How did Danone perform in 2017?

In 2017, our results were fully in line with the objectives we set for the year. We delivered a double-digit recurring earnings per share growth. As anticipated, sales growth accelerated from the third quarter, led by a strong recovery in demand for infant formula and water products in China as well as a gradual improvement in Essential Dairy and Plant-based Products (EDP). Overall, we’ve been able to significantly improve the margin for the third year in a row, which is a great outcome a year after the WhiteWave acquisition. More specifically, the performance for our Specialized Nutrition activity has been very strong throughout the year. In particular, Early Life Nutrition saw a double digit growth in China due to a solid execution of our agenda in response to the increase in market demand. Our Waters division has performed well for plain waters and Aquadrinks, in all regions, both in terms of volume and sales. For EDP Noram, the performance has been gradually improving, and we’re gaining market share in very competitive categories. Coffee creamers is showing a strong growth. The plant-based business has turned positive in the second part of the year, driven by gradual stabilization of the core beverages portfolio (Silk) and very strong sales growth for Vega nutritionals. Our Premium Dairy category is facing headwinds, we have a lot of innovation in the pipeline. For EDP International, we have been progressing around fixing the fundamentals and accelerating young and local brands. Our brand Alpro, capitalizing on new trends in plant-based products, grew 10% and is seven times bigger than its closest competitor in Europe.

What are your expectations and strategic priorities for 2018?

We have three major priorities. First, we’ll continue growth acceleration through innovation, brand activation, retail strategy disruption and focus on local brands, and ensure that we better connect to the consumer. Our second priority is to maximize efficiencies by unlocking resources both through synergies around the acquisition of WhiteWave and our Protein savings program. And finally, our third focus is capital discipline, which is really about balancing the different time horizons when we allocate resources between short-, mid-, and long-term. This includes making sure we will continue to have a dynamic and disciplined portfolio management to maximize sustainable value creation.

We’ll continue to execute on the plan we announced in May 2017 at the Investor’s Seminar to deliver on our 2020 targets, including an organic growth of 4% to 5% and a recurring operating margin of over 16% in 2020.

2018 is a new step toward this objective, and another year where we will continue to be mindful of how we deliver results. Performance is not only about finance, it’s also about how we deliver good results in a responsible way and in line with our "Danone, One Planet. One Health" vision. It’s crucial that we ensure sustainable value creation for all our stakeholders.

You are now in charge of Cycles and Procurement. How do you contribute to "One Planet. One Health" in that regard?

It’s all about the way we use resources. We have a responsibility to ensure that we are creating more value while using fewer natural resources to meet our long-range sustainability goals. "Danone, One Planet. One Health" is all about making sure we are acknowledging the necessary changes in what we do to play our part in the Food Revolution and to connect this vision through our brands. In other words, we must do business with purpose.

2020 OBJECTIVES

Organic Growth
4 to 5%

Like-for-like sales growth

Recurring operating margin
>16%
ROIC
~12%

Return On Invested Capital

Net debt / EBITDA
< 3.0x

see definition in interim financial report

consistent recurring
EPS Growth

at constant exchange rate