Danone // 2020 Universal Registration Document

DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 84 4.1 Consolidated financial statements and notes to the consolidated financial statements Note 7. Events and transactions outside the Group’ s ordinary activities Other operating income (expense) in 2019 In 2019, the net Other operating expense of €(609) million consisted mainly of the following items: (in € millions) Related income (expenses) Effect of the disposal of Earthbound Farm (a) (154) Costs relating to the strategic restructuring of the EDP and Waters Reporting Entities in certain countries (b) (159) Expenses related to the transformation of Danone’s organization (114) Impairment of two brands in the EDP Reporting Entity and one brand in the Specialized Nutrition Reporting Entity (84) Costs associated with the integration of WhiteWave (46) (a) Including impairment charges of €119 million, on the date they were classified as assets held for sale in accordance with IFRS 5, less disposal costs. (b) Latin America, Africa and China. Note 7.2. Transformation of Danone’s organization and operations In February 2020, Danone announced the transformation and adaptation of its operations across its entire value chain: digital, end-to-end connected value chain through data, technology and agile ways of working to strengthen execution and to meet new consumer needs in terms of products, consumption premises and times, and effects on the environment. Regarding the Other operating expenses recognized in 2020, they mostly concern the beginning of the execution of the operations’ transformation of the EDP Reporting Entity and mainly relate to employee-related costs. In addition, in light of the global spread of the Covid-19 health crisis and the emergence of a radically changed environment, Danone decided to implement a new organization to (i) best serve its strategy and (ii) optimize the execution of its transformation and adaptation plans, (iii) by being better adapted and more agile at the local level: • move from a category-led global organization to a local geogra- phy-led organization: Local First plan; • integration of the value chain, End-to-End Design to Delivery: creation of a new strategic function, integrating global and local capabilities fromResearch & Innovation, Cycles & Procurement, Operations (manufacturing and supply chain) and Quality. To reflect this new organization, on November 23, 2020, Danone announced the expansion of its Executive Committee: • creation of two macro-regions: • Danone International which, to ensure decisions are pushed down to a local level, will be organized around five zones in 2021: Europe, Asia/Africa & Middle East, Greater China & Oceania, CIS & Turkey and Latin America; • Danone North America; • representation of the newEnd-to-End Design to Delivery function. Since the new geography-led organization is due to be implemented in 2021, it had no impact on the operating segments in 2020 as the primary operational decision-makers continued tomonitor Danone’s businesses on a category basis (EDP,Waters andSpecializedNutrition).