Danone: Continued strong momentum in Q3; Consistently delivering quality growth

2024 Third-Quarter Sales

Press release - Paris, October 24, 2024

Continued strong momentum in Q3

Consistently delivering quality growth

Antoine de Saint-Affrique: CEO statement

With like-for-like sales growth of +4.2% in Q3, driven by +3.6% volume/mix, we continue to deliver broad-based quality growth, with both volume/mix and price positive in all categories.

Our consistent focus on science based and consumer and patient centric innovation, combined with strong in-market execution keeps paying off, as demonstrated by the continued good performance of our winning platforms such as High Protein, Coffee Creations and Medical Nutrition. We have also improved competitiveness within our Core portfolio across many geographies.

In what remains a challenging environment, we view our future with confidence, further leveraging the fundamentals we reestablished with Renew Danone.

I. THIRD QUARTER SALES

In Q3 2024, consolidated sales stood at €6,826m, up +4.2% on a like-for-like basis, led by an increase of +3.6% from volume/mix and +0.7% from price. On a reported basis, sales decreased by -1.2%, notably due to the negative impact from scope (-3.1%), resulting predominantly from the deconsolidation of Horizon Organic and Wallaby. Reported sales were also negatively impacted by forex (-3.2%), reflecting the depreciation of several currencies against the euro, notably the Argentine Peso, the Mexican Peso, the Brazilian Real and the Turkish Lira. In addition, hyperinflation contributed positively to reported sales (+1.5%).

Sales by operating segment

In the third quarter, Europe sales were up +1.4% on a like-for-like basis, led by further acceleration of volume/mix, up +2.4%, while price stood at -1.0%. EDP made additional progress in its transformation, notably led by the strong competitive performance of YoPro, Actimel and Alpro, while Waters posted solid growth, despite adverse weather conditions in the region.

In North America, sales were up +5.8% on a like-for-like basis, led by strong volume/mix, up +4.9%, while price was resilient at +0.9%. The strong performance was driven by Coffee Creations, growing double-digits, Yogurt, accelerating in a very dynamic category, and Waters, with evian posting strong performance and continued market share gains.

China, North Asia & Oceania delivered +8.0% like-for-like sales growth, with volume/mix accelerating to +10.2% and price down -2.2%. In Specialized Nutrition, Infant Milk Formula posted solid competitive growth, in a category showing first signs of growth recovery, and Medical Nutrition sustained its good momentum. In Waters, Mizone pursued its strong performance, while EDP delivered another quarter of strong growth in Japan.

In Latin America, sales were up +2.7% on a like-for-like basis, with volume/mix slightly down -0.7% and price up +3.5%. While the performance was impacted by the licensing out of milk business in Brazil and poor weather conditions in Mexico, Aptamil, Danone and YoPro brands pursued their solid momentum.

In the Rest of the World, sales increased by +6.0% on a like-for-like basis, with volume/mix up +1.2% and price up +4.7%, notably led by the strong performance of Specialized Nutrition across the region, and the solid growth of Africa, where the dairy portfolio transformation starts to yield results.

Sales by geography by category

2024 guidance confirmed: Like-for-like sales growth between +3% and +5% with moderate improvement in recurring operating margin.

III. MAJOR DEVELOPMENTS OVER THE PERIOD

• September 5, 2024: Danone successfully issued a €700 million bond with a 7-year maturity and a 3.20% coupon. The settlement took place on September 12, 2024 and the bonds are listed on Euronext Paris.

IAS 29: impact on reported data

Danone has applied IAS 29 in hyperinflation countries, as defined in IFRS. Adoption of IAS 29 in hyperinflationary countries requires their non-monetary assets and liabilities and their income statement to be restated to reflect the changes in the general purchasing power of their functional currency, leading to a gain or loss on the net monetary position, recorded in net income. Moreover, their financial statements are converted into euros using the closing exchange rate of the relevant period.

9M 2024 sales correspond to the addition of:

• Q3 2024 reported sales;
• Q1 and Q2 2024 sales resulting from the application of IAS 29 until September 30, 2024, to sales of entities in hyperinflation countries (application of the inflation rate until September 30, 2024, and translation into euros using the September 30, 2024, closing rate) and provided in the table below for information (unaudited data)

²Results from the application of IAS 29 until September 30, 2024, to Q2 sales of entities of hyperinflation countries.