• New CEO Antoine de Saint-Affrique, together with a strengthened leadership team, will present Danone’s new strategic plan “Renew Danone” today at a Capital Market Event (CME). 
• The plan will enable Danone to reconnect with a sustainable profitable growth model. The delivery of the plan will be facilitated by a greater alignment between purpose and performance. 

However, the review also recognised Danone’s historic underperformance compared to its markets, which can be attributed to a lack of focus on its core portfolio, late and sub-scale innovation efforts, inconsistent execution and low investments. 

In this context, and under the oversight of Danone’s Board of Directors, Antoine de Saint-Affrique and the Executive Committee have built a plan that aims at restoring Danone’s performance, competitiveness and value creation for the long-term.

The plan is articulated around four strategic pillars:

• Restoration of Danone’s competitiveness in core categories and geographies;
• Selective expansion of Danone’s presence, in terms of segments, channels and geographies;
• Active seeding of future growth avenues;
• Active portfolio rotation.

The plan will allow Danone to reconnect with a sustainable profitable growth model. It will be based upon an end-to-end step up in the quality of execution, a strengthened innovation model geared for scale and impact, and increased investments in consumer value, as well as brands and commercial development. 

Delivery of the plan will be facilitated by a greater alignment between purpose and performance, consistently putting consumer and customer at the heart of everything Danone does. The company will restore passion for execution, a stronger discipline on capital allocation, and a greater sense of urgency in seizing opportunities and tackling issues.

Based on this, Danone announces a new set of targets for the 2022-2024 period:

• 2022 will be a foundational year with price-led like-for-like sales growth between +3 and +5% and a recurring operating margin above 12%, assuming the reinvestment of 100% of Local First savings, a productivity higher than last year and a low to mid-teens level of input cost inflation (based on current macro-economic assumptions);
• 2023-2024 ambition, profitable growth: like-for-like sales growth between +3 and +5% with recurring operating income growing faster than like-for-like net sales;
• Sustainable value creation and shareholder returns: sequential ROIC improvement over the period supported by capital allocation discipline, portfolio rotation reaching around 10% of net sales, an annual capital expenditure envelope equivalent to a maximum of 4.5% of net sales, and further improvement in working capital;
• Disciplined financial policy: healthy balance sheet with targeted net debt to EBITDA ratio below 3x, and stable or growing yearly dividend.

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