H RESULTS. July 30 th,

Transcription

1 H RESULTS July 30 th,

2 FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements that reflect Danone's current views and estimates. These statements are based on many factors and assumptions. Changes in such factors or assumptions could produce significantly different results. 2

3 AGENDA Update on Recent Strategic Moves (AGE) Update on Wahaha (EF) H Results (AGE) 3

4 A STRATEGIC REINFORCEMENT Over the past few months, Danone has initiated a significant repositioning centered on its core strategic mission: To become the fastest growing food company with a dominant health positioning Sale of Biscuits activity Friendly offer to acquire Numico This intensive M&A activity did not distract us from delivering superior performance Top-line growth well above guidance Strong margin improvement in spite of negative headwinds Continuous EPS growth 4

5 BABY FOOD UPDATE In recent months we have identified Numico as a unique strategic fit for Danone We have reached a friendly deal with the Numico board Subject to regulatory approvals we expect to close the deal around end of Q3 Organization of Numico as a new division of Danone has been prepared 5

6 SALE OF BISCUITS ACTIVITY TO KRAFT Scope: All Danone Biscuits activities, excluding Britannia and Arcor JV Price: 5.3bnE at 13.7x 2006A EBITDA Conditions: consultation with employee representatives and regulatory approvals Closing: expected by 2007 year-end Process on track and with a solid business performance in H

7 DANONE READY FOR 2008 CHALLENGES Danone will be in its new configuration as of January 1st, 2008 Priorities for H2 2007: Continue to apply the same level of focus on operational execution and performance At current scope (ie: including Biscuits, excluding the Numico transactio) we confirm our current guidance for 2007 (top-line and margin) The 2008 and mid-term targets will be announced after Numico is acquired (Q4 2007) 7

8 UPDATE ON WAHAHA 8

9 RESULTS H

10 H RESULTS The disposal of the biscuits activities will most probably take place at 2007 year-end The activity will remain consolidated in the Groupe Danone accounts until the closing of the transaction. Specifically: Under IFRS, the sold activities will be accounted for as «discontinued operations» as of January 1 st, ie: no sales and no EBIT in the Group reported figures (see annexes). However, for the purpose of this presentation, the entire Biscuits activities are fully consolidated in the 2007 figures. 10

11 H KEY FIGURES Net Sales 7,553 M +8.6% like-for for-like +4.7% reported 1,055 M Trading operating income +8.6% Trading operating margin Underlying net income from continuing activities Underlying EPS (fully diluted) from continuing activities % 663 M bp like-for for-like + 51 bp reported Vs 614 M H % Vs 1.25 H % Free Cash Flow (1) (1) 631 M Vs 732 M H % For purposes of this presentation, all figures reflect a scope of consolidation which INCLUDES the biscuits activities (1): Free Cash Flow: Cash flow from operations less capital expenditure (net of disposals) and change in working capital 11

12 H1 2007: A Very Strong Performance Despite Headwinds Sales growth (like-for-like) above our guidance (+8.6%), despite Wahaha Strong margin improvement (+47bp) despite negative input cost headwinds Continued growth of EPS (+10%), after a very strong H1 06 (+25%) FCF affected by Wahaha working capital deterioration and higher CAPEX 12

13 Q2 07 top-line growth in our targeted range +8.0% 9% 8.9% 9.5% 11.5% 10.1% 7.3% +6.0% Like-for-like sales growth Q Q Q Q Q Q Without Wahaha +7.8% +7.1% +7.5% +8.8% +10.3% +9.9% 13

14 Impact of currency and scope Q Q H Reported Net Sales +3.9% +5.4% +4.7% Currency -3.9% -0.8% -2.2% Scope of consolidation -2.3% -1.1% -1.7% Like-for-like Net Sales +10.1% +7.3% +8.6% 14

15 Analysis of H Net Sales Growth +8.6% Like-for-like + HOD MEXICO (01/07) + Danone Japan (04/07) + DJURJURA (07/06) - BRITANNIA (07/06) - GRIFFINS (05/06) - DWOC (06/06) VOLUME +2.1% VALUE +4.7% -2.2% +6.5% 7,553 M 7,217 M CURRENCY -1.7% SCOPE OF CONSO H H

16 FRESH DAIRY PRODUCTS FRESH DAIRY PRODUCTS 9.5% 8.5% 9.2% 9.6% 12% 11.2% Q Q Q Q Q Q Outstanding growth in all major geographies, built on very strong 06 comparatives Solid growth trend in mature home markets confirmed Top line growth continues to be driven by Eastern Europe (>+20%) and Latin America (+18%) Blockbusters show strong positive trends at mid-double digits Continuous high single-digit at Bledina 16

17 Q2 LAUNCHES UPDATE Essensis Ireland Dobro Mama Drink Czech Republic Danaten Spain Danito Brazil Danio Delight Belgique Danette Duett Bar Romania 17

18 BEVERAGES 21,7% 11.8% 12.4% 14.9% 9.1% 0.9% Without Wahaha Q Q Q Q Q Q % +5.8% +8.2% +10.5% +9.7% +9.0% Quarter heavily impacted by Wahaha performance at -19% Sustained superior growth excluding Wahaha Europe growing mid single-digits with poor weather, offset by strong Poland Sustained momentum in LATAM with growth exceeding +20% 18

19 Q2 LAUNCHES UPDATE Villa del Sur FIZ Argentina Volvic Aro Sport caps Germany Volvic Revive UK Silouhette Fiz Canada Volvic Fruit Kiss Japan 19

20 BISCUITS & CEREAL PRODUCTS 3.5% 4.4% 3.8% 4.3% 6.3% 0.3% Q Q Q Q Q Q A very good quarter driven by double-digit growth in Spain and continued superior growth in France Eastern Europe growing slightly, with very good performance in Poland offsetting weaker sales in Russia Asia growing double-digits, with China leading the trend 20

21 Q2 LAUNCHES UPDATE Cake tout choco France Mikado Multipack Lait France Rollitos Italy 21

22 Strong performance in Europe offsets decline in Asia EUROPE 8% 4.3% 4.7% 5.3% 6.2% 7.7% ASIA Q Q Q Q Q Q % 17.9% 17.7% 20.1% 8.4% -5.6% Without Wahaha Q Q Q Q Q Q % +7.3% +7.3% +7.9% +8.9% +9.2% REST OF WORLD 16.5% 15.6% 14.9% 17.2% 17.2% 16.6% Q Q Q Q Q Q

23 Trading operating income and margin million H H Trading operating income 972 1, % Other operating items 16 1 Operating income 988 1,056 Trading operating margin 13.46% 13.97% 23

24 A healthy like-for-like margin progression in H1: + 47 bp Scope of consolidation +3bp Translation FX rates +1bp Country mix -3bp +47 bp Like-for-like Operational performance 13.97% 13.46% +144 bp - 94bp Input costs H H

25 Trading operating margin by business line & geographical area H1 06 * Reported H1 07 Like-for for-like progression Fresh Dairy Products 13.6% Beverages 13.7% Biscuits & Cereal Products Europe 14.7% Asia 11.7% Rest of World 11.5% GROUP *Central costs & adjustments fully allocated to business units 12.8% 13.5% 14.1% 13.8% 13.9% 15.3% 11.6% 12.1% 14.0% + 85bp + 13bp - 41bp + 64bp - 89bp + 106bp + 47bp 25

26 From Operating income to Net income million Operating income 988 Cost of net debt Other financial items Income tax Net income (loss) of affiliates Net income of discontinued activities Net Income Attributable to the parent Attributable to minority interests H H (18) (11) (245) (64) (33) 3 (314) Net income of consolidated companies For purposes of this presentation, all figures reflect a scope of consolidation which INCLUDES the biscuits activities 26

27 Underlying net income from continuing operations million H H Underlying net income from continuing operations % Non current net income from continuing operations (67) (7) Net income from discontinued operations (sauces) Net income attributable to the parent For purposes of this presentation, all figures reflect a scope of consolidation which INCLUDES the biscuits activities as «continuing operations» 27

28 Underlying Earnings Per Share from continuing activities H H Underlying net income fully dluted from continuing activities Million Shares Fully diluted Millions of Shares Underlying EPS fully diluted from continuing activities % 28

29 Free Cash Flow from Operations million H H Cash flow from operations Change in working capital Capital expenditure (246) 954 (53) (302) Assets Sales Free Cash Flow from Operations

30 Cash flow statement million H H Free Cash Flow from Operations Investments in sub. & affiliates Disposals & repayment of vendors loans Dividends paid Share buyback Increase in capital (325) 583 (590) (325) 48 (366) 206 (617) (467) 59 Others (40) 6 Change in Net Financial Debt 83 (548) 30

31 Financing million 2006 June Dec June 30 Net Debt 3,411 2,902 3,365 Of which Put options granted to minority interests 2,548 2,504 2,418 Equity Incl. minorities 5,455 6,069 5,937 31

32 IFRS ACCOUNTS (BISCUITS AS DISCONTINUED OPERATIONS) 32

33 Analysis of H Net Sales Growth (IFRS) + HOD MEXICO (01/07) + Danone Japan (04/07) + DJURJURA (07/06) - BRITANNIA (07/06) - GRIFFINS (05/06) - DWOC (06/06) VOLUME +9.2% Like-for-like +2.3% VALUE +4.8% -2.6% +6.9% 6,508 M 6,208 M CURRENCY -1.8% SCOPE OF CONSO H H

34 Impact of currency and scope (IFRS) Q Q H Reported Net Sales +4.2% +5.5% +4.8% Currency -4.2% -1.0% -2.6% Scope of consolidation -2.6% -1.0% -1.8% Like-for-like Net Sales +11% +7.5% +9.2% 34

35 H like-for-like sales growth Breakdown volume/value (IFRS) Like-for-like Volume Value Total Fresh Dairy Products +8.7% +2.9% Beverages +3.5% +1.2% +11.6% +4.7% Europe +6.4% +2.5% Asia +1.2% -1.2% Rest of World +12.3% +4.2% +8.9% 0.0% +16.5% GROUP +6.9% +2.3% +9.2% 35

36 H Net Sales by business & geographical area (IFRS) million H H Like-for for- like growth Fresh Dairy Products 3,966 4, % Beverages 2,045 2, % Britannia, Griffins N/A Europe 3,430 3, % Asia 1,246 1, % Rest of World 1,532 1, % GROUP 6,208 6,508 +9,2% 36

37 Top line growth by business line & geographical area (IFRS) Like-for-like Q Q H Fresh Dairy Products +12.0% +11.2% +11.6% Beverages +9.1% +0.9% +4.7% Europe +9.3% +8.4% +8.9% Asia +8.3% -7.3% +0.0% Rest of World +16.9% +16.2% +16.5% GROUP +11% +7.5% +9.2% 37

38 Analysis of Q Net Sales Growth (IFRS) + HOD MEXICO (01/07) + Danone Japan (04/07) + DJURJURA (07/06) - BRITANNIA (07/06) - GRIFFINS (06/06) - DWOC (05/06) +7.5% Like-for-like VOLUME VALUE +1.3% +5.5% +6.2% 3,341 M 3,167 M -1.0% CURRENCY -1.0% SCOPE OF CONSO Q Q

39 Q like-for-like sales growth Breakdown volume/value (IFRS) Like-for-like Volume Value Total Fresh Dairy Products +7.8% +3.4% Beverages +3.3% -2.4% +11.2% +0.9% Europe +5.9% +2.6% Asia +0.1% -7.4% Rest of World +11.2% +5.0% +8.5% -7.3% +16.2% GROUP +6.2% +1.3% +7.5% 39

40 Trading operating income by business & geographical area (IFRS) million H H million Fresh Dairy Products Beverages Britannia, Griffins Europe Asia Rest of World GROUP

41 Trading operating margin by business line & geographical area (IFRS) Reported H1 06 * H1 07 Like-for for-like progression Fresh Dairy Products 13.1% Beverages 13.2% 13.7% 13.5% + 88bp + 15bp Europe 14.5% Asia 10.9% Rest of World 11.0% 15.3% 10.8% 11.8% + 90bp - 86bp + 109bp GROUP 12.9% 13.7% + 65bp *Central costs & adjustments fully allocated to business units 41

42 From Operating income to Net income (IFRS) million H Operating income 816 H Cost of net debt Other financial items Income tax (19) (10) (208) (33) 3 (260) Net income of consolidated companies Net income (loss) of affiliates (70) 29 Net income of discontinued activities Net Income Attributable to the parent Attributable to minority interests

43 Underlying net income from continuing operations (IFRS) million H H Underlying net income from continuing operations % Non current net income from continuing operations (67) (7) Net income from discontinued operations Net income attributable to the parent

44 Back-ups 44

45 Major changes in exchange rates 49% of sales denominated in % total Q2 07sales Q1 07 vs Q2 07 vs Q1 06 (avg) Q2 06 (avg) Chinese Yuan 9% US Dollar 7% Mexican Peso Argentinian Peso Russian Rouble Polish Zloty 3% Sterling Pound Canadian Dollar Brazilian Real South African Rand 6% 3% 4% 3% 2% 2% 1% - 5% - 9% - 12% - 9% - 2% - 1% - 8% - 10% - 5% - 22% - 2% - 6% - 2% - 6% - 1% + 4% + 2% - 3% + 6% Indonesian Roupie 2% - 14% - 5% - 12% 45

46 Q Net Sales by business & geographical area million Q Reported Q Fresh Dairy Products 1,977 2,214 Beverages 1,098 1,127 Biscuits & Cereal Products Like-for for- like growth +11.2% +0.9% +6.3% Europe 2,243 2,433 Asia Rest of World GROUP 3,683 3, % -5.6% +16.6% +7.3% 46

47 Q like-for-like sales growth Breakdown volume/value Like-for-like Volume Value Total Fresh Dairy Products +7.7% +3.5% Beverages +3.3% -2.4% Biscuits & Cereal Products +5.4% +0.9% Europe +5.6% +2.1% Asia +0.7% -6.3% Rest of World +11.6% +5% +11.2% +0.9% +6.3% +7.7% -5.6% +16.6% GROUP +6.0% +1.3% +7.3% 47

48 H like-for-like sales growth Breakdown volume/value Like-for-like Volume Value Total Fresh Dairy Products +8.7% +2.9% Beverages +3.5% +1.2% Biscuits & Cereal Products +4.4% 0.9% Europe +5.7% +2.1% Asia +1.9% +-0.8% Rest of World +12.6% +4.3% +11.6% +4.7% +5.3% +7.8% +1.1% +16.9% GROUP +6.5% +2.1% +8.6% 48

49 Q2 & H1 Top line growth Like-for-like Q Q H Fresh Dairy Products +12.0% +11.2% +11.6% Beverages +9.1% +0.9% +4.7% Biscuits & Cereal Products +4. 3% +6.3% +5.3% Europe +8.0% +7.7% +7.8% Asia +8.4% -5.6% +1.1% Rest of World +17.2% +16.6% +16.9% GROUP +10.1% +7.3% +8.6% 49

50 H Net Sales by business & geographical area million H H Like-for for- like growth Fresh Dairy Products 3,967 4, % Beverages 2,045 2, % Biscuits & Cereal Products 1,205 1, % Europe 4,322 4, % Asia 1,356 1, % Rest of World 1,539 1, % GROUP 7,217 7, % 50

51 Trading operating income by business & geographical area million Fresh Dairy Products Beverages Biscuits & Cereal Products H1 2006* H Europe Asia Rest of World GROUP *Central costs & adjustments fully allocated to business units 51

52 Share buy-back program Q Share buy-back back Treasury Stock as of 06/30/ ,258,320 shares Number of Shares in % of outstanding capital at 03/31/ % Investment 9.23% of the outstanding capital* 8,618, M *Outstanding capital as of 30 June 2007: 522,851,460 52