Our Equation: Leverage & Invest Pierre-André Térisse Chief Financial Officer

Transcription

1 Our Equation: Leverage & Invest Pierre-André Térisse Chief Financial Officer

2 Building a high quality portfolio Our infancy:

3 Portfolio refocus Sales breakdown in 1996 Sales breakdown in 2006 Glass Container Beer Italian Cheese Sauces 8% 5% 3%3% Fresh Dairy Products 7% 26% 9% Prepared Food Pasta 9% Baby Food 10% Waters 20% Biscuits Baby Nutrition Waters Biscuits Fresh Dairy Products Emerging markets Emerging markets Western Europe 77% 17% 6% North America Western Europe 50% 39% 2% 9% Others North America 3

4 Building the new portfolio sales bridge -6pts bn bn -8pts +10pts 14.3 bn -5pts +7pts 14.1 bn 11.8 bn Sales 2000 Beers Cheese Others Waters Dairy Sales 2006 Sales ( mln) and like-for-like growth (%) +10.7% +7.6% 3, % Water +9.9% Annual Average growth: + 9.2% +10.0% +7.0% +14.8% 3, % +6.8% 6,488 Dairy +9.4% +9.6% +10.5% +7.0% Annual Average growth: + 8.5% +9.2% 7,

5 Building the Dairy model Sales ( mln) Activia Vitalinea Actimel Danonino ROW France Western Europe pts France ROW Western Europe 5

6 Building a high quality margin Trading operating margin (% of sales) 13.1% 13.3% 13.6% 10.0% 10.5% 10.8% 11.1% 11.7% 12.2% 8.9% 9.1%

7 Building a virtuous cash model Working Capital (% of sales) % -5.1% -6.4% -3.9% -4.3% -5.0% -6.2% Free cash flow (% of sales) 7.7% 8.5% 9.2% 10.0% 10.8% 4.4% 5.6%

8 Fast EPS expansion. As well. Underlying fully diluted EPS +17.9% +8.0% +11.0% +5.6% +10.9% % CAGR % 8

9 Completing the transformation From infancy to adult:

10 Completing our transformation Numico 3 years after Unimilk and our Emerging Platforms Increasing competitiveness through Reset Building our sustainability 10

11 Numico*: a full price but returns more than on track mln 2007** 2010 Like-for-like Business Plan Sales 3,170 4, % +10% Trading Operating income Trading operating margin 16.6% 19.1% +116 bps +70 bps FCF % +18% * Current DBMN Perimeter * *2008 for FCF 11

12 Transforming our emerging markets business in strong platforms 2006 % of total sales 2010 % of total sales MEXICO Bonafont / Danone 5% Danone / Bonafont 5% INDONESIA Biscuits / Aqua 2% Aqua / Nutricia / SH 5% CHINA Wahaha / Huy Yuan / Mengniu/ Robust 11% Dumex / Dairy / Mizone 4% RUSSIA 20% WBD / Danone Russia 3% Nutricia / Danone Unimilk 11% USA Dannon / Stonyfield 7% Dannon / MNI / Stonyfield / YoCream 8% BRAZIL Danone Brazil 2% Total MICRUB % Danone / Bonafont / Baby Total MICRUB % 37% 12

13 Unimilk: stepping-up in the CIS market Combined portfolio (2009 base) RUSSIA 44% Yogurt & flavoured milk % Belarus Ukraine 11% 19% Kefir Other dairy products % 22% 4% Milk % Others 13

14 Resetting Dairy: more than just price adjustments % of total volume % of total volume 38 $/kg 17% 13% 35 $/kg 23 $/kg 43% 34% 23 $/kg 20 $/kg 32% 24% 18 $/kg 24 $/kg 7% 28% 17 $/kg 14 14

15 Leveraging our platform And now? The adult age

16 Leveraging our platform A platform designed for GROWTH Managing our cost & MARGINS Generating and using CASH FLOW The engines of our EPS growth 16

17 A platform designed for growth Faster growing categories 2010 Volume growth Sales breakdown by region Baby Nutrition Medical Nutrition Dairy Waters Savoury Biscuits and Crackers Frozen Processed Food Sauces, Dressings and Condiments Cheese Ice Cream Confectionery RTE Cereals Soup 2.8% 2.8% 2.3% 2.0% 1.6% 1.4% 0.8% 6.5% 5.7% 5.0% 4.6% 8.7% Source : Euromonitor & Internal estimate Western Europe 39% North America 10% 2% Others Emerging markets 49% 17

18 Pricing: mechanics and limits CORE PRICING = CPI (Consumer Price Inflation) Area CPI (e) % Group sales Asia Pacific Mid single digit 13% Latin America High single digit 14% CIS High single digit 12% Raws and Packs COMPETITIVE PRICING 1. Absorb through productivity 2. Handle volatility 3. Selective price increases 18

19 Productivity: anchored in our model Best practices collection and roll out PURCHASING INDUSTRIAL LOGISTICS RECIPES PACKAGING WWBU Target setting CBUs Productivity mln and % COGS NATURE COMMERCIAL HQ & SERVICES

20 Our second engine: cash-flow 2, % Like-for-like growth 2,7 2,6 +0.2% +5.7% 2,5 +6.9% 2,4-5.0% , % +6.3% ,2 2,1 Underlying reported EPS 2009 Capital increase Scope Currency Sales Margin Financial & others Underlying reported EPS

21 Cashflow: cash obsession drives improvements Working Capital (% of 2010 sales) Dairy Waters Baby Nutrition Medical Nutrition +4.3% -7.8% -6.2% -5.1% Cash is everywhere Cash committees FCF = in all incentives Specific projects: Gem, Free Highly disciplined capex mgt Levers yet to activate Unimilk: optimizing industrial assets + working capital Medical Nutrition Converting DTA into cash 21 21

22 FCF: 10% and 2 bn in 2012 Free cash flow ( mln and % growth) +21% +20% +20% 2bn Free cash flow (% of sales) 9.52% 10.07% 7.70% 7.77%

23 Use of cash: strong distribution track record Free Cash Flow Dividend & SBB Rights issue = Consistent track record of cash distribution: dividend & share-buyback 2009 Rights Issue: refinancing Numico in the middle of the credit crunch 23

24 Financial policy: our second EPS engine 2, % Like-for-like growth 2,7 2,6 +0.2% +5.7% 2,5 +6.9% 2,4-5.0% , % +6.3% ,2 2,1 Underlying reported EPS 2009 Capital increase Scope Currency Sales Margin Financial & others Underlying reported EPS