DANONE : DANONE : 2012 Full-Year Results

                   DANONE : DANONE : 2012 Full-Year Results

                  ------------  PRESS RELEASE ------------

                                      


                            2012 Full-Year Results

                              February 19, 2013

                                 2012 results
                  Sales^[1]of over €20 billion, up +5.4%^[2]
                   Trading operating margin down 50 bps^[2]
                      Free cash-flow^[3]over €2 billion

                                 2013 targets
      A solid year of transition on the way to profitable growth in 2014
                     Sales^[1]growth of at least +5%^[2]
      Trading operating margin down, by between -50 bps and -30 bps^[2]
    Free cash-flow held steady at around €2 billion excluding exceptional
                                  items^[3]

[1] Net sales
[2] Like for  like: see pages  10-12 for details  on calculation of  financial 
indicators not defined in IFRS
[3] See pages  10-12 for details  on calculation of  financial indicators  not 
defined in IFRS

Chairman's comments

"2012 was an important year for Danone in many respects. Important in that  we 
achieved some major milestones:  our sales exceeded the  €20 billion mark  for 
the first time,  reflecting our  ability to bring  health through  food to  an 
ever-increasing number of people. And for  the first time, too, our  cash-flow 
topped €2 billion-double  the 2008  figure. Finally,  even as  our Group  grew 
rapidly from 2008 to 2012, our CO[2] emissions held steady. Which means a  35% 
reduction in the carbon intensity of our business.

Most of  these achievements  were due  to our  operations outside  Europe^[1], 
which now  generate 60%  of our  total sales  and reported  profitable  growth 
averaging over  10% in  2012. We  must  make every  effort to  pursue  lasting 
expansion in these markets.

But 2012 also saw some  of our business in Europe  come under pressure from  a 
severe deterioration in overall consumer demand, which led to a 3% decline  in 
our revenues in this  region^[1] and a  decline of over  10% in our  operating 
income. Clearly this situation is not sustainable, and we will overcome it. In
December we  set a  €200million  target for  savings  and announced  that  we 
intended to launch a plan to  adapt our organization. Today we are  initiating 
discussions with our Works Councils over  the plan's main measures, which  are 
designed to win back  our competitive edge and  achieve greater efficiency  in 
Europe. We will  also continue  to revamp the  product ranges  offered by  our 
business lines.

So 2013 will be a year of transition, with vigorous development in business in
our growth markets  and a  drive to strengthen  operations in  Europe. A  year 
aimed at returning our activities as  a whole to strong, profitable growth  by 
2014."

[1] Europe excluding CIS region

Highlights   

  *Full-year 2012 sales of €20.9 bn, up +8.0% as reported and +5.4% like  for 
    like^[2]

  *Solid 2012 performance, with contrasts  from region to region: sales  down 
    -3% in  Europe excluding  the CIS;  growth of  over +10%^[2]  in  emerging 
    markets and North America combined

  *Q4 performance in line  with Q3, with sales^[1]  up +7.3% as reported  and 
    +4.9% like for like^[2]

  *Trading operating margin^[3] at  14.18% full year,  down -50 bps^[2]  from 
    2011, in line with the target as revised in June 2012 

  *Underlying fully diluted EPS^[3]of €3.01,  up +4.1% as reported and  +1.1% 
    like for like^[2]

  *Free cash-flow^[3]of €2.1 billion, exceeding target set in 2009

  *Dividend of €1.45  per share, up  +4.3%, will be  proposed to this  year's 
    Shareholders' Meeting

Key figures                            2011          2012          Change
Sales^[1] (€ million)                 19 318      20 869    +5.4%^[2]
Free cash flow^[3] (€ million)        1 874     2 088  +11.4%^[4]
Trading operating income^[3] (€       2 843     2 958   +1.8%^[2]
million)
Trading operating margin^[3]         14.72%       14.18%      -50 bps^[2]
Underlying net income^[3] (€          1 749     1 818   +0.9%^[2]
million)
Underlying fully diluted EPS^[3]       2.89     3.01  +4.1%^[4]
(€)



[1] Net sales
[2] Like for  like: see pages  10-12 for details  on calculation of  financial 
indicators not defined in IFRS
[3] See pages  10-12 for details  on calculation of  financial indicators  not 
defined in IFRS
[4] As reported



  
Sales by business line and geographical area in Q4 and full-year 2012

€ millions                     Change   Volume                Change   Volume
                     Q4   Q4  Like for  growth   2011  2012  Like for  growth
                     11   12  like[1]  Like for              like[1]  Like for
                                       like[1]                        like[1]
BY BUSINESS LINE
Fresh Dairy            2    2                       11    11
Products             778  859   1.3%     0.4%      235   675   2.0%    -0.2%
Waters               746  832   8.5%     7.9%    3 229 3 649  10.0%     5.9%
                            1
Baby Nutrition       950  105  12.1%     6.1%    3 673 4 257  11.6%     5.2%
Medical Nutrition    312  340   5.5%     7.3%    1 181 1 288   5.9%     6.8%
BY GEOGRAPHICAL
AREA
                       2    2                       10    10
Europe               607  617  -2.3%    -0.9%      809   848  -1.0%    -2.2%
Asia                 727  876  15.1%    11.0%    2 862 3 584  17.4%    12.0%
                       1    1
Rest of World        453  643  12.9%     5.5%    5 647 6 437  11.7%     4.7%
                       4    5                       19    20
Total                786  136   4.9%     3.2%      318   869   5.4%     2.3%

[1] Like for like: see pages 10-12 for details on calculation of financial
indicators not defined in IFRS

At its meeting  on February 18,  the Board of  Directors closed statutory  and 
consolidated financial statements  for the  2012 fiscal year.  As regards  the 
audit process,  the  statutory  auditors have  substantially  completed  their 
examination of accounts as of today.

Net sales in 2012

Consolidated sales increased  +8.0% as  reported to total  €20,869 million  in 
2012. Excluding  the impact  of changes  in the  basis for  comparison,  which 
include exchange rates and scope of  consolidation, sales were up +5.4%.  This 
organic growth reflects a +2.3% increase in sales volume and a +3.1%  increase 
due to the price/mix effect.

The  +2.5%  exchange-rate  effect  reflects  favorable  trends  in  currencies 
including the US dollar, the Chinese yuan, sterling and the Russian ruble.

Overview of sales performance - Q4 2012

Consolidated sales increased +7.3% as reported to total €5,136 million in  the 
fourth quarter  of 2012.  Excluding the  impact of  changes in  the basis  for 
comparison, which include  exchange rates  and scope  of consolidation,  sales 
were up +4.9%. This organic growth  reflects a +3.2% increase in sales  volume 
and a +1.7% increase due to the price/mix effect.

The  +1.8%  exchange-rate  effect  reflects  favorable  trends  in  currencies 
including the Mexican peso, the Russian  ruble, the US dollar and the  Chinese 
yuan.

Fresh Dairy Products

Fresh Dairy Products division sales were up +1.3% like-for-like in the  fourth 
quarter of 2012, reflecting a +0.4% increase in volume and a +0.9% increase in
value.

After a year of  transition for North America^[1]  and the CIS region,  these 
markets ended  2012-as  planned-with  their  strongest  growth  of  the  year, 
enabling the division to report a slight improvement from the third quarter.

In the United  States, the Group  benefited from new  production capacity  for 
Greek-style yogurt that came on line in the second half of the year and raised
its market share by around 5 points, full year, in this fast-growing  segment. 
Danone thus strengthened its leading  position in Fresh Dairy Products,  where 
competition has picked up.

In the CIS region, Danone-Unimilk is on track to meet its target calling for a
return to strong growth.  Deployment of the unit's  strategy for the year  was 
successful, including  a  focus on  key  brands such  as  Prostokvashino,  Bio 
Balance and Tëma, and ongoing integration of Danone-Unimilk operations through
the roll-out of common systems and gradual merger of logistics and sales force
resources.

Sales in Latin America  and the Africa-Middle  East region remained  extremely 
buoyant, with continued double-digit growth.

Conditions in Europe remained difficult with fourth-quarter trends similar  to 
those observed in the third quarter. In Southern Europe, the price/mix  effect 
was negative, reflecting investments in pricing and promotions.

^[1] North America : United States and Canada

Waters

The Waters  division  reported  strong fourth-quarter  growth,  with  a  +8.5% 
like-for-like increase driven  by a +7.9%  rise in sales  volumes and a  +0.6% 
rise due to the price/mix effect.

Strong  growth  in  emerging  markets   continued  to  drive  the   division's 
performance. In Western Europe, sales fell back slightly due to the high basis
of comparison in Q4 2011.

This quarter the division no longer  benefited from the impact of hefty  price 
increases introduced  in  emerging countries  in  2011. Yet  growth  in  value 
remained positive, fueled by aquadrinks and their positive price/mix effect.

Baby Nutrition

The  Baby  Nutrition  division  continued  to  report  robust  growth  in  all 
geographical markets, with sales up +12.1% like-for-like in the fourth quarter
of 2012. This includes a +6.1% rise in volume and +6.0% growth in value.

Key  to  the  division's  success  is  a  very  strong  performance  in  Asia, 
particularly China,  where  a  complete revamp  of  the  Dumex  range-Danone's 
flagship brand for baby nutrition in this country-has continued to pay off.

As in  the  past,  changes in  the  division's  product mix  made  a  positive 
contribution to performance, while the growing-up milk segment again  reported 
double-digit growth and weaning foods  continued to decrease significantly  in 
Europe.

Medical Nutrition

Medical Nutrition sales increased +5.5% like-for-like in the fourth quarter of
2012, driven by volume growth of +7.3%. Slowing growth reflects  deteriorating 
conditions on some markets in Western Europe.

In contrast, China, Turkey and  Brazil maintained their momentum, with  strong 
growth for key brands like Nutrison, Nutrini and Neocate.

Trading operating margin^[1]: 14.18%, down -50 bps like for like^[2] from 2011

                                      Change
                      2011   2012  like for like
                                        [1]
BY BUSINESS LINE
Fresh Dairy Products 13.13% 12.11%   -101 bps
Waters               13.13% 13.23%    +22 bps
Baby Nutrition       19.28% 19.51%    +23 bps
Medical Nutrition    19.98% 17.95%   -149 bps
BY GEOGRAPHICAL AREA
Europe               13.96% 12.17%   -160 bps
Asia                 20.27% 22.07%   +192 bps
Rest of World        13.35% 13.17%    -26 bps
Total                14.72% 14.18%    -50 bps

[1] See pages 10-12 for details on calculation of financial indicators not
defined in IFRS
[2] Like for like: see pages 10-12 for details on calculation of financial
indicators not defined in IFRS



Danone's trading operating margin fell back by 50 bps like for like in 2012 to
stand at 14.18%.

Lower sales in  Europe, particularly Southern  Europe, cut significantly  into 
Group profitability. This decline could not be fully offset by higher  margins 
outside Europe, where investment programs were maintained as planned.

Raw material costs rose significantly, gaining  over 6%, and were driven by  a 
particularly steep  increase  in  certain  commodities  including  whey,  milk 
proteins, sugar and fruits.

Ongoing cost-cutting  measures helped  generate  robust productivity  of  €589 
million,  partly  offsetting  the  rise   in  raw  material,  production   and 
distribution costs.

A&P outlays increased  slightly in  2012, which maintained  the visibility  of 
Group brands in  the media  over the  year. Expenditure  on digital  marketing 
continues to grow apace, and now represent 10% of total media investment.

Danone also continued to  invest heavily in other  growth drivers, beefing  up 
its sales forces and spending  on R&D. Outlays in  these areas rose by  around 
10%.^[1]



[1] Like for like: see pages 10-12 for details on calculation of financial
indicators not defined in IFRS

Underlying fully diluted  EPS^[1]increased by  +4.1%, as  reported, to  total 
€3.01 in 2012

€ million (unless stated otherwise)          2011  2012
Trading operating income^[1]               2 843 2 958
Other operating items                       (114) (211)
Operating income                            2 729 2 747
Cost of net debt                            (174) (170)
Other financial income and expense          (120) (132)
Income tax                                  (626) (712)
Net income of consolidated companies        1 809 1 733
Net income of affiliated companies             46    54
Net income                                  1 855 1 787
  Minority interests                        184   115
  Attributable to the Group               1 671 1 672
   of which non-current net result^[1]   (78) (146)
Underlying net income^[1]                   1 749 1 818
Underlying fully diluted EPS (€)^[1]         2.89  3.01



[1] See pages 10-12 for details on calculation of financial indicators not
defined in IFRS

Other operating  items stood  at -€211  million, due  primarily to  the  costs 
arising from the integration  of Unimilk group's  companies, costs related  to 
the disposal process of  Danone Chiquita Fruits, and  the impairment of  other 
goodwill and financial assets.

Cost of  net debt  eased slightly  from 2011,  due primarily  to the  positive 
impact of bond debt management. This  gain was partially offset by the  higher 
cost of borrowing in some emerging countries whose currencies rose in value in
2012.

The change in other financial income and expense results primarily from a rise
in the cost of hedging exchange rates for emerging economies.

The underlying tax rate^[1] for  the full year was  27.6% in 2012, up  sharply 
from 2011 due to a general rise in tax pressure, and, particularly in  France, 
to the ceiling on deductibility of financial interest as of 2012.

The net  result  of affiliated  companies  was up  due  to higher  profits  at 
minority holdings in Asia and the Africa/Middle-East region in 2012.

Minority interests  declined, reflecting  the impact  of lower  net income  at 
Danone Spain and the reduction  in this subsidiary's minority shareholders  in 
the course  of  the  year.  These factors  were  partially  offset  by  higher 
profitability at Danone Unimilk.

Underlying net income^[1] rose  +4.0% as reported to  total €1,818 million,  a 
like-for-like^[1] increase  of +0.9%.  Underlying fully  diluted EPS  came  to 
€3.01, for a  rise of  +4.1% from  the reported figure  for 2011  and a  +1.1% 
increase like for like.

[1] See pages 10-12 for details on calculation of financial indicators not
defined in IFRS

Cash flow and debt

Free cash flow^[1] increased  +11.4% to €2,088  million representing 10.0%  of 
sales in 2012, or €2billion above the 2012 free cash flow target set in 2009.
At the same time, capital expenditure rose sharply, and was up +10.3% in  2012 
at €976 million or 4.7% of sales.

Robust generation of  free cash-flow  net of  dividends allowed  the Group  to 
finance its 2012 acquisition of Wockhardt's nutrition business in India and to
buy back shares in  an amount of €398million^[2],  while pursuing efforts  to 
hold debt ratios steady.  At December 31, 2012,  net financial debt^[1]  stood 
at€3,021 million  (excluding  put options  in  an amount  of  €3,721  million 
granted to minority shareholders).

[1] See pages 10-12 for details on calculation of financial indicators not
defined in IFRS
[2] Excludes purchase of treasury stock to offset dilution resulting from
shares transferred to minority shareholders at Danone Spain in exchange for
their shares in this subsidiary.



Reduction of carbon footprint

Danone products depend to a large extent on natural eco-systems.It is thus in
the Group's best interest to make care for the environment an integral part of
its business activities.

Carbon footprint  is  a  global  indicator  that  reflects  a  wide  range  of 
environmental  criteria.  Danone   had  committed  to   reducing  its   carbon 
intensity^[1] by an ambitious 30% from 2008 to 2012.

In the event,  the Group more  than achieved  this goal in  2012, cutting  its 
carbon intensity by      -35.2%^[2] over the five-year period.

[1] Grams of CO[2] per kilogram of product sold
[2] Based on constant scope of consolidation, excluding Unimilk, and on
emissions under Danone's direct responsibility (packaging, industrial
activities, logistics and end of life)

2013 outlook

The Group  assumes  that trends  in  consumer  demand will  continue  to  show 
contrasts  from   region  to   region,  with   overall  trends   negative   in 
Europe-assuming,  however,  no  major  political  or  economic   upheavals-and 
favorable in the rest of the world.

The Group  also expects  the cost  of its  major raw  materials and  packaging 
materials to remain high, with moderate growth.

This being the case,  the Group will  continue to adapt  its model in  Europe, 
stepping up  the pace  of updates  to its  product ranges  to meet  consumers' 
changing needs, and  at the  same time adapting  its structures  and costs  to 
achieve €200 million in savings between now and the end of 2014.

In the rest of the world, it  will continue to expand its product  categories, 
build its brands and grow its market share in a profitable and lasting way.

Through these  actions, Danone  plans to  get  back on  the track  to  strong, 
profitable organic growth as of 2014.

For 2013,  which will  remain a  year of  transition, the  Group has  set  the 
following targets:
·    a like-for-like^[2] sales^[1] growth of at least +5%
·    a decline in trading operating margin, by between -50 bps and -30 bps
like-for-like^[2]
·    free cash-flow of around €2 billion excluding exceptional items^[2]

[1] Net sales
[2] See pages 10-12 for details on calculation of financial indicators not
defined in IFRS

Share buyback

As announced when results for the third quarter of 2012 were released,  Danone 
has bought back 12,959,694 of its own shares over the past four months for  an 
amount of €639.5 million.

Meeting on  February 18,  2013, the  Board of  Directors voted  to cancel  8.8 
million treasury shares. Authorized by shareholders at the General Meeting  on 
April 28, 2011, this cancellation will take effect on February 21, 2013.

Following it, Danone's  share capital will  total €158,590,500 represented  by 
634,362,000 shares.

Dividend

At the Shareholders'  Meeting on  Thursday, April  25, 2013,  Danone will  ask 
shareholders to approve distribution of a €1.45 dividend per share in  respect 
of the 2012 fiscal year, to be paid in cash. This represents a +4.3% rise from
2011. If this proposal is approved, the ex-dividend date will be Thursday, May
2, 2013 and the dividend will be payable from Tuesday, May 7, 2013.

Governance

At its meeting  on February  18, 2013,  Danone's Board  of Directors  approved 
draft resolutions for  the Group's April  25 Shareholders' Meeting,  including 
the proposal to renew  the appointments of the  two directors whose terms  are 
expiring: Mr. Franck  Riboud, Chairman  and Chief Executive  Officer, and  Mr. 
Emmanuel Faber, Deputy Managing Director.

At that  meeting,  the  Board  of Directors,  on  the  recommendation  of  the 
Nomination and Compensation  Committee, voted  to appoint  a Lead  Independent 
Director when  the positions  of Chairman  of the  Board and  Chief  Executive 
Officer are combined. The Lead independent  director, who must be chosen  from 
among the majority of  independent directors serving on  the Board, will  help 
strengthen Danone's  corporate governance  and improve  the operation  of  its 
Board.

The Board therefore  voted to  appoint Mr.  Jean Laurent  as Lead  Independent 
Director based on  his extensive business  experience as the  former CEO of  a 
major banking group, and  on his thorough knowledge  of Danone and its  Board, 
which he has served as Chairman  of the Nomination and Compensation  Committee 
(since 2011) and  as Chairman  of the Social  Responsibility Committee  (since 
2007). In  addition, the  Board ensured  that  Mr. Jean  Laurent met  all  the 
requirements for independence necessary to serve as Lead Independent Director.

Finally, the  Board reiterated  its  commitment, made  several years  ago,  to 
continue  to  improve  its  corporate   governance  by  bringing  before   the 
Shareholders'  Meeting  proposals  on   ensuring  the  Board's   independence, 
increasing the number  of women  directors, and increasing  the expertise  and 
diversity of  its  composition.  The  Board renewed  this  commitment  at  its 
February 18 meeting.

Change in Danone SA shareholder base in Spain  

On July 26, 2012, Danone completed the purchase from two minority shareholders
of a total  of 1,416,368 shares  of its subsidiary  Danone Spain, raising  its 
equity  interest  from  57.0%  to  65.6%.  Most  of  the  remaining   minority 
shareholders hold put options. These options are recognized in Group financial
statements as financial debt.

As announced in the  earnings release for  the first half  of 2012, the  Group 
began  talks  with  Danone  Spain  minority  shareholders  on  the  terms  and 
conditions of  these put  options, especially  in light  of Southern  Europe's 
deteriorating economy and the significant impact this has on Danone Spain.

As part of this effort, since the beginning of 2013 the Group has  repurchased 
a total of 1,544,227 shares  from several Danone Spain minority  shareholders, 
raising its shareholding to 75.0%. Shares  were acquired in exchange for  cash 
payments totaling €87.4 million  and for 6,715,266  shares of Danone  treasury 
stock. An equal number of shares will be purchased by the Group over the  next 
three months under its share buyback program to offset dilution resulting from
this transaction.

These transactions are accretive for Danone earnings per share as of year one,
and will have a favorable impact on the Group's net debt of €79 million.

Other minority shareholders, representing around  14% of Danone Spain's  share 
capital, have exercised their put  options. Talks with these shareholders  are 
still under way.

Based on these events-the share  buyback, option exercise and talks-the  Group 
decided to recognize a portion of  the remaining put options (€1,305  million) 
as short-term financial debt in its financial statements at December 31, 2012.
Put options amounting to €390 million  continue to be classified as  long-term 
financial debt, since it  is unlikely that they  will be exercised within  the 
next 12 months.

                                  o o O o o

Change in geographical breakdown starting in 2013

In order to adapt its reporting to the Group's evolutions, Danone will use a
new geographical breakdown to track operations starting in 2013:

 2011 2012 Change        
             Like-for-like^[1]

Sales (€ millions)

Europe excl. CIS         8 614  8 431 -3.0%
CIS & North America^[2]  3 948  4 426 6.7%
ALMA^[3]                 6 756  8 012 15.7%
Total                   19 318 20 869 5.4%

Trading operating margin^[1]

Europe excl. CIS         17.37% 15.66% -190 bps
CIS & North America^[2]  9.33% 10.21% +144 bps
ALMA^[3]                 14.49% 14.81%  +31 bps
Total                    14.72% 14.18%  -50 bps

[1] Like for like:  see pages 10-12 for  details on calculation of  financial 
indicators not defined in IFRS
[2] North America: United States and Canada
[3] Asia-Pacific / Latin America / Middle East / Africa

Financial indicators not defined in IFRS

Information published by Danone uses  the following financial indicators  that 
are not defined by IFRS:

  *Like-for-like changes in net sales, trading operating income, trading
    operating margin and underlying net income

  *Trading operating income

  *Trading operating margin

  *Underlying net income

  *Free cash flow

  *Free cash flow excluding exceptional items

  *Net financial debt

Given severe deterioration in  consumer spending in Europe,  Danone has set  a 
target  for  savings  and  adaptation  of  its  organization  to  regain   its 
competitive edge. Starting in  the first half of  2013, Danone will publish  a 
free cash-flow indicator excluding cash-flows related to initiatives  deployed 
within  the  framework  of  this  plan.  In  2012,  free  cash-flow  excluding 
exceptional items was equally to free cash-flow and totaled €2,088 million.



To facilitate  comparison with  other  companies, the  Group has  revised  its 
definition of like-for-like  changes, aligning  itself on  market practice  to 
measure the impact of changes in  the scope of consolidation. Starting in  the 
first quarter of 2013, financial  communications from Danone will  incorporate 
this new indicator (see definition below),  a change that should not  generate 
any  significant  difference  in  Group  performance  indicators.  Changes  in 
like-for-like indicators for 2011 and 2012 based on prior and new  definitions 
are as follows:



                              Change 2011 - 2012 like-for-like
                         Prior definition ^[1] New definition ^ [2]
Sales                            +5.4%                +5.4%
Trading operating income         +1.8%                +1.9%
Trading operating margin        -50 bps              -50 bps
Underlying net income            +0.9%                +1.0%

[1] Applied through December 31, 2012
[2] Applied from the first quarter of 2013

Calculation of financial indicators not defined in IFRS and used by the  Group 
are calculated as follows:

Based on the  prior definition,  Like-for-like changes in  net sales,  trading 
operating income,  trading  operating margin  and  net income  -  Group  share 
essentially exclude the impact  of: (i)changes in  exchange rates, with  both 
previous year and current year  indicators calculated using the same  exchange 
rates (the exchange  rate used is  a projected annual  rate determined by  the 
Group for the  current year),  and (ii)changes in  consolidation scope,  with 
previous-year indicators calculated on the basis of current-year scope.

Based on  the new  definition,  Like-for-like changes  in net  sales,  trading 
operating income,  trading  operating margin  and  net income  -  Group  share 
essentially exclude the impact  of: (i)changes in  exchange rates, with  both 
previous year and current year  indicators calculated using the same  exchange 
rates (the exchange  rate used is  a projected annual  rate determined by  the 
Group for the  current year),  and (ii)changes in  consolidation scope,  with 
indicators related  to  considered fiscal  year  calculated on  the  basis  of 
previous-year scope.

Trading operating income is  defined as the  Group operating income  excluding 
other operating  income and  expense. Other  operating income  and expense  is 
defined under  Recommendation  2009-R.03  of the  French  CNC,  and  comprises 
significant items that, because of their exceptional nature, cannot be  viewed 
as inherent  to current  activities. These  mainly include  capital gains  and 
losses on disposals  of fully  consolidated companies,  impairment charges  on 
goodwill, significant  costs  related  to strategic  restructuring  and  major 
external growth transactions,  and costs  related to  major litigation.  Since 
application of  IFRS3 (Revised),  they have  also included  acquisition  fees 
related to business combinations.

Trading operating margin is defined as  the trading operating income over  net 
sales ratio.

Underlying net  income (or  current net  income -  Group share)  measures  the 
Group's recurring performance and excludes significant items that, because  of 
their exceptional nature, cannot be viewed as inherent to the Group's  current 
performance. Such non-current income and expense mainly include capital  gains 
and losses  on  disposals  and impairments  of  non-fully-consolidated  equity 
interests and  tax  income, and  expense  related to  non-current  income  and 
expense. Non-current net income - Group share is defined as non-current income
and expense excluded from Net income - Group share.



                                            2011                          2012
                               Non-current                   Non-current
(€ millions)        Underlying       items Total  Underlying       items Total
Trading operating
income                   2 843             2 843       2 958             2 958
Other operating
income (expense)                     (114) (114)                   (211) (211)
Operating income         2 843       (114) 2 729       2 958       (211) 2 747
Cost of net debt         (174)             (174)       (170)             (170)
Other financial
income (expense)         (107)        (13) (120)       (130)         (2) (132)
Income before tax        2 562       (127) 2 435       2 658       (213) 2 445
Income tax expense       (661)          35 (626)       (735)          23 (712)
Effective tax rate       25,8%             25,7%       27,6%             29,1%
Net income from
fully-consolidated
companies                1 901        (92) 1 809       1 923       (190) 1 733
Share of profit of
associates                  46                46          59         (5)    54
Net income               1 947        (92) 1 855       1 982       (195) 1 787
  *Group share         1 749        (78) 1 671       1 818       (146) 1 672
  *Non-controlling
    interest              198        (14)   184         164        (49)   115




Underlying fully diluted EPS is defined as the underlying net income over
diluted number of shares ratio.

                                             2011                       2012
(In euros per share
except for number of
shares)                    Underlying        Total    Underlying        Total
Net income - Group share        1 749        1 671         1 818        1 672
Number of shares
· Before dilution         602 202 781  602 202 781   600 477 145  600 477 145
· After dilution          604 049 698  604 049 698   603 105 304  603 105 304
Net income - Group share,
per share
                                                                       
· Before dilution                2.90         2.77          3.03      2.78 
                                                                 
· After dilution                 2.89         2.77       3.01       2.77 



Free cash flow represents cash flows provided or used by operating activities
less capital expenditure net of disposals and excluding acquisition costs
related to business combinations (since the application of IFRS3 (Revised)).

(€ millions)                                             2011  2012
Cash flow from operating activities                     2 605 2 858
Capital expenditure                                     (885) (976)
Disposal of tangible assets                               152   193
Transaction fees related to business combinations ^ [1]     2   13
Free cash-flow                                          1 874 2 088



[1] These expenses previously classified as investment flows impact  cash-flow 
from operating activities as from January  1, 2010 pursuant to Revised IFRS  3 
on Business Combinations.

Free cash-flow excluding  exceptional items represents  free cash-flow  before 
cash-flows related to initiatives that may be taken by the Group to deploy the
plan to generate savings and adapt organization in Europe.

Net financial  debt  represents the  net  debt portion  bearing  interest.  It 
corresponds  to   current  and   non-current  financial   debt   (i)excluding 
Liabilities related to  put options granted  to non-controlling interests  and 
(ii)net of Cash and cash equivalents, Short term investments and  Derivatives 
- assets.

(In€ millions)                                                   2011    2012
Non-current financial debt                                       7 166   6 346
Current financial debt                                           1 865   3 176
Short term investments                                         (1 114) (1 748)
Cash and cash equivalents                                      (1 027) (1 269)
Derivatives - assets                                             (257)   (213)
Net debt                                                         6 633   6 292
Liabilities related to put options granted to non-controlling
interests - Non current                                        (3 622) (1 881)
Liabilities related to put options granted to non-controlling
interests - Current                                                    (1 390)
Financial debt excluded from net financial debt                (3 622) (3 271)
Net financial debt                                               3 011   3 021









Our presentation to analysts and investors will be broadcast live from 9.30
a.m. (Paris time) on Tuesday, February 19, 2013. Related slides will be
available on our website (www.finance.danone.com) from 8.00 a.m. today (Paris
time).



                          FORWARD-LOOKING STATEMENTS

                                      

This press  release  contains certain  forward-looking  statements  concerning 
Danone. Although  Danone believes  its expectations  are based  on  reasonable 
assumptions, these forward-looking  statements are subject  to numerous  risks 
and uncertainties, which could cause actual results to differ materially  from 
those  anticipated  in  these  forward-looking  statements.  For  a   detailed 
description of  these  risks and  uncertainties,  please refer  to  the  "Risk 
Factors" section of Danone's Annual Report (available on www.danone.com )



                  APPENDIX - Sales by division and by region

                First quarter    Second       Third      Fourth     Full-year
                                quarter      quarter     quarter      2012
€ millions       2011   2012   2011  2012  2011  2012  2011  2012  2011  2012
BY BUSINESS
LINE
Fresh Dairy      2   2 960   2   2 946  2  2 910  2  2 859  11  11
Products        851           821          785         778         235   675
Waters           718    841  949   1 014  816        746       3 229 3 649
                                                 962        832
Baby Nutrition   910   1 014   907   1 076  906  1 062  950  1 105 3 673 4 257
Medical          278    302  293         298        312       1 181 1 288
Nutrition                            323        323        340
BY GEOGRAPHICAL
AREA
Europe          2 697  2 710  2 845  2 839 2 661 2 682 2 607 2 617  10  10
                                                                   809   848
Asia             661  829  734                          2 862 3 584
                                     933  740  946  727  876
Rest of World   1 399  1 578  1 391  1 587 1 404 1 629 1 453 1 643 5 647 6 437
Group           4 757  5 117  4 970  5 359 4 805 5 257 4 786 5 136  19    20
                                                                    318   869

                 First Quarter 2012         First quarter 2012         Third quarter 2012        Fourth quarter 2012           Full-year 2012
€ millions   Reported      Change       Reported      Change       Reported      Change       Reported      Change       Reported      Change
              change  Like-for-like^[1]  change  Like-for-like^[1]  change  Like-for-like^[1]  change  Like-for-like^[1]  change  Like-for-like^[1]
BY BUSINESS
LINE
Fresh Dairy    3.8%        3.8%          4.4%        2.1%          4.5%        0.7%         2.9%        1.3%          3.9%        2.0%
Products
Waters        17.1%     16.4%           6.9%        4.6%         17.8%         12.3%        11.4%         8.5%         13.0%         10.0%
Baby          11.4%         9.0%         18.6%    13.6%           17.2%         11.5%        16.4%    12.1%           15.9%         11.6%
Nutrition
Medical        8.3%        6.4%         10.3%         6.7%          8.4%        4.9%         9.2%        5.5%          9.1%        5.9%
Nutrition
BY
GEOGRAPHICAL
AREA
Europe         0.5%        0.9%        -0.2%       -1.0%         0.8%        -1.5%        0.4%       -2.3%         0.3%       -1.0%
Asia          25.4%         19.4%        27.1%         17.2%        27.8%         18.3%        20.6%         15.1%        25.2%         17.4%
Rest of       12.8%         12.7%        14.1%         10.7%        16.1%         10.5%        13.1%         12.9%        14.0%         11.7%
World
Group         7.6%         6.9%         7.8%        5.0%         9.4%        5.0%         7.3%        4.9%         8.0%        5.4%

[1] Like for like: see pages 10-12 for details on calculation of financial
indicators not defined in IFRS



                            For more information :
  Press Relations: +33 1 44 35 20 75 - Investor Relations: +33 1 44 35 20 76
                DANONE : 17, boulevard Haussmann, 75009 Paris

2012 Full-Year Results

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