Danone // 2020 Universal Registration Document

Business highlights in 2020 and outlook for 2021 3.2 Consolidated net income review DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 46 NET FINANCIAL INCOME (EXPENSE) Market risks exposure and management policy See Note 13 of the Notes to the consolidated financial statements. Net financial income (expense) Year ended December 31 (in € millions) 2019 2020 Interest income on cash, cash equivalents and short-term investments 181 151 Interest expense on financial debt (400) (358) Cost of net financial debt (220) (207) Other financial income 37 53 Other financial expense (188) (156) Other financial income or expense (151) (103) Net financial income (expense) (370) (310) Net financial costs were down by -€60 million to -€310 million, notably given the successful bond issues realized in the first semester at attractive rates and favorable currency effects. EFFECTIVE TAX RATE Recurring income tax rate remained at 27.5%, in line with the prior year. RECURRING NET INCOME – GROUP SHARE AND RECURRING EPS Recurring net income reached €2,264 million in 2020 (€2,618 million in 2019). Net income from associates Recurring net income from associates decreased from €98 million to €85 million in 2020, reflecting the deteriorated performance of Mengniu and Yashili in China, especially in the first semester. Net income from non-controlling interests Recurringminority interests were down by €28million, reflecting a deterioration of performance across entities held byminority shareholders. Recurring net income – Group share Recurring net income – Group share was €2,189 million in 2020, down -13% vs last year. Recurring EPSwas €3.34 per share, down -13%vs last year. Reported EPS increased by +1.2% to €2.99 per share.