Danone in CISYves Legros

Agenda

– 2 –

CIS: Opportunities in a Growth Region

Danone Unimilk: the right growth platform

“One Company” Plan and Ambition

Russia is back to solid growthafter the crisis

Russian economy stands at the 7th place of GDP calculated on the basis of the purchasing power parity (€bln., 2010)

(1) Calculated in 2005 prices

(2) Estimate based on the data from EIU and Global Insight

Starting from early 2000s Russian GDP grew at a steady rate of approximately 5% per year

USA

Italy

France

UK

Brazil

Russia

Germany

India

Japan

China 7 614

10 941

1 369

1 590

1 609

1 627

1 655

2 195

3 131

3 196

47%

242%

32%

164%

38%

100%

72%

40%

39%

26%

Growth rate

2010/2000

Real GDP1 (€ bln.)

4.20%4.82%

GDP based on PPP per capita1 (€ per capita)

2009

4.44%5.20%

201520052000

2015200920052000

– 3 –

CIS fresh dairy markethas been growing consistently

Fresh Dairy Market Size Growth (mln Euro) vs Y-1

Market estimation by Euromonitor

CIS Fresh Dairy

Market:

- Doubled in 6 years

- Sensitive to crisis,

but fast recovering

CIS Total Dairy

Market:

- Steady growth of per

capita consumption

2000-2010 at 4%

CAGR

- Market Valorization

– 4 –

(1) Fresh Dairy Market includes: Yoghurt and Sour Milk Drinks, Chilled and Shelf

Stable Desserts, Chilled Snacks, Cream, Fromage Frais and Quark

Still a market with low fresh dairyconsumption per capita

* Data on Fresh Dairy Consumption by Euromonitor

** GDP growth PPP 2010-2015 (source EIU)

GDP Growth 2010-15CIS Dairy and Fresh Dairy Market:

- Growing Purchasing Power

- High potential market for Fresh Dairy

– 5 –

Key trends on CIS market

BRANDS

NATURALITY

MODERN TRADE

Naturality, Purity

and Tradition trend

Cooking at home

Switch from bulk consumption

Highly ‘branded’ market

Value-added categories growth

Growth of Modern Trade

Consolidation of main players

Regional expansion

– 6 –

Agenda

– 7 –

CIS: Opportunities in a Growth Region

Danone Unimilk: the right growth platform

“One Company” Plan and Ambition

Danone + Unimilk Snapshot

Danone entered Russian market in 1992

4 plants in CIS

Annual sales* 2010 : 700 mln €

Focus on “blockbuster” brands; developing

mainstream modern category

Russian Fresh dairy market**

- 25.6% market share

- #1 player

* Based on 2010 exchange rate : 40.31 RUR/€

** Source: Nielsen Retail Audit, National Urban, FM 2011

Unimilk established in 2002

25 plants in CIS

Annual sales* 2010 : 1.3 bn €

Numerous brands allowing the company

to address the vast majority of the market

Russian Fresh dairy market**

- 13.9% market share

- #3 player

– 8 –

Marrying Activia with Prostokvashino…

Activia #1 brand for Danone Russia

Leader of Active Health

Brand #1 for women

Modern Categories and Kefir

Strong drive through Media support

Bifidus and health as consumption trigger

Growing through innovations

- Adjacent categories

- New consumption occasions

Activia Prostokvashino

Prostokvashino #1 brand for Unimilk

Tradition & Quality

Family Brand

Leader in Traditional Categories

Strong and well-recognized ambassador –

Matroskin

- 2009 – Brand of the Year Award/EFFIE

- #2 Brand in Russia 2010 (FMCG) by Forbes*

Growing through innovations

- PET bottled Milk

- Granulated Cheese

* Based on 2010 exchange rate : 40.31 RUR/€

** Domik v Derevne, main competitor on #6 with x2 advertising budgets

– 9 –

An alliance of 2 complementary geographies

Western Russia

Population 73 %COMBINED ~27%

Eastern Russia

Population 17%COMBINED ~30%

Russia, Total Dairy, FM 2011 estimated Value Market Share

Source: AC Nielsen FM 2011

– 10 –

Distribution

Modern retail

and

Direct RTM

Presence in

traditional

channels

Regions

Focused

on “the West”

Focused

on “the East”

Portfolio

Focus on

Premium

and

Health

Focus on

traditional with

reach to all SELs

Industrial &

supply chain

Best-in-class

practices

Large

network

Cost synergies:

+ ~ 200 bp margin over 4 years

Revenue synergies:

+10% additional sales over 3 years

+

=

Danone-Unimilk: complimentarity drives synergies

DANONE UNIMILK

– 11 –

Agenda

– 12 –

CIS: Opportunities in a Growth Region

Danone Unimilk: the right growth platform

“One Company” Plan and Ambition

From Collaboration to Integration

07/2010

09/2010

Deal

announcement

Collaboration

initiatives

Deal

approval

12/2010

7 selected collaboration project in key

business areas:

- SAP implementation in Unimilk

- Finance reporting in Unimilk

- Joint Sales Operations (RTM-pilot)

- Key Account Management

- Purchasing Synergies

- Product Localization and Industrial

- Logistics

Identification of most potential areas

of Danone and Unimilk best practices

implementation

Building organization with focus on:

- Growth

- Profitability

- Sustainability

Full scope integration

- Strategic Plan

- Operating Models

- Change Plan

03/2011

Joint Sales

Team PilotDays of Change

Phase 1. Collaboration Phase 2. Integration

– 13 –