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DANONE : DANONE : 2013 First-Quarter Sales

                  DANONE : DANONE : 2013 First-Quarter Sales

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

                                      


                           2013 First-Quarter Sales

                                April 16, 2013

                           Solid start to the year:
                  organic growth +5.6% in the first quarter

                     Full-year targets for 2013 confirmed

  *Q1 2013 sales^[1], up +5.6%  like-for-like^[3], and up +4.3% as  reported, 
    with balanced increases in volume (+3.0%)^[2] and value (+2.6%)^[2]

  *As anticipated, performance varied  from region to  region: sales grew  by 
    over +10%^[2] in  emerging markets  and North America  combined, with  the 
    accelerating Q1  trend  driven  by exceptionally  strong  growth  in  Baby 
    Nutrition. At the same time, sales in Europe fell back -5.1%^[2], a  trend 
    comparable to that observed in Q4 2012

  *Danone confirms its  full-year targets  for 2013: sales^[1]  growth of  at 
    least +5%^[2], trading operating margin down,  by between -50 bps and  -30 
    bps^[2], and free cash-flow^[3] held steady of around €2 billion excluding
    exceptional items^[3]

[1] Net sales
[2] Like-for-like (see definition page 7)
[3] See page 7 for details on calculation of financial indicators not defined
in IFRS



Chairman's comment

"As we  expected, the  first quarter  of  2013 saw  a solid  performance  that 
highlighted once again the contrast between robust growth in emerging  markets 
and the sluggish economy in Europe.

In both Russia and the United  States our brands scored further strong  gains, 
underpinned by our ongoing efforts to  innovate and drive category growth.  In 
Asia growth  reached  record  highs, particularly  in  Baby  Nutrition.  Sales 
continued to grow steadily in both Latin America and Africa, benefiting  fully 
from the emergence of a middle class.

In Europe consumer  spending is  still lackluster, especially  in Fresh  Dairy 
Products. Our teams are  fully engaged, taking action  to innovate and  update 
our product ranges. The cost  reduction and organizational adaptation plan  we 
presented in  February is  moving ahead  on schedule,  and consultations  with 
employee representatives  are now  under  way. Initial  results of  all  these 
measures are expected in the second half of the year.

Results to date are in line with our roadmap and reflect progress in  building 
a profitable growth model.  On this basis, we  stand by our full-year  targets 
for 2013."

Sales by business line and geographical area in Q1 2013


                              Q1 12  Q1 13  Change^[1] Volume growth ^[1]
By business line (€ millions)
BY BUSINESS LINE
Fresh Dairy Products          2 960  2 952    +0.7%         +0.5%
Waters                         841  887   +8.6%         +4.6%
Baby Nutrition                1 014  1 177    +17.1%         +7.8%
Medical Nutrition              302  322   +6.3%         +6.2%
BY GEOGRAPHICAL AREA
Europe excl. CIS              2 116  2 005    -5.1%         -3.8%
CIS & North America^[2]       1 084  1 163    +8.5%         +4.9%
ALMA^[3]                      1 917  2 170    +16.6%         +8.2%
Group                         5 117  5 338    +5.6%          +3.0%



 [1] Like-for-like; see page 7 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

Overview of sales performance - Q1 2013

Consolidated sales rose +4.3% to €5,338 million in the first quarter of  2013. 
Excluding the impact  of changes in  the basis for  comparison, which  include 
exchange rates and scope of consolidation,  sales were up +5.6%. This  organic 
growth reflects  a +3.0%  increase in  sales volume  and a  +2.6% increase  in 
value.

The  exchange-rate  effect  of  -2.4%  reflects  unfavorable  trends  in   the 
Argentinian  peso,  the  Brazilian  real,  the  Indonesian  rupee  and   other 
currencies. Changes  in the  scope of  consolidation led  to a  +1.2% rise  in 
sales, that primarily reflected the integration of Centrale Laitière (Morocco)
from March 2013.

Fresh Dairy Products

Fresh Dairy Products division sales were  up +0.7% like-for-like in the  first 
quarter of  2013, including  a +0.5%  rise  in volume  and a  +0.2%  price/mix 
effect. This reflects similar trends observed in the previous quarter,  scaled 
back by one less day this quarter than in the first three months of 2012.

Sales in  the CIS  and North  America^[1] region  have continued  the pace  of 
growth observed at  the end  of 2012  and are  in line  with expectations  for 
full-year 2013. In  North America, momentum  is still driven  by market  share 
gains in the Greek yogurt segment, where additional capacity will be added  in 
the short term to meet strong demand.

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

Conditions in Europe have remained difficult  with Q1 trends similar to  those 
observed in  the last  quarter of  2012. That  includes a  negative  price/mix 
effect resulting notably from investments in pricing and promotion.

[1] North America: United States and Canada

Waters

The Waters  division once  again  reported solid  growth  in sales,  up  +8.6% 
like-for-like from Q1 2012. Gains were balanced with sales volume up +4.6% and
value up  +4.0%,  reflecting  the  positive  price/mix  effect  of  growth  in 
aquadrinks in particular.

Vigorous growth  in emerging  countries continued  to drive  the division.  In 
Europe, sales edged down, hit by the cold wave in March.

Baby Nutrition

The Baby Nutrition division reported exceptional sales in Q1 2013 with a
like-for-like rise of 17.1%.

Momentum came  once  again from  booming  sales in  the  Asia-Pacific  region, 
especially China this quarter, also boosted by the Chinese New Year which came
later than in  2012. Surging  growth in  Europe was  linked to  the appeal  of 
international baby formula brands for consumers in some emerging countries.

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

Medical Nutrition

Medical Nutrition division sales rose  +6.3% like-for-like in Q1 2013,  driven 
by a volume rise of +6.2%.

Growth was again moderate  in Europe, with contrasts  from one country to  the 
next. Emerging  markets  continued  to  gain  momentum  within  the  division, 
reflecting successful growth  in flagship  markets such as  China, Turkey  and 
Brazil, but  also the  emergence of  new markets  such as  Russia, Poland  and 
Argentina.

Transactions linked to the share capital of Danone and its subsidiaries

On February 28, 2013, Danone finalized  share buybacks mentioned in the  press 
release issued on  October 17, 2012,  which announced that  a total budget  of 
€500-700 million  was earmarked  for buybacks.  Between these  two dates,  the 
Group thus purchased 14.1 million shares for a total €700 million.

In addition, as announced  when full-year 2012  results were released,  Danone 
has bought back 6.7  million of its  own shares since  early March to  replace 
treasury  shares  used  to  pay  minority  shareholders  for  their  sale   of 
shareholdings in  Danone Spain  in  early 2013,  and thus  eliminate  dilution 
resulting from that transaction.

As also  indicated in  February 2013,  in the  opening months  of 2013  Danone 
finalized discussions with certain minority  shareholders of Danone Spain  and 
raised its equity interest in this subsidiary to 75%. Conditions applied  took 
into account trends on markets in  which Danone Spain operates, the impact  of 
deterioration in the Spanish  economy, and, more  generally, the situation  of 
Danone Spain.  Some other  minority  shareholders opted  not to  continue  the 
discussion process and have since decided  to submit this disagreement to  the 
competent jurisdiction.

Danone is considering  further share  buybacks totaling between  €100 and  200 
millions within the next few weeks.

2013 Outlook (from press release dated February 19, 2013)

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  in  response  to 
consumers' changing needs, and  at the same time  adapting its structures  and 
costs to achieve €200 million in savings by the end of 2014.

In the  rest  of  the  world,  Danone 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 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:
·    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 page 7 for details on calculation of financial indicators not defined
in IFRS

Key financial transactions and other developments during the quarter (from
press releases issued in Q1 2013)

On February 22, 2013,  Danone finalized its  acquisition of exclusive  control 
(67.0%) of Centrale Laitière (Morocco) by acquiring part of SNI's shareholding
for a total €543  million.^[1] Since 2001,  the Group had  held 29.2% of  this 
company's capital. Having raised its  shareholding in Centrale Laitière  above 
the 40% threshold, the Group was required to file a mandatory takeover bid for
the company's shares.



^[1]6,050 million dirhams, equal to €543 million at an exchange rate of 11.15
dirhams/1 euro.

On February 27, 2013, Danone announced the successful launch of a €750 million
bond issue maturing  June 6, 2018.  The issue,  priced at mid  swap +33  basis 
points, pays a coupon of 1.25%, and was widely subscribed by a broad  investor 
base. Funds raised will enable Danone to diversify its sources of finance  and 
extend the maturity of its debt at favorable market conditions.

Our presentation to analysts and investors  will be broadcast live at 9.00  am 
(Paris time) this  Tuesday, April 16,  2013. Slides will  be available on  our 
website (www.finance.danone.com) from 7.30 am (Paris time) today.





                          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 more  detailed 
description of these risks  and uncertainties, we invite  you to refer to  the 
Registration Document ("Risk Factors" section, available at www.danone.com).
APPENDIX - Sales by division and by region

                        First quarter
€ millions               2012   2013
BY BUSINESS LINE
Fresh Dairy Products    2 960  2 952
Waters                   841  887
Baby Nutrition          1 014  1 177
Medical nutrition        302  322
BY GEOGRAPHICAL AREA
Europe excl. CIS        2 116  2 005
CIS & North America^[2] 1 084  1 163
ALMA^[3]                1 917  2 170
Group                   5 117  5 338





                               First quarter 2013
€ millions              Reported change      Change
                                        like-for-like^[1]
BY BUSINESS LINE
Fresh Dairy Products         -0.3%            0.7%
Waters                       5.5%             8.6%
Baby Nutrition               16.1%            17.1%
Medical nutrition            6.4%             6.3%
BY GEOGRAPHICAL AREA
Europe excl. CIS             -5.3%            -5.1%
CIS & North America^[2]      7.4%             8.5%
ALMA^[3]                     13.2%            16.6%
Group                       +4.3%           +5.6%

                            [1] See page 7 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

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 equal 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 incorporate  this 
new indicator (see definition below).

Financial indicators used by the Group and not defined in IFRS are  calculated 
as follows:

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 
applied to  both  years),  and  (ii)  changes  in  consolidation  scope,  with 
indicators related  to  considered fiscal  year  calculated on  the  basis  of 
previous-year scope.

Trading operating income and expense is defined as the Group operating  income 
before 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 (ordinary)  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 operations, and costs related to major litigation. Since
application of IFRS 3 (Revised), other income and operating expense have  also 
included acquisition fees related to business combinations.

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

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 IFRS 3 (Revised)).

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.

 APPENDIX - Change in the definition of the regions and of the like-for-like
                                   changes:
          2012 and 2013 information, on the basis of new definitions

To adapt its  reporting to trends  in Group  business, Danone has  used a  new 
geographical breakdown to track operations  since January 2013. 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.  Based  on  these  new 
definitions, data for the first half of 2012 and 2013 is as follows:

      Sales            Change
  (€ millions)    Like for like^[1]
 Q1 2012 Q1 2013  Q1 2012  Q1 2013

Europe excl. CIS    2 116 2 005  -0.5% -5.1%
CIS & North America 1 084 1 163  5.3%  8.5%
ALMA                1 917 2 170  18.1% 16.6%
Total               5 117 5 338  6.9%  5.6%

Fresh Dairy Products 2 960 2 952  3.8%  0.7%
Waters                 841   887  16.4% 8.6%
Baby Nutrition       1 014 1 177  9.0%  17.1%
Medical Nutrition      302   322  6.4%  6.3%
Total                5 117 5 338  6.9%  5.6%

[1] Based on the revised definition of like-for-like changes- see page 7 for
definition 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


2013 First-Quarter Sales

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Source: DANONE via Thomson Reuters ONE
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