Managing a winning portfolioBernard Hours

Rewind

– 2 –

2008-2010: Historical move to boost our sales

– 3 –

Group Sales

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

1998 … 2007 2008 2009 2010

Baby & Medical

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Consolidated sales in K€

Fresh Dairy Products: Over € 10 bn sales

– 4 –

Fresh Dairy Products Sales

Waters: Back to growth

– 5 –

Waters Sales

4.0%

1.9%1.0%

5.3%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

2007 2008 2009 2010

Life for Like Sales growth

1 750

1 950

2 150

2 350

2 550

2 750

2 950

3 150

3 350

3 550

2007 2008 2009 2010

Consolidated sales in K€

Baby Nutrition: growth potential confirmed

– 6 –

Baby Nutrition Sales

500

600

700

800

900

1 000

1 100

2007 2008 2009 2010

Consolidated sales in K€

Medical € 1 bn: change of scale

– 7 –

Medical Nutrition Sales

2007: a historical move to reach out for more consumers

Baby Adulthood Elderly/

pathology

Sp

ecif

icn

utr

itio

n/h

ealt

hn

eed

s

Life stage

High

Low

Toddler Childhood

2007:

– 8 –

High

Low

Healthy living & best nutrition

HEALTHY NUTRITION

Health as a Reassurance

PLAISIR/INDULGENCESHARP HEALTH

Specific healthy conditions

Leading to A COMPLETE AND WINNING BRANDS PORTFOLIO

– 9 –

Healthy living & best nutrition

HEALTHY NUTRITION

Health as a Reassurance

PLAISIR/INDULGENCESHARP HEALTH

Specific healthy conditions

Supported by a very specific R&D model

– 10 –

R & DConsumer has Different needs

ROngoing scientific investigation

to strengthen current benefits

and find new ones

Clinical studies and scientific papers

Strong network of partnerships and collaborations

Publication Danone-Harvard PNAS Bifidobacterium animalis subsp. lactis fermented

milk product reduces inflammation by altering a

niche for colitogenic microbes

GMPP

Research: scientific rigor in Danone laboratory

– 11 –

DConstantly innovate on product line

extensions and new launches

Continuously improve taste

in obsession for excellence

Multiply textures and play with ingredients

Development: magician competencesin Danone kitchen

– 12 –

With an extended geographical coverage and strong local leadership

– 13 –

Market share 2010

Dairy Product

North America

#1

Dairy Product

Waters

Baby Food

Medical N.

Western Europe

#1

#1

#2

#1

Dairy Product

Baby Food

Medical N. #1

#1

#1

Eastern Europe

Waters

Baby Food

Asia Pacific

#2

#1

Dairy Product

Waters

LATAM

#1

#1Dairy Product

Baby Food

Africa Middle East

#2

#1

Play

– 14 –

MICRUBs

LABs

People Organization & Mindset

We have 3 weapons

The Danone “winning” model

– 15 –

MICRUB

– 16 –

RUSSIA

USA

BRASIL

CHINA

MEXICO

I NDONESIA

> 35% > 60% 60%

MICRUB: our trump for today

– 17 –

Sales Growth People

MEXICO

– 18 –

Fresh Dairy Products

Dan’Up DanoninoActivia

35.3% 34.5% 35.9%36.9% 38.1% 40.1% 38.9%

41%

44.1%

6.8%

9.7%13.1%

15.5%

18.3%19.5%

23.0% 23.1%22.0%

18.5% 19.1%17.9% 17.3%

17.0% 15.2% 16.2% 16.9%15.9%

2002 2003 2004 2005 2006 2007 2008 2009 2010

Competitor #1

Competitor #2

Volume share

MEXICO

– 19 –

Market share Fresh Dairy Products

Sales

2004 2005 2006 2007 2008 2009 2010

MEXICO

– 20 –

Waters

Booming HOD businessDiversified product ranges

29%

27%

22%19%

17%

12%14%

2004 2005 2006 2007 2008 20102009

Competitor #2

Competitor #1

MEXICO

– 21 –

Volume share (Bottles + HOD)

Market share Waters

Premium

Superpremium

Affordability

Mainstream

INDONESIA

– 22 –

Baby NutritionNutricia & Sari Husada

29.5%31.4%

32.3%34.3%

38.6%

Competitor #123.5% 23.7% 24.0% 23.2% 23.9%

11.1%10.2% 10.1% 9.6% 9.2%

2006 2007 2008 20102009

Value Share

Competitor #2

INDONESIA

– 23 –

Leader on the 2nd Asian Baby Nutrition Market

INDONESIA

– 24 –

Waters

Large Products rangeNature Origin uniqueness

Icon Status

“The sign of me”By Sebastian Gunawan

“Enjoy my pulse

of life”

New drinks concept born in Asia

TV

Digital

Sampling

CHINA

– 25 –

Waters

Mizone

+50%

Distribution

Brand promotion

Moscow

+Center

Siberia

Volga

North West

Ukraine

Oural

South

RUSSIA

– 26 –

#1

#2

#2

#1

#1

#1

JV Danone Unimilk:

#1 in Fresh Dairy Products

And #1 in Baby Nutrition

32%

34%

36%

38%

40%

42%

44%

Jan '10

Fev '10

Mars '10

Avr '10

Mai '10

Juin '10

Juill '10

Aou '10

Sept '10

Oct '10

Nov '10

Dec '10

Competitor #1

Rich brand mapping covering all price segments

and consumers need

HealthPleasureAll family Kids & Teens

RUSSIA

– 27 –

Danone Unimilk Leverage Baby

Affordable

Basic

Premium

USA

– 28 –

A consolidated business leader on Fresh Dairy Products

35% market share (value)

Complementarity Strategy Visible in our product range

And locals

Worldwide

O T X

From Hospitals

To the community

BRAZIL

– 29 –

Initiatives accorded to the local identity

Strong brands

More than a Lab: A Pioneer

29.8 % 30.5 %32.9 % 32.6 % 33.2 % 34.1 %

35.8 %

26.9 % 25.9 %

22.8 %21.3 %

22.4 % 22.4 % 21.1 %

13.3 % 13.4 % 13.6 % 14.4 % 13.5 %12.4 %

11.0 %

2004 2005 2006 2007 2008 2009 2010

Competitor #1

Competitor #2

BRAZIL

– 30 –

Long term & stronger leaderon Fresh Dairy Products

NEVER STOP TRYING

DANONE LABs

Danone Winning Model

– 31 –

Yoghurteria

New retail model

Expand Danone experience

into new and personalized

ways of enjoying Yoghurt

Testing the future: New channels

– 32 –

People Organization & Mindset

Danone Winning Model

– 33 –

+ intelligence

+ best practices

+ synergies

+ knowledge

A multi centric, highly connected organization

– 34 –

ParisAmsterdam

Moscow

Shanghai

Singapour

New York

Buenos Aires

Barcelona

Adaptability

Multiplicity

Reactivity

Sao Paulo

connections + success+ =

Moving by nature

No dogma: “Jeu de Jambes”

Curiosity

Uncommon Energy

State of Mind

– 35 –