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TRANSCRIPT
Health starts
with water
Thomas Kunz
Danone Waters: 23 countries; 19 bn Liters; € 2.6 bn
Argentina N 1
Indonesia
N 1
Turkey N 2
Germany N 1
Belgium N 2
Switzerland N 2
France N 2
UK N 1
Ireland N 1
Poland N 1
China
Japan N 1
Algeria
Iran N 1DAMAVAND
Uruguay N 1
Mexico N 1
Spain N 1
Brazil
Summary
Improving business trends, with developing countries
representing 50% of sales
Clear strategy focused on Category growth
Priorities: Category relevance, brand presence & costs
Volume growth is accelerating in 2009. . .
3.0%
9.8%
4.4%4.0%
5.8%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
Quarterly volume growth vs YA
. . .and sales value is returning to growth
4.6%
0.2%
4.1%
0%
1%
2%
3%
4%
5%
6%
-1.7%
-3.9%
-1%
-2%
-4%
-3%
-5%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
Organic sales growth vs YA)
This covers two realities. . .
Mature Countries
Developing Countries
…
-10%
-5%
0%
5%
10%
15%
20%
-15%
-20%
14.4%
17.1%
11.8%
10.1%
16.4%
-3.4%
-14.6%
-17.1%
-7.4% -6.8%
Q3 08 Q3 09Q4 08 Q1 09 Q2 09
60% 40%
2005
E 2009
EBIT
Developing Countries: 50% of sales, 60% of profit
49%
51%E 2009
Mature Countries
Developing
Countries
41% 59%
2005
Sales
Our objectives:
Return Mature Countries
to growth
Accelerate
in Developing Countries
Three priorities across all geographies
1. Category growth
2. Presence
3. Cost
Per Capita Consumption
1. Category growth: Driven by Health Credibility &
Sustainability
…the original
purity of
our water
…our sources
Health Credibility battles Sustainability is at the heart of our model
Water
Natural
Water …the
environment
…water
resources
communities
Brands
The 3 Credibility Battles
Grow water category
in the beverage marketThe battle for water
Build relevance & visibility
of our brand benefitsThe battle
for
our brands
Differentiate natural waters
vs tap & purified watersThe battle for
natural waters
The main Battle is at the Base
The battle for water
The battle for
Natural waters
The battle
for
Our brands
1. Water is the healthiest
beverage to hydrate March 09
2. We don‟t drink enough waterMarch 09
360
360
The Battle For Water is our main battle
More water = less calories = better hydration
Daily liquid consumption analysis, France Consumption shifting analysis, UK
Soft drinks
74%
Tap & hot
beverages
26%
UK Bottled Water 2008 switching
analysis
(source: Nielsen consumer panel)
Consumption profile according to Plain water SS
Subject number
SS of Plain water
L/day
0,050,24
0,60
1,12
1,78
0,09
0,08
0,21
0,20
0,33
0,39
0,32
0,25
0,12
0,61
0,35
0,30
0,27
0,26
0,12
0,46
0,45
0,43
0,35
0,27
0,14
0,47
0,51
0,37
0,00
0,50
1,00
1,50
2,00
2,50
3,00
<10% <20% <40% <60% 60-100%
All other beverages
Alcoholic drinks
Milk beverages
Hot beverages
Fruit juice
CSD
Aquadrinks
Sparkling water
Tap water
Plain water
162242321179157
Heavy water drinkers drink
less sugary beveragesWhere did volume losses go to?
In France / UK, full category defence plans. . .
. . .are contributing to the re-start of the category
Q3 08 Q4 08 Q1 09
-3.8%
Q2 09
+4.6%
Q3 09
-3.6%
-9.4%
-7.9%-9.0%
Q3 08
-9.9%
Q4 08
-7.0%
Q1 09
+2.8%
Q2 09
+11.6%
Q3 09
(Source: Nielsen – Total Bottled Waters volume Great Britain) (Source: IRI– Total Bottled Waters volume)
France cat. Volume growthUK cat. volume growth
+10.2%
In developing countries:
Building the category with health authorities
Drinking water: one of the Mexican Ministry of Health„s
“5 STEPS towards a healthier nation” (5 PASOS) program
5. Share
with
family
& friends4.
Measure
2.Drink
water
3. Eat
vegetables
& fruits
1. Move
yourself
Promote the healthy life style, make people self- conscious
-1,1
2,9
5,0
10,1
-2
0
2
4
6
8
10
12
Q4 08 Q1 09 Q2 09 Q3 09
Mexico: Plain Still Water Volume growth in %
(Bottles <10L - Source: Nielsen)
32.4%34.1%
35.6%
2007 2008 YTD Sep09
Bonafont Volume share(Plain Still Water - Bottles <10L - Source
Nielsen )
38%
35%
32%
29%
26%
Developing countries:
Building the category with Health authorities
In Poland we started a campaign targeted at children
« Mum, Dad, I prefer water! »
under the sponsorship of the Polish ministry of Health
In schoolsIn stores
Category growth is accelerating
Zywiec is gaining share
0
2
4
6
8
10
12
14
2007 2008 YTD Sep09
Plain Still market volume growth(Source: Nielsen)
20.1%
21.8%
22.5%
2007 2008 YTD Sep09
Zywiec volume share (Source: Nielsen)
23%
22%
21%
20%
19%
18%
17%
16%
15%
Sustainability is at the heart of our model
…the original
purity of
our water
…our sources
…the
environment
…water
resources
communities
Sustainability achievements 2009
30 mln mangroves planted in 2009
(Danone Ramsar wetlands protection initiative)
-7% CO2 reduction achieved in 2009
On track for 50% rPET content by 2011
-10% water usage reduction in 2009
2. Presence:
Availability and visibility to consumers
Store coverage Jugs
On-the-go In homes
Proximity stores: A major growth driver
Controlled Proximity Outlets
(Index 100 in 2006)
100
118
147
186
2006 2006 2008 E 2009
Nb stores covered
Proxi45%
Other55%
Split by channel
% Growth 2009
Availability & visibility in homes:
HOD is a brand-building business model
A branded, affordable proposition
for daily home consumption
A packaging size that we market actively
An offer that strongly enhances brand visibility
A unique way to come closer to consumers
HOD is growing and profitable
HOD12%
PET
88%
HOD 12.4%
EBIT YTD oct09Sales YTD oct09
PET
87.6%
HOD insights from Developing Countries
translated to Mature Countries
More proximity, more affordability
Practical 3L size positioned for fridges– Convenient, easy storage
– Designed for fridge door
– More volume with less plastic per liter
Bigger 5L / 8L formats, for an
optimized CO2 footprint
3. Cost
Productivity efforts stepped up in 2009. . .
Transparent value chains
Packaging lightweighting
Supply chain re-engineering
DaMaWay performance gains
Strong benchmarking culture
COGS Productivity (in € mln and as a % of COGS)
2007 2008
5.3%
2005 2009E2006
4.4%
3.4%
3.3%3.1%
. . .allowing to decrease our COGS‟ weight
100.0
2007
6.0
103.5
2008
Net
price
-2.5
Re-
eng-3.0
97.0
E2009
Net
price-3.5
Re-
eng.
Index 100 in 2007, excl. mix & forex effects
As a conclusion. . .
“Drinking 2L of water a day
is a simple, but a decisive
attitude step
towards a healthy lifestyle”