DANONE company profile

(AOF) –

= / Key points / =

– World leader in the food industry: first in fresh dairy products (Activia, Gervais, Alpro, Oikos, Actimel brands, etc.), second in the world in infant and medical nutrition (Blédina, Dumex, SGM, Aptamil, Theocate, etc.) and third in bottled waters (Mizone, Volvic, Evian and Acqua);

– Sales of € 23.6 billion divided into 3 divisions: dairy or vegetable products for 54%, specialized nutrition for 31% and bottled water;

– Balanced revenues between Europe-North America (57%, including 21% for the United States) and the rest of the world – Argentina, Brazil, Mexico, China, Indonesia, Russia, Turkey and Morocco;

– Model 2030 “One Planet. One Health ”for the first company with a listed Mission: from the raison d’être of“ bringing health through innovation ”, accelerating growth, maximizing efficiency, developing committed brands and increasing profitability through annual growth from 5 to 10%;

– Open but blocked capital (double voting rights, voting limited to AGs, financial authorization during a public offer, 5% of the shares being held directly or by self-control), Gilles Schnepp being chairman of the board of directors of 16 members, Antoine de Saint-Affrique providing general management;

– Healthy balance sheet with net debt of € 11.9 billion rated A or Baa and free cash flow of € 2.1 billion but leverage effect of 2.8.

= / Issues / =

– Medium-term return strategy to annual growth between 3 and 5% and an operating margin between 15 and 25%:

– 3 general directorates; North America, International and the “Design to Delivery” value chain,

– review of the portfolio of brands and assets (sale of the stake in the Chinese Mengniu Dairy and sale of Vega),

– finalization of the “local first” plan in the 1st quarter of 2021,

– € 1 billion in cost savings by 2023;

– Innovation strategy contributing to ¼ of annual sales and carried out in 2 international centers and 7 specialized centers;

– 6 themes: microbiota, plant matrices, packaging and after-plastic, naturalness and organic, allergies and healthy aging,

– co-construction with consumers using agile methods;

– Long-standing environmental strategy, Danone being among the best rated in the world in terms of “corporate social responsibility” reinforced by

– “Climate acceleration plan” with € 2 billion invested (2020-22) in the group’s brands, agriculture, packaging and digitization,

– “WeActForWater”: halving of the use of virgin plastic, i.e., in 2025, 50% recycled PET (rPET) worldwide and 100% in Europe, acceleration of carbon neutrality in Europe by 2025 (2020 for Evian and Volvic), water access fund (50 million people by 2030),

– B Corp certification for 50% of turnover;

– Reinforcement, with the purchase of Follow your Heart, of the plant-based products activity, the prices of which will have to increase from € 2 billion in 2020 to € 5 billion in 2025;

– Continued rotation of the portfolio, with speculations on a sale of the water division.

= / Challenges / =

– High sensitivity to currency fluctuations and milk prices (10% of turnover), health risks and climatic hazards for water;

– Recovery of the “water” branch, affected by restaurant closures and changes in consumer consumption in Europe;

– Total renewal of the board of directors, of 12 members, by 2023;

– Impact of the pandemic: 6.6% increase in sales in the 1st half;

– Objectives for the second half of 2021: return to profitable growth and stability of the operating margin;

– 2020 dividend of € 1.94 and share buyback program of € 800 million by the end of 2021.