Presentation to investors April 2008 Forw ard looking statements - PDF document

1 Presentation to investors – April 2008

Forw ard looking statements This document contains certain forward-looking statements concerning Groupe DANONE. Although Groupe 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 sections “Risks Factors” in Groupe DANONE’s Annual Report (which is available on www.danone.com). Groupe 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

I. Danone’s business and strategy overview II. Numico acquisition acquisition II. Numico III. III. Recent trading update and outlook Recent trading update and outlook IV. A conservative financial structure IV. A conservative financial structure 3

The unique capacity to be inspired by a pow erful mission To bring health through To bring health through food to the largest food to the largest number of people number of people 4

We play in the most attractive food segments World Market CAGR 06-11 (volume) Clinical nutrition 8.8% Still bottled water 6.6% Functionnal drinks 6.4% Baby Nutrition 5.3% Savoury biscuits and crackers 4.6% Yogurt 4.4% Sweet biscuits 4.0% Ice cream 3.7% Sauces, dressing & condts 3.2% Frozen processed food 3.0% Confectionery 2.8% Cheese 2.8% RTE cereals 2.4% Carbonates 1.9% Soup 0.9% 0% 2% 4% 6% 8% 10% Source: Euromonitor, Kalorama Information 5

Key features of our business model All divisions command leadership positions Through well-known brands and value-adding products Our brands have superior pricing power Growth is fuelled through � Innovation � Roll-out � Geographic expansion S trong productivity gains are generated on fixed and overhead costs 6

We command leadership positions Eastern Europe Western Europe North America # 1 Fresh Dairy # 1 Fresh Dairy # 1 Fresh Dairy # 1 Baby Nutrition # 2 Bottled Water # 1 Medical Nutrition # 1 Baby Nutrition # 1 Medical Nutrition Asia # 2 Baby Nutrition Latin America # 1Fresh Dairy # 1 Bottled Water Africa & Middle East # 1 Fresh Dairy #1 Medical Nutrition # 2 Baby Nutrition Source: Euromonitor value share (Dairy 2006 values; Beverages 2007 values) 7

8 €500 mln A success built on w ell know n brands €500 mln €1100 mln €1900 mln 2007 Sales

Dairy : one brand = one health benefit Transit Weight Transit Transit Weight Weight Protection Growth Protection Protection Growth Growth Digestion Management Digestion Management Digestion Management €1,900mln €800mln €1,100mln €900mln 9

The identification of active ingredients: Expertise of R& D and its partners D Dairy R&D Dairy R&D community community ~ 450 people ~ 450 people specialised specialised along brand along brand and health and health benefit lines benefit lines D 10

Grow th fuel: Roll-out 2007 2007 2000 2000 Yogurt Only Yogurt, fermented milk and other relevant supports 1.9 Activia sales (€bn) Activia sales (€bn) 1.3 0.9 0.7 0.5 0.4 0.3 2001 2002 2003 2004 2005 2006 2007 11

Grow th fuel: geographic expansion New countries since 2006: Thailand, Colombia, Chile, Egypt, Algeria I n 10 years Danone present in 80 countries 80 Today Danone present in 40 countries 40 3 to 5 new countries/year 0 2007 2017 12

I. Danone’s business and strategy overview II. Numico acquisition acquisition II. Numico III. III. Recent trading update and outlook Recent trading update and outlook IV. A conservative financial structure IV. A conservative financial structure 13

2007: Significant portfolio refocusing Disposal of Biscuits Friendly offer to Kraft for Numico Outstanding price at €5.3bn €12.1bn acquisition or 13.7x 2006A EBITDA Creation of a unique 100% “Health- Fast execution through food” company Strong 2007 performance Potential to leverage exceptional unaffected by transition R&D and marketing skills from both process sides Closed 30/11 Proximity of cultures As of today 98.9% acquired and delisted from Amsterdam stock exchange Squeeze out in progress Danone is now a major baby and clinical nutrition player 14

Danone + Numico: 100% health story 2007 at 2008 Scope 2007 Pro-Forma 2006 Medical Baby Nutrition Nutrition € 0.8 bn Baby 3% Biscuits 5% Nutrition 16% € 2.4 bn 17% Fresh Dairy Fresh Dairy 53% € 8.3 bn Waters 57% Waters 28% € 3 bn 21% Healthy Food Healthy Food 84% 100% 15

The creation of the #2 tie w orldw ide Baby Nutrition player Numico + Blédina: Baby Nutrition positions Numico + Blédina: Baby Nutrition positions Africa Africa W. Europe E. Europe Asia W. Europe E. Europe Asia Middle East Middle East # 1 # 1 # 2 tie # 2 Source: Euromonitor 16

Numico’s Baby Nutrition portfolio is highly complimentary to Danone’s product lines Main Netherlands UK Germany Italy China countries France Ireland Eastern Thailand Europe Malaysia Products: Milk (75% of sale) Food (25% of sale) Source: Numico public information, Euromonitor 17

The barriers to entry are high…. 25% Frozen food 21% Pet food 19% Shelf stable food 15% Yogurt 12% Non alcoholic beverages 9% Confectionnery 6% Alcoholic beverages 2% Baby Nutrition 0 5 10 15 20 25 30% Worlwide Private Labels market share Source: Baby Food public information, brokers, Nielsen 18

…and the category offers significant grow th potential WW average 20kg APac AMEA Latin America Eastern Europe North America Western Europe France 50 100 150 200 250 0 Per capita consumption (kg/ baby) Source: Euromonitor, External data – APac: Asia Pacific 19

20 Medical Nutrition consists of tw o distinct businesses… Targeted Disease Nutrition Medical Nutrition

…w ith a number of long term grow th drivers Ageing population Lifestyle diseases exploding Growing role of Nutrition in disease management and prevention Industry in its infancy and growing at a fast rate 21

I. Danone’s business and strategy overview II. Numico acquisition acquisition II. Numico III. III. Recent trading update and outlook Recent trading update and outlook IV. A conservative financial structure IV. A conservative financial structure 22

FY 2007 Key Figures 9,7% like- -for for- -like like + 9,7% like + €12,776M Net Sales Net Sales Net Sales +5.9% reported reported +5.9% €1,696M Trading operating income Trading operating income Trading operating income +6.2% +6.2% + 45 bp bp like like- -for for- -like like + 45 13.27 % Trading operating margin Trading operating margin Trading operating margin + 3 + 3 bp bp reported reported €1,185M Underlying net income Underlying net income Underlying net income Vs €1,194M FY ‘06 €11,261M Net debt Incl. put options Net debt Net debt Incl. put options Vs €2,902M FY ‘06 Incl. put options Vs €1,516M FY ’06 €1,184M Incl. Biscuits (1) (1) Free Cash Flow Incl. Biscuits Free Cash Flow Free Cash Flow Incl. Biscuits (1) -21.9% - 21.9% 1 Free Cash Flow: Cash flow from operations less capital expenditure (net of disposals) and change in working capital 23

FY 2007 performance at opening scope: key take-aw ays ⌦ Top line and margin performance in the upper part of the guidance… ⌦ …despite loss of Wahaha co-packed sales, poor summer in Europe, and significant input cost headwinds ⌦ Core business growth is very healthy record growth rate in Fresh Dairy with resilient volume growth strong growth in water division, recovering from poor summer broad-based growth across all major geographies ⌦ Continued profitable growth despite significant input cost headwinds unfavorable milk price increase fully offset by pricing ⌦ Attractive financing obtained for Numico’s acquisition 24

Raw materials and pricing update Milk is the main input affected by recent cost increases Impact of approx. €390m in 2008 Entire amount offset by pricing, productivities and operating leverage Price increases taken throughout the year in all major geographies 25

Analysis of FY 2007 published Sales +9.7% Like-for-like +3.7% +3.7% VOLUME VALUE +5.9% NUMICO +4.2% CURRENCY WAHAHA -2.9% H2 07 €12,776M +5.5% OTHER -4.7% +0.1% -4.6% €12,068M SCOPE OF CONSOLIDATION FY 2006 FY 2007 26 IFRS, excl. biscuits

New Danone targets reflect the New Danone Targets Medium Term Target 2008 Target 2008 Target +8% to +10% Sales growth* +8% to +10% Faster than Faster than Trading Op.Profit* (EBIT) growth sales growth sales growth EBIT margin >+30bp Improving 1 On a like-for-like basis 27

I. Danone’s business and strategy overview II. Numico acquisition acquisition II. Numico III. Recent trading update and outlook III. Recent trading update and outlook IV. IV. A conservative financial structure A conservative financial structure 28