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The New Danone

Groupe DANONE

Premium Review Conference December 6th, 2007

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•Danone’s Profitable Growth Model

•Vision for the New Danone

•Baby Food Business

•Danone Business Results and New Profile

OVERVIEW

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9.7%9.7%

6.7%6.7%7.8%7.8%

7.2%7.2%6.0%6.0%5.1%5.1%

2001 2002 2003 2004 2005 2006

AverageAverage organicorganic sales sales growthgrowth

+6.0%

+8.0%

Average organic sales growth = +7,1%

2007 9M

7.0%7.0%

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2000

10.8%

2001

11.1%

2002

11.7%

2003

12.2%12.4%

13.35%

20052004IFRS

13.10%

2004

13.6%

2006 2007 H1

14.0%

AverageAverage operating operating marginmargin

5

Source: EuromonitorSource: Euromonitor

World Market CAGR 06-11 (volume) World Market CAGR 06-11 (volume)

0% 1% 2% 3% 4% 6%

0.9%1.9%

2.4%2.8%2.8%

3.0%3.2%

3.7%4.0%

4.4%4.6%

5.3%6.4%

6.6%

SoupSoupCarbonatesCarbonatesRTE cerealsRTE cereals

ConfectioneryConfectioneryCheeseCheese

Frozen processed foodFrozen processed foodSauces, dressings & condtsSauces, dressings & condts

Ice creamIce creamSweet biscuitsSweet biscuits

YogurtYogurtSavoury biscuits & crackersSavoury biscuits & crackers

Baby foodBaby foodFunctional drinksFunctional drinksStill bottled waterStill bottled water

5%

We play in the most attractive food segments

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0

5

10

15

20

25

30

35

40

Nether

lands

Switz

erlan

dFr

ance

German

ySp

ainBe

lgium

Austri

aFin

land

Denmar

kS. A

rabia

Portug

alCZ R

ep.

Swed

enNor

wayBulga

riaArge

ntina

Irelan

d UKSlo

vakia

Hunga

ryJa

pan

Israe

lRu

ssia

Turk

eyAlge

riaAus

tralia

Poland

Greece

New Ze

aland

Tunis

iaS.

Korea

Canad

aChil

eMex

icoTaiw

an Italy

Ukrain

eBraz

ilRo

mania

South

Afri

ca USAHon

g Kong

Thail

and

Moroc

coCo

lombia

Singa

pore

Egypt

Vene

zuela

Malays

iaPhil

ippine

sChin

aViet

nam

Indon

esia

1 cup a day

1 cup every 2 days

1 cup a week

1 cup a month

Fresh Dairy Products Per Capita consumptionFrom 1 cup a month to 1 cup a day

Source: Euromonitor

7800 M€ 1000 M€ 1300 M€ 900 M€

GrowthGrowth TransitDigestion

TransitDigestion

WeightManagement

WeightManagementProtectionProtection

Our Fresh Dairy Blockbusters

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2007200720002000Yogurt OnlyYogurt Only Yogurt, fermented milk and other

relevant supportsYogurt, fermented milk and other

relevant supports

The Activia Example: one health benefit, many extensions

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Beauty ? ?Cardio

Preparing tomorrow’s Diamonds

7 countries 5 countries

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11

Health = Survival

Health = No disease

Health = Well ageing

Source : Human Mortality Database, INSEE

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1507 2007

Albrecht Dürer Mum, 70

Jane Fonda 70

These women have the same age.

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PreventionPrevention

FoodFood

CureCure

DrugsDrugs

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Life stage

Spec

ific

nutr

ition

/ hea

th n

eeds

Babies/ Toddlers

Teenagers - Adulthood Elderly / pathology

Low

High

Clinical NutritionClinical

NutritionActive health

Food and drinks

Active health Food and

drinks Baby FoodBaby Food

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Beverages

Infant Nutrition € 2.1BClinical Nutrition € 0.8B

Dairy

Infant Nutrition € 3.9 B€ 8.2 B

€ 0.5 B

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Baby Food3%

Biscuits16%

Beverages28%

Fresh Dairy53%

Clinical Nutrition5%

Baby Food17%

Beverages26%

Fresh Dairy52%

ROW22%

Asia-Pacific17%

E. Eur.11%

W. Europe50%

ROW22%

Asia-Pacific19%

E. Eur.11%

W. Europe48%

Danone in 2006 Danone in 2006 Danone pro-formaDanone pro-forma

In 2008, Danone post portfolio swap, will be an est. 17blnE company, with an enhanced growth and margin profile

Danone + Numico combined sales: 100% “health through food”

Danone + Numico combined sales: 100% “health through food”

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18

06-11 growth

6% 2% 4% 7% 6% 3%

Bottled water Sauces,dressings, condiments

Fresh Dairy Functional drinks Baby Food Pasta

Market sizes (€B)

Note: Clinical Nutrition includes oral, tube and devices. Manufacturers’ sales valueSource: Euromonitor, external sources

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Source: Euromonitor, internal data, Baby Food players public information

Australasia

2006

€18B

0

20

40

60

80

100%

Baby Food market

BabyFoodmarket

Blédina

BabyFoodmarket

Numico

France UK

2%

6%

2%

10%+

2006 Baby Food growth

AME

Especially in Asia and Eastern Europe…

Especially in Asia and Eastern Europe…

… With potential also in developed countries

… With potential also in developed countries

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High profitability High profitability High entry barriersHigh entry barriers

Milk & Foodplayers

Milk players

Baby Food playermargin (%)

Source: Baby Food public information, brokers, Nielsen

2%Baby Food

Alcoholicbeverages

Confectionnery

Non alcoholicbeverages

Yogurt

Shelfstable food

Pet food

Frozen food

2%6%

9%12%

15%19%

21%25%

0 5 10 15 20 25 30%WW Private Labels market share

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WW average20kg

France

WesternEurope

NorthAmerica

EasternEurope

Latin America

AMEA

APac

0 50 100 150 200 250Per capita consumption (kg/ baby)

Source: Euromonitor, External data – APac: Asia Pacific

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Source consumption book RI Sept 2003

BBF

NS

Homemade food

Breastfeeding

45

42

10

9

82

9

16-36 months

3

6-15 months

Sha

reof

sto

mac

h(1

00%

)

231970 1990 2000 20071980

1st Evening meal1st jar in 1974

1st plate

1st brand for toddlers

1906… 1st milk +cereals1st cereals for toddlers

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0

200

400

600

800

1000

1200

1992 1994 1996 1998 2000 2002 2004 2006

Sources : Nielsen Mass market + INSEE

Births in thousand French BBF market (K€)

Market value doubled in 14 years with stable number of annual births

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Market share (val) - 100% AIE+UHT BB + toddlers

+6.4 +7.7 +10.1 +10.6 +13.2 +16.6 +18.3Deltain pt

B vs N+13.4

2002 2003 2004 2005 2006 éch 2006 census YTD 07 P9/07

Nielsen P9/07

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W. EuropeW. Europe E. EuropeE. Europe AsiaAsia Africa Middle East

Africa Middle East

Numico + Blédina Baby Food positionsNumico + Blédina Baby Food positions

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The Americas are a growth engine

- Very good success at Dannon US thanks to Blockbusters

- Latam on track with our ambitious objectives

Eastern Europe will have an outstanding year

Return to growth in mature home markets (including France) is confirmed (excluding weather impact)

And this despite loss of co-packed sales at Wahaha

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Continued product mix improvement

Successful offsetting of input cost headwinds through selective price increases

Stepped-up productivities programs

Operational leverage on fixed costs and overheads

While continuously fuelling brand equity through increased A&P

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Top Line

EBIT Margin Danone margin will be positively impacted by:

The 2007 portfolio swap between a low-growth mature business and a leading playerin nutrition, posting the highest growth in the industry, will increase our new growth profile

The continuous margin improvement of currentactivities

Favorable activity mix within Numico portfolio (Nutrition growing faster than Baby Food)

Group Mix: Numico more profitable thanDanone