & CIS 13%
6
2008 – 2012: Growth markets / NORAM & CIS Sales (€ bn)
Trading operating margin 14.5% 6.8
12.9%
12.9%
13.0%
2011
2008
2009
2010
11.4%
12.0%
5.9 4.4
4.6
2008
2009
2010
3.9
2.1
2008
2009
2010
2012
11.2% 9.3%
2.7 2.2
2011
2011
2008
2009
2010
2011
2012 7
2008 – 2012: Europe (ex CIS)
Trading operating margin
Sales (€ bn)
8.7
8.5
8.6
16.8%
17.5%
17.9%
17.4%
2009
2010
2011
8.3
2008
2009
2010
2011
2008
2012
8
Resulting Group equation
FY 2011
% Group Sales
LFL Growth
LFL margin change
GROWTH MARKETS
35%
+ 19%
+ [100-150]
NORAM & CIS
20%
+ 5%
+ [50-100]
EUROPE (ex CIS)
45%
+ 2%
- [50-100]
TOTAL
100%
+ 7.8%
+ 20 bps
9
Increasingly contrasted equations
% Group Sales
9M12 LFL growth
H112 LFL margin change
GROWTH MARKETS
37%
+ 16%
+ [50-100]
NORAM & CIS
21%
+ 5%
+ [100-150]
EUROPE (ex CIS)
42%
- 2%
- [200-250]
TOTAL
100%
+ 5.6%
- 60 bps
2012
10
Europe:
11
Europe: A unique portfolio of strong positions
EUROPE No. 1 fresh dairy No. 2 bottled water No. 1 baby nutrition No. 1 medical nutrition No. 2 fresh dairy No. 1 bottled water No. 1 baby nutrition No. 1 medical nutrition
No. 2 fresh dairy No. 2 bottled water No. 2 baby nutrition No. 2 medical nutrition No. 1 fresh dairy No. 1 bottled water No. 1 baby nutrition
No. 1 fresh dairy No. 2 bottled water No. 1 baby nutrition No. 1 medical nutrition
No. 1 fresh dairy No. 2 bottled water No. 3 baby nutrition No. 2 medical nutrition
No. 1 fresh dairy No. 2 baby nutrition No. 1 medical nutrition No. 2 fresh dairy No. 3 bottled water No. 1 baby nutrition No. 2 medical nutrition 12
Europe: Strong brand platforms
Activia Actimel Aptamil & Immunity Volvic Evian Blédina Bebelac & Superior nutrition Danette Fortimel Vitalinea Danonino
13
Difficult but contrasted Macro Environment Unemployment rate: 15-25% 10 -15% 5 -10% 0 - 5%
GDP - 0.2%
GDP +0.8%
GDP +0.1% GDP - 1.6%
GDP growth 2012 – The Economist
GP - 2.4%
GDP +3.2% 14
Difficult Tax Environment
VAT increases
Spain 2010
Spain 2012
Italy 2013*
Tax increases
+ 1 pt
France package (2013)
+ € 30 bn
+ 2 pts
Spain package (2012 - 2014)
+ € 34 bn
+ 1 pt
Italy package (2013)
+ € 12 bn
* Under discussion 15
France: balanced portfolio in a balanced environment France – Dairy sales growth
2008
2009
2010
2011
H1 2012
France – Sales breakdown Market share volume
Market share value
Medical Nutrition 5% Baby Nutrition 21%
28.8% 27.8% Dairy 50%
Waters 24%
2008
2009
2010
2011
YTD 2012
16
Southern Europe under pressure Dairy - Southern Europe - Sales growth
Q1 11
Q3 11
Q4 11
Q1 12
Q2 12
Q3 12
Spain EBIT
Spain Sales Baby Nutrition
Q2 11
Medical Nutrition Baby Nutrition
Waters
Waters
Dairy
Dairy
Dairy 78%
Medical Nutrition
Dairy 83% 17
Restoring growth in Southern Europe: A clear roadmap
Drive category growth
Ministry endorsement + industry collaboration
TV
Deliver value for money Pot lid messaging
Sampling
Teachers guide
Deepen consumer connection
18
Restoring growth in Southern Europe: A clear roadmap
Drive category growth
Deliver value for money
Deepen consumer connection
The best product
The right price point
Differentiating innovation
19
Restoring growth in Southern Europe: A clear roadmap
Drive category growth Services & Contents
Deliver value for money Target heavy users
Deepen consumer connection
550 K users 130k Actives 20
Limited inflation transfer to the consumer
GSCI Index
1000
Price/mix vs inflation in Europe
>10%
900 800 700 600 500 400 300
1%
200 100 0
2 years Inflation average 2010-2011
(1) Source: Bloomberg
2 years price/mix (CAGR) 2010-2011
21
Managing margins: productivity & cost
Boosted Productivity (€ mln)
Example: Upgrading and optimizing our purchasing organization
Danone productivity (€ mln)
> 500 516
Strong purchasing platforms for Baby & Medical
528
470
DanSource project
324 Dairy: expert structure in second-tier buying
H1 246 2008
2009
2010
2011
2012
22
Growth
*Including NORAM & CIS
* markets
23
Growth Makets: unique portfolio of strong positions
R U
No. 1 fresh dairy No. 1 fresh dairy
M
No. 1 fresh dairy No. 2 baby nutrition
No. 1 fresh dairy No. 1 bottled water
B
No. 1 fresh dairy
I
No. 1 fresh dairy No. 2 baby nutrition No. 2 medical nutrition No. 1 fresh dairy No. 1 bottled water
C
No. 1 baby nutrition No. 1 medical nutrition
No. 1 bottled water No. 1 baby nutrition
No. 1 fresh dairy
24
Growth markets: building platforms
2012 agenda Activating the key brands
2011 priorities Integration
Drive efficiency to invest behind brands Segment the portfolio
Unimilk - Trading operating margin
2012 Danone Unimilk margin
FY11: 4.5% FY10: 2.3%
H1 2010
H2 2010
H1 2011
H2 2011 25
2012: new step in 2 key regions Majority stake in CLM (Morocco)
Acquisition of Wockhardt (India)
•
Number 2 player
•
National sales coverage
•
More that 30,000 HCPs /doctors coverage
•
+22% sales growth H1 2012
26
GM: Big brands
Activia
Bebelac & Superior nutrition
Dumex
Prostokvashino
Bonafont
Danonino
Aqua
Mizone
Oikos 27
Growth markets: Investing behind our brands
US
China
100%
100%
Others
36%
38%
Comp. 3
11%
10%
15%
15%
17%
18%
2011 YTD
2012 YTD
Value Market shares Source : IRI Multi-Outlet with Walmart
31.9 Total Danone 27.0 Competitor 1
Comp. 2 16.3 Competitor 2 8.5 Danone Greek(1)
Q4 2011 (1) Dannon + Stonyfield + Light & Fit Greek
Comp. 1
Q3 2012 NB: SOM in SPRE segment in Modern Trade – Source: Nielsen RI
28
Growth markets: Consistent profitable growth
Growth markets – Sales*
NORAM & CIS – Sales* CAGR 07-11: +8%
CAGR 07-11: +15%
2008
2009
2010
2011
2008
2009
2010
2011
LFL Margin change 2007-2011:
LFL Margin change 2007-2011:
> +200 bps
> +100 bps
*Sales in € mln & like-for-like CAGR growth
29
Conclusion:
30
A fast moving portfolio
Evolution of sales by region 65% 60%
59%
58% 56%
55%
54%
50% 45%
44%
46%
55% 53% 47% 45% 42%
41%
40% 35% 30% 2007
2008
2009
Europe (exc.CIS)
2010
2011
YTD 2012 (9M)
Growth markets 31
A strong engine for growth
% Group Sales
9M12 LFL Growth
H112 LFL Margin change
GROWTH MARKETS
37%
+ 16%
+ [50-100]
NORAM & CIS
21%
+ 5%
+ [100-150]
EUROPE (ex CIS)
42%
- 2%
- [200-250]
TOTAL
100%
+ 5.6%
- 60 bps
2012
32
A strong platform with clear priorities
A strong underlying model
Clear short term priorities: • Growth markets: sustain profitable growth • Europe: resume top line & push productivities
33
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 Annual Report (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.
2
Danone 2008-2012:
3
Our geographies: A different view
4
Our geographies: A different view
EUROPE (ex CIS)
NORAM & CIS
GROWTH MARKETS
5
A geographical transformation 2008 Growth markets 29%
H1 2012 Growth markets 37% Europe 42%
Europe 57% NORAM CIS 14%
NORAM & CIS 21%
Growth markets 41%
Growth markets 25%
Europe 46%
Europe; 64%
NORAM & CIS 11%
NORAM & CIS 13%
6
2008 – 2012: Growth markets / NORAM & CIS Sales (€ bn)
Trading operating margin 14.5% 6.8
12.9%
12.9%
13.0%
2011
2008
2009
2010
11.4%
12.0%
5.9 4.4
4.6
2008
2009
2010
3.9
2.1
2008
2009
2010
2012
11.2% 9.3%
2.7 2.2
2011
2011
2008
2009
2010
2011
2012 7
2008 – 2012: Europe (ex CIS)
Trading operating margin
Sales (€ bn)
8.7
8.5
8.6
16.8%
17.5%
17.9%
17.4%
2009
2010
2011
8.3
2008
2009
2010
2011
2008
2012
8
Resulting Group equation
FY 2011
% Group Sales
LFL Growth
LFL margin change
GROWTH MARKETS
35%
+ 19%
+ [100-150]
NORAM & CIS
20%
+ 5%
+ [50-100]
EUROPE (ex CIS)
45%
+ 2%
- [50-100]
TOTAL
100%
+ 7.8%
+ 20 bps
9
Increasingly contrasted equations
% Group Sales
9M12 LFL growth
H112 LFL margin change
GROWTH MARKETS
37%
+ 16%
+ [50-100]
NORAM & CIS
21%
+ 5%
+ [100-150]
EUROPE (ex CIS)
42%
- 2%
- [200-250]
TOTAL
100%
+ 5.6%
- 60 bps
2012
10
Europe:
11
Europe: A unique portfolio of strong positions
EUROPE No. 1 fresh dairy No. 2 bottled water No. 1 baby nutrition No. 1 medical nutrition No. 2 fresh dairy No. 1 bottled water No. 1 baby nutrition No. 1 medical nutrition
No. 2 fresh dairy No. 2 bottled water No. 2 baby nutrition No. 2 medical nutrition No. 1 fresh dairy No. 1 bottled water No. 1 baby nutrition
No. 1 fresh dairy No. 2 bottled water No. 1 baby nutrition No. 1 medical nutrition
No. 1 fresh dairy No. 2 bottled water No. 3 baby nutrition No. 2 medical nutrition
No. 1 fresh dairy No. 2 baby nutrition No. 1 medical nutrition No. 2 fresh dairy No. 3 bottled water No. 1 baby nutrition No. 2 medical nutrition 12
Europe: Strong brand platforms
Activia Actimel Aptamil & Immunity Volvic Evian Blédina Bebelac & Superior nutrition Danette Fortimel Vitalinea Danonino
13
Difficult but contrasted Macro Environment Unemployment rate: 15-25% 10 -15% 5 -10% 0 - 5%
GDP - 0.2%
GDP +0.8%
GDP +0.1% GDP - 1.6%
GDP growth 2012 – The Economist
GP - 2.4%
GDP +3.2% 14
Difficult Tax Environment
VAT increases
Spain 2010
Spain 2012
Italy 2013*
Tax increases
+ 1 pt
France package (2013)
+ € 30 bn
+ 2 pts
Spain package (2012 - 2014)
+ € 34 bn
+ 1 pt
Italy package (2013)
+ € 12 bn
* Under discussion 15
France: balanced portfolio in a balanced environment France – Dairy sales growth
2008
2009
2010
2011
H1 2012
France – Sales breakdown Market share volume
Market share value
Medical Nutrition 5% Baby Nutrition 21%
28.8% 27.8% Dairy 50%
Waters 24%
2008
2009
2010
2011
YTD 2012
16
Southern Europe under pressure Dairy - Southern Europe - Sales growth
Q1 11
Q3 11
Q4 11
Q1 12
Q2 12
Q3 12
Spain EBIT
Spain Sales Baby Nutrition
Q2 11
Medical Nutrition Baby Nutrition
Waters
Waters
Dairy
Dairy
Dairy 78%
Medical Nutrition
Dairy 83% 17
Restoring growth in Southern Europe: A clear roadmap
Drive category growth
Ministry endorsement + industry collaboration
TV
Deliver value for money Pot lid messaging
Sampling
Teachers guide
Deepen consumer connection
18
Restoring growth in Southern Europe: A clear roadmap
Drive category growth
Deliver value for money
Deepen consumer connection
The best product
The right price point
Differentiating innovation
19
Restoring growth in Southern Europe: A clear roadmap
Drive category growth Services & Contents
Deliver value for money Target heavy users
Deepen consumer connection
550 K users 130k Actives 20
Limited inflation transfer to the consumer
GSCI Index
1000
Price/mix vs inflation in Europe
>10%
900 800 700 600 500 400 300
1%
200 100 0
2 years Inflation average 2010-2011
(1) Source: Bloomberg
2 years price/mix (CAGR) 2010-2011
21
Managing margins: productivity & cost
Boosted Productivity (€ mln)
Example: Upgrading and optimizing our purchasing organization
Danone productivity (€ mln)
> 500 516
Strong purchasing platforms for Baby & Medical
528
470
DanSource project
324 Dairy: expert structure in second-tier buying
H1 246 2008
2009
2010
2011
2012
22
Growth
*Including NORAM & CIS
* markets
23
Growth Makets: unique portfolio of strong positions
R U
No. 1 fresh dairy No. 1 fresh dairy
M
No. 1 fresh dairy No. 2 baby nutrition
No. 1 fresh dairy No. 1 bottled water
B
No. 1 fresh dairy
I
No. 1 fresh dairy No. 2 baby nutrition No. 2 medical nutrition No. 1 fresh dairy No. 1 bottled water
C
No. 1 baby nutrition No. 1 medical nutrition
No. 1 bottled water No. 1 baby nutrition
No. 1 fresh dairy
24
Growth markets: building platforms
2012 agenda Activating the key brands
2011 priorities Integration
Drive efficiency to invest behind brands Segment the portfolio
Unimilk - Trading operating margin
2012 Danone Unimilk margin
FY11: 4.5% FY10: 2.3%
H1 2010
H2 2010
H1 2011
H2 2011 25
2012: new step in 2 key regions Majority stake in CLM (Morocco)
Acquisition of Wockhardt (India)
•
Number 2 player
•
National sales coverage
•
More that 30,000 HCPs /doctors coverage
•
+22% sales growth H1 2012
26
GM: Big brands
Activia
Bebelac & Superior nutrition
Dumex
Prostokvashino
Bonafont
Danonino
Aqua
Mizone
Oikos 27
Growth markets: Investing behind our brands
US
China
100%
100%
Others
36%
38%
Comp. 3
11%
10%
15%
15%
17%
18%
2011 YTD
2012 YTD
Value Market shares Source : IRI Multi-Outlet with Walmart
31.9 Total Danone 27.0 Competitor 1
Comp. 2 16.3 Competitor 2 8.5 Danone Greek(1)
Q4 2011 (1) Dannon + Stonyfield + Light & Fit Greek
Comp. 1
Q3 2012 NB: SOM in SPRE segment in Modern Trade – Source: Nielsen RI
28
Growth markets: Consistent profitable growth
Growth markets – Sales*
NORAM & CIS – Sales* CAGR 07-11: +8%
CAGR 07-11: +15%
2008
2009
2010
2011
2008
2009
2010
2011
LFL Margin change 2007-2011:
LFL Margin change 2007-2011:
> +200 bps
> +100 bps
*Sales in € mln & like-for-like CAGR growth
29
Conclusion:
30
A fast moving portfolio
Evolution of sales by region 65% 60%
59%
58% 56%
55%
54%
50% 45%
44%
46%
55% 53% 47% 45% 42%
41%
40% 35% 30% 2007
2008
2009
Europe (exc.CIS)
2010
2011
YTD 2012 (9M)
Growth markets 31
A strong engine for growth
% Group Sales
9M12 LFL Growth
H112 LFL Margin change
GROWTH MARKETS
37%
+ 16%
+ [50-100]
NORAM & CIS
21%
+ 5%
+ [100-150]
EUROPE (ex CIS)
42%
- 2%
- [200-250]
TOTAL
100%
+ 5.6%
- 60 bps
2012
32
A strong platform with clear priorities
A strong underlying model
Clear short term priorities: • Growth markets: sustain profitable growth • Europe: resume top line & push productivities
33
