Evian November 2009 Operations Excellence Evian November 2009

S afety Q uality C ost D elivery E nvironment M otivation 0 Loss Time Accident 3 rd Wise audit > 40pts Reduce COGS/t every year 100 mEUR Booster pa Capex at 3,5 to 4% CANN Customer Service > 98,5% 15 to 20% less DOH inventories pa Kwh/t reduced by 4%+ pa CO2 reduced by 30% by 2013 Best Place to Work Improve score at each Danone survey 10% less Consumer Complaints pa CO2 Sourcing Lead Win 2010 / 2012 OPERATIONS road map OptimiseourOperations Footprints & Networks Reduce the Exposure & Volatility of raw materials Continuously improve our Operations Everyday, we passionately supply the best value nutrition nutrition to babies & toddlers, through operations excellence operations excellence

What is working ! Base Powder recipes simplification, Transparency on budget cost and KPI’s, Consistent quality, Customer service, Productivity + Booster, Stock reduction.

What is not working ! High Inventories, Safety as a priority for all, Lack of regular / frequent cost update in EMELA, Portfolio Harmonization & management of complexity, Supply of small markets (batch size / production runs), Non quality write-offs (returns, marketing changes, shelf life expiry), S&OP Local –Regional – Global, Some of our suppliers are also competitors, Visibility of category sourcing strategies,

What is missing ! How to support geographic opportunities ? Low cost manufacturing footprint (affordable factory), Small batch manufacturing capability, 3 rd party strategy, Transversal career path (in / out of Operations), Management of transversal / business projects, Flexibility to align with multiple RTM, Shorten time to Market (NPD),

What is possible ! Tailor supply to market size / needs, Supply chain as competitive lever (+/or quality), Co2 Neutral (offset projects), Best practices sharing, 3 rd parties to speed up innovation, Identify (recognize) when complexity adds value (specialties), Lowest Base Powder cost in the world.

Enablers Articulate manufacturing master plans aligned to commercial plans, Robust S&OP process, Flexible financial system / reporting, Base Powder rationalization, Massive dryers in Europe / Asia, Flexible blending and packing facilities (foods + milks), Management competencies and capabilities from Front line managers,

Barriers € / $ SSD contracts Volatility in commodity prices Complexity : –Technology –Sku’s –Quality standards Cultural barrier to cross functional development and integration

2012 € 4 Billion business plan “Big for Big” and “Small for Small” footprint. In everything we do, we execute right first time, while improving standards. A uniquely integrated Operations & Commercial business that is a breakthrough competitive edge

2012 (2) A seamless S&OP horizontal & vertical (3 dimensions), Speed To Market is our competitive weapon, Operations is a CO + Cash engine : “ more Co, less Co2”, Operations is a reservoir of management talents, We have the BEST & The BEST MOTIVATED people, A real time & transparent cost model.

2012 (3) “Massive” dryers in Europe and China, Small, competitive and affordable tailor made blending & packing factories in emerging markets (Vietnam-Algeria-Bahrain- Brazil), Istra is completed, We reduced write-offs by € 10 M (50%)

2012 (4) We have a centre of excellence for food category blockbusters + small flexible competitive factories plants with competitive partners, X Gm’s have recently been appointed coming from Operations + 2 plant managers in Sales or Marketing. All Front Line Managers have been through Danone Leadership College, Reduce outsourcing to the minimum, 1 Week FG Stocks, A Completely integrated S&OP

2012 (5) No accidents since 12 months, SC DBN has been recognized by all key customers as best in class, A real cost reporting system + direct link commodity prices and retailer prices, 12 months shelf life, We own vertical integrated raw material supply,

2012 (6) TTM < 12 months. (idea launch), Operations is a real business partner, Commercial can articulate the OPS Strategy and vice versa, QFS is only focusing on Quality in Design because OPS is fully under control, €300 M delivered by 31/12/2012 and we budget € 350 M in 2013, DBN Ops scores better than other Food Operations (Danone survey)