Danone // 2020 Universal Registration Document

Key figures	2
1. Information about the issuer and information on the Universal	4
1.1 Information about the Issuer	6
Information concerning the Issuer	6
Statutory auditors	6
1.2 Information about the Universal Registration Document	7
Selected financial information	7
References and definitions	7
Incorporation by reference	8
1.3 Person responsible for the Universal Registration Document	9
Person responsible for the Universal Registration Document	9
Statement by the person responsible for the Universal Registration Document	9
2. Overview of activities, risk factors	10
2.1 Presentation of Danone	12
Activities	12
Main Markets	12
2.2 Strategic priorities	13
Danone’s strategic framework	13
Adapting to a new world	14
2.3 Description and strategy of the Reporting Entities	15
Essential Dairy & Plant-Based (EDP)	15
Specialized Nutrition	16
Waters	17
2.4 Other elements related to Danone’s activity and organization	17
Distribution	17
Competition	18
Research and Innovation	19
Production sites and equipment	19
Raw materials purchasing	19
Regulatory environment	19
2.5 Simplified organizational chart as of December 31, 2020	20
Parent company Danone SA	20
Subsidiaries	20
Main listed companies	20
2.6 Risk factors	20
Identification and control policy of strategic risks	20
Main risk factors	21
Description of main risk factors	22
2.7 Control environment	33
Risk management	33
Internal control	33
Financial and accounting information	35
2.8 Insurance and risk coverage	37
3. Business highlights in 2020 and outlook for 2021	38
3.1 Business highlights in 2020	40
Highlights of 2020 (Highlights were detailed in the main press releases issued by Danone during 2020)	40
Other activities in 2020	41
3.2 Consolidated net income review	43
Key figures	43
Sales	43
Recurring operating income and recurring operating margin	45
Net financial income (expense)	46
Effective tax rate	46
Recurring net income – Group share and Recurring EPS	46
Additional information on consolidated income statement	48
Dividend paid in respect of 2020 fiscal year	48
3.3 Free cash flow	49
Free cash flow	49
Consolidated statement of cash flows	50
3.4 Balance sheet and financial security review	51
Condensed consolidated balance sheet	51
Financing structure and financial security	51
Liabilities related to put options granted to non-controlling interests	53
Net debt and net financial debt	53
Shareholder’s equity	55
Off-balance sheet commitments	55
3.5 Outlook 2021	55
Material change in financial or trading position	55
Outlook for 2021	55
Governance: launch of the process of separation of Chairman and CEO roles	55
3.6 Financial indicators not defined in IFRS	56
3.7 Documents available to the public	56
4. Financial statements	58
4.1 Consolidated financial statements and notes to the consolidated financial statements	60
Consolidated financial statements	60
Notes to the consolidated financial statements	67
4.2 Financial statements of Danone SA, the parent company	119
Financial statements of Danone SA	119
Notes to the financial statements of the parent company Danone SA	121
4.3 Information on payment terms granted to suppliers and customers of the parent company, Danone SA	140
4.4 Information originating from third parties, expert opinions and declarations of interest	140
5. Social, Societal and Environmental Responsibility	142
5.1 An integrated approach of sustainable business model	145
Danone’s mission and vision: a long-standing commitment to sustainable value creation	145
Governance established to support Danone’s One Planet. One Health frame of action	146
An integrated way to track and foster progress	146
A comprehensive approach to meet external demands	147
 Responsible practices: ethics and integrity	149
5.2 Offering safe, healthy products	151
Unique product portfolio to impact people’s health	151
Responsible communication	155
Marketing of breast milk substitutes	156
5.3 Preserve and renew the planet’s resources	157
 Environmental strategy	157
 Fight against climate change	158
Transition toward regenerative agriculture that includes organic agriculture	164
 Circular economy	165
 Preservation of the water resource	169
5.4 Building the future with Danone employees	173
Danone’s employment approach	173
 Inclusive talent development	174
 Social relations	178
 Workplace health and safety	180
 Employee security	182
5.5 promoting sustainable, inclusive growth with suppliers	183
 Responsible sourcing – milk	183
 Responsible sourcing – supplies other than milk	184
5.6 DANONE’S SOCIAL INNOVATION FUNDS	189
Danone Communities	189
Danone Ecosystem Fund (Fonds Danone pour l’Écosystème)	189
Livelihoods Carbon Fund	189
Livelihoods Fund for Family Farming	189
5.7 Vigilance plan	190
5.8 Methodology note	194
Consolidation scope and coverage	194
Like-for-like changes in scope (constant scope)	195
Definition of the Reporting Entities	195
Data collection	195
Information regarding methodologies	196
5.9 Report by one of the Statutory Auditors, appointed as an independent third party, on the consolidated non-financial information statement included in the management report	201
6. Corporate Governance	206
6.1 Governance bodies	208
Board of Directors	209
Audit Committee	225
Governance Committee	227
Engagement Committee (formerly the Purpose & Engagement Committee)	228
Strategy & Transformation Committee	229
Executive Committee	229
Application of AFEP-MEDEF corporate governance code for listed companies	231
6.2 Positions and responsibilities of the Directors	232
6.3 Compensation and benefits of governance bodies	245
Compensation policy for corporate officers for 2021	245
Compensation policy for Directors	251
Report on the compensation of corporate officers and Directors for 2020	252
6.4 Detailed information on long-term compensation plans	262
Group performance shares (GPS)	262
Group performance units (GPU)	284
6.5 Danone shares held by the members of the Board of Directors and the Executive Committee	288
Number of DANONE shares held by the members of the Board of Directors and the Executive Committee (which includes 2 Directors)	288
Transactions on DANONE shares	289
6.6 Related party agreements	290
Statutory auditors’ special report on related party agreements	290
7. Share capital and ownership	292
7.1 Share capital of the company	294
Transactions on the share capital in the last three years and share capital as of December 31, 2020	294
Shares constituting the share capital	294
7.2 Treasury shares held by the Company and its subsidiaries	294
Authorization granted to the Company to buy back its own shares	294
Authorization to cancel shares and reduce the share capital following the buyback by the Company of its own shares	295
Transactions on Company shares in 2020 and situation as of December 31, 2020	295
7.3 Authorizations to issue securities giving access to the share capital	296
Summary of financial authorizations in effect as of December 31, 2020	296
Capital increases reserved for employees	297
Financial authorizations subject to approval by the Shareholders’ Meeting	297
Changes to share capital and rights attached to shares	298
7.4 Financial instruments not representing share capital	298
7.5 Dividends paid by the Company	298
Dividend pay-out policy	298
Dividend paid in respect of 2020 fiscal year	298
Dividends paid in respect of the previous three fiscal years prior to 2020	298
Dividends forfeited to the French State	299
7.6 Shareholders’ Meeting, voting rights	299
Participation in Shareholders’ Meetings	299
Voting rights	299
7.7 Crossing of thresholds, shares and share sales	301
Crossing of thresholds	301
Purchases and sales of Company shares	301
7.8 Share ownership structure of the Company as of December 31, 2020 and significant changes over the past three years	301
Share ownership structure as of December 31, 2020	301
Significant changes in the company’s share ownership during the past three fiscal years	302
7.9 Market for the Company’s shares	303
7.10 Factors that might have an impact in the event of a public tender offer	304
7.11 Change of control	305
Appendix	306
Cross-reference tables	308
Cross-reference table for the Annual Financial Report	308
Cross-reference table for the provisions of Annexes 1 and 2 of the 2019/980 Delegated Regulation of the European Commission	309
Cross-reference table for the Management Report of the Company and Danone Group	311

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