DANONE - Registration document 2015

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DANONE REGISTRATION DOCUMENT 2015
Danone's business highlights in 2015 and outlook for 2016
3.5 Outlook for 2016
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3.5 OUTLOOK FOR 2016
Material change in financial or trading position
The Company and its subsidiaries overall have not experienced any material changes in their financial or trading position since the close
of the 2015 fiscal year.
Financial outlook for 2016
After delivering profitable growth in 2015, Danone will pursue its
journey to meet its ambition for 2020, which calls for strong, prof-
itable and sustainable growth.
Danone assumes that economic conditions will remain volatile and
uncertain overall, with fragile or even deflationary consumer trends
in Europe, emerging markets undermined by volatile currencies,
and difficulties specific to a few major markets, in particular the
CIS, China and Brazil.
In 2016, Danone also anticipates upward trends in the cost of its
main strategic raw materials. Against this backdrop, it will contin-
ue to strengthen its model through a range of initiatives aimed at
offsetting inflation and limiting its exposure to volatility.
Milk prices are thus expected to edge up, with variations from one
geographical area to the next:
• lower prices in Europe and the United States in the first half, with
a possible rebound in the second half of the year, and
• steady price increases in emerging countries all year long,
particularly in the CIS.
Regarding its other raw materials, including plastics, sugar and
fruits, Danone anticipates overall inflation in which the recent de-
terioration in emerging market currencies is an important factor.
In this context, Danone will continue its transformation toward an
increasingly balanced model, which makes perfect execution of
its roadmap for growth and discipline in allocating resources its
top priorities.
As a result, Danone's 2016 targets include:
• sales growth within a range of +3% to +5% (see definition of this
indicator in section 3.6 Financial indicators not defined by IFRS);
• solid improvement of trading operating margin (see definition of
this indicator in section 3.6Financial indicators not defined by IFRS);
Danone will also focus on increasing the free cash flow (see defi-
nition of this indicator in section 3.6 Financial indicators not defined
by IFRS), without setting a short-term target.
These forecasts, outlooks, representations and other forward-look-
ing information included in this Registration Document are based
mainly on the data, assumptions and estimates detailed hereafter,
and which are deemed reasonable Danone. They are not historical
data and should not be interpreted as guarantees that actual results
will be in line with said forecasts. By their very nature, such data,
assumptions and estimates, as well as all other factors taken into
account in the preparation of such forward-looking representations
and information, may happen and are susceptible to change or be
amended because of uncertainties notably related to Danone's
economic, financial and competitive environment. In addition, the
occurrence of certain risks described in section 2.7 Risk factorscould
have an impact on Danone's activities, financial position, earnings
and outlook and on the achievements of its forecasts, outlooks,
representations and forward-looking information provided above.