Danone Presentation at 2010 Consumer Goods Analyst Conference

1. Pierre-André Terisse
February 18th, 2010

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 www.danone.com). 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.
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3. Agenda
1 2009: Adjusting the model
2 Danone: 6 levers for profitable growth
3 2010: our key priorities
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4. 2009: adjusting the model
4

5. KEY FIGURES - FY 09
Sales +3.2% like-for-like (1)
Sales € 14,982 mln (1.6)% reported
+61 bps like-for-like (1)
Trading operating margin 15.31% +40 bps reported
Underlying net income +11.5% like-for-like (1,2)
from continuing activities € 1,412 mln +7.5% reported
Underlying EPS (fully diluted) +10.2% like-for-like
€ 2.57
(1,2)
from continuing activities (3.1)% reported
Free cash flow (3) € 1,427mln + 20.6% reported
(1) At constant scope of consolidation and constant exchange rates
(2) Excluding exceptionals and excluding the effects of the capital increase
(3) Free Cash Flow: Cash flow from operations less capital expenditure (net of disposals) 5

6. We strongly accelerated
Like-for-like sales growth
1st quarter 4th quarter
13.6%
10.5% 10.8%
7.0%
+ 5.5%
4.6%
3.8%
+ 1.0%
(1.2)%
(3.9)%
Baby Medical Baby Medical Nutrition
Dairy Waters GROUP GROUP Dairy Waters
Nutrition Nutrition Nutrition
6

7. FRESH DAIRY - Market shares continue to strengthen
Volume market share vs year ago1
France +0.8 pt Poland +1.4 pt US +1.2 pt
Czech
+2.8 pt Mexico +1.0 pt Argentina -0.5 pt
Republic
Russia +0.1 pt(2) UK +1.8 pt Germany +0.8 pt
(1) Full year 2009 vs full year 2008
(2) Year to date November 09 vs year to date November 08 7

8. Margins have strongly and consistently progressed in the past two
years with a peak in H1 09
Reported margins and like-for-like growth
16.03%
+61 bps
15.31%
+53 bps 14.91%
14.58%
13.27%
FY 07 FY 08 FY 09 H1 09 H2 09
8

9. Danone: 6 levers for profitable growth
9

10. Danone: 6 levers for profitable growth
Fast growing categories
Diversified geographies
A unique mission
Focus on productivity
Unique cash conversion cycle
Decentralized organization
10

11. Well positioned in faster growing categories
Faster growing categories Growth focused portfolio
5 - year volume CAGR 2009 performance
As of 2008 As of 2009 Sales growth Margin
Medical nutrition 8.8% 8.8%
6% Medical Nutrition +11.4% 20.57%
Baby nutrition 5.3% 5.3%
Still bottled water 6.6% 4.9%
20% Baby Nutrition +7.9% 18.32%
Yogurt 4.4% 3.9%
Savoury biscuits 4.6% 3.6%
and crackers
Ice cream 3.7% 3.2%
Frozen processed
3.0%
17% Waters +1.0% 12.56%
food 2.8%
Sauces, dressings 3.2% 2.7%
& condiments
Cheese 2.8% 2.6%
Confectionery 2.8% 2.0%
Functional drinks 6.4% 2.0%
57% Fresh Dairy Products +1.6% 14.54%
RTE cereals 2.4% 1.7%
Soup 0.9% 1.3%
Carbonates 1.9% 1.3%
Source: Euromonitor
11

12. Unique ability to build differentiation
Danacol: exclusive plant sterols Fortimel: superior high protein supplement
82% of Drive the
Market segment
Share growth
Bebelac: unique complete care formula Elimination: low mineral water to help eliminate
> 1 Bn€ sales Leader in
Mexico
12

13. Unique ability to build differentiation
With unparalleled taste superiority and dailiness
 Excellent
 Daily
 Superior
50% 40% 10%
superior parity inferior
13

14. Our key brands drive the growth
Volume evolution Activia
Volume evolution Bonafont Volume evolution Aqua
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15. Our key brands drive the growth
Volume evolution Immunity
Volume evolution Neocate Volume evolution Fortimel
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16. Well diversified geographical footprint exposed to fast growing
geographies
Diversified geographic portfolio Faster growing markets
(sales split 2009)
GDP growth differential v. OECD1
Country
07/08 08/09
China 8.2 % 10.6 %
Indonesia 5.3 % 6.5 %
Brazil 4.3 % 2.6 %
Argentina 6.2 % 0.6 %
Mexico 0.6 % (0.3)%
Russia 4.8 % (0.9)%
Source: Economist Intelligence Unit (EIU) as of May 28 2009 (national sources, EIU)
1OECD aggregate real GDP growth rate used as benchmark for 07/08 and 08/09 is 0.8% and
(4.1)%, respectively
41% of sales generated in Emerging Markets
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17. Our mission and market positions provide a strong platform
for continued above-sector growth
North America Western Europe Eastern Europe
No. 1 fresh dairy No. 1 fresh dairy No. 1 fresh dairy
No. 2 bottled water No. 1 baby nutrition
No. 1 baby nutrition No. 1 medical nutrition
No. 1 medical nutrition
Latin America Africa/Middle East Asia
No. 1 fresh dairy No. 1 fresh dairy No. 1 baby nutrition
No. 1 bottled water No. 1 bottled water
To bring health through food to the largest number of people
17

18. Substantial potential to increase our worldwide footprint
Danone’s geographical presence in 2000
Danone’s geographical expansion since 2000
Danone’s geographical opportunities going forward

19. Unique expertise and opportunities in new geographies
White space in current big
countries: East Russia + West USA +
North Brazil
+ 200 mln new consumers
One meaningful area to Per Capita potential in
assess BOP model: recently opened countries
Indian subcontinent
- 1 bn people
Dairy
800 mln consumers with
<1 kg per cap
19

20. Danone: a unique mission
Treating
critical
Measuring
nutritional
stomach
Bring health through needs
distention
food to the largest
number of people
Hydration and
elimination
Treating immunity,
infection & allergies
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21. Our Mission: To bring health through food to the largest
number of people
> USD 25k
USD 9-25k
< USD 9k
n
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22. Our Mission: To bring health through food to the largest
number of people
Dairy Romania Baby Nutrition Indonesia
22

23. Our Mission: To bring health through food to the largest
number of people
Waters Mexico
23

24. Focus on productivity
By-product valorization Upstream Differentiation
Desserts & Drinks DanFarm – potential up
to €40-80 mln
CO2 Footprint reduction
DanCream DanMilk means to differentiate
European Cream sales Danone milk
Milk Transformation
optimization of
milk usage
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25. Focus on productivity
Head office convergence:
- 7 countries initiated move in 2009-2010
- 6 more in 2011-2012
Global plan for IS/IT convergence
Purchasing opportunities cross division
2010 media pitch - 17 Countries
- Cross divisional
- + 15% GRP (€ 80 mln equivalent)
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26. Unique cash conversion cycle
FCF in € mln and as a % of sales
Numico
1516 1427
1303
1224 1184 1183
1149
1036
794
622 624
4.7% 4.4% 5.5% 7.6% 8.8% 10.0% 10.0% 12.6% 9.3% 7.8% 9.5%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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27. Unique cash conversion cycle
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Days inventory 38.7 37.8 38.4 35.5 34.3 33.7 37.2 42.6 42.1 42.2
Days payable -92.0 -87.1 -91.5 -94.6 -94.4 -94.7 -108.8 -119.2 -114.4 -112.8
Days Receivables net of rebates 39 36 34 30 29 25 32 28 18 19
Cash conversion cycle
including rebates -15 -13 -19 -29 -31 -36 -40 -48 -54 -54
Successful initiatives Headwind New Initiatives
Cash committee Negative mix (new geo) FR€€
Suppliers negotiation LME G€M
Sales & operations planning process Capex monitoring
(decrease of stocks)
Wall to Wall
Animation of KPIs
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28. Decentralized organisation
+ synapses
Adaptability =
+ intelligence
Multiplicity + synergies
+ knowledge
Reactivity + success
Amsterdam Moscow
Paris
New York Barcelona
Shanghai
Singapour
Buenos Aires
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29. Medium-term objectives
Medium-term objectives
Sales growth1 At least +5%
At least +5%
Annual free cash flow € 2 bn by 2012
€ 2 bn by 2012
from operations
1 Based on constant scope of consolidation and constant exchange rates 29

30. 2010: our key priorities
30

31. Dynamics of our operating environment
Consumption in Western economies Solid growth in emerging countries
12%
10%
8%
6%
4%
2%
W.Europe
W.Europe
0%
S O N D J F M A M J J A S O N
(2)% 2009 2010 2011
(4)% W.Europe
2008 2009
Source: Eurostat Industrial Production Source: Nomura Economic Monitor
Raw materials rebound Currencies stabilizing
SMP price 2005 - 2009
31

32. Key priorities 2010
CONTINUE TO STRENGTHEN TOP-LINE GROWTH
1
Keep reinforcing our competitive positions
Negative value growth gradually fading away
Strengthen new geographies & seize new opportunities
2 SUSTAIN OPERATING MARGINS
Productivity will be key priority to counter cost inflation
Competitive management of pricing
Balancing H1/H2
3 MAINTAIN FREE CASH FLOW FOCUS
Continue to improve the cash conversion cycle
Intention to start using share buy-back authorization in 2010
32

33. Outlook 2010
Objectives 2010
Sales growth1 At least +5%
At least +5%
Free cash flow At least +10%
At least +10%
EBIT margin 1
Stable margin
Stable margin
1 Based on constant scope of consolidation and constant exchange rates 33

34. Notes
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35. Notes
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36. Notes
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