Danone S.A.

April 19th, 2021 Innovative Companies

ALPORA Sustainable Technology

April 2021

Danone is a food and beverage company headquartered in Paris, France, serving customers worldwide. The company produces and markets dairy products, beverages, and specialty foods, especially early childhood, and medical nutrition. Two megatrends are pursued at the same time: sustainability & health.

Focus on Innovation

The innovation focus is on the ecologically sustainable production of food and beverages. For example, measures are being developed to reduce food losses along Danone’s food value chain. With the One Planet Global Target, the global player believes it has a responsibility to reduce food losses by 50% by 2025 compared to 2016. Furthermore, provisions are made to address global water problems. With WeActForWater, people around the world will have the opportunity to be provided with clean drinking water and healthy hydration. To this end, the company developed a strategy consisting of three basic pillars: Conserve water resources, strengthen water cycles, and provide access to safe water. Particularly vulnerable areas with water scarcity are supported through the preservation and restoration of ecosystems, wetlands, and natural water cycles.

In terms of packaging, they are aiming to accelerate the transition from a linear to a circular economy, and by 2025 every piece of packaging should be reusable or recyclable. By World Recycling Day on March 18, 2021, Danone was able to save over 7,000 tons of plastic with its Volvic water brand. For about 7 months, the company has switched its extensive beverage range to bottles made from 100% recycled plastic and has already made an enormous contribution to the circular economy of packaging.

FINANCIAL REPORT

ANNUAL FINANCIAL REPORT 2020

The Danone company closes fiscal 2020 with consolidated sales of 23.6 billion euros. On a comparable basis, this corresponds to a decline in sales of -1.5%. Compared to the previous year 2019, sales decreased by -6.6 % on a reported basis. This is mainly due to the negative impact of exchange rates at -5.0 %. The Essential Dairy & Plant-based (EDP) reporting entity achieved net sales growth of +3.4% on a like-for-like basis in 2020. In the plant-based products business, sales increased by +15% compared to the previous year, with the USA and Europe sales regions contributing to this growth. However, Covid-related mobility restrictions, ongoing border closures with Hong Kong, and travel restrictions to mainland China were also reflected in the sales figures. This affected the business units: Specialized Nutrition and Waters. On a comparable basis, Specialized Nutrition sales were down -0.9% and Waters’ sales were down -16.8% compared to 2019.

In 2020, recurring operating income was €3.3 billion, and the recurring operating margin was 14.0%. This represents a year-on-year decrease of -13.8% or -117 basis points on a reported basis. Caused by additional costs directly related to Covid-19 as well as a negative category and country mix. Danone responded in time and realized savings of almost 850 million euros, particularly in the second half of the year, and increased internal productivity by 280 basis points.

The company achieved a free cash flow of €2.1 billion in 2020 compared with €2.5 billion in the previous year. A deterioration in working capital due to a negative channel mix led to this decrease. Compared with the previous year’s figure of €951 million, CAPEX in 2020 is relatively stable at €962 million.

Every month ALPORA presents an ALPORA Top Innovator for each innovation fund. For each company, a detailed innovation analysis was carried out based on the ALPORA-Methods and the resulting innovation efficiency score was determined.