Danone Model in Motion

Transcription

1 Danone Model in Motion Franck Riboud Sept 7 th, 2011

2 2 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 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.

3 Danone Model in Motion A unique model Growing our categories and brands Productivities and cash efficiency 3 3

4 A unique mission, a unique portfolio Fresh dairy Products Developing a well being category worldwide Waters Hydration and elimination Danone worldwide position Baby nutrition Supporting growing children every step of the way Bring health through food to the largest number of people Medical nutrition Nutritional support for persons in fragile health #1 Fresh Dairy Products #2 Packaged water #2 Baby Nutrition #3 Medical Nutrition 4 4

5 5 Best positioned in fastest growing categories & geographies Fastest growing categories 2010 volume growth by category ~50% sales in emerging markets H sales breakdown Baby Nutrition 8.7% Medical Nutrition 6.5% Dairy Waters Savoury Biscuits and Crackers 5.7% 5.0% 4.6% Western Europe 38% Emerging markets Frozen Processed Food 2.8% 50% Sauces, Dressings and Condiments 2.8% Cheese Ice Cream Confectionery RTE Cereals Soup 2.3% 2.0% 1.6% 1.4% 0.8% North America 9% 3% Japan & ANZ Source : Euromonitor & Internal estimate

6 6 MICRUB: strongholds in emerging markets Sales proforma Unimilk % group sales mln % group sales Growth MEXICO 5% 1.0 5% INDONESIA 2% 0.9 5% >60% CHINA 11% 0.8 4% RUSSIA 3% % People USA 7% 1.4 8% BRAZIL 2% 0.7 4% Total MICRUB 30% 37% 60%

7 A strong H1 Objectives Results Sales growth (1) 6-8% 8.7% Trading operating margin around -30 bps (1) -23 bps (1) FCF (2) +8% (1) Like-for-like : Based on constant scope of consolidation (including 12 months Unimilk) and constant exchange rates (2) Free Cash Flow: Cash flow from operations less capital expenditure (net of disposals) and excluding business combinations fees 7

8 Danone Model in Motion A unique model Growing our categories and brands Productivities and cash efficiency 8 8

9 Broad based growth across ALL our businesses and geographies Like-for-like sales growth H Dairy w/o Unimilk 5.5% Europe w/o Unimilk 3.2% Dairy 6.0% Europe 4.0% Waters 16.2% Asia 19.5% Baby 10.4% ROW 13.6% Medical 9.0% 9

10 Growing our categories and brands - WATERS Aquadrinks - Growth vs year ago Segment weight (2010, value) Plain sparkling 8% HOD 12% Aquadrinks 21% 59% Plain still PET 2011 launches : Volvic Muscat (Japan) Bonafont hibiscus (Mexico) Mizone «Mango kweni» (Indonesia) Badoit «Fruit bubble» (France) 10 10

11 11 Growing our categories and brands BABY NUTRITION -9 m 0 m 12 m 36 m Supporting pregnant & lactating women Addressing the special needs of babies Building superiority over non specific food 2011 launches :

12 12 Growing our categories and brands MEDICAL NUTRITION 2011 launches :

13 Growing our categories and brands FRESH DAIRY PRODUCTS Danone Per Capita Consumption (kg/yr) & increases All Danone countries: + 33% pcc growth

14 14 Growing our categories and brands FRESH DAIRY PRODUCTS Packaging New channels + 19 pts preference New benefits New segments

15 Fresh Dairy Products in Russia : major growth area in volume & value Average consumption of Fresh Dairy Products Netherlands 35 France 1 cup a day Germany Portugal Spain Austria Finland Belgium Norway Sweden Iran Czech R. Bulgaria 1 cup every 2 days Argentina Slovakia UK Poland Hungary Russia Turkey Japan Algeria Canada Chile Ukraine Mexico Italy South Africa Brazil USA Romania Colombia Kazakhstan 1 cup a week Belarus China India 2% 3% 4% 5% 6% 7% 8% 9% 10% * GDP growth PPP (source EIU) Purchasing Power growth 15*

16 Danone-Unimilk integration creating a national leader Portfolio Regions Distribution Industrial & supply chain + Focus on Premium and Health Focused on the West Modern retail and Direct RTM Best-in-class practices Focus on traditional with reach to all SELs Focused on the East Presence in traditional channels Large network RUSSIA Belarus Ukraine 16

17 17 Danone-Unimilk integration creating a national leader Phase 1. Collaboration Phase 2. Integration 7 selected collaboration project in key business areas Identification of most potential areas of Danone and Unimilk best practices implementation Building organization with focus on: - Growth - Profitability - Sustainability Full scope integration Integration milestones : 07/2010 Deal announcement 09/2010 Collaboration initiatives 12/2010 Deal approval 03/2011 Joint Sales Team Pilot Building one company by 2012 One company

18 18 Unimilk : focusing on mix & profitability improvement Clear short term priorities Segmenting the portfolio FOCUS ON THE RIGHT KPIs PRODUCT MIX S1 like-for-like sales growth Prostokvashino brand 14% S Tëma brand 21% S Drive efficiency to invest behind brands GROSS MARGIN Trading operating margin 4.05% Integration SYNERGIES -0.65% -2.04% Q Q Q2 2011

19 19 Unimilk : focusing on mix & profitability improvement Brand portfolio dynamics Portfolio simplification Example of sku rationalization : Portfolio optimization Focus on Golden SKUs example of Golden SKU :

20 20 Fresh Dairy Products in US : Danone catching the opportunity 2010 PCC in LB 90.0 Potential : Doubling consumption Almost 2/3 s of all Yogurt Buyers only Buy the Category Once a Month or Less.

21 Danone performance in US Sales Danone Fresh Dairy Products* Danone* contribution to PCC evolution CAGR +10 % Total Market Groupe Danone Danone* market share (value) Groupe Danone* *Includes Danone US [Ex-Frusion & LaCreme] & Stonyfield Source: IRI 30.0 Competitor YTD11

22 The Greek Phenomenon US Fresh Dairy Products - Market Share by Segment Core Light Proactive Health Kids Greek YTD Source: IRI 22

23 Danone s Greek relaunch July

24 24

25 Activia innovations New Tastes & Formats Entering new distribution channel GREEK STYLE PARFAIT 1oz Crunchy Granola 5oz Creamy Vanilla Yogurt Thick and Creamy Crunchy and Creamy 2oz Real Strawberries FRENCH STYLE Silky and Fruity Fruit Bites on the Bottom 25

26 Danone Model in Motion A unique model Growing our categories and brands Productivities and cash efficiency 26 26

27 Input cost at high level and volatile 1000 S&P GSCI Commodity Index Source : Bloomberg 27

28 Strong productivities the first lever to manage input costs Productivity (1) ( mln) Change the Model Stretch the Model 324 H1 246 Innovate and change Do more with less Buy Better (1) Perimeter = COGS including logistic costs 28

29 Strong productivities the first lever to manage input costs 2011 Saudi Arabia Recipe - Danette 360 renovation Better product Cheaper recipe Product recipe score beat current (9.5) vs. (9.0) in consumer test Business opportunities to fuel brand growth Better nutrition Less CO2 Meet Nutritional requirements Fat and Energy reduction achieved No new ingredient excepted milk solids -17% CO 2 56 M litres of milk saved 21% water saving 29

30 Strong productivities the first lever to manage input costs Danone stand-alone before Unimilk Trading operating margin growth Like-for-like -8bps +36 bps +91bps -174bps -53bps +92bps 15.30% Net of +269 pts productivity Margin H Leverage & Others Pricing & Mix Input costs Other COGS A&P Margin H

31 FCF: virtuous model and strong performance Free-Cash-Flow (1) 2,000 1, ,183 1,427 H % vs H (1) Free cash flow: Cash flow from operations less capital expenditure (net of disposals) and excluding business combinations fees 31

32 32 Looking forward with confidence

33 2011 target confirmed H Objectives FY 2011 Sales growth (1) 8.7% 6-8% Trading operating margin -23 bps (1) around +20 bps (1) FCF (2) +8% on track for 2 bn in 2012 (1) Like-for-like : Based on constant scope of consolidation (including 12 months Unimilk) and constant exchange rates (2) Free Cash Flow: Cash flow from operations less capital expenditure (net of disposals) and excluding business combinations fees 33