DANONE : 2012 Full-Year Results

Tue Feb 19, 2013 2:02am EST

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 ------------   PRESS RELEASE ------------

 

 

2012 Full-Year Results

February 19, 2013


2012 results
Sales[1]of over EUR20 billion, up +5.4%[2]
Trading operating margin down 50 bps[2]
Free cash-flow[3]over EUR2 billion

2013 targets
A solid year of transition on the way to profitable growth in 2014
Sales[1]growth of at least +5%[2]
Trading operating margin down, by between -50 bps and -30 bps[2]
Free cash-flow held steady at around EUR2 billion excluding exceptional items[3]


[1] Net sales
[2] Like for like: see pages 10-12 for details on calculation of financial indicators not defined
in IFRS
[3] See pages 10-12 for details on calculation of financial indicators not defined in IFRS 

Chairman's comments

"2012 was an important year for Danone in many respects. Important in that we achieved some major
milestones: our sales exceeded the EUR20 billion mark for the first time, reflecting our ability
to bring health through food to an ever-increasing number of people. And for the first time, too,
our cash-flow topped EUR2 billion-double the 2008 figure. Finally, even as our Group grew rapidly
from 2008 to 2012, our CO2 emissions held steady. Which means a 35% reduction in the carbon
intensity of our business.

Most of these achievements were due to our operations outside Europe[1], which now generate 60% of
our total sales and reported profitable growth averaging over 10% in 2012. We must make every
effort to pursue lasting expansion in these markets. 

But 2012 also saw some of our business in Europe come under pressure from a severe deterioration
in overall consumer demand, which led to a 3% decline in our revenues in this region[1] and a
decline of over 10% in our operating income. Clearly this situation is not sustainable, and we
will overcome it. In December we set a EUR200 million target for savings and announced that we
intended to launch a plan to adapt our organization. Today we are initiating discussions with our
Works Councils over the plan's main measures, which are designed to win back our competitive edge
and achieve greater efficiency in Europe. We will also continue to revamp the product ranges
offered by our business lines. 

So 2013 will be a year of transition, with vigorous development in business in our growth markets
and a drive to strengthen operations in Europe. A year aimed at returning our activities as a
whole to strong, profitable growth by 2014."

[1] Europe excluding CIS region

Highlights        

*Full-year 2012 sales of EUR20.9 bn, up +8.0% as reported and +5.4% like for like[2] 
*Solid 2012 performance, with contrasts from region to region: sales down -3% in Europe excluding
the CIS; growth of over +10%[2] in emerging markets and North America combined 
*Q4 performance in line with Q3, with sales[1] up +7.3% as reported and +4.9% like for like[2] 
*Trading operating margin[3] at 14.18% full year, down -50 bps[2] from 2011, in line with the
target as revised in June 2012  
*Underlying fully diluted EPS[3]of EUR3.01, up +4.1% as reported and +1.1% like for like[2] 
*Free cash-flow[3]of EUR2.1 billion, exceeding target set in 2009 
*Dividend of EUR1.45 per share, up +4.3%, will be proposed to this year's Shareholders' Meeting

 Key figures                                 2011    2012     Change    
 Sales[1] (EUR million)                     19 318  20 869  +5.4%[2]    
 Free cash flow[3] (EUR million)            1 874   2 088   +11.4%[4]   
 Trading operating income[3] (EUR million)  2 843   2 958   +1.8%[2]    
 Trading operating margin[3]                14.72%  14.18%  -50 bps[2]  
 Underlying net income[3] (EUR million)     1 749   1 818   +0.9%[2]    
 Underlying fully diluted EPS[3] (EUR)      2.89    3.01    +4.1%[4]    


[1] Net sales
[2] Like for like: see pages 10-12 for details on calculation of financial indicators not defined
in IFRS
[3] See pages 10-12 for details on calculation of financial indicators not defined in IFRS 
[4] As reported 

 


      
Sales by business line and geographical area in Q4 and full-year 2012

 EUR millions          Q4 11  Q4 12       Change          Volume growth       2011    2012        Change          Volume growth    
                                      Like for like[1]   Like for like[1]                     Like for like[1]   Like for like[1]  
 BY BUSINESS LINE                                                                                                                  
 Fresh Dairy Products   2 778  2 859        1.3%               0.4%           11 235  11 675        2.0%              -0.2%        
 Waters                   746    832        8.5%               7.9%            3 229   3 649       10.0%               5.9%        
 Baby Nutrition           950  1 105       12.1%               6.1%            3 673   4 257       11.6%               5.2%        
 Medical Nutrition        312    340        5.5%               7.3%            1 181   1 288        5.9%               6.8%        
 BY GEOGRAPHICAL AREA                                                                                                              
 Europe                 2 607  2 617       -2.3%              -0.9%           10 809  10 848       -1.0%              -2.2%        
 Asia                     727    876       15.1%              11.0%            2 862   3 584       17.4%              12.0%        
 Rest of World          1 453  1 643       12.9%               5.5%            5 647   6 437       11.7%               4.7%        
                                                                                                                                   
 Total                  4 786  5 136        4.9%               3.2%           19 318  20 869        5.4%               2.3%        


[1] Like for like: see pages 10-12 for details on calculation of financial indicators not defined
in IFRS

At its meeting on February 18, the Board of Directors closed statutory and consolidated financial
statements for the 2012 fiscal year. As regards the audit process, the statutory auditors have
substantially completed their examination of accounts as of today. 


Net sales in 2012


Consolidated sales increased +8.0% as reported to total EUR20,869 million in 2012. Excluding the
impact of changes in the basis for comparison, which include exchange rates and scope of
consolidation, sales were up +5.4%. This organic growth reflects a +2.3% increase in sales volume
and a +3.1% increase due to the price/mix effect.

The +2.5% exchange-rate effect reflects favorable trends in currencies including the US dollar,
the Chinese yuan, sterling and the Russian ruble.

Overview of sales performance - Q4 2012

Consolidated sales increased +7.3% as reported to total EUR5,136 million in the fourth quarter of
2012. Excluding the impact of changes in the basis for comparison, which include exchange rates
and scope of consolidation, sales were up +4.9%. This organic growth reflects a +3.2% increase in
sales volume and a +1.7% increase due to the price/mix effect. 

The +1.8% exchange-rate effect reflects favorable trends in currencies including the Mexican peso,
the Russian ruble, the US dollar and the Chinese yuan.

Fresh Dairy Products

Fresh Dairy Products division sales were up +1.3% like-for-like in the fourth quarter of 2012,
reflecting a +0.4% increase in volume and a +0.9% increase in value.

After a year of transition for North America[1]  and the CIS region, these markets ended 2012-as
planned-with their strongest growth of the year, enabling the division to report a slight
improvement from the third quarter.

In the United States, the Group benefited from new production capacity for Greek-style yogurt that
came on line in the second half of the year and raised its market share by around 5 points, full
year, in this fast-growing segment. Danone thus strengthened its leading position in Fresh Dairy
Products, where competition has picked up.

In the CIS region, Danone-Unimilk is on track to meet its target calling for a return to strong
growth. Deployment of the unit's strategy for the year was successful, including a focus on key
brands such as Prostokvashino, Bio Balance and Tëma, and ongoing integration of Danone-Unimilk
operations through the roll-out of common systems and gradual merger of logistics and sales force
resources. 

Sales in Latin America and the Africa-Middle East region remained extremely buoyant, with
continued double-digit growth.

Conditions in Europe remained difficult with fourth-quarter trends similar to those observed in
the third quarter. In Southern Europe, the price/mix effect was negative, reflecting investments
in pricing and promotions.

[1] North America : United States and Canada

Waters

The Waters division reported strong fourth-quarter growth, with a +8.5% like-for-like increase
driven by a +7.9% rise in sales volumes and a +0.6% rise due to the price/mix effect.

Strong growth in emerging markets continued to drive the division's performance. In Western
Europe, sales fell back slightly due to the high basis of comparison in Q4 2011.

This quarter the division no longer benefited from the impact of hefty price increases introduced
in emerging countries in 2011. Yet growth in value remained positive, fueled by aquadrinks and
their positive price/mix effect.

Baby Nutrition

The Baby Nutrition division continued to report robust growth in all geographical markets, with
sales up +12.1% like-for-like in the fourth quarter of 2012. This includes a +6.1% rise in volume
and +6.0% growth in value.

Key to the division's success is a very strong performance in Asia, particularly China, where a
complete revamp of the Dumex range-Danone's flagship brand for baby nutrition in this country-has
continued to pay off.

As in the past, changes in the division's product mix made a positive contribution to performance,
while the growing-up milk segment again reported double-digit growth and weaning foods continued
to decrease significantly in Europe.

Medical Nutrition 

Medical Nutrition sales increased +5.5% like-for-like in the fourth quarter of 2012, driven by
volume growth of +7.3%. Slowing growth reflects deteriorating conditions on some markets in
Western Europe.

In contrast, China, Turkey and Brazil maintained their momentum, with strong growth for key brands
like Nutrison, Nutrini and Neocate.

Trading operating margin[1]: 14.18%, down -50 bps like for like[2] from 2011

                        2011    2012       Change      
                                        like for like  
                                             [1]       
 BY BUSINESS LINE                                      
 Fresh Dairy Products  13.13%  12.11%     -101 bps     
 Waters                13.13%  13.23%      +22 bps     
 Baby Nutrition        19.28%  19.51%      +23 bps     
 Medical Nutrition     19.98%  17.95%     -149 bps     
 BY GEOGRAPHICAL AREA                                  
 Europe                13.96%  12.17%     -160 bps     
 Asia                  20.27%  22.07%     +192 bps     
 Rest of World         13.35%  13.17%      -26 bps     
                                                       
 Total                 14.72%  14.18%      -50 bps     


[1] See pages 10-12 for details on calculation of financial indicators not defined in IFRS
[2] Like for like: see pages 10-12 for details on calculation of financial indicators not defined
in IFRS

 

Danone's trading operating margin fell back by 50 bps like for like in 2012 to stand at 14.18%.

Lower sales in Europe, particularly Southern Europe, cut significantly into Group profitability.
This decline could not be fully offset by higher margins outside Europe, where investment programs
were maintained as planned.

Raw material costs rose significantly, gaining over 6%, and were driven by a particularly steep
increase in certain commodities including whey, milk proteins, sugar and fruits. 

Ongoing cost-cutting measures helped generate robust productivity of EUR589 million, partly
offsetting the rise in raw material, production and distribution costs.

A&P outlays increased slightly in 2012, which maintained the visibility of Group brands in the
media over the year. Expenditure on digital marketing continues to grow apace, and now represent
10% of total media investment.

Danone also continued to invest heavily in other growth drivers, beefing up its sales forces and
spending on R&D. Outlays in these areas rose by around 10%.[1]  

 

[1] Like for like: see pages 10-12 for details on calculation of financial indicators not defined
in IFRS

Underlying fully diluted EPS[1] increased by +4.1%, as reported, to total EUR3.01 in 2012

 EUR million (unless stated otherwise)               2011   2012 
 Trading operating income[1]                        2 843  2 958 
 Other operating items                              (114)  (211) 
 Operating income                                   2 729  2 747 
 Cost of net debt                                   (174)  (170) 
 Other financial income and expense                 (120)  (132) 
 Income tax                                         (626)  (712) 
 Net income of consolidated companies               1 809  1 733 
 Net income of affiliated companies                    46     54 
 Net income                                         1 855  1 787 
 Minority interests                                   184    115 
 Attributable to the Group                          1 671  1 672 
 of which non-current net result[1]                  (78)  (146) 
 Underlying net income[1]                           1 749  1 818 
 Underlying fully diluted EPS (EUR)[1]               2.89   3.01 


[1] See pages 10-12 for details on calculation of financial indicators not defined in IFRS

Other operating items stood at -EUR211 million, due primarily to the costs arising from the
integration of Unimilk group's companies, costs related to the disposal process of Danone Chiquita
Fruits, and the impairment of other goodwill and financial assets.

Cost of net debt eased slightly from 2011, due primarily to the positive impact of bond debt
management. This gain was partially offset by the higher cost of borrowing in some emerging
countries whose currencies rose in value in 2012. 

The change in other financial income and expense results primarily from a rise in the cost of
hedging exchange rates for emerging economies.

The underlying tax rate[1] for the full year was 27.6% in 2012, up sharply from 2011 due to a
general rise in tax pressure, and, particularly in France, to the ceiling on deductibility of
financial interest as of 2012. 

The net result of affiliated companies was up due to higher profits at minority holdings in Asia
and the Africa/Middle-East region in 2012.

Minority interests declined, reflecting the impact of lower net income at Danone Spain and the
reduction in this subsidiary's minority shareholders in the course of the year. These factors were
partially offset by higher profitability at Danone Unimilk.

Underlying net income[1] rose +4.0% as reported to total EUR1,818 million, a like-for-like[1]
increase of +0.9%. Underlying fully diluted EPS came to EUR3.01, for a rise of +4.1% from the
reported figure for 2011 and a +1.1% increase like for like. 

[1] See pages 10-12 for details on calculation of financial indicators not defined in IFRS

Cash flow and debt

Free cash flow[1] increased +11.4% to EUR2,088 million representing 10.0% of sales in 2012, or
EUR2 billion above the 2012 free cash flow target set in 2009. At the same time, capital
expenditure rose sharply, and was up +10.3% in 2012 at EUR976 million or 4.7% of sales. 

Robust generation of free cash-flow net of dividends allowed the Group to finance its 2012
acquisition of Wockhardt's nutrition business in India and to buy back shares in an amount of
EUR398 million[2], while pursuing efforts to hold debt ratios steady. At December 31, 2012, net
financial debt[1] stood at EUR3,021 million (excluding put options in an amount of EUR3,721
million granted to minority shareholders). 

[1] See pages 10-12 for details on calculation of financial indicators not defined in IFRS
[2] Excludes purchase of treasury stock to offset dilution resulting from shares transferred to
minority shareholders at Danone Spain in exchange for their shares in this subsidiary.

 

Reduction of carbon footprint 

Danone products depend to a large extent on natural eco-systems. It is thus in the Group's best
interest to make care for the environment an integral part of its business activities.

Carbon footprint is a global indicator that reflects a wide range of environmental criteria.
Danone had committed to reducing its carbon intensity[1] by an ambitious 30% from 2008 to 2012.

In the event, the Group more than achieved this goal in 2012, cutting its carbon intensity by     
      -35.2%[2] over the five-year period.

[1] Grams of CO2 per kilogram of product sold
[2] Based on constant scope of consolidation, excluding Unimilk, and on emissions under Danone's
direct responsibility (packaging, industrial activities, logistics and end of life)

2013 outlook

The Group assumes that trends in consumer demand will continue to show contrasts from region to
region, with overall trends negative in Europe-assuming, however, no major political or economic
upheavals-and favorable in the rest of the world. 

The Group also expects the cost of its major raw materials and packaging materials to remain high,
with moderate growth.

This being the case, the Group will continue to adapt its model in Europe, stepping up the pace of
updates to its product ranges to meet consumers' changing needs, and at the same time adapting its
structures and costs to achieve EUR200 million in savings between now and the end of 2014.

In the rest of the world, it will continue to expand its product categories, build its brands and
grow its market share in a profitable and lasting way.

Through these actions, Danone plans to get back on the track to strong, profitable organic growth
as of 2014.

For 2013, which will remain a year of transition, the Group has set the following targets:
·        a like-for-like[2] sales[1] growth of at least +5%
·        a decline in trading operating margin, by between -50 bps and -30 bps like-for-like[2]
·        free cash-flow of around EUR2 billion excluding exceptional items[2]

[1] Net sales
[2] See pages 10-12 for details on calculation of financial indicators not defined in IFRS


Share buyback


As announced when results for the third quarter of 2012 were released, Danone has bought back
12,959,694 of its own shares over the past four months for an amount of EUR639.5 million. 

Meeting on February 18, 2013, the Board of Directors voted to cancel 8.8 million treasury shares.
Authorized by shareholders at the General Meeting on April 28, 2011, this cancellation will take
effect on February 21, 2013.

Following it, Danone's share capital will total EUR158,590,500 represented by 634,362,000 shares.

Dividend

At the Shareholders' Meeting on Thursday, April 25, 2013, Danone will ask shareholders to approve
distribution of a EUR1.45 dividend per share in respect of the 2012 fiscal year, to be paid in
cash. This represents a +4.3% rise from 2011. If this proposal is approved, the ex-dividend date
will be Thursday, May 2, 2013 and the dividend will be payable from Tuesday, May 7, 2013.

Governance

At its meeting on February 18, 2013, Danone's Board of Directors approved draft resolutions for
the Group's April 25 Shareholders' Meeting, including the proposal to renew the appointments of
the two directors whose terms are expiring: Mr. Franck Riboud, Chairman and Chief Executive
Officer, and Mr. Emmanuel Faber, Deputy Managing Director.

At that meeting, the Board of Directors, on the recommendation of the Nomination and Compensation
Committee, voted to appoint a Lead Independent Director when the positions of Chairman of the
Board and Chief Executive Officer are combined. The Lead independent director, who must be chosen
from among the majority of independent directors serving on the Board, will help strengthen
Danone's corporate governance and improve the operation of its Board.

The Board therefore voted to appoint Mr. Jean Laurent as Lead Independent Director based on his
extensive business experience as the former CEO of a major banking group, and on his thorough
knowledge of Danone and its Board, which he has served as Chairman of the Nomination and
Compensation Committee (since 2011) and as Chairman of the Social Responsibility Committee (since
2007). In addition, the Board ensured that Mr. Jean Laurent met all the requirements for
independence necessary to serve as Lead Independent Director.

Finally, the Board reiterated its commitment, made several years ago, to continue to improve its
corporate governance by bringing before the Shareholders' Meeting proposals on ensuring the
Board's independence, increasing the number of women directors, and increasing the expertise and
diversity of its composition. The Board renewed this commitment at its February 18 meeting.


Change in Danone SA shareholder base in Spain     


On July 26, 2012, Danone completed the purchase from two minority shareholders of a total of
1,416,368 shares of its subsidiary Danone Spain, raising its equity interest from 57.0% to 65.6%.
Most of the remaining minority shareholders hold put options. These options are recognized in
Group financial statements as financial debt.

As announced in the earnings release for the first half of 2012, the Group began talks with Danone
Spain minority shareholders on the terms and conditions of these put options, especially in light
of Southern Europe's deteriorating economy and the significant impact this has on Danone Spain.

As part of this effort, since the beginning of 2013 the Group has repurchased a total of 1,544,227
shares from several Danone Spain minority shareholders, raising its shareholding to 75.0%. Shares
were acquired in exchange for cash payments totaling EUR87.4 million and for 6,715,266 shares of
Danone treasury stock. An equal number of shares will be purchased by the Group over the next
three months under its share buyback program to offset dilution resulting from this transaction. 

These transactions are accretive for Danone earnings per share as of year one, and will have a
favorable impact on the Group's net debt of EUR79 million.

Other minority shareholders, representing around 14% of Danone Spain's share capital, have
exercised their put options. Talks with these shareholders are still under way.

Based on these events-the share buyback, option exercise and talks-the Group decided to recognize
a portion of the remaining put options (EUR1,305 million) as short-term financial debt in its
financial statements at December 31, 2012. Put options amounting to EUR390 million continue to be
classified as long-term financial debt, since it is unlikely that they will be exercised within
the next 12 months. 

o o O o o

Change in geographical breakdown starting in 2013

In order to adapt its reporting to the Group's evolutions, Danone will use a new geographical
breakdown to track operations starting in 2013:

    2011  2012 Change                   
                   Like-for-like[1]     


Sales (EUR millions)

 Europe excl. CIS          8 614   8 431 -3.0%  
 CIS & North America[2]    3 948   4 426  6.7%  
 ALMA[3]                   6 756   8 012 15.7%  
 Total                    19 318  20 869  5.4%  


Trading operating margin[1]

 Europe excl. CIS         17.37%  15.66% -190 bps  
 CIS & North America[2]    9.33%  10.21% +144 bps  
 ALMA[3]                  14.49%  14.81%  +31 bps  
 Total                    14.72%  14.18%  -50 bps  


[1] Like for like: see pages 10-12 for details on calculation of financial indicators not defined
in IFRS
[2] North America:  United States and Canada
[3] Asia-Pacific / Latin America / Middle East / Africa


Financial indicators not defined in IFRS


Information published by Danone uses the following financial indicators that are not defined by
IFRS:

*Like-for-like changes in net sales, trading operating income, trading operating margin and
underlying net income 
*Trading operating income 
*Trading operating margin 
*Underlying net income 
*Free cash flow 
*Free cash flow excluding exceptional items 
*Net financial debt 

Given severe deterioration in consumer spending in Europe, Danone has set a target for savings and
adaptation of its organization to regain its competitive edge. Starting in the first half of 2013,
Danone will publish a free cash-flow indicator excluding cash-flows related to initiatives
deployed within the framework of this plan. In 2012, free cash-flow excluding exceptional items
was equally to free cash-flow and totaled EUR2,088 million.

 

To facilitate comparison with other companies, the Group has revised its definition of
like-for-like changes, aligning itself on market practice to measure the impact of changes in the
scope of consolidation. Starting in the first quarter of 2013, financial communications from
Danone will incorporate this new indicator (see definition below), a change that should not
generate any significant difference in Group performance indicators. Changes in like-for-like
indicators for 2011 and 2012 based on prior and new definitions are as follows:

                               Change 2011 - 2012 like-for-like      
                           Prior definition [1]  New definition [2]  
 Sales                             +5.4%                +5.4%        
 Trading operating income          +1.8%                +1.9%        
 Trading operating margin         -50 bps              -50 bps       
 Underlying net income             +0.9%                +1.0%        


[1]  Applied through December 31, 2012
[2]  Applied from the first quarter of 2013

Calculation of financial indicators not defined in IFRS and used by the Group are calculated as
follows:

Based on the prior definition, Like-for-like changes in net sales, trading operating income,
trading operating margin and net income - Group share essentially exclude the impact of: (i)
changes in exchange rates, with both previous year and current year indicators calculated using
the same exchange rates (the exchange rate used is a projected annual rate determined by the Group
for the current year), and (ii) changes in consolidation scope, with previous-year indicators
calculated on the basis of current-year scope.

Based on the new definition, Like-for-like changes in net sales, trading operating income, trading
operating margin and net income - Group share essentially exclude the impact of: (i) changes in
exchange rates, with both previous year and current year indicators calculated using the same
exchange rates (the exchange rate used is a projected annual rate determined by the Group for the
current year), and (ii) changes in consolidation scope, with indicators related to considered
fiscal year calculated on the basis of previous-year scope.

Trading operating income is defined as the Group operating income excluding other operating income
and expense. Other operating income and expense is defined under Recommendation 2009-R.03 of the
French CNC, and comprises significant items that, because of their exceptional nature, cannot be
viewed as inherent to current activities. These mainly include capital gains and losses on
disposals of fully consolidated companies, impairment charges on goodwill, significant costs
related to strategic restructuring and major external growth transactions, and costs related to
major litigation. Since application of IFRS 3 (Revised), they have also included acquisition fees
related to business combinations.

Trading operating margin is defined as the trading operating income over net sales ratio.

Underlying net income (or current net income - Group share) measures the Group's recurring
performance and excludes significant items that, because of their exceptional nature, cannot be
viewed as inherent to the Group's current performance. Such non-current income and expense mainly
include capital gains and losses on disposals and impairments of non-fully-consolidated equity
interests and tax income, and expense related to non-current income and expense. Non-current net
income - Group share is defined as non-current income and expense excluded from Net income - Group
share.

                                                                                2011                                    2012   
 (EUR millions)                                 Underlying  Non-current items  Total    Underlying  Non-current items  Total   
 Trading operating income                            2 843                     2 843         2 958                     2 958   
 Other operating income (expense)                                       (114)  (114)                            (211)  (211)   
 Operating income                                    2 843              (114)  2 729         2 958              (211)  2 747   
 Cost of net debt                                    (174)                     (174)         (170)                     (170)   
 Other financial income (expense)                    (107)               (13)  (120)         (130)                (2)  (132)   
 Income before tax                                   2 562              (127)  2 435         2 658              (213)  2 445   
 Income tax expense                                  (661)                 35  (626)         (735)                 23  (712)   
 Effective tax rate                                  25,8%                     25,7%         27,6%                     29,1%   
 Net income from fully-consolidated companies        1 901               (92)  1 809         1 923              (190)  1 733   
 Share of profit of associates                          46                        46            59                (5)     54   
 Net income                                          1 947               (92)  1 855         1 982              (195)  1 787   
 *Group share                                        1 749               (78)  1 671         1 818              (146)  1 672   
 *Non-controlling interest                             198               (14)    184           164               (49)    115   


Underlying fully diluted EPS is defined as the underlying net income over diluted number of shares
ratio.

                                                                          2011                          2012   
 (In euros per share except for number of shares)    Underlying          Total     Underlying          Total   
 Net income - Group share                                 1 749          1 671          1 818          1 672   
 Number of shares                                                                                              
 · Before dilution                                  602 202 781    602 202 781    600 477 145    600 477 145   
 · After dilution                                   604 049 698    604 049 698    603 105 304    603 105 304   
 Net income - Group share, per share                                                                           
 · Before dilution                                         2.90           2.77           3.03           2.78   
 · After dilution                                          2.89           2.77           3.01           2.77   


Free cash flow represents cash flows provided or used by operating activities less capital
expenditure net of disposals and excluding acquisition costs related to business combinations
(since the application of IFRS 3 (Revised)).

 (EUR millions)                                           2011   2012 
 Cash flow from operating activities                     2 605  2 858 
 Capital expenditure                                     (885)  (976) 
 Disposal of tangible assets                               152    193 
 Transaction fees related to business combinations [1]       2     13 
 Free cash-flow                                          1 874  2 088 


[1] These expenses previously classified as investment flows impact cash-flow from operating
activities as from January 1, 2010 pursuant to Revised IFRS 3 on Business Combinations.

Free cash-flow excluding exceptional items represents free cash-flow before cash-flows related to
initiatives that may be taken by the Group to deploy the plan to generate savings and adapt
organization in Europe. 

Net financial debt represents the net debt portion bearing interest. It corresponds to current and
non-current financial debt (i) excluding Liabilities related to put options granted to
non-controlling interests and (ii) net of Cash and cash equivalents, Short term investments and
Derivatives - assets.

 (In EUR millions)                                                                          2011     2012 
 Non-current financial debt                                                                7 166    6 346 
 Current financial debt                                                                    1 865    3 176 
 Short term investments                                                                  (1 114)  (1 748) 
 Cash and cash equivalents                                                               (1 027)  (1 269) 
 Derivatives - assets                                                                      (257)    (213) 
 Net debt                                                                                  6 633    6 292 
 Liabilities related to put options granted to non-controlling interests - Non current   (3 622)  (1 881) 
 Liabilities related to put options granted to non-controlling interests - Current                (1 390) 
 Financial debt excluded from net financial debt                                         (3 622)  (3 271) 
 Net financial debt                                                                        3 011    3 021 


Our presentation to analysts and investors will be broadcast live from 9.30 a.m. (Paris time) on
Tuesday, February 19, 2013. Related slides will be available on our website
(www.finance.danone.com) from 8.00 a.m. today (Paris time).


 

FORWARD-LOOKING STATEMENTS

 

This press release 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 "Risk Factors" section of Danone's Annual
Report (available on www.danone.com )

  

APPENDIX - Sales by division and by region

                         First quarter     Second quarter      Third quarter     Fourth quarter      Full-year 2012    
 EUR millions            2011     2012     2011      2012      2011     2012     2011      2012      2011      2012    
 BY BUSINESS LINE                                                                                                      
 Fresh Dairy Products  2 851     2 960   2 821       2 946   2 785     2 910   2 778       2 859   11 235    11 675    
 Waters                  718      841       949      1 014     816      962       746       832      3 229     3 649   
 Baby Nutrition          910     1 014      907      1 076     906     1 062      950      1 105     3 673     4 257   
 Medical Nutrition       278      302       293       323      298      323       312       340      1 181     1 288   
 BY GEOGRAPHICAL AREA                                                                                                  
 Europe                 2 697    2 710     2 845     2 839    2 661    2 682     2 607     2 617   10 809    10 848    
 Asia                    661      829       734       933      740      946       727       876      2 862     3 584   
 Rest of World          1 399    1 578     1 391     1 587    1 404    1 629     1 453     1 643     5 647     6 437   
                                                                                                                       
 Group                  4 757    5 117     4 970     5 359    4 805    5 257     4 786     5 136    19 318    20 869   


                               First Quarter 2012                  First quarter 2012                  Third quarter 2012                  Fourth quarter 2012                   Full-year 2012            
 EUR millions          Reported change       Change        Reported change       Change        Reported change       Change        Reported change       Change        Reported change       Change        
                                         Like-for-like[1]                    Like-for-like[1]                    Like-for-like[1]                    Like-for-like[1]                    Like-for-like[1]  
 BY BUSINESS LINE                                                                                                                                                                                          
 Fresh Dairy Products        3.8%              3.8%              4.4%              2.1%              4.5%              0.7%              2.9%              1.3%              3.9%              2.0%        
 Waters                     17.1%       16.4%                    6.9%              4.6%             17.8%             12.3%             11.4%              8.5%             13.0%             10.0%        
 Baby Nutrition             11.4%              9.0%             18.6%       13.6%                   17.2%             11.5%             16.4%       12.1%                   15.9%             11.6%        
 Medical Nutrition           8.3%              6.4%             10.3%              6.7%              8.4%              4.9%              9.2%              5.5%              9.1%              5.9%        
 BY GEOGRAPHICAL AREA                                                                                                                                                                                      
 Europe                      0.5%              0.9%             -0.2%             -1.0%              0.8%             -1.5%              0.4%             -2.3%              0.3%             -1.0%        
 Asia                       25.4%             19.4%             27.1%             17.2%             27.8%             18.3%             20.6%             15.1%             25.2%             17.4%        
 Rest of World              12.8%             12.7%             14.1%             10.7%             16.1%             10.5%             13.1%             12.9%             14.0%             11.7%        
                                                                                                                                                                                                           
 Group                       7.6%              6.9%              7.8%              5.0%              9.4%              5.0%              7.3%              4.9%              8.0%              5.4%        


[1] Like for like: see pages 10-12 for details on calculation of financial indicators not defined
in IFRS

 

  
For more information :
Press Relations: +33 1 44 35 20 75 - Investor Relations: +33 1 44 35 20 76
DANONE : 17, boulevard Haussmann, 75009 Paris

2012 Full-Year Results http://hugin.info/143411/R/1679058/548289.pdf 


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(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.

Source: DANONE via Thomson Reuters ONE


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