Inside Pack EngV

July 2011 – Corporate Internal Communications – Inside Pack v.2

1


2

to Danone Welcome


3

Our mission is to provide health through food to as

many people as possible. Achieving this mission requires the active support and personal commitment of every Danoner. You have a fundamental place in the operation of our business:

your work makes a direct contribution to Danone’s development! We grow as a company by working together and by sharing the same key business values and CODE leadership, in whatever country, business division or CBU where we are working. The Danone Way Fundamentals and corporate values are the basis for our business conduct and Danone’s unique way of doing business. This book will help you to understand these important principles that guide us at Danone – our common DNA. Thank you for joining the team, I’m confident in our shared commitment to make our mission a successful daily reality. Sincerely,

Franck Riboud Chairman and CEO of Danone


4

Content Content


5

1. Who is Danone? Our mission and strategic axes People Health Nature

For all Danone’s history Our business and products My CBU

2. Our Values Openness Enthusiasm Humanism Proximity

3. Our Leadership Style Committed Open Doer Empowered

4. The Danone Way of doing business Human rights Human relations Environment Consumers Governance and relations with external partners

5. Danone Business Conduct Policy Our company commitments Commitments of all Danoners


6

Who is Danone?

Our mission and strategic axes

o People o Health o Nature o For all

Danone’s history Our business and products My CBU

Who is Danone?


7

“Growth cannot be an end in itself, but a tool

which, far from impairing the quality of life,

enhances it.”

Antoine Riboud Danone founder


8

A FOOD COMPANY LIKE NO OTHER Danone is a major company with 17 million euros annual sales and an ever-growing portfolio of some of the world’s most popular, and best-loved brands: Evian, Bonafont, Petit Gervais/Danonino, Activia, Blédina, Neocate... with a

worldwide presence, focused on products that bring health to our consumers. Today our technological expertise continues to drive a spirit of innovation that began nearly a century ago, when our pioneering work in probiotics resulted in one of the first commercialized versions of yoghurt.

Do you dare to dream? Together, we have the energy and inspiration to achieve goals that ordinary efforts could never achieve.


9

Danone dares to be different and the result is a food company like no other. Every Danoner contributes to this success. Danone is a people-focused place to work, learn and share ideas. Our employees, “Danoners”, come from a variety of countries and cultures, and their creativity, talent and enthusiasm fuel the company’s growth.

The key to Danone’s evolving success story is our unique business vision: financial and social performance is inseparable. We are actively exploring new business models that will enable us to bring affordable nutrition and economic growth to the developing world. Imagine a world where people have optimal health and can succeed on their own terms. With your help, we’re working to make it happen!

Welcome to the team !!


10

“Our first goal is leadership in our

market – food with a focus on nutrition and

health for all our business lines.”

Bernard Hours, Co-Chief Operating Officer

“For Danone, health through food means healthy products, and that in turn means healthy animals and farming methods[…] Everything is interrelated.”

Emmanuel Faber, Co-Chief Operating Officer


11

OUR MISSION & STRATEGIC AXES

Danone’s activities are focused on one core mission: to bring health through food to as many people as possible. This mission has structured our entire sustainable development approach which is now based on even more in-depth integration of economic and societal aspects into our strategy.

Working together, we can make it happen!

There are four strategic directions to our work: they are essential to our ongoing success.


12

2010 was a year of transformation for the People focus area: the many projects begun in 2009 as part of the 2009-2011 Human Resources strategic plan were widely implemented, resulting in a significant impact on Danone’s employees and ecosystem. The HR plan aims to boost Danone’s growth and cultivate a unique culture in which individuals, teams and partners can grow and make a difference for the purpose of nurturing the group’s mission. The Danone Human Resources policy holds a central position in the group development, establishing a new relationship between the company and its 100,995 employees, based on dialogue, which gives meaning to work on an everyday basis and offers a real competitive advantage. Danone is innovative in terms of HR, basing its policy on 3 priority actions: 1. Continuing and deepening social dialogue

2. Developing efficiency and feeding growth by

encouraging autonomy 3. Stimulating innovative projects for society and

creating the right conditions for employee involvement

People People


13

5.

Mission: to support, reinforce and develop Danone’s ecosystem activities The creation of the Danone Ecosystem Fund was approved at the Danone General Meeting in April 2009. The Danone Ecosystem Fund aims to extend Danone’s twofold economic and social project. Donations must be used to support, reinforce and develop the activity of its ecosystem. The ecosystem is a range of stakeholders whose activity is impacted by Danone, operating in connection with local subsidiaries from an economic, social and territorial point of view: farmers, agricultural producers, suppliers and sub-contractors, transport or logistics companies, distributors, territorial communities, etc. The Fund works exclusively on projects proposed by Danone’s CBUs. The projects supported by the Fund are co-created and implemented in cooperation with non-profit partners, such as NGOs, and respond to 5 major issues, which are relevant both in the developing and developed countries:

The supply of agricultural raw materials

Waste management

Micro-distribution

Management of the territories on which Danone is established

Training of paramedical staff Since the creation of the Danone Ecosystem Fund, 22 projects have been validated by the Social Innovation Committee and have already received funds from the Danone Ecosystem Fund.

Danone Ecosystem Fund Focus on…


14

The origins of Danone are rooted in the awareness that food and nutrition are key to building and sustaining health and well-being for all—from birth through old age. We act on that conviction by seeking to bring health through food to as many people as possible. This aim is broken down into two strategic priorities and is based on an approach very specific to Danone: 1. A unique line of products providing consumers with

the health benefits they need throughout their lives

Products meeting the needs of a large proportion of the local population

Products meeting special dietary needs and whose nutritional profile is specifically tailored to consumer needs (especially by adding essential nutrients)

Products providing appropriate functional benefits for consumers with specific physiological and metabolic conditions

2. Promoting products responsibly and providing information and education to encourage healthy behaviors

Providing reliable and clear product information to help consumers make informed food choices

Conducting responsible marketing practices, especially for the most vulnerable consumers, such as children

Setting up product information services and healthy eating educational programs, and promoting physical exercise

Health Health


15

Mission: to improve scientific knowledge showing the link between food, nutrition and health Operating in 19 countries, this world network of independent non-profit organizations (charities or foundations depending on the country) has the mission of improving scientific knowledge showing the link between food, nutrition and health. The Danone Institutes work in three fields of activity:

Supporting research with grants, research prizes, etc.

Informing and training health professionals on subjects linked to food, encouraging the sharing of knowledge

Participation, through information and education actions directed at the general public, to the improvement of the diet of local populations

Their work has no commercial aim; it is under the responsibility of an independent multi-discipline scientific committee that brings together locally scientific experts who are well known in the fields of medicine, nutrition and social sciences. Since the creation of Danone Institutes, over 900 research projects have been supported, representing a total amount of over 16 million Euros.

The Danone Institutes Focus on…


16

“There is only one planet Earth!” This idea is the foundation of the group’s dual economic and social project that has made nature part of Danone’s DNA since 1972. Since the nineties Danone has regularly quantified and made official its environmental commitments; in 2000 another step was taken with ambitious objectives in terms of the reduction of water and energy consumption and of the weight of packaging materials. These objectives were reached in 2008. From that date, Danone’s Nature strategy took on a new dimension with the commitment to reduce the group’s carbon footprint by 30% by 2012. Environmental policy is now organized around five pillars.

The central pillar is the fight against climate change,

symbolized by the reduction of CO2 emissions. This ambition is supplemented by the other four pillars:

Working on packaging,

Promoting sustainable agriculture,

Protecting water resources and

Preserving biodiversity. The participation of hundreds of Danone employees helped rapidly spread good environmental practices, which has brought about effective reductions and commitment even faster. All CBU’s General Managers and corporate directors now have a carbon footprint reduction goal as part of their bonus determination.

Nature Nature


17

Mission: to provide carbon credits with “high social intensity” by seeking the best balance between the value generated for local communities and the value of carbon credits returned to investors. Danone is leading the Livelihoods initiative, an unprecedented investment fund open to other companies, so as to concentrate a portion of investments devoted to carbon offsetting over to restoring ecosystems, which are crucial to the world’s future food supply. Livelihoods enjoys all the know-how gained through the Danone Fund for Nature, which yields its place to this new initiative. The Livelihoods Fund, officially unveiled in July 4th and 5th 2011, is the culmination of a long series of initiatives on Danone’s part in protecting and restoring natural ecosystems. This fund was born of the original notion that outside investors should be sought to join the group in its work to have greater, more effective, and longer-lasting impact. Livelihoods seeks to merge carbon offset efforts with ecosystem restoration programmes, while creating social value wherever these actions are undertaken. Livelihoods covers two of the five strategic orientations established by the group to protect Nature: fighting climate change, preserving and restoring biodiversity. The purpose of Livelihoods is now to generate more partnerships with NGOs to conduct programs with high potential for environmental, economic and social development.

The Livelihoods Initiative Focus on…


18

This strategic priority is central to Danone's mission of bringing health though food to as many people as possible, especially to low-income groups in developing countries. In pursuit of this mission, Danone defined several priorities and began deploying the four dimensions of the New Danone strategy in 2009. Consequently, the group must adapt to a variety of local nutritional and economic situations, and in many cases has to invent new models to make products affordable. The aim of the ‘For all’ strategy, defined in late 2008, is to increase the number of consumers from 700 million in 2008 to one billion by 2012 (consumers buying one Danone product at least once a month). Three strategic priorities have been identified to allow Danone to achieve this goal: 1. Increasing the number of consumers reached at

different levels of the pyramid 2. Continuing the group’s geographic expansion

3. Creating new models to reach Base of Pyramid

(BOP) consumers Danone endeavors to sell products that offer something extra on a nutritional level and fit into local consumer habits whilst taking account of the economic position of the populations targeted.

For all For all


19

Mission: to reduce poverty and malnutrition in the poorest countries by supporting the creation of businesses The plan for the danone.communities investment Fund was born from an encounter in 2005 between Franck Riboud and Muhammad Yunus, winner of the Nobel Peace Prize 2006. With this investment Fund, Danone states its desire to go further in the field of social innovation. danone.communities has the aim of reducing poverty and malnutrition in the poorest countries by supporting the creation of businesses. These must be lasting, focus on social objectives and coherent with Danone’s mission of bringing health through food to as many people as possible. The priority objective is always to assist with the development of local populations through the creation of lasting economic activity achieving the greatest social impact. The objectives of the Fund are particularly to encourage projects that:

Improve the health of the most vulnerable populations with relevant products or by means of access to drinking water

Create employment locally

Preserve the environment

Are economically viable

Since the creation of danone.communities, the team has already accompanied and financed 5 projects that impact over 500,000 people worldwide.

danone.communities Focus on…


20

DANONE’S HISTORY

From the beginning, Danone has been a unique company – if you like innovation, you’re in the right place! The merger of BSN and Gervais Danone in 1973 brought together two ambitious companies, creating a powerful unity that was destined for success. BSN, founded in 1966 as a glass-making and packaging company, experienced dynamic growth under the leadership of Antoine Riboud, CEO. In the early 1970s, BSN recognized promising growth opportunity in the food sector and began strategic acquisitions to secure a stronghold in this market. In 1972, Antoine Riboud had an opportune meeting with Daniel Carasso, founder of Danone. Daniel was growing the innovative yoghurt business that his father, Isaac Carasso, began in 1919. The men shared a similar vision to build a global company with clear health-through-food positioning. When the two companies merged in 1973, the result was the birth of a food company like no other. A recap of our company’s history unfolds in the timeline below. But new chapters in our success story are being written every day, thanks to Danone’s leadership, our commitment to our mission and values, and the efforts of all Danoners.


21

“Danone has been my life’s passion. I have

always been convinced of the health benefits of

yoghurt.”

Daniel Carasso, Pioneer of Danone in France

“Corporate responsibility does not end at the factory gate or at the office door. The jobs that a business creates are central to the lives of employees and the energy and raw materials that we consume change the shape of our planet. Public opinion is there to remind us of our responsibility in today’s industrial world.” Antoine Riboud, founder of Groupe Danone


22

DANONE’S TIMELINE: A STRATEGY OF PERPETUAL MOTION AND INNOVATION

Isaac Carasso makes the first Danone yoghurt in Barcelona.

Antoine Riboud establishes and directs BSN, a French glass and packaging company. Over the next 10 years, this dynamic, fast growing company will become Groupe Danone, only food group to focus totally on health.

A milestone year for BSN, that impacts its future. Antoine Riboud meets Daniel Carasso, then CEO of Gervais Danone. There is a positive synergy between the two companies and the two men begin discussions of how to make Gervais Danone a worldwide brand.

Daniel Carasso launched Danone in

France.

In the early 1970s, BSN shifts its strategic focus from containers to food

and acquires Evian, Kronenbourg and

Blédina.

BSN and Gervais Danone merge to become Europe’s

leading food company. Antoine Riboud is CEO.

1919

1929

1966

1970

1972

1973


23

A series of acquisitions reinforce BSN–Gervais Danone’s leadership position, including entry into the European biscuit market. The dynamic, fast-growing company will later become Groupe Danone.

Antoine Riboud passes the leadership to his son Franck. Under Franck Riboud’s leadership, Danone begins a strategic restructuring process that makes the company grow by acquisition and capture new marketshare.

The company refocuses on health-through-food and acquires the Dutch company Royal Numico. The biscuit line is sold. For 2008, Danone is restructured into four business lines – Fresh Dairy Products, Waters, Baby Nutrition, and Medical Nutrition.

BSN is re-named Groupe Danone and

has a new logo.

Danone has three main business lines: Fresh Dairy

Products, biscuits and cereal products, and beverages.

Reflecting the growth strategy, Danone

successfully closed the deal of the joint venture with

Unimilk on December 1st 2010, making Russia the

largest single national market.

1986

1994

1996

1997

2007

2010


24

Our People around the world enjoy

Danone’s products and our brands are

household names in over 120 countries.


25

ABOUT DANONE Our company is large and on an energetic growth path. We remain strongly focused on our core mission. This exclusive focus on health is reflected in the four key areas of our business: Fresh Dairy Products, Waters, Baby Nutrition and Medical Nutrition. People around the world enjoy Danone’s products and our brands are household names in over 120 countries. The recipe for our brand’s success is healthy nutrients, quality and pleasing taste.

Activia, Actimel, Petit Gervais / Danonino and Taillefine /

Vitalinea are top sellers in our popular range of Fresh Dairy Products, with an annual growth rate of 6.5% in 2010.

Waters sales totaled 20 billion liters in 2010 and accounted for 17% of our consolidated turnover.

Baby Nutrition, one of our new divisions, accounted for 20% of our sales in 2010.

Sales of our Medical Nutrition products topped 1.05 billion Euros in this high-growth market sector.


26

FACTS & FIGURES Danone’s robust performances in 2010 testify the strength of this business model.

+6.9% sales growth highlights the positive growth potential for our success strategy – to be 100%

focused on healthy food and strongly committed

to social and environmental responsibilities.

A world leader in the healthy

food industry


27

Danone has around 100,000

employees and operates in over 120

countries

OUR FRESH DAIRY PRODUCTS are No.1 worldwide. Activia is the division’s most dynamic product, accounting for half of overall growth.

OUR WATERS DIVISION No.2 on the packaged water market, enjoys strong sales growth in emerging markets (Indonesia, Mexico, Argentina) while the environment remains steady in mature economies, where France and German are top performers.

BABY NUTRITION No.2 worldwide experienced a +8.9% like-for-like change rate in 2010. All regions reported growth, with China, Indonesia and the United Kingdom still the main contributors. The milks category continued to deliver double-digit

growth, while weaning foods saw a slight rise in the fourth quarter reflecting good performances in France, Poland and Russia. OUR MEDICAL NUTRITION line is No.1 in Europe and has achieved good results in all regions, with Western Europe and new geographies contributing equally. All product categories gained ground, with paediatrics and the gastro-intestinal allergy range again showing above-average growth.


28

MY CBU – Text to be written

Text to be written - dignim erit luptat praese magnit incip raequat lutatierum

Text to be written. Magna ad magnibh eros acidunDelit veliqua mconseniam, quat. Sed ming er illa con eumsan etum volobor tiscil dolortie tatisl ut iliquat, sit lore dipis nulpute faccum dolore dunt vel ent iriustrud ea alit, co volortie velesequisi el ip esequatueros ex er in hendre facidui bla feugait praesed ming.ex exeraestie magna ad magnibh eros acidunDelit veliqua mconseniam, quat.

Text to be written wis nostrud ex ero incincidui blaoreet wis nulluptate dolorer iriure tatem ea conse veliquis eugue modolent nim nosto consequ ismodolortie te cortio consectem diatuer exerat velestie minibh enisim nim qui blan velesed ea feu facidunt il iuscil ex erate digna feum nis nonsed. Sed ming er illa con eumsan etum volobor tiscil dolortie tatisl ut iliquat, sit lore dipis nulpute faccum dolore dunt vel ent iriustrud ea alit, co volortie velesequisi el ip esequatueros ex er in hendre facidui bla feugait praesed ming.ex exeraestie magna ad magnibh eros acidunDelit veliqua mconseniam, quat. ismodolortie te cortio consectem diatuer exerat velestie minibh enisim nim qui blan velesed ea feu facidunt il iuscil ex erate digna feum nis nonsed.


29

Sed ming er illa con eumsan etum volobor tiscil dolortie tatisl ut iliquat, sit lore dipis nulpute faccum dolore dunt vel ent iriustrud ea alit, co volortie velesequisi el ip esequatueros ex er in hendre facidui bla feugait praesed ming.ex exeraestie magna ad magnibh eros acidunDelit veliqua mconseniam, quat.

Sed ming er illa con eumsan etum volobor tiscil dolortie tatisl ut iliquat, sit lore dipis nulpute faccum dolore dunt vel ent iriustrud ea alit, co volortie velesequisi el ip esequatueros ex er in hendre facidui bla feugait praesed ming.ex exeraestie magna ad magnibh eros acidunDelit veliqua mconseniam, quat.

Text to be written wis nostrud ex ero incincidui blaoreet wis nulluptate dolorer iriure tatem ea conse veliquis eugue modolent nim nosto consequ ismodolortie te cortio consectem diatuer exerat velestie minibh enisim nim qui blan velesed ea feu facidunt il iuscil ex erate digna feum nis nonsed. Sed ming er illa con eumsan etum volobor tiscil dolortie tatisl ut iliquat, sit lore dipis nulpute faccum dolore dunt vel ent iriustrud ea alit, co volortie velesequisi el ip esequatueros ex er in hendre facidui bla feugait praesed ming.ex exeraestie magna ad magnibh eros acidunDelit veliqua mconseniam, quat. ismodolortie te cortio consectem diatuer exerat velestie minibh enisim nim qui blan velesed ea feu facidunt il iuscil ex erate digna feum nis nonsed. Sed ming er illa con eumsan etum volobor tiscil dolortie tatisl ut iliquat, sit lore dipis nulpute faccum dolore dunt vel ent iriustrud ea alit, co volortie velesequisi el ip esequatueros ex er in hendre facidui bla feugait praesed ming.ex exeraestie.

Text to be

written


30

Danone Values

Leading in Danone

Danone Way Fundamentals

Business Conduct Policy


31

OUR 4 REFERENCES FOR DOING BUSINESS

DANONE VALUES reflect how we act as individuals in business, with each other, and the world around us.

LEADING IN DANONE is a mindset to take action in order to solve problems or to make something move foward.

DANONE WAY FUNDAMENTALS explain how Danone, as a company, with Danoners support, does responsible and sustainable business with all its stakeholders.

BUSINESS CONDUCT POLICY provide a clear list of company and Danoners commitments, indicating what they can do or not while doing business.


32

Values Our

Our Values

Openness Enthusiasm Humanism Proximity


33

Danone is a global company and our diversity is a powerful asset. As a community of Danoners we are united by strong and clearly stated values.

Danone Values express our unique business vision and ethics. The history of these values reflects our company’s commitment to open communication and working together.

Franck Riboud, Chairman and CEO

They were developed with input from fellow Danoners about what key values should drive our company. The result of this collaboration was four Danone Values that are a respected and integral part of our daily activities.

These values guide our decision-making as well as our professional outlook. They protect and nourish what is truly special about Danone’s culture.

“Danone has a unique identity that

others cannot imitate and is rooted in its

own distinctive values.”


34

Curiosity: Characterizes an attitude of awareness and looking ahead, of being attuned to others, refusing to accept preconceived ideas and models, and imagination.

Agility: Symbolizes our sense of vitality and energy, quickly responding to situations with flexibility and adaptability.

Dialogue: Our management style is informal, favors active listening and open discussion. We encourage debate and accept conflicting views.

Openness is…


35

Enthusiasm means…

Boldness: Free to think and act independently, we take intelligent risks and explore different new paths. We can confidently overcome failure.

Passion: Synonymous with conviction, a drive to convince and lead, the pleasure of work, the ability to surpass oneself and achieve excellence.

Appetite for challenge: Characterized by the optimistic, enthusiastic and almost physical desire to grow and take the lead.


36

Sharing: Being real to ourselves and others creates dialogue, transparency and teamwork.

Responsibility: We pay careful attention to the safety of people and products, as well as nature and society.

Respect for others: We are sensitive to cultural differences, treat everyone with equal respect, and support the development of our business partners.

Humanism is a sense of…


37

Accessibility: Our management style is approachable and straightforward.

Credibility: Be true to yourself and take responsibility for your actions.

Empathy: Connect with customers, suppliers and consumers in a sincere way to build ties beyond buying and selling.

Proximity requires…


38

Leadership Our

Our Leadership Style

Committed Open Doer Empowering

Style


39

DANONE’S LEADERSHIP STYLE IS UNIQUE and is nourished by our mission and our values - this sets us apart from competitors. We are agile, fast moving and smart - questioning traditional solutions and responding to opportunity with fresh ideas and winning strategies. HOW WE LEAD IMPACTS OUR MISSION, VALUES, AND HOW WE WORK TOGETHER. Leadership is not only for management. By taking ownership of the principles in this pack and putting them into action in your daily work, you will become a leader too. Leadership is a way of being that we encourage in all Danoners - a common “glue” that helps us to work and grow together.


40

A good leader has a clear, positive mindset that guides

his or her actions.

The Danone Leadership CODE describes four qualities that can enable all of us to develop our leadership abilities. The CODE is also part of our corporate DNA - these practical guidelines help us to put ideas into action, to be committed to progress, feel empowered, and to build positive relationships.

Each CODE guideline is like the link of a chain individually strong – and when combined, the result is a powerful unity. It is our collective strength as Danoners!

“Danone Leaders are

COMMITTED to an ambitious future

OPEN to learn & share with others

DOERS who deliver results fast

through EMPOWERING & growing people”


41

Inspire & be the vision

o Build and share an ambitious future

o Create a sense of purpose for team & colleagues,

connected with our mission

o Lead by example: “I say what I do, I do what I say”.

Translate the values into daily behaviors

Commit to create breakthrough results

o Stand to make a sustainable difference, challenge

status quo, and generate breakthrough

o Think & act ahead: able to project in the future,

consider different options & commit to achieve the

ambition

o Drive change with optimism (“can do attitude”) and

face difficulties along the way

Committed to build an ambitious future


42

Listen with empathy & talk straight

o Demonstrate empathy & respect people, interact

with proximity at all levels

o Develop authentic relationships through generous

listening & straight talk, whether agreeing or

disagreeing

o Value different opinions, and be able to change

his/her mind

Connect inside & outside

o Learn fast and share with others. Demonstrate

curiosity, look outside areas of interest / expertise

o Foster collaboration with other functions&

departments, at all levels. Act to break silos

o Network, connect outside Danone, to learn from &

interact positively with our environment

(consumers, employees, clients, suppliers,

communities…)

Open to learn and share with

each other


43

Take responsibility & risk to show

the way forward

o Honor and foster commitment to deliver results on

promises

o Take initiatives and measured risks, willing to

experiment even in uncertain environment

o Speak up, act or ask for support inside & outside

direct working area

o Able to take tough decisions, in the best interest for

all

Act with speed, agility & pragmatism

o Solve complex problems with smart & pragmatic

solutions. Able to switch between “big picture” &

hands-on approach

o Set priorities and engage into energetic and focused

action

o Manage complexity and contradictions with

resilience and tenacity

Doer to deliver results sharp and

fast


44

Engage and align teams

o Leverage the power of the team, mobilize towards

common goals and collective performance

o Empower people through involvement, delegation

and trust

o Give regular, honest & constructive feed-back,

based on accurate individual assessment

Coach and harness diverse talents

o Being passionate for people Growth. Foster other

thoughts, valuing individual characteristics and

developing self confidence

o Demonstrate healthy ambition, search for

opportunities to grow, for self and others

o Seek feedback, gain awareness of own strengths &

weaknesses, take responsibility to improve oneself

CODE puts the keys to success in our hands –

we have the opportunity to learn, grow, and go beyond

what we ever thought was possible. It’s an exciting

challenge, and working together, we can make it

happen!

Empowered to energize and develop

people


45

Way of The Danone

The Danone Way of doing business

Human Rights Human Relations Environment Consumers Governance and Relations with External Partners

doing business


46

Our commitment to responsible business: Danone Way Fundamentals

To support our mission, to bring health through food to as many people as possible, we have developed a set of commitments called the Danone Way Fundamentals. They represent our vision of doing business in a responsible way, and offer guidance for our every day actions on the job. As a Danoner, you are part of a global community of colleagues. The Danone Way Fundamentals help to unite us and to create a path that leads to ever - growing success.

To make it simple, the

Danone Way means to respect all Danoners, nature, the consumer, our suppliers and the local communities where we work. By following the Danone Way Fundamentals, we believe that our company development will be strong and sustainable. Your commitment to these fundamentals is essential.

Working together, we can be sure that our daily business practices are consistent with our mission and values.

Welcome and thanks for joining us on the Danone Way!

Muriel Penicaud, Executive VP Human Resources


47

Full compliance against forced labor and no child labor It is an economic reality that people need money to live. But no one, particularly children, should be forced to work in conditions that are illegal or harmful. Danone is in full compliance with the International Labor Organization’s regulations against forced labor or under - age workers. Proof of age is required for all employees, as well as employment contracts, in each CBU of the Group. The minimum age to work in Danone is 15 years old, except in case of a legally specified apprenticeship.

HUMAN RIGHTS

These fundamentals explain how we work

with a sense of equality and with careful

attention to our health and safety.


48

1. DEDICATED TO DIVERSITY

Equal opportunity for everyone PRACTICING DAY TO DAY:

Diversity is our strength! What would it be like if everyone at Danone was exactly the same? With the same ideas, the same way of communicating – even the same gender, cultural origin or physical appearance? Our company would be less innovative and dynamic, and it could be a very boring place to work. Diversity at Danone creates a positive synergy, and benefits both business and people.

2. COMMITMENT TO WORKPLACE SAFETY

A safe working place for all employees PRACTICING DAY TO DAY:

Make every day a safe day! Safety at work is a top priority at Danone – everyone has the right to work in a safe environment. The “ Wise ” safety program is in place at all Danone sites and helps to correct unsafe situations and prevent accidents. What is the best safety solution? It is all of us, working with a safety-first attitude on the job and caring for others’ safety!


49

3. COMMITTED TO HEALTH AT WORK

A healthy work environment for all Danoners PRACTICING DAY TO DAY:

Make every day a healthy day! Health is at the heart of our mission, both for consumers and our employees. To be consistent with this mission – to provide health through food to the greatest number of people – we pay close attention to our own healthy habits. Our commitment is that each Danoner benefits from medical health care coverage and wellness checkups, plus access to healthy nutrition at work. Training on hygiene, nutrition and physical activity helps us to live and work with greater wellbeing and energy!


50

1. COMMITMENT TO SOCIAL DIALOGUE

A positive workplace and active social dialogue PRACTICING DAY TO DAY:

Partnership with employee representatives Each employee has the right to be affiliated with a trade union or to be represented by other representative bodies. Danone promotes active social dialogue with employee representatives. For instance, we have signed nine agreements with the IUF (International Unions Food) representatives at the group level over the past 20 years, including a Convention on trade union rights. By participating in open discussions, in a spirit of mutual respect, we help to create a positive workplace.

HUMAN RELATIONS

In this section you’ll find our commitment to open dialogue with labor unions, fair working hours and pay, and your right to

ongoing training.


51

2. COMMITMENT TO FAIR WORKING HOURS AND WORK ORGANIZATION

Compliance with labor working time regulations PRACTICING DAY TO DAY:

Reasonable and fair work time Every day is a busy day at Danone – but everyone also needs time to eat, take a break, and feel positive about work responsibilities. At the end of the day, we all want to go home and relax. Danone’ working time policies conform to the International Labor Organization’s (ILO) and local regulations for employees.

3. COMMITMENT TO COMPENSATION AND BENEFITS

Fair and transparent pay PRACTICING DAY TO DAY:

Equal wages for equal job Fair compensation is very important to all of us – our employees share in the wealth that our company is building. Danone is committed to paying employees a fair wage for the work performed, along with access to social protection. Danone has created compensation and benefit guidelines for the CBUs to use as a reference. We respect local wage regulations and keep wages in line with local market averages.


52

4. WE ARE COMMITMENT TO ONGOING TRAINING

Saying “Yes” to learning and growth! PRACTICING DAY TO DAY:

Personal and professional development Danone strongly supports professional training and development for every employee. There are formal training programs to help developing your professional skills and to acquire new ones. You can also benefit from everyday learning opportunities, like networking and discussing ideas and experiences with colleagues. Danone is the right place to grow! It is in our best interest to actively pursue all opportunities to learn.


53

1. REDUCING CO2 EMISSIONS IN OUR BUSINESS ACTIVITY

Healthy People – Healthy Planet PRACTICING DAY TO DAY:

How does Danone reduce its carbon footprint? Danone has taken a powerful commitment to measure the “carbon footprint” of its products and to reduce worldwide CO2 emissions. Since 2000, we have reduced water and energy consumption at our plants by 23%. One new project is to naturally purify and recycle wastewater from production. Our products bring health to people, so let us also work to make a healthy planet. Together, we can make it happen!

ENVIRONMENT

This overview describes

how we are reducing CO2 emissions and environmental

hazards in our business activity. We also protect nature by

minimizing the environmental impact on the supply /

production of the raw materials used to make our products.


54

2. COMMITMENT TO REDUCING ENVIRONMENTAL HAZARDS

A partnership with nature PRACTICING DAY TO DAY:

How does Danone protect the environment? The “GREEN” tool helps us to identify industrial environmental hazards in our plants. Each of us can also make an important contribution by participating in our action plan to reduce environmental hazards. Let us do our best to make this a safe and healthy planet!

3. MINIMIZING ENVIRONMENTAL IMPACT FOR RAW MATERIALS FROM SUPPLY TO PRODUCTION

Growing our business in harmony with nature PRACTICING DAY TO DAY:

How do we reduce our raw materials environmental impact? To produce healthy products, Danone needs a constant supply of raw materials such as milk or fruits and vegetables. However, agriculture impacts the environment – from water consumption, to greenhouse gas emissions, and pollution from fertilizers or pesticides. Our sustainable agriculture programs are helping our suppliers adhere to environmental-friendly practices. We firmly believe that environmental responsibility goes hand-in-hand with good business practice.


55

4. REDUCING THE ENVIRONMENTAL IMPACT OF OUR PACKAGING

Respect for nature, from start to finish PRACTICING DAY TO DAY:

Our commitment to responsible packaging Packaging protects the safety and quality of Danone products – but not always at risk to the environment. Danone analyzes the environmental impact of our packaging at all stages – from design, to distribution, and end of life. For example, we are recovering part of the polyethylene terephthalate (PET) from used water bottles and using this to make new ones.


56

1. 100% COMMITMENT TO PRODUCT QUALITY AND FOOD SAFETY

Full compliance with all food safety regulations PRACTICING DAY TO DAY:

Safe and consistent products Our customers trust us to provide top quality products. Food safety and quality is a serious commitment at Danone, and we are in strict compliance with all local and international regulations. At every stage of development, production and shipping, let us work together to be sure that Danone products reflect high quality and food safety.

CONSUMERS

These fundamentals explain why nutritional

value, quality and safety of our products is a

serious commitment for all Danoners.


57

2. COMMITTED TO HEALTH AND NUTRITION

A responsible producer of healthy food PRACTICING DAY TO DAY:

Responding to today’s health challenges According to the World Health Organization, over 1.6 billion adults are over-weight, and at the same time up to 168 million children suffer from malnutrition. As a Danone employee, you are helping to provide a solution to these serious health concerns. Every product we make is supported by extensive scientific research to ensure high nutritional quality and relevant health benefits.


58

1. GOVERNANCE AND RELATIONS WITH EXTERNAL PARTNERS

Ethical and transparent business practices PRACTICING DAY TO DAY:

Honesty is the best policy Danone’s Business Conduct Policy is our guideline for working in an ethical way, complying with all laws and regulations. Staying true to these policies is essential to maintain the trust of shareholders, consumers and all partners. A good reputation is priceless, and all of us should feel proud to say: “I work at Danone”.

GOVERNANCE

Learn more about our commitment to ethical and

transparent business policies, corporate social

responsibility, and how we develop sustainable growth

in the local communities where we do business.


59

2. SOCIAL RESPONSIBILITY COMPLIANCE OF OUR SUPPLIERS AND BUSINESS PARTNERS

Growing and supporting sustainable sourcing PRACTICING DAY TO DAY:

Keeping our promises Danone places a strong emphasis on corporate social responsibility (CSR) – all of our business relations should accurately reflect our fundamentals. We verify that suppliers and business partners follow an ethical code of conduct and respect all labor and environmental rules. CSR is a blueprint that helps us to build long-term sustainable growth with our suppliers!


60

3. GROWING OUR INVOLVEMENT WITH

LOCAL STAKEHOLDERS AND COMMUNITIES

Business can build positive change in local environments PRACTICING DAY TO DAY:

Proactive collaboration for sustainable growth Danone is a profit-making company and this gives us the ability to create, and share, wealth in a win-win way. Our “Danone Way” sustainable business model gives economic empowerment to our suppliers and partners, while also benefiting local communities. Antoine Riboud, founder of Group Danone, said in 1972:“The company’s responsibility doesn’t end at the factory gate or the office door. Its actions have an impact on the entire community around and it influences the quality of life of every citizen”.

It is important for all of us to be totally committed to these guidelines. They are the common success factor that unites all Danoners and motivates us to work, share and learn together. To have a complete understanding of these fundamentals, please read the full version of the Danone Way Fundamentals in the Appendix to this book.


61

Business Conduct Danone

Danone Business Conduct Policy

Our company commitments Commitments of all Danoners

Policy


62

Danone developed the Business Conduct Policy (BCP) to provide a clear framework of our company commitments. They also affirm our commitment to the Danone Way Fundamentals – to respect all Danoners, nature, the consumer, our suppliers and the local communities where we work. They are consistent withthe Universal Declaration of Human Rights and the international conventions of the International Labour Organisation (ILO). The Business Conduct Policy also contains a set of guidelines that all Danoners need to follow. These commitments unite us, regardless of where we work in Danone’s worldwide operations. Good rules make good sense – when we know what is expected from us, we can work together in an efficient and transparent way. The following sections offer a simplified overview of Danone’s Business Conduct Policy. You will find an overview of Danone’s commitments as a company, followed by Business Conduct Policy that is especially important for employees. Please take the time to read and understand these guidelines.

Any questions or need for more information? To read the complete version of the Business Conduct Policy, please refer to the Appendix of the Danone Inside Pack. This policy was created to be widely read and understood – do not hesitate to contact your Team Leader or Human Resources if you have any questions.


63

OUR COMPANY COMMITMENTS Our company commitments are the Danone Way Fundamentals. On top of this, the BCP offer some additional guidelines for transparent reporting to shareholders, fair and free competition with competitors, and strict adherence to the regulations of the countries where we operate.

TO CONSUMERS Danone bases its success on the quality of its products and customer satisfaction. In each country that Danone operates in, it complies with regulations issued by health authorities. Each Danone facility is required to have the adequate quality structures and tools to ensure correct monitoring of production and compliance with food safety obligations.


64

TO SHAREHOLDERS Danone is fully transparent in its business activities – shareholders regularly receive information and we fully comply with stock market regulations and the principles of corporate governance. Our accounts reflect a precise, fair and accurate way of reporting all of the transactions carried out.

TO COMPETITORS Danone supports open competition and all Danoners are expected to comply with our laws regarding competition. No agreement or arrangement can be made that aims at reducing free competition.

Every company has established suitable

internal control procedures to ensure operational efficiency

and reliability of financial information.


65

TO THE COUNTRIES WHERE WE OPERATE

Danone acts as a responsible company in the countries where we operate, complying with all local rules and regulations. Our goal is to ensure long-term development. As a company, honesty is our top priority – all Danoners must reject any form of corruption. It is strictly forbidden to grant direct or indirect payments or hidden benefits to clients, suppliers or the representatives of public authorities or, to any interested third party. Accepting payments or benefits from third parties that have a business relationship with Danone is absolutely forbidden.


66

THE COMMITMENT OF COMPANIES CONTROLLED BY DANONE This Business Conduct Policy applies to all companies that are controlled by Danone. Every company controlled by Danone, and every employee working in these companies, is expected to do business in a way that does not favor the objectives and interests of that company more than the objectives and interests of Danone. If there are no laws in place or if regulations are unclear, it is the responsibility of the company (or interested parties) to consult with Danone. All companies controlled by Danone must follow the same commitments.

OUR COMMITMENT TO ETHICAL BEHAVIOR Danone as a company, and all Danoners, must act with fairness, integrity and a sense of responsibility, in accordance with this Business Conduct Policy.


67

COMMITMENTS OF ALL DANONERS The BCP are a mutual commitment. It is our company’s responsibility to provide a working environment that adheres to all regulations, is safe, respectful and promotes the professional development of employees. In return, all Danoners need to follow this Business Conduct Policy in their daily work.

What does the BCP mean to me?


68

RELATIONS WITH THIRD PARTIES As Danoners, our actions impact the image and reputation of our company and Danone. We cannot make commitments that are unreasonable or beyond our job responsibility – don’t exceed the limits of your authority or make promises you cannot keep. Employees cannot use the funds or other assets of their company, or of Danone, other than in the context of their job activities and objectives of Danone. In relationship to third parties, they have to ensure that: - Transactions correspond to a service or supply of goods. - Prices are in line with market conditions or normal practices. - Payments are made directly to the co-contracting individual or company. Danoners should not use the funds or other assets of their company or of Danone, directly or indirectly, for the benefit of associations and/or organization without formal agreement of the management.

Danone has communication rules that need to be followed when any Danoner is expressing his/herself in the name of their company or of Danone, especially if speaking to journalists. These rules are available at your HR or Communication department.


69

CONFIDENTIALITY AND PROTECTION OF DANONE’S ASSETS

Confidentiality is a top priority and every Danoner needs to protect our intellectual property (registered trademarks, patents and copyrights), of all the projects and know-how of any kind at Danone, and any confidential information.

Confidentiality is a top priority and every

Danoner needs to protect and ensure protection of registered trademarks,

patents and copyrights.


70

No one is permitted to disclose confidential information about decisions, plans and budgets, unpublished results, remunerations, sales forecasts, new products, industrial processes, research programs and acquisition or divestiture projects, etc:

To third parties outside of Danone

To other employees of Danone, except if he/she is certain that sharing this information is strictly necessary for the execution of his/her mission

This obligation continues to be in effect for every employee even after he/she no longer works at Danone. Every Danoner needs to use Danone resources and the company’s assets in an appropriate and balanced way, avoiding improper or excessive use. We use what is provided to us in order to properly do our job, while safeguarding the interests of Danone and complying with all applicable rules.


71

RESPECT OF THE BUSINESS CONDUCT POLICY Everyone working at Danone is required to follow the principles that are explained in this document. If you have any questions, or wish to see the full version of the Business Conduct Policy, please contact your Team Leader or Human Resources.


72

DIALERT – INTERNAL ALERT SYSTEM You are encouraged to report any violation of the following: • Internal control principles and procedures (theft, abuse

of company equipment or services, violation of a law or regulation etc.)

• Accounting and financial principles (use of false invoices, falsification of reporting or accounts, fraud, etc.)

• Anti-corruption procedures (concealed payments, etc.) You can make a report two ways: • Through the usual communication channels of your

company such as your Management, Human Resources Department, Legal Department,...

• Or by using Dialert, which reports directly and confidentially to Danone Top Management.

It is your right as Danoner to use Dialert. You are not at risk of any retaliation by your manager or your employer if you use Dialert in good faith, without malicious or false intent. There are three confidential ways to make a report using Dialert:

1. Website address: www.dialert.eu Use this access code: Good4ALL

2. Dedicated fax number: + 33 1 44 35 23 23

3. Letter sent to: DANONE DIALert 15 rue du Helder, F- 75439 PARIS Cedex 09 - France


73

For more information, ask your Team Leader or Human Resources department…

Your HR department surname name telephone address www.danone.com CBU website.


74

Notes: ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________


75

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.


76

Inside Pack EngV

Documents

chief operating

reducing co2

business conduct

fresh dairy

unique business

corporate

fair working

danone ecosystem