Trian Partners Activist Presentation Deck
Attractive Valuation
Despite (a) health focus, (b) structurally attractive categories and (c) top-tier
emerging markets exposure, Danone trades in-line with slower-growing US peers
like Campbell and General Mills
2013E P/E
■
Historically Danone traded at a premium to Nestle; now trades at approximately
1.5x discount on 2013 P/E and much wider discount on free cash flow yield (1)
19.0x
18.0x
17.0x
16.0x
15.0x
14.0x
13.0x
2.0%
Relationship Between Long-Term
Organic Sales Growth Targets and 2013E P/E
Correlation
(ex-Danone): 88%
g
General
Mills
Kellogg's
Heinz
ConAgra Campbells
3.0%
DANONE
10-Yr
Avg.(2)
4.0%
Nestle
HERSHEY'S
5.0%
Mondelez,
6.0%
Management Long-Term Organic Sales Growth Target
DANONE
Today
Meadjohnson
7.0%
8.0%
Despite near-term
headwinds, we would
expect Danone to trade
back to historic levels
and believe it should
trade at a premium
given its portfolio mix
and emerging market
exposure
Source: Company filings and presentations.
Note: Graph reflects mid-point of target organic sales growth where applicable. Mead Johnson uses 2012 estimated growth rate per CAGNY presentation in Feb 2012. Danone's
medium term organic sales growth is 5+%, which we have assumed to be 5.5% for this analysis. Danone's average organic growth for the years 2009-2011 was 6.0%.
General Mills long-term growth of "low single digits," which we have assumed to be as 2.5% for this analysis. Heinz uses outlook for next three to five years per May 2012
Analyst Meeting. Excludes Kraft Foods Group and Unilever due to limited growth rate disclosure.
(1) There is no assurance that Danone and Nestle were or are of comparable value.
(2) Average of weekly NTM P/E ratios over the period from January 3, 2003 through November 2, 2012.
- 11 -View entire presentation