Danone Annual Report 2014

CONTENTS 5
Social,societal and
environmental responsibility 176
1 5.1 Danone social, societal and environmental approach
5.2 Information concerning the Group’s social,
178
Selected financial information,

societal and environmental performance in compliance
with the Grenelle II law 181
information about the issuer 5.3 Funds sponsored by Danone 208
and information on the

Registration Document 4 6
1.1 Selected financial information 6
Corporate Governance 214
1.2 Information about the issuer 6
1.3 Information about the Registration Document 8 6.1 Governance bodies 216
6.2 Positions and responsibilities of the Directors
2
and nominees to the Board of Directors 242
6.3 C ompensation and benefits for corporate officers
and governance bodies 262
Overview of activities, 6.4 Internal control and risk management 298
6.5 Statutory auditors’ special report on related party
risk factors 10 agreements and commitments 306
7
2.1 History 12
2.2 Presentation of the Group 13
2.3 Strategic growth areas 15
2.4 Description and strategy of the Divisions 16 Share capital
2.5 Other elements related to the Group’s activity
and organization 18 and share ownership 316
2.6 Simplified organizational chart of the Group 7.1 Company’s share capital 318
as of December 31, 2014 24 7.2 Treasury shares and DANONE call options held
2.7 Risk factors 27 by the Company and its subsidiaries 319
3
7.3 Authorization to issue securities that give access
to the share capital 322
7.4 Financial instruments not representing capital 326
7.5 Dividends paid by the Company 326
Danone’s business 7.6 Voting rights, crossing of thresholds 327
highlights in 2014 and outlook 7.7 Share ownership structure as of December 31, 2014
and significant changes over the last three fiscal years 330
for 2015 40 7.8 Market for the Company’s shares 333
3.1 Business highlights in 2014 42 7.9 Factors that might have an impact in the event
3.2 Consolidated net income review 46 of a public tender offer 334
3.3 Free cash-flow 54 7.10 Change of control 336
8
3.4 Balance sheet and financial security review 56
3.5 Outlook for 2015 65
3.6 Financial indicators not defined by IFRS 68
3.7 Documents available to the public 70 Combined Shareholders’
4 Meeting of April 29, 2015

8.1 Shareholders’ Meetings
338
340
Financial statements 72 8.2 Draft resolutions presented at the Shareholders’ Meeting 340
8.3 C omments on the resolutions of
4.1 Consolidated financial statements and Notes the Shareholders’ Meeting 351
to the consolidated financial statements 74
8.4 Special reports of the Statutory auditors to
4.2 Financial statements of Danone SA, parent company the Shareholders’ Meeting 381
of the Danone group 153
4.3 Fees paid by the Group to the Statutory auditors
and members of their network 174 Appendix386
4.4 Information originating from third parties, Cross-reference tables 388
expert opinions and declarations of interest 175 List of subsidiaries 394
“ BRINGING HEALTH THROUGH FOOD
TO AS MANY PEOPLE AS POSSIBLE ”
2014
REGISTRATION
DOCUMENT
Annual financial report
This Registration Document

includes all the items of the Annual Financial Report.
The French language version of this Registration Document (Document de Référence) was filed with the French financial markets autho-
rity (Autorité des Marchés Financiers, or AMF) on March 19, 2015, pursuant to Article 212-13 of its general regulations. This Registration
Document may be used in support of a financial transaction if supplemented by a Securities prospectus (Note d’opération) authorized by
the AMF. This Registration Document was prepared by the issuer and its signatories are liable for its contents.
This is a free translation into English for information purposes only.
Copies of this Registration Document are available from Danone at: 17, boulevard Haussmann – 75009 Paris,
on Danone’s website: www.danone.com and on the website of the Autorité des Marchés Financiers: www.amf-france.org
KEY FIGURES
“OUR 2014 ACHIEVEMENTS LAID A SOLID FOUNDATION FOR DANONE TO BUILD ON

“OUR
IN 2015 AND THE YEARS AHEAD. LOOKING AHEAD, WE ANTICIPATE AN ONGOING
DIFFICULT AND UNSTABLE ENVIRONMENT, AND I HAVE WORKED TO DEFINE THREE
PRIORITIES :
• CONTINUE TO MAKE OUR BRANDS AND BUSINESSES MORE COMPETITIVE TO SERVE
OUR CONSUMERS;
• CONTINUE TO GENERATE PROFITABLE GROWTH IN SALES AND SET THE CONDITIONS
FOR MAKING THAT GROWTH SUSTAINABLE;
• ROLL OUT OUR DANONE 2020 ROADMAP WITH A VIEW TO CREATING SHARED
VALUE FOR ALL OUR STAKEHOLDERS.”
Emmanuel FABER, Chief Executive Officer
+4.7% 21,144 MLN 2,662 MLN

2014 Sales Trading
like-for-like in 2014 operating income
sales growth in 2014
Full-year Group sales DIVIDEND

(in € billions) 20.9 21.3 21.1
(in € per share) 1.50
1.45 1.45
19.3 1.39
1.30
17.0 1.20 1.20
15.2 15.0 1.10
14.5 1.00
13.6 13.1 13.7 13.0
12.8
12.1 0.85
0.68
0.58 0.61
0.52
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
The Group’s Strategy is consistent with

its mission of “bringing health through
food to as many people as possible”.
2 DANONE REGISTRATION DOCUMENT 2014
KEY FIGURES
Evolution of the Group’s sales

since 2001 • 99,927 employees
• R
eduction of carbon intensity (a) 1
2001 2014 by 41.6% from 2008 to 2014
• R
anked n°1 in the ATNI index
(Access To Nutrition Index)
• R
anked in leading social responsibility
indexes: Dow Jones Sustainability
Index, Vigeo, Ethibel Sustainability
60 %
Index.
37 %
Sales realized
Sales realized
outside Europe
(a) Based on constant scope of consolidation, excluding
Unimilk group’s companies, and on emissions under Danone’s
direct responsibility (packaging, industrial activities, logistics
and end of life).
outside Europe
Key Financial Figures

Year ended December 31 2012 2013 2014
Sales (a) 20,869 21,298 21,144
Like-for-like growth (b) +5.4% +4.8% +4.7%
Trading operating income (a) (b) 2,958 2,809 2,662
Trading operating margin (b) 14.18% 13.19% 12.59%
Like-for-like growth (b) - 50 bps - 81 bps -12 bps
Net income (a) 1,787 1,550 1,253
Earnings per share - Group share (c) 2.78 2.42 1.88
Underlying fully diluted EPS (b) (c) 3.01 2.78 2.62
Free cash-flow
2,088 1,549 1,401
excluding exceptional items (a) (b)
Dividend (c) 1.45 1.45 1.50
(a) In € millions.
(b) Financial indicator not defined by IFRS, see definition in section 3.6 Financial indicators not defined by IFRS.
(c) In € per share.
DANONE REGISTRATION DOCUMENT 2014 3

Selected financial
information,
information about
the issuer and
information on
the Registration
Document
1
1.1 Selected financial information 6
1
1.2 Information about the issuer 6

Legal name and trade name 6
Registration number in the Register of commerce and

companies6
Date of incorporation and term of the Company 6
Registered office 6
Legal form and applicable law 6
Corporate purpose 7
Statutory auditors 7
1.3 Information about

the Registration Document 8
References and definitions 8
Incorporation by reference 9
Persons responsible for the Registration Document 9

Selected financial information, information about
the issuer and information on the Registration Document
Selected financial information
1.1 Selected financial information

The financial information presented in section Key figures is extracted Consolidated financial statements and Notes to the consolidated
from section 3 Danone’s business highlights in 2014 and outlook for 2015 financial statements for 2014 fiscal year are presented in sec-
and from the Danone group’s consolidated financial statements for tion 4.1 Consolidated financial statements and Notes to the consolidated
2014 fiscal year prepared in accordance with International Financial financial statements.
Reporting Standards (IFRS).
1.2 Information about the issuer

Legal name and trade name
The Company’s legal name is “Danone” (hereafter the “Company”), having been changed by the Shareholders’ Meeting of April 23, 2009 from
“Groupe Danone”.
Registration number in the Register of commerce and companies

The Company is registered in the Paris Register of commerce and companies under number 552 032 534.
The Company’s APE Industry code is 7010Z, which corresponds to the activity of registered offices.
Date of incorporation and term of the Company

The Company was incorporated on February 2, 1899. The Extraordinary Shareholders’ Meeting of April 25, 2013 extended the term of the
Company to April 25, 2112.
Registered office
The Company’s registered office is located at 17, boulevard Haussmann, in Paris (75009), France. The telephone number of the registered
office is +33 (0) 1 44 35 20 20.
Legal form and applicable law

The Company, a French corporation (société anonyme) with a Board of Directors, is subject to the provisions of Book II of the French
commercial code.

Information about the issuer
Corporate purpose
In accordance with Article 2 of Danone’s by-laws, the purpose of It shall be entitled to act and to effect the aforementioned transactions
1
the Company, whether directly or indirectly, in France and in any directly or indirectly, in any form whatsoever, on its own behalf or
country, shall be: on behalf of third parties, and whether alone or in a joint-venture,
association, grouping or company involving any other individuals
• industry and trade relating to all food products; and or companies.
• the performance of any and all financial transactions and the It shall also be entitled to acquire interests and holdings in any
management of any and all property rights and securities, whether
and all French and foreign companies and businesses, regardless
listed or unlisted, French or foreign, together with the acquisi-
of the purpose thereof, by means of the establishment of special
tion and the management of any and all real estate properties
companies, through asset contributions or subscriptions, through
and rights.
the acquisition of shares, bonds or other securities and any and all
In general, the Company shall be entitled to effect any and all pro- company rights, and, in general, by any means whatsoever.
perty, real estate, industrial, commercial, and financial transactions
relating directly or indirectly or possibly useful in any connection
whatsoever to the Company in the fulfillment of its corporate purpose.
Statutory auditors
Principal Statutory auditors Substitute Statutory auditors
Ernst & Young et autres Auditex
Membre de la Compagnie Régionale des Commissaires aux comptes Tour First, 1, place des Saisons
de Versailles
TSA 14444
Tour First, 1, place des Saisons
92037 Paris-La Défense Cedex
TSA 14444
Start date of first term of office: April 22, 2010
92037 Paris-La Défense Cedex
Expiration date of term of office: date of the Shareholders’ Meeting
Represented by Gilles COHEN and Pierre-Henri PAGNON deliberating on the financial statements for the fiscal year ending
December 31, 2015
Yves NICOLAS
deliberating on the financial statements for the fiscal year ending 63, rue de Villiers
December 31, 2015
92208 Neuilly-sur-Seine Cedex
PricewaterhouseCoopers Audit
Membre de la Compagnie Régionale des Commissaires aux comptes
de Versailles Expiration date of term of office: date of the Shareholders’ Meeting
deliberating on the financial statements for the fiscal year ending
63, rue de Villiers December 31, 2015
92208 Neuilly-sur-Seine Cedex
Represented by Anik CHAUMARTIN and Philippe VOGT
Start date of first term of office: May 21, 1992

deliberating on the financial statements for the fiscal year ending
December 31, 2015

Information about the Registration Document
1.3 Information about the Registration Document

References and definitions
Unless otherwise noted, all the references mentioned hereafter refer to the following elements:
ALMA All references herein to the “ALMA” region refer to the Asia/Pacific, Latin America, Middle East and Africa region;
Company All references herein to the “Company” refer to Danone the issuer;
Company and its subsidiaries All references herein to the “Company and its subsidiaries”, the “Group” or “Danone” refer to the Company and its
consolidated subsidiaries;
Consolidated financial state- All references herein to consolidated financial statements and Notes to the consolidated financial statements refer to
ments, Notes to the consolidated consolidated financial statements for 2014 fiscal year;
financial statements
DANONE call options All references to DANONE call options refer to DANONE share purchase options subscribed by the Company to hedge
certain stock-option plans detailed in section 7.2 Treasury shares and DANONE call options held by the Company and its
subsidiaries;
Division All references herein to “Division” or “Divisions” refer to Fresh Dairy Products, Waters, Early Life Nutrition and Medical
Nutrition Group businesses;
Early Life Nutrition All references herein to “Early Life Nutrition” and the early life nutrition business or markets refer to baby formula
(infant milk formula, follow-on milk, growing up milks), milk-and fruit-based desserts, cereals, small pots of baby
food and ready-made baby food;
Emerging countries All references herein to “emerging countries” refer to countries other than mature countries where the Group is present;
Fresh Dairy Products All references herein to “Fresh Dair y Products” and the fresh dair y products business or markets refer to
processed dairy products and exclude milk, cream and butter;
GPS All references herein to GPS (Group performance shares) refer to Company shares subject to performance conditions
(Group performance shares) granted to certain employees and executive directors and officers detailed in section 6.3 Compensation and benefits
for executives and governance bodies;
GPU All references to GPU (Group performance units) refer to multiannual variable compensation detailed in section
(Group performance units) 6.3 Compensation and benefits for executives and governance bodies;
Group All references herein to the “Group”, the “Company and its subsidiaries” or “Danone” refer to the Company and its
consolidated subsidiaries;
Group market shares and All references herein to market shares or to the Group’s market positions are derived from third-party market studies
positions and data base provided notably by Nielsen, IRI, Euromonitor and Canadean institutes;
Market shares and market Data pertaining to market shares or the Group’s market positions are based on the value of sales;
positions
Markets All references herein to “markets” for products in particular, or to market shares, refer to markets for packaged
products and exclude products that may be otherwise marketed or sold;
Mature countries All references herein to “mature countries” refer to Western Europe (notably France and Southern Europe including
Spain, Italy and Portugal), North America, Japan, Australia and New Zealand;
Medical Nutrition All references herein to “Medical Nutrition” and the medical nutrition business or markets refer to adult or pediatric
clinical nutrition products to be taken orally, or through a catheter in the event of malnutrition related to illness or
other causes;
North America All references herein to the “North America” region refer to the United States and Canada;
Put options granted to non- All references herein to “put options granted to non-controlling interests” refer to put options granted by the Group
controlling interests to certain non-controlling shareholders on part or all of their equity investments in certain of its consolidated
subsidiaries detailed in section 3.4 Review of the balance sheet and financial security;
Registration Document All references herein to the “Registration Document” refer to the Group Registration Document;
Sales All references herein to “Sales” refer to the consolidated net sales of the Group;
Stock-options All references herein to stock-options refer to options to purchase DANONE shares granted to certain employees and
executive directors and officers detailed in section 6.3 Compensation and benefits for corporate officers and governance bodies;
Value of GPS and stock-options All references herein to the value of the GPS and stock-options refer to the fair value of those shares and options
calculated as of grant date in accordance with IFRS 2;
Waters All references herein to “Waters” and the waters business or markets refer to bottled water, water sold in large contai-
ners (jugs), and water sold in small containers (cups).

Information about the Registration Document
Incorporation by reference
Pursuant to article 28 of regulation (EC) No. 809/2004 of the the fiscal year ended December 31, 2012 on pages 4, 29 to 43
1
European Commission dated April 29, 2004 and to section 36 of of the Registration Document that was filed with the AMF on
IAS 1, Presentation of Financial Statements, requiring that at least March 19, 2013;
one-year comparative information be presented, this Registration
Document incorporates by reference the following information:
• the consolidated financial statements and the Statutory audi-
tors’ report relative to the fiscal year ended December 31, 2013
• the consolidated financial statements and the Statutory audi- on pages 67 to 138 of the Registration Document that was filed
tors’ report relative to the fiscal year ended December 31, 2012 with the AMF on March 21, 2014 under filing number D. 14-0186;
on pages 49 to 107 of the Registration Document that was filed • the Company financial statements and the Statutory auditors’
with the AMF on March 19, 2013 under filing number D. 13-0175; report relative to the fiscal year ended December 31, 2013 on
• the Company financial statements and the Statutory auditors’ pages 139 to 158 of the Registration Document that was filed
report relative to the fiscal year ended December 31, 2012 on with the AMF on March 21, 2014; and
pages 109 to 124 of the Registration Document that was filed • the key financial information, the Group operating and financial
with the AMF on March 19, 2013; review, and all of the non-financial information pertaining to
• the key financial information, the Group operating and financial the fiscal year ended December 31, 2013 on pages 2 to 3 and 39
review, and all of the non-financial information pertaining to to 61 of the Registration Document that was filed with the AMF
on March 21, 2014.
Persons responsible for the Registration Document

Person responsible for the Registration Document
Emmanuel FABER
Chief Executive Officer
Danone
Statement by the person responsible for the Registration Document

This is a free translation into English of the Chief Executive Officer’s statement issued in French, and is provided solely for the convenience of
English-speaking readers.
Paris, on March 18, 2015
“We hereby certify, after having taken all reasonable measures, that to our knowledge all of the information in this Registration Document
is accurate, and that no information liable to alter its scope has been omitted.
We certify that, to our knowledge, the financial statements in this document have been prepared in accordance with applicable accounting
standards and provide a faithful representation of the assets, the financial situation, and the results of the Company and of all companies
within its scope of consolidation, and that the management report referred to in the cross-reference table in the Appendix of the present
Registration Document presents a faithful representation of the business trends, results, and financial position of the Company and of all
companies within its scope of consolidation, as well as a description of the principal risks and uncertainties that they face.
The Statutory auditors have provided us with a letter (lettre de fin de travaux, or auditors’ completion letter) stating that their work has
been completed, and in which they indicate that they have verified the information included in this Registration Document relative to the
financial situation and the financial statements, and have read this Registration Document in its entirety.”
Emmanuel FABER

Overview of activities, risk factors
PARTIE A METTRE À JOUR
Overview
of activities,
risk factors

2
2.1 History
Group’s roots: from glass to food
12
12
2.5 Other elements related to the
Group’s activity and organization 18
2
1973-1990: European expansion 12 Distribution18
1990-1996: global ambitions 12 Marketing18
1996-2007: refocus on health food 12 Competition19
Since 2007: acceleration of international development 12 Acquisitions19
Research and Development 19

2.2 Presentation of the Group 13 Plants and equipment 22
Activities13 Raw materials purchasing 22
Principal markets 13 Social and environmental responsibility 23
IT systems 23
2.3 Strategic growth areas 15
Financial risk management 24
Develop the geographical presence of Danone 15
Promote a holistic approach of health through food,

anchored in local cultures 15
2.6 Simplified organizational
chart of the Group as of
Develop sustainable industrial and agricultural models 15
December 31, 2014 24
Parent company Danone 24
2.4 Description and strategy
of the Divisions 16 Danone consolidated Group 25
Fresh Dairy Products 16 Main fully consolidated but not fully owned companies 26
Waters16 Main publicly traded companies 26
Early Life Nutrition 17

2.7 Risk factors 27
Medical Nutrition 17
Risk identification and control policy 28
Operational risks related to the Group’s activity 28
Operational risks specific to the Group’s activity and

organization31
Legal and regulatory risks 34
Industrial and environmental risks 35
Financial risks 37
Insurance and risk coverage 38

History
2.1 History
Group’s roots: from glass to food
The Group’s origins date back to 1966 when the French glass In 1972, Antoine RIBOUD, then the Chairman and Chief Executive
manufacturers, Glaces de Boussois and Verrerie Souchon Neuve- Officer of BSN, laid the foundation of the “dual economic and social
sel, merged to form Boussois Souchon Neuvesel, or BSN, which project,” which has since guided the Group’s strategy. The following
in 1967 generated sales of around €150 million in flat glass and year, in 1973, BSN merged with Gervais Danone, a French food and
glass containers. In 1970, BSN began a program of diversification beverage group specialized in dairy and pasta products, becoming
in the food and beverage industry by successively acquiring three the largest food and beverage group in France, with consolidated
of its primary glass container customers: Brasseries Kronenbourg, sales of around €1.4 billion, 52% out of which in food and beverage.
Société Européenne de Brasseries and Société Anonyme des Eaux
Minérales d’Evian. These acquisitions made BSN France’s market
leader in beer, bottled water, and baby food.
1973-1990: European expansion

During the 1970s and 1980s, after selling off its flat glass operations, brands, (iii) the biscuit subsidiaries of Nabisco, Inc. in France, Italy,
the BSN group focused its growth on food and beverages, primarily in the United Kingdom and Asia, and (iv) Galbani, Italy’s leading cheese
Western Europe. In particular, this expansion included the acquisition maker. With consolidated sales of €7.4 billion in 1989, the BSN group
of (i) breweries in Belgium, Spain, and Italy, (ii) Générale Biscuit, a became the third-largest diversified food and beverage company in
French holding company that owned LU and other European biscuit Europe, and the largest in France, Italy, and Spain.
1990-1996: global ambitions

In the early 1990s, the BSN group started consolidating the positions In 1994, in order to consolidate its position as a multinational food
acquired in previous years in Western Europe, enabling the deve- and beverage group, the Group decided to change the BSN parent
lopment of synergies. In France, for example, BSN acquired Volvic company’s name to “Groupe Danone” (in 2009, the shareholders
to strengthen its position in bottled water. During this period, the would subsequently approve the change of the legal name of the
Group also laid the groundwork for its international development Groupe Danone parent company to “Danone”).
by completing numerous acquisitions and joint-ventures outside
of Western Europe (in the Asia-Pacific region, Latin America and
Eastern Europe, as well as in selected markets such as South Africa
and the Middle East).
1996-2007: refocus on health food

In 1997, the Group decided to focus on its global business lines. In 2006, Danone formalized its mission of “bringing health through
Danone therefore steadily made divestitures in its Grocery, Pasta, food to as many people as possible,” and the following year it com-
Prepared Foods, Confectionery Products, Beer, Sauces and Italian pleted a 10-year period of refocusing its operations on the health
cheese and Meats activities. Danone also sold BSN Glasspack, the food sector. Indeed, in 2007 the Group sold nearly all of its Biscuits
holding company of its Glass Containers business. and Cereal Products business (to the Kraft Foods group), and
acquired Numico, which enabled it to add early life nutrition and
medical nutrition activities to its portfolio.
Since 2007: acceleration of international development

Since 2007, the Group has pursued its international development Since 2013, Danone has also accelerated its development on the
strategy built around its four business lines, notably with the African continent, notably with the acquisition of a controlling
acquisition of the Unimilk group’s companies in Russia (in 2010) interest in Centrale Laitière (Fresh Dairy Products, Morocco) and
and the Wockhardt group’s nutrition activities in India (in 2012). In equity interests in Fan Milk (Fresh Dairy Products, West Africa) and
2013, Danone forged a strategic alliance with Mengniu, the Chinese Brookside (Fresh Dairy Products, Kenya).
fresh dairy products market leader, to accelerate the growth of the
fresh dairy products category in China. In 2014, an agreement was
signed calling for this alliance to be extended to the infant formula
category through Danone’s acquisition of a stake in Yashili, a Men-
gniu subsidiary.

Presentation of the Group
2.2 Presentation of the Group

Activities Principal markets
The Group’s strategy is consistent with its mission of “bringing The Group is present in all of the regions of the world:
health through food to as many people as possible”. Since 2007
and the acquisition of Numico, this mission has been implemented
• Europe, including Turkey, accounted for 40% of Group sales in 2014,
with contributions from all four Divisions. The leading countries
through four Divisions:
in this region include France, Spain and the United Kingdom;
• the Fresh Dairy Products Division (production and distribution • the CIS & North America zone represented 21% of Group sales
of yogurts, fermented dairy products and other specialties of
in 2014 thanks to the strong performance of the Fresh Dairy
fresh dairy products) accounted for 52% of Group sales in 2014;
Products Division in these markets; 2
• the Waters Division (production and distribution of packaged • the ALMA zone – which combines the activities in the Asia/Pacific
natural, flavored and vitamin-enriched water) represented 20%
region, Latin America, Africa and the Middle East – represented
of Group sales in 2014;
38% of Group sales in 2014:
• the Early Life Nutrition Division (production and distribution of • in the Asia/Pacific region, Indonesia and China lead the way
specialized food for babies and young children to complement
thanks to the robust sales in the Waters and Early Life Nutrition
breast-feeding) accounted for 21% of Group sales in 2014;
Divisions;
• the Medical Nutrition Division (production and distribution of • in Latin America, Mexico, Argentina and Brazil are the main
specialized food for people afflicted with certain illnesses or frail
contributors in the Group’s four Divisions;
elderly people) made up 7% of Group sales in 2014.
• in Africa and Middle East regions, Morocco and South Africa
are the largest markets, focused mainly on the fresh dairy
products. The Early Life Nutrition Division is also growing
rapidly in this zone through an export model.
Consolidated sales by Division Consolidated sales by geographic area

(in € millions) (in € millions)
1,432
Fresh Dairy Products

Europe
4,397 8,097 8,522
Waters
11,129 CIS & North America 1 432
Early Life Nutrition
ALMA
Medical Nutrition 4,186
4,525
Each Division has a global management unit, to which the dedicated

local entities report.
The Group enjoys the following leadership positions: No. 1 worldwide
for fresh dairy products, No. 3 worldwide for packaged waters and
No. 2 worldwide for early life nutrition.

Presentation of the Group
Europe
CIS & North America
ALMA
Top ten countries Top ten customers

The Group’s top ten countries in terms of contribution to the conso- In 2014, the Group’s top 10 customers worldwide (of which five
lidated net sales are as follows: are French) accounted for approximately 19% of its consolidated
sales; the top five customers represented approximately 13% of
Year ended December 31 its consolidated sales.
2014
France 10%
Russia 9%
United States 9%
China 7%
Indonesia 5%
United Kingdom 5%
Spain 5%
Mexico 5%
Brazil 5%
Argentina 4%

Strategic growth areas
2.3 Strategic growth areas

The Group’s strategy is driven by its mission of “bringing health through food to as many people as possible”.
Develop the geographical presence of Danone

The development of its activities around the world, in particular Danone is also pursuing its expansion in new countries in order
emerging markets, constitutes a key mechanism by which Danone to develop new sources of growth. 2014 was marked in particular
successfully carries out its mission while ensuring its long-term by Danone’s accelerated growth in Africa, with the increase of its
growth. In 2014, emerging markets accounted for 53% of Group sales. majority stake in Centrale Laitière (Fresh Dairy Products) in Morocco
This strategy starts with major growth markets in which Danone
and the purchase of an equity interest in Brookside (Fresh Dairy 2
Products) in East Africa.
enjoys strong positions, like Indonesia, China, Russia, the United
States, Mexico or Brazil. In these countries, the Group continues to With a presence in more than 130 markets, Danone is committed to
develop the consumption of its product categories through innovation. develop and optimize its organizational model to make the most of
its global size while providing strong support to local businesses.
Promote a holistic approach of health through food, anchored in local cultures

For Danone, food is an essential part of life, to build and maintain Innovation plays a key role in order to adapt the products and
well-being for both the mind and body. The concept of “alimenta- distribution to local constraints and patterns of consumption. In
tion” goes beyond addressing nutritional needs to be a part of every South Africa, for example, Danone offers several products with
culture and lifestyle around the globe – always different and always longer shelf lives, such as Mayo (90 days) and Ultra Mel (7 months).
special. It is worth taking the time to understand this richness and
to harness pleasure in food to promote healthy lifestyles.
Danone works towards this through programs like Nutriplanet,
which analyses the habits and health issues of target populations,
using nutritional, epidemiological, socio-economic and cultural
data to ensure that any solutions we develop are relevant to local
communities. As of 2014, the Nutriplanet approach has been applied
to over 50 countries.
Develop sustainable industrial and agricultural models

The Group’s strategy increasingly relies on the upstream segment • in the area of water, Danone has made commitments to protect
of its activity (environment management, raw materials, industrial resources, particularly where they are scarce, and uses water
processes and logistics’ supply), not only to optimize costs but also in harmony with local ecosystems and communities. By 2020,
to turn it into a genuine mechanism for creating value and standing Danone plans to deploy a new tool for measuring Danone’s water
apart from the competition. footprint in all Waters Division subsidiaries. The Group is also
committed to reduce water consumption in its factories by 20%
The activities’ upstream work in particular enables Danone to
between 2010 and 2020;
develop and secure high-quality supplies, while monitoring volatility
risks, for each of its three key resources: water, plastic and milk. • in the area of plastics, Danone is striving to reduce its weight and
excess packaging and to use recycled materials. In that regard,
• in the milk supply chain, the Group is for instance working in close Danone contributes to the development of recycling chains for
cooperation with local producers to improve animal husbandry
its packaging in many countries.
practices in both developed and emerging countries. Collec-
tion entities and cooperatives open to small producers were
created in several countries (Egypt, Indonesia, India, Mexico,
Turkey, Ukraine, etc.) in order to help members manage their
farms, optimize their purchases, improve the herd’s feed or get
veterinary treatment;

Description and strategy of the Divisions
2.4 Description and strategy of the Divisions

The Group implements its strategy in a specific manner for each of its four Divisions.

The Fresh Dairy Products Division produces and markets yogurts, To promote the consumption of fresh dairy products, the Division
fermented fresh dairy products and specialized dairy products. also strives to build a consensus around the central role of its
products as part of a balanced daily diet. Fresh dairy products
The Division’s strategy consists of developing consumption of these
certainly do provide essential nutritional benefits for the human
products in all regions around the world. The strategy is based
body, notably proteins, carbohydrates, calcium, phosphorus and
notably on:
vitamins B2 and B12.
• strengthening the Division’s main growth platforms such as The Division relies on a solid portfolio of international and local
the United States, Russia, Brazil, Mexico, Morocco or South
brands benefiting from having a high profile and good reputation.
Africa, where consumption of fresh dairy products offers strong
growth potential; The Division’s main brands and product lines are as follows:
• maintaining business volume in mature European countries, • so-called core business brands, which include basic fresh dairy
notably through product quality, constant product line renewal products such as plain and fruit yogurts;
and innovation;
• Greek-style yogurt lines such as Oikos and Danio, which contain
• the development of new regions, in particular in Africa (for example twice as much protein as standard yogurt;
in Egypt, Nigeria and Kenya) or Asia (notably in China through
the strategic alliance forged with Mengniu in 2013).
• the Activia line, which has been marketed for more than 20 years
and is now present in more than 70 countries;
The Division continuously renews its product lines in terms of fla-
vor, texture, ingredients, nutritional content and packaging. This
• brands aimed at children and pre-adolescents, such as Danonino,
which have been replicated in more than 50 countries (notably
innovative capacity enables it to reach new consumer segments
under the Fruchtswerge, Danoninho and Petit Gervais brand names),
and develop new consumption moments while adapting to the local
as well as Danimals in the United States, Serenito in Argentina
tastes and dietary preferences of each market and making sure to
or Tëma in Russia;
cover the full range of price points.
• functional brands such as Actimel, Danacol or Densia;
• indulgent lines such as Danette, Fantasia, Danissimo or YoCrunch;
• Vitalinea, also marketed under the Light & Fit, Taillefine or Ser
brand names, which comprises the low-fat product lines.
Waters
The Waters Division comprises the natural waters business along • management and environmental protection of high-quality natu-
with aquadrinks (flavored and vitamin-enriched waters – natural ral water resources: Danone strives to preserve the unique and
fruit juice extracts, fruit juices, vitamins, minerals). sustainable nature of its natural waters products by strengthening
the protection of its springs. The Group has therefore crea-
The main international brands include Evian and Volvic (France,
ted associations comprising all of the socio-economic players
Germany, United Kingdom, Japan), Bonafont (Mexico, Brazil), and
involved, which favor the development of non-polluting activities
Mizone (China, Indonesia). The Division also has very strong local
around the catchment areas;
brands in Indonesia (Aqua), Spain (Fontvella and Lanjarón), Argentina
(Villavicencio and Villa del Sur), and in Poland (Zywiec Zdroj). • development of an alternative product line with taste qualities
that are superior to other products and categories: in the past
The Division’s strategy is based primarily on the development of
five years, many of the Group’s water brands have been rolled
bottled water consumption, notably in emerging countries, and in
out as so-called aquadrinks, i.e. waters flavored with natural
particular through the following actions:
fruit extracts or fruit juice. The goal is to attract a new consumer
• promotion of hydration-related health benefits: Danone is esta- segment to the waters category by offering a light and natural
blishing initiatives to promote the benefits of good hydration on alternative to sodas and other sugary beverages;
health by communicating directly with consumers as well as
through cooperation with public health authorities. Notably,
• packaging innovation: in order to reduce its environmental foot-
print, the Division regularly redesigns its packaging in order to
the Group runs the “Hydration for Health” scientific platform:
reduce the weight of its bottles on the one hand and use new
for the past five years, 150 scientists and public health authority
materials – e.g. plant-based or recycled materials – to a greater
representatives from around the world have met annually to share
extent on the other.
and promote the advances in the area of hydration science and
its positive effect on health;

Description and strategy of the Divisions

The Early Life Nutrition Division focuses on specialized foods for The Division’s development strategy is built around a main area of
babies and young children to complement breast-feeding while focus: develop products suitable for a child’s first years, and revolves
always complying with the World Health Organization (WHO) Code around three priorities:
and local laws.
• build the credibility of the early life nutrition brands as an answer
The infant formula segment accounts for more than 80% of this to the specific needs of babies and young children by making this
Division’s activity, with a special emphasis on the development product category better known and understood among opinion
of second and third stage follow-up milks (designed for children leaders, healthcare professionals and principal order-givers
between the ages of one and three). in the sector;
Solid foods for babies, also known as “weaning food”, account for • associate health and flavor as two indivisible qualities in baby 2
more than 10% of the activity and are concentrated mainly in Euro- food. The Early Life Nutrition Division is very active in research
pean countries such as France, Italy and Poland. on taste acquisition in the youngest children and prepares pro-
ducts offering a wide range of flavors, in close collaboration
The Division deploys its local brands from international brand
with sensory experts;
platforms, thereby enabling the rapid global dissemination of best
practices from each country. For example: • identify local nutritional profiles, notably in the new regions where
the Division is growing – Malaysia, Vietnam, Cambodia, Colom-
• the “Blue House” platform includes in particular the Aptamil, bia, Chile, Bolivia, Senegal, Kenya, and Cameroon – by studying
Nutrilon, Almiron and Gallia brands;
local needs to bring answers to local public health challenges
• the “Heritage Brands” platform includes mainly the Bebelac, in accordance with the requirements of health authorities and
Cow&Gate, Blédina and Malyutka brands. local associations.
Medical Nutrition
The Medical Nutrition Division focuses mainly on people receiving Since 2012, the Group has introduced the nutritional product Sou-
medical treatment, babies afflicted with certain illnesses and frail venaid, which satisfies special medical needs as part of the dietary
elderly people. The Division’s products are designed primarily to handling of early onset Alzheimer’s disease, to around ten countries.
treat disease-related malnutrition by satisfying special food needs.
The Group’s strategy consists of increasing its global coverage
These products – most of which are eligible for insurance reim-
by penetrating new countries and developing various distribution
bursement – are prescribed by healthcare professionals (doctors,
channels. The Group estimates that the medical nutrition market’s
medical personnel in hospitals and clinics, pharmacists).
growth potential is significant, mainly as a result of (i) the aging of
Under the umbrella brand Nutricia, the Group has a large portfolio the population in some countries, (ii) the increased awareness of
of brands marketed in several countries, including for example: the role of nutrition in health (notably for preventive purposes), (iii)
the emergence of new illnesses and allergies, and (iv) the growing
• Nutrison: tube feeding for dietary treatment of patients who are number of screening procedures enabling early treatment of afflicted
not capable of feeding themselves normally or who suffer from
patients. Moreover, current research to accompany certain illnesses
illness-related malnutrition;
and allergies treatments could contribute to this growth potential.
• Fortimel/Fortisip: liquid oral nutritional supplements;
• Neocate: hypoallergenic products aimed at babies and children
with lactose or multiple food protein intolerance or allergy-
related troubles;
• Nutrini/Infatrini: oral and feeding tube food products adapted
for the dietary treatment of infants and children incapable of
feeding themselves normally or sufficiently or who suffer from
illness-related malnutrition.

Other elements related to the Group’s activity and organization
2.5 Other elements related to the Group’s activity

and organization
Distribution
Although they vary to reflect local specificities, the Group’s distri- The Group also works with its customers to develop specific mar-
bution models reflect two main approaches: keting activities such as joint promotions.
• distribution aimed at major retail chains; Traditional market outlets
• distribution to traditional commercial sales points. Globally, and in the emerging countries particularly, a large portion
Moreover, a significant portion of the Group’s products in the early of Danone’s sales is generated through traditional market outlets
life nutrition and medical nutrition markets are distributed through thanks to small-scale sales points networks. An in-house sales
more specialized distribution channels such as hospitals, clinics force and exclusivity agreements with wholesalers represent a
and pharmacies. competitive advantage for the Group in countries where traditional
commerce and independent supermarkets continue to account for
The Group is constantly streamlining its logistics flows in order to
a significant share of food and beverage sales.
improve service quality while reducing costs. This policy is based
on an ongoing assessment of its organization, notably through out- Moreover, in Latin America and Asia, a significant portion of the
sourcing of distribution in collaboration with specialized companies. Waters Division’s products is directly distributed to consumers
(Home & office delivery or “HOD”).
Major retail chains Finally, in the emerging countries, Danone is developing new local
The Group establishes global partnerships with its main distributors retail models through large networks of independent sellers.
in order to help develop the sales of its products. These partnerships
are related in particular to logistics collaboration and food safety Specialized distribution channels
management. Matters involving pricing policies, which are up to
each subsidiary, are not included in these agreements.
of hospitals, clinics and pharmacies
In the early life nutrition and medical nutrition markets, a significant
In particular, the Group has taken several initiatives to work clo-
portion of products are marketed in hospitals, clinics and pharmacies,
sely with large retailers in order to optimize the flow of goods and
through specialized distributors or following a tendering process.
the inventory levels of its customers with the Efficient Consumer
Danone also maintains an ongoing relationship with healthcare
Response (ECR) approach. In addition to inventory management,
professionals through its medical representatives, who meet with
automatic inventory replenishments and just-in-time delivery, ECR
general practitioners and specialists (pediatricians, nutritionists,
aims at working with distributors to better manage consumer demand
etc.) as well as pharmacists.
and expectations at the sales points. To that end, the Group has
implemented shared inventory management systems with its leading
distributors, that are used to coordinate inventory levels among
stores, as well as at the distributors’ and Danone’s warehouses.
Marketing
Key success factors underpinning the Group’s strategy include its • at the product and packaging level, by differentiating the product
brand reputation and close ties to consumers. The Group therefore experience for the consumer as much as possible;
strives to develop a strong and interactive relationship with its
consumers in each of its markets by adapting to media trends and
• at the sales points level, through measures that feature the
products.
consumption methods.
In the early life nutrition and medical nutrition markets, consu-
This dialogue takes place at several levels:
mers are informed mainly by healthcare professionals (general
• at the level of communication, through traditional media (TV, press, practitioners and specialists, medical personnel in hospitals and
billboard), and increasingly online through online advertisement clinics, pharmacists).
campaigns, interactive sites and e-commerce;

Competition
The Group’s competitors in its respective business lines include supported by its products’ quality, taste, affordability and innova-
(i) large multinational food and beverage corporations such as tive aspect, and by the powerful brand image conveyed on health,
Nestlé, PepsiCo, Coca-Cola, General Mills, (ii) large corporations nutrition or societal and environmental responsibility.
in the medical nutrition and early life nutrition segments such as
Considering that success in this food and beverage industry is
Abbott and Mead Johnson, (iii) more local companies specialized
achieved through strong local market positions, the Group strives
in certain product lines or markets such as Fresenius, Lala, Yakult
to be the market leader of each segment in every country where it
and Biostime, or (iv) retail chains offering generic or private label
operates, always in compliance with laws and regulations relating
products.
to competition. This strategy allows for a long-lasting, balanced and
The packaged food and beverage sector is highly competitive due constructive relationship with major distribution networks, by mar-
to the large number of national and international competitors. The keting key products yielding growth and profitability for both parties. 2
Group is confident that its strategy for profitable growth is strongly
Acquisitions
In the pursuit of its international development strategy, the Group end, the Group is constantly examining acquisition opportunities.
will continue to make acquisitions any time suitable for opportu- In this context, the Group may notably enter into partnerships or
nities to arise, in order to strengthen its various Divisions. To that create joint-ventures.
Research and Development

Presentation of the Group’s Research and Research and Development organization
Development Through Danone Nutricia Research, the Group’s Research and
Development function has approximately 1,500 employees, inclu-
Research and Development plays a central role in the implementation
ding around 500 in France. The competencies are spread among
of the Group’s growth strategy. The Group believes that food can
the following:
play an essential role in addressing health challenges.
In order to create and improve its products, the Group focuses its
• two international research centers:
Research and Development strategy on four main innovation areas: • Danone Research Centre Daniel Carasso: based near Paris
in Palaiseau, France, focuses on fresh dairy products and
• progress: building bridges between science and food to contribute waters,
to people’s health, from the youngest to the oldest;
• Nutricia Research: based in Utrecht, the Netherlands, this
• reliability: committing to nutritional quality of the products and center is dedicated to early life nutrition and medical
managing natural resources sustainably;
nutrition;
• cultures: rooting food styles and leveraging cultural differences • four specialized centers:
to create a unique consumer experience and address local needs;
• Danone Research Packaging in Evian, France,
• well-being: promoting the Group’s products categories to support
daily health and well-being for all; Danone therefore promotes • Nutricia Research Singapore, in Singapore,
nutrition research, educates and trains health professionals on
• Danone Research Fresh Dair y Technological Expertise,
diet-related matters and contributes toward improved dietary
in Madrid, Spain,
practices for the population through educational and informa-
tional campaigns. • Dumex Research, in Shanghai, China;
This process is conducted in compliance with a policy of strict • local teams established in most countries where the Group is
food safety and through the development of innovative production present. Their primary mission is to adapt the products (texture,
processes that strive to optimize production costs. aroma, size, packaging and nutrition) to the local consumer
preferences and develop products specific to their market.

Scientific collaborations The symbiotic balance between the human host and microbiota is
initiated at the start of life and its formation is a biological process
To conduct research, the Group’s Research and Development teams that has an impact on the immune, metabolic and neurological
regularly work in collaboration with outside institutions such as systems. The Research and Development teams of the Advanced
universities and public research centers. For example: Medical Nutrition and Early Life Nutrition divisions are studying
• the Group benefits from the expertise of external scientific com- the interaction between the determinant factors of microbiota
mittees on strategic topics such as probiotics or water; development in the early stages of life, its influence on health and
how it can be modulated through nutrition. Group researchers are
• the Group maintains permanent contact with the scientific also studying how bacteria are involved in cerebral development,
community to better understand health and nutrition issues. behavior and metabolic programming at the start of life. The goal
This collaborative scientific approach enables the pooling of is to optimize bacterial colonization in order to improve health.
investments, resources and skills. This ongoing dialogue with
scientists and research support are two of the commitments In order to develop fermented dairy products that have an impact
made by the Group in its Food Nutrition Health Charter. This on the human body’s balance and homeostasis, the Group, among
Charter formalizes Danone’s strategy in the nutrition and health other approaches, uses its extensive collection of lactic acid bacte-
area and is consistent with the main orientations set by health ria and selects the top-performing ones depending on the desired
authorities in many countries; physiological and clinical effects.
• as part of its contribution to nutritional research, the Group For all the work carried out in these areas, the Research and Deve-
created the Danone Institutes (non-profit entities) to help further lopment teams use the latest techniques in genomics, cellular and
understanding of the links between food, nutrition and health. As molecular biology, cytometrics and robotics. They design and set
of end-2014, 16 Danone institutes are located worldwide. Their up clinical studies based on international standards and utilize the
initiatives cover everything from support for scientific research latest statistical analysis methods. They also collaborate with other
to information and training for health professionals, as well as internationally recognized, high-level scientific partners such as the
educational programs for children and the general public. Institut Pasteur (Pasteur Institute), Institut National de la Recherche
Agronomique – INRA (the French National Institute for Agricultural
Group’s Research and Development Research) in Paris and Harvard Medical School in Boston (United
States), Mount Sinai Hospital in New York and University College of
innovation areas London. Furthermore to develop this research area more fully, the
The Group determines its Research and Development areas in accor- Group helps to sponsor conferences with these institutions in order to
dance with the Company’s strategy based on its four innovation areas: release the latest findings to the international scientific community.
Progress: crossing science and nutrition Lastly, Danone Nutricia Research continues to promote science and
research on probiotics, notably by acting as the principal sponsor
This innovation field consists of building bridges between science and of the “Probiotics Throughout the Lifespan” symposium hosted by
nutrition in order to develop food that strengthens each individual’s Harvard Medical School’s Nutrition Department.
health potential, from the youngest to the elderly.
To that end, the Group has developed scientific expertise in selecting
Reliability: Making a commitment to nutritional
and characterizing lactic acid bacteria as well as understanding quality and resource preservation
the way in which these bacteria (known as probiotics) can benefit The Group applies the recommendations of the World Health Organi-
human health. Notably: zation (WHO). Controlling the nutritional composition of its products
is a key component of its nutrition strategy, with a dual objective:
• the digestive tract is used for digestion but also acts as a barrier
made up of various elements (intestinal flora or microbiota, • strive to reach nutritional targets defined by nutrient, product
immune effectors, etc.) which, through their close interaction, category and consumer group. These targets were reset in 2014
play a major role in anti-infective defenses, nutritional and for all three divisions: Fresh Dairy Products, Early Life Nutrition
metabolic balance, digestive comfort, etc.; and Waters (aquadrinks).
• prebiotics and probiotics can have a beneficial impact on the • develop products that constitute an alternative, with nutritional
composition and activities of this intestinal barrier and thereby and taste qualities exceeding those of other products or cate-
generate positive health effects. gories that might be chosen in a given consumption situation.
In recent years Danone has therefore developed substantial The Group prepares and implements action plans to steadily improve
knowledge of the various genomic, molecular, cellular, physiological its products in order to maintain the sensory qualities of the products
and functional elements that form the basis for this link between the and ensure continued consumer preference.
microbiota, the immune system, intestinal walls and their overall
This approach is also conducted in accordance with a strict food
contribution to health outcomes.
safety policy.
Therefore in order to develop and improve medical nutrition solu-
tions for children suffering from cow’s milk allergy, the Group is
currently studying the use of a combination of pre- and probiotic
ingredients, which are known as synbiotics, which mechanistically
may have a role to play in the induction of immunological tolerance.

Cultures: Embrace local dietary practices Well-being: Promote the Group’s product
Danone puts the consumer at the heart of its development projects. categories
To that end, Danone relies on its Sensory & Behavior Science Through its four Divisions, Danone focuses on product categories
Department within the Research and Development Department. that revolve primarily around health and well-being:
Indeed, the Group firmly believes that consumer and its specific • fresh dairy products, because consuming one yogurt per day
needs must be taken into account upstream from product develop- is consistent with the recommendations for a balanced diet,
ment, including the identification of research areas. The Group’s as evidenced by the official food pyramids of many countries;
Research and Development Department seeks to understand the
human parameters of food consumption and identify consumer • water, an essential beverage;
expectations in terms of taste, usage, experience in everyday life • early life nutrition, because the diet in the first 1,000 days of life
and targeted benefits. is critical for good health; 2
As mentioned above, understanding local challenges surrounding • medical nutrition, because targeted products work together
nutrition and food as well as major challenges pertaining to public with medical treatment.
health and involving food are also key to the Group’s strategy. This
enables Danone to develop products that are relevant and more The Group is developing a new research area that involves measuring
closely adapted to local market conditions. To that end, Danone the impact of its products on consumer diets, an area that, among
drafted a “Nutriplanet” map of nutrition and public health challenges other factors, includes: the creation of quantitative measurement
in order to identify food deficiencies and excesses in these countries tools; the definition of diet quality indices; the development of
and thereby adapt its product recipes. Today, Nutriplanet have methods to classify consumers based on their dietary practices;
been completed in over 50 countries and is a resource for research the quantified simulation of the impact of a change in a given food
published in scientific journals. In 2014, for example, a summary on the overall quality of the diet.
of Nutriplanet and national data on children aged six months to As for classification methods, the work carried out in 2014 as part
three years in Europe was published in “Annales de Nutrition et du of the Metacardis consortium made it possible to determine that a
Métabolisme.” For this population, the study confirmed deficiencies healthier diet is associated with reduced inflammation markers as
in ALA, DHA, iron, vitamin D, iodine and vegetables on the one hand well as greater diversity of intestinal flora among overweight and
and excessive intake of proteins, saturated fats and added sugars obese people. This research shows the value of studying dietary
on the other, thereby leading to greater risk of obesity. typologies and paves the way for the study of the interaction between
This expertise also leads the Group to study dietary practices and food and various health factors.
trends, and the role of various food groups in the local cultures In the quantified simulation area, the work performed in 2014 in
through a sociological approach. conjunction with the INRA of Marseille focused in particular on
In 2014, a study conducted by Blédina in France gave rise to an oral one study that was reported in Journées Françaises de Nutrition:
presentation on “Feeding young children: what physical and mental • a study on the eating habits of 1,719 French adults showed that it
workload, what division of labour and what inequalities are involved is possible for people of all income levels to comply with dietary
in caring for young eaters?” recommendations.
Similar studies conducted in Ivory Coast and Cameroon made it The Group is also developing new expertise in nutrition economics,
possible in 2014 to integrate socio-anthropological approaches in the ultimately in order to measure the economic impact of diet on the
training sessions for healthcare professionals. Meanwhile, scientific cost of public health policies. In August 2014, a working Group that
presentations at Rencontres Africaines de Nutrition Infantile (RANI) includes Danone was created as part of the International Society
made it possible to raise awareness among many pediatricians on for Pharmacoeconomics and Outcomes Research (ISPOR) in order
the importance of this approach. to list emerging best practices in economic assessments.

Plants and equipment

The Group’s general policy is to own its production facilities. The
Group has many, widely-dispersed production facilities, except in
the Early Life Nutrition and Medical Nutrition Divisions, whose sites In 2014, the production of the Early Life Nutrition Division represented
are more concentrated. 0.8 billion tons. The Group’s largest facility in the Early Life Nutrition
Division is located in Ireland and accounted for approximately 17%
The Group has production facilities around the world in its principal of the Division’s production in 2014.
markets. As of December 31, 2014, the Group had 184 production
sites (see section 5.2 Information concerning the Group social, societal
and environmental performance in compliance with the Grenelle II law).
Medical Nutrition
In 2014, the production of the Medical Nutrition Division represented
Fresh Dairy Products 0.1 billion liters. The Group’s largest facility in the Medical Nutrition
Division is located in the Netherlands and accounted for around 86%
In 2014, the production of the Fresh Dairy Products Division repre- of the Division’s production in 2014.
sented 6.9 million tons. The two leading plants of the Division were
located in Mexico and Brazil and accounted for approximately 12% Lastly, the Group rents some facilities, notably offices and ware-
of the Division’s total production. It should be noted that the four houses (see section 3.4 Balance sheet and financial security review).
plants of Centrale Laitière in Morocco account for 12% of the Divi- The production sites are inspected regularly to assess possibilities
sion’s total production. for improving quality, environmental protection, safety, and produc-
tivity. On the basis of these reviews, management establishes plans
Waters for the expansion, specialization, upgrading, and modernization (or
In 2014, the production of the Waters Division represented nearly closing) of specific sites.
25 billion liters. The Division’s two largest bottled water facilities,
located in France, accounted for approximately 11% of the Group’s
total bottled water production capacity in 2014, and the two largest
production facilities for water in large containers, both located in
Indonesia, accounted for close to 12% of the Division’s total water
in large containers production in 2014.
Raw materials purchasing

The Group’s raw materials needs consist mainly of: • implementation of a purchasing policy (“Market Risk Manage-
ment”) that consists of defining rules for securing the physi-
• materials needed to produce food and beverage products, mainly cal supply and price setting with suppliers and/or on financial
milk and fruits (the “food raw materials”). On a value basis, milk
markets when they exist. The monitoring of exposures and the
represents the main raw material purchased by the Group. These
implementation of this policy are made at the level of each raw
purchases consist mainly of liquid milk, for which the operating
materials category by the Group’s central purchasing team. The
subsidiaries typically enter into agreements with local producers
buyers typically negotiate forward purchase agreements with
or cooperatives. Liquid milk prices are set locally, over contractual
suppliers, since no financial markets exist that would allow full
periods that vary from one country to another. The main other
hedging of the volatility of the Group’s main raw materials pur-
food raw materials are fruit-based preparations and sugar;
chase prices. Forward purchase agreements are monitored at
• product packaging materials, in particular plastics and card- the Group level at the end of each year. The information regarding
board (“packaging”). Packaging purchases are managed through these future purchasing commitments is presented in section 3.4
global and regional purchasing programs making it possible Balance sheet and financial security review. Also, with respect to
to optimize skills and volume effects. Prices are influenced by the Group’s two main raw materials categories (milk and dairy
supply and demand at the global and regional levels, economic ingredients and plastics including PET), a sensitivity analysis
cycles, production capacities and oil prices; of the impact of changes in their prices on the Group’s annual
purchasing costs (applied simultaneously in all countries where
• energy supplies. They account for only a limited portion of the the Group has a production activity) is presented in Note 5.7 of
Group’s overall purchases.
the Notes to the consolidated financial statements.
The price trends of major raw materials may have a significant
Moreover, the Group’s strategy increasingly relies on the upstream
impact on the volatility of the Group’s results. In that context, the
portion of its activities and in particular its supply of raw materials,
Group manages cost inflation of raw materials through the following
not only to manage its costs but also to make it a genuine source
measures:
of value added and differentiation relative to the competition (see
• continuous productivity gains: the Group strives in particular to section 2.3 Strategic growth areas).
optimize its use of raw materials (reductions in production waste,
lighter packaging and more effective use of milk sub-components
in the Group’s various products) and take advantage of pooled
purchasing for its various subsidiaries. In 2013, for example, the
Group established centralized purchasing for the Fresh Dairy
Products Division other than milk;

Social and environmental responsibility

A direct result of Danone’s dual economic and social project, To continue to meet these challenges and grow in accordance with
Corporate Social Responsibility (CSR) is deeply anchored in the its mission, Danone decided to focus on three key strategic areas:
Group’s strategy.
• diet: the goal is to promote changes in dietary practices by raising
In 1972, Antoine RIBOUD noted that “corporate responsibility does awareness among target populations and helping people to make
not stop at the factory gate or the office door”. This vision led to the healthier choices in their daily lives;
dual economic and social project that forms the basis for Danone’s
development and organizational model.
• food and water cycles: the goal is to ensure Danone’s ability to
sustain its operations by promoting sustainable development
In 2006, Danone redefined the Group’s mission: “bringing health and securing access to strategic raw materials in terms of both
through food to as many people as possible”. This mission requires quantity and quality, and to strengthen its competitive advantage 2
that Danone take concrete steps with regard to the major societal for each of its principal resources: water, plastics and milk;
challenges today:
• a unique management model: by 2020, Danone will have incen-
• the challenges related to products and consumers with the tivized and enabled its nearly 100,000 employees and their eco-
market launches of safe and healthy products, efforts to promote systems to work in concert and seize the growth opportunities
a healthy lifestyle and nutritional education; of a new and constantly changing world.
• environmental challenges, because for Danone, healthy food These strategic areas are the guiding principles for Danone’s
starts with a healthy natural environment; relationship with stakeholders in the preparation, production and
distribution of its products. See also sections 5.1 Danone social,
• social challenges, notably employment, enhancing employability societal and environmental approach, 5.2 Information concerning the
and professional skills, employee commitment, labor relations
Group’s social, societal and environmental performance in compliance
and consideration for the local and regional areas where the
with the Grenelle II law and 5.3 Funds sponsored by Danone.
company operates and for their social cohesion.
IT systems
The Group has a policy for developing core model IT (Information
Technology) systems, which are then deployed in its subsidiaries
Research and Development
in order to optimize and streamline investments in information In this area, the Artemis system (developed by SAP) was developed in
technology while taking advantage of global synergies and limiting order to consolidate all formulations of products and raw materials
risks. The development and deployment of IT systems are the used. This application makes it possible to take advantage of and
responsibility of a centralized team within the Group’s IT Systems share nutritional and food safety information related to products and
Department. This IT systems policy covers all of the Group’s func- ingredients used by Danone and to accelerate the design phases for
tions and activities, in particular. new products. When the Fresh Dairy Products Division centralized
its purchasing, the roll-out of this system continued in 2014 with a
Integrated information system closer integration of the supply cycle.
At its subsidiaries, the Group implements an integrated information The Waters Division continued to pursue the Hydre project for
system, Themis, based on a centrally hosted SAP architecture. systematic quality measurement of hydrological resources that
combines an analysis management application along with a GPS
The activities supported by Themis account for 81% of consolidated (Global Positioning System) application.
sales in the Fresh Dairy Products and Waters Divisions (excluding
Unimilk group’s companies) as of December 31, 2014. The Themis
roll-out continued in the Unimilk group’s companies in 2014.
Planning
In 2014, the APO sales forecasting and production planning solu-
The same information system is currently being deployed at sub- tion (developed by SAP), which is already used by the Fresh Dairy
sidiaries of the Medical Nutrition and Early Life Nutrition Divisions Products Division, was deployed in 22 subsidiaries and 10 plants in
(accounting for 42% of these two activities’ combined sales as of Europe and in the CIS region. This program has been complemented
December 31, 2014). by a data gathering solution tailored to the smallest commercial
The security level of the data center, which had heretofore been entities, thereby making it possible to cover almost all of Europe.
ensured through a redundant infrastructure at two remote sites,
was extended through the establishment of a disaster recovery site.

Simplified organizational chart of the Group as of December 31, 2014
Purchasing and Supply chain Sales and marketing

The Group has implemented a Supplier Relationship Management As described in section 2.5 Other elements related to the Group’s
solution, which covers the processes for analyzing expenditure, activity and organization related to Marketing, the Group’s brand image
selecting suppliers, managing contracts, and analyzing supplier and close customer ties are key success factors in its strategy. The
performance. This system is designed to structure and reinforce Group is pursuing its consumer relations strategy by stepping up its
the internal procurement processes and supplier relationships. communications at the corporate and product levels, enhancing the
brand experience and satisfying consumer expectations through a
Most notably, when the Fresh Dairy Products Division centralized its
more relevant promotional policy, notably involving:
purchasing, it used the SAP system to solidify all of its raw materials
and packaging supply processes, including the calculation of raw • development of the www.danone.com and www.nutrijournal.
materials needs. This solution covers all of the projected supply danone.com web sites, which provide abundant and dynamic
needs for the medium term along with short-term orders for the information on the Group and its product categories;
various production facilities. These needs are then sent to suppliers,
either through an internet portal or by electronic data interchange
• development of systems that satisfy new European regulatory
standards on consumer product information;
(EDI), and the solution implemented also makes it possible to receive
supplier invoices. All of these integrated and automated processes • a special effort to make promotional offers more relevant, notably
enable the purchasing function to manage the supplier relationship in Europe, where the situation is structurally more challenging.
and supply chain cycle in a centralized, accurate and comprehensive
manner. The solution has been operational in Italy and Poland since
end-2013 and its deployment continued to be rolled out in France,
Belgium, Germany and North America in 2014.
Environment
Through a joint effort with IT systems developer SAP, the Group
developed an innovative application to measure the carbon footprint
of its products. Based on an analysis of each product’s life cycle
and operational monitoring of these various stages, this application
makes it possible to measure the carbon footprint of each product.
In 2013, this solution was fully integrated into the SAP application
and in 2014 functional upgrades were implemented.
Financial risk management

The Group’s policy consists of (i) minimizing and managing the Through its Treasury and Financing Department, which is part of the
impact that its exposure to financial market risks could have on its Group Finance Department, the Group possesses the expertise and
results and, to a lesser extent, on its balance sheet, (ii) monitoring tools (trading room, front and back office software) to act on different
such exposure centrally, (iii) whenever the regulatory and monetary financial markets following the standards generally implemented by
frameworks so allow, executing the financial transactions locally or first-tier companies. In addition, the Internal Control and Internal
centrally, and (iv) using derivative instruments only for the purpose Audit Departments review the organization and procedures applied.
of economic hedging. Lastly, a monthly financing and treasury report is sent to the Group
Finance Department, enabling it to monitor the decisions taken to
implement the previously approved management strategies (see
section 2.7 Risk Factors).
2.6 Simplified organizational chart of the Group as of

December 31, 2014
Parent company Danone
Danone SA is the parent company of the Danone Group. The company of the Group, and (ii) coordinating the Group’s main functions and
has mainly a role of (i) holding, directly or indirectly, companies activities, with an average number of employees of 725 in 2014.

Danone consolidated Group

The Group is organized around its four Divisions, which main subsidiaries are presented hereafter. It presents for each Division, the 20
largest fully consolidated subsidiaries in terms of net sales.
Fresh Dairy Products Division Waters Division Early Life Nutrition Division Medical Nutrition Division
DANONE SOUTHERN AFRICA PTY DANONE WATERS DEUTSCHLAND MILUPA GMBH NUTRICIA GMBH
LTD. (SOUTH AFRICA) GMBH (GERMANY) (GERMANY) (GERMANY)
DANONE DJURDJURA AGUAS DANONE DE ARGENTINA SA (a) NUTRICIA-BAGO SA (a) NUTRICIA AUSTRALIA PTY LTD. (a)
(ALGERIA) (ARGENTINA) (ARGENTINA) (AUSTRALIA)
DANONE GMBH DANONE WATERS BENELUX NUTRICIA AUSTRALIA PTY LTD. (a) NV NUTRICIA BELGIE (a) 2
(GERMANY) (BELGIUM) (AUSTRALIA) (BELGIUM)
DANONE ARGENTINA SA DANONE LTDA. SUPPORT PRODUTOS NUTRICIO- SUPPORT PRODUTOS

(ARGENTINA) (BRAZIL) NAIS LTDA. (a) (BRAZIL) NUTRICIONAIS LTDA. (a) (BRAZIL)
NV DANONE SA ROBUST FOOD & BEVERAGE CO. DUMEX BABY FOOD CO. LTD. NUTRICIA PHARMACEUTICAL
(BELGIUM) LTD. (a) (CHINA) (CHINA) (WUXI) CO. LTD. (CHINA)
DANONE LTDA. SHENZHEN DANONE YILI DRINKS NUTRICIA EARLY LIFE NUTRITION NUTRICIA TRADING (SHANGHAI)
(BRAZIL) CO. LTD. (a) (CHINA) (SHANGHAI) CO. LTD. (CHINA) CO. LTD. (CHINA)
DANONE INC. AQUA D'OR MINERAL WATER NUTRICIA MIDDLE EAST DMCC (a)(b) NUTRICIA AS
(CANADA) (DENMARK) (UNITED ARAB EMIRATES) (DENMARK)
DANONE SA AGUAS FONT VELLA Y LANJARON HAPPY FAMILY HOLDING COMPANY (b) NUTRICIA MIDDLE EAST DMCC (a)(b)
(SPAIN) SA (SPAIN) (UNITED STATES) (UNITED ARAB EMIRATES)
STONYFIELD FARM INC. DANONE WATERS OF AMERICA INC. BLEDINA NUTRICIA SRL
(UNITED STATES) (UNITED STATES) (FRANCE) (SPAIN)
THE DANNON COMPANY INC. (a) EVIAN RESORT (b) DANONE BABY NUTRITION AFRICA NUTRICIA NORTH AMERICA INC.
(UNITED STATES) (FRANCE) & OVERSEAS (FRANCE) (UNITED STATES)
DANONE PRODUITS FRAIS SOCIÉTÉ ANONYME DES EAUX PT NUTRICIA INDONESIA NUTRICIA NUTRITION CLINIQUE
FRANCE (FRANCE) MINÉRALES D’EVIAN (FRANCE) SEJAHTERA (INDONESIA) S.A.S. (FRANCE)
DANONE SPA PT TIRTA INVESTAMA (a) PT SARIHUSADA GENERASI NUTRICIA IRELAND LTD. (a)
(ITALY) (INDONESIA) MAHARDHIKA (INDONESIA) (IRELAND)
DANONE JAPAN BONAFONT SA DE CV MELLIN SPA NUTRICIA ITALIA SPA

(JAPAN) (MEXICO) (ITALY) (ITALY)
CENTRALE LAITIÈRE GRUPO CUZCO INTERNATIONAL S DANONE DUMEX (MALAYSIA) SDN. NUTRICIA NORGE AS
(MOROCCO) DE RL DE CV (a) (MEXICO) BHD. (MALAYSIA) (NORWAY)
DANONE DE MEXICO ZYWIEC ZDROJ SA NUTRICIA NEDERLAND B.V. (a) NUTRICIA NEDERLAND B.V. (a)
(MEXICO) (POLAND) (NETHERLANDS) (NETHERLANDS)
DANONE SP Z.O.O. DANONE WATERS (UK & IRELAND) NUTRICIA POLSKA SP Z.O.O. (a) SORGENTE B.V.(b)
(POLAND) LTD. (UNITED KINGDOM) (POLAND) (NETHERLANDS)
DANONE PORTUGAL SA EVIAN -VOLVIC SUISSE SA NUTRICIA LTD (a) NUTRICIA POLSKA SP Z.O.O. (a)
(PORTUGAL) (SWITZERLAND) (UNITED KINGDOM) (POLAND)
DANONE LTD. DANONE HAYAT IÇECEK VE GIDA AS OJSC ISTRA - NUTRICIA NUTRICIA LTD (a)
(UNITED KINGDOM) (TURKEY) BABYFOODS (b) (RUSSIA) (UNITED KINGDOM)
DANONE INDUSTRIA OOO SIRMAGRUP IÇECEK AS DUMEX LTD. (a) NUTRICIA NORDICA AB
(RUSSIA) (TURKEY) (THAILAND) (SWEDEN)
OJSC UNIMILK COMPANY (a) COMPANIA SALUS SA NUMIL GIDA ÜRÜNLERI AS (a) NUMIL GIDA ÜRÜNLERI AS (a)
(RUSSIA) (URUGUAY) (TURKEY) (TURKEY)
(a) F or this consolidated company, (a) For this consolidated company, the (a) T his company also has a medical (a) T his company also has a medical
the activity is spread among several activity is spread among several nutrition activity presented in the nutrition activity presented in the
legal entities in its country. legal entities in its country. financial statements of the Medical financial statements of the Early
Nutrition Division. Life Nutrition Division.
(b) E vian Resort operates the Evian (b) For this consolidated company, the (b) F or this consolidated company,
casino. In that regard, it is subject activity is spread among several the activity is spread among several
to the control of the French Ministry legal entities in its country. legal entities in its country.
of the Interior and all regulations
that apply to gaming activities in
casinos.
The list of the Group’s consolidated companies by country appears in the Appendix of the present Registration Document.

Main fully consolidated but not fully owned companies

Ownership percentage of non-controlling interests as of December 31
Division Country Listing market (a) 2013 2014
Fresh Dairy
Danone CIS (b) Products CIS zone 49.1% 49.1%
Fresh Dairy
Danone Spain (c) Products Spain 23.4% 23.4%
Fresh Dairy
Centrale Laitière (d) Products Morocco Casablanca 31.3% 9.1%
(a) If the company is listed.
(b) The non-controlling interests in that group’s parent company have three representatives on the company’s board of directors (out of a total of seven
directors).
(c) The non-controlling interests in the company have two representatives on the company’s board of directors (out of a total of nine directors).
(d) Acquisition of an additional stake by the Group in 2014. Since that time, the non-controlling interests no longer have a representative on the company’s
board of directors.
Each of these companies operates the Group’s Fresh Dairy Pro- In the case of Centrale Laitière, the non-controlling shareholders
ducts activities in a given country or group of countries. Most of the that have put options represent 5% of the company’s share capital.
non-controlling shareholders of each of these companies hold put
These put options constitute the principal commitments and/or
options on their interest which are described in section 3.4 Balance
agreements between the Group and the non-controlling shareholders
sheet and financial security review in the section on Liabilities related
of certain fully consolidated companies in which the Group does not
to put options granted to non-controlling interest.
own a 100% equity interest.
Main publicly traded companies
As of December 31, 2014, the Group holds interests which are either • China Mengniu Dairy (Fresh Dairy Products, China) listed on
fully consolidated or accounted for using the equity method in the the Hong Kong Stock Exchange. The company is accounted for
following listed companies: using the equity method;
• Centrale Laitière (Fresh Dairy Products, Morocco) listed on the • Yakult Honsha (Fresh Dairy Products, Japan) listed on the Tokyo
Casablanca Stock Exchange. The company is fully consolidated; Stock Exchange. The company is accounted for using the equity
method.

Risk factors
2.7 Risk factors

Table of contents
Risk identification and control policy 28 Risks associated with the Group’s products 32
Risks associated with human resources 33
Operational risks related to the Group’s activity 28 Risks associated with information systems 33
Risks associated with price volatility and raw materials Risks of an internal control failure 33
availability28 Risks of failure of insurance coverage 34
Risks associated with the concentration of distribution 2
and the default of a customer 28 Legal and regulatory risks 34
Risks associated with competition 29 Risks associated with intellectual property 34
Risks associated with the geopolitical environment 29 Risks associated with regulations 34
Risks associated with economic conditions Risks associated with changing tax regulations 35
in the Group’s principal markets 29 Risks associated with changes in accounting standards 35
Risks associated with restructuring plans 30
Risks associated with the Group’s image and reputation 30 Industrial and environmental risks 35
Risks associated with weather conditions Industrial risks 35
and seasonal cycles 30 Risks associated with environmental regulations 36
Risks associated with consumers’ choices, preferences
Operational risks specific to the Group’s activity
and organization 31 or environmental considerations 36
Other environmental risks 36
Risks associated with the concentration of purchases
of some products and services from a limited number Financial risks 37
of suppliers 31
Introduction 37
Risks associated with the Group’s position
in certain markets 31
Currency risk 37
Risks associated with the Group’s

Financing and liquidity risk 37
acquisitions and partnerships 31 Interest rate risk 38
Risks associated with an unfavorable change Counterparty risk and credit risk 38
in business activity and business activity forecasts Securities-related risk 38
and their impact on impairment testing of intangible
assets and investments in associates 32 Insurance and risk coverage 38

Risk factors
Risk identification and control policy

Danone maintains an active risk identification and management policy • effectiveness and efficiency of internal processes, including
aimed at protecting and developing its assets and reputation and those related to the protection of net assets.
protecting the interests of its shareholders, employees, consumers,
The principal risk factors to which the Group believes it is exposed
customers, suppliers, the environment and its other stakeholders.
as of the date of this Registration Document are described hereafter.
This risk identification and management policy is described in the
Other risks that could adversely affect the Group may exist, even
Chairman’s report on internal control and risk management in
though the Group was unaware of them or considered them imma-
section 6.4 Internal control and risk management. It is designed to
terial as of the date of this Registration Document.
provide reasonable assurance – and not an absolute guarantee –
that the following main objectives will be achieved:
• reliability of financial information;
• compliance with applicable laws, rules and internal policies;
Operational risks related to the Group’s activity

Risks associated with price volatility and Risks associated with the concentration
raw materials availability of distribution and the default
Risk identification of a customer
The Group’s principal raw material needs consist primarily of: Risk identification
• materials needed to produce Danone’s food and beverage pro- While the end customers of Danone products are individual consu-
ducts, primarily milk and fruits (“food raw materials”); mers, the Group sells its products mainly to major retail and grocery
chains. Overall, the distribution market has become increasingly
• materials needed for packaging its products, primarily plastics concentrated globally and locally. A continuation of the trend to
and cardboard (“packaging”);
concentrate distribution at the global level along with the emergence
• energy supplies. They account for only a limited portion of the of key players at the local level would result in a smaller number
Group’s purchases. of customers for the Group companies and could lead to retailers
demanding better terms. This could affect the operating margin of
Variations in supply and demand at global or regional levels, weather
these companies and therefore of the Group, change their market
conditions, government controls, regulatory changes and geopolitical
shares and/or represent a counterparty risk in the event of a default
events could substantially impact the price and availability of (i) raw
by a major customer, and consequently have a significant adverse
materials, and (ii) materials needed to package certain Group pro-
effect on the Group’s activities and results.
ducts, which could have an adverse effect on its results. In particular,
a potential increase in the prices of these raw materials (especially In addition, certain subsidiaries of the Early Life Nutrition and Medical
milk) and other materials may not be passed on, either in full or in Nutrition Divisions also have commercial relations with public and
part, in the sales price of the Group’s products, notably in countries quasi-public organizations, health insurance and supplementary
whose economic environment has deteriorated, which could have health insurance companies, as well as hospitals, whose default
a significant adverse effect on the Group’s activities and results. risk is relatively limited but which have long payment terms. It is
possible that some of these organizations would collaborate and
Risk monitoring and management issue joint tenders, which could have a significant negative impact
In the context of high raw materials price volatility and to limit its on the results of the respective Divisions.
impact on the Group’s activity and results to the greatest extent
possible, the Group manages this cost inflation through actions Risk monitoring and management
described in section 2.5 Other elements related to the Group’s activity Danone’s international development results in a geographical distri-
and organization. bution that helps to diversify and limit the concentration of this risk
for a given customer. The relative share of Group sales generated
The Group’s principal raw materials risk exposure, in particular milk
with its leading international customers in 2014 is described in Note
and a sensitivity analysis are described in Note 5.7 of the Notes to
5.4 of the Notes to the consolidated financial statements.
the consolidated financial statements.
The Group has also taken measures that help to reduce this risk,
in particular action programs with respect to the sales and mar-
keting policies involving large, key accounts (see section 2.5 Other
elements related to the Group’s activity and organization) and Credit
Committees or their equivalent established in certain subsidiaries.
In 2014, the Group’s exposure to unpaid trade receivables not yet
impaired was limited (see Note 5.4 of the Notes to the consolidated
financial statements).

Risk factors
Risks associated with competition ject of criminal penalties and/or significant financial penalties. Any
period of political, regulatory or economic instability in a country
Risk identification in which the Group operates or any economic or political measure
The Group conducts its business in highly competitive markets that such as the ones described above that may be implemented in some
include large multinational companies and numerous local players countries could have a negative impact on the Group’s activities,
of different sizes: results and reputation.
• in Western Europe and North America, the Group’s markets tend Risk monitoring and management
to be relatively mature, and competition is therefore particularly Danone’s international growth results in a geographical distribution
intense, both in terms of pricing and innovations; that diversifies and limits the concentration of this risk for a given
• with respect to the Group’s activities in the rest of the world, country. In addition, the Group prepares action plans and implements
a few international food and beverage groups also hold strong measures aimed at reducing the potential impacts of this risk in the 2
positions in some emerging markets and seek to expand such areas of human resources, finance and legal affairs.
positions or enter new markets. Depending on the situation, the Group’s Security Department
In addition, certain retail and grocery chains, having developed their may participate in the development and implementation of these
own brands, could reduce the shelf space occupied by the Group’s plans and measures. In certain regions, it creates or consolidates
products in favor of their own products. relationships with State or private partners, which may be called
upon if necessary. The Security Department also gets involved in
The Group is thus facing national and international competitors, which situations where the safety of the State and/or international crises
are described in section 2.5 Other elements related to the Group’s may affect the activities of the Group’s subsidiaries.
activity and organization related to Competition. This competition could
lead the Group to reduce its prices in order to defend its market However, there can be no assurance that the results of the Group
shares, which could have a significant adverse effect on its results. will not be significantly affected by a deterioration of economic, poli-
tical or regulatory conditions or by a crisis in some of the countries
Risk monitoring and management where the Group is present.
The Group’s strategy and its implementation help to limit the effects
on the Group of competition from the leading players in its markets, Risks associated with economic conditions
notably through its strategy of (i) differentiation relative to its com- in the Group’s principal markets
petitors, especially in terms of product lines, price/quality ratios
and positioning, and (ii) development through organic growth and Risk identification
acquisitions. These elements of the Group’s strategy are described The Group’s activity and in particular its sales, trading operating
in sections 2.3 Strategic growth areas and 2.5 Other elements related income and cash-flows depend on the economic conditions in its
to the Group’s activity and organization. principal markets.
Risks associated with the geopolitical In periods of slowing economic growth and/or deficit and public
debt reductions that may occur in some countries, the Group may
environment have to contend with the following phenomena:
Risk identification • contraction in purchases by consumers, whose purchasing
Danone’s activities and employees can be subject directly or power has diminished, and/or change in consumption patterns
indirectly to the effects of a period of economic, political, social as a result of economic conditions;
or military instability in countries susceptible to experiencing or • increase of existing taxes or establishment of new taxes on
having recently experienced such a period, in particular in Africa, consumers and/or companies, especially in heavily-indebted
Argentina, and CIS countries. countries;
Also, some countries where the Group is present have regulations • specifically in the case of the Medical Nutrition Division, a reduc-
that are not very developed and/or not very protective (in particular tion in the insurance reimbursement of medical products and/or
with respect to intellectual property rights), and are often unstable pressure on prices and contraction in healthcare expenditures.
due to the influence of powerful local interests. Some of these
countries maintain foreign exchange controls and/or control the These changes could have a negative impact on the Group’s activities.
repatriation of profits and invested capital, impose taxes and other Also, as described in section 2.3 Strategic growth areas, in order to
payments and impose restrictions, sometimes retroactively, on ensure its long-term expansion, the Group’s growth strategy is based
the activities of multinational groups. In some countries, national primarily on a limited number of countries in which Danone has
and/or local authorities may also have recourse to laws and regu- strong positions in rapidly growing markets. If the Group’s activity
lations, or to any other measure having a similar effect, notably to in one or more of these countries were subjected to adverse trend,
foreign interests, that restrict the ownership rights and/or access it could have negative effects on the Group’s growth.
to liquidity and assets availability and/or the freedom to exercise
its activity and/or equivalent to confiscation, nationalization or Finally, given their economic and/or monetary situation, certain
expropriation of assets. countries as Argentina experience very high and potentially volatile
inflation, which may affect the Group’s activities and results.
Lastly, the Group conducts business in certain countries, notably
Iran, which may be targeted by economic and financial sanctions
imposed in particular by U.S. or European regulations; such sanc-
tions prohibit notably transactions with certain financial institutions
and require prior authorization with the proper authorities before
executing any fund transfers. If the Company and/or its subsidiaries
do not comply with these regulations, the Group could be the sub-

Risk factors
Risk monitoring and management These elements and additional information are presented in sec-
Danone’s international growth results in a geographical distribution tions 5.1 Danone social, societal and environmental approach and 5.2
that diversifies and, to a lesser extent, limits the concentration of Information concerning the Group’s social, societal and environmental
risk to economic conditions for a given country. The Group also relies performance in compliance with the Grenelle II law.
on (i) its reporting system to monitor its activity and the potential
impact of economic conditions in countries where it is present, and Risks associated with the Group’s image
(ii) its organization to take the necessary measures (adaptation of and reputation
the Group’s activity, its organization and, if necessary, restructuring
plans). In particular, with respect to the Group’s activities in Europe Risk identification
and in light of the significant deterioration in the consumer environ- The Group is exposed to criticisms of all types and origin, whether
ment, in 2012 Danone set goals to achieve cost savings and adapt well-founded or not and whether in good or bad faith, that could affect
its organizations in order to regain competitiveness (see section its image and reputation. The Group may therefore face negative
hereafter on Risks associated with restructuring plans). publicity that could result from a risk situation, or even a simple
allegation, concerning its activities and/or products.
Risks associated with restructuring plans Such events could adversely affect the Group’s sales, activities,
Risk identification results, image and growth prospects.
Danone works continuously to improve its efficiency in order to Risk monitoring and management
achieve better performance and anticipate adjustments needed to
respond to changes in the market, projects, competition, and with In order to limit the risk of criticism, Danone has developed gover-
respect to its internal organization, jobs and skills. This commit- nance rules and best practices – which are communicated to
ment to blending both short and medium-term visions may, in some the subsidiaries – notably with respect to (i) business conduct,
cases, result in difficult decisions regarding jobs (plant closings, (ii) societal responsibility applied to suppliers, (iii) relations with
restructuring plans with layoffs, etc.). local communities, and (iv) ethics. In order to ensure that these
rules and best practices are communicated and followed wit-
These decisions may be poorly understood and received by both hin the Group, the Group has integrated the subsidiaries’ as-
employees and local constituencies (local elected officials, govern- sessments with respect to these rules and best practices into
mental authorities, etc.) and could affect the Group’s relations with its Danone Way approach. Further information is available in
its employees, resulting in social disputes including, in particular, sections 5.1 Danone social, societal and environmental approach,
stoppages, strikes and other disruptions and, consequently, could 5.2 Information concerning the Group social, societal and environmental
have, in addition to the financial impacts, adverse effects on the performance in compliance with the Grenelle II law, and 6.4 Internal
Group’s reputation, activities and results. control and risk management.
Moreover, the Group cannot guarantee that it will successfully The Group has also established procedures to manage (i) risks so
implement these decisions, and specifically it may not achieve all as to avoid and anticipate potential crises, and (ii) crises in order to
of the cost reductions or expected changes and/or it may complete prevent the spread and scope of such criticisms and to limit their
them later than planned, which could have a negative impact on its impacts as much as possible.
activities and results. Such is particularly the case of the savings and
adaptation plan for the Group’s organizations in Europe, which was Risks associated with weather conditions
approved by the Group in 2012 and, which implementation started
in 2013 and continued in 2014. and seasonal cycles
Risk monitoring and management Risk identification
In order to limit the various risks associated with such decisions In some cases and for certain Group products, sales may be tied
(labor disputes, increase in local unemployment, risk on reputation), to weather conditions and seasonal cycles. In particular, beverage
Danone’s policy consists of (i) preparing a restructuring decision consumption typically peaks during the summer months, such that
as far in advance as possible, when the Group still has the time and relatively cool summer temperatures may result in substantially
resources to prevent and responsibly manage the social and human reduced sales of beverages, especially bottled water, in the corres-
impacts of such restructurings, and (ii) limiting their potential impact. ponding area compared to a normal year. Seasonal consumption
This policy is implemented through its organization of actions and cycles pertaining to certain Group products and weather variations
policies, in particular: could adversely affect the Group’s activities and results.
• ensuring ongoing employee dialogue within the company; Weather conditions can also have an impact on the prices and supply
of certain raw materials, and as a result on the Group. This risk is
• developing the employability of all employees; described in the section above Risks associated with price volatility
• signing collective conventions with International Union of Food and raw materials availability.
workers (IUF) that focus in particular on steps to be implemented
when changes in the company’s activity affect jobs as well as their
implementation, with an emphasis on a return to employment
and support for employees.

Risk factors
Risk monitoring and management and limit the concentration of this risk of weather changes for a
given region. Lastly, the Group relies on its operating experience
The intensity of the seasonal impact varies depending on the Group’s
(notably through the development of its product lines and mana-
business lines. Moreover, Danone’s international growth results in
gement of its markets) to limit the impact of weather conditions as
a geographical distribution of its activities that helps to diversify
much as possible.
Operational risks specific to the Group’s activity and organization

Risks associated with the concentration Risks associated with the Group’s
of purchases of some products acquisitions and partnerships 2
and services from a limited number Acquisitions
of suppliers Risk identification
The Group’s strategy consists of holding leading positions in each
Risk identification of the markets in which it operates. Given the context of continued
In connection with its policy of optimizing its purchasing, the concentration in the food and beverage industry, this strategy
Group may move to centralize the purchases of (i) certain goods involves the pursuit of growth opportunities through joint-ventures or
in particular raw materials (for example the ferments used in the acquisitions, as was the case in 2010 with the Unimilk transaction in
Fresh Dairy Products Division or powdered milk for the Early Life Russia and in other countries with YoCream (Fresh Dairy Products,
Nutrition Division in some Asian countries), and (ii) certain services United States) , Wockhardt (Early Life Nutrition and Medical Nutri-
(in particular sub-contracted services or information technology tion, India), Centrale Laitière (Fresh Dairy Products, Morocco), etc.
services) from a restricted number of suppliers.
Given notably the competitive landscape, the Group may not be able
If some of these suppliers were not able to provide the Group with to achieve the transactions that it contemplates for its development
the quantities and qualities of products or goods specified that the or external growth, which could have an adverse effect on its acti-
Group needs under the conditions set forth, or if the suppliers are vities, results and reputation.
not able to provide services in the required time period, the Group’s
In addition, acquisitions may have an adverse effect on the Group’s
activities and results could be materially adversely affected.
results and activities if it does not successfully integrate the acquired
Risk monitoring and management companies, provide the necessary resources and/or achieve all of
the expected synergies and cost savings, acquisitions may have a
In order to limit this risk, the Group selects and then monitors
negative impact on its activities and results.
and supervises its key suppliers. It also prepares and implements
procedures designed to secure its supplies and services as well as Finally, during the integration phase, acquisitions may generate risks
business continuity plans designating alternative suppliers. associated with the entities and practices pre-dating the acquisitions,
which, in the case of major acquisitions, could adversely affect the
Risks associated with the Group’s Group’s activities, results and reputation.
position in certain markets Risk monitoring and management
The Group draws up an integration program and provides the
Risk identification resources necessary for its implementation.
The Group is market leader in some of its markets. As a consequence,
In the case of the acquisition of the Unimilk group’s companies,
the Group may be accused by third parties of abusing a dominant
which now go by the names of Danone Russia, Danone Ukraine,
position in these markets and/or of engaging in anti-competitive
Danone Belarus and Danone Kazakhstan, they had been part of an
practices. Such allegations could affect the reputation of the Group,
integration plan, and have been integrated into the Group’s internal
and possibly result in investigations by competition authorities in
control system.
countries where the Group is present, legal proceedings or even
potential penalties. This could have an adverse effect on the Group’s Partnerships
activities and results.
Risk identification
Risk monitoring and management The relationships with partners of the Group in certain entities are
governed by contracts or documents that may provide for certain
The Group has developed, within its legal function, an international
decisions to be made either with the agreement of such partners or
network of competition law specialists who monitor this risk.
without the agreement of the Group. Such restrictions could make
The Group pays also close attention to this matter and seeks to limit it difficult for the Group to carry out its strategy in these entities,
the corresponding risk, mainly by communicating and promoting the which could have an adverse effect on the Group’s activities. More
Business Conduct Principles and Code of Conduct dedicated to the generally, problems of any kind encountered with joint-venture
sales functions, and the Group has integrated these rules and best partners could adversely affect the Group’s activities and results.
practices into its Danone Way approach in order to ensure that they In addition, certain agreements signed with partners may provide
are communicated and followed. Further information is available in the Group or its partners with call or put options on their stake.
sections 5.1 Danone social, societal and environmental approach, 5.2
Risk monitoring and management
Information concerning the Group social, societal and environmental
Danone carefully reviews the drafting of shareholders’ agreements
performance in compliance with the Grenelle II law, and 6.4 Internal
and ensures the implementation and maintenance of adequate
control and risk management.
governance with its partners.

Risk factors
Risks associated with an unfavorable Clearly, if certain Group products were actually or allegedly conta-
minated due to the non-detection of contaminants (even in trace
change in business activity and business amounts), product deterioration during the distribution phase or
activity forecasts and their impact on any other event, the Group’s activities, sales, brands, results and
reputation could be adversely affected.
impairment testing of intangible assets These risks of actual or alleged contamination could also occur (i)
and investments in associates upstream from the Group’s activity (with the suppliers or during
the transportation phase by suppliers), and (ii) downstream from
Risk identification its activity (with its customers and distributors or during the trans-
As part of the acquisition price allocation for acquisitions involving portation phase by its distributors).
groups or companies that are fully consolidated or consolidated
using the equity method, a significant amount of the acquisition Risk monitoring and management
price could be allocated to goodwill and to acquired brands with Danone’s priority is to avoid any contamination risk. To that end, the
an indefinite useful life. Specifically, a significant portion of the Group applies an uncompromising food quality and security policy,
acquisition price in connection with the Numico acquisition in 2007 which is implemented through a quality organization at both the
(Early Life Nutrition and Medical Nutrition) was allocated to goodwill central and local levels and makes it possible to achieve the targeted
and acquired brands with an indefinite useful life, and the same was level of food quality and security. The Group has established measures
true, albeit to a lesser extent, in connection with the acquisitions to limit contamination risk, in particular through the implementa-
of (i) the Unimilk group companies in 2010 (Fresh Dairy Products, tion of multiple controls of the production lines and throughout the
mainly Russia and Ukraine), and (ii) Centrale Laitière in 2013 (Fresh distribution chain as well as regular audits of its plants:
Dairy Products, Morocco). • the risk of contamination is classified into four categories (micro-
Acquired goodwill and indefinite useful life brands are not amortized. biological, chemical, physical and allergic) and depends on the
As with investments in associates, they are subject to an impairment nature of the products;
test at least once a year and whenever events or circumstances • it is controlled at each stage of the production and marketing
indicate that a reduction in value may have occurred. cycle: at the time of purchase and delivery of raw materials, the
An unfavorable change in business activity, business activity fore- production process, the packaging of products, the storage and
casts and assumptions used in the projection of cash-flows for the delivery of finished products to distributors and food retailers, the
purpose of the impairment tests, in particular with respect to the storage and shelving of finished products at the final sales points.
goodwill and brands of the Early Life Nutrition and Medical Nutrition Danone has also prepared and implemented a procedure at each
Divisions arising from the Numico acquisition, could result in the subsidiary that organizes (i) measures for halting production and
recognition of impairment charges, which could then have signi- withdrawing or even recalling products in certain cases, together
ficant adverse effects on the Group’s results. As for investments with the relevant institutions, and (ii) systematic, in-depth controls
in associates whose shares are listed, a significant or prolonged and inquiries to determine whether the Group has liability exposure.
decrease in their stock price could also result in impairment charges
that could adversely affect the Group’s results. Other health risks
Risk identification
Risk monitoring and management In the event that certain of the Group’s products (including recipes/
The Group draws up assumptions and business activity forecasts. formulas or certain active ingredients) were alleged to have harmful
Each year, it prepares a strategic plan and an annual budget for each short or long-term health effects or to have no health effects, or
subsidiary, analyzes them and, when deemed necessary, draws up if that were actually the case, the Group’s activities, results and
suitable action plans. reputation could be adversely affected to an even greater extent
The principal intangible assets and monitoring of their value are des- since the Group’s strategy is based on the development of products
cribed in Note 9 of the Notes to the consolidated financial statements. with a strong nutrition/health component.
The principal investments in associates and the monitoring of In addition, the food industry must deal with the growth in obe-
their value are described in Note 4 of the Notes to the consolidated sity and consumers, the medical professionals and governmental
financial statements. organizations are increasingly concerned about the resulting public
health consequences. Although the Group has a large portfolio of
Risks associated with the Group’s products product lines enabling it to offer a wide variety of products mee-
ting the various needs and changing tastes of consumers, local
Danone’s activity exposes the Group to the risk – known or merely governments could take actions against the food industry, such as
perceived, anticipated or alleged – of product contamination or imposing surtaxes or more stringent regulation on the advertising
that its products are harmful, which, in addition to the immediate of certain products. Such actions could adversely affect not only
financial impact, could also have an adverse impact on the Group’s the Group’s results but also its reputation.
reputation, brands, activities and profitability.
Contamination risk The health of its consumers lies at the core of Danone’s history
Risk identification and mission of “bringing health through food to as many people as
The actual or alleged existence of (i) chemical and microbiological possible” and Danone’s strategy in the nutrition and health area is
contaminants in raw materials and packaging, (ii) cross-conta- consistent with the guiding principles set by health authorities in the
mination with allergens, and (iii) non-compliance with the safety respective countries and is formalized in the Group’s Food Nutrition
measures of finished products when they leave the factory and Health Charter. In implementing this strategy, the Group pays close
throughout the distribution chain could have a significant adverse attention to scientific fundamentals, the regulatory environment
impact on the Group’s reputation, brands and sales. and the origin of ingredients used through organizations, actions
and procedures that it implements, such as:

Risk factors
• the Group’s Research and Development strategy and organization, Risk monitoring and management
which are described in section 2.5 Other elements related to the
As described in section 5.2 Information concerning the Group social,
Group’s activity and organization;
societal and environmental performance in compliance with the Grenelle
• the development of partnerships with internationally renowned II law related to Compensation and promotion, Danone offers compe-
scientific organizations and an ongoing dialogue with public titive and fair compensation, and to that end has developed appraisal
health authorities and consumer associations; systems and procedures that are also described in this section.
• the establishment of an internal procedure to ensure the consis- Danone has also developed a social, societal and environmental
tency, credibility and scientific foundation of health and nutri- responsibility approach that it rolls out in its subsidiaries, including
tion claims that are disseminated in its communications (see in emerging countries. Danone believes that its approach and the
section 5.2 Information concerning the Group social, societal and actions implemented contribute to the Group’s appeal. This approach
environmental performance in compliance with the Grenelle II law and the related actions are described in sections 5.1 Danone social, 2
relating to Fair trade practices). societal and environmental approach and 5.2 Information concerning
the Group social, societal and environmental performance in compliance
The Group also pays close attention to risks “perceived” by consu-
with the Grenelle II law.
mers such as obesity. To monitor this risk, the Group has developed
a network of key contacts (including, in particular, consumer asso-
ciations) in order to discuss common topics of concern in both a
Risks associated with information
formal and informal manner and to offer clarifications. systems
Further information is presented in sections 2.3 Strategic growth Risk identification
areas, 2.5 Other elements related to the Group’s activity and organi-
The Group is increasingly dependent upon common infrastructures
zation and 5.2 Information concerning the Group social, societal and
and information technology applications for all its business activities.
environmental performance in compliance with the Grenelle II law.
The main risks are related to the availability of information technology
Risks associated with innovation services and the confidentiality and integrity of data. Any failure of
these infrastructures, applications or communication networks,
and consumer taste
any interruption linked to the failure of security of data centers or
Risk identification networks as well as any accidental or intentional loss of data and
The Group’s activities are subject to trends in the tastes and pre- any use of data by third parties, could block or slow down production
ferences of consumers. If the Group cannot predict, identify, and or sales, delay or taint certain decisions and, more generally, have
interpret trends in the tastes and dietary habits of consumers, its an adverse effect on the Group’s activities and results.
sales and results could be adversely affected.
In addition, most of the former Numico subsidiaries, as well as
Risk monitoring and management the recently acquired Unimilk group’s companies, rely on different
The Group has developed a broad portfolio of product lines that information systems, specific to certain subsidiaries, which may
allows it to offer a wide variety of products to respond to different increase the complexity of the monitoring and management of
consumption needs and situations. Also, as described in section these risks by the Group.
2.5 Other elements related to the Group’s activity and organization
related to Marketing, the Group strives to foster ongoing dialogue Risk monitoring and management
with its consumers by adapting to new forms of communications The Group’s policy is to consolidate data centers. In particular, the
and consumer patterns. Group’s central applications are hosted in a highly-secure data
center managed by IBM.
Risks associated with human resources In addition, Danone is developing and implementing specific infor-
Risk identification mation systems (Themis, Artemis, etc.) in its subsidiaries to optimize
and streamline information technology investment while promoting
The availability, quality and commitment of Danone’s employees
global synergies and reducing risks. The former Numico and Unimilk
play an essential role in the Group’s success. If the Group’s ability
subsidiaries are gradually benefitting from the implementation
to attract and retain employees with the necessary skills or talents
of Themis, Danone’s integrated information system. Additional
– notably in the emerging countries and/or the Group’s principal
information is provided in section 2.5 Other elements related to the
markets – were to diminish or be insufficient – especially in an
Group’s activity and organization.
environment marked by efforts to control wage and salary costs
and/or in light of the impact of the economic crisis on the Group’s
various annual and multi-year variable compensation plans – then
Risks of an internal control failure
Danone’s ability to achieve its objectives could be adversely affected, Risk identification
which could also negatively affect its results.
The risk of an internal control failure is mainly associated with (i)
reliability of financial information, (ii) compliance with the appli-
cable laws, regulations and internal policies, and (iii) efficiency and
effectiveness of internal processes, including those related to the
protection of the Group’s assets.
If the Group’s internal control systems were to experience failures
or prove to be inadequate, particularly in the area of fraud, the
quality of its financial information, the ability of its executives to
take the correct decisions and, more generally, its results, could
be adversely affected.

Risk factors
Risk monitoring and management all aspects for reducing the risk of fraud or the potential impact of
any fraud (awareness, prevention, detection, investigation, penalty,
The Group has implemented an internal control system, which
reporting and continuous improvements to the internal control
is described in section 6.4 Internal control and risk management.
system) (see section 6.4 Internal control and risk management) limit
Regardless of how adequate it may be, this system can only provide
the Group’s exposure to this risk.
reasonable assurance and not an absolute guarantee with respect
to the achievement of the company’s objectives, given the limita-
tions inherent in any control process. While the Group cannot fully
Risks of failure of insurance coverage
exclude the risk of an internal control failure, the performance level Risk identification
and widespread deployment of its five internal control components
The Group’s insurance coverage could be insufficient and/or the
(Control environment, Risk identification and assessment, Control
Group could be unable to renew its insurance programs on accep-
activities, Information and communication, and Continuous moni-
table terms, which could have an adverse effect on its financial
toring) reduce the Group’s exposure to this risk (see section 6.4
situation and results.
Internal control and risk management).
Similarly, the Group cannot exclude all risks associated with fraud Risk monitoring and management
or corruption. However, the risk profile of its activities and the See section Insurance and risk coverage hereafter.
existence of a widely disseminated anti-fraud program that covers
Legal and regulatory risks

Risks associated with intellectual The Group is continuing its efforts to develop awareness among staff
with access to and/or in possession of sensitive and/or confidential
property information and provides updates to employees on best practices
with a view to limiting this risk, notably as regards the use of infor-
Risk identification mation systems and social networks.
The Group owns rights to brand names, registered designs and
patterns, copyrights and domain names throughout the world. Risks associated with regulations
The territorial extent of the protection depends on the significance
Risk identification
of the products and activities concerned. The protection is global for
products intended for the international arena, and local or regional As a player in the food and beverage industry present in numerous
for other products. countries, the Group’s activities are subject to extensive laws and
regulations enacted by many national and international authorities
The Group also owns patents, licenses, proprietary recipes and and organizations, notably with respect to corporate governance, tax
substantial expertise related to its products and packaging, as and customs duties, commercial laws and regulations, competition
well as to their manufacturing processes. Finally, the Group has authorities, labor law, hygiene and food safety, quality control and
established licensing agreements with its subsidiaries and partners the use of water sources. The Group’s activities are also subject to
that use these intellectual property rights. Intellectual property good conduct rules such as those of the World Health Organization
represents a significant portion of the Group’s assets. (WHO) regarding the marketing of breast-milk substitutes and the
Danone cannot be certain that third parties will not attempt to corresponding rules at the various local regulatory levels. The Group
infringe on its intellectual property rights. Moreover, the Group’s may also be subject to customs duties, trade barriers or penalties
potential recourse to intellectual property rights protection varies that may be imposed.
by country. The degree of protection may be different, as may be More particularly, the Group’s activities are subject to numerous
the Group’s implementation of a defense strategy. If the Group laws and regulations that are always changing and becoming
was unable to protect its intellectual property rights against such increasingly restrictive, relating, in particular, to the protection of
infringement or misuse, its results and growth could be negatively health and food safety, consumer protection, nutrition and claims
affected, as could its reputation. about the health benefits of products marketed by the Group,
In addition, certain employees have access to confidential documents along with environmental claims, the reimbursement of certain
in the course of their work. The loss or dissemination of sensitive products of the medical nutrition and the Group’s advertising and
and/or confidential information could harm the Group’s interests promotional activities.
and reputation, and have an adverse effect on its results. Any change in these laws or regulations, any decision by an authority
regarding these laws or regulations or any other event that would
Risk monitoring and management challenge the nutritional or health claims related to certain products
In order to monitor its assets and ensure the protection, manage- could have a significant impact on the Group’s activities, increase
ment and defense of these rights in a coherent and optimal manner, its costs, reduce consumer demand and possibly result in litigation.
the Group has drawn up an “Intellectual Property” charter. The
Group regularly contacts each of its subsidiaries in order to update Moreover, by strengthening its presence in many emerging countries,
its intellectual property rights portfolio and thereby protect and subsidiaries and the Group’s teams are increasingly involved in zones/
defend, to the best of its ability, the brand names, graphic design, countries that may be exposed, to varying extents, to issues of fraud,
forms, packaging, advertisements, websites, etc. that are used by corruption and compliance with relating national and international
the Group. The Group also takes all appropriate legal measures, laws and regulations, which could have a significant impact on the
notably through actions for infringement and/or unfair competition, Group’s activities, reputation and results.
to protect and defend its intellectual property rights at both inter- Finally, the Group is involved, or could be involved, in litigation
national and local level. associated with its normal course of business. This litigation may
result in criminal and/or civil consequences (including financial

Risk factors
consequences) on the Group. Should the result of such litigation be Any change in tax regulations through increases in existing taxes
unfavorable for the Group, this could adversely affect the Group’s or the establishment of new taxes involving in particular tax rates,
financial situation and its image or reputation. The Group’s exposure transfer prices, dividends, social security contributions, special
to actual or potential major litigation and major litigation, where tax plans or tax exemption rules could adversely affect the Group’s
applicable, are presented in Note 14.2 of the Notes to the consoli- results.
dated financial statements.
As described in the above section related to Risks associated with
Risk monitoring and management economic conditions in the Group’s principal markets, efforts from
some countries to reduce their indebtedness could lead to increases
Danone’s international development results in a geographical dis-
in existing taxes or the creation of new taxes, which could adversely
tribution of its activities that helps to diversify and limit the concen-
affect the Group’s results.
tration of the risk of more restrictive regulations for a given country.
Furthermore, the Group has developed a legal organization at the Risk monitoring and management 2
local (subsidiaries) and central levels. The subsidiaries and the Danone’s international development results in a geographical
Group, assisted by their legal departments and/or external legal distribution of its activities that helps to diversify and limit the
advisors, take steps to ensure that they comply, at all times, with concentration of the risk of increased taxes for a given country.
applicable laws and regulations. In addition, the Group developed and
implemented internal policies and procedures relating to compliance Risks associated with changes
detailed in section 6.4 Internal control and risk management. In order
to ensure that such measures are commonly practiced within the
in accounting standards
Group, Danone has integrated compliance into its quality approach Risk identification
and internal control system.
The consolidated financial statements of Danone and its subsidiaries
To the best of the Group’s knowledge and as of the date of this Regis- are prepared in accordance with International Financial Reporting
tration Document, no governmental, court, arbitration or any other Standards (IFRS) as adopted by the European Union. The standards
proceeding to which the Group is a party is currently ongoing which and interpretations applied to prepare these consolidated financial
would be likely to have a material impact on the Group’s financial statements are also consistent with IFRS as determined by the
position or profitability other than those mentioned in Note 14.2 of International Accounting Standards Board (IASB).
the Notes to the consolidated financial statements.
Standards, amendments and interpretations that may be prepared
and/or become applicable could have an adverse impact on the
Risks associated with changing tax Group’s consolidated financial statements.
regulations
Risk identification See section 4.1 Consolidated financial statements and Notes to the
The Group is subject to corporate income tax as well as various other consolidated financial statements related to Changes in accounting
expenses, taxes and duties related to its activity, the repatriation of principles and Current IASB and IFRIC projects.
dividends, social security contributions, etc.
Industrial and environmental risks

Industrial risks Moreover, its plants (buildings and equipment) are designed by
taking into account measures recommended by prevention/pro-
Natural risks (floods, earthquakes, hurricanes, tection experts and that often go beyond the applicable national
tornadoes, etc.) safety standards, which helps to limit the exposure of these sites
Risk identification to natural risks.
The Group’s geographic expansion sometimes leads it to be pre- The Group’s insurance policy also helps to reduce the potential
sent in regions exposed to natural risks, notably seismic. Natural financial impact from a natural disaster (see section hereafter).
disasters could therefore (i) cause damage to persons, property or
the environment, and (ii) directly affect the Group or its consumers Other risks
or the regions where it is present and potentially have a negative Risk identification
impact on the Group’s activities, financial situation and image. Like any industrial activity, the Group’s sites are exposed to various
risks: fire, explosion, equipment failure, security systems failure or
human error in equipment operation or works management. Such
For its new site development projects, the Group conducts a risk
events could cause damage to persons, property or the environ-
exposure analysis for such risks in order to choose the site with the
ment and possibly have a negative impact on the Group’s activities,
least possible exposure. If, however, the site chosen (or the exis-
financial situation and image.
ting site in the case of an expansion) is exposed to these risks, the
building construction and equipment installation take into account
recommendations from prevention/protection experts to limit the
potential impacts of these natural risks.

Risk factors
Risk monitoring and management Risk monitoring and management

In order to reduce, if not eliminate, these risks and their poten- In order to comply with applicable environmental regulations, the
tial impact, the Group has decided to elevate personal safety and Group has established organizations and implemented procedures
industrial plant and environmental protection to core values of its and tools, in addition to setting targets for reducing its environ-
policy. These values are “measured” through various programs with mental footprint.
ambitious targets and action plans monitored by Group departments,
notably the Divisions’ industrial departments. These various initiatives along with the measures taken in 2014
are described in section 5.2 Information concerning the Group
Risks associated with environmental social, societal and environmental performance in compliance with
the Grenelle II law.
regulations
No major provision for contingencies and charges related to environ-
Risk identification mental protection has been recognized in the consolidated balance
In the course of its activities, the Group is subject to numerous sheet as of December 31, 2014.
environmental regulations (mainly regarding water, air, the use of
natural resources, noise and waste), which are constantly evolving Risks associated with consumers’
and becoming increasingly stringent. Specifically, the Group’s
activities are subject to the following environmental regulations:
choices, preferences or environmental
With respect to water, air and the use of natural resources
considerations
The Group’s activity is subject to obtaining authorizations to operate Risk identification
and/or appropriate permits: Consumers’ purchasing preferences, notably in the most developed
• in Europe, pursuant to the laws relating to sites designated for countries, are increasingly influenced by environmental concerns
environmental protection; (in particular (i) greenhouse gas emissions, mainly methane emis-
sions by cows producing the milk used by the Group, and (ii) the
• in other countries, pursuant to similar regulations. preservation of water resources), and such preferences are at times
Access to water sources and resources is sometimes linked to supported by NGOs (Non-Governmental Organizations). Distributors
national or local regulations. Changes in these regulations could also pay increasing attention to communications with consumers
negatively affect the availability of water intended to be bottled and (in particular the labeling of the products’ carbon footprint). If the
marketed by Danone. Group is unable to anticipate changing consumer preferences, in
particular through the implementation of measures to (i) reduce
With respect to waste and packaging and (ii) disclose environmental impacts, its activities, results and
Danone’s activities are subject to special regulations, notably reputation could be negatively affected.
European directives:
• directive 2008/98/EC on waste management; Risk monitoring and management
The Group undertakes continuous efforts to reinforce its societal
• directive 94/62 (amended in 2004) relating to packaging and and environmental commitment and to improve the management
packaging waste, which requires source reductions, reductions of its business activities throughout the entire product life cycle,
in the use of substances hazardous to the environment, recycling, notably through its Nature strategy. Danone’s Nature strategy, its
and recovery. implementation and achievements in 2014 are described in section 5.2
With respect to greenhouse gas emissions Information concerning the Group social, societal and environmental
The Group’s activities are subject to the following regulations: performance in compliance with the Grenelle II law.
• the European directive of 2003 establishing a trading system; Other environmental risks
• quotas for greenhouse gas emissions and the transpositions of Risk identification
the National allocation plans in the European Union.
Other environmental risks are mainly water pollution (essentially
With respect to emissions quotas, five of the Group’s plants in the organic and biodegradable pollution), environmental risks related
European Union are subject to such quotas (whose impact on the to (i) cooling installations (ammonia and other cooling liquids),
Group’s financial situation is not significant), while the other sites (ii) the storage of raw materials or products for the cleaning and
are currently below the minimum eligibility threshold. disinfection of the Group’s plants (acid and alkaline products),
In the future, if the Group is unable to limit the emissions of these especially when these plants are located in residential areas, and
five sites and comply with allocated quotas, it will incur a fine and (iii) wastewater treatment. In the event that the Group is exposed to
would have to purchase the shortfall on the market for greenhouse potential environmental liability as a result of a significant accident
gas quotas. The quantity of quotas allocated at no charge will gra- or pollution, its results and reputation could be adversely affected.
dually diminish and be reduced to zero in the years ahead, which
will represent an additional cost for the Group.
More generally, the Group cannot guarantee that it will always be
in compliance with these multiple regulations, which are complex
and constantly changing. Also, bringing the Group’s activities into
compliance with new regulations or changes in existing regula-
tions could be costly or even limit the Group’s capacity to pursue
or develop its activities.

Risk factors
Risk monitoring and management a “paper/cardboard packaging and deforestation study” to address
the risks related to these challenges.
Danone prepares and implements actions, procedures, tools and
policies aimed at (i) preventing and reducing these risks, (ii) mea- These various initiatives as well as the measures taken in 2014 are
suring and controlling the Group’s impact and implementing action described in section 5.2 Information concerning the Group social,
plans when necessary, and (iii) preparing and making public the societal and environmental performance in compliance with the Gre-
Group’s positions, including for example a “Forest impact study” and nelle II law.
Financial risks
Introduction • translating into euros the financial statements of subsidiaries
denominated in a foreign currency: the Net sales and the Trading 2
Risk identification operating income are generated in currencies other than the
As part of its normal business, the Group is exposed to financial risks, euro (see section 2.2 Presentation of the Group related to Princi-
especially foreign currency, financing and liquidity, interest rate, pal markets for the top ten countries in terms of contribution to
counterparty risks, securities-related risks and commodity risks. consolidated net sales). Consequently, fluctuations in exchange
rates of foreign currencies against the euro may have an impact
Additional and quantified information, in particular with regard to on the Group’s income statement. These fluctuations also have
the Group’s residual exposure (after hedging) to these various risks, an impact on the carrying amount in the consolidated balance
are provided in the Notes 5.4, 5.7, 10.3, 10.7, 11.2 and 12.3 to 12.7 of sheet of assets and liabilities denominated in currencies other
the Notes to the consolidated financial statements. than euro.
Risk monitoring and management In accordance with IAS 39, Financial instruments: recognition and
The Group’s policy consists of (i) minimizing and managing the measurement, foreign exchange rate fluctuations can have an
impact that its exposure to financial market risks could have on its impact on the Group’s results and consolidated shareholders’
results and, to a lesser extent, on its balance sheet, (ii) monitoring equity (see Notes 12.3 and 12.4 of the Notes to the consolidated
and managing such exposure centrally, (iii) whenever the regulatory financial statements).
and monetary frameworks so allow, executing the financial tran-
sactions locally or centrally, and (iv) using derivative instruments
only for the purpose of economic hedging. Pursuant to its operational currency risk hedging policy, the Group’s
residual exposure (after hedging) was significantly reduced during
Through its Treasury and Financing Department, which is part of the the fiscal year (see Note 5.6 of the Notes to the consolidated finan-
Group Finance Department, the Group possesses the expertise and cial statements).
tools (trading room, front and back office software) to act on different
financial markets following the standards generally implemented by Pursuant to its financial currency risk hedging policy, the Group’s
first-tier companies. In addition, the Internal Control and Internal residual exposure (after hedging) is not material (see Note 10.7 of
Audit Departments review the organization and procedures applied. the Notes to the consolidated financial statements).
Lastly, a monthly treasury and financing report is sent to the Group The Group has established a policy for monitoring and hedging the
Finance Department, enabling it to monitor the decisions taken to net position of certain subsidiaries, with regular assessments of
implement the previously approved management strategies. risks and opportunities to use hedging instruments.
Currency risk Financing and liquidity risk

Risk identification Risk identification
Due to its international presence, the Group could be exposed to The Group does not use debt in either a recurring or a significant
foreign exchange rate fluctuations in the three following situations: way in connection with its operating activities. Operating cash flows
• its operating activities: the Group mainly operates on a local are generally sufficient to finance the Group’s business operations
basis and consequently in the currency of the country in which it and organic growth.
is operating, thereby incurring no foreign exchange risk. However, The Group may, however, take on additional debt to finance acqui-
the location of some of the Group’s production units may result sitions or, occasionally to manage its cash cycle, particularly when
in inter-company billings in foreign currencies. This applies dividends are paid to the Company’s shareholders.
particularly to the Early Life Nutrition and Medical Nutrition
Divisions and, to a lesser extent, to the Fresh Dairy Products The Group’s objective is always to keep this debt at a level enabling
Division. Similarly, some raw materials are billed or indexed in it to maintain the flexibility of its financing sources.
foreign currencies, in particular as regards the Waters and Fresh The Group’s liquidity risk arises mainly from the maturities of its
Dairy Products Divisions. Lastly, the Group is also developing (i) interest-bearing liabilities (bonds, bank debt, etc.), and (ii) non-
some export activities. The sales and operating margin of some interest-bearing liabilities (liabilities on put options granted to non-
subsidiaries are therefore exposed to fluctuations of foreign controlling interests), and from payments on derivative instruments.
exchange rates against their functional currency;
As part of its debt management strategy, the Group regularly seeks
• in relation to its financing activities: in application of its risk new financing, especially to refinance its existing debt.
centralization policy, the Group manages multi-currency finan-
cings and liquidities; In countries where centralized financing is not accessible, when
medium-term financing is unavailable and/or in cases where cer-
tain financing existed at a company prior to being acquired by the
Group, the Group is exposed to liquidity risk on limited amounts in
these countries.

Risk factors
More generally, it is possible that in the event of a systemic finan- Risk monitoring and management
cial crisis, the Group could be unable to access the financing or
The Group has established a policy for monitoring and managing
refinancing it needs on the credit or capital markets, or to access
interest rate risk aimed at limiting the volatility of its financial result
such finance on satisfactory terms, which could have an adverse
through the use of hedging instruments.
impact on its financial situation.
Meanwhile, the Group’s ability to access financing and its interest Counterparty risk and credit risk
expense may depend in part on its credit rating from credit rating
agencies. The Company’s short-term and long-term credit ratings Risk identification
and their possible downgrade could result in higher financing costs The Group is exposed to counterparty risk, especially on banking
for the Group and affect its access to financing. counterparties, as part of its financial risk management activities.
Finally, most of the financing agreements entered into by the As part of its normal activities, the Group has financial institutions
Company (credit facilities and bonds) include a change of control as counterparties, mainly to manage its cash and foreign exchange
provision, which offers creditors a right of early repayment in the rate and interest rate risks. The failure of these counterparties to
event a change in control of the Company causes its rating by the comply with one or more of their commitments could adversely
financial rating agencies to fall below investment grade. affect the Group’s financial situation.
Risk monitoring and management Risk monitoring and management

Under its refinancing risk management policy, the Group reduces its The Group’s banking policy aims to reduce its risks by focusing on
exposure to financing risk by (i) centralizing its financing sources, the quality of counterparty credit and by applying limits for each
(ii) borrowing from diversified financing sources, (iii) arranging a counterparty The Group’s exhibition at these risks is described
significant portion of its financing as medium-term financing, (iv) in the Note 5.4 and 12.6 of the Notes to the consolidated financial
maintaining financing sources available at all times, and (v) ensuring statements.
that it is not subject to any covenant relative to maintaining financial
ratios in connection with financing contracts. In those countries Securities-related risk
where centralized financing is not available, when medium-term
financing is unavailable and/or in the case of some existing financing Risk identification
in a company prior to the acquisition by the Group of a controlling Risk related to the Company’s shares
interest in it, certain Group companies may, for operational reasons, Pursuant to its share buyback policy and the authorizations granted
be required to borrow from local sources. From a Group perspective, by the Shareholders’ Meeting, the Company may choose to repur-
the amounts borrowed are relatively small, whether considered chase its own shares. Any fluctuations in the price of the Company’s
individually or in total, given the level of operating cash flow that is treasury shares repurchased in this manner have no impact on the
generally sufficient to finance their operations and organic growth. Group’s results. Any decrease in the Company’s share price could,
however, have an impact on the potential amount paid out in shares
Further information on the financing structure and on financial
in connection with the financing of acquisitions.
security is provided in section 3.4 Balance sheet and financial secu-
rity review. Risk related to other shares
The Group holds stakes in listed companies. Any significant and/‌or
Interest rate risk prolonged decline in the prices of these companies’ shares could
have an adverse impact on the Group’s results.
Risk identification
The Group is exposed to interest rate risk on its financial liabilities as Risk monitoring and management
well as its cash and cash equivalents. Through its interest-bearing The Group has established a monitoring policy for this risk. The
debt, for example, the Group is exposed to the risk of interest rate Group’s exhibition at these risks is described in the Note 11.2 and
fluctuations that affect the amount of its financial expense. 12.7 of the Notes to the consolidated financial statements.
In addition, in accordance with IAS 39, Financial Instruments: Reco-
gnition and Measurement, interest rate fluctuations may have an
impact on the Group’s consolidated results and consolidated equity
Insurance and risk coverage
(see Note 10.7 of the Notes to the consolidated financial statements). As regards risks other than financial market risks (which are descri-
bed in the above section), the Group has a global insurance coverage
policy that is based on stringent underwriting assessments and uses
insurance products from the world market, depending on availability
and local regulations. This risk coverage is therefore consistent
for all companies over which the Group has operational control.

Risk factors
Insurance programs for property damage, business interruption and Lastly, insurance programs for potentially significant special risks,
commercial general liability risk are negotiated at Group level for which require centralized management, such as the liability of the
all subsidiaries, with leading international insurers. The “all risks Group’s corporate officers, fraudulent acts, and assorted risks
except” policies are based on the broadest guarantees available on (taking products off the market, credit risk, environmental risk,
the market, coupled with deductibles of varying amounts, which are etc.) are negotiated according to market availability, on the basis
relatively low compared to those extended to groups of comparable of scenarios estimating the probable impact of any claims. The
size to reflect the autonomous management of the subsidiaries. The total cost of this category of coverage amounted to approximately
guarantee limits are set on the basis of worst case scenarios and €4 million in 2014.
on insurance market availability. These programs were renewed
In addition, in order to optimize its insurance costs and properly
on January 1, 2013 for a term of two years; the total cost of these
control its risks, the Group has a self-insurance policy through
programs was approximately €27 million in 2014.
its captive reinsurance subsidiary Danone Ré (a fully consolidated
Insurance programs for “traditional” risks, which require local Group entity). The self-insurance policy applies to specific risks 2
management, such as coverage of vehicle fleets, guarantees for the where the costs can be accurately estimated as the Group is aware
transportation of merchandise, work-related accidents (in countries of their frequency and financial impact. This concerns essentially (i)
in which these accidents are covered by private insurance), and coverage of property damage, business interruption, commercial
insurance specific to some countries, are negotiated and managed general liability, and transportation for a large majority of the Group’s
in accordance with local practices and regulations, within the fra- companies (these self-insurance programs are limited to frequent
mework of precise directives provided and controlled by the Group. claims with a maximum of €7.5 million per claim), and (ii) for the
Total premiums came to approximately €21 million in 2014. French subsidiaries payments for death, long-term disability, and
education. Moreover, stop-loss insurance protects Danone Ré against
any increased frequency of claims. These self-insurance programs
are managed by professional insurers under Danone’s supervision
and the provisions are determined by independent actuaries.

Danone’s business
highlights in 2014
and outlook
for 2015

3
3.1 Business highlights in 2014
Highlights of 2014
42
42
3.5 Outlook for 2015
Material change in financial or trading position
65
65
Other business activities in 2014 43 Subsequent events 65 3

Profit forecasts or estimates 65
3.2 Consolidated net income Statutory auditors’ report on the profit forecasts 67
review 46
2015 financial communication calendar 68
Sales46
Trading operating income and trading operating margin 50 3.6 Financial indicators not
Net financial income (expense) 52 defined by IFRS 68
Tax rate 52
Underlying net income and underlying fully diluted

3.7 Documents available
earnings per share 52 to the public 70
Dividend for the 2014 fiscal year 53
3.3 Free cash-flow 54

Free cash-flow 54
Consolidated statement of cash-flows 55
3.4 Balance sheet and financial

security review 56
Simplified consolidated balance sheet 56
Financing structure and financial security 56
Liabilities related to put options granted to non-

controlling interests 61
Net debt and net financial debt 63
Shareholder’s equity 64
Off-balance sheet commitments 64

Danone’s business highlights in 2014 and outlook for 2015
Business highlights in 2014
Danone’s consolidated financial statements and the Notes to the consolidated financial statements are presented in section 4.1 Consolidated
financial statements and Notes to the consolidated financial statements. Risk identification and control policy, as well as the major operational
risks relating to the Group’s business sectors or to the Group’s activity and organization, are described in section 2.7 Risk factors.
Unless indicated otherwise, amounts are expressed in millions of euros and rounded to the nearest million. Generally speaking, the values
presented are rounded to the nearest unit. Consequently, the sum of the rounded amounts may differ, albeit to an insignificant extent, from the
reported total. In addition, ratios and variances are calculated on the basis of the underlying amounts and not on the basis of the rounded amounts.
The Group reports on financial indicators not defined by IFRS, internally (among indicators used by the chief operating decision makers) and
externally. These indicators are defined in section 3.6 Financial indicators not defined by IFRS:
• like-for-like changes in net sales, trading operating income, trading operating margin, underlying net income and underlying net income per
share;
• trading operating income;
• trading operating margin;
• underlying net income;
• underlying fully diluted EPS or current net income – Group share, per share after dilution;
• free cash-flow;
• free cash-flow excluding exceptional items;
• net financial debt.
The Group also uses references that are defined in section 1.3 Information about the Registration Document related to References and definitions.
3.1 Business highlights in 2014

Highlights of 2014
Highlights were detailed in the main press releases issued by duties strengthened, Franck RIBOUD remains Chairman of the
the Group during 2014. Board and Emmanuel FABER appointed Chief Executive Officer;
• on January 8, 2014, Danone announced its decision to terminate • on October 31, 2014, Danone and Mengniu expand their strategic
its existing supply contract with Fonterra and making any further alliance to infant milk formula in China. Danone, Mengniu and
collaboration contingent on a commitment by its supplier. Danone Yashili today announced that they have signed an agreement
is also initiating proceedings in the New Zealand High Court, as allowing Danone to take part in a private placement by Yashili
well as arbitration proceedings in Singapore; totaling €437 million, at a price of HK$3.70 per share. Upon com-
pletion of the subscription, Mengniu, currently Yashili’s majority
• on January 16, 2014, Danone announced the implementation of shareholder, will hold a 51.0% equity interest and Danone will
a liquidity contract;
hold 25.0%. As part of this agreement, Danone will recommend
• on February 12, 2014, Danone raised its stake in China’s leading candidates to serve as Yashili’s CEO. Danone and Mengniu want
dairy company Mengniu; to use this expanded alliance to grow Yashili and develop a wide
range of products that meet the very highest standards in this
• on May 28, 2014, Danone announced the result of the option to category. Through their alliance, Danone, Mengniu and Yashili
receive the 2013 dividend payment in shares;
intend to expand and strengthen their cooperation in the infant
• on June 11, 2014, Danone announced plan to close plants in Casale milk formula (IMF) business in the People’s Republic of China
Cremasco (Italy), Hagenow (Germany) and Budapest (Hungary); (PRC). The parties will study the possibility of a minority equity
investment by Yashili in Danone’s subsidiary Dumex China;
• on July 18, 2014, Danone partners with Brookside, enabling
Danone to acquire 40% stake in the holding company Brookside. • on November 3, 2014, Danone acquires an additional 21.75%
With 2013 revenues of around €130 million, Brookside is East equity interest in Centrale Laitière (Morocco) for an amount of
Africa’s leading dairy products group. Established in Kenya in €278 million. The transaction will raise Danone’s equity stake
1993, Brookside operates a unique distribution platform enabling in Centrale Laitière to 90.86%;
a daily access to over 200,000 outlets. The company manages
the largest milk collection network in East Africa, with 140,000
• on December 12, 2014, Danone confirms strategic priorities and
strengthens management team.
farmers in the region;
See also section 3.7 Documents available to the public.
• on September 2, 2014, Danone announced change in its governance
with, chairman and CEO functions to be separated, with Chairman’s

Other business activities in 2014

Acquisitions, disposal of company shares
Main changes in fully consolidated companies
Ownership percentage as of December 31
(in percentage) Division Country Transaction date (a) 2013 2014
Main companies consolidated for the first time during 2014
Infant formula production and Early Life

packaging companies (b) Nutrition New Zealand July − 100.0%
Main consolidated companies with change in ownership percentage
Fresh Dairy
Centrale Laitière Products Morocco November 68.7% 90.9%
Main companies that are no longer fully consolidated as of December 31
Group’s fresh dairy products Fresh Dairy 3

companies in China (c) Products China July 100.0% 20.0%
Group’s fresh dairy products Fresh Dairy
companies in Indonesia Products Indonesia December 100.0% 0.0%
(a) Month of the fiscal year.
(b) NEW ZEALAND CAN AUCKLAND LTD, SUTTON GROUP LTD, K&B LTD, which produce and package drinks, notably infant formula. The companies
have been restructured and/or renamed as DANONE NUTRICIA NZ LTD and NUTRICIA CAN MANUFACTURERS LTD.
(c) DANONE DAIRY BEIJING and DANONE DAIRY SHANGHAI CO. LTD. Danone now owns 20% of the new group formed together with the Mengniu group’s
fresh dairy products companies.
Main changes in investments in associates

Main companies accounted for using the equity method for the first time in 2014
Fresh Dairy
Mengniu (b) Products China January 4.0% 9.9%
Danone Group’s and Mengniu
group’s fresh dairy products Fresh Dairy
companies in China (c) Products China July − 20.0%
Fresh Dairy
Brookside (d) Products Kenya July − 40.0%
Main associates with change in ownership percentage
Fresh Dairy
Yakult (e) Products Japan January 20.0% 21.3%
Main companies no longer accounted for using the equity method as of December 31, 2014
– – – – – –
(b) INNER MONGOLIA MENGNIU DAIRY (GROUP) CO. LTD. This company was recognized within Investments in other non-consolidated companies in 2013.
(c) INNER MONGOLIA MENGNIU DANONE DAIRY CO. LTD.
(d) BROOKSIDE AFRICA LIMITED. With 2013 revenues of around €130 million, Brookside is East Africa’s leading dairy products group. Established in
Kenya in 1993, Brookside operates a unique distribution platform that provides daily access to over 200,000 sales outlets. The company manages the
largest milk collection network in East Africa, with 140,000 farmers in the region. By uniting international expertise in fresh dairy products with
Brookside’s regional expertise and robust supply chain, the partnership will enable Brookside to accelerate its growth by expanding its product portfolio
and strengthening its geographical presence in key markets in the East African region, including Uganda and Tanzania. This partnership has significantly
strengthened the platform Danone is in the process of constructing in Africa.
(e) YAKULT HONSHA CO. LTD. The Group’s ownership percentage increased mechanically in 2014 due to the purchases of its own shares carried out by
Yakult in 2013 and reflected in the Group’s consolidated financial statements in 2014.

Reduction of carbon footprint continue to improve corporate governance by increasing the Board’s
independence (with the percentage of independent Directors rising
Danone products depend on natural ecosystems. It is thus in its from 71% to 77% at the end of the General Meeting), the number
best interest to take care for the environment an integral part of of women Directors (up from 29% to 38%), and the expertise and
its business activities. diversity of its composition.
Since carbon footprint is a global indicator that reflects a wide
range of environmental criteria, Danone has committed to reducing Research and Development
the carbon intensity (grams of CO 2 per kilo of product sold) of its Fresh Dairy Products
products very significantly over the past several years. As a result
of action plans deployed to this end, the Company and its affiliates In 2014, the Fresh Dairy Products Division continued its research
reduced their carbon intensity by -42% (based on constant scope of on the impact of the consumption of yogurt as an essential food
consolidation, excluding Unimilk group’s companies, and on emis- categor y in terms of diet and health. It financed independent
sions under Danone’s direct responsibility – packaging, industrial studies performed by academic researchers. In Spain, a study of
activities, logistics and end of life) from 2008 to 2014. people whose average age was 37 showed that those who consu-
med at least one yogurt per day had a reduced risk of obesity. This
See also section 5.2 Information concerning the Group’s social, societal study was published in the international journal “The SUN cohort
and environmental performance in compliance with the Grenelle II law. study, Nutrition, Metabolism & Cardiovascular Diseases” in 2014.
Meanwhile, a different study that analyzed current consumption
Social and societal responsibility data in Sao Paolo, Brazil showed that adults (ages 18 to 59) who
These activities are described in sections 5.2 Information concerning consume at least four yogurts per week ensure greater coverage
the Group’s social, societal and environmental performance in com- of nutritional needs and enjoy better quality of life. These results
pliance with the Grenelle II law and 5.3 Funds sponsored by Danone. were released at the World Congress of Public Health Nutrition Las
Palmas in November 2014.
Governance The Fresh Dairy Products Division also worked with scientific ins-
At its meeting on February 19, 2015, Danone’s Board of Directors titutions such as the Institut Pasteur, INRA and Harvard Medical
approved draft resolutions for the Group’s Annual General Meeting School. These scientific collaborations focused on such topics as
of Shareholders, to be held on April 29 this year. understanding intestinal flora, its changes and the impact of diet or
probiotics on the richness of this flora. These studies were published
Acting on the recommendation of the Nomination and Compensa- in 2014 in journals – Nature Biotechnology, ISME (Journal of the
tion Committee, the Board of Directors will ask shareholders to International Society for Microbial Ecology) and PLOS One (Public
approve the renewal of the appointments of Jean LAURENT, Lead Library of Science) – and presented at a symposium co-sponsored by
Independent Director, Jacques-Antoine GRANJON, Benoît POTIER, Yakult at Harvard Medical School (United States) in September 2014.
Mouna SEPEHRI and Virginia A. STALLINGS, whose current terms
are expiring. Finally, the Division pursued a major innovation project that led
to the launch of the Greek yogurts Oikos and Danio across Europe
Meeting on February 19, 2015, the Board also noted former Director and the Americas (United States and Brazil). In 2014, the Danonino
Richard GOBLET D’ALVIELLA’s decision not to seek a new term bottle was launched in Europe and then America in a redesigned
as Director. Speaking on behalf of the Board, Franck RIBOUD and more child-friendly packaging format. Meanwhile, the Zakvaska
expressed his deep gratitude for Richard GOBLET D’ALVIELLA’s brand posted strong gains in Russia.
active contribution to Danone’s Board and Committees for 12 years.
Waters
Acting on the recommendation of the Nomination and Compensa-
In 2014, the Waters Division’s Research and Development depart-
tion Committee, the Board of Directors will ask shareholders to
ment, which develops innovative solutions to promote healthier
fill this directorship by appointing Serpil TIMURAY to the Board.
hydration for consumers, continued its efforts in the aquadrinks
Serpil TIMURAY qualifies as an Independent Director under the
and packaging areas:
AFEP-MEDEF governance code.
A native of Turkey, 45-year-old Serpil TIMURAY holds a degree in
• the Division continued to develop the line of aquadrinks (beve-
rages made from water and fruit juice), with the launch of Vit’ in
business administration from Bogazici University in Istanbul. She
Indonesia, sugar-free versions in Argentina and Uruguay, and
began her career in 1991 at Procter & Gamble, where she was later
a line of carbonated aquadrinks in Mexico. Consistent with its
on appointed to the Executive Committee of Procter & Gamble Turkey.
strategy, the Group develops product lines that are adapted to
In 1999, she moved to Groupe Danone as the Marketing Director
the specific local tastes and traditions of each country where
and a member of the Executive Committee for the Fresh Dairy
the Waters Division is active;
Products subsidiary in Turkey. From 2002 to 2008, she served as
General Manager of Danone Turkey, overseeing the acquisition and • in the packaging area, the Group continues to develop a 100%
integration of several companies in the region. In 2009 she joined plant-based plastic bottle, with various bottle types blow-molded
Vodafone Group as the Chief Executive Officer of Vodafone Turkey, and filled. It is also pursuing the development of innovative pac-
contributing to its considerable growth. Since January 2014, Serpil kaging formats, notably with the launch of Evian’s “The Drop,”
TIMURAY is serving as the Regional CEO of Africa, Middle East and which won the 2014 Diamond Pentaward for global innovation
Asia-Pacific and as a member of the Executive Committee of Voda- in packaging.
fone Group. Her widely recognized skills in executive positions, her
The Group also continued to conduct scientific research on the
success in helping international groups grow their business, and her
health benefits of water and to collaborate with scientific partners
thorough knowledge of markets that are critical for Danone will be
EASO (European Association for the Study of Obesity) and ISN
valuable assets for the work of the Board of Directors.
(International Society of Nephrology). All of the innovative findings
The Board notes that these renewals and this new appointment were presented at the sixth annual H4H (“Hydration For Health”)
are in keeping with its commitment, made several years ago, to symposium with a special focus on children’s hydration.

Lastly, the Group is developing awareness-raising programs on the partners, they work to build solid clinical evidence for the Group’s
benefits of water, notably in Mexico among women and employees products.
in their working place.
In 2014, a major study on age-related loss of muscle mass, strength
Early Life Nutrition and function was completed. The results of this PROVIDE study were
presented at the European Society for Clinical Nutrition and Meta-
The food that a mother and her child eat during The concept of early
bolism (ESPEN) conference in September 2014. Pivotal studies are
life nutrition, focusses on the principle that what a mother and her
also under way with nutritional treatment in the early Alzheimer’s
child eat in the first 1,000 days, i.e. from the first day of pregnancy
stages (LipiDiDiet) and severe cow’s milk allergy (ASSIGN, PRESTO).
until the child is two years old, can significantly affect the child’s
health later in adulthood. Another key area is to optimize consumers’ experience with our
products. For example, significant changes were made to optimize
The Danone Nutricia Research center, which is dedicated to maternal
the taste of the metabolic product line (Anamix®, Lophlex®) and
and infant nutrition, is progressing research and scientific discove-
Souvenaid®.
ries in order to better understand the science behind the first 1,000
days of life, and in particular on:
Legal arbitration proceedings
• maternal physiology during pregnancy and lactation; Following a statement by the New Zealand government and Fonterra
• the benefits of breast milk and lactation; on August 2, 2013 warning that batches of ingredients supplied by
Fonterra to four Danone plants in Asia-Pacific might be contaminated
• the metabolism of infants and young children; with Clostridium botulinum bacteria, Danone has reviewed its recourse
• the development of the intestinal function and microbiota, the and compensation options and decided to initiate proceedings in 3
immune system and the brain; the New Zealand High Court, as well as arbitration proceedings in
Singapore to bring all facts to light and to obtain compensation for
• the development of healthy eating habits; and the harm it has suffered. Proceedings are in progress.
• product development and technology to apply science to products. Company and its subsidiaries are parties to legal proceedings
To that end, the three Research and Development centers (Utrecht, arising in the normal course of business, in particular by compe-
Singapore, Shanghai) work closely with a global network of colla- tition authorities in certain countries. Provisions are recognized
borators – from opinion leaders in a specific area to healthcare when an outflow of resources is probable and the amount can be
professionals, scientists and political decision-makers. The strength reliably estimated. 
of this network enables the development of special products which
To the best of the Group’s knowledge, no other governmental, court
are optimized to contribute to healthy growth and development
or arbitration proceedings are currently ongoing, to which the Group
in the first 1,000 days. Through its understanding of the needs of
is a party that are likely to have, or have had in the past 12 months,
mothers, infants and young children around the world as well as
a material impact on the Group’s financial position or profitability.
science based on nutritional standards for products, the research
center seeks to develop nutritionally optimal products for each
stage in the first 1,000 days of life.
Major contracts and related party
Danone Nutricia Research consistently delivers high quality and
transactions
food safety standards for its products by ensuring that quality is a The Group granted put options to third parties with non-controlling
priority for every employee. interests in certain consolidated subsidiaries, with these options
giving the holders the right to sell part or all of their investment in
In 2014, the research teams launched a line of services and products
these subsidiaries.
– covering everything from pregnancy and lactation to formulas for
young children – in several European markets to set up an optimal As of December 31, 2014, financial liabilities related to these options
program for future health. This unique concept is based specifically totaled €2,558 million and are classified as financial debt. The
on metabolic, cerebral and immune system health. It is marketed main commitment involves Danone Spain, for €1,030 million as of
under the Profutura brand. December 31, 2014 and Danone-Unimilk entity for €912 million (see
section 3.4 Balance sheet and financial security review).
Medical Nutrition
Related party transactions are described in Note 15 of the Notes to
The Medical Nutrition division strives to be a pioneer in the area of
the consolidated financial statements.
nutritional discoveries to help people to live longer healthier lives.
To that end, Research and Development teams focused their efforts See also section 6.5 Statutory auditors’ special report on related party
in 2014 on memory and brain health, frailty and muscle health and agreements and commitments.
allergy and gut health. Through our clinical study programs with

Consolidated net income review
3.2 Consolidated net income review

Year ended December 31
(in € millions except per-share data in €, percentage and bps) 2013 2014 Change
Net sales 21,298 21,144 +4.7%(a)

Trading operating income (c) 2,809 2,662 +3.7% (a)
Trading operating margin (c) 13.19% 12.59% -12 bps (a)
Underlying net income (c) 1,636 1,561 +3.6% (a)
Underlying fully diluted EPS (c) 2.78 2.62 +2.5% (a)
Free cash-flow excluding exceptional items (c) 1,549 1,401 -9.6% (b)
(a) Like-for-like and after treatment of over-inflation during the year.
(b) As reported.
(c) See definition section 3.6 Financial indicators not defined by IFRS.
Sales
Consolidated net sales
Consolidated sales stood at €21,144 million in 2014, down -0.7% from The impact of changes in scope of consolidation were neutral on the
the figures reported in 2013. Excluding the impact of changes in the whole (+0.1%), reflecting both the deconsolidation of various Fresh
basis for comparison, which include exchange rates and scope of Dairy Products operations (in Saudi Arabia in 2013, and in China
consolidation, sales were up +4.7%. This organic growth reflects a and Indonesia in 2014) and the full consolidation of companies in
-1.5% decline in sales volume and a +6.2% increase in value. which Danone acquired a controlling interest in 2013, in particular
Centrale Laitière (Morocco), YoCrunch (United States), Sirma (Turkey)
The negative impact of fluctuations in exchange rates was -5.5% and
and Happy Family (United States).
reflects a marked decline in certain emerging currencies, including
the Russian ruble, the Argentine peso and the Indonesian rupiah.
Sales by Division
Like-for-like net Like-for-like
(in € millions except percentage) 2013 2014 sales growth volume growth
Net sales by Division
Fresh Dairy Products 11,790 11,129 +1.5% -6.6%

Waters 3,903 4,186 +11.6% +7.5%
Early Life Nutrition 4,263 4,397 +6.1% +1.7%
Medical Nutrition 1,342 1,432 +7.9% +5.6%
Total 21,298 21,144 +4.7% -1.5%

Fresh Dairy Products Brands and new products

The Greek-style yogurt segment has remained one of the Division’s
Sales main growth drivers, especially in North America with the Light&Fit
The Fresh Dairy Products Division recorded sales of €11,129 million and Oikos brands, as well as in France and Brazil with the replications
in 2014, up 1.5% on a like-for-like basis. This growth resulted from of this product line under the Danio brand. The Group is the fresh
the combined impacts of a -6.6% decline in sales volume and a dairy products market leader in all of the 38 principal countries
robust +8.1% increase in prices, reflecting the actions taken in where it is present, with a 26% market share in 2013 (source:
certain regions to improve the product portfolio mix. Nielsen). The Indulgence segment (“gourmet” brands) also recorded
strong growth, notably the Danissimo brands in Russia and Griego
Like-for-like volume Like-for-like net sales in Europe and Latin America.
growth growth
3.2 % The Group is the fresh dairy products market leader in all of the 37
principal countries where it is present, with a 26% market share in
1.7 % 1.5 % 2014 (source: Nielsen).
2013 (6.6 %) 2013 2014 Waters

Sales
The Waters Division recorded an excellent performance in 2014,
with sales up 11.6% on a like-for-like basis to €4,186 million. This
growth reflected the combined impact of a +7.5% increase in sales 3
volume and +4.1% increase in prices.
2014 Like-for-like volume Like-for-like net sales
growth growth
Main Markets 11.2 % 11.6 %

In Europe, sales continued to decline in 2014, albeit at a slower pace
than in the previous year. This decline reflected the continued drop
in sales volume, which was partially due to market trends but also
to greater selectivity in the use of discounting and the elimination of 7.5 %
certain product lines. These measures were implemented gradually 6.8 %
over the course of 2014 in order to improve the product portfolio mix.
In the United States, after several years of robust growth the
category’s growth ebbed in 2014, notably in the Greek yogurt segment.
Danone confirmed its position as the market leader and undertook
many initiatives in terms of innovation, distribution and partnerships
in order to continue developing the category.
Sales in the CIS region were marked by very high milk price inflation, 2013 2014 2013 2014
which led to several major price increases in this region beginning
in the third quarter of 2013. These increases enabled Danone to
increase the value of its product portfolio, notably through a positive Main markets and new products
mix effect linked to the favorable performance of high value-added
The Division’s performance resulted in part from the solid growth
products. Overall sales volumes contracted sharply, however,
in Europe along with rapid growth in emerging countries, notably
illustrating significant sales volume declines for lower value items
in the Asian markets where the roll-out of the Mizone aquadrinks
such as milk and fermented products. Overall, full-year sales were
brand is continuing apace.
solid despite a slowdown in the second half.
In 2014, the Division maintained its policy of innovation and product
Sales growth remained solid in Latin America, in particular in Brazil,
portfolio renovation, notably with the introduction of new flavors in
where the Division recorded double-digit growth. Growth in the
the aquadrinks line, new packaging formats and the launch of a new
Africa/Middle East region was more modest in 2014 than in 2013,
brand identity for the international brand Volvic.
mainly as a result of flat sales in Morocco given the unfavorable
economic climate there.

Early Life Nutrition Medical Nutrition

Sales Sales
The Early Life Nutrition Division recorded sales of €4,397 million The Medical Nutrition Division recorded a very strong perfor-
in 2014, up +6.1% on a like-for-like basis. This increase resulted mance in 2014, with sales rising by +7.9% on a like-for-like basis to
from +1.7% growth in sales volume and a +4.4% increase in prices. €1,432 million. This growth consisted of a +5.6% increase in sales
volume and a +2.3% increase in prices.
In the first half of the year, the Division’s growth remained affected
by the false alarm triggered by its supplier Fonterra in August Like-for-like volume Like-for-like net sales
2013, which resulted in recalls of certain infant formula products growth growth
in eight Asian markets. In the second half, however, the Division’s
performance benefited from the favorable base impact in these eight 7.9%
markets, most of which have since returned to their pre-crisis levels.
Like-for-like volume Like-for-like net sales

growth growth 5.6% 5.8%
5.5%
6.1%
3.6%
1.7% 2013 2014 2013 2014
(0.7%) 2014 2013 2014

Main markets
2013 The Division’s performance reflected solid growth of its activity
in Europe on the one hand and the dynamic growth in its principal
Main markets emerging markets such as China, Brazil and Turkey. Across all re-
gions, growth is driven by the pediatric nutrition brands Neocate and
Europe recorded a very satisfactory performance, sustained by
Nutrini, whose performances remained above the Division’s average.
strong demand for international brands, notably Aptamil and Nutrilon.
In Asia, sales performances remained mixed. In Indonesia, sales
were particularly robust, marked by double-digit growth. In China,
the market most affected by the Fonterra false alarm in 2013, de-
mand for all Group brands grew throughout 2014. The Nutrilon brand
thereby continued its strong growth, notably in the ultra-premium
segment and in the specialized retail distribution channel (“mom
& baby stores”). The Group is also benefiting from the surge in
e-commerce sales, which is drastically changing consumer pur-
chasing trends in China. Meanwhile, Dumex brand sales remained
below their projected levels.
Latin America and the Africa/Middle East region continued to record
strong, double-digit growth.
The infant formula product category continued to drive growth,
whereas sales in the weaning food category continued to fall.

Sales by geographic area

Sales Sales
Like-for-like breakdown by breakdown by
net sales Like-for-like geographic geographic
(in € millions except percentage) 2013 2014 growth volume growth area in 2013 area in 2014
Net sales by geographic area
Europe excl. CIS 8,197 8,522 +2.0% -0.9% 39% 40%

CIS & North America (a) 4,713 4,525 +5.0% -6.9% 22% 22%
ALMA (b) 8,388 8,097 +7.4% +0.5% 39% 38%
Total 21,298 21,144 +4.7% -1.5% 100% 100%
(a) North America = United States and Canada.
(b) ALMA = Asia-Pacific/Latin America/Middle-East/Africa.
Europe
3
The Europe region recorded sales of €8,522 million in 2014, up +2.0% the lowest-margin segments such as milk and fermented products.
on a like-for-like basis. This increase was driven by the Early Life In the United States, Danone confirmed its position as the leader
Nutrition Division, which benefited from the robust demand for its in the Fresh Dairy Products category even as the market slowed in
international infant formula brands such as Aptamil and Nutrilon. 2014 after several years of robust growth.
Growth remained solid in the Waters and Medical Nutrition Divisions.
Sales in the Fresh Dairy Products Division continued to fall, but at ALMA
a slower rate than in 2013. The ALMA zone generated sales of €8,097 million in 2014, up +7.4%
on a like-for-like basis. The Waters Division in Asia and the Fresh
CIS &North America Dairy Products Division’s activities in Latin America were the main
The CIS & North America zone recorded sales of €4,525 million in contributors to this growth. Meanwhile, the Early Life Nutrition
2014, up +5.0% on a like-for-like basis. Sales in the CIS region were Division’s activities in Asia continued to be significantly affected by
marked by significant price increases against a backdrop of high the false alarm triggered by its supplier Fonterra in August 2013,
milk price inflation. The price increases enabled Danone to improve which led to the recall of certain infant formula products in eight
its product portfolio mix while sharply reducing sales volumes in Asian markets.
Sales breakdown by quarter
First quarter Second quarter Third quarter Fourth quarter Total

(in € millions) 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014
By Division
Fresh Dairy Products 2,952 2,809 3,071 2,831 2,913 2,796 2,854 2,693 11,790 11,129
Waters 887 895 1,104 1,179 1,089 1,169 823 944 3,903 4,186
Early Life Nutrition 1,177 1,029 1,206 1,042 924 1,084 956 1,241 4,263 4,397
Medical Nutrition 322 328 339 354 333 366 348 384 1,342 1,432
By geographic area
Europe excl. CIS 2,005 2,053 2,155 2,208 2,068 2,156 1,969 2,105 8,197 8,522
CIS & North America (a) 1,163 1,154 1,197 1,176 1,183 1,153 1,170 1,042 4,713 4,525
ALMA (b) 2,170 1,854 2,368 2,022 2,008 2,107 1,842 2,114 8,388 8,097
Total 5,338 5,061 5,720 5,406 5,259 5,416 4,981 5,261 21,298 21,144

First quarter Second quarter Third quarter Fourth quarter Total

2014 2014 2014 2014 2014
Like-for-like change (c)

Like-for-like change
Reported change
Reported change
Reported change
Reported change
Reported change
(in percentage)
By Division
Fresh Dairy Products -4.8% +3.9% -7.8% +2.4% -4.0% +0.7% -5.7% -1.0% -5.6% +1.5%
Waters +0.9% +8.9% +6.8% +13.1% +7.3% +11.8% +14.6% +12.3% +7.3% +11.6%
Early Life Nutrition -12.6% -7.7% -13.6% -9.2% +17.3% +19.2% +29.9% +28.1% +3.1% +6.1%
Medical Nutrition +1.8% +5.2% +4.4% +7.3% +10.1% +10.1% +10.3% +8.7% +6.7% +7.9%
By geographic area
Europe excl. CIS +2.4% +0.5% +2.5% +0.1% +4.2% +2.8% +6.9% +4.8% +4.0% +2.0%
CIS & North America (a) -0.8% +7.8% -1.8% +7.0% -2.6% +3.3% -10.9% +2.0% -4.0% +5.0%
ALMA (b) -14.6% +0.5% -14.6% +2.0% +4.9% +13.5% +14.7% +14.0% -3.5% +7.4%
Total -5.2% +2.2% -5.5% +2.3% +3.0% +6.9% +5.6% +7.5% -0.7% +4.7%
(c) Like-for-like and after treatment of over-inflation during the year.
Trading operating income and trading operating margin

Consolidated trading operating income trends, by selective and competitive price increases, by optimization
of the mix, and, finally, by additional efforts to reduce costs. A focus
and trading operating margin on optimizing raw material, production and logistics costs led to
Trading operating income totaled €2,662 million in 2014, compared continued high productivity. In addition, most of the cost-reduction
with €2,809 million in 2013. plan for Europe was finalized by the end of 2014 and delivered the
savings anticipated.
Danone’s trading operating margin stood at 12.59%, down -60 bps
as reported, reflecting: Danone continued to invest in its growth drivers, with no change
(on a like-for-like basis) in amounts spent on marketing, sales and
• a -20 bps decline due to changes in the scope of consolidation, research and development compared with 2013.
resulting primarily from the integration of Centrale Laitière
(Morocco), YoCrunch (United States) and Sirma (Turkey) ; Selling expense was €5,209 million in 2014 (€5,425 million in 2013),
or 24.6% of consolidated sales (25.5% in 2013).
• a -28 bps decline due to trends in exchange rates and overinflation
in Argentina in 2014 ; and General and administrative expense was €1,743 million in 2014
(€1,707 million in 2013), or 8.2% of consolidated sales (8.0% in 2013).
• a -12 bps decline in trading operating margin like-for-like.
Research and Development costs totaled €272 million in 2014 (€275
As expected, the consequences of the false alert on quality triggered million in 2013), or 1.3% of consolidated sales (1.3% in 2013) (see
by Fonterra in August 2013 and the decline in sales of Dumex brand section 3.1 Business highlights in 2014).
products in China in particular continued to undermine Danone’s
growth and profitability in 2014. Other operating items stood at €(511) million, and mainly reflected
expenses related to cost-reduction and organizational adaptation
Cost of goods sold totaled €11,056 million in 2014 (€10,977 million plans rolled out by the Company and its affiliates, especially in
in 2013), or 52.3% of consolidated sales (51.5% in 2013). Key Europe (€(186) million for the all plans), and the €(249) million in
developments during the year included a very steep rise in the cost impairment for Dumex reflecting a relaunch for the brand that was
of milk and dairy ingredients. This surge was offset by solid growth longer than initially anticipated.

Trading operating income and trading operating margin by Division

Trading operating income Trading operating margin
(in € millions except Like-for-like
percentage and bps) 2013 2014 2013 2014 change
Fresh Dairy Products 1,219 1,033 10.35% 9.28% -67 bps

Waters 509 539 13.04% 12.88% +93 bps
Early Life Nutrition 837 828 19.62% 18.83% -40 bps
Medical Nutrition 244 262 18.16% 18.28% +89 bps
Total 2,809 2,662 13.19% 12.59% -12 bps
The Fresh Dairy Products Division’s trading operating margin was The Early Life Nutrition’s trading operating margin was 18.83% in
9.28% in 2014, down -67 bps on a like-for-like basis. The backdrop of 2014, down -40 bps on a like-for-like basis. The impact of the false
high milk price inflation weighed heavily on the Division’s profitability. alarm triggered by Fonterra in August 2013, and in particular the drop
in Dumex brand sales in China, adversely affected this profit margin
The Waters Division’s trading operating margin was 12.88% in 2014,
as did the substantial inflation in milk and milk ingredient prices. 3
a robust +93 bps increase on a like-for-like basis. This increase was
largely due to the Division’s increased sales volume and a favorable The Medical Nutrition Division’s trading operating margin was
mix effect linked to the strong growth in the aquadrinks segment. 18.28% in 2014, up +89 bps on a like-for-like basis relative to 2013.
The continued gains recorded by this margin in 2014 reflected the
Division’s solid sales volume growth in Europe despite an overall
environment marked by pressure on health expenditures.
Trading operating income and trading operating margin by geographic area

Trading operating income Trading operating margin
(in € millions except Like-for-like
percentage and bps) 2013 2014 2013 2014 change
Europe excl. CIS 1,182 1,336 14.42% 15.67% +158 bps

CIS & North America (a) 450 387 9.56% 8.56% -63 bps
ALMA (b) 1,177 939 14.03% 11.60% -157 bps
Total 2,809 2,662 13.19% 12.59% -12 bps
The trading operating margin for the Europe region, excluding the The trading operating margin of the ALMA zone was 11.60% in 2014,
CIS countries, was 15.67% in 2014, up +158 bps on a like-for-like down -157 bps on a like-for-like basis. This decline reflected in
basis. The region’s profitability benefited from the strong growth particular the drop in the trading operating margin due to the false
in the international infant formula brands as well as the favorable alarm triggered by Fonterra in August 2013 along with strong milk
performances of the Waters and Medical Nutrition Divisions. price inflation throughout all the countries of the zone.
The trading operating margin of the CIS & North America zone
was 8.56% in 2014, down -63 bps on a like-for-like basis. High milk
price inflation weighed on profitability in this zone, notably in the
CIS countries.

Net financial income (expense)

Market risks exposure and management policy
See section 2.7 Risk factors.
Net financial income (expense)

(in € millions) 2013 2014
Interest income on cash, cash equivalents and short term

investments 76 94
Interest expense on financial debt (269) (274)
Cost of net financial debt (193) (179)
Other financial income 52 5

Other financial expense (122) (137)
Other financial income or expense (70) (132)
Net financial income (expense) (263) (312)
Cost of net financial debt Other financial income (expense)

In 2014, the cost of net financial debt was €(179) million (€(193) In 2014, Other financial income and expense was €(132) million
million in 2013). (€(70) million in 2013).
Cost of net debt declined despite higher net financial debt than in The change in Other financial income and expense resulted primarily
2013. This decline was linked in particular to lower interest rates from the exceptionally high basis for comparison in 2013, which
and the benefits of bond issues that enabled the Company to extend recorded a capital gain linked to Danone’s disposal of its interest
the average maturity of its debt at favorable market conditions. in SNI as part of the transaction that led to its takeover of Centrale
Laitière (Morocco).
Tax rate
The underlying tax rate for the full year was 30.45% in 2014, stable Moreover, when including the non-current items, the Group’s effective
compared with 2013. This tax rate excludes the non-current items tax rate was 32.6% in 2014 (32.4% in 2013) and the differential with
and the tax income and expense pertaining to these items (see the legal tax rate in France in 2014 and 2013 is provided in Note 8
table hereafter). of the Notes to the consolidated financial statements.
Underlying net income and underlying fully diluted earnings per share
The net income amounted to €1,253 million in 2014 (€1,550 million the year, Danone also booked a €54 million charge representing
in 2013). The net income – Group share amounted to €1,119 million impairment of interests in some affiliated companies consolidated
in 2014 (€1,422 million in 2013). on an equity basis (recorded as non-current).
Share of profit of associates Underlying net income

The sharp change in net income of affiliated companies also largely Underlying net income stood at €1,561 million in 2014, up +3.6%
reflects the exceptionally favorable basis for comparison in 2013, from 2013 like-for-like and down -4.6% as reported. Underlying
boosted by the €226 million revaluation of Danone’s historical 29.2% fully diluted EPS was €2.62, up +2.5% like-for-like from 2013 and
interest in Central Laitière. Excluding non-current items, the net down -5.6% as reported.
income of affiliated companies came to €66 million in 2014. During

Transition from Net income – Group share to Underlying net income – Group share
2013 2014
Non-current Non-current
(in € millions except percentage) Underlying items Total Underlying items Total
Trading operating income 2,809 2,809 2,662 2,662
Other operating income (expense) (681) (681) (511) (511)

Operating income 2,809 (681) 2,128 2,662 (511) 2,151
Cost of net debt (193) (193) (179) (179)

Other financial income (expense) (118) 48 (70) (129) (3) (133)
Income before tax 2,498 (633) 1,865 2,353 (514) 1,839
Income tax expense (750) 146 (604) (716) 117 (599)

Effective tax rate 30.0% 32.4% 30.5% 32.6%
Net income from fully consolidated 3
companies 1,748 (487) 1,261 1,637 (397) 1,239
Share of profit of associates 50 239 289 66 (52) 14

Net income 1,798 (248) 1,550 1,703 (450) 1,253
• Group share 1,636 (214) 1,422 1,561 (442) 1,119

• Non-controlling interests 162 (34) 128 142 (7) 134
Transition from Net income – Group share per share to Underlying net income – Group share per share
2013 2014
(in € per share except

for number of shares) Underlying Total Underlying Total
Net Income - Group share 1,636 1,422 1,561 1,119
Number of shares
• Before dilution 587,411,533 587,411,533 594,472,798 594,472,798

• After dilution 588,469,577 588,469,577 595,536,328 595,536,328
Net Income - Group share,

per share
• Before dilution 2.79 2.42 2.63 1.88

• After dilution 2.78 2.42 2.62 1.88
Dividend for the 2014 fiscal year

At the Annual General Meeting on Wednesday, April 29, 2015, Danone’s at 90% of the average opening DANONE share price on Euronext
Board of Directors will ask shareholders to approve distribution of a over the twenty trading days prior to the General Meeting on April
€1.50 dividend per share in respect of the 2014 fiscal year, up +3.5% 29, 2015 less the amount of the dividend.
from 2013. This dividend reflects the confidence of both the Board
Assuming this proposal is approved, the ex-dividend date will be
and management in Danone’s scope for growth in profit.
Thursday, May 7, 2015. The period during which shareholders may
In keeping with the current absence of share buybacks, shareholders opt to receive dividends in cash or in shares will begin on Thursday,
will be asked to opt for full payment of their dividend in either cash May 7 and run through Thursday, May 21. Dividends will be payable
or in DANONE shares. New shares would be issued at a price set in cash or in shares on Wednesday, June 3, 2015.

Free cash-flow
3.3 Free cash-flow

At the date of this Registration Document, the Group is confident that Free cash-flow stood at €1,277 million in 2014, including €123 mil-
the cash-flows generated by its operating activities, its cash and lion (net of tax) in outlays linked to the Company and its affiliates’
cash equivalents and the funds available under committed credit cost-reduction and adaptation plan in Europe.
facilities managed at Corporate level will be sufficient to cover the
Free cash-flow excluding exceptional items thus came to €1,401
expenditures and investments necessary for its operations, service
million (6.6% of sales), down -9.6% from 2013, reflecting in particular
its debt (including the financing during the year of the exercise of all
the impact of negative exchange-rate effects.
put options granted to non-controlling interests) and pay dividends.
Capital expenditure for 2014 came to €984 million, or 4.7% of sales.
Free cash-flow
Transition from operating cash-flow to free cash-flow
Cash-flow from operating activities 2,356 2,189
Capital expenditure (1,039) (984)

Disposal of tangible assets 79 67
Transaction fees related to business combinations (a) 32 6
Earn-outs related to business combinations (b) − −
Free cash-flow 1,428 1,277
Cash-flows related to plan to generate savings and adapt

organization in Europe (c) 121 123
Free cash-flow excluding exceptional items 1,549 1,401
(a) Represents acquisition costs related to business combinations paid during the period.
(b) Represents earn-outs related to business combinations and paid subsequently to acquisition date and over the period.
(c) Net of tax.

Free cash-flow
Consolidated statement of cash-flows

Net income 1,550 1,253
Share of profit of associates (289) (14)
Dividends received from associates 27 18
Depreciation, amortization and impairment of property, plant and equipment
and intangible assets 772 956
Increases in (reversals of) provisions 62 43
Change in deferred taxes (6) (94)
(Gains) losses on disposal of property, plant and equipment
and financial investments (29) (8)
Expense relating to stock-options and Group performance shares 19 19
Cost of net financial debt 193 179
Net interest paid (178) (212)
Net change in interest income (expense) 14 (33)
Other components with no cash impact 17 19
Other net cash outflows (6) (6)
3
Cash flows provided by operating activities, before changes in net working capital 2,132 2,154
(Increase) decrease in inventories (231) (105)
(Increase) decrease in trade receivables (15) (96)
Increase (decrease) in trade payables 392 184
Change in other receivables and payables 78 52
Change in working capital requirements 224 35
Cash flows provided by (used in) operating activities 2,356 2,189
Capital expenditure (a) (1,039) (984)
Proceeds from disposal of property, plant and equipment (a) 79 67
Net cash outflows on purchases of subsidiaries and financial investments (b) (1,246) (1,070)
Net cash inflows on disposal of subsidiaries and financial investments (b) 69 34
(Increase) decrease in long-term loans and other long-term financial assets (19) (14)
Cash flows provided by (used in) investment activities (2,156) (1,966)
Increase in issued capital and additional paid-in capital 37 33
Purchases of treasury shares (net of disposals) and of DANONE call options (c) (793) 13
Dividends paid to Danone shareholders (848) (307)
Buyout of non-controlling interests (121) (363)
Dividends paid (107) (110)
Contribution from non-controlling interests to capital increases 15 1
Transactions with non-controlling interests (213) (471)
Net cash-flows on hedging derivatives (d) 54 (4)
Bonds issued or raised during the period 2,900 150
Bonds repaid during the period (193) (618)
Increase (decrease) in other current and non-current financial debt (111) 312
Increase (decrease) in short term investments (1,176) 535
Cash flows provided by (used in) financing activities (343) (357)
Effect of exchange rate changes (157) 45
Increase (decrease) in cash and cash equivalents (300) (89)
Cash and cash equivalents at beginning of period 1,269 969
Cash and cash equivalents at end of period 969 880
Supplemental disclosures
Payments during the year of income tax 598 601
(a) This expenditure relates to property, plant and equipment and intangible assets used in operations.
(b) Acquisition/disposal of companies shares. In the case of fully-consolidated companies, this comprises cash net of financial liabilities as of the acquisition/
disposal date.
(c) DANONE call options acquired by the Company.
(d) Derivative instruments used to manage net debt.

Balance sheet and financial security review
3.4 Balance sheet and financial security review

Simplified consolidated balance sheet
As of December 31
(in € millions except percentage) 2013 2014
Non-current assets 23,078 24,299

Current assets 7,850 7,448
Total assets 30,928 31,747
Equity - Group share 10,694 11,696

Non-controlling interests 35 49
Net debt 7,966 7,764
Net financial debt 4,722 5,206
Gearing based on net debt 74% 66%
Gearing based on net financial debt 44% 45%
Financing structure and financial security

Liquidity risk exposure and management policy
Liquidity risk exposure
The Group does not use debt in either a recurring or a significant More generally, it is possible that in the context of a systemic
way in connection with its operating activities. Operating cash–flows financial crisis, the Group could be unable to access the financing
are generally sufficient to finance the Group’s business operations or refinancing it needs on the credit or capital markets, or to access
and organic growth. such finance on satisfactory terms, which could have an adverse
The Group may, however, take on additional debt to finance acquisitions
or, occasionally to manage its cash cycle, particularly when dividends Financial security management
are paid to the Company’s shareholders.
Under its refinancing risk management policy, the Group reduces its
The Group’s objective is always to keep this debt at a level enabling exposure to financing risk by (i) centralizing its financing sources,
it to maintain the flexibility of its financing sources. (ii) borrowing from diversified financing sources, (iii) arranging a
significant portion of its financing as medium-term financing, (iv)
The Group’s liquidity risk arises mainly from the maturities of its
maintaining financing sources available at all times, and (v) ensuring
(i) interest-bearing liabilities (bonds, bank debt, etc.), and (ii) non-
interest-bearing liabilities (liabilities on put options granted to non-
ratios in connection with financing contracts.
controlling interests), and from payments on derivative instruments.
As part of its debt management strategy, the Group regularly seeks
new financing, especially to refinance its existing debt.
In those countries where centralized financing is not available,
when medium-term financing is unavailable and/or in the case of
some existing financing in a company prior to the acquisition by the
Group of a controlling interest in it, certain Group companies may,
for operational reasons, be required to borrow from local sources.
From a Group perspective, the amounts borrowed are relatively
small, whether considered individually or in total, given the level
of operating cash–flow that is generally sufficient to finance their
operations and organic growth.

Group’s financing structure and financial security

As of December 31
2013 2014
(in € millions) Principal amount Amount used (f) Principal amount Amount used (f)
Bank financing (a)
Syndicated credit facility (b) 2,000 – 2,000 –

Committed credit facilities (c) 3,400 − 3,400 −
Capital markets financing (a)
EMTN financing (d) (e) 9,000 7,018 9,000 6,615

Bond issued in the United States
market (d) NA 850 NA 850
Commercial paper
(Billets de trésorerie) 3,000 737 3,000 1,068
(a) The Group’s financial structure and financial security are managed at the Company level.
(b) Syndicated credit facility (revolving) maturing in December 2019.
3
(c) A portfolio of back-up facilities entered into with major credit institutions, with maturities ranging from 2015 to 2018.
(d) Bonds issued by the Company are disclosed on the Group’s website.
(e) Euro Medium Term Notes.
( f ) Amount denominated in euros except bond issued in the United States market denominated in U.S. dollars.
Most of the financing agreements entered into by the Company (bank lines of credit and bonds) include a change of control provision,
which offers creditors a right of early repayment in the event a change in control of the Company causes its rating by the financial rating
agencies to fall below investment grade.
None of these financing sources is subject to any covenant relating to the maintenance of financial ratios.
Company’s rating
As of December 31
2013 2014
Moody's Standard and Poor's Moody's Standard and Poor's
Short-term rating (a)

Rating – A-2 – A-2
Outlook – Stable – Stable
Long-term rating (b) (c)
Rating A-3 A- Baa1 (c) A-

Outlook Stable Stable Stable Negative (d)
(a) Rating given to the Company’s commercial paper program.
(b) Rating given to the Company’s debt issues with a maturity of more than one year.
(c) Rating lowered on December 13, 2014.
(d) Outlook attributed on December 23, 2014.

Use of its financing sources Danone shareholders, and (ii) alternatively, its commercial paper
and EMTN programs or its syndicated credit facility to optimize its
The Group’s policy consists of keeping its financing sources available
financing cost while still ensuring its financial security, such that
and managing them at the Company level. The Group may need to
the maturity and currency of its financing raised may vary without
use (i) its commercial paper program and syndicated credit facility
changing the net debt level or the Group’s financial security.
to manage its cash cycle, notably when paying out the dividend to
Financing situation and liquidity risk

Main financing transactions in 2014
2014
Nominal
Currency (in millions of currency) Maturity
New financing
Euro bond issue under the EMTN program EUR 150 2019
Renewal
Syndicated credit facility (a) EUR 2,000 2019

Repayment
(a) Multi-currency revolving credit facility implemented in July 2011 and renewed in December 2014.

2013
Nominal
New financing
Euro bond issue under the EMTN program EUR 1,000 2021
Repayment
Private placement under the EMTN program CZK 814 2013

Private placement under the EMTN program JPY 23,900 2013

Carrying amount of financial debt and change during the period

Movements during the period
Bond issue or net increase of
Exercise or expiration of put

Transfer to current portion
Translation adjustments
As of December 31, 2014

decrease of other items

Bond repayment or net
New put options

other items
Other (e)
options
(in € millions)
Bonds (a) (b) 618 – (618) 603 − − − − 603
Commercial paper (b) 737 331 – − − − − − 1,068
Other financing and

other debts (a) (c) 740 (39) 40 (68) − − (12) 661
Financing (a) 2,095 331 (657) 644 (68) − − (12) 2,332 3

Derivatives – liabilities
(a) (b) − – (4) – 7 − 3
Financing and derivatives
– liabilities (a) 2,095 331 (661) 644 (61) − − (12) 2,336
Liabilities related to put
options granted to non-
controlling interests (a) 2,767 − − − − − (340) (218) 2,209
Current financial debt 4,862 331 (661) 644 (61) − (340) (230) 4,544
Bonds (b) (d) 6,460 150 – (603) 81 − − − 6,087
Other financing and other

debts (a) (c) 116 23 – (40) 43 − − 8 150
Financing (d) 6,576 173 − (644) 124 − − 8 6,238
Derivatives – liabilities
(b) (d) 12 − − − − − − − 11
Financing and derivatives
– liabilities (d) 6,588 173 − (644) 124 − − 8 6,249
controlling interests (d) 477 − − − − − − (128) 349
Non-current financial debt 7,065 173 − (644) 124 − − (120) 6,598
Financial debt 11,927 504 (661) − 63 − (340) (350) 11,143

(a) Less than one year portion.
(b) Financing managed at the Company level.
(c) Subsidiaries' bank financing and other financing, liabilities related to finance leases.
(d) More than one year portion.
(e) O ther movements correspond mainly to (i) the revaluation of the liability related to put options granted to non-controlling interests including currency
translation adjustments, and (ii) changes in scope.

Financial debt repayment schedule

Projected cash outflows linked to the contractual repayment of the principal amount and contractual interest payments
on the financial assets and liabilities, including premiums to be paid on derivative financial instruments, based on the
assumption of non-renewal
Carrying
amount
on consolidated Cash
balance sheet Cash Cash Cash Cash flows
as of December flows flows flows flows 2019 and
(in € millions) 31, 2014 2015 2016 2017 2018 after
Bonds (a) (b) 6,691 (603) (696) (921) (802) (3,669)
Commercial paper (a) (f) 1,068 (1,068) – – – –
Derivatives – liabilities (a) (d) (e) (i) 14 (14) – – – –
Financial debt managed at
Corporate level 7,773 (1,685) (696) (921) (802) (3,669)
Subsidiaries’ bank financing
and other financing (c) 738 (668) (12) (10) (10) (37)
Finance lease
commitments (c) (d) 74 (15) (16) (9) (8) (26)
Liabilities related to put options
granted to non-controlling
interests (g) 2,558 (2,209) (238) – (111) −
Total debt (before flows of
financial instruments other than
accrued interest) 11,143 (4,578) (962) (940) (931) (3,732)
Interest on above-mentioned
debt (d) (h) (134) (119) (107) (93) (243)
Flows on derivatives (d) (e) (h) (j) – (5) 65 6 –
(a) Financing managed at the Company level.
(b) Flows determined on the basis of the carrying amount of the bonds as of December 31, 2014 and their contractual maturity date.
(c) Contractual nominal and interest flows.
(d) The floating interest rates are calculated on the basis of the rates applicable as of December 31, 2014.
(e) Net contractual flows, including premiums payable, net flows payable or receivable relating to the exercise of options in the money at the year-end.
( f ) The Commercial Paper issuances are backed-up by available confirmed credit lines.
(g) Cash flows determined on the basis of the carrying amount of the options as of December 31, 2014 and their contractual exercise date.
(h) Interest flows are net of accrued interest taken into account in the subtotals above.
( i ) T he amount recognized in the balance sheet represents the market value of these instruments. The flows in respect of these instruments as well as
those relating to derivatives - assets are detailed hereafter.
( j ) Concerns derivative instruments on net debt, assets and liabilities.
Cash outflows linked to the contractual repayment of swapped bonds

Currency swap agreements are used in order to hedge against exchange rate fluctuations for certain bonds denominated in foreign
currency and obtain equivalent financing in euros.
Carrying amount and repayment value after taking into account swaps into euros
As of December 31
Carrying amount 7,078 6,691

Repayment value after taking into account swaps into euros (a) 7,018 6,633
(a) C orresponds to (i) the carrying amount for the bonds not swapped into euros, and (ii) the value after swaps for the bonds swapped into euros. The
difference with the carrying amount therefore corresponds to the fair value of the cross-currency swaps qualified as fair value hedge on the bonds
swapped into euros and presented on the balance sheet under the Derivatives heading.

Sources of financing available at any time

The sources of financing available at any time established by the Group are composed mainly of committed available credit facilities
carried by the Company. The Group also has other bank credit facilities carried by certain of its subsidiaries.
Amount Amount Amount Amount Amount Amount

available as of available as of available as of available as of available as of available as of
December 31, December 31, December 31, December 31, December 31, December 31,
(in € millions) 2014 2015 2016 2017 2018 2019 and after
Credit facilities (a) 5,465 5,465 4,515 3,247 2,597 2,397

Other credit facilities (b) 326 – – – – –
(a) Nominal amount of the portion of the syndicated credit facility and back-up credit facilities managed at the Company level and not drawn down as of
December 31, 2014.
(b) Nominal amount of the portion not drawn as of December 31, 2014.
Liabilities related to put options granted to non-controlling interests

General principles
The Group granted put options to third parties with non-controlling interests in certain consolidated subsidiaries, with these options giving 3
the holders the right to sell part or all of their investment in these subsidiaries. These financial liabilities do not bear interest.
Main characteristics
As of December 31
Start of exercise Price calculation
(in € millions) 2013 2014 period formula
Non-current portion 337 236

Current portion 799 794
Average earnings
multiple over several
Danone Spain (a) 1,136 1,030 At any time (a) years
Earnings multiple with
Danone CIS 1,079 912 2014 floor price
Other – Non-current portion 140 113 After 2014
Other – Current portion 889 503 2014
Other (b) 1,029 616
Total 3,244 2,558
of which, Non-current financial liabilities 477 349
of which, Current financial liabilities 2,767 2,209

(a) Contractually, these options can be exercised at any time. However, some beneficiaries signed a rider under the terms of which they accepted that the
settlement of the amount owed by Danone and the transfer of ownership would be deferred by one year.
(b) S everal put options with an individual amount less than or equal to 10% of the total amount of put options granted by the Group to some non-controlling
interests.

Change during the period

As of January 1 3,271 3,244

New options (a) 403 −
Options exercised (509) (341)
Change in the present value of the strike price of outstanding
options 79 (345)
As of December 31 3,244 2,558
(a) Carrying amount as of December 31.
Current and non-current financial Accounting in 2014

liabilities relating to put options The financial liabilities related to put options granted to non-
controlling interests of Danone Spain amounted to €1,030 million
granted to non-controlling interests as of December 31, 2014.
in Danone Spain Accounting in 2013
Since 2012, the Group had discussed with Danone Spain’s non- The financial liabilities related to put options granted to non-
controlling shareholders the terms and conditions of these put controlling interests of Danone Spain amounted to €1,136 million
options, especially in light of Southern Europe’s deteriorating as of December 31, 2013.
economy and its significant impact on Danone Spain.
Based on these events, the share buyback, option exercises and
As a reminder of the background, during the first half of 2013, the procedures, the Group decided to maintain a portion of the remaining
Group repurchased a total of 1,642,618 shares from several Danone put options (€799 million related to the 15% of the capital mentioned
Spain non-controlling shareholders (including 1,550,315 shares above) as short-term financial debt in its financial statements as of
through the exercise of put options by their beneficiaries, and the December 31, 2013. Put options amounting to €337 million continued
remainder through direct purchases of Danone Spain shares from to be classified as non-current financial debt, as these options are
their holders), raising its Danone Spain shareholding from 65.6% subject to a one-year payment term.
to 75.6%. Shares were acquired in exchange for cash payments
The main impacts on the consolidated financial statements related
totaling €108 million and for 6,715,266 DANONE treasury shares
to the Danone Spain options repurchased in 2013 are as follows:
(1.0% of the Danone SA share capital). An equal number of DANONE
shares was purchased on the market by the Group over the first six • decrease by €504 million of the liabilities related to put options
months, under its share buyback program to offset dilution resulting granted to non-controlling interests;
from this transaction.
• favorable impact of €80 million on consolidated equity and the
After that share buyback, Danone Spain’s shares were held (i) for Group net debt, the transaction price paid being lower than the
75.6% by the Group, (ii) for 22.1% by non-controlling interests with carrying values of these commitments, for purchases by means
put options, (iii) for 1.0% by non-controlling interests without put of put options exercises;
options, and (iv) for 1.3% by Danone Spain.
• €108 million cash–flows used in financing activities, corresponding
Non-controlling shareholders representing around 15% of Danone to the portion paid in cash (to holders of put options and other
Spain’s share capital exercised their put options in 2013. The Group selling shareholders) and presented in Transactions with non-
contested those exercises and invited the shareholders concerned to controlling interests in the Consolidated statement of cash–flows;
continue the process of renegotiation of their put options’ terms and
conditions. During the first six months of 2013, these non-controlling
• the transfer of 6.7 million DANONE shares did not have any impact
on the Consolidated statement of cash–flows. Nevertheless, as
shareholders opted not to continue the discussion process and
described above, an equal number of DANONE shares had been
initiated proceedings against the Group for the purpose of execution
purchased on the market by the Group over the first six months
of their put options before an arbitration tribunal.
of 2013. Those purchases are presented in the item Purchases
The arbitration panels petitioned by these holders of put options of treasury shares (net of disposals) and of DANONE call options
issued their rulings in December 2014 and February 2015. Following in the cash–flows used in financing activities in the Consolidated
these decisions, in early 2015 the Group purchased in exchange for statement of cash-flows.
cash 2,581,030 shares in Danone Spain. For the shares subject to
put options, the Group paid an amount below the carrying value as
of December 31, 2014 of the related liabilities. The shares purchased
through this transaction represent approximately 15.7% of Danone
Spain’s share capital, thereby bringing the Group’s overall equity
interest in the company to 91%.

Net debt and net financial debt

Net debt
As of December 31
Non-current financial debt 7,065 6,598

Current financial debt 4,862 4,544
Short-term investments (2,862) (2,317)
Cash and cash equivalents (969) (880)
Derivatives – assets – Non-current (130) (181)
Derivatives – assets – Current − −
Net debt 7,966 7,764
Change in net debt in 2014 Change in net debt in 2013

3
Net debt stood at €7,764 million as of December 31, 2014, including In 2013, the Group’s net debt increased by €1,674 million to reach
€2,558 million in put options granted to non-controlling shareholders. €7,966 million.
The debt represented by these options is down €686 million from
Excluding put options granted to non-controlling interests, the
December 31, 2013 due in particular to Danone’s increased equity
Group’s net debt totaled €4,722 million as of December 31, 2013,
interest in Centrale Laitière (Morocco) during the year.
up €1,701 million from the previous year. This increase was mainly
Excluding put options for non-controlling shareholders, the Group’s due to the acquisitions carried out by Danone in 2013. They included
net financial debt stood at €5,206 million, up €484 million from the purchase of a portion of the non-controlling interests in Danone
December 31, 2013. The rise is linked mainly to acquisitions made Spain, the increased equity interest acquired in Centrale Laitière,
by Danone in the course of 2014, including its increased stake in the acquisition of a controlling interest in Sirma in Turkey, the
Centrale Laitière (Morocco) and Mengniu (China), and its acquisition acquisition of Happy Family and YoCrunch in the United States and
of an interest in Brookside (Kenya). strategic investments of a 4.0% equity interest in Mengniu in China
and a 49% equity interest in Fan Milk in West Africa.
Transition from net debt to net financial debt

As of December 31
Non-current financial debt (a) 7,065 6,598

Short term investments (2,862) (2,317)
Derivatives – assets (130) (181)
Net debt 7,966 7,764
Liabilities related to put options granted to non-controlling

interests – Non current (477) (349)
interests – Current (2,767) (2,209)
Financial debt excluded from net financial debt (3,244) (2,558)
Net financial debt 4,722 5,206

(a) Includes Derivatives– liabilities.

Shareholder’s equity
Change in shareholder’s equity – Group share
As of January 1 12,191 10,694

Dividend paid for the previous fiscal year (848) (307)
Cumulative translation adjustments (a) (1,417) 177
Transactions with non-controlling interests (350) 290
Transactions involving DANONE shares (475) 13
Capital increase under the Company Savings Plan for the
benefit of employees of French entities 37 33
Other comprehensive income 131 (323)
Counterpart entry to expense relating to Group performance
shares and stock-options 19 19
Other (16) (18)
As of December 31 10,694 11,696
(a) In 2013, negative translation differences were due to the decrease in the exchange rate for several currencies against the euro, in particular the Indonesian
rupiah, Russian ruble and Turkish lira.
Off-balance sheet commitments

Commitments given in 2014 relating to operating activities
Amount of financial flows for the year
(in € millions) Total 2015 2016 2017 2018 2019 and after
Operating lease commitments (622) (162) (113) (84) (62) (200)

Commitments to purchase
goods and services (2,863) (1,646) (556) (301) (111) (249)
Capital expenditure
commitments (161) (140) (6) (2) (2) (11)
Guarantees and pledges given (224) (170) (12) (16) (2) (25)
Other (189) (121) (23) (16) (5) (23)
Total (4,059) (2,239) (711) (419) (182) (508)
Commitments received in 2014 relating to operating activities

Commitments as of December 31 of each year
(in € millions) 2014 2015 2016 2017 2018 2019
Guarantees and pledges

received 83 68 − − − 15
Other 43 30 6 6 1 −
Total 126 98 7 6 1 15

Outlook for 2015
3.5 Outlook for 2015

Material change in financial or trading position
The Company and its subsidiaries overall have not experienced any material changes in their financial or trading position since the close
of the 2014 fiscal year.
Subsequent events
Danone launches a successful Euronext, the leading exchange in the Eurozone, congratulated
Danone on January 23, 2015 on the success of its dual-tranche
dual-tranche €1.3 billion bond issue €1.3 billion bond issue. Aimed at financing the Group’s business
and growth by extending the maturity of its debt, the bonds were
Danone announced the successful launch of a €1.3 billion dual-
admitted to trading on 14 January.
tranche bond issue in euros on January 7, 2015.
An integral part of financing for Danone and its development, this Other events
issue enables the Group to extend the maturity of its debt in a market
To the best of the Company’s knowledge, no significant events
favorable to quality bond issues.
occurred between the end of the reporting period and February 19,
The issue consists of two tranches: 2015, the date on which the Board of Directors approved the 2014 3
• a tranche of 5-year floating rate notes of €550 million (coupon consolidated financial statements and at the date of this Registration
Document.
of Euribor 3 months +33 basis points);
• a tranche of 10-year fixed rate bonds of €750 million, priced at
mid swap +48 basis points (coupon of 1.125%).
Profit forecasts or estimates

Financial outlook for 2015 As a result, Danone’s 2015 targets include:
Danone assumes that economic conditions will remain difficult and • organic growth in sales of between +4% and +5% on a like-for-
unstable overall, with fragile or even deflationary consumer trends like basis (see definition of this indicator in section 3.6 Financial
in Europe, emerging markets undermined by volatile currencies, indicators not defined by IFRS);
and difficulties specific to a few major markets, in particular the CIS. • slight growth in trading operating margin on a like-for-like basis
In 2015, Danone also anticipates marked but varied trends in the (see definition of this indicator in section 3.6 Financial indicators
cost of major strategic raw materials, particularly milk: not defined by IFRS).
• lower prices in Europe and the United States in the first half, with Lastly, Danone will continue to work towards lasting gains in free
a rebound likely in the second half of the year; and cash-flow (see definition of this indicator in section 3.6 Financial
indicators not defined by IFRS) without setting a short-term target.
• gradual price increases in emerging countries all year long.
These forecasts, outlooks, representations and other forward-looking
Altogether, Danone anticipates a moderate rise in the cost of main information included in this Registration Document are based mainly
raw materials and packaging in 2015. on the data, assumptions and estimates detailed hereafter, and
Against this backdrop, Danone will focus on developing its product which are deemed reasonable by the Group. They are not historical
categories and winning market share. In Europe, Danone will con- data and should not be interpreted as guarantees that actual results
tinue to strengthen its competitive edge. In growth markets, it will will be in line with said forecasts. By their very nature, such data,
focus on developing its product categories, in particular through assumptions and estimates, as well as all other factors taken into
strong local brands in the most attractive geographical markets. account in the preparation of such forward-looking representations
and information, may happen and are susceptible to change or be
After delivering profitable growth in the second half of 2014, Danone amended because of uncertainties notably related to the Group’s
will seek to make this equation sustainable, generating organic economic, financial and competitive environment. In addition, the
growth in sales and in operating margin in 2015, while making occurrence of certain risks described in section 2.7 Risk factors could
the investments necessary to ensure this performance is lasting. have an impact on the Group’s activities, financial position, earnings
and outlook and on the achievements of its forecasts, outlooks,
representations and forward-looking information provided above.

Outlook for 2015
Main assumptions underlying the profit • cost trends for the main strategic raw materials will be pronounced
but not uniform, especially milk prices:
forecasts
• a decline in Europe and the United States in the first half
The forecasts presented above were prepared using accounting before a likely rebound in the second, and
methods consistent with those used by the Group to prepare the
historical information. They are based on a number of assumptions, • steady increases in the emerging countries throughout the
including: year.
• the data were prepared using projected exchange rates and

interest rates determined at the Group level;
• the overall macroeconomic context will remain challenging and
unstable, with fragile and in some cases deflationary consumption
trends in Europe, adverse impacts of currency volatility on
emerging markets and, lastly, specific contextual challenges in
several key markets, notably the CIS region; and

Outlook for 2015
Statutory auditors’ report on the profit forecasts

This is a free translation into English of the Statutory auditors’ report issued in the French language and is provided solely for the convenience of
English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing
standards applicable in France.
To the Chairman of the Board of Directors,
In our capacity as Statutory auditors of your Company and in accordance with EC Regulation No. 809/2004, we have prepared this report
on Danone’s like-for-like trading operational margin forecasts for year 2015, included in section 3.5 of this Registration Document.
These forecasts and the significant assumptions on which they are based are your responsibility, in accordance with the provisions of EC
Regulation No. 809/2004 and the ESMA recommendations on profit forecasts.
It is our responsibility, on the basis of our procedures, to express an opinion, in accordance with the terms specified in appendix I, point
13.2 of EC Regulation No. 809/2004, as to whether such forecasts have been properly prepared.
We have carried out the procedures we deemed necessary with regard to the professional standards of the French society of auditors
(Compagnie nationale des commissaires aux comptes) regarding this assignment. This work has comprised an assessment of the proce-
dures implemented by management for the preparation of the forecasts and the implementation of procedures to verify the consistency
of the accounting methods used with those applied for the preparation of Danone’s consolidated financial statements for the year ended
December 31, 2014. Our procedures have also included gathering such information and explanations that we have considered necessary
in order to obtain reasonable assurance that the forecasts were properly prepared on the basis of the assumptions as set out. 3
We would remind you that, since forecasts are, by their very nature, subject to uncertainties, actual results sometimes differ significantly
from the forecasts presented and that we do not express any opinion on the likelihood, or otherwise, of the actual results being in line
with these forecasts.
In our opinion:
• the forecasts have been properly prepared in accordance with the basis indicated; and
• the accounting principles used in the preparation of these forecasts are consistent with the accounting policies applied by Danone for
the preparation of its consolidated financial statements for the year ended December 31, 2014.
This report is issued solely for the purposes of filing the 2014 Registration Document with the French securities regulator (Autorité des
marches financiers – AMF) and, where relevant, for a public offering in France and in the other countries of the European union, or admission
to trading on a regulated market in the European union of securities offered in France or in other countries of the European union, in which
a prospectus containing this Registration Document, authorized by the AMF, would be published, and may not be used in any other context.
Neuilly-sur-Seine and Paris La Défense, March 18, 2015

The Statutory auditors
PricewaterhouseCoopers Audit Ernst & Young et Autres
Anik CHAUMARTIN Philippe VOGT Gilles COHEN Pierre-Henri Pagnon

Financial indicators not defined by IFRS
2015 financial communication calendar

February 20, 2015 2014 Final full year results
April 15, 2015 2015 1st quarter sales
April 29, 2015 Shareholders Annual Meeting
July 24, 2015 2015 1st half sales and results
October 19, 2015 2015 nine months sales
3.6 Financial indicators not defined by IFRS

Information published by Danone uses the following financial Since inflation in Argentina –already structurally high– accelerated
indicators that are not defined by IFRS: further in 2014, in particular following the sharp, steep devaluation
of the peso in January, using an identical exchange rate to compare
• like-for-like changes in net sales, trading operating income, 2014 figures with those for the prior year would not have reflected
trading operating margin, underlying net income and underlying
the Group’s organic performance accurately. As a result, Danone
net income per share;
fine-tuned the definition of like-for-like changes to include in its
• trading operating income; exchange-rate impact the differences caused by the exceptional
volatility in structurally hyperinflationary countries. Danone is
• trading operating margin; applying this methodology starting with the release of 2014 full-year
• underlying net income results, where it is applicable only to Argentina, and where adjustment
for the full year was recorded in the fourth quarter. More specifically,
• underlying fully diluted EPS or current net income – Group share, it led to (i) limit the inflation of price and cost of goods sold per kilo
per share after dilution;
to their average level for the past three years and (ii) cap trading
• free cash-flow; operating margin at its prior-year level; this methodology has been
applied to each Division operating in Argentina.
• free cash-flow excluding exceptional items; and
Trading operating income is defined as the Group operating income
• net financial debt. excluding other operating income and expense. Other operating
Given severe deterioration in consumer spending in Europe, Danone income and expense is defined under Recommendation 2013-03 of
has set a target for savings and adaptation of its organization to the French ANC (format of consolidated financial statements for
regain its competitive edge. Starting in the first half of 2013, Danone companies reporting under international reporting standards), and
published a free cash-flow indicator excluding cash-flows related comprises significant items that, because of their exceptional nature,
to initiatives deployed within the framework of this plan. cannot be viewed as inherent to current activities. These mainly
include capital gains and losses on disposals of fully consolidated
Calculation of financial indicators not defined in IFRS and used by
companies, impairment charges on goodwill, significant costs related
the Group is as follows:
to strategic restructuring and major external growth transactions,
Like-for-like changes in net sales, trading operating income, trading and costs related to major crisis and major litigations. Furthermore,
operating margin, current net income – Group Share (or underlying in connection with of IFRS 3 (Revised) and IAS 27 (Revised) relating to
net income) and current net income – Group Share per share (or business combinations, the Group also classifies in Other operating
underlying net income per share) reflect the Group’s organic income and expense (i) acquisition costs related to business
performance and essentially exclude the impact of: combinations, (ii) revaluation profit or loss accounted for following
a loss of control, and (iii) changes in earn-outs relating to business
• changes in consolidation scope with indicators related to a given combinations and subsequent to acquisition date.
fiscal year calculated on the basis of previous-year scope;
Trading operating margin is defined as the trading operating income
• changes in applicable accounting principles; over net sales ratio.
• changes in exchange rates, (i) with both previous year and current Underlying net income (or current net income – Group Share) measures
year indicators calculated using the same exchange rates (the
the Group’s recurring performance and excludes significant items
exchange rate used is a projected annual rate determined by
that, because of their exceptional nature, cannot be viewed as inherent
the Group for the current year), and (ii) correcting differences
to the Group’s current performance. Such non-current income and
caused by the exceptional volatility of inflation in countries that
expense mainly include capital gains and losses on disposals and
are structurally subject to hyperinflation, which would otherwise
impairments of non-fully-consolidated equity interests and tax
distort any interpretation of the Group’s organic performance.
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.

Financial indicators not defined by IFRS
Underlying fully diluted EPS (or current net income – Group Share, Free cash-flow excluding exceptional items represents free cash-
per share after dilution) is defined as the underlying net income flow before cash-flows related to initiatives that may be taken by the
over diluted number of shares ratio. Group to deploy the plan to generate savings and adapt organization
in Europe.
Free cash-flow represents cash-flows provided or used by operating
activities less capital expenditure net of disposals and, in connection Net financial debt represents the net debt portion bearing interest. It
with of IFRS 3 (Revised), relating to business combinations, excluding corresponds to current and non-current financial debt (i) excluding
(i) acquisition costs related to business combinations, and (ii) earn- Liabilities related to put options granted to non-controlling interests
outs related to business combinations and paid subsequently to and (ii) net of Cash and cash equivalents, Short term investments
acquisition date. and Derivatives – assets.

Documents available to the public
3.7 Documents available to the public

The by-laws, the minutes of Shareholders’ Meetings, reports of the information and certain information regarding the organization and
Statutory auditors, and other corporate documents may be consulted businesses of the Company and its subsidiaries are available on the
at the Company’s registered office. Moreover, historical financial Group’s website in the section pertaining to regulated information.
The table below lists all of the regulated information published between January 1, 2014 and March 18, 2015:
Subject Date Place of consultation

Danone sets terms for continued partnership with Fonterra and
initiates legal proceedings 01/08/2014 www.danone.com, AMF, OTC
Implementation of a liquidity contract 01/16/2014 www.danone.com, AMF, OTC
Voting Rights Declaration (January 2014) 02/07/2014 www.danone.com, AMF, OTC
Danone raises its stake in China’s leading dairy company Mengniu 02/12/2014 www.danone.com, AMF, OTC
2013 Full-Year Results 02/20/2014 www.danone.com, AMF, OTC
Voting Rights Declaration (February 2014) 03/06/2014 www.danone.com, AMF, OTC
Danone publishes its 2013 Registration Document 03/24/2014 www.danone.com, AMF, OTC
Convening to combined Shareholders' meeting of April 29th 2014 04/04/2014 www.danone.com, AMF, OTC
Voting Rights Declaration (March 2014) 04/07/2014 www.danone.com, AMF, OTC
2014 First-Quarter Sales 04/16/2014 www.danone.com, AMF, OTC
2014 Danone Shareholders’ Meeting 04/29/2014 www.danone.com, AMF, OTC
Voting Rights Declaration (April 2014) 05/13/2014 www.danone.com, AMF, OTC
Result of the option to receive the 2013 dividend payment in shares 05/28/2014 www.danone.com, AMF, OTC
Voting Rights Declaration (May 2014) 06/06/2014 www.danone.com, AMF, OTC
Danone announces plan to close plants in Casale Cremasco (Italy),
Hagenow (Germany) and Budapest (Hungary) 06/11/2014 www.danone.com, AMF, OTC
Half-Year liquidity contract statement 07/02/2014 www.danone.com, AMF, OTC
Voting Rights Declaration (June 2014) 07/04/2014 www.danone.com, AMF, OTC
Danone partners with Brookside, East Africa’s leading dairy
products company 07/18/2014 www.danone.com, AMF, OTC
2014 First-Half Results 07/25/2014 www.danone.com, AMF, OTC
Notification of availability of Danone’s 2014 interim financial report 07/25/2014 www.danone.com, AMF, OTC
Voting Rights Declaration (July 2014) 08/21/2014 www.danone.com, AMF, OTC
Change in Danone’s Governance 09/02/2014 www.danone.com, AMF, OTC
Voting Rights Declaration (August 2014) 09/05/2014 www.danone.com, AMF, OTC
Voting Rights Declaration (September 2014) 10/03/2014 www.danone.com, AMF, OTC
Sales in the third quarter and first nine months of 2014 10/15/2014 www.danone.com, AMF, OTC
Danone and Mengniu expand their strategic alliance to infant milk
formula in China 10/31/2014 www.danone.com, AMF, OTC
Danone acquires an additional 21.75% equity interest in Centrale
Laitière (Morocco) 11/03/2014 www.danone.com, AMF, OTC
Voting Rights Declaration (October 2014) 11/06/2014 www.danone.com, AMF, OTC
Voting Rights Declaration (November 2014) 12/04/2014 www.danone.com, AMF, OTC
Danone confirms strategic priorities and strengthens
management team 12/12/2014 www.danone.com, AMF, OTC
Half-Year liquidity contract statement 01/05/2015 www.danone.com, AMF, OTC
Voting Rights Declaration (December 2014) 01/07/2015 www.danone.com, AMF, OTC
Danone launches a successful dual-tranche €1.3 billion bond
issue 01/07/2015 www.danone.com, AMF, OTC
Voting Rights Declaration (January 2015) 02/06/2015 www.danone.com, AMF, OTC
2014 Full-Year Results 02/20/2015 www.danone.com, AMF, OTC
Voting Rights Declaration (February 2015) 03/05/2015 www.danone.com, AMF, OTC
Danone appoints Lorna Davis and Pascal de Petrini to the
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Financial
statements
4
4.1 Consolidated financial
statements and Notes
to the consolidated financial
statements 74
Consolidated financial statements 74
Notes to the consolidated financial statements 81
Cross-reference table with the Notes

to the consolidated financial statements for
the year ended December 31, 2013 150
4
Statutory auditors’ report on the consolidated
financial statements 151
4.2 Financial statements of

Danone SA, parent company
of the Danone group 153
Financial statements of Danone SA 153
Notes to the financial statements of the parent

company Danone 155
Statutory auditor’s report on the financial statements

of the parent company Danone 173
4.3 Fees paid by the Group

to the Statutory auditors
and members of their network 174
4.4 Information originating

from third parties,
expert opinions and
declarations of interest 175

FINANCIAL STATEMENTS
Consolidated financial statements and Notes to the consolidated financial statements
4.1 Consolidated financial statements and Notes

to the consolidated financial statements
Consolidated financial statements
Consolidated income statement and earnings per share
(in € millions except earnings per share in €) Notes 2013 2014
Net sales 5.1 to 5.2 21,298 21,144
Cost of goods sold (10,977) (11,056)

Selling expense (5,425) (5,209)
General and administrative expense (1,707) (1,743)
Research and development expense (275) (272)
Other income (expense) 5.3 (105) (202)
Trading operating income 2,809 2,662
Other operating income (expense) 6.1 (681) (511)

Operating income 2,128 2,151
Interest income 76 94
Interest expense (269) (274)
Cost of net debt 10.6 (193) (179)
Other financial income 11.3 52 5
Other financial expense 11.3 (122) (137)
Income before tax 1,865 1,839
Income tax expense 8.1 (604) (599)

Net income from fully consolidated companies 1,261 1,239
Share of profit of associates 4.7 289 14

Net income – Group share 1,422 1,119

Net income – non-controlling interests 128 134
Net income – Group share, per share 13.4 2.42 1.88
Net income – Group share, per share after dilution 13.4 2.42 1.88

Consolidated statement of comprehensive income

Translation adjustments (1,417) 177
Cash-flow hedging derivatives
Gross unrealized gains and losses 89 (120)

Tax effects (31) 5
Available-for-sale financial assets
Gross unrealized gains and losses 119 (71)

Amount recycled to profit or loss in the current year (52) −
Tax effects (3) (1)
Other comprehensive income, net of tax − 3

Items that may be subsequently recycled to profit or loss (1,295) (7)
Actuarial gains and losses on retirement commitments
Gross gains and losses 11 (203)

Tax effects (2) 64
4
Items not subsequently recyclable to profit or loss 9 (138)
Total comprehensive income – Group share 136 973

Total comprehensive income – non-controlling interests 83 77
Total comprehensive income 219 1,051

Consolidated balance sheet

As of December 31
(in € millions) Notes 2013 2014
Assets
Goodwill 11,474 11,582

Brands 4,501 4,337
Other intangible assets 333 315
Intangible assets 9.1 to 9.3 16,308 16,234
Property, plant and equipment 5.5 4,334 4,582
Investments in associates 4.1 to 4.8 1,033 2,146
Investments in other non-consolidated companies 11.1 to 11.2 313 92
Long-term loans and other long-term financial assets 11.1 to 11.2 251 228
Other financial investments 564 320
Derivatives – assets (a) 12.4 130 181
Deferred taxes 8.2 709 836
Non-current assets 23,078 24,299
Inventories 5.4 1,252 1,340

Trade receivables 5.4 1,809 1,900
Other receivables 5.4 916 974
Short-term loans 23 30
Short-term investments 10.4 2,862 2,317
Cash and cash equivalents 969 880
Assets held for sale 19 8
Current assets 7,850 7,448
Total assets 30,928 31,747

(a) Derivative instruments used to manage net debt.

As of December 31
Equity and liabilities
Share capital 158 161

Additional paid-in capital 2,930 3,505
Retained earnings 11,153 11,817
Cumulative translation adjustments (1,553) (1,501)
Accumulated other comprehensive income (123) (427)
Treasury shares and DANONE call options (a) 13.2 (1,871) (1,859)
Equity – Group share 10,694 11,696
Non-controlling interests 3.1 to 3.6 35 49

Consolidated equity 10,729 11,745
Financing 10.1 to 10.3 6,576 6,238

Derivatives – liabilities (b) 12.4 to 12.5 12 11
interests 3.5 477 349
Non-current financial debt 7,065 6,598 4
Provisions for retirement obligations and other long-term
benefits 7.3 584 818
Deferred taxes 8.2 1,265 1,225
Other non-current provisions and liabilities 14.2 678 737
Non-current liabilities 9,592 9,377
Financing 10.1 to 10.3 2,095 2,332

Derivatives – liabilities (b) 12.4 to 12.5 − 3
interests 3.5 2,767 2,209
Trade payables 5.4 3,248 3,334
Other current liabilities 5.4 2,497 2,741
Liabilities directly associated with assets held for sale − 6
Current liabilities 10,607 10,625
Total equity and liabilities 30,928 31,747

(a) DANONE call options acquired by the Company.
(b) Derivative instruments used to manage net debt.

Consolidated statement of cash flows

Share of profit of associates 4.7 (289) (14)
Dividends received from associates 27 18
Depreciation, amortization and impairment of property,
plant and equipment and intangible assets 5.5, 9.2 772 956
Increases in (reversals of) provisions 14.2 62 43
Change in deferred taxes 8.2 (6) (94)
(Gains) losses on disposal of property, plant and equipment
and financial investments 5.4, 9.2 (29) (8)
Expense relating to stock-options and Group performance shares 7.4 19 19
Cost of net financial debt 10.6 193 179
Net interest paid (178) (212)
Net change in interest income (expense) 14 (33)
Other components with no cash impact 17 19
Other net cash outflows (6) (6)
Cash flows provided by operating activities, before changes
in net working capital 2,132 2,154
(Increase) decrease in inventories (231) (105)
(Increase) decrease in trade receivables (15) (96)
Increase (decrease) in trade payables 392 184
Change in other receivables and payables 78 52
Change in working capital requirements 5.4 224 35
Cash flows provided by (used in) operating activities 2,356 2,189
Capital expenditure (a) 5.5 (1,039) (984)
Proceeds from disposal of property, plant and equipment (a) 5.5 79 67
Net cash outflows on purchases of subsidiaries and financial
investments (b) 2, 4, 11 (1,246) (1,070)
Net cash inflows on disposal of subsidiaries and financial
investments (b) 2, 4, 11 69 34
(Increase) decrease in long-term loans and other long-term
financial assets 11 (19) (14)
Cash flows provided by (used in) investment activities (2,156) (1,966)
Increase in issued capital and additional paid-in capital 37 33
Purchases of treasury shares (net of disposals) and of DANONE
call options (c) 13.2 (793) 13
Dividends paid to Danone shareholders 13.4 (848) (307)
Buyout of non-controlling interests 3 (121) (363)
Dividends paid (107) (110)
Contribution from non-controlling interests to capital increases 15 1
Transactions with non-controlling interests (213) (471)
Net cash flows on hedging derivatives (d) 12.4, 12.5 54 (4)
Bonds issued or raised during the period 10.3 2,900 150
Bonds repaid during the period 10.3 (193) (618)
Increase (decrease) in other current and non-current financial debt 10.3 (111) 312
Increase (decrease) in short term investments 10.4 (1,176) 535
Cash flows provided by (used in) financing activities (343) (357)
Effect of exchange rate changes (157) 45
Increase (decrease) in cash and cash equivalents (300) (89)
Cash and cash equivalents at beginning of period 1,269 969
Cash and cash equivalents at end of period 969 880
Supplemental disclosures
Payments during the year of income tax 598 601
(a) This expenditure relates to property, plant and equipment and intangible assets used in operations.
(b) A cquisition/disposal of companies’ shares. In the case of fully-consolidated companies, this comprises cash net of financial liabilities as of the
acquisition/disposal date.
(c) DANONE call options acquired by the Company.
(d) Derivative instruments used to manage net debt.
The cash flows described correspond to items presented in the consolidated balance sheet. However, these flows may differ from changes
78
in assets DANONE
and liabilities, mainly as DOCUMENT
REGISTRATION a result of the rules for (i) translating transactions in currencies other than the functional currency, (ii)
2014
translating the financial statements of companies with a functional currency other than the euro, and (iii) changes in the consolidation scope.
Consolidated statement of changes in equity

relating to Group performance shares

Other transactions involving treasury
shares and DANONE call options (a)
Other comprehensive income
Counterpart entry to expense
non-controlling interests
Decrease in issued capital

Other transactions with
Dividends paid in shares
Dividends paid in cash

As of January 1, 2013
and stock-options (b)

Capital increase
Other changes
(in € millions) Notes
Share capital 161 (3) 158
Additional paid-in
capital 3,487 37 (594) 2,930
Retained earnings 10,926 1,422 19 (848) (350) (16) 11,153
Cumulative translation
adjustments (136) (1,417) (1,553)
Unrealized gains
and losses related
to cash-flow
hedging derivatives,
net of tax (87) 58 (29)
4
Unrealized gains
and losses related
to available-for-sale
financial assets
net of tax 11 85 64 149
Other
comprehensive
income, net of tax 2 2
Actuarial gains and
losses on retirement
commitments
not recyclable
to profit or loss 7 (254) 9 (245)
Other comprehensive
income (254) 131 − − − − − − − − (123)
Treasury shares and
DANONE call options 13 (1,993) 597 (475) (1,871)
Equity – Group share 12,191 136 37 − (475) 19 − (848) (350) (16) 10,694
Non-controlling
interests 63 83 (107) (4) 35
Consolidated equity 12,254 219 37 − (475) 19 − (955) (354) (16) 10,729
(b) Group performance shares and stock-options granted to certain employees and corporate officers.

Other transactions with non-controlling

Counterpart entry to expense relating
Other transactions involving treasury
shares and DANONE call options (a)
to Group performance shares and

Other comprehensive income
Decrease in issued capital
Dividends paid in shares

Dividends paid in cash
As of January 1, 2014
Capital increase
stock-options (b)
Other changes
interests
(in € millions) Notes
Share capital 158 3 161
Additional paid-in
capital 2,930 33 541 3,505
Retained earnings 11,153 1,119 19 (544) (307) 290 88 11,817
Cumulative
translation
adjustments (1,553) 177 (126) (1,501)
Unrealized gains
and losses related
to cash-flow
hedging derivatives,
net of tax (29) (115) 34 (109)
Unrealized gains
and losses related
to available-for-sale
financial assets net
of tax 11 149 (73) (31) 45
Other
comprehensive
income, net of tax 2 3 (5)
Actuarial gains and
losses on retirement
commitments not
recyclable to profit
or loss 7 (245) (138) 21 (363)
Other comprehensive
income (123) (323) − − − − − − − 19 (427)
Treasury shares and
DANONE call options 13 (1,871) 13 (1,859)
Equity – Group share 10,694 973 33 − 13 19 − (307) 290 (18) 11,696
Non-controlling
interests 35 77 1 (110) 37 8 49
Consolidated equity 10,729 1,051 35 − 13 19 − (418) 327 (10) 11,745
(b) Group performance shares and stock-options granted to certain employees and corporate officers.

Notes to the consolidated financial statements

Table of contents
Note 1. Accounting principles 83 Note 5. Information concerning

Note 1.1. Basis for preparation 83 the Group’s operating activities 98
Note 1.2. Accounting framework applied 83 Note 5.1. Accounting principles 98
Note 5.2. Operating segments 98
Note 2. Fully consolidated Note 5.3. Other components of trading operating income 100
companies 84 Note 5.4. Working capital 100
Note 2.1. Accounting principles 84 Note 5.5. Property, plant and equipment and capital
expenditure 102
Note 2.2. Main changes during the period 85
Note 5.6. Off-balance sheet commitments relating to
Note 2.3. Main fully consolidated companies 86 operating activities 105
Note 2.4. Transactions in respect of Centrale Laitière Note 5.7. Financial risks associated
(Fresh Dairy Products, Morocco) 86 with operating activities 106
Note 2.5. Accounting for other material acquisitions
resulting in control being obtained in 2014 87
Note 2.6. Finalization in 2014 of the accounting for
Note 6. Events and transactions
the other material acquisitions resulting in outside the Group’s ordinary
control being obtained carried out in 2013 87
Note 2.7. Liabilities/assets linked to earn-outs related
activities 107
to acquisitions resulting in control being obtained 88 Note 6.1. Other operating income (expense) 107
Note 6.2. Savings and adaptation plan for the Group’s 4
organizations in Europe 107
Note 3. Non-controlling Note 6.3. Impact of the false safety alert issued by
interests and related liabilities 88 Fonterra with respect to certain ingredients
supplied to the Group in Asia in 2013 108
Note 3.1. Accounting principles 88
Note 3.2. Main companies in terms of net income and
consolidated net assets, fully consolidated Note 7. Number of employees,
but not fully-owned 88
personnel costs and employee
Note 3.4. Transactions relating to non-controlling
benefits 109
interests in Danone Spain (Fresh Dairy Note 7.1. Number of employees at fully
Products, Spain) 89 consolidated companies 109
Note 3.5. Liabilities related to put options granted Note 7.2. Personnel costs of fully consolidated companies 110
to non-controlling interests 90
Note 7.3. Retirement obligations and other
Note 3.6. Impact of Other transactions with long-term benefits 110
Note 7.4. Group performance shares and stock-
on the consolidated financial statements 91
options granted to certain employees and
corporate officers 114
Note 4. Associates 92 Note 7.5. Company Savings Plan 115

Note 4.2. Main associates in terms of net income Note 8. Income tax 115
and consolidated net assets 93
Note 8.1. Income tax 115
Note 8.2. Deferred taxes 116
Note 4.4. Mengniu (Fresh Dairy Products, China) 94
Note 8.3. Tax loss carryforwards 117
Note 4.5. Yakult (Fresh Dairy Products, Japan) 95
Note 4.6. Carrying amount and change during the period 96
Note 9. Intangible assets 118
Note 4.7. Impairment review of investments in associates 97
Note 4.8. Share of profit of associates 97
Note 9.2. Carrying amount and change during the period 119
Note 9.3. Impairment review 121

Note 10. Financing and financial Note 14. Other non-current

security, net debt and cost provisions and liabilities
of net debt 124 and legal and arbitration
Note 10.1. Accounting principles 124 proceedings 144
Note 10.2. L iquidity risk and management policy 124 Note 14.1. Accounting principles 144
Note 10.3. Financing situation and liquidity risk 126 Note 14.2. Carrying amount and change during the period 144
Note 10.4. Short-term investments 129 Note 14.3. Legal and arbitration proceedings 144
Note 10.5. Net debt 129
Note 10.6. Cost of net debt 130 Note 15. Related party
Note 10.7. F inancial risks associated with
the financing activity 130
transactions 145
Note 15.2. Transactions with associates 145
Note 11. Other financial
Note 15.3. Compensation and benefits granted
investments, Other financial to members of the Executive Committee
income (expense) 132 and Board of Directors 145
Note 15.4. Related party agreements 145
Note 11.2. Other financial investments 132
Note 11.3. O ther financial income and other Note 16. Subsequent events 145
financial expense 133
Note 17. List of subsidiaries

Note 12. Organization of as of December 31, 2014 146
financial risks and derivatives Note 17.1. Fully consolidated holding companies and
management 133 financial companies held directly by the Company 146
Note 17.2. Main fully consolidated companies
Note 12.1. Organization of financial risks management 133
of the Fresh Dairy Products Division 146
Note 12.3. Derivatives used to hedge operational of the Waters Division 147
currency risk 134
Note 12.4. Derivatives used to hedge currency risks of the Early Life Nutrition Division 148
relating to financing, currency translation
and assets 136
of the Medical Nutrition Division 149
Note 12.5. Derivatives used to hedge interest rate risk 136
Note 17.6. Main investments in associates 149
Note 12.6. Counterparty risk 137
Note 12.7. Securities risk 138
Note 12.8. Other information required by IFRS 7,
Financial instruments: disclosures 138
Note 13. DANONE shares, dividend,

earnings per share 140
Note 13.2. Transactions and changes involving
DANONE shares 141
Note 13.3 Outstanding DANONE shares 142
Note 13.4. Earnings per share – Group share 142
Note 13.5. Dividend 143

Accounting principles
Note 1. Accounting principles

Note 1.1. Basis for preparation presented are rounded to the nearest unit. Consequently, the sum of
the rounded amounts may differ, albeit to an insignificant extent, from
The consolidated financial statements of Danone (the “Company”), the reported total. In addition, ratios and variances are calculated
its subsidiaries and associates (together, the “Group”) as of and on the basis of the underlying amounts and not on the basis of the
for the year ended December 31, 2014 were approved by Danone’s rounded amounts.
Board of Directors on February 19, 2015 and will be submitted for
approval to the Shareholders’ Meeting on April 29, 2015. The preparation of consolidated financial statements requires
management to make estimates and assumptions that affect the
The consolidated financial statements and the Notes to the reported amounts in the consolidated balance sheet, consolidated
consolidated financial statements are presented in euros. Unless income statement and Notes to the consolidated financial statements.
indicated otherwise, amounts are expressed in millions of euros The main such estimates and assumptions relate to:
and rounded to the nearest million. Generally speaking, the values
Notes
Measurement of intangible assets 9.3

Measurement of investments in associates 4.1, 4.4, 4.5, 4.7
Measurement of deferred tax assets 8.2, 8.3
Recognition of liabilities related to put options granted to non-controlling interests 1.2, 3.1
Determination of the amount of provisions for risks and charges 14.2, 14.3
Determination of the amount of rebates, trade supports and other deduction relating to agreements with customers 5.1
These assumptions, estimates and appraisals are made on the basis The standards, amendments and interpretations applied since
of available information and conditions at the end of the financial January 1, 2014 do not have a material impact on the consolidated 4
period presented. Actual amounts may differ from those estimates, financial statements for the year ended December 31, 2014. In
particularly in an economical and financial volatile context. particular, the application of IFRS 10 and IFRS 11 did not affect the
Group’s consolidation scope as of December 31, 2013 and 2014.
In addition to the use of estimates, the Group’s management uses
its judgment to define the accounting treatment for certain activities Standards, amendments and interpretations
and transactions, when they are not explicitly addressed in IFRS and
published by the IASB which may be adopted
related interpretations, particularly in the case of the recognition
of put options granted to non-controlling interests. early as of January 1, 2014
• IFRIC 21, Levies.
Note 1.2. Accounting framework applied The Group did not exercise the option to apply this interpretation in
The consolidated financial statements have been prepared in advance to the consolidated financial statements for the year ended
accordance with IFRS (International Financial Reporting Standards) December 31, 2014 and does not expect it to have a material impact
as adopted by the European Union, which are available on the website on its results and financial position.
of the European Commission (http://ec.europa.eu/internal_market/ In addition, the IASB has published standards, amendments and
accounting/ias/index_en.htm). interpretations that have not yet been adopted by the European Union:
First-time application of new accounting standards • IFRS 9, Financial Instruments;
Standards, amendments and interpretations whose • IFRS 15, Revenue from Contracts with Customers;
application is mandatory as of January 1, 2014
• Amendments to IAS 16 on property, plant and equipment;
• IFRS 10, Consolidated financial statements;
• Amendment to IAS 38 on intangible assets.
• IFRS 11, Joint arrangements;
The Group is currently assessing the impact of these standards on
• IFRS 12, Disclosure of interests in other entities; its results and financial position.
• Amendments to IFRS 10, IFRS 12 and IAS 27 on investment entities; Other standards
• Revised IAS 27, Separate financial statements; The Group is closely monitoring the economic conditions that could,
• Revised IAS 28, Investments in associates; in 2015, result in Argentina being qualified as a hyperinflationary
economy, with the result that IA S 29 Financial Reporting in
• Amendment to IAS 32 on the offsetting of financial assets and Hyperinflationary Economies would become applicable. This standard
financial liabilities; would require the balance sheets and net income of the subsidiaries
• Amendment to IAS 36 on the recoverable amount disclosures concerned to be (i) restated to reflect the changes in the general
for non-financial assets; purchasing power of the local currency by using official inflation
rate indices applicable at the end of the reporting period, and (ii)
• Amendment to IAS 39 on the novation of derivatives and the translated into euros at the exchange rate ruling at the end of the
continuation of hedge accounting. reporting period.

Fully consolidated companies
Current IASB and IFRIC projects granted to non-controlling interests must be recognized in profit or
loss in accordance with IAS 39 and IFRS 9. The Group, in the absence
The Group is also closely monitoring the work of the IASB and the
of specific IFRS guidance, applies the recommendations issued by
IFRIC, which could lead to a revision of the treatment of put options
the AMF (Autorité des marchés financiers) in November 2009: the
granted to non-controlling interests. The draft interpretation
difference between the exercise price of the options granted and
published by IFRIC on May 31, 2012 specifies that all changes in
the carrying amount of the non-controlling interests is presented
the measurement of the financial liability in respect of put options
in equity, as a deduction from Retained earnings – Group share.
Note 2. Fully consolidated companies

Note 2.1. Accounting principles Business combinations: acquisitions resulting
in control being obtained, partial disposal
Fully consolidated companies resulting in control being lost
All subsidiaries, in which the Group has direct or indirect exclusive
The accounting treatment of acquisitions resulting in control being
control, are fully consolidated. Exclusive control over an investee
obtained and partial disposals resulting in control being lost is as
exists when the Group has (i) power over said investee, (ii) exposure,
follows:
or rights, to variable returns from its involvement with the investee,
and (iii) the ability to use its power over the investee to affect the • when control is obtained, the incidental transaction costs are
amount of the Group’s returns. recognized in the income statement under the heading Other
operating income (expense) in the year in which they are incurred.
Full consolidation enables the recognition of all assets, liabilities
In addition, price adjustments are initially recognized at their fair
and income statement items relating to the companies concerned in
value in the acquisition price and their subsequent changes in
the Group’s consolidated financial statements, after the elimination
value are recognized in the income statement under the heading
of intercompany transactions, the portion of the net income and
Other operating income (expense);
equity attributable to owners of the Company (Group share) being
distinguished from the portion relating to other shareholders’ • when control is obtained (or lost), the revaluation at its fair
interests (Non-controlling interests). Intercompany balances and value of the interest previously held (or the residual interest) is
transactions between consolidated entities (including dividends) are recognized in the income statement under the heading (i) Other
eliminated in the consolidated financial statements. operating income (expense) when control is lost, (ii) Share of
profit of associates when control is obtained of an entity pre-
viously accounted for as an associate, and (iii) Other financial
income (expense) when control is obtained of an entity previously
accounted for as an investment in a non-consolidated company;
• when control is obtained, non-controlling interests are recognized,
either at their share of the fair value of the assets and liabilities
of the acquired entity, or at their fair value. In the latter case,
the goodwill is then increased by the portion relating to these
non-controlling interests. The treatment adopted is selected on
an individual basis for each acquisition.
Business combinations may be recognized on a provisional basis, as
the amounts allocated to the identifiable assets acquired, liabilities
assumed and goodwill may be amended during a maximum period
of one year from their acquisition date.

Note 2.2. Main changes during the period

Main changes during 2014
Infant formula production and Early Life

packaging companies (b) Nutrition New Zealand July − 100.0%
Fresh Dairy
Centrale Laitière (c) Products Morocco November 68.7% 90.9%

companies in China (d) Products China July 100.0% 20.0%
companies in Indonesia Products Indonesia December 100.0% 0.0%
(b) NEW ZEALAND CAN AUCKLAND LTD, SUTTON GROUP LTD, K&B LTD, which produce and package drinks, notably infant formula. The companies
have been restructured and/or renamed as DANONE NUTRICIA NZ LTD and NUTRICIA CAN MANUFACTURERS LTD.
(c) See Note 2.4 of the Notes to the consolidated financial statements.
(d) DANONE DAIRY BEIJING and DANONE DAIRY SHANGHAI CO. LTD. Danone now owns 20% of the new group formed together with the Mengniu group’s
fresh dairy products companies (See Note 4.4 of the Notes to the consolidated financial statements).
4

Fresh Dairy
Centrale Laitière (b) Products Morocco February 30.7% 68.7%
Sirma Waters Turkey June − 50.1%
Early Life
Happy Family Nutrition United States June − 91.9%
Fresh Dairy
YoCrunch Products United States August − 100.0%

Fresh Dairy
Danone Spain (c) Products Spain July 66.5% 76.6%

Fresh Dairy
Alsafi Danone (d) Products Saudi Arabia July 50.1% 50.1%
(b) See Note 2.4 of the Notes to the consolidated financial statements.
(d) A s from July 1, 2013, the Group no longer had exclusive control of this company, which was fully consolidated as of December 31, 2012. The governance
contract giving the Group said exclusive control expired on July 1, 2013 and was not renewed. Consequently, the company has been accounted for as an
associate since that date. In accordance with Revised IAS 27, the loss of control of the company resulted in the recognition of a revaluation reserve under
the heading Other operating income (expense) in the income statement for the year ended December 31, 2013.

Note 2.3. Main fully consolidated Acquisition of additional stake in 2014

companies On November 3, 2014, Danone announced it had acquired an additional
21.75% interest in Centrale Laitière from SNI, at a price estimated on
Main Group companies are listed in Notes 17.1 to 17.5 of the Notes that date of €278 million as a result of the exercise of put options by
to the consolidated financial statements. non-controlling shareholders. Following this transaction, Danone
held a 90.9% interest in Centrale Laitière. Those non-controlling
Note 2.4. Transactions in respect interests with put options over their residual interest held a 5%
of Centrale Laitière (Fresh Dairy stake. They no longer have a representative on Centrale Laitière’s
board of directors (see Note 3.5 of the Notes to the consolidated
Products, Morocco) financial statements).
Acquisition resulting in control being obtained Accounting for acquisition resulting in control
in 2013 being obtained
Description of the transaction Accounting in 2013
On June 27, 2012, Danone announced that it was increasing its equity The Company has been fully consolidated since February 20, 2013,
interest in Centrale Laitière from 29.2% to 67.0%. Centrale Laitière the remaining 31.3% not held by the Group being accounted for as a
is Morocco’s leading dairy products company with a market share of non-controlling interest, including a 26.7% stake, which is subject
nearly 60%. The company generates sales of around €600 million to a shareholders’ agreement and put and call options. Pursuant to
and markets products under the Danone brand such as Yawmy, this agreement, non-controlling interests holding the 26.7% stake
Moufid and Activia. keep their voting rights and rights to receive dividends related to
their stake, as well as two representatives on the company’s board
The acquisition resulting in control being obtained was subject to
of directors.
approval by the relevant Moroccan authorities. It was finalized on
February 20, 2013: the Group acquired an additional 37.8% equity In accordance with Revised IFRS 3, the acquisition of an additional
interest and obtained control of the company for a €543 million stake in Centrale Laitière resulting in control being obtained is
consideration. analyzed as follows:
Furthermore, (i) the increase in Danone’s shareholding to 67.0% led • the revaluation at fair value of the equity interest previously held
to subsequent additional purchases of the company’s shares in the by the Group, which resulted in a €226 million profit recognized
Casablanca stock market, notably through a mandatory takeover under the Share of profit of associates heading in the consolidated
bid, and (ii) a 26.7% stake held by non-controlling interests is subject income statement for the 2013 fiscal year;
to a shareholders’ agreement and put and call options with a fixed
exercise price and exercise date in 2014 at subsequent periods.
• the acquisition resulting in control being obtained, which requires
(i) an allocation of the purchase price, and (ii) the acquired assets
The transaction is not subject to a contingent payment (earn-out).
and liabilities to be recognized at their fair value. As of December
Furthermore, in connection with this transaction, the Group carried
31, 2013, this business combination was recorded on a definitive
out the disposal of its 2.61% equity stake in the company SNI, by
basis.
exercising its put option.
In addition, the disposal by Danone of its equity interest in SNI,
In total, Danone acquired an additional 39.5% equity interest in
previously accounted for under Other non-consolidated investments
Centrale Laitière for a total consideration of €566 million. As of
in the consolidated financial statements, resulted in a €52 million
December 31, 2013, the Group held 68.7% of the shares of the
profit, recognized under the Net financial income (expense) heading
company, non-controlling interests holding 31.3%.
in the consolidated income statement for the year ended December
31, 2013, fully recycled from equity to profit and loss.
Purchase price allocation
At the acquisition date
(in € millions) 2013
Fair value of net assets acquired (at 100%) (a) 211

Net assets attributable to non-controlling interests (66)
Partial goodwill (b) 727
Fair value at the date of acquisition of the consideration being transferred (c) 872
(a) T he assets acquired mainly comprise three brands with indefinite useful lives (€173 million) and other property, plant and equipment and intangible
assets (€240 million). The liabilities mainly comprise net debt (€48 million) and other liabilities (€135 million).
(b) Residual goodwill represents mainly the human capital, the advantages associated with the size and industrial structure and the expected synergies
in terms of Research and Development, the pooling of expertise and industrial marketing and access for Danone to a significant distribution network
in Morocco.
(c) T he fair value, as of the acquisition date, of the consideration transferred comprises (i) the €566 million paid for Danone's additional 39.5% equity
interest in the company and (ii) the fair value of the equity interest previously held (€306 million).

Note 2.5. Accounting for other material The main characteristics of these other acquisitions carried out in
2014 are as follows:
acquisitions resulting in control being • they were paid for in cash;
obtained in 2014 • none of them is subject to a contingent payment (earn-out) or
The business combinations carried out in 2014 have been accounted put options granted to non-controlling interests;
for on a provisional basis since the amounts allocated to the acquired
identifiable assets and liabilities and to goodwill may be adjusted • the acquisition-related expenses incurred during the period
during a period of one year from the respective date of each of totaled €3 million before taxes and have been expensed in the
these combinations. consolidated income statement under Other operating income
(expense).
Since these transactions are not material on an individual basis,
they have been grouped for the purposes of the preparation of the They did not have a material impact on the items of the consolidated
information provided hereafter. income statement for the year ended December 31, 2014 and would
not have had a material impact if they had been calculated on a
full-year basis.


Net assets attributable to non-controlling interests (b) −
Partial goodwill (c) (d) 124
Fair value at the date of acquisition of the consideration paid to the sellers 199
(a) The assets acquired correspond mainly to property, plant and equipment and the liabilities correspond mainly to financial debt.
(b) For each of the subsidiaries not fully acquired, the non-controlling interests are recognized at their share of the fair value of the assets and liabilities
of the acquired entity. 4
(c) Provisional goodwill.
(d) Residual goodwill represents mainly the human capital and the expected synergies in terms of industrial activity, cost savings and security of the
milk supply.
Note 2.6. Finalization in 2014 of the accounting for the other material acquisitions resulting in
control being obtained carried out in 2013
In 2014, the Group finalized the accounting treatment of the companies acquired during 2013 other than Centrale Laitière. This did not
result in a material adjustment to the purchase price allocation in the consolidated financial statements for 2014 as compared with the
consolidated financial statements for 2013.


Net assets attributable to non-controlling interests (b) (14)
Partial goodwill (c) 299
Fair value at the date of acquisition of the consideration paid to the sellers 381
(a) The assets acquired correspond mainly to property, plant and equipment and the liabilities correspond mainly to financial debt.
(b) For each of the subsidiaries not fully acquired, the non-controlling interests are recognized at their share of the fair value of the assets and liabilities
of the acquired entity.
(c) Residual goodwill represents mainly the human capital, the expected synergies in terms of commercial and industrial activity and cost savings, mar-
ket shares and their growth potential.

Non-controlling interests and related liabilities
Note 2.7. Liabilities/assets linked to earn-outs related to acquisitions resulting in

control being obtained
At December 31
Total liabilities (assets) (a) − −

(a) Comprises all earn-outs related to acquisitions resulting in control being obtained, i.e. relating to transactions carried out in 2013, 2014 and during earlier
fiscal years.
Note 3. Non-controlling interests and related liabilities

Note 3.1. Accounting principles In accordance with IAS 32, Financial instruments: presentation, when
non-controlling interests hold put options enabling them to sell
Acquisitions or disposals of interests in controlled their investment in the Group, a financial liability is recognized in an
companies with no impact on control amount corresponding to the present value of the option strike price,
and the counterpart of the liability arising from these obligations is:
Purchases or disposals of interests in controlled companies that
do not result in control being obtained or lost are recognized • on the one hand, the reclassification as debt of the carrying
directly in equity under the heading Retained earnings, as transfers amount of the corresponding non-controlling interests;
between the Group share and the non-controlling interests’ share
in the consolidated equity, with no impact on profit or loss and the
• on the other, a reduction in the equity – Group share: the dif-
ference between the present value of the strike price of the
corresponding cash flows are presented within cash flows relating
options granted and the carrying amount of non-controlling
to financing activities. The same accounting treatment is applied to
interests is presented as a reduction of Retained earnings –
the costs associated with these transactions.
Group share. This item is adjusted at the end of each reporting
Liabilities related to put options granted period to reflect changes in the strike price of the options and the
carrying amount of non-controlling interests. In the absence of
to non-controlling interests
specific provisions stipulated by IFRS, the Company has applied
The Group granted put options to third parties with non-controlling the recommendations issued by the AMF (Autorité des marchés
interests in certain consolidated subsidiaries, with these options financiers) in November 2009.
giving the holders the right to sell part or all of their investment in
these subsidiaries. These financial liabilities do not bear interest.
Note 3.2. Main companies in terms of net income and consolidated net assets,
fully consolidated but not fully-owned
Ownership percentage of non-controlling interests as of December 31
Fresh Dairy
Danone CIS (b) Products CIS zone 49.1% 49.1%
Fresh Dairy
Danone Spain (c) Products Spain 23.4% 23.4%
Fresh Dairy
Centrale Laitière (d) Products Morocco Casablanca 31.3% 9.1%
(b) T he non-controlling interests in that group’s parent company have three representatives on the company’s board of directors (out of a total of seven
directors).
(c) T
he non-controlling interests in the company have two representatives on the company’s board of directors (out of a total of nine directors).
(d) A cquisition of an additional stake by the Group in 2014 (see Note 2.4 of the Notes to the consolidated financial statements). Since that time, the non-
controlling interests no longer have a representative on the company’s board of directors.

Each of these companies operates the Group’s Fresh Dairy Products The arbitration panels petitioned by these holders of put options
activities in a given country or group of countries. Most of the non- issued their rulings in December 2014 and February 2015. Following
controlling shareholders of each of these companies hold put options these decisions, in early 2015 the Group purchased in exchange for
on their interest as described hereafter (in the case of Centrale cash 2,581,030 shares in Danone Spain. For the shares subject to
Laitière, the non-controlling shareholders that have put options put options, the Group paid an amount below the carrying value as
represent 5% of the company’s share capital). of December 31, 2014 of the related liabilities. The shares purchased
through this transaction represent approximately 15.7% of Danone
Lastly, in 2014 as in 2013, the non-controlling interests’ share in
Spain’s share capital, thereby bringing the Group’s overall equity
these companies did not exceed 5% of the Group’s net sales or
interest in the company to 91%.
assets and liabilities (excluding liabilities related to put options),
which is deemed to be not material. Accounting in 2014
The financial liabilities related to put options granted to non-
Note 3.3. Main changes during the period controlling interests of Danone Spain amounted to €1,030 million
See Note 2.2 of the Notes to the consolidated financial statements. as of December 31, 2014.
Note 3.4. Transactions relating to Accounting in 2013

The financial liabilities related to put options granted to non-
non-controlling interests in Danone Spain controlling interests of Danone Spain amounted to €1,136 million
(Fresh Dairy Products, Spain) as of December 31, 2013.
Since 2012, the Group had discussed with Danone Spain’s non- Based on these events, the share buyback, option exercises and
controlling shareholders the terms and conditions of these put procedures, the Group decided to maintain a portion of the remaining
options, especially in light of Southern Europe’s deteriorating put options (€799 million related to the 15% of the capital mentioned
economy and its significant impact on Danone Spain. above) as short-term financial debt in its financial statements as of
December 31, 2013. Put options amounting to €337 million continued
As a reminder of the background, during the first half of 2013, the
to be classified as non-current financial debt, as these options are
Group repurchased a total of 1,642,618 shares from several Danone
subject to a one-year payment term.
Spain non-controlling shareholders (including 1,550,315 shares
through the exercise of put options by their beneficiaries, and the The main impacts on the consolidated financial statements related
remainder through direct purchases of Danone Spain shares from to the Danone Spain options repurchased in 2013 are as follows: 4
their holders), raising its Danone Spain shareholding from 65.6%
to 75.6%. Shares were acquired in exchange for cash payments
• decrease by €504 million of the liabilities related to put options
granted to non-controlling interests;
totaling €108 million and for 6,715,266 DANONE treasury shares
(1.0% of the Danone SA share capital). An equal number of DANONE • favorable impact of €80 million on consolidated equity and the
shares was purchased on the market by the Group over the first six Group net debt, the transaction price paid being lower than the
months, under its share buyback program to offset dilution resulting carrying values of these commitments, for purchases by means
from this transaction. of put options exercises;
After that share buyback, Danone Spain’s shares were held (i) for • €108 million cash flows used in financing activities, corresponding
75.6 % by the Group, (ii) for 22.1 % by non-controlling interests with to the portion paid in cash (to holders of put options and other
put options, (iii) for 1.0 % by non-controlling interests without put selling shareholders) and presented in Transactions with non-
options, and (iv) for 1.3% by Danone Spain. controlling interests in the Consolidated statement of cash flows;
Non-controlling shareholders representing around 15% of Danone • the transfer of 6.7 million DANONE shares did not have any impact
Spain’s share capital exercised their put options in 2013. The Group on the Consolidated statement of cash flows. Nevertheless, as
contested those exercises and invited the shareholders concerned to described above, an equal number of DANONE shares had been
continue the process of renegotiation of their put options’ terms and purchased on the market by the Group over the first six months
conditions. During the first six months of 2013, these non-controlling of 2013. Those purchases are presented in the item Purchases
shareholders opted not to continue the discussion process and of treasury shares (net of disposals) and of DANONE call options
initiated proceedings against the Group for the purpose of execution in the cash flows used in financing activities in the Consolidated
of their put options before an arbitration tribunal. statement of cash-flows.

Note 3.5. Liabilities related to put options granted to non-controlling interests

Carrying amount and main characteristics
As of December 31
Start of exercise Price calculation
(in € millions) 2013 2014 period formula
Non-current portion 337 236

Current portion 799 794
Average earnings
multiple over
Danone Spain (a) 1,136 1,030 At any time (a) several years
Earnings multiple
Danone CIS 1,079 912 2014 with floor price
Other – Non-current portion 140 113 After 2014
Other – Current portion 889 503 2014
Other (b) 1,029 616
Total 3,244 2,558
of which, Non-current financial
liabilities 477 349
of which, Current financial liabilities 2,767 2,209
(a) Contractually, these options can be exercised at any time. However, some beneficiaries signed a rider under the terms of which they accepted that the
settlement of the amount owed by Danone and the transfer of ownership would be deferred by one year.
(b) S everal put options with an individual amount less than or equal to 10% of the total amount of put options granted by the Group to some non-controlling
interests.

As of January 1 3,271 3,244

New options (a) 403 −
Options exercised (509) (341)
Change in the present value of the strike price
of outstanding options 79 (345)
As of December 31 3,244 2,558
(a) Carrying amount as of December 31.

Note 3.6. Impact of Other transactions with non-controlling interests on the consolidated
Impact on the consolidated financial statements for the fiscal year ended December 31, 2014
Total Other transactions with

Other transactions with non-
Change in present value of

strike price of outstanding

Change before effect of
controlling interests
Options exercised
New options
options
Other
Total
(in € millions)
Equity – Group share 10,694 712 − (10) 305 (5) 290 1,002 11,696
Holders of put options − (40) − − 40 − 40 − −
Not holding put options 35 17 − − − (3) (3) 14 49
Non-controlling interests 35 (23) − − 40 (3) 37 14 49
Equity 10,729 689 − (10) 345 (8) 327 1,016 11,745
options 3,244 − − (341) (345) − (686) (686) 2,558
Financing flows received
(paid) (a) (109) – (351) – (12) (363) (471) – 4
(a) Transactions with non-controlling interests.

Associates
Impact on the consolidated financial statements for the fiscal year ended December 31, 2013
Total Other transactions with

Other transactions with non-
Change in present value of

strike price of outstanding

Change before effect of
controlling interests
Options exercised
New options
Other (b)
options
Total
(in € millions)
Equity – Group share 12,191 (1,147) (332) 80 (97) (1) (350) (1,497) 10,694
Holders of put options (a) − (18) (71) − 18 71 18 − −
Not holding put options 63 (6) − − − (22) (22) (28) 35
Non-controlling interests 63 (24) (71) − 18 49 (4) (28) 35
Equity 12,254 (1,171) (403) 80 (79) 48 (354) (1,525) 10,729
options 3,271 403 (509) 79 − (27) (27) 3,244
Financing flows received (paid) (b) (107) − (94) − (27) (121) (228)
(a) Transactions with non-controlling interests.
(b) Mainly effects of changes in consolidation scope and in shareholding of non-controlling interests holding put options.
Note 4. Associates
Note 4.1. Accounting principles
All companies in which the Group exercises a significant influence, The main components of Net income of associates are:
directly or indirectly, are accounted for using the equity method.
Under this method, the Group recognizes in the carrying amount
• the Group’s share of the profits or losses of its associates,
calculated on the basis of estimates;
of the shares held in the associated or jointly-controlled entity the
acquisition-related cost of the shares adjusted by its proportionate • gains or losses on disposals of shareholdings in associates;
share of changes in the entity’s net assets since its acquisition.
• revaluation reserve resulting from a loss of influence where
On the acquisition of investments accounted for using the equity there is no disposal of shares;
method, the acquisition price of the shares is allocated on a fair value
basis to the identifiable assets acquired and liabilities assumed. The
• impairment of investments in associates.
difference between the acquisition price and the Group’s share in the
fair value of the assets acquired and liabilities assumed represents
goodwill, which is added to the carrying amount of the shares.

Associates
Note 4.2. Main associates in terms of net income and consolidated net assets
Fresh Dairy
Mengniu (b) Products China Hong Kong 4.0% 9.9%
Fresh Dairy
Yakult (c) Products Japan Tokyo 20.0% 21.3%
(c) YAKULT HONSHA CO. LTD.
The Group acquired its stake in these companies under the terms In 2014, these companies accounted for more than 60% in total of
of broader agreements, the main aim of which was operational Investments in associates (other investments in associates did not,
collaboration and the development of regional categories and individually, account for more than 10% of the total). In addition, none
markets. of these companies accounted for more than 5% of the net income
or consolidated net assets.
Note 4.3. Main changes during the period

Division Country Transaction date (a) 2013 2014
Fresh Dairy 4
Mengniu (b) Products China January 4.0% 9.9%
Danone group’s and Mengniu
group’s fresh dairy products Fresh Dairy
companies in China (c) Products China July – 20.0%
Fresh Dairy
Brookside (d) Products Kenya July – 40.0%
Fresh Dairy
Yakult (e) Products Japan January 20.0% 21.3%
– – – – – –
(c) INNER MONGOLIA MENGNIU DANONE DAIRY CO. LTD. See Note 4.4 of the Notes to the consolidated financial statements.
(d) BROOKSIDE AFRICA LIMITED. With 2013 revenues of around €130 million, Brookside is East Africa’s leading dairy products group. Established in
Kenya in 1993, Brookside operates a unique distribution platform that provides daily access to over 200,000 sales outlets. The company manages the
largest milk collection network in East Africa, with 140,000 farmers in the region. By uniting international expertise in fresh dairy products with
Brookside’s regional expertise and robust supply chain, the partnership will enable Brookside to accelerate its growth by expanding its product portfolio
and strengthening its geographical presence in key markets in the East African region, including Uganda and Tanzania. This partnership has significantly
strengthened the platform Danone is in the process of constructing in Africa.
(e) YAKULT HONSHA CO. LTD. The Group’s ownership percentage increased mechanically in 2014 due to the purchases of its own shares carried out by
Yakult in 2013 and reflected in the Group’s consolidated financial statements in 2014.

Associates

Division Country Transaction date (a) 2012 2013
Fresh Dairy
Alsafi Danone (b) Products Saudi Arabia July 50.1% 50.1%
Fresh Dairy
FanMilk Products West Africa November – 49.0%
– – – – – –
Fresh Dairy
Centrale Laitière (c) Products Morocco February 30.7% 68.7%
Note 4.4. Mengniu (Fresh Dairy Products, • meanwhile, COFCO, Danone and Arla, the three reference sha-
reholders in Mengniu, combined their respective equity interests
China) (16.3%, 9.9% and 5.3%) in a joint venture, COFCO Dairy Invest-
ments, enabling the pooling of interests in Mengniu’s governance
Main characteristics of the investment and becoming the company’s largest single shareholder with an
and increase in the Group’s investment in 2014 equity interest of nearly 32%.
On May 20, 2013, Danone announced that the Group had signed When these steps were completed, Danone was the second-largest
agreements with COFCO and Mengniu to join forces to accelerate shareholder in Mengniu behind COFCO, with a 9.9% indirect stake
the development of fresh dairy products in China. The main terms through its 31% ownership interest in COFCO Dairy Investments.
and conditions of these agreements are as follows:
In addition, on October 31, 2014, Danone, Mengniu and Yashili
• pursuant to the terms and conditions of the agreement signed announced the expansion of their strategic alliance into infant milk
with COFCO, Danone becomes a strategic shareholder in Men- formula in China through the signing of an agreement allowing
gniu, owning an indirect interest of approximately 4% initially, Danone to take part in a private placement by Yashili totaling around
with an aim to increase the interest in Mengniu based on market €437 million on that date, at a price of HKD 3.70 per share. This
conditions in the future; transaction will give Danone an equity stake of 25.0% in Yashili, one
• a framework agreement was signed with Mengniu to establish a of China’s main infant milk companies that generated revenue of CNY
joint venture for the production and sale of fresh dairy products 3.9 billion in 2013. Under the terms of the agreement, Danone will
in China. The joint venture will combine their respective assets recommend candidates to serve as Yashili’s Chief Executive Officer.
in this segment and will generate 2012 pro forma net sales of
about €500 million, with an estimated market share of around
Accounting treatment of the investment
21%. Danone will own 20% and Mengniu 80% of the new joint- As of December 31, 2013, the 4% indirect equity interest in Mengniu
venture in China. was recognized under Investments in other non-consolidated
companies and classified as available-for-sale securities in
These agreements were implemented gradually in 2013 and 2014: accordance with IAS 39.
• with respect to the fresh dairy products production and distri- Effective January 1, 2014, this investment was recognized under
bution joint venture in China, the approval obtained from China’s Investments in associates. Indeed, according to those elements
antitrust authorities on January 8, 2014 enabled the joint venture above and notably following the Chinese antitrust authorities’
(the INNER MONGOLIA MENGNIU DANONE DAIRY CO. LTD approval of the joint venture, which endorsed the transaction, the
company) to be launched through the operational integration of Group considers that it can exercise significant influence over the
activities and asset contributions, which were finalized during financial and operating policies of the Mengniu group as (i) a strategic
the second half of 2014; shareholder in Mengniu pursuant to the agreements with COFCO,
• on February 12, 2014, Danone announced the joint signature along (ii) its participation in Mengniu’s governance, and (iii) the Group’s
with COFCO Dairy Investments of an agreement to subscribe a operating involvement in Mengniu’s fresh dairy products activities
reserved rights issue by Mengniu. This transaction valued at and the joint operating activities involving Mengniu and Danone
€486 million, which increased Danone’s stake in Mengniu from Dairy China, pursuant to those agreements.
4.0% to 9.9%, was completed on March 27, 2014;

Associates
Carrying amount and market capitalization

As of December 31
Market capitalization (a) 6,318 6,651

Carrying amount (b) 250 759
(a) The amount disclosed is 100% of the company’s market capitalization.
Main financial information

2013 2014
Financial statements Financial statements Financial statements
for the half-year for the year for the half-year
(in € millions) ended June 30 ended December 31 ended June 30
Non-current assets (a) 1,816 2,877 3,136

Current assets (a) 1,565 1,955 2,324
Equity (a) 1,787 2,157 2,742

Non-current liabilities (a) 121 511 809
Current liabilities (a) 1,474 2,164 1,910
Sales (a) 2,543 5,310 3,056

Net income (a) 105 228 145
4
Other comprehensive income (a) (16) (22) 21
(a) P ublished financial statements prepared in accordance with IFRS. Income statement items have been translated into euros at the average exchange
rate for the reporting period. Balance sheet items and the market capitalization have been translated at the exchange rate ruling at the end of the
reporting period.
Note 4.5. Yakult (Fresh Dairy Products, Japan)

Main characteristics of the investment
Danone has a stake in Yakult of around 20% and has representatives and two representatives on the company’s board as of December
on the company’s board of directors under the terms of its strategic 31, 2014) and does not have any impact on the Group’s consolidated
alliance signed in 2004, which aimed at strengthening their global financial statements, as the company will continue to be accounted
leadership in probiotics and accelerating the growth of both for as an associate.
companies in the functional food market, the first phase of which
It should be noted that, as Yakult’s fiscal year closing date is March
had ended in May 2012.
31, the amounts prepared for Group consolidation purposes as
On April 26, 2013, Danone and Yakult signed a new cooperation of December 31 are estimated on the basis of the most recent
agreement to replace the existing strategic alliance. This new financial statements published for each fiscal year (interim financial
agreement calls for existing collaborations to be continued and statements for the six months ended September 30, 2013 for 2013
envisages extending them into areas that are more operational in and interim financial statements for the six months ended September
nature. It does not modify either Danone’s equity interest in Yakult or 30, 2014 for 2014).
its influence in that company (Danone had 21,3% of the voting rights
Carrying amount and market capitalization

As of December 31
Market capitalization (a) 6,454 7,728

Carrying amount 587 634
(a) The amount disclosed is 100% of the company’s market capitalization.

Associates
Main financial information

2013 2014
Financial statements Financial statements Financial statements Financial statements

for the year ended for the half-year ended for the year ended for the half-year ended
(in € millions) March 30 September 30 March 30 September 30
Non-current assets (a) 2,094 2,116 2,165 2,319

Current assets (a) 1,532 1,523 1,483 1,565
Equity (a) 2,375 2,152 2,163 2,336

Non-current liabilities (a) 247 462 721 695
Current liabilities (a) 1,003 1,024 765 853
Sales (a) 2,620 1,357 2,488 1,293

Net income (a) 159 102 192 103
Other comprehensive income (a) 160 126 193 (15)
(a) P ublished financial statements prepared in accordance with Japanese GAAP. Income statement items have been translated into euros at the average
exchange rate for the reporting period. Balance sheet items and the market capitalization have been translated at the exchange rate ruling at the end
of the reporting period.
Note 4.6. Carrying amount and change during the period

Group’s share in net
(in € millions) Net goodwill assets and income Total
As of January 1, 2013 311 662 973
Acquisitions, losses of exclusive control and capital

increase during the year 159 107 266
Disposals and losses of influence during the year (32) (59) (91)
Share of profit of associates before impact of disposals − 52 52

Dividends paid − (28) (28)
Translation adjustments (49) (90) (139)
Impairment − − −
Others − − −
As of December 31, 2013 389 644 1,033
Acquisitions, losses of exclusive control and capital

increase during the year 636 421 1,057
Disposals and losses of influence during the year − − −
Share of profit of associates before impact of disposals − 76 76
Dividends paid − (19) (19)
Translation adjustments 53 − 53
Impairment (54) − (54)
Others − − −
As of December 31, 2014 1,024 1,123 2,146

Associates
Note 4.7. Impairment review of investments in associates

Methodology
The Group reviews the measurement of its investments in associates shareholding. However, the Group does not consider this fall to be
when events or circumstances indicate that impairment is likely to long-term or material with regard to (i) the price as of December
have occurred. With regard to listed shares, a significant or prolonged 31, 2014, its volatility and recent movements, (ii) the outlook for
fall in their stock price below their historical stock price constitutes valuations of the shares as published by the main brokers, and (iii)
an indication of impairment. qualitative information available on Mengniu’s performance. The
Group therefore concluded that there was no indication that these
An impairment provision is recognized within Share of profit of
shares were to be impaired as of December 31, 2014.
associates when the recoverable amount of the investment falls below
its carrying amount. This impairment provision may be reversed if Other investments in associates
the recoverable amount subsequently exceeds the carrying amount, Following the review of its other investments in associates, the
up to the limit of the share of the equity held by the Group. Group recognized, under the heading Share of profit of associates, an
impairment provision in respect of the shares of some companies in
Measurement review as of December 31, 2014 the Fresh Dairy Products and Waters Divisions totaling €54 million.
Mengniu shares
The Group noted a fall in the stock price of the Mengniu group as Measurement review as of December 31, 2013
compared with the average purchase price paid by the Group for its No impairment provision was recognized in 2013.
Note 4.8. Share of profit of associates

Share of profits of associates before gains (losses) on disposal 52 76

Impairment charges − (54) 4
Gains (losses) on disposal and revaluation and other (a) (b) 237 (8)
Total 289 14
(a) In 2013, corresponded mainly to the €226 million revaluation surplus recognized in connection with control being obtained of Centrale Laitière (see
Note 2.4 of the Notes to the consolidated financial statements).
(b) Comprised the withholding tax applied to the dividends paid by Yakult.

Information concerning the Group’s operating activities
Note 5. Information concerning the Group’s operating

activities
Note 5.1. Accounting principles Note 5.2. Operating segments
Net sales General principles
The Group’s sales mainly comprise sales of finished products. They The key indicators reviewed and used internally by the Group’s
are recognized in the income statement when the risks and benefits primary operational decision-makers (the Chief Executive Officer,
incident to ownership are transferred. Mr. Emmanuel FABER and the Chief Financial Officer, Mr. Pierre-
André TERISSE) to assess operational performance are:
Sales are stated net of trade discounts and customer rebates, as
well as net of costs relating to trade support and listing or linked • net sales;
to occasional promotional actions invoiced by customers. These
amounts are estimated when net sales are recognized, on the basis
• trading operating income;
of agreements with the concerned customers. • trading operating margin, which is defined as the trading ope-
rating income over net sales ratio;
Cost of goods sold
The cost of goods sold mainly comprises industrial costs (including
• free cash-flow, which represents cash flows provided or used
by operating activities less capital expenditure net of disposals
raw material costs, depreciation of industrial assets and overheads
and, in connection with Revised IFRS 3, excluding (i) acquisi-
dedicated to production activity) and certain logistics and transport
tion costs related to business combinations, and (ii) cash flows
costs.
related to earn-outs related to business combinations and paid
Selling expense subsequently to the acquisition date;
The selling expenses mainly comprise marketing spends and • free cash-flow excluding exceptional items, an indicator published
consumer promotions as well as sales force overheads. by the Group since the first half of 2013, in connection with its
plan to generate savings and adapt its organizations in Europe
General and administrative expense corresponding to free cash-flow before cash flows related to
The general and administrative expenses mainly comprise other initiatives that may be taken by the Group in connection with
overheads and administrative costs. the plan;
Research and development expense • net financial debt, which represents the interest-bearing portion
of net debt. It corresponds to Current and non-current financial
Development costs are generally expensed as incurred due to the
debt, excluding Liabilities related to put options granted to non-
very short time between the date on which technical feasibility is
controlling interests and net of Short-term investments, Cash
demonstrated and the date on which the products are launched.
and cash equivalents and Derivatives – assets.
Certain development costs are recognized under assets in the
Among the key indicators reviewed and used internally by the Group’s
consolidated balance sheet (see Note 9 of the Notes to the consolidated
primary operational decision-makers, only Net sales, Trading
operating income and Trading operating margin are monitored by
Division, the other indicators being monitored at the Group level.
The primary operational decision-makers monitor the four Divisions
listed below: it should be noted that the Group has not carried out
a reorganization of its operating segments.

Information by Division
Net sales (a) Trading operating income Trading operating margin
(in € millions, except percentage) 2013 2014 2013 2014 2013 2014
Fresh Dairy Products 11,790 11,129 1,219 1,033 10.3% 9.3%

Waters 3,903 4,186 509 539 13.0% 12.9%
Early Life Nutrition 4,263 4,397 837 828 19.6% 18.8%
Medical Nutrition 1,342 1,432 244 262 18.2% 18.3%
Group total 21,298 21,144 2,809 2,662 13.2% 12.6%
(a) Net sales to third parties.
Information by geographic area

Net sales, Trading operating income and Trading operating margin
Net sales (a) Trading operating income Trading operating margin
(in € millions, except percentage) 2013 2014 2013 2014 2013 2014
Europe excl. CIS (b) 8,197 8,522 1,182 1,336 14.4% 15.7%
CIS & North America (c) 4,713 4,525 450 387 9.6% 8.6%
ALMA (d) 8,388 8,097 1,177 939 14.0% 11.6%
Group Total 21,298 21,144 2,809 2,662 13.2% 12.6% 4
(a) Net sales to third parties.
(b) Including €2,210 million in France in 2014 (€2,045 million in 2013).
(c) North America: United States and Canada.
(d) Asia-Pacific/Latin America/Middle-East/Africa.
Top ten countries contributing to the consolidated net sales

(in percentage) 2013 2014
France 10% 10%

Russia 11% 9%
United States 8% 9%
China 7% 7%
Indonesia 6% 5%
United Kingdom 5% 5%
Spain 5% 5%
Mexico 5% 5%
Brazil 4% 5%
Argentina 5% 4%

Non-current assets: property, plant and equipment and intangible assets

As of December 31
Property, plant and equipment and intangible assets
Europe excl. CIS (a) 10,268 10,208

CIS & North America (b) 3,341 2 779
ALMA (c) 7,033 7,830
Group total 20,642 20,816
(a) Including €1,857 million in France as of December 31, 2014 (€1,783 million as of December 31, 2013).
(b) North America: United States and Canada.
(c) Asia-Pacific/Latin America/Middle-East/Africa.
Note 5.3. Other components of trading operating income

Other income (expense)
Employee benefits (a) (142) (141)

Various taxes (14) (54)
Capital gains on disposal of property, plant and equipment
and intangible assets 28 27
Restructuring costs (b) (19) (19)
Other (c) 42 (16)
Total (105) (202)
(a) Employee profit-sharing, Group performance shares and stock-options, defined benefit retirement plans and other employee benefits.
(b) E xcluding restructurings implemented in connection with the plan for savings and adaptation of the Group’s organizations in Europe (see Note 6.2 of
the Notes to the consolidated financial statements).
(c) Comprises mainly exchange differences, impairments, provisions for doubtful receivables and several other components.
In 2014, capital gains on disposal of property, plant and equipment and intangible assets resulted mainly from the sale of buildings and
industrial equipment.
In 2013, capital gains on disposal of property, plant and equipment and intangible assets resulted mainly from the sale of buildings.
Note 5.4. Working capital Transactions denominated in foreign currencies

When they are not hedged, transactions denominated in foreign
Accounting principles currencies are translated using the exchange rate prevailing on the
Inventories date of the transaction. At period-end, trade receivables and trade
Inventories and work-in-progress are recognized at the lower of payables denominated in foreign currencies are translated using
cost and net realizable value. Cost is determined using the weighted exchange rates on that date. Foreign exchange gains and losses
average cost method. arising from transactions in foreign currencies are recognized
under the heading Other income (expense) in the consolidated
Trade receivables income statement.
Trade receivables are recognized at their nominal value. Impairment
provisions are recognized when their recovery appears uncertain. When transactions denominated in foreign currencies are hedged,
The methods used for determining such provisions are based mainly the hedging impact is recognized in the same item as the hedged
on a historical analysis of overdue payments. element. As a result, all such transactions are recognized at the
hedged spot rate, swap points being recognized under the heading
The fair value of Trade receivables is considered to be equivalent to Other financial income (expense).
their carrying amount due to the high degree of liquidity of these items.

Carrying amount
As of December 31
Goods purchased for resale 50 77

Raw materials and supplies 560 562
Semi-finished goods and work-in-progress 106 95
Finished goods 581 655
Non-refundable containers 47 50
Impairment provisions (92) (99)
Inventories, net 1,252 1,340
Trade receivables 1,842 1,930
Notes receivable 35 38
Impairment provisions (68) (68)
Trade receivables, net 1,809 1,900
State and local authorities 450 486
Social security bodies and non-operating receivables 210 206
Prepaid expense 106 109
Derivatives – assets (a) 40 86
Other 110 87
4
Total other current assets 916 974
Total current assets 3,977 4,214
Trade payables (3,248) (3,334)

Year-end rebates payable to customers (903) (926)
Personnel costs, including social security charges (548) (584)
Taxes payable (279) (303)
State and local authorities (189) (199)
Refundable containers (81) (94)
Customers deposits (87) (68)
Derivatives – liabilities (a) (27) (169)
Prepayments from customers (7) (3)
Other (376) (395)
Total other current liabilities (2,497) (2,741)
Total current liabilities (5,745) (6,075)
Working capital (1,768) (1,861)
As a percentage of consolidated sales 8.3% 8.8%

(a) Fair value of derivatives other than derivative instruments used to manage net debt.

Credit risk on trade receivables

Credit risk exposure Due to the number of customers located in diverse geographic areas
Credit risk represents the risk of financial loss for the Group if a and the fact that its main customers are in the mass retail sector
customer or counterparty should fail to meet its contractual payment and despite the current economic situation, the Group believes
obligations. The customer payment term is generally 30 days and that it is neither exposed to significant credit risk, nor dependent
the Group’s main customers are essentially in the mass retail sector on any single customer.
where credit risk is considered low.
Sales to the Group’s largest customers and overdue receivables for which no impairment provision has been recognized
Portion of sales made to the Group’s largest customers
Group’s largest customer 4.0% 4.3%

Group’s five largest customers 14% 13%
Group’s ten largest customers 21% 19%
Portion of overdue trade receivables for which
no impairment provision has been recognized (a) 3.0% 4.1%
(a) More than 30 days overdue.
Trade receivables derecognized in connection with the non-recourse factoring program

As of December 31
Total trade receivables derecognized in connection
with the non-recourse factoring program (a) 241 257
(a) These relate to several Group subsidiaries that have used non-recourse factoring programs (with transfer of risks and benefits).
Note 5.5. Property, plant and equipment Depreciation

Depreciation of property, plant and equipment is calculated on a
and capital expenditure straight-line basis over the estimated useful lives as follows:
Accounting principles • buildings: 15 to 40 years;
Property, plant and equipment acquired by the Group are recognized
at cost of acquisition or at construction cost.
• equipment, furniture, fixtures: 5 to 20 years;
Assets used by the Group under finance leases are recognized
• other: 3 to 10 years.
as Property, plant and equipment in the consolidated balance The depreciation charges in respect of property, plant and equipment
sheet, when, in substance, the terms of the lease transfer to the are allocated to various headings in the income statement on the
Group essentially all of the risks and rewards associated with the basis of the nature and utilization of the assets concerned.
ownership of the asset. The asset is recognized for an amount that
Refundable containers
corresponds to the lower of fair value and the discounted value of
Refundable containers (including, in particular, jugs in the Waters
future lease payments. The assessment of the level of risks and
Division) are recognized at cost. They are depreciated on a straight-
rewards transferred is based on an analysis of the lease agreement.
line basis, based on available statistics for each Group entity, over
The financial debt associated with the leased asset is recognized as
the shorter of the following lengths of time:
a liability in the consolidated balance sheet under Financial debt.
Interest on borrowings to finance the construction of property, plant
• physical useful life, taking into account the internal and external
breakage rates and wear and tear;
and equipment until their operational start date is considered to be an
integral part of the cost price of the property, plant and equipment, • commercial useful life, taking into account planned or likely
provided that the criteria of IAS 23, Borrowing Costs are met. modifications of containers.
When the amount of the refund changes, the liability for deposits
received is measured based on the new amount.

Carrying amount and change during the period

Machinery Capital
and Refundable assets in
(in € millions) Land Buildings equipment containers Others progress Total
Gross amount
As of January 1, 2013 270 1,922 5,205 274 708 600 8,979
Capital expenditure (a) 14 51 167 51 38 718 1,039

Disposals (8) (33) (125) (30) (64) (7) (267)
Reclassification of assets
held for sale − − − − − − −
Changes in consolidation
scope 22 31 182 − 79 37 351
Translation adjustments (17) (107) (352) (41) (45) (55) (617)
Other 14 122 425 − 57 (612) 6
As of December 31, 2013 295 1,986 5,502 254 773 681 9,491
Depreciation
As of January 1, 2013 (38) (896) (3,274) (161) (484) (11) (4,864)
Depreciation charges and

impairment (2) (110) (402) (45) (72) − (631)
Disposals 1 22 100 27 57 − 207
4
Reclassification of assets
held for sale − − − − − − −
scope − (10) (71) − (54) 1 (134)
Translation adjustments − 34 183 25 27 − 269
Other − 2 (8) − (8) 10 (4)
As of December 31, 2013 (39) (958) (3,472) (154) (534) − (5,157)
Carrying amount
As of December 31, 2013 256 1,028 2,030 100 239 681 4,334
(a) Including property, plant and equipment acquired under finance leases. The gross amount and carrying amount of property, plant and equipment
acquired under finance leases totaled €100 million and €40 million respectively as of December 31, 2013.

Machinery Capital
and Refundable assets in
(in € millions) Land Buildings equipment containers Others progress Total
Gross amount
As of January 1, 2014 295 1,986 5,502 254 773 681 9,491
Capital expenditure (a) 2 86 145 49 27 613 921

Disposals (5) (50) (194) (27) (56) (4) (338)
Reclassification of assets held
for sale (1) − 6 − − − 5
scope 15 9 (1) − − (2) 21
Translation adjustments 3 (18) (28) 15 (2) (28) (57)
Other 13 108 358 (3) 168 (694) (50)
As of December 31, 2014 322 2,121 5,787 288 909 565 9,992
Depreciation
As of January 1, 2014 (39) (958) (3,472) (154) (534) − (5,157)

Depreciation charges and
impairment (2) (98) (398) (45) (96) − (640)
Disposals 1 40 162 27 50 − 280
Reclassification of assets held
for sale − 1 3 − − − 4
scope − 1 16 − − − 17
Translation adjustments (1) 2 18 (8) 1 − 11
Other 2 34 132 3 (96) − 74
As of December 31, 2014 (39) (979) (3,539) (176) (675) − (5,410)
Carrying amount
As of December 31, 2014 283 1,142 2,248 112 234 565 4,582
(a) Including property, plant and equipment acquired under finance leases. The gross amount and carrying amount of property, plant and equipment
acquired under finance leases totaled €129 million and €47 million respectively as of December 31, 2014.
Impairment review of property, plant and As of December 31, 2014 and December 31, 2013, impairment in
equipment respect of property, plant and equipment related mainly to the
savings and adaptation plan for the Group’s organizations in Europe
Property, plant and equipment are reviewed for impairment when (see Note 6.2 of the Notes to the consolidated financial statements).
events or circumstances indicate that the recoverable amount of
the asset (or group of assets to which it belongs) may be impaired: Capital expenditure during the period
• the recoverable amount corresponds to the higher of the market Capital expenditure fell slightly in 2014, with the related cash flows
value and value in use; totaling €984 million, or 4.7% of consolidated net sales (4.9% in 2013).
• value in use is estimated on the basis of the discounted cash flows .

that the asset (or group of assets to which it belongs) is expected
to generate over its estimated useful life in the conditions of use
determined by the Group;
• market value corresponds to the estimated net selling price that
could be obtained by the Group in an arm’s length transaction.
An impairment provision is recognized when the recoverable amount
of the asset proves to be lower than its carrying amount.

Note 5.6. Off-balance sheet commitments relating to operating activities

Commitments given in 2014

Capital expenditure
commitments (161) (140) (6) (2) (2) (11)
Other (189) (121) (23) (16) (5) (23)
Total (4,059) (2,239) (711) (419) (182) (508)
Commitments received in 2014

(in € millions) 2014 2015 2016 2017 2018 2019
Guarantees and pledges received 83 68 − − − 15

Other 43 30 6 6 1 −
Total 126 98 7 6 1 15
4
Commitments given in 2013


Capital expenditure
commitments (200) (192) (8) − − −
Other (338) (189) (69) (48) (19) (13)
Total (3,727) (2,413) (570) (347) (153) (244)
Commitments received in 2013

(in € millions) 2013 2014 2015 2016 2017 2018
Guarantees and pledges received 64 45 1 − − 18

Other 48 27 12 5 4 −
Total 112 71 12 5 4 18

Other commitments Commodities risk

The Company and its subsidiaries are parties to a variety of legal The Group is also exposed to price volatility and to a potential shortage
proceedings arising in the normal course of business, notably as of the commodities that it purchases, mainly to produce its finished
a result of guarantees given on disposals between 1997 and 2014. products. To manage this exposure, the Group has implemented a
In some cases, damages and interest are sought. Provisions are commodity purchasing policy (Market Risk Management).
recognized when an outflow of resources is probable and the amount
In fact, the Group’s raw material needs mainly involve:
can be reliably estimated.
• materials needed to produce food and beverage products, mainly
Note 5.7. Financial risks associated milk and fruits (the “food raw materials”). On a value basis, milk
represents the main raw material purchased by the Group. These
with operating activities purchases consist mainly of liquid milk, for which the operating
The Group’s financial risk policy and its organization are described subsidiaries typically enter into agreements with local producers
in Note 12.1 of the Notes to the consolidated financial statements. or cooperatives. Liquid milk prices are set locally, over contractual
periods that vary from one country to another. The main other
Foreign exchange risk food raw materials are fruit-based preparations and sugar;
Due to its international presence, the Group could be exposed to
foreign exchange rate fluctuations in the context of:
• product packaging materials, in particular plastics and card-
board (“packaging”). Packaging purchases are managed through
• its operating activities: the Group mainly operates on a local global and regional purchasing programs making it possible
basis and consequently in the currency of the country in which to optimize skills and volume effects. Prices are influenced by
it is operating, thereby incurring no currency risk. However, supply and demand at the global and regional levels, economic
the location of some of the Group’s production units may result cycles, production capacities and oil prices;
in inter-company billings in foreign currencies. This applies
particularly to the Early Life Nutrition and Medical Nutrition
• energy supplies. They account for only a limited portion of the
Group’s overall purchases.
Divisions and, to a lesser extent, to the Fresh Dairy Products
Division. Similarly, some raw materials are billed or indexed in The price trends of major raw materials may have a significant
foreign currencies, in particular as regards the Waters and Fresh impact on the volatility of the Group’s results. In that context, the
Dairy Products Divisions. Lastly, the Group is also developing Group manages cost inflation of raw materials through the following
some export activities. The sales and operating margin of some measures:
subsidiaries are therefore exposed to fluctuations of foreign
exchange rates against their functional currency;
• continuous productivity gains: the Group strives in particular to
optimize its use of raw materials (reductions in production waste,
• translating into euros the financial statements of subsidiaries lighter packaging and more effective use of milk sub-components
denominated in a foreign currency: The Net sales and the Trading in the Group’s various products) and take advantage of pooled
operating income are generated in currencies other than the purchasing for its various subsidiaries. In 2013, for example, the
euro. Consequently, fluctuations in exchange rates of foreign Group established centralized purchasing for the Fresh Dairy
currencies against the euro may have an impact on the Group’s Products Division other than milk;
income statement. These fluctuations also have an impact on the
carrying amount in the consolidated balance sheet of assets and
• implementation of a purchasing policy (“Market Risk Manage-
ment”) that consists of defining rules for securing the physical
liabilities denominated in currencies other than euro.
supply and price setting with suppliers and/or on financial markets
Pursuant to its operational currency risk hedging policy, the Group’s when they exist. The monitoring of exposures and the implemen-
residual exposure (after hedging) was significantly reduced during tation of this policy are made at the level of each raw materials
the fiscal year. As of December 31, 2014, the main hedged currencies category by the Group’s central purchasing team. The buyers
in terms of value included the British pound, U.S. dollar, Russian typically negotiate forward purchase agreements with suppliers,
ruble, Mexican peso, Chinese Yuan and Brazilian real (see Note 12.3 since no financial markets exist that would allow full hedging of
of the Notes to the consolidated financial statements). the volatility of the Group’s main raw materials purchase prices.
Forward purchase agreements are monitored at the Group level
at the end of each year. Also, with respect to the Group’s two
main raw materials categories (milk and dairy ingredients and
plastics including PET), a sensitivity analysis of the impact of
changes in their prices on the Group’s annual purchasing costs
(applied simultaneously in all countries where the Group has a
production activity) is presented in the following section.
Moreover, the Group’s strategy increasingly relies on the upstream
facets of its activity, notably its supply of raw materials, not just to
manage costs but also as a genuine means of value creation and
differentiation relative to the competition.

Events and transactions outside the Group’s ordinary activities
Sensitivity of net income to changes in prices of the two main categories of raw materials purchased by the Group
2013 2014
(in € millions) Gain (loss) Gain (loss)
Increase of 5%
Liquid milk, milk powder and other milk-based ingredients (167) (191)
Plastics, including PET (78) (77)
Decrease of 5%
Liquid milk, milk powder and other milk-based ingredients 165 191
Plastics, including PET 78 77
Note 6. Events and transactions outside the Group’s

ordinary activities
Note 6.1. Other operating income Other operating income (expense) in 2013
(expense) In 2013, the net Other operating expense of €(681) million consisted
mainly of expenses including (i) €(280) million related to the plan for
savings and adaptation of the Group’s organizations in Europe, (ii) 4
€(201) million relating to the false safety alert issued by Fonterra
Other operating income (expense) is defined under Recommendation in respect of some ingredients supplied to the Group in Asia, (iii)
2013-03 of the French ANC relating to the format of consolidated €(62) million relating to the impairment of brands with indefinite
financial statements prepared under international accounting useful lives, (iv) €(36) million of costs relating to acquisitions
standards, and comprises significant items that, because of their resulting in control being obtained carried out in 2013, (v) €(34)
exceptional nature, cannot be viewed as inherent to current activities. million corresponding to Unimilk integration expenses (Fresh Dairy
These mainly include capital gains and losses on disposals of fully Products, mainly Russia and Ukraine), and (vi) €(21) million paid as
consolidated companies, impairment charges on goodwill, significant a result of the investigation by the Chinese national development and
costs related to strategic restructuring and major external growth reform commission.
transactions, and incurred or estimated costs related to major crisis
and major litigation. Furthermore, in connection with Revised IFRS Note 6.2. Savings and adaptation plan for
3 relating to business combinations, the Group also classifies in
Other operating income (expense) (i) acquisition costs related to the Group’s organizations in Europe
business combinations, (ii) revaluation profit or loss accounted for Since 2010, the lasting downturn in the economy and consumer trends
following a loss of control, and (iii) changes in earn-outs related in Europe have resulted in a significant decrease in sales in this part
to business combinations and subsequent to the acquisition date. of the world. Despite signs of a gradual increase in volumes, the
Fresh Dairy Products Division in Europe has experienced a decrease
Other operating income (expense) in 2014 in its global activity and overcapacity in the region.
In 2014, the net Other operating expense of €(511) million consisted
mainly of expenses, including (i) €(249) million relating to the On December 13, 2012, Danone announced the preparation of a cost
impairment of the Dumex brand following the false safety alert reduction and adaptation plan to win back its competitive edge in
issued by Fonterra in 2013 in respect of some ingredients supplied order to address a lasting downturn in the economy and the consumer
to the Group in Asia, (ii) €(160) million relating to the plan for savings trends in Europe. On February 19, 2013, Danone presented the
and adaptation of the Group’s organizations in Europe, (iii) €(26) organizational part of its plan for savings and adaptation in Europe.
million relating to the restructuring of the Group’s activities in In addition to this project to reorganize its structure, in order to
Argentina as a result of the economic climate, (iv) €(21) million of address the overcapacity in Europe, on June 11, 2014, Danone
losses on company disposals, and (v) €(14) million corresponding announced the planned closure of its sites in Casale Cremasco
to Unimilk integration expenses (Fresh Dairy Products, mainly (Italy), Hagenow (Germany) and Budapest (Hungary), these three
Russia and Ukraine). countries having been particularly badly affected by the drop in
sales. The planned closure of these three plants and the gradual
reallocation of volumes to Belgium, Poland, Germany and France
should enable the Fresh Dairy Products Division to improve the
use of its production facilities and its competitiveness in Europe.
Costs relating to this plan mainly comprise (i) costs of employee-
related measures (measures with respect to internal mobility,
redundancy and support for departing employees), (ii) impairment

Events and transactions outside the Group’s ordinary activities
losses in respect of property, plant and equipment and intangible best estimate as of the closing date of the costs to be incurred
assets, and (iii) other reorganization costs (notably compensation in connection with these measures, given the information then
for early termination of contracts and consulting fees). As this available to the Group
plan consists in a strategic restructuring, costs incurred directly in
Cash flows related to initiatives that may be taken by the Group to
connection to the plan are accounted for as Other operating income
deploy this plan are presented in Cash flows provided by (used in)
(expense). Costs recognized consist in costs (i) paid (ii) incurred or
operating activities in the consolidated statement of cash-flows.
(iii) provisioned. Provisions are recognized based on the Group’s
Costs and cash flows relating to this plan

Costs
Employee-related measures (185) (75)

Impairment of intangible assets and property,
plant and equipment (30) (11)
Other reorganization costs (65) (74)
Total (a) (280) (160)
Cash flows net of taxes (b) (121) (123)

(a) Of which, €58 million in provisions as of December 31, 2014 (€62 million as of December 31, 2013).
(b) Including a tax saving calculated on the basis of the applicable tax rate in the respective countries.
Note 6.3. Impact of the false safety alert Legal and arbitration proceedings

issued by Fonterra with respect to Danone has reviewed its recourse and compensation options and
decided to initiate proceedings in the New Zealand High Court,
certain ingredients supplied to the Group as well as arbitration proceedings in Singapore to bring all facts
in Asia in 2013 to light and to obtain compensation for the harm it has suffered.
Proceedings are in progress.
Following a statement by the New Zealand government and
Fonterra on August 2, 2013 warning that batches of ingredients Impact on Early Life Nutrition Division’s sales
supplied by Fonterra to four Danone plants in Asia-Pacific might in Asia
be contaminated with Clostridium botulinum bacteria, the Group The Early Life Nutrition Division’s sales, notably those under the
recalled selected infant formula products from sale in eight markets Dumex brand, were seriously affected by these recalls. Action plans
(New Zealand, Singapore, Malaysia, China, Hong Kong, Vietnam, have been gradually deployed as from the second half of 2014 to
Cambodia and Thailand) of this region as a precautionary measure. restore sales in affected markets, via the relaunch of the Dumex
The alert was lifted on August 28 when New Zealand’s Ministry for brand and the introduction of innovative products.
Primary Industries (MPI) concluded after several weeks of tests that
there was no Clostridium botulinum in any of the batches concerned. The Group can now determine the effects of these initiatives, which
were as follows:
None of the many tests conducted by the Group, both before and
after this critical period, showed any contamination whatsoever • in China, activity has gradually recovered but ended the year at
of its products with Clostridium botulinum. Danone’s food safety a level significantly below pre-crisis levels;
management system is among the most demanding and effective • in the other countries concerned, which now generate more than
in the world and includes rigorous testing of all of its products. 50% of the sales generated under the Dumex brand, the level of
But because Danone makes consumer safety an absolute priority, activity is equivalent to pre-crisis levels.
its teams nonetheless quickly and efficiently deployed recall
procedures. Consequently, the Group has carried out additional restructurings
in respect of its Early Life Nutrition business in Asia and notably
On January 8, 2014, the Group also announced its decision to in China.
terminate its existing supply contract with Fonterra and make any
further collaboration contingent on a commitment by its supplier to
full transparency and compliance with the cutting-edge food safety
procedures applied to all products supplied to Danone.

Number of employees, personnel costs and employee benefits
Impact on the carrying amount of the Dumex brand This review resulted in a €249 million impairment provision in
respect of the Dumex brand as of December 31, 2014.
As of December 31, 2014, the Group reviewed the recoverable amount
of the Dumex brand based on the principles described in Note 9.3 of In future, changes in the assumptions detailed above could affect
the Notes to the consolidated financial statements. the result of this review. The Group would therefore be required to
adjust the value of the brand downwards or upwards (whilst ensuring
The key assumptions adopted in the valuation model used by the
that its value does not exceed its historical value).
Group have been determined on the basis of the following, assessed
by management based on its best estimate at the time: Impact on the consolidated financial statements
• growth in net sales: the Group has drawn up the annual budget Given this is a major crisis for Asia, affecting the Group’s early
and an eight-year strategic plan based on a gradual and limited life nutrition activity, the related costs are recognized under Other
upturn in the Dumex brand in China; operating income (expense).
• royalty rate, determined for each country on the basis of (i) Impact on the 2014 consolidated financial statements
quantitative data such as the growth in net sales and the long- The €249 million impairment charge in respect of the Dumex brand
term profitability of this activity, and (ii) qualitative data such as was recognized under Other operating income (expense) in the 2014
awareness; the royalty rate used was then calculated pro-rata income statement.
to the activity levels in the countries concerned;
Impact on the 2013 consolidated financial statements
• long-term growth rate used to calculate the terminal value is in The related costs totaled €201 million, most of which had been
line with the one used for the Early Life Nutrition Division in Asia; incurred during the year and corresponded to the following items:
• discount rate comprises a risk premium specific to the asset • costs resulting directly from the crisis and its management
whose recoverable amount is being reviewed. (notably product recall and destruction procedures, restructu-
ring and re-launch plans implemented in response to the crisis),
which totaled €134 million in 2013;
• idle time costs directly related to the crisis (costs of production
stoppages in China induced by the crisis), which totaled €67
million in 2013.
4
Note 7. Number of employees, personnel costs

and employee benefits
Note 7.1. Number of employees at fully consolidated companies
As of December 31
2013 2014
Total number of employees 104,642 99,927
By geographic area
France 8% 9%
Rest of Europe 30% 28%
China 10% 10%
Rest of Asia-Pacific 17% 18%
North and South America 26% 27%
Africa and Middle East 9% 9%
Total 100% 100%
By Division
Fresh Dairy Products 45% 42%

Waters 36% 38%
Early Life Nutrition 12% 12%
Medical Nutrition 6% 7%
Corporate functions 1% 1%
Total 100% 100%

Note 7.2. Personnel costs of fully consolidated companies

Salaries and social security charges (a) (3,040) (2,971)

Retirement obligations – defined benefit plans (b) (30) (26)
Expenses relating to Group performance shares and stock-options (19) (19)
(a) Salaries after social security charges. Also comprises the contributions in respect of defined contribution retirement plans.
(b) Service cost.
Note 7.3. Retirement obligations and In addition, the expected return on plan assets is measured on the
basis of the discount rate used to estimate the actuarial value of
other long-term benefits retirement commitments.
General principles Actuarial gains and losses resulting from experience adjustments
The Group contributes to employee retirement benefit plans in and changes in the actuarial assumptions that are used to calculate
accordance with the laws and usual practices of countries where its the obligations net of the assets (including the difference between
subsidiaries operate. As a result of contributions paid under such the expected return and the actual return on plan assets) are fully
plans to private or state sponsored pension funds, the Group has no recognized within Other comprehensive income.
actuarial liability in that respect. The recognized costs and income of defined benefit plans correspond
mainly to:
The Group also has contractual obligations for supplementary
retirement plans as well as severance, retirement indemnities and • the cost of services provided during the year and of prior services
personal protection plans. The related actuarial commitments are (where relevant) recognized within Trading operating income;
taken into account either through the payment of contributions to
independently-managed funds responsible for their service and the
• the accretion of the present value of the obligations, net of the
expected return on plan assets, recognized within Other financial
fund administration, or through provisions.
income (expense).
Accounting principles Other long-term benefits
Defined contribution retirement plans Other long-term benefits may be granted by certain Group companies
Contributions due under defined contribution plans are expensed to their employees, such as personal protection coverage and long-
as incurred. These expenses are allocated to different headings in service awards. The Group’s obligations in respect of these benefits
the consolidated income statement. are determined by applying a similar method to that used to determine
the obligations relating to post-employment defined benefit plans.
Defined benefit retirement plans
The Group’s obligations relating to defined benefit retirement plans The amounts recognized in the balance sheet in respect of these
are calculated using the projected unit credit method and by taking plans correspond to the present value of the obligations, as detailed
into account several actuarial assumptions, including employee above. They are presented under the heading Provisions for retirement
turnover, salary increases and employees’ expected active lives. and other long-term benefits.
The carrying amounts of these plans on the consolidated balance The actuarial gains and losses resulting from experience adjustments
sheet correspond to the actuarial value of the obligations, as defined and changes in the actuarial assumptions used to calculate obligations
above, less the fair value of the plan assets (retirement funds to which are recognized in full within Trading operating income of the fiscal
the Group contributes, for example). They are presented under the year in which they are incurred.
heading Provisions for retirement and other long-term benefits.
Defined benefit plans

Provisions for retirement and other long-term benefits
As of December 31
Defined benefit retirement plans 566 796

Other long-term benefits 18 21
Total 584 818

Defined benefit retirement plans

Carrying amount of gross obligations
As of December 31
Retirement plan for senior managers 35% 37%

Other 15% 15%
France 50% 51%
Germany 16% 14%
United States 6% 6%
United Kingdom 6% 5%
Indonesia 5% 7%
Ireland 5% 6%
Other (a) 12% 10%
Total 100% 100%
(a) Several countries, none of which represents more than 5% of the Group's gross obligations.
Group’s principal obligation • with respect to a second category of Senior Managers in the
The Group’s principal defined benefit retirement plan obligations Group, to the full amount of retirement benefits that they acqui-
involve the Retirement plan for senior managers in France, which red due to the implementation of a Company non-contributory
was granted to certain senior managers of the Group and closed supplementary retirement plan, and may reach a maximum of
to any new beneficiaries as of December 31, 2003. 65% of final salaries.
General principles In the event of leaving the Group before the age of 55 or in the event 4
Approximately 139 Group executives who hold the status of senior of death before retirement, the employee loses all benefits under
manager and who were covered by French retirement schemes as this plan, it being specified that if the employee is laid off after the
of December 31, 2003 are, under certain conditions (in particular age of 55, the plan benefits are preserved, subject to the beneficiary
seniority and continuing employment conditions), eligible for a not taking any salaried position in the future. This provision, which is
defined benefit retirement plan. As a reminder, in 2009, more than consistent with applicable French regulations, enables in particular
210 executives were covered by this plan. protecting all beneficiaries against the risks related to a termination
of employment occurring after the beneficiary has reached the age
This plan provides for a pension based on years of service and the
of 55 but prior to reaching retirement age.
amount of final salary, under the condition that the beneficiary is still
in the Group’s employment at the time of retirement. The pension is Other obligations
paid after deducting certain pensions corresponding: The other retirement plans introduced by the Group relate only to
one particular subsidiary in one particular country. Consequently,
• with respect to a first category of Senior Managers in the Group, the Group is required to manage several different plans in a given
to the full amount of retirement benefits they acquired over the
country. None is material.
course of their professional career;
Carrying amount of provisions (gross obligations net of plan assets)

As of December 31
2013 2014
Retirement Retirement
plan for senior plan for senior
(in € millions) managers Other plans Total managers Other plans Total
Vested rights with projected

salaries 350 647 997 468 803 1, 272
Fair value of plan assets (171) (260) (431) (172) (302) (475)
Vested rights net of fair value
of plan assets 179 387 566 296 501 796
Impact of ceiling on assets − − − − − −

Obligations for which provisions
have been established on the
balance sheet 179 387 566 296 501 796
In addition, the total amount of contributions/benefits to be paid out in 2015 in connection with these plans is estimated at €41 million.

Actuarial assumptions
Methodology
The Group defines the actuarial assumptions by country and/or subsidiary.
The discount rates used in 2014 were obtained on the basis of investment grade (AA rating) bond yields of private issuers for durations
equivalent to that of the commitment in the corresponding monetary areas.
The level of quality used is assessed on the basis of the rating obtained from the leading financial rating agencies. In the case of illiquid
markets, the discount rate is determined using government bonds of equivalent maturity to the term of the assessed plans. In 2014, this
was notably the case in respect of Indonesia.
Retirement plan for senior managers
Main actuarial assumptions
(as a percentage, except for ages in number of years) 2013 2014
Discount rate 3.5% 2.2%

Expected return on plan assets 3.5% 2.2%
Salary growth rate 3.0% 3.0%
Retirement age 61-65 60-65
Sensitivity analysis to the key assumption: the discount rate

2013 2014
(in € millions) Increase (decrease) Increase (decrease)
Increase of 50 bps (29) (41)

Decrease of 50 bps 34 45
Changes in carrying amount of provisions

Defined benefit Fair value of plan Unrecognized past Net accrued
(in € millions) obligation assets service costs obligation
As of January 1, 2013 1,027 (436) (1) 590
Service cost 30 − − 30
Interest cost 37 − − 37
Expected return on plan assets − (16) − (16)
Other (6) 2 − (4)
Expense for the year 61 (14) − 47
Payments made to retirees (41) 23 − (18)
Contributions to plan assets − (13) − (13)
Changes in demographic
assumptions − − − −
Changes in economic
assumptions (28) − − (28)
Impact of actual results 10 3 − 13
Actuarial gains and losses (18) 3 − (15)
Translation adjustments (23) 6 − (17)
Other (9) − 1 (8)
As of December 31, 2013 997 (431) − 566

Defined benefit Fair value of plan Unrecognized past Net accrued

(in € millions) obligation assets service costs obligation
As of January 1, 2014 997 (431) − 566
Service cost 26 − − 26
Interest cost 38 − − 38
Expected return on plan assets (16) − (16)
Other (2) − − (2)
Expense for the year 62 (16) − 47
Payments made to retirees (43) 24 − (19)

Contributions to plan assets (16) − (16)
Changes in demographic
assumptions 6 − − 6
Changes in economic
assumptions 204 − − 204
Impact of actual results 25 (24) − −
Actuarial gains and losses 234 (24) − 210
Translation adjustments 21 (11) − 10
Other − − − (1)
As of December 31, 2014 1,272 (475) − 796 4
Defined benefit plan assets
The Group’s investment policy for plan assets depends, for each company, on the employees’ age structure and the expected return on
the various asset classes.
Plan assets of retirement plan for senior managers

As of December 31
Fair value of plan assets (171) (172)
Main class of plan assets
Debt securities (a) (b) 88% 98%

Shares (b) 8% –
Real estate and other asset classes (b) 4% 2%
(a) These assets are diversified, in particular the exposure to individual sovereign credit risk is limited.
(b) Do not include any financial instruments issued by the Group.
Defined contribution plans

Contributions paid as part of defined contribution plans are recognized under Trading operating income.

Note 7.4. Group performance shares conditions). Group performance shares were introduced in 2010 by
the Shareholders’ Meeting held on April 22, 2010 to replace the
and stock-options granted to certain stock-option program that was consequently closed.
employees and corporate officers Group performance shares (GPS) are shares in the Company that are
subject to performance conditions, set by the Shareholders’ Meeting
Group policy
for each plan. In the case of all outstanding plans, the performance
The Group has awarded long-term variable compensation in the conditions are based on aspects of the Company’s performance.
form of Group performance shares since 2010 and awarded such The GPS are also subject to continuing employment conditions. The
compensation in the form of stock-options until 2010. Around 1,300 vesting period is three or four years depending on the plan.
directors and senior executives worldwide, as well as the corporate
officers, have benefitted from these arrangements. General principles applicable to stock-options
Stock-options are options to purchase shares in the Company that
General principles applicable to Group performance shares were granted to certain employees and corporate officers up until
and termination of the stock-option program the Combined Shareholders’ Meeting of April 22, 2010. No stock-
The Group’s long-term variable compensation takes the form of options have been granted since then and since the end of 2013, all
Group performance shares (Company shares subject to performance stock-options are exercisable: the last plans expire in 2017.
Group performance shares and stock-options in effect

(number of shares) 2013 2014
Group performance shares
As of January 1 1,991,001 2,488,418

Shares granted during the year 821,643 778,371
Shares that lapsed or were cancelled
during the year (101,855) (810,867)
Shares delivered during the year (222,371) (504,927)
As of December 31 2,488,418 1,950,995
Stock-options
As of January 1 9,866,231 7,177,600
Options that lapsed or were cancelled

during the year (151,037) (195,922)
Options exercised during the year (2,537,594) (1,292,981)
As of December 31 (a) 7,177,600 5,688,697
(a) As of December 31, 2013 and December 31, 2014, all options can be exercised and most are in the money.
Accounting treatment of Group performance The fair value of the stock-options is determined using the Black
shares and stock-options & Scholes valuation model, based on assumptions determined
by management. The corresponding charge is expensed over the
Accounting principles vesting period (i.e. 2 to 4 years).
The benefits relating to stock-options and Group performance
shares granted to certain employees and corporate officers are The fair value of Group performance shares is calculated on the
written off as an expense on the Other income (expense) item of basis of assumptions made by the Group’s management. The
the consolidated income statement. The corresponding entry to corresponding charge is spread over the vesting period (either 3
this charge is an equivalent increase in consolidated equity on the or 4 years). To the extent that performance conditions are based
Retained earnings item of the consolidated balance sheet. The charge on internal performance, charges recognized in respect of shares
corresponds to the fair value, determined on the grant date, of the that lapse due to the failure to achieve said performance conditions
stock-options and Group performance shares granted. are written back in the income statement for the period in which it
is probable they will lapse.
They are taken into account in calculating the dilution as described
in Note 13.4 of the Notes to the consolidated financial statements.

Income tax
Valuation
(in € per share except number of shares) 2013 2014
Number of shares granted during the year 821,643 778,371

Fair value of Group performance shares granted during
the year (a) 51.8 50.3
Average DANONE share price during the year 55.0 54.3
(a) Fair value as of the grant date.
Expense related to Group performance shares and stock-options

Group performance shares (17) (19)

Stock-options (a) (2) −
Total expense (19) (19)
(a) As of December 31, 2013 and December 31, 2014, all options can be exercised and therefore no longer require the recognition of an expense.
Note 7.5. Company Savings Plan Capital increase reserved for employees in 2014

In 2014, under the terms of the Company Savings Plan, the Group
General and accounting principles implemented a capital increase involving 831,986 new shares issued
Employees of the Group’s French entities can, on an annual basis, at a price of €40.26 per share.
subscribe a capital increase in the Company through a Company
Savings Plan. The purchase price of the shares corresponds to 80% The fair value of the shares issued in 2014 under the terms of the 4
of the average DANONE share price over the 20 days preceding the Company Savings Plan was calculated based on a DANONE share
meeting of the Board of Directors that approves the plan. price of €50.33, a 1.5% risk-free interest rate and a 4.8% employees’
five-year borrowing rate. No expense is recognized, in accordance
The benefit granted to the employees is calculated based on the fair with the provisions of the notice issued by the French national
value of the shares on the grant date. The fair value is calculated accounting council (Conseil National de la Comptabilité, CNC) on
after taking into account the five-year holding period on these shares December 21, 2004.
and the market parameters applicable to employees, in particular
the borrowing rate.
Note 8. Income tax

Note 8.1. Income tax
Income before tax and tax expense
(in € millions except tax rate in percentage) 2013 2014
Income before tax 1,865 1,839
Current tax (expense) income (610) (693)

Deferred tax (expense) income 6 94
Current and deferred tax (expense) income (604) (599)
Effective tax rate 32.4% 32.6%

Amount (paid) received during the year (598) (601)

Income tax
Tax rate and tax systems Other tax systems

French tax system Similar tax grouping arrangements exist in other countries,
Danone forms a tax group with most of its French subsidiaries in in particular in the United States, the Netherlands, the United
which it owns, directly or indirectly, more than 95% of the share Kingdom, Germany and Spain.
capital, enabling taxable profits and losses to be offset subject to
Effective tax rate
certain limits and conditions.
In 2014, the Group effective tax rate was 32.6%, relatively stable in
The statutory tax rate for companies with sales exceeding €250 million comparison with 2013.
was raised to 38% in 2013 following a temporary increase in the
surtax on corporate income from 5% to 10.7%. This measure will As is the case with the Group’s business activity (see breakdown of
be applied over two years, i.e. until 2015. Nevertheless, the current sales by country in Note 5.2 of the Notes to the consolidated financial
and deferred tax rates of these companies was maintained at 34.43% statements), the Group’s current and deferred tax expense is also
since the tax loss carryforwards is expected to recovered beyond this relatively well distributed across several countries, with no single
two-year period. dominant country.
Difference between effective tax rate and 34.43% statutory tax rate in France
Statutory tax rate in France 34.4% 34.4%

Differences between French and foreign tax rates (a) (11.9)% (12.4)%
Tax on dividends and royalties (b) 5.2% 4.1%
Permanent differences 2.7% 3.0%
Tax loss carryforwards (c) 1.5% 1.0%
Tax adjustments and unallocated taxes (d) 1.2% 3.0%
Impact of capital gains and losses on disposal and asset
impairment (0.2)% 0.3%
Other differences (0.5)% (0.8)%
Effective income tax rate 32.4% 32.6%
(a) Various countries, none of which generates a significant difference with the French tax rate.
(b) Includes (i) the contribution of costs and expenses (French quote part de frais et charges), (ii) withholding taxes on dividends and royalties, and (iii) the
impact of the 3% dividends tax.
(d) In 2014, corresponds mainly to tax adjustments, unallocated taxes and net changes in provisions for tax risks, partially offset by changes in rates.
Note 8.2. Deferred taxes In addition, temporary differences are reflected in the consolidated

financial statements as deferred tax assets or liabilities systematically
Accounting principles in the case of associates and on the basis of the most likely scenario
Deferred taxes are recognized for all temporary differences between as regards the reversal of the differences, i.e. distribution of reserves
the tax bases of assets and liabilities and their carrying amounts or disposal of the entity concerned, in the case of fully-consolidated
for financial reporting purposes, except for the cases specified in subsidiaries.
IAS 12, Income taxes. Deferred taxes are calculated using the liability Deferred tax assets and liabilities are offset, when the tax entity
method, applying the last enacted income tax rates expected to be has a legal right to offset.
applicable when the temporary differences will be reversed.
Lastly, the Company and its subsidiaries may be subject to tax audits.
A provision is recognized in the consolidated financial statements
whenever it is probable that a tax reassessment will be made.

Income tax
Carrying amount
As of December 31
Intangible assets and property, plant and equipment (1,341) (1,326)

Tax loss carryforwards (a) 431 533
Provisions for retirement and other long-term benefits 153 227
Employee profit-sharing provisions 20 20
Restructuring provisions 23 17
Other 158 139
Net deferred taxes (556) (389)
Deferred tax assets 709 836

Deferred tax liabilities (1,265) (1,225)
Net deferred taxes (556) (389)
(a) See section hereafter related to Tax loss carryforwards.

As of January 1 (508) (556)
Changes recognized in Other comprehensive income (7) 104

Changes recognized in profit or loss 6 95 4
Changes in consolidation scope (a) (84) 1
Other 37 (32)
As of December 31 (556) (389)
(a) See Note 2.2 of the Notes to the consolidated financial statements.
Note 8.3. Tax loss carryforwards At each closing, the Group reviews the unused tax losses and the
amount of deferred tax assets recognized on the balance sheet. In
Accounting principles some countries in which losses can be carried forward indefinitely,
Deferred tax assets relating to tax loss carryforwards and temporary the Group takes into consideration long-term recovery horizons
differences are recognized in the consolidated balance sheet when when justified in light of forecast taxable profits.
it is more likely than not that these taxes will be recovered.
Carrying amount
As of December 31
Tax losses – recognized portion
Recognized tax loss carryforwards (a) (b) 1,306 1,630

Tax savings (c) 431 533
Tax losses – unrecognized portion
Tax loss carryforwards and tax credits not yet used (a) 623 403
Potential tax savings 157 107
(a) Basis amount.
(b) In 2014, they mainly come from the French consolidated tax group.
(c) Corresponds to deferred tax assets based on tax loss carryforwards.
Consumption horizon
Most of the tax losses as of December 31, 2014 can be carried forward indefinitely and have a probable consumption horizon of more
than five years.

Intangible assets
Note 9. Intangible assets

Note 9.1. Accounting principles Other brands
Other acquired brands that are deemed to have finite useful lives
Goodwill are presented under the heading Brands in the consolidated balance
When control of a company is acquired, the fair value of the sheet. They are amortized on a straight-line basis over their estimated
consideration given to the seller is allocated to the acquired identified useful lives, which do not exceed 60 years. The amortization charges
assets and the liabilities and contingent liabilities assumed, which in respect of brands with finite useful lives are allocated to various
are measured at fair value. The difference between the consideration headings in the income statement on the basis of the nature and
given to the seller and the Group’s share of the fair value of the utilization of the brands concerned.
acquired identified assets and the liabilities and contingent liabilities
assumed represents goodwill. When the option of recognizing non- Development costs
controlling interests at fair value is applied, a corresponding premium Development costs are only recognized under assets in the
is allocated to goodwill. Goodwill is recognized in the consolidated consolidated balance sheet if all the recognition criteria set by IAS 38,
balance sheet as an asset under the heading Goodwill. Intangible Assets are met before the products are launched on the
market. They are amortized over the term of their legal protection
Goodwill arising from the acquisition of a foreign entity is recognized
granted to the Group as from the date the corresponding products
in the functional currency of the entity acquired and translated at
are launched on the market.
the exchange rates prevailing on the closing date.
Development costs are generally expensed as incurred (see Note
Goodwill is not amortized but is tested for impairment at least
5.1 of the Notes to the consolidated financial statements).
annually.
For the purposes of impairment testing, goodwill is allocated to Technologies, development costs and other
the Cash generating units (CGU) or groups of CGUs most likely intangible assets
to benefit from the synergies of the business combination and to The following elements are recognized in the balance sheet under
the lowest level at which goodwill is monitored by the Group. The the heading Other intangible assets:
CGUs correspond to subsidiaries or groups of subsidiaries that are
included in the same Division and that generate cash flows largely • acquired technologies, which are generally valued with the
independent from those generated by other CGUs. assistance of specialized consultants and amortized over the
average duration of the patents;
Brands with indefinite useful lives
• acquired development costs meeting the criteria for the recogni-
Acquired brands that are distinguishable, having a significant value, tion of an intangible asset in accordance with IAS 38, Intangible
are supported by advertising expense, have indefinite useful lives Assets (see above);
and have been recognized in connection with business combinations
since 1989 are recorded under the heading Brands in the consolidated • other acquired intangible assets are recognized at their acquisi-
balance sheet. The valuation of these brands is generally determined tion cost. They are amortized on a straight line basis over their
with the assistance of valuation specialists, taking into account estimated economic lives, which do not exceed 40 years.
various factors, including brand awareness and their contribution The amortization charges in respect of these assets are allocated
to earnings. These brands, which are legally protected, are not to various headings in the income statement on the basis of their
amortized but are tested for impairment annually or more frequently nature and utilization.
if signs of impairment exist (see hereafter).

Intangible assets

Carrying amount and change during 2013
Other intangible
(in € millions) Goodwill Brands (a) assets Total
Gross value
As of January 1, 2013 11,361 4,557 827 16,745
Capital expenditure − − 47 47
Disposals − − (10) (10)
Changes in consolidation scope (b) 961 273 1 1,235
Translation adjustments (845) (255) (24) (1,124)
Impairment − (62) − (62)
Other (3) 4 9 10
As of December 31, 2013 11,474 4,517 850 16,841
Amortization
As of January 1, 2013 − (14) (466) (480)

Amortization charges for the year
(net of disposals) − (3) (69) (72)
Changes in consolidation scope (b) − − − −
Translation adjustments − 1 12 13
4
Other − − 6 6
As of December 31, 2013 − (16) (517) (533)
Carrying amount
As of December 31, 2013 11,474 4,501 333 16,308

(a) This heading comprises the brands with indefinite useful lives and the other brands.

Intangible assets
Carrying amount and change during 2014

Other intangible
(in € millions) Goodwill Brands (a) assets Total
Gross value
As of January 1, 2014 11,474 4,517 850 16,841
Capital expenditure − − 42 42
Disposals − − (30) (30)
Changes in consolidation scope (b) 124 − 3 128
Translation adjustments (8) 52 (4) 40
Impairment (c) (3) (249) − (252)
Other (6) 30 (19) 6
As of December 31, 2014 11,582 4,351 842 16,775
Amortization
As of January 1, 2014 − (16) (517) (533)

Amortization charges for the year
(net of disposals) − (3) (32) (35)
Changes in consolidation scope (b) − − 1 1
Translation adjustments − 4 (1) 3
Other − 1 22 23
As of December 31, 2014 − (14) (527) (541)
Carrying amount
As of December 31, 2014 11,582 4,337 315 16,234

(a) This heading comprises the brands with indefinite useful lives and the other brands.
(c) See section above relating to Brands with indefinite useful lives.

Intangible assets
Note 9.3. Impairment review The cash flows used to determine value in use of the CGUs or groups
of CGUs and the recoverable amount of the brands with indefinite
Methodology useful lives are derived from the annual budgets and strategic plans
The carrying amounts of goodwill and brands with indefinite useful of the CGUs or groups of CGUs, which are drawn up by Management
lives are reviewed for impairment at least annually and whenever and cover a period of three years, and are extended, on the basis of
events or circumstances indicate that they may be impaired. These the most recent forecasts, to:
events or circumstances are linked to significant, unfavorable and • five years for the Fresh Dairy Products and Waters Divisions;
lasting changes that have an impact on the economic environment
and the assumptions or targets set at the time of acquisition. • eight years for the Early Life Nutrition and Medical Nutrition
Divisions, to better reflect the expected development of the
Impairment tests are carried out on all property, plant and equipment Divisions’ activity on the estimation of the value in use. The Group
and intangible assets of the CGUs and groups of CGUs. When the uses projections over eight years to better reflect the Division’s
carrying amount of all the property, plant and equipment and growth over this period, since the actual growth rate of these
intangible assets of the CGUs and groups of CGUs becomes greater CGUs and groups of CGUs exceeds the long-term growth rate
than their recoverable amount, an impairment provision is recognized that the Group applies to each of these CGUs.
and first charged against goodwill.
Future cash flows beyond that period are extrapolated using a long-
The recoverable amount of the CGUs or groups of CGUs to which the term growth rate that is specific to each CGU or group of CGUs:
tested assets belong is the higher of the fair value net of disposal
costs, which is generally estimated on the basis of earnings multiples, • the operational assumptions used to calculate the terminal value
and the value in use, which is assessed with reference to expected are in line with the last year of projections described above in
future discounted cash flows of the CGU or group of CGUs concerned. terms of sales and operating margin rate;
Annual impairment testing of brands with indefinite useful lives is • the long-term growth rate is determined for each CGU or group
based on an individual recoverable amount established using the of CGUs taking into account its average growth rate in recent
royalties method, with the exception of certain brands for which the years and its geographic area (macro-economic fundamentals,
Group has a third-party valuation. In the case of the major brands, demographics, etc.).
the Group re-estimates the royalty rate of the brands concerned Finally, future cash flows are discounted using the weighted average
in accordance with a method applied each year and based on the cost of capital method, according to which the cost of debt and the
brand’s parameters including awareness of the brand, its profitability, after-tax cost of equity are weighted based on their respective 4
market shares, etc. proportions in the business sector concerned. It is calculated for
the Group and increased, for certain CGUs or groups of CGUs, by
a premium to take into account the risk factors affecting certain
countries.

Intangible assets
Review of the value of intangible assets with indefinite useful lives as of December 31, 2014
Carrying amount and assumptions concerning the long-term growth rate and discount rate in respect of the CGUs or
groups of CGUs comprising material assets
As of December 31
Carrying amount of goodwill
and brands with indefinite Long-term Discount rate
useful lives growth rate (h) after tax (h)
(in € millions) 2013 2014 2013 2014 2013 2014
Centrale Laitière CGU 893 924 – 3% – 10%
Danone CIS CGU (a) 497 311 3% 3% 10% 10%
Southern Europe CGU (b) 376 376 0% 0% 10.2% 9.2%
Other CGUs (c) 668 729 0 to 3% 0 to 3% 8 to 14% 8 to 15%
Total Fresh Dairy Products 2,434 2,340
• Of which goodwill 1,798 1,683
• O f which, brands with
indefinite useful lives (d) 636 658
Waters
Danone Eaux France 428 428 1% 1% 8.2% 7.9%
Other CGUs (e) 380 413 0 to 3% 0 to 3% 8 to 14% 8 to 13%
Total Waters 808 840
• Of which goodwill 599 630
indefinite useful lives (d) 209 210

Early Life Nutrition Asia group
of CGUs 2,932 3,108 2.5% 2.5% 8.1% 8.2%
Early Life Nutrition Rest of the
World group of CGUs 5,323 5,114 2.5% 2.5% 8.2% 8.2%
Other CGUs 147 168 – 2.5% – 7.9%
Total Early Life Nutrition 8,402 8,390
indefinite useful lives (f) 2,599 2,460
Total Medical Nutrition 4,160 4,246 2.5% 2.5% 7.5% 7.6%

indefinite useful lives (g) 886 906
Total 15,804 15,816
indefinite useful lives 4,330 4,234
(a) The Danone CIS CGU comprises mainly Russia and Ukraine.
(b) The Southern Europe CGU comprises Spain, Italy, Portugal and the Canary Islands.
(c) More than 20 CGUs, the main ones of which are the United States, Northern Europe and South Africa CGUs, none of which exceeded €200 million as of
December 31, 2014.
(d) Concerns several brands, none of which is material on an individual basis.
(e) Comprises mainly the Waters Asia CGU and other GGUs, none of which exceeded €200 million as of December 31, 2014.
(f) C oncerns several brands, the main ones of which are Milupa and Dumex (see section hereaf ter on Brands with indefinite useful lives).
The carr ying amount in the above table includes the impairment of the Dumex brand.
(g) Concerns several brands, the main one of which is Nutricia (see section hereafter on Brands with indefinite useful lives).
(h) For those CGUs whose recoverable amount is determined on the basis of their value in use except those CGUs corresponding to companies acquired
in 2014 and whose recoverable amount was estimated on the basis of the transaction value, the Group being satisfied that nothing was likely to call
into question this valuation as of December 31, 2014.

Intangible assets
Goodwill of the groups of CGUs in the Early Life Nutrition and Medical Nutrition Divisions
As of December 31, 2014, the recoverable amount exceeded the In addition, an analysis of the sensitivity of the value in use to the
carrying amount by €0.9 billion in the case of the Medical Nutrition key assumptions was carried out for each of the three groups of
group of CGUs, €2.0 billion in the case of the Early Life Nutrition CGUs. The assumptions used in the valuation model used by the
Rest of the World group of CGUs and €1.7 billion in the case of the Group are (i) the growth in Net sales, (ii) the Trading operating
Early Life Nutrition Asia group of CGUs. margin (corresponding to the ratio Trading operating income over
Net sales), (iii) the long-term growth rate used to calculate the
terminal value, and (iv) the discount rate. The results of the sensitivity
analysis are as follows:

Annual decrease that would make recoverable
Impact on recoverable amount amount and carrying amount the same
(in € billions) (in percentage)

2013 2014 2013 2014
Net sales – decrease of 50 bps (a)

of CGUs (b) (0.2) (0.2) (10)% (6)%
World group of CGUs (c) (0.3) (0.3) (3)% (4)%
Medical Nutrition group of CGUs (d) (0.2) (0.2) (2)% (3)%
Trading operating margin – decrease
of 100 bps (e)
Early Life Nutrition Asia group 4

of CGUs (b) (0.3) (0.3) (11)% (6)%
World group of CGUs (c) (0.4) (0.4) (3)% (5)%
Medical Nutrition group of CGUs (d) (0.3) (0.3) (2)% (3)%
Long-term growth rate – decrease
of 50 bps

of CGUs (b) (0.3) (0.2)
World group of CGUs (c) (0.3) (0.4)
Medical Nutrition group of CGUs (d) (0.2) (0.3)
Discount rate – increase of 50 bps

of CGUs (b) (0.3) (0.2)
World group of CGUs (c) (0.3) (0.3)
Medical Nutrition group of CGUs (d) (0.3) (0.3)
(a) Decrease applied, each year, to the assumptions concerning growth in Net sales, including the final year, on the basis of (i) the 2014 projections for the
tests performed in 2013, and (ii) the 2015 projections for the tests performed in 2014.
(b) Carrying amount of €3.1 billion as of December 31, 2014.
(c) Carrying amount of €5.1 billion as of December 31, 2014.
(d) Carrying amount of €4.2 billion as of December 31, 2014.
(e) Decrease applied, each year, to the assumptions concerning Trading operating margin, including the final year, on the basis of (i) the 2014 projections
for the tests performed in 2013, and (ii) the 2015 projections for the tests performed in 2014.
Goodwill of other CGUs

As of December 31, 2014, the CGUs of the Fresh Dairy Products and Waters Divisions represented in total 20% of the carrying amount of
the Group’s goodwill and comprised more than 30 CGUs located in diverse geographic regions and in different countries.
As of December 31, 2014, following the impairment review of intangible assets with indefinite useful life of these CGUs, the Group did not
recognize any impairment provisions.

Financing and financial security, net debt and cost of net debt
As of December 31, 2013, following the impairment review of intangible In addition, analysis of the sensitivity of the value in use to the key
assets with indefinite useful life of these CGUs, the Group did not assumptions was carried out on each of these other main brands.
recognize any impairment provisions. The key assumptions involved in the valuation model used by the
Group are (i) the growth in Net sales, (ii) the royalty rate, (iii) the
Brands with indefinite useful lives long-term growth rate used to calculate the terminal value, and
The Group’s main brands are Dumex, Nutricia and Milupa. As of (iv) the discount rate. The following changes, deemed reasonably
December 31, 2014, they represented €2.7 billion, or 63% of the possible, in the key assumptions do not alter the findings of the
carrying amount of the Group’s brands with indefinite useful lives impairment review, i.e. the absence of any impairment:
and none represented individually more than 35% of the carrying
amount of the Group’s brands with indefinite useful lives. The other
• 100 bps decrease in Net sales (decrease applied, each year, to
the assumptions concerning growth in Net sales, including the
brands are spread over all Divisions and located in diverse geographic
final year, on the basis of the 2015 projections);
regions and different countries and none represented individually
more than 10% of the carrying amount of the Group’s brands with • 50 bps decrease in the royalty rate (decrease applied, each year,
indefinite useful lives as of December 31, 2014. to the assumptions concerning royalty rate, including the final
year, on the basis of the 2015 projections);
Impairment review of the main brands with indefinite
useful lives • 50 bps decrease in the long-term growth rate;
As of December 31, 2014 and December 31, 2013, the Group carried
out a review of the value of the Dumex, Nutricia and Milupa brands in
• 50 bps increase in the discount rate.
accordance with the methodology and the valuation model described Other brands with indefinite useful lives
above and on the basis of assumptions based on those of the groups As of December 31, 2014, following the impairment review of the
of CGUs concerned. other brands with indefinite useful lives, the Group did not recognize
any impairment provision.
Review of the Dumex brand
See Note 6.3 of the Notes to the consolidated financial statements. As of December 31, 2013, following the impairment review of the
other brands with indefinite useful lives, the Group recognized an
Review of the other main brands
impairment provision totaling €62 million in respect of a brand
This review did not result in the recognition of any impairment
in the Early Life Nutrition Division based on strategic plan’s new
provisions.
assumptions at that time.
Note 10. Financing and financial security, net debt and cost

of net debt
Note 10.1. Accounting principles Other short-term investments are measured at their fair value as
securities held for trading within the meaning of IAS 39, Financial
Financing Instruments: Recognition and Measurement.
Debt instruments are recognized in the consolidated balance sheet Changes in fair value of short-term investments are recognized
(i) under the amortized cost method, using their effective interest directly under the heading Interest income in the consolidated
rate, or (ii) at their fair value. income statement.
When the fair value risk of a debt is hedged by a derivative, the change Translation of transactions denominated in foreign
in fair value of the hedged component of said debt is recognized in
the consolidated balance sheet, with the counterpart to the entry
currencies
being to the heading Other financial income (expense), which thereby At period-end, trade receivables and trade payables denominated in
offsets the change in fair value of the derivative instrument. foreign currencies are translated using exchange rates on that date.
Foreign exchange gains and losses arising from the translation of
When future cash flows of a debt are hedged by a derivative, the borrowings or other instruments denominated in foreign currencies
change in the fair value of the effective portion of the derivative that are used to hedge long-term investments denominated in the
hedging said debt is recognized in the consolidated balance sheet, same currencies are recognized in consolidated equity under the
with the counterpart to the entry being to consolidated equity, and heading Cumulative translation adjustments.
is recycled to profit or loss when the hedged item (the interest flows
relating to the hedged debt) impacts the consolidated net income. Note 10.2. Liquidity risk and management
Short-term investments policy
Short-term investments comprise marketable securities and other
short-term investments.
Liquidity risk exposure
The Group does not use debt in either a recurring or a significant
Marketable securities comprise highly liquid instruments with short
way in connection with its operating activities. Operating cash flows
maturities that are easily convertible into a known amount of cash.
are generally sufficient to finance the Group’s business operations
They are measured as securities held for trading within the meaning
and organic growth.
of IAS 39, Financial Instruments: Recognition and Measurement and
are carried at their fair value.

The Group may, however, take on additional debt to finance From a Group perspective, the amounts borrowed are relatively
acquisitions or, occasionally to manage its cash cycle, particularly small, whether considered individually or in total, given the level
when dividends are paid to the Company’s shareholders. of operating cash flow that is generally sufficient to finance their
operations and organic growth.
The Group’s objective is always to keep this debt at a level enabling
it to maintain the flexibility of its financing sources. More generally, it is possible that in the context of a systemic
financial crisis, the Group could be unable to access the financing
The Group’s liquidity risk arises mainly from the maturities of its
or refinancing it needs on the credit or capital markets, or to access
(i) interest-bearing liabilities (bonds, bank debt, etc.), and (ii) non-
such finance on satisfactory terms, which could have an adverse
interest-bearing liabilities (liabilities on put options granted to non-
controlling interests), and from payments on derivative instruments.
As part of its debt management strategy, the Group regularly seeks Financial security management
new financing, especially to refinance its existing debt. Under its refinancing risk management policy, the Group reduces its
exposure to financing risk by (i) centralizing its financing sources,
In those countries where centralized financing is not available,
(ii) borrowing from diversified financing sources, (iii) arranging a
when medium-term financing is unavailable and/or in the case of
significant portion of its financing as medium-term financing, (iv)
some existing financing in a company prior to the acquisition by the
maintaining financing sources available at all times, and (v) ensuring
Group of a controlling interest in it, certain Group companies may,
for operational reasons, be required to borrow from local sources.
ratios in connection with financing contracts.
Group’s financing structure and financial security

As of December 31
2013 2014
(in € millions) Principal amount Amount used (f) Principal amount Amount used (f)
Bank financing (a)
Syndicated credit facility (b) 2,000 − 2,000 −

4
Committed credit facilities (c) 3,400 − 3,400 −
Capital markets financing (a)
EMTN financing (d) (e) 9,000 7,018 9,000 6,615

Bond issued in the United States
market (d) NA 850 NA 850
Commercial paper (Billets de
trésorerie) 3,000 737 3,000 1,068
(a) The Group’s financial structure and financial security are managed at the Company level.
(b) Syndicated credit facility (revolving) maturing in December 2019.
(c) A portfolio of back-up facilities entered into with major credit institutions, with maturities ranging from 2015 to 2018.
(d) Bonds issued by the Company are disclosed on the Group’s website.
(e) Euro Medium Term Notes.
(f) Amount denominated in euros except bond issued in the United States market denominated in U.S. dollars.
Most of the financing agreements entered into by the Company (bank lines of credit and bonds) include a change of control provision, which
offers creditors a right of early repayment in the event a change in control of the Company causes its rating by the financial rating agencies
to fall below investment grade. None of these financing sources is subject to any covenant relating to the maintenance of financial ratios.
None of these financing sources is subject to any covenant relating to the maintenance of financial ratios.

Company’s rating
As of December 31
2013 2014
Moody's Standard and Poor's Moody's Standard and Poor's
Short-term rating (a)
Rating − A-2 − A-2

Outlook − Stable − Stable
Long-term rating (b) (c)
Rating A-3 A- Baa1 (c) A-

Outlook Stable Stable Stable Negative (d)
(a) Rating given to the Company’s commercial paper program.
(b) Rating given to the Company’s debt issues with a maturity of more than one year.
(c) Rating lowered on December 13, 2014.
(d) Outlook attributed on December 23, 2014.
Use of its financing sources Danone shareholders, and (ii) alternatively, its commercial paper
and EMTN programs or its syndicated credit facility to optimize its
The Group’s policy consists of keeping its financing sources available
financing cost while still ensuring its financial security, such that
and managing them at the Company level. The Group may need to
the maturity and currency of its financing raised may vary without
use (i) its commercial paper program and syndicated credit facility
changing the net debt level or the Group’s financial security.
to manage its cash cycle, notably when paying out the dividend to
Note 10.3. Financing situation and liquidity risk

2014
Nominal
New financing
Renewal
Syndicated credit facility (a) EUR 2,000 2019

Repayment
(a) Multi-currency revolving credit facility implemented in July 2011 and renewed in December 2014.

2013
Nominal
New financing
Euro bond issue under the EMTN program EUR 1,000 2021
Repayment
Private placement under the EMTN program JPY 23,900 2013

Carrying amount of financial debt and change during the period

Bond repayment or net decrease

Bond issue or net increase of
Transfer to current portion
Translation adjustments

Exercise or expiration
New put options
of put options(e)
of other items
other items
Other (f)
(in € millions)
Bonds (a) (b) 618 − (618) 603 − − − − 603
Commercial paper (b) 737 331 − − − − − − 1,068
Other financing and

other debts (a) (c) 740 (39) 40 (68) − − (12) 661
Financing (a) 2,095 331 (657) 644 (68) − − (12) 2,332
Derivatives –
liabilities (a) (b) − − (4) - 7 − 3
Financing and derivatives –

liabilities (a) 2,095 331 (661) 644 (61) − − (12) 2,336
Liabilities related to put 4

options granted to non –
controlling interests (a) 2,767 − − − − − (340) (218) 2,209
Current financial debt 4,862 331 (661) 644 (61) − (340) (230) 4,544
Bonds (b) (d) 6,460 150 − (603) 81 − − − 6,087
Other financing and other

debts (a) (c) 116 23 − (40) 43 − − 8 150
Financing (d) 6,576 173 − (644) 124 − − 8 6,238
Derivatives –
liabilities (b) (d) 12 − − − − − − − 11
Financing and derivatives –

liabilities (d) 6,588 173 − (644) 124 − − 8 6,249
options granted to non –
controlling interests (d) 477 − − − − − − (128) 349
Non-current financial debt 7,065 173 − (644) 124 − − (120) 6,598
Financial debt 11,927 504 (661) − 63 − (340) (350) 11,143

(a) Less than one year portion.
(b) Financing managed at the Company level.
(c) Subsidiaries' bank financing and other financing, liabilities related to finance leases.
(d) More than one year portion.
(e) See Note 3.3 of the Notes to the consolidated financial statements.
(f) O ther movements correspond mainly to (i) the revaluation of the liability related to put options granted to non-controlling interests, including currency
translation adjustments, and (ii) changes in scope.

Financial debt repayment schedule

Projected cash outflows linked to the contractual repayment of the principal amount and contractual interest payments
on the financial assets and liabilities, including premiums to be paid on derivative financial instruments, based on the
assumption of non-renewal
Carrying
amount on
consolidated
balance sheet
as of December Cash flows Cash flows Cash flows Cash flows Cash flows
(in € millions) 31, 2014 2015 2016 2017 2018 2019 and after
Bonds (a) (b) 6,691 (603) (696) (921) (802) (3,669)
Commercial paper (a) (f) 1,068 (1,068) − − − −
Derivatives - liabilities (a) (d) (e) (i) 14 (14) − − − −
Financial debt managed at
Corporate level 7,773 (1,685) (696) (921) (802) (3,669)
Subsidiaries’ bank financing
and other financing (c) 738 (668) (12) (10) (10) (37)
Finance lease
commitments (c) (d) 74 (15) (16) (9) (8) (26)
Liabilities related to put options
granted to non-controlling
interests (g) 2,558 (2,209) (238) − (111) −
Total debt (before flows
of financial instruments
other than accrued interest) 11,143 (4,578) (962) (940) (931) (3,732)
Interest on above-mentioned
debt (d) (h) (134) (119) (107) (93) (243)
Flows on derivatives (d) (e) (h) (j) − (5) 65 6 −
(a) Financing managed at the Company level.
(b) Flows determined on the basis of the carrying amount of the bonds as of December 31, 2014 and their contractual maturity date.
(c) Contractual nominal and interest flows.
(d) The floating interest rates are calculated on the basis of the rates applicable as of December 31, 2014.
(e) Net contractual flows, including premiums payable, net flows payable or receivable relating to the exercise of options in the money at the year-end.
(f) The Commercial Paper issuances are backed-up by available confirmed credit lines.
(g) Cash flows determined on the basis of the carrying amount of the options as of December 31, 2014 and their contractual exercise date (See Note 3.5 of
the Notes to the consolidated financial statements).
(h) Interest flows are net of accrued interest taken into account in the subtotals above.
(i) T he amount recognized in the balance sheet represents the market value of these instruments. The flows in respect of these instruments as well as
those relating to derivatives - assets are detailed hereafter.
(j) Concerns derivative instruments on net debt, assets and liabilities.
Cash outflows linked to the contractual repayment of swapped bonds

Currency swap agreements are used in order to hedge against exchange rate fluctuations for certain bonds denominated in foreign
currency and obtain equivalent financing in euros.
Carrying amount and repayment value after taking into account swaps into euros
As of December 31
Carrying amount 7,078 6,691

Repayment value after taking into account swaps into euros (a) 7,018 6,633
(a) C orresponds to (i) the carrying amount for the bonds not swapped into euros, and (ii) the value after swaps for the bonds swapped into euros. The
difference with the carrying amount therefore corresponds to the fair value of the cross-currency swaps qualified as fair value hedge on the bonds
swapped into euros and presented on the balance sheet under the Derivatives heading.

Sources of financing available at any time

The sources of financing available at any time established by the Group are composed mainly of committed available credit facilities
carried by the Company. The Group also has other bank credit facilities carried by certain of its subsidiaries.
Amount Amount Amount Amount Amount Amount

available as of available as of available as of available as of available as of available as of
December 31, December 31, December 31, December 31, December 31, December 31,
(in € millions) 2014 2015 2016 2017 2018 2019 and after
Credit facilities (a) 5,465 5,465 4,515 3,247 2,597 2,397

Other credit facilities (b) 326 − − − − −
(a) Nominal amount of the portion of the syndicated credit facility and back-up credit facilities managed at the Company level and not drawn down as of
December 31, 2014.
(b) Nominal amount of the portion not drawn as of December 31, 2014.
Note 10.4. Short-term investments

Carrying amount
As of December 31
Money market funds 2,306 1,838

Bank deposits, negotiable debt instruments and other short-
term investments 556 479
Total 2,862 2,317
4
Counterparty risk in respect of short-term investments
The Group invests primarily in money market funds (French SICAV monétaires) or short-term money market funds (French SICAV monétaires
court terme), which are highly liquid, diversified and not rated. Bank deposits, negotiable debt instruments and other short-term instruments
are subscribed from first-tier financial institutions.
Note 10.5. Net debt

As of December 31
Non-current financial debt 7,065 6,598

Short-term investments (2,862) (2,317)
Derivatives – assets – Non-current (130) (181)
Derivatives – assets – Current − −
Net debt 7,966 7,764
Change in net debt in 2014 Change in net debt in 2013

Net debt stood at €7,764 million as of December 31, 2014, including In 2013, the Group’s net debt increased by €1,674 million to reach
€2,558 million in put options granted to non-controlling shareholders. €7,966 million.
The debt represented by these options is down €686 million from
Excluding put options granted to non-controlling interests, the
December 31, 2013 due in particular to Danone's increased equity
Group’s net debt totaled €4,722 million as of December 31, 2013,
interest in Centrale Laitière (Morocco) during the year.
up €1,701 million from the previous year. This increase was mainly
Excluding put options for non-controlling shareholders, the Group's due to the acquisitions carried out by Danone in 2013. They included
net financial debt stood at €5,206 million, up €484 million from the purchase of a portion of the non-controlling interests in Danone
December 31, 2013. The rise is linked mainly to acquisitions made Spain, the increased equity interest acquired in Centrale Laitière,
by Danone in the course of 2014, including its increased stake in the acquisition of a controlling interest in Sirma in Turkey, the
Centrale Laitière (Morocco) and Mengniu (China), and its acquisition acquisition of Happy Family and YoCrunch in the United States and
of an interest in Brookside (Kenya). strategic investments of a 4.0% equity interest in Mengniu in China
and a 49% equity interest in Fan Milk in West Africa.

Note 10.6. Cost of net debt Cost of net debt in 2014

Cost of net debt declined despite higher net financial debt than in
Accounting principles 2013. This decline was linked in particular to lower interest rates
Cost of net debt comprises mainly interest charges (calculated at and the benefits of bond issues that enabled the Group to extend
the effective interest rate) on current and non-current financing and the average maturity of its debt at favorable market conditions.
the effects of the derivatives relating to said financing.
Cost of net debt in 2013
Interest income comprises mainly interests received and, if applicable,
Cost of net debt increased due to higher net financial debt than in
the effects of the measurement at fair value through profit or loss of
2012. This increase was attributable mainly to the various acquisitions
the short-term investments and cash and cash equivalents.
made by the Group since July 1, 2012 and, more particularly, to the
The related cash flows are presented within Cash flows provided acquisition of a portion of the non-controlling interests in Danone
by (used in) operating activities. Spain and the increase in the Group’s stake in Centrale Laitière, as
well as buybacks by the Group of 16.4 million treasury shares since
that date.
Amount of interest expense paid and accrued

Net interest expense paid (178) (212)

Interest expense accrued as of December 31 47 20
Note 10.7. Financial risks associated with These derivatives are mainly interest rate swaps, caps and sometimes
collars. All these instruments are plain vanilla. The interest rate
the financing activity derivatives are contracted for the purpose of managing interest
rate risk and are either eligible to be used as hedges or not in
Interest rate risk accordance with IAS 39.
Interest rate risk exposure
The Group is exposed to interest rate risk on its financial liabilities as Sensitivity of net income to changes in the cost of net debt
well as its cash and cash equivalents. Through its interest-bearing resulting from changes in the short-term interest rate
debt, the Group is exposed to the risk of interest rate fluctuations As of December 31, 2014, 81% of the Group’s consolidated gross
that affect the amount of its financial expense. debt after taking into account interest rate hedges in effect and
active (see hereafter) on that date is hedged against an increase in
In addition, in accordance with IAS 39, Financial Instruments: short-term interest rates. As a percentage of consolidated net debt
Recognition and Measurement, interest rate fluctuations may have an (see hereafter), 128% is hedged against an increase in short-term
impact on the Group’s consolidated results and consolidated equity. interest rates. As of December 31, 2014 in terms of its consolidated
The Group has implemented a policy to monitor and manage this net debt, the Group is therefore exposed to the risk of a decline in
interest rate risk for the purpose of limiting the volatility of its net short-term rates.
financial income or expense through the use of hedging instruments.

Sensitivity of the cost of net debt to a change in the short-term interest rate
2013 2014
(in € millions) Gain (loss) Gain (loss)

Increase of 25 bps (a) 6 4
Decrease of 25 bps (a) (6) (4)
(a) T he impact on the cost of debt, calculated over a full year, of a change in the short-term interest rate applied to the net debt at year-end, after taking
into account the interest rate hedges in effect at that date.
The interest rate hedges in effect and active include (i) fixed-rate Financial currency risk
borrowings, (ii) interest rate swaps (net) as well as (iii) active option
Due to its international presence, the Group could be exposed
hedges. An option hedge is considered to be active when it is in the
to foreign exchange rate fluctuations in relation to its financing
money if the increase in short-term rates does not exceed 25 bps
activities: in application of its risk centralization policy, the Group
compared to interest rates as of the closing date.
manages multi-currency financings and liquidities.
The net debt used to measure the Group’s sensitivity to changes
In application of its financial currency risk hedging policy, the Group’s
in interest rates corresponds to financial debt net of short-term
residual exposure (after hedging) is not material.
investments, cash and cash equivalents. It excludes the financial
liabilities related to put options granted to non-controlling interests As part of these policies, the Group uses cross-currency swaps as
as these are not interest-bearing. described in Note 12.4 of the Notes to the consolidated financial
statements.

Other financial investments, Other financial income (expense)
Note 11. Other financial investments, Other financial

income (expense)
Note 11.1. Accounting principles Bonds and money-market funds are classified as available-for-sale
financial assets within the meaning of IAS 39, Financial Instruments:
Investments in other non-consolidated Recognition and Measurement. They are recognized at fair value in the
companies consolidated balance sheet, with changes in fair value recognized
Investments in other non-consolidated companies are measured as under consolidated equity in Accumulated other comprehensive
available-for-sale investments within the meaning of IAS 39, Financial income, except for unrealized losses that are considered to be
Instruments: Recognition and Measurement. They are recognized at significant or prolonged, which are recognized directly in profit or
fair value in the consolidated balance sheet, with changes in fair loss in Other financial income (expense). Their fair value is calculated
value recognized under consolidated equity in Accumulated other on the basis of listed prices on active markets.
comprehensive income, except for unrealized losses that are Long-term loans
considered to be significant or prolonged, which are recognized
directly in profit or loss in Other financial income (expense). Long-term loans are measured at amortized cost using the effective
interest rate method within the meaning of IAS 39, Financial
Fair value Instruments: Recognition and Measurement.
For listed companies, fair value is assessed according to the stock
price as of the end of the period. Note 11.2. Other financial investments
For unlisted companies, fair value is assessed based on recent Main changes during the period
transactions entered into with third parties, put or call options
negotiated with third parties or external appraisals. 2014 transactions
The Group’s equity interest in the Mengniu group (Fresh Dairy
When such elements do not exist, the fair value of investments in Products, China), acquired in 2013, has been accounted for as an
unlisted companies is deemed to be equivalent to the acquisition associate since January 1, 2014 (see Note 4.4 of the Notes to the
cost of the investments. consolidated financial statements).
Gains or losses on disposal of non-consolidated investments are 2013 transactions
recognized under the heading Other financial income (expense) in The main transactions carried out by the Group in 2013 were as
the consolidated income statement. follows:
Other long-term financial assets • the acquisition of an equity interest in the Mengniu group (see
Other long-term financial assets mainly comprise bonds and money- Note 4.4 of the Notes to the consolidated financial statements);
market funds and security deposits required by the tax regulations • in connection with acquiring control of Centrale Laitière, the
of certain countries in which the Group operates. Group sold its entire 2.61% equity interest in SNI (Fresh Dairy
Products, Morocco – See Note 2.4 of the Notes to the consolidated

Organization of financial risks and derivatives management
Carrying amount
As of December 31
Mengniu (a) 250 −

Other 63 92
Investments in other non-consolidated companies 313 92
Bonds and money-market funds (b) 122 123

danone.communities 20 20
Other (c) 84 68
Other long-term financial assets 226 210
Long-term loans 25 17
Other financial investments 251 228
Of which unrealized capital gain (loss) (d) 97 42

(a) L isted company. Equity interest acquired in 2013, accounted for as an associate in 2014, see Note 4.4 of the Notes to the consolidated financial
statements.
(b) Bonds and money-market funds held as the counterpart to certain “damage and personal protection” provisions.
(c) Comprises mainly security deposits required by the tax regulations of some countries in which the Group operates.
(d) Gross value, recognized under consolidated equity in Accumulated other comprehensive income.
Note 11.3. Other financial income and • bank commissions, including commissions for the non-use of
committed credit facilities (recognized in Other financial expense);
other financial expense 4
• gains or losses on disposals of Investments in other non-conso-
Accounting principles lidated companies and Other long-term financial assets.
Other financial income and other financial expense correspond Change in Other financial income in 2014
to financial income and expense other than income and expenses
related to net financial debt. They include, in particular, the following: The change in other financial income and expense resulted primarily
from the exceptionally high basis for comparison in 2013, which
• the ineffective portion of the hedges, in particular hedges of included a capital gain relating to Danone’s disposal of its interest in
currency risk related to operations in accordance with IAS 39, SNI as part of the takeover of Centrale Laitière (Morocco).
Financial Instruments: Recognition and Measurement;
Change in Other financial income in 2013
• the impact of the accretion of the present value of commitments
net of the expected return on plan assets of retirement commit- In 2013, Other financial income increased by €47 million compared
ments and other long-term benefits; with 2012, due mainly to the impact of the disposal by Danone of its
equity interest in SNI (Fresh Dairy Products – Morocco), resulting
in a €52 million capital gain.
Note 12. Organization of financial risks and derivatives

management
Note 12.1. Organization of financial risks management
As part of its normal business, the Group is exposed to financial risks, Through its Treasury and Financing Department, which is part of the
especially foreign currency, financing and liquidity, interest rate, Group Finance Department, the Group possesses the expertise and
counterparty risks, securities-related risks and commodity risks. tools (trading room, front and back office software) to act on different
financial markets following the standards generally implemented by
The Group’s policy consists of (i) minimizing and managing the impact
first-tier companies. In addition, the Internal Control and Internal
that its exposure to financial market risks could have on its results
Audit Departments review the organization and procedures applied.
and, to a lesser extent, on its balance sheet, (ii) monitoring and
Lastly, a monthly treasury and financing report is sent to the Group
managing such exposure centrally, (iii) whenever the regulatory and
Finance Department, enabling it to monitor the decisions taken to
monetary frameworks so allow, executing the financial transactions
implement the previously approved management strategies.
locally or centrally, and (iv) using derivative instruments only for
the purpose of economic hedging.

The Group is also exposed to price volatility and to a potential shortage changes in the value of the ineffective portions of derivatives are
of the commodities that it purchases, mainly to produce its finished recognized directly in profit or loss, in the heading Other financial
products. To manage this exposure, the Group has implemented income (expense). Changes in the fair value of derivative financial
a commodity purchasing policy (Market Risk Management). The instruments that do not meet the conditions for classification as
impact of a price change in the two main commodity categories on hedging instruments are recognized directly in profit or loss for the
the Group’s annual cost of purchases is presented hereafter in the period, in a heading within operating income or financial income
section Commodities risk. depending on the nature of the hedge.
Note 12.2. Accounting principles Note 12.3. Derivatives used to hedge

Derivatives are recognized in the consolidated balance sheet at operational currency risk
their fair value:
The Group’s policy is to hedge its highly probable commercial
• derivatives used to manage net debt and hedges of net invest- transactions so that, as of December 31, its residual exposure
ments in foreign operations are recognized in the financial debt in respect of the whole of the following fiscal year is significantly
or current and non-current asset lines; reduced. However, when the hedging conditions of certain currencies
have deteriorated (less availability, high cost, etc.), the Group may
• foreign exchange derivatives related to operations are recognized be required to limit the hedging of its highly probable commercial
in the heading Derivatives – assets within Other receivables or in
transactions in its currencies, by not hedging or only partially
the heading Derivatives – liabilities within Other current liabilities.
hedging the exposure. The Group uses forward currency contracts
When derivatives are designated as fair value hedges of assets or and currency options to reduce its exposure.
liabilities in the consolidated balance sheet, changes in the fair
The execution of the hedging policy for currency risk related to
value of both the derivatives and the hedged items are recognized
operations consists of providing the necessary hedges to subsidiaries
in profit or loss in the same period.
through a centralized management system, or, in the case of
When derivatives are designated as hedges of net investments in subsidiaries where such hedges are legally prohibited, through a
foreign operations, changes in the fair value of the derivatives are monitoring and control process.
recognized in equity under Cumulative translation adjustments.
The Group mainly applies cash flow hedge accounting.
When derivatives are designated as future cash flow hedges, changes
Based on pending transactions as of December 31, 2014, the Group’s
in the value of the effective portion of the derivative are recognized
residual exposure after hedging of exchange risks on its highly
in equity under Accumulated other comprehensive income. This
probable commercial operating transactions is significantly reduced
effective portion is recycled to profit or loss, in the same heading,
for 2015, the main currencies not hedged beyond the first half of
when the hedged item itself is recognized in profit or loss. However,
2015 being the Russian ruble and the Brazilian real.
Portfolio of foreign exchange derivative instruments related to operations

Net notional amount of the derivative instruments on the principal hedged currencies
As of December 31
2013 2014
Forward Currency Forward Currency
contracts, options, contracts, options,
(in € millions) net (a) net (b) Total net (a) net (b) Total
(Sales)/Purchases of currencies
GBP (432) (232) (664) (505) (131) (636)

USD (c) 363 (73) 290 416 (27) 389
CNY (c) (44) − (44) (145) − (145)
BRL (c) (118) − (118) (143) − (143)
MXN (c) (141) − (141) (138) − (138)
RUB (c) (118) − (118) (36) − (36)
Other (c) (566) 27 (539) (739) (9) (748)
Total (1,056) (278) (1,334) (1,290) (167) (1,457)
(a) Spot portion of notional amount, based on closing rates.
(b) Spot portion of notional amount. Includes in- and out-of-the money options.
(c) Transactions denominated with the EUR or other currencies as counterpart.

Fair value
As of December 31
2013 2014
Of which Of which
recognized recognized
(in € millions) Notional Fair value in equity (a) Notional Fair value in equity (a)
Forward contracts and

currency options (1,484) 24 22 (1,693) 10 25
(a) Amount recognized in equity in respect of instruments designated as cash flow hedge.
Sensitivity of equity and net income to changes in The impact recognized in profit or loss relates to:
the fair value of currency derivative instruments • the time value and swap point variations, when they are excluded
related to operations from the hedging relationship;
A change in the fair value of the derivative financial instruments • transactions to which hedge accounting is not applied.
hedging the operating currency risk, induced by a change in foreign
exchange rates, could impact the Group’s equity and net income.
Sensitivity to a change in the euro against the principal currencies with exchange rate exposure
As of December 31
2013 2014
(in € millions) Equity Gain (loss) Equity Gain (loss)
10% increase in EUR (a)
GBP 54 (2) 54 (1)

USD (b) 16 (1) 11 (6) 4
CNY (b) 2 1 11 1
BRL (b) 5 – 3 1
MXN (b) 1 – − −
RUB (b) 11 – − −
10% decrease in EUR (a)
GBP (48) (4) (56) (2)

USD (b) (13) (2) (14) 8
CNY (b) (3) (1) (14) (1)
BRL (b) (6) – (4) (1)
MXN (b) (1) – − −
RUB (b) (14) – − −
(a) Increase/decrease in EUR applied to transactions that are outstanding and at constant volatility and interest rates.
(b) Transactions denominated with the EUR or other currencies as counterpart. In the case of transactions denominated in currencies other than the EUR,
the increase or decrease in the EUR is applied simultaneously to the base currency and the secondary currency.
These instruments and the hedged items typically have maturities of less than one year. Consequently the cash flows related to these
instruments will, for the most part, be recognized in the consolidated income statement in 2015.

Note 12.4. Derivatives used to hedge currency risks relating to financing,

currency translation and assets
The Group has established a policy for monitoring and hedging the net situation of certain subsidiaries, with regular assessments of risks
and opportunities to use hedging instruments.
The Group’s policy consists of maintaining the debtor and/or surplus cash positions of Danone and its subsidiaries in their respective functional
currencies. Furthermore, in compliance with its policy of managing risks centrally, the Group may manage multi-currency borrowings and
surplus cash.
As part of these policies, the Group therefore uses cross-currency swaps.
Notional amount and fair value amount

As of December 31
2013 2014
Of which, Of which,
(in € millions) Notional Fair value in equity Notional Fair value (b) in equity
Fair value hedge 138 61 − 820 68 (9)

Net investment hedge 277 55 55 240 92 92
Instruments not eligible for
hedge accounting (a) 80 4 – 157 (10) −
Total (b) 495 120 55 1,217 150 83
(a) For currency risk related to financing and to net investment in foreign operations, hedge accounting might not be applied to minor amounts. In such
cases, both the derivative and the underlying are revalued and the change in value is recorded in the consolidated income statement.
(b) Comprises also the fair value of the interest rate portion of the cross-currency swaps with fixed-rate components, which, in addition, were qualified as cash-
flow hedge and recognized in equity.
Sensitivity of equity and net income to changes in the fair value of foreign exchange derivative
instruments related to financing, currency translation and assets
A change in the fair value of these derivative financial instruments induced by a change in foreign exchange rates at the reporting date would
not have a significant impact on the Group’s equity or net income. Changes in the foreign exchange rates of the financial instruments are
offset by changes in the foreign exchange rates on loans and borrowings in hedged currencies or on net foreign investments.
Note 12.5. Derivatives used to hedge interest rate risk

The Group has implemented a policy to monitor and manage interest rate risk for the purpose of limiting the volatility of its net financial
income or expense through the use of hedging instruments.
These derivatives are mainly interest rate swaps, caps and sometimes collars. All these instruments are plain vanilla. The interest rate
derivatives are contracted for the purpose of managing interest rate risk and are either eligible to be used as hedges or not in accordance
with IAS 39.
Fair value
As of December 31
2013 2014
Of which, Of which,
(in € millions) Fair value in equity Fair value in equity
Instruments classified as cash flow hedge (1) (1) 6 6
Instruments not eligible for hedge accounting 2 − 1 −
Total (a) 1 (1) 7 6
(a) Increase/decrease applied to the entire yield curve, to transactions that are outstanding and at constant volatility.

Sensitivity of equity and net income to changes in • impacts recognized in equity relate to the effective portion of the
the fair value of interest rate derivatives instruments eligible to be used as hedges of future cash flows;
A change in the fair value of interest rate derivatives induced by a • impacts recognized in profit or loss relate to the ineffective portion
change in the yield curve recognized as of the reporting date would of the instruments eligible to be used as hedges of future cash
have the following impact on the Group’s equity and net income: flows, as well as to the impact of the change in fair value of the
instruments not qualifying as hedges.
Sensitivity to a change applied to the entire yield curve

2013 2014
(in € millions) Equity Gain (loss) Equity Gain (loss)
Increase of 10 bps (a)
Interest rate options (b) − − − −

Interest rate swaps (c), other − − − −
Sensitivity, net − − − −
Decrease of 10 bps (a)
Interest rate options (b) − − − −

Interest rate swaps (c), other − − − −
Sensitivity, net − − − −
(a) Increase/decrease applied to the entire yield curve, to transactions that are outstanding and at constant volatility.
(b) Caps and cap spreads.
(c) Fixed-rate payer and receiver swaps.
4
Note 12.6. Counterparty risk The Group’s banking policy aims to apply deposit limits per
counterparty and emphasize the importance of its credit rating quality
Counterparty risk exposure inherent in financial by concentrating its transactions among first-tier counterparties
risk management that (i) have credit ratings at least in the Single A category for more
than 90% of the deposits as of December 31, 2014; (ii) possess
The Group is exposed to counterparty risk, especially on banking
international branch networks and (iii) provide it with financing.
counterparties, as part of its financial risk management activities.
Moreover, in order to invest its short-term surpluses, the Group
As part of its normal activities, the Group has financial institutions mainly invests in either money-market funds (SICAV monétaires) or
as counterparties, mainly to manage its cash and foreign exchange short-term money-market funds (SICAV monétaires court terme),
rate and interest rate risks. The failure of these counterparties to which are not rated. These funds are very liquid and diversified.
comply with one or more of their commitments could adversely The other short-term investments are made in accordance with
affect the Group’s financial situation. the Group’s above-mentioned banking policy.
The Group’s overall exposure to counterpar ty risk has been Finally, in certain countries, the Group may be obliged to conduct
significantly reduced through the centralization of financial risks transactions with local banks that have lower credit ratings.
and implementation of centralization applications as well as its
cash management policy of minimizing and managing surpluses.
Counterparty risk exposure arising from interest rate derivatives and cross-currency swaps
As of December 31
(in percentage of the total fair value as of December 31) (a) 2013 2014
Counterparty rating (Standard & Poor's rating)
A or higher 76% 80%

BBB+ 24% 20%
Below BBB+ – –
(a) Net amount, when positive, of the positive and negative fair values by counterparty, of the outstanding interest rate derivatives and currency swaps
as of December 31.

Counterparty risk exposure arising from currency derivatives hedging operational currency risk
As of December 31
(in percentage of the total fair value as of December 31) (a) 2013 2014
Counterparty rating (Standard & Poor's rating)
A or higher 92% 79%
BBB+ 8% 16%
Below BBB+ – 5%
(a) Net amount when positive, of the positive and negative fair values by counterparty, of the outstanding foreign exchange rate derivatives as of December 31.
Fair value associated with derivatives counterparty risk

The valuation associated with derivatives counterparty risk is calculated on the basis of historical default probabilities derived from the
calculations of a leading rating agency, to which a recovery rate is applied. As of December 31 2014 and December 31, 2013, the impact
associated with the adjustment required by IFRS 13 is not material.
Note 12.7. Securities risk
As of December 31
Risk on Company shares
Treasury shares and DANONE call options (a) 1,871 1,859
Risk on other shares
Other non-consolidated investments (b) 313 92

(a) DANONE call options acquired by the Company. See Note 13.3 of the Notes to the consolidated financial statements.
Note 12.8. Other information required by IFRS 7, Financial instruments: disclosures

Recognition at fair value of cash flow hedging derivatives
Income and expense recognized in profit or loss for the period
2013 2014
(in € millions) Currency hedges Interest rate hedges Currency hedges Interest rate hedges
Ineffective portion over the year

of the change in fair value of
instruments qualified as future
cash flow hedge (a) (b) 5 – 5 −
Effective portion recognized
in equity in the preceding year
of instruments qualified as future
cash flow hedge and recycled
to profit or loss in the year under
review (c) (d) 74 (2) 59 −
(a) Impact on financial income (expense).
(b) Comprises mainly changes in (i) the time value of currency and interest rate options, and (ii) currency swap point variations for swaps excluded from
the hedging relationship.
(c) Impact on operating or financial income (expense).
(d) Comprises mainly (i) the effective portion of forward currency agreements and interest rate hedges, and (ii) the intrinsic value of currency and interest
rate options.

Reconciliation of the consolidated balance sheet by class and accounting category

Liabilities
Assets Assets Loans and Liabilities recorded at
recorded at available financial recorded at amortized Carrying Fair value
(in € millions) fair value for sale assets fair value cost amount Fair value level (c)
Financial assets
Investments in other non-
consolidated companies − 92 − − − 92 92 1-3
Long-term loans and other
long-term financial assets − 201 26 − − 228 228 1-3
Derivatives – assets (a) 181 − 181 181 2
Trade receivables (b) − 1,900 − − 1,900 1,900 –
Other current assets (b) 86 − 400 − − 486 486 –
Short-term loans − 30 − − 30 30 –
Shares in mutual funds 1,838 − − − − 1,838 1,838 1
Other short-term
investments 479 − − − − 479 479 2
Cash and cash equivalents 880 − − − − 880 880 1
Carrying amount of the
financial assets by categories 3,464 293 2,356 − − 6,113 6,113
Financial liabilities
Financing − − − 880 7,689 8,569 8,835 2
Derivatives – liabilities (a) − − − 14 − 14 14 2
controlling interests − − − 2,558 − 2,558 2,558 3
Trade payables (b) − − − − 3,334 3,334 3,334 – 4
Other current liabilities (b) − − − 169 2,572 2,741 2,741 –
Carrying amount of financial
liabilities by categories − − − 3,621 13,595 17,217 17,482
Financial assets
Investments in other non-
consolidated companies − 313 − − − 313 313 1-3
Long-term loans and other
long-term financial assets − 226 25 − − 251 251 1-3
Derivatives – assets (a) 130 − − − − 130 130 2
Trade receivables (b) − − 1,809 − − 1,809 1,809 –
Other current assets (b) 40 − 876 − − 916 916 –
Short-term loans − − 23 − − 23 23 –
Shares in mutual funds 2,306 − − − − 2,306 2,306 1
Other short-term
investments 556 − − − − 556 556 2
Cash and cash equivalents 969 − − − − 969 969 1
Carrying amount of the
financial assets by categories 4,001 539 2,733 − − 7,273 7,273
Financial liabilities
Financing − − − 198 6,378 6,576 6,788 2
Derivatives – liabilities (a) − − − 12 − 12 12 2
controlling interests − − − 3,244 − 3,244 3,244 3
Current financial liabilities − − − − 2,095 2,095 2,098 2
Trade payables (b) − − − – 3,248 3,248 3,248 –
Other current liabilities (b) − − − 27 2,470 2,497 2,497 –
Carrying amount of financial
liabilities by categories − − − 3,481 14,191 17,672 17,887
(a) Derivative instruments used to manage net debt.
(b) The carrying amount corresponds to fair value given the short-term nature of these items.
(c) Valuation hierarchy level used to assess fair value.

DANONE shares, dividend, earnings per share
Valuation hierarchy in accordance with IFRS 7, Financial For asset and liability derivative instruments recognized at fair value,
instruments – Disclosures the Group uses measurement techniques that include data observable
Level 1 on the market, notably for interest rate swaps, forward purchases
Fair value is based on (unadjusted) prices listed on active markets and sales or currency options. The model integrates diverse data
for identical assets and liabilities. such as spot and forward exchange rates and the yield curve.
Level 2 For put options granted to non-controlling interests, the value is
Fair value is based on data other than listed prices as per level 1, based on contractual terms.
which are observable for the asset or liability concerned, directly
or indirectly.
Level 3
Fair value is based on data relating to the asset or liability which
are not based on observable data on active markets.
Note 13. DANONE shares, dividend, earnings per share

Note 13.1. Accounting principles DANONE call options
DANONE call options are options held by the Company to purchase
DANONE shares DANONE shares to hedge certain of its stock-option plans granted
DANONE shares held by the Company and its fully-consolidated to certain employees and corporate officers. They do not constitute
subsidiaries are recognized as a reduction in consolidated equity, financial assets but are instead equity instruments in accordance
under the heading Treasury shares and DANONE call options, and with IAS 32, Financial instruments: presentation. They are recognized
are measured at effective cost. upon acquisition as a deduction from consolidated equity, under
the heading Treasury shares and DANONE call options. They are
measured at effective cost, i.e. the premium paid plus transaction
expense, and are not subsequently remeasured.

Note 13.2. Transactions and changes involving DANONE shares

2014 changes involving treasury shares in terms of transactions and use according to the Company’s
purpose
Changes during the period
Exercise Delivery Delivery

of following of Group
As of DANONE Sales / exercise perfor- As of
December call Trans- Reallo- Cancella- of stock mance December
(number of shares) 31, 2013 Buybacks options fers cations tions options shares 31, 2014
Acquisition transactions 31,117,762 − − (120,000) (228,402) − − − 30,769,360

Liquidity agreements − 676,134 − (796,134) 120,000 − − − −
Coverage of Group
performance shares
and stock options 7,710,647 − 1,022,794 − 228,402 − (1,292, 981) (504,927) 7,163,935
Cancellation of shares − − − − − − − − −
Shares held
by the Company 38,828,409 676,134 1,022,794 (916,134) 120,000 − (1,292, 981) (504,927) 37,933,295
Shares held
by Danone Spain 5,780,005 − − − − − − − 5,780,005
Total shares held
by the Group 44,608,414 676,134 1,022,794 (916,134) 120,000 − (1,292,981) (504,927) 43,713,300
4
2014 changes involving DANONE call options, in terms of transactions
As of December As of December
(number of shares) 31, 2013 Acquisitions Expired options Exercises 31, 2014
DANONE call options

held by the Company
Number of call options 2,021,415 − − (1,022,794) 998,621

Percentage of the Company’s
share capital as of December 31 0.3% 0.2%

Note 13.3 Outstanding DANONE shares

2013 2014
(in number of shares) Share capital Treasury Outstanding Share capital Treasury Outstanding
As of January 1 643,162,000 (49,831,234) 593,330,766 631,028,000 (44,608,414) 586,419,586

Dividends in shares − − − 11,932,014 − 11,932,014
Other capital increases 918,000 − 918,000 831,986 − 831,986
Capital reductions (13,052,000) − (13,052,000) − − −
Change in DANONE treasury
shares and call options − 5,222,820 5,222,820 − 895,114 895,114
As of December 31 631,028,000 (44,608,414) 586,419,586 643,792,000 (43,713,300) 600,078,700
Note 13.4. Earnings per share – Group share

Accounting principles • the increase in the weighted average number of shares that
would result:
Earnings per share correspond to the ratio of Net income – Group
share divided by the Number of shares. The Number of shares • from the exercise of stock-options, taking into account only
corresponds to the average number of outstanding shares during those options in the money on the basis of the average price
the year, after deducting the treasury shares held by the Company during the reference period,
and its fully-consolidated subsidiaries.
• from the acquisition of Group performance shares, taking
Earnings per share after dilution (or diluted earnings per share) into account only those shares whose performance conditions
correspond to the ratio of Net income – Group share divided by the are met as of the closing date;
Diluted number of shares. The Diluted number of shares corresponds
to the Number of shares increased by the net impact, when it is
• the reduction in the number of shares that could theoretically
be acquired.
positive, of the following two elements:
in accordance with the treasury stock method specified by IAS 33,
Earnings per share.
Diluted earnings per share do not take into account DANONE call
options held by the Company.
Earnings per share

(in € millions except for the number of shares and net income
in € per share) 2013 2014
Before dilution
Average number of outstanding shares (a) 587,411,533 594,472,798
Net income – Group share, per share 2.42 1.88
After dilution
Average number of outstanding shares (a) 587,411,533 594,472,798
Payment of dividend in shares (a) − 776,192
Shares subject to performance conditions and stock-options (a) (b) 1,058,044 287,338
Outstanding shares after dilution (a) 588,469,577 595,536,328
Net income – Group share, per diluted share 2.42 1.88
(a) Weighted average.
(b) Shares subject to performance conditions and stock-options granted to certain employees and corporate officers are described in Note 7.4 of the
Notes to the consolidated financial statements. Non-dilutive stock-options and shares subject to performance conditions as of December 31, 2014
could become dilutive depending on changes in the DANONE stock price and the possible achievement of the performance conditions.

Note 13.5. Dividend
Distributable reserves of the parent company Danone
As of December 31
Distributable reserves (a) 1,018 1,047

(a) Distributable reserves of the parent company Danone on a tax free basis.
The legally distributable reserves of subsidiaries and associated In the case of the Group, under French law, dividends can only be
companies may differ from their reported retained earnings as paid out of the net income for the year and the distributable reserves
a consequence of (i) consolidation adjustments applied to their of the parent company Danone.
separate financial statements, and (ii) the laws applicable in the
countries where the Group operates.
Payment of 2013 dividend with the option of a payment in shares

The Shareholders’ Meeting on April 29, 2014 in Paris approved the trading days prior to the date of the Shareholders’ Meeting, less the
dividend proposed with respect to the 2013 fiscal year, i.e. €1.45 per amount of the dividend and rounded to the next highest euro cent. The
share, and decided that each shareholder could decide to receive settlement and delivery of the shares and their admission to trading
the dividend payment in cash or DANONE shares. on Euronext occurred on June 3, 2014. These shares carry dividend
rights as of January 1, 2014 and are fungible with existing shares.
The option period was open from Wednesday May 7, 2014 to Wednesday
May 21, 2014, inclusive. The issue price of new shares distributed A total of 65.23% of the rights were exercised in favor of the 2013
as payment for the dividend was €45.62. It corresponds to 90% of dividend payment in shares.
the average opening price listed on Euronext during the 20 market
Year ended December 31, 2014 4
Number of Consolidated cash flow used
(in € millions except for the number of shares) outstanding shares Consolidated equity in financing transactions
Portion paid in newly issued shares (a) 11,932,014 − −

Portion paid in cash − (307) (307)
Total 11,932,014 (307) (307)
(a) Or 1.89% of Danone’s share capital based on the capital as of April 30, 2014.

Other non-current provisions and liabilities and legal and arbitration proceedings
Note 14. Other non-current provisions and liabilities and

legal and arbitration proceedings
Note 14.1. Accounting principles Provisions are recognized when the Group has a present obligation
to a third party and it is certain or probable that this obligation will
Other non-current provisions and liabilities consist mainly of: result in a net outflow of resources for the Group. The timing or
• provisions; amount of the net outflow may be uncertain, but the amount must
be estimated in a reliable manner. A provision is reversed when it
• investment subsidies. no longer appears probable that the corresponding payment or an
Other non-current provisions and liabilities also include the short- outflow of resources will occur (provision not utilized).
term portion due in less than one year since it is deemed immaterial.

As of As of
December Decrease Decrease Translation December
(€ millions) 31, 2013 Increase (utilized) (not utilized) adjustments Other 31, 2014
Restructuring provisions 95 56 (69) (15) − 4 71

Other provisions for risks
and charges 567 179 (43) (61) 1 9 652
Investment subsidies 16 (1) − − − − 14
Total (a) 678 234 (112) (76) − 13 737
(a) The portion due in less than one year totaled €45 million as of December 31, 2014 (€81 million as of December 31, 2013).
Changes to Other non-current provisions and liabilities for 2014

were as follows:
Note 14.3. Legal and arbitration
• increases result primarily from lawsuits against the Company proceedings
and its subsidiaries in the normal course of business; Following the August 2, 2013 warning by the New Zealand government
and Fonterra as to the possible botulism contamination of several
• decreases occur when corresponding payments are made or batches of ingredients supplied by Fonterra to four Danone plants
when the risk is considered extinguished. Unused decreases
in the Asia/Pacific region, Danone is pursuing indemnification (see
relate mainly to reassessments and situations where some
risks, notably tax risks, cease to exist;
Lastly, the Company and its subsidiaries are parties to legal
• other changes correspond primarily to reclassifications and proceedings arising in the normal course of business, in particular
changes in scope.
by competition authorities in certain countries. Provisions are
As of December 31, 2014, Other provisions for risks and charges recognized when an outflow of resources is probable and the amount
consist mainly of provisions for legal, financial and tax risks as well can be reliably estimated.
as provisions for multi-year variable compensation granted to some
To the best of the Group’s knowledge, no other governmental, court
employees, with these provisions established in the context of the
or arbitration proceedings are currently ongoing that are likely to
Group’s normal course of business.
have, or have had in the past 12 months, a material impact on the
Also as of this date, the Group believes that it is not subject to risks Group’s financial position or profitability.
that could, individually, have a material impact on its financial
situation or profitability.

Subsequent events
Note 15. Related party transactions

Note 15.1. Accounting principles Note 15.2. Transactions with associates
The main related parties are the associated companies and the Transactions with these companies are generally carried out at
members of the Executive Committee and members of the Board arm’s length. They mainly involve management fees and royalties
of Directors. paid to the Group.
Amounts related to 2014 are immaterial.
Note 15.3. Compensation and benefits granted to members of the Executive

Committee and Board of Directors
Compensation paid to corporate officers and members
of the Executive Committee (a) 17.2 13.4
Attendance fees paid to Directors (b) 0.5 0.6
Compensation paid out 17.7 14.0
Termination benefits _ 2.1

Carrying amount of grants from the exercise
of Group performance shares (c) 8.3 9.1
(a) A nnual and multi-year fixed and variable compensation (gross amount excluding employer contributions), of which the variable portion totals
€7 million in 2014 (€11 million in 2013).
(b) The three corporate officers are not eligible to receive attendance fees. 4
(c) For 2012, the carrying amount represented the full value estimated as of the grant date in accordance with IFRS 2 on the assumption that the
performance conditions had been satisfied (see above and Note 1 of the Notes to the consolidated financial statements).
It should also be noted that certain Directors received an annuity as of December 31, 2014 (€67 million as of December 31, 2013). No
under the Group’s supplementary retirement plan, to which they loan or guarantee was granted or established by the Company or its
are entitled as a result of their prior service on behalf of the Group. subsidiaries on behalf of Executive Committee members.
In 2014, the aggregate amount of this benefit totaled €0.9 million
(€1.5 million in 2013), paid entirely through the aforementioned Note 15.4. Related party agreements
supplementary retirement plan.
See section 6.5 Statutory auditors’ special report on related party
Also, the portion of the Group’s total obligation with respect to agreements and commitments, notably with respect to the amounts
defined benefit retirement plans applicable to corporate officers and paid by the Company to Bernard HOURS in connection with the
members of the Company’s Executive Committee was €67 million cessation in 2014 of his functions as Deputy General Manager and
of his employment contract.
Note 16. Subsequent events

To the Company’s knowledge, no material events occurred after the approval date of the 2014 consolidated financial statements (approved
by the Board of Directors on February 19, 2015)

List of subsidiaries as of December 31, 2014
Note 17. List of subsidiaries as of December 31, 2014

Note 17.1. Fully consolidated holding companies and financial companies held directly
by the Company
Group’s control Interest
Main fully consolidated companies Country (in percentage) (in percentage)
DANONE France Parent company
Holding and financial companies

DANONE FINANCE INTERNATIONAL Belgium 100.0 100.0
COMPAGNIE GERVAIS DANONE France 100.0 100.0
DANONE CORPORATE FINANCE SERVICES France 100.0 100.0
DAN INVESTMENTS France 100.0 100.0
DANONE BABY AND MEDICAL HOLDING France 100.0 100.0
HOLDING INTERNATIONALE DE BOISSONS France 100.0 100.0
DANONE FINANCE NETHERLANDS BV Netherlands 100.0 100.0
DANONE SINGAPORE HOLDINGS PTE LTD Singapore 100.0 100.0
DANONE ASIA PTE LTD Singapore 100.0 100.0
Note 17.2. Main fully consolidated companies of the Fresh Dairy Products Division
Main fully consolidated companies (a) Country (in percentage) (in percentage)
DANONE DJURDJURA Algeria 100.0 100.0
DANONE ARGENTINA SA Argentina 99.8 99.7
NV DANONE SA Belgium 100.0 100.0
DANONE LTDA. Brazil 100.0 100.0
DANONE INC. Canada 100.0 100.0
DANONE PRODUITS FRAIS FRANCE France 100.0 100.0
DANONE GMBH Germany 100.0 100.0
DANONE SPA Italy 100.0 100.0
DANONE JAPAN Japan 100.0 100.0
DANONE DE MEXICO Mexico 100.0 100.0
CENTRALE LAITIERE Morocco 90.9 90.9
DANONE SP Z.O.O. Poland 100.0 100.0
DANONE PORTUGAL SA Portugal 74.7 74.6
DANONE INDUSTRIA OOO Russia 50.9 50.9
OJSC UNIMILK COMPANY (b) Russia 50.9 50.9
DANONE SOUTHERN AFRICA PTY LTD. South Africa 100.0 100.0
DANONE SA Spain 76.6 76.6
DANONE LTD. United Kingdom 100.0 100.0
STONYFIELD FARM INC. United States 100.0 100.0
THE DANNON COMPANY INC (b) United States 100.0 100.0
(a) Corresponds to the 20 largest companies of the Division in terms of net sales (non-Group sales). They generated more than three-fourths of the
Division’s sales in 2014.
(b) For this consolidated company, the business is spread over several legal entities in its country.

Note 17.3. Main fully consolidated companies of the Waters Division

AGUAS DANONE DE ARGENTINA SA (b) Argentina 100.0 100.0
DANONE WATERS BENELUX Belgium 100.0 100.0
DANONE LTDA. Brazil 100.0 100.0
ROBUST (GUANGDONG) FOOD & BEVERAGE CO. LTD. (b) China 92.0 92.0
SHENZHEN DANONE YILI DRINKS CO. LTD. (b) China 100.0 100.0
AQUA D'OR MINERAL WATER Denmark 90.0 90.0
EVIAN RESORT (c) France 100.0 100.0
SOCIETE ANONYME DES EAUX MINERALES D'EVIAN France 100.0 100.0
DANONE WATERS DEUTSCHLAND GMBH Germany 100.0 100.0
PT TIRTA INVESTAMA (b) Indonesia 74.0 74.0
BONAFONT SA DE CV Mexico 100.0 100.0
GRUPO CUZCO INTERNATIONAL S DE RL DE CV (b) Mexico 50.0 50.0
ZYWIEC ZDROJ SA Poland 100.0 100.0
AGUAS FONT VELLA Y LANJARON SA Spain 85.2 85.7
EVIAN-VOLVIC SUISSE SA Switzerland 99.7 100.0
DANONE HAYAT IÇECEK VE GIDA AS Turkey 100.0 100.0 4
SIRMAGRUP IÇECEK AS Turkey 50.1 50.1
DANONE WATERS (UK & IRELAND) LTD. United Kingdom 100.0 100.0
DANONE WATERS OF AMERICA INC. United States 100.0 100.0
COMPANIA SALUS SA Uruguay 94.1 94.1
(b) For this consolidated company, the business is spread over several legal entities in its country.
(c) Evian Resort operates the Evian casino. In that capacity, it is subject to the control of the French Ministry of the Interior and all regulations applicable
to games of chance in casinos.

Note 17.4. Main fully consolidated companies of the Early Life Nutrition Division
NUTRICIA-BAGO SA (b) Argentina 51.0 51.0
NUTRICIA AUSTRALIA PTY LTD. (b) Australia 100.0 100.0
SUPPORT PRODUTOS NUTRICIONAIS LTDA . (b) Brazil 100.0 100.0
DUMEX BABY FOOD CO. LTD. China 100.0 100.0
NUTRICIA EARLY LIFE NUTRITION (SHANGHAI) CO. LTD. China 100.0 100.0
BLEDINA France 100.0 100.0
DANONE NUTRICIA AFRICA & OVERSEAS France 100.0 100.0
MILUPA GMBH Germany 100.0 100.0
PT NUTRICIA INDONESIA SEJAHTERA Indonesia 100.0 100.0
PT SARIHUSADA GENERASI MAHARDHIKA Indonesia 100.0 100.0
MELLIN SPA Italy 100.0 100.0
DANONE DUMEX (MALAYSIA) SDN. BHD. Malaysia 100.0 100.0
NUTRICIA NEDERLAND B.V. (b) Netherlands 100.0 100.0
NUTRICIA POLSKA SP Z.O.O. (b) Poland 100.0 50.0
OJSC ISTRA - NUTRICIA BABYFOODS (c) Russia 100.0 100.0
DUMEX LTD. (b) Thailand 98.9 98.9
NUMIL GIDA ÜRÜNLERI AS (b) Turkey 100.0 100.0
NUTRICIA MIDDLE EAST DMCC (b) (c) United Arab Emirates 100.0 100.0
NUTRICIA LTD. (b) United Kingdom 100.0 100.0
HAPPY FAMILY HOLDING COMPANY (c) United States 91.9 91.9
(b) This company also has a medical nutrition activity presented in the financial statements of the Medical Nutrition Division.
(c) For this consolidated company, the business is spread over several legal entities in its country.

Note 17.5. Main fully consolidated companies of the Medical Nutrition Division
NUTRICIA AUSTRALIA PTY LTD. (b) Australia 100.0 100.0
NV NUTRICIA BELGIE (b) Belgium 100.0 100.0
SUPPORT PRODUTOS NUTRICIONAIS LTDA. (b) Brazil 100.0 100.0
NUTRICIA PHARMACEUTICAL (WUXI) CO. LTD. China 100.0 100.0
NUTRICIA TRADING (SHANGHAI) CO. LTD. China 100.0 100.0
NUTRICIA AS Denmark 100.0 100.0
NUTRICIA NUTRITION CLINIQUE S.A.S. France 100.0 100.0
NUTRICIA GMBH Germany 100.0 100.0
NUTRICIA IRELAND LTD. (b) Ireland 100.0 100.0
NUTRICIA ITALIA SPA Italy 100.0 100.0
NUTRICIA NEDERLAND B.V. (b) Netherlands 100.0 100.0
SORGENTE B.V. (c) Netherlands 100.0 100.0
NUTRICIA NORGE AS Norway 100.0 100.0
NUTRICIA POLSKA SP Z.O.O. (b) Poland 100.0 50.0
NUTRICIA SRL Spain 100.0 100.0
NUTRICIA NORDICA AB Sweden 100.0 100.0
NUMIL GIDA ÜRÜNLERI AS (b) Turkey 100.0 100.0 4
NUTRICIA MIDDLE EAST DMCC (b) (c) United Arab Emirates 100.0 100.0
NUTRICIA LTD. (b) United Kingdom 100.0 100.0
NUTRICIA NORTH AMERICA INC. United States 100.0 100.0
(b) This company also has an early life nutrition activity presented in the financial statements of the Early Life Nutrition Division.
Note 17.6. Main investments in associates

Main investments in associates (a) Country (in percentage) (in percentage)
INNER MONGOLIA MENGNIU DAIRY (GROUP) CO LTD (c) China 9.9 9.9
INNER MONGOLIA MENGNIU DANONE DAIRY CO LTD (c) China 20.0 20.0
FAN MILK INTERNATIONAL AS (b) (c) Denmark 49.0 49.0
STRAUSS HEALTH LTD Israel 20.0 20.0
YAKULT HONSHA CO LTD Japan 20.0 21.3
BROOKSIDE AFRICA LIMITED (c) Kenya 40.0 40.0
ALSAFI DANONE COMPANY LTD (c) Saudi Arabia 50.1 50.1
DANONE PULMUONE COMPANY LTD South Korea 50.0 50.0
SOCIETE TUNISIENNE DES INDUSTRIES
ALIMENTAIRES (STIAL) Tunisia 50.0 50.0
Other
BAGLEY LATINO AMERICA SA (c) Spain 49.0 49.0
(a) Corresponds to the 10 largest companies in terms of the share of net assets. They accounted for more than 90% of Investments in associates in 2014.
(b) The company is comprised of several companies operating in West Africa.

Cross-reference table with the Notes to the consolidated financial statements for the year ended December 31, 2013
Cross-reference table with the Notes to the consolidated

financial statements for the year ended December 31, 2013
Notes to the
consolidated financial
statements for
the year ended
Notes to the consolidated financial statements for the year ended December 31, 2013 December 31, 2014
General information: accounting principles, changes in the scope of consolidation, operating segments
and other general information
Note 1. Accounting principles 1.1, 1.2, 2.1, 3.1, 4.1,4.7,
5.1, 5.4, 5.5, 6.1, 7.3, 7.4,
7.5, 8.2, 8.3, 9.1, 9.3, 10.1,
10.6, 11.1, 11.3, 12.2, 13.1,
13.4, 14.1,15.1
Note 2. Highlights of the year 1.2, 2.2, 3.3, 4.3
Note 3. Changes in the scope of consolidation and in the Group’s equity interests in its subsidiaries 2.2, 3.3, 4.3
Note 4. Acquisition resulting in control being obtained of Centrale Laitière / accounting treatment for the transaction 2.4
Note 5. Accounting for other acquisitions resulting in control being obtained in 2012 and 2013 2.5, 2.6
Note 6. Operating segments 5.2
Consolidated income statement items
Note 7. Other income (expense) 5.3
Note 8. Other operating income (expense) 6.1 to 6.3
Note 9. Cost of net financial debt and other financial income and expense 10.6, 11.3
Note 10. Share of profit of associates 4.8
Note 11. Earnings per share 13.4
Balance sheet items – assets
Note 12. Intangible assets 9.1 to 9.3
Note 13. Property, plant and equipment 5.5
Note 14. Investments in associates 4.1 to 4.7
Note 15. Investments in other non-consolidated companies 11.2
Note 16. Long-term loans and other long-term financial assets 11.2
Note 17. Inventories 5.4
Note 18. Trade receivables 5.4
Note 19. Other receivables 5.4
Note 20. Short-term investments 10.4
Balance sheet items – equity and liabilities
Note 21. Information on changes in consolidated equity 13
Note 22. Current and non-current financial liabilities and net debt 3.5, 10.2, 10.3, 10.5
Note 23. Current and non-current financial liabilities related to put options granted to non-controlling interests 3.4
in Danone Spain
Note 24. Other current liabilities 5.4
Other information
Note 25. Income tax 8.1 to 8.3
Note 26. Other provisions and non-current liabilities and legal and arbitration proceedings 14.1 to 14.3
Note 27. Information on consolidated cash flows –
Note 28. Retirement obligations and other long-term benefits 7.3
Note 29. Personnel 7.1
Note 30. Group performance shares and stock-options granted to certain employees and corporate officers, 7.4, 7.5
Company Savings Plan
Note 31. Financial market risks and derivative instruments 5.7, 10.2, 10.3, 10.7, 12.1
to 12.8
Note 32. Savings and adaptation plan for the Group’s organizations in Europe 6.2
Note 33. Impact of the false safety alert issued by Fonterra with respect to certain ingredients supplied 6.3
to the Group in Asia
Note 34. Related party transactions 15.1 to 15.4
Note 35. Off-balance sheet commitments 5.6
Note 36. Main Group companies as of December 31, 2013 2.3, 3.2, 17.1 to 17.6
Note 37. Subsequent events 16

Statutory auditors’ report on the consolidated financial statements
Statutory auditors’ report on the consolidated financial

statements
This is a free translation into English of the Statutory auditors’ report on the consolidated financial statements issued in French and is provided
solely for the convenience of English-speaking users. The Statutory auditors’ report includes information specifically required by French law in
such reports, whether modified or not. This information presented below is the audit opinion on the consolidated financial statements and includes
an explanatory paragraph discussing the auditors’ assessments of certain significant accounting and auditing matters. These assessments were
considered for the purpose of issuing an audit opinion on the consolidated financial statements taken as a whole and not to provide separate
assurance on individual account balances, transactions or disclosures. This report also includes information relating to the specific verification
of information given in the Group’s management report. This report should be read in conjunction with, and construed in accordance with, French
law and professional auditing standards applicable in France.
To the shareholders,
In compliance with the assignment entrusted to us by your Shareholders’ Meeting, we hereby report to you, for the year ended December
31, 2014, on:
• the audit of the accompanying consolidated financial statements of Danone;
• the justification of our assessments;
• the specific verification required by law.
These consolidated financial statements have been approved by the Board of Directors. Our role is to express an opinion on these
consolidated financial statements based on our audit.
I - Opinion on the consolidated financial statements

We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan and
perform the audit to obtain reasonable assurance that the consolidated financial statements are free of material misstatement. An audit
involves performing procedures, using sampling techniques or other methods of selection, to obtain audit evidence about the amounts 4
and disclosures in the consolidated financial statements. It also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made, as well as the overall presentation of the consolidated financial statements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of
the Group as at December 31, 2014, and of the results of its operations for the year then ended in accordance with International Financial
Reporting Standards as adopted by the European Union.
II - Justification of assessments
In accordance with the requirements of Article L. 823-9 of the French commercial code relating to the justification of our assessments,
we bring to your attention the following matters:
• your company presented under the “Other operating income (expense)” heading in the Consolidated income statement the impact
of your company’s plan for cost savings and adaptation of the Group’s entities in Europe as well as that of the false alert issued by
Fonterra in respect of certain ingredients supplied to your group in Asia in 2013, as described in Notes 6.2 and 6.3 of the Notes to the
consolidated financial statements. Management is of the opinion that these were material items that, due to their exceptional nature,
cannot be regarded as inherent to the Group’s ordinary activities.
Our work involved examining the elements making up these amounts and assessing the appropriateness, in the light of Recommendation
R 2013-03 of the French National Accounting Board (Conseil National de la Comptabilité CNC), of their presentation in the Consolidated
income statement and of the disclosures in Note 6 of the Notes to the consolidated financial statements.
• your company is committed to acquiring the shares held by shareholders of certain consolidated subsidiaries, should the latter wish
to exercise their put options. In the absence of any specific provision under IFRS on this subject, we have verified that the accounting
treatment applied and described in the section entitled Liabilities related to put options granted to non-controlling interests in Note 3.1 of
the Notes to the consolidated financial statements was compliant with the principles of IFRS as adopted by the European Union and
currently in effect.
We also reviewed the methods adopted by your company for the valuation of the debt recognized in connection with these put options
based on the information available to date. We have verified that Note 3 of the Notes to the consolidated financial statements contains
appropriate information on these put options and on the assumptions used by your company.
• your company performed at the reporting date an impairment test on goodwill and brands with indefinite useful life, and also assessed
whether there was any indication of impairment of other long-term assets, in accordance with the procedures described in the sec-
tions entitled Accounting principles in Notes 9.1. and 5.5 of the Notes to the consolidated financial statements and the section entitled
Methodology in Note 9.3 of the Notes to the consolidated financial statements. We have reviewed the procedures for implementing this
impairment test and for identifying indications of impaired value, and verified that Notes 9.3 and 5.5 as well as the section entitled
Impact on the carrying amount of the Dumex brand in Note 6.3 of the Notes to the consolidated financial statements give appropriate
information, in particular in relation to the assumptions adopted and the sensitivity analysis in respect of Goodwill and brands with
indefinite useful life.

As indicated in Note 1.1 of the Notes to the consolidated financial statements, this impairment test was based on estimates prepared
in accordance with information and circumstances existing on the date the financial statements were drawn up. Such estimates may
differ from the actual amounts.
These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore contributed
to the opinion we formed, which is expressed in the first part of this report.
III – Specific verification

As required by law, we have also verified, in accordance with professional standards applicable in France, the information presented in
the Group’s management report.
We have no observations to make as to its fair presentation and consistency with the consolidated financial statements.


Financial statements of Danone SA, parent company of the Danone group
4.2 Financial statements of Danone SA, parent company

of the Danone group
Financial statements of Danone SA
Income statement
Net sales 520 474

Other income 2 42
Total operating income 3 522 516
Personnel costs 4 (216) (231)

Other operating expense 5 (390) (401)
Total operating expense (606) (632)
Net operating expense (84) (116)
Income from equity interests 6 964 730

Interest on loans and receivables and similar income 23 32
Interest on borrowings and similar expense (242) (197)
Other financial income (expense) 1 22
4
Net financial income 6 746 587
Net income before non-recurring items and tax 662 471
Net non-recurring income (expense) 7 8 (6)

Income tax 8 77 76
Net income 747 541

Balance sheet
Assets
As of December 31
2013 2014
Depreciation,
amortization and
(in € millions) Notes Net amount Gross amount provisions Net amount
Intangible assets 21 79 (52) 27

Property, plant and equipment 5 23 (18) 5
Equity interests 16,975 17,755 (50) 17,705
Other long-term financial assets 2,421 2,335 (1) 2,334
Financial assets 9 19,396 20,090 (51) 20,039
Non-current assets 19,422 20,192 (121) 20,071
Short-term loans and receivables 10 1,124 234 (1) 233

Marketable securities 11 356 324 − 324
Cash and cash equivalents 1 − − −
Current assets 1,481 558 (1) 557
Deferrals and prepaid expense 136 124 − 124

Total assets 21,039 20,874 (122) 20,752
Equity and Liabilities

As of December 31
Share capital 158 161

Additional paid-in capital 2,727 3,301
Legal reserve 4 4
Other reserves 3,781 3,781
Retained earnings 3,238 3,125
Net income for the year 747 541
Regulated provisions 1 1
Equity 12 10,656 10,914
Provisions for risks and charges 13 83 61

Bonds 14 7,106 6,664
Other financial debt 14 2,744 2,102
Other liabilities 15 297 925
Deferrals and accrued expense 153 86
Total equity and liabilities 21,039 20,752

Notes to the financial statements of the parent company Danone

The financial statements of the parent company Danone (“the Danone and in the Notes to the financial statements of the parent
Company”) for the year ended December 31, 2014 were approved by company Danone are rounded to the nearest unit. Consequently,
Danone’s Board of Directors on February 19, 2015 and will be sub- the sum of the rounded amounts may differ, albeit to an insignificant
mitted for approval to the Shareholders’ Meeting on April 29, 2015. extent, from the reported total. In addition, ratios and variances are
Danone and its consolidated subsidiaries constitute “the Group”. calculated on the basis of the underlying amounts and not on the
basis of the rounded amounts.
Unless indicated otherwise, amounts are expressed in millions of
euros and rounded to the nearest million. Generally speaking, the
values presented in the financial statements of the parent company
table of contents
General information : Balance sheet items– equitiy

accounting principles and and liabilities
highlights of the year Note 12. Equity 163
Note 1. Accounting principles 156 Note 13. Provisions for risks and charges 163
Note 2. Highlights of the year 158 Note 14. Bonds and other financial debt 164
Note 15. Other liabilities 166
Income statement items Note 16. Net debt 167
Note 3. Operating income 158

Note 4. Personnel costs and compensation of the Other information 4
members of the management bodies and the Note 17. Post-employment benefit commitments
Board of Directors 158 and commitments to management bodies
Note 5. Other operating expense 159 and the Board of Directors 168
Note 6. Net financial income (expense) 159 Note 18. Off-balance sheet commitments 168
Note 7. Net non-recurring income (expense) 159 Note 19. Personnel 169
Note 8. Income tax 160 Note 20. Related party transactions 169
Note 21. Subsidiaries and associates
as of December 31, 2014 170
Balance sheet items– assets Note 22. Summary of shares held in portfolio 171
Note 9. Financial assets 161
Note 23. Results and other significant information
Note 10. Short-term loans and receivables 162 relating to the last five years 172
Note 11. Marketable securities 162 Note 24. Subsequent events 172

Note 1. Accounting principles

The Company’s financial statements are prepared in accordance with DANONE treasury shares
French statutory and regulatory provisions and generally accepted
accounting principles. DANONE shares repurchased by the Company are recognized
under the heading:
The main accounting methods used are detailed hereafter.
• Other long-term financial assets, when they are repurchased in
Property, plant and equipment and connection with corporate acquisitions, to be cancelled or to be
held under the terms of a liquidity contract;
intangible assets
• Marketable securities, when they are repurchased to hedge stock-
Property, plant and equipment and intangible assets are valued option plans granted to certain Group employees and corporate
at acquisition cost (including acquisition-related costs) and are officers or Group performance share plans under which shares
amortized or depreciated on a straight-line basis according to the are allocated to certain Group employees and corporate officers
duration of their estimated use, as follows: subject to performance conditions.
Buildings 15 to 20 years They are recognized at acquisition cost, excluding acquisition-

related costs. On disposal, the cost of the DANONE shares sold is
Fixtures and fittings 8 to 10 years calculated by allocation category in accordance with the weighted
Other property, plant and equipment 4 to 10 years average cost method, this cost being calculated individually for
each plan for the shares held to hedge stock-option plans or Group
Software 1 to 7 years performance share plans.
DANONE shares recognized as Other long-term

Long-term financial assets financial assets
Financial assets comprise Equity interests and Other long-term In the case of DANONE shares recognized as Long-term financial
financial assets. assets that are not to be cancelled, an impairment provision is
recognized when their recoverable amount (assessed at the ave-
Equity interests are shares in companies, the long-term possession
rage price for the last month of the fiscal year) falls below their
of which is deemed to be useful for the Company’s activity, notably
carrying amount.
because it enables the Company to exercise an influence on or
control over the issuing company. Investments that do not meet DANONE shares recognized as Marketable
this definition are classified as Other long-term financial assets.
securities
Equity interests are recognized at acquisition cost, including Hedging of out-of-the-money stock-option and Group
acquisition-related costs, which are amortized over 5 years as of performance share plans
the date of acquisition. For tax purposes, these assets are subject In the case of treasury shares allocated to hedge plans that cannot
to accelerated tax amortization rates. An impairment provision be exercised (the market value of DANONE shares is less than the
is recognized when the recoverable amount of Equity interests is option exercise price in the case of the stock-option plans or it is
below their carrying amount. probable that the performance conditions will not be met in the case
Recoverable amount is determined using various criteria including: of the Group performance share plans), a provision for impairment
is recognized when the market value of the shares (assessed at the
• market value; average price for the last month of the fiscal year) is less than their
• value in use based on forecast discounted cash-flows; and carrying amount.
• revalued equity. Hedging of in-the-money stock-option and Group

performance share plans
The assumptions, estimates or appraisals used to determine the In the case of treasury shares allocated to hedge plans that can
net realizable value are made on the basis of available information be exercised (the market value of DANONE shares exceeds the
and conditions at the end of the financial period presented, which option exercise price in the case of the stock-option plans or it is
may differ from the reality, particularly in an economically and probable that the performance conditions will be met in the case of
financially volatile context. Impairment provisions are recognized the Group performance share plans), a provision for impairment is
as Other financial income (expense), with the exception of reversals not recognized. However, a provision for risks and charges is, where
of impairments in connection with disposals of equity interests, necessary, recognized in respect of these plans and corresponds:
which are recognized as Non-recurring income (expense). Gains
or losses on the disposals of equity interests are recognized as • in the case of stock-option plans, to the difference between the
Non-recurring income (expense). carrying amount of the shares allocated to these plans and the
exercise price set under the terms of the plan if lower;
Other long-term financial assets consist mainly of a portion of the
DANONE treasury shares held in connection with the authorizations • in the case of Group performance share plans, to the carrying
given by the Shareholders’ Meeting (see hereafter) and long-term amount of the shares allocated to said plans.
loans and receivables granted by the Company. The provision is booked pro rata to the rights vesting period. It is
recognized in Personnel costs in the income statement.

DANONE call options held by Bonds

the Company Bonds consist in borrowings raised by Danone, on debt and capital
markets, notably under its EMTN (Euro Medium Term Note) program,
The DANONE call options (calls) held by the Company are allocated
through public issues and private placements, denominated in euros
in full to hedge stock-option plans granted to certain employees and
or foreign currencies. Bonds denominated in foreign currencies may
corporate officers. The premiums paid in respect of these options
be maintained in those currencies or swapped into euros:
are recognized in Marketable securities.
• foreign currency bonds that are not swapped into euros are
Hedging of out-of-the-money stock-option plans recognized at their nominal value, translated at the closing
In the case of call options allocated to plans that cannot be exercised exchange rate;
(the market value of DANONE shares is less than the option exercise
price set under the terms of the plan), a provision for impairment is
• foreign currency bonds that are swapped into euros are reco-
gnized at their nominal value, which continues to be translated
recognized when the market value of the call options, determined
at the historical exchange rate.
by banks, is less than their carrying amount.
Hedging of in-the-money stock-option plans Derivatives

In the case of call options allocated to plans that can be exercised Danone hedges part of its bonds denominated in foreign currencies
(the market value of DANONE shares exceeds the option exercise by cross-currency swaps. For each bond hedged, Danone applies
price set under the terms of the plan), a provision for impairment is hedge accounting, which involves recognizing at the historical rate
not recognized. However, a provision for risks and charges is, where (hedged rate resulting from the implementation of the cross-currency
necessary, recognized in respect of these plans and corresponds swap) the interest relating to the bond and the cross-currency swap.
to the difference between the exercise price set under the terms of Since Danone is not ultimately exposed to foreign exchange risk on
the stock-option plan and the call premium paid plus the forward repayment of the bonds, said bonds are not revalued at the closing
DANONE share price. rate. Conversely, unhedged bonds are revalued at the closing rate
at each balance sheet date.
The provision is booked pro rata to the rights vesting period. It is
recognized in Personnel costs in the income statement. In addition, Danone Corporate Finance Services, a wholly-owned
subsidiary, also carries out interest rate hedging transactions in
Loans and receivables respect of certain borrowings and commercial paper (Billets de 4
trésorerie) issued by the Company.
Loans and receivables are stated at their nominal value. An impair-
ment provision is recognized when the recoverable amount is less
than the carrying amount.
Provisions for risks and charges
Provisions are recognized for identified risks and charges of uncertain
Recognition of transactions in foreign timing or amount, when the Company has an obligation to a third
currencies party and it is certain or probable that this obligation will result in
a net outflow of resources for the Company.
Expense and income in foreign currencies are recorded at their
For further information about provisions against stock-option plans
exchange value in euros at the date of the transaction.
and Group performance share plans, see the above section DANONE
Liabilities, receivables and cash denominated in foreign currencies shares recognized as Marketable securities.
are recorded in the balance sheet at their exchange value in euros
at the year-end rate. The differences resulting from translation at Retirement commitments
this latter rate are recorded in the balance sheet in the line items
Supplementary retirement commitments and gratuity payments
Deferrals and prepaid expense and Deferrals and accrued expense
borne by the Company are presented within Off-balance sheet
in the case of liabilities and receivables. A provision for risks is
commitments (see Note 17 and Note 18 of the Notes to the financial
recognized for non-hedged unrealized exchange losses.
statements of the parent company Danone).
Marketable securities
Marketable securities comprise a portion of the treasury shares and
DANONE call options held by the Company and other investments
made by the Company.
The gross value of Marketable securities corresponds to the acquisi-
tion cost excluding acquisition-related costs. When the market value
of each category of securities of the same nature is lower than the
acquisition cost, a provision for impairment is recognized equal to
the difference. For further information about treasury shares and
DANONE call options reclassified as Marketable securities, see the
above section DANONE shares recognized as Marketable securities.

Highlights of the year
Note 2. Highlights of the year

On January 17, 2014 Danone concluded a liquidity contract and allo- €710 million (see Note 9 of the Notes to the financial statements of
cated 120,000 DANONE shares and €0 for its implementation. As the parent company Danone).
of December 31, 2014, the liquidity account contained the following
On May 28, 2014, Danone announced the result of the option offered
resources: 0 DANONE share and €6,168,649 (see Note 9 of the Notes
to shareholders to receive the 2013 dividend payment in shares:
to the financial statements of the parent company Danone).
65.23% of the voting rights were exercised in favor of payment of
On February 12, 2014, Danone raised its stake in China’s leading the dividend in shares. The total cash dividend paid to those share-
dairy company Mengniu, by increasing its stake in its subsidiary holders who did not elect to receive payment in shares amounted
Danone Asia Pte Ltd. The cost of this additional investment was to €299 million.
Note 3. Operating income

Operating income comprises mainly the billing of direct and indirect Other operating income totaled €42 million and comprised mainly the
subsidiaries for services rendered by the Company to those subsi- reversal of a provision for risks and charges relating to the hedges
diaries. It totaled €474 million for the year ended December 31, 2014 of the stock-option plans and Group performance share plans held
(€520 million for the year ended December 31, 2013). by the Company (€44 million in 2013 included in personnel costs).
See Note 1 of the Notes to the financial statements of the parent
company Danone.
Note 4. Personnel costs and compensation of the members

of the management bodies and the Board of Directors
Personnel costs
Personnel costs comprise the gross compensation of the Company’s Personnel costs totaled €231 million in 2014 (€216 million in 2013).
employees and senior executives and the related social charges as Social charges totaled €71 million (€66 million in 2013).
well as the charges relating to the stock-option plans and Group
performance share plans under which shares are allocated to
certain Group employees and corporate officers subject to perfor-
mance conditions.
Company’s share of the compensation paid to the members of the Board of Directors
and the Executive Committee
Compensation paid to corporate officers and members of the

Executive Committee (a) 11 7
Attendance fees paid to non-executive members of the Board
of Directors (b) 1 1
Total 12 8
(a) Recognized in Personnel costs.
(b) Recognized in Other operating expense.
The Company’s other commitments to the management bodies and Board

of Directors.
See Note 17 of the Notes to the financial statements of the parent company Danone.

Net non-recurring income (expense)
Note 5. Other operating expense

Other operating expense comprised mainly fees paid to external service providers and charges for rent and services provided and totaled
€401 million in 2014 (€390 million in 2013).
Note 6. Net financial income (expense)

Net financial income totaled €587 million in 2014 (€746 million in 2013).
Income from equity interests

Income from equity interests consisted mainly of dividends received from the Company’s equity interests. In 2014, these dividends amounted
to €730 million (€964 million in 2013). The €234 million decrease was due mainly to the decrease in the dividends paid by Compagnie
Gervais Danone and Holdings Internationale de Boissons.
Interest on loans and receivables and similar income

Interest on loans and receivables and similar income comprised mainly interest received on the loans and receivables granted by the
Company to Zywiec Zdroj and Danone Poland and totaled €32 million in 2014 (€23 million in 2013).
Interest on borrowings and similar expense

Interest on borrowings and similar expense comprised mainly interest in respect of the following borrowings:
As of December 31
Medium-term loan from and current account with Danone 4
Finance International (a) (b) 80 43
Bonds (a) 161 152
Commercial paper (a) 1 2
Total 242 197
(a) Interest paid and accrued in respect of the fiscal year.
(b) T he change during the year was due mainly to the repayment of the medium-term loan (see Note 14 of the Notes to the financial statements of the
parent company Danone).
Other financial income (expense)

As regards Other financial income (expense), the Company generated net income of €22 million in 2014, comprising mainly the reversal
of a provision for equity investments.
In 2013, the corresponding figure was net income of €1 million.
Note 7. Net non-recurring income (expense)

In 2014, net non-recurring expense of €6 million consisted mainly In 2013, net non-recurring income of €8 million consisted mainly
of non-recurring costs related to the implementation of the Group’s of the €33 million capital gain on the transfer to a Group company
plan for savings and adaptation of its organizations in Europe. of 6,715,266 DANONE shares and non-recurring costs totaling
€23 million related to the implementation of the Group’s plan for
savings and adaptation of its organizations in Europe.

Income tax
Note 8. Income tax

Tax group
Danone forms a tax group with the French subsidiaries in which it holds, directly or indirectly, a stake of more than 95%.
Companies who were members of the tax group in 2014

BLEDINA HELDINVEST 9
COMPAGNIE GERVAIS DANONE HOLDING INTERNATIONALE DE BOISSONS
DANONE CORPORATE FINANCE SERVICES LES 2 VACHES RESTO
DANONE PRODUITS FRAIS FRANCE MENERVAG
DANONE DAIRY ASIA NUTRICIA NUTRITION CLINIQUE SAS
DANONE NUTRICIA AFRICA ET OVERSEAS PRODUITS LAITIERS FRAIS EST EUROPE
DANONE BABY AND MEDICAL HOLDING PRODUITS LAITIERS FRAIS SUD EUROPE
DANONE (a) PRODUITS LAITIERS FRAIS ESPAGNE
DANONE RESEARCH SOCIETE ANONYME DES EAUX MINERALES D’EVIAN
DAN INVESTMENTS SOCIETE DES EAUX DE VOLVIC
FERMINVEST STEP SAINT JUST
HELDINVEST 8 STONYFIELD FRANCE
(a) The Company.
The subsidiaries that are members of the tax group recognize and
pay their tax to the Company as if they were taxed separately, in
Other information
compliance with the rules set by the French tax authorities. In accordance with the provisions of Article 39.4 of the French tax
code (Code Général des Impôts – CGI), in 2014 Danone recognized
The savings (or additional charges) – based on the difference between €382,377 in respect of passenger vehicle depreciation and rental
the sum of tax charges recorded by the different subsidiaries of the under taxable income.
tax group and the tax charge resulting from the computation of the
consolidated tax results of the tax group – are recognized in the The application of Article 39.5 of the CGI did not result in any amounts
income statement under Income tax. The amount booked in this recognized under taxable income in 2014.
line for 2014 relates exclusively to this difference. As of December 31, 2014, items likely to result in a reduction of future
At the year end, the tax group had made a taxable loss. As of December tax liabilities consisted mainly of accrued charges. They totaled
31, 2014, tax loss carry-forwards accumulated within the tax group €83 million and would reduce future tax charges by €31 million.
in France amounted to €1,149 million, compared to €884 million as
of December 31, 2013.

Financial assets
Note 9. Financial assets

Carrying amount and changes during the period
As of December Reclassification, As of December

(in € millions) 31, 2013 Increase (a) Decrease Translation 31, 2014
Gross amount
Equity interests 17,045 710 – – 17,755

Long-term loans
and receivables 821 – (79) – 742
DANONE treasury shares (b) 1,595 – – (17) 1,578
Other 6 2 – 6 14
Other long-term financial
assets 2,422 2 (79) (11) 2,334
Total 19,467 712 (79) (11) 20,089
Provisions (c) (71) – 21 (50)

Total (net) 19,396 712 (58) (11) 20,039
(a) See Note 2 of the Notes to the financial statements of the parent company Danone.
(b) Portion of DANONE treasury shares recognized as Long-term financial assets (see Note 1 of the Notes to the financial statements of the parent company
Danone).
(c) Consists mainly of provisions for impairment of Equity interests.
4
Equity interests Long-term loans and receivables
Detailed information about Equity interests is provided in Note 21 of The change in Long-term loans and receivables was due to the
the Notes to the financial statements of the parent company Danone repayment of euro denominated loans by Danone Poland and Zywiec
related to securities held in portfolio as of December 31, 2014. Zdroj totaling €64 million.
Foreign currency loans
Foreign currency loans are translated at the closing rate, resulting in the recognition of translation differences at the year end.

(in € millions except Nominal value in Nominal value in Translation
foreign currency, in currency millions) foreign currency Historical value difference Carrying amount
Yen 43,000 381 (85) 296
DANONE treasury shares

The change in treasury shares held by the Company and reco- • the reclassification of 228,402 DANONE treasury shares from the
gnized as Long-term financial assets (see Note 1 of the Notes to Treasury shares heading to the Marketable securities heading
the financial statements of the parent company Danone) in respect at a carrying amount of €11 million.
of 2014 was due to:
• the main transaction carried out by the Company on its shares:
120,000 shares were allocated to the liquidity contract by the
Company in 2014 (see Note2 of the Notes to the financial state-
ments of the parent company Danone);

Short-term loans and receivables
Note 10. Short-term loans and receivables

As of December 31, 2014, this heading comprised mainly €233 million of receivables due to the Company within less than one year, inclu-
ding receivables due from its subsidiaries and equity interests totaling €128 million and tax receivables totaling €83 million. Loans and
receivables due to the Company within less than one year amounted to €1,124 million as of December 31, 2013.
Note 11. Marketable securities

Decrease
As of December (exercised/ As of December
(in € millions) 31, 2013 Increase delivered) Reallocation Reclassification 31, 2014
DANONE shares
DANONE shares hedging

stock-option plans (a) 205 − (8) − − 197
DANONE shares hedging Group
performance share plans (a) 95 − (20) − 11 86
Total 300 − (28) − 11 283
DANONE call options 36 − (15) − − 21

danone.communities (b) 20 − − − − 20
Total 356 − (43) − 11 324
(a) Portion of DANONE treasury shares recognized as Marketable securities (see Note 1 of the Notes to the financial statements of the parent company
Danone).
(b) danone.communities is a mutual fund (French SICAV) aimed at financing certain social projects through an investment that generates a return nearly
comparable to the money-market rate.

Provisions for risks and charges
Note 12. Equity
As of
December
As of December 31, 2013 Movements during the period 31, 2014
Before After Net Capital Capital Other Before

(in € millions) allocation allocation (b) income reduction increase (c) movements (d) allocation
Share capital 158 158 − − 3 − 161

In number of shares (a) 631,028,000 631,028,000 − − 831,986 11,932,014 643,792,000
Additional paid-in capital 2,727 2,727 − − 33 541 3,301
Legal reserve 4 4 − − − − 4
Other reserves 3,781 3,781 − − − − 3,781
Retained earnings 3,238 3,125 − − − − 3,125
Net income for the year 747 − 541 − − − 541
Regulated provisions 1 1 − − − − 1
Total 10,656 9,796 541 − 36 541 10,914
(a) Ordinary shares with a par value of €0.25.
(b) Following shareholder approval at the Shareholders' Meeting of April 29, 2014, earnings available for allocation in respect of the year ended December
31, 2013 were allocated in the amount of €299 million to the payment of a dividend and the balance to retained earnings.
(c) Issue carried out on June 5, 2014 under the terms of the Company savings plan (Plan d’Épargne Entreprise).
(d) Movements relating to the portion of the dividend paid in shares.
4
Note 13. Provisions for risks and charges

As of December Decrease As of December

(in € millions) 31, 2013 Increase Decrease (not utilized) 31, 2014
Provisions in respect of stock-

option and Group performance
share plans (a) 74 20 (39) − 55
Other provisions 9 3 (6) − 6
Total 83 23 (45) − 61
(a) P rovisions in respect of stock-option plans hedged by DANONE call options and Group performance share plans. The provision was established at the
time of the first purchases of DANONE call options in 2011, in the amount of €96 million.

Bonds and other financial debt
Note 14. Bonds and other financial debt

Bonds
Carrying amount
As of December 31
Nominal value 7,018 6,615

Accrued interest 88 49
Total 7,106 6,664
Bonds issued by the Company are disclosed on the Group’s website.

Most of the financing agreements entered into by the Company (bank lines of credit and bonds) include a change of control provision, which
offers creditors a right of early repayment in the event a change in control of the Company causes its rating by the financial rating agencies
to fall below investment grade. None of these financing sources is subject to any covenant relating to the maintenance of financial ratios.
2014 transactions
2014
Nominal
New financing
Renewal
Syndicated facilities agreement (a) EUR 2,000 2019

Repayment
(a) Multi-currency revolving syndicated facilities agreement implemented in July 2011 and renewed in December 2014.

Bonds and other financial debt
Bonds: fixed rate/floating rate breakdown and changes during the period
Change
As of December New in accrued As of December
(in € millions) 31, 2013 borrowings Repayment interest Revaluation 31, 2014
Fixed rate portion
Bonds 6,880 − (618) − 65 6,327

Accrued interest 87 − − (38) 49
Floating rate portion
Bonds 138 150 − − − 288

Accrued interest 1 − − (1) − −
Total 7,106 150 (618) (39) 65 6,664
Bonds breakdown by currency

(in € millions except Nominal value in Nominal value Historical Translation Carrying
foreign currency, in currency millions) in foreign currency value difference amount
Bonds denominated or swapped into

euros
Euro 5,548 5,548 5,548 5,548 4

Swiss franc 225 138 138 138
U.S. Dollar (a) 850 682 682 682
Bonds denominated in other

currencies
Yen 43,000 381 296 296

Total 6,749 6,664 6,664
(a) Implementation of cross-currency swaps facilitated the conversion of the USD 850 million bonds (recognized originally in the amount of €685 million)
into euros in the amount of €682 million, thus corresponding to its new historical value.
Portfolio of cross-currency swaps hedging certain foreign currency denominated bonds

(in € millions except Nominal value in foreign currency, Nominal value in Historical value
in currency millions) foreign currency in euros
Euro – Swiss franc 225 138

Euro – U.S. Dollar 850 682
Total 820
In addition, as specified in Note 1 of the Notes to the financial statements of the parent company Danone, Danone Corporate Finance Ser-
vices, a wholly-owned subsidiary, also carries out interest rate hedging transactions in respect of certain bonds issued by the Company.

COMPOSITION OF OTHER LIABILITIES
Other financial debt

Other financial debt: fixed rate/floating rate breakdown during the period
Change
As of December New in accrued As of December
(in € millions) 31, 2013 borrowings Repayment interest Revaluation 31, 2014
Fixed rate portion
Loan from Danone Finance

International (a) 2,000 1,000 (2,000) − − 1,000
Floating rate portion
Commercial paper (b) 737 329 − − − 1,066

Other 7 29 − − − 36
Total 2,744 1,358 (2,000) − − 2,102
(a) Fixed-rate medium-term loan maturing in June 2019.
(b) Movements in commercial paper (billets de trésorerie) are shown as net movements.
Maturity of Bonds and Other financial debt

As of December 31
Due date < 1 year 3,450 1,755

Due date between 1 and 5 years 3,613 4,160
Due date > 5 years 2,786 2,851
Total 9,849 8,766
Note 15. OTHER LIABILITIES

Composition of Other liabilities
As of December 31
Amounts owed by the Company to certain subsidiaries

and affiliates (a) 51 672
Trade payables 39 46
Accrued charges 207 207
Total 297 925
(a) Including a €614 million current account balance due to Danone Finance International as of December 31, 2014. As of December 31, 2013, the balance
on this current account was an excess cash balance presented under the Short-term loans and receivables heading.

Net debt
Composition of Accrued charges

As of December 31
Services provided 99 92
Personnel costs 70 70
Social charges 26 32
Tax liabilities 12 12
Financial liabilities – 1
Total 207 207
Maturity of Other liabilities

The majority of Other liabilities have a maturity of less than one year. The maturity dates of Trade payables are shown in the following table:

Due date
Due date < or equal between 31 Due date
(in € millions) to 30 days and 60 days > 60 days Total
Trade payables 33 13 – 46
4
Note 16. Net debt
Composition of Net debt
As of December 31
Bonds 7,106 6,664
Other financial debt 2,744 2,102
Amounts owed by the Company to certain subsidiaries
and affiliates (a) 51 672
Total Debt 9,901 9,438
Amounts owed to the Company from certain subsidiaries

and affiliates (b) 906 −
Marketable securities 356 324
Cash 1 −
Total Cash and cash equivalents 1,263 324
Total Net debt 8,638 9,114

(a) Portion of the amounts owed by the Company to subsidiaries and associates presented under the Other liabilities heading.
(b) Portion of the amounts owed to the Company by subsidiaries and associates presented under the Short-term loans and receivables heading.

The €476 million increase in Net debt was due mainly to the increase in the Company’s interest in its subsidiary Danone Asia Pte Ltd in
connection with its increased stake in Mengniu. The cost of this additional investment was €710 million (see Note 2 of the Notes to the
financial statements of the parent company Danone), partially offset by cash-flows related to the net income generated during the year.

Post-employment benefit commitments and commitments to management bodies and the Board of Directors
Note 17. Post-employment benefit commitments and

commitments to management bodies and the Board
of Directors
Post-employment benefit commitments Commitments to management bodies
Gross commitments relating to a defined benefit retirement plan, and the Board of Directors
estimated using the actuarial method, amounted to €539 million as
of December 31, 2014 and €340 million after taking into account plan Post-employment benefit commitments
assets (net commitment of €207 million as of December 31, 2013). As of December 31, 2014, the total commitment of the Company in
The €133 million increase is attributable primarily to the decrease respect of retirement benefits for corporate officers and Executive
in discount rates. More specifically, as regards the retirement plan Committee members amounted to €67 million.
reserved for Group executives who hold the status of senior manager,
the Company’s net commitment amounted to €296 million, which Indemnification of Executive Committee members
corresponds to a gross commitment of €468 million and plan assets Indemnification payments to members of the Executive Committee
totaling €172 million. in certain cases where they cease to continue their terms of office
or exercise their functions were set at twice the annual gross
These net commitments are presented off-balance sheet (see
compensation (fixed, variable, and in-kind) they received over the
Note 18 of the Notes to the financial statements of the parent
12 months preceding the date on which they cease to continue their
company Danone).
functions, and, in the case of the Company’s three corporate offi-
cers, the Board of Directors decided on February 19, 2015 that the
payment of these indemnities would be subject to the achievement
of certain performance objectives.
Note 18. Off-balance sheet commitments

Main commitments given directly and indirectly by the Company
As of December 31
Put options held by third-party shareholders over some

of the Company's direct and indirect equity interests (a) 3,244 2,558
Post-employment benefits (b) 207 340
Rents 66 84
Services provided 18 9
Derivatives (c) 138 820
Security interests (d) 2,000 2,000
Guarantees (e) 750 750
Total 6,423 6,561
(a) Commitments given directly or indirectly by the Company (see details hereafter in the section entitled Put options over the Company’s direct and indirect
equity interests).
(b) Net commitments in respect of defined benefit retirement plans (see Note 17 of the Notes to the financial statements of the parent company Danone).
(c) Cross-currency swaps to hedge bonds denominated in foreign currencies (see Note 14 of the Notes to the financial statements of the parent company
Danone).
(d) The Company acted as joint and several guarantor for Danone Finance International.
(e) T he Company may grant a guarantee or a security interest for the various financial risk management operations to be carried out by its subsidiary
Danone Corporate Finance Services.

Related party transactions
Put options over the Company’s direct and indirect Commitments received
equity interests
Commitments received by the Company concern €5.9 billion in
The Company or certain of its direct or indirect subsidiaries granted available committed credit facilities.
put options to third parties with non-controlling interests in certain
consolidated subsidiaries, with these options giving the holders the Other commitments
right to sell part or all of their investment in these subsidiaries.
Their exercise price is generally based on the profitability and The Company and certain of its subsidiaries are parties to a variety
financial position of the company concerned at the exercise date of legal and arbitration proceedings arising in the ordinary course of
of the put option. business. Some of these proceedings involve claims for damages,
and liabilities are provided for when a loss is probable and can be
As of December 31, 2014, the financial commitments given by the reliably estimated.
Company and all of its consolidated subsidiaries were estimated at
€2,558 million, of which €2,209 million may be paid in accordance
with contractual terms in the 12 months following the year end.
Note 19. Personnel
Average number of Company’s employees during the year
(in number, except percentage) 2013 2014
Executives and managers 583 79% 575 79%
Supervisors and technicians 115 16% 103 14%
Clerical staff 42 5% 47 7% 4
Total 740 100% 725 100%
Note 20. Related party transactions

Transactions with related parties
Operating income 467 463
Income from equity interests 964 730
Interest on loans and receivables and similar financial income 23 27
Total income 1,454 1,220
Operating expense (41) (29)

Interest on borrowings and similar financial expense (80) (43)
Total expense (121) (72)

Subsidiaries and associates as of December 31, 2014
Balances with related parties

As of December 31
Long-term loans and receivables − −

Short-term loans and receivables (a) 1,012 113
Total assets 1,012 113
Other financial debt 2,000 1,035

Other liabilities 78 69
Total liabilities 2,078 1,104
(a) As of December 31, 2013, the main component was the current account balance due from Danone Finance International.
Note 21. Subsidiaries and associates as of December 31, 2014
Net sales for last fiscal year (b)

Carrying amount of shares
Carrying amount of shares
Company during the fiscal

Share capital held by the
and endorsements given
Dividends received by the

Net income (loss) for last
amount of guarantees
Maximum authorized
held by the Company
held by the Company

Other shareholders’
Number of shares
by the Company
fiscal year (b)

equity (a) (c)
Company
Capital (a)
Gross
(in € millions except
year
percentage) Net
Subsidiaries (at least 50% of the share capital held by the Company)
French holdings
DANONE CORPORATE
FINANCE SERVICES 142 95 100% 8,875,000 179 179 500 − 2 −
COMPAGNIE GERVAIS
DANONE 843 1,742 100% 33,440,074 473 473 − − (146) 348
DANONE BABY AND
MEDICAL HOLDING 12,369 44 100% 12,369,171,277 12,366 12,366 − − 58 59
DAN INVESTMENTS 6 − 100% 300,000 6 4 − − (1) −
HOLDING INTERNATIO-
NALE DE BOISSONS 174 931 100% 86,768,722 966 966 − − 55 52
Foreign holdings
DANONE SINGAPORE
HOLDINGS PTE LTD 142 − 61% 144,830,596 108 108 − − 26 16
DANONE ASIA PTE LTD 1,258 180 88% 1,951,114,726 1,151 1,151 − − 138 183
DANONE FINANCE
NETHERLANDS 8 36 100% 800,000 94 45 − − − −
Associates (at least 10% to 50% of the share capital held by the Company)
NV DANONE SA 983 721 23% 21,988 400 400 − 291 72 −

DANONE FINANCE
INTERNATIONAL 965 4,959 33% 4,034,154 2,012 2,012 2,000 − 189 72
Total 17,755 17,704
(a) The amounts relating to foreign companies are translated at the year−end rate.
(b) The amounts relating to foreign companies are translated at the year−end rate.
(c) Excluding results for the year.

Summary of shares held in portfolio
Note 22. Summary of shares held in portfolio

Carrying amount
As of December 31
Shares of subsidiaries and associates (a)
Equity interests (gross) 17,045 17,755

Provisions for impairment of equity interests (70) (50)
Total 16,975 17,705
DANONE treasury shares

Treasury shares classified as Long-term financial assets (b) 1,595 1,578
Treasury shares classified as Marketable securities (b) 300 283
Total 18,870 19,566
(a) See details for the 2014 fiscal year in Note 9 of the Notes to the financial statements of the parent company Danone.
(b) See classification in Note 1 of the Notes to the financial statements of the parent company Danone.

Results and other significant information relating to the last five years
Note 23. Results and other significant information relating

to the last five years
2010 2011 2012 2013 2014
Capital at balance sheet date

Share capital (in €) 161,980,460 160,561,643 160,790,500 157,757,000 160,948,000
Number of shares issued 647,921,840 642,246,573 643,162,000 631,028,000 643,792,000
Results for the year
(in € millions)
Net sales 347 417 478 520 474
Net income before taxes,
amortization, depreciation
and provisions 791 530 395 686 482
Net income tax (a) 126 109 112 77 76
Net income after taxes,
and provisions 910 631 442 762 541
Dividend paid (b) 786 837 857 860 966
Earnings per share
(in € per share)

but before amortization,
depreciation and provisions 1.42 1.00 0.79 1.19 0.85
and provisions 1.40 0.98 0.69 1.16 0.84
Dividend paid 1.30 1.39 1.45 1.45 1.50
Personnel
Average number of employees

for the year 690 725 746 740 725
Payroll expense (in € millions) 123 236 170 149 159
Compensation and benefits
paid (c) (social security, social
benefit schemes, etc.)
(in € millions) 60 66 71 66 71
(a) Income (expense).
(b) A mount relating to the 2014 fiscal year estimated as of December 31, 2014 on the basis of the number of shares held by the Company as of that date.
The 2013 dividend corresponds to the amount actually paid during the 2014 fiscal year. Of the total amount of €860 million, €315 million was paid in
cash and €544 million was paid in new shares.
(c) C omprises personnel costs excluding social charges (see Note 12 of the Notes to the financial statements of the parent company Danone) and the
provisions relating to stock-options and Group performance shares (see Note 13 of the Notes to the financial statements of the parent company Danone).
Note 24. Subsequent events

To the best of the Company’s knowledge, no significant events occurred between the end of the reporting period and February 19, 2015, the
date on which the Board of Directors approved the financial statements of the parent company Danone for the year ended December 31, 2014.

Statutory auditor’s report on the financial statements of the parent company Danone
Statutory auditor’s report on the financial statements

of the parent company Danone
This is a free translation into English of the Statutory auditors’ report on the financial statements issued in French and is provided solely for the
convenience of English-speaking users. The Statutory auditors’ report includes information specifically required by French law in such reports,
whether modified or not. This information presented below is the audit opinion on the financial statements and includes an explanatory paragraph
discussing the auditors’ assessments of certain significant accounting and auditing matters. These assessments were considered for the purpose
of issuing an audit opinion on the financial statements taken as a whole and not to provide separate assurance on individual account balances,
transactions or disclosures. This report also includes information relating to the specific verification of information given in the management
report and in the documents addressed to the shareholders. This report should be read in conjunction with, and construed in accordance with,
French law and professional auditing standards applicable in France.
To the shareholders, Danone, these estimates were prepared in accordance with
information and circumstances existing on the date the financial
Pursuant to the assignment entrusted to us by your Shareholders’
statements were drawn up and such estimates may differ from
Meeting, we hereby report to you, for the year ended December
the actual amounts.
31, 2014, on:
• the audit of the accompanying financial statements of Danone; • as stated in Note 18 of the Notes to the financial statements of the
parent company Danone, your company or some of its direct or
• the justification of our assessments; indirect subsidiaries have undertaken to acquire the shares held
by third-party shareholders in certain companies in which your
• the specific verifications and information required by law. company has a direct or indirect stake should such shareholders
These financial statements have been approved by the Board of wish to exercise their put option. We reviewed the methods used
Directors. Our role is to express an opinion on these financial sta- by your company to calculate these financial commitments based
tements based on our audit. on the information currently available. We have assessed the
data and assumptions on which these estimates are based and
I. Opinion on the financial statements the resulting valuations.
We conducted our audit in accordance with professional standards These assessments were made as part of our audit of the parent 4
applicable in France; those standards require that we plan and perform company financial statements taken as a whole, and therefore
the audit to obtain reasonable assurance that the financial statements contributed to the opinion we formed, which is expressed in the
are free of material misstatement. An audit involves performing pro- first part of this report.
cedures, using sampling techniques or other methods of selection, to
obtain audit evidence about the amounts and disclosures in the annual III. Specific verifications and information
financial statements. It also includes evaluating the appropriateness of
We have also performed, in accordance with professional standards
accounting policies used and the reasonableness of accounting estimates
applicable in France, the specific verifications required by French law.
made, as well as the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and We have no observations to make as to the fair presentation of the
appropriate to provide a basis for our audit opinion. information given in the management report of the Board of Directors
and in the documents addressed to shareholders with respect to
In our opinion, the financial statements give a true and fair view of
the financial position and the financial statements or its consistency
the assets and liabilities and of the financial position of the Company
with the parent company financial statements.
as of December 31, 2014, and of the results of its operations for the
year then ended in accordance with French accounting principles. Regarding the information provided in accordance with the provisions
of Article L. 225-102-1 of the French Commercial Code relating to
II. Justification of our assessments remuneration and benefits granted to the corporate officers (man-
dataires sociaux) and any other commitments made in their favor,
In accordance with the provisions of Article L. 823-9 of the French
we have verified its consistency with the financial statements, or
commercial code relating to the justification of our assessments,
with the underlying information used to prepare these financial
we bring to your attention the following matters:
statements and, where applicable, with the information obtained
• the section entitled Financial assets in Note 1 of the Notes to the by your company from companies controlling your company or
financial statements of the parent company Danone describes controlled by it. Based on this work, we attest the accuracy and fair
the methods for accounting for equity interests as well as the presentation of this information.
methods used to calculate impairment losses. We performed
In accordance with French law, we have verified that the required
sample tests to confirm that these methods were applied correctly
information concerning the identity of the shareholders and holders
and we reviewed the methods used to determine the amount of
of the voting rights has been properly disclosed in the management
the impairment losses. We have assessed the data and assump-
report.
tions on which these estimates are based: as indicated in Note 1
of the Notes to the financial statements of the parent company
Neuilly-sur-Seine and Paris-La Défense, March 10, 2015

Fees paid by the Group to the Statutory auditors and members of their network
4.3 Fees paid by the Group to the Statutory auditors

and members of their network
The table below presents the fees net of tax paid to the Statutory auditors for their services rendered in 2013 and 2014:
PricewaterhouseCoopers Ernst & Young et Autres

(in € millions except
percentage) Fees 2013 Fees 2014 Fees 2013 Fees 2014
Audit
Statutory audits, certifi-

cations and review of the
individual and consolidated
financial statements 4.4 72% 4.4 53% 4.1 66% 4.1 48%
including Danone SA 0.8 13% 0.7 9% 0.8 13% 0.8 9%

including fully consolidated
subsidiaries 3.6 59% 3.7 45% 3.3 53% 3.3 39%
Other services directly

related to the audit 1.3 21% 3,3 (a) 40% 1.8 29% 4,0 (a) 47%
including Danone SA 0.7 11% 3.0 36% 1.3 21% 3.8 45%
including fully consolidated
subsidiaries 0.6 10% 0.3 4% 0.5 8% 0.2 3%
Total Audit 5.7 93% 7.7 94% 5.9 95% 8.1 96%
Other services provided

by the auditors' networks
to the fully consolidated
subsidiaries
Legal, tax, social 0.3 5% 0,3 (b) 4% 0.3 5% 0,4 (b) 4%

Other 0.1 2% 0,2 (c) 2% − 0% – 0%
Total Other services 0.4 7% 0.5 6% 0.3 5% 0.4 4%
Total (d) 6.1 100% 8.2 100% 6.2 100% 8.5 100%
(a) Services provided in 2014 included due diligence directly related to the Statutory auditors' engagements performed during the transactions of acquisition
or disposal of entities for €2.9 million (PricewaterhouseCoopers, €1 million in 2013) and €3.7 million (Ernst & Young, €0.9 million in 2013).
(b) T his amount related solely to tax services provided by the networks to some foreign Group subsidiaries. These services related mainly to the issuance
of tax certifications as required by local authorities (Turkey - PricewaterhouseCoopers, Mexico – Ernst & Young) as well as the review or technical
analysis of tax positions adopted by some foreign subsidiaries.
(c) T his amount, for 2014 and 2013 included mainly services of assistance and training on non-financial fields provided by the network to some Group
subsidiaries (Russia).
(d) Fees invoiced in foreign currencies have been translated into euros on the basis of the 2014 average rates used by Danone.

Information originating from third parties, expert opinions and declarations of interest
4.4 Information originating from third parties,

expert opinions and declarations of interest
Nil.

Social,
societal and
environmental
responsibility

5
5.1 Danone social, societal
and environmental approach 178
General policy 178
Danone’s CSR policy in detail 178
Primary programs, policies and actions implemented

by Danone with regard to social, societal and
environmental responsibility 179
5.2 Information concerning

the Group’s social,
societal and environmental
performance in compliance
with the Grenelle II law 181
Social information 182
5
Environmental information 189
Societal information 199
Methodology note 202
Report by one of the Statutory Auditors,

appointed as an independent third party,
on the consolidated environmental,
labour and social information presented
in the management report 206
5.3 Funds sponsored by Danone 208

danone.communities208
Danone Ecosystem Fund

(Fonds Danone pour l’Écosystème) 210
Livelihoods211

Social, societal and environmental responsibility
Danone social, societal and environmental approach
This section describes the Group’s policy and accomplishments in the area of social, societal and environmental responsibility. It is organized
as follows:
• description of Danone’s approach to social, societal and environmental responsibility;
• information concerning the Group’s social, societal and environmental performance in compliance with the provisions of Article 225 of law
No. 2010-788 of July 12, 2010 (“Grenelle II”) and its implementing decree; and
• other information related to the Group’s social, societal and environmental responsibility: Funds sponsored by Danone.
More extensive information concerning Danone’s strategy and performance with regard to Sustainable Development can be found in the Group’s
Sustainable Development Report published annually. The Group’s practices and quantitative results are described there, based in particular on
the Global Reporting Initiative (GRI) indicators.
Danone has also been a pilot participant in the IIRC (International Integrated Reporting Council) integrated reporting program since 2011.
In general, the amounts presented are rounded to the nearest unit. As a result, the sum of the rounded amounts may vary slightly from the reported
total. Moreover, ratios and differences are calculated on the basis of the underlying amounts, not the rounded figures.
5.1 Danone social, societal and environmental approach

General policy
As a direct result of Danone’s dual economic and social project, • social challenges, notably jobs, enhancing employability and
Corporate Social Responsibility (CSR) is deeply anchored in the professional skills, employee commitment, social dialogue
Group’s business activity (see section 2.5 Other elements related to and consideration for the communities and regions where the
the Group’s activity and organization). company operates and of their social cohesion.
In 1972, Antoine RIBOUD noted that “corporate responsibility does To continue to meet these challenges and grow in accordance with
not stop at the factory gate or the office door.” This vision led to the its mission, Danone decided to focus on three key strategic areas:
dual economic and social project that forms the basis for Danone’s
development and organizational model.
• diet: the goal is to promote changes in dietary practices by rais-
ing awareness among target populations and helping people to
In 2006, Danone redefined the Group’s mission: “bringing health make healthier choices in their daily lives;
through food to as many people as possible.” This mission requires
that Danone take concrete steps with regard to today’s major so-
• food and water cycles: the goal is to ensure Danone’s ability to
sustain its operations by promoting sustainable development
cietal challenges:
and securing access to strategic raw materials in terms of both
• challenges linked to products and consumers, by marketing quantity and quality, and to strengthen its competitive advantage
safe and healthy products and promoting a healthy lifestyle and for each of its principal resources: water, plastics and milk; and
nutrition education;
• a unique management model: by 2020, Danone will have in-
• environmental challenges, because for Danone, healthy food centivized and enabled its nearly 100,000 employees and their
begins with a healthy environment; and ecosystems to work in concert and seize the growth opportunities
of a new and constantly changing world.
Danone’s CSR policy in detail

Danone’s CSR approach is characterized by the depth of its integra- • procurement, based on a policy of responsible procurement;
tion into the Group businesses and the systematic intention to create
value for shareholders and for all stakeholders as well.
• human resources, notably through diversity, social dialogue and
individual employee development; and
To achieve this, Danone has integrated its CSR approach into its
primary processes and business activities across the various stages
• marketing, research and development and sales, by developing
synergies between CSR and these functions.
in the value chain, and notably for the following processes:
Danone has, in particular, created an organization and specific
• production, in particular through the direct participation of governance, including:
manufacturing in achieving targets for safety and reduced water
and energy consumption;

Social Responsibility Committee Variable compensation system

Formed from the Board of Directors, it notably examines the Group’s Since 2008, the Group has integrated societal performance into its
extra-financial data and ratings, as well as social policy and invest- variable compensation system, with the introduction of criteria to
ments related to societal aspects implemented by the Group (see evaluate the performance of the Company’s 1,300 senior manag-
section 6.1 Governance bodies related to the Social Responsibility ers and executive managers. This system is based on a three-part
Committee). approach to performance: (i) one part on economic, (ii) one part on
social and/or environmental, and (iii) one part on individual per-
Health governance formance (see section 6.3 Compensation and benefits for corporate
officers and governance bodies).
It integrates the principles, mechanisms and evaluation methods
that allow Danone to meet its commitments as defined in 2009 in the
Danone Food Nutrition Health Charter (see section Food Nutrition
Funds sponsored by Danone
Health Charter hereafter). These are funds created at Danone’s initiative: danone.communities
created in 2007, the Danone Ecosystem Fund (Fonds Danone pour
CSR goals defined at the Group level l'Écosystème) created in 2009 and the Livelihoods fund created in
2011 (see section 5.3 Funds sponsored by Danone).
These CSR goals are set by General Management at the consoli-
dated Group level, and may be defined over the medium term, such
as the Group’s carbon footprint reduction goal, staff safety, etc.
Deployment of the CSR approach
Certain goals determine a portion of the variable compensation of in all the Group’s subsidiaries through
its employees (see section Variable compensation system, hereafter).
the design and implementation of policies
and conventions
The main conventions and policies deployed by Danone are detailed
and described in section 5.2 Information concerning the Group’s so-
cial, societal and environmental performance in compliance with the
Grenelle II law hereafter.
Primary programs, policies and actions implemented by Danone with regard

to social, societal and environmental responsibility
Danone Way WISE “Work In Safe Environment”
The Danone Way approach, launched in 2001 and updated in 2007, WISE is a global program rolled out by Danone in 2004 which aims
is a key component of Danone’s sustainable development approach, to develop a robust health and safety culture in all its subsidiaries
with the goal of ensuring compliance with basic sustainable develop- and reduce workplace accidents. 5
ment criteria by all subsidiaries. In 2014, the subsidiaries covered by
This program defines rules and best practices for safety and health.
the program represented 93% of the Group consolidated net sales.
It is deployed in all Divisions around the world, at the Group’s
It defines best practices for social, societal and environmental re- plants and logistics warehouses and in distribution. It also applies
sponsibility in the various stages of the Group business, from raw to subcontractors working at Danone sites. The program is led by
materials sourcing to recycling the packaging of finished products. the Human Resources Department, with designated managers at
To assess the relative progress of sustainable development at the each level: Division, subsidiary and site.
subsidiaries, the Danone Way approach assesses their compliance
To ensure that the health and safety culture is disseminated
with these best practices. This approach is verified by a third-party,
throughout the Group, the WISE program relies on WISE audits
independent organization.
to evaluate subsidiaries’ performance in the following 13 catego-
Each year, every subsidiary self-assesses its sustainable development ries: “organization, policy, responsibility and accountability, goals
performance based on 16 key sustainability practices, organized and objectives, standards, motivation, communication, training,
into the following five thematic areas: observation (audit), contractors, supportive safety personnel and
incident investigations”.
• human rights (equal opportunity and diversity, workplace safety
and health);
IUF conventions
• human relations (social dialogue, working hours, individual Danone has signed conventions with the IUF (International Union
development and training);
of Food workers), beginning in 1988. As of December 31, 2014, nine
• environment (environmental footprint management, environ- global conventions and one European convention between Danone
mental risk control, raw materials management and reduction and the IUF were in effect.
of packaging);
These conventions define rules and best practices, notably with regard
• consumers (quality management and nutrition and health stan- to diversity, social dialogue, steps to be implemented for business
dards); and changes impacting employment or working conditions, combating
all forms of discrimination and encouraging diversity, trade union
• governance (business conduct policy, social responsibility applied rights, and procedures for consulting employee representatives in
to suppliers and relations with local communities).
the case of business changes with consequences for employment.

The latest global convention between Danone and the IUF was The RESPECT methodology is based on a system of controls that
signed on September 29, 2011 and concerns health, safety, working includes: (i) suppliers’ signature of the sustainable development
conditions and stress, following the framework agreement signed principles, (ii) a map of supplier risks drawn up by purchasing
in 2010 with trade union organizations in France. managers, (iii) external labor audits for the most “at risk” suppli-
ers, (iv) corrective action plans in case of non-compliance identified
This convention defines the following principles:
during the audit, and (v) monitoring of this action plan by Danone’s
• consideration for the human consequences of change, in advance purchasing managers.
of major changes to the organization;
RESPECT is based on a specific tool Sedex (Supplier Ethical Data
• preservation of the balance between personal and professional Exchange), a dedicated online information sharing and pooling
life; platform used by several companies in the food and beverage sector
that allows their suppliers to (i) enter the data pertaining to their
• identification of pathways for simplifying work to improve ef- production sites, sustainable development and societal responsibility
ficiency as well as employee well-being;
policies, and (ii) share this information with several clients at once.
• employee participation in safety-related preventive actions making In 2009, the scope of the RESPECT policy was expanded to include
it possible to ensure their safety as well as their right to remove
environment and ethics sections.
themselves from a hazardous situation; and
Based on these three pillars – employment, environment and eth-
• implementation of medical monitoring in all subsidiaries and ics – RESPECT constitutes a global policy for managing sustainable
at all sites.
development standards with suppliers.
These conventions between Danone and the IUF are deployed in
every Group subsidiary, and their application is jointly evaluated Food Nutrition Health Charter
every year by a representative from Danone and a representative
Danone’s Food Nutrition Health Charter describes the concrete action
from the IUF.
guidelines based on Danone’s mission of “bringing health through
food to as many people as possible.” This charter, implemented in
RESPECT 2005 and updated in 2009, formalizes Danone’s five commitments.
The RESPECT policy aims to protect sustainable development These commitments address the concerns of authorities on food-
principles across the entire Group supply chain and in particular related public health issues.
with Danone’s primary suppliers.
The five commitments include:
This policy was launched in 2005 and rolled out since 2006 in all
Divisions to ensure compliance with the seven fundamental labor
• proposing nutritional solutions that are continuously tailored to
nutritional needs and recommendations, tastes and incomes;
principles formalized by Danone since 2001 based on standards
defined by the International Labor Organization: (i) child labor, (ii) • developing products with relevant, scientifically proven health
forced labor, (iii) non-discrimination, (iv) freedom of association and benefits;
the right to collective bargaining, (v) workplace health and safety,
(vi) working hours, and (vii) compensation. Those principles are
• informing consumers clearly and advertising responsibly;
described in the section hereafter. • promoting healthy diet and lifestyle; and
• address major health-and-nutrition-related societal challenges.

Information concerning the Group’s social, societal and environmental performance in compliance with the Grenelle II law
5.2 Information concerning the Group’s social,

societal and environmental performance in compliance
with the Grenelle II law
This section presents information concerning Danone’s social, societal and environmental performance in compliance with the provisions of
Article 225 of law No. 2010-788 of July 12, 2010 (“Grenelle II”) and its implementing decree.
Scopes and definitions related to social, societal and environmental performance data are described in the Methodology note, at the end
of this section.
Table of contents
Social information 182 Societal information 199
Employment 182 Regional, economic and social impact
Work organization 184 of the Group’s business 199
Social relations 185 Relationships with the people and organizations
Health and safety 185 with an interest in the Group’s business 200
Training and employee development 187 Subcontracting and suppliers 200
Equal treatment 188 Fair trade practices 201
Promotion of and compliance with ILO’s Initiatives in favor of Human Rights 202
fundamental conventions 189
Methodology note 202
Environmental information 189 Consolidation scope and coverage 202
General environmental policy 189 Data collection 203
Pollution and waste management 191 Methodological details 203
Sustainable use of resources 193
Report by one of the Statutory auditors,
Climate change 197 appointed as an independent third party,
Protecting biodiversity 198 on the consolidated environmental, labour and social
information presented in the management report 206

Social information
Employment
Group workforce
As of December 31, 2014, the Group workforce of all globally consolidated Danone companies was 99,927 employees (104,642 in 2013).
This data covers the Group’s Total Workforce Scope as defined in the Methodology note.
Breakdown by region and by Division

The table hereafter shows the total number of employees and their breakdown by geographic region and by Division as of December 31,
2013 and 2014 on the Social Indicators Scope (excluding the subsidiaries that did not report social indicators other than the total work-
force – see Methodology note).

2013 2014
Total workforce (a) 85,853 93,925
By geographic region
France 10% 9%
Rest of Europe 22% 30%
China 12% 11%
Rest of Asia-Pacific 20% 18%
North and South America 32% 28%
Africa and Middle East 4% 4%
Total 100% 100%
By Division
Fresh Dairy Products 35% 40%

Waters 43% 40%
Early Life Nutrition 14% 13%
Medical Nutrition 7% 6%
Central function 1% 1%
Total 100% 100%
(a) Social Indicators Scope (see Methodology note).
Workforce by age and by gender
By gender
The table hereafter shows the breakdown of the workforce by gender as of December 31, 2013 and 2014.

Women Men Total
2013 2014 2013 2014 2013 2014
Total workforce (a) 25,456 29,311 60,397 64,614 85,853 93,925
Percentage of the total (a) 30% 31% 70% 69% 100% 100%

By age
As of December 31, 2014, more than 89% of Danone employees (Social Indicators Scope, see Methodology note) were underage 50.

Workforce percentage (a) 2014
< 20 years old 0.4%

from 20 to 29 years old 27.1%
> 60 years old 1.1%
Total 100%
As of December 31, 2014, fewer than 20% of all employees in Western Europe and North America were under age 30, while employees under
age 30 in the other geographic regions accounted for 27% to 33% of the workforce.

2014
Workforce percentage (a) Under 30 30 to 49 50 and older
Africa and Middle East 31% 64% 5%

Asia Pacific 33% 63% 4%
Eastern Europe 27% 59% 14%
Western Europe 15% 59% 26%
Latin America 31% 64% 5%
North America 16% 60% 24%
(a) Social Indicators Scope (see Methodology note). 5
New hires and dismissals This policy is updated annually within each subsidiary, based on
In an international economic environment marked by tensions, market studies of external compensation levels by country and on
Danone needs to make the necessary adjustments to changes in decision-making tools and processes guaranteeing equitable com-
the market, business plans and the competition as well as adapt its pensation. Median salaries by classification level and rules for wage
organization in order to return to sustainable growth and ensure increases are defined relative to local job market conditions and
its long-term viability. The consequences of these adjustments on subsidiaries’ needs, and under consideration of the Group subsid-
employment are the subject of ongoing social dialogue that is part of iaries’ ability to generate growth and profits, as well as employment
an employment system designed to minimize the adverse impacts. performance.
Alternative solutions to layoffs are systematically sought. When Compensation policy is generally based on an overall compensation
such layoffs become inevitable, a significant employee support approach related to economic, social and managerial performance
system is deployed to minimize the consequences for the individuals goals (see section 6.3 Compensation and benefits for corporate offi-
concerned. Thus it was possible to ensure continued employment cers and governance bodies).
for workers after the disposal of several sites thanks to guarantees
implemented by Danone in 2014. Incentive and profit-sharing plans for employees of certain
Group companies
In 2014, there were 8,773 dismissals, compared with 5,234 the previ-
The Company’s employees benefit from a three-year incentive plan,
ous year (Social Indicators Scope, see Methodology note), along with
which was renewed in 2012 and is mainly based on the Group’s re-
a total of 14,439 new hires.
sults.
Compensation and promotion The Group’s other French subsidiaries and certain of its foreign sub-
Compensation sidiaries have also implemented employee profit-sharing and/or in-
Danone fosters competitive and equitable compensation based on centive plans based on their own results.
its own system for evaluating and classifying jobs to support hu-
In 2014, expenses recognized by the Group in connection with
man resources development worldwide and create an individualized
employee incentive and profit-sharing plans totaled €99 million
compensation management approach that takes into account the
(€96 million in 2013).
requirements and local situations of the various subsidiaries.

Employee shareholding and Company Savings Plan for cer- The Group also has contractual obligations for supplementary re-
tain Group companies tirement plans as well as severance, retirement indemnities and
The employees of the Group’s French subsidiaries may subscribe personal protection. The related actuarial commitments are taken
an annual capital increase as part of a Company Savings Plan (Plan into account either through the payment of contributions to inde-
d'Épargne Entreprise). The shares’ subscription price corresponds to pendently-managed funds responsible for their service and the fund
80% of the average listed Danone share price during the 20 market administration, or through provisions.
trading days prior to the Board of Directors’ meeting at which the
The amount provisioned for these obligations in the Group’s con-
capital increase is approved (see section 7.3 Authorization to issue
solidated financial statements as of December 31, 2014 and the
securities that give access to the share capital).
expenses for the year are presented in Note 7.3 of the Notes to the
Other employee benefits consolidated financial statements.
In accordance with the Law of July 28, 2011, a profit-sharing bonus
of €150 was paid to all employees of Danone and its French sub- Work organization
sidiaries in 2014, in addition to the amounts paid under the Group’s
other incentive and profit-sharing mechanisms. Organization of working hours
The organization of working hours within the Group varies accord-
Retirement obligations and other long-term benefits
ing to the local environment of each subsidiary, with different work
The Group contributes to employee retirement benefit plans in ac-
schedules, such as employees opting for a transition to part-time
cordance with the laws and usual practices of countries where its
work (number of work hours hereafter that legally defined for full-
subsidiaries operate. As a result of contributions paid under such
time employment or the number of hours generally worked in the
plans to private or state sponsored pension funds, the Group has no
subsidiary) or the establishment of work-at-home practices at the
actuarial liability in that respect.
Group’s various subsidiaries, which helps to improve the employees’
quality of life.
The table hereafter shows the breakdown of full-time and part-time employees by geographic region and by Division as of December 31,
2013 and 2014:

Full-time employees Part-time employees
Workforce percentage (a) 2013 2014 2013 2014
Africa and Middle East 98.2% 99.7% 1.8% 0.3%

Asia Pacific 97.3% 98.6% 2.7% 1.4%
Eastern Europe 96.7% 97.7% 3.3% 2.3%
Western Europe 86.9% 86.2% 13.1% 13.8%
Latin America 99.9% 99.6% 0.1% 0.4%
North America 97.9% 98.3% 2.1% 1.7%
By Division
Fresh Dairy Products 97.5% 97.9% 2.5% 2.1%

Waters 96.2% 97.2% 3.8% 2.8%
Early Life Nutrition 95.2% 94.6% 4.8% 5.4%
Medical Nutrition 90.2% 90.3% 9.8% 9.7%
Central functions 91.7% 91.6% 8.3% 8.4%
Danone promotes the application by its subsidiaries of best prac- • monitoring indicators such as (i) average weekly time worked
tices for work organization, especially through the Danone Way per employee (including overtime), and (ii) number of days off
approach and the “Working hours and Organization” key practice per week for each employee.
(see section 5.1 Danone social, societal and environmental approach),
which includes: Absenteeism
The absenteeism rate (see Methodology note) was 2,2% in 2014.
• evaluating policies implemented by the subsidiaries, notably Given the limited availability of information in certain countries, the
with regard to introducing (i) procedures and information sys- Group made estimates for this indicator as of December 31, 2014.
tems for measuring work time, (ii) employee surveys to assess
workload, and (iii) targeted action plans if excess work time is
noted with regard to the standards set or wishes expressed by
employees; and

Social relations Health and safety

Organization of social dialogue Workplace safety
Social dialogue at Danone is organized around: Since 2004, Danone has been committed to a worldwide program,
known as WISE (see section 5.1 Danone social, societal and environ-
• a worldwide social dialogue body, the Consultation and Informa- mental approach), with the goal of developing a safety culture at all
tion Committee (CIC) as well as its Steering Committee (Comité Group sites and hence significantly reducing the number of work-
de Pilotage – COPIL); place accidents. This program is rolled out in each Division world-
• the negotiation and monitoring of international conventions with wide, in plants and logistics warehouses and in distribution. It also
the IUF (International Union of Food workers), see section 5.1 applies to subcontractors working at Danone sites.
Danone social, societal and environmental approach; and
The management of health and safety and the WISE program are
• active social dialogue in the Group’s subsidiaries with union and coordinated by the Human Resources Department with the support
employee representatives. of designated managers at every level of the Group’s organization.
Danone also promotes the application by its subsidiaries of best Workplace accidents
practices for social dialogue, in particular through the Danone Way
The annual frequency rate of workplace accidents with medical
approach’s “Social Dialogue and Employee Involvement” key prac-
absence (FR1 rate, see Methodology note) fell from 2.3 to 1.9 be-
tice (see section 5.1 Danone social, societal and environmental ap-
tween 2013 and 2014. The Group’s 2014 severity rate (SR rate, see
proach), which includes:
Methodology note) for workplace accidents with medical absence
• evaluating policies implemented by subsidiaries, in particular totaled 0.1 for the Safety Scope (see Methodology note).
with regard to (i) the application of the IUF convention on social
For the past two years, Danone has expanded its workplace accident
dialogue, (ii) the creation of a favorable framework for social dia-
management to include accidents with and without medical leave
logue, (iii) the organization of elections for independent employee
through systematic monitoring of the FR2 rate (accident frequency
representatives, and (iv) the organization of discussions with
rate without medical leave). Danone now manages safety improve-
employee representatives and negotiation of agreements; and
ments at each of its sites and subsidiaries by measuring the decline
• monitoring indicators such as (i) the number of economic and in both types of accidents.
employment information sessions for all employees, (ii) the pro-
In 2014, the continued decline in the FR1 rate (-15%) was mainly due
portion of employees represented by employee representatives,
to the results of the Fresh Dairy Products Division, which was able
and (iii) the number of annual meetings between site management
to reverse the trend in Europe despite the challenging economic
and employee representatives.
and social environment, and in Russia, where the roll-out of WISE
Review of collective conventions in the sites of the former Unimilk group’s companies has led to a
drop in the FR1 rate of these companies for the first time since
Nine global conventions between Danone and the IUF were in ef-
their acquisition. The Division also continued to record significant
fect as of December 31, 2014 (see section 5.1 Danone social, societal
improvement in Latin America. This decrease was also due to very
and environmental approach). In particular, they concern diversity,
social dialogue, and the phases to be implemented when changes
steady improvement in the FR1 rate by the Waters Division. 5
in business activity affect employment or working conditions. The In 2014, the Group’s workplace accident frequency rate without
most recent global convention was signed on September 29, 2011 medical leave (FR2 rate, see Methodology note) was 4.4 for the Safety
and addresses health, safety, working conditions and stress. In ad- Scope (see Methodology note).
dition, two agreements on methodology specific to the plan for sav-
ings and adaptation of the Group’s organizations in Europe notably
the manufacturing facilities of the Fresh Dairy Products Division in
Europe were signed in 2014. As part of this framework, three col-
lective conventions were also signed in Germany, Italy and Hungary.
The nine global conventions are deployed in every Group subsidiary,

and their application is jointly assessed each year at several subsid-
iaries by a representative from Danone and a representative from
the IUF. Between 2009 and 2014, more than 50 fully consolidated
subsidiaries were visited in this way.
Other conventions may be signed on local at the initiative, such as

the agreement to promote employment of workers with disabilities,
signed in February 2014 for Danone SA (the Group parent company),
or the gender equality agreement signed by Blédina (Early Life
Nutrition – France).

The following table presents the number of fatal accidents, the number of accidents with at least one day medical leave and Frequency
Rate 1 by Division in 2013 and 2014.

Lost-time Lost-time
accident (with Frequency accident (with Frequency
at least one day Rate 1 at least one day Rate 1
Fatalities (a) of absence) (a) (FR1) (a) Fatalities (a) of absence) (a) (FR1) (a)
(in number of accidents except

frequency rate in percentage) 2013 2014
By Division
Fresh Dairy Products 1 228 3.4 − 194 2.4

Waters – 103 1.2 3 86 1.0
Early Life Nutrition – 61 2.5 − 65 2.3
Medical Nutrition – 11 1.1 − 26 2.4
Central functions – 30 7.2 − 28 6.5
Total 1 433 2.3 3 399 1.9
(a) Safety Scope (see Methodology note).
Working conditions Work-related illness

The rate of work-related illness and associated absenteeism are
Use of the WISE program to promote improved working
monitored only at the local level, mainly in order to take each coun-
conditions
try’s legislation into account.
For the past two years, as an extension of the WISE program (see
section 5.1 Danone social, societal and environmental approach) and Health at work
due to the increased occurrence of musculoskeletal disorders
Danone conducts initiatives aimed at promoting and developing
among the workplace injuries at various types of Danone sites,
health and well-being at work.
working conditions are increasingly addressed through safety action
plans. Ensure the health and well-being of Group employees by
promoting good nutrition and a healthy lifestyle
The initiatives began in 2012 have been continued in the areas of: Danone has been promoting health through food for its employees
• training: motion and posture training, ergonomics training for for several years with the Health@Work training programs of its sub-
technical and engineering teams and training in risks associated sidiaries.
with the use of chemicals; Most subsidiaries have rolled out programs in the workplace to
• workstation adaptations; and encourage employees to take responsibility for their health through
a balanced diet and regular physical activity.
• new project design: dedicated investments and participatory
proposals; Provide quality social welfare and medical coverage for all
employees, notably through the Dan’Cares program
and expanded to the following areas: In 2010 Danone launched the Dan’Cares program, with the goal of
• measures for employee turnover and working hours (local dis- providing all Danone employees with basic healthcare coverage:
tribution); and hospitalization and surgery, maternity care, medical exams and
pharmacy services.
• engineering guidelines at the Fresh Dairy Products Division,
currently being disseminated to the other Divisions. Dan’Cares’ specificity lies in its scope of application. It is meant to
be rolled out in all Group subsidiaries, including in countries where
Deployment of human feasibility studies
such coverage does not traditionally exist (for example, maternity
The convention signed in September 2011 with the IUF on health,
care). All employees are covered, including those with long-term,
safety, working conditions and stress (see section 5.1 Danone social,
fixed-term and in some cases temporary contracts.
societal and environmental approach) stipulates that planning for the
human consequences of major organizational changes is an impor- In some countries, employee healthcare coverage is also valid for
tant factor in maximizing the success of these changes and prevent- their families.
ing potential negative impacts on employee working conditions.
In 2012, the Group conducted an audit of healthcare coverage
The “human feasibility studies” implemented pursuant to the con- in effect at all fully consolidated subsidiaries in order to expand
vention and intended to analyze, manage and monitor the human Dan’Cares coverage to all countries where the Group operates.
components of organizational projects continued to be implemented
in 2014 in the framework of the Group’s transformation projects.

As of the date of this Registration Document, 70,000 employees in Making Group training programs available to as
25 countries received healthcare coverage in line with the stan- many employees as possible
dards defined by Dan’Cares, including 40,000 employees whose
coverage resulted from the implementation of action plans initi- Danone seeks to reach a maximum number of employees through
ated since 2011; the actions carried out in 2014 focused mainly on the Danone Academy training programs.
the implementation of Dan’Cares in Russia. First, Danone favors functional training courses developed and run
Prevent work-related stress and improve quality of life at work internally by Danone managers from various functions and coun-
In the spirit of the agreement signed with the IUF in September 2011 tries. Danone invests in a structured network of in-house trainers,
(see section 5.1 Danone social, societal and environmental approach), supported by suitable training and development tools and appropri-
Danone addresses issues of workplace health and safety, working ate recognition given to promoting the organization of self-instruc-
conditions, and stress prevention in the workplace through preventive tion.
measures applied to all subsidiaries. Additional training courses are provided in a corporate university
In France, this convention has been implemented through the signa- format, the “Danone Academy Campus.” These universities com-
ture in 2011 of two company-wide agreements concerning respec- bine training, networking and exploration of general interest topics
tively (i) prevention of stress and mental health risks and improve- (such as “social innovation and social business”). In 2014, Danone
ment of working conditions at Danone Produits Frais France, and (ii) Academy Campus events were organized worldwide.
improvement of quality of life through risk prevention and collective Danone has also developed the Danone Learning Solutions training
performance at Société Anonyme des Eaux Minérales d’Evian. kits, which are distributed to the human resources managers at the
Since 2012, the completion of a self-assessment by subsidiaries subsidiaries to facilitate employee access to training on general top-
with regard to the content of the convention with the IUF, and the ics such as finance for non-financial staff, marketing for non-mar-
drafting of a prioritized action plan were integrated into the Danone keting staff, project management and welcoming new employees.
Way “Health, Safety, Working Conditions and Stress” key practice Finally, numerous online programs were launched using an e-learn-
(see section 5.1 Danone social, societal and environmental approach). ing format (e-learning modules: short, topical learning modules us-
Several initiatives have been rolled out, notably: ing videos, text documents, etc.) to make them more accessible (for
example, Category Manager training, WISE for workplace safety top-
• certain subsidiaries have established workplace health commit- ics, the Danone Discovery Induction integration game).
tees to enable formal coordination of initiatives for quality of life
in the workplace, in concert with trade unions; Following these programs, the Group developed a “Campus 2.0”
technology platform in order to:
• in 2014, some subsidiaries were able to measure the impact of
stress by recording workplace accidents involving mental health; • provide employees with digital training materials; and
• the implementation of committees to detect situations of work- • facilitate the sharing of knowledge and best practices among
place isolation, making it possible to anticipate risk situations employees.
and implement multidisciplinary prevention measures, continues
This platform has been operational since October 2013 and steadily
at a growing number of sites;
implemented at all of the Group’s consolidated subsidiaries, with a 5
• management training programs are steadily enhanced with deployment scheduled in many Group subsidiaries in 2015.
stress detection and prevention modules for team managers.
The goal of these initiatives is to multiply the learning opportuni-
Specialized coaches are made available to certain teams in order
ties for Danone employees, a goal that is summed up in the adage
to remedy situations that have deteriorated; and
“One learning a Day.”
• lastly, in 2014 certain subsidiaries began formally extending
the Wise approach to enable systematic stress prevention and Danone Leadership College (DLC)
improve quality of life in the workplace, and adapted their Health/ In addition to the functional training courses, Danone launched the
Safety organizations to address these challenges. Danone Leadership College (DLC) training module in 2008, with
the goal of enhancing autonomy and accountability of all Group
Training and employee development employees and making Danone a “Great Place to Grow” (where
every employee can learn and develop). This program is based
Develop the employability of all employees on a “Danone leadership model” known as "CODE" (Committed,
Ensuring the employability of all its employees is one of Danone’s Open, Doer, Empowered), which is based on the principle that every
priorities. The Group therefore ensures that all employees receive employee can develop leadership skills.
regular training, sets up effective work structures that combine
The primary advantage of the DLC is the dynamism it brings to (i)
well-being and efficiency, and develops its employees’ autonomy.
operations, by uniting and extensively involving the teams in each
In 2014, 83,366 employees participated in at least one training subsidiary’s strategy, and (ii) individual and collective management
course (compared with 83,060 in 2013 on the Social Indicators and leadership capabilities, formally defined around Group values.
Scope, see Methodology note), and a total of 2,329,650 training hours
Since 2011, the program has been expanded to involve a greater
were provided (compared with 2,632,750 hours in 2013 on the Social
number of Danone non-management employees in manufacturing
Indicators Scope, see Methodology note).
operations and local sales teams. In this regard, the CODE in Ac-
tion programs for operators at production sites and CODE for sales
teams are deployed and distributed globally.

Promoting best practices in training Training

Danone raises employee awareness of diversity, in particular when
Danone promotes the application of best practices for training in they first join the Group, (i) by human resources for new hires dur-
its subsidiaries, in particular through the Danone Way approach ing the recruiting process, and (ii) for operational staff through the
(see section 5.1 Danone social, societal and environmental approach), training programs offered by the French subsidiaries: for example,
based on the “Training” and “Individual Development” key practices, the Dan’Discovery training program aimed at new hires includes
which include: a diversity module.
• evaluating the policies implemented by subsidiaries, notably Gender equality
with regard to (i) a training plan suited to the subsidiary’s train-
ing needs, with a budget and information system dedicated to Danone carefully monitors female employment trends in the overall
training, (ii) training policy, (iii) joint monitoring of employee workforce and by management level.
development, and (iv) training initiatives; and The proportion of women in the population of managers, senior
• monitoring indicators such as: the percentage of employees managers and executive managers in the Group continued to grow
who (i) received at least 24 hours of training during the year or in 2014.
(ii) had a formal individual meeting with their supervisors, or (iii) The Group achieved these results in particular thanks to the Women
the number of Danone in-house trainers. Plan program introduced in 2009 and rolled out in every subsidiary,
(via the Danone Way approach, see section 5.1 Danone social, societal
Equal treatment and environmental approach), which is based on the following two
Diversity approaches hereafter, one organizational and the other individual.
Danone relied on the global convention signed with the IUF in 2007 Organizational
(Diversity convention described hereafter) to develop its equal treat- On the organizational level, the Group has implemented the fol-
ment policy. lowing measures:
This policy is implemented through social dialogue, human resources • proactive measures aimed at increasing the number of female
practices and procedures. employees at all management levels, based on three key factors:
(i) internal promotions, (ii) external hiring, and (iii) retention of
The Group has identified and implemented seven action areas to women within the Group;
guarantee equal treatment: recruiting, training, Human Resources
development (career and skills management), compensation, work- • measures supporting flexible working hours for men and women;
ing conditions, communication and social dialogue. and
The Group adopts a global and integrated approach to equal treat- • wage equality.
ment, although some action areas may be implemented locally to Individual
address specific challenges. On the individual level, the Group has implemented the following
The Group ensures the promotion of “Equal Opportunities and Di- measures:
versity” through the Danone Way approach (see section 5.1 Danone • support for women through the ad-hoc training programs (“Lead-
social, societal and environmental approach), which focuses on: ership au Féminin”, Women in Leadership), networking (Eve
• statistical analysis of all Human Resources processes and the seminar, DSN Women Network@Danone community, Eve the
objectivity of all Human Resources practices and processes; blog) and mentoring (Eve2Eve); and
• the development of a managerial culture and knowledge of • inclusion of men in the diversity approach (participation in Eve
diversity through training; and seminars, opening of women’s networks to men).
• communication and mobilization around diversity-related matters. In late 2010, Danone created the EVE seminar along with several
partner companies around the theme of “Dare to be yourself in order
Social dialogue to act.” The EVE seminar, which includes both women and men, is
Local agreements have been signed by some subsidiaries with the now a benchmark in the area of awareness-raising and personal
trade unions to combat discrimination and encourage diversity, with development on the topic of female leadership.
the global convention signed with the IUF in 2007 (Diversity conven-
tion) serving as a reference point and basis for dialogue between Following its success in Europe, the Group deployed EVE Asia in 2014.
employees and management (see section 5.1 Danone social, societal
Generational diversity
and environmental approach).
In 2014, the Group pursued two major intergenerational initiatives:
Agreements fostering equality between men and women in particu-
lar have been signed in recent years, or are about to be signed, in Octave seminar
many subsidiaries, particularly in France. These agreements pri- In 2012, Danone launched the Octave seminar – also an intercompany
marily concern equality in hiring and internal promotion, training, initiative – as an extension of the EVE seminar based on the notion
wage equality, measures to support personal/professional life bal- that older and younger workers both have something to contribute to
ance such as telecommuting or parenting. the Group, and that overall performance benefits when generations
interact. The Octave seminar is held annually. In 2014 it drew 180
Several agreements aimed at promoting the integration of all attendees from different countries and 20 speakers on the topic of
generations working at the company exist in the subsidiaries, for “intergenerational affairs in the digital era.”
example in the French subsidiaries: agreements on management of
employment for seniors, intergenerational agreements to promote
the transfer of knowledge and skills.

Gen D program working hours and compensation) defined in the ILO’s conventions,
This program launched by Danone in 2012 aims to share the Danone were addressed in a convention between Danone and the IUF (see
culture with the Group’s youngest workers (employees under age section 5.1 Danone social, societal and environmental approach).
30) and to increase their contact with Group executive management.
Proper application of these principles by the Group’s subsidiaries
It is held twice a year.
is verified by audits carried out jointly by Danone and the IUF (see
Disabilities above section Review of collective conventions).
The percentage of persons with disabilities working for the Group in These principles are also implemented through the Danone Way ap-
France was 4.2% in 2014 (consolidated data for each year compiled proach, which comprises Human Rights and Human Relations sec-
in February of the following year). tions and which imposes the abolition of forced labor and child labor
as a prerequisite for participation (see section 5.1 Danone social, so-
This figure covers a variety of situations in terms of degree of
cietal and environmental approach).
advancement and integration policy for workers with disabilities,
notably depending on the stringency of applicable local laws. Some These seven Fundamental Social Principles also form the founda-
subsidiaries have signed specific three-year agreements with tion for the RESPECT policy launched in 2005, one goal of which is
trade unions, thereby demonstrating their long-term commitment to extend these principles to the Group’s suppliers (see section 5.1
in this area. Danone social, societal and environmental approach). The RESPECT
policy is applied by evaluating and, if necessary, auditing supplier
Promotion of and compliance with ILO’s practices in all these areas.
fundamental conventions Lastly, these commitments are rolled out to all Group employees
Danone’s commitment to comply with and promote the fundamental through the Group’s code of ethics known as the Business Conduct
conventions of the International Labor Organization (ILO) has been Policy, which is based on principles drawn from the following inter-
formalized, deployed and promoted to employees and suppliers national instruments:
through a variety of means and in several phases. • the Universal Declaration of Human Rights;
Danone joined the United Nations Global Compact, which integrates • the fundamental conventions of the International Labor Orga-
the ILO’s fundamental conventions, in 2003 and confirmed its com- nization;
mitment again in 2009.
• the guiding principles defined by the Organization for Economic
Additionally, in 2005, the seven Fundamental Social Principles (abo- Cooperation and Development for multinational companies; and
lition of child labor, abolition of forced labor, principles of non-dis-
crimination, freedom of association, workplace health and safety, • the Global Compact on Human rights, labor rights, environmental
protection and anti-corruption.
Environmental information
General environmental policy Danone identified four key areas on which it would like to structure 5
the new Nature plan for 2020: (1) the climate, (2) water, (3) packaging
For Danone, a “healthy diet begins with a healthy environment”. and (4) agriculture:
The Group’s actions are embedded in the nutrition supply chain, • (1) fight climate change by reducing Danone’s footprint while
which extends from the production of agricultural raw materials promoting carbon sequestration;
and use of water to product end-of-life, including along the way
industrial processing, packaging, transportation and distribution.
• (2) protect water resources, notably where they are scarce, and
use them in harmony with local ecosystems and communities;
Danone adopted an Environmental Charter in 1996 and established
goals and a 10-year roadmap in 2000. In 2008, the Group strength-
• (3) transform waste into a resource and use materials made
from sustainable resources; and
ened its commitment by setting a goal of reducing its greenhouse
gas emissions intensity by 30% for the scope of operations under • (4) promote and encourage agriculture that produces a healthy
its direct responsibility. This goal was exceeded in 2012, and at and balanced diet while at the same time remaining competi-
end-2014 the reduction totaled 41.6%. tive, creating economic and social value added and respecting
natural ecosystems.
Each of these areas includes ambitious initiatives. In some cases,
the Group is already engaged, while in others the Group faces new
frontiers and new targets. The solutions will require innovation.
Danone’s commitments under its Nature 2020 plan are formalized
in a dashboard available on the www.danone.com website in the
“Our strategy” and “A sustainable food chain” section.

Group organization to address environmental issues External evaluation

Danone is evaluated by various extra-financial rating agencies:
Organization
The implementation of the Nature strategy is based on (i) a Nature • in its most recent evaluation of companies in the food and bever-
sponsor on the Group Executive Committee, (ii) a Nature department age sector in 2014, the extra-financial rating agency Vigeo ranked
reporting directly to a member of the Group Executive Committee Danone as the food sector environmental performance leader;
and including a Nature financial officer, and (iii) environment senior
managers in each of the Divisions.
• in 2014, Danone was recognized by the DJSI (Dow Jones Sustain-
ability Index), which makes an annual selection of the companies
Danone has also developed a network of more than 100 environ- with the best performance for criteria such as social responsibility
mental correspondents in its subsidiaries. A “Carbon Master” is in policy, innovation management and economic performance) as
charge of the “Carbon Plan” for each subsidiary, measuring green- a benchmark company in the food and beverage sector, notably
house gas emissions at least twice a year, defining and implement- for its packaging, raw materials supply and water-related risk
ing action plans to reduce these emissions and communicating with management;
the Divisions and the Group.
• in 2014 Danone received an A rating (the highest) and a transpar-
Lastly, since 2010 Danone has held strategic deliberations focusing ency score of 97 points in the Climate Leadership Performance
on Nature together with a panel of outside experts, opinion leaders Index (CPLI), thereby placing it among the top 10 highest-scoring
and NGOs (Board of Nature stakeholders) in order to continuously companies in France; and
optimize its priorities and long-term plans. • Danone also participates in CDP Water Disclosure and Forest
Information systems Footprint Disclosure, which do not yet publish ratings.
The Group has collaborated with information systems developer Certification
SAP to develop an innovative solution to measure its products’ Danone bases its environmental management policy on the interna-
carbon footprint. This solution uses product lifecycle analysis and tional ISO 14001 standard. This ISO 14001 certification is therefore
operational monitoring of the various lifecycle phases to measure a prerequisite set by the Group to obtain the top performance rat-
each product’s carbon footprint. This module was successfully ing in its GREEN environmental risk audits (see section hereafter
validated for two pilot entities in 2010 and deployed in 2011 in the Resources devoted to preventing environmental risks and pollution).
subsidiaries equipped with the SAP/Themis integrated information
system (see section 2.5 Other elements related to the Group’s activity
and organization). As of end-2014, 23 subsidiaries measured their
carbon footprint using this tool.
Internal evaluation
Subsidiaries’ progress is evaluated and audited annually as part
of the Danone Way approach, in which four of the 16 key practices
involve the “Environment” topic (see section 5.1 Danone social,
societal and environmental approach).
The table hereafter presents the percentage of sites having received ISO 14001 certification:

(in number of sites except percentage of sites in percentage) 2013 2014
Total number of sites in the Production Site Environment

Scope (a) 161 179
Total number of ISO 14001-certified sites in this Scope (a) 96 89
Percentage of IS0 14001-certified sites in this Scope (a) 60% 50%
(a) Production Site Environment Scope (see Methodology note).
This change is mainly due to the change in scope following the inclusion in 2014 of 27 new manufacturing sites and the exit of nine sites
(see Methodology note). It should be noted that the 25 new sites of the Fresh Dairy Products Division, which correspond to the sites of the
former Unimilk group’s companies, are not certified as of December 31, 2014.

Employee training and information initiatives Global Risk Evaluation for the Environment (GREEN) program
in environmental protection The Group defined environmental production standards for its prod-
ucts (“Green Plants Program”) in 1995, and began using internal au-
The Group has developed training and information modules (i)
dits to check compliance with these standards in 1997.
adapted to the needs of the various businesses and functions, and
(ii) consistent with Danone’s environmental commitments, notably In 2006, the Group began worldwide deployment of its GREEN proj-
including: ect, a tool for monitoring the main environmental risks relating to
the production sites (accidents, reputation, non-compliance with
• sustainability Land, a program that helps the management com- environmental regulations).
mittees of subsidiaries to define their strategies and goals with
the inclusion of local sustainable development issues (social, As of December 31, 2014, 61% of the Group’s production sites (Pro-
societal and environmental issues); duction Sites Environment Scope, see Methodology note) had been
subjected to an external GREEN audit, or 109 sites in all.
• a “Nature” training module developed and made available through
“Danone Campus” (see above section related to Training). This Environmental investments and expenditures
module is intended primarily for the “Carbon Masters” but is also In 2014, Group investments targeting environmental protection
available for other Group functions. The “Carbon Masters” also amounted to €32 million, around 3% of the Group’s total capital in-
participate in videoconferences held by Division on a monthly or dustrial expenditures.
quarterly basis in order to coordinate and manage their initiatives
involving the Nature goals for the year as defined by the Group; The primary categories of these investments in 2014 included:
• a website and dedicated to environmental claims for the marketing • environmental compliance: waste processing, wastewater pro-
and communications teams is made available by Danone to all cessing, treatment facilities, noise measurement, air quality, etc.
subsidiaries communicating on Nature topics in order to provide On a like-for-like basis, these investments fell by 25% relative
them with all the information they need to frame responsible to 2013; and
communication around their environmental initiatives and share • investments targeting carbon emissions reductions (energy
best practices. This website was developed in cooperation with savings, renewable energy use, logistics and eco-design of
the British “anti-greenwashing” agency Futerra; and packaging). These investments fell by 18% from 2013.
• sharing best practices with the industrial and supply chain Operating expenditures related to the environment amounted to
teams, notably through (i) the creation of Nature Campus, with €108 million in 2014. They included €53 million to manage waste
the primary aim of helping experts from each plant implement as well as water and air quality and €47 million for environmental
best practices in various areas (reducing raw material losses, taxes other than taxes on packaging in 2014.
reducing energy and water consumption, managing waste) in
the Fresh Dairy Products Division, (ii) the Energy network (with Provisions and guarantees for environmental risks
one expert from every plant) which aims to reduce energy and No significant provision for environmental risks and charges was
water consumption in the Early Life Nutrition Division, and (iii) recognized in the Group’s consolidated balance sheet as of Decem-
the development of documents listing best environmental prac- ber 31, 2014 (as in 2013).
tices illustrated by case studies in the Fresh Dairy Products and 5
Waters Divisions. Pollution and waste management
Other information channels Measures to prevent, reduce or compensate
Danone uses new media and has launched “Down to Earth,” a blog for waste discharged directly into the air,
specifically dedicated to sustainable development that is accessible water and soil
both internally for Danone employees and externally. The goal is
to share Danone’s vision and innovative experiences in the field of Danone’s activities discharge waste into the air (greenhouse and
sustainable development and corporate social responsibility. refrigerant gases, see the section hereafter), the water (waste-
water) and the soil (sludge from treatment facilities and the live-
Resources devoted to preventing environmental stock industry in certain subsidiaries). This waste is monitored un-
der the GREEN program (see section Global Risk Evaluation for the
risks and pollution
Environment (GREEN) program above).
Information on risk management, notably with respect to risks
related to weather conditions and seasonality and to industrial and
environmental risks, are detailed in section 2.7 Risk factors.

The table hereafter presents the quantities of Chemical Oxygen Demand (COD) discharged after treatment by the Group’s production
sites as of December 31, 2013 and 2014:

2013 2014
Final discharge of Chemical Oxygen Demand (COD) (a)

(in thousands of tons) 5.0 6.4
Net COD ratio (a) (kg/ton of product) 0.17 0.20
The Group’s net Chemical Oxygen Demand (COD) ratio (after treat- Measures to prevent, recycle and eliminate waste
ment) per ton of product increased by 19% in 2014 relative to the
previous year. This increase in consumption is mainly due to the Waste management at Danone production sites
The Group consolidates the quantities of waste generated by the
impact of the 25 former Unimilk group’s companies, whose average
production sites in accordance with four categories (see Methodol-
rate is 1.28 kg/ton of product.
ogy note): hazardous waste, non-hazardous inorganic waste, non-
However, the rate fell by approximately 12.3% at constant scope in hazardous organic waste and wastewater treatment plant sludge
2014 (see Methodology note). This decline was partially due to the (i.e. does not include product returns and whey, the latter being a
action plans implemented in 2014 at the subsidiaries responsible by-product typically reused by a third party) – and monitors the
for discharging the most pollution within the Group. These plans percentage of this waste when recovered. Such recovery may occur
focused mainly on reducing “product loss” in wastewater and/or through recycling, reuse, composting or waste-to-energy conver-
improving the waste treatment yield of the sites. sion. The production sites seek to maximize their waste recovery
rate by implementing the following measures: (i) organizing on-site
waste sorting and staff training; (ii) finding subcontractors capable
of recovering the various types of waste generated, and (iii) sharing
best practices among sites.
The table hereafter presents the quantities of waste generated at the Group’s production sites in 2013 and 2014 (including wastewater treat-
ment plant sludge generated by the production sites that have only full wastewater treatment on site, in order to maintain comparable data)
and for 2014 the wastewater treatment plant sludge of sites that have full or partial wastewater treatment on site (see Methodology note):

2013 2014 2014
(with sludge of (with sludge of (with sludge of sites

sites that have full sites that have full that have full or partial
treatment) treatment) treatment)
Waste generated (a)
Total quantity (in thousands of tons) 295 298 307
Ratio of total quantity of waste per ton of product

(in kg/ton) 9.8 9.3 9.6
Recovered waste (a)
Total quantity (in thousands of tons) 229 251 256

Proportion of recovered waste (in %) 77.6% 84.2% 83.3%
The ratio of waste generated per ton of product (including sludge the following reasons: (i) better classification of waste into the four
from sites with full treatment) fell by 5.5% in 2014, mainly as a categories (see Methodology note), (ii) integration of wastewater
result of a reduction in the quantity of organic waste following the treatment plant sludge resulting from partial treatment on-site,
implementation of action plans by the Group to reduce product and (iii) reduction in the quantity of non-recoverable organic waste.
loss. In 2014, the recovery rate increased 6% from 78% to 84% for

Packaging end of life: turning waste into resources Sustainable use of resources
Danone seeks to expand collection and recycling of its packaging,
in order to: Water consumption and water supply based
• continue to support efforts to increase collection and recovery on local constraints
rates for recycling in the countries where waste collection is Total water withdrawn from the surrounding area and
already organized by national environmental agencies; protection of springs
Of the 69,295 thousand cubic meters of water withdrawn, Danone
• where this activity is not organized, contribute to the collection of uses:
materials used in the packaging of Danone products and explore
new collection systems. Four projects initiated by the Danone • 25,826 thousand cubic meters of water in the composition of its
Ecosystem Fund (Fonds Danone pour l’Écosystème) are currently finished products, primarily at its bottling sites (compared with
under way (see section 5.3 Funds sponsored by Danone); and 24,573 thousand cubic meters in 2013); and
• develop the use of recycled packaging. • 43,469 thousand cubic meters of water for production processes
(compared with 36,055 thousand cubic meters in 2013).
Monitoring noise pollution and other forms
of pollution specific to a given business The Group’s water consumption increased by 14.3% in 2014, of which
2.1% consisted of water used in product composition and 12.2%
Noise pollution at Danone’s production sites is measured in the resulted from water used in the production process. This increase
framework of the GREEN program (see section above). in consumption is primarily due to the change in scope, as 27 new
production sites were added and nine exited in 2014 (see Methodology
note), which accounted for a 12.9% increase. This change in scope
thus accounts for 12.9% of the increase.
On a like-for-like basis (see Methodology note), the Group’s total
water consumption increased by 1.4% in 2014. This trend was due
to a 3.5% volume effect across all Divisions, mainly in the Waters
Division, and slight decreases of 1.2% and 0.9% resulting from a
favorable mix effect and efforts to enhance productivity.
The table hereafter presents water consumption at the Group’s production sites in 2013 and 2014:

(in thousands of cubic meter) 2013 2014
Well water withdrawn from the surrounding area (a) 43,934 44,634
Municipal water withdrawn from the surrounding area (a) 12,759 18,978
River water withdrawn from the surrounding area (a) 3,935 5,684 5
Total water withdrawn from the surrounding area (a) 60,628 69,295
Meanwhile, in 2004 Danone has established an internal “Groundwater • take actions to protect each water resource based on local
Protection Policy” charter. This policy aims to ensure the sustain- conditions;
ability of resources and to protect and enhance sites’ natural heri-
tage. The Group’s subsidiaries are committed to applying this policy
• never withdraw more than what the spring can naturally produce;
through the following actions: • dedicate the necessary resources under the responsibility of a
designated manager; and
• know the resource’s hydrogeology and the site’s natural and
human environment; • periodically verify and assess that policy goals are being met.
• develop sustainable relationships with the local players and
contributing to local development;

These application principles are systematically evaluated for each Reduction of water consumption in the production process
spring and give rise to specific action plans. Site evaluation is carried Water linked to the production process – for example cleaning water –
out using SPRING (Sustainable Protection and Resources manag- does not enter into the composition of the products.
ING), an in-house water resource management tool for the physical,
regulatory and community management of aquifers (geological Water consumption intensity related to the Group’s production
formations containing underground water) and their watershed. process increased by 13% in 2014. This increase in consumption
In 2012, the Ramsar convention (United Nations international is primarily due to the change in scope, as 27 new production sites
convention for wetlands protection), the IUCN (International Union were added and nine exited in 2014 (see Methodology note).
for Conservation of Nature) and Danone launched a certification The change in scope approximately accounts for 17% of this increase.
process to give this tool benchmark status.
On a like-for-like basis, the intensity of water consumption related
to the production process decreased by 4% in 2014. Some 3% of
this decrease resulted from a positive mix effect and another 1%
was due to efforts to enhance productivity across all Divisions (see
Methodology note).
The table hereafter presents water consumption related to production processes at the Group’s sites in 2013 and 2014:

2013 2014
Water consumption from production process (a)
(in thousands of cubic meters) 36,055 43,469
Intensity of water consumption related to production process (a)
(in cubic meters/ton of product) 1.20 1.36

Best practices in the Fresh Dairy Products Division, in particular the and come up with appropriate action plans to reduce these losses.
use of water in cleaning cycles, are consolidated in the NEPTUNE The sites have annual targets to reduce their water losses. Their
application and deployed at plants. performance and rankings are published quarterly at each Division.
Since 2008, more than 15 billion liters of water have been saved in
Within the Waters Division, the “WaterWatcher” tool allows moni- this manner (equivalent to 15 million tons).
toring of water use at the bottling sites and helps identify areas for
improvement. This tool has been rolled out to every Division site. The graph hereafter shows the changes in water consumption
intensity related to the Group’s production process since 2000, for
The sites measure all quantities of water consumed for each use the reporting scope of each of the years concerned.
(production, cleaning, etc.) in order to identify loss-generating areas
Intensity of water consumption related to the production process

(in cubic meters / ton of product)
2.22
1.67
1.48
1.32 1.31 1.36
1.27 1.20
2000 2008 2009 2010 2011 2012 2013 2014

Calculation of the water footprint taking into account local Going forward, this evaluation methodology will help identify sen-
water stress sitive zones as well as methods for reducing impacts across the
Danone has continued its water footprint research in 2014, notably entire lifecycle of the Group’s products, as a first stage within the
with its partner Quantis but also by contributing to the develop- Waters Division.
ment of international (ISO) and European (Product Environmental
In addition, in 2012 the Fresh Dairy Products Division worked with
Footprint) standards.
Quantis and the Livestock Institute to test a water footprint evaluation
This approach has served to establish a water footprint evaluation methodology for upstream agriculture in four Group subsidiaries
methodology that takes into account: in various regions around the world. In 2013, Danone and Quantis
developed a measurement tool (pilot) for the Water Footprint, which
• the inventory of consumption at each stage of a product’s devel- complements the Group’s carbon footprint measurement and will
opment (ingredients, containers, production and packaging), and be deployed in the Waters Division subsidiaries beginning in 2015.
for transportation, consumer use and end of life;
Consumption of raw materials and measures taken
• local water stress factors (water stress defined as a deficit of
water of acceptable quality to meet human and environmental to improve their efficient use
needs); and Information on risk management, notably with respect to risks re-
lated to seasonal fluctuations and raw materials availability, are pre-
• compensatory measures directly related to product formulation sented in section 2.7 Risk factors.
(protection policy or CSR program), which are evaluated in the
form of water volume credits.
The following table presents production at the Group’s production sites in 2013 and 2014:

(in thousands of tons) 2013 2014
Production (a) 30,000 32,023

The Group produced the equivalent of 32 million tons of products Energy consumption, measures taken to improve
in 2014, up 6.7% from the previous year. This increase was due to a energy efficiency and the use of renewable
change in scope (see Methodology note), which accounted for a 3.2%
increase, and a 3.5% increase in production volume across all Divi- energies
sions. This 3.5% increase in production on a like-for-like basis in Energy consumption
2014 (see Methodology note) was primarily generated by the Waters The Group’s energy consumption intensity increased by 8.5% in 2014.
and Early Life Nutrition Divisions. This increased consumption resulted primarily from the change in
scope, as 27 new production sites were added and nine exited in
The primary raw materials consumed in the Group’s products are: 2014 (see Methodology note); the change in scope accounted for an
5
• water; 11.4% increase.
• liquid milk and powdered milk; On a like-for-like basis (see Methodology note), the intensity of total
energy consumption (energy consumption per ton of product) was
• packaging materials (plastic, cardboard, etc.); reduced by 2.9% in 2014. This improvement resulted mainly from the
• sugar; and application of energy management best practices in all the Group’s
Divisions, which led to a 1.3% reduction in energy consumption in-
• fruit. tensity (productivity) on a like-for-like basis as well as a favorable
The amount of raw materials consumed per ton of finished product 1.6% product mix effect.
is one of the primary criteria for production performance, as raw
materials represent a large share of the Group products’ cost struc-
ture. Several measures are therefore taken to use them more ef-
ficiently:
• liquid milk, sugar, fruit: raw material losses in the Fresh Dairy
Products Division are monitored daily at the production sites,
with results consolidated monthly at the level of the subsidiaries
and the Division for comparison with the monthly loss reduction
goals determined in the budget process. The principal measures
applied to reduce these losses include (i) optimizing raw mate-
rials inventories, and (ii) optimizing production scheduling or
production line scaling to reduce raw materials losses at the
start and end of production runs; and
• packaging materials: Danone’s packaging development complies
with eco-design principles defined by the Group in the 2002
guidelines. The Group intends to strengthen these guidelines
and roll them out to all Divisions.

The table hereafter presents energy consumption by the Group’s production sites in 2013 and 2014:

(in MWh except intensity in KWh/tons of product) 2013 2014
Thermal energy (a) 2,311,832 2,819,112

Electricity (a) 1,817,815 1,962,911
Total 4,129,647 4,782,023
Intensity of energy consumption 137.7 149.3

The graph hereafter shows changes in the total energy consumption intensity at the production sites since 2000, for the reporting scope
of each of the years concerned.
Intensity of total energy consumption in the production sites

(in KWh/ton of product)
275.0
186.2
163.3 158.9
151.6 147.1 149.3
137.7
2000 2008 2009 2010 2011 2012 2013 2014
Measures taken to improve energy efficiency Use of renewable energies

The Group achieved better energy management through two main
Thermal energy from renewable sources
approaches:
Danone is testing renewable energy production and usage projects
• optimizing energy production at the plants. For example, several at the local level, for instance:
sites in the Fresh Dairy Products Division have installed cogen- • in Uruguay, 80% of thermal energy for the Waters Division’s Minas
eration facilities to produce electricity and heat from a single plant is generated through locally produced biomass energy;
energy source and improve the plants’ energy performance.
Up to 90% of energy can be recovered through cogeneration, • in Brazil, at the Poços de Caldas plant in the Fresh Dairy Prod-
compared with 40% to 55% for traditional systems; and ucts Division, a biomass boiler was installed in August 2011 to
replace the heavy fuel oil used for heating. Thanks to the use of
• optimizing energy use. biomass, the thermal energy used by the plant is now generated
Sharing best practices and fostering emulation between Group entirely from renewable sources (97%);
plants strengthened this improvement process in 2014: • since 2012, the Early Life Nutrition Division site in Wexford, Ireland
• in the Waters Division, the “WattWatcher” tool deployed through- has used a wood furnace that replaced heavy fossil fuels and
out all sites helps to define performance objectives adapted to helped to lower the site’s fossil fuel energy bill and greenhouse
each plant; gas emissions. The energy produced represents 54% of the
thermal energy used at the site; and
• in the Fresh Dairy Products Division, energy training courses
known as “Energy Campus” continue to bring in energy experts • in Russia, at the Chekhov plant in the Fresh Dairy Products Divi-
to support the implementation of best practices at all produc- sion, a methanization reactor was brought online in June 2013
tion sites; and to recover the treatment plant sludge and produce biogas. The
energy produced represents 8% of the thermal energy used at
• in the Early Life Nutrition Division, monthly Energy network ac- the site. For all of the Group’s Divisions, thermal energy produced
tions are implemented (see above section Employee training and from renewable sources and used at the plants represents 4%
information initiatives in environmental protection). of total thermal energy consumed by the Group.

Purchase of electricity specifically generated from 100% Reducing the carbon footprint: goals and results
renewable sources For the direct responsibility scope
Each subsidiary is responsible for choosing its energy mix. In 2014, In 2008, Danone had set the ambitious goal of reducing its carbon
six production sites purchased electricity from 100% renewable footprint by 30% by 2012 – a goal that it has exceeded – wherever the
sources (wind power, hydropower, etc.). This represents 3% of the Group exercises direct responsibility (production sites, packaging
Group’s total electricity purchases. and end of life, transport and warehousing – excluding upstream
Thus in Germany, 100% of the electricity at the three Fresh Dairy agriculture). Through end-2014, Danone had achieved a 41.6%
Products plants (Ochsenfurt, Rosenheim and Hagenow) comes reduction compared with 2008 (on a like-for-like basis). A specific
from renewable sources. strategy and priorities are established for each segment in the value
chain. In 2014, the Group reaffirmed its commitment by setting a
Soil use goal of a 50% reduction of its carbon footprint (for the same base
The Group commissioned a study from Bio Intelligence Service to year and scope) by 2020.
estimate the overall soil use related directly and indirectly to its ac-
(in gr CO2 /kg)
tivities. This study indicated that indirect activities (upstream agri-
culture) use more than 98% of the estimated surface area (3 million
304.4gr
hectares). CO2/kg -29.3gr
-12.3gr -88.0gr
Soil use issues are also taken into account in the sustainable ag-
Product
riculture approach. and geo-
Change 204.4gr
in emis- +31.0gr CO2/kg
graphic
sions -1.5gr
Climate change mix ef-
fect
factors
Reduc- Scope Change
tion in mea-
Greenhouse gas emissions action surement
plans method
Danone applies two methodologies for measuring greenhouse gas
emissions:
2007 2014
• a “product” approach based on a product and packaging life cycle
analysis, which takes into account emissions at every stage: raw The most meaningful actions to reduce emissions are energy con-
materials (including milk and upstream agriculture), packag- servation measures in the plants, reductions in packaging and the
ing, production, logistics, warehousing, sale and products and optimization of logistics supply routes.
packaging end of life. This method makes it possible to identify For the total product lifecycle
the most significant means of reducing emissions; and The Group’s total emissions in 2014 (including upstream agriculture)
• an “organization” approach that calculates greenhouse gases are estimated at 19 million tons equivalent CO2 (on approximately
emissions generated by production activities and therefore 93% of the Group’s sales volume).
a more restricted scope than for the “product” approach, in
Expressed in grams equivalent CO2 per kilogram of product, the
compliance with the provisions of Article 75 of the “Grenelle II”
Group’s total emissions amount to:
law, which categorizes direct emissions, called “scope 1”, and 5
indirect emissions, called “scope 2” (see section Greenhouse gas • direct responsibility scope: 204 grams equivalent CO 2
per kilo-
emissions by organization hereafter). gram of product (production, packaging, logistics, product and
packaging end of life); and
Greenhouse gases emissions through product
lifecycle analysis • total scope: 586 grams equivalent CO 2
per kilogram of product
(Greenhouse Gas Emissions Scope, see Methodology note), which
Measuring the carbon footprint can be broken down by lifecycle as follows:
Danone has developed and deployed a carbon footprint measure-
ment tool based on lifecycle analysis (Greenhouse Gas Emissions Lifecycle breakdown
Scope, see Methodology note) at most of its subsidiaries. This tool
was successfully integrated into the Group’s existing information (in percentage)
systems thanks to a solution jointly developed with software devel-
oper SAP.
Raw materials
The goal is to allow the Group’s subsidiaries that have this module 8%
10% Packaging
to monitor their carbon emissions within their direct scope of action,
as well as the emissions of their suppliers and customers.
10% Production
59%
13% Logistics
Product end of life

Carbon offsets Greenhouse gas emissions by organization

Danone teamed up with nine other large corporations in the Liveli- Greenhouse gases emissions by organization (scope 1 and 2, see
hoods fund and its mission is to invest in major natural ecosystem hereafter) for 2014 are calculated using the methodology described
restoration projects. These projects help to combat climate change in the GHG Protocol Corporate Standard (revised 2010 version, see
by sequestering significant quantities of carbon (see section 5.3 Methodology note).
Funds sponsored by Danone).
The approach chosen by Danone is to integrate all emissions sourc-
Consistent with its commitment and after reducing its carbon
es from the Group’s production plants into the measurement of its
footprint by 40% over the 2008-2012 period, the Evian brand offset
carbon footprint.
its remaining emissions in 2012 by supporting several quality proj-
ects. Beginning in 2013 and after consulting its stakeholders, Evian Direct emissions (scope 1) are those generated by the fuel consump-
decided to offset its emissions using the carbon credits provided by tion at the sites (natural gas, fuel oil, etc.), and refrigerant leaks.
the Livelihoods fund as they will be delivered. Through the grow-
ing role of these projects, the Group aims to steadily offset Evian’s Indirect emissions (scope 2) are those created through the produc-
emissions, which should thus be fully offset by 2020. tion of electricity, steam, heat or cold purchased and consumed
by the Group.

(in tons CO2 equivalent) 2013 2014
Emissions scope 1 460,256 561,353

Emissions scope 2 778,566 860,404
Total emissions 1,238,822 1,421,757
Ratio of total emissions in CO2 equivalent kg per ton of products 41.3 44.4
The ratio of total emissions in CO2 equivalent kg per ton of product projects: water management at the Poços de Caldas site and the
increased by 7.5% in 2014. This increased consumption resulted pilot site for strawberry production in the southern part of the state
primarily from the change in scope, as 27 new production sites of Minas Gerais.
were added and nine exited in 2014 (see Methodology note). However,
With respect to agriculture and milk supply, the Fresh Dairy Prod-
at constant scope in 2014 (see Methodology note), this ratio fell by
ucts Division launched the FaRMS initiative, which evaluates the
approximately 0.2%.
livestock farmers’ performance based on economic, social and
Adapting to the consequences of climate change environmental criteria, including some regarding biodiversity, with
all of its farmer partners in 1997 (see section hereafter Relations
Danone is working on estimating climate change consequences to
with milk producers). In this context, Danone, in collaboration with
complete the comprehensive policy of risk identification and man-
the University of Berne, developed DanRISE, a tool for measuring
agement described in section 2.7 Risk factors.
and managing its sustainable agriculture approach. This tool was
Therefore, the Group has identified medium-term risks, including: tested in six pilot countries: Brazil, United States, Germany, Ukraine,
Poland and Indonesia.
• raw materials supply (milk, fruit, etc.) in certain regions of the
world, due to possible droughts or inclement weather; Preserving and developing biodiversity near Danone sites
The Group’s sites are located in very diverse ecosystems and cli-
• cold production in Fresh Dairy Products Division sites in case mates. Some of those sites benefit from an exceptional environment
of a significant rise in temperatures; and and specific protection; such is particularly the case of the Waters
• damages to certain production sites located near coastlines, Division sites, whose rainwater catchment areas are very carefully
which could be impacted in the case of unusual climate events. managed:
Protecting biodiversity • in 2009 the Evian spring was added to the list of wetlands covered
by the Ramsar Convention, which aims to ensure sustainable man-
Measures taken to preserve or develop agement of these regions that are key to maintaining biodiversity;
biodiversity • to preserve its natural mineral water spring, the Villavicen-
Sustainable agriculture cio brand in Argentina protects its nature reser ve totaling
The impact of Danone’s business on biodiversity is primarily related 72,000 hectares, rich in biodiversity. Based on this experience,
to upstream agriculture (soil and water). In 2012, the Brazilian the brand is continuing its innovative partnership with the NGO
subsidiary of Danone’s Fresh Dairy Products Division launched a Banco de Bosques and has implemented the operation “Déjà
pilot product lifecycle analysis in conjunction with NGO partners IPE tu Huella” (“Leave your footprint”), which invites consumers to
(Instituto de Pesquisas Ecologicas) and IUCN (International Union participate in the creation of a new natural reserve. For every
for Conservation of Nature) to develop a methodology for evaluating bottle of Villavicencio purchased, the company pledges to protect
issues relating to biodiversity in Danone’s value chain. 1 square meter of the park. The brand is also carrying out initia-
tives to raise public awareness as to the dangers of deforestation
In 2014, the Danone Brazil company (Fresh Dairy Products) won and the importance of biodiversity in the local ecosystem. The
the "Exame" Guide for Sustainability 2014 award in the Biodiversity results of this operation are impressive: nearly 2,200 hectares
Management category. This award is the culmination of a study on protected, active public participation in the project and increased
biodiversity with the Danoninho brand and the related operational consumer preference for the Villavicencio brand; and

• starting in 2012, Danone Waters China has enhanced its protec- that enter its supply chain (99% of the total volume is used for animal
tion initiatives at the Longmen site through a partnership with feed); Danone nevertheless estimates that this volume represents
the Danone Ecosystem Fund (Fonds Danone pour l’Écosystème). approximately 900 kilotons, or less than 0.3% of global production.
The project, which aims to enlist the support of numerous farm-
Danone has made a commitment along with the involved leading
ers, is designed to preserve the quantity and quality of water
market participants – from farmers to producers of animal feed to
resources and biodiversity while improving living conditions for
the leading soybean trading companies – to help develop a more
local communities. The Danone Ecosystem Fund is described in
responsible soybean industry.
section 5.3 Funds sponsored by Danone.
The Group is reflected this goal in five strategic aims:
Group’s Forest Footprint Policy
1. seek total transparency throughout the supply chain, from the
Conscious of the importance of preserving our planet’s forests (in
animal to the land;
particular tropical forests in Indonesia and the Congo and Amazon
river basins), Danone is committed to a strategy of eliminating the 2. w herever possible, promote local cultivation rich in proteins
deforestation impacts of its supply chain and to a reforestation pro- instead of soybean imports, thereby helping to make farmers
gram, between now and 2020 (including the natural ecosystem re- more independent in the production of animal feed;
storing program of the Livelihoods fund).
3. promote supply from countries not at risk of deforestation (India,
For this purpose, Danone has created a Forest Footprint policy that United States, etc.);
aims to:
4. w hen soybeans do come from a country with a high risk of de-
• evaluate deforestation risks related to the raw materials used forestation in South America, ensure traceability from risk-free
directly or indirectly for the Group’s businesses; areas; and
• propose specific policies; and 5. help to drive change on a global scale through the Consumer
Goods Forum, the Sustainable Agriculture Initiative and all other
• implement prioritized actions based on risks and associated initiatives that enable Danone to achieve its objectives.
impacts. Six major materials have been prioritized: paper and
cardboard packaging, palm oil, soy for animal feed, wood energy, The Group will focus this strategy on seven key countries that ac-
sugar cane, and bio-sourced raw materials for packaging. count for 90% of the total estimated volume of animal feed affecting
its supply chain, i.e. Russia, Argentina, Brazil, France, the United
This policy has been rolled out for two raw materials categories: States, Spain and South Africa.
Specific palm oil policy Specific policy for paper/cardboard packaging
With a volume of approximately 30,000 tons, Danone uses palm oil Jointly developed with several leading NGOs (in particular Rainforest
in modest proportions relative to other businesses in the food and Alliance), the paper/cardboard packaging policy has three objec-
beverage industry. tives:
In 2014, Danone satisfied 100% of its palm oil needs from CSPO • actively reduce the paper packaging weight of each product;
(Certified Sustainable Palm Oil) sources.
• give priority to the use of recycled fibers; and 5
In the long term, Danone considers replacing palm oil with alterna-
tive resources on a case-by-case basis. • when possible, give priority to FSC-certified virgin fibers.
Specific soybean policy Danone makes its policies publicly available on its website.
Danone does not directly purchase the vast majority of the soybeans
Societal information
Danone’s societal approach is characterized by a systematic effort Regional, economic and social impact
to create value for shareholders and all stakeholders. Danone there-
fore ensures that its activity leads to the development of benefits to of the Group’s business
society. Danone has decided to consider both economic factors (wage lev-
els, purchasing and subcontracting, local taxes, etc.) and societal
Within this framework, three funds were created: the Danone
issues (employment, provision of know-how, training, support for
Ecosystem Fund (Fonds Danone pour l’Écosystème), the danone.
local initiatives, support for education in areas of expertise, partner-
communities mutual fund (SICAV) and the Livelihoods fund. These
ships around environmental matters) into account for its business
funds are described in section 5.3 Funds sponsored by Danone.
activities. The Group’s ability to develop positive relationships with its
local environment plays an important role in its overall performance.

Danone’s commitment to local communities is part of its “dual eco- Subcontracting and suppliers
nomic and social project”, which involves:
Taking into account suppliers’ and subcontractors’
• knowing the local players and developing sustainable relation- social and environmental responsibility
ships with them;
Due to Danone’s relationships with thousands of suppliers around
• participating in the economic and social development of its the world, a significant portion of its environmental and social impact
labor markets; occurs within these companies. Consistent with the Group’s “dual
• developing products that are affordable to the greatest number economic and social project”, the RESPECT approach launched in
of people; and 2005 and managed using the Danone Way approach (see section 5.1
Danone social, societal and environmental approach) serves to extend
• participating in maintaining local economies and employment by this vision to the Group’s entire supply chain, excluding milk produc-
reindustrializing Group sites that have undergone restructuring. ers (see section hereafter Relations with milk producers), based on
several processes:
Relationships with the people and orga-
• contractualizing suppliers’ Corporate Social Responsibility (CSR)
nizations with an interest in the Group’s performance with the signature of Sustainable Development
business Principles (including social, environmental and ethical elements)
and their integration into the general purchasing terms;
Partnership and corporate sponsorship initiatives
• information-sharing based on self-disclosures by suppliers on
More than just partnerships, Danone is committed to a co-creation their CSR performance using the Sedex platform (cross-company
process involving new forms of collaboration between multiple part- evaluation platform for the consumer goods industry, see sec-
ners: Danone and/or its subsidiaries together with an institution, tion 5.1 Danone social, societal and environmental approach); and
representatives from civil society and/or a local development orga-
nization. • external CSR audits of suppliers viewed as at-risk based on this
information exchange, with a view to implementing an appropri-
Due to Danone’s largely decentralized organization, the subsidiaries ate action plan.
support and develop partnerships and corporate sponsorships lo-
cally. Examples include: The suppliers involved are in every category of Group procurement
except milk (see section hereafter Relations with milk producers): raw
• Sed Cero: the Danone Foundation in Argentina supports a tri- materials (ingredients, sugar and fruit), packaging (plastic and card-
national (Argentina, Bolivia and Paraguay) program known as board), production machinery, transport and other services (promo-
“Sed Cero” – “zero thirst” – which aims to provide drinking water tional products, etc.).
to 100,000 families by 2016. This program is built around various
local initiatives in the Gran Chaco, a region of South America Subcontractors, i.e. suppliers that manufacture finished products on
where the lack of clean and drinking water is critical; behalf of Danone, also take part in the above-mentioned RESPECT
approach, although Danone uses very little subcontracting, since the
• Eat like a champ: a nutrition education program for children vast majority of its finished products being produced in the Group’s
in the United Kingdom that targets primary schools and seeks own plants.
to improve children’s eating habits and promote a more active
lifestyle. Launched as a pilot program in a few schools in 2010, The areas addressed through this process deal with the principles of
it has been rolled out and enhanced each year. This program is Human Rights, health and safety, compensation, work time, respect
based on key partnerships with the British Nutrition Foundation, for the environment and ethics, notably with regard to the application
which helped to design interactive lessons in connection with of the International Labor Organization’s fundamental conventions.
the primary school curriculum; and
In applying these proactive initiatives to secure CSR issues with
• Restos du Cœur: since 2008, Danone, Carrefour and Restos du its suppliers, Danone supports the long-term sustainability of its
Cœur have implemented a partnership built around a welfare- partners and of its own development. RESPECT also contributes
to-work initiative. to changing the nature of commercial relationships, in terms of
comprehensiveness and transparency of information to be docu-
Initiatives with schools mented and shared.
In addition to the Group’s participation in various school forums,
in 2008 Danone supported the creation of the Social Business/ Relations with milk producers
Enterprise and Poverty chair at HEC Paris. The chair’s mission is to Danone maintains relations with its milk producer partners that
contribute to developing a more inclusive economy that creates both contribute to sustainable agriculture from an economic, environ-
economic and societal value. mental and social perspective.
It is co-chaired by Professor Muhammad Yunus, the Bangladeshi

economist, entrepreneur and Nobel Peace Prize winner, and Mr.
Martin Hirsch, the Chairman of the Civic Service Agency and mem-
ber of the Danone Ecosystem Fund steering committee.
Danone’s partnerships and initiatives with educational institu-

tions are also implemented at the local level and carried by the
subsidiaries themselves. For example, the “Danone Young Social
Entrepreneur” (DYSE) program in Indonesia was developed by local
Human Resources teams in order to attract young talents.

From an economic perspective, milk accounts for about half of the Responsible communications
Group’s raw materials expenditures, and Danone must therefore In 2002 Danone introduced an internal procedure to ensure the con-
strike a balance between a competitive purchasing price and the sistency, credibility and scientific validity of the health and nutrition
farmers’ need for greater financial security. From an environmental claims contained in its communications.
perspective, milk accounts for a large share of the Group’s carbon
footprint, so attention must be paid to the choice of food, as well In terms of advertising, Danone is committed to applying the ICC
as soil and water use in farms. The FaRMs (Farmers Relationship Code (International Chamber of Commerce Code for Responsible
Management) approach is a key tool for this relationship. It involves Food and Beverage Marketing Communication). In the particular
evaluating livestock farmers’ performance with regard to economic, case of communications aimed at children, Danone is committed
environmental, social and quality criteria, using an audit grid devel- to restricting advertising exclusively to products adapted to their
oped by Danone, and based on assistance from Danone technicians nutritional needs. To that end, Danone has joined numerous local
who visit the farms to help milk producers subscribe to a policy of and regional pledges (associations of companies). In most of the
continuous improvement. countries involved, compliance with this commitment is certified by
an external agency. In 2014, for example, Danone registered 98%
This approach is already in place for the milk producers with which overall compliance with its television advertising commitments in
Danone has a direct commercial relationship, and is now being the seven countries audited (Germany, Portugal, Spain, Italy, France,
deployed to those governed by an indirect relationship (such as Hungary and Poland).
collection centers). The approach aims to cover 75% of the milk
volumes purchased by the Group. Concerning early life nutrition, Danone is committed to the Code
established by the WHO (International Code of Marketing of Breast-
Fair trade practices milk Substitutes). This policy is rolled out in internal documents
that translate the Code into principles and apply it in day-to-day
Initiatives taken to prevent fraud and corruption operations. An independent auditor regularly evaluates the Group’s
See section 6.4 Internal control and risk management. compliance with this commitment.
Detailed product nutrition information
Measures taken in support of consumer health Danone products include nutrition labels in compliance with regu-
Consumer health is at the heart of Danone’s history and its mission lations. The Group’s fresh dairy products and beverages (except
of “bringing health through food to as many people as possible”. natural mineral waters) have more detailed labeling showing the
contribution of each portion to daily needs. Such labeling is an
Danone’s health and nutrition strategy is aligned with the major
initiative of the European inter-branch professional organization,
policy orientations of health authorities in the various countries; it
implemented at Danone through an internal document known as the
is defined in the Group’s Food Nutrition and Health Charter.
Nutritional Information Charter. This nutrition information is also
A unique offer of products adapted to people’s needs available from the subsidiaries’ consumer relations departments
throughout their lifetime and/or the websites of the subsidiaries in Europe and certain other
Most of Danone’s products can be consumed on a daily basis: they countries outside of Europe.
are either included in the recommended categories of the food
Promoting a balanced diet and healthy lifestyle
pyramids used in many countries (fresh dairy products and mineral
waters) or belong to food categories governed by regulations (early
A large number of Danone subsidiaries organize consumer informa- 5
tion and education programs. Most of these initiatives are developed
life nutrition and medical nutrition), (see section 2.4 Description and
in partnership with local institutions to ensure their relevance to
strategy of the Divisions).
the local healthcare environment. The Malin program in France is
In some cases, product composition is dictated by strict regula- one example: Blédina (Early Life Nutrition – France) is a partner
tions and in others it is governed by internal Group nutrition stan- along with the French Red Cross, the Nutrition Committee of the
dards based on public health authority recommendations (WHO and French Society of Pediatrics (Société Française de Pédiatrie – SFP)
Eurodiet). The Nutriprogress program created by Danone monitors and the French Association of Ambulatory Pediatrics (Association
the nutritional quality of product portfolios and, if necessary, refor- Française de Pédiatrie Ambulatoire – AFPA).
mulation projects may be launched.
Measuring the Group’s nutrition and health performance
In August 2014, for example, the U.K. Fresh Dairy Products subsid- In 2011, Danone created a series of performance indicators (Score-
iary launched a new version of Actimel with 15% less sugar added; card) to tangibly measure improvements and progress made with
in January 2014, the Polish subsidiary launched a new version of regard to health and nutrition issues, in particular product com-
Danonkid (drinkable yogurt for children) with 20% less sugar added; position and responsible communication, with the results publicly
in both cases, the product reformulation successfully preserved disclosed annually. These indicators are consolidated for a scope of
consumer taste preferences. 15 countries combining all four of the Group’s Divisions (a total of 45
subsidiaries in 2014, representing around 76% of consolidated sales).
Along with these performance indicators, the subsidiaries’ applica-
tion of best practices in the marketing of products that contribute
to consumer health is monitored under the Danone Way approach
(see section 5.1 Danone social, societal and environmental approach).

Measures taken in support of consumer safety The Group Product Compliance Committee is responsible for
Danone is committed to creating, producing and delivering its compliance with applicable laws and regulations as well as rules
products on a daily basis without compromising food safety and specific to Danone and its commitments.
while strictly adhering to Danone’s strict compliance policy and Danone is an active member of the Global Food Safety Initiative (GFSI).
identifying any risks that may arise.
Internal management system
These food safety commitments are formalized in the Group’s Consistent with its requirements, Danone chose the FSSC 22000
Business Conduct Principles as well as in its Food Safety Policy. standard as its benchmark. This standard is recognized by the
Two types of documents underpin Danone’s policy and governance authorities, consumers and distributors.
with respect to food safety: Danone’s goal is to have 100% of its sites covered by the FSSC 22000
• Danone’s fundamental principles on food quality and safety, the standard in the medium or long term.
Danone Operating Models (DOMs), are based on a set of quality To ensure the implementation and alignment of the internal systems,
criteria that define what must be done to ensure product safety an audit guide specific to Danone was developed. It includes special
and compliance with Danone specifications at each stage of the Danone requirements that exceed the requirements of international
distribution chain, from product design to consumption, in all standards. The Group has selected four certification organizations
countries and at all times. Each subsidiary must use these criteria and trained and certified more than 40 auditors to ensure that
as the basis for the Quality Management System and measure Danone’s expectations are taken into account in the assessments.
the level of compliance at each control point, performing an an-
nual self-assessment in the DANgo management system; and Crisis management system reports to Group management
The Group has a system to notify customers, block potential new
• the Danone Food Safety standards, including (i) Food Safety sales and recall products, with complete traceability. Therefore,
Directives, (ii) Food Safety Reference Documents, (iii) integrated Danone may announce product recalls in the event of food safety
management and risk assessment, (iv) control models and lists risks detected in products already on the market.
specific to Danone.
Each subsidiary must ensure compliance with the Group’s crisis
Governance management procedures, which are also audited on a regular basis.
Given the ever-changing food safety environment and Danone’s need
to operate as a going concern, the Group in 2014 strengthened its Initiatives in favor of Human Rights
governance system in this area as well as the resources devoted
to it. The Global Food Safety Officer) s responsible for food safety Danone takes Human Rights into account in its operations and
within the Group and reports to the Corporate Secretary, the Vice activities through its policies, programs and initiatives, notably
President for Product Compliance and the Vice President for Re- Danone Way, RESPECT, WISE, Dan’Cares and the IUF conventions,
search and Development/Quality. mentioned above.
Methodology note
Consolidation scope and coverage • Safety Scope;
The consolidation scope is composed of all subsidiaries fully con-
• Production Sites Environment Scope; and
solidated for the establishment of the Group’s consolidated finan- • Greenhouse Gas Emissions Scope.
cial statements, in other words the subsidiaries in which the Group
holds, directly or indirectly, a controlling interest (see Note 2.3 of the Total Group Workforce Scope and Social Indicators
Notes to the consolidated financial statements). Scope
In 2014, 169 Group entities representing around 94% of the total
Nevertheless, some subsidiaries do not report all social, safety and
workforce reported social indicators (Social Indicators Scope). In
environmental indicators. These entities have been consolidated
the case of the total workforce indicators, the coverage rate is 100%
into the Group’s consolidated financial statements for the year end-
(Total Group Workforce Scope).
ed December 31, 2014, and action plans have been drawn up and/
or are planned to ensure the availability and accuracy of the social, Safety Scope
environmental and safety data reported. Most of these have been
In 2014, 159 Group entities representing around 95% of the total
acquired most recently, in particular those joining the Group as a
workforce reported safety indicators (Safety Scope).
result of the acquisition of Centrale Laitière (Fresh Dairy Products
– Morocco) in 2013. In addition, in the case of subsidiaries exiting the consolidation scope
as of December 31, 2014, their social and safety data is reported
Finally, those subsidiaries that do not report certain social, safety
until the date they exit the consolidation scope and is not taken into
or environmental indicators may vary depending on the indicators;
account in the workforce as of December 31, 2014. In 2014, main
the coverage scope may differ following the categories hereafter, as
entities exiting the Safety scope are the Fresh Dairy Products com-
described in the following sections:
panies in China and Indonesia following their disposal. The main
• Total Group Workforce scope; companies that are no longer fully consolidated as of December
31, 2014, are listed in the Note 2.2 of the Notes to the consolidated
• Social Indicators Scope; financial statements.

Production Sites Environment Scope Methodological details

In 2014, 179 production sites (among the Group’s 184 production The methodologies used for certain social and environmental indi-
sites) representing around 98% of the Group’s consolidated net sales cators may involve limitations due in particular to:
reported environmental indicators (Production Sites Environment
Scope). • the absence of shared national and/or international definitions; and
The environmental impact of administrative headquarters and • the need to estimate, the representative nature of measurements
logistics centers is not included in the consolidation scope (except performed or the limited availability of external data needed for
for certain indicators, when the logistics centers are adjacent to a calculations.
production site). For these reasons, the definitions and methodologies used for the
indicators hereafter are specified.
Greenhouse Gas Emissions Scope
(product approach) Workforce
In 2014, this scope covered 93% of the Group’s sales volume. A negligible portion of the managerial workforce is not collected in
the data reporting framework (a few cases of internationally mobile
Like-for-like variations (constant scope) employees on assignment to other Group entities). Furthermore,
The Group measures changes to some environmental indicators on a some disparities may exist in the workforce accounting methods for
like-for-like basis, i.e. at constant consolidation scope. The 2014 data expatriate employees (such is notably the case for expatriate em-
are restated using a consolidation scope identical to the 2013 scope. ployees who have three-party contracts between the employee, the
home subsidiary and the host subsidiary).
Data collection
Employees on long-term leaves (more than nine months) are not
To ensure the homogeneity of indicators across the reporting scope, counted in the total workforce at the end of the reporting period.
shared data reporting guidelines for social, safety and environmen-
tal data are transmitted and updated each year following data con- In China, employees remunerated by Danone but whose contracts
solidation and comments by contributors. These guidelines specify are with a third-party company (equivalent to a temporary work
the methodologies to use for reporting indicators: definitions, meth- agency), are not included in the workforce.
odology principles, calculation formulas and standard factors. Short-term contracts and movements within the Group are not
These reporting guidelines regarding environmental, social, included in the entries/exits.
safety and GHG data are available upon request from the Social
Number of training hours and number of trained
Responsibility Department.
employees
The social, safety and environmental indicators are transmitted Training data from French subsidiaries include training categorized
from the subsidiaries and/or production sites and are consolidated as ongoing professional training as well as other types of training.
at Group level by the corresponding departments. The environmental
data are checked at the subsidiary level and then at the Division The number of trained employees takes into account all the employ-
level when reported. In the case of social and safety data, a control ees who received at least one training session during the year, in- 5
is performed at the end of the third quarter and at the time of the cluding employees who have left the Group as of December 31, 2014.
consolidation of the December 31 data.
The training sessions for which evidence has not been received at
Social and safety indicators the reporting closing date are included in the following fiscal year.
The Human Resources Department is responsible for social and Given the limited availability of data in certain countries, the Group
safety indicators. Social data from the subsidiaries are generally de- made estimates for this indicator as of December 31, 2014.
rived from payroll systems installed in the entities and reported via
the Group’s financial consolidation software (SAP/BusinessObjects Employees with disabilities
Financial Consolidation). This indicator covers employees declared as disabled workers. The
definition of a person with disabilities is determined by local regula-
Safety indicators are reported monthly by each subsidiary in WISE,
tions in the different countries. In addition, due to local regulatory
the Group consolidation system for safety indicators.
specificities, certain countries include both externally documented
Environmental indicators disability recognition and disability recognized internally by the on-
site occupational physician.
The Nature Department is responsible for environmental indicators.
Environmental data are reported by the Environment manager at Absenteeism
each production site. Greenhouse gas emissions (product approach)
The absenteeism rate is, in percentage, the total number of absence
related data are reported via the Danprint application and/or SAP
hours divided by the theoretical total number of working hours. The
Carbon.
grounds for absence taken into account for this indicator include sick
leaves (with or without hospitalization), absences due to work-related
illness and injury and unauthorized leave. Long-term sickness (more
than nine months) and maternity/paternity leaves are not included.
The assumptions used for the theoretical hours worked calculation
is left to the discretion of the subsidiaries, taking into account local
specificities, which can lead to minor discrepancies.
Some subsidiaries monitor absenteeism only for hourly paid employ-
ees, as other employees are included in a specific program providing

them some available days-off that can be used for several reasons Consolidated data related to waste do not include (i) product returns
(vacation, sickness, special leave, etc.). Such is the case in particular (non-compliant raw materials rejected/unsold due to commercial
for The Dannon Company Inc. (Fresh Dairy Products – United States), issues), and (ii) whey, a by-product normally reused by a third party.
Danone Inc. (Fresh Dairy Products – Canada), Danone Argentina SA
Data related to recovered waste include materials recovery (recy-
(Fresh Dairy Products – Argentina) and Grupo Cuzco International
cling, compost, reuse, etc.) and energy recovery.
S de RL de CV (Waters – Mexico) whose absenteeism rate for em-
ployees not paid on an hourly basis is estimated. Absenteeism is not Water consumption
recorded in the Group’s subsidiaries in the Netherlands. The Group
Consumption of well water or surface water may be estimated when
will implement an action plan in order to measure absenteeism in
sites have no meter. The definition and methods of accounting for
these subsidiaries.
various uses of water (including run-off, water pumped from and
Given the limited availability of data in certain countries, the Group returned into streams) are specified in the technical environmental
made estimates for this indicator as of December 31, 2014. guide established by the Group and transmitted to its subsidiaries.
Water consumption includes water used in industrial process and
Frequency rates of work accidents water used in finished product formulation.
Frequency Rate 1 (FR1) is the number of workplace accidents with
The calculation method used by the Group consists in taking into
lost time of one day or more that occur over a 12-month period for
account the water used in open cooling circuits (water pumped and
every 1 million hours worked.
returned without any modification except temperature).
The frequency rate of workplace accidents without lost time (FR2)
If a logistics center is located adjacent to a production site, its water
represents the number of workplace accidents without lost time
consumption is included when the sites are not able to distinguish it.
for every 1 million hours worked.
The severity rate (SR) represents the number of calendar days of Energy consumption
absence due to workplace accidents with lost time for every 1,000 By definition and with the exception of the GHG Protocol Corporate
hours worked. Regarding the number of lost days taken into account Standard indicator, the environmental indicators cover only the im-
in the calculation of the severity rate and given the limited availability pact of production sites. When Research and Development centers
of data in certain countries, the Group made estimates for this indi- or other non-industrial sites are located adjacent to the production
cator as of December 31, 2014. sites, estimates may be made by the production sites to take into
account only their own energy consumption (estimate and deduction
The hours worked are actual hours worked; if this figure is not avail-
of energy consumed by the non-industrial site adjacent to the plant).
able, theoretical hours worked are taken into account based on local
practices and regulations regarding work time. In some cases, the energy consumption of buildings located adjacent
to the production sites is included when no separate measurement
The assumptions used for the theoretical hours worked calculation
is possible.
is left to the discretion of the subsidiaries, taking into account local
specificities, which can lead to minor discrepancies. Greenhouse gas emissions by organization
Workplace accident indicators also cover accidents affecting tem- Greenhouse gas emissions by organization (scope 1 and scope 2)
porary employees working at Danone’s sites as well as interns who for 2014 are calculated using the methodology described in the GHG
have an internship agreement with Danone. Temporary employees Protocol Corporate Standard (revised 2010 version).
refers to individuals who do not have a contract with Danone but are
For the organizational approach to measuring its carbon footprint,
under the Group’s direct management, working on a temporary basis
Danone has chosen to include all sources of emissions at the
and for whom working time is available (in number of hours); this
Group’s industrial sites. The share of emissions from offices and
can create discrepancies in the scope of the workforce accounted
warehouses remains limited relative to the total (7% of total emis-
for by the sites.
sions in 2012). Vehicles produce a greater share of emissions (21%
Waste of total emissions in 2012). However, Danone focuses its actions on
the industrial activities (more than 70% of total emissions in 2012).
In 2014, waste is classified into four categories (hazardous waste,
non-hazardous organic waste, non-hazardous inorganic waste and For the so-called “product” approach based on a lifecycle analysis,
sludge from water treatment facilities). however, Danone also records emissions related to logistics and
transportation.
In 2013, the quantity of sludge from water treatment facilities taken
into account was limited to sites for which wastewater was dis- Direct emissions (scope 1) are those arising from on-site consump-
charged directly into the environment after on-site treatment (full tion of fuels (natural gas, propane/butane/LPG, heating oil, heavy
treatment). Sludge from wastewater treatment facilities generated fuel oil and coal) and from refrigerant leaks (in accordance with the
by partial on-site treatment and subsequent off-site treatment was GHG Protocol Corporate Standard, only HFC and PFC consumption
not included. is included). No Group site uses PFCs.
In 2014, the “Volume of sludge from wastewater treatment facilities” Indirect emissions (scope 2) are those linked to the generation of
indicator took into account all sites with on-site wastewater treat- electricity, steam, heat or cold and purchased by the Group.
ment (complete and partial) and generating sludge. This indicator
Emissions (scopes 1 and 2) are calculated by applying the global
is calculated based on the quantity of wet sludge and a dry mat-
warming potential (GWP) and emissions factors to the activity data.
ter ratio. When the dry matter ratio was not available (around 7% of
cases), the default value was set at 100%. The emissions factors and GWPs used in calculating emissions
arising from energy consumption correspond to data in the 2006
The total quantity of sludge from wastewater treatment facilities was
IPCC Guidelines (2006 IPCC Guidelines for National Greenhouse
approximately 26,000 tons at 59 sites in 2014. In 2013, this indicator
Gas Inventories). The IPCC (Intergovernmental Panel on Climate
was reported by only 19 sites.
Change) is a group of inter-governmental experts specializing in

climate change. The emission factors regarding electricity corre- Wastewater

spond to the data from the International Energy Agency (CO2 high-
Chemical Oxygen Demand (COD) data presented correspond to
lights 2013), and the factors used regarding heat, steam and cold
wastewater after internal and/or external treatment. If no infor-
correspond to data from the French Agency for the Environment and
mation about external treatment is available, a purified output of
Energy Management (Agence de l'environnement et de la maîtrise
90% is applied.
de l'énergie – ADEME) carbon database.
Emissions factors used to characterize the impact of refrigerant

fugitive emissions are based on the report “Climate Change 2007,
4th Assessment Report, The Physical Science Basis”, from IPCC,
published in 2007.

Report by one of the Statutory auditors, appointed as an independent third party,

on the consolidated environmental, labour and social information presented
in the management report
This is a free translation into English of the Statutory auditors’ report issued in French and is provided solely for the convenience of English
speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing
To the Shareholders,
In our capacity as Statutory auditor of Danone, appointed as an independent third party and certified by COFRAC under number 3-1060 ,
we hereby present to you our report on the consolidated environmental, labour and social information for the year ended on December
31st, 2014 presented in the management report (hereinafter the "CSR Information"), in accordance with Article L.225-102-1 of the French
Commercial Code (Code de commerce).
Responsibility of the company

The Board of Directors is responsible for preparing the company's management report including CSR Information in accordance with the
provisions of Article R.225-105-1 of the French Commercial Code and with the protocols used by the company (hereinafter the "Guide-
lines"), summarised in the methodological information at the end of the chapter 5.2 of the management report and available on request
from the company's head office.
Independence and quality control

Our independence is defined by regulatory texts, the French code of ethics governing the audit profession and the provisions of Article
L.822-11 of the French Commercial Code. We have also implemented a quality control system comprising documented policies and
procedures for ensuring compliance with the codes of ethics, professional auditing standards and applicable legal and regulatory texts.
Responsibility of the Statutory auditor

On the basis of our work, it is our responsibility to:
• certify that the required CSR Information is presented in the management report or, in the event that any CSR Information is not pre-
sented, that an explanation is provided in accordance with the third paragraph of Article R.225-105 of the French Commercial Code
(Statement of completeness of CSR Information);
• express limited assurance that the CSR Information, taken as a whole, is, in all material respects, fairly presented in accordance with
the Guidelines (Reasoned opinion on the fairness of the CSR Information).
Our work was carried out by a team of eight people between October 2014 and March 2015 and took around twenty weeks. We were as-
sisted in our work by our specialists in corporate social responsibility.
We performed our work in accordance with the French professional auditing standards related to labour and environmental informa-
tion falling within the scope of procedures directly related to the statutory audit engagement (NEP 9090), with the decree of 13 May 2013
determining the conditions in which the independent third party performs its engagement and with ISAE 3000 concerning our reasoned
opinion on the fairness of the CSR Information.
1. Statement of completeness of CSR Information

We conducted interviews with the individuals in charge of the relevant departments, we reviewed the Company’s sustainable develop-
ment strategy with respect to the labour and environmental impact of its activities and its social commitments and, where applicable,
any initiatives or programmes it has implemented as a result.
We compared the CSR Information presented in the management report with the list provided for by Article R.225-105-1 of the French
Commercial Code.
For any consolidated Information that was not disclosed, we verified that the explanations provided complied with the provisions of Article
R.225-105, paragraph 3 of the French Commercial Code.
We verified that the CSR Information covers the scope of consolidation, i.e., the Company, its subsidiaries as defined by Article L.233-1 and
the entities it controls as defined by Article L.233-3 of the French Commercial Code within the limitations set out in the methodological
information at the end of the chapter 5.2 of the management report, especially the exclusion of the entity Centrale Laitière (Morocco) for
most CSR information.
Based on this work and given the limitations mentioned above, we attest to the completeness of the required CSR Information in the
management report.

2. Reasoned opinion on the fairness of the CSR Information

Nature and scope of our work
We conducted around forty interviews with the people responsible for preparing the CSR Information in the departments charged with
collecting the information and, where appropriate, the people responsible for the internal control and risk management procedures, in
order to:
• assess the suitability of the Guidelines in the light of their relevance, completeness, reliability, impartiality and comprehensibility, and
taking into account best practices where appropriate;
• verify that a data-collection, compilation, processing and control procedure has been implemented to ensure the completeness and
consistency of the CSR Information and reviewed the internal control and risk management procedures used to prepare the CSR
Information.
We determined the nature and scope of our tests and controls according to the nature and importance of the CSR Information with respect
to the characteristics of the Company, the labour and environmental challenges of its activities, its sustainable development policy and
best practices.
With regard to the CSR Information that we considered to be the most important (Social information: headcount; dismissals; absenteeism;
workplace accidents, their frequency and severity; training; ILO core convention; Environmental information: amount of provisions and
guarantees for environmental risks; water emissions and chemical oxygen demand (COD); waste and their recovery treatments; water
consumption and local constraints; raw material consumption and its efficient use; energy consumption and efficiency; greenhouse
gas emissions; biodiversity; Labour information: suppliers and subcontracting; prevention of corruption; consumer health and safety):
• at parent entity, we consulted documentary sources and conducted interviews to substantiate the qualitative information (organisa-
tion, policy, action), performed analytical procedures on the quantitative information and verified, using sampling techniques, the
calculations and the consolidation of the data. We also verified that the information was consistent and in concordance with the other
information in the management report;
• at the level of a representative sample of entities selected by us (Water Division: Aguas Danone de Argentina SA (Argentina), Bonafont
SA de CV (Mexico), PT Tirta Investama (Indonesia), Société des Eaux de Volvic (France); Fresh Dairy Division: Danone Argentina SA
(Argentina), Danone Djurdjura (Algeria), Danone GMBH (Germany), Danone Inc. (Canada), Danone Industria OOO (Russia), Danone SA
(Spain); Early Life Nutrition Division: PT Sarihusada Generasi Mahardhika (Indonesia); Medical Nutrition Division: Nutricia Nederland
B.V. (Netherlands)) on the basis of their activity, their contribution to the consolidated indicators, their location and risk analysis, we
conducted interviews to ensure that procedures are followed correctly, and we performed tests of details, using sampling techniques,
in order to verify the calculations made and reconcile the data with the supporting documents. The selected sample represents on
average 18% of headcount and between 17% and 31% of quantitative environmental data.
For the other consolidated CSR information, we assessed consistency based on our understanding of the company.
We also assessed the relevance of explanations given for any information that was not disclosed, either in whole or in part in the light of
good professional standards. 5
We believe that the sampling methods and sample sizes used, based on our professional judgment, allow us to express limited assurance;
a higher level of assurance would have required us to carry out more extensive work. Because of the use of sampling techniques and
other limitations intrinsic to the operation of any information and internal control system, we cannot completely rule out the possibility
that a material irregularity has not been detected.
Conclusion
Based on our work, nothing has come to our attention that causes us to believe that the CSR Information, taken as a whole, is not presented
fairly, in all material respects, in accordance with the Guidelines.
Observation
Without qualifying our conclusion, we draw your attention to the following matters: certain local contacts in the different subsidiaries are
not sufficiently trained to understand the definitions and calculation methods used by the company while the internal controls procedure
described in the Guidelines is not deployed in a homogenous manner throughout the subsidiary, division and corporate levels on social
data. This may result in deficiencies in the reporting process at entity level for certain indicators, including “Absenteeism rate”, “Training
hours”, and “number of days lost” used for the calculation of the “Severity rate”. The deficiencies identified on the reviewed data were
corrected in the CSR Information presented in the management report.
Neuilly-sur-Seine, March 9, 2015

One of the Statutory auditors
PricewaterhouseCoopers Audit
Philippe VOGT Sylvain LAMBERT
Partner Partner in charge of the Sustainable Development department

5.3 Funds sponsored by Danone

danone.communities
The danone.communities mutual fund (Société d’Investissement à the viability and sustainability of each of the projects: Grameen
Capital Variable - SICAV) and the danone.communities professional Danone Foods Limited in Bangladesh, Laiterie du Berger in Senegal
specialized investment fund (Fonds Professionnel Spécialisé – FPS, and NutriGo in China.
formerly the Fonds Commun de Placements à Risques - FCPR) were
Under the terms of the danone.communities Governance Charter,
created in 2007 on Danone’s initiative.
the Company may invest, directly or indirectly, in companies in
The aim of the danone.communities FPS is to invest in businesses with which the danone.communities FPS invests, but only if the co-in-
significant social impact located mainly in the emerging countries, vestments: (i) comply with Danone’s corporate purpose, (ii) are of a
in accordance with Danone’s mission. nature to strengthen the mission, governance and sustainability of
the companies concerned, and (iii) are made in agreement with the
The SICAV’s investment strategy consists of investing a minimum of
shareholders of these companies. Each co-investment is subject to
90% of its assets in a selection of shares or units of mutual funds or
prior review by the Social Responsibility Committee, which gives an
investment funds invested in money market investments, government
opinion as to its compliance with these requirements.
bonds and bonds of companies in the euro zone favoring a “Socially
Responsible Investment” (SRI) approach, and a maximum of 10% of Hereafter is a description of the eight projects in which the danone.
its assets in the danone.communities FPS. communities FPS (and, for three of them, the Group) has invested.
As of December 31, 2014, the danone.communities SICAV had assets Grameen Danone Foods Ltd., Bangladesh
under management totaling around €77 million.
The danone.communities FPS made its first investment in Grameen
Danone Foods Ltd., a company created in 2006 in Bangladesh at
Investment by the Group and its the initiative of Grameen Bank and the Group.
employees in danone.communities Grameen Danone Foods Ltd. is a social business that built a factory
At the Shareholders’ Meeting of April 26, 2007, 99.77% of the share- for manufacturing micronutrient-fortified (vitamin A, zinc, iron and
holders approved the implementation of the danone.communities iodine) yogurts. Sold at a very affordable price to the poorest families
project. by “Grameen Ladies” and in small retail stores, these yogurts make
it possible to combat children’s nutritional deficiencies. In addition
With the creation of the danone.communities SICAV in May 2007,
to its beneficial health impact, the project also aims to create local
the Company subscribed for €20 million of its capital.
jobs to increase living standards in the community, protect the
In addition, Danone makes a financial contribution each year to the environment and save resources.
danone.communities project. The maximum annual financial contri-
In 2012, the Group agreed to participate in the capital increase
bution is set by Danone’s Board of Directors, upon the recommen-
implemented by Grameen Danone Foods Ltd. to finance the launch
dation of the Social Responsibility Committee, and is reviewed each
of new products and the future expansion of the company, insofar
year to take into account the development of danone.communities.
as it was not possible to find new investors willing to participate in
At its meeting on February 19, 2014, the Company’s Board of Direc- this capital increase given the local political climate.
tors, acting on the recommendation of the Social Responsibility
As of December 31, 2014, the Group’s aggregate investment in
Committee, set the Company’s annual financial contribution for the
Grameen Danone Foods Ltd. was approximately €2.2 million, which
2014 fiscal year at €3.17 million, unchanged from the previous year.
represents 29.4% of its share capital.
In 2014, Danone’s financial contribution to the danone.communities
As of December 31, 2014, the FPS invested a total of approximately
projects totaled €3.6 million (unchanged from the previous year).
€1.6 million in Grameen Danone Foods Ltd., or around 21.6% of its
Furthermore, the employees of the Company and its French subsidia- share capital. The other shareholders of the company include various
ries also participate in the danone.communities project by investing entities of the Grameen group and Grameen Crédit Agricole Fund.
in the SICAV through the danone.communities employee savings
mutual fund (Fonds Commun de Placement d’Entreprise – FCPE) as 1001 Fontaines, Cambodia
part of the Group savings plan. As of December 31, 2014, approxi- 1001 Fontaines gives isolated villages in Cambodia access to a clean
mately 30% of the Group’s employees in France had subscribed to drinking water system so that their inhabitants can avoid drinking
the danone.communities FCPE for a total amount of €12.4 million surface water, which is the cause of a high infant mortality rate and
(a 8.8% increase from 2013). diarrhea-related illnesses. 1001 Fontaines uses a solar-powered
ultraviolet treatment process powered by solar energy that makes
Projects supported by the it possible to kill bacteria present in surface water and render it
drinkable at a minimal cost.
danone.communities FPS
The danone.communities FPS supports this project through a total
Since its creation, the danone.communities FPS has carried out
investment of €0.15 million in the company UV+Solaire.
eight investments.
As of December 31, 2014, this project was operating in approximately
In accordance with the danone.communities Governance Charter,
120 villages in Cambodia, 10 newly added villages in Madagascar
the Company’s Social Responsibility Committee is consulted prior
and three newly added villages in eastern India, giving access to
to each investment by the danone.communities FPS and issues an
drinking water to approximately 250,000 people.
opinion as to its compliance with this charter.
In 2012, the Group decided to invest directly in the capital of three
projects alongside the danone.communities FPS in order to ensure

La Laiterie du Berger, Senegal are ensured by the company’s staff, but are managed directly in the
villages by people who have been specially recruited and trained.
La Laiterie du Berger is a Senegalese social business created in
2005 to help improve the situation of Peuls herders by providing As of December 31, 2014, the danone.communities FPS has invested
them with a source of fixed income. around €2 million in Naandi Community Water Services.
In Senegal, imported milk in powder form accounts for the bulk of El Alberto, Mexico
consumption, even though a significant portion of the population
The El Alberto project, which is the result of a partnership between
lives traditionally through raising animals and is therefore capable
the Porvenir Foundation, HOD Mexico, the Mexican government
of producing milk. La Laiterie du Berger manufactures products
and danone.communities, was launched in 2011. Its objective is to
(mainly yogurts and “crème fraîche”) made from fresh milk collec-
give the indigenous communities in the El Alberto region of Mexico
ted locally from Peuls herders. These products are then sold at
access to clean and inexpensive water.
competitive prices on the Senegalese market. The company also
supplies the farmers with feed for their farm animals and offers As of December 31, 2014, the danone.communities FPS has invested
training to improve farms’ productivity. a total of around €0.25 million in this project.
The danone.communities FPS has invested approximately €1.2 million Nutrigo, China
in La Laiterie du Berger, giving it an approximately 23.4% stake.
The Nutrigo project, implemented through a partnership, notably with
At the request of all La Laiterie du Berger shareholders and in order the non-governmental organization Shanghai NPI Social Innovation
to ensure that the company’s sustainability, the Group agreed to Development Center, is a major player in social innovation and social
acquire a 23.2% equity interest through a €1.4 million investment entrepreneurship in the People’s Republic of China.
as part of a capital increase carried out in November 2012.
This project, which was launched in 2011, seeks to:
At that time, the Group also became a part to the shareholders’
agreement, entered into by all shareholders, which provides that the
• market YingYangBao, a powdered food supplement that provides
children with key nutrients (notably proteins, vitamins, iron and
purpose of La Laiterie du Berger is to achieve economic sustainability
calcium), in the economically disadvantaged rural areas of China
and have a positive social impact on its environment. The agreement
whose people suffer from chronic malnutrition; and
defines principles, specific and quantifiable commitments, notably
with respect to: (i) increasing and securing the annual income of the • provide stronger nutrition education to local populations.
farmers, (ii) training, (iii) developing a local dairy production chain,
As of December 31, 2014, the danone.communities FPS, through
(iv) lowering production costs enabling the marketing of products
SAS DC China Investment, has invested a total of around €0.6 million
offering the best mix of price, quality and nutritional contributions
and has a 41.7% equity interest in the company.
in an environment marked by malnutrition and economic fragility,
and (v) the proportion of sales corresponding to fortified products At the end of 2011, danone.communities was not able to enter into
targeting the most fragile populations. the partnership agreement contemplated at the beginning of the
project with the previously identified potential local partners. In 2012,
Isomir, France the Group therefore agreed to invest in the project and become a
Financed by the danone.communities FPS in 2010, Isomir (“Indus- shareholder in Nutrigo in order to enable the launch of the project,
trialisation Solidaire en Milieu Rural”) supports small farmers in pending a long-term solution. The Group has invested a total of 5
France developing their businesses through direct farm marketing, approximately €0.8 million in the project, which represents around
by providing production facilities (poultry slaughtering, meat, fruit 43.4% of Nutrigo’s share capital.
and vegetable and dairy processing) for local sale (direct sales,
collective catering, etc.). Jita, Bangladesh
The FPS’s eighth investment, made in January 2012, concerns JITA,
Isomir provides small farmers with turnkey production facilities,
a women-operated rural distribution network for basic products
advice and services to start up and launch their business (regulatory
in Bangladesh.
training, technical support, marketing advice, etc.) as well as with
a financial partnership (through direct investment in the financing This is an extension of a program launched by the non-governmental
of the business. organization CARE Bangladesh in 2004 and seeks to increase the
number of “sales ladies” working with JITA (they were 2,580 in 2011
The FPS participated in the establishment of Isomir with an equity
and reaching 7,250 by the end of 2014), by carving out a social busi-
investment of €0.1 million.
ness from CARE Bangladesh. Its main objectives are to create job
Naandi Community Water Services, India opportunities for several thousand women living in fragile economic
conditions, enable the establishment of distribution points in rural
Financed by the danone.communities FPS in 2010, Naandi Commu-
areas and make basic products and services available to numerous
nity Water Services was created through an initiative of the Indian
Bangladeshis. JITA therefore seeks to promote a sustainable, rural
foundation Naandi in 2006 to provide very low cost drinking water
sales model and to develop a rural company network thanks to
to village communities in India.
greater access to the market and services.
The water treatment and distribution systems were installed in
The danone.communities FPS invested a total of €0.6 million in
more than 400 villages by Naandi Community Water Services. The
the project in 2012.
installation, maintenance and technical operation of the installations

Danone Ecosystem Fund (Fonds Danone pour l’Écosystème)

At the April 23, 2009 Shareholders’ Meeting, shareholders approved In 2015, the salaries and travel expenses of Group employees allocated
the proposed creation of the Danone Ecosystem Fund, with 98.36% to the fund’s activities will be fully rebilled by Danone to the fund.
of shareholders casting ballots in favor.
This rebilling is performed in accordance with a rebilling procedure
implemented by the fund after all supporting documents have been
Description of the Danone Ecosystem Fund submitted by the Group to the fund.
The fund is governed by the provisions of the French Law of August 4,
2008 and is run by a board of directors. Furthermore, a steering Projects supported by Danone Ecosystem
committee, composed of representatives of the Danone Group and
non-Group members, establishes the fund’s major strategic gui-
Fund
delines, especially with regard to priorities and resource allocation Since its creation, the fund’s Board of Directors has approved 56
principles, as presented by the fund’s board of directors. projects (excluding feasibility studies), including eight new projects
and eight extensions of existing projects in 2014.
The purpose of the fund is to strengthen and develop activities
of public interest within the Danone ecosystem. Together with The fund’s Board of Directors terminated two projects as a result
non-profit organizations, the fund supports economic initiatives of of their non-viability. Consequently, 54 projects remained in the
certain Danone constituents (farmers, suppliers, local authorities, portfolio as of December 31, 2014.
economic agents located close to plants, small distributors, etc.) in
These projects are selected in accordance with the fund Governance
order to strengthen the Group’s ecosystem, promote job creation
Charter and after a review on the basis of the following five criteria:
and develop micro-entrepreneurship.
• economic viability of activity being funded;
Contributions from the Group to the • creation of social value;
Danone Ecosystem Fund • possibility of developing or replicating the initiative;
Under the terms of the resolution approved by the April 23, 2009
Shareholders’ Meeting, the Company made a free and irrevocable
• innovative character; and
capital endowment of €100 million into the fund in 2009. • differentiation opportunities.
In addition to this capital endowment, every year, for a five-year The projects are initiated by Group subsidiaries around the world,
period beginning in 2009, the Company and its subsidiaries may both in developed and emerging market countries.
also make supplementary annual contributions totaling up to 1%
Of the 54 projects in the portfolio, 14 were located in Western Europe,
of the Danone underlying net income per year.
12 in America, 10 in Central and Eastern Europe, 10 in Asia and 8 in
Acting upon the recommendation of Danone’s Social Responsibility Africa and the Middle East.
Committee, Danone’s Board of Directors therefore approved:
Projects are implemented primarily through non-profit organizations
• for the 2009 fiscal year, an overall annual supplementary contri- selected by the fund (e.g. associations, international organizations,
bution of €1.4 million (representing approximately 0.1% of the etc.). They are subject to contracts between the fund and the selec-
Group’s 2009 underlying net income); ted partner, which define detailed rules for their implementation
(description, timetable, payment schedule, partner’s responsibility,
• for the 2010 fiscal year, an overall annual supplementary contri- performance indicators, project governance, etc.). Moreover, since
bution of €1.4 million (approximately 0.07% of the Group’s 2010
2013, certain projects have been carried out directly by the fund.
underlying net income);
The fund supports initiatives that fall under five main themes:
• for the 2011 fiscal year, an overall annual supplementary contri-
bution of €0.9 million (approximately 0.05% of the Group’s 2011 • supplies: supporting the milk and fruit supply chain in local
underlying net income); regions where Danone operates by developing small producers
in particular (reinforcement or acquisition of new expertise,
• for the 2012 and 2013 fiscal years, no supplementary contribu- technical solutions, access to credit, etc.) (22 portfolio projects
tion was made.
representing €25 million committed by the fund as of Decem-
ber 31, 2014);
Management of the fund’s administrative,
accounting, financial and legal activities • micro-distribution: provide job insertion for people who are
struggling in the job market by creating new distribution chan-
The fund does not have any employees and the management of the nels for mass market consumer products, and/or local products
fund’s activities (administrative, accounting, financing and legal with high nutritional value (nine portfolio projects representing
services) is ensured by dedicated employees of Danone in accordance €8 million committed by the fund as of December 31, 2014);
with the terms of a services agreement between Danone and the fund.
• recycling: collecting PET and helping to organize the work of
Until 2011, Danone provided these services free of charge in the associations providing support to communities of distressed
context of the overall annual contribution (which was paid partly in individuals (chiffonniers) and improving their quality of life and
cash and partly in kind to the extent that salaries and travel expenses that of their family (four portfolio projects representing €5 million
of Group employees were allocated to the fund). committed by the fund as of December 31, 2014);
In 2014, the salaries and travel expenses of Group employees allo- • services to individuals: in connection with nutrition, develop the
cated to the fund were rebilled entirely by Danone to the fund, which professional skills of participants in the personal services sector
represented a total invoiced amount of €1.8 million. (13 portfolio projects representing €7 million committed by the
fund as of December 31, 2014); and

• local development: contribute to social development at the local As of December 31, 2014, a total of €60 million had been committed
and regional levels where the Group’s plants are located through by the fund to projects implemented by non-profit organizations
local economic initiatives (six portfolio projects representing (which in effect corresponds to amounts actually paid out by the fund
€6 million committed by the fund as of December 31, 2014). to the partners as well as the amounts that the fund has agreed to
pay out under contracts entered into with the partners) and public-
These projects are also subject to audits, impact studies and
interest initiatives carried out directly by the fund, audits, impact
monitoring by a coordination team (these overhead costs totaled
studies and monitoring by a coordination team.
€2 million in 2014).
Livelihoods
Creation of Livelihoods fund Livelihoods fund’s investments
Livelihoods fund is an investment fund dedicated to ecosystem and As of December 31, 2014, Livelihoods fund manages seven projects,
carbon assets restoration and created on Danone’s initiative. It is since the Novacel project was discontinued following a decision by
a Luxembourg-registered mutual fund (Société d’Investissement à the Livelihoods fund’s Board of Directors on May 28, 2013. The first
Capital Variable-specialized investment fund) founded on Decem- four projects initiated by Danone and subsequently transferred to the
ber 15, 2011. fund in December 2011. Three additional projects were launched by
the fund in 2012 and 2013: the Hifadhi project in Kenya, the Fundaeco
Livelihoods fund seeks to invest in three types of projects that ful-
project in Guatemala and the Tiipaalga project in Burkina Faso.
fill both environmental and social criteria in Africa, Asia and Latin
America: (i) the restoration and preservation of natural ecosystems, These projects are described hereafter:
(ii) agroforestry and soils restoration through sustainable agricul-
tural practices, and (iii) rural energy access to limit deforestation.
• mangrove plantations in Senegal. Thanks to the work of Océanium,
a local NGO, 350 villages in the Casamance and Sine Saloum
Livelihoods fund also seeks to have a significant impact on local
regions restored 7,920 hectares of mangroves and thereby
communities (food security, development of new revenues, etc.)
contributed to the return of food supplies in their ecosystem
and on the environment.
(fish, shell fish) and developed activities making it possible to
The initial term of the fund is 24 years, the life span of a project improve living conditions for these villagers;
being around 20 years.
• mangrove plantations in India. Working with the Indian NGO
The creation of Livelihoods fund is part of the Group’s goal of reducing Nature Environment & Wildlife Society (NEWS), villagers in the
its carbon and environmental footprint through the development Ganges delta will have replanted 5,500 hectares of mangroves by
of offset actions that enable carbon credits to be earned through the end of the first quarter of 2014. In this region, the replanting
projects with a high environmental and social impact. of mangroves protects levies against hurricanes and flooding
and provides food resources in the form of fish;
Investments by the Group and • mangrove plantations in Indonesia. Led by Yagasu Aceh, a local
co-investors in Livelihoods fund NGO, the coastal villagers are working to restore 5,000 hectares 5
on the island of Sumatra, with a very active approach to help
As the fund’s sponsor, Danone put together an initial investor group
local communities develop their mangrove-based activities
in 2011 comprising the Crédit Agricole (Crédit Agricole CIB and
(aquaculture, batik dyes);
Delfinances), CDC Climat and Schneider Electric Industries groups.
They were joined by La Poste, Hermès International and Voyageurs • agroforestry in India. With the support of Naandi Foundation, the
du Monde in 2012, by SAP and Firmenich in 2013 and by Michelin in Adivasi tribal communities of the Araku valley planted 3 million
2014. The fund now has a total of ten investors. fruit trees, coffee plants and timber trees using agroforestry
models;
By inviting co-investors to participate in the fund, which increases
the amounts invested in the fund, Danone is able to limit the pro- • rural energy and community reforestation in Kenya. With support
ject-related risks (through diversification over a greater number from ClimatePal and together with Ecoact, the “Hifadhi” project
of projects), achieve economies of scale, and benefit from comple- seeks to manufacture and distribute 60,000 efficient artisanal
mentary expertise and know-how. ovens that will reduce the consumption of wood, the sole fuel
source in African rural areas. Some 300,000 people in the Embu
As of December 31, 2014, the investors have pledged to invest a total
region should benefit from this initiative, which sharply reduces
of €37.93 million, of which €18 million has already been disbursed
the workload borne by women, pressure on forests and negative
to the fund. Of these amounts, the Group has committed to pay in
health impacts on the population;
€13.8 million and has disbursed €6.6 million as of December 31, 2014.
The carbon credits generated by the projects developed by Livelihoods
• agroforestry in Guatemala. With the support of the local NGO
Fundaeco and the Guatemalan government, this project is intended
fund are certified in accordance with best practices and allocated to
to preserve the biodiversity of the Cerro San Gil mountain by
investors pro rata to their investment. Investors may use these credits
enabling the small farmers living in the mountain’s foothills to
to offset their carbon emissions or sell the credits on the market.
live decently thanks to agroforestry. A total of 4,000 hectares of
trees and plants of different varieties will be planted; and

• rural energy and community reforestation in Burkina Faso. With Delivery of carbon credits
the support of the Tiipaalga NGO, the “Livelihoods-Tiipaalga”
project aims to manufacture and provide improved stoves to In 2014, the Livelihoods fund carried out its first delivery of carbon
30,000 households. These efficient stoves are designed to reduce credits to investors thanks to two projects – Oceanium in Senegal
the consumption of wood, the sole source of fuel in the African and Araku in India – after they had been verified by independent
countryside. Some 150,000 people in Bam and Loroum provinces auditors. In 2014, these two projects delivered a total of 141,941
should benefit from this initiative, which significantly eases credits to the fund, which were in turn redistributed to investors in
the burden on women, helps to preserve forest resources and the same year. As part of this initial distribution, Danone received
improves the health of the local populations. 51,641 carbon credits.


Corporate
Governance

6
6.1 Governance bodies
Board of Directors
216
217
6.4 Internal control
and risk management 298
Audit Committee 232 General organization of internal control 298
Nomination and Compensation Committee 234 Danone’s overall internal control

and risk management procedures 300
Social Responsibility Committee 237
Internal control procedure for the preparation
Strategy Committee 239 and processing of Danone’s financial
and accounting information 302
Executive Committee 239
Statutory auditors’ report 305
Application of the AFEP-MEDEF
Corporate Governance Code for listed companies 240
6.5 Statutory auditors’ special
6.2 Positions and responsibilities report on related party
of the Directors and nominees agreements and commitments 306
to the Board of Directors 242
Appointment243
Renewal of terms of office 244
Current Directors 249
6.3 Compensation and benefits

for corporate officersand 6
governance bodies 262
Principles of the compensation policy
for Group executives 263
Description of the Group compensation

collective programs 269
Compensation and benefits paid to corporate officers

and governance bodies 280
Individual compensation of corporate officers

in accordance with the AFEP-MEDEF Code 297
Transactions made in 2014 involving Company

shares by members of the Board of Directors
and Executive Committee 297

Corporate Governance
Governance bodies
6.1 Governance bodies

TABLE OF CONTENTS
Board of Directors 217 Social Responsibility Committee 237
Composition of the Board of Directors 217 Composition of the Social Responsibility Committee 237
Rules applicable to the organization and Social Responsibility Committee’s rules of procedure 237
the governance of the Board of Directors 221 Work of the Social Responsibility Committee 238
Operation of the Board of Directors
during the fiscal year 224 Strategy Committee 239
Work performed by the Board of Directors 228 Composition of the Strategy Committee 239
Self-assessment of the Board of Directors 230 Strategy Committee’s rules of procedure 239
Lead Independent Director 230 Work of the Strategy Committee 239
Audit Committee 232 Executive Committee 239

Composition of the Audit Committee 232 Role of the Executive Committee 239
Audit Committee’s rules of procedure 232 Composition of the Executive Committee 239
Work of the Audit Committee 233
Application of the AFEP-MEDEF
Nomination and Compensation Committee 234 Corporate Governance Code for listed companies 240
Composition of the Nomination

and Compensation Committee 234
Nomination and Compensation Committee’s
rules of procedure 234
Work of the Nomination and Compensation Committee 235

Governance bodies
Board of Directors
Composition of the Board of Directors Members of the Board of Directors as of
February 28, 2015
The members of the Board of Directors are appointed by the
Shareholders’ Meeting, except the two Directors representing the As of February 28, 2015, the following persons are the 15 members
employees appointed pursuant to Act no. 2013-504 of June 14, 2013 of the Board of Directors:
concerning job security, who are designated by the Company Works
Council and by the Group European Works Council, in accordance
with the Company’s by-laws.
Starting date of Expiration date of

Name Age Primary position (a) Director’s term Director’s term (b)
Franck RIBOUD 59 Chairman of Danone’s Board of Directors 1992 2016
Chief Executive Officer of Danone and

Emmanuel FABER 51 Vice-Chairman of the Board of Directors 2002 2016
Bruno BONNELL (c) 56 Chairman of I-Volution 2002 2017
Richard GOBLET D’ALVIELLA (c) (d) 66 Honorary Chairman of Sofina SA 2003 2015
Chairman and Chief Executive Officer

Jacques-Antoine GRANJON (c) 52 of vente-privee.com 2012 2018 (e)
Marie-Anne JOURDAIN 56 Director representing employees 2014 2017
Chairman of the Board of Directors of

Jean LAURENT (c) 70 Foncière des Régions 2005 2018 (e)
CEO of the property insurance businesses

Gaëlle OLIVIER (c) 43 of AXA Asia 2014 2017
Chairman and Chief Executive Officer of

Benoît POTIER (c) 57 L’Air Liquide SA 2003 2018 (e)
Head of Financial Institutions EMEA
Isabelle SEILLIER 55 of J.P Morgan 2011 2017
Member of the Executive Committee,
Mouna SEPEHRI (c) 51 Executive Vice-President of Renault SAS 2012 2018 (e)
Jean-Michel SEVERINO (c) 57 Head of I&P SARL 2011 2017
Professor of Pediatrics at the Children’s

Virginia A. STALLINGS (c) 64 Hospital of Philadelphia 2012 2018 (e)
Bettina THEISSIG 52 Director representing employees 2014 2017
Lionel ZINSOU-DERLIN (c) 60 Chairman of PAI partners SAS 2014 2017
6
(a) E ach Director’s term of office and duties are detailed hereafter (see section 6.2 Positions and responsibilities of the Directors and nominees to the Board
of Directors).
(b) Date of the Shareholders’ Meeting.
(c) Director considered to be independent by the Board of Directors meeting held on February 19, 2015, upon recommendation of the Nomination and
Compensation Committee (see section hereafter related to Review of Directors’ independence).
(d) The Board of Directors acknowledged Mr. Richard GOBLET D’ALVIELLA’s desire not to seek renewal of his term of office.
(e) Provided his/her term of office is renewed by the Shareholders’ Meeting of April 29, 2015.
Pursuant to Act no. 2013-504 of June 14, 2013, Mrs. Marie-Anne The Board of Directors comprises a Lead Independent Director
JOURDAIN and Mrs. Bettina THEISSIG were appointed, respectively, Mr. Jean LAURENT who was appointed by the Board of Directors
by the Works Council on September 3, 2014 and by the European of February 18, 2013 upon recommendation by the Nomination and
Works Council on September 6, 2014, as Directors representing Compensation Committee (see description hereafter in the section
employees. Since their appointment, a single member of the Works on the Lead Independent Director).
Council has participated in Board of Directors’ meetings in an advisory
capacity, compared with four members previously.

Governance bodies
Lastly, the Board of Directors includes an honorary Vice-Chairman of Moreover, in accordance with the rules of procedure, in addition to
the Board of Directors, Mr. Michel DAVID WEILL, who was appointed his powers under the law, the Chairman of the Board of Directors:
to this function following the Shareholders’ Meeting of April 28, 2011
and serves in an advisory capacity.
• presides over and chairs the Strategy Committee;
• monitors compliance with Danone’s values and culture;
Separation of the offices of Chairman
of the Board of Directors and Chief Executive Officer • may, upon request by the Chief Executive Officer, represent the
Company in its high-level relations at a national and internatio-
Separation of the offices of Chairman of the Board nal level, and in particular with public authorities and with the
of Directors and Chief Executive Officer Company’s partners and strategic stakeholders; and
The Board of Directors of September 2, 2014, upon recommendation
by the Nomination and Compensation Committee, decided to separate • may, without prejudice to the prerogatives of the Board of Directors
the offices of Chairman of the Board of Directors and Chief Executive and its Committees, be regularly consulted by the Chief Executive
Officer, with effect on October 1, 2014, and to appoint Mr. Emmanuel Officer concerning all events of significance with regard to the
FABER as Chief Executive Officer, with Mr. Franck RIBOUD remaining Company’s strategy within the framework of the priorities defined
Chairman of the Board of Directors. This separation of offices creates by the Board of Directors, major external growth projects, large-
the best conditions to prepare for Mr. Franck RIBOUD’s succession scale financial operations, societal initiatives or the appointment
at the head of the Company, while ensuring that Danone’s strategy of directors for the key activities and functions in the company.
continues to evolve in accordance with the Company’s culture and Upon invitation by the Chief Executive Officer, the Chairman may
values, by maintaining Mr. Franck RIBOUD as Chairman. participate in internal meetings with the Company’s managers
and teams in order to share his input on strategic issues.
Powers of the Chairman of the Board of Directors
The duties of the Chairman of the Board of Directors have been In all his/her specific duties, the Chairman acts in close coordination
strengthened in order to enhance consultation between the Chairman with the Chief Executive Officer, who ensures the executive and
and the Chief Executive Officer on all the major issues impacting operational management of the Group.
the corporate life, and to give the Chairman the ability to represent Powers of the Chief Executive Officer
Danone in its high-level relations. These duties aim at preparing, in The Chief Executive Officer has full power to act in all circumstances
the best possible way, his succession at the head of Danone and at in the name of the Company, within the scope of its corporate
ensuring a smooth and progressive transition. The duties performed purpose and subject to the powers that the law expressly attributes
by the Chairman of the Board of Directors are further described to shareholders’ meetings and to the Board of Directors. The rules
in section 6.3 Compensation and benefits for corporate officers and of procedure provide for limits to his/her powers for certain deci-
governance bodies related to 2014 Annual fixed compensation. sions which, due to their purpose or the sums involved, are subject
In accordance with the law, the Chairman of the Board organizes and to prior approval by the Board.
directs the work of the Board, and reports on it to the Shareholders’ Thus, the Board of Directors is required to approve (i) strategic
Meeting. He/she oversees the smooth operation of the Company’s investment projects and (ii) all transactions, such as acquisitions
governance bodies and ensures in particular that the Directors or disposals, which may significantly impact the Group’s results,
are able to fulfill their duties. He/she may in particular request its balance sheet structure or its risk profile.
any document or information that may serve to brief the Board in
preparing its meetings. In particular, the Chief Executive Officer must obtain the Board of
Directors’ prior authorization for the following transactions:
Type of transactions Authorization thresholds

Acquisitions or disposals of securities and/or Threshold of €250 million applicable:
assets, partnerships or joint-ventures (in cash or
by asset contributions, carried out in one or several • for acquisitions, partnerships or joint ventures: per investment for the Group
operations) share;
• for disposals: proceeds received for the Group share.
Any off-balance sheet commitment made by the Group Threshold of €100 million for the Group share
Other investments Any significant excess over the amount set within the framework of the
annual budget
Internal reorganizations Any reorganization representing an overall cost for the Group share
exceeding €50 million

Governance bodies
Change in the composition of the Board of Directors proposed to the Shareholders’ Meeting
of April 29, 2015
It is proposed to the Shareholders’ Meeting of April 29, 2015 to renew the terms of office of Messrs. Jacques-Antoine GRANJON, Jean
LAURENT and Benoît POTIER, Mrs. Mouna SEPEHRI and Mrs. Virginia A. STALLINGS, as well as the appointment of Mrs. Serpil TIMU-
RAY as Director (see section 8.3 Comments on the resolutions of the Shareholders’ Meeting). The Board of Directors of February 19, 2015
acknowledged the wish of Mr. Richard GOBLET D’ALVIELLA, a Director for the past 12 years, not to seek renewal of his term of office.
In accordance with the French Financial Markets Authority recommendation no. 2012-12, the table hereafter summarizes the changes in
the composition of the Board of Directors that occurred in 2014 or that are planned for 2015:
Date Departures Appointments Renewals

Shareholders’ Meeting Jacques VINCENT Gaëlle OLIVIER Bruno BONNELL
of April 29, 2014
Lionel ZINSOU-DERLIN Bernard HOURS
Isabelle SEILLIER
Jean-Michel SEVERINO
Board of Directors of October Bernard HOURS Marie-Anne JOURDAIN (b) –

17, 2014 (a)
Bettina THEISSIG (b)
Shareholders’ Meeting Richard GOBLET Serpil TIMURAY Jacques-Antoine GRANJON

of April 29, 2015 D’ALVIELLA
Jean LAURENT
Benoît POTIER
Mouna SEPEHRI
Virginia A. STALLINGS
(a) Board having confirmed these appointments/departures.

(b) Director representing employees.
Provided that the aforementioned term of office renewals and the appointments proposed are approved by the Shareholders’ Meeting of
April 29, 2015, the composition of the Board will present the following characteristics:
Composition Composition Composition Composition

subsequent to the subsequent to the subsequent to the subsequent to the
2011 Shareholders’ 2013 Shareholders’ 2014 Shareholders’ 2015 Shareholders’
Meeting Meeting Meeting Meeting
Rate of independence 57% 57% 71% 77%
Percentage of women 14% 21% 29% 38%
Average age of Directors 58.6 years 57.3 years 56.1 years 55.4 years
Average duration of Directors’ terms of office 8.3 years 7.6 years 7.4 years 6.9 years
Percentage of Directors with non-French

6
nationality 29% 29% 29% 31%
In accordance with the recommendations of the AFEP-MEDEF • the rate of independence would still be higher than that recom-
Code, the Directors representing employees are not included in the mended by the AFEP-MEDEF Code (which is 50% for widely-held
calculation of the rate of independence for the Board of Directors. In companies without controlling shareholders, such as Danone),
addition, in accordance with applicable laws, these same Directors and all the members of the Audit Committee and Nomination
are not taken into consideration when calculating the percentage of and Compensation Committee would be independent, which is
women on the Board. As a result, in order to ensure the consistency also higher than that recommended by the AFEP-MEDEF Code
of the data presented, the Directors representing employees are (under which these committees should comprise at least two-
also not included in the calculation of the average age, the average thirds and a majority of independent Directors, respectively);
duration of terms of office, as well as the percentage of Directors
with non-French nationality.
• the percentage of women would be in line with the objective set
up by regulations (which require the percentage of women to be
Accordingly, following the Shareholders’ Meeting of April 29, 2015, at least 40% by the Shareholders’ Meeting to be held in 2017); and
subject to a favorable vote by the Meeting:

Governance bodies
• the average age of Directors and the average duration of their It should be noted that, for several years, the Board has committed
terms of office would be falling. Faced with this decrease in the to its shareholders to continue to make proposals to the Sharehol-
average seniority of its members, in order to preserve its expertise ders’ Meeting to improve its corporate governance, particularly in
and experience, the Board of Directors believes it is important to terms of its independence, the percentage of women on the Board
retain among its members several non-executive Directors who and the diversity of its expertise and composition.
are fully aware of the Group’s history, in particular, Mr. Bruno
BONNELL, who has been a Director since 2002, and Mr. Benoît
POTIER, who has been a Director since 2003 and whose term
of office is proposed for renewal to the Shareholders’ Meeting.
Composition of the Board of Directors at the end of the 2015 Shareholders’ Meeting (a)
Franck RIBOUD
Chairman of the Board of Directors
Jean LAURENT Emmanuel FABER

Lead Independent Director Chief Executive Officer and
Vice-Chairman of the Board of Directors
Serpil Virginia
TIMURAY A. STALLINGS
Jean-Michel Lionel
SEVERINO ZINSOU-DERLIN
Gaëlle Bettina
OLIVIER THEISSIG
Benoît Bruno
POTIER BONNELL
Isabelle Marie-Anne
SEILLIER JOURDAIN
Mouna Jacques-Antoine
SEPEHRI GRANJON
(a) Subject to the approval by the Shareholders’ Meeting of the term of office renewals and proposed appointment.
Independent Social Responsibility

Corporate officer Director Committee Audit Committee
Director representing Other non-independent Nomination and

employees Director Compensation Committee Strategy Committee

Governance bodies
Rules applicable to the organization and • in December 2013, in order to comply with the recommendations
of the AFEP-MEDEF Code, revised in June 2013, the Board’s rules
the governance of the Board of Directors of procedure were amended with regard to: the authorization
to be obtained in case of acceptance of a new term of office by
Directors’ terms of office a corporate officer, meetings between Directors and corporate
Duration and renewal of terms of office officers without the presence of the officers, the annual meeting
Pursuant to the by-laws and in accordance with the AFEP-MEDEF of external Directors called by the Lead Independent Director,
Code (in which Directors’ terms of office may not exceed four years), the training of the Directors representing employees and the
a Director is appointed for a three-year term of office that may be prohibition of transactions in securities of the companies for
renewed. The term of office of a Director who is an individual expires which the Directors hold privileged information due to their
automatically at the end of the Shareholders’ Meeting convened to functions at Danone; and
vote on the past fiscal year’s financial statements or held in the year
during which such Director has turned or will turn 70. Furthermore, • on September 2, 2014, within the framework of the separation
upon a decision of the Shareholders’ Meeting, this age limit does of the offices of Chairman of the Board of Directors and Chief
not apply to one or more Directors who may remain in office or who Executive Officer, the Board of Directors amended its rules of
may be reappointed one or more times, so long as the number of procedure in order to define their respective roles and strengthen
Directors concerned by this decision does not exceed one-fourth the Chairman’s duties (see the section on Powers of the Chairman
of the number of Directors in office. of the Board of Directors above).
In order to support the smooth renewal of the Board, the Directors’ Current Rules of Procedure
terms of office are staggered. The regular renewal of such terms The main provisions of the Board of Directors’ rules of procedure
of office by shareholders is thus facilitated (i) due to the fact that are summarized hereafter.
the by-laws limit the terms of office to three years and (ii) by sprea- Responsibilities of the Board of Directors
ding the expiration dates of the various terms of office and thereby The Board of Directors sets the Company’s business policies and
enabling the Shareholders’ Meeting to vote on the terms of office ensures that they are implemented. It votes on all decisions concer-
of several Directors each year. ning the Company’s major strategic, economic, social, financial and
Based on the current composition of the Board, the terms of office technological policies. Moreover, it grants prior approval for tran-
of six Directors will expire at the end of the Shareholders’ Meeting sactions defined by the rules of procedure which limit the powers
convened to vote on the financial statements for the fiscal year 2014, of the Chief Executive Officer (see section above Powers of the Chief
two will expire at the end of the Shareholders’ Meeting convened Executive Officer). It is responsible towards the shareholders and
to vote on the financial statements for the fiscal year 2015, and the establishes operating rules for itself and its various Committees.
seven others, including the terms of the two Directors representing Chairman of the Board of Directors
employees, will expire at the end of the Shareholders’ Meeting In addition to the powers vested in him/her by law, the Chairman
convened to vote on the financial statements for the fiscal year 2016. of the Board of Directors presides over and chairs the Strategy
Holding of DANONE shares by the Directors Committee and ensures compliance with Danone’s values and
Although French law does not require minimum shareholding by the culture. He/she may, upon request by the Chief Executive Officer,
directors of French limited companies (sociétés anonymes), Danone’s represent the Company in its high-level relations at a national and
by-laws nevertheless, in accordance with the AFEP-MEDEF Code, international level, and in particular with public authorities and with
require each Director (with the exception of Directors representing the Company’s partners and strategic stakeholders. He/she may,
employees) to hold a minimum of 4,000 shares. By way of example without prejudice to the prerogatives of the Board of Directors and
and based on the closing price of the Company’s share on December its Committees, be regularly consulted by the Chief Executive Officer
31, 2014 (i.e. €54.45 per share), 4,000 DANONE shares represent concerning all events of significance with regard to the Company’s
an amount of €217,800. strategy within the framework of the priorities defined by the Board
of Directors, major external growth projects, large-scale financial
Board of Directors’ rules of procedure operations, societal initiatives or the appointment of directors for
6
Adoption by the Board of Directors on April 25, 2002 the key activities and functions in the Company. Upon invitation by
The Board of Directors’ rules of procedure, which set out the the Chief Executive Officer, the Chairman may participate in internal
Directors’ rights and obligations and the method of operation of meetings with the Company’s managers and teams in order to share
the Board of Directors, were adopted by the Board of Directors his/her input on strategic issues.
on April 25, 2002. In accordance with the recommendations of the In all his/her specific duties, the Chairman acts in close coordination
AFEP-MEDEF Code, the Board of Directors’ rules of procedure with the Chief Executive Officer, who alone ensures the executive
are described in detail in this Registration Document and are also and operational management of the Group.
published on Danone’s website.
Vice-Chairman of the Board of Directors
Main changes The capacity as Vice-Chairman entitles to chair the Shareholders’
The Board of Directors’ rules of procedure are reviewed on a regular Meetings, on the one hand, and the Board of Directors’ meetings,
basis, and have been notably amended following the regulatory on the other hand.
developments and self-assessments (the most recent being achieved
in 2010, 2012 and 2014 (see section Self-assessment of the Board of Operation of the Board of Directors
Directors hereafter) and within the framework of the Board’s annual The Board of Directors is a collegiate body in which all Directors
review of its operations. have the same powers and duties, and in which decisions are made
collectively. It meets at least five times annually.
The rules of procedure have therefore been amended as follows:
• amendments in 2010 on the addition of new Directors;
• in 2011, the procedure for declaring and managing conflicts of
interest was strengthened;

Governance bodies
At each Board meeting, the Chairman reports on the main transactions Meeting approves the total maximum amount of attendance fees to
concluded by the Group since the previous meeting and on significant be divided among the Directors.
projects in progress that may be concluded before the following
In accordance with the AFEP-MEDEF Code, the allocation of atten-
meeting. Each year, the Board reviews the key points of the Group
dance fees takes the effective participation of Directors at Board and
Management Report, as well as the resolutions to be submitted to
Committee meetings into account and includes a majority variable
the Shareholders’ Meeting. Furthermore, at least once every six
element (see section Directors’ attendance fees hereafter).
months, General Management informs the Board of Directors of
the Company’s financial position, cash position and commitments. Moreover, a reimbursement oversight policy for expenses incurred
by Board members when carrying out their duties was adopted by
Between Board meetings, the Directors receive all necessar y
the Board at its meeting of February 18, 2013.
information concerning events or transactions of significance to the
Group. More generally, the Directors may at any time request from Directors’ Code of ethics
the Chairman all information and documents they deem necessary A Code of Ethics for Directors is included in the Board of Directors’
to perform their duties. rules of procedure.
Board of Directors’ meetings Defense of the corporate interest
In accordance with statutory and regulatory provisions and the Each Director is appointed by all the shareholders and, in carrying
Board of Directors’ rules of procedure, Directors who attend Board out his/her duties, should act in the best interests of Danone, inde-
meetings by videoconference or other means of telecommunication pendently from all other interests.
are deemed to be present for the purposes of calculating the quorum
Awareness of Directors’ rights and obligations
and majority. However, this method of attendance is not permissible
At the time he/she takes office, each Director must be aware of
when the Board decides on whether to approve Danone’s statutory
the general and specific obligations incumbent on his/her position.
and consolidated financial statements or when it prepares the
management report, including the Group’s Management Report. Independence of Board members
Each year, after reviewing the opinion of the Nomination and Com-
The corporate officers attend Board of Directors’ meetings. In
pensation Committee, the Board of Directors individually considers
principle, the Company’s external Directors meet only when the
the situation of each Director in light of the AFEP-MEDEF Code
internal Directors are present to ensure that all Board members
independence rules. It considers a director to be independent
have access to the same amount of information and to reinforce the
when he/she “has no relationship of any type with the company,
collegiate nature of the Board.
its group or its management that could compromise his/her ability
In addition, the independent Directors meet at least once a year to freely exercise his/her judgment”, and sets forth the following
on the initiative of the Lead Independent Director, who may invite independence criteria:
the Company’s other external Directors to attend the meeting (see
section Work of the Lead Independent Director hereafter).
• he/she is not, and during the previous five years has not been, an
employee or corporate officer of the company, or an employee
When the Board sets the compensation of corporate officers, they are or director of its parent company or of a company within its
present at the time of the Board’s deliberations but, in accordance consolidation scope;
with the law, they do not take part in either the discussions or the vote.
• he/she is not a corporate officer of a company in which the
Committees of the Board of Directors company directly or indirectly holds a directorship or in which
The Board of Directors may create one or more specialized Com- an employee appointed for such purpose or a corporate officer
mittees and determine their composition, powers and rules of of the company (currently or who has held such position within
operation. The Committees perform their duties under the Board the previous five years) holds a directorship;
of Directors’ responsibility.
• he/she is not a customer, supplier, investment bank or com-
The Committees are comprised solely of Directors: their members mercial bank:
are appointed by the Board of Directors upon recommendation of
• that is significant to the company or its group;
the Nomination and Compensation Committee. They are appointed
in their individual capacity and may not, in turn, appoint a proxy to • or for which the company or its group represents a significant
represent them. The Committee Chairmen are appointed by the Board part of its business;
of Directors upon recommendation of the Nomination and Compen-
sation Committee. However, these Committees may not interfere
• he/she does not have close family ties with a corporate officer;
in the Company’s management or reduce or limit the powers of the • he/she has not been one of the company’s statutory auditors
Chairman of the Board, the Chief Executive Officer or the Board of during the previous five years; and
Directors. On matters within its scope of powers, each Committee
submits proposals, recommendations and opinions, and reports to
• he/she has not been a director of the company for more than
12 years (see, on the application of this criterion, section Appli-
the Board of Directors on its activities. The final decision is taken
cation of the AFEP-MEDEF Corporate Governance Code for listed
by the Board of Directors, in accordance with the provisions of the
companies hereafter).
French commercial code.
Each of these Committees may carry out studies or obtain the advice
of independent experts.
Compensation of Directors
Directors receive attendance fees; however, the members of the
Executive Committee, the Company’s corporate officers, the honorary
Directors, the Chairman of the Board and the Directors representing
employees do not receive any attendance fees. The Shareholders’

Governance bodies
Duty to report conflicts of interest Any Director who is unsure about a transaction involving the
Each Director must at all times ensure that his/her personal situation Company’s securities (or other financial instruments) that he/she
does not create any conflict of interests with the Group. Any Director intends to enter into or the precise nature of the information he/she
who has a conflict of interest must (i) report it to the Board so that is required to disclose, must inform the Chairman of the Board of
the latter may make a decision thereon, and (ii) refrain from taking Directors or the Lead Independent Director accordingly.
part in any deliberations and vote on the relevant matter.
Finally, pursuant to the recommendations of the AFEP-MEDEF Code,
Each Director must provide a sworn statement describing whether or the Board of Directors’ rules of procedure also prohibit Directors
not he/she has any conflicts of interest, including potential conflicts from engaging in transactions in securities (and all related financial
of interest: (i) at the time he/she takes office, (ii) annually, in res- instruments) of the companies for which he/she, as a result of his/
ponse to the Company’s request when preparing the Registration her duties in Danone, has insider information.
Document, (iii) at any time, if requested by the Chairman of the Board
Board of Directors’ assessment
of Directors, and (iv) within 10 business days of the occurrence of
Pursuant to the recommendations of the AFEP-MEDEF Code, the
any event that causes the Director’s previously filed statement to
Board’s composition, organization and operation are assessed
become inaccurate, in whole or in part.
every two years. This assessment may be a self-assessment, an
Directors’ confidentiality obligation assessment by the Nomination and Compensation Committee or
Directors are bound by a general confidentiality obligation regarding an assessment by any third party organization.
the decisions of the Board and of the Committees, as well as with
In addition, in accordance with the recommendations of the AFEP-
respect to confidential information of which they become aware in
MEDEF Code, once a year the Board devotes one item on the agenda
the performance of their duties as a Director.
of one of its meetings to discussion of its operation.
The Directors’ general confidentiality obligation was extended to
Training of Directors
all information and documents of which they may become aware in
Each Director is entitled to the training necessary for him/her to carry
the course of their duties as a Director.
out his/her term of office, either upon appointment or throughout
Attendance requirement his/her term. These trainings, whether internal or external, enable
With respect to their attendance obligations, Directors must limit the Director to understand in particular the Group’s business, risks
the number of offices and Board committee chairs they hold in other and organization, or to improve certain specific skills. It is organized
companies to ensure sufficient availability. Should a corporate officer and paid for by the Company.
wish to accept a new appointment within a French or foreign listed
The Directors representing employees receive training suitable
company, he/she must first inform the Chairman of the Board of
to carrying out their terms of office as soon as they take up their
Directors and the Chairman of the Nomination and Compensation
positions.
Committee and, in accordance with the provisions of the AFEP-
MEDEF Code, obtain the prior approval of the Board of Directors. Furthermore, when taking up their positions, all new Directors receive
all the documentation and information required to ensure thorough
Transactions involving the Company’s securities by members
knowledge and understanding of the Group and its accounting, finan-
of the Board of Directors
cial and operating characteristics (its history, organization, legal
The relevant securities include the Company’s shares and all financial
structure, financial results, press summaries, analysts’ reports,
instruments linked to the shares.
press releases issued by the Company, etc.) and the performance
In general, members of the Board of Directors are bound by a duty of their duties as members of the Board (rules of procedure of the
to exercise due care and diligence, as well as an obligation to take Board of Directors and its Committees and the AFEP-MEDEF Code,
particular care with respect to any personal transactions involving etc.). The Secretary of the Board also provides them with the rules
the Company’s securities. pertaining to holding, communicating and using insider information,
and to transactions on DANONE shares.
In particular, Directors may not engage in speculative or short-term
transactions involving the Company’s securities. Lastly, following the self-assessment carried out by the Board of
Directors in 2012 (see section hereafter Self-assessment of the Board 6
Furthermore, they may not engage in transactions involving the
of Directors), (i) every new Director is offered an improved integration
Company’s securities in the following cases:
process comprising individual meetings with several Directors and
• if they have information that, when published, is likely to affect individual interviews with members of the General Management
the price of the securities; and and the Executive Committee, and (ii) all Directors are given the
opportunity to attend presentations by senior managers in charge
• during periods explicitly indicated by the Company, in particular, of the Group’s main functions as well as regular on-site visits.
during the month preceding announcements of the Company’s
annual and semi-annual results, or during the 15-day period
prior to publication of the Company’s quarterly sales figures.
In addition, members of the Board of Directors must not use any
instruments to hedge DANONE shares or any financial instruments
linked to DANONE shares (in particular, stock-options or rights to
allotments of DANONE shares subject to performance conditions).
This rule also applies to all transactions engaged in by persons who
are related to the Directors (within the meaning of the applicable
regulations).

Governance bodies
Information of Directors Moreover, in accordance with the recommendations of the AFEP-

Concerning ongoing information of Directors, the rules of procedure MEDEF Code, when examining the business relationship between a
provide that: Director and the Group to determine whether there are significant
business relationship that may affect the independence of a Director,
• prior to each Board meeting, each Director should receive a file the criteria used by the Board are both quantitative and qualitative,
on the agenda items requiring specific analysis and advance
including in particular the amount of revenue generated and an
reflection, so that he/she can consider his/her position on the
analysis of the nature of the existing relationships.
matters to be discussed at the meeting in an informed and
enlightened manner; the Lead Independent Director also ensures Aside from the two Directors representing employees, the three
that the Directors are provided with a high level of information Directors who are not considered to be independent are:
in advance of Board meetings;
• Messrs. Franck RIBOUD and Emmanuel FABER in their capacity
• at each Board meeting, the Chairman advises Directors of the as corporate officers;
main facts and significant events affecting the Group and occurred
since the date of the previous Board meeting;
• Mrs. Isabelle SEILLIER, senior executive within the J.P. Morgan
banking group. During the annual review of the designation of
• between Board meetings, the Directors receive all necessary independence of the directors, the Nomination and Compensation
information concerning events or transactions of significance to the Committee and the Board specifically examined the business
Group. More generally, the Directors may at any time request from relationship between the Group and the J.P. Morgan banking group,
the Chairman all information and documents they deem necessary which is among the banks which the Group regularly uses. The
to perform their duties. In particular, they receive additional press Board of Directors thus analyzed these relationships in light of
releases to those reviewed during Board meetings; and several criteria. Although it does not appear significant in terms
of amounts for fiscal year 2014, the Board considered that this
• General Management specifically informs the Board of Directors business relationship was liable to be significant and create a
of the Company’s financial position, cash position and commit-
situation of conflict of interest, due to: (i) the very nature of the
ments at least once every six months.
business relationship, as the J.P. Morgan group is a bank which
the Group regularly uses, in particular for financing and consulting
Operation of the Board of Directors in mergers and acquisitions, and (ii) the office of senior executive
during the fiscal year held by Mrs. Isabelle SEILLIER within the J.P. Morgan group for
the EMEA region. The Board therefore decided to consider Mrs.
Review of Directors’ independence Isabelle SEILLIER to be a non-independent Director.
The Board of Directors of February 19, 2015, upon recommendation
In that context, it is reminded that, upon recommendation by
by the Nomination and Compensation Committee, examined as
the Nomination and Compensation Committee, the Board has
every year the independence of each of the Directors based on the
taken various steps to ensure that potential conflicts of interest
independence criteria defined by the rules of procedure in accor-
related to Mrs. Isabelle SEILLIER’s functions are controlled, in
dance with the AFEP-MEDEF Code (see section Board of Directors’
particular: (i) systematic abstention by Mrs. Isabelle SEILLIER
rules of procedure above).
from participating in discussions and voting on any deliberations
As of February 19, 2015, Danone’s Board of Directors is composed of which could place her in a situation in which there is a conflict
15 Directors, of which ten are considered to be independent, giving of interest, (ii) express reference in the report of the Board of
an independence rate of 77%. As a reminder, in accordance with Directors to the Shareholders’ Meeting of her designation as
the recommendations of the AFEP-MEDEF Code, the two Directors a non-independent Director and of the existence of potential
representing employees are not included in the calculation of this conflicts of interest involving her, (iii) full transparency on com-
rate of independence. pensation terms for the J.P. Morgan group by the Danone Group
as part of agreements subject to shareholders’ approval, and
Concerning the criterion of the AFEP-MEDEF Code under which
(iv) a resolution concerning all new related-party agreements
Directors would lose their independence once the length of their
entered into with the J.P. Morgan group, which will automatically
term of office exceeds 12 years, the Board observes that Danone
be put to a separate shareholders’ vote during the subsequent
has a dual economic and social project, which gives it a unique
Shareholders’ Meeting.
culture, which the Group has reaffirmed in its strategy, governing
bodies, performance measurement and management performance The ten independent Directors are Messrs. Bruno BONNELL, Richard
for a number of years. The Board has stressed on many occasions GOBLET D’ALVIELLA, Jacques-Antoine GRANJON, Jean LAURENT,
the primary importance that it attaches to the Company’s cultural Benoît POTIER, Jean-Michel SEVERINO and Lionel ZINSOU-DER-
factors in order to assess the pertinence and feasibility of the pro- LIN, Mrs. Gaëlle OLIVIER, Mrs. Mouna SEPEHRI and Mrs. Virginia
jects submitted to its approval. It considers that Danone’s culture A. STALLINGS, who meet the AFEP-MEDEF Code’s independence
with respect to its dual project is a unique competitive advantage, criteria at February 28, 2015:
for the Group and in the interests of its shareholders. As such, the
Board has observed that in the collective decision-making approach
• concerning Mr. Bruno BONNELL, Director for more than 12
years, the Board of Directors examined his situation with regard
taken at its meetings, of the in-depth understanding of cultural traits
to the rules of the AFEP-MEDEF Code. In addition to the above
specific to the Company and its mission in the long term is a real
developments concerning the assessment of the 12-year seniority
benefit which clarifies the Board’s work. The Board thus believes
criterion, the Board has observed that Mr. Bruno BONNELL has
that the holding of a term of office over a long period constitutes a
continually proven his particularly noteworthy independence
measure of an ability to contribute to the Board’s work in a free and
of thought and freedom of speech, which have led him to take
autonomous manner while ensuring that the Group’s identity and
up marked and constructive positions and to provide specific
culture are preserved, rather than being an obstacle to independence,
and differentiated viewpoints during Board discussions. The
and that additionally, the length of service on the Board should not
Board noted that his positions have enriched its decisions and
be used solely to determine the non-independence of a Director.
that the independence of such decisions is an important value

Governance bodies
for Danone, within a Board of Directors which has a majority of paid by the Group to the Axa group were significantly below 0.1%
independent Directors as defined using the strictest application of the earnings generated by both the Group and the Axa group.
of current standards. Moreover, the Board noted the absence of As a result, the Board considered that, to the extent that these
a significant business relationship between Mr. Bruno BONNELL contracts or agreements are concluded under market conditions
and the Danone group in application of the criteria presented in the normal course of the Group’s business and do not represent
above. As a result, the Board confirmed his qualification as an significant sums, none of these contracts or agreements taken
independent Director; separately or all together is: (i) liable to give rise to conflicts of
interest between, on the one hand, Mrs. Gaëlle OLIVIER’s duties
• concerning Mr. Benoît POTIER, Chairman and Chief Executive towards Danone and its shareholders in her capacity as Director
Officer of Air Liquide, whose term of office is proposed for renewal
and, on the other hand, her private interests and/or other duties or
to the Shareholders’ Meeting of April 29, 2015, and who would be
(ii) of a nature to impair her independence as a Danone Director.
a Director for more than 12 years if this renewal is approved by
The Board therefore confirmed that Mrs. Gaëlle OLIVIER satisfies
the Shareholders’ Meeting, the Board has noted, in addition to the
all of the AFEP-MEDEF Code independence criteria and that her
above developments concerning the assessment of the 12-year
situation is not likely to be a source of any conflicts of interest;
seniority criterion, the strong contribution to Board discussions
by Mr. Benoît POTIER, Chairman and Chief Executive Officer of • concerning Mr. Jean-Michel SEVERINO, the Board of Directors
one of the largest CAC 40 companies, as well as his freedom examined his situation with regard to the rules of independence of
of thought and speech. Mr. Benoît POTIER also demonstrates a the AFEP-MEDEF Code, in particular with regard to the absence
remarkable independence of spirit. Moreover, the Board noted of a significant business relationship between Mr. Jean-Michel
the absence of a significant business relationship between Mr. SEVERINO and the Danone group in application of the criteria
Benoît POTIER and the Danone group in application of the criteria presented above, and confirmed his qualification as an inde-
presented above. As a result, the Board confirmed Mr. Benoît pendent Director;
POTIER’s qualification as an independent Director;
• concerning Mrs. Virginia A. STALLINGS, the Board of Directors
• concerning Mr. Richard GOBLET D’ALVIELLA, Honorary Chairman examined her situation with regard to the rules of independence of
of Sofina since May 2014, the Board examined his situation with the AFEP-MEDEF Code, in particular with regard to the absence
regard to the rules of independence of the AFEP-MEDEF Code, of a significant business relationship between Mrs. Virginia A.
in particular with regard to the absence of a significant business STALLINGS and the Danone group in application of the criteria
relationship between Mr. Richard GOBLET D’ALVIELLA and the presented above, and confirmed her qualification as an inde-
Danone group in application of the criteria presented above, pendent Director;
and confirmed Mr. Richard GOBLET D’ALVIELLA’s qualification
as an independent Director. The Board also noted his desire to
• concerning Mrs. Mouna SEPEHRI, the Board of Directors exa-
mined her situation given her functions at Renault. Thus, the
not request the renewal of his term of office;
Board analyzed whether the presence of Mr. Franck RIBOUD on
• concerning Mr. Jacques-Antoine GRANJON, the Board examined the Board of Directors of Renault, a group in which Mrs. Mouna
his situation with regard to the rules of independence of the SEPEHRI performs management functions, could compromise
AFEP-MEDEF Code, in particular with regard to the absence Mrs. Mouna SEPEHRI’s independence. Pursuant to the rules of
of a significant business relationship between Mr. Jacques- the AFEP-MEDEF Code, the independence of a Director would
Antoine GRANJON and the Danone group in application of the be compromised only if the said Director was himself/herself a
criteria presented above, and confirmed his qualification as an corporate officer of Renault, which is not the case here (since
independent Director; Mrs. Mouna SEPEHRI is not a director of Renault). The Board
also reviewed the financial transactions between Danone and
• concerning Mr. Jean LAURENT, Lead Independent Director and the Renault group of which Mrs. Mouna SEPEHRI is a senior
Chairman of the Nomination and Compensation Committee, given
executive. Renault is the supplier to the company car leasing
his functions within Eurazeo (he is not an officer but Vice-Chairman
agencies used by the Group. The amounts paid by the Group to
of the Supervisory Board), the Board of Directors examined his
the Renault group for fiscal year 2014 were far below 0.1% of the
situation with regard to the rules of independence of the AFEP-
MEDEF Code. The Board also considered that given the minimal
revenues generated by either the Group or the Renault group. 6
As a result, the Board considered that, to the extent that these
nature of Eurazeo’s equity stake in the Company’s share capital,
contracts are concluded under market conditions in the normal
he does meet all the AFEP-MEDEF Code’s independence criteria.
course of the Group’s business and do not represent significant
In 2013, Eurazeo transferred practically all the DANONE shares
sums, none of these contracts taken separately or all together
it held to bearers of Eurazeo bonds convertible into existing
is: (i) liable to give rise to conflicts of interest between, on the
DANONE shares; as of December 31, 2015, Eurazeo thus holds
one hand, Mrs. Mouna SEPEHRI’s duties towards Danone and
a residual shareholding representing approximately 0.01% of
its shareholders in her capacity as Director, and on the other
Danone’s share capital. Lastly, the Board noted the absence of
hand, her private interests and/or other duties, or (ii) of a nature
a significant business relationship between Mr. Jean LAURENT
to impair her independence as a Danone Director. The Board
and the Danone group in application of the criteria presented
therefore confirmed that Mrs. Mouna SEPEHRI satisfies all
above, and confirmed the qualification of Mr. Jean LAURENT as
of the AFEP-MEDEF Code independence criteria and that her
an independent Director;
situation is not likely to be a source of any conflicts of interest;
• concerning Mrs. Gaëlle OLIVIER, the Board of Directors exa- • lastly, concerning Mr. Lionel ZINSOU-DERLIN, the Board of
mined her situation and in particular reviewed the financial
Directors examined his situation with regard to the rules of
transactions between the Danone group and the Axa group, of
independence of the AFEP-MEDEF Code and considered that
which Mrs. Gaëlle OLIVIER is a senior executive. These financial
the fact that Mr. Lionel ZINSOU-DERLIN was an employee and
transactions essentially correspond to payment by the Group of
senior executive of the Group for 11 years, until 1997, does not
insurance premiums for insurance policies covering property
call into question his qualification as an independent Director.
damage/operating losses and civil liability as well as personal
Indeed, the AFEP-MEDEF Code provides that only those directors
insurance policies. In any case, for the 2014 fiscal year, the sums

Governance bodies
who were an employee or corporate officer of the Company, of In addition, in reviewing the proposed appointments as Directors,
its parent company or of a company that it consolidates over the the Board of Directors, upon recommendation of the Nomination
five previous years be qualified as non-independent. The Board and Compensation Committee, examined the situation of Mrs. Serpil
therefore confirmed that Mr. Lionel ZINSOU-DERLIN satisfies TIMURAY in light of the independence rules of the AFEP-MEDEF
all of the AFEP-MEDEF Code independence criteria, including Code. The Board concluded that Mrs. Serpil TIMURAY should be
with regard to the absence of a significant business relationship considered as an independent Director, because she meets all the
between Mr. Lionel ZINSOU-DERLIN and the Danone group in independence criteria of the AFEP-MEDEF Code applied by the
application of the criteria presented above. Board. The presentation of Mrs. Serpil TIMURAY and the analysis of
this candidate’s independence are given in the report of the Board of
Directors to the Shareholders’ Meeting (see section 8.3 Comments
on the resolutions of the Shareholders’ Meeting).
In accordance with French Financial Markets Authority recommendation no. 2012-02, the table below presents the situation of each
Director with regard to the independence criteria defined by the AFEP-MEDEF Code (situation as of February 19, 2015).
Employee or
officer during Significant Term of office
the past five Cross- business Family Statutory exceeding
Name years (a) directorships (a) relationship (a) relationship (a) auditor (a) 12 years (a) (b)
Franck RIBOUD X O O O O X
Emmanuel FABER X O O O O X
Bruno BONNELL O O O O O O (b)
Richard GOBLET D’ALVIELLA O O O O O O
Jacques-Antoine GRANJON O O O O O O
Marie-Anne JOURDAIN X O O O O O
Jean LAURENT O O O O O O
Gaëlle OLIVIER O O O O O O
Benoît POTIER O O O O O O (b)
Isabelle SEILLIER O O X O O O
Mouna SEPEHRI O O O O O O
Jean-Michel SEVERINO O O O O O O
Virginia A. STALLINGS O O O O O O
Bettina THEISSIG X O O O O O
Lionel ZINSOU-DERLIN O O O O O O
(a) “O” represents an independence criterion that is met, “X” represents an independence criterion that is not met.
(b) Concerning the application of the criterion of a term of office exceeding 12 years, see section Review of Directors’ independence above.
Conflicts of interest
To the Company’s knowledge, on one hand there are no family ties To the Company’s knowledge, there are no potential conflicts of inte-
between the Company’s corporate officers, and on the other hand rest between any Director’s duties to the Company and their private
during the last five years, no corporate officer has been convicted interests and/or other duties, with the exception of Mrs. Isabelle
of fraud, declared bankruptcy, been placed in receivership or liqui- SEILLIER (see section Review of Directors’ independence above).
dation, been officially and publicly accused and/or penalized by any
At the date of the present Registration Document, no corporate
statutory or regulatory authority, or been deprived by a court of the
officer is connected to the Company or one of its subsidiaries via a
right to hold a position in a company’s administrative, management
services contract granting any benefits whatsoever.
or supervisory bodies or to participate in a company’s management
or business operations.

Governance bodies
Training of Directors (ii) Variable portion

In accordance with the Board’s rules of procedure, specific training Board of Directors’ meetings
provided by an outside organization was offered to the Directors • €2,000 per meeting; and
representing employees. This training was taken by one of these
Directors, and should be completed by the second in 2015. • for travel by Directors residing outside of France:
Mrs. Gaëlle OLIVIER and Mr. Lionel ZINSOU-DERLIN, Directors • an additional amount of €2,000 per trip to a meeting of the
appointed in 2014, completed an integration program in 2014 that Board of Directors for Directors residing elsewhere in Europe;
included several individual interviews with certain members of and
General Management and the Executive Committee, as well as • an additional amount of €4,000 per trip to a meeting of the
presentations by certain directors of the Group’s main functions. Board of Directors for Directors residing outside Europe.
They were also mentored by more senior Directors of the Company.
It is specified that the rules set out above also apply to meetings of
In addition, a site visit was organized during the year within the independent Directors convened by the Lead Independent Director.
framework of continuing training for the Directors.
Meetings of Board Committees
Directors’ attendance fees
Directors receive attendance fees; however, the members of the • Members: €4,000 per meeting; and
Executive Committee, the Company’s corporate officers, the hono- • Chairmen: €8,000 per meeting.
rary Directors, the Chairman of the Board (in case of separation of
offices) and the Directors representing employees do not receive Moreover, for the additional travel expenses to attend Board’s
any attendance fees. The Shareholders’ Meeting approves the Committees meetings, the same rules apply as those specified
total maximum amount of attendance fees to be divided among for Directors.
the Directors. Proposal to the Shareholders’ Meeting of April 29, 2015 to
In accordance with the AFEP-MEDEF Code, the allocation of increase the total amount of attendance fees and rules for
attendance fees takes into account the effective participation of allocating attendance fees in 2015
Directors at Board and Committee meetings by including a majority It is proposed that the Shareholders’ Meeting of April 29, 2015 increase
variable element. the maximum amount of attendance fees paid to all Directors from
€800,000 to €1,000,000 per fiscal year (see section 8.3 Comments
Amount of Directors’ attendance fees for 2014 on the resolutions of the Shareholders’ Meeting hereafter).
The gross amount of attendance fees due in respect of 2014 was
€599,000 (€512,000 in 2013). Subject to the adoption of this resolution, the increase in the total
attendance fees for fiscal year 2015 will make it possible:
Amount authorized by the Shareholders’ Meeting of April
25, 2013 and rules for allocating attendance fees in 2014 • to take on the costs related to (i) the operation of the Strategy
The Shareholders’ Meeting of April 25, 2013 had increased the Committee created by the Board of Directors of September 2,
maximum total yearly amount of attendance fees to be divided by the 2014 and (ii) the new arrangement of the other committees; and
Board of Directors among its members from €600,000 to €800,000. • to increase the variable portion paid for Board meetings (from
As stated by the Board in its report to the Shareholders’ Meeting of €2,000 to €3,000, the other rules remaining unchanged) so as to
April 25, 2013, the total amount of attendance fees was used only better reflect the actual participation of Directors in the Board’s
for the following purposes: (i) to cover the compensation payable to meetings, in accordance with best governance practices and the
the Lead Independent Director appointed by the Board of Directors recommendations of the AFEP-MEDEF Code.
at its meeting of February 18, 2013 for the fixed amount of €50,000
Expense policy
per year, and (ii) to take into account the specific situation of Direc-
tors residing outside France through the allocation of an additional A reimbursement oversight policy for expenses incurred by Board
amount to cover their travel expenses to attend Board meetings members when carrying out their duties was adopted by the Board 6
(€2,000 for Directors residing in Europe and €4,000 for Directors at its meeting of February 18, 2013.
residing outside Europe).
Since January 1, 2014, the total amount of attendance fees is allo-
cated between the Directors as follows:
(i) Fixed portion
• Director: fixed amount of €10,000 per year; and
• Lead Independent Director: fixed amount of €50,000 per year.

Governance bodies
Work performed by the Board Executive Committee at a dedicated one-day event held off-site. All
these matters and presentations are always followed by in-depth
of Directors discussions with the Directors.
The Board of Directors met six times in 2014 (seven times in 2013). In addition, each year Directors are invited to attend several working
The average length of each meeting was two hours forty minutes days organized in Evian, where an annual seminar is held for all of
as in 2013. the Group’s senior executives, during which the strategies of the
Directors’ attendance, expressed by their attendance rate at mee- Group and its various Divisions are reviewed and discussed.
tings, was 95% in 2014 (89% in 2013). Specific matters
Following discussions with the shareholders, the decision was taken The following specific matters were reviewed by the Board of
to disclose, when a Director’s term of office is being renewed by the Directors in 2014 and in February 2015:
Shareholders’ Meeting, said Director’s individual average attendance
rate at Board meetings, for the full duration of his/her expiring (i) Transactions and the Group’s accounting and financial
term of office. Since 2014, the average individual attendance rate at position
meetings of the Committees on which are seated Directors whose • review of the year-end closing process in connection with the
renewal of office is proposed, has also been presented. 2014 statutory and consolidated financial statements;
Recurring matters
• monitoring of the Group’s indebtedness (change, amount, com-
position and redemption schedules);
The following recurring matters were reviewed and discussed by
the Board of Directors in 2014: • review of the annual authorization in connection with the Group’s
commercial paper issue program;
(i) Strategic aspects of day-to-day management
Detailed review of the Group’s business activities, presentation of • review of the Group’s financing transactions;
annual budgets, approving statutory and consolidated annual finan- • implementation of a capital increase reserved for employees;
cial statements, approving the semi-annual financial statements,
financial communications, main acquisitions and sales of assets • authorization given to the Company to sign a subscription agree-
or equity interests, reviewing the Group’s financial position and its ment within the framework of a bond issue carried out by the
indebtedness (changes, amount, composition and repayment dates, Company under the EMTN program with several banks, including
off-balance sheet commitments, equity levels, liquidity, hedging J.P. Morgan Securities PLC (see section 8.3 Comments on the
of financial risks, credit ratings), reviewing the Statutory auditors’ resolutions of the Shareholders’ Meeting);
approach to their work, reviewing financial commitments (security • review of the authorization for Danone’s guarantee, in the total
interests and guarantees), monitoring the Group’s financial com- amount of €750 million per year for commitments of Danone
munication policy including reviewing all press releases bearing on Corporate Finance Services (in connection with financial risk
the annual and interim financial statements, annual authorization management transactions carried out by it on behalf of Group
to General Management with respect to the Group’s bond issuance companies);
program (EMTN), receiving regular information on the Group’s risk
management and internal control systems and reviewing the Group’s • payment of the 2014 dividend in DANONE shares;
risks by overseeing the work of the Audit Committee, implementing • authorization of a new amendment to the syndicated facilities
the share buyback program, annual capital increases reserved agreement with twelve banks (including J.P. Morgan (see section
for employees, allotting Group performance units and Group per- 8.3 Comments on the resolutions of the Shareholders’ Meeting
formance shares (including setting, each year, the performance hereafter); and
objectives for the following year and verifying that such objectives
were met the previous year), following up the Company’s share • in connection with the Shareholders’ Meeting of April 29, 2015,
price and shareholding, setting the proposed dividend, approving review of the resolutions to be submitted to the Shareholders’
the Group’s yearly contributions to danone.communities and the Meeting regarding the renewal of financial authorizations and
Danone Ecosystem Fund, as well as discussing Danone’s policy on the Company’s share repurchase program, as well as the dis-
gender work and pay equality. tribution of dividends.
(ii) Operation of corporate bodies (ii) Corporate governance

Follow-up of corporate governance issues, receiving regular reports In connection with the Shareholders’ Meeting of, April 29, 2014
on the meetings of the three Board Committees (Audit Committee, • review of the composition of the Board, in the context of the policy
Nomination and Compensation Committee and Social Responsibility on the renewal of members’ terms of office and the appointment
Committee), which are submitted to the Board after each meeting, of new members, particularly with regard to the percentage
determining all components of the compensation of each of the of women and independent members on the Board, and of the
Company’s three corporate officers, approving the various Board diversity of the Board’s composition, leading to the proposal to
reports and proposed resolutions submitted for shareholders’ renew the terms of office of Messrs. Bruno BONNELL, Bernard
approval, and preparing the Shareholders’ Meeting. HOURS, Jean-Michel SEVERINO and Mrs. Isabelle SEILLIER and
to appoint Mrs. Gaëlle OLIVIER and Monsieur Lionel ZINSOU-
(iii) Group strategy DERLIN as Directors;
Reviewing the Group’s transformation priorities (i.e., exposure to
emerging markets, prioritizing certain key countries, etc.) and their • review of the amendment necessary to the by-laws in order to
various impacts on the Group (in terms of organization and operation designate Directors representing employees as Board members,
of human resources, adjustment of the Group’s products to local in accordance with the French Act of June 14, 2013 concerning
demand, etc.); in particular reviewing the work completed within job security;
the framework of the “Danone 2020” project, attending annual • review of Mr. Bernard HOURS’ position, particularly in connection
strategic presentations made to the Board by each member of the with the execution of a Dutch Statutory Director mandate contract

Governance bodies
with one of Danone’s Dutch subsidiaries, Danone Trading B.V., in the Audit Committee and the Social Responsibility Committee,
order to organize the operational management of the Group’s four allocation of additional means and resources to these functions;
Divisions, by Mr. Bernard HOURS, from Schiphol as from January
1, 2014 (see section 6.5 Statutory auditors’ special report on related
• review of the “Danone 2020” project intended to guide the Group
towards a new phase of its development; and
party agreements and commitments and section 8.3 Comments
on the resolutions of the Shareholders’ Meeting hereafter); and • setting up of a Strategy Committee.
• authorization of new related-party agreements and examina- (iv) Equity divestments and acquisitions
tion of the agreements authorized during prior fiscal years, the • review of the increased equity stake in the Mengniu company
performance of which continued during the 2013 fiscal year. (Fresh Dairy Products, China);
In connection with the composition of the Board of Directors • review of the acquisition of an equity stake in the Yashili group
• at its meeting of September 2, 2014, the Board decided: (Early Life Nutrition, China);
• to separate the offices of Chairman of the Board of Directors • review of the acquisition of an equity stake in the Brookside group
and Chief Executive Officer. The Board defined the powers of (Fresh Dairy Products, East Africa);
the Chairman of the Board of Directors and confirmed the
appointment of Mr. Franck RIBOUD to this position. It elimi-
• review of the plan to close plants of the Fresh Dairy Products
Division in Italy, Germany and Hungary;
nated the offices of Deputy General Managers. Therefore the
term of office of Mr. Bernard HOURS as Deputy General • follow-up on the plan to acquire assets (spray dryer and packa-
Manager was terminated, and Mr. Emmanuel FABER was ging plant) for the Early Life Nutrition Division in New Zealand;
appointed as Chief Executive Officer, and
• follow-up on the increased equity stake in the Centrale Laitière
• to create the Strategy Committee; and company (Fresh Dairy Products, Morocco); and
• acknowledgment of the resignation of Mr. Bernard HOURS from • review of a possible plan to sell certain Group assets.
his office of Director and of the appointment of Mrs. Marie-Anne
(v) Corporate Social Responsibility (CSR)
JOURDAIN and Mrs. Bettina THEISSIG as Directors representing
employees, in application of the Act of June 14, 2013 concerning
• annual review of the Group’s situation and policy concerning
gender work and pay equality;
job security, under the conditions stipulated in the Company’s
by-laws. • review of the Group’s non-financial risks, particularly reputa-
tion risk;
In connection with the Shareholders’ Meeting of April 29, 2015
• review of the composition of the Board, in the context of the policy • review of the strategic policies presented to the Works Council;
on the renewal of members’ terms of office and the appointment
of new members, particularly with regard to its percentage of
• monitoring of the activities of the Danone Ecosystem Fund,
danone.communities and Livelihoods;
women and independent members, and of the diversity of the
Board’s composition, leading to the proposal to renew the terms • examination of the Sustainable Development Report; and
of office of Messrs. Jacques-Antoine GRANJON, Jean LAURENT
and Benoît POTIER, Mrs. Mouna SEPEHRI and Mrs. Virginia A.
• examination of the 2020 Nature Plan.
STALLINGS, and to appoint Mrs. Serpil Timuray as Director; and (vi) Compensation for corporate officers
• authorization of new related-party agreements and examination of • within the framework of the changes applied at the level of the
Group’s General Management, examination and review of the
the agreements concluded and authorized during previous fiscal
compensation elements of Messrs. Franck RIBOUD and Emma-
years which remained in effect during the 2014 fiscal year; and
nuel FABER, effective October 1, 2014;
• proposal to increase the total amount of attendance fees and to • determination of the amount of Mr. Bernard HOURS’s termination
modify their rules of allocation.
indemnity by virtue of the termination of his term of office as
Other governance items Deputy General Manager; and 6
• meeting of the non-executive Directors held at the initiative of the • determination of the various elements of variable compensation
Lead Independent Director, concerning in particular the operation
due to each of the corporate officers in respect of 2014 and of
of and evolution of the Company’s governance, in accordance with
targets for the various elements of variable compensation for
the recommendations of the AFEP-MEDEF Code;
the Chief Executive Officer for 2015.
• review of the activity of the Lead Independent Director (annual
work and end of term review); and
• review of the Board’s assessment and report on its operation.
(iii) The Group’s activity and strategy for fiscal year 2014
• regular review of progress on the savings and adaptation plan for
the Group’s organizations in Europe, including its social aspects,
the monitoring of the costs incurred and savings achieved, as
well as its impact on the Group’s organization;
• regular review, following the false alarm issued by Fonterra in
Asia in the second-half of 2013 (concerning possible bacterial
contamination of batches of ingredients supplied to the Group by
this New Zealand supplier and used for the production of baby milk
in Asia), of the Group’s various internal control and compliance
systems and procedures, and, based on recommendations by

Governance bodies
Self-assessment of the Board of Directors within the framework of their interview with the Board Secretary.
Moreover, the Board of Directors reviews the completed question-
In accordance with its rules of procedure, every two years, the naires, providing it with the opportunity to fully assess the contribu-
Board of Directors conducts a self-assessment (recently in 2012 tions and involvement of all Directors in the work of the Board and
and 2014), which covers the composition, organization and opera- its Committees. Lastly, the Board’s rules of procedure expressly
tion of the Board itself and of each of its Committees. Following provide that this assessment should make it possible to ensure
each of these self-assessments, the Board amended its operating “the availability and commitment of Directors”. The contribution
methods and rules of procedure. In addition, once a year the Board of each Director is assessed by the Nomination and Compensation
devotes one item on the agenda of one of its meetings to discussion Committee and by the Board, in particular at the time of renewal of
of its operation. the terms of office of Directors and Committee members. Taking into
account the satisfactory results of these assessments, the Board
Self-assessments in 2010 and 2012 of Directors did not express, at this date, the need to carry out a
The self-assessment of the Board in 2010 notably led to improve- formal assessment of each Director’s contribution.
ments in: (i) the operation of the Board, by the introduction of annual
meetings on specific topics, (ii) the integration of new Directors, Review of the Board’s operation
by offering them the opportunity to benefit from the support of The review of the operation of the Board was included within the
a dedicated Director during their first 12 months in office and an framework of the self-assessment completed in 2014.
integration process including site visits and meetings with opera-
tional managers, and (iii) the composition of the Board, particularly A review of the operation of the Board is organized annually as
as regards its independence and the diversity of its composition. stipulated in the Board’s rules of procedure.
Another self-assessment of the Board and the various Committees Lead Independent Director
was conducted in second-half 2012. Following this self-assess-
ment, the position of Lead Independent Director was introduced, Presentation of the Lead Independent Director
an enhanced integration program was created for new Directors, In 2013, discussions with the Company’s shareholders brought to
training offered to Directors was improved, and a regular review the attention of the Board of Directors that certain shareholders
of the results of the assessment of the Board of Directors was perceived corporate governance risks in combining the offices of
established. Chairman of the Board of Directors and Chief Executive Officer.
Self-assessment in 2014 It appeared opportune to the Board to make obligatory the appoint-
The last self-assessment of the Board and its various Committees ment of a Lead Independent Director when the functions of Chairman
took place together with the Lead Independent Director during of the Board of Directors and Chief Executive Officer are combined
second-half 2014 in the form of individual interviews conducted by in order to provide additional assurance as to the smooth operation
the Secretary of the Board of Directors with each non-executive of the Board and the balance of powers within General Management
member of the Board, based on a detailed questionnaire. The results and the Board. Consequently, at the Board meeting on February 18,
of this self-assessment were examined first by the Nomination 2013, the Board’s rules of procedure were amended to create the
and Compensation Committee, then by the Board at its meeting of position of a Lead Independent Director.
December 11, 2014. Within the framework of the governance changes that took effect on
The conclusions of this self-assessment reveal a very positive October 1, 2014 and the separation of the offices of Chairman of the
assessment overall of the operations of the Board, in particular Board of Directors and Chief Executive Officer, and with a view to
with regard to the proper preparation of the items examined by ensuring the successful setting up of the new governance structure,
the Board. This self-assessment highlighted the Directors’ strong the Board decided to maintain the functions of the Lead Independent
contribution to the work of the Board and the Committees, illustrated Director and amended its rules of procedure to this effect.
in particular by their freedom of speech and critical understanding. The Lead Independent Director is appointed by the Board of Directors
The recommendations formulated following this assessment include: from among the independent Directors, based on a proposal from
(i) sending preparatory documentation for Board meetings more in the Nomination and Compensation Committee. He/she remains in
advance, (ii) systematic presentation of the major risks and issues, office throughout the duration of his/her term of office. Each time
(iii) more regular review of the organization and operation of the the Lead Independent Director’s term of office expires, the Board
support functions (Finance, Human Resources, Legal, etc.), (iv) will complete a review of the operation of this corporate body and
strengthened interactions between the Board and the Committees as well as a re-examination of its powers in order to adapt them
and (v) participation of more Directors to the work of the Committees. if necessary.
The Board of Directors took note of these recommendations and

of the improvement measures studied by General Management to
address them.
The recommendation of the AFEP-MEDEF Code concerning mea-
suring the actual contribution of each Director to the Board’s work
which should be carried out within the framework of the Board’s
assessment, is not applied, notably due to the practical difficulties
involved in implementing this type of recommendation and its pos-
sible consequences for team spirit and collegiality. Nonetheless,
each year, each Director completes a very detailed questionnaire on
the operation of the Board, allowing each member to give his/her
opinion on potential issues. In this way, the Directors who so wish
can freely express their view of the effective individual contributions

Governance bodies
Duties and powers of the Lead Independent Director The Lead Independent Director ensures the link between the
independent Directors, the other Board members and General
Duties of the Lead Independent Director
Management.
The Lead Independent Director’s primary function is to ensure the
smooth operation of the Board of Directors and its Committees. In Committees of the Board of Directors
that context, he/she is in charge of the following matters: The Lead Independent Director may be appointed by the Board of
Directors to serve as Chairman or member of one or more Board of
Board of Directors assessment
Directors Committees. Even if not appointed, the Lead Independent
The Lead Independent Director participates in the Board of Directors
Director may attend the meetings and has access to the work of the
assessment process.
other Committees. In particular, the Lead Independent Director is
Management of conflicts of interest involved in the work of the Nomination and Compensation Committee
The Lead Independent Director prevents conflicts of interest from concerning the annual performance assessment and recommen-
occurring, notably by taking preventive measures to raise awareness. dations regarding the compensation of corporate officers.
He/she brings any conflicts of interest involving corporate officers
Meetings with managers
and other Board members that he/she has identified to the attention
The Company keeps the Lead Independent Director regularly
of the Board of Directors.
informed of its activities, including through the organization of
As part of his/her duty to report conflicts of interest see section regular meetings with operational or functional managers, upon
above Directors’ Code of ethics), any Director having a conflict of his/her request and after informing the Chairman and the Chief
interest, even potential, notifies the Lead Independent Director. Executive Officer.
Compliance with the rules of procedure Means
The Lead Independent Director ensures that the rules of proce- The Lead Independent Director has access to all documents and
dure of the Board of Directors are complied with. As part of the information that he/she deems necessary to fulfill his/her duties.
consultation procedure with respect to market ethics (i.e. the
consultation procedure concerning transactions by the Directors Appointment and renewal of office of Mr. Jean
involving DANONE shares, see section above Transactions involving LAURENT as Lead Independent Director
the Company’s securities by members of the Board of Directors), the Mr. Jean LAURENT was appointed as Lead Independent Director
Lead Independent Director may be consulted by the Directors in the by the Board of Directors of February 18, 2013, in view of his inde-
same capacity as the Chairman. pendence, experience and knowledge of the Group (see section Review
Relations with shareholders of Directors’ independence). The Board of Directors also took into
The Lead Independent Director assists the Chairman and the Chief account the extensive business experience of Mr. Jean LAURENT
Executive Officer, upon their request, to answer questions from as the former Chief Executive Officer of a major banking group as
shareholders, and makes himself/herself available to meet with well as his thorough knowledge of the Board and the Group. Indeed,
them and receive comments and suggestions from them, at the he has served the Group as Director since 2005, Chairman of the
request of and with the approval of the Chairman and the Chief Social Responsibility Committee since 2007, and Chairman of the
Executive Officer. Nomination and Compensation Committee since 2011.
Activity report In addition, the Board of Directors, at its meeting of February 19,
The Lead Independent Director reports on the execution of his/her 2015, given Jean LAURENT’s record as Lead Independent Director,
duties once a year to the Board of Directors. decided to extend his appointment as Lead Independent Director
under the condition precedent that his term of office as Director is
During Shareholders’ Meetings, he/she may be requested by the renewed by the Shareholders’ Meeting of April 29, 2015.
Chairman to report on his/her actions.
For information, Mr. Jean LAURENT’s attendance at Board and
Prerogatives of the Lead Independent Director Committee meetings was respectively 96% and 100% for the past
As part of his/her duties, the Lead Independent Director exercises three fiscal years.
the following prerogatives: 6
Lastly, we recall that Mr. Jean LAURENT held two other terms of
Convening of the Board of Directors/Agenda/ office in listed companies as of December 31, 2014.
Informing Directors
The Lead Independent Director may request the Chairman to convene Work of the Lead Independent Director
the Board of Directors for a given agenda. Since his appointment, the Lead Independent Director has in par-
He/she may propose to the Chairman additional agenda items. ticular accomplished the following:
He/she ensures that the Directors are capable of performing their • convening and chairing of a meeting of non-executive Directors of
duties under the best possible conditions, and notably that they are the Company in July 2014, concerning in particular the operation
properly informed prior to the Board of Directors meetings. of and changes to the Company’s governance;
Independent Directors • participation in some interviews with the Directors within the
The rules of procedure of the Danone Board of Directors specify, framework of the self-assessment;
since December 2013, that the independent Directors should hold at • review of conflict-of-interest questionnaires submitted by Direc-
least one meeting per year, on the initiative of the Lead Independent tors at the end of the year to confirm that no conflicts of interest
Director, who may invite the Company’s other external Directors to exist;
attend this meeting.
• organization of communication with certain Danone sharehol-
The first meeting of the independent Directors was held on July 24, ders and with the French High Committee for the Corporate
2014 (see section Work performed by the Board of Directors above). Governance (HCGE); and
• presentation of the review of his action since his appointment.

Governance bodies
Review of the Lead Independent Director at the end In particular, the Board considered the work completed by the Lead
of his term of office Independent Director since his appointment in 2013 (see section
Work of the Lead Independent Director above), in the context of the
At the end of the first term of office of the Lead Independent Director, Company’s evolving governance and continuous improvement of
and in accordance with its rules of procedure, the Board of Direc- the Board’s composition.
tors of February 19, 2015 studied the operation of this function and
reexamined its powers.
Audit Committee
Composition of the Audit Committee Audit Committee’s rules of procedure
As of December 31, 2014, all members of the Audit Committee Adoption by the Board of Directors
were independent Directors (as a reminder, the AFEP-MEDEF Code on December 15, 2006
requires only two-thirds of Committee members to be independent
directors): On December 15, 2006, the Board of Directors adopted rules of
procedure for the Audit Committee, which specify its role, responsi-
• Mr. Jean-Michel SEVERINO, Chairman of the Audit Committee, bilities and operating rules.
was appointed as member and Chairman of this Committee in
April 2012. On that date, Mr. Jean-Michel SEVERINO was desi- Main provisions of the Audit Committee’s rules
gnated “Committee’s financial expert” within the meaning of of procedure
Article L. 823-19 of the French commercial code in light of his The main provisions of the Audit Committee’s rules of procedure,
skills and expertise. Mr. Jean-Michel SEVERINO is indeed an adopted by the Board of Directors, are summarized hereafter.
Inspector General of Finance and previous positions have included
Development Director at the French Ministry of Cooperation, The Audit Committee is in particular responsible for monitoring
the World Bank’s Vice-President in charge of Far East Asia the following:
and Chief Executive Officer of the French Development Agency • the preparation of financial information;
(AFD). In these previous positions, he developed solid expertise
in accounting and finance as well as in internal control and risk • the effectiveness of the internal control, risk management and
management issues; internal audit systems;
• Mr. Richard GOBLET D’ALVIELLA was appointed member of the • the statutory audit of the annual and consolidated financial
Audit Committee in April 2003 (he has also been a member of the statements; and
Nomination and Compensation Committee since July 2013). Mr. • the independence of the Statutory auditors.
Richard GOBLET D’ALVIELLA is Honorary Chairman of the Sofina
financial company. He is also a member of the audit committees The Audit Committee is tasked with:
of Eurazeo and GLEvents. He has very significant experience and • regarding the financial statements and financial information: (i)
is highly skilled in both financial and accounting matters; and reviewing the Company’s statutory and consolidated financial
• Mrs. Mouna SEPEHRI was appointed to the Audit Committee in statements before they are submitted to the Board of Directors,
April 2012. Mrs. Mouna SEPEHRI has been closely involved in (ii) ensuring the consistency of the accounting policies the Com-
the development of the Renault group for the last 18 years and pany applies, (iii) reviewing the accounting treatment of the main
in its major acquisitions and strategic partnerships, including complex and/or non-recurring transactions, (iv) reviewing the
the Renault-Nissan Alliance. As Executive Vice-President of the consolidation scope of group companies and being informed of
Chief Executive’s Office, she oversees the corporate functions consolidation problems that may arise, (v) reviewing the policy for
delegated to that office, including legal affairs. Her extensive monitoring off-balance sheet commitments, (vi) being informed
experience in the area of mergers and acquisitions demons- of the Statutory auditors’ opinions and comments, (vii) being
trates her proven financial skills; furthermore, as head of the informed at half-yearly presentations by the General Management
legal division of a major international listed group, Mrs. Mouna of the Company’s financial position, cash position and commit-
SEPEHRI brings important additional experience in risk mana- ments, (viii) reporting the main accounting options concerning
gement and internal control. the closing of the annual and semi-annual consolidated financial
statements to the Board of Directors, (ix) reviewing, together with
The composition of the Audit Committee was modified following the General Management, press releases on the Group’s results
the Board of Directors meeting of February 19, 2015, which noted and having access to the Group’s main financial communication
the non-renewal of the term of office of Mr. Richard GOBLET documents, (x) accessing non-financial information published by
D’ALVIELLA as Director. the Group, which have been presented to the Social Responsibility
Mrs. Gaëlle OLIVIER was appointed member of the Committee to Committee, and (xi) reviewing the Group’s main disputes and any
replace Mr. Richard GOBLET D’ALVIELLA. Mrs. Gaëlle OLIVIER corresponding accounting provisions twice a year;
developed solid financial expertise while working on the trading • regarding the Group’s Statutory auditors: (i) management of the
floor at Crédit Lyonnais and as investment transactions manager selection process for the Company’s Statutory auditors by super-
for AXA. She also has recognized expertise in risks and internal vising call for tenders launched by General Management, with
audit, as CEO of AXA’s property insurance businesses in Asia. Her in particular (ii) making proposals for the appointment, renewal
presence on the Audit Committee will serve to strengthen the skills and compensation of the Statutory auditors, (iii) reviewing the
and expertise this Committee already has. results of their work and audits as well as their recommendations
The Committee thus remains entirely composed of independent and the follow-up of the latter, (iv) regularly meeting with the
Directors. Statutory auditors, including without directors being present,

Governance bodies
and (v) ensuring the independence of the Statutory auditors. Main amendments and changes to the Audit
In accordance with the recommendations of the French Finan- Committee’s rules of procedure
cial Markets Authority working group on audit committees, of
December 14, 2010, the Board of Directors supplemented the The Audit Committee’s rules of procedure are reviewed regularly,
rules of procedure to provide for a joint review by the Audit notably to ensure that they comply with the latest legal provisions
Committee and the Statutory auditors of the protective measures and updated recommendations of the AFEP-MEDEF Code. The rules
the Statutory auditors adopt to mitigate potential risks to their of procedure were amended in this way at the Board of Directors’
independence, and ensure that they comply with statutory and meeting on December 10, 2013, in order to implement the new
regulatory provisions concerning the conflicts set out in the recommendations of the AFEP-MEDEF Code, and in particular,
Statutory auditors’ code of ethics; to provide (i) for the recommendation that the Statutory auditors
should meet regularly with the Audit Committee, including without
• regarding risk management: (i) ensuring that structures and corporate officers being present, particularly during Audit Committee
systems are in place to identify and evaluate the risks that the meetings on the review of the process for the preparation of financial
Group faces, as well as monitoring the effectiveness of such information and review of the financial statements, so that the Sta-
systems. This entails verifying that major risks faced by the tutory auditors can report on the execution of their responsibilities
Group are adequately taken into account and are subject to action and the conclusions from their work, (ii) that the Audit Committee
plans; (ii) being informed by the Board of Directors, the Statutory should be given information regarding the internal audit program
auditors and the General Management of any events which expose and receive periodic summaries of these programs, and (iii) that
the Company to significant risk, and (iii) being informed of the the Audit Committee should meet with the internal audit managers.
Group’s main social, societal and environmental risks which
have been presented to the Social Responsibility Committee; Work of the Audit Committee
• regarding internal control: (i) ensuring that an internal control In 2014, the Audit Committee met six times (as in 2013). Its members’
system is in place and monitoring its effectiveness, (ii) being attendance rate at meetings was 94% (the same as in 2013). The
informed of any significant failures or weaknesses in internal Audit Committee invites the Statutory auditors to attend each of its
control and any major fraud, (iii) reviewing the report of the meetings. Additionally, an Audit Committee meeting is organized
Chairman of the Board of Directors on the composition, pre- once a year with the Statutory auditors without corporate officers
paration and organization of the Board’s work, as well as the being present, in accordance with the AFEP-MEDEF Code recom-
internal control and risk management procedures established mendations and the Committee’s rules of procedure.
by the Company, (iv) ensuring that procedures are in place to
process complaints received by the Group concerning accounting In 2014 and early 2015, the Committee’s work focused primarily on
and financial transactions, breaches of internal control or anti- the following matters:
corruption and anti-fraud regulations, (v) being informed about • the Group’s financial position;
significant complaints received by this system and supervising
the processing of the most important files referred to it, and • review of the Group’s annual and semi-annual consolidated
(vi) being available for the Social Responsibility Committee to financial statements. In all cases, this review involves (i) a pre-
consult on any questions relating to the business conduct policy sentation of the Group’s financial position by the Chief Financial
or ethics; and Officer, (ii) a presentation by the Statutory auditors of their audit
approach, (iii) on the one hand, a joint presentation by the Chief
• regarding internal audit: (i) approving the internal audit plan and Financial Officer, the executive responsible for preparing the
overseeing its implementation, (ii) reviewing the structure of financial statements (the Head of Financial Control) and, on
internal audit, being informed about the content of the Group’s the other, the Statutory auditors of the main accounting options
Internal Audit Charter and being informed and consulted in chosen, (iv) a review of the Group’s main disputes, (v) a review of
relation to the appointment or replacement of the Internal Audit the off-balance sheet commitments and (vi) hearing the conclu-
Director, (iii) providing opinions on the adequacy of internal audit sions of the Statutory auditors including their audit adjustments;
resources and its independence and, in the event that external
consultants are used to fulfill all or part of the internal audit • review of the financial indicators not defined by IFRS and used 6
missions, issuing recommendations regarding their appoint- externally for publication of the annual and semi-annual conso-
ment and renewal, (iv) being informed about the internal audit lidated financial statements;
program and receiving a regular summary of these reports, and • review of the main changes in the Group’s consolidation scope
(v) meeting the heads of internal audit. and examination of the primary terms of operations leading to
In performing its duties, the Audit Committee may regularly interview changes of scope, and their accounting;
the corporate officers, the General Management of the Company • review of put options granted to certain minority shareholders
and of its subsidiaries, as well as the Internal Audit Director, the in the Group’s subsidiaries, notably the minority shareholders
Statutory auditors and senior managers of the Group (in particular, of Danone Spain and the Danone-Unimilk entity;
managers in charge of preparing the consolidated and statutory
financial statements, risk management, internal control, legal, tax, • review of the draft press releases on the annual and semi-annual
treasury and financing and ethics compliance). At the Committee’s consolidated results. At such time, the Committee ensures that
request, these interviews may take place without the presence of the financial information presented to the markets is consistent
representatives of the Company’s General Management. In addi- with the consolidated financial statements, and that the process
tion, the Audit Committee may request opinions from independent of preparing the press releases included a review thereof by the
external advisors, in particular on legal and accounting matters, Statutory auditors;
and request any internal or external audits. • presentation of the proposed dividend distribution to be submitted
to a vote of the shareholders;

Governance bodies
• review of the draft resolutions concerning the renewal of financial In addition, within the framework of a joint meeting of the Audit
authorizations and the share buyback program submitted for Committee and the Social Responsibility Committee held on April
approval at the Shareholders’ Meeting of April 29, 2015; 29, 2014 and coordinated and co-chaired by the Lead Independent
Director, a review was made of the Group’s compliance policy. In
• the review of the Group’s crisis management system, including a this regard, the Committees notably proposed the allocation of
semi-annual review of its main risks (including financial risks),
additional support and resources to the Group’s compliance and
particularly by thematic presentations and discussions with the
internal control functions. In particular, a Product Compliance Board
operational managers in charge of monitoring and managing
was created during the fiscal year. This corporate body establishes
these risks, and updated presentations of risk mapping;
and reviews the policies and governance relating to compliance of
• monitoring the effectiveness of the internal control systems; Danone products, covering all regulations applicable to products
as well as Danone’s specific rules. The Committee is also in charge
• approval of the Group’s internal audit plan, and review of the of monitoring the implementation of these product policies. This
principal results of audits conducted during the year and the
Product compliance board covers the four following areas: quality
summary thereof;
and food safety, health and nutrition, communication on brands and
• review of the section of the Chairman’s report on internal control products and intellectual property. It comprises nine members, is
and risk management; sponsored by the Chief Executive Officer of Danone and is chaired by
the Group’s General Secretary. It meets at least once every quarter
• updating of the pre-approval policy for assignments by the for half-day meetings.
Statutory auditors (other than statutory audit assignments),
thereby ensuring their independence (including a regular review In addition, the Audit Committee reviewed the annual consolidated
of their fees); financial statements at meetings held sufficiently in advance in
accordance with the AFEP-MEDEF Code, namely at least three
• monitoring of the accounting and organizational aspects of the days before the Board meeting approving the financial statements.
Group’s plan for savings and adaptation in Europe;
A report on each Audit Committee meeting is made at the next Board
• monitoring of the Group’s financial transactions; of Directors meeting. All Directors are sent a copy of the minutes of
• monitoring of the Group’s organization with regard to food com- each Audit Committee meeting, once approved by the Committee
pliance and safety; members. The purpose of these reports is to keep the Board fully
informed, thereby facilitating its decisions.
• operation of the Committee, and establishing its program and
priorities for the 2014 and 2015 fiscal years;
• review of the Group’s main tax risks and examination of tax
policy changes; and
• follow-up on the IFRS standards’ developments.
Nomination and Compensation Committee

Composition of the Nomination Mr. Lionel ZINSOU-DERLIN, independent Director, was appointed
member of the Committee to replace Mr. Richard GOBLET D’ALVIELLA
and Compensation Committee who did not seek the renewal of his term of office as Director. Mr.
As of December 31, 2014, the Nomination and Compensation Lionel ZINSOU-DERLIN has extensive expertise in compensation
Committee comprised only independent Directors (note that the systems for corporate officers and in governance.
AFEP-MEDEF Code recommends that this Committee should have The Committee is thus entirely composed of independent Directors.
a majority of independent Directors):
• Mr. Jean LAURENT, former Chief Executive Officer of Crédit Nomination and Compensation
Agricole, appointed as Danone Lead Independent Director in Committee’s rules of procedure
February 2013, Chairman of the Nomination and Compensation
Committee and of the Social Responsibility Committee, inde- Adoption by the Board of Directors
pendent Director, a member of the Nomination and Compensation On December 15, 2006, the Board of Directors adopted rules of
Committee since April 2005; procedure for the Nomination and Compensation Committee, which
• Mr. Richard GOBLET D’ALVIELLA, Honorary Chairman of Sofina, specify its role, responsibilities and operating rules.
independent Director since 2003 and member of the Audit Com- Main provisions of the Nomination and
mittee since this date, member of the Nomination and Compen-
sation Committee since July 2013; and
Compensation Committee’s rules of procedure
The main provisions of the Nomination and Compensation Commit-
• Mr. Benoît POTIER, Chairman and Chief Executive Officer of L’Air tee’s rules of procedure are summarized hereafter.
Liquide, independent Director since 2003 and a member of the
Committee since April 2012 (after having chaired Danone’s Audit The Nomination and Compensation Committee has the following
Committee from April 22, 2005 to April 22, 2010). responsibilities:
The composition of the Nomination and Compensation Committee • in connection with the appointment of Directors and corporate
was modified following the Board of Directors of February 19, 2015, officers or the renewal of their terms of office: (i) making recom-
which noted the non-renewal of the term of office of Mr. Richard mendations to the Board of Directors regarding the appointment
GOBLET D’ALVIELLA as Director. or renewal of members of the Board of Directors, its Chairman
and Vice-Chairmen, the Chief Executive Officer or Deputy General

Governance bodies
Managers, Committee members and Committee Chairmen, and Concerning General Management
(ii) making proposals to the Board of Directors regarding the
succession of corporate officers, in particular in the event of
unexpected vacancies. In addition, the Nomination and Compen-
• review of (i) the organization of General Management and, more
specifically, (ii) the renewal of the term of office of Mr. Bernard
sation Committee is informed of all appointments of members of
HOURS as Deputy General Manager (subject to the renewal of
the Group’s Executive Committee (other than corporate officers);
his term of office by the Shareholders’ Meeting on April 29, 2014);
• in connection with corporate governance: preparing the Board • review of Mr. Bernard HOURS’s position, notably in connection
of Directors’ review of corporate governance issues and, in
with the signature of a Dutch Statutory Director agreement with
particular, checking whether and to what extent the Directors
one of Danone’s Dutch subsidiaries, Danone Trading B.V.;
and Committee members comply with the independence criteria
laid out in the AFEP-MEDEF Code; • review of the position of corporate officers, and in particular, a
review of the following items:
• in connection with the assessment of the Board of Directors,
the Audit Committee and the Social Responsibility Committee: • the Company’s commitments with respect to indemnities for
organizing these assessments upon their request; termination in certain cases of termination of office for Mr.
Bernard HOURS, and the proposed amendments to be made
• in connection with compensation of the Company’s corporate to the previous arrangements;
officers: (i) proposing criteria for determining all components
of their compensation, as well as the amount and ensuring the • all of the offices held by Mr. Bernard HOURS with regard to
correct application of these criteria, in particular for the variable the legal provisions and the recommendations of the AFEP-
portion, (ii) making proposals on granting performance-based MEDEF Code regarding the simultaneous holding of corporate
stock-options or Group performance shares to corporate officers; offices;
• in connection with the attendance fees paid to Directors: recom- • concerning renewal of Mr. Bernard HOURS’ term of office,
mending to the Board the amount of attendance fees to be pro- the review of his obligation to retain DANONE shares acquired
posed at the Shareholders’ Meeting as well as the allocation of through the grant of shares subject to performance conditions.
these attendance fees among the Directors; and On this occasion, in view of the demanding nature of the
holding obligation already implemented, the Board renewed
• in connection with the Group compensation policy: providing its decision not to apply the AFEP-MEDEF Code’s recommen-
an opinion or making recommendations on the principles and
dation relating to the additional obligation to buy DANONE
methods for the Group’s policy on allocating Company shares
shares on the market when the shares granted vest;
free of charge, stock purchase or subscription options and
Group performance units and on any compensation mechanism • the Group’s variable compensation policy (including a review
linked to the Company’s shares and, more generally, making any of the balance of the benefits granted to the various categories
recommendation in relation to the Group’s compensation policy. of beneficiaries of shares subject to performance conditions)
In addition, the Nomination and Compensation Committee is and the weighting between the long-term programs (Group
informed of the compensation policy for the Group’s Executive performance shares – GPS) and medium-term programs
Committee members (other than corporate officers). (Group performance units – GPU);
Main changes to the Nomination and Compensation • all components of compensation of each of the three corporate
officers and, in particular, the variable compensation due in
Committee’s rules of procedure
respect of the 2013 fiscal year. The Committee thus reviewed
The Nomination and Compensation Committee’s rules of procedure the following variable compensation programs:
are regularly updated. The primary changes involved the possibi-
lity that the Nomination and Compensation Committee evaluate (i) the short-term program (variable annual compensation)
the operation of the Social Responsibility Committee and that the granted subject to performance conditions;
confidentiality clause be unified with that applicable to the Board (ii) the medium-term program (Group performance units),
of Directors. including a review of whether performance objectives were met
6
in each of the preceding fiscal years, and setting performance
Work of the Nomination and objectives at the beginning of each new fiscal year; and
Compensation Committee (iii) the long-term program (Group performance shares),
In 2014, the Nomination and Compensation Committee met six times including a review of the obligation of the corporate officers
(four times in 2013). Its members’ attendance rate at meetings was to hold shares; and
100% (83% in 2013). • the resolutions to be presented to the Shareholders’ Meeting
A report on each Nomination and Compensation Committee meeting of April 29, 2014 regarding the individual compensation for the
is made at the next Board of Directors’ meeting. The purpose of three corporate officers (“say on pay”).
these reports is to keep the Board fully informed, thereby facili-
tating its decisions.
In 2014 and in early 2015, the work of the Nomination and Com-
pensation Committee focused on the following points in particular:

Governance bodies
Concerning the separation of the offices of Chairman of the In connection with the Shareholders’ Meeting of April 29, 2015
Board of Directors and Chief Executive Officer • implementing the selection process concerning the Board of
• examination of the organization of General Management and Directors’ composition, including: (i) reviewing the general
recommendation to separate the offices of Chairman of the Board guidelines as to changes in the composition of the Board, (ii)
and Chief Executive Officer and to appoint Mr. Franck RIBOUD confirming a recruitment and a medium-term renewal policy for
as Chairman of the Board and Mr. Emmanuel FABER as Chief its members (taking into consideration notably the objectives in
Executive Officer of the Company; relation to the number of women, independence, and diversity in
terms of nationality and international expertise of Board members,
• review (i) of the components of compensation for Mr. Franck whilst retaining continuity of expertise), (iii) determining selec-
RIBOUD as Chairman of the Board and (ii) of the waiver by Mr.
tion criteria for candidacies, and (iv) examining each proposed
Franck RIBOUD of his termination indemnity due in case of
appointment both in regard to the determined selection criteria
termination of his functions as corporate officer;
and to the different assumptions on changes in the Board and
• review of the components of compensation of Mr. Emmanuel each of its Committees;
FABER as Chief Executive Officer and review of the terms and
conditions of Mr. Emmanuel FABER’s termination indemnity and
• in this context, the Committee:
recommendation to maintain identical terms and conditions; • acknowledged Mr. Richard GOBLET D’ALVIELLA’s desire not
to seek renewal of his term of office as Director;
• examination of the elimination of the offices of Deputy General
Manager and of the termination of the office of Mr. Bernard • recommended the renewal of the terms of office of Messrs.
HOURS as Deputy General Manager; Jacques-Antoine GRANJON, Jean L AURENT and Benoît
POTIER, Mrs. Mouna SEPEHRI and Mrs. Virginia A. STALLINGS;
• examination of the termination indemnity for Mr. Bernard HOURS;
and • recommended the appointment of Mrs. Serpil TIMURAY as
Director. The Committee deemed that she met all of the inde-
• examination of the creation and composition of the Strategy pendence criteria set forth in the AFEP-MEDEF Code;
Committee.
• acknowledged, subject to the Shareholders’ Meeting of April
29, 2015 adopting all resolutions concerning changes in the
• review of the Group’s variable compensation policy (including composition of the Board, changes in the Board, in particular
a review of the balance of the benefits granted to the various
in terms of independence, number of women, diversity and
categories of beneficiaries of shares subject to performance
reduction in the average age; and
conditions [Group performance shares]) and the weighting
between the long-term and medium-term programs (Group • recommended that the Board continue to improve corporate
performance units); governance with respect to the percentage of women and the
diversity of its composition.
• review of all components of the compensation of the Chairman
of the Board of Directors, the Chief Executive Officer and, in Concerning the different Committees
particular, the variable compensation due in respect of the 2014
fiscal year. The Committee thus reviewed the following variable
• examined the evolution of the composition of the Nomination
and Compensation Committee with the proposal to appoint Mr.
compensation programs:
Lionel ZINSOU-DERLIN as member of this Committee to replace
(i) the short-term program (variable annual compensation) Mr. Richard GOBLET D’ALVIELLA;
granted subject to performance conditions;
• examined the evolution of the composition of the Audit Committee
(ii) the medium-term program (Group performance units), with the proposal to appoint Mrs. Gaëlle OLIVIER as member of
including a review of whether performance objectives were met this Committee to replace Mr. Richard GOBLET D’ALVIELLA;
in each of the preceding fiscal years, and setting performance
objectives at the beginning of each new fiscal year; and
• examined the evolution of the composition of the Social Responsi-
bility Committee with the proposal to appoint Mrs. Marie-Anne
(iii) the long-term program (Group performance shares), inclu- JOURDAIN, Director representing employees and Mrs. Virginia
ding a review of the obligation of the corporate officers and the A. STALLINGS as members of this Committee to replace Mr.
other Executive Committee members to retain their shares; Emmanuel FABER, Mr. Jean-Michel SEVERINO and Mr. Jean
LAURENT;
• review of the proposal to increase the total amount of attendance
fees and to amend the rules of allocation of attendance fees • examined the creation of a Strategy Committee and its rules of
starting on January 1, 2015; and procedure; and
• review of the resolutions to be presented to the Shareholders’ • considered the composition of the Strategy Committee, with the
Meeting of April 29, 2015 concerning the individual compensation proposal to appoint, in addition to the Chairman of the Board and
for Mr. Franck RIBOUD, Mr. Emmanuel FABER and Mr. Bernard the Chief Executive Officer, Mr. Benoît POTIER, Mrs. Isabelle
HOURS (“say on pay”). SEILLIER and Mr. Jean-Michel SEVERINO as members of this
Committee.
Concerning the composition of the Board of Directors
• review of the composition of the Board and proposal of resolutions
concerning changes to it;
• review of the number of offices held by each Director; and
• annual individual review of Directors’ independence and of the
existence of conflicts of interest, including potential conflicts
of interest.

Governance bodies
Concerning the variable compensation elements Concerning corporate governance

of the Group’s directors and managers for the 2015 • annual individual review of the independence of each Director and
fiscal year of the existence of any conflicts of interest, including potential
• review and determination of the various criteria and weighting conflicts of interest. Details of the review of the independence
criteria applicable to these candidates and of their individual
elements for the annual variable compensation: in particular,
expertise and skills are found above in the section Review of
definition for each criterion of the target, the cap, the maximum
Directors’ independence;
and minimum attributable;
• review, at the start of each new fiscal year, of the determination • monitoring of the process of appointing Directors representing
employees to the Danone Board of Directors pursuant to the Act
of performance conditions applicable to the Group performance
of June 14, 2013 concerning job security;
units based on targets communicated to the market;
• review of a new draft resolution concerning the granting of Group • examination of the review of the Lead Independent Director;
performance shares to be put to the Shareholders’ Meetings of • annual review of the process and practices in effect within the
2014 and 2015; and Group in terms of the succession plan for the Group’s General
• annual review to determine whether performance conditions Management and key positions in the Group’s companies; and
have been achieved for Group performance units and Group • review of the results of the Directors’ self-assessment and
performance shares. discussion of the proposals to address the comments regarding
this self-assessment.
Social Responsibility Committee

On December 15, 2006, the Board of Directors created a third specific Main provisions of the Social Responsibility
governance body, the Social Responsibility Committee. Committee’s rules of procedure
Composition of the Social Responsibility The main provisions of the Social Responsibility Committee’s rules
of procedure are summarized hereafter.
Committee
The Social Responsibility Committee is responsible for overseeing
On December 31, 2014, the Social Responsibility Committee com- the Group’s societal project. Its scope covers all areas of social
prised the following four Directors, three of whom have been deemed responsibility related to the project and the Group’s activities and,
by the Board of Directors to be independent within the meaning of in particular, social, environmental and ethical issues.
the AFEP-MEDEF Code:
The Social Responsibility Committee pays special attention to the
• Mr. Jean LAURENT, the Committee Chairman, an independent Group’s action principles, policies and practices in these areas:
Director and a Committee member and Chairman since February
2007; • social, relating to the Group’s employees and those of its partners,
subcontractors, suppliers and customers;
• Mr. Bruno BONNELL, an independent Director and a Committee
member since February 2007; • environmental, relating to (i) activities directly controlled by
the Group (industrial production, packaging, etc.) or indirectly
• Mr. Emmanuel FABER, a Director and Chief Executive Officer, a controlled by it (purchasing, transport, energy, etc.), and (ii) the
Committee member since February 2007; and use of non-renewable natural resources;
• Mr. Jean-Michel SEVERINO, an independent Director and a • ethical, relating to Group employees, consumers and, more
Committee member since April 2011. generally, all Group stakeholders; and
The composition of the Social Responsibility Committee was modified • nutrition, relating in particular to public health issues, the social 6
following the Board of Directors of February 19, 2015. Mrs. Marie- impact of its products and communication with its consumers.
Anne JOURDAIN (Director representing employees) Mrs. Virginia
A. STALLINGS (independent Director) were appointed members of The Social Responsibility Committee is responsible for:
the Committee to replace Mr. Emmanuel FABER, Mr. Jean-Michel • reviewing the Group’s main environmental risks and opportunities
SEVERINO and Mr. Jean LAURENT. in relation to its objectives and activities;
The Committee will thus comprise a majority of independent • ensuring that members are informed about the internal control
Directors. procedures implemented within the Group relating to its main
environmental risks;
Social Responsibility Committee’s rules
• being consulted by the Audit Committee with respect to audit
of procedure missions related to its areas of intervention;
Adoption by the Board of Directors on February • reviewing the Group’s social policies, their objectives and the
14, 2007 results obtained;
On February 14, 2007, the Board of Directors adopted the Social • reviewing the reporting, evaluation and control systems to enable
Responsibility Committee’s rules of procedure, which detail its the Group to produce reliable non-financial information;
responsibilities and expertise and method of operation.
• reviewing all non-financial information published by the Group,
in particular concerning social and environmental matters;
• annually reviewing the summary of the ratings given to the
Company and its subsidiaries by non-financial rating agencies;

Governance bodies
• ensuring the application of the ethical rules adopted by the Group; Work of the Social Responsibility
• being regularly informed about complaints received as part of Committee
the employee whistle blowing procedure which concern ethical,
social or environmental issues and reviewing those which come In 2014, the Social Responsibility Committee met four times (as in
under the scope of its remit, in conjunction with the work carried 2013). Its members’ attendance rate at meetings was 100% (the
out by the Audit Committee; and same as in 2013).
• regularly reviewing the results of the Group’s self-assessments In 2014 and early 2015, the Committee’s work focused on:
under the Danone Way program. • the review of the Group’s ongoing social projects and, more
In addition, in the area of socially responsible investments, the specifically, a review of the activity and budgets of the funds
Committee is responsible for: sponsored by Danone, notably:
• evaluating the impact of these investments for the Group; • the Group’s investment in a new fund: the Livelihoods fund
for family farming;
• reviewing application of the rules established by the Group
concerning social investments and programs in areas related • review of the Danone Ecosystem Fund, bearing notably on its
to the Group’s activities; and operating resources and the projects supported by the Fund,
as well as the amount paid by the Company in respect of its
• ensuring that the Company’s interests are protected, with parti- financial contribution to the Danone Ecosystem Fund; and
cular focus on preventing any conflicts of interest between these
investments and the rest of the Group’s activities. • the amount paid by the Company in respect of its annual finan-
cial contribution to danone.communities (see sections 5.3
The Committee is also responsible for preparing and providing Funds sponsored by Danone and 6.5 Statutory auditors’ special
information to assist the work of the Board on investments and social report on related party agreements and commitments);
action programs which Danone leads or participates in.
• review of the focus areas of the Danone 2020 plan, in particular
Main amendments/changes in the Social of the strategic priorities, the implementation calendar and
Responsibility Committee’s rules of procedure progress achieved;
On December 17, 2009, the Board of Directors amended the rules of • examination of the non-financial information published by the
procedure, which stipulate that henceforth the Social Responsibility Group;
Committee will carry out a regular assessment of its performance.
• monitoring of the process of designation of Directors represen-
In 2009, the Committee carried out a first assessment of its ting employees (in accordance with Act no. 2013-504 of June
activities, which led to a reflection on the Committee’s position, in 14, 2013); and
particular in relation to the Audit Committee. The Committee the-
refore decided to carry out a new assessment of its activity by all • review of the presentation of the Company’s strategic policies
Directors, whose results were examined in 2010. This assessment presented to the Works Council.
confirmed the Committee’s contribution to the Group’s strategy, In addition, within the framework of a joint meeting of the Audit
because the Committee enables a better understanding of changes Committee and the Social Responsibility Committee held on April
that affect the Group’s business, as well as consumer expectations 29, 2014 and coordinated and co-chaired by the Lead Independent
in the face of new issues (in particular, environmental, health and Director, a review was made of the Group’s compliance policy. In this
social policy issues). regard, the Committees notably proposed the allocation of additio-
Following this assessment, it was decided (i) to improve coordi- nal support and resources to the compliance and internal control
nation in reviewing Group risks with the Audit Committee, and (ii) functions, in particular the creation of a Product Compliance Board.
to provide feedback on its work to the Board in a more concrete A report on each Social Responsibility Committee meeting is made
manner. Furthermore, the Committee’s duties were expanded to at the next Board of Directors’ meeting. These reports enable the
ensure (i) the implementation of the Group’s four social initiatives Board to stay fully informed, thereby facilitating its decisions.
and verifying the actual impact of the transformation process on
corporate management, and (ii) the accuracy and reliability of the
Group’s non-financial communications.

Governance bodies
Strategy Committee
On September 2, 2014, the Board of Directors decided to create a Main provisions of the Strategy Committee’s
fourth specific governance body, the Strategy Committee. rules of procedure
Composition of the Strategy Committee The main provisions of the Strategy Committee’s rules of procedure,
adopted by the Board of Directors at its meeting on October 17, 2014,
At February 28, 2015, the Strategy Committee comprised the five are summarized hereafter.
following Directors:
The mission of the Strategy Committee is to analyze the Danone
• Mr. Franck RIBOUD, Chairman of the Committee, Chairman of group’s major strategic policies.
the Board of Directors;
The Strategy Committee prepares and informs the work of the Board
• Mr. Emmanuel FABER, Chief Executive Officer; on key matters of strategic interest such as:
• Mr. Benoît POTIER; • development priorities;
• Mrs. Isabelle SEILLIER; and • external growth opportunities;
• Mr. Jean-Michel SEVERINO. • divestment transactions;
Strategy Committee’s rules of procedure • significant agreements and partnerships;
Adoption by the Board of Directors on October
• possible transactions concerning the Company’s share capital;
17, 2014 • potential diversification opportunities;
On October 17, 2014, the Board of Directors adopted rules of procedure • and more generally, any transaction of significance for the future
for the Strategy Committee, which specify its role, responsibilities of the Group.
and operating rules.
Work of the Strategy Committee
The members of the Strategy Committee were appointed during the
Board of Directors meeting of February 19, 2015. As with Danone’s
other committees, at least two meetings are planned annually.
Executive Committee
Role of the Executive Committee
Under the authority of the Chief Executive Officer, Mr. Emmanuel FABER, the Executive Committee is responsible for the Group’s ope-
rational management. It implements the strategy defined by the Board of Directors, approves annual budgets, ensures the consistency
of actions undertaken by each of the subsidiaries and Divisions and, depending on the results achieved, decides on action plans to be
implemented. The Executive Committee meets at least once a month.
Composition of the Executive Committee

As of February 28, 2015, the following are the ten members of the Executive Committee:
Starting date
as Executive 6
Committee
Name Age Principal position within the Group member
Chief Executive Officer and Vice-Chairman of the

Emmanuel FABER 51 Board of Directors 2000
Felix MARTIN GARCIA 54 General Manager, Early Life Nutrition 2008
Pierre-André TERISSE 48 General Manager Africa 2008
Flemming MORGAN 59 General Manager, Medical Nutrition 2009
Jean-Philippe PARE 56 General Manager, Research and Development 2011
Francisco CAMACHO 49 General Manager, Waters 2011
Marc BENOIT 51 General Manager, Human Resources 2014
Bertrand AUSTRUY 41 General Secretary 2015
Cécile CABANIS 44 Chief Financial Officer 2015
Gustavo VALLE 51 General Manager, Fresh Dairy Products 2015

Governance bodies
Application of the AFEP-MEDEF Corporate Governance Code for listed companies

The Company complies with the corporate governance system applicable in France, in accordance with the provisions described in this
section.
Pursuant to the Act of July 3, 2008, on December 18, 2008, the Board of Directors reviewed the provisions of the AFEP-MEDEF Code and
decided that the Group would refer to this Code of Governance (this decision was published in a press release issued on December 19,
2008). This code is available on the MEDEF website (www.medef.fr).
Danone applies the recommendations of the AFEP-MEDEF Code, with the exception of the following points which the Company does not
apply in a strict manner:
Recommendations Danone’s practice and justification
Assessment of the Board (section 10.2 of the The recommendation of the AFEP-MEDEF Code concerning measuring the actual
AFEP-MEDEF Code) contribution of each Director to the Board’s work is not applied, notably due to the prac-
One of the objectives of the assessment of the tical difficulties involved in implementing this type of recommendation and its possible
board of directors must be “to measure the actual consequences for team spirit and collegiality.
contribution of each director to the board’s work
Nonetheless, each year, the Directors complete a very extensive questionnaire on the
through his or her competence and involvement in
operation of the Board, allowing them to freely give their opinion on potential issues. In
discussions”.
this way, the Directors who so wish can freely express their view of the effective individual
contributions during their interview with the Board Secretary. The Board of Directors’
review of the completed questionnaires thus provides it with the opportunity to fully
assess the contributions and involvement of all Directors in the work of the Board and
its Committees.
Lastly, the Board’s rules of procedure expressly provide that this assessment should make
it possible to “ensure the availability and commitment of Directors”. The contribution of
each Director is assessed by the Nomination and Compensation Committee and by the
Board, in particular at the time of renewal of the terms of office of Directors and Committee
members. Taking into account the satisfactory results of these assessments, the Board
of Directors did not express, at this date, the need to carry out a formal assessment of
the each Director’s contribution.
Termination of employment contract in case of At the time of the separation of the offices of Chairman and Chief Executive Officer, the
appointment as corporate officer (section 22 of Board of Directors’ meeting of September 2, 2014, pursuant to the recommendation
the AFEP-MEDEF Code) of the Nomination and Compensation Committee, confirmed the position taken by the
“When an employee is appointed as corporate officer, Board in 2013 and considered that the employment contracts of Mr. Franck RIBOUD and
it is recommended to terminate his or her employment Mr. Emmanuel FABER should be maintained (although they should remain suspended),
contract with the company or with a company affiliated given their age, personal circumstances and length of service as Group employees.
to the group, whether through contractual termination Indeed, the Board considered this system relevant for corporate officers with at least 10
or resignation. years of seniority within the Group, to encourage internal promotion and the sustainable
management that the Company is striving to implement, as terminating the employment
contract could, on the contrary, dissuade internal candidates from accepting positions
This recommendation applies to the chairman, as corporate officers.
chairman and chief executive officer, and general
manager of companies with a board of directors The Board believed that implementing the AFEP-MEDEF recommendations to permanently
[…].” terminate these employment contracts would cause them to lose the rights gradually
acquired under their employment contracts during their careers at the company (33
years for Mr. Franck RIBOUD and 17 years for Mr. Emmanuel FABER), particularly the
benefits gradually acquired throughout their career at Danone based on seniority and
actual service, i.e. severance pay and long-term benefits such as participation in group
plans, compensation that in any case would not exceed, in its entirety, the cap of two
years of compensation (fixed and variable).
In addition, the French Financial Markets Authority considers that it is in compliance
with the AFEP-MEDEF Code for an employment contract to remain in force in view of
an executive’s (i) length of service as an employee within the company and (ii) his or her
personal situation.
Functioning of compensation committees (section Corporate officers are present when the Board of Directors deliberates on issues relating
18.2 of the AFEP-MEDEF Code) to their compensation but do not take part in any debate or vote in relation to decisions
“When the report on the work of the compensation which affect them.
committee is presented, the board should
In addition, the Board of Directors only decides on compensation upon recommendation
deliberate on issues relating to the compensation
of the Nomination and Compensation Committee, which is entirely composed of inde-
of the corporate officers without the presence
pendent Directors and which includes no corporate officer.
of the latter.”
A Lead Independent Director was appointed in 2013 to provide additional assurance
that the Board is functioning correctly and that power is well-balanced on the General
Management and Board of Directors.

Governance bodies
Recommendations Danone’s practice and justification
Stock-options and performance shares (sec- Given the high obligation imposed on corporate officers and other Executive Committee
tion 23.2.4 of the AFEP-MEDEF Code) members to retain DANONE shares, the Board of Directors, acting upon recommendation
“It is recommended that performance shares allo- of the Nomination and Compensation Committee, considered that it was not necessary to
cated to corporate officers be conditional upon the require them to purchase a certain number of Company shares at the end of the holding
purchase of a defined number of shares when the period of their shares, subject to performance conditions.
allocated shares vest, in accordance with the terms
and conditions set by the board of directors.”
Supplementary pension plans (section 23.2.6 of Directors’ eligibility for the pension plan is indeed subject to the condition that they are
the AFEP-MEDEF Code) performing their duties within the Group at the time of retirement. As an exception to this
“Supplementary defined benefit pension plans are principle, in the sole case of redundancy after the age of 55, the benefit derived from the
subject to the condition that the beneficiary must plan will be maintained, provided that the employee does not take up paid employment.
be a corporate officer or employee of the company This last provision, consistent with applicable French regulations, makes it possible to
when claiming his or her pension rights in accor- protect all beneficiaries against the risk of redundancy after the age of 55 and before
dance with the rules in force.” they have reached retirement age.
Independence criteria for directors (section 9.4 of Concerning the criterion of the AFEP-MEDEF Code whereby Directors would lose their
the AFEP-MEDEF Code) independence once the length of their term of office exceeded 12 years, the Board observes
“The criteria to be reviewed by the committee and that Danone has a dual economic and social project, which gives it a unique culture, which
the board in order for a director to qualify as inde- the Group has reaffirmed in its strategy, governing bodies, performance measurement
pendent […] are the following: […] and management performance for a number of years. The Board has stressed on many
occasions the primary importance that it attaches to the Company’s cultural factors in
–not to have been a director of the corporation for
order to assess the pertinence and feasibility of the projects submitted to its approval.
more than twelve years.”
It considers that Danone’s culture with respect to its dual project is a unique competitive
advantage, for the Group and in the interests of its shareholders. As such, the Board
has observed that in the collective decision-making approach taken at its meetings, the
ability to view the development of cultural traits specific to the Company and its mission
in the long term is a real benefit which clarifies the Board’s work. The Board thus believes
that the holding of a term of office over a long period constitutes a measure of an ability
to contribute to the Board’s work in a free and autonomous manner while ensuring that
the Group’s identity and culture are preserved, rather than being an obstacle to inde-
pendence, and that additionally, the length of service on the Board should not be used
solely to determine the non-independence of a Director.
Concerning Mr. Bruno BONNELL, the Board has noted that he has continually proven
his particularly noteworthy independence of thought and freedom of speech, which have
led him to take up marked and constructive positions and to provide specific and diffe-
rentiated viewpoints during Board discussions. The Board noted that his positions have
enriched its decisions and that the independence of such decisions is an important value
for Danone, within a Board of Directors which has a majority of independent Directors
as defined using the strictest application of current standards.
Concerning Mr. Benoît POTIER, the Board has noted his strong contribution to the Board’s
discussions as well as the freedom of thought and of speech of the Chairman and Chief
Executive Officer of one of the largest companies in the CAC 40. Lastly, Mr. Benoît POTIER
demonstrates a remarkable independence of spirit.
Cap set for the qualitative portion of the annual As a reminder, the annual variable compensation of corporate officers is indeed subject
variable compensation of corporate officers (sec- to a global cap, which is indicated in the registration document (see section 6.3 Com- 6
tion 23.2.3 of the AFEP-MEDEF Code) pensation and benefits for corporate officers and governance bodies related to Principles of
“Within the variable compensation, when qualitative annual variable compensation of corporate officers); however, only the cap of the qualitative
criteria are used, a cap must be applied to the qua- portion of corporate officers’ variable compensation, although set, is not published for
litative portion while still allowing for the possibility confidentiality reasons.
of taking into account exceptional circumstances
where necessary”
In addition, the French High Committee for the Corporate Governance communicated recommendations to Danone in 2014. One of these
recommendations involves the independence of the members of the Board who have been seated for more than 12 years. The Board decided
not to apply this recommendation and to maintain the qualification of independence based on circumstances for the Directors who have
been seated for more than 12 years for the reasons mentioned above. A second recommendation involved the indication of the cap set for
the qualitative portion of variable compensation; as mentioned above, this cap exists but is not communicated for confidentiality reasons.

Positions and responsibilities of the Directors and nominees to the Board of Directors
6.2 Positions and responsibilities of the Directors

and nominees to the Board of Directors
(Article R. 225-83 of the French commercial code)
Information relating to the Directors and the nominees to the Board of Directors:
Appointment
Serpil TIMURAY
Renewal of terms of office

Jacques-Antoine GRANJON
Jean LAURENT
Benoît POTIER
Mouna SEPEHRI
Virginia A. STALLINGS
Current Directors
Bruno BONNELL
Emmanuel FABER
Richard GOBLET D’ALVIELLA
Marie-Anne JOURDAIN
Gaëlle OLIVIER
Franck RIBOUD
Isabelle SEILLIER
Jean-Michel SEVERINO
Bettina THEISSIG
Lionel ZINSOU-DERLIN

Appointment
serpil timuray
Positions and responsibilities as of December 31, 2014 (a)

Born on July 7, 1969
Age: 45
Positions Companies Countries
Director VODACOM GROUP (b) (c) South Africa
Member of the
Nomination Committee
Member of the
Remuneration Committee
Director VODAFONE INDIA (c) India

Business address: One Kingdom Street,
Paddington Central – London W2 6BY – Chairperson of Corporate
United Kingdom S ocial Responsibilit y
Committee
Number of DANONE shares held
Member of the
as of December 31, 2014: 0 (in accordance with
the by-laws, the 4,000 DANONE shares to be
held by each Director must be purchased within Member of the
3 months following his/her appointment by the Remuneration Committee
Shareholders’ Meeting at the latest) Director VODAFONE HUTCHISON AUSTRALIA (c) Australia
Independent Director Member of the
Turkish nationality Nomination Committee
Member of the
Principal responsibility: Regional Chief Executive
Director SAFARICOM KENYA (c) Kenya
Officer Africa, Middle East, Asia and Pacific, and
Executive Committee member of Vodafone Group Member of the
Personal background –
experience and expertise: Member of the
A native of Turkey, 45-year-old Serpil TIMURAY holds
a degree in business administration from Bogazici Director VODAFONE QATAR (c) Qatar
University in Istanbul. Member of the
She began her career in 1991 at Procter & Gamble,
where she was later on appointed to the Executive Member of the
Committee of Procter & Gamble Turkey. In 1999, she Remuneration Committee
moved to Groupe Danone as the Marketing Director
and a member of the Executive Committee for the 6
Fresh Dairy Products subsidiary in Turkey. From 2002 Positions Associations/Foundations/Other Countries
to 2008, she served as General Manager of Danone Chairperson of the YASED (Turkish International Investors Turkey
Turkey, overseeing the acquisition and integration of Board Association)
several companies in the region. In 2009, she joined
Member of the Board TOBB-GGK (Young Entrepreneurs Council of Turkey
Vodafone Group as the Chief Executive Officer of Turkish Union of Chambers and Commodity
Vodafone Turkey, contributing to its considerable Exchanges)
growth. Since January 2014, Serpil TIMURAY is serving
as the Regional CEO of Africa, Middle East and Asia- Board of Trustees Koc University Turkey
Member
Pacific and as a member of the Executive Committee
of Vodafone Group. She is also a board member in (a) O ffices shown in italics are not governed by Article L. 225-21 of the French commer-
several Vodafone companies in the region and sits in cial code concerning multiple directorships.
boards of several non-profit organizations outside of (b) Listed company.
the Vodafone Group. (c) Companies owned by Vodafone Group.
Positions and responsibilities held during the past five years

Chief Executive Officer VODAFONE TURKEY Turkey

Renewal of terms of office
jacques-antoine granjon
Born on August 9, 1962 Positions and responsibilities as of December 31, 2014(a)
Age: 52
Director (term of office DANONE SA (b) France
from April 26, 2012 to the
end of the Shareholders’
Meeting to approve the
2 017 f inancial s t ate -
ments) (c)
Chairman and Chief VENTE-PRIVEE.COM SA France
Business address: Executive Officer
249, avenue du Président Wilson – 93210 La Plaine- Chairman OREFI ORIENTALE ET FINANCIÈRE SAS(d) France
Saint-Denis – France
Number of DANONE shares held Chairman of the Board PALAIS DE TOKYO SAS France
as of December 31, 2014: 4,127 of Directors
Independent Director
Positions Associations/Foundations/Other Countries
French nationality Chairman FONDATION VENTE-PRIVEE.COM France
Principal responsibility: Chairman and Chief (a) O ffices shown in italics are not governed by Article L. 225-21 of the French commercial
Executive Officer of vente-privée.com code concerning multiple directorships.
(b) Listed company.
Personal background – (c) Subject to the renewal of his term of office by the Shareholders’ Meeting of April 29,
experience and expertise: 2015.
(d) Jacques-Antoine GRANJON also holds corporate offices in companies controlled by
Jacques-Antoine GRANJON is a graduate of the OREFI ORIENTALE ET FINANCIÈRE SAS:
European Business School in Paris. • Chairman of HOLDING DE LA RUE BLANCHE SAS (France), ORIMM SAS (France), VENTE
PRIVEE USA BRANDS, INC. (United States), VENTE-PRIVEE.COM DEUTSCHL AND
After completing his studies, his entrepreneurial spirit (Germany), VENTE-PRIVEE.COM LIMITED (United Kingdom), VENTA- PRIVADA IBERICA
led him and a friend to found Cofotex SA in 1985, which (Spain), VENDITA.PRIVATA ITALIA SRL (Italy);
specialized in wholesale close-outs. • Chairman and Chief Executive Officer of PIN UP SA (France);
• Manager of EGLISE WILSON SARL (France), ORIMM BIENS SARL (France);
In 1996, Jacques-Antoine GRANJON purchased the • Co-Manager of VENTE-PRIVEE.COM IP SARL (Luxembourg);
former printing plants of Le Monde newspaper, which • Director of VENTE-PRIVEE.COM HOLDING SA (Luxembourg), LOOKLET (Sweden),
VENTE-PRIVEE USA, LLC (United States);
were being sold as part of an urban renewal program
• Director of NOUVELLE D’EXPLOITATION DE RENOVATION ET DE RENAISSANCE DU
for La Plaine-Saint-Denis (93), and there he established THEATRE DE PARIS SA (France);
the headquarters of Oredis group. Jacques-Antoine • Manager of French civil partnerships (sociétés civiles françaises) SCI 247, SCI 249, BM
GRANJON came up with a completely innovative WILSON SCI, FRUITIER WILSON SCI, LANDY WILSON SCI, LYON 3 SCI, MM WILSON
concept: a web platform dedicated to private sales SCI, PRESSENSE WILSON SCI, SCI BRETONS WILSON, SCI LE STADE WILSON, SCI
of brand name products at deeply discounted prices. SAINT WILSON, SCI HOTEL WILSON, SCI BEAUNE-WILSON, SCI MB WILSON, and
MALAKOFF WILSON;
In January 2001, Jacques-Antoine GRANJON and his • Chairman of VENTE-PRIVEE HOLDING PRODUCTIONS SAS (France);
partners launched vente-privee.com in France. He thus • Chairman of HOLDING DE LA RUE DE LA MICHODIERE SAS (France): company pending
incorporation; and
took his experience in drawing down inventories of
• Co-Manager of PRODUCTS AND BRANDS STUDIO SAS (France): company pending
close-outs from leading fashion and home furnishing registration.
brands to the Internet by applying a dual approach:
event-based and exclusive, while always emphasizing Positions and responsibilities held in the past five years
customer satisfaction. vente-privee.com was built in
the image of its founder as a model corporate citizen
promoting responsible growth, training and employa-
bility and a social conscience. Chairman ROSEBUZZ SAS France
In 2011, Jacques-Antoine GRANJON partnered with

Xavier Niel and Marc Simoncini to create the Ecole
Européenne des Métiers de l’Internet.

jean laurent
Born on July 31, 1944 Positions and responsibilities as of December 31, 2014 (a)
Age: 70
from February 10, 2005
to the end of the Share-
holders’ Meeting to ap-
prove the 2017 financial
statements)(c)
Chairman and member
Business address: of the Board of Directors’
30, avenue Kléber – 75208 Paris Cedex 16 – France Compensation and Nomi-
nation Committee (since
Number of DANONE shares held April 28, 2011 and April
as of December 31, 2014: 5,100 22, 2005, respectively)
Independent Director and Chairman and member

Lead Independent Director of the Board of Directors’
S ocial Responsibilit y
Committee (since Februa-
French nationality ry 14, 2007)
Lead Independent Direc-
Principal responsibility: Chairman of the Board of
tor (since February 18,
Directors of Foncière des Régions
2013)
Personal background – Chairman of the Board FONCIèRE DES RéGIONS SA (b) France
experience and expertise: of Directors
Jean LAURENT is a graduate of the École Nationale Member of the Strategy

Supérieure de l’Aéronautique (1967) and has a Master and Investments
Committee
of Sciences degree from Wichita State University.
Vice-Chairman of the EURAZEO SA (b) (d) France
He spent his entire career at the Crédit Agricole group, Supervisory Board
first with Crédit Agricole de Toulouse, and later with
Chairman of the Audit
Crédit Agricole du Loiret and then Crédit Agricole
Committee
de l’Ile de France, where he exercised or supervised
Member of the Finance
various retail banking business activities.
Committee
He then joined Caisse Nationale du Crédit Agricole, Director BENI STABILI (a) Italy
first as Deputy General Manager (1993-1999) and
later as Chief Executive Officer (1999-2005). In that (a) O ffices shown in italics are not governed by Article L. 225-21 of the French commercial
capacity, he was responsible for the public offering code concerning multiple directorships.
(b) Listed company.
of Crédit Agricole SA (2001) and the acquisition and (c) Subject to the renewal of his term of office by the Shareholders’ Meeting of April 29, 2015.
integration of Crédit Lyonnais in Crédit Agricole group. (d) A s of December 31, 2014, Eurazeo holds 0.01% of the Company’s share capital (see section
7.7 Share ownership structure as of December 31, 2014 and significant changes over the last
He is also Chairman of the Board of Directors of three fiscal years).
Foncière des Régions. 6
Positions and responsibilities held in the past five years
The Board of Directors of Danone appointed Jean
LAURENT as Chairman of the Social Responsibility
Committee on February 14, 2007, Chairman of the Positions Companies Countries
Compensation and Nomination Committee on April Director CRÉDIT AGRICOLE EGYPT SAE Egypt
28, 2011 and Lead Independent Director on February
18, 2013. Member of the M6 SA (MÉTROPOLE TELEVISION) (a)
France
Supervisory Board
Member of the Audit
Committee
Director UNIGRAINS SA France

Chairman PÔLE DE COMPÉTITIVITÉ “FINANCE France
INNOVATION” (Association)
Chairman of the Board of FONDATION INSTITUT EUROPLACE France
Directors DE FINANCE
(a) Listed company.

benoît potier
Born on September 3, 1957 Positions and responsibilities as of December 31, 2014(a)
Age: 57
ments) (d)
Member of the Board of
Business address: Directors’ Compensation
75, quai d’Orsay – 75007 Paris – France and Nomination Commit-
tee (since April 26, 2012)
Chairman and Chief AIR LIQUIDE SA (b) France
as of December 31, 2014: 8,343
Executive Officer
Independent Director AIR LIQUIDE INTERNATIONAL (SA) (c) France
French nationality Director AMERICAN AIR LIQUIDE HOLDINGS INC (c)

United States
Principal responsibility: Chairman and Chief Chairman, President & AIR LIQUIDE INTERNATIONAL CORPORATION United States
Executive Officer of Air Liquide SA Chief Executive Officer (ALIC) (c)
experience and expertise: Positions Associations/Foundations/Other Countries
A graduate of the École Centrale de Paris, Benoît Chairman EUROPEAN ROUNDTABLE OF Belgium
POTIER joined the Air Liquide group in 1981 as a INDUSTRIALISTS (ERT)
Research and Development engineer. He then held FONDATION D’ENTREPRISE AIR LIQUIDE France
positions as Project Manager in the Engineering and
Construction Department and Head of Energy Deve- Vice-Chairman ASSOCIATION NATIONALE DES SOCIETES PAR France
ACTIONS (ANSA)
lopment within the Large Industry segment. In 1993
he was named Head of Strategy-Organization and Director ASSOCIATION FRANÇAISE DES ENTREPRISES France
in 1994 he was appointed Head of Chemicals, Steel, PRIVÉES (AFEP)
Refining and Energy Markets. He became Deputy CERCLE DE L’INDUSTRIE (Association) France
General Manager in 1995, and added to the aforemen- LA FABRIQUE DE L’INDUSTRIE (Association) France
tioned responsibilities that of Head of Construction
Engineering and Large Industry for Europe. ÉCOLE CENTRALE DES ARTS ET France
MANUFACTURES
Benoît POTIER was appointed Chief Executive Officer
in 1997, Director of Air Liquide in 2000 and Chairman Member of the Board INSEAD France
of the Management Board in November 2001. In 2006,
he was named Chairman and Chief Executive Officer (a) O ffices shown in italics are not governed by Article L. 225-21 of the French commercial
code concerning multiple directorships.
of Air Liquide SA. (b) Listed company.
In 2004, Air Liquide acquired the assets of Messer (c) Companies in the Air Liquide group in which Benoît POTIER holds a corporate office.
(d) Subject to the renewal of his term of office by the Shareholders’ Meeting of April 29, 2015.
Griesheim in Germany, the United Kingdom and the
United States.
In 2007, the group expanded its technology portfolio Positions and responsibilities held in the past five years
by acquiring the Lurgi engineering company and in
2008 launched the Alma company project aimed at Positions Companies Countries
accelerating its growth. The group is continuing to Member and Chairman DANONE (a)
France
diversify internationally, notably through its growing of the Audit Committee
presence in developing economies: Asia, Russia, Member of the MICHELIN (a) France
Central and Eastern Europe, the Middle East and Supervisory Board
Latin America.
Member of the Audit
In 2008, Benoît POTIER initiated the creation of Fonda- Committee
tion Air Liquide and has served as its Chairman since (a) Listed company.
inception. Fondation Air Liquide supports research
projects in the environmental and healthcare fields
and contributes to local development by encouraging
micro-initiatives in those areas of the world where
the group is present.
Since May 2014, Benoît POTIER has also been Chair-
man of the European Roundtable of Industrialists (ERT).

mouna sepehri
Born on April 11, 1963 Positions and responsibilities as of December 31, 2014(a)
Age: 51
ments) (c)
Business address: Directors’ Audit Commit-
13-15, quai Le Gallo – 92513 Boulogne-Billancourt tee (since April 26, 2012)
– France
Director NEXANS SA (b) France
Director ORANGE (b) France
Independent Director Chair woman of the
Governance and Corpo-
Dual French and Iranian nationality rate Social Responsibility
Committee (CGRSE)
Principal responsibility: Executive Vice-President, Member of the Supervi- M6 SA (MéTROPÔLE TéLéVISION) (b) France
Member of the Executive Committee, sory Board
Vice-President CEO Office of Renault Member of the Audit
Committee
experience and expertise:
After receiving her law degree and joining the Paris Positions Associations/Foundations/Other Countries
bar, Mouna SEPEHRI began her career in 1990 as a Director FONDATION RENAULT France
lawyer in Paris and then New York, where she spe-
cialized in Mergers & Acquisitions and International (a) O ffices shown in italics are not governed by Article L. 225-21 of the French commercial
Business Law. code concerning multiple directorships.
(b) Listed company.
She joined Renault in 1996 as the group’s Deputy (c) Subject to the renewal of her term of office by the Shareholders’ Meeting of April 29, 2015.
General Counsel. She played an integral part in the
group’s international growth and participated in the Positions and responsibilities held in the past five years
creation of the Renault-Nissan Alliance from the
beginning (1999) as a member of the negotiating team.
In 2007, she joined the Office of the CEO and was in None
charge of the management of the cross functional
teams.
In 2009, she was appointed Director of the Renault-
Nissan Alliance CEO Office and Secretar y of the
6
Renault-Nissan Alliance Board of Directors. In 2010,
she also became a member of the steering committee
on the Alliance cooperation with Daimler. As a part
of that mission, she was responsible for steering the
implementation of Alliance synergies, coordinating
strategic cooperation and for driving new projects.
On April 11, 2011, she joined the Renault group Execu-
tive Committee as Executive Vice President, Office of
the CEO. She oversees the following functions: Legal,
Public Affairs, Communications, Public Relations,
Corporate Social Responsibility, Property and General
Services, Prevention and Group Protection, Cross-
functional Support, the Operating Costs Effectiveness
Program and the Strategy and Group Planning. In 2013,
she was appointed as a permanent member of the
Management Board of the Renault-Nissan Alliance.

virginia a. stallings
Born on September 18, 1950 Positions and responsibilities as of December 31, 2014 (a)
Age: 64
ments) (c)
Business address: Positions Associations/Foundations/Other Countries

Children’s Hospital of Philadelphia –
Professor of Pediatrics THE CHILDREN’S HOSPITAL OF PHILADELPHIA, United States
3535 Market Street – Rm 1558 –
DEPARTMENT OF PEDIATRICS, THE UNIVER-
Philadelphia, PA 19104 – United States SITY OF PENNSYLVANIA PERELMAN SCHOOL
Number of DANONE shares held OF MEDICINE
as of December 31, 2014: 4,000 Director, THE CHILDREN’S HOSPITAL OF PHILADELPHIA United States
The Nutrition Center
Independent Director
Director, Office of THE CHILDREN’S HOSPITAL OF PHILADELPHIA United States
Faculty Development RESEARCH INSTITUTE
American nationality
Member NATIONAL ACADEMY OF SCIENCES, INSTITUTE United States
Principal responsibility: Professor of Pediatrics at OF MEDICINE
Children’s Hospital of Philadelphia Member of International CHILDREN’S HOSPITAL OF LA PLATA Argentina
Research Advisory RESEARCH INSTITUTE
Personal background – Committee
(a) O ffices shown in italics are not governed by Article L. 225-21 of the French commercial
Virginia A. Stallings is a Professor of Pediatrics code concerning multiple directorships.
(b) Listed company.
at the University of Pennsylvania Perelman School (c) Subject to the renewal of his term of office by the Shareholders’ Meeting of April 29, 2015.
of Medicine, Director of the Nutrition Center at The
Children’s Hospital of Philadelphia and holds a Chair Positions and responsibilities held during the past five years
in Gastroenterology and Nutrition. She is a pediatri-
cian and an expert in nutrition and growth in children
with chronic illnesses. Her research interests are in Positions Associations/Foundations/Other Countries
nutrition-related growth in healthy children and those President of the Board DANONE INSTITUTE USA (a) United States
with chronic illnesses including: obesity, sickle cell of Directors
disease, osteoporosis, cystic fibrosis, cerebral palsy, DANONE INSTITUTE INTERNATIONAL (a) France
Crohn’s disease, HIV and congenital heart disease.
She has been extensively involved in pediatric nutrition (a) The mission of these two organizations, which are established as non-profit associations,
is to promote research and education in the field of nutrition as well as the importance
clinical care and research for more than 25 years. of nutrition on health.
Dr. Stallings plays a significant role in the commu-
nity of nutrition scientists and physicians as a member
of the Institute of Medicine, the Food and Nutrition
Board of the US National Academy of Sciences and
the Council of the American Society for Nutrition. She
steered the Institute of Medicine committee report,
Nutrition Standards for Foods in Schools: Leading the
Way Towards Healthier Youth, and the committee report,
School Meals: Building Blocks for Healthy Children, that
led to new policy to improve the nutritional quality
of children’s meals and school meals in the United
States. She has received research and teaching awards
from the American Society of Nutrition, the American
Academy of Pediatrics, the Institute of Medicine, and
the National Academies.

Current Directors
bruno bonnell
Born on October 6, 1958 Positions and responsibilities as of December 31, 2014 (a)
Age: 56
from February 18, 2002
statements)
Business address: Directors’ Social Res-
1, rue du Docteur Fleury-Pierre Papillon – 69100 ponsibility Committee
Villeurbanne – France (since February 14,
2007)
as of December 31, 2014: 4,000 Director APRIL SA (b) France
Independent Director Member of the Sustai-

nable Development
French nationality Committee
Principal responsibility: Chairman of I-Volution Member of the Strategy

Committee
Chairman AWABOT SAS France
I-VOLUTION SAS France
Bruno BONNELL was born in Algiers, Algeria in 1958.
He received a degree in chemical engineering at CPE SOROBOT SAS France
Lyon (École Supérieure de Chimie Physique Électronique
de Lyon) and another in applied economics from the Director ROBOPOLIS SAS France
University of Paris-Dauphine (class of 1982).
He began his career at Thomson SDRM as a business Member of the PATHÉ SAS France
engineer responsible for launching and marketing the Management Board
company’s first computer, the T07. Member of the BANQUE RHONE-ALPES France
In June 1983, Bruno BONNELL founded Infogrames, Supervisory Board
which in 2000 merged with Atari (listed on the NYSE
Euronext). In 1995, he co-founded Infonie, the first
Internet service provider in France. Positions Associations/Foundations/Other Countries
Chairman of the Board EMLYON BUSINESS SCHOOL France
He left Infogrames in April 2007 and founded Robopo- of Directors
lis, a company that specializes in service robotics and
distributes robots aimed at the household market. The Chairman FRENCH FEDERATION OF SERVICE ROBOTICS France
company has operations in seven European countries. (SYROBO)
Founding partner ROBOLUTION CAPITAL (professional private France
6
In 2010, he founded Awabot, a robotic platform services
equity fund)
company that specializes in telepresence robots. That
same year, he founded the French Federation of Service (a) O ffices shown in italics are not governed by Article L. 225-21 of the French commercial
Robotics (Syndicat de la Robotique de Service – SYROBO) code concerning multiple directorships.
and serves as its Chairman. (b) Listed company.
In 2011, he was appointed Chairman of the Board of

Directors of EM Lyon Business School.
He is a member of the Management Board of Pathé SAS Positions Companies Countries
and of the Board of Directors of April SA. He has also
been a member of the Supervisory Board of Banque Member of the ANF IMMOBILIER SA (a) France
Rhône-Alpes since 2013. Supervisory Board
Together with his Orkos Capital partners, in March ZSLIDE SA France

2014 he created Robolution Capital, a private equity
fund that focuses on service robotics. (a) Listed company.
Bruno BONNELL has written two books on new tech-

nologies: Pratique de l’ordinateur familial (1983) and Viva
la robolution (2010).

emmanuel faber
Born on January 22, 1964 Positions and responsibilities as of December 31, 2014 (a)
Age: 51
Chief Executive Officer DANONE SA (b) France
(since October 1, 2014)
V ice-Chairman of the
Board of Directors (since
April 28, 2011)
Director (term of office
from April 25, 2002 to
Business address: the end of the Sharehol-
17, boulevard Haussmann – 75009 Paris – France ders’ Meeting to approve
the 2015 financial sta-
tements)
as of December 31, 2014: 59,108
Non-Independent Director Directors’ Social Res-
ponsibility Committee
French nationality (since February 14, 2007)
Member of the
Principal responsibility: Chief Executive Officer Executive Committee
and Vice-Chairman of the Board of Directors of (since January 1, 2000)
Danone Director COFCO DAIRY INVESTMENTS LIMITED (c) Hong Kong
Seniority in Danone group: October 1997 (17 years)
GRAMEEN DANONE FOODS LIMITED (c) (d) Bangladesh
experience and expertise: danone.communities (SICAV) (d) France
After graduating from HEC, Emmanuel FABER began PROMINENT ACHIEVER LIMITED (c) Hong Kong
his career as a consultant at Bain & Company and
later Baring Brothers. Director and NAANDI COMMUNITY WATER SERVICES India
Vice-President PRIVATE LTD (d)
In 1993, he joined Legris Industries as Chief Admi-
nistrative and Financial Officer before being named Member of the Steering LIVELIHOODS FUND (SICAV) (d) Luxembourg
Committee
Chief Executive Officer in 1996.
He joined Danone in 1997 as Head of Finance, Strate-
gies and Information Systems. He became a member Positions Associations/Foundations/Other Countries
of the Executive Committee in 2000. Member of the Steering DANONE ECOSYSTEM FUND France
Committee (endowment fund) (d)
In 2005, while Danone was strengthening its manage-
ment structure in the Asia-Pacific region, Emmanuel Co-Chairman ACTION TANK ENTREPRISE ET PAUVRETE France
FABER was named Vice-President for the Asia-Pacific
region in charge of the Group’s operational activities. (a) O ffices shown in italics are not governed by Article L. 225-21 of the French commer-
cial code concerning multiple directorships.
From January 1, 2008 to September 30, 2014, he served (b) Listed company.
as Deputy General Manager of Danone, responsible (c) Company consolidated as associate by Danone.
(d) Duties performed in the framework of social projects initiated by the Group.
for major corporate functions (Finance, Human
Resources, etc.), and was named Vice-Chairman of
the Board of Directors on April 28, 2011. Positions and responsibilities held in the past five years
Since 2008, he has served as Director of the danone.
communities mutual investment fund (SICAV).Since Positions Companies Countries
2009, he has been a member of the Steering Committee Deputy General DANONE SA (a) France
of the Danone Ecosystem Fund. And since December Manager
2011, he has been a member of the Steering Committee Director RYANAIR HOLDINGS PLC (a) Ireland
of the Livelihoods Fund.
Member of the Audit
Since October 1, 2014, he has been Danone’s Chief Committee
Executive Officer.
Director RYANAIR LIMITED Ireland
YAKULT HONSHA CO., LTD (a)
Japan
Member of the LEGRIS INDUSTRIES SA France
Supervisory Board
(a) Listed company.

richard goblet d’alviella
Born on July 6, 1948 Positions and responsibilities as of December 31, 2014(a)
Age: 66
2 014 f inancial s tate-
ments)
Business address: Directors’ Audit Commit-
Rue Ducale 21, – 1000 Brussels – Belgium tee (since April 11, 2003)
Directors’ Compensation
and Nomination Commit-
Independent Director tee (since July 26, 2013)
Honorary Chairman SOFINA SA (b) Belgium
Belgian nationality
Managing Director UNION FINANCIÈRE BOEL SA Belgium
Principal responsibility: Honorary Chairman of
Sofina SA, Managing Director of Union Financière Director HENEX SA Belgium
Boël SA
SOCIÉTÉ DE PARTICIPATIONS Belgium
Personal background – INDUSTRIELLES SA
experience and expertise
POLYGONE SA France
Richard GOBLET D’ALVIELLA received a commer-
cial engineering degree from the Free University of Director GL EVENTS SA (b) France
Brussels and an MBA from Harvard Business School.
For 15 years, Richard GOBLET D’ALVIELLA was an Member of the Audit
investment banker specializing in international finance Committee
in London and New York. Member of the EURAZEO SA (b) France
Supervisory Board
He was Managing Director and Executive Chairman of
Sofina from 1989 to May 2014. He has held the position Member of the Audit
Committee
of Honorary Chairman of Sofina SA since May 2014.
Member of the Com-
pensation Committee
(a) O ffices shown in italics are not governed by Article L. 225-21 of the French commer-
(b) Listed company.

6
Executive Chairman SOFINA SA (a) Belgium
V ice-Chairman of the
Board of Directors and
Managing Director
Director SUEZ-TRACTEBEL Belgium
Director CALEDONIA INVESTMENTS United

Kingdom
Memb er of the A udit
Committee and the Nomi-
nation and Compensation
Committee
Director – Member DELHAIZE GROUP (a) Belgium
of the C ompens ation
Committee
Non-voting advisor GDF SUEZ (a) France
(“censeur”)
(a) Listed company.

marie-anne jourdain
Born on April 28, 1958 Positions and responsibilities as of December 31, 2014 (a)
Age: 56
Director representing DANONE SA (b) France
employees

Counselor PARIS LABOR TRIBUNAL France
Business address:
17, boulevard Haussmann – 75009 Paris – France (a) O ffices shown in italics are not governed by Article L. 225-21 of the French commercial
Number of DANONE shares held (b) Listed company.
as of October 1, 2014: 0 (the obligation to hold
DANONE shares is not applicable to Directors
representing employees) Positions and responsibilities held in the past five years
Director representing employees

French nationality Works Council repre- DANONE SA (a) France
sentative to the Board of
Directors
Principal responsibility: Danone project and social
monitoring manager Member of the Supervi-
sory Board of the "Fonds
Personal background – Danone" company
experience and expertise: investment fund
Marie-Anne JOURDAIN began her career at a para- Works Council Secretary

chemicals SME and later moved on to metallurgy Shop Steward
before joining the Danone Group in 1989 where she
has held various responsibilities in several of the Secretary of the Work-
place Health and Safety
Group’s businesses. Committee
After spending nine years abroad and helping to create Trade Union
the Group’s Export Division, she joined Danone’s Representative
Legal Department where she worked for three years. Member of the European
Works Council (CIC)
In 2002, she changed course and began to represent
and defend employees’ interests, joining the various Member of the Group-
Employee Representative Bodies both at Danone’s level Works Council
registered office and at the national level. (a) Listed company.
In 2008, she also became a Counselor at the Paris

Labor Tribunal (Conseil de Prud’Hommes).
She has ser ved as project and social monitoring
manager at Danone since September 2014.

gaëlle olivier
Born on May 25, 1971 Positions and responsibilities as of December 31, 2014 (a)
Age: 43
Director DANONE SA (b) France
(term of office from April
29, 2014 to the end of the
Shareholders’ Meeting to
approve the 2016 finan-
cial statements)
Director AXA ASIA REGIONAL CENTRE PTE LTD Singapore
Business address: 1 Raffles Place – #14-61 One
Raffles Place Tower Two – Singapore 048616 AXA GENERAL INSURANCE HONG KONG China
LIMITED
as of December 31, 2014: 4,088 AXA GENERAL INSURANCE CHINA LIMITED China
Independent Director WIN PROPERTY (SHANGHAI LINKS) LIMITED China

French nationality
AXA INSURANCE SINGAPORE PTE LTD Singapore
Principal responsibility: Chief Executive Officer
AXA Asia General Insurance AXA AFFIN GENERAL INSURANCE BERHAD Malaysia
Personal background – BHARTI – AXA GENERAL INSURANCE India

COMPANY LIMITED
Graduate of Ecole Polytechnique, ENSAE and the AXA TIAN PING PROPERTY & CASUALTY China
Institut des Actuaires. INSURANCE COMPANY LIMITED
Chairwoman and AXA THAILAND PUBLIC COMPANY LIMITED Thailand
After having started her career in the dealing room
Director
at Crédit Lyonnais with equity derivative products,
Gaëlle OLIVIER joined the AXA group in 1998 where
she has had responsibilities in various activities, both
in France and abroad. Positions Associations/Foundations/Other Countries
After two years with AXA Investment Managers, she French Foreign Trade NATIONAL COMMITTEE OF FRENCH Singapore
Advisor FOREIGN TRADE ADVISORS
became Executive Assistant to AXA group CEO, Henri
de Castries, and Secretary of the Supervisory Board (a) O ffices shown in italics are not governed by Article L. 225-21 of the French commercial
for five years. (b) Listed company.
In 2004, she joined AXA Life Japan as Head of Invest-
ment Operations, and then became a member of the Positions and responsibilities held in the past five years
Management Committee in 2006, in charge of Strategy,
Winterthur Japan Integration and Audit.
In 2009, she became Head of Group Communication
Director WIN PROPERTY (SHANGHAI LINKS) LIMITED China
and Corporate Responsibility for the AXA Group.
AXA TECHNOLOGY SERVICES SINGAPORE Singapore 6
Since 2011, she has been Chief Executive Officer, AXA PTE LTD
Asia General Insurance.
Director AXA RESEARCH FUND – France

SCIENTIFIC COMMITTEE
Member of the Board FRENCH CHAMBER OF COMMERCE Singapore
of Directors IN SINGAPORE

franck riboud
Born on November 7, 1955 Positions and responsibilities as of December 31, 2014 (a)
Age: 59
Chairman of the Board DANONE SA (b) France
of Directors (since
October 1, 2014)
Director (term of office
from September 30, 1992
Business address: statements)
17, boulevard Haussmann – 75009 Paris – France
Chairman of the Strategy
Number of DANONE shares held Committee
as of December 31, 2014: 274,512 Director RENAULT SA (b) France
Non-Independent Director BAGLEY LATINOAMERICA, SA (c) Spain
DANONE (SPAIN) SA (d) Spain
French nationality RENAULT SAS France
ROLEX SA Switzerland
Principal responsibility: Chairman of Danone’s ROLEX HOLDING SA Switzerland
Board of Directors
Chairman of the Board danone.communities (SICAV) (e) France
Seniority in Danone group: October 1981 (33 years) of Directors
Member of the Steering LIVELIHOODS FUND (SICAV) (e) Luxembourg
Committee
Franck RIBOUD is a graduate of the École Polytech-
nique Fédérale de Lausanne.
Chairman of the DANONE ECOSYSTEM FUND France
He joined the Group in 1981, where he held succes- Steering Committee (endowment fund) (e)
sive positions through 1989 in management control, Director INTERNATIONAL ADVISORY BOARD HEC France
sales and marketing. After serving as Head of Sales BUSINESS SCHOOL
at Heudebert, in September 1989 he was appointed
RAISE (endowment fund) France
to head up the department responsible for the inte-
gration and development of new companies in the Member of the FONDATION ELA (EUROPEAN France
Biscuits branch. He was involved in the most signifi- Supervisory Board LEUKODYSTROPHY ASSOCIATION)
cant acquisition, at that time, completed by a French Honorary member ASSOCIATION ELA France
group in the United States, namely the acquisition of
Member of the Board of FONDATION EPFL PLUS (ÉCOLE Switzerland
Nabisco’s European activities by BSN. In July 1990, POLYTECHNIQUE FEDERALE DE LAUSANNE)
he was appointed General Manager of Société des
Eaux Minérales d’Evian. code concerning multiple directorships.
(b) Listed company.
In 1992, Franck RIBOUD became Head of the Group (c) Company consolidated as associate by Danone.
Development Department. The Group then launched (d) Company fully consolidated by Danone.
its international diversification marked by increased (e) Duties performed in the framework of social projects initiated by the Group.
development in Asia and Latin America and through
the creation of an Export Department.
In 1994, BSN changed its name to Danone in order to Positions Companies Countries
become a global brand. Chairman of the DANONE SA (a) France
From May 2, 1996 to September 30, 2014, he was Executive Committee
Chairman and Chief Executive Officer of Danone. Fol- Chief Executive Officer
lowing the separation of offices, he became Chairman Director LACOSTE SA France
of Danone’s Board of Directors on October 1, 2014.
OMNIUM NORD AFRICAIN (ONA)(a) Morocco
Since 2008, he has been the Chairman of the Board Director and Member ACCOR SA (a) France
of Directors of the danone.communities mutual of the Compensation
investment fund (SICAV), a financing entity aimed at Committee
promoting the development of profitable companies Chairman and Member RENAULT SA (a) France
whose primary goal is to maximize socially responsible of the C ompens ation
objectives as opposed to profit. Committee
Since 2009, he has served as the Chairman of the

Steering Committee of the Danone Ecosystem Fund, Positions Associations/Foundations/Other Countries
and in December 2011 he was named member of the Director ASSOCIATION NATIONALE DES INDUSTRIES France
Steering Committee of the Livelihoods Fund. AGROALIMENTAIRES
(a) Listed company.

isabelle seillier
Born on January 4, 1960 Positions and responsibilities as of December 31, 2014 (a)
Age: 55
2 016 f inancial s t ate-
ments)
Director CLUB MÉDITERRANÉE SA (b) France
Business address:
25 Bank Street, Canary Wharf – London E14 5JP Member of the Strategy
– United Kingdom Committee

as of December 31, 2014: 4,000 Positions Associations/Foundations/Other Countries
Non-Independent Director
Member of the Board of AFB (ASSOCIATION FRANÇAISE DES BANQUES) France
Directors
French nationality PARIS EUROPLACE (Association) France
Principal responsibility: Head of Financial code concerning multiple directorships.
Institutions EMEA of J.P Morgan (b) Listed company.
experience and expertise: Positions and responsibilities held in the past five years
Isabelle SEILLIER is a graduate of Sciences-Po Paris
(Economics-Finance, 1985) and holds a master’s Positions Companies Countries
degree in business law. Chairman J.P. MORGAN CHASE BANK France
In 1987, she began her professional career in the
options division of Société Générale in Paris, where
she headed the Sales Department for options products
in Europe until 1993.
Isabelle SEILLIER joined J.P. Morgan in Paris in 1993
as the Head of the Sales Department for derivative
products in France for industrial companies. In 1997,
she became an investment banker at J.P. Morgan & Cie
SA as a banking advisor providing coverage for large
industrial clients. In March 2005, she was appointed
the joint Head of investment banking before being
named sole Head of this activity beginning in June 2006.
She was Chairman of J.P. Morgan for France from 6
2008 while remaining in charge of investment banking
for France and North Africa.
Since January 15, 2013, she is the Head of all Invest-
ment Banking activities for financial institutions of J.P.
Morgan for Europe, Middle East and Africa (EMEA).
Isabelle SEILLIER is actively involved in philanthropic
activities, in particular children’s aid associations.
Under her direction, J.P. Morgan France has developed
a philanthropic program by helping these associations.

jean-michel severino
Born on September 6, 1957 Positions and responsibilities as of December 31, 2014 (a)
Age: 57
Position Company Country
2 016 f inancial s t ate-
ments)
Chairman, member and
Business address: financial exper t of the
10, rue de Sèze – 75009 Paris – France Board of Directors’ Audit
Committee (since April
Number of DANONE shares held 26, 2012)
Independent Director Directors’ Social Res-
ponsibility Committee
French nationality (since April 28, 2011)
Principal responsibility: Head of I&P SARL Chairman of the Board EBI SA (ECOBANK INTERNATIONAL) France
(Investisseurs & Partenaires) of Directors
Director ORANGE (b) France
Member of the Audit
Jean-Michel SEVERINO was born on September 6, Committee
1957 in Abidjan, Ivory Coast. He is a graduate of the Director I&P GESTION Mauritius
École Nationale d’Administration, ESCP, IEP Paris
and holds a postgraduate degree (DEA) in economics I&P DEVELOPEMENT Mauritius
and a degree in law.
PHITRUST IMPACT INVESTORS SA France
After four years working at the Inspection générale
des finances (French General Inspection of Finance) Chairman of the Board I&P AFRIQUE ENTREPRENEURS Mauritius
(1984-1988), he was named technical advisor for of Directors
economic and financial affairs at the French Ministry Director ADENIA PARTNERS Mauritius
of Cooperation (1988-1989). He later became the
Head of that Ministry’s Department of Economic and Member of the Invest-
Financial Affairs and then its Development Director. ment Committee
In all these positions, he was particularly active in Manager EMERGENCES DEVELOPPEMENT France
macroeconomic and financial relations, as well as the
management of political and humanitarian crises, in I&P SARL (INVESTISSEURS ET PARTENAIRES) France
sub-Saharan Africa.
In 1996, he was recruited by the World Bank as Director
for Central Europe at a time when this region was
marked by the end of the Balkans conflict and recons- Chairman CONVERGENCES 2015 France
truction. He became the World Bank’s Vice-President
CRITICAL ECOSYSTEM PARTNERSHIP FUND United States
in charge of East Asia from 1997 to 2001 and focused (CEPF)
on the management of the major macroeconomic and
Director FONDATION SANOFI ESPOIR France
financial crisis that shook these countries.
After a brief stint working once again for the French FONDATION GRAMEEN CREDIT AGRICOLE Luxembourg
government as Inspector General of Finance, he was
Senior fellow THE GERMAN MARSHALL FUND OF THE United States
named Chief Executive Officer of the Agence Française UNITED STATES (Foundation)
de Développement (AFD), where from 2001 to 2010 he
Research Director and FONDATION POUR LES ÉTUDES ET France
led the expansion efforts to cover the entire emerging
member of the Strategy RECHERCHES SUR LE DÉVELOPPEMENT
and developing world, notably in the Mediterranean Steering Committee INTERNATIONAL
region, Asia and Latin America, while still maintaining
its strong roots in sub-Saharan Africa. He signifi- Member ACADÉMIE DES TECHNOLOGIES (public-sector France
institution with administrative activities)
cantly expanded the bank’s development activities
and extended its areas of responsibility to a large (a) O ffices shown in italics are not governed by Article L. 225-21 of the French commer-
number of new countries as well as contemporary (b) Listed company.
global issues: climate, biodiversity, poverty, growth,
etc. He also implemented a significant restructuring
of the AFD by entering into close partnerships with
the local and international industrial and financial
private sector.

jean-michel severino (continued)
In 2010, at the end of his third term of office, he Positions and responsibilities held in the past five years
returned once again to the Inspection générale
des finances, where he was responsible for the
French Water Partnership. In May 2011, he left the
civil service in order to head up “I&P (Investisseurs Chairman SOCIÉTÉ DE PROMOTION ET DE PARTICIPA- France
TION POUR LA COOPÉRATION ÉCONOMIQUE
et Partenaires)”, a fund management company
specializing in financing African small and medium-
sized businesses. Positions Associations/Foundations/Other Countries
In addition to his professional duties, he has signi- Chairman INSTITUT D’ÉTUDE DU DÉVELOPPEMENT France
ficant experience in the educational and research ÉCONOMIQUE ET SOCIAL
areas, notably as an associate professor at CERDI FRENCH WATER PARTNERSHIP France
(Centre d’Études et de Recherches sur le Dévelop-
pement International). He was elected as a member Chief Executive Officer AGENCE FRANÇAISE DE DÉVELOPPEMENT France
(public-sector institution with industrial and
of the Académie des Technologies (2010); he is commercial activities)
currently a senior fellow of the Fondation pour la
Vice-Chairman COMITÉ NATIONAL FRANÇAIS France
Recherche sur le Développement International
(FERDI) and of the German Marshall Fund (GMF).
He has published numerous articles and books, Director EUROPEAN INVESTMENT BANK Luxembourg
including, in 2010, Idées reçues sur le développement INSTITUT DE RECHERCHE POUR LE France
and Le temps de l’Afrique and, in 2011, Le Grand DÉVELOPPEMENT (French public-sector
Basculement. institution with scientific and technological
activities)
danone.communities (SICAV) France
CENTRE DE COOPÉRATION INTERNATIO- France

NALE EN RECHERCHE AGRONOMIQUE
POUR LE DÉVELOPPEMENT (public-sector
institution with industrial and commercial
activities)
FONDATION JACQUES CHIRAC France
CONSERVATION INTERNATIONAL United

(Foundation) States
AFRICAN CENTER FOR ECONOMIC Ghana
TRANSFORMATION (ACET) GHANA
Member INDEPENDENT ASSESSMENT COMMITTEE France
ON SUSTAINABLE DEVELOPMENT, VEOLIA
ENVIRONNEMENT
CONSEIL D’ORIENTATION SCIENTIFIQUE France
DE LA FONDATION JEAN-JAURÈS
Member of Working ONU – DIVISION DÉVELOPPEMENT France
Group DURABLE
6

bettina theissig
Born on July 2, 1962 Positions and responsibilities as of December 31, 2014 (a)
Age: 52
Director representing DANONE SA (b) France
employees
Member of the European
Works Council (CIC) and
its steering committee.
Chairwoman of the Works MILUPA GMBH Germany
Council
Business address:
Chairwoman of the
Bahnstrasse 14-30, 61381 Friedrichsdorf –
Central Works Council
Germany
Representative of em-
Number of DANONE shares held ployees with disabilities
as of October 1, 2014: 0 (the obligation to hold Health Officer
Danone shares is not applicable to Directors
representing employees) Representative to the
Wor ks Council of the
Director representing employees Danone Group’s sites in
Germany
German nationality (a) O ffices shown in italics are not governed by Article L. 225-21 of the French commer-
(b) Listed company.
Principal responsibility: Chairwoman of the Works
Council of Milupa GmbH
Bettina THEISSIG began her training in the industrial None
sector in 1978 at Milupa GmbH, a baby food and for-
mula manufacturer that has been part of Danone’s
Early Life Nutrition Division since the acquisition of
the Numico Group in 2007.
She acquired her first professional experience in
Milupa’s advertising department. She then held various
responsibilities in several departments, including
marketing, sales, human resources and medical, which
enabled her to gain further knowledge of the company.
Her unwavering interest in the condition of employees
and the protection of their rights prompted her to
join Milupa’s Works Council in 2002. She is currently
Chairwoman of Milupa’s Works Council, Chairwoman
of Milupa’s Central Works Council and Representative
to the Works Council of the Danone Group’s sites in
Germany. She is also a member of the Danone Group’s
European Works Council and its steering committee.
Bettina THEISSIG has also represented employees
with disabilities since 1998.

lionel zinsou-derlin
Born on October 23, 1954 Positions and responsibilities as of December 31, 2014 (a)
Age: 60
2016 financial statements)
Chairman and Chair- PAI PARTNERS SAS France
man of the Executive
Business address: Committee
232, rue de Rivoli – 75001 Paris – France Member of the
Investment Committee
as of December 31, 2014: 4,000 Director INVESTISSEURS & PARTENAIRES Mauritius
Independent Director I&P AFRIQUE ENTREPRENEURS Mauritius
Dual French and Beninese nationality KAUFMAN & BROAD SA (b) France
PAI SYNDICATION GENERAL PARTNER LIMITED Guernsey

Principal responsibility: Chairman of PAI partners
SAS PAI EUROPE III GENERAL PARTNER LIMITED Guernsey
Personal background – PAI EUROPE IV GENERAL PARTNER LIMITED Guernsey
Lionel ZINSOU-DERLIN, of French and Beninese
PAI EUROPE V GENERAL PARTNER LIMITED Guernsey
nationality, is a graduate from the Ecole Normale PAI EUROPE VI GENERAL PARTNER LIMITED Guernsey
Supérieure (Ulm), the London School of Economics
and the Institut d’Etudes Politiques of Paris. He holds Chairman and Member LES DOMAINES BARONS DE ROTHSCHILD SCA France
a master degree in Economic History and is an Asso- of the Supervisory (LAFITE)
ciate Professor in Social Sciences and Economics. Board
Member of the Advisory MOET HENNESSY France
He started his career as a Senior Lecturer and Pro-
Council
fessor of Economics at Université Paris XIII.
Member of the CERBA EUROPEAN LAB SAS France
From 1984 to 1986, he became an Advisor to the French Supervisory Board
Ministry of Industry and then to the Prime Minister. Alternate Director UNITED BISCUITS TOPCO LTD Luxembourg
In 1986, he joined Danone where he held various
positions, in particular Group Corporate Development Manager SOFIA – SOCIÉTÉ FINANCIÈRE AFRICAINE France
Director, then General Manager at HP Foods Limited SARL
and Lea & Perrins.
In 1997, he joined Rothschild & Cie bank as Managing Positions Associations/Foundations/Other Countries
Partner where he was Head of the Consumer Products 6
Founder and Treasurer FONDATION ZINSOU Benin
Group, Head of Middle East and Africa region and a
member of the Global Investment Bank Committee. Director CARE FRANCE (Association) France
In 2008, he joined PAI partners SAS of which he has LE SIÈCLE (Association) France
been Chairman since 2009 and Chairman of the Exe-
cutive Committee since 2010. AMREF (Association) France
INSTITUT PASTEUR (Foundation) France
Member of the Strategy FONDATION POUR LES ÉTUDES France

Steering Committee ET RECHERCHES SUR LE DÉVELOPPEMENT
INTERNATIONAL
(a) O ffices shown in italics are not governed by Article L. 225-21 of the French commer-
(b) Listed company.

lionel zinsou-derlin (continued)

V ice-Chairman of the CHR HANSEN HOLDING AS (a) Sweden
Board of Directors
Director ATOS SA (a) France
CHR HANSEN HOLDING AS (a) Sweden
FINANCIÈRE SPIE SAS France
SODIMA SAS France
SPIE SAS France
STRATEGIC INITIATIVES FRANCE SAS France
YOPLAIT FRANCE SAS France
YOPLAIT MARQUES INTERNATIONALES SAS France
YOPLAIT SAS France
Manager STAR LADYBIRD SARL Luxembourg
(a) Listed company.


Compensation and benefits for corporate officers and governance bodies
6.3 Compensation and benefits for corporate officers

and governance bodies
TABLE OF CONTENTS
Principles of the compensation policy Description of the Group performance shares program
for Group executives 263 (long-term variable compensation) 271
Role of the Nomination and Compensation Committee 263 Description of stock-options programs
Principles applicable to annual compensation (as of December 31, 2014) 278
of Group executives 263
Compensation and benefits paid to corporate
Principles applicable to multi-annual variable
officers and governance bodies 280
compensation of Group executives 265
Compensation and benefits paid to members
Principles applicable to long-term variable of the Board of Directors and of the Executive Committee 280
compensation of Group executives 265
Compensation and benefits paid to corporate officers 282
Principles relative to Group executives’ supplementary
retirement plan 268 Individual compensation of corporate officers 297
Description of the Group compensation collective Transactions made in 2014 involving Company
programs269 shares by members of the Board of Directors
Description of the Group performance units program and Executive Committee 297
(multi-annual variable compensation) 269

Principles of the compensation policy for Group executives

The Group’s compensation policy for general managers and senior • performance conditions are both complementary and stable.
executives uses a tiered approach to responsibilities based on job In fact, they enable the interests of shareholders to be aligned
content and market practices. This policy is built on collective prin- with those of management, since they are largely based on the
ciples applied to approximately 1,300 general managers and senior Group’s objectives communicated to the financial markets. In
executives worldwide as well as to corporate officers. The principles addition, these performance conditions reflect best compensation
adopted by the Group break compensation down into two distinct practices, namely “no pay below median” as regards external
parts: annual compensation and multi-annual compensation, as performance conditions; and
described hereafter.
• compensation-related performance criteria are sufficiently
Danone’s compensation policy is based on simple, stable and stringent so as to reward long-term performance in line with
transparent principles. As such, multi-annual compensation in market expectations.
the form of Group performance units was established in 2005,
and long-term compensation in the form of Group performance Principles applicable to annual compen-
shares in 2010. All performance conditions for these components
of multi-annual/long-term compensation, as well as the review of
sation of Group executives
their achievement, have been set out clearly and precisely in the This annual compensation consists of:
Registration Document for several years.
Principles applicable to fixed compensation
The compensation of the Company’s corporate officers is determined
Fixed compensation of corporate officers is reviewed after rela-
by the Board of Directors on the basis of recommendations made by
tively long periods, in accordance with the recommendations of
the Nomination and Compensation Committee as described hereafter.
the AFEP-MEDEF Code, and reflects the experience and level of
responsibility of the beneficiary.
Role of the Nomination and Compensation
Committee Principles applicable to annual variable
compensation
The Group’s compensation policy is regularly reviewed by the
Nomination and Compensation Committee. As described above in Annual short-term variable compensation is subject to performance
section 6.1 Governance Bodies, this Committee is composed entirely conditions and determined on the basis of quantitative (economic
of independent Directors, and is chaired by the Lead Independent objectives) and qualitative (social and managerial objectives) cri-
Director. In particular, the Nomination and Compensation Committee teria, which are specifically and objectively defined and described
reviews the Group’s compensation policy annually. To do so, it relies hereafter for the (i) corporate officers, (ii) members of the Execu-
on a study conducted by a specialized firm, the objectivity of which tive Committee who manage a Division, (iii) other members of the
is guaranteed and which takes into account practices in two main Executive Committee, and (iv) the Group’s other senior executives.
markets (France and Europe). Conditions of annual variable compensation
In its recommendations on the compensation of corporate officers of corporate officers
and members of the Executive Committee, the Compensation and For Mr. Franck RIBOUD, Chairman and Chief Executive Officer until
Remuneration Committee seeks to maintain a balance between the September 30, 2014 (who does not anymore receive any annual
various components. The Nomination and Compensation Committee, variable compensation since October 1, 2014, effective date of his
in its recommendation on the overall compensation of corporate appointment as Chairman of the Board of Directors) for Mr. Emmanuel
officers, integrates the advantage represented by the potential FABER, Deputy General Manager from January 1 to September 30,
benefit of a supplementary pension plan. 2014 and then Chief Executive Officer, and for Mr. Bernard HOURS,
Deputy General Manager until September 2, 2014, annual variable
The Committee considers best market practices on the basis of (i) a compensation consists of the following items:
benchmark prepared by the aforementioned specialized firm, inclu-
ding large international companies listed in France (CAC 40), and (ii) (i) a variable economic portion, representing 60% for corporate 6
a panel of eight international benchmarks in the food and beverage officers (except the Chairman and Chief Executive Officer), calcula-
sector (the same panel used to set the performance conditions for ted with reference to Group objectives as disclosed to the financial
the Group’s performance shares and the termination indemnities markets in terms of:
of corporate officers, and includes Unilever NV, Nestle SA, PepsiCo • sales;
Inc., The Coca-Cola Company, General Mills Inc., Kellogg Company,
Kraft Foods Group Inc. and Mondelez International Inc.). • trading operating margin; and
The Nomination and Compensation Committee ensures, in parti- • free cash-flow.
cular, that: In accordance with the French Financial Markets Authority recom-
• multi-annual compensation which is subject to performance mendation no. 2012-02 of February 9, 2012, for Messrs. Franck
conditions, has sufficient weighting in relation to the annual RIBOUD, Emmanuel FABER and Bernard HOURS the expected level
compensation in order to (i) encourage corporate officers to focus of fulfillment of each of these criteria was specifically predefined
their work on the long-term, and (ii) prevent poor performance on the basis of recommendations from the Nomination and Com-
from being rewarded by bonuses; pensation Committee but cannot be disclosed publicly for reasons
of confidentiality. Indeed, Danone is particularly careful about
confidentiality issues, all the more so in a sector characterized by
robust competition. Nonetheless, in view of shareholders’ require-
ments to align corporate officers’ variable compensation with Group
performance and shareholders’ interests, information is provided
concerning the calculation of the amounts allocated as variable

compensation to allow shareholders to verify the transparency of (ii) a variable social portion, representing 20%, calculated with
compensation and ensure compliance with best market practices; reference to the social objectives set for the relevant Division (such
as safety at work, employee training, skills development, environ-
(ii) a variable social portion, representing 20% for corporate officers
mental parameters and societal initiatives); and
(except the Chairman and Chief Executive Officer), calculated with
reference to the Group’s social objectives such as safety at work, (iii) a variable managerial portion, representing 20%, calculated
employee training, skills development, environmental parameters with reference to objectives linked to the expansion of the Division’s
and societal initiatives; and business (product innovation, market share, expansion in new geo-
graphic areas and implementation of strategic themes).
(iii) a variable managerial portion, representing 20% for corporate
officers (except the Chairman and Chief Executive Officer), calcu- Conditions of annual variable compensation for the other
lated with reference to objectives linked to the expansion of the members of the Executive Committee
Group’s business (product innovation, market share, expansion in For the other members of the Executive Committee, the annual
new geographic areas and implementation of strategic themes). variable compensation consists of the following items:
The following weightings have been applied to the Chairman and (i) a variable economic portion, representing 60%, calculated with
Chief Executive Officer, namely: 40% for the economic and social reference to Group objectives as communicated to the financial
objectives, and 60% for the managerial objectives. markets (e.g. in terms of sales, trading operating margin and free
cash-flow);
As a reminder, Mr. Franck RIBOUD’s target bonus for his duties as
Chairman and Chief Executive Officer for 2014 is €1,063,125 (pro- (ii) a variable social portion, representing 20%, calculated with
rated over the first nine months of the year given that he has been reference to the Group’s social objectives (such as safety at work,
Chairman of the Board of Directors since October 1 and receives employee training, skills development, environmental parameters
no annual variable compensation in that capacity), Mr. Emmanuel and societal initiatives); and
FABER’s target bonus for his duties as Deputy General Manager
(iii) a variable managerial portion, representing 20%, calculated
until September 30, 2014 is €423,000 (prorated) and the target bonus
with reference to objectives linked to the expansion of the Group’s
for his duties as Chief Executive Officer, since October 1, 2014, is
business.
€250,000 (prorated), and Mr. Bernard HOURS’ target bonus for
his duties as Deputy General Manager until September 2, 2014 is Conditions of annual variable compensation for other
€376,000 (prorated). general managers and senior executives of the Group
The annual variable compensation applicable to corporate officers
The level of achievement of each variable portion category is capped
and to members of the Executive Committee applies in the same
at a maximum of twice the target, in line with best practices in the
way to all the Group’s 1,300 general managers and senior executives
Fast Moving Consumer Goods sector to which Danone belongs.
at all locations throughout the world, particularly as regards the
For reasons of confidentiality, the level of fulfillment of all the various criteria and their weighting.
objectives for each of the portions, although specifically predefined,
cannot be made public precisely but further indications are provided
hereafter in section 2014 annual short-term variable compensation.
At its meeting on February 18, 2014, upon recommendation of the
Nomination and Compensation Committee, the Board of Directors
capped the 2014 annual short-term variable compensation of Mr.
Franck RIBOUD, who served as Chairman and Chief Executive
Officer until September 30, 2014, at 236% of his fixed compensation.
Mr. Emmanuel FABER’s annual short-term variable compensation, in
respect of his duties as Deputy General Manager, from January 1 to
September 30, 2014, was capped at 166% of his fixed compensation.
As of October 1, 2014, for his duties as Chief Executive Officer, this
cap is 200% of his fixed compensation.
Lastly, Mr. Bernard HOURS’s annual short-term variable compen-
sation, in respect of his duties as Deputy General Manager, for the
period from January 1 to September 2, 2014, was capped at 166%
of his fixed compensation.
Moreover, the formula used to determine annual short-term variable
compensation does not include a guaranteed portion, which prevents
the payment of a bonus in the event of poor performance.
Conditions of annual variable compensation for members of
the Executive Committee managing a Division
For the members of the Executive Committee who manage one
of the Group’s four Divisions, the annual variable compensation
consists of the following items:
(i) a variable economic portion, representing 60%, calculated with
reference to the objectives set in the annual budget of the relevant
Division (in terms of sales, trading operating margin and operating
free cash-flow);

Principles applicable to multi-annual are partially waived in the event of death, voluntary or non-voluntary
retirement of a beneficiary.
variable compensation of Group executives The Group performance unit plans comply with the AFEP-MEDEF
This multi-annual compensation is in the form of Group perfor- Code, which states that, in the event of the departure of a corpo-
mance units. rate officer before the expiry of the term set for the assessment
of performance criteria, the payment of multi-annual variable
General principles of Group performance units compensation is canceled, except in exceptional circumstances
The multi-annual variable compensation consists of Group perfor- justified by the Board.
mance units paid subject to multi-annual performance conditions
over a three-year period. As such, in the event of the departure or retirement of a corporate
officer:
The Group performance units were introduced in 2005 with the
objective of aligning more closely the compensation of the corporate (i) he loses all rights to the Group performance units granted to him
officers, the members of the Executive Committee and the 1,300 over the 12 months preceding his departure; and
general managers and senior executives with the Group’s overall (ii) the Group performance units granted previously are (a) consi-
operating and economic performance and in the medium term. In dered vested by said beneficiary and the condition of continuous
accordance with the AFEP-MEDEF Code, Group performance units employment for three years does not apply, and (b) valued at the
are not reserved only for corporate officers. date of the event in accordance with the following rules:
Group performance units are allocated each year upon the decision • the calendar year(s) for which the accounts have been closed
of the Board of Directors, upon recommendation of the Nomination by the Board of Directors are valued based on the achievement
and Compensation Committee, for a three-year period. The Board of objectives; and
of Directors, upon the recommendation of the Nomination and
Compensation Committee, sets the performance objective(s) for • current and future calendar years are deemed to have zero value.
the next calendar year and afterwards verifies the achievement of
the previous year’s objective(s) for each Group performance unit Principles applicable to long-term
plan. The annual objectives for Group performance units currently variable compensation of Group executives
in the process of vesting (Group performance units granted in 2012,
2013 and 2014) are detailed hereafter in section Group performance Long-term compensation in the form of Group
units annual objectives. performance shares (program introduced in 2010)
Value of Group performance units General principles applicable to Group performance shares
With regard to outstanding Group performance units, the years and termination of the stock-options program
2012 and 2013 are valued individually and respectively at €10 and The Group’s long-term variable compensation takes the form of
€0 based on the achievement or non-achievement of the defined Group performance shares (Company shares subject to performance
objectives and the year 2014 was valued at €7 as a result of a me- conditions). Group performance shares were introduced in 2010 by
chanism that gradually increases the compensation of each Group the Shareholders’ Meeting held on April 22, 2010 to replace the stock-
performance unit from €0 to €10 based on the level of fulfillment option program that was consequently closed. They are allocated
of the defined objective. to corporate officers, members of the Executive Committee and
more than 1,300 Group general managers and senior executives.
Lastly, the valuation of each Group performance unit is zero if the In accordance with the AFEP-MEDEF Code, Group performance
objective(s) was/were not 100% achieved at least one out of three shares are not reserved uniquely for corporate officers.
years.
This long-term, performance-based incentive program is intended to
Performance objectives of Group performance units strengthen the commitment of beneficiaries to support the Group’s
The objective(s) of Group performance units, determined by the development and enhance the share value on a long-term basis.
Board of Directors for a fiscal year, is/are based on performance
conditions in line with the Group’s objectives, as communicated to The plan regulations prohibit Group performance shares benefi- 6
the financial markets at the beginning of the year (see list hereafter ciaries from hedging in any manner (i) their position with respect to
in section Group performance units annual objectives). These objec- their rights to receive Group performance shares or (ii) their rights
tives are the same for all beneficiaries of Group performance units. with respect to shares that they have already received and that are
still subject to a holding period. Moreover, for the Group’s corpo-
Other characteristics of the Group performance rate officers, the prohibition of hedging is extended to all DANONE
units shares or financial instruments related to these shares that they
Consequences for a beneficiary following a change of own or may be in a position to own (see section hereafter Obligation
control to hold Company shares resulting from vestings of Group performance
If a person or group of persons acting in concert (within the meaning shares). In addition, in accordance with the AFEP-MEDEF Code, each
of Article L. 233-10 of the French commercial code) were to acquire beneficiary of Group performance shares has personally agreed not
control of Danone (within the meaning of Article L. 233-3 of the to use hedging instruments. To the Group’s knowledge, no hedging
French commercial code), the performance objectives for the year instrument is put in place.
during which the change of control occurred would be deemed to Authorization by the Shareholders’ Meeting
have been achieved and all the outstanding Group performance unit On April 22, 2010 the Shareholders’ Meeting authorized the Board of
plans would be paid during the month following the change of control. Directors to grant on one or more occasions, existing or to be issued
Consequences following death, voluntary or non-voluntary Company shares, to members of personnel or to certain categories
retirement of a beneficiary thereof that it shall select among eligible employees and directors
The regulations of the Group performance unit plans stipulate that and officers of the Company or of its affiliates within the meaning of
the continuous employment condition and the performance condition Article L. 225-197-2 of the French commercial code. At the same time,

the Shareholders’ Meeting decided that this authorization canceled A new authorization will be submitted for the approval of the Sha-
the as-then-unused portion of the previous authorization granted reholders’ Meeting on April 29, 2015 (see section 8.3 Comments on
on April 23, 2009 by the Shareholders’ Meeting in its 30th resolution the resolutions of the Shareholders’ Meeting).
to grant options to purchase and/or subscribe shares.
This authorization was renewed by the Shareholders’ Meetings of
April 26, 2012, April 25, 2013 and April 29, 2014.
Cap on the number of Group performance shares granted

Group performance share grants are subject to a double cap, decided by the Shareholders’ Meeting, limiting (i) the total number of Group
performance shares that may be granted, and (ii) the total number of Group performance shares that may be granted to all the corporate
officers as follows:
Shareholders’ Meeting authorizing

the Group performance shares 04/22/2010 04/26/2012 04/25/2013 (b) 04/29/2014 (b)
Maximum number of Group

performance shares that may
be granted (a) 0.4% 0.4% 0.2% 0.2%
Including the maximum number of

Group performance shares that may
be granted to all corporate officers (a) 0.1% 0.1% 0.05% 0.05%
(a) E xpressed as a percentage of the share capital for the fiscal year in question, recorded at the close of the Shareholders’ Meeting that authorized
the plans. This number of shares does not reflect potential adjustments that may be made in accordance with applicable legal and regulatory
requirements and, where applicable, contractual provisions calling for other adjustments in order to maintain the rights of holders of securities or
other rights giving access to capital the share capital.
(b) Authorization valid until December 31, 2014.
Grant by the Board of Directors Demanding performance conditions appropriate

Group performance shares are granted annually by the Board of for the Group’s current environment
Directors, upon recommendation of the Nomination and Com- The performance conditions for Group performance shares consist
pensation Committee, at consistent and regular periods. They of two complementary criteria representative of the Group’s per-
are granted at the end of July to the members of the Executive formances and adapted to the specificity of its activity:
Committee (including to corporate officers), as well as to general
(i) the first criterion (an external performance criterion) is based on
managers and senior executives. In addition, a second, very minor
the Group’s sales growth compared to that of a panel of the Group’s
grant, to the benefit of certain new employees, is made in October.
historical peers, comprising leading international groups in the food
Finally, regardless of the date of the grant, in 2014, as in previous and beverage sector; and
years, the Group performance share performance conditions were
(ii) the second criterion (an internal performance criterion) is based
set in advance and described in the report of the Board of Directors
on the change in the Group’s trading operating margin.
to the Shareholders’ Meeting presenting the resolution on Group
performance shares. These two objectives reflect key indicators followed by investors
and analysts to measure companies’ performance in the food and
Review of the potential achievement of performance objectives
beverage sector.
by the Board of Directors
The potential achievement of performance objectives is examined Stability of performance conditions and consistency of the
by the Board of Directors after prior review by the Nomination and composition of the panel of the Group’s historical peers
Compensation Committee. The Board considers that consistency in performance conditions
is an essential factor for long-term value creation. In that regard,
Valuation and booking in the consolidated financial statements
the performance criterion related to Group sales was used for all
Long-term compensation in the form of Group performance shares is
Group performance shares grants.
valued and booked in the Group’s consolidated financial statements,
pursuant to IFRS 2, Share-based payment (see Note 7.4 of the Notes The Group operating margin criterion has been used since 2013.
to the consolidated financial statements). Since performance conditions constitute one of the factors in long-
term value creation, in 2013 the Board of Directors stated that it
General principles of the performance conditions of Group
did not intend to amend the nature of these conditions every year.
performance shares
The performance conditions are determined by the Board of Direc- As a consequence, for the Group performance shares awarded in 2015,
tors upon recommendation of the Nomination and Compensation the performance conditions will continue to include performance
Committee. They are the same for all beneficiaries of Group per- criteria related to the Group’s sales and trading operating margin.
formance shares.
Moreover, regarding the external performance criterion, the
The performance conditions of the various plans in effect are based composition of the panel of peers that serves as the basis for the
on the following principles: performance conditions of the Group performance shares but also
for those of the termination indemnities has remained unchanged
since 2007. It was, however, adjusted in 2013 following the spin-off
of one of its members, Kraft Foods Inc., which was replaced by the
two companies resulting from the spin-off that occurred in 2012,
i.e. Kraft Foods Group Inc. and Mondelez International Inc.

Introduction of a single reference period of three years Holding period provided for by the Shareholders’ Meeting
applicable to all performance conditions The beneficiaries must hold the shares for a period of two years
In 2013, the criterion related to the growth of the Group’s sales was following their definitive grant.
set with a three-year reference period and the criterion related
If the vesting period for all or part of one or more grants is at least
to the trading operating margin with a two-year period. Given the
four years, the Board of Directors may choose not to impose any
Board of Directors’ desire to comply with investors’ expectations,
holding period for the corresponding shares.
at the time of the allocation of 2014 Group performance shares,
the reference period related to both performance conditions was Allocation by the Board of Directors of “3+2” and “4+0” plans
aligned with a single period of three years. In 2010, 2011 and 2012, the Board set up “3+2” plans (three-year
vesting period and two-year holding period) and “4+0” plans (four-
A single three-year reference period will again be proposed for the
year vesting period and no holding period) depending on the social
allocation of 2015 GPS.
security contributions regime of beneficiaries (i.e. “3+2” for the
Application of performance conditions to all Group French regime and “4+0” for those of other countries).
performance shares
Since 2013 and in order to strengthen the incentive character of
In accordance with best market practices and further to discussions
Group performance shares for the Group’s corporate officers and
with certain shareholders and shareholder representatives of the
employees, the Board of Directors has only set up “4+0” plans.
Group, from 2012, the Board of Directors decided to have all Group
performance shares allocated by virtue of the authorization given Impact of Group performance shares in terms of dilution/
by the Shareholders’ Meeting subject to performance conditions. ownership of the Company’s share capital
The Group’s policy on the grant of stock-options and Group per-
General principles related to the condition of continuous
formance shares has always had a limited impact on dilution/
employment for Group performance shares
ownership of the Company’s share capital. In particular, the grant
Each grant is subject to a condition of continuous employment, which
of Group performance shares is subject to a double cap set by the
applies to all Group performance share beneficiaries.
Shareholders’ Meeting which limits: (i) the total number of Group
Therefore, a Group performance share beneficiary who leaves the performance shares that may be granted and, (ii) the total number
Group prior to the end of the vesting period may not retain his/ of Group performance shares that may be granted to all corporate
her Group performance shares, which will be canceled. By way of officers.
exception, in statutory cases of early departure (including death
In 2014, as in 2013, the grant of Group performance shares to cor-
and disability categories two and three), and barring exceptions
porate officers could not exceed 0.05% of the share capital until
approved by the Board of Directors, the Group performance share
December 31, 2014. In prior years, the cap was set at 0.10% over
plan regulations stipulate that the continuous employment and
a 2-year period. In 2015, the new authorization submitted for the
performance conditions may be partially waived. In the event of the
April 29, 2015 Shareholders’ Meeting’s approval provides that the
employee’s voluntary retirement (or statutory early retirement),
grant of Group performance shares to corporate officers cannot
the continuous employment condition (but not the performance
exceed 0.03% of the share capital (see section 8.3 Comments on the
conditions) may also be partially waived. However, in the specific
resolutions of the Shareholders’ Meeting).
case where an employee retires (or takes statutory early retirement)
in the 12 months following a grant, the Group performance shares Long-term compensation in the form of
thus granted will be canceled. stock-options (until 2009)
In addition, the plan regulations for Group performance shares leave General principles of stock-options and closure of the
open the possibility, for Group performance share beneficiaries, of stock-options program
waiving the continuous employment and performance conditions In its 15 th resolution, the April 22, 2010 Shareholders’ Meeting
in the event of a change of control of the Company (all stock-option authorized the Board of Directors to grant Company existing or to
plans introduced since 2003 have a similar procedure, until their be issued shares, on one or more occasions. At the same time, the
closure – see section hereafter Compensation and benefits paid to Shareholders’ Meeting decided that this authorization canceled the
corporate officers and governance bodies). Therefore, if a person or as-then-unused portion of the previous authorization granted by the 6
group of people acting collectively (as defined in Article L. 233-10 April 23, 2009 Shareholders’ General Meeting in its 30th resolution
of the French commercial code) acquires the control of Danone (as to grant options to purchase and/or subscribe shares.
defined in Article L. 233-3 of the French commercial code), there
would be no more conditions (not even performance conditions) in Consequently, no stock-option has been granted since November
order to receive the Group performance shares at the end of the 2009. Table 4 of the French Financial Markets Authority nomenclature
vesting period. concerning disclosures in registration documents on compensation
of corporate officers is therefore not applicable. Instead, Group
Finally, if the continuous employment condition is not met for another performance shares have been granted to the members of the
reason, the Board of Directors can decide to uphold a beneficiary’s Executive Committee (including the corporate officers) and to the
rights to the Group performance shares, subject to fulfillment of other senior executives since 2010.
the performance conditions.
Until the end of 2009, only stock- purchase options were granted to
General principles of the definitive grant of Group eligible employees as part of stock-option plans (the Company had
performance shares not issued options to subscribe shares since 1997). These alloca-
tions were granted to the same group of employees as those now
Vesting period provided for by the Shareholders’ Meeting receiving Group performance shares.
resolutions
The grants of Group performance shares become final and Company
shares are delivered to their beneficiaries after a vesting period
set by the Board of Directors. In accordance with the authorization
given by the Shareholders’ Meeting, this vesting period may not be
less than three years.

Grant by the Board of Directors Principles relative to Group executives’

Stock-options were generally granted twice a year: (i) the main
grant during the course of the year (generally in April) was intended supplementary retirement plan
for members of the Executive Committee (including the corporate Approximately 139 Group employees who hold the status of senior
officers), as well as the other senior executives, and (ii) a second executives and who were covered by French retirement schemes
grant (generally in October) was intended for certain new employees, as of December 31, 2003 are, under certain conditions (in particular
and where appropriate, for certain employees of recently acquired seniority and continuous employment conditions), eligible for a
companies. defined benefit retirement plan. As a reminder, in 2009, more than
Characteristics of stock-options 210 executives were covered by this plan.
The exercise price of the options was the equivalent of the average This plan provides for a pension based on years of service and the
stock market price of DANONE shares during the 20 trading days amount of final salary, under the condition that the beneficiary is still
leading up to the Board of Directors’ meeting held to grant them, in the Group’s employment at the time of retirement. The pension is
with no discount offered. paid after deducting certain pensions corresponding:
The term of the existing plans is eight years: with the last plan • with respect to a first category of senior executives in the Group,
having been approved in October 2009, the Group’s stock-option to the full amount of retirement benefits they acquired over the
program will remain in effect until October 2017. Since 2006, the course of their professional career; and
options may be exercised following a four-year period from the date
of grant (with the exception of the two plans granted in December • with respect to a second category of senior executives in the
2007 and April 2008, for which the respective vesting periods are Group, to the full amount of retirement benefits that they acqui-
two and three years). However, the regulations of the stock-option red due to the implementation of a Company non-contributory
plans authorized by the Board of Directors beginning April 11, 2003 supplementary retirement plan;
entitle beneficiaries to exercise all or part of the options granted to and can be as high as 65% of final salaries.
them in the event of a successful public offer targeting the Company’s
shares (see section 7.10 Change of control). In the event an employee leaves the Group before the age of 55
or in the event of death before retirement, the employee loses all
In the event of voluntary departures, the granted options would be benefits under this plan, it being specified that if the employee is
canceled. Thus, for example, as of December 31, 2014, the aggregate laid off after the age of 55, the plan benefits are preserved, subject
number of void or canceled options represented 1,857,462 options to the beneficiary not taking any salaried position in the future. This
out of a total of 13,059,050 options granted. provision, which is consistent with applicable French regulations,
Valuation and booking in the consolidated financial enables in particular protecting all beneficiaries against the risks
statements related to a termination of employment occurring after the benefi-
Long-term compensation in the form of stock-options is valued and ciary has reached the age of 55 but prior to reaching retirement age.
booked in the consolidated financial statements, pursuant to IFRS 2, This retirement plan was closed to any new beneficiaries as of
Share-based payment (see Note 7.4 of the Notes to the consolidated December 31, 2003. The current corporate officers are eligible
financial statements). for this supplementary retirement plan (see section Agreements,
plans and indemnities applicable to corporate officers which describes
notably the progressive increase in potential rights, the reference
wage taken into account for pension calculation (spread over a
three-year period in accordance with the recommendations of the
AFEP-MEDEF Code)).
The amount booked for this plan represents the obligation of the
Group as of December 31, 2014 for the payment of annuities calcu-
lated on the basis of life expectancies derived from mortality tables
(see Note 7.3 of the Notes to the consolidated financial statements).

Description of the Group compensation collective programs

Description of the Group performance Nomination and Compensation Committee, noted the achievement
of the 2012 objectives.
units program (multi-annual variable
Objectives for fiscal year 2013 (applied to Group
compensation) performance units granted in 2011, 2012 and 2013)
For 2013, the criteria set by the Board of Directors, acting upon
Group performance units annual objectives recommendation of the Nomination and Compensation Committee,
Objectives for fiscal year 2012 (applied to Group are as follows:
performance units granted in 2010, 2011 and 2012)
For 2012, the criteria set by the Board of Directors, acting upon • an increase in consolidated net sales of at least 5% on a like-
recommendation of the Nomination and Compensation Committee, for-like basis; and
are as follows: • a reduction in the trading operating margin of a maximum of 50
• an increase in consolidated net sales of at least 5% on a like- basis points in 2013 versus 2012, on a like-for-like basis.
for-like basis; and The Board, upon recommendation of the Nomination and Com-
• the generation of at least €2 billion in free cash-flow on a repor- pensation Committee, acknowledged that the objective related to
ted basis. the trading operating margin was not achieved. As a result, as the
Group performance unit performance conditions are cumulative,
The 2012 results exceeded the objectives (namely 5.4% growth in the Board of Directors meeting on February 19, 2014 noted that the
consolidated net sales and €2,088 billion in free cash-flow). As a Group performance unit 2013 objectives had not been achieved.
result, the Board of Directors, acting upon recommendation of the
Objective for fiscal year 2014 (applied to Group
performance units granted in 2012, 2013 and 2014)
For 2014, the criterion set by the Board of Directors, acting upon recommendation of the Nomination and Compensation Committee, is
an increase in net sales of at least 5% on a like-for-like basis.
Moreover, the Board acting upon recommendation of the Nomination and Compensation Committee, in the event of partial achievement
of the aforementioned objective (i.e. if growth in net sales for 2014 is between 4.5%, the lower range of the objective disclosed to the
market, and 5%, on a like-for-like basis), decided to implement a mechanism that gradually increases the compensation of each Group
performance unit between 0 and 10 euros, in line with the objective disclosed to the market, as follows:
Level of fulfillment of the objective in 2014 Value of each Group performance unit for 2014 (in €)
< 4.5% 0
≥ 4.5% 5
≥ 4.6% 6
≥ 4.7% 7
≥ 4.8% 8
≥ 4.9% 9
≥ 5.0% 10
The Board of Directors, acting upon recommendation of the Nomination and Compensation Committee, noted that the objective related 6
to an increase in net sales was achieved at a rate of 4.7%. Consequently, on February 19, 2015, the Board of Directors applied the above-
mentioned valuation scale and valued the 2012, 2013 and 2014 GPU at €7 for 2014.
Objectives for fiscal years after 2014
The criterion/criteria will be set by the Board of Directors during the fiscal year in question, upon recommendation of the Nomination
and Compensation Committee.

Group performance unit plans: position as of December 31, 2014

Group performance unit plans currently outstanding are presented hereafter:
Group performance unit plans outstanding Total
Year of grant 2011 2012 2013 2014
Date of Board of Directors’

meeting granting the Group
performance units 04/28/2011 07/26/2012 07/26/2013 07/24/2014
Number of Group performance

units granted 1,099,772 1,042,424 1,019,636 967,017 4,128,849
Of which number granted to

corporate officers 108,000 68,500 68,500 61,000 306,000
Number of beneficiaries 1,454 1,525 1,584 1,330
Group performance unit characteristics
Year paid 2014 2015 2016 2017

Performance conditions (a) Objectives set for Objectives set for Objectives set for Objectives set for
each of the 2011, each of the 2012, each of the 2013, each of the 2014,
2012 and 2013 2013 and 2014 2014 and 2015 2015 and 2016
fiscal years fiscal years fiscal years fiscal years
Review to determine whether Achievement of • Achievement of • Objectives for • Partial

performance conditions have objectives for objectives for 2012 fiscal year 2013 achievement of
been achieved 2011 and 2012, but (b) not achieved (b) objectives for
not for 2013 (b) 2014 (b)
• But not • Partial
for 2013 (b) achievement of • A review will
objectives for be conducted in
• Partial 2014 (b) 2016 and 2017
achievement to determine
of objectives for • A review will whether the
2014 (b) be conducted in 2015 and 2016
2016 to determine objectives were
whether the 2015 achieved
objectives were
Unit value of Group €20 (since the €17 (since the €17 maximum €27 maximum
performance units 2013 objectives 2013 objectives (since the 2013 (since the 2014
were not achieved) were not achieved objectives were objectives were
and the 2014 not achieved partially achieved)
objectives were and the 2014
partially achieved) objectives were
partially achieved)
(a) See details of these objectives above.

(b) See details of possible achievement of these objectives above.

Description of the Group performance shares program (long-term variable

compensation)
Description of the Group performance shares’ performance conditions
The performance conditions for each of the outstanding Group performance share plans are described hereafter:

the Group performance shares 04/22/2010 04/26/2012 04/25/2013 04/29/2014
Performance conditions applied Grants made Grants made Grants made Grants made
to Group performance shares in 2010 and 2011 in 2012 in 2013 in 2014
Performance conditions of grants made in connection with The Board of Directors on February 18, 2013 noted the achievement
the resolution approved on April 22, 2010 (2010 and 2011 of the performance conditions of the 2011 Group performance share
Group performance share plans) plan, i.e. for the 2011 and 2012 fiscal years: average annual growth
The performance conditions of the grants related to the resolution in sales of 6.6% and growth in free cash-flow of 11.7%.
approved on April 22, 2010 were determined as follows:
Performance conditions of grants made in connection with
(i) Nature of performance conditions and detailed objectives the resolution approved on April 26, 2012 (2012 Group
for each performance criterion performance share plan)
• growth in Group sales (on a consolidated and like-for-like basis, The performance conditions of the grants related to the resolution
i.e. excluding changes in scope and exchange rates) (“CA”); and approved on April 26, 2012 are:
• growth in free cash-flow (on a consolidated and like-for-like (i) Nature of performance conditions and detailed objectives
basis, i.e. excluding changes in scope and exchange rates) (“FCF”). for each performance criterion
(a) Comparison of the average arithmetic sales growth (“CA”) of the
The performance conditions are calculated for the first two years
Group with that of a reference Panel, on a like-for-like basis, during
of the vesting period based on the following objectives:
the CA Reference Period:
• for grants approved in 2010: the first and second years of the • if the Group’s CA exceeds or is equal to the Median CA of the
vesting period (2010 and 2011), average arithmetic annual growth
Panel, the definitive allocation shall be 100%; and
over the period in sales of 5% and in free cash-flow of 10%; and
• for grants approved in 2011: the first and second years of the • if the Group’s CA is less than the Median CA of the Panel, the
definitive grant shall be 0%.
vesting period (2011 and 2012), average arithmetic annual growth
over the period in sales of 5% and in free cash-flow of 10%. Where:
(ii) Weighting of each performance criterion • the Group’s CA refers to the arithmetic average internal (“organic”)
For Executive Committee members, the definitive grant of half of the sales growth over the CA Reference Period (on a consolidated
shares subject to performance conditions attributed to a beneficiary and like-for-like basis, i.e. excluding changes in consolidation
will be subject to each of these two criteria being achieved (subject scope and exchange rates);
to compliance with the condition of continuous employment within
the Group). For the other beneficiaries, the definitive grant of shares
• the CA of each Panel member refers to the arithmetic average
internal (“organic”) growth of sales recorded by the said member
representing a maximum of one-third of the Group performance
of the Panel over the CA Reference Period (on a consolidated and
share grants will not be subject to the performance conditions, and
like-for-like basis, i.e. excluding changes in consolidation scope
the definitive grant of each half of the reminding shares granted will
and exchange rates);
be subject to the achievement of one of the two criteria.
• the Panel CAs refers to the CAs of all members of the Panel; 6
(iii) Exceptions to the application of performance conditions
Part of the Group performance shares granted pursuant to the • the CA Reference Period refers to the first three fiscal years of
resolution approved in 2010 could be made without performance the vesting period for each grant, with the first fiscal year being
conditions within the following limits: the one during which the grant is decided;
• the grantees could only be Group employees, excluding corporate • the Median CA of the Panel refers to the value of the CA of the
officers and members of the Executive Committee; Panel member that divides the Panel CAs into two equal parts
(i.e. such that there are as many Panel members with a CA
• these shares could not represent more than 25% of the total exceeding or equal to the Median as Panel members with a CA
number of shares eligible to be granted pursuant to this autho-
being less than or equal to the Median), it being specified that if
rization; and
the Panel members are an even number, the Median CA of the
• these shares could not represent more than 33% of the total Panel will be equal to the arithmetic average of the two central
number of shares granted for each respective employee. values of the Panel CAs;
(iv) Review of achievement of performance conditions for • the Panel designates seven benchmark multinational compa-
grants related to the resolution approved on April 22, 2010 nies in the food and beverage sector, specifically: Unilever N.V.,
(2010 and 2011 Group performance share plans) Nestlé S.A., PepsiCo Inc., Coca-Cola Company, General Mills
The Board of Directors on February 14, 2012 noted the achievement Inc., Kellogg Company and Kraft Foods;
of the performance conditions of the 2010 Group performance share
plan, i.e. for the 2010 and 2011 fiscal years: average annual growth
• in the event that the audited financial statements accounting or
financial results of one of the Panel members are not published
in consolidated sales of 7.3% and growth in free cash-flow of 14.3%.
or are published late, the Board of Directors may, exceptionally,

exclude this member of the Panel through a duly justified decision • these shares could not represent more than 33% of the total
at a later date that is mentioned in the Report of the Board of number of shares granted for each respective employee.
Directors to the Shareholders’ Meeting;
(iv) Review of achievement of performance conditions for
• in the event that the audited financial statements or financial grants related to the resolution approved on April 26, 2012
results of two or more members of the Panel are not published (2012 Group performance share plans)
or published late, the Board of Directors will reach a decision Concerning the level of free cash-flow of at least €2 billion per year
duly justified at a later date and described in the Report of the on average over the Reference Period, the Board of Directors meeting
Board of Directors to the Shareholders’ Meeting, on the basis of February 19, 2014 acknowledged that this objective had not been
of the most recent audited financial statements published by achieved. As a result, the share of Group performance shares granted
the members of the Panel and by Danone over the three latest subject to the free cash-flow performance condition is zero, with
completed fiscal years for which financial statements were an impact (i) of 50% on the number of Group performance shares
published for all members of the Panel and for Danone; granted to corporate officers and to the members of the Executive
Committee and, (ii) of 33% on the number of Group performance
• the Board of Directors may, through a duly justified decision taken shares granted to other beneficiaries.
later and mentioned in the Report of the Board of Directors to
the Shareholders’ Meeting, exclude a member of the Panel in the Concerning sales growth, the achievement or otherwise of this
event of an acquisition, absorption, dissolution, spin-off, merger condition will be reviewed at the end of the first half of 2015, when
or change of activity of one of the companies in the Panel, provided the companies in the Panel have published their sales results.
that it maintains the overall coherence of the peer group; and
Performance conditions of grants made in connection
• the Board of Directors must state whether the performance with the resolution approved on April 25, 2013 (2013 Group
conditions were attained, on the basis of a duly justified decision performance share plan)
taken later and mentioned in the Report of the Board of Directors The performance conditions of the grants related to the resolution
to the Shareholders’ Meeting, following a recommendation by approved on April 25, 2013 are:
the Nomination and Compensation Committee, and based on a
(i) Nature of performance conditions and detailed objectives
report of a financial advisor.
for each performance criterion
(b) Achievement of a level of free cash-flow (“FCF”) for the Group (a) Comparison of the arithmetic average net sales growth (the “CA”)
averaging at least €2 billion per year over the Reference Period. of the Group with that of a reference panel, on a like-for-like basis,
for a period of three years, i.e. 2013, 2014 and 2015:
Where:
• FCF refers to the Group’s free cash-flow over the FCF Reference • if the Group’s CA exceeds or is equal to the Median CA of the
Period; and
• the FCF Reference Period refers to the first two years of the • if the Group’s CA is less than the Median CA of the Panel, the
definitive allocation will be 0%, in accordance with the “no pay
vesting period for each grant, the first fiscal year being the one
below median” principle;
during which the grant is decided.
Where:
(ii) Weighting of each performance criterion
The achievement of each of these two criteria (subject to continuous • the Group’s CA refers to the arithmetic average internal (“organic”)
employment condition with the Group) determines the definitive grant net sales growth (on a consolidated basis and on a like-for-like
of half of the Group performance shares granted to the beneficiary. basis, i.e. excluding changes in consolidation scope and exchange
Accordingly, and in all cases subject to a continuous employment rates) for the years 2013, 2014 and 2015;
condition with the Group:
• the CA of each Panel member refers to the arithmetic average
• for the beneficiary corporate officers or members of the Executive internal (“organic”) net sales growth recorded by the said member
Committee: the definitive grant of half of the shares will be subject of the Panel (on a consolidated basis and on a like-for-like basis,
to the achievement of the performance condition related to the i.e. excluding changes in consolidation scope and exchange rates)
FCF, and the definitive grant of the other half will be subject to the for the years 2013, 2014 and 2015;
achievement of the performance condition related to the CA; and
• the Panel CAs refers to the CAs of all members of the Panel;
• for the other beneficiaries: the definitive grant of shares repre- • the Median CA of the Panel refers to the value of the CA of the
senting a maximum of one-third of the grants will not be subject
Panel member that divides the Panel CAs into two equal parts
to the performance condition (see hereafter); the definitive grant
of the remainder of the shares granted will be subject to the
exceeding or equal to the Median as Panel members with a CA
achievement of the performance condition related to the FCF
for the first half, and of the performance condition related to
the CA for the second half.
Panel will be equal to the arithmetic average of the two central
(iii) Exceptions to the application of performance conditions values of the Panel CAs;
Part of the Group performance shares granted pursuant to the
resolution approved in 2012 could be made without performance
• the Panel designates eight benchmark multinational groups in
the food sector, specifically: Unilever N.V., Nestlé S.A., PepsiCo
conditions within the following limits:
Inc., The Coca‑Cola Company, Kraft Foods Group Inc., Mondelez
• the grantees could only be Group employees, excluding corporate International Inc., General Mills Inc. and Kellogg Company;
officers and members of the Executive Committee;
• restatements (mainly adjustments of scope and/or foreign ex-
• these shares could not represent more than 25% of the total change effects) will be made only to the extent strictly necessary
number of shares eligible to be granted pursuant to this autho- in order to ensure the consistency of the calculation method for
rization; and the CAs of all Panel members and the CA of the Group over the
entire period under review;

• in the event that the audited accounting or financial results of one • “trading operating income” is defined as the Group operating
of the Panel members are not published or are published late, income excluding Other operating income and expense. Other
the Board of Directors may, exceptionally, exclude this member operating income and expense is defined under Recommendation
of the Panel through a duly justified decision taken at a later date 2009-R.03 of the French CNC “on the format of financial state-
that is mentioned in the Report of the Board of Directors to the ments for entities applying international accounting standards”,
Shareholders’ Meeting; and comprises significant items that, because of their exceptional
nature, cannot be viewed as inherent to current activities. These
• in the event that the audited accounting or financial results of two mainly include capital gains and losses on disposals of fully
or more members of the Panel are not published or published
consolidated companies, impairment charges on goodwill, signi-
late, the Board of Directors will make a decision duly justified at
ficant costs related to strategic restructuring and major external
a later date and described in the Report of the Board of Directors
growth transactions, and costs related to major litigation. Since
to the Shareholders’ Meeting, on the basis of the most recent
the application of IFRS 3 Revised, Business combinations, Other
audited financial statements published by the members of the
operating income has also included acquisition fees related to
Panel and by Danone over the three latest completed fiscal years
business combinations;
for which financial statements were published for all members
of the Panel and for Danone; • “net sales” corresponds to the Group’s consolidated net sales,
as defined in IFRS;
• the Board of Directors may, through a duly justified decision
taken at a later date and mentioned in the Report of the Board • the change (increase or decrease) on a “like-for-like basis” in
of Directors to the Shareholders’ Meeting, exclude a member of the trading operating margin essentially exclude the impact of: (i)
the Panel in the event of an acquisition, absorption, dissolution, changes in exchange rates, with both previous year and current
spin-off, merger or change of activity of this member of the year indicators calculated using the same exchange rates (the
Panel, provided that it maintains the overall consistency of the exchange rate used is a projected annual rate determined by
peer group; and the Group for the current year), and (ii) changes in consolidation
scope, with indicators related to considered fiscal year calculated
• the Board of Directors must state whether this first performance on the basis of previous-year scope; and
condition was attained, on the basis of a duly justified decision
taken at a later date and mentioned in the Report of the Board • the Board of Directors will need to state whether this second
of Directors to the Shareholders’ Meeting, following a recom- performance condition has been achieved through a duly infor-
mendation by the Nomination and Compensation Committee, med decision made at a later date and mentioned in the Report
and based on a report of a financial advisor. of the Board of Directors to the Shareholders’ Meeting, upon the
recommendation of the Nomination and Compensation Committee.
(b) Achievement of trading operating margin objectives set by
the Board of Directors and disclosed to the market (the “Margin (ii) Weighting of each performance criterion
Objective”) for a period of two years, i.e. the years 2013 and 2014: For all beneficiaries, provided that the condition of continuous
employment with the Group is met (see hereafter), two-thirds of
• if the Margin Objective is achieved in each of the two years 2013 the Group performance shares will be definitively allocated subject
and 2014, the definitive allocation will be 100%; and
to the achievement of the performance condition related to sales
• if the Margin Objective is not achieved in either of the two years growth, and the remaining third will be allocated subject to the
2013 and 2014 or if it is achieved in only one of these years, the achievement of the performance condition related to the trading
definitive allocation will be 0%; operating margin.
Where: (iii) No exceptions to the application of performance conditions
In accordance with best practices in the market and following dis-
• for the year 2013, the Margin Objective is a trading operating cussions with shareholders, 100% of Group performance shares
margin down by a maximum of 50 basis points on a like-for-like
granted under this plan are subject to performance conditions.
basis relative to the trading operating margin for fiscal year 2012;
(iv) Review of achievement of performance conditions for
• for the year 2014, the Margin Objective will be the higher of (i) a grants related to the resolution approved on April 25, 2013
6
positive evolution (i.e. an increase in basis points) of the trading
(2013 Group performance share plans)
operating margin on a like-for-like basis relative to the trading
Concerning the achievement of the trading operating margin in
operating margin for fiscal year 2013 and (ii) any trading operating
2013 and 2014, the Board of Directors meeting on February 19, 2014
margin objective for fiscal year 2014 that may be subsequently
acknowledged that this objective had not been achieved for fiscal year
set by the Board of Directors and disclosed to the market;
2013. As a result, the share of Group performance shares granted
• moreover, and in accordance with the “no pay below market subject to the trading operating margin performance condition is
objectives” principle, in the event that the Board of Directors zero, with an impact of 33% on the number of Group performance
should decide to revise its trading operating margin objective shares granted to all beneficiaries.
upward for 2013 and/or 2014, the Margin Objective would be
Concerning sales growth in the period 2013 to 2015, the achievement
automatically adjusted upward for the corresponding year on
of this condition will be reviewed at the end of the first half of 2016,
the basis of the trading operating margin objective as amended
when the companies in the Panel have published their sales results.
(to avoid any confusion, it should be noted that in the event that
the trading operating margin objective disclosed to the market
is revised downward, the amount of the Margin Objective will
not be adjusted and will therefore be calculated on the basis of
the initial operating margin objective disclosed to the market for
the corresponding year);
• “trading operating margin” is defined as the trading operating
income over net sales ratio;

Performance conditions of grants made in connection with • the Board of Directors may, through a duly justified decision
the resolution approved on April 29, 2014 (2014 Group taken at a later date and mentioned in the Report of the Board
performance share plan) of Directors to the Shareholders’ Meeting, exclude a member of
The performance conditions of the grants related to the resolution the Panel in the event of an acquisition, absorption, dissolution,
approved on April 29, 2014 are: spin-off, merger or change of activity of this member of the
Panel, provided that it maintains the overall consistency of the
(i) Nature of performance conditions and detailed objectives
peer group;
for each performance criterion
(a) Comparison of the arithmetic average net sales growth (the “CA”) • the Board of Directors must state whether this first performance
of the Group with that of a reference panel, on a like-for-like basis, condition was attained, on the basis of a duly justified decision
for a period of three years, i.e. 2014, 2015 and 2016: taken at a later date and mentioned in the Report of the Board
of Directors to the Shareholders’ Meeting, following a recom-
• if the Group’s CA exceeds or is equal to the Median CA of the mendation by the Nomination and Compensation Committee,
and based on a report of a financial advisor;
• if the Group’s CA is less than the Median CA of the Panel, the (b)The arithmetic average of growth in the trading operating margin
over a three-year period, i.e. for 2014, 2015 and 2016:
below median” principle;
Where:
• if the arithmetic average of growth in the trading operating
margin calculated over the three fiscal years (2014, 2015 and
• the Group’s CA refers to the arithmetic average internal (“organic”) 2016) is positive (i.e. greater than or equal to 1 basis point), the
net sales growth (on a consolidated basis and on a like-for-like definitive allocation shall be 100%;
basis, i.e. excluding changes in consolidation scope, exchange
rates and applicable accounting principles) for the years 2014,
• if the arithmetic average of growth in the trading operating margin
calculated over the three fiscal years (2014, 2015 and 2016) is
2015 and 2016;
equal to zero or negative, the definitive allocation shall be 0%;
• the CA of each Panel member refers to the arithmetic average Where:
internal (“organic”) net sales growth recorded by the said mem-
ber of the Panel (on a consolidated basis and on a like-for-like • the arithmetic average of growth in the trading operating margin
basis, i.e. excluding changes in consolidation scope, exchange refers to the arithmetic average of:
rates and applicable accounting principles) for the years 2014,
• growth in the trading operating margin for fiscal year 2014
2015 and 2016;
relative to fiscal year 2013, on a like-for-like basis,
• the Panel CAs refers to the CAs of all members of the Panel; • growth in the trading operating margin for fiscal year 2015
• the Median CA of the Panel refers to the value of the CA of the relative to fiscal year 2014, on a like-for-like basis,
• growth in the trading operating margin for fiscal year 2016
relative to fiscal year 2015, on a like-for-like basis,
being less than or equal to the Median), it being specified that if • “trading operating margin” is defined as the trading operating
the Panel members are an even number, the Median CA of the income over net sales ratio;
Panel will be equal to the arithmetic average of the two central
values of the Panel CAs;
• “trading operating income” is defined as the Group operating
income excluding Other operating income and expense. Other
• the Panel refers to eight benchmark multinational groups in operating income and expense is defined under Recommendation
the food sector, specifically: Unilever N.V., Nestlé S.A., PepsiCo 2009-R.03 of the French CNC “on the format of financial state-
Inc., The Coca-Cola Company, Kraft Foods Group Inc., Mondelez ments for entities applying international accounting standards”,
International Inc., General Mills Inc. and Kellogg Company; and comprises significant items that, because of their exceptio-
nal nature, cannot be viewed as inherent to current activities.
• restatements (mainly adjustments of scope and/or foreign ex- These mainly include capital gains and losses on disposals of
change effects) will be made only to the extent strictly necessary
fully consolidated companies, impairment charges on goodwill,
in order to ensure the consistency of the calculation method for
significant costs related to major strategic restructuring and
the CAs of all panel members and the CA of the Group over the
external growth operations and (incurred or estimated) costs
entire period under review;
related to crises and major litigation. Moreover, under revised
• in the event that the audited accounting or financial results of one IFRS 3, Business Combinations, in the Other operating income
of the Panel members are not published or are published late, and expenses item the Group also presents (i) costs to acquire
the Board of Directors may, exceptionally, exclude this member companies in which the Group acquires a controlling interest,
of the Panel through a duly justified decision taken at a later date (ii) revaluation variances recorded following a loss of control,
that is mentioned in the Report of the Board of Directors to the and (iii) changes in additional purchase prices subsequent to the
Shareholders’ Meeting; acquisition of a controlling interest;
• in the event that the audited accounting or financial results of two • “net sales” corresponds to the Group’s consolidated net sales,
or more members of the Panel are not published or published as defined in IFRS;
late, the Board of Directors will make a decision duly justified at
• the change (increase or decrease) on a “like-for-like basis” in
the trading operating margin 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
Panel and by the Company over the three latest completed fis-
exchange rate used is a projected annual rate determined by the
cal years for which financial statements were published for all
Group for the current year), and (ii) changes in consolidation scope,
members of the Panel and for the Company;

with indicators related to considered fiscal year calculated on (iii) No exceptions to the application of performance conditions
the basis of previous-year scope; and (iii) changes in applicable In accordance with best practices in the market and following dis-
accounting principles; and cussions with shareholders, 100% of Group performance shares
granted under this plan are subject to performance conditions.
• the Board of Directors will need to state whether this second
performance condition has been achieved through a duly infor- (iv) Review of achievement of performance conditions for
med decision made at a later date and mentioned in the Report grants related to the resolution approved on Tuesday, April 29,
of the Board of Directors to the Shareholders’ Meeting, upon the 2014 (2014 Group performance share plans)
recommendation of the Nomination and Compensation Committee. Concerning growth in the trading operating margin for 2014, 2015
and 2016, the achievement of this condition will be reviewed in early
(ii) Weighting of each performance criterion
2017 after the closing of the 2016 accounts, it being stipulated that,
For all beneficiaries, provided that the condition of continuous
at its meeting on February 19, 2015, the Board of Directors noted
employment with the Group is met (see hereafter), two-thirds of
that the change in the trading operating margin in 2014 relative to
the shares will be definitively allocated subject to the achievement
2013, on a like-for-like basis, was -12 basis points.
of the Performance Condition related to sales growth, and the
remaining third will be allocated subject to the achievement of the Concerning sales growth in the period 2014 to 2016, the achievement
Performance Condition related to the trading operating margin. of this condition will be noted at the end of the first half of 2017,
when the companies in the Panel have published their sales results.
Vesting periods of the Group performance share plans

A vesting period and, where relevant, a holding period (lock-up period) applies to the “3+2” and “4+0” plans, described hereafter:
Shareholders’ Meeting
authorizing the Group perfor-
mance shares 04/22/2010 04/26/2012 04/25/2013 04/29/2014
Plans “3+2” “4+0” “3+2” “4+0” “4+0” “4+0”
Vesting period
of shares (a) 3 years 4 years 3 years 4 years 4 years 4 years
Retention
period (b) 2 years – 2 years – – –
(a) Shares are delivered to their beneficiaries at the end of a vesting period, after application of the performance and continuous employment conditions.
(b) T he retention period starts on the delivery date and applies only to "3+2" plans whose beneficiaries are subject to the French system of social security
contributions.
In the case of corporate officers and members of the Executive Committee, an obligation to hold their shares received under the terms of
Group performance shares plans and stock-options has also been implemented and is described in sections Obligation to hold Company
shares resulting from vestings of Group performance shares and Obligation to hold Company shares resulting from exercise of stock-options
hereafter.
Group performance share plans: position as of December 31, 2014

Summary of Group performance shares outstanding and grants for fiscal year 2014
The characteristics of the Group performance share plans currently outstanding in 2014, the grants made in connection with these
plans and the changes in these plans during 2014 are presented hereafter (information required by French Financial Markets Authority
recommendation relative to disclosures in registration documents on compensation of corporate officers, Tables 6 and 7 of the French
Financial Markets Authority nomenclature): 6

Group performance share plans outstanding

Shareholders’ Meeting authorizing the
Group performance shares 04/22/2010
Group performance shares authorized
by the Shareholders’ Meeting (a) 2,587,963
Of which Group performance shares not
granted 1,229,737
Board of Directors’ meeting granting
the Group performance shares 07/26/2010 04/28/2011 04/28/2011 10/20/2011 10/20/2011
Plans “4+0” “3+2” “4+0” “3+2” “4+0”
Number of Group performance shares
granted 377,665 276,023 420,288 11,000 6,350
Group performance share characteristics
Delivery date 07/27/2014 04/29/2014 04/29/2015 10/21/2014 10/21/2015
Retention period (b) − 2 years − 2 years −
Performance conditions (c) Conditions determined at the February 10, 2010 Board meeting:
• average (arithmetic) annual growth in consolidated sales of 5% over two fiscal years;
• average (arithmetic) annual growth in free cash-flow of 10% over two fiscal years.
Review to determine whether perfor- Achievement for the two fiscal years Achievement for the t wo fiscal years determined by the Februar y 18,
mance conditions have been achieved determined by the February 14, 2012 2013 Board of Directors’ meeting (average grow th in 2011 and 2012 (i)
Board of Directors’ meeting (average of consolidated sales of 6.6 % and (ii) of free cash-flow of 11.7 %).
growth in 2010 and 2011 (i) of conso-
lidated sales of 7.3% and (ii) of free
cash-flow of 14.3%).
Changes in 2014 and situation as of December 31, 2014

Group performance shares as of 319,349 260,130 331,131 11,000 5,100
December 31, 2013
Group performance shares granted − − − − −
in 2014 (d)
Of which Group performance shares − − − − −
granted to corporate officers
Void or canceled Group performance 26,510 6,050 39,310 − −
shares in 2014
Of which Group Performance Shares can-
celed in 2014 due to non-achievement of
some of the performance conditions
Transfer from Group performance share − (48,992) 48,992 (4,000) 4,000
plan “3+2” to “4+0”
Shares delivered in 2014 292,839 205,088 − 7,000 −
Of which shares delivered to corporate − 68,000 − − −
officers
Of which shares delivered to the ten Group 29,150 45,150 − 7,000 −
employees (excluding corporate officers)
who received the largest number of shares
in 2014
Group performance shares as of − − 340,813 − 9,100
December 31, 2014
Of which, Group performance shares − 98,000 − − −
granted to corporate officers (e)
Of which, Group performance shares 21,150 137,000 24,300 11,000 4,000
granted to members of the Executive
Committee (e)
Of which number of Executive Committee 3 6 3 2 1
beneficiaries
Of which, Group performance shares − − − − −
granted to the ten Group employees
(excluding corporate officers) who received
the largest number of shares in 2014 (f)
Number of beneficiaries (g) 1,372 − 1,449 − 5
Void or canceled Group performance 108,845 21,943 128,267 − 1,250
shares as of December 31, 2014
a) Authorization expressed as a percentage of the Company’s share capital as recorded at the close of the Shareholders’ Meeting and excluding any adjust-
ments likely to take place.
(b) T he retention period starts on the delivery date and applies only to “3+2” plans whose beneficiaries are subject to the French system of social security
contributions.
(c) Conditions other than continuous employment condition.
276
(d) 100% ofDANONE
grants areREGISTRATION DOCUMENT
subject to performance 2014
conditions.
Total
04/26/2012 04/25/2013 04/29/2014
2,568,986 1,268,724 1,262,056
1,784,674 447,081 483,685
07/26/2012 07/26/2012 10/23/2012 07/26/2013 10/23/2013 07/24/2014 10/17/2014

“3+2” “4+0” “4+0” “4+0” “4+0” “4+0” “4+0”
334,406 446,506 3,400 817,993 3,650 776,521 1,850 3,475,652
07/27/2015 07/27/2016 10/24/2016 07/27/2017 10/24/2017 07/25/2018 10/18/2018

2 years − − − − − −
Conditions determined at the February 14, 2012 Board Conditions determined at the February Conditions determined at the February
meeting: 18, 2013 Board meeting: 19, 2014 Board meeting:
• growth in sales equal to or greater than the median sales • average growth in sales equal to or • average growth in sales equal to or
of the Panel over the 2012, 2013 and 2014 fiscal years; greater than the median sales of the greater than the median sales of the
• achievement of a consolidated free cash-flow level of at Panel over the 2013, 2014 and 2015 Panel over the 2014, 2015 and 2016
least €2 billion per year on average over the 2012 and 2013 fiscal years; fiscal years;
fiscal years. • achievement of a trading operating • average growth in trading operating
margin level for 2013 and 2014. margin over fiscal years 2014, 2015
and 2016.
• The Board of Directors will conduct a review at the end of • Sales growth objective from 2013 The Board of Directors will conduct
the first half of 2015 to determine whether the sales criterion to 2015: the Board of Directors will a review in 2017 to determine whether
was met, based on the recommendation of the Nomination and conduct a review in 2016 to determine these criteria were met;
Compensation Committee; whether this criterion was met;
• The non-achievement of the free cash-flow objective was • The non-achievement of the trading
noted by the Board of Directors on February 19, 2014. operating margin objective was noted
by the Board of Directors on February
19, 2014.
Total
327,689 412,876 3,400 814,093 3,650 − − 2,488,418
− − − − − 776,521 1,850 778,371
− − − − − 122,000 − 122,000
180,397 174,016 1,132 342,563 1,714 39,175 − 810,867
109,352 129,009 1,132 235,150 964 − − 475,607
− − − − − − − −
− − − − − − − 504,927
− − − − − − − 68,000
6
− − − − − − − 81,300
147,292 238,860 2,268 471,530 1,936 737,346 1,850 1,950,995
137,000 − − 137,000 − 122,000 − 494,000
202,000 40,000 − 239,500 − 217,500 − 896,450
7 3 − 10 − 10 −
− − − − − 108,500 − 108,500
− 1,523 5 1,578 9 1,327 4

187,114 207,646 1,132 346,463 1,714 39,175 − 1,043,549
(e) A s a reminder, Group performance shares granted to members of the Executive Committee and to corporate officers are subject to performance
conditions.
(f) Of which 95,500 Group performance shares granted to seven members of the Executive Committee, excluding corporate officers.
(g) Cumulative number of beneficiaries for “3+2” and “4+0” plans granted by the Board of Directors.
DANONE DOCUMENT DE RÉFÉRENCE 2014
Impact of Group performance shares in terms of dilution/ownership of the Company’s share capital
2013 2014
Percentage Percentage
Allocations in the fiscal year Number of shares of share capital (a) Number of shares of share capital (a)
Group performance shares granted 821,643 0.13% 778,371 0.12%
Of which Group performance shares granted to
all corporate officers 137,000 0.02% 122,000 0.02%
(a) Percentage of share capital as of December 31 of the fiscal year in question.

2013 2014
Balance as of December 31 (b) Number of shares of share capital (a) Number of shares of share capital (a)
GPS in the process of vesting 2,488,418 0.39% 1,950,995 0.30%
Of which GPS granted to all
corporate officers (c) 372,000 0.06% 375,500 0.06%
(b) Balance of 2011, 2012, 2013 and 2014 GPS in the process of being vested as of December 31 of the fiscal year in question.
(c) For fiscal year 2014, the number takes into account the cancellation of Mr. Bernard HOURS’ 2012, 2013 and 2014 GPS.
The number of Group performance shares granted in 2014 to Messrs. Franck RIBOUD, Emmanuel FABER and Bernard HOURS represent
respectively 0.008%, 0.006% and 0.006% of the Company’s share capital as of December 31, 2014, and 15.7% of the overall grant. The grant
made to Mr. Bernard HOURS was thereafter canceled due to his departure from the Group.
Description of stock-options programs (as of December 31, 2014)

Stock-option plans outstanding
Shareholders’ Meeting authorizing the options 4/22/2005
Stock-options authorized by the Shareholders’ Meeting 6,000,000 (b)
Of which stock-options not granted 1,497,900 (c)
Board of Directors’ meeting granting the stock-options 04/27/2006 10/16/2006 04/26/2007
Of which number that may be issued or purchased by:
Franck RIBOUD 424,000

Emmanuel FABER 56,180
Bernard HOURS 56,180
Stock-options granted (a) 2,045,853 36,040 2,633,517
Stock-options characteristics
First exercise date (f) 04/27/2010 10/16/2010 04/26/2011
Expiration date 04/26/2014 10/15/2014 04/25/2015
Exercise price 46.92 52.40 57.54
Changes in 2014 and situation as of December 31, 2014
Stock-options as of December 31, 2013 967,599 26,076 2,231,830
Void or canceled stock-options in 2014 81,866 18,444 16,536
Stock-options exercised in 2014 (g) 885,733 7,632 −
Of which, stock-options exercised by corporate officers in 2014 (h) 268,180 − −
Stock-options as of December 31, 2014 − − 2,215,294
Of which, stock-options granted to corporate officers (g) − − 536,360
Of which stock-options granted to members of the Executive Committee − − 623,704
Of which number of Executive Committee beneficiaries − − 7
Void or canceled stock-options as of December 31, 2014 317,027 25,440 378,049
(a) The number of stock-options granted was adjusted to reflect the June 25, 2009 capital increase.
(b) The number of authorized stock-options was not adjusted to reflect the June 25, 2009 capital increase.
(c) The number of stock-options not granted was not adjusted to reflect the June 25, 2009 capital increase.
(d) Date of last grant of options to corporate officers.
(e) The first exercise date corresponds to the end of the vesting period.

Summary of stock-option plans outstanding

The characteristics of the stock-option plans currently outstanding and the changes in these plans during 2014 are presented hereafter
(information required pursuant to the French Financial Markets Authority recommendation relative to disclosures in registration documents
on compensation of corporate officers, Tables 5, 8 and 9 of the French Financial Markets Authority nomenclature) and take into account:
• the split by half of DANONE shares that occurred in June 2004 and June 2007; and
• the adjustments, following the June 25, 2009 share capital increase, to the number of stock-options granted and to the exercise prices
of the plans in existence as of that date. The maximum number of stock-options authorized by the various Shareholders’ Meetings
was not changed.
Total
04/26/2007 04/23/2009
6,000,000 (b) 6,000,000
476,942 (c) 5,979,600
10/19/2007 12/17/2007 04/29/2008 10/21/2008 04/23/2009 (d) 10/20/2009
212,000 164,300
106,000 82,150
106,000 82,150
28,408 327,078 2,762,403 31,941 2,704,611 20,400 13,059,050
10/19/2011 12/18/2009 04/29/2011 10/21/2011 04/23/2013 10/20/2013

6
10/18/2015 12/16/2015 04/28/2016 10/20/2016 04/22/2017 10/19/2017
52.33 56.57 53.90 43.71 34.85 40.90
Total
15,052 195,343 2,033,144 20,776 1,669,380 18,400 7,177,600
212 15,088 18,938 − 44,638 200 195,922
− − 15,296 4,240 379,280 800 1,292,981
− − − − 82,150 − 350,330
14,840 180,255 1,998,910 16,536 1,245,462 17,400 5,688,697
− − 424,000 − 328,600 − 1,288,960
− − 623,810 − 554,380 − 1,801,894
− − 9 − 9 −
12,720 108,677 520,556 6,148 486,645 2,200 1,857,462
(f) O f which 228,984 options were exercised at a weighted average price of €43.12 by the 10 Group employees (excluding corporate officers) who
exercised the largest number of shares in 2014 (including 72,104 options by two members of the Executive Committee who are not executive
(g) S ee detail s in sec tion Compensation and benefits paid to corporate of ficers and governance bodies hereaf ter. A s of December 31, 2 014,
56% of these stock-options were in the money relative to the DANONE share price on that date (€54.45 per share).
.

Impact of stock-options in terms of dilution/ownership of the Company’s share capital

The Group’s policy on the grant of stock-options and Group performance shares has always had a limited impact on dilution/ownership
of the Company’s share capital. The most recent stock-options grants were made in 2009:
Year ended December 31, 2009

Number of shares Percentage of share capital (a)
Allocations in the fiscal year
Stock-options granted 2,725,011 0.4%
Of which, stock-options granted

to all corporate officers 575,050 0.1%
(a) Percentage of share capital on the grant date (date of the Shareholders’ Meeting authorizing the stock-options grants).
The balance of stock-options granted as a percentage of share capital as of December 31, 2013 and 2014 is presented hereafter:
Fiscal year ending on December 31

2013 2014
Number of shares of share capital (a) Number of shares of share capital (a)
Balance as of December 31 (b)
Active stock-options 7,177,600 1.14% 5,688,697 0.88%
Of which stock-options granted

to all corporate officers 1,557,140 0.25% 1,206,810 0.19%
(b) Balance of stock-options that could be exercised as of December 31 of the fiscal year in question.
Compensation and benefits paid to corporate officers and governance bodies

Compensation and benefits paid to members of the Board of Directors and
of the Executive Committee
Summary of compensation and benefits paid to members of the Board of Directors and of the Executive
Committee (except corporate officers)
Compensation and benefits paid to Directors in 2013 and 2014 (including Messrs. Franck RIBOUD, Emmanuel FABER and Bernard HOURS)
and to the members of the Company’s Executive Committee are detailed hereafter:

Compensation paid to corporate officers

and to members of the Executive Committee (a) 17.2 13.4
Attendance fees paid to Directors (b) 0.5 0.6
Compensation paid 17.7 14.0
Termination benefits – 2.1
Carrying amount of Group

performance shares granted (c) 8.3 9.1
(a) A nnual and multi-annual fixed and variable compensation (gross amount before employers’ charges), of which the variable portion amounts to €7
million in 2014 (€11 million in 2013).
(b) The three corporate officers are not entitled to attendance fees.
(c) For fiscal year 2012, the carrying amount represented the entirety of the estimated value at the date of granting in application of IFRS 2, supposing the
performance conditions to be achieved (see details above and see Note 7.4 of the Notes to the accounts).
It is also important to note that one Director received an annuity under the supplementary retirement plan, which they have earned in
respect of prior positions in the Group. The amount was €0.9 million in 2014 (unchanged from 2013).

Compensation and benefits paid to members of the Board of Directors who are not corporate officers
The amount of annual compensation due and paid, as well as of all types of benefits granted during fiscal years 2013 and 2014 to the
members of the Board of Directors who are not corporate officers breaks down as follows (information required pursuant to the French
Financial Markets Authority recommendation relative to disclosures in registration documents on compensation of corporate officers –
Table 3 of the French Financial Markets Authority nomenclature).
For information, it is noted that the two Directors representing employees hold an employment contract with the Group and therefore
receive compensation in this regard that has no connection to the exercise of their office. This compensation is therefore not communicated.

2013 2014
Total Total
annual annual
Benefits of compensa- Benefits of compensa-
(in €) Attendance fees (a) any kind tion Attendance fees (a) any kind tion
Amounts Amounts Amounts Amounts

Amounts Amounts due and due and Amounts Amounts due and due and
Name due paid paid paid due paid paid paid
Bruno BONNELL 34,000 34,000 − 34,000 38,000 38,000 − 38,000
Richard GOBLET D’ALVIELLA 62,000 62,000 − 62,000 88,000 88,000 − 88,000
Jacques-Antoine GRANJON 20,000 20,000 − 20,000 20,000 20,000 − 20,000
Yoshihiro KAWABATA (c) 9,000 9,000 − 9,000 −
Jean LAURENT 138,000 138,000 − 138,000 152,000 152,000 − 152,000
Gaëlle OLIVIER 26,000 26,000 − 26,000
Benoît POTIER 38,000 38,000 − 38,000 46,000 46,000 − 46,000
Isabelle SEILLIER 29,000 29,000 − 29,000 30,000 30,000 − 30,000
Mouna SEPEHRI 42,000 42,000 − 42,000 44,000 44,000 − 44,000
Jean-Michel SEVERINO 84,000 84,000 − 84,000 86,000 86,000 − 86,000
Virginia A. STALLINGS 34,000 34,000 − 34,000 42,000 42,000 − 42,000
Jacques VINCENT (b) 22,000 22,000 − 22,000 9,000 9,000 − 9,000
Lionel ZINSOU-DERLIN 18,000 18,000 − 18,000
Total 512,000 512,000 − 512,000 599,000 599,000 − 599,000
(a) Gross amount due during the year before withholding tax.
(b) T he term of office of Director of Mr. Jacques VINCENT was ended following the Shareholders’ Meeting of April 29, 2014. The annuity received by Mr.
Jacques VINCENT under the Group’s supplementary retirement plan in respect of his prior positions and for which he qualifies as a result of his 40
years’ service in the Group amounted to €0.9 million in 2014 (unchanged from 2013), which was paid in full by the said retirement plan.
(c) Mr. Yoshihiro KAWABATA ended his term of office as Director on July 15, 2013.
6

Compensation and benefits paid to corporate officers

Evolution of compensation paid to current corporate officers
The evolution of compensation paid to current corporate officers over the last five years is detailed for information in the tables hereafter,
the first one is related to Mr. Franck RIBOUD and the second one is related to Mr. Emmanuel FABER:
Chairman of
Chairman and Chief executive Officer the Board
(in €) 2010 2011 2012 2013 2014 (a) 2014 (b)
Short-term compensation
in cash 2,897,370 2,840,670 2,401,245 1,947,645 2,385,653 501,155
Value of the granted GPU 1,500,000 1,500,000 817,500 545,000 675,000 –
Total amount 4,397,370 4,340,670 3,218,745 2,492,645 3,060,653 501,155
Value of the granted GPS 1,497,688 1,716,560 2,197,985 1,882,413 2,513,500 –

Total 5,895,058 6,057,230 5,416,730 4,375,058 5,574,153 501,155
(a) For the period from January 1 to September 30, 2014.
(b) For the period from October 1 to December 31, 2014.
Chief Executive
Deputy General Manager Officer
(in €) 2010 2011 2012 2013 2014 (a) 2014 (b)
Short-term compensation in
cash 1,678,870 1,550,732 1,334,720 1,041,440 954,280 508,655
Value of the granted GPU 750,000 840,000 618,750 412,500 486,000 −
Total amount 2,428,870 2,390,732 1,953,470 1,453,940 1,440,280 508,655
Value of the granted GPS 966,250 1,201,592 1,663,613 1,424,775 1,809,720 –

Total 3,395,120 3,592,324 3,617,083 2,878,715 3,250,000 508,655
(a) For the period from January 1 to September 30, 2014.
(b) For the period from October 1 to December 31, 2014.

Summary of compensation paid to corporate officers

The total compensation due and the overall amount of the value at the grant date of Group performance units and Group performance
shares during fiscal years 2013 and 2014 to each corporate officer break down as follows (information required pursuant to the French
Financial Markets Authority recommendation relative to disclosures in registration documents on compensation of corporate officers –
Table 1 of the French Financial Markets Authority nomenclature):

(in €) 2013 2014
Franck RIBOUD
Annual compensation (a) 1,947,645 2,886,808
Multi-annual variable compensation (value of Group

performance units granted in the fiscal year) (b) 545,000 675,000
Long-term compensation (value of Group performance

shares granted in the fiscal year) (c) 1,882,413 2,513,500
Total 4,375,058 6,075,308
Emmanuel FABER
Annual compensation (a) 1,041,440 1,458,935

performance units granted in the fiscal year) (b) 412,500 486,000

shares granted in the fiscal year) (c) 1,424,775 1,809,720
Total 2,878,715 3,754,655
Bernard HOURS (d)

Annual compensation (a) 1,041,440 855,076

performance units granted in the fiscal year) (b) 412,500 −

shares granted in the fiscal year) (c) 1,424,775 −
Total 2,878,715 855,076
(a) Amounts due, fixed and variable. See details hereafter.
(b) For fiscal year 2014, the value is €27 per Group performance unit (€17 for fiscal year 2013), see details above.
(c) For 2014, the amount corresponds to the full value estimated at the grant date pursuant to IFRS 2, on the assumption that performance conditions
would be achieved (see details above and Note 7.4 of the Notes to the consolidated financial statements). For fiscal year 2013, the amount indicated
reflected the non-achievement of the performance condition relating to the margin, i.e. a reduction of one-third of the value of the Group performance
shares granted in July 2013.
(d) The grant of GPU and GPS in 2014 was canceled following the departure of Mr. Bernard HOURS.
6

Details of annual compensation and benefits due and paid to corporate officers
Summary of annual compensation due and paid, as well as benefits of any kind granted in fiscal years 2013 and 2014
The amount of annual compensation due and paid, as well as all types of benefits granted during fiscal years 2013 and 2014 to corporate
officers breaks down as follows (information required pursuant to the French Financial Markets Authority recommendation relative to disclo-
sures in registration documents on compensation of corporate officers – Table 2 of the French Financial Markets Authority nomenclature):

(in €) 2013 2014
Name Amounts due Amounts paid Amounts due Amounts paid
Franck RIBOUD
Fixed annual compensation (a) 1,050,000 1,050,000 1,287,500 1,287,500

Variable annual compensation 893,025 1,346,625 1,594,688 893,025
Benefits of any kind (b) 4,620 4,620 4,620 4,620
Extraordinary compensation N/A N/A N/A N/A
Directors’ attendance fees (c) N/A N/A N/A N/A
Total 1,947,645 2,401,245 2,886,808 2,185,145
Emmanuel FABER
Fixed annual compensation (a) 681,500 681,500 761,125 761,125
Variable annual compensation 355,320 648,600 693,190 355,320
Total 1,041,440 1,334,720 1,458,935 1,121,065
Bernard HOURS
Fixed annual compensation (a) 681,500 681,500 457,445 457,445
Variable annual compensation 355,320 648,600 394,550 355,320
Total 1,041,440 1,334,720 855,075 815,845
(a) Gross amount. The amounts due correspond to amounts allocated in respect of the fiscal year concerned. The amounts paid correspond to amounts
effectively paid during the fiscal year and include amounts due in respect of the preceding fiscal year.
(b) Benefits in kind correspond to the Company car pool and drivers made available to all Executive Committee members.
(c) The three corporate officers are not entitled to attendance fees.
2014 annual fixed compensation and strategic stakeholders; and lastly may, without prejudice to
The fixed compensation of Mr. Franck RIBOUD, in his capacity as the prerogatives of the Board of Directors and its Committees,
Chairman and Chief Executive Officer, due for the period from January be regularly consulted by the Chief Executive Officer concerning
1 to September 30, 2014, amounts to €787,500; it has remained all events of significance with regard to the Company’s strategy in
stable for seven years. the framework of the policies set by the Board of Directors, major
external growth projects, large-scale financial operations, societal
On September 2, 2014, in the framework of the separation of the
initiatives or the appointment of directors for the key activities and
functions of Chairman of the Board of Directors and Chief Executive
functions in the company. Upon invitation by the Chief Executive
Officer, Mr. Franck RIBOUD was appointed Chairman of the Board of
Officer, the Chairman may participate in internal meetings with
Directors effective October 1, 2014. The missions of the Chairman
the Company’s managers and teams in order to share his input on
of the Board of Directors of Danone, defined by the Board’s rules
strategic issues.
of procedure, were expanded and are in particular more extensive
than those provided for by law. The rules of procedure stipulate in The Board of Directors at its session of September 2, 2014, upon
particular that he presides over and chairs the Strategy Committee; recommendation by the Nomination and Compensation Committee,
ensures compliance with Danone’s values and culture; may, upon decided to allocate to Mr. Franck RIBOUD in respect of his func-
request by the Chief Executive Officer, represent the Company in tions as Chairman of the Board of Directors, fixed compensation of
its high-level relations at a national and international level, and in €500,000 for the period from October 1 to December 31, 2014, given
particular with public authorities and with the Company’s partners the expanded missions of the Chairman of the Board, the seniority

of Mr. Franck RIBOUD within the Group, his intimate knowledge of The preparation of the organization of Mr. Franck RIBOUD’s suc-
Danone’s markets, culture and environment, his expanded role as cession was thus perfectly managed. It enabled the entry into a
Chairman of the Board and the need to prepare for his succession smooth and progressive transition starting as early as October 1,
at the head of Danone under the best conditions. The organization considered as remarkable.
of the succession of Danone’s executive management has been
The fixed compensation of Mr. Emmanuel FABER, in his capacity
carried out in a proactive and forward-looking manner.
as Deputy General Manager, due for the period from January 1 to
Concerning the annual compensation of the Chairman of the Board, September 30, 2014, amounts to €511,125; it has been stable for four
Mr. Franck RIBOUD will receive only a fixed salary. The separation of years. On September 2, 2014, in the framework of the separation of
the functions of Chief Executive Officer and Chairman was proposed the functions of Chairman of the Board of Directors and Chief Exe-
by Mr. Franck RIBOUD with the aim of preparing his succession at cutive Officer, Mr. Emmanuel FABER was appointed Chief Executive
the head of the company under the best conditions and focusing on Officer. Upon recommendation by the Nomination and Compensation
Danone’s major medium - and long-term strategic orientations. Committee, the Board of Directors decided to allocate him a fixed
compensation of €250,000 for the period from October 1 (the date
The Lead Independent Director, Mr. Jean LAURENT, was involved
his appointment took effect) to December 31, 2014.
in the discussions and organization of the General Management
succession plan. Lastly, the fixed compensation of Mr. Bernard HOURS, in his capa-
city as Deputy General Manager, due for the period from January
Several factors were taken into consideration, including the fact that
1 to September 2, 2014, amounts to €457,445; it had been stable
Mr. Franck RIBOUD, in his capacity as Chairman and Chief Executive
for four years.
Officer, had transformed the Group into a global company focused
on emerging markets and prepared for tomorrow’s challenges, that 2014 annual short-term variable compensation
the value of Danone’s stock increased fivefold over the course of his Compensation target and annual cap set for fiscal year 2014
term of office, that the dividend never decreased and, lastly, that Mr. The Board of Directors of February 19, 2015, in accordance with the
Franck RIBOUD embodies Danone and its values, its management policy described above in the section Principles of the compensation
style and its very unique culture. policy for Group executives and upon recommendation by the Nomi-
nation and Compensation Committee, set the target amount of the
Therefore, the Board of Directors, upon recommendation by the
variable short-term compensation to be paid in 2015 in respect of
Nomination and Compensation Committee and the Lead Independent
fiscal year 2014, subject to performance conditions, at €1,594,688
Director, accepted Mr. Franck RIBOUD’s proposal to organize his
for Mr. Franck RIBOUD, for Mr. Emmanuel FABER in respect of the
succession, even before he turns 60, but wished for him to maintain
period from January 1 to September 30, 2014 at €435,690 and for
a full-time involvement in the Company without holding executive
the period from October 1, 2014 to December 31, 2014 at €257,500,
office, in order to ensure a smooth, gradual transition, and therefore
and for Mr. Bernard HOURS for the period from January 1, 2014 to
arranged an enhanced chairmanship enabling Mr. Franck RIBOUD
September 2, 2014 at €394.550.
to remain fully involved in the company’s activity.
The target amount of the variable short-term compensation of Mr.
Since October 2014, in addition to overseeing the work of the Board
Franck RIBOUD for the period from January 1 to September 30,
of Directors and in the framework of the enhanced chairmanship,
2014, in respect of his functions as Chairman and Chief Executive
Mr. Franck RIBOUD actively devoted himself to several missions,
Officer, was €1,063,125.
the most important of which are the following:
• support for the introduction of the new General Management Emmanuel FABER, for the period from January 1 to September 30,
and presentation of the new governance principles to the Danone
2014, in respect of his functions as Deputy General Manager, was
teams (in particular via a presence at conventions and major
€423,000, and for the period from October 1 to December 31, 2014,
in-house events, at various management meetings) and to the
in respect of his functions as Chief Executive Officer, was €250,000.
company’s major commercial and financial partners;
• configuration of the Strategy Committee, which will begin its work Bernard HOURS for the period from January 1 to September 2, 2014,
in first-half 2015: proposed composition, method of operation,
in respect of his functions as Deputy General Manager, was €376,000.
6
work and discussion themes and topics, principle of coordinating
the committee’s work with that of the Board, etc; Concerning Mr. Franck RIBOUD, who held the office of Chairman and
Chief Executive Officer until October 1, 2014, the cap on his variable
• dialogue with the management team regarding the Danone 2020 annual short-term compensation, in respect of 2014, had been set
project, begun in April 2014, in particular to help set the goals
by the Board of Directors upon recommendation by the Nomination
and the levels of ambition of the various priorities;
and Compensation Committee at 236% of his fixed compensation.
• representation of the Company through meetings with high- The cap for the variable annual short-term compensation of Mr.
ranking public authorities, in particular French, Russian and
Emmanuel FABER (until September 30, 2014) and Mr. Bernard HOURS
American, and with the shareholders of some of the Company’s
(until September 2, 2014) was set at 166% of their fixed compensation,
international entities, notably in Latin America;
and the cap for the variable annual short-term compensation of Mr.
• participation in several symbolic events for Danone’s development Emmanuel FABER, starting from October 1, 2014, was set at 200%
and image, such as the inauguration of a research and deve- of his fixed compensation.
lopment center in Argentina and the world final of the Danone
Nations Cup in Brazil; and
• participation in various projects related to Danone’s culture and
the dual economic and social project, such as the launch of the
new Livelihoods fund for family farming in alliance with Mars Inc.

Review of achievement of objectives Weightings

The Group results for fiscal year 2014 led to a payment to corporate For the first nine months of 2014, the following weightings were
officers of a variable annual compensation that is differentiated and applied for the Deputy General Managers (as well as for the last
above the target for this year. three months of the year for the Chief Executive Officer): 60% for the
economic objectives, 20% for the social objectives and 20% for the
After analyzing the results, the criteria linked to the variable economic
managerial objectives. These same weightings were homogeneously
portion have been met. They had been established by reference to
applied for the 1,300 Danone general managers and senior execu-
the Group’s objectives as disclosed to the market. As a reminder,
tives in the world, the definition of the objectives being necessarily
these objectives were as follows: increase in sales between 4.5%
adapted to the various management teams’ specific responsibility
and 5.5% on a like-for-like basis, stable trading operating margin
scopes (Division, regions, business units).
within a range of -20 bps and +20 bps on a like-for like basis and
free cash-flow of around €1.5 billion excluding exceptional items. For the first nine months of 2014, the following weightings were
applied for the Chairman and Chief Executive Officer: 40% for the
The objectives linked to the social portion have been overpassed.
economic and social objectives and 60% for the managerial objectives.
Indeed, the various plans aimed at adapting the organizations and
industrial capacities notably in Europe were well-managed (savings, Mr. Franck RIBOUD, since his appointment as Chairman of the Board
high quality social dialogue, setting up of clusters and simplification of Directors effective October 1, 2014, does not receive any variable
of business processes). In addition, in the area of work safety, 2014 compensation for his office as Chairman of the Board.
was marked by the relaunch of the “WISE” initiative at worldwide
Annual variable compensation target for 2015
level and by the achievement of results with regard to frequency
The Board of Directors of February 19, 2015, in accordance with the
and seriousness rates far exceeding expectations.
policy described above in the section Principles of the compensation
The objectives linked to the managerial portion have been fully policy for Group corporate executives and upon recommendation
achieved for the Deputy General Managers and for the Chief Exe- by the Nomination and Compensation Committee, confirmed the
cutive Officer. The quality of action plans to prepare the future, decision of the Board of Directors of September 2, 2014 which had
the definition of Danone’s business scopes and the development set the variable short-term compensation target to be paid in 2016
in the African region were selected. With regard to the Chairman in respect of fiscal year 2015, subject to performance conditions, at
and Chief Executive Officer, the preparation of the organization of €1,000,000 for Mr. Emmanuel FABER. The cap on this compensation
his succession was perfectly managed. It enabled the entry into, a has been set at 200% of his fixed compensation.
smooth and progressive transition starting as early as October 1,
considered as remarkable by the Board. Details of Group performance units granted
to corporate officers
The Board of Directors, upon recommendation of the Nomination
and Compensation Committee, grants Group performance units
annually to corporate officers (for more information see section
General principles of Group performance units above).
Grant of Group performance units and amounts paid to corporate officers
The value of Group performance units granted and amounts paid during fiscal years 2013 and 2014 to corporate officers breaks down as
follows:

(in €) 2013 2014
Value of Group Value of Group

performance units performance units
granted during granted during
Name the year (a) Amounts paid (b) the year (a)(c) Amounts paid (b)
Franck RIBOUD 545,000 1,500,000 675,000 1,000,000

Emmanuel FABER 412,500 750,000 486,000 560,000
Bernard HOURS(c) 412,500 750,000 − 600,000
(a) For 2013, the value is equal to €20 per Group performance unit as the margin objectives was not achieved (see details above).
(b) T he amounts paid in 2013 were paid in respect of the Group performance units granted in 2010 given the achievement of the performance conditions
in 2010, 2011and 2012 (see details above). The amounts paid in 2014 were paid in respect of the Group performance units granted in 2011 given the
achievement of the performance conditions 2011 and 2012, since the 2013 performance condition was not achieved (see details above).
(c) The grant of GPU in 2014 was canceled following the departure of Mr. Bernard HOURS.

History of Group performance unit grants to corporate officers

The Group performance units granted to each corporate officer break down as follows:
Year of grant 2011 2012 2013 2014
Date of Board of Directors’ meeting

granting the Group performance
units 04/28/2011 07/26/2012 07/26/2013 07/24/2014
Of which, granted to
Franck RIBOUD
Number of Group performance units 50,000 27,250 27,250 25,000
Maximum value of Group

performance units granted
during the year (a) 1,500,000 817,500 545,000 675,000
Emmanuel FABER
Number of Group performance units 28,000 20,625 20,625 18,000
Value of Group performance units

granted during the year (a) 840,000 618,750 412,500 486,000
Bernard HOURS (c)
Number of Group performance units 30,000 20,625 − −
Value of Group performance units

granted during the year (a) 900,000 618,750 − −
Group performance unit

characteristics
Year paid 2014 2015 2016 2017

Performance conditions (a) Objectives set for each Objectives set for each Objectives set for each Objectives set for each
of the 2011, 2012 and of the 2012, 2013 and of the 2013, 2014 and of the 2014, 2015 and
2013 fiscal years 2014 fiscal years 2015 fiscal years 2016 fiscal years
Review to determine whether Achievement • Achievement of • Non-achievement of • Partial achieve-

performance conditions have been of objectives for 2011 objectives for 2012 (b) objectives for 2013(b) ment of objectives for
achieved and 2012, but not 2014 (b)
for 2013 (b) • Non-achievement of • Partial achieve-
objectives for 2013 (b) ment of objectives for • A review will be
2014 (b) conducted in 2016
• Partial achieve- and 2017 to determine
ment of objectives for • A review will be whether the 2015 and
2014 (b) conducted in 2016 to 2016 objectives were
determine whether achieved
the 2015 objectives
were achieved
6
Unit value of Group performance €20 (as the objectives €17 (as the objectives Maximum €17 (as the Maximum €27 (as the
units for 2013 were not met) for 2013 were not met objectives for 2013 objectives for 2014
and the objectives for were not met and the were only partially
2014 were only par- objectives for 2014 met)
tially met) were only partially
met)
(a) See details of these objectives above.

(b) See details of possible achievement of these objectives above.
(c) T he GPUs granted in 2013 and 2014 to Mr. Bernard HOURS were canceled following his departure. As Mr. Bernard HOURS left the Group on December
19, 2014, the 20,625 GPU granted in 2012 relating to the 2012, 2013 and 2014 objectives will be paid at normal intervals and remain entirely subject to
unchanged performance conditions.
For information, the Board of Directors decided, as part of the overall assessment of the compensation of the Chairman of the Board,
that no Group performance unit would be granted to him in 2015.
The performance conditions are presented in section Group performance units annual objectives above.
Details of Group performance shares granted to corporate officers

The Board of Directors, upon the recommendation of the Nomination and Compensation Committee, grants Group performance shares
annually to corporate officers (as detailed in section Long-term compensation in the form of Group performance shares (program introduced
in 2010)).

Grant in the fiscal year and history of Group performance share grants to corporate officers
Group performance shares granted to Messrs. Franck RIBOUD, Emmanuel FABER and Bernard HOURS are presented hereafter (infor-
mation required pursuant to the French Financial Markets Authority recommendation relative to disclosures in registration documents
on compensation of corporate officers, Tables 6 and 10 of the French Financial Markets Authority nomenclature):
Group performance share plans outstanding
Shareholders’ Meeting autho-

rizing the Group performance
shares 04/22/2010 04/26/2012 04/25/2013 04/29/2014
Group performance shares

authorized by the Sharehol-
ders’ Meeting (a) 2,587,963 2,568,986 1,268,724 1,262,056
Of which Group performance

shares not granted 1,229,737 1,784,674 447,081 483,685
Board of Directors’ meeting

granting the Group performance
shares 07/26/2010 04/28/2011 07/26/2012 07/26/2013 07/24/2014
Plans “3+2” and “4+0” “3+2” and “4+0” “3+2” and “4+0” “4+0” “4+0”

shares granted 644,565 696,311 780,912 821,643 778,371
Group performance share characteristics for “3+2” plans (b)
Delivery date 07/27/2013 04/29/2014 07/27/2015 07/27/2017 07/25/2018
Retention period (c) 2 years 2 years 2 years – –

Performance conditions (d) Conditions determined at the February Conditions Conditions Conditions
10, 2010 Board meeting: determined at the determined at the determined at the
February 14, 2012 February 18, 2013 February 19, 2014
• average (arithmetic) annual growth Board meeting: Board meeting: Board meeting:
in consolidated sales of 5% over two
fiscal years; • growth in sales • average growth • average growth
equal to or greater in sales equal to in sales equal to
• average (arithmetic) annual growth than the median or greater than or greater than
in free cash-flow of 10% over two fiscal sales of the Panel the median sales the median sales
years. over the 2012, of the Panel over of the Panel over
2013 and 2014 the 2013, 2014 and the 2014, 2015 and
fiscal years; 2015 fiscal years; 2016 fiscal years;
• achievement of a • achievement of a • average growth
consolidated free trading operating in trading opera-
cash-flow level of margin level for ting margin over
at least €2 billion 2013 and 2014. fiscal years 2014,
per year on ave- 2015 and 2016.
rage over the 2012
and 2013 fiscal
years.
Review to determine whether Achievement for Achievement for • The Board of • Sales growth The Board of
performance conditions have the two fiscal the two fiscal Directors will objective from Directors will
been achieved years determined years determined conduct a review 2013 to 2015: the conduct a review
by the February by the February at the end of first Board of Directors in 2017 to deter-
14, 2012 Board of 18, 2013 Board of half 2015 to deter- will conduct a mine whether
Directors’ meeting Directors’ meeting mine whether review in 2016 to these criteria
(average growth in (average growth in these criteria determine whe- were met.
2010 and 2011 (i) in 2011 and 2012 (i) in were met, upon ther this criterion
consolidated sales consolidated sales recommendation was met;
of 7.3%, and (ii) in of 6.6 %, and (ii) in of the Nomination
• The non-achie-
free cash-flow of free cash-flow of and Compensation
vement of the
14.3%). 11.7 %). Committee;
trading operating
• The non-achie- margin objective
vement of the was noted by the
free cash-flow Board of Directors
objective was on February 19,
noted by the Board 2014.
of Directors on
February 19, 2014.

Group performance shares granted to corporate officers
Franck RIBOUD

shares 38,750 40,000 54,500 54,500 50,000
Value of Group performance

shares granted during the year (e) 1,497,688 1,716,560 2,197,985 1,882,413 2,513,500
Number of void or canceled

Group performance shares (f) – – – – –
Number of available Group

performance shares – – – – –
Emmanuel FABER

shares 25,000 28,000 41,250 41,250 36,000
Theoretical value of Group

performance shares granted
during the year (e) 966,250 1,201,592 1,663,613 1,424,775 1,809,720

performance shares (f) – – – – –
Number of available Group

performance shares – – – – –
Bernard HOURS

shares 25,000 30,000 41,250 41,250 36,000
Theoretical value of Group

performance shares granted
during the year (e) 966,250 1,287,420 1,663,613 1,424,775 1,809,720

Group performance shares (f) – – 41,250 41,250 36,000
Number of available shares – – – – –
(a) Authorization expressed as a percentage of the Company’s share capital at the close of the Shareholders’ Meeting and excluding any adjustments
likely to take place.
(b) For the 2010, 2011 and 2012 grants, Group performance shares under the “3+2” plans were granted to corporate officers. In 2013, the Board of
Directors, upon the recommendation of the Compensation and Nomination Committee, decided that they would be granted Group performance shares
under a “4+0” plan.
(c) T he retention period starts from the delivery date. These shares are subject to a retention obligation described in the section Compensation and
benefits paid to corporate officers concerning the Obligation to hold Company shares resulting from vestings of Group performance shares.
(d) Conditions other than continuous employment condition.
(e) For the 2010, 2011, 2012 and 2014 fiscal years, the carrying amount represents the full value estimated as of the grant date in accordance with IFRS
2 on the assumption that performance conditions are met (see details above and Note 7.4 of the Notes to the consolidated financial statements). For 6
fiscal year 2013, the amount indicated reflects the non-achievement of the performance condition relating to the margin, i.e. a decrease of one-third
of the value of the Group performance shares granted in July 2013.
(f) T he notion of void or canceled Group performance shares covers the cases where the continuous employment condition was not satisfied and does not
include the Group performance shares that were not vested because of the non-achievement of performance conditions.
For information, the Board of Directors decided, as part of the overall assessment of the compensation of the Chairman of the Board, that
no Group Performance Shares would be granted to him in 2015. The performance conditions are described above in section Description
of Group performance share conditions.

Delivery of Group performance shares

In accordance with Article L. 225-184 of the French commercial code, the Company’s shares delivered in 2014 to Messrs. Franck RIBOUD
and Emmanuel FABER are presented in the following table:
Date of Board
of Directors’ meeting Number of shares
granting the shares Date of delivery delivered Retention period (a)
Franck RIBOUD 04/28/2011 04/29/2014 40,000 2 years

Emmanuel FABER 04/28/2011 04/29/2014 28,000 2 years
(a) T he retention period starts on the delivery date. These shares are subject to a retention obligation described in the section Compensation and benefits
paid to corporate officers concerning the Obligation to hold Company shares resulting from vestings of Group performance shares.
In accordance with the provisions of the 2011 GPS plan, the Board of Given the significant level of the obligation to hold shares applicable
Directors decided to remove the continuous employment condition to corporate officers and other Executive Committee members, the
applicable to the 30,000 GPS granted to Mr. Bernard HOURS (that Board of Directors, acting upon recommendation of the Nomination
were initially 3+2 GPS which were transformed into 4+0 due to Mr. and Compensation Committee, agreed it was not necessary to require
Bernard HOURS’ move to the Netherlands in 2013). To the extent them to purchase a certain number of Company shares at the end of
that the attainment of the performance conditions for these GPS had the holding period for their shares subject to performance conditions.
already been validated and the continuous employment condition for
In addition, acting upon recommendation of the Nomination and
these 2011 GPS would have expired in 2014 if Mr. Bernard HOURS
Compensation Committee, the Board of Directors’ of February 14,
had stayed in France, the Board decided to maintain the delivery of
2012 decided to complement the current system with the addition of
the 30,000 GPS in April 2015 pursuant to the provisions of this plan.
an overall holding ceiling for shares resulting from the delivery of
Obligation for corporate officers and other Executive group performance shares or from stock-options, representing in
Committee members to retain the Company shares from shares the equivalent of four years of fixed compensation for Gene-
the delivery of Group performance shares ral Management and two years of fixed compensation for the other
All corporate officers and other Executive Committee members are members of the Executive Committee. This scheme complies fully
also subject to an obligation to hold the shares in the Company they with the new recommendations of the AFEP-MEDEF Code regarding
acquired through Group performance shares. They must hold (in the requirement to retain shares acquired by the corporate officers.
the registered form) a number of shares derived from each Group
The Board of Directors confirmed the holding obligation at the time
performance share plan granted as from July 26, 2010 (until ter-
of (i) the renewal of the terms of office of Mr. Franck RIBOUD and
mination of their corporate functions) corresponding to 35% of the
Mr. Emmanuel FABER on February 18, 2013, and Mr. Bernard HOURS
capital gains upon acquisition, net of tax and social security contri-
on February 19, 2014, and (ii) the granting of Group performance
butions, which would be realized if all shares resulting from each
shares decided by the Board of Directors meeting of July 24, 2014.
Group performance share plan granted to the executive were sold.

Details of stock-options granted to corporate officers

History of stock-option grants to corporate officers
Stock-options outstanding in 2014 and granted to Messrs. Franck RIBOUD, Emmanuel FABER and Bernard HOURS are presented in the
table hereafter:
Stock-option plans outstanding

the options 04/22/2005 04/26/2007
Stock-options authorized by the

Shareholders’ Meeting 6,000,000 (b) 6,000,000 (b)
Of which stock-options not granted 1,497,900 (c) 476,942 (c)
Board of Directors’ meeting

authorizing the stock-options 04/27/2006 04/26/2007 04/29/2008 04/23/2009 (d)
Stock-options granted (a) 2,045,853 2,633,517 2,762,403 2,704,611
Stock-option characteristics
First exercise date 04/27/2010 04/26/2011 04/29/2011 04/23/2013

Expiration date 04/26/2014 04/25/2015 04/28/2016 04/22/2017
Exercise price 46.92 57.54 53.90 34.85
Options granted to corporate officers
Franck RIBOUD
Number of options 212,000 424,000 212,000 164,300

Value of options granted (e) 2,088,000 5,846,000 3,142,000 1,573,250
Emmanuel FABER

Value of options granted (e) 553,320 774,595 1,571,000 786,625
Bernard HOURS

Value of options granted (e) 553,320 774,595 1,571,000 786,625
(a) The number of stock-options granted was adjusted to reflect the June 25, 2009 capital increase.
(b) The number of authorized stock-options was not adjusted to reflect the June 25, 2009 capital increase.
(c) The number of stock-options not granted was not adjusted to reflect the June 25, 2009 capital increase.
(d) Last grant to corporate officers.
(e) Represents the entirety of the estimated fair value on the grant date in accordance with IFRS 2 and before adjustment for the effect of the capital
increase of June 25, 2009. See Note 7.4 of the Notes to the consolidated financial statements.

Exercise of stock-options
In accordance with Article L. 225-184 of the French commercial code, details of the exercise of Company stock-options in fiscal year 2014
by Messrs. Franck RIBOUD, Emmanuel FABER and Bernard HOURS (relating to grants made prior to the termination of the stock-option
program after 2009, the last grant date), are presented in the table hereafter (information required pursuant to the French Financial
Markets Authority recommendation relative to disclosures in registration documents on compensation of corporate officers – Table 5 of
the French Financial Markets Authority nomenclature):
Date of Board of Direc-

tors’ meeting granting Number of options Average
the options Exercise date exercised exercise price
Franck RIBOUD 04/27/2006 02/21/2014 212,000 46.92

Emmanuel FABER 04/27/2006 03/20/2014 56,180 46.92
Bernard HOURS 04/23/2009 12/04/2014 44,333 34.85
04/23/2009 12/05/2014 37,817 34.85
Obligation to hold Company shares resulting from exercise Also, in accordance with the AFEP-MEDEF Code and upon recom-
of stock-options mendation of the Nomination and Compensation Committee, the
All corporate officers and other Executive Committee members Board of Directors reviewed and confirmed the obligation to hold
are subject to an obligation to hold the shares in the Company they shares resulting from the exercise of options as part of the review
acquired through the exercise of stock-options. In accordance with of the compensation of officers in February 2015.
Article L. 225-185 of the French commercial code, the Chairman of
the Board and the Chief Executive Officer must hold (in the regis-
tered form) a certain number of shares resulting from the exercise
of options granted under each stock-option plan approved from
January 1, 2007 until such time as the termination of their functions.
Accordingly, the Board of Directors has decided (i) that this com-
mitment to hold a portion of the shares would apply to a number of
shares corresponding to 35% of the capital gain upon acquisition,
net of tax and social security contributions, realized on all of the
shares resulting from an exercise of stock-options by the executive
concerned under this plan, and (ii) to subject all other members of
the Executive Committee to this obligation to hold shares to the
same conditions.

Agreements, plans and indemnities applicable to corporate officers

Summary of agreements, plans and indemnities applicable to the corporate officers
The table hereafter shows the various agreements, plans and indemnities applicable to individuals having held office as corporate officers
of the Group during the fiscal year closed on December 31, 2014 (information required pursuant to the French Financial Markets Autho-
rity recommendation relative to disclosures in registration documents on compensation of corporate officers – Table 11 of the French
Financial Markets Authority nomenclature):
Indemnities or benefits
due likely to be due as a Indemnities
Supplementary result of termination or relating to a non-
Name Work contract (a) retirement plan (b) change in function (c) compete clause (d)
Yes No Yes No Yes No Yes No

Franck RIBOUD x x x x
Chairman of the Board
Date of first appointment: 1992
Date appointment ends: 2016
Emmanuel FABER x x x x
Date of first appointment: 2002
Date appointment ends: 2016
(a) T he employment contracts of Messrs. Franck RIBOUD and Emmanuel FABER have been suspended, see section Suspension of employment contract
of corporate officers hereafter.
(b) These supplementary retirement plans are described in section Obligations relative to executives’ supplementary retirement plans hereafter.
(c) T he indemnities payable in the event of certain cases of the cessation of the corporate mandates of corporate officers are detailed in section Termination
indemnities for corporate officers hereafter. In the event that these office holders are dismissed, no contractual indemnity would be payable. The
indemnities provided for in the collective agreement (Group collective status) would be due, however. The application conditions of these indemnities
are set out in section Termination indemnities for corporate officers hereafter.
(d) T his clause applies solely in the event of the resignation of the officer concerned and enables the Group either to activate the clause for a period of 18
months in exchange for financial compensation equivalent to 50% of the officer’s fixed and variable compensation, or to release him from the clause
with no financial compensation. See section Non-compete indemnities hereafter for more information on the non-compete clause.
Termination indemnities for corporate officers The termination indemnities for Danone corporate officers have
Principles the following characteristics, these being in accordance with the
Upon the separation of the offices of Chairman of the Board of recommendations of the AFEP-MEDEF Code:
Directors and Chief Executive Officer, Mr. Emmanuel FABER was
appointed Chief Executive Officer. At that time, the Board, upon
• application of demanding performance conditions covering
a five-year period preceding the date on which the corporate
recommendation by the Nomination and Compensation Committee,
officer’s duties end;
renewed in identical terms the entire system in respect of termina-
tion indemnity from which Mr. Emmanuel FABER already benefited • the amount of the termination indemnity due in certain cases 6
in the framework of his term of office as Deputy General Manager of termination of the corporate office (i) is capped at two years
and which had been approved by the Company’s shareholders in of gross compensation (fixed and variable) and (ii) in the event
the ninth resolution of the Shareholders’ Meeting of April 25, 2013. that it is paid in addition to the indemnity due in case of termi-
In accordance with applicable law, payment of this termination nation of the duties as a salaried employee, it is included within
indemnity is subject to performance conditions. Comprehensive a global cap, also limited to two years of gross compensation
information relating to the termination indemnity of the Mr. Emmanuel (fixed and variable), applicable to all termination indemnities,
FABER is provided in the Statutory auditors’ report on related-party pursuant to the corporate office as well as to the duties as a
agreements in section 6.5 Statutory auditors’ report on related party salaried employee; and
agreements and commitments.
• payment of the termination indemnity only being applicable in
This system is identical to that benefiting Mr. Bernard HOURS in the event of forced termination, of whatever form, and linked to
respect of his term of office as Deputy General Manager, which a change in control or of strategy.
was approved by the Company’s shareholders in the fourteenth
Comprehensive information concerning the termination indemnities
resolution of the Shareholders’ Meeting of April 29, 2014, and was
for the Company’s corporate officers is provided in section 6.5 Sta-
implemented upon his departure.
tutory auditors’ special report on related party agreements and com-
Lastly, since October 1, 2014, Mr. Franck RIBOUD, now Chairman of mitments.
the Board, is no longer eligible to receive a termination indemnity
in respect of his office.

Termination indemnity paid to Mr. Bernard HOURS contract of Mr. Franck RIBOUD (which had been suspended on
In the framework of the end of the term of office of Deputy General August 26, 1994 when he was appointed as corporate officer of the
Manager of Mr. Bernard HOURS, the Board implemented the provi- Company) would be resumed if his term of office ended, for whatever
sions concerning his termination indemnity which had been approved reason, and established that:
by the Company’s shareholders in the fourteenth resolution of the
Shareholders’ Meeting of April 29, 2014.
• the amount of time during which he has exercised his duties as
corporate officer for the benefit of the Company will be entirely
Thus, payment of the termination indemnity results from a forced taken into account with respect to seniority and his resulting
departure and reflects the change in the Group’s strategic orien- rights within the framework of his employment contract;
tations. This change in strategy is related to the definition by the
Group of new medium-term strategic priorities, after in-depth
• the Company undertakes to offer him a position involving duties
comparable to those currently exercised by the members of the
discussions held since the beginning of 2014. This has resulted, in
Company’s Executive Committee;
particular, in a change in the Group’s management, the simplifi-
cation of decision-making processes, and the introduction of new • the annual compensation that will be paid out to him cannot be less
cross-organization structures. In particular, the creation of the than the total annual average compensation (gross base salary,
new Africa Division, whose manager is a member of the Executive benefits in kind, and bonus of any type) allocated to all members
Committee, will put the management of the Group’s four business of the Executive Committee during the 12 months preceding the
lines for a strategic region under one Division (whereas previously resumption of his employment contract; and
each Division corresponded to a particular business line).
• he will benefit from the Company’s supplementary retirement
The termination indemnity in respect of his term of office as Deputy plan for executives based on his seniority as an officer and under
General Manager and in respect of the termination of his employ- his employment contract.
ment contract, were subject to the achievement of a performance
Suspension of the employment contract of corporate officers
condition, approved by the Shareholders’ Meeting of April 29, 2014.
Concerning Mr. Franck RIBOUD, in the context of the separation of
The Board of Directors verified the achievement of this performance
the offices of Chairman and Chief Executive Officer, upon recommen-
condition. To do so, it commissioned an advisory bank which verified
dation by the Nomination and Compensation Committee, the Board
that the performance condition for the reference period (i.e. from
of Directors meeting of September 2, 2014 confirmed the position
2009 to 2013) was met: the 5.6% growth in Group sales was higher
taken by the Board in 2013 and considered that it was appropriate
than the 4.25% median growth in sales of the benchmark panel
to maintain, while continuing to suspend, the employment contract
(comprising Kellogg Company, Unilever N.V., PepsiCo Inc., the
of Mr. Franck RIBOUD and that of Mr. Emmanuel FABER, given their
Coca-Cola Company and General Mills Inc.) for the reference period.
age, personal situation and seniority as employees with the Group.
Therefore, the Board, upon recommendation by the Nomination Indeed, the Board considered this system relevant for executives
and Compensation Committee, authorized payment of the entirety with at least ten years of seniority within the Group, to encourage
of the amount due in respect of the termination indemnity for Mr. internal promotion and the sustainable management that the
Bernard HOURS, i.e. €2,109,640, of which €1,787,920 in respect of Company is striving to implement, as terminating the employment
termination indemnity for the termination his employment contract contract could, on the contrary, dissuade internal candidates from
(stipulated in Danone’s collective agreement and applicable to all accepting positions as corporate officers.
Danone employees), and €321,720 in respect of his term of office as
The Board believed that implementing the AFEP-MEDEF Code
Deputy General Manager, noting that Mr. Bernard HOURS received
recommendations to permanently terminate these employment
no termination indemnity in respect of his Dutch Statutory Director
contracts would cause them to lose the rights gradually acquired
Contract. For more information, see section 6.5 Statutory auditors’
under their employment contracts during their careers at the
special report on related party agreements and commitments.
company (33 years for Mr. Franck RIBOUD and 17 years for Mr.
Thus, in accordance with the recommendations of the AFEP-MEDEF Emmanuel FABER), particularly the benefits gradually acquired
Code, the total sums received by Mr. Bernard HOURS in the fra- throughout their career at Danone based on seniority and actual
mework of the termination of his functions did not exceed twice the service, i.e. termination indemnities and long-term benefits such as
gross annual compensation (fixed and variable included) received by participation in group plans, compensation which, in any case, may
Mr. Bernard HOURS during the twelve months preceding the date not exceed in their entirety the cap of two years of compensation
of termination of his functions. (fixed and variable).
Moreover, in accordance with the recommendations of the AFEP- In addition, the French Financial Markets Authority considers that
MEDEF Code, the Board of Directors verified that the termination it is in compliance with the AFEP-MEDEF Code for an employment
indemnity of Mr. Bernard HOURS was not combined with pension contract to remain in force in view of an executive’s (i) length of
rights available in the short term. Mr. Bernard HOURS will only be service as an employee within the company, and (ii) his or her
eligible for the executive pension scheme starting in 2018, subject personal situation.
to his not resuming salaried employment. He was dismissed after
Concerning Mr. Bernard HOURS, his employment contract was
age 55 and, in accordance with French regulations and Danone’s
automatically reactivated when his term of office as Deputy Gene-
practices, the beneficiaries of this Danone’s pension plan are
ral Manager was terminated. Discussions took place between the
protected in case of dismissal after age 55 but not before reaching
Company and Mr. Bernard HOURS, following which a termination
retirement age.
procedure was implemented. This procedure led to the termination of
Employment contract of the Chairman of the Board the employment contract of Mr. Bernard HOURS in December 2014.
As of December 31, 2014, Mr. Franck RIBOUD has been with the
Group for 33 years, including more than 18 years as Chairman and
Chief Executive Officer of Danone.
Note for information that at its July 21, 2004 meeting, the Board
of Directors updated the conditions under which the employment

Employment contract of the Chief Executive Officer In accordance with the recommendations of the AFEP-MEDEF
Concerning Mr. Emmanuel FABER, the Board of Directors meeting of Code, eligibility for these arrangements is subject to the following
February 13, 2008 authorized an amendment to his existing employ- conditions:
ment contract, aimed at determining the conditions for reactivation
of his employment contract (suspended upon his appointment as an
• the group of potential beneficiaries is larger than just the corporate
officers since it concerns a collective contractual commitment.
officer of the Company) in the hypothesis of the end of his term of office
As of December 31, 2014, 139 employees who were classified
as an officer for whatever reason. This amendment stipulates that:
as senior executives and who were members of the French
• the amount of time during which he will have exercised his duties retirement plan as of December 31, 2003 remained eligible for
on behalf of the Company will be entirely taken into account membership of the said plan (excluding beneficiaries who had
with respect to seniority and to the resulting rights within the already liquidated their rights). It should be noted that in 2009
framework of his employment contract; more than 210 executives were eligible for this plan;
• the Company undertakes to offer him a position involving duties • this eligibility is subject to the condition that they are performing
comparable to those currently exercised by the members of the their duties within the Group at the time of retirement, it being
Company’s Executive Committee; specified that as an exception to this principle, in the event of
leaving the Group before the age of 55, the rights are forfeited
• the annual compensation that will be paid out to them cannot and that, only in the event of dismissal after the age of 55, would
be less than the total annual average compensation (gross base
the benefit of the plan be maintained provided that the beneficiary
salary, benefits in kind, and bonus of any type) allocated to all
does not take up any employee position elsewhere. This last pro-
members of the Executive Committee during the 12 months
vision, although consistent with applicable French regulations,
preceding the resumption of their employment contract;
does not form part of the AFEP-MEDEF Code recommendations,
• he will benefit from the Company’s defined benefit pension plan however it enables the Company to protect all beneficiaries
based on his seniority as an officer and under his employment against the risk of termination after the age of 55 and before
contract; and they have reached retirement age;
• the contractual indemnity due in the event of a breach of the • beneficiaries must have at least five years’ service within the
employment contract will be canceled. Group (i.e. a more stringent condition than the two-year minimum
set out in the AFEP-MEDEF Code);
Non-compete indemnities
The non-compete clause currently applicable to Mr. Emmanuel • this benefit is taken into account by the Nomination and Com-
FABER, Chief Executive Officer of the Company (there is no non- pensation Committee and the Board of Directors when the total
compete clause included in the suspended employment contract compensation of each corporate officer is set;
of Mr. Franck RIBOUD, Chairman of the Board) enables the Group
either to activate the clause for a period of 18 months in exchange
• the basis of calculation of this retirement guarantee corres-
ponds to the average of the base salaries and variable annual
for gross monthly financial compensation paid to him equivalent to
compensation received by each beneficiary during the last three
50% of his gross average fixed and target variable compensation paid
complete years of service within the Group (the term of office
over the last 12 months (“Consideration for non-compete clause”),
included). For Mr. Franck RIBOUD, if he were to retire from the
or to release him from the clause with no financial compensation.
Group in 2015, this average of the base salaries and annual
This non-compete clause aims to protect the Company, and poten- variable compensation received for 2012, 2013 and 2014 would
tial non-compete indemnities constitute the necessary financial be €2,471,067. For information, last year, the amount including
consideration for the restrictions imposed. fiscal years 2011, 2012 and 2013 would have been €2,708,475; and
Moreover, to avoid any aggregation of (i) the indemnity provided for by • the increase in the potential rights each year represents only
Danone’s collective agreement applicable to all Company employees a limited percentage of the beneficiary’s compensation. Thus:
(the “Indemnity for termination of employment contract”), (ii) the
(i) the amount of the annuity which would be paid to Mr. Emmanuel
indemnity due in certain instances of termination of the term of
their office, and (iii) the Non-compete clause consideration, which
FABER would correspond to: (i) 1.5% per year of service (including 6
the period corresponding to the term of office) of this calculation
would exceed twice the gross annual compensation (comprising
base, for the portion falling between three and eight times the French
both fixed and variable compensation) and which would therefore
social security ceiling, and (ii) 3% per year of service (including the
breach the recommendations of the AFEP-MEDEF Code, the Board
period corresponding to the term of office) of this calculation base,
of Directors’ meeting on February 10, 2010, upon recommendation
for the portion that is higher than eight times the ceiling (this amount
of the Nomination and Compensation Committee, amended the
will, however, be capped on the basis of a maximum period of service
suspended employment contract of Mr. Emmanuel FABER such
of 20 years), less the full amount of the retirement rights acquired
that the non-compete clause may only be exercised by the Company
by Mr. Emmanuel FABER resulting from the implementation of the
in the event of resignation, in which event neither an indemnity for
Company’s non-contributory supplementary retirement plan. As of
termination of the employment contract nor any indemnity due in
December 31, 2014 Mr. Emmanuel FABER’s length of service was 17
certain cases of termination of their term of office would be paid.
years. The overall retirement package he would be entitled to receive
Mr. Bernard HOURS, for his part, received no non-compete indemnity would provide him with an amount equal to 51% of that portion of
in the framework of his departure from the Company. his compensation exceeding eight times the Social Security ceiling,
as defined above. Nevertheless, in the event that he were to leave
Obligations relative to executives’ supplementary
the Group before the age of 55 years, the potential entitlement from
retirement plans
this regime would be fully canceled; and
Corporate officers are covered by a defined benefit retirement plan
provided to employees who are classified as senior executives. This (ii) the amount of the annuity that would be paid to Mr. Franck
retirement plan was closed to all new beneficiaries on December RIBOUD would correspond to 2% of this calculation base per year
31, 2003. of service (this amount will, however, be capped at 65% of the calcu-

lation base), less the full amount of the retirement rights acquired As indicated above, the executives’ supplementary retirement plans
by Mr. Franck RIBOUD during his professional life, including the are a collective contractual commitment which benefits a large num-
Company’s non-contributory supplementary retirement plan. As ber of Danone managers; as of December 31, 2014, 139 employees
of December 31, 2014 Mr. Franck RIBOUD’s length of service with were eligible for this collective contractual commitment. In this
the Group was 33 years. As a result, the overall retirement package context, any amendment to this collective contractual commitment
he would be entitled to receive would provide him with an amount would require the individual agreement of each of the 139 people
equal to 65% due to the application of the ceiling mentioned above, affected. Furthermore, entitlement to this collective contractual
and is in accordance with the recommendation of the AFEP-MEDEF commitment constitutes an established right for each of these 139
Code, to the extent that this retirement plan was closed to all new beneficiaries which cannot be affected retroactively.
beneficiaries on December 31, 2003 and that the limit of 45% of
Accordingly, shareholders’ attention is drawn to the fact that:
income mentioned in the said Code does not concern retirement
plans closed to new beneficiaries (see section 6.5 Statutory auditors’ • the collective and contractual nature of the defined benefit plan
report on related party agreements and commitments); and is an obstacle to its modification and the Group reaffirms its wish
to respect the contractual obligations that it has legitimately
(iii) for each corporate officer, in the event of retirement without
concluded;
satisfying the conditions necessary for obtaining the full rate of
social security pension, a reduction of 1.25% per quarter between • this retirement plan was closed to new beneficiaries as of
the age at which the person retired and the age at which he would 31 December 2003;
have received his full rate social security pension will be applied
to this annuity.
• the importance of the potential amounts under this plan in
respect of the Chairman of the Board and the Chief Executive
The corporate officers also benefit from the supplementary exe- Officer results primarily from their length of service (33 years
cutive retirement plan (retirement plan with defined contributions for Mr. Franck RIBOUD, 17 years for Mr. Emmanuel FABER) and
implemented for executives with annual gross compensation greater not from the percentage used as the basis of calculation for each
than or equal to three annual social security ceilings). The amount year of service – which is limited to 2% per year for Mr. Franck
of contributions in respect of 2014 was €33,000 for Messrs. Franck RIBOUD and to between 1.5% and 3% (see detail above) per year
RIBOUD, Emmanuel FABER and Bernard HOURS. The plan regulation for Mr. Emmanuel FABER;
stipulates that the benefit derived from this plan will be deducted
in full from any defined benefit retirement plan.
• all characteristics of these contractual commitments was com-
municated to them and submitted for their approval, approval
As of December 31, 2014, the portion of the total amount of the granted with a majority of 95% during a resolution on related
Group’s obligation relating to the Company’s corporate officers and party agreements at the Shareholders’ Meeting held in April 2008,
to members of the Executive Committee under this defined benefit including the specific confirmation of this retirement plan; and
retirement plan amounted to €66.9 million, which takes into account
the impact of the new charges applicable according to the provisions
• lastly, the size of the benefit resulting from this collective contrac-
tual commitment for the corporate officers concerned has been
of the Act of December 22, 2014 concerning social security financing
taken into account by the Nomination and Compensation Com-
for 2015. Mr. Bernard HOURS remains eligible for the executive
mittee and by the Board of Directors in determining their overall
pension scheme starting in 2018, subject to his not resuming paid
compensation.
employment. He was dismissed after age 55 and, in accordance
with French regulations and Danone’s practices, the beneficiaries
of Danone’s pension plan are protected in case of dismissal after
age 55 but before reaching retirement age.
The total amount paid by the Company with respect to this retirement
plan for the benefit of members of the Board of Directors, based on
their functions exercised within the Group, amounted to €0.9 million
in 2014 and currently concerns Mr. Jacques VINCENT, on account
of his 40 years of service with the Group.

Individual compensation of corporate officers in accordance

with the AFEP-MEDEF Code
In accordance with the recommendations of the AFEP-MEDEF Code, the table summarizing the components of compensation due or
granted to each of the corporate officers and being presented to the shareholders for consultation, is presented in section 8.3 Comments
on the resolutions of the Shareholders’ Meeting.
Transactions made in 2014 involving Company shares by members of the Board
of Directors and Executive Committee
Name Position Type of Type of Transaction Gross price Number of Total gross
securities transaction date per unit shares amount
(in €) (in €)
Franck RIBOUD Chairman and Chief Shares Exercise of stock- 02/21/2014 46.92 212,000 9,947,040.00
Executive Officer options
Shares Disposal 02/21/2014 51.02 204,620 10,439,712.40

Shares (a) Subscription 06/03/2014 45.62 5,248 239,413.76
A person related to Shares (a) Subscription 06/03/2014 45.62 244 11,131.28
Franck RIBOUD
Emmanuel FABER Deputy General Shares Exercise of stock- 03/20/2014 46.92 56,180 2,635,965.60
Manager options
Shares (a) Subscription 06/03/2014 45.62 1,168 53,284.16
Bernard HOURS Deputy General Shares (a) Subscription 06/03/2014 45.62 556 25,364.72
Manager
Shares Disposal 09/12/2014 54.50 6,433 350,588.07
Marc BENOIT Executive Other (b) Subscription 06/05/2014 10.00 748 7,481.51
Committee member
Francisco CAMACHO Executive Shares Exercise of stock- 03/31/2014 46.92 6,360 298,411.20
Committee member options
Shares Disposal 03/31/2014 51.58 6,360 328,070.42

Félix MARTIN Executive Shares Exercise of stock- 05/30/2014 34.85 27,000 940,950
GARCIA Committee member options
Shares Disposal 05/30/2014 54.77 27,000 1,478,730.60

Jacques-Antoine Director Shares (a) Subscription 06/03/2014 45.62 127 5,793.74
GRANJON
Jean-Philippe Executive Shares (a) Subscription 06/03/2014 45.62 593 27,052.65
PARE Committee member
Other (b) Subscription 06/05/2014 10.00 4,000 40,000.00 6

Benoît POTIER Director Shares (a) Subscription 06/03/2014 45.62 165 7,527.30
Mouna SEPEHRI Director Shares (a) Subscription 06/03/2014 45.62 127 5,793.74
Jean-Michel Director Shares (a) Subscription 06/03/2014 45.62 126 5,748.12
SEVERINO
Pierre-André Executive Shares Exercise of stock- 03/18/2014 34.85 45,104 1,571,874.40
TERISSE Committee member options
Other (c) Disposal 03/21/2014 83.68 1,732 144,889.03

Shares Exercise of stock- 03/25/2014 34.85 5,456 190,141.60
options
Shares (a) Subscription 06/03/2014 45.62 655 29,881.10
Other (b) Subscription 06/05/2014 10.00 5,069 50,687.87
Lionel ZINSOU- Director Shares Purchase 07/28/2014 56.50 2,969 167,748.50
DERLIN
(a) T his is a subscription in connection with the option offered to shareholders by the Shareholders’ Meeting of April 29, 2014 to choose to receive payment
of a dividend in cash or in new shares in the Company.
(b) T his is a subscription as part of the annual capital increases reserved for employees of the Company and its French subsidiaries, with the subscription
made to a Temporary Fund (Fonds Relais) with shares valued at €10 per share in 2014. At the completion of this capital increase, this Temporary Fund
was merged into the “Fonds Danone” company investment fund.
(c) T his is the sale of shares of the “Fonds Danone” company investment fund.
In the case of corporate officers and members of the Executive Committee, an obligation to hold their shares received under the terms
of Group performance share plans and stock-option issues has also been implemented and is described in sections above Obligation for
corporate officers and other Executive Committee members to retain the Company sharesDANONE
from theREGISTRATION
delivery of Group performance
DOCUMENT shares297
2014 and
Obligation to hold Company shares resulting from exercise of stock-options.
Internal control and risk management
6.4 Internal control and risk management

In accordance with the Article L. 225-37 paragraph 6 of the French The Audit Committee examined this report of the Chairman of the
commercial code (Code de commerce), the section 6.4 Internal control Board of Directors, which had been then reviewed and approved by
and risk management represents the report of the Chairman of the the Company’s Board of Directors on February 19, 2015, in accor-
Board of Directors on the internal control and risk management dance with the French Law of July 3, 2008.
procedures implemented by the Group.
General organization of internal control

Internal control objectives and guidelines Scope of internal control
used Danone’s internal control system applies systematically to the
Group’s fully consolidated subsidiaries and to certain subsidiaries
Internal control is a process put in place by Danone’s General Mana-
consolidated as associates using the equity method. In the specific
gement, line management and operational teams. It is designed to
case of very small or newly-acquired entities, a simplified referential
provide reasonable assurance, albeit not absolute certainty, that
focused on the DANgo “fundamentals” was specifically established
the following main objectives are being met:
in order to facilitate their integration and development while ensu-
• accuracy of financial information; ring adequate control of their financial and accounting processes.
• compliance with applicable laws, regulations and internal poli- During the fiscal year 2014, 181 Group-owned entities located in 60
cies; and countries and accounting for 99% of the Group’s consolidated net
sales were evaluated under Danone’s internal control system, inclu-
• effectiveness and efficiency of internal processes, including ding 47 using the referential focusing on the fundamental controls.
those related to the protection of the Group’s assets.
Centrale Laitière (Morocco), which recently became a fully-conso-
Group’s internal control lidated subsidiary, is now integrated in the Group’s internal control
system for the first time in 2014.
referential: DANgo
Danone’s internal control system is adapted to the Group’s strate- Internal control participants
gic orientations and consistent with its international development.
The internal control referential drawn up and used by the Group – General Management
DANgo (Danone Governing and Operating Processes) is based on General Management is responsible for the Group’s internal control
the reference framework implementation guidelines suggested in system, while the Audit Committee is responsible for monitoring the
2007 by the French Financial Markets Authority (Autorité des Marchés effectiveness of the Group’s internal control and risk management
Financiers), completed by its application guide, and updated in 2010. systems (see section 6.1 Governance bodies). In order to accomplish
This reference framework relates to risk management and internal this, General Management relies on the Group Finance Department
control procedures, and approaches monitoring processes and the and the operational reporting lines (Divisions, regions, business
preparation of the accounting and financial information. This refe- lines, subsidiaries).
rence framework is consistent with the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) I and II guidelines. Group Finance Department
The Group Finance Department is responsible for the Finance
It was created in its present form in 2003, and greatly enriched
function within the entire Group, directly through centralized func-
in 2005 and 2006, as Danone, a publicly listed corporation in the
tions (Finance Control, Consolidation, Reporting and Standards,
United States at the time, was subject to the Sarbanes-Oxley Act.
Treasury and Financing, Tax, Strategy, Financial Communication,
It includes operating procedures (Danone Operating Models), Acquisitions, Corporate Legal), and, through functional ties, with
internal control items per se (Danone Internal Control Evaluation), the finance directors of the respective Divisions.
and the practices promoted by the Danone Way approach (see
The Group Finance Department is also responsible for risk mana-
section 5.1 Danone social, societal and environmental approach) and
gement, internal control and internal audit, which enables a focus
is the subject of an annual systematic review (see section hereafter
on corporate governance and compliance-related topics.
Control environment).
The Chief Financial Officer, who reports to the Chief Executive Officer,
In addition, this DANgo referential is managed in an eponymous
is a member of the Group’s Executive Committee. The main heads
software application accessible to everyone worldwide.
of the Finance functions and Divisions are members of an Executive
Finance Committee, which meets monthly.

Risk management Internal Audit Department

Since 2013, the Group has organized its risk identification and risk The Internal Audit Department reports to the Financial Controlling
management system around two complementary processes: Department. It reports functionally to the Chairman of the Audit
Committee (see section 6.1 Governance bodies) and submits twice
• identification and management of operational risks, under the a year reports to the Audit Committee on internal audit activity and
responsibility and monitoring of the Internal Control Depart-
fraud management.
ment; and
The Internal Audit Department consists of a central team of audit
• identification and management of strategic risks, under the res- engagement managers and directors that supervises specialized
ponsibility and monitoring of the Financial Controlling Department.
teams from international audit firms (including KPMG) and manages
The process for identifying and managing Group risks is described a Singapore-based internal audit team. It conducts regular audits in
hereafter in section Risk identification and assessment. the operating units as well as audits covering central and transversal
functions. In 2009, the Internal Audit Department was certified, for
Financial Controlling department the first time, by the French Institute for Internal Audit and Internal
Part of the Group Finance Department, the Financial Controlling Control (IFACI) in accordance with International Internal Auditing
Department is responsible for the identification, management and Standards. Following annual renewals of this initial certification,
monitoring of strategic risks. In particular, it manages the Group’s the Internal Audit Department was again certified by IFACI in 2012
strategic risk identification and management system. It is suppor- for a further three-year period. In 2013 and 2014, a follow-up audit
ted by several other teams, notably Group operational managers was conducted and confirmed the IFACI certification.
through various internal committees, including the Group Risks
This central unit is supported by audits and supervision activities
Executive Committee, and for the Finance business line through the
of other centralized functions (Food Safety, Quality, Industrial,
finance directors of the Divisions and regions (see section hereafter
Safety, Environment, Information Systems, Crisis Management,
Organization of the finance function).
Organization, Human Resources, etc.).
Internal Control Department
Other internal control participants
Reporting to the Financial Controlling Department, the Internal
In the Group’s largest and most complex subsidiaries notably in the
Control Department is composed of a four-member central team,
emerging countries, the local head of internal control is supported
supported by (i) a head of the Asia/Pacific region, (ii) a coordinator
by a team of operational internal controllers, who are responsible for
dedicated to the Early Life Nutrition and Medical Nutrition Divisions,
ensuring the successful achievement of internal control practices
and (iii) a network of local internal controllers, who typically report
at the sites (warehouses, plants, etc.).
to the finance directors of the subsidiaries. These internal control-
lers ensure that the procedures defined by the Group are properly In addition, the line management teams at headquarters and in the
applied in their entities and organizations. subsidiaries have a major role in internal control and its implemen-
tation in their respective areas of responsibility, with support from
The Internal Control Department’s main responsibilities are as
relevant central corporate departments (mainly Finance, but also
follows:
Human Resources, Sustainable Development, Environment, Safety,
• preparing and rolling out DANgo, the Group’s internal control Quality, Information Systems, Legal, etc., see section hereafter Risk
referential; identification and assessment).
• defining: (i) the priorities as regards to internal control, and (ii) Finally, (i) the DANgo steering and transversal coordination Com-
the methodology to be used for the self-assessment process, mittee, (ii) the Internal Control steering Committee, (iii) the Dialert
its testing and documentation; Committee (fraud monitoring), and (iv) the Compliance Committee
described hereafter are also involved in the management and
• managing and analyzing the: (i) internal control indicators, and continuous monitoring of internal control, with a view to ensuring,
(ii) results of the assessments and action plans implemented by
in particular, consistency with the operating activity at all levels.
the community of internal controllers;
6
• establishing and monitoring operational risks mapping at the
various levels of the organization and managing the network of
internal controllers on priority actions to be defined in response
to these risk maps; and
• supporting and guiding the international network of internal
controllers through coordination, communication and training.

Danone’s overall internal control and risk management procedures

Internal control consists of the following five closely-related com- departments and makes it possible to enhance the referential
ponents: through best operating practices;
• control environment; • in addition to DANgo, an intranet site dedicated to the Group’s
internal controllers and the communities set up on the Danone
• risk identification and assessment; Social Network present all the documents useful for internal
• control activities; control and contribute to the sharing of experiences and best
practices in the area of internal control. These documents may
• information and communication; and also be accessed by all Danone employees and are updated
• continuous monitoring. regularly; and
They are implemented by the Group as described hereafter. • the elaboration and diffusion of internal control guidelines, which
were reviewed in 2014.
Control environment
The aim of the control environment is to make staff aware of the
Risk identification and assessment
usefulness and necessity of internal control, and it is the foundation Every company faces internal and external risks that may hinder the
on which the other components of internal control are built, notably achievement of its objectives. The principal risks to which the Group
by establishing an ethic, discipline and organization. believes it is exposed as of the date of this Registration Document
are described in section 2.7 Risk Factors.
Danone’s control environment is based on the following:
The Group has established a system for identifying and managing
• Danone values, which are widely communicated across all of the risks based on two distinct systematic risk identification processes.
subsidiaries and the Group’s dual economic and social project;
• the Business Conduct Policy, defined by the Group and conveyed Operational risks
through a Questions & Answers booklet updated in December 2011; The first process for risk identification and management focuses
on operational risks related to the company’s current activity and
• the human resources and social policy, particularly with regard deficiencies identified by the internal control review (through the
to employee development and training;
self-assessment and testing of control indicators, see section
• the impetus given by the Board of Directors and the willingness Internal Control Department above). A local standardized mapping
to achieve continuous improvements in all operating procedures, of these deficiencies (Internal Control Deficiencies Impact Mapping)
as expressed by the Group’s General Management; at the level of each operating unit makes it possible to classify them
based on two categories qualifying (i) their potential impact on the
• the Danone Way approach, which is deployed in nearly all of the company and (ii) the expected difficulty in resolving the deficiency
Group’s subsidiaries;
under consideration. This mapping may then be used at different
• an anti-fraud program, which has been deployed and operated by levels of the organization (management committee of the operating
the Group for several years and which informs the subsidiaries’ unit, region, WWBU, function, etc.) as a prioritization tool for action
Management Committees and all employees of internal fraud plans to be implemented in order to reduce the identified risk.
and corruption risks. This antifraud program is based on seven
“stages”: (i) raising awareness, (ii) prevention, (iii) detection, (iv) Strategic risks
investigation, (v) penalties, (vi) reporting and (viii) continuous The second risk identification and management process focuses
improvement of the internal control system. In addition, since 2006 on strategic risks and takes the form of a risk mapping hierarchy
Danone has operated a whistle-blowing system (Dialert), which based on their likelihood of occurrence and their estimated impact
focuses on internal control matters concerning (i) employees, (ii) on the Group.
suppliers and (iii) any failure to comply with the terms defined
Methodology
by the WHO Code (World Health Organization Code see section
This risk mapping is prepared and updated semi-annually by the
5.2 Information concerning the Group social, societal and environ-
Group Finance Department , with each of the Group’s four Divisions.
mental performance in compliance with the Grenelle II law). The
The following methodology is used:
system’s visibility was enhanced in 2010 through the progressive
deployment of an introductory guide (Danone Inside Pack) for • identification of risks and weaknesses deemed strategic and/or
new employees that highlights the Business Conduct Policy and structural for all activities of covered subsidiaries;
the ethics hotline;
• consolidation by the business Division and then at the Group level;
• the standardization of the Group’s operating processes through • ranking of risks based on their likelihood of occurrence and esti-
the implementation of the DANgo referential and the regular use
mated financial impact, at the scale of a country or a Division; and
of a single integrated information system (Themis, see section
hereafter SAP/Themis integrated information system) which contri- • determination of preventive or corrective actions, which may be
bute to the strength of the control environment; local or global depending on the case.
• the DANgo referential (see section above Group’s internal control Risk monitoring
referential: DANgo): accessible to all Group employees, in a user For each Division, the most significant risks are reviewed twice a
friendly electronic version, it is subject to a systematic annual year by the regional managers and the Group’s Head of Financial
review by which the Group ensures that the DANgo internal Controlling, who is also responsible for internal control, at special
control and best practices referential is kept up-to-date. DANgo meetings attended by the general manager and finance director of
is updated by (i) experts from the network of internal control- each Division.
lers and (ii) operational managers from various business lines,
which enables DANgo to be used by participants in the various

Furthermore, a review of the most significant risks is also presented • its organization and information system, which are elements
twice a year by the Group’s Head of Financial Controlling to the Chief that facilitate the communication of the necessary information
Executive Officer as well as to the Chief Financial Officer. A mapping of to the decision-making process;
Danone’s major risks is assessed during these meetings, risk owners
are systematically designated, and risk mitigation plans are reviewed
• the various intranet sites and documentation databases that
enable information to be shared within the Group. This information
and assessed. This work serves as the basis for the presentations
includes not only financial information but also non-financial
made to Danone’s Executive Committee and to the Audit Committee.
information that meets the needs of the various operating and
Other Group’s organizational units contributing to risk administrative departments. Since 2012, the Group has deployed
identification and analysis its social network (Danone Social Network), which is accessible
The existence of procedures – regarding the monitoring of competi- to all, to transmit information and develop communication and
tion, training, risk prevention and protection, etc. – and the initiatives the sharing of experience;
taken by specialized departments – such as the Environment Depart-
ment and the Quality and Safety Department for food – contribute
• the distribution of the DANgo referential by the Internal Control
Department, which manages, trains and coordinates the internal
to the identification and analysis of risks.
controllers’ network:
Also, the Safety Department helps to identify threats against Group
• it organizes working and annual training sessions for the inter-
employees or assets.
nal controllers’ network including workshops and informa-
In addition, the Crisis Management Department uses information tion-sharing seminars: more than 160 attended the two ses-
made available by the risk maps established at each Division level to sions organized in 2014;
identify potential crises and prepare the affected entities accordingly,
• it is responsible for the training and integration of new internal
ensuring that an appropriate response is provided for all crises,
controllers, including those working for newly-acquired
even if the related risk was not previously identified.
companies;
Moreover, the identification and reporting of risks is also facilitated
• it is also responsible for internal control training sessions
by the relatively low number of reporting levels within the Group,
open to all managers of the finance functions; and
short decision-making channels and input from the operating
units in strategic discussions. In addition, a quarterly transversal • it communicates regularly at various levels of the organization
Compliance Committee, headed by the Internal Audit Department, (Corporate Committees, meetings at Division level with the
has been set up to deal with compliance issues. Since 2006, various finance directors or operational employees, systematic annual
central functions that collaborate on the quality of the control envi- presentations to the general managers and finance directors
ronment participate in this process. of the regions, and par ticipation on the Management
Committees of central functions).
Control activities
The control activities are intended to ensure the application of the
Continuous monitoring
standards, procedures and recommendations that contribute to The internal control system is reviewed periodically so that its
the implementation of the main strategic orientations made by the performance and effectiveness may be qualitatively assessed.
Group’s General Management.
The continuous monitoring of control procedures is part of the
All the subsidiaries integrated within the DANgo scope use an annual ongoing activities of the Company and its subsidiaries.
self-assessment process. The largest of them follow a more detailed
The quality of the internal control system’s steering and monitoring
internal control review methodology that includes information flows,
is ensured by two Committees – led by the Internal Control Depart-
control points and tests conducted by management:
ment – which meet regularly:
• the IT application that hosts the DANgo system allows subsidiaries • the DANgo steering and transversal coordination Committee,
to perform self-assessments and determine whether they are
which meets twice a year and consists of the operational executive
compliant with the Group’s internal control referential. It also
managers designated to represent the Group’s key functions:
6
makes it possible to monitor any action plan that may be needed;
Research and Development, Purchasing, Operations, Marketing,
• the results of the DANgo self-assessment campaign by the sub- Sales, Finance, Human Resources, Information Systems, etc.;
sidiaries are sent periodically to the Internal Control Department,
which analyzes them and communicates relevant summaries
• the Internal Control steering Committee, which consists mainly
of the heads of the Group Finance function and the Divisions and
to the different interested parties. Appropriate action plans are
meets quarterly.
put in place by the entities under the supervision of the Internal
Control Department, with a goal of continuous improvement In addition, the Audit Committee, as well as Group’s General
and internal audits are subsequently carried out to validate that Management, are informed at least twice a year of the status of the
corrective measures have indeed been taken. self-assessments in the subsidiaries, the related findings and the
results of the audits conducted by the Internal Audit Department.
In addition, the performances and results of each operating unit
The following year’s targets are also presented as well as the prio-
in the area of internal control are regularly and systematically
rities selected by the Internal Control and Internal Audit functions.
monitored by the entities’ Management Committees.
Monitoring of internal control indicators
Information and communication The Internal Control Department has introduced and monitors inter-
Appropriate information must be identified, collected, quantified and nal control performance indicators (coverage rate, internal control
communicated in a format and within an appropriate time frame intensity rate and deficiency rate on control points) to analyze and
that enables each person to carry out his or her responsibilities. communicate the internal control results of the subsidiaries and of
the Group together with a monitoring by geographic region and by
To accomplish this, Danone relies on:
Division. The targets for these performance indicators are discussed

in the Internal Control Committee and in the DANgo steering and A monitoring meeting of fraud cases and suspected frauds is
transversal coordination Committee, and are then presented to the held monthly at Group headquarters level in order to ensure the
Audit Committee (see section 6.1 Governance bodies), before being effective monitoring of fraud cases and their appropriate manage-
sent to the subsidiaries, which assists in harmonizing and developing ment with respect to compliance and internal control. To that end,
a shared vision of the internal control priorities. detailed information on the nature of the main cases is collected
and analyzed by the Dialert Committee (fraud monitoring), which
In 2014, Danone’s internal control key indicators showed again signs
comprises representatives from the Human Resources, Legal and
of improvements. The deficiencies rate compared with 2013 continued
Internal Audit functions.
to fall even as the coverage rate of subsidiaries remained stable at
97%. This improvement was achieved thanks to on-going imple- In 2014, the Group received notifications of around a hundred sus-
mentation of internal control initiatives throughout the organization. pected fraud cases, of which only a minority were subsequently
confirmed to be fraudulent.
Monitoring of internal fraud
Reporting Internal audit assignments
The Group has a six-month internal fraud reporting covering 181 In 2014, the Internal Audit Department conducted 43 internal audits
entities, i.e. nearly all of the Group’s operating entities. These entities at subsidiaries or transversal functions, based on the plan previously
report twice a year on identified fraud cases. The number of suspected approved by the Audit Committee. These audits confirmed the
or confirmed fraud cases reported by the subsidiaries fell in 2014 overall reliability’s level of the DANgo self-assessment performed
compared to 2013, mainly in certain emerging countries. In 2014, by the subsidiaries.
approximately 230 suspected cases were reported per six-month
Following each audit, an action plan is prepared by the management
period, of which on average 145 were subsequently confirmed to
of the subsidiary to correct weaknesses identified in the audit report.
involve fraudulent activity, the majority of these confirmed cases
The implementation of action plans is monitored by the operational
involving commercial relations with our customers or suppliers.
and functional managers, under the supervision of the Internal Audit
None of these fraud cases had a significant impact on Danone’s
Department. In particular, in 2014, 17 short follow-up audits on the
consolidated financial statements. In the majority of the identified
implementation of action plans were carried out, within 12 months
cases, the employment agreements of the corresponding employees
from the initial audit as far as possible.
were terminated following investigations of these frauds.
Moreover, the Treasury and Financing, Information Systems, Envi-
Dialert
ronment, Legal and Crisis Management Departments all arrange
The Group has also a whistleblowing system (Dialert), which enables
for audits and periodic reviews in the subsidiaries, in addition to the
employees, suppliers and other third parties to confidentially
general internal audit assignments.
disclose any fraud case they suspect (see also the above section
Control environment).
Internal control procedure for the preparation and processing of Danone’s

financial and accounting information
Organization of the finance function • monthly updated forecasts of certain financial indicators pro-
jected to the year end (monthly scorecards) as well as monthly
The finance function’s organization is based on: performance review meetings attended by the finance teams
and the general managers of the Divisions.
• centralized functional departments: Treasury and Financing,
Acquisitions, Strategy, Financial Controlling (to which the following The relevance of the financial indicators selected to monitor per-
departments in particular report: (i) Consolidation, Reporting and formance is reviewed on a regular basis.
Standards, (ii) Controlling, (iii) Internal Control, and (iv) Internal
In this context, each operating unit prepares a monthly, detailed
Audit), Financial Communication and Corporate Legal; and
financial reporting, and twice a year an exhaustive consolidation
• the finance department of each Division. These departments are package used in the preparation of the Group’s consolidated finan-
organized by geographic regions supervising operating units with, cial statements.
in some countries, transactional functions (accounting, treasury,
These consolidation packages are verified by a central team, which
tax compliance) and certain specialized functions are shared.
is responsible for all elimination and consolidation entries, as
well as analyzing and validating the most significant line items of
Production of financial and accounting the Group’s consolidated financial statements (intangible assets,
information financial assets, taxes, equity, provisions and liabilities).
Financial information is generated by a rigorous and comprehensive In addition, the production of financial information integrates the
financial planning process. This process integrates, in particular: following preliminary control stages, carried out by the Consoli-
dation, Reporting and Standards Department:
• a medium-term strategic plan;
• an annual budget process, preceded by the preparation of a • validation by the central team, throughout the year, of the main
accounting options adopted by the subsidiaries and central
framework defining key financial targets;
functions and simulation of complex transactions in the conso-
• two comprehensive month-by-month re-estimates of financial lidation software;
indicators projected to the year-end are performed, one in April
and the other in October;
• in-depth review of certain subsidiaries’ monthly reports at the
end of May and November (known as the hard close procedures)
• monthly reports; and based on the specific transactions and risks identified prior
to the consolidated interim and annual financial statements,
respectively;

• implementation and maintenance of a central tool called Daφnet, • the controls carried out by the Consolidation, Reporting and
which stores the finance function’s main organizational principles Standards Department (see section above Production of financial
and processes and the accounting principles validated for use and accounting information);
by the Group;
• the definition for the Group of the roles and skills required at
• meetings to share information and best practices are attended the different levels of the finance organization and the drawing
regularly by the main financial managers of each Division and up, as a result, of the internal training programs;
some central department heads and training sessions covering
specific accounting topics are also held regularly; and
• the production and communication of the Group’s financial and
accounting information via the unified tools described above; and
• preparation meetings with the financial staff of the Group’s main • the single set of guidelines covering Group accounting procedures
subsidiaries based on the specific transactions and risks identified,
and principles, which are consistent with its internal control
and (ii) presentations to the Audit Committee (specific transactions
principles. Available on the Da φ net intranet, these guidelines
during the period, the main accounting options concerning the
are accessible to all the Group’s employees.
closing and the contemplated significant changes introduced by
developments of the International Financial Reporting Standards)
(see section 6.1 Governance bodies).
Risk identification and assessment
The monitoring and management of the main identified risks rela-
In addition, the Group’s financial and accounting information is
ting to the preparation and processing of Danone’s financial and
produced and communicated using the following applications.
accounting information is organized as follows:
SAP/Themis integrated information system • the identified risks and results obtained through the various
The management and optimization of information flows for the approaches established (DANgo, Danone Way) are used;
financial functions as well as the purchasing, industrial, quality,
supply chain and sales functions, both within the subsidiaries and
• the budgeting and strategic planning processes, the perfor-
mance monitoring, the regularly scheduled meetings that highly
between them, is performed primarily through the SAP/Themis
involve finance functions (Controlling, Treasury and Financing,
integrated information system. This application is being steadily
Consolidation, Reporting and Standards, Development) as well
deployed in all Group subsidiaries and its features are constantly
as the meetings of the Group Risks Executive Committee and
being improved.
the Group’s Executive Committee allow to monitor and manage
As of December 31, 2014, the activities supported by Themis accounted the most important risks identified; and
for 81% of consolidated sales in the Fresh Dairy Products and Waters
Divisions (excluding the Unimilk group’s companies). The roll-out
• the internal control system is also adapted based on the iden-
tified risks.
of Themis continued in the Unimilk group’s companies in 2014.
The same information system is currently being rolled out in the Control activities
subsidiaries of the Medical Nutrition and Early Life Nutrition Divi-
Each Division has a finance department, which is responsible for
sions (covering 42% of these two activities’ total sales for the year
monitoring performance, capital expenditure and operating cash-
ended December 31, 2014).
flow, primarily through the rigorous financial planning and reporting
The data center’s level of security, until then ensured by an infras- process. The Divisions’ finance departments are supported by the
tructure duplicated across two remote sites, was improved by finance departments in the geographic regions and operating units,
implementation of a Disaster Recovery site. with the overall financial planning process administered by the
Controlling Department.
Consolidation software
Members of the central departments visit the operating units on a
Monthly financial reports, and more generally the financial infor-
regular basis (performance monitoring, procedure reviews, pre-
mation used to manage and control the activities of the operating
closing meetings, ad hoc audits, progress on improving internal
units, are produced by a unified information system (SAP/Business
Objects Financial Consolidation).
controls, follow-up on action plans, and training in accounting stan- 6
dards). The appropriate documents are provided sufficiently well in
This same system is also used to produce the six-month and full year advance for them to be reviewed by the Group’s management bodies.
consolidated financial statements. The procedures related to the
Twice a year, the general manager and finance director of each
security, use and development of new features of this consolidation
subsidiary along with their counterparts in the regions and Divi-
system are documented.
sions provide written confirmation of compliance with the Group’s
Control environment applicable procedures and with all of the standards applicable to the
financial information sent to the central teams. This confirmation
The control environment relating to the preparation and processing is provided in a representation letter that covers the closing of the
of Danone’s financial and accounting information is based on the six-month and full year financial statements, including all subjects
following: involving risk management, internal control and corporate law.
• the organization of the finance function, which is based on cen- The control activities are therefore conducted at all of the Group’s
tral functional departments and the finance department of each hierarchical and functional levels and include a variety of actions such
of the Divisions (see section above Organization of the finance as approving and authorizing, verifying and comparing, assessing
function). In all cases, the operating units are responsible for operational performances, ensuring the protection of assets and
the production and content of their financial statements as well monitoring the segregation of duties. The audits administered and
as their internal control; conducted independently by the Internal Audit Department provide
appropriate validation.
• the DANgo control practices and procedures, which help to ensure
the reliability of the processes for preparing the financial state-
ments. Indeed, the DANgo referential includes many points that
address the quality of the financial and accounting information;

Information and communication key control procedures in the preparation of financial information
(particularly published disclosures) in the subsidiaries and in the
The Group’s financial and accounting information is produced and Group’s headquarters and on their effective application. Moreover,
communicated via the tools described above. the internal audit assignments conducted in the operating units
To communicate financial information within the Group, each quarter are aimed primarily at verifying the quality of the accounting and
the Group’s entire finance function can log onto a website where the financial information. The Divisions’ Finance Departments ensure
Chief Financial Officer comments on the activity for the quarter, the that the action plans established subsequent to the above-mentio-
year-to-date financial results and the main challenges for the Group. ned internal and external audits have been carried out correctly.
Lastly, the Group’s referential covering financial and accounting Assessment

information (Da φ net, DANgo, etc.) are accessible to all employees.
The procedures intended to control the accounting and financial
Continuous monitoring information provided by the consolidated subsidiaries, as well as
the internal control procedures used to prepare the consolidated
One of the responsibilities of each Division’s finance director and financial statements, are adequate to provide reliable accounting
function manager is to improve the procedures used to prepare and and financial information.
process financial information. Detailed audits are conducted on the

Statutory auditors’ report

This is a free translation into English of the Statutory auditors’ report issued in the French language and is provided solely for the conve-
nience of English-speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and
professional auditing standards applicable in France.
Statutory auditors’ report prepared in accordance with Article L. 225-235 of the

French commercial code on the report prepared by the Chairman of the Board of
Directors of Danone
To the shareholders,
In our capacity as Statutory auditors of Danone, and in accordance with Article L. 225-235 of the French commercial code, we hereby
report to you on the report prepared by the Chairman of your Company in accordance with Article L. 225-37 of the French commercial
code for the year ended December 31, 2014.
It is the Chairman’s responsibility to prepare, and submit to the Board of Directors for approval, a report describing the internal control
and risk management procedures implemented by the Company and providing the other information required by Article L. 225-37 of the
French commercial code, in particular relating to corporate governance.
It is our responsibility:
• to report to you on the information contained in the Chairman’s report on internal control and risk management procedures relating
to the preparation and processing of financial and accounting information; and
• to attest that the report contains the other information required by Article L. 225-37 of the French commercial code, it being specified
that it is not our responsibility to assess the fairness of this information.
We conducted our work in accordance with professional standards applicable in France.
Information concerning the internal control and risk management procedures relating to the preparation
and processing of financial and accounting information
The professional standards require that we perform due diligence procedures to assess the fairness of the information on internal control
and risk management procedures relating to the preparation and processing of financial and accounting information contained in the
Chairman’s report. These procedures mainly consist of:
• obtaining an understanding of the internal control and risk management procedures relating to the preparation and processing of financial
and accounting information on which the information presented in the Chairman’s report is based, and of the existing documentation;
• obtaining an understanding of the work performed to support the information given in the report and of the existing documentation; and
• determining if any material deficiencies in the internal control procedures relating to the preparation and processing of financial and
accounting information that we may have identified in the course of our assignment are properly described in the Chairman’s report.
On the basis of our work, we have no observations to make on the information given on internal control and risk management procedures
relating to the preparation and processing of financial and accounting information, set out in the Chairman of the Board’s report, prepared
in accordance with Article L. 225-37 of the French commercial code.
Other information
We attest that the Chairman’s report contains the other information required by Article L. 225-37 of the French commercial code. 6


Statutory auditors’ special report on related party agreements and commitments
6.5 Statutory auditors’ special report on related party

agreements and commitments
This is a free translation into English of the Statutory auditors’ report issued in the French language and is provided solely for the convenience of
English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing
In our capacity as Statutory auditors of your company, we hereby report on certain related party agreements and commitments.
We are required to inform you, on the basis of the information provided to us, of the terms and conditions of those agreements and com-
mitments indicated to us, or that we may have identified in the performance of our engagement. We are not required to comment as to
whether they are beneficial or appropriate or to ascertain the existence of any such agreements and commitments. It is your responsibi-
lity, in accordance with Article R. 225-31 of the French commercial code, to evaluate the benefits resulting from these agreements and
commitments prior to their approval.
In addition, we are required, where applicable, to inform you in accordance with Article R. 225-31 of the French commercial code concerning
the implementation, during the year, of the agreements and commitments already approved by the Shareholders’ Meeting.
We have performed the due diligence procedures that we deemed necessary in accordance with the professional guidance issued by the
French Institute of statutory auditors (Compagnie nationale des commissaires aux comptes) for this type of assignment. These procedures
consisted in verifying that the information provided to us is consistent with the documentation from which it has been extracted.
1. Agreements and commitments submitted for approval by the Shareholders’

Meeting
Agreements and commitments authorized during the past fiscal year
In accordance with Article L. 225-40 of the French commercial code, we were informed of the following agreements and commitments
which received prior authorization of your board of directors.
1.1. With J.P. Morgan Group

Person concerned
Mrs. Isabelle SEILLIER, a Director of your company and a managing director within the J.P. Morgan Chase group.
1.1.1. Consulting agreement dated October 28, 2014
Nature, purpose and conditions
On October 17, 2014, the Board of Directors (excluding Mrs. Isabelle SEILLIER who abstained from voting) unanimously authorized the
signing of a consulting agreement between your company and J.P. Morgan Limited related to the possible sale of certain Group assets.
Under the terms of this consulting agreement signed on October 28, 2014, J.P. Morgan Limited, along with another consultant bank,
agreed to act as your company’s financial consultant and, in particular, agreed to help your company find buyers, draft a memorandum
describing the activities being sold, analyze bids, coordinate the due diligence process, determine the structure and definition of the terms
and conditions of the transaction and negotiate the documents needed to complete the transaction.
Pursuant to the agreement, your company would pay J.P. Morgan Limited, in return for its consulting services and subject to completion of
the transaction, a fee representing approximately 0.32% of the total value of the assets being sold as estimated on the date of the agreement.
Since the project was not completed, the consulting agreement will end on May 15, 2015 and will not result in the payment of the above-
mentioned fee, as provided by the agreement.
1.1.2. New amendment to the syndicated facilities agreement dated December 18, 2014
On July 27, 2011, the Board of Directors had unanimously authorized your company (excluding Mrs. Isabelle SEILLIER who abstained from
voting) to enter into a syndicated facilities agreement and all related contractual documents with J.P. Morgan Europe Limited and J.P.
Morgan Limited (hereinafter “J.P. Morgan”).
On July 28, 2011, your company therefore entered into a syndicated facilities agreement with J.P. Morgan and several other banks. This
agreement provides for the establishment of a €2 billion (multi-currency) revolving credit line, combined with a €300 million “swingline”
facility, up to a maximum principal amount of €2 billion. The agreement’s initial term was five years, with the possibility of renewal for up
to two additional years subject to banks’ approval.
Interest due by your company on the amounts used with respect to this syndicated facilities agreement are calculated using market
rates (EURIBOR, EONIA or equivalent foreign currency indices), plus a margin and potential mandatory costs under certain conditions.
A utilization fee is added to the interest due based on the credit portion used and, if the facility is not drawn down, a non-utilization fee
equivalent to a percentage of the margin is owed. Finally, your company had paid customary fees to the banks as part of the establishment
of the syndicated facilities agreement in 2011.

J.P. Morgan’s commitment in its capacity as a lender on the syndicated facilities agreements is €210 million, or 10.5% of the total, i.e. the
same percentage as the other banking institutions having the first rank in the syndicated facilities agreement. Fees and interest owed
by your company to J.P. Morgan are determined on a strict pro-rated basis relative to its commitments under the syndicated facilities
agreement and are therefore equivalent to fees and interest due to the other banks having a first rank in the facilities agreement;
On June 18, 2012, the Board of Directors (excluding Mrs. Isabelle SEILLIER who abstained from voting) had unanimously authorized your
company to enter, along with J.P. Morgan, into an amendment to the syndicated facilities agreement to provide for (i) the extension of
the syndicated facilities agreement for a further year (i.e. until July 28, 2017) and (ii) as consideration, the addition, for all participating
banks and in proportion to their commitments, of a utilization fee of the facilities under certain circumstances and an additional margin
for drawdowns in US dollars. Therefore, on July 12, 2012, your company, together with J.P. Morgan and the other banks parties to the
syndicated facilities agreement amended the syndicated facilities agreement accordingly. This amendment took effect on July 28, 2012
(the syndicated facilities agreement’s anniversary date).
On April 25, 2013, the Board of Directors (excluding Mrs. Isabelle SEILLIER who abstained from voting) unanimously authorized your
company to extend the duration of the syndicated facilities agreement entered into with J.P. Morgan on July 28, 2011 and amended on July
12, 2012 for a further year (i.e. until July 28, 2018). Accordingly, through an amendment signed on May 24, 2013, the syndicated facilities
agreement was again extended for a further year, without modifying the other terms of the syndicated facilities, as agreed by all banking
institutions parties to the syndicated facilities agreement (including J.P. Morgan).
On December 11, 2014, the Board of Directors (excluding Mrs. Isabelle SEILLIER who abstained from voting) unanimously authorized
your company to enter into a new amendment to the syndicated facilities agreement in order to (i) reduce the applicable margin and the
non-utilization fee, (ii) eliminate the additional margin for drawdowns in US dollars, (iii) extend the term of the facility up to five years after
the signature date of the amendment, with the option to extend it by two additional years, subject to the banks’ agreement and under the
same terms and conditions as the original syndicated facility agreement, and (iv) make other changes of a technical or legal nature to
reflect changes in current legislation and market practices.
On December 18, 2014, your company therefore amended the syndicated facilities agreement accordingly, with the approval of all the
banks parties to the syndicated facility (including J.P. Morgan).
J.P. Morgan’s commitment in its capacity as lender on the syndicated facilities agreement continues to be €210 million, or 10.5% of the
total, i.e. the same percentage as the other banks having the first rank in the syndicated facilities agreement. Fees and interest owed
by your company to J.P. Morgan are determined on a strict pro-rated basis relative to its commitments under the syndicated facilities
agreement and are therefore equivalent to fees and interest due to the other banks having a first rank in the facilities agreement.
No amount was drawn under this syndicated facilities agreement in 2014.
In 2014, your company paid J.P. Morgan a total of €508,083 in fees related to these credit facilities (fees related to the signing of the
amendment and non-utilization fees).
1.1.3. Subscription agreement of January 12, 2015 in connection with a bond issue
On December 11, 2014, the Board of Directors (excluding Mrs. Isabelle SEILLIER who abstained from voting) unanimously authorized your
company to enter into subscription agreements with J.P. Morgan group in connection with bond issues to be carried out by your company.
In accordance with this authorization, on January 12, 2015, within the scope of a €1.3 billion bond issue under the EMTN program in two
tranches (one €550 million tranche with a maturity of five years and one €750 million tranche with a maturity of 10 years), your company
entered into a subscription agreement with the banks responsible for placing the bonds (including J.P. Morgan Securities PLC), under
the terms of which said banks underwrote your company’s entire bond issue, which they then immediately placed with investors wishing
to participate in the issue.
6
The commitment to subscribe gave rise to a fee of 0.21% of the nominal amount of the bonds issued, i.e. €1.3 billion, equally divided
among the banks responsible for placing the bonds (including J.P. Morgan Securities PLC), as these fees are proportional to the banks’
underwriting commitments, which were all of the same amount (subject to rounding rules).
Accordingly, the fee paid to each of the banks responsible for placing the bonds, including J.P. Morgan Securities PLC, amounted to €390,000.
1.2. With Mr. Emmanuel FABER, Chief Executive Officer

Commitments concerning the indemnification conditions applicable to Mr. Emmanuel FABER, Chief Executive Officer, in
certain cases of termination of his term of office
On February 13, 2008, the Board of Directors (excluding Mr. Emmanuel FABER who abstained from voting) unanimously approved the prin-
ciple and terms of Mr. Emmanuel FABER’s right to an indemnity in certain cases of termination of his duties as Deputy General Manager.
On February 18, 2013, on the recommendation of the Nomination and Compensation Committee, the Board of Directors (excluding Mr.
Emmanuel FABER who abstained from voting) unanimously decided, at the time of renewal of Mr. Emmanuel FABER’s term of office subject
to approval by the Shareholders’ Meeting of April 25, 2013, to renew his rights to indemnity in certain cases of termination of his duties.
These rights to indemnity had been renewed on the same basis as that set by the Board of Directors on February 10, 2010 and approved
by the Shareholders’ Meeting of April 22, 2010, subject to certain amendments made in order to ensure compliance with the provisions
of the AFEP-MEDEF Code or to make the payment conditions more restrictive.
These amendments were approved by your company’s Shareholders’ Meeting of April 25, 2013.

On September 2, 2014, in connection with the separation of the offices of Chairman of the Board of Directors and Chief Executive Officer
and Mr. Emmanuel FABER’s appointment as Chief Executive Officer, the Board of Directors (excluding Mr. Emmanuel FABER who abstained
from voting), on the recommendation of the Nomination and Compensation Committee, decided that his rights to indemnity should be the
same as those approved by your company’s Shareholders’ Meeting of April 25, 2013.
The mechanism approved by the Board of Directors on September 2, 2014, which took effect on October 1, 2014 (effective date of Mr.
Emmanuel FABER’s appointment as Chief Executive Officer), is described below.
(i) Amount of the Indemnity
Mr. Emmanuel FABER will receive, by way of indemnity (the “Indemnity”) and subject to performance conditions, an amount equal to twice
his gross annual compensation (including both fixed and variable compensation) received in respect of his term of office during the twelve
months preceding the date of termination of said duties.
The sum of the amounts of (i) the indemnity provided under your company’s collective agreement applicable to all Company employees
(the “Indemnity for Termination of the Employment Contract”, with the portion of this indemnity that corresponds to the length of service
acquired pursuant to the office being subject to performance conditions) and (ii) the Indemnity must not exceed twice the gross annual
compensation (including both fixed and variable compensation) received in respect of the term of office over the last twelve months.
If Mr. Emmanuel FABER’s term of office ends in 2015, the base compensation used to calculate this indemnity will be the gross annual
compensation (including fixed and variable compensation) received by Mr. Emmanuel FABER during the twelve months preceding the date
of termination of his term of office, whether such compensation is paid for his duties as Deputy General Manager or Chief Executive Officer.
In the event that the amount of the Indemnity and the amount of the Indemnity for Termination of the Employment Contract exceed this
ceiling of twice the gross annual compensation, and to ensure strict compliance with this ceiling, the amount actually paid to Mr. Emmanuel
FABER will first be charged to the Indemnity and then, where applicable, to the portion of the Indemnity for Termination of the Employ-
ment Contract subject to performance conditions and corresponding to the length of service acquired in respect of the term of office.
(ii) Cases of payment of the Indemnity
The Indemnity will be payable to Mr. Emmanuel FABER only in case of termination of his term of office as corporate officer related to a
change in control or strategy, on the initiative of the Board of Directors, regardless of the form of such termination, in particular dismissal
or non-renewal (except in case of serious misconduct, i.e. an extremely serious fault which precludes any continuation of his term of office,
or gross negligence, i.e. an extremely serious fault committed with the intention of harming your company), and subject to the performance
conditions being met. It is specified that “change of control” means any change in your company’s legal situation resulting, in particular,
from a merger, restructuring, sale, takeover bid or exchange offer, following which a shareholder that is a legal entity or natural person,
either alone or acting in concert, comes to hold, directly or indirectly, more than 50% of your company’s share capital or voting rights.
Moreover, in accordance with the recommendations of the AFEP-MEDEF Code, no payment of the Indemnity will be due if Mr. Emmanuel
FABER is able to avail himself of his pension entitlements within a short period of time under the terms and conditions defined by the
pension schemes.
Given the automatic resumption of Mr. Emmanuel FABER’s employment contract in the event of the termination of his term of office as a
corporate officer, the Indemnity will also be due if Mr. Emmanuel FABER ceases to carry out his duties under said employment contract
or resigns from his salaried position within the three months following the date on which his term of office as a corporate officer came
to an end due to a change of control.
Where applicable, no Indemnity pursuant to the office will be due if Mr. Emmanuel FABER resumes a salaried position and does not
request that such position be terminated within the aforementioned three-month period.
(iii) Performance conditions governing payment of the Indemnity
Payment of the Indemnity will be based on:
a) the arithmetic average internal (“organic”) growth in the Danone group’s net sales (the “Group’s CA”) over the five completed fiscal
years preceding the date of termination of the term of the corporate officer (the “Reference Period”); and
b) the arithmetic average internal (“organic”) growth in net sales recorded by the Panel members (the “CA of the Panel”) over the Refe-
rence Period.
For application of this decision, it is noted that:
• the Group’s CA refers to the arithmetic average internal (“organic”) growth in the Group’s net sales over the Reference Period (on a
consolidated basis and on a like-for-like basis, i.e. excluding changes in consolidation scope and exchange rates);
• the CA of each Panel member refers to the arithmetic average internal (“organic”) growth in net sales recorded by said Panel mem-
ber over the Reference Period (on a consolidated basis and on a like-for-like basis, i.e. excluding changes in consolidation scope and
exchange rates);
• the Panel CAs refer to the CAs of all members of the Panel;
• the Median CA of the Panel refers to the value of the CA of the Panel member that divides the Panel CAs into two equal parts (i.e. such
that there are as many Panel members with a CA exceeding or equal to the Median as Panel members with a CA being less than or
equal to the Median), it being specified that if the Panel members are an even number, the Median CA of the Panel will be equal to the
arithmetic average of the two central values of the Panel CAs; and
• the Panel consists of eight benchmark international groups in the food and beverage sector, namely Kellogg Company, Unilever N.V.,
Nestlé S.A., Kraft Foods Group Inc., Mondelez International Inc., PepsiCo Inc., The Coca-Cola Company and General Mills Inc.

The Board of Directors must determine whether these performance conditions are met within three months of the date of termination
of the term of office of the corporate officer. Its explicit decision must be duly justified and mentioned in the Board of Directors’ report
to the Shareholders’ Meeting, following a recommendation by the Nomination and Compensation Committee, and based on a report of
a financial advisor.
To ensure the comparability of the CAs used, it is specified that:
• restatements will be made (such as corrections related to changes in consolidation scope and exchange rates) to the strict extent
necessary in order to ensure that the method of calculating the CAs of all Panel members and the Group’s CA is consistent over the
entire period;
• in the event that the audited accounting or financial results of one of the Panel members are not published or are published late, the
Board of Directors may, exceptionally, exclude this member from the Panel through a duly justified decision; and
• in the event that the audited accounting or financial results of two or more members of the Panel are not published or are published
late, the Board of Directors will make a decision duly justified at a later date, on the basis of the most recent audited financial state-
ments published by the members of the Panel and by your company over the last five fiscal years for which financial statements were
published for all members of the Panel and for your company.
In addition, it is noted that the Board of Directors may, through a duly justified decision, exclude a member of the Panel in the event of
an acquisition, absorption, dissolution, spin-off, merger or change of activity of this member of the Panel, provided that it maintains the
overall consistency of the peer group.
Over the Reference Period:
• if the Group’s CA exceeds or is equal to the Median CA of the Panel, 100% of the Indemnity will be paid to Mr. Emmanuel FABER; and
• if the Group’s CA is lower than the Median CA of the Panel, no Indemnity will be paid to Mr. Emmanuel FABER.
In accordance with the amendment to Mr. Emmanuel FABER’s employment contract, it should be noted that the same performance condi-
tions will apply to the portion of the Indemnity for Termination of the Employment Contract corresponding to the length of service acquired
pursuant to the office and that the sum of the Indemnity pursuant to the office and of the Indemnity for Termination of the Employment
Contract may not exceed twenty-four (24) months of gross fixed and variable compensation.
At the time of each renewal of Mr. Emmanuel FABER’s term of office, these performance conditions and, where appropriate, the compo-
sition of the Panel will be reexamined by the Board of Directors and, where appropriate, modified to take into account changes affecting
your company and its business sectors.
(iv) Payment of the Indemnity
The amount of the Indemnity determined according to the above rules will be paid within 30 days following the date of the Board of Direc-
tors’ meeting which will decide whether the performance conditions governing payment of the Indemnity have been met.
It is also recalled that, in accordance with Mr. Emmanuel FABER’s employment contract, amended by authorization of the Board of Directors
on February 10, 2010, the performance conditions applicable to the portion of the Indemnity for Termination of the Employment Contract
corresponding to the seniority acquired in respect of his term of office are the same as those applicable to the Indemnity.
2. Agreements and commitments already approved by the Shareholders’ Meeting

2.1. Agreements and commitments approved in prior fiscal years
2.1.1. Whose implementation continued during the past fiscal year 6
In accordance with Article R. 225-30 of the French commercial code, we were informed that the implementation of the following agree-
ments and commitments, already approved by the Shareholders’ Meeting, continued during the past fiscal year.
2.1.1.1. Cooperation agreement in connection with the danone.communities project
Persons concerned
Mr. Franck RIBOUD, Chairman of the Board of Directors, Mr. Emmanuel FABER, Chief Executive Officer, and Mr. Bernard HOURS, former
Deputy General Manager and former Director, all three being Directors of the danone.communities mutual investment fund (SICAV).

On April 26, 2007, within the framework of the danone.communities project, your company’s Board of Directors unanimously authorized
the signing of a cooperation agreement established between your company, the danone.communities mutual investment fund (Société
d’Investissement à Capital Variable – SICAV), the danone.communities FCPR (venture capital fund, now FPS), and companies of the Crédit
Agricole group, namely IDEAM (which was merged into Amundi in 2011) and Crédit Agricole Private Equity (now renamed Omnes Capital),
respectively management companies for the SICAV and the FCPR, it being specified that as of the date of this meeting, Mr. Jean Laurent,
Director of your company, was also the Chairman of the Board of Directors of Calyon, a subsidiary of the Crédit Agricole group, and abs-
tained from voting. This agreement governs the relations between your company and other entities that have taken part in the danone.
communities project, and in particular provides for the subscription of shares of the danone.communities SICAV by your company for a
maximum amount of €20 million, as well as the annual financial contribution by your company of a maximum amount of €1.5 million for
the first fiscal year, it being specified that this amount must be revised annually by your company’s Board of Directors.

On February 19, 2014, the Board of Directors unanimously set your company’s annual financial contribution for 2014 at a maximum of €3.7
million (your company’s total financial contributions toward danone.communities for 2014 thus amounted to €3.6 million). Mr. Franck
RIBOUD, Mr. Emmanuel FABER and Mr. Bernard HOURS abstained from voting as all three were Directors of the danone.communities
SICAV at the time.
On February 19, 2015, the Board of Directors unanimously set your company’s annual financial contribution for 2015 at a maximum of €3.7
million. Mr. Franck RIBOUD and Mr. Emmanuel FABER abstained from voting as both are Directors of the danone.communities SICAV.
2.1.1.2. Commitments with respect to Mr. Franck RIBOUD, Chairman of the Board of Directors, Mr. Emmanuel FABER, Chief
Executive Officer, and Messrs. Bernard HOURS and Jacques Vincent, former Deputy General Managers, relative to the
payment of a pension under the defined benefit pension plan
Persons concerned
Mr. Franck RIBOUD, Chairman of the Board of Directors, Mr. Emmanuel FABER, Chief Executive Officer, and Messrs. Bernard HOURS
and Jacques VINCENT, former Deputy General Managers.
On February 13, 2008, the Board of Directors unanimously confirmed your company’s commitment with respect to each of the four
corporate officers (Messrs. Franck RIBOUD, Emmanuel FABER, Bernard HOURS and Jacques VINCENT it being specified that Messrs.
Bernard HOURS and Vincent are no longer corporate officers), relative to the payment of a pension under the defined benefit pension
plan in the form of an annuity (with a reversion option), calculated based on the following elements (the corporate officers concerned
abstained from voting):
• the basis of calculation for the retirement guarantee corresponds to the average of annual base salaries and bonuses for the last
three entire years of activity within the Group. The length of service taken into account would include the period corresponding to the
term of office;
• in the event of retirement without satisfying the conditions necessary for obtaining the full rate with respect to the social security
pension, a reduction of 1.25% per quarter between the age at which the person retired and the age at which he would have received
his full rate social security pension will be applied to this annuity;
• the amount of the annuity that would be paid to Mr. Franck RIBOUD and Mr. Jacques Vincent would correspond to 2% of this calculation
base per year of service (this amount will, however, be capped at 65% of the calculation base), less the full amount of the retirement
rights acquired by Mr. Franck RIBOUD and Mr. Jacques Vincent during their professional life, including the supplementary pension
plan fully funded by your company; and
• the amount of the annuity that would be paid to Mr. Emmanuel FABER and Mr. Bernard HOURS would correspond to (i) 1.5% per year
of seniority (including the period corresponding to the term of office) of this calculation base, for the tranche located between 3 and
8 French Social Security ceiling levels (3 et 8 plafonds de la Sécurité Sociale), and (ii) 3% per year of seniority (including the period
corresponding to the term of office) of this calculation base, for the tranche that is higher than these 8 ceiling levels (this amount will
however be limited on the basis of a maximum seniority of 20 years) minus the full amount of pension rights that Mr. Emmanuel FABER
and Mr. Bernard HOURS have acquired due to the implementation of the supplementary pension plan fully funded by your company.
The person concerned is eligible to benefit from this pension plan only if he was performing his duties within the Group at the time of
retirement (it being specified that in the event the person leaves the Group before reaching the age of 55, all the rights acquired will be
lost, and that in the event such officer is laid off after the age of 55, the benefit derived from this plan will be preserved, on condition that
the person does not take up a salaried position).
These agreements remained in force and unchanged in 2014 and were not implemented, with the exception of the one involving Mr. Jacques
Vincent, who exercised his rights to retirement benefits effective April 1, 2010 (after 40 years within the Group). The annuity which was
paid to him during the 2014 fiscal year with respect to this agreement amounted to €0.9 million.
2.1.1.3. Commitments with respect to Mr. Emmanuel FABER, Chief Executive Officer, and Mr. Bernard HOURS, former
Deputy General Manager, relative to the conditions under which their employment contracts would be resumed following
the expiration of their terms of office
Persons concerned
Mr. Emmanuel FABER, Chief Executive Officer, and Mr. Bernard HOURS, former Deputy General Manager.
On February 13, 2008, the Board of Directors (excluding Mr. Emmanuel FABER and Mr. Bernard HOURS who abstained from voting) una-
nimously authorized an amendment to your company’s employment contracts concluded with Mr. Emmanuel FABER and Mr. Bernard
HOURS, for the purpose of determining the conditions under which their respective employment contracts would be resumed (these
employment contracts were suspended when they were appointed corporate officers of your company), assuming that their term of office
had ended, for whatever reason.
These amendments provide both executives, in an identical manner, with the assurance that:
• the amount of time during which they have exercised their duties as corporate officers for the benefit of your company will be entirely
taken into account with respect to seniority and to their resulting rights within the framework of their employment contracts;
• your company undertakes to offer him a position involving duties comparable to those currently exercised by the members of your
company’s Executive Committee;

• the annual compensation that will be paid out to him cannot be less than the total annual average compensation (gross base salary,
benefits in kind, and bonus of any type) allocated to all members of the Executive Committee during the twelve months preceding the
resumption of his employment contract;
• they will benefit from your company’s defined benefit pension plan based on their seniority as corporate officers and seniority under
their employment contract; and
• the contractual indemnity due in the event of a breach of the employment contract will be canceled.
On September 2, 2014, in connection with the decision to separate the offices of Chairman of the Board of Directors and Chief Executive
Officer and eliminate the two Deputy General Manager positions in keeping with changes in the Group’s strategy, the Board of Directors
(excluding Mr. Bernard HOURS who abstained from voting) decided to terminate Mr. Bernard HOURS’ term of office as Deputy General
Manager. Consequently, the employment contract between your company and Mr. Bernard HOURS was automatically reinstated. A
dismissal procedure then began, culminating in the termination of Mr. Bernard HOURS’ employment contract on December 19, 2014.
Accordingly, as indicated in the amendment drawn up to determine the conditions under which his employment contract would be reins-
tated, your company did not pay Mr. Bernard HOURS the individual contractual indemnity (see Implementation of the mechanism upon the
termination of Mr. Bernard HOURS’ term of office as Deputy General Manager in section 2.2.b) below regarding the Indemnity for Termination
of the Employment Contract provided under your company’s collective agreement applicable to all Company employees and paid by your
company to Mr. Bernard HOURS).
2.1.1.4. Amendments to the suspended employment contracts of Mr. Franck RIBOUD, Chairman of the Board of Directors,
Mr. Emmanuel FABER, Chief Executive Officer, and Mr. Bernard HOURS, former Deputy General Manager
Persons concerned
Mr. Franck RIBOUD, Chairman of the Board of Directors, Mr. Emmanuel FABER, Chief Executive Officer, and Mr. Bernard HOURS, former
Deputy General Manager.

On February 10, 2010, the Board of Directors amended the suspended employment contracts of Mr. Franck RIBOUD, Mr. Emmanuel FABER
and Mr. Bernard HOURS, it being specified that for Mr. Bernard HOURS, the renewal of these conditions under identical terms was decided
by the Board of Directors at its February 14, 2011 meeting (the corporate officers concerned abstained from voting).
These agreements were therefore amended in order that:
• the indemnity provided under your company’s collective agreement applicable to all Company employees (the “Indemnity for Termi-
nation of the Employment Contract”) is (i) subject to a limit of two years’ fixed and variable gross compensation and (ii) in the event
of the payment of both the Indemnity for Termination of the Employment Contract and the indemnity due in certain instances of the
termination of the term of office of a corporate officer, included in an overall limit, also subject to a limit of two years’ fixed and variable
gross compensation, applicable to all termination indemnities paid in respect of a term of office or an employment contract;
• the portion of the Indemnity for Termination of the Employment Contract corresponding to the seniority acquired in respect of the
term of office of the person concerned is subject to the same performance conditions as the indemnity due in certain instances of the
termination of the term of office of the corporate officer; and
• in the event only of the termination of his term of office caused by a change of control, the person concerned may, provided he is not
guilty of serious misconduct or gross negligence, request the termination of his employment contract in the form of lay-off within three
months from the date of the termination of his term of office as a corporate officer (i.e. the date on which his employment contract is
resumed).
In the event of the amendment of the performance conditions applicable to the indemnity due in certain instances of the termination 6
of the term of office of a corporate officer, the performance conditions applicable to the portion of the Indemnity for Termination of the
Employment Contract corresponding to the seniority acquired in respect of the term of office will be automatically amended.
The portion of the Indemnity for Termination of the Employment Contract which is subject to performance conditions and which corres-
ponds to the seniority acquired in respect of the term of office will be subject to the agreement of the Board of Directors and the approval
of the shareholders on each occasion the term of office is renewed.
In addition, the non-compete clause included in the suspended employment contracts of Mr. Emmanuel FABER and Mr. Bernard HOURS
was amended such that it can only be exercised by your company and result in the payment of consideration in the event of resignation.
(excluding Mr. Bernard HOURS who abstained from voting) decided to terminate Mr. Bernard HOURS’ term of office as Deputy General
Manager. Consequently, the employment contract between your company and Mr. Bernard HOURS was automatically reinstated. A
dismissal procedure then began, culminating in the termination of Mr. Bernard HOURS’ employment contract on December 19, 2014.
Accordingly, after confirming that the performance condition applicable by the Board of Directors on October 17, 2014 had been met and
on the recommendation of the Nomination and Compensation Committee, the Indemnity for Termination of the Employment Contract
(provided under your company’s collective agreement and applicable to all Company employees) authorized by the Board of Directors
on October 17, 2014 and paid by your company to Mr. Bernard HOURS (after more than 29 years of service within the Group) amounted to
€1,787,920 (see Implementation of the mechanism upon the termination of Mr. Bernard HOURS’ term of office as Deputy General Manager in
section 2.2.b below). Moreover, the non-compete clause was not applied given that the consideration was payable only in case of Mr. Ber-

nard HOURS’ resignation. It should be noted that the total indemnities paid to Mr. Bernard HOURS following the termination of his duties
(including the Indemnity for Termination of the Employment Contract) amounted to €2,109,640 and, in accordance with the provisions of
the AFEP-MEDEF Code, do not exceed the ceiling of twice the gross annual compensation (including fixed and variable compensation)
received by Mr. Bernard HOURS during the twelve months preceding the date of termination of his duties.
2.1.2. Which were not implemented during the past fiscal year
In addition, we were informed of the following agreements and commitments, already approved by the Shareholders’ Meeting during
previous fiscal years and which were not implemented during the past fiscal year.
2.1.2.1. Commitments with respect to the Chairman of the Board of Directors relative to the conditions under which his
employment contract would be resumed following the expiration of his term of office
Person concerned
Mr. Franck RIBOUD, Chairman of the Board of Directors.

On July 21, 2004, the Board of Directors (excluding Mr. Franck RIBOUD who abstained from voting), on recommendation of the Nomination
and Compensation Committee, unanimously updated the conditions under which the employment contract of Mr. Franck RIBOUD (which
was suspended on August 26, 1994 when he was appointed as corporate officer of your company) would be resumed if his term of office
ended, for whatever reason, and established that:
• the amount of time during which he exercised his duties as a corporate officer for the benefit of your company will be entirely taken
into account with respect to seniority and his resulting rights within the framework of his employment contract;
• your company undertakes to offer him a position involving duties comparable to those currently exercised by the members of your
company’s Executive Committee;
• the annual compensation that will be paid out to him cannot be less than the total annual average compensation (gross base salary,
benefits in kind, and bonus of any type) allocated to all members of the Executive Committee during the twelve months preceding the
resumption of his employment contract; and
• he will benefit from your company’s defined benefit pension plan based on his seniority as a corporate officer and his seniority under
his employment contract.
2.1.2.2. Commitments concerning the indemnification conditions applicable to Mr. Franck RIBOUD, Chairman of the Board of
Directors, in certain cases of termination of his term of office
On February 13, 2008, the Board of Directors (excluding Mr. Franck RIBOUD who abstained from voting) had unanimously approved the
principle and terms of the right to an indemnity of M. Franck RIBOUD, Chairman and Chief Executive Officer at the time.
On February 18, 2013, on the recommendation of the Nomination and Compensation Committee, the Board of Directors decided, at the
time of renewal of Mr. Franck RIBOUD’s term of office subject to approval by the Shareholders’ Meeting of April 25, 2013, to renew his
rights to indemnity in certain cases of termination of his duties. Mr. Franck RIBOUD abstained from voting. These rights to indemnity
were renewed on the same basis as that set by the Board of Directors on February 10, 2010 and approved by the Shareholders’ Meeting
of April 22, 2010, subject to certain amendments made in order to ensure compliance with the provisions of the AFEP-MEDEF Code or to
make the payment conditions more restrictive.
These amendments were approved by your company’s Shareholders’ Meeting of April 25, 2013.
On September 2, 2014, the Board of Directors (excluding Mr. Franck RIBOUD who abstained from voting) decided to separate the offices of
Chairman of the Board of Directors and Chief Executive Officer and to appoint Mr. Franck RIBOUD as Chairman of the Board of Directors
effective October 1, 2014.
Accordingly, as a result of the termination of his executive duties as of October 1, 2014, Mr. Franck RIBOUD waived the termination indem-
nity applicable to him in the event of termination of his duties as a corporate officer. It should be noted, as necessary, that Mr. Franck
RIBOUD also holds an employment contract which is suspended, and that the portion of the termination indemnity provided under the
employment contract corresponding to the length of service acquired during his term as Chairman and Chief Executive Officer and, as of
October 1, 2014, as Chairman of the Board of Directors, will continue to be subject to the performance conditions approved by the Board
of Directors on February 18, 2013.
The mechanism applicable to Mr. Franck RIBOUD until this waiver, which is the same as the mechanism applicable to Mr. Emmanuel
FABER, Chief Executive Officer, is described in section 1.2. above.
2.2. Agreements and commitments approved during the past fiscal year
We were also informed of the implementation of the following agreements and commitments, already approved by the Shareholders’
Meeting of April 29, 2015 on the basis of the Statutory auditors’ special report of March 7, 2014, during the past fiscal year.

Commitments concerning the indemnification conditions applicable to Mr. Bernard HOURS, former Deputy General
Manager, in certain cases of termination of his term of office as corporate officer and his Statutory Director Contract with
Danone Trading B.V.
Persons concerned
Mr. Bernard HOURS, former Deputy General Manager.
a) Statutory Director’s contract between Mr. Bernard HOURS and Danone Trading B.V., a wholly-owned indirect subsidiary
of your company based in the Netherlands
On December 10, 2013, on recommendation of the Nomination and Compensation Committee, the Board of Directors (excluding Mr. Bernard
HOURS who abstained from voting) had unanimously approved the Statutory Director’s contract (the “Dutch Statutory Director Contract”)
between Mr. Bernard HOURS and Danone Trading B.V., a wholly-owned indirect subsidiary of your company based in the Netherlands and
an operational holding company for part of the management teams of the Medical Nutrition and Early Life Nutrition Divisions and some
of the teams of the Fresh Dairy Products Division.
To this effect, on December 20, 2013, Danone Trading B.V. entered into a Dutch Statutory Director Contract with Mr. Bernard HOURS, who
was appointed Statutory Director as of January 1, 2014, effective date of the Dutch Statutory Director Contract.
decided to terminate Mr. Bernard HOURS’ term of office as Deputy General Manager. Consequently, Mr. Bernard HOURS’ Dutch Statutory
Director Contract was automatically terminated on that date.
From January 1, 2014 to September 2, 2014, the gross fixed compensation paid by Danone Trading B.V. to Mr. Bernard HOURS under the
Dutch Statutory Director Contract amounted to €367,122 and the gross variable compensation amounted to €284,256. Moreover, the
Group Performance Units and Group Performance Shares granted to Mr. Bernard HOURS under the Dutch Statutory Director Contract
became null and void. Lastly, Mr. Bernard HOURS received no indemnity under the Dutch Statutory Director Contract as a result of the
termination of his duties at Danone Trading B.V.
b) Commitments concerning the indemnification conditions applicable to Mr. Bernard HOURS in certain cases of termination
of his term of office as corporate officer and his Statutory Director Contract with Danone Trading B.V.
On December 10, 2013, on recommendation of the Nomination and Compensation Committee, the Board of Directors (excluding Mr.
Bernard HOURS who abstained from voting) had unanimously decided, upon the signing of the Dutch Statutory Director Contract (see
section 2.2.a) above), to amend Mr. Bernard HOURS’ termination indemnity in certain cases of termination of his duties as Deputy General
Manager (the “Indemnity”).
This indemnity right, authorized by the Board of Directors on February 14, 2011 and approved by the Shareholders’ Meeting on April
28, 2011, had been modified to take into account the signing of the Dutch Statutory Director Contract and to bring Mr. Bernard HOURS’
indemnity entitlement into line with those applicable to Mr. Franck RIBOUD and Mr. Emmanuel FABER, authorized by the Board on
February 18, 2013 and approved by the Shareholders’ Meeting on April 25, 2013. The modifications were made to ensure compliance with
the provisions of the AFEP-MEDEF Code. The mechanism amended by the Board of Directors on December 10, 2013, applicable as from
January 1, 2014, is described hereafter.
On February 19, 2014, on recommendation of the Nomination and Compensation Committee, the Board of Directors (excluding Mr. Bernard
HOURS who abstained from voting) unanimously decided, upon the renewal of Mr. Bernard HOURS’ term of office subject to approval by
the Shareholders’ Meeting of April 29, 2014, to renew the commitments made by the Group in certain cases of termination of his duties
as Deputy General Manager and his Dutch Statutory Director Contract. These commitments were renewed under the same terms and
6
conditions as those set by the Board of Directors on December 10, 2013. The mechanism amended by the Board of Directors on February
19, 2014, applicable as from the Shareholders’ Meeting of April 29, 2014, is described hereafter.
Description of the mechanism
(i) Amount of the Indemnity
Mr. Bernard HOURS will receive, in respect of the Indemnity and subject to performance conditions, an amount equal to twice the gross
annual compensation (comprising both fixed and variable compensation) received in respect of his duties as Deputy General Manager for
the twelve months preceding the date on which said duties ceased.
Moreover, pursuant to the Dutch Statutory Director Indemnity, Mr. Bernard HOURS will be able to receive, under the same terms and
conditions as those set for the payment of the Indemnity (in particular concerning payment and performance conditions), an amount equal
to twice the gross annual compensation (comprising both fixed and variable compensation) received for his duties pursuant to the Dutch
Statutory Director Contract in the twelve months preceding the date on which said duties ceased.
The sum of the amounts received under (i) the indemnity provided by your company’s collective agreement applicable to all Company
employees, i.e. the “Indemnity for Termination of the Employment Contract” (the portion of said indemnity corresponding to the length
of service acquired in respect of his term of office as Deputy General Manager being also subject to performance conditions), (ii) the
Indemnity pursuant to the Dutch Statutory Director Contract and (iii) the Indemnity, must not exceed twice the gross annual compensation
(comprising both fixed and variable compensation) received by Mr. Bernard HOURS in respect of the last twelve months preceding the
date of termination of his duties as Deputy General Manager and his Dutch Statutory Director Contract.

In the event that the sum of the amounts due in respect of the Indemnity, the Indemnity for Termination of the Employment Contract and
the Indemnity pursuant to the Dutch Statutory Director Contract exceed this upper limit of twice the gross annual compensation (com-
prising both fixed and variable compensation) received by Mr. Bernard HOURS in respect of his duties as Deputy General Manager and
his Dutch Statutory Director Contract, so as to ensure strict compliance with this limit the amount paid will be deducted in priority from
the Indemnity and then, where relevant, from the amount payable in respect of the Indemnity pursuant to the Dutch Statutory Director
Contract, and lastly, if applicable, from the portion of the Indemnity for Termination of the Employment Contract subject to performance
conditions and corresponding to the length of service acquired in respect of the term of office as Deputy General Manager.
(ii) Cases of payment of the Indemnity
The Indemnity will be payable to Mr. Bernard HOURS only in the event that his duties as Deputy General Manager are terminated by the
Board of Directors due to a Change of Control or change of strategy, regardless of the form of such termination, including dismissal or
the non-renewal of his term of office (but excluding serious misconduct (faute grave) – i.e. an extremely serious fault which precludes any
continuation of the term of office, or gross negligence (faute lourde) i.e. an extremely serious fault committed by Mr. Bernard HOURS with
the intention of harming your company), and subject to the performance conditions being met. It is specified that “Change of Control”
means any change in your company’s legal situation resulting, in particular, from a merger, restructuring, sale, takeover bid or exchange
offer, following which a shareholder that is a legal entity or natural person, either alone or acting in concert, comes to hold, directly or
indirectly, more than 50% of your company’s share capital or voting rights.
Moreover, in accordance with the recommendations of the AFEP-MEDEF Code, no payment of the Indemnity will be due if Mr. Bernard
HOURS is able to avail himself of his pension entitlements within a short period of time on the terms and conditions defined by the pension
schemes.
It is also specified that, given the automatic resumption of Mr. Bernard HOURS’ employment contract in the event of the termination of his
term of office as corporate officer, the Indemnity will also be due if Mr. Bernard HOURS ceases to hold his salaried position or requests
that it be terminated within three months following the date of termination of his duties as Deputy General Manager in the case of forced
termination following a Change of Control.
Where applicable, no indemnity pursuant to the office of Deputy General Manager and no indemnity pursuant to the Dutch Statutory
Director Contract will be due if Mr. Bernard HOURS resumes a salaried position and does not request that such position be terminated
within the aforementioned three-month period.
(iii) Performance conditions governing payment of the Indemnity to Mr. Bernard HOURS
Payment of the Indemnity will be based on:
a) the arithmetic average internal (“organic”) growth in the Group’s net sales (the “Group’s CA”) over the five completed fiscal years pre-
ceding the date of termination of Mr. Bernard HOURS’ duties as Deputy General Manager (“the Reference Period”); and
b) the arithmetic average internal (“organic”) growth in net sales recorded by the Panel members (the “Panel CAs”) over the Reference Period.
For application of this decision, it is noted that:
• the Group’s CA refers to the arithmetic average internal (“organic”) growth in the Group’s net sales over the Reference Period (on a
consolidated basis and on a like-for-like basis, i.e. excluding changes in consolidation scope and exchange rates);
• the CA of each Panel member refers to the arithmetic average internal (“organic”) growth in net sales recorded by said Panel mem-
ber over the Reference Period (on a consolidated basis and on a like-for-like basis, i.e. excluding changes in consolidation scope and
exchange rates);
• the Panel CAs refer to the CAs of all members of the Panel;
• the Median CA of the Panel refers to the value of the CA of the Panel member that divides the Panel CAs into two equal parts (i.e. such
that there are as many Panel members with a CA exceeding or equal to the Median as Panel members with a CA being less than or
equal to the Median), it being specified that if the Panel members are an even number, the Median CA of the Panel will be equal to the
arithmetic average of the two central values of the Panel CAs; and
• The Panel consists of eight benchmark international groups in the food and beverage sector, namely Kellogg Company, Unilever N.V.,
Nestlé S.A., Kraft Foods Group Inc., Mondelez International Inc., PepsiCo Inc., The Coca-Cola Company and General Mills Inc.
The Board of Directors must determine whether these performance conditions are met within three months of the date of termination of
Mr. Bernard HOURS’ duties as Deputy General Manager. Its explicit decision must be duly justified and mentioned in the Board of Direc-
tors’ report to the Shareholders’ Meeting, following a recommendation by the Nomination and Compensation Committee, and based on
a financial adviser’s report.
To ensure the comparability of the CAs used, it is specified that:
• restatements will be made (such as corrections related to changes in consolidation scope and exchange rates) to the strict extent
necessary in order to ensure that the method of calculating the CAs of all Panel members and the Group’s CA is consistent over the
entire period;
• in the event that the audited accounting or financial results of one of the Panel members are not published or are published late, the
Board of Directors may, exceptionally, exclude this member from the Panel through a duly justified decision; and

• in the event that the audited accounting or financial results of two or more members of the Panel are not published or are published late,
the Board of Directors will make a decision duly justified at a later date, on the basis of the most recent audited financial statements
published by the members of the Panel and by the Group over the last five fiscal years for which financial statements were published
for all members of the Panel and for the Group.
In addition, it is noted that the Board of Directors may, through a duly justified decision, exclude a member of the Panel in the event of an
acquisition, absorption, dissolution, spin-off, merger or change of activity, provided that it maintains the overall consistency of the peer group.
Over the Reference Period:
• if the Group’s CA exceeds or is equal to the Median CA of the Panel, 100% of the Indemnity will be paid to Mr. Bernard HOURS;
• if the Group’s CA is lower than the Median CA of the Panel, no Indemnity will be paid to Mr. Bernard HOURS.
In accordance with the amendment to Mr. Bernard HOURS’ employment contract and the terms of the Dutch Statutory Director Contract,
it is recalled that the same performance conditions and payment conditions will apply to the portion of the Indemnity for Termination of
the Employment Contract corresponding to the length of service acquired in respect of the office of Deputy General Manager, and to the
Indemnity pursuant to the Dutch Statutory Director Contract and that the sum of all amounts due in respect of the Indemnity, the Indem-
nity pursuant to the Dutch Statutory Director Contract and the Indemnity for Termination of the Employment Contract shall not exceed
an amount equal to twice the gross annual compensation (including both fixed and variable compensation) paid to Mr. Bernard HOURS
by the Group during the twelve months preceding the date on which his duties ceased.
Upon each renewal of Mr. Bernard HOURS’ term of office as Deputy General Manager, these performance conditions as well as, where
relevant, the composition of the Panel, will be reviewed by the Board of Directors and, where appropriate, amended to take into account
any changes to your company and its business sectors.
It is recalled that, where relevant, such modifications will apply under the same conditions to the portion of the Indemnity for Termination
of the Employment Contract corresponding to the length of office acquired in respect of the office of Deputy General Manager and to the
Indemnity pursuant to the Dutch Statutory Director Contract.
(iv) Payment of the Indemnity to Mr. Bernard HOURS
The amount of the Indemnity determined according to the above rules will be paid to Mr. Bernard HOURS within 30 days following the date of
the Board of Directors’ meeting which will decide whether the performance conditions governing payment of the Indemnity have been met.
It is also recalled that, in accordance with Mr. Bernard HOURS’ employment contract, amended by authorization of the Board of Directors
on February 10, 2010, the performance conditions applicable to the portion of the Indemnity for Termination of the Employment Contract
corresponding to the seniority acquired in respect of his term of office will be automatically modified by the approval of this commitment.
Implementation of the mechanism upon the termination of Mr. Bernard HOURS’ term of office as Deputy General Manager
In keeping with changes in the Group’s strategy, on September 2, 2014, the Board of Directors (excluding Mr. Bernard HOURS who abstained
from voting), on the recommendation of the Nomination and Compensation Committee, decided to separate the offices of Chairman of the
Board of Directors and Chief Executive Officer and terminate Mr. Bernard HOURS’ term of office as Deputy General Manager.
Accordingly, on October 17, 2014, the Board of Directors, on the recommendation of the Nomination and Compensation Committee:
• noted, based on a financial expert’s report, that the Group’s CA was 5.60% over the Reference Period (fiscal years 2009 to 2013) and was
higher than the Median CA of the Panel, i.e. 4.25%, over this same period and that the performance condition had therefore been met; and
• authorized the payment of the Indemnity by your company to Mr. Bernard HOURS in respect of his duties as Deputy General Manager,
which totaled €321,720 It should be noted that the Indemnity for Termination of the Employment Contract (provided under your com-
pany’s collective agreement and applicable to all Company employees) paid by your company to Mr. Bernard HOURS totaled €1,787,920
(see section 2.1.1.4. above), and that no indemnity was paid pursuant to the Dutch Statutory Director Contract. The total amount paid 6
to Mr. Bernard HOURS for termination of his duties was therefore €2,109,640. Therefore, in accordance with the AFEP-MEDEF Code,
the total sums received by Mr. Bernard HOURS for termination of his term of office did not exceed twice the annual gross compen-
sation (including fixed and variable compensation) received by Mr. Bernard HOURS during the twelve months preceding the date of
termination of his duties.

Anik CHAUMARTIN Philippe VOGT Gilles COHEN Pierre-Henri PAGNON

Share capital
and share
ownership
7
7.1 Company’s share capital
Share capital as of February 28, 2015
318
318
7.5 Dividends paid
by the Company 326
Changes in share capital in the last five fiscal years 318 Dividend pay-out policy 326
Dividends paid in respect of the three previous

fiscal years 327
7.2 Treasury shares and DANONE
call options held by the Dividends forfeited to the State 327
Company and its subsidiaries 319

Authorization granted to the Company to repurchase
7.6 Voting rights, crossing
its own shares 319 of thresholds 327
Authorization to cancel shares and reduce the share Voting rights 327
capital following the purchase by the Company
of its own shares 319 Crossing of thresholds 329
DANONE call options held by the Company 320
Liquidity contract 321

7.7 Share ownership structure
as of December 31, 2014
Transactions on Company shares in 2014 and situation
as of December 31, 2014 321 and significant changes over
Shares and DANONE call options held by the Group
the last three fiscal years 330
as of February 28, 2015 (by type of objective) 322 Share ownership structure as of December 31, 2014 330
Significant changes in Company’s share ownership

7.3 Authorization to issue over the last three fiscal years 331
securities that give access Survey of the Company’s identifiable bearer
to the share capital 322 shareholders332
Existing authorizations to issue ordinary shares Employee profit-sharing 333

and securities giving access to the Company’s share
capital as of December 31, 2014 322
7.8 Market for the Company’s
Financial authorizations proposed to the vote
of the Shareholders’ Meeting 325 shares333 7
Changes in share capital and in the rights associated Listing markets and indices 333
with the shares 325
Stock price and trading volumes (Euronext Paris) 334
7.4 Financial instruments 7.9 Factors that might have

not representing capital 326 an impact in the event
Powers of the Board of Directors 326 of a public tender offer 334
Delegation of powers to the General Management 326
Bonds outstanding as of December 31, 2014 326 7.10 Change of control 336

Share capital and share ownership
Company’s share capital
7.1 Company’s share capital

Share capital as of February 28, 2015
As of February 28, 2015, the Company’s share capital amounted to €160,948,000. It was divided into 643,792,000 fully paid in shares of
the same class with a nominal value of €0.25 per share. Each share gives a right to ownership of a proportion of the Company’s assets,
profits and liquidation surplus, based on the percentage of share capital that it represents.
Changes in share capital in the last five fiscal years

Company’s share capital in the last five fiscal years
As of December 31
2010 2011 2012 2013 2014
Capital
Share capital (in €) 161,980,460 160,561,643 160,790,500 157,757,000 160,948,000

Number of issued shares 647,921,840 642,246,573 643,162,000 631,028,000 643,792,000
Transactions on the share capital in the last five fiscal years

Shares created/ Shares making up
Effective date of the (cancelled) by the Nominal amount Amount of capital the share capital
transaction transaction Transaction type of the transaction after the transaction after the transaction
(in number of
(in number of shares) (in €) (in €) shares)
Capital increase reserved

for employee members of
May 6, 2010 930,990 a company savings plan 232,747.50 161,980,460.00 647,921,840

Capital decrease by
December 13, 2011 (6,614,427) cancellation of shares (1,653,606.75) 160,561,643.25 642,246,573

Capital decrease by
February 18, 2013 (8,800,000) cancellation of shares (2,200,000.00) 158,590,500.00 634,362,000

Capital decrease by
July 26, 2013 (4,252,000) cancellation of shares (1,063,000.00) 157,757,000.00 631,028,000
Capital increase for

payment of the dividend
June 3, 2014 11,932,014 in shares 2,983,003.50 160,740,003.50 642,960,014

June 5, 2014 831,986 a company savings plan 207,996.50 160,948,000.00 643,792,000

Treasury shares and DANONE call options held by the Company and its subsidiaries
7.2 Treasury shares and DANONE call options held

by the Company and its subsidiaries
This section is a description of the share repurchase program in accordance with Articles 241-1 et seq. of the general regulations of the
French Financial Markets Authority.
Authorization granted to the Company to repurchase its own shares

The Board of Directors may purchase the Company’s shares, subject • the implementation of any plan for the allocation of shares sub-
to limits and conditions set forth by law, and in particular subject ject to performance conditions to employees and/or corporate
to authorization by the Shareholders’ Meeting. officers of the Company and of companies or economic interest
groups related to it pursuant to applicable legal and regulatory
Existing authorization provisions;
The Shareholders’ Meeting of April 29, 2014 therefore authorized the • the sale of shares to employees (either directly or through an
Board of Directors, for an 18-month period, to repurchase an amount employee savings mutual fund) within the context of employee
of the Company’s shares representing a maximum of 10% of the share shareholding plans or company savings plans;
capital of the Company at a maximum purchase price of €65 per
share. This authorization cancelled and replaced the authorization
• the delivery of shares upon the exercise of rights attached to
securities giving access to the Company’s share capital;
previously granted by the Shareholders’ Meeting of April 25, 2013.
This authorization was used during fiscal year 2014 (see section
• the later delivery of shares as payment or for exchange in the
context of external growth transactions;
Transactions on Company shares in 2014 and situation as of December 31,
2014 hereafter). • the cancellation of shares within the maximum legal limit; and
Authorization subject to approval by the • supporting the market for the shares pursuant to a liquidity
contract concluded with an investment service provider in accor-
Shareholders’ Meeting dance with the Ethical Charter recognized by the French Financial
Markets Authority.
In addition, the Board of Directors will submit to the Shareholders’
Meeting to be held on April 29, 2015, a new authorization valid for Share repurchases may, within the limits permitted by the regulations
18 months, which will supersede, as from the date of its adoption, in force, be carried out, in whole or in part, as the case may be, by
the authorization granted by the Shareholders’ Meeting of April 29, acquisition, sale, exchange or transfer, on one or more occasions,
2014, to repurchase an amount of the Company’s shares represen- by any means on any stock markets, including multilateral trading
ting a maximum of 10% of the share capital of the Company (i.e., facilities (MTF), through a systematic internalizer or over-the-coun-
for indicative purposes only, 64,379,200 shares as of February 28, ter, including by acquisition or disposal of blocks of shares (without
2015, representing a maximum potential purchase amount (exclu- limiting the portion of the share repurchase program that may be
ding acquisition costs) of approximately €4.5 billion) at a maximum completed this way). These means include the use of any financial
purchase price of €70 per share. contract or financial instrument (including in particular any future
or any option), except the sale of put options, in compliance with
Subject to approval of the authorization by the Shareholders’ Mee-
the conditions set out by applicable regulations.
ting of April 29, 2015, the purchase of the Company’s shares may
be executed for the purposes of: These transactions may be carried out during an 18-month period
beginning April 29, 2015 (with the exception of periods of public
• the allocation of shares with respect to the exercise of stock-op- tender offer on the Company’s shares) within the limits allowed by
tions by employees and/or corporate officers of the Company and
the applicable regulations.
of companies or economic interest groups related to it pursuant
to applicable legal and regulatory provisions;
Authorization to cancel shares and reduce the share capital following

the purchase by the Company of its own shares
Existing authorization Authorization subject to approval 7
The Shareholders’ Meeting of April 25, 2013 granted an authorization by the Shareholders’ Meeting
to the Board of Directors for 24 months to cancel shares acquired in
The Board of Directors will submit to the Shareholders’ Meeting to
the context of a share repurchase program subject to a limit of 10%
be held on April 29, 2015, a new authorization valid for 24 months
of the existing share capital as of the day of the Meeting.
(which will supersede, as from the date of its adoption, the autho-
This authorization was not used during fiscal year 2014. On July 26, rization previously granted by the Shareholders’ Meeting of April
2013, the Board of Directors, using this authorization, cancelled 25, 2013) to reduce the share capital by the cancellation, on one or
4,252,000 Company shares representing approximately 0.7% of more occasions, subject to a limit (per 24-month period) of 10%
the share capital. of the share capital as of the date of the Meeting, of some or all of
the shares the Company holds or could acquire under the terms
of share repurchase programs authorized by the Shareholders’
Meeting (see section above).

DANONE call options held by the Company

Purchase of DANONE call options by the Company in 2011
On October 25, 2011, within its share repurchase program, the these stock-options by the acquisition of DANONE call options, as
Company acquired DANONE call options to hedge part of the a substitute for the treasury shares held.
stock-options granted to certain of its employees and corporate
A total of 6.6 million DANONE call options representing around 1.02%
officers and still in force, as a substitute for their existing hedge by
of the share capital were thus acquired from a financial institution.
treasury shares held.
The Company’s intention is to exercise these call options at any time
Prior to this date, in order to satisfy its legal obligations, the Company until the expiry of the last stock-option plans still in force (i.e. until
held treasury shares specifically allocated to hedge these stock- October 2017), in order to comply with its commitments to deliver
option plans. These treasury shares were earmarked for gradual shares to stock-option beneficiaries.
release into circulation on the market as and when beneficiaries
The 6.6 million treasury shares held until then to hedge the stock-
exercised stock-options until the expiry of the plans still in force,
options concerned were reallocated with a view to their cancellation
i.e. until October 2017. In order to limit the dilutive effect of the exer-
and were subsequently cancelled on December 13, 2011.
cise of these options, in 2011 the Company decided to hedge part of
DANONE call options held by the Company as of December 31, 2014

As of As of
(number of shares) December 31, 2013 Purchases Matured options Options exercised December 31, 2014
DANONE call options held

by the Company
Number of call options 2,021,415 − − (1,022,794) 998,621
Percentage of the Company’s

share capital as of December 31 0.3% 0.2%
Open positions in equity derivatives on the Company’s shares as of December 31, 2014
Open positions in equity derivatives on the Company’s shares as of December 31, 2014
Open long positions Open short positions
Call options purchased Forward purchases Call options sold Forward sales
Number of shares 998,621 − − −

Weighted maximum average maturity 04/23/2017 N/A N/A N/A
Weighted average exercise price (in €) 35.07 N/A N/A N/A
Additional information on open positions on DANONE call options held by the Company as of December 31, 2014
Board of Directors' meeting authorizing the hedged
stock-option plans (a) 10/21/2008 04/23/2009 10/20/2009
DANONE call options hedging stock-option plans 14,436 969,491 14,694
Expiry date of DANONE call options hedging stock-option plans 10/20/2016 04/22/2017 10/19/2017
Exercise price of DANONE call options hedging stock-option

plans (in € per share) 43.71 34.85 40.90
(a) Stock-option plans granted to certain employees and corporate officers are detailed in section 6.3 Compensation and benefits for corporate officers and
governance bodies.

Liquidity contract
On January 17, 2014 and for a period of one year with tacit renewal, Meeting of April 25, 2013 for a period of 18 months and renewed by
the Company concluded, with an investment service provider, the Shareholders’ Meeting of April 29, 2014.
Rothschild & Cie Banque, a liquidity contract, in accordance with the
In order for this liquidity contract to be implemented, the Company
Ethical Charter drawn up by the Association Française des Marchés
allocated 120,000 DANONE shares and €0.
Financiers (AMAFI) and recognized by the French Financial Markets
Authority, with a view to supporting the market for DANONE shares As of December 31, 2014, the liquidity account contained the following
on Euronext Paris. resources: 0 DANONE share and €6,168,649.
This liquidity contract was implemented in connection with the
share repurchase program authorization given by the Shareholders’
Transactions on Company shares in 2014 and situation as of December 31, 2014

Transactions on Company treasury shares during fiscal year 2014 presented by type of Company objective were as follows:
Movement during the period

Delivery
of shares Delivery
Exer- following of Group
As of cise of exercises perfor- As of
December DANONE Sales/ Realloca- Cancel- of stock- mance December
(number of shares) 31, 2013 Purchases calls Transfers tions lations options shares 31, 2014
External growth
transactions 31,117,762 − − (120,000) (228,402) − − − 30,769,360
Liquidity contract − 676,134 − (796,134) 120,000 − − − −
Hedging of stock-options and

Group performance shares 7,710,647 − 1,022 794 − 228,402 − (1,292,981) (504,927) 7,163,935
Share cancellations − − − − − − − − −
Treasury shares 38,828,409 676,134 1,022,794 (916,134) 120,000 − (1,292,981) (504,927) 37,933,295
Shares held by Danone Spain 5,780,005 − − − − − − − 5,780,005
Total shares held

by the Group 44,608,414 676,134 1,022,794 (916,134) 120,000 − (1,292,981) (504,927) 43,713,300
The average price of DANONE shares repurchased during fiscal year year 2014 under the terms of the liquidity contract was €52.54 per
2014 was €52.77 per share for shares repurchased under the terms share. Transaction expenses during this period totaled €0.3 million.
of the liquidity contract and €35.07 per share (exercise price of call
As of December 31, 2014, the Company held 37,933,295 treasury
options, excluding premium paid in 2011 on the acquisition of call
shares, which represented 5.9% of its share capital (nominal value
options, see section Purchase of DANONE call options by the Company
of €9,483,323.75) and a gross purchase value of €1,867 million.
above) for shares purchased through the exercise of DANONE call
options. The average price of DANONE shares sold during fiscal

Authorization to issue securities that give access to the share capital
Shares and DANONE call options held by the Group as of February 28, 2015
(by type of objective)
(number of shares) As of February 28, 2015
External growth transactions 30,769,360
Liquidity contract –
Hedging of stock-options and Group performance shares 5,369,927
Cancellation –
Shares held by the Company 36,139,287
Shares held by Danone Spain 5,780,005

Total shares held by the Group 41,919,292
Call options held by the Company (a) 742,410

Total shares held by the Group (including through call options) 42,661,702
(a) Each call option giving the right to subscribe for one DANONE share.
Based on the closing price of the Company’s share on February 28, 2015 (i.e. 62.33 per share), the market value of the Company’s shares
held as of that date by the Group (excluding call options) amounted to €2,613 million. A 10% increase or decrease of the Company’s share
price would result in a €261 million increase or decrease, respectively, in the market value of the Company’s shares held by the Group.
7.3 Authorization to issue securities that give access

to the share capital
Existing authorizations to issue ordinary shares and securities giving access
to the Company’s share capital as of December 31, 2014
The Shareholders’ Meeting regularly grants to the Board of Directors authorizations to increase the share capital of the Company through
the issuance of ordinary shares or securities giving access to the Company’s share capital.
Summary of financial authorizations valid as of December 31, 2014

The existing authorizations for the issuance of ordinary shares The Shareholders’ Meeting of April 29, 2015 will be asked to renew
and securities giving access to the share capital, with or without all these authorizations (see section Financial authorizations subject
preferential subscription right, valid as of December 31, 2014, are to approval by the Shareholders’ Meeting hereafter).
provided in the following table.
Except for the authorization to grant Group performance shares, all
such authorizations were approved by the Shareholders’ Meeting
of April 25, 2013 for a period of 26 months until June 25, 2015. The
authorization to grant Group performance shares was approved
by the Shareholders’ Meeting of April 29, 2014 and expired on
December 31, 2014.

Individual Balance available

Authorized maximum maximum amounts as of December 31,
common amounts of capital Authorization type authorized Use in 2014 2014
(nominal amount or (nominal amount or
(nominal amount) percentage of capital) (nominal amount) percentage of capital)
Maximum amount Capital increase €55.3 million _ €55.3 million

applicable to with preferential (approximately
non-dilutive subscription right 34.4% (a)
issuances: €55.3 of shareholders of capital) (b)
million (approxi-
mately 34.4% (a)
of capital)
Capital increase
without preferential €23.6 million
subscription (approximately
_ €23.6 million
right but with 14.7% (a)
Maximum priority period of capital) (b)
common for shareholders
amount
Overallotment
applicable
(as a % of initial 15% (b) (c) _ _
to all Maximum issuance)
dilutive and amount
non-dilutive applicable €15.7 million
issuances: to dilutive Public exchange
(approximately
€55.3 million issuances: offer initiated by _ €15.7 million
9.8% (a)
(approximately the Company
of capital) (b)
34.4% (a) €23.6 million
of capital) (approximately Contributions
14.7% (a) of 10% of capital _ 10% of the capital
in kind
capital)
Capital increase
€3.1 million
reserved for
(approximately
employees and/or €207,996.50 €2.9 million (d)
1.9%(a)
managers of the
of capital)
Group
0.2% of capital as 778,371 shares

Grants of Group
of the closure of granted (f) i.e. 0.08% (g)
performance
the Shareholders’ (approximately of the capital
shares (GPS) (e)
Meeting 0,12% (g) of capital
_ _
Incorporation of €40.7 million
reserves, ear- (approximately
_ €40.7 million
nings, premiums 25.3% (a)
or other sums of capital)
(a) This percentage is calculated for indicative purposes only, on the basis of the share capital as of December 31, 2014.
(b) A ll issuances of securities representing debts giving access to the Company’s share capital liable to be performed pursuant to these authorizations:
(i) capital increase with preferential subscription right, (ii) capital increase without preferential subscription right but with priority period for shareholders,
(iii) over-allotment option, and (iv) public tender offer initiated by the Company, shall not exceed a ceiling representing a principal amount of €2 billion
(or the counter-value of this amount if issued in a foreign currency or unit of account set by reference to several currencies).
(c) For capital increases without preferential subscription right (but with priority period for shareholders) resulting from cash subscriptions, the Board
of Directors may increase the number of securities to be issued within the limit of 15% of the initial issues and at the same price. This over-allotment
option shall not have the effect of increasing the ceiling under this authorization (€23.6 million in capital and €2 billion for debt securities giving access
to the Company’s share capital).
(d) T he nominal amount of the new capital increase reserved for the Group’s employees, decided by the Board of Directors at its meeting of February 19,
2015 and to be completed in June 2015, will be deducted from this amount. 7
(e) This financial authorization expired on December 31, 2014 and accordingly can no longer give rise to grants of Group performance shares.
( f ) S ee section 6.3 Compensation and benefits for corporate officers and governance bodies with respect to the review of the achievement of the performance
conditions related to these grants.
(g) This percentage is calculated on the basis of the share capital noted at the end of the Shareholders’ Meeting of April 29, 2014.
Lastly, it is noted that in addition to these issuance authorizations, the Shareholders’ Meeting has authorized the Board of Directors to
cancel shares repurchased by the Company. This authorization was not used by the Board of Directors during fiscal year 2014 (see section
Authorization to cancel shares and reduce the share capital following the purchase by the Company of its own shares above).

Group performance share plans (GPS) Employee shareholding

During fiscal year 2014, the Board of Directors used the authorization Capital increase reserved for employees carried
granted by the Shareholders’ Meeting to grant Group performance out in 2014
shares (GPS).
The Shareholders’ Meeting of April 25, 2013 authorized the Board
The granting of GPS during fiscal year 2014, the various GPS plans of Directors, for a period of 26 months, to carry out share capital
in force as of December 31, 2014, the impact of outstanding plans increases reserved for employees who are members of a Company
in terms of dilution/ownership of the Company’s share capital, Savings Plan (Plan d’Épargne Entreprise – PEE), within the limit of a
the performance conditions applicable to said GPS plans and the nominal amount of €3.1 million.
review of the achievement of performance conditions by the Board
of Directors are described in section 6.3 Compensation and benefits Pursuant to this authorization, the Company carried out in June
for corporate officers and governance bodies. 2014 a share capital increase reserved for Group employees who
are members of a Company Savings Plan (through a transition fund
Stock purchase option plans later merged into the “Fonds Danone” company investment fund)
for a nominal amount of €207,996.50, representing the issuance
(stock-options) of 831,986 new shares, or approximately 0.13% of the Company’s
Pursuant to a decision of the Shareholders’ Meeting of April 22, share capital.
2010, the Group no longer grants stock purchase options and/or Capital increase reserved for employees underway
stock subscription options. Indeed, it was decided that the autho-
rization to grant Group performance shares cancelled, for the Pursuant to the authorization of the Shareholders’ Meeting of April
portion not yet used by such date, the authorization granted by the 25, 2013, the Board of Directors of February 19, 2015 decided to carry
Shareholders’ Meeting of April 23, 2009, to allocate stock purchase out a share capital increase reserved for Group employees who are
options (stock-options) and/or stock subscription options. The last members of a Company Savings Plan for a maximum subscription
outstanding stock-option plans implemented by the Company will amount of €80 million, representing a maximum of 1,698,153 new
expire in October 2017. shares (or 0.3% of the Company’s share capital) based on a discounted
DANONE share price of €47.11. The actual amount subscribed will
The various stock-option plans still outstanding as of December 31, be disclosed in June 2015.
2014, their main terms and the impact of outstanding plans in terms
of dilution/ownership of the Company’s share capital are described
in section 6.3 Compensation and benefits for corporate officers and
governance bodies.

Financial authorizations proposed to the vote of the Shareholders’ Meeting

The Shareholders’ Meeting of April 29, 2015 will be asked to renew the issuance authorizations in respect of ordinary shares and securities,
with or without preferential subscription right, in accordance with the conditions set out in the table hereafter:
Authorized maximum
Ordinary shares
(nominal amount
Authorization date Expiry date of the issue) Debt securities
Non-dilutive issuances €56.3 million

(with preferential subscription April 29, 2015 (approximately 35% (a)
right of shareholders) (26 months) June 29, 2017 of capital)
€16 million (b)
(approximately 10%(a)
of capital), forming
Dilutive issuances (without part of the maximum Common
preferential subscription right amount of €56.3 million maximum
of shareholders, but with obligation April 29, 2015 of the above amount of
to grant a priority period) (26 months) June 29, 2017 non-dilutive issuances €2 billion
€16 million
(approximately 10% (a)
of capital) forming
part of the maximum
amount of €16 million
Dilutive issuance (public exchange April 29, 2015 common to the above
offer initiated by the Company) (26 months) June 29, 2017 dilutive issuances
10% of capital forming

part of the maximum
amount of €16 million
Dilutive issuance (contributions April 29, 2015 common to the above
in kind granted by the Company) (26 months) June 29, 2017 dilutive issuances –
€40.2 million
Capital increase by incorporation April 29, 2015 (approximately 25% (a)
of reserves, earnings or premiums (26 months) June 29, 2017 of capital) –
€3.2 million
(approximately 2% (a)
of capital) forming
Capital increase reserved for part of the maximum
members of a Company Savings amount of €16 million
Plan and/or reserved sales April 29, 2015 of the above dilutive
of securities (26 months) June 29, 2017 issuances –
0.2% of capital as
of the closure of the
Shareholders’ Meeting,
forming part of the
maximum amount of
€16 million common
Grants of Group April 29, 2015 to the above dilutive
performance shares (GPS) (26 months) December 31, 2015 issuances – 7
(a) This percentage is calculated for indicative purposes only, on the basis of the share capital as of February 28, 2015.
(b) In the case of dilutive issuances resulting from subscriptions in cash, the Board of Directors may increase the number of securities to be issued within
the limit of 15% of the initial issue and at the same price. This over-allotment option shall not have the effect of increasing the ceiling under this
authorization.
These draft resolutions are presented in sections 8.2 Draft resolutions presented at the Shareholders’ Meeting and 8.3 Comments on the
resolutions of the Shareholders’ Meeting.
Changes in share capital and in the rights associated with the shares
Any changes in the share capital or the rights attached to the securities comprising the share capital are subject to applicable legal
provisions, as the by-laws do not contain any specific provisions related thereto.

Financial instruments not representing capital
7.4 Financial instruments not representing capital

Powers of the Board of Directors
At the Combined Shareholders’ Meeting of April 23, 2009, it was to the Shareholders’ Meeting), in order to recognize the Board of
decided to delete Article 27.l.9 of the Company’s by-laws (which Directors’ authority in principle in this area, pursuant to the first
reserved the authority to decide on or authorize bond issuances paragraph of Article L. 228-40 of the French commercial code.
Delegation of powers to the General Management

At its meeting of October 17, 2014, the Board of Directors decided ted debt securities or complex securities (whether fixed-term or
to renew, for a period of one year, the authorization granted to the perpetual) or any other type of negotiable debt instrument for up to
General Management to issue, in France or abroad (including, in a maximum outstanding principal amount at any time of €10 billion
particular, in the United States of America by means of private (or the equivalent amount in any other currency or unit of account).
placements to institutional investors), ordinary bonds, subordina-
Bonds outstanding as of December 31, 2014

As of December 31, 2014, the total outstanding principal amount on red into on November 16, 2009 by the Company and its subsidiary
bonds issued by the Company was €6,690 million (amount recorded Danone Finance (which has been since dissolved), the Company was
in the consolidated financial statements, see Note 10.3 of the Notes substituted for Danone Finance in its debt securities issued under its
to the consolidated financial statements). EMTN (Euro Medium Term Note) program. The last debt securities
issued by Danone Finance (which the Company has replaced) and
The Company is the sole issuer of the Group’s bonds. In particular,
still outstanding will reach maturity in June 2016.
it is noted that in accordance with a substitution agreement ente-
7.5 Dividends paid by the Company

Dividend pay-out policy
and not reimbursed, it being specified that if in a given fiscal year
Rules set out by law and the Company’s earnings are not sufficient to make this payment, the shortfall may
by-laws be paid by deduction from the earnings of subsequent fiscal years.
In accordance with law, the following is withheld from earnings Any remaining balance is available for allocation by the annual Sha-
(from which, if applicable, past losses have already been deducted): reholders’ Meeting, in accordance with a proposal by the Board of
(i) at least 5% for the creation of the legal reserve, a deduction that Directors, to shares as dividends or, in full or in part, to any reserve
will cease to be mandatory when the legal reserve has reached accounts or to retained earnings.
one-tenth of the share capital, but that will be reinstituted if, for
The reserves available to the Shareholders’ Meeting can be used, if it
any reason whatsoever, the legal reserve falls below this amount,
so decides, to pay a dividend. In this case, the decision will expressly
and (ii) any sums to be allocated to reserves in accordance with law.
indicate those accounts to which the dividend will be charged.
The balance, to which are added retained earnings, represents the
distributable earnings.
Group’s pay-out policy
Under the terms of the by-laws, the amount necessary to consti-
The dividend pay-out policy, defined by the Board of Directors, is
tute a first dividend payment to shareholders is deducted from the
based on an analysis that notably takes into account the history of
distributable earnings: this amount corresponds to interest of 6%
dividend payments, the financial situation and the profits of the Group,
per annum on the amount of their shares that has been paid up
as well as the pay-out practices applicable in the Group’s sector.

Voting rights, crossing of thresholds
Dividends paid in respect of the three previous fiscal years

A dividend of €1.50 per share will be proposed at the Shareholders’ Furthermore, the Shareholders’ Meeting of April 29, 2015 will propose
Meeting of April 29, 2015 in respect of shares for which the dividend to offer each shareholder the possibility to opt for the payment in
entitlement date is January 1, 2014. If this dividend is approved, it new shares of the Company of the full dividend to which the shares
will be detached from the share on May 7, 2015 and will be payable owned give an entitlement (see section 8.3 Comments on the reso-
as from June 3, 2015. lutions of the Shareholders’ Meeting).
The following dividends were paid for the three fiscal years prior to the 2014 fiscal year:
Dividend per share Dividend approved Dividend paid (b)
Dividend relating to fiscal year (a) (in € per share) (in € millions) (in € millions)
2011 1.39 893 843
2012 1.45 933 858
2013 1.45 915 299 (c)
(a) Paid in the following year.
(b) Treasury shares held directly by the Company (i.e. approximately 5.9% of the share capital as of December 31, 2014) do not carry the right to receive a
dividend. By contrast, the Company’s shares held by its subsidiary Danone Spain (i.e. approximately 0.9% of the share capital as of December 31, 2014)
carry the right to receive a dividend.
(c) T he Shareholders’ Meeting of April 29, 2014 approved the proposed dividend in respect of fiscal year 2013 and decided that each shareholder could
choose to receive payment of the dividend in cash or in DANONE shares. Shareholders owning 65.23% of the voting rights voted to receive payment of
the dividend in shares, which resulted, in June 2014, in the issuance by the Company of 11,932,014 new shares (i.e. approximately 1.89% of the share
capital). The amount of the dividend paid in cash corresponded to the dividend paid to those shareholders who did not opt for payment in shares (see
Dividends forfeited to the French State

In accordance with law, dividends that have not been claimed within a five-year period are prescribed and revert to the French State.
7.6 Voting rights, crossing of thresholds

Voting rights
Double voting rights capacity of agent, the limit set above may be exceeded by taking
into account only the extra voting rights resulting therefrom. In
The Extraordinar y Shareholders’ Meeting of October 18, 1935 such a case, the total voting rights that he or she represents shall
decided to grant double voting rights, in accordance with law and not exceed 12% of the total number of voting rights attached to
in relation to the portion of the Company’s share capital that they the Company’s shares.
represent, to all fully paid up shares for which evidence is provided
that they have been registered in the name of the same shareholder In accordance with Article 26 II of the Company’s by-laws, this
for at least two years, as well as – in the event of a share capital limitation applies as follows:
increase through capitalization of reserves, earnings or additional • the total number of voting rights taken into account is calculated
paid-in capital – to registered shares granted free of charge to a as of the date of the Shareholders’ Meeting and is brought to the
shareholder in consideration of existing shares in respect of which attention of shareholders at the opening of the Shareholders’
he enjoys said rights. Meeting;
Double voting rights cease in the event of a transfer or conversion • the number of voting rights held directly and indirectly refers
into bearer shares, unless otherwise provided for by law. A merger particularly to those attached to shares held personally by a
with another company shall not affect double voting rights, which shareholder, shares held by a corporation he or she controls
can be exercised within the absorbing company if its by-laws have within the meaning of Article L. 233-3 of the French commercial
instituted this procedure. code and shares assimilated with shares held, as defined by the
provisions of Articles L. 233-7 et seq. of the French commercial
code; and 7
Limitation on voting rights
• in respect of voting rights used by the Chairman of the Sharehol-
at Shareholders’ Meeting ders’ Meeting, those attached to shares for which a proxy form
Principle of limitations on voting rights has been returned to the Company without naming a proxy and
which, individually, do not violate the applicable limitations, are
The Extraordinary Shareholders’ Meeting of September 30, 1992
not taken into account.
decided that at Shareholders’ Meetings no shareholder may cast
more than 6% of the total number of voting rights attached to the This limitation of voting rights in the Shareholders’ Meeting was
Company’s shares in his or her own right or through proxy (mandataire), implemented by the Company at the Shareholders’ Meeting of
in respect of single voting rights attached to shares which he or April 29, 2014, in respect of the MFS group (see section 7.7 Share
she holds directly and indirectly and of powers which have been ownership structure as of December 31, 2014 and significant changes
granted to him or her. Nevertheless, if, additionally, he or she over the last three fiscal years for more information on the interest
enjoys double voting rights in a personal capacity and/or in the held by the MFS group in the Company’s share capital).

Exceptions to limitations on voting rights In 2007, the Shareholders’ Meeting rejected a resolution aimed at
removing this clause limiting voting rights at Meeting.
In accordance with Article 26 II of the Company’s by-laws, the afore-
mentioned limitations shall become null and void if any individual In 2010, following discussions with its shareholders, the Board
or corporate entity, acting alone or in concert with one or more considered it would be appropriate to amend the terms of this voting
individuals or corporate entities, were to come into possession of rights limitation mechanism in order to introduce the automatic
at least two-thirds of the total shares of the Company as a result suspension of the limitation process for any Shareholders’ Meeting
of a public tender offer for all the Company’s shares. The Board at which a sufficiently high quorum is achieved. Indeed, whereas
of Directors shall formally acknowledge that the limitations have this limitation appears appropriate and justified in the event of a low
become null and void and shall complete the corresponding modi- quorum, it appears superfluous in the event of a high quorum, since
fications to the by-laws. such a quorum would ensure all shareholders could express their
opinion without the risk of distortion. For this reason, this limitation
In addition, in accordance with the general regulations of the French
is suspended, in respect of any Meeting at which the number of
Financial Markets Authority, the effects of the limitations provided
shares whose shareholders are present or represented reaches
for in the preceding sections shall be suspended at the first Share-
or exceeds 75% of the total number of shares with voting rights.
holders’ Meeting following the close of a public tender offer if the
bidder, acting alone or in concert, were to come into possession of In the event that a shareholder acquires a significant non-control-
more than two-thirds of the total shares or total voting rights of the ling interest in the Company’s share capital, the quorum should
company concerned. automatically increase and would facilitate the suspension of
the clause, whilst ensuring that said shareholder was not able to
Lastly, following adoption of the 16th resolution by the Shareholders’
influence proceedings at the Shareholders’ Meeting in a manner
Meeting of April 22, 2010, the aforementioned limitations shall be
disproportionate to his or her shareholding.
suspended for a Shareholders’ Meeting if the number of shares
present or represented at such meeting reaches or exceeds 75% The quorum achieved at the Shareholders’ Meeting of April 29,
of the total number of shares carrying voting rights. In such event, 2014 was 52.2%.
the Chairman of the Board of Directors (or any other person who is
presiding over the meeting in his absence) shall formally acknowledge Procedures for exercising voting rights
the suspension of said limitation when the Shareholders’ Meeting
Any shareholder, regardless of the number of shares he/she holds,
is opened.
may attend the Shareholders’ Meeting, subject to proof of identity
Reasons for the limitation of voting rights and share ownership.
for shareholders Shareholders may choose between one of the three following
The Board of Directors has, on several occasions, reviewed this clause participation options:
limiting voting rights at Shareholders’ Meetings and, following dis- • attend the Meeting in person by requesting an admission card;
cussions with its shareholders, has concluded that this voting rights
limitation is in the interest of all the Company’s shareholders. Thus: • give a proxy to the Chairman of the Shareholders’ Meeting or
any other natural or legal person of their choice; or
• this limitation prevents shareholders from influencing corporate
decisions in a manner that would be disproportionate to the actual • vote by correspondence.
size of their shareholding, particularly in the event of a low quo- In accordance with Article R. 225-85 of the French commercial
rum or when a simple majority is sufficient for the adoption of a code, the right to attend the Shareholders’ Meeting requires the
corporate decision (with a quorum for Shareholders’ Meetings registration of the securities in the name of the shareholder or of
of 50%, 25% of the votes could be sufficient to adopt or reject a the authorized intermediary acting on his/her behalf (pursuant to
corporate decision); the seventh paragraph of Article L. 228-1 of the French commercial
• it also prevents shareholders taking control of the Company “by code), on the second business day preceding the Meeting, either
stealth”, i.e. without being obliged to launch a public tender offer in the Company’s registry of registered shares or in the registry
and therefore enables existing shareholders to dispose of their of bearer securities maintained by the authorized intermediary.
shareholdings in the Company under satisfactory conditions. In accordance with Article R. 225-85 of the French commercial code,
Therefore, the clause limiting voting rights enables this situation the registration of securities in the registry of bearer securities
to be avoided by requiring a shareholder wishing to take control maintained by the authorized intermediary shall be established
of the Company to launch a public tender offer on all the Com- by a certificate of participation issued by the intermediary (as the
pany’s shares. In this regard, this provision provides protection case may be, by electronic means under the conditions set forth
for all the shareholders and guarantees them the best valuation in Article R. 225-61 of the French commercial code), and attached
for their shares; to the correspondence voting form, the proxy voting form or of
• this clause of the by-laws does not under any circumstances the request for an admission card completed in the name of the
constitute an obstacle to a public tender offer on the Company, shareholder or on behalf of the shareholder represented by the
since the clause becomes automatically null and void in the event registered intermediary.
that one or more shareholders acting in concert would come to Shareholders may appoint any individual or legal entity of their choice
own more than two-thirds of the Company’s share capital or as a proxy holder to be represented at a Shareholders’ Meeting.
voting rights; and Proxies, as well as any proxy revocations, must be evidenced in
• the validity of clauses limiting voting rights has been recognized writing and notified to the Company or to its authorized represen-
by the French commercial code and these limitation clauses are tative (BNP Paribas Securities Services). Proxies may be revoked in
used by several CAC 40 companies. the same forms as those required for the designation of the proxy
holder, including by electronic means if need be. The owners of
shares that are properly registered in the name of an intermediary
under the conditions provided for in Article L. 228-1 of the French
commercial code may be represented by a registered intermediary
under the conditions provided for in said Article.

The Company’s by-laws allow for shareholders to participate in

Shareholders’ Meetings through electronic means, and a website
Crossing of thresholds
will be specially configured for the Shareholders’ Meeting of April In addition to the legal obligation to inform the Company and the
29, 2015, enabling shareholders to vote online before the Meeting. French Financial Markets Authority in the event of a crossing, in
The electronic signature of the proxy or mail-in voting forms may either direction, of any of the following thresholds: 5%, 10%, 15%,
be carried out using a procedure consistent with the terms defined 20%, 25%, 30%, one-third, 50%, two-thirds, 90% or 95% of the
in Articles R. 225-79 (for proxies) and R. 225-77 (for votes by cor- Company’s share capital or voting rights, within four trading days
respondence) of the French commercial code. of crossing such shareholding threshold (Article L. 233-7 of the
French commercial code), any individual or entity that comes to
Holders of bearer shares may also use the online VOTACCESS acquire or ceases to hold in any manner whatsoever, within the
platform for the Shareholders’ Meeting of April 29, 2015 (as was meaning of Articles L. 233-7 et seq. of the French commercial
already the case for the Shareholders’ Meeting of April 29, 2014). code, a fraction equivalent to 0.5% of the voting rights or a multiple
This facility has been available, since the Shareholders’ Meeting of thereof must, within five trading days of crossing such threshold,
April 25, 2013, to all shareholders for whom the account-holding notify the Company of the total number of shares or securities giving
institution has adhered to the VOTACCESS system and, since the future access to the capital and the total number of voting rights
Shareholders’ Meeting of April 29, 2014, to all holders of a minimum that said individual or entity holds alone, or indirectly, or in concert,
of one bearer share. This platform allows holders of bearer shares by registered mail with return receipt to the Company’s registered
to send their voting instructions electronically, request an admission office. If the threshold is crossed as a result of a purchase or sale
card and appoints or revokes a proxy, before the Shareholders’ on the market, the period of five trading days begins as from the
Meeting is held. date of trade and not the date of delivery.
Finally, the Board of Directors may decide that any vote cast during In the event of failure to comply with this notification requirement,
a Shareholders’ Meeting may be expressed by videoconference or upon the request of any holder or holders of 5% or more of the
by any telecommunication mean enabling the shareholder to be voting rights, the voting rights in excess of the fraction that should
identified, in accordance with the terms set forth in the applicable have been declared may not be exercised or delegated by the non-
legislation and regulations. complying shareholder at any Shareholders’ Meeting held during
a period of two years as from the date on which the shareholder
makes the corrective notification.

Share ownership structure as of December 31, 2014 and significant changes over the last three fiscal years
7.7 Share ownership structure as of December 31, 2014

and significant changes over the last three fiscal years
Share ownership structure as of December 31, 2014
It should be noted that double voting rights are granted to all fully paid-up shares held in registered form in the name of the same sha-
reholder for at least two years (see section 7.6 Voting rights, crossing of thresholds).
The following table provides details (on the basis of the declarations of crossing statutory thresholds received by the Company) on the
shareholders having declared that they own more than 1.5% of the Company’s voting rights as of December 31, 2014:
Number
Number of of gross voting % of gross Number of net % of net voting
Shareholders shares held % of capital rights voting rights (a) voting rights rights (b)
MFS Group (c) 80,984,423 12.6% 64,886,476 9.6% 64,886,476 10.3 %(d)
Sofina & Henex group 13,957,819 2.2% 27,542,360 4.1% 27,542,360 4.4%
Harris Associates L.P. 19,551,538 3.0% 19,551,538 2.9% 19,551,538 3.1%
Amundi Asset Management 13,574,413 2.1% 13,574,413 2.0% 13,574,413 2.1%
First Eagle Investment

Management (e) 12,681,299 2.0% 12,339,645 1.8% 12,339,645 2.0%
CDC group 10,557,910 1.6% 10,557,910 1.6% 10,557,910 1.7%
Norges Bank 9,665,010 1.5% 9,665,010 1.4% 9,665,010 1.5%
Natixis Asset Management (e) 12,363,241 1.9% 6,981,958 1.0% 6,981,958 1.1%
Employee shareholding –
“Fonds Danone” company
investment fund 8,429,898 1.3% 16,311,908 2.4% 16,311,908 2.6%
Treasury shares – the Company 37,933,295 5.9% 37,933,295 5.6% − −
Treasury shares – Danone

Spain subsidiary 5,780,005 0.9% 5,780,005 0.9% − −
Others 418,313,149 65.0% 450,171,847 66.7% 450,171,847 71.3%
Total 643,792,000 100.0% 675,296,365 100.0% 631,583,065 100.0%
(a) T he percentage of gross voting rights is calculated taking into account the shares held by the Company and its subsidiaries, which are stripped of
voting rights.
(b) The number of net voting rights (or voting rights “exercisable in a Shareholders' Meeting") is calculated excluding shares stripped of voting rights.
(c) S ee section Significant changes in Company’s share ownership structure over the last three fiscal years hereafter for details on MFS group's positions.
(d) T he voting rights of MFS group were capped at 6% at the Shareholders’ Meeting of April 29, 2014 in accordance with Article 26 II of the by-laws of the
Company (see section 7.6 Voting Rights, crossing of thresholds above for details on limitations on voting rights in Shareholders’ Meetings).
(e) F irst Eagle Investment Management and Natixis Asset Management indicated to the Company that the number of voting rights (gross and net) it held in
the Company is less than the number of shares that it holds, as certain of its customers retain the voting right attached to the shares managed by them.
As of December 31, 2014, the total number of the Company’s share register (nominatif pur) and in registered form on the books
shares held by the 15 members of the Board of Directors and the 8 of a financial intermediary (nominatif administré) and pledged was
members of the Executive Committee (including 1 Director), i.e. a not material.
total of 22 persons, was 549,188 shares, representing 0.09% of the
To the Company’s knowledge, on the basis of threshold crossing
Company’s share capital.
statements made to the French Financial Markets Authority, no
There is no clause in the Company’s by-laws giving preferential shareholder other than the MFS group had a stake of more than 5% in
rights for the acquisition or sale of Company shares. the Company’s share capital or voting rights as of December 31, 2014.
Lastly, as of December 31, 2014, the portion of the Company’s share
capital held by shareholders in registered form on the Company

Significant changes in Company’s share ownership over the last three fiscal years
The following table shows an analysis of share ownership and voting rights of the Company’s principal shareholders over the last three
fiscal years:

2014 2013 2012
% of net % of net % of net

Number of % of total voting Number of % of total voting Number of % of total voting
Shareholders shares shares rights (a) shares shares rights (a) shares shares right (a)
MFS group (b) 80,984,423 12.6% 10.3% 68,665,265 10.9% 8.7% 55,558,778 8.6% 6.6%
Eurazeo group (b) 94,227 0.01% 0.01% 94,227 0.01% 0.01% 16,433,370 2.6% 5.0%
Sofina & Henex

group 13,957,819 2.2% 4.4% 13,584,541 2.2% 4.0% 13,584,541 2.1% 3.9%
Harris Associates 19,551,538 3.0% 3.1% 14,426,983 2.3% 2.4% 3,187,384 0.5% 0.5%
Amundi Asset
Management 13,574,413 2.1% 2.1% 14,048,609 2.2% 2.3% 20,039,020 3.1% 3.1%
First Eagle
Investment
Management 12,681,299 2.0% 2.0% 0 − − 0 − −
CDC group 10,557,910 1.6% 1.7% 9,145,941 1.4% 1.5% 9,783,434 1.5% 1.5%
Norges Bank 9,665,010 1.5% 1.5% 10,761,115 1.7% 1.8% 15,048,614 2.3% 2.4%
Natixis Asset
Management 12,363,241 1.9% 1.1% 14,651,596 2.3% 1.5% 12,811,179 2.0% 2.0%
Employee share-
holding – “Fonds
Danone” company
investment fund 8,429,898 1.3% 2.6% 8,269,252 1.3% 2.6% 8,533,644 1.3% 2.6%
Treasury shares –
the Company 37,933,295 5.9% − 38,828,409 6.2% − 44,051,229 6.8% −
Treasury shares –
subsidiary Danone
Spain 5,780,005 0.9% − 5,780,005 0.9% − 5,780,005 0.9% −
Others 418,218,922 65.0% 71.3% 432,772,057 68.6% 75.2% 438,350,802 68.2% 72.3%
Total 643,792,000 100.0% 100.0% 631,028,000 100.0% 100.0% 643,162,000 100.0% 100.0%
(a) This percentage excludes shares held by the Company and its subsidiaries, which are stripped of voting rights.
(b) See hereafter for details on MFS group and Eurazeo groups' positions.
Interest held by Eurazeo group

On May 28, 2009, Eurazeo announced the launch of an issue of These bonds exchangeable for existing DANONE shares were
five-year bonds convertible into existing DANONE shares, in an scheduled to reach maturity on June 10, 2014. However, on April 26,
initial offering totaling €500 million, an amount increased to €700 2013, the Eurazeo group announced that, in view of the increase in
million as a result of the full exercise of the over-allotment option. the DANONE share price, it had received requests from bondhold-
ers to exchange 12.3 million bonds into DANONE shares and that
This issue was represented by 15.5 million convertible bonds at a
it planned to exercise its early redemption option on the bonds for
7
ratio of one DANONE share per bond issued (this parity having been
which no exchange request was received. In a statement issued on
subject to adjustments in the context of the share capital increase
August 28, 2013, the Eurazeo group said that it had ultimately kept
with preferential subscription right completed by the Company
94,227 DANONE shares (approximately 0.01% of the share capital)
in 2009). As part of this issue, 16.4 million DANONE shares were
following the transaction.
pledged by Eurazeo in favor of bearers of these convertible bonds.
As of December 31, 2014, the Eurazeo group held 0.01% of the share
Eurazeo’s entire equity stake in the Company, except for the 16.4
capital (corresponding to 94,227 shares) and 0.01% of the gross
million shares pledged as described above, was sold in 2009 and
voting rights of the Company.
2010. In this context, Eurazeo notified that it had fallen below the
5% legal threshold for voting rights on July 13, 2010, and that it held,
at such date, 2.71% of the Company’s share capital and 4.78% of its
voting rights (declaration no. 210C0641).

Interest held by the MFS group 10.1% of capital) for which MFS exercises voting rights and 16,097,947
shares (representing approximately 2.5% of capital) for which MFS
The Massachusetts Financial Services group (“MFS”) has gradually clients have retained voting rights.
increased its stake in the Company’s share capital to 12.6% as of
December 31, 2014. Other significant changes during
It is specified that until August 2012, the MFS group declared that the last three fiscal years
it recognized separately the DANONE securities held by the various
entities within its group. Prior to that date, two MFS group entities, In the course of 2013 and 2014, the company Harris Associates, an
MFS Investment Management and MFS Institutional Advisors, Inc., had American subsidiary of the Natixis group, increased its stake in the
made separate declarations of crossing thresholds to the Company. Company’s share capital up to 3.0% of the Company’s shares as of
December 31, 2014.
On August 13, 2012, Massachusetts Financial Services Company
indicated to the Company that it had, on August 8, 2012, in accordance In the course of 2014, the First Eagle group became a sharehol-
with the provisions of Article 223-12-II-1 of the general regulations of der in the Company and held 2.0% of the Company’s shares as of
the French Financial Markets Authority, abandoned its disaggregation December 31, 2014.
policy, which had aimed to recognize separately in two groups of No statement regarding the crossing of legal thresholds in respect
companies the stakes in the Company’s share capital owned. This of the share capital or voting rights of the Company was made by
decision has resulted, since August 8, 2012, in the aggregation at the French Financial Markets Authority in fiscal year 2014, with the
Massachusetts Financial Services Company level of all the DANONE exception of that of MFS described above.
shares held by the MFS group.
To the Company’s knowledge, no other significant changes in the
This decision also led the MFS group to declare the crossing of a Company’s shareholding structure have taken place during the
threshold to the French Financial Markets Authority on August 10, past three fiscal years.
2012. Abandoning the policy of disaggregation led the MFS group
to cross the legal thresholds of 5% of capital and voting rights Survey of the Company’s identifiable
(declaration no. 212C1042). bearer shareholders
In addition, on November 14, 2014, MFS declared to the French Under the terms of its by-laws and in accordance with law and regu-
Financial Markets Authority that it had increased its shareholding lations, the Company may, at any time, ask the entity responsible for
in Danone above the 10% threshold and as a result held 64,466,947 clearing shares (Euroclear France) for the name (or legal name),
DANONE shares representing the same number of voting rights, nationality, and address of the holders of shares or other securities
i.e. 10.01% of the share capital and 9.55% of the voting rights. On conferring immediate or future voting rights at its Shareholders’ Mee-
this occasion, MFS notably declared that it did not contemplate tings, along with the number of securities held by each of them and,
to acquire control of the Company and that it had no intention to if applicable, any restrictions placed upon such securities. Euroclear
request the appointment of a member of the Board of Directors (12 France obtains the information requested from account-holding cus-
(declaration no. 214C2390). todians affiliated to it, which are obliged to provide such information.
Finally, MFS indicated to the Company that the number of (gross and At the request of the Company, the above information may be limited
net) voting rights of the Company it holds, is less than the number to those individuals holding a number of securities as determined
of shares it owns, as certain of its clients retain the voting ability by the Company.
on the shares whose management is assigned to MFS. As such, on
December 31, 2014, MFS has informed the Company that it held The following table provides an analysis of the Company’s sharehol-
80,984,423 DANONE shares (approximately 12.6% of the share ders on the basis of the survey of identifiable bearer shareholders
capital), including 64,886,476 shares (representing approximately the Company conducted in August 2014:
In percentage of capital
Institutional investors 78%

France 12%
United Kingdom 8%
Switzerland 4%
Rest of Europe 12%
North America 36%
Asia Pacific 5%
Rest of the World 1%
Individual shareholders and “Fonds Danone” company investment fund 11%
Shares held by the Company and its subsidiaries 7%
Other 4%
Total 100%

Market for the Company’s shares
Employee profit-sharing
The Company performs each year a capital increase reserved for Only the supervisory board of the “Fonds Danone” company invest-
Group employees having subscribed to a Company Savings Plan ment fund is authorized to vote on behalf of the shares held by the
(see section Employee shareholding above). FCPE. As an exception to this principle, in accordance with the
decisions taken by the supervisory board, holders of shares in the
As of December 31, 2014, to the Company’s knowledge, the number
FCPE may be consulted directly by referendum in the event that
of the Company’s shares held directly or indirectly by employees of
the supervisory board has a split vote. The supervisory board is
the Company and of companies related to it, and, in particular, those
currently composed of (i) four employee members representing
that are subject to collective management or conditions prohibiting
the employee shareholders and former employees appointed by
their disposal, either within the framework of a French Company
the representatives of the various trade unions representing the
Savings Plan (Plan d’Épargne Entreprise) or through a French company
Company’s employees in accordance with the French labor code,
investment fund (Fonds Communs de Placement Entreprise – FCPE)
and of (ii) four members representing the Company and appointed
(the “Fonds Danone” company investment fund and the company
by the Group’s management.
investment funds of other Group subsidiaries), amounted to 8,579,457
shares, or 1.3% of the Company’s share capital.
7.8 Market for the Company’s shares

Listing markets and indices
Listing markets Indices
The Company’s shares are listed on Euronext Paris (Compartment The Company’s shares are included in the following indices:
A – Deferred Settlement Department; ISIN Code: FR 0000120644;
ticker “BN”) and also have a secondary listing on the Swiss Stock
• CAC 40, the principal index published by Euronext Paris; and
Exchange (SWX Suisse Exchange). • Eurostoxx 50, which lists the 50 largest market capitalizations
in the euro zone.
Between 1997 and 2007, the Company’s shares were also listed on
the New York Stock Exchange in the form of American Depositary The Company is also included in the main indices of social
Shares (ADS). Due to the low trading volume of these ADS on this responsibility:
market, in 2007 the Group decided to delist the shares from that
market and to deregister them with the Securities and Exchange
• Dow Jones Sustainability Index, Vigeo World 120 and Ethibel
Sustainability Index (ESI) Excellence Europe comprise the best-
Commission, pursuant to the U.S. Securities Exchange Act of 1934.
performing companies selected annually based on strict criteria
The Group nevertheless maintains a sponsored Level 1 program such as the quality of corporate governance, social responsibility
of American Depositary Receipts (ADR), which are traded over the policy, their criteria relating to innovation, and their economic
counter), through the OTCQX platform under the symbol DANOY performance; and
(each ADR representing one-fifth of a DANONE share). OTCQX is
an information platform representing over 300 international groups
• Carbon Disclosure Leadership Index (see section 5.2 Information
concerning the Group’s social, societal and environmental perfor-
and enabling them to access US investors while guaranteeing price
mances in compliance with the Grenelle II law).
transparency.

Factors that might have an impact in the event of a public tender offer
Stock price and trading volumes (Euronext Paris)

Number of shares dealt (a) Amount dealt (a) Stock price (a)
Monthly average
Total Daily average Total amount traded stock High Low
(in number (in number

of shares) of shares) (in € millions) (in € per share) (in € per share) (in € per share)
2014
January 41,821,865 1,900,994 2,131 51.102 53.310 48.330

February 36,884,694 1,844,235 1,858 50.408 52.460 48.500
March 42,350,690 2,016,700 2,139 50.464 52.780 49.040
April 36,014,803 1,800,740 1,890 52.438 54.610 50.610
May 36,673,561 1,746,360 1,962 53.684 55.600 50.520
June 35,612,994 1,695,857 1,927 54.098 55.720 52.530
July 39,994,808 1,738,905 2,221 55.386 57.440 53.810
August 31,336,633 1,492,221 1,677 53.463 54.560 52.560
September 36,372,941 1,653,316 1,949 53.711 55.460 51.570
October 55,265,319 2,402,840 2,836 51.272 54.460 49.835
November 30,830,811 1,541,541 1,686 54.742 56.800 53.160
December 35,652,941 1,697,759 1,947 54.908 57.000 51.500
2015
January 47,139,066 2,244,717 2,656 56.116 60.530 51.880

February 43,230,076 2,161,504 2,558 59.243 62.380 56.820
(a) Source Euronext Paris. Includes over-the counter transactions.
7.9 Factors that might have an impact in the event

of a public tender offer
In accordance with article L. 225-100-3 of the French commercial code, the factors that might have an impact in the event of a public
tender offer are set out hereafter:
(i) Structure of the Company’s share capital

Details of the structure of the Company’s share capital are provided in section 7.7 Share ownership structure as of December 31, 2014 and
significant changes over the last three fiscal years.
(ii) By-laws’ restrictions to the exercise of voting rights

The Company’s by-laws provide for a system of limitation of voting In the event of failure to comply with this notification requirement,
rights, described in section 7.6 Voting rights, crossing of thresholds. upon the request of any holder or holders of 5% or more of the
The Shareholders’ Meeting of April 22, 2010 has decided to include voting rights, the voting rights in excess of the fraction that should
a mechanism for suspending this limitation if the number of shares have been declared may not be exercised or delegated by the non-
present or represented at a Shareholders’ Meeting reaches or complying shareholder at any Shareholders’ Meeting held during
exceeds 75% of the total number of shares carrying voting rights. a period of two years as from the date on which the shareholder
makes the corrective notification.
In addition, the Company’s by-laws provide for a reporting obligation
for anyone who would hold or cease to hold a fraction equal to 0.5% On the date hereof, the Company is not aware of any clause of
of voting rights or a multiple thereof, beginning when one of the agreements providing for preferential terms of sale or acquisition
thresholds is crossed. This mechanism is described in section 7.6 concerning at least 0.5% of the capital or voting rights of the Company.
Voting rights, crossing of thresholds.

Factors that might have an impact in the event of a public tender offer
(iii) Direct or indirect holdings in the Company’s share capital of which the
Company is aware
Details of the Company’s shareholder structure are provided in section 7.7 Share ownership structure as of December 31, 2014 and significant
changes over the last three fiscal years.
(iv) Holders of securities providing special control rights over the Company
and description of such rights
None.
(v) Control mechanisms provided for any employee shareholding program,

when such control rights are not exercised by employees
Only the supervisory board of the “Fonds Danone” company in- this principle, holders of shares in the company investment fund
vestment fund (which on December 31, 2014 held 1.3% of the share may be consulted directly by referendum if the supervisory board
capital and 2.6% of the net voting rights) has the authority to decide were to have a split vote.
how to respond to a possible public tender offer. As an exception to
(vi) Agreements between shareholders of which the Company is aware

and that could impose restrictions on the transfer of shares and the exercise
of voting rights
To the Company’s knowledge, no agreement exists between shareholders that could impose restrictions on the transfer of the Company’s
shares and the exercise of voting rights.
(vii) Rules applicable to the appointment and replacement of members

of the Board of Directors or to amendments of the by-laws
With the exception of the rules, approved by the shareholders 6.1 Governance bodies), there are no specific rules applicable to the
at the Shareholders’ Meeting of April 29, 2014, concerning the appointment and replacement of members of the Board of Directors
appointment of the Directors representing employees (see section or to amendments of the by-laws.
(viii) Powers of the Board of Directors in the event of a public tender offer
Pursuant to the resolution approved by shareholders at the April authorizations in respect of shares and securities with or without
29, 2014 Shareholders’ Meeting, the Board of Directors is prohibited preferential subscription right, will be asked to provide that the Board
from implementing the Company share repurchase program during of Directors may not decide on such issuances (other than capital
a public tender offer involving the Company’s shares. The Sharehol- increases reserved for employees and managers and grants of Group
ders’ Meeting of April 29, 2015 will be asked to renew this prohibition. performance shares) during periods when the Company’s shares
are the subject of a public tender offer (see section 8.3 Comments
In addition, following the amendment of Article L.233-32 of the
on the resolutions of the Shareholders’ Meetings).
French commercial code by law no. 2014-384 of March 29, 2014
aimed at recapturing the real economy (the “Florange law”), the
Shareholders’ Meeting of April 29, 2015 called to renew the issuance

Change of control
(ix) Agreements signed by the Company that are amended or terminated

in the event of the change of control of the Company
• The Group granted put options to minority shareholders of its • The stock-option plans, as well as Group performance units
subsidiaries, relating to their shares and which may be exercised (GPU) and Group performance shares (GPS) plans, that were
during a public tender offer. The amount of such options is set put in place by the Company for the benefit of certain employees
out in Notes 3.4 and 3.5 of the Notes to the consolidated financial and its corporate officers (mandataires sociaux), include specific
statements. provisions in the event of a change of control of the Company
resulting from a public tender offer on the Company’s securities,
• In 2005, the Company and the Arcor group signed an agreement described in section 6.3 Compensation and benefits for corporate
governing relations between the Group and Arcor within the joint
officers and governance bodies.
venture named Bagley Latino America, a leader in biscuits in
Latin America, in which the Company holds a 49% equity interest. • The Group’s syndicated facilities agreement includes a change of
In the event of a change of control of the Company, the Arcor control clause, which offers the lending banks an early redemption
group will have the right to have the Company repurchase all of right in the event of a change of control of the Company, if it is
its interest held in Bagley Latino America, for an amount equal accompanied by a downgrade of its rating by the rating agencies
to its fair value. to “sub-investment grade”. This syndicated facilities agreement,
with a principal amount of €2 billion, has a term of five years
• Under the terms of contracts regarding the use of mineral as from its renewal on December 18, 2014, with options for an
springs, in particular Volvic and Evian in France, the Group has
extension for a further two years with the Banks’ agreement.
very old and privileged relations with local municipalities in
which these springs are located. It is difficult for the Company • The Group’s EMTN program, the Company’s bond issue in the US
to assess with certainty the impact on these contracts of any in June 2012 and certain bank credit lines also include a similar
change in its control. feature in the event of a change of control of the Company (see
(x) Agreements providing for indemnities to be paid to employees and corporate

officers of the Company in the event that they resign, or their employment
is terminated in the absence of a real and serious cause, or if their employment
expires due to a public tender offer
The indemnities that would be paid to the Company’s corporate in section 6.3 Compensation and benefits for corporate officers and
officers (mandataires sociaux) in certain circumstances are described governance bodies.
7.10 Change of control

To the Company’s knowledge, no agreement exists which, if implemented, could, at a future date, lead to a change of control of the Company.


Combined
Shareholders’
Meeting
of April 29, 2015
8
8.1 Participation
in Shareholders’ Meetings 340
8.4 Special reports of
the Statutory auditors
to the Shareholders’ Meeting 381
8.2 Draft resolutions presented Extraordinary Shareholders’ Meeting of April 29, 2015
at the Shareholders’ Meeting 340 (20 th, 21st, 22nd, 23rd and 24th resolutions) 381
Resolutions within the authority of the Ordinary Extraordinary Shareholders’ Meeting of April 29, 2015
Shareholders’ Meeting 340 (26th resolution) 383
Resolutions within the authority of the Extraordinary Combined Shareholders’ Meeting of April 29, 2015
Shareholders’ Meeting 344 (27th resolution) 384
Extraordinary Shareholders’ Meeting of April 29, 2015

(28 th resolution) 385
8.3 Comments on the resolutions
of the Shareholders’ Meeting 351
Approval of the statutory and consolidated financial
statements for fiscal year 2014 (1st and 2nd resolutions) 351
Allocation of earnings (3rd and 4th resolutions) 351
Composition of the Board of Directors

(5th to 10 th resolutions) 352
Approval of agreements and commitments

referred to in the Statutory auditors’ special report
(11th and 12 th resolutions) 355
Advisory opinion on the components of compensation

of corporate officers (13th to 17th resolutions) 357
Fixing of the amount of Directors’ attendance fees

(18 th resolution)370
Acquisition by the Company of its own shares

Financial authorizations (20 th to 27th resolutions) 372
Authorization to reduce the share capital

by canceling shares (28 th resolution) 380

Combined Shareholders’ Meeting of April 29, 2015
Participation in Shareholders’ Meetings
8.1 Participation in Shareholders’ Meetings

The Board of Directors convenes Shareholders’ Meetings in accor- by any legal representative so entitled or by an individual specially
dance with French law. empowered for said purpose.
Meetings shall be held in the town in which the registered office Participation in Shareholders’ Meetings by any means shall be
is located or in any other locality, depending on the decision made contingent on the registration or recording of stock ownership,
in such regard by the person calling the meeting, and at the venue according to the terms and within the time-limits stipulated by the
specified in the notice of meeting. regulations in force.
All shareholders may participate to Shareholders’ Meetings, At the Shareholders’ Meeting of April 23, 2009, the Company’s by-
regardless of the number of shares held, subject to the loss of rights laws were amended (i) to facilitate the implementation of electronic
incurred under any applicable laws or regulations. voting for the vote prior to Shareholders’ Meetings and (ii) to allow
the Board of Directors to decide that votes during the Sharehol-
When properly convened and constituted, the Shareholders’ Meeting
ders’ Meeting may be cast by videoconference or any other means
represents all the shareholders. Its resolutions are binding on all,
of telecommunication by which shareholders may be identified in
even dissenting, incompetent, or absent shareholders.
accordance with regulatory conditions.
Any shareholder may be represented by his or her spouse, by another
Upon decision of the Board of Directors, the shareholders can follow
shareholder or by any other individual or legal entity of his or her
the Shareholders’ Meeting in real time or in replay during one year
choice, by virtue of a proxy statement which form is determined by
on the Group’s website.
the Board of Directors.
Danone also publishes on its website a report on the Sharehol-
Minors and incompetent persons shall be represented by their
ders’ Meeting, including in particular the main presentations to
legal guardians and trustees, who do not need to be shareholders
shareholders.
themselves. A corporate entity shall be legitimately represented
8.2 Draft resolutions presented at the Shareholders’

Meeting
Resolutions within the authority of the Ordinary Shareholders’ Meeting
First resolution Third resolution
(Approval of the statutory financial statements (Allocation of earnings for the fiscal year ended
for the fiscal year ended December 31, 2014) December 31, 2014 and setting of the dividend
The Shareholders’ Meeting, acting under the conditions of quorum at €1.50 per share)
and majority required for ordinary shareholders’ meetings, having The Shareholders’ Meeting, acting under the conditions of quorum
reviewed the reports of the Board of Directors and of the Statutory and majority required for ordinary shareholders’ meetings, having
auditors, approves the statutory financial statements of the Com- reviewed the reports of the Board of Directors and of the Statutory
pany for the fiscal year ended December 31, 2014, which include the auditors:
balance sheet, the income statement and the notes, as presented,
which show earnings amounting to €541,271,933.84, as well as the • acknowledges that the earnings for fiscal year 2014 amount to
transactions reflected therein and summarized in these reports. €541,271,933.84;
• acknowledges that retained earnings amount to €3,124,805,677.01;
Second resolution
totaling earnings available for allocation of profits of €3,666,077,610.85;
(Approval of the consolidated financial statements • decides to allocate the total earnings as follows:
for the fiscal year ended December 31, 2014)
• to dividends in the amount of €965,688,000;
The Shareholders’ Meeting, acting under the conditions of quorum
and majority required for ordinary shareholders’ meetings, having • to retained earnings in the amount of €2,700,389,610.85.
reviewed the reports of the Board of Directors and of the Statu-
The Shareholders’ Meeting therefore decides the payment of a
tory auditors, approves the consolidated financial statements of
dividend of €1.50 per share.
the Company for the fiscal year ended December 31, 2014, which
include the balance sheet, the income statement and the notes, When paid to individuals domiciled in France for tax purposes, the
as presented, as well as the transactions reflected therein and dividend is fully eligible for the 40% deduction provided for in Article
summarized in these reports. 158-3.2° of the French tax code.
The ex-dividend date is May 7, 2015 and the dividend will be payable
on June 3, 2015.
In accordance with the provisions of Article L.225-210 of the French
commercial code, the Shareholders’ Meeting decides that the amount
of the dividend corresponding to the shares held by the Company on
the payment date will be allocated to the “retained earnings” account.

Draft resolutions presented at the Shareholders’ Meeting
As a reminder, the dividends distributed for the three previous fiscal years were as follows:
Dividend distributed per share (a)

Fiscal year Number of shares (in €)
2011 642,246,573 1.39
2012 643,162,000 1.45
2013 631,028,000 1.45 (b)
(a) Dividend fully eligible for the 40% deduction provided for in Article 158-3.2° of the French tax code.
(b) The Shareholders’ Meeting of April 29, 2014 has offered each shareholder the option for the payment of the dividend either in cash or in shares.
Fourth resolution Fifth resolution

(Option for the payment of the dividend in shares) (Renewal of the term of office of
The Shareholders’ Meeting, acting under the conditions of quorum Mr. Jacques-Antoine GRANJON as Director)
and majority required for ordinary shareholders’ meetings, having The Shareholders’ Meeting, acting under the conditions of quorum
reviewed the Board of Directors’ report and noted that the Com- and majority required for ordinary shareholders’ meetings, having
pany’s share capital has been fully paid up, decides, in accordance reviewed the Board of Directors’ report, renews the term of office of
with the provisions of Articles L.232-18 et seq. of the French com- Mr. Jacques-Antoine GRANJON as Director for the three-year period
mercial code and Articles 27.I and 34.I of the Company’s by-laws, set forth in the by-laws. Mr. Jacques-Antoine GRANJON’s term of
to offer each shareholder the possibility to opt for the payment in office will expire at the end of the Ordinary Shareholders’ Meeting
new shares of the Company of the full dividend to which the shares convened to approve the financial statements for the fiscal year 2017.
owned give an entitlement.
The new shares will bear rights as from January 1, 2015 and will be Sixth resolution
entirely fungible with the Company’s other shares. (Renewal of the term of office of Mr. Jean LAURENT
The issuance price of these new shares is set at 90% of the average as Director in accordance with Article 15-II of the
of the opening Company share prices on Euronext over the twenty Company’s by-laws)
trading days preceding the date of this Shareholders’ Meeting less
the amount of the dividend. This issuance price will be rounded up
and majority required for ordinary shareholders’ meetings, in accor-
to the next euro cent.
dance with the provisions of Article 15-II of the Company’s by-laws,
If the amount of the dividends to which the shareholder is entitled having reviewed the Board of Directors’ report, renews the term of
does not correspond to a whole number of shares, the shareholder office of Mr. Jean LAURENT as Director for the three-year period
will obtain the number of shares immediately below, and a balancing set forth in the by-laws. Mr. Jean LAURENT’s term of office will
payment in cash. expire at the end of the Ordinary Shareholders’ Meeting convened
to approve the financial statements for the fiscal year 2017.
The option for the payment of the dividend in shares can be exercised
between May 7, 2015 and May 21, 2015 by requesting authorized
financial intermediaries or, for shareholders registered in registered
Seventh resolution
share accounts of the Company, to its agent (BNP Paribas Securi- (Renewal of the term of office of Mr. Benoît POTIER
ties Services, Service Opérations sur Titres – Les Grands Moulins
as Director)
de Pantin, 9, rue du Débarcadère – 93761 Pantin Cedex). Failure to
exercise this option within this period will result in the full amount The Shareholders’ Meeting, acting under the conditions of quorum
of the dividend owed to the shareholder being paid in cash on the and majority required for ordinary shareholders’ meetings, having
date of payment of the dividend, i.e. on June 3, 2015. reviewed the Board of Directors’ report, renews the term of office
of Mr. Benoît POTIER as Director for the three-year period set forth
The Shareholders’ Meeting grants full powers to the Board of Direc- in the by-laws. Mr. Benoît POTIER’s term of office will expire at the
tors, with the ability to sub-delegate in accordance with the conditions end of the Ordinary Shareholders’ Meeting convened to approve the
set out by law, to implement this resolution, within the conditions set financial statements for the fiscal year 2017.
forth above and within the limits authorized by applicable laws, and
regulations and in particular to carry out all transactions related or
consecutive to the exercise of the option, acknowledge the resulting
share capital increase, amend the Company’s by-laws accordingly,
and more generally, complete all formalities useful for the issuance,
listing and financial servicing of securities issued as a result of this
resolution and take all useful and necessary steps in accordance
with applicable laws and regulations.

Eighth resolution Twelfth resolution

(Renewal of the term of office of (Approval of the agreements and undertakings
Mrs. Mouna SEPEHRI as Director) referred to in Articles L.225-38 and L.225-42-1
The Shareholders’ Meeting, acting under the conditions of quorum of the French commercial code regarding
and majority required for ordinary shareholders’ meetings, having Mr. Emmanuel FABER)
reviewed the Board of Directors’ report, renews the term of office of The Shareholders’ Meeting, acting under the conditions of quorum
Mrs. Mouna SEPEHRI as Director for the three-year period set forth and majority required for ordinary shareholders’ meetings, having
in the by-laws. Mrs. Mouna SEPEHRI’s term of office will expire at reviewed the special report of the Statutory auditors concerning
the end of the Ordinary Shareholders’ Meeting convened to approve the agreements and undertakings referred to in Articles L.225-
the financial statements for the fiscal year 2017. 38 and L.225-42-1 of the French commercial code, approves the
agreements and undertakings covered by Articles L.225-38 and
Ninth resolution L.225-42-1 of the French commercial code entered into for the benefit
(Renewal of the term of office of of Mr. Emmanuel FABER and mentioned in this report.
Mrs. Virginia A. STALLINGS as Director) Thirteenth resolution
and majority required for ordinary shareholders’ meetings, having (Advisory opinion on the components
reviewed the Board of Directors’ report, renews the term of office of of compensation due or awarded for
Mrs. Virginia A. STALLINGS as Director for the three-year period set the fiscal year ended December 31, 2014
forth in the by-laws. Mrs. Virginia A. STALLINGS’ term of office will
expire at the end of the Ordinary Shareholders’ Meeting convened
to Mr. Franck RIBOUD, Chairman and Chief
to approve the financial statements for the fiscal year 2017. Executive Officer until September 30, 2014)
The Shareholders’ Meeting, consulted pursuant to the AFEP-MEDEF
Tenth resolution corporate governance code for listed companies, acting under the
conditions of quorum and majority required for ordinary shareholders’
(Appointment of Mrs. Serpil TIMURAY as Director) meetings, issues a favorable opinion on the components of compen-
The Shareholders’ Meeting, acting under the conditions of quorum sation due or awarded for the fiscal year ended December 31, 2014
and majority required for ordinary shareholders’ meetings, having to Mr. Franck RIBOUD, Chairman and Chief Executive Officer until
reviewed the Board of Directors’ report, appoints Mrs. Serpil TIMU- September 30, 2014, as presented in the Board of Directors’ report.
RAY as Director for the three-year period set forth in the by-laws.
Mrs. Serpil TIMURAY’s term of office will expire at the end of the Fourteenth resolution
Ordinary Shareholders’ Meeting convened to approve the financial
statements for the fiscal year 2017. (Advisory opinion on the components
of compensation due or awarded for
Eleventh resolution the fiscal year ended December 31, 2014
(Approval of the agreements referred to in to Mr. Franck RIBOUD, Chairman of the
Articles L. 225-38 et seq. of the French Board of Directors as from October 1, 2014)
commercial code entered into by the Company The Shareholders’ Meeting, consulted pursuant to the AFEP-MEDEF
corporate governance code for listed companies, acting under the
with the J.P. Morgan group) conditions of quorum and majority required for ordinary sharehol-
The Shareholders’ Meeting, acting under the conditions of quorum ders’ meetings, issues a favorable opinion on the components of
and majority required for ordinary shareholders’ meetings, having compensation due or awarded for the fiscal year ended December 31,
reviewed the special report of the Statutory auditors concerning the 2014, to Mr. Franck RIBOUD, Chairman of the Board of Directors as
agreements and undertakings referred to in Articles L.225-38 et from October 1, 2014, as presented in the Board of Directors’ report.
seq. of the French commercial code, approves the new agreements
authorized by the Board of Directors during the fiscal year ended Fifteenth resolution
on December 31, 2014 and entered into with the J.P. Morgan group
mentioned in this report. (Advisory opinion on the components
of compensation due or awarded for the
fiscal year ended December 31, 2014
to Mr. Emmanuel FABER, Deputy General
Manager until September 30, 2014)
conditions of quorum and majority required for ordinary sharehol-
ders’ meetings, issues a favorable opinion on the components of
compensation due or awarded for the fiscal year ended December
31, 2014 to Mr. Emmanuel FABER, Deputy General Manager until
September 30, 2014, as presented in the Board of Directors’ report.

Sixteenth resolution • the implementation of any plan for the allocation of shares subject
to performance conditions to employees and/or corporate officers
(Advisory opinion on the components of compen- of the Company and of companies or economic interest groups
sation due or awarded for the fiscal year ended related to it pursuant to applicable legal and regulatory provisions;
December 31, 2014 to Mr. Emmanuel FABER, Chief • the sale of shares to employees (either directly or through em-
Executive Officer as from October 1, 2014) ployee savings mutual funds) within the context of employee
shareholding plans or company savings plans;
corporate governance code for listed companies, acting under the • the delivery of shares upon the exercise of rights attached to
conditions of quorum and majority required for ordinary sharehol- securities giving access to the Company’s share capital;
31, 2014 to Mr. Emmanuel FABER, Chief Executive Officer as from
October 1, 2014, as presented in the Board of Directors’ report. • the cancelation of shares within the maximum legal limit;
Seventeenth resolution • supporting the market for the shares pursuant to a liquidity
contract concluded with an investment service provider in accor-
(Advisory opinion on the components of compen- dance with the Ethical Charter recognized by the French Financial
sation due or awarded for the fiscal year ended Markets Authority.
December 31, 2014 to Mr. Bernard HOURS, Deputy Within the limits permitted by applicable regulations, the shares
General Manager until September 2, 2014) may be acquired, sold, exchanged or transferred, in whole or in part
as the case may be, on one or more occasions, by any means on any
stock markets, including multilateral trading facilities (MTF) or via a
systematic internalizer or over the counter, including by acquisition or
conditions of quorum and majority required for ordinary sharehol-
disposal of blocks of shares (without limiting the portion of the share
repurchase program that may be completed this way). These means
include the use of any financial contract or instrument (including in
31, 2014 to Mr. Bernard HOURS, Deputy General Manager until
particular any future or any option) except the sale of put options,
September 2, 2014, as presented in the Board of Directors’ report.
in the conditions set out by applicable regulations.
Eighteenth resolution 2. Decides that these transactions may be completed at any time,
except during the period of a public tender offer on the Company’s
(Fixing of the amount of the Directors’ attendance shares, and within the limits allowed by applicable regulations.
fees)
3. Decides that the maximum purchase price may not exceed €70
The Shareholders’ Meeting, acting under the conditions of quo- per share (excluding acquisition costs).
rum and majority required for ordinary shareholders’ meetings,
having reviewed the Board of Directors’ report, sets, as from the In the event of a capital increase by incorporation of premiums,
2015 fiscal year, at €1 million the maximum annual amount to be reserves or earnings through free allocations of shares or in the
paid to the Board of Directors in attendance fees and thus until the event of a stock split or a reverse stock split or any other transaction
Shareholders’ Meeting decides otherwise. relating to the share capital, the price indicated above will be adjusted
by a multiplying factor equal to the ratio between the number of
Nineteenth resolution shares comprising the share capital before the transaction and the
number of shares comprising the share capital after the transaction.
(Authorization granted to the Board of Directors to
4. Acknowledges that the maximum number of shares that may be
purchase, retain or transfer the Company’s shares) purchased under this authorization may not, at any time, exceed
The Shareholders’ Meeting, acting under the conditions of quorum 10% of the total number of shares comprising the share capital
and majority required for ordinary shareholders’ meetings, having (i.e., on an indicative basis, 64,379,200 shares as of February 28,
reviewed the Board of Directors’ report and the description of the 2015, without taking into account the shares already held by the
program established in accordance with Articles 241-1 et seq. of Company, representing a maximum theoretical purchase amount
the general regulations of the French Financial Markets Authority: (excluding acquisition costs) of €4,506,544,000), it being specified
that (i) this limit applies to an amount of the Company’s capital
1. Authorizes the Board of Directors to purchase, retain or transfer
that will be, if necessary, adjusted to take into account the tran-
the Company’s shares, on one or more occasions, within the
sactions affecting the share capital following this Meeting and (ii)
context of a share repurchase program, pursuant to the pro-
in accordance with Article L.225-209 of the French commercial
visions of Articles L.225-209 et seq. of the French commercial
code, when shares are repurchased to enhance liquidity under
code and European Regulation 2273/2003 of December 22, 2003
the conditions set out in the general regulations of the French
implementing European Directive 2003/6/EC of January 28, 2003.
Financial Markets Authority, the number of shares taken into
The Company may repurchase its own shares for any of the fol- account for the calculation of the above-mentioned 10% limit
lowing purposes: corresponds to the number of shares purchased, minus the
• the allocation of shares with respect to the exercise of stock number of shares resold during the authorization. The acquisi-
tions made by the Company may not under any circumstances
purchase options by employees and/or corporate officers of the
Company and of companies or economic interest groups related
result in the Company holding more than 10% of its share capital, 8
either directly or indirectly through subsidiaries.
to it pursuant to applicable legal and regulatory provisions;

Furthermore, the number of shares acquired by the Company to be Authority or any other authority regarding the transactions
retained and later delivered for payment or exchange in the context carried out pursuant to this resolution;
of an acquisition may not exceed 5% of its share capital.
• define the terms and conditions under which, where applicable,
5. Delegates full powers to the Board of Directors to implement the rights of holders of securities giving access to the Company’s
this authorization, with the ability to sub-delegate in accordance share capital will be preserved in accordance with regulatory
with the conditions set out by law, to: provisions; and
• place all orders on any market or carry out any transaction over • carry out all other formalities and, generally, take any necessary
the counter; measures.
• enter into any agreements for, among other purposes, the main- The Board of Directors will inform the Shareholders’ Meeting of the
tenance of the share purchase and sale registries; transactions carried out pursuant to this resolution.
• allocate or re-allocate the shares acquired to the various objec- This authorization is granted for an 18-month period as from the
tives under the applicable legal and regulatory conditions; date of this Meeting and supersedes with effect from this day the
authorization granted by the Shareholders’ Meeting of April 29, 2014
• prepare all documents, file all declarations, issue all statements in its 18 th resolution.
and carry out all formalities with the French Financial Markets
Resolutions within the authority of the Extraordinary Shareholders’ Meeting

Twentieth resolution b) All issuances of debt securities carried out pursuant to this
delegation shall not exceed a maximum principal amount of €2 bil-
(Delegation of authority to the Board lion (or the corresponding value of this amount for an issuance in
of Directors to issue ordinary shares a foreign currency or monetary unit determined by reference to
and securities, with preferential subscription several currencies); this limit is a common limit applicable to all
issuances of debt securities, which may be carried out pursuant
right of the shareholders) to the delegations granted in the 21st , 22 nd and 23 rd resolutions
The Shareholders’ Meeting, acting under the conditions of quorum submitted to this Meeting.
and majority required for extraordinary shareholders’ meetings,
having reviewed the Board of Directors’ report and the special report In calculating the limit set forth in paragraph (b) above, the corres-
of the Statutory auditors and acknowledged that the share capital ponding value in euros of the nominal value of debt securities issued
is fully paid up, and acting in accordance with Articles L. 225-129 in foreign currencies shall be determined on the date of the issuance.
to L. 225-129-6, L. 228-91 and L. 228-92 of the French commer- Shareholders may exercise, in accordance with the provisions
cial code, delegates to the Board of Directors, with the ability to provided for by law, their preferential subscription right by irrevo-
sub-delegate in accordance with the conditions set out by law, the cable entitlement (à titre irréductible). The Board of Directors may
authority to decide on the issuance of, on one or more occasions, furthermore grant to shareholders a preferential subscription
in the proportions and periods that it deems appropriate, except right subject to pro rata reduction (à titre réductible), in proportion
during the period of a public tender offer on the Company’s shares, to their subscription rights and, in any case, limited to the number
in France and abroad, either in euros or any foreign currency, and of securities requested.
with preferential subscription right of the shareholders, (i) ordinary
shares of the Company and/or (ii) securities which are equity secu- According to Article L.225-134 of the French commercial code, if
rities of the Company giving access by any means, immediately and/ the amount of subscriptions exercised by irrevocable entitlement
or in the future, to other equity securities of the Company and/or to and, if applicable, subject to pro rata reduction, does not attain the
an allotment of debt securities, and/or (iii) debt securities giving or amount of the entire issuance, the Board of Directors may use, at
entitling access by any means, immediately and/or in the future, to its option and in the order it finds most appropriate, one or more
equity securities of the Company to be issued. of the following options:
The Shareholders’ Meeting decides that any issuance of preferred • limit the issuance to the amount of subscriptions received,
shares and securities giving a right to preferred shares is expressly provided this amounts to at least three quarters of the approved
excluded. issuance;
a) The maximum nominal amount of the increase in the Company’s • allocate at its discretion all or part of the unsubscribed secu-
share capital resulting from all issuances realized either immedia- rities; and
tely and/or in the future pursuant to this delegation is fixed at an • offer to the public, on the French or international market, all or
amount of €56.3 million, it being specified that the nominal amount part of the unsubscribed securities.
of ordinary shares issued under the 21st, 22nd, 23rd, 24th, 26th and 27th
resolutions of this Meeting will be applied to this maximum amount. The Shareholders’ Meeting acknowledges that this delegation
entails ipso jure the waiver by the shareholders of their preferential
It is noted that the limit indicated in paragraph (a) above is determined subscription right to the Company’s ordinary shares, to which the
without having taken into account the nominal value of the ordinary securities that would be issued on the basis of this delegation would
shares of the Company to be issued, if applicable, pursuant to the give right, for the benefit of the holders of securities giving access to
adjustments made in order to protect the interests of the holders the Company’s share capital and issued pursuant to this delegation.
of rights attached to securities giving access to the Company’s
share capital, in accordance with applicable legal and regulatory
requirements and contractual provisions. To this end, the Sharehol-
ders’ Meeting authorizes the Board of Directors, when necessary,
to increase the share capital proportionately.

The Board of Directors will have the necessary powers, with the ability
to sub-delegate in accordance with the conditions set out by law, to
Twenty-first resolution
carry out this resolution, determine the conditions of the issuance, (Delegation of authority to the Board of Directors
and in particular, the form and characteristics of the securities to to issue ordinary shares and securities, without
be created, to acknowledge the resulting increases in share capital,
preferential subscription right of the sharehol-
and to proceed with, as necessary, any adjustments to take into
account the impact of the transactions on the Company’s share ders, but with the obligation to grant a priority
capital, determine the terms and conditions according to which the period)
preservation of the rights of the holders of securities giving access The Shareholders’ Meeting, acting under the conditions of quorum
to the Company’s share capital shall be ensured, in accordance with and majority required for extraordinary shareholders’ meetings,
applicable legal, regulatory and contractual provisions, amend the having reviewed the Board of Directors’ report and the special report
by-laws of the Company accordingly, charge the fees and expenses of the Statutory auditors and acknowledged that the share capital
to the issue premium and take generally all necessary measures. is fully paid up, and acting in accordance with Articles L. 225-129 to
In the event of an issuance of debt securities, the Board of Directors L. 225-129-6, L. 225-135, L. 225-136, L. 228‑91 and L. 228-92 of the
will have all powers, with the ability to sub-delegate in accordance French commercial code, delegates to the Board of Directors, with
with the conditions set out by law, to decide whether or not they are the ability to sub-delegate in accordance with the conditions set out
subordinated, to set their interest rate, duration (which may be with by law, the authority to decide to issue, on one or more occasions,
or without a fixed-term), the fixed or variable redemption price with in the proportions and periods that it deems appropriate, except
or without a premium, the terms and conditions for their redemption during the period of a public tender offer on the Company’s shares,
in accordance with market conditions, the conditions according to in France and abroad, either in euros or any foreign currency,
which these securities shall give access to the Company’s share through a public offering, (i) ordinary shares of the Company and/
capital and their other terms and conditions. or (ii) securities which are equity securities of the Company giving
access by any means, immediately and/or in the future, to other
The Shareholders’ Meeting decides that, in the case of an issuance equity securities of the Company and/or to an allotment of debt
of ordinary Company warrants (bons de souscription d’actions), securities, and/or (iii) debt securities giving or entitling access by
included in the maximum limit mentioned in paragraph (a) above, any means, immediately and/or in the future, to equity securities
the issuance may take place either by cash subscription according of the Company to be issued.
to the conditions provided for hereafter, or by a free allocation of
these warrants to the holders of existing shares. The Shareholders’ Meeting decides to waive the preferential subs-
cription right of the shareholders to these ordinary shares, equity
The Board of Directors will set, with the ability to sub-delegate in securities and securities giving access to the Company’s equity
accordance with the conditions set out by law, the issuance price securities to be issued with the understanding that the Board of
of the ordinary shares or securities. The sum received immediately Directors will be required to grant shareholders a right of priority to
by the Company, increased, if applicable, by the sum that may be the totality of the issuance, for a minimum period of five trading days
received at a later date by the Company, shall be at least equal to and under the conditions it will set in accordance with the applicable
the nominal value for each ordinary share issued as of the issue legal and regulatory provisions. This subscription priority will not
date of said securities. give rise to the creation of negotiable rights but may be exercised,
This delegation is granted for a 26-month period as from the date by irrevocable entitlement (à titre irréductible) or subject to pro rata
of this Meeting and supersedes with effect from this day the dele- reduction (à titre réductible), if the Board of Directors decides that
gation granted by the Shareholders’ Meeting of April 25, 2013 in its it is appropriate.
12 th resolution. a) The maximum nominal amount of the increase in the Company’s
share capital resulting from all issuances carried out either imme-
diately and/or in the future pursuant to this delegation is fixed at €16
million, which is a common limit applicable to the capital increases
made pursuant to the delegations granted in the 22 nd, 23 rd, 24 th,
26th and 27 th resolutions submitted to this Meeting. The capital
increases carried out pursuant to this delegation shall be deducted
from the global maximum amount mentioned in paragraph (a) of
the 20 th resolution of this Meeting.
It is noted that the limit indicated in paragraph (a) above is determi-
ned without taking into account the nominal value of the ordinary
shares of the Company to be issued, if applicable, pursuant to the
adjustments made in order to preserve the interests of the holders
of rights attached to securities giving access to the Company’s
share capital, in accordance with applicable legal and regulatory
requirements and contractual provisions. To this end, the Sharehol-
ders’ Meeting authorizes the Board of Directors, when necessary,
to increase the share capital proportionately.

b) All issuances of debt securities carried out pursuant to this dele-

gation shall not exceed a maximum principal amount of €2 billion
Twenty-second resolution
(or the corresponding value of this amount for an issuance in a (Delegation of authority to the Board of Directors
foreign currency or monetary unit determined by a reference of to increase the number of securities to be issued in
several currencies); this limit is a common limit applicable to all
the event of a capital increase without preferential
issuances of debt securities, which may be carried out pursuant
to the delegations granted in the 20 th , 22 nd and 23 th resolutions subscription right of the shareholders)
submitted to this Meeting. The Shareholders’ Meeting, acting under the conditions of quorum
and majority required for extraordinary shareholders’ meetings,
In calculating the limit set forth in paragraph (b) above, the cor-
having reviewed the Board of Directors’ report and the special
responding value in euros of the principal amount of the debt
report of the Statutory auditors, and acting in accordance with
securities issued in foreign currencies shall be determined on the
Article L.225-135-1 of the French commercial code, delegates to the
date of the issuance.
Board of Directors, with the ability to sub-delegate in accordance
The Shareholders’ Meeting acknowledges that this delegation with the conditions set out by law, the authority to decide to increase,
entails, ipso jure, the waiver by the shareholders of their preferen- except during the period of a public tender offer on the Company’s
tial subscription right to the Company’s ordinary shares and equity shares, the number of securities to be issued, for any issuance
securities to which the securities that would be issued on the basis approved pursuant to the 21st resolution above, in accordance with
of this delegation would give right, for the benefit of the holders of the conditions of the abovementioned Article L.225-135-1, up to a
securities giving access to the Company’s share capital, and issued maximum of 15% of the initial issue and at the same price as the
pursuant to this delegation. price of the initial issue.
The Board of Directors will have the necessary powers, with the ability The Shareholders’ Meeting decides that the amount of the capital
to sub-delegate in accordance with the conditions set out by law, to increases that may be carried out pursuant to this delegation will be
implement this resolution, determine the conditions of issuances, applied to the capital increase limit stipulated in the 21st resolution
and in particular, the form and characteristics of the securities to of this Meeting.
be created, acknowledge the resulting increases in share capital,
This delegation is granted for a 26-month period as from the date
amend the by-laws of the Company accordingly, charge the fees and
of this Meeting and supersedes with effect from this day the dele-
expenses to the issue premium and take generally all necessary
gation granted by the Shareholders’ Meeting of April 25, 2013 in its
measures. It is specified that:
14th resolution.
• the issuance price of the ordinary shares shall be at least equal
to the minimum value provided for by the legal and regulatory Twenty-third resolution
provisions applicable when this delegation is implemented, after
adjustment of this amount, if necessary, to take into account (Delegation of authority to the Board of Directors
the difference in the dividend entitlement date of the shares. to issue ordinary shares and securities,
On the date of this Meeting, the minimum price corresponds to without preferential subscription right
the weighted average price of the last three trading sessions of the shareholders, in the event of a public
on Euronext preceding the fixing of the subscription price and
exchange offer initiated by the Company)
possibly subject to a maximum of 5% discount;
The Shareholders’ Meeting, acting under the conditions of quorum and
• the issuance price of the securities giving access to the Company’s majority required for extraordinary shareholders’ meetings, having
share capital shall be such that the sum received immediately reviewed the Board of Directors’ report and the special report of the
by the Company increased, if applicable, by the sum that may be Statutory auditors, and acting in accordance with Articles L. 225-129
received at a later date by the Company for each ordinary share to L. 225-129-6, L. 225-148, L. 228-91 and L. 228-92 of the French
issued as a result of the issuance of securities, shall be at least commercial code, delegates to the Board of Directors, with the
equal to the amount set forth in the preceding paragraph after ability to sub-delegate in accordance with the conditions set out
adjustment, if necessary, of this amount to take into account the by law, the authority to decide, except during the period of a public
difference in the dividend entitlement date of the shares. tender offer on the Company’s shares, to issue (i) ordinary shares
In the event of an issuance of debt securities, the Board of Directors of the Company and/or (ii) securities which are equity securities of
will have all powers, with the ability to sub-delegate in accordance the Company giving access, by any means, immediately and/or in
with the conditions set out by law, to decide whether or not they are the future, to other equity securities of the Company and/or to an
subordinated, to set their interest rate, duration (which may be with allotment of debt securities, in consideration for securities tende-
or without a fixed-term), the fixed or variable redemption price with red in a public exchange offer initiated by the Company in France
or without a premium, the terms and conditions for their redemption or abroad, according to local regulations, for another company’s
in accordance with market conditions, the conditions according to securities which are listed on one of the regulated markets provided
which these securities shall give access to the Company’s share in the above-mentioned Article L.225-148, and decides, to the extent
capital and their other terms and conditions. necessary, to waive the shareholders’ preferential subscription right
to the ordinary shares and securities to be issued for the benefit of
This delegation is granted for a 26-month period as from the date the holders of these securities.
gation granted by the Shareholders’ Meeting of April 25, 2013 in its The Shareholders’ Meeting acknowledges that this delegation
13 th resolution. entails, ipso jure, the waiver by the shareholders of their preferential
subscription rights to the Company’s ordinary shares and equity
securities to which the securities that will be issued pursuant to this
delegation may give right, for the benefit of the holders of securities
giving access to the Company’s share capital issued pursuant to
this delegation.

a) The maximum nominal amount of the increase in the Company’s

share capital resulting from all issuances carried out either imme-
Twenty-fourth resolution
diately and/or in the future pursuant to this delegation is fixed at an (Delegation of powers to the Board of Directors
amount of €16 million, it being specified that the issuances that may to issue ordinary shares and securities, without
be carried out as a result of this delegation shall be deducted from
preferential subscription right of the shareholders,
the limits provided for in paragraphs (a) of the 20 th and 21st resolu-
tions submitted to this Meeting. in consideration for contributions in kind granted
to the Company and comprised of equity securities
b) All issuances of debt securities carried out pursuant to this
delegation shall not exceed a maximum principal amount of €2 bil-
or securities giving access to share capital)
lion (or the corresponding value of this amount for an issuance in The Shareholders’ Meeting, acting under the conditions of quorum
a foreign currency or monetary unit determined by reference to and majority required for extraordinary shareholders’ meetings,
several currencies); this limit is a common limit applicable to all having reviewed the Board of Directors’ report and the special
issuances of debt securities, which may be carried out pursuant report of the Statutory auditors, and acting in accordance with
to the delegations granted in the 20 th , 21st and 22 nd resolutions Articles L. 225-147 of the French commercial code, delegates to the
submitted to this Meeting. Board of Directors, with the ability to sub-delegate in accordance
with the conditions set out by law, the powers necessary to decide,
In calculating the limit set forth in paragraph (b) above, the cor- within the limit of 10% of the Company’s share capital, on the date of
responding value in euros of the principal amount of the debt the Board’s decision and except during the period of a public tender
securities issued in foreign currencies shall be determined on the offer on the Company’s shares, upon the report of the Contribution
date of the issuance. auditor(s) mentioned in the first and second paragraphs of the
The Shareholders’ Meeting grants to the Board of Directors, with above-mentioned Article L.225-147, to issue (i) ordinary shares of
the ability to sub-delegate in accordance with the conditions set the Company and/or (ii) securities which are equity securities of the
out by law, all necessary powers to carry out the issuances of Company giving access, by any means, immediately and/or in the
ordinary shares and/or securities in consideration for the tendered future, to other equity securities of the Company, in consideration for
shares pursuant to the abovementioned public exchange offers, in the contributions-in-kind granted to the Company and comprised of
particular for: equity securities or securities giving access to share capital, when
the provisions of Article L.225-148 of the French commercial code
• in the case of an issuance of securities as consideration for secu- are not applicable, and decides, to the extent necessary, to waive,
rities in a public exchange offer (offre publique d’échange (OPE)), for the benefit of the holders of these securities, which are the object
determine the list of securities to be exchanged, determine the of these contributions-in-kind, the shareholders’ preferential subs-
conditions of the issuance, the exchange parity as well as, if cription right to the securities issued pursuant to this delegation.
applicable, the amount of cash to be paid and determine the
terms of the issuance in the context of an exchange offer, or an The Shareholders’ Meeting acknowledges that this delegation
alternative tender or exchange offer, either a single tender or entails, ipso jure, the waiver by the shareholders of their preferen-
exchange offer for securities in exchange for shares and cash, tial subscription right to the Company’s ordinary shares to which
or a principal public tender offer or exchange offer, together the securities, that would be issued on the basis of this delegation,
with a subsidiary exchange offer or tender offer, or an exchange would give right, for the benefit of holders of securities giving access
offer carried out in France or abroad according to local regu- to the Company’s share capital issued pursuant to this delegation.
lations (for example, in connection with a reverse merger in In addition to the legal limit of 10% of the Company’s share capital
the United States) relating to securities meeting the conditions provided in Article L.225-147 of the French commercial code, the
provided for in Article L.225-148 of the French commercial code, issuances carried out pursuant to this delegation shall be deducted
or any other form of public offer in accordance with the laws and from the limits provided for in paragraphs (a) of the 20 th and 21st
regulations applicable to the such public offer; resolutions submitted for approval to this Meeting.
• determine the dates, conditions of issuance, notably the price The Board of Directors will have full powers, with the ability to
and dividend entitlement date of new ordinary shares or, if need sub-delegate in accordance with the conditions set out by law, to
be, of securities; implement this resolution, in particular:
• record as liabilities in the balance sheet in an “additional paid- • to decide, on the basis of the report of the Contribution auditor(s)
in capital” account, to which all shareholders have rights, the mentioned in the first and second paragraphs of the above-men-
difference between the issue price of new ordinary shares and tioned Article L.225‑147, on the valuation of the contributions and
their nominal value; the granting of certain advantages and their values;
• charge, if the need arises, all expenses and amounts incurred • to acknowledge the completion of the capital increases carried
in connection with such transaction to the “additional paid-in out pursuant to this delegation, amend the by-laws of the Com-
capital” account; and pany accordingly, enable any setting off of expenses against the
• acknowledge the completion of the capital increases carried out contribution premium, carry out all necessary formalities and
pursuant to this delegation, amend the by-laws of the Company request all authorizations for the completion of these contribu-
accordingly, carry out all necessary formalities and request all tions, and to take generally all necessary measures.
authorizations for the completion of these contributions, and to This delegation is granted for a 26-month period as from the
take generally all necessary measures. date of this Meeting and supersedes with effect from this day the
This delegation is granted for a 26-month period as from the date delegation granted by the Shareholders’ Meeting of April 25, 2013
of this Meeting and supersedes with effect from this day the dele- in its 16th resolution. 8
15th resolution.

Twenty-fifth resolution Twenty-sixth resolution

(Delegation of authority to the Board of Directors (Delegation of authority to the Board of Directors
to increase the Company’s share capital through to issue ordinary shares and securities in favor
incorporation of reserves, profits, premiums of employees who are members of a company
or any other amounts that may be capitalized) savings plan and/or to carry out reserved sales
The Shareholders’ Meeting, acting under the conditions of quorum of securities, without preferential subscription
and majority required for ordinary shareholders’ meetings, having right of the shareholders)
reviewed the Board of Directors’ report, and acting in accordance The Shareholders’ Meeting, acting under the conditions of quorum
with Articles L. 225-129 to L. 225-129-6 and L. 225-130 of the French and majority required for extraordinary shareholders’ meetings,
commercial code, delegates to the Board of Directors, with the having reviewed the Board of Directors’ report and the special
ability to sub-delegate in accordance with the conditions set out by report of the Statutory auditors, and acting in accordance with
law, the authority to decide to increase the share capital, on one or Articles L.225-129-2, L.225-129-6 and L.225-138-1 of the French
more occasions, at the times and under the conditions that it deems commercial code and Articles L.3332-1 et seq. of the French labor
appropriate, except during the period of a public tender offer on the code, delegates to the Board of Directors, with the ability to sub-
Company’s shares, through the incorporation of reserves, profits, delegate in accordance with the conditions set out by law, the
premiums or any other amounts that may be capitalized, followed by authority to decide to increase the Company’s share capital, on
the issuance and the free allocation of shares or the increase of the one or more occasions, at the times and under the conditions that
nominal value of the existing ordinary shares, or any combination it deems appropriate, through the issuance of ordinary shares or
of these two methods. securities giving access to ordinary shares reserved for the mem-
The Shareholders’ Meeting decides that rights corresponding to bers subscribing to a company savings plan of the Company or of
fractional shares may neither be negotiable nor transferable and French or foreign companies related to the Company according to
that the corresponding shares will be sold. The amounts obtained Articles L.225-180 of the French commercial code and L.3344-1 of
from the sale shall be distributed to the holders of the rights within the French labor code.
the applicable legal time period. The maximum nominal amount of the increase of the Company’s
The maximum nominal amount of the share capital increase that share capital that may be completed pursuant to this resolution
may be achieved, immediately or in the future, pursuant to this may not exceed €3.2 million, it being specified that the issues
resolution is fixed at €40.2 million. This limit is set (i) without taking carried out pursuant to this delegation shall be deducted from the
into account the nominal value of the Company’s ordinary shares limits provided for in paragraph (a) of the 20 th and 21st resolutions
to be issued, if applicable, pursuant to the adjustments carried out submitted to this Meeting.
in order to protect the interests of holders of rights attached to It is noted that the above limit is determined without taking into
the securities that shall be issued on the basis of this delegation, account the nominal value of the ordinary shares of the Company to
in accordance with legal and regulatory requirements as well as be issued, if applicable, pursuant to the adjustments made in order
applicable contractual provisions and (ii) independently from the to preserve the interests of the holders of rights attached to secu-
limits on the share capital increases resulting from the issuances rities giving access to the Company’s share capital, in accordance
of the ordinary shares or securities as authorized in the 20 th, 21st, with applicable legal and regulatory requirements and contractual
22nd, 23rd, 24th, 26th and 27th resolutions submitted to this Meeting. provisions. To this end, the Shareholders’ Meeting authorizes the
The Shareholders’ Meeting grants full powers to the Board of Board of Directors, when necessary, to increase the share capital
Directors, with the ability to sub-delegate in accordance with the proportionately.
conditions set out by law, to implement this resolution, particularly The Shareholders’ Meeting decides to waive in favor of the beneficia-
in order to: ries, as defined above, the shareholders’ preferential subscription
• determine the terms and conditions of the authorized transac- right to the ordinary shares or securities giving access to ordinary
tions and in particular decide on the amount and the nature of shares to be issued according to this resolution and to waive any
the reserves and premiums to incorporate into the share capital, right to the shares or other securities allocated free of charge on
determining the number of new shares to issue or the amount to the basis of this delegation.
which the nominal value of the existing shares comprising the The Shareholders’ Meeting decides to set the discount offered under
share capital will be increased, decide on the dividend entitlement the company savings plan at 20% of the average of the Company’s
date (even retroactive) of the new shares or the date on which opening share prices listed on Euronext during the 20 trading ses-
the increase in their nominal value will take effect; sions preceding the date of the decision setting the opening date for
• take all necessary measures to protect the rights of the holders subscription. When this delegation will be implemented, the Board
of securities giving access to the Company’s share capital on the of Directors may decrease the amount of the discount on a case-by-
day of the capital increase; case basis only for reasons of legal, tax or social constraints that
may be applicable outside of France, in any of the countries in which
• acknowledge the capital increase resulting from the issuance the Danone group’s entities employing the employees participating
of shares, amend the by-laws of the Company accordingly and in the share capital increases are located. The Board of Directors
carry out all necessary publicity formalities; may also decide, pursuant to the provisions of Article L.3332-21
• and generally take all measures and complete all formalities of the French labor code, to substitute the discount with a grant of
required to ensure the proper completion of each capital increase. free shares for subscribers of new shares.
This delegation is granted for a 26-month period as from the date The Shareholders’ Meeting decides that the Board of Directors
of this Meeting and supersedes with effect from this day the dele- may also grant to the aforementioned beneficiaries free shares
gation granted by the Shareholders’ Meeting of April 25, 2013 in its or other securities giving access to the Company’s share capital
17th resolution. to be issued or already issued, by way of company contribution

(abondement), within the limits set forth by Article L.3332-21 of issued shares exceeding 0.2% of the Company’s share capital
the French labor code. at the end of this Meeting; this percentage shall be calculated
without taking into account the adjustments that may be made in
The Shareholders’ Meeting grants the Board of Directors full powers,
accordance with any applicable legal and regulatory requirements
with the ability to sub-delegate in accordance with the conditions
or any contractual provisions providing for any other adjustments,
set out by law, to implement this resolution, particularly in order to:
to protect the rights of the holders of securities or other rights
• set the subscription price, the amount, the dividend entitlement giving access to the share capital. It is noted that the nominal
date of the shares (even retroactively) and the terms of each amount of the existing or newly issued shares allocated pursuant
issuance of shares or securities giving access to ordinary shares; to this authorization shall be deducted from the limits provided
for in paragraph (a) of the 20 th and 21st resolutions submitted to
• determine if the subscriptions may be made directly by the this Meeting.
beneficiaries or through a collective investment undertaking,
and in particular through a company investment fund; 4. Decides that the existing or newly issued shares allocated pursuant
to this authorization may be allocated, in accordance with legal
• set the opening and closing dates of the subscriptions, and more requirements, to corporate officers of the Company, provided
generally decide on all other conditions of each issuance;
that the total thereof does not represent more than 0.03% of the
• at its sole discretion and if it deems it appropriate, charge the Company’s share capital at the end of this Meeting (subject to
expenses of capital increases to the amount of the premiums any adjustment mentioned in the preceding paragraph).
associated to these increases, and deduct from this amount the
5. Decides that the allocation of shares to their beneficiaries will
sums needed to bring the legal reserve to one-tenth of the new
become final after a vesting period, the duration of which will
capital after each share capital increase; and
be set by the Board of Directors and shall not be less than three
• acknowledge completion of one or more share capital increases years. The beneficiaries must hold said shares for a duration set
through the issuance of ordinary shares up to the amount of by the Board of Directors and the holding period may not be less
ordinary shares that shall be subscribed, enter into all agree- than two years after the final allocation of such shares. However,
ments, take all measures necessary to carry out such increases, if the vesting period for all or a part of one or more allocations is
complete the subsequent formalities, in particular those related a minimum of four years, the Shareholders’ Meeting authorizes
to the listing of the securities created, amend the by-laws of the the Board of Directors not to impose any holding period for the
Company accordingly, and generally take all necessary measures. shares in question. It is reminded that the Board of Directors
may provide for longer vesting and holding periods than the
Pursuant to applicable legal provisions, the transactions carried
aforementioned minimum durations.
out pursuant to this resolution may also take the form of the sale
of shares to members of a company savings plan. 6. Expressly subjects the final allocation of all existing or newly
issued shares under this resolution to the achievement of the
This delegation is granted for a 26-month period as from the date
performance conditions determined by the Board of Directors
and presented in the Board of Directors’ report.
18 th resolution. 7. Decides, moreover, that, in the event that the disability of the
beneficiary corresponds to a classification in the second or
Twenty-seventh resolution third of the categories provided in Article L.341-4 of the French
social security code, the shares will be definitively allocated to
(Authorization granted to the Board of Directors the beneficiary before the end of the remaining vesting period.
to allocate existing or newly issued shares Said shares will be freely transferable from delivery.
of the Company, without preferential subscription 8. Acknowledges that this authorization entails ipso jure the waiver
right of the shareholders) by the shareholders of their preferential subscription right to the
The Shareholders’ Meeting, acting under the conditions of quorum shares that would be issued as a result of this resolution, to the
and majority required for extraordinary shareholders’ meetings, benefit of the beneficiaries.
having reviewed the Board of Directors’ report and the special report
9. Grants full powers to the Board of Directors, with the ability to
of the Statutory auditors, in accordance with Articles L.225-197-1
sub-delegate in accordance with the conditions set out by law,
et seq. of the French commercial code:
to implement this resolution, within the conditions set forth
1. Authorizes the Board of Directors to freely allocate, on one or above and within the limits authorized by applicable laws and
more occasions, shares of the Company, existing or to be issued, regulations, and in particular to determine, if applicable, the
to members of personnel or to certain categories thereof that it terms and conditions of the issuances that will be completed as
shall select among eligible employees and corporate officers of a result of this authorization, as well as the dividend entitlement
the Company and of affiliates of the Company within the meaning dates of the newly issued shares, acknowledge the share capital
of Article L.225-197-2 of the French commercial code. If the increases, amend the Company’s by-laws accordingly, and more
shares allocated are to be issued, this authorization will result, generally complete all formalities useful for the issuance, listing
after the expiration of the vesting period(s), in a capital increase and financial servicing of securities issued as a result of this
through the incorporation of reserves, earnings or premiums in resolution and take all useful and necessary steps in accordance
favor of the beneficiaries of said shares. with applicable laws and regulations.
2. Decides that the Board of Directors will proceed with the alloca- This authorization is granted until December 31, 2015.
tions and will determine the identity of the beneficiaries of said
allocations.
Each year, the Board of Directors will inform the Ordinary Shareholders’ 8
Meeting, in accordance with legal and regulatory requirements, and
3. Decides that the allocation of shares in accordance with this in particular Article L.225-197-4 of the French commercial code, of
authorization may not represent a number of existing or newly the transactions completed pursuant to this resolution.

Twenty-eighth resolution Twenty-ninth resolution

(Authorization granted to the Board of Directors (Powers to carry out formalities)
to reduce the share capital by canceling shares) The Shareholders’ Meeting gives full powers to any bearer of an
The Shareholders’ Meeting, acting under the conditions of quorum original, a copy or an excerpt of these minutes to make all legal and
and majority required for extraordinary shareholders’ meetings, administrative formalities and carry out all filings and any publicity
having reviewed the Board of Directors’ report and the special required by applicable laws and regulations.
report of the Statutory auditors, and acting in accordance with
Articles L. 225-209 et seq. of the French commercial code:
1. Authorizes the Board of Directors to reduce the Company’s share
capital by cancelling, on one or more occasions, within the limit
of 10% of the Company’s share capital on the date of this Meeting
and by 24-month periods, all or part of the Company’s shares
that the Company holds or may acquire within the framework
of share repurchase programs authorized by the Shareholders’
Meeting.
2. Decides that the excess of the repurchase price of the shares over
their par value shall be charged to the “additional paid-in capital”
account or to any other available reserve account, including the
legal reserve, within the limit of 10% of the reduction of share
capital completed.
3. Delegates full powers to the Board of Directors, with the ability
to sub-delegate in accordance with the conditions set out by
law, to carry out, on its sole decision, the cancellation of shares
thus acquired, to proceed with the resulting reduction of share
capital, and the aforementioned deduction, as well as to amend
the by-laws of the Company accordingly.
This authorization is granted for a 24-month period as from the
date of this Meeting and replaces the authorization granted by the
Shareholders’ Meeting of April 25, 2013 in its 20 th resolution.

Comments on the resolutions of the Shareholders’ Meeting
8.3 Comments on the resolutions of the Shareholders’

Meeting
Table of contents
Approval of the statutory and consolidated financial Fixing of the amount of Directors’ attendance fees
statements for fiscal year 2014 (1st and 2nd resolutions) 351 (18 th resolution) 370
Allocation of earnings (3rd and 4th resolutions) 351 Acquisition by the Company of its own shares
Composition of the Board of Directors
(5th to 10 th resolutions) 352 Financial authorizations (20 th to 27th resolutions) 372
Approval of agreements and commitments referred Authorization to reduce the share capital
to in the Statutory auditors’ special report by canceling shares (28 th resolution) 380
(11th and 12 th resolutions) 355
Advisory opinion on the components of compensation
of corporate officers (13th to 17th resolutions) 357
Approval of the statutory and consolidated financial statements

for fiscal year 2014 (1st and 2nd resolutions)
We request that you approve the Company’s statutory and consolida- in paragraph 4 of Article 39 of the French tax code totaled €382,377
ted financial statements for the fiscal year ended December 31, 2014. during the year under review, and that the tax borne as a result of
these expenses and charges totaled €145,303.
In accordance with Article 223 quater of the French tax code, it is
stipulated that the total amount of expenses and charges referred to
Allocation of earnings (3rd and 4th resolutions)

Allocation of earnings and dividend proposal (3rd resolution)
You are asked to: The amount of €965,688,000 distributed among shareholders enables
the payout of a dividend of €1.50 per share.
• acknowledge that the earnings for fiscal year 2014 amount to
€541,271,933.84; Where this is paid to individuals domiciled in France for tax purposes,
the dividend is fully eligible for the 40% tax allowance provided for
• a c k n o w l e d g e
t h a t t h e r e t a i n e d e a r n i n g s a m o u nt to
in Article 158-3.2° of the French tax code.
€3,124,805,677.01;
The ex-dividend date is May 7, 2015 and the dividend will be payable
totaling ear nings av ail able for alloc ation of profit s of
as from June 3, 2015.
€3,666,077,610.85;
In accordance with Article L. 225-210 of the French commercial
• decide to allocate the total earnings available for allocation as code, the amount of the dividend corresponding to the shares held
follows:
by the Company on the payment date will be allocated to “retained
• to dividends in the amount of €965,688,000; and earnings” account.
• to retained earnings in the amount of €2,700,389,610.85.

Dividends paid in respect of the last three fiscal years

Fiscal year Number of shares Dividend distributed per share (a)
(in €)
2011 642 246 573 1,39
2012 643,162,000 1.45
2013 631,028,000 1.45 (b)
(a) Dividend fully eligible for the 40% deduction provided for in Article 158-3.2° of the French tax code.
(b) The Shareholders’ Meeting of April 29, 2014 has offered each shareholder the option for the payment of the dividend either in cash or in shares.
Option for the payment of the dividend in shares (4th resolution)

We propose, in accordance with applicable legal provisions and the Meeting less the amount of the dividend. This issuance price would
Company’s by-laws, to offer each shareholder the possibility to opt be rounded up to the next euro cent.
for the payment in new shares of the Company of the full dividend
If the amount of the dividends to which the shareholder is entitled
to which the shares owned give an entitlement.
did not correspond to a whole number of shares, the shareholder
This option, already offered by the Company in 2009 and 2014, would would obtain the number of shares immediately below, and a balan-
allow shareholders opting to have their dividend paid in shares to cing payment in cash.
immediately reinvest the amount of their dividend and obtain in
The option for dividends to be paid in shares would be open from
return new DANONE shares.
May 7, 2015 to May 21, 2015.
The new shares would bear rights as from January 1, 2015 and would
Failure to exercise this option within this period would result in the full
be entirely fungible with the Company’s other shares.
amount of the dividend owed to the shareholder being paid in cash.
The issuance price of these new shares would be set at 90% of the
The ex-dividend date is set at May 7, 2015. The date set for payment
average of the opening Company share prices on Euronext over
in cash or delivery of the shares is June 3, 2015.
the twenty trading days preceding the date of the Shareholders’
Composition of the Board of Directors (5th to 10th resolutions)

We request that you renew the terms of office of Mr. Jacques-Antoine Renewal of terms of office as Directors
GRANJON, Mr. Jean LAURENT, Mr. Benoît POTIER, Mrs. Mouna
SEPEHRI and Mrs. Virginia A. STALLINGS as Directors for the three- (5th to 9th resolutions)
year period set forth in the by-laws. These renewed terms of office
Regarding Mr. Jacques-Antoine GRANJON
would expire at the end of the Shareholders’ Meeting convened to
approve the financial statements for fiscal year 2017. (5th resolution)
We request that you renew the term of office as Director of Mr.
We request that you also appoint Mrs. Serpil TIMURAY as a Director
Jacques-Antoine GRANJON.
for a three-year period. Her term of office would also expire at the
end of the Shareholders’ Meeting convened to approve the financial 1. Mr. Jacques-Antoine GRANJON’s situation with regard to
statements for fiscal year 2017. multiple directorships rules
On February 19, 2015, the Board of Directors, upon recommenda-
The Board of Directors noted that, if all its proposals are approved
tion of the Nomination and Compensation Committee, examined
by the Shareholders’ Meeting, the changes in the Board’s compo-
Mr. Jacques-Antoine GRANJON’s situation with regard to the law
sition will allow the Board to continue the ongoing improvement in
and the recommendations of the AFEP-MEDEF Code concerning
the Company’s governance.
multiple directorships. The Board came to the conclusion that, in
Accordingly, at the end of the Shareholders’ Meeting of April 29, this instance, the rules had been complied with in full. In particular,
2015, and in comparison with the composition of the Board at the Mr. Jacques-Antoine GRANJON currently holds no other term of
end of the Shareholders’ Meeting of April 29, 2014: office as director of another listed company.
• the rate of independence of the Board would rise from 71% to 77%; A biography and a list of all Mr. Jacques-Antoine GRANJON’s positions
and responsibilities as of December 31, 2014 and of those held during
• the percentage of women on the Board would rise from 29% the last five years are included above in section 6.2 Positions and
to 38%;
responsibilities of the Directors and nominees to the Board of Directors.
• the average age of Directors would fall from 56.1 years to 55.4 2. Mr. Jacques-Antoine GRANJON’s attendance rate
years;
Over the past three years, Mr. Jacques-Antoine GRANJON’s atten-
• the average length of term of office as Director would fall from dance rate at Board meetings has averaged 85%. He was not a
7.4 years to 6.9 years; and Member of any Board Committee in 2014.
• the international composition of the Board would rise from 3. Mr. Jacques-Antoine GRANJON’s situation with regard
29% to 31%. to independence rules
In the annual individual review of the independence of Directors, the
The Board recalls that it has been committed toward its sharehol-
Board of Directors of February 19, 2015 confirmed, upon recom-
ders for several years to improving its governance, particularly in
mendation of the Nomination and Compensation Committee, the
terms of its independence, the percentage of women on the Board,
qualification of Mr. Jacques-Antoine GRANJON as an independent
its expertise and the diversity of its composition.
Director pursuant to the AFEP-MEDEF Code independence criteria
(see section 6.1 Governance bodies, Review of Directors’ independence).

Regarding Mr. Jean LAURENT (6th resolution) Regarding Mr. Benoît POTIER (7th resolution)
We request that you renew the term of office as Director of We request that you renew the term of office as Director of Mr.
Mr. Jean LAURENT. Benoît POTIER.
1. Mr. Jean LAURENT’s situation with regard to multiple 1. Mr. Benoît POTIER’s situation with regard to multiple
directorships rules directorships rules
On February 19, 2015, the Board of Directors, upon recommendation On February 19, 2015, the Board of Directors, upon recommendation
of the Nomination and Compensation Committee, examined Mr. Jean of the Nomination and Compensation Committee, examined Mr. Benoît
LAURENT’s situation with regard to the law and the recommenda- POTIER’s situation with regard to the law and the recommendations
tions of the AFEP-MEDEF Code concerning multiple directorships. of the AFEP-MEDEF Code concerning multiple directorships. The
The Board came to the conclusion that, in this instance, the rules Board came to the conclusion that, in this instance, the rules had
had been complied with in full. In particular, Mr. Jean LAURENT been complied with in full. In particular, Mr. Benoît POTIER currently
currently holds only two terms of office in other listed companies holds only one term of office in another listed company (Chairman
(Chairman of the Board of Directors of Foncière des Régions and and Chief Executive Officer of Air Liquide).
Vice Chairman of the Supervisory Board of Eurazeo).
A biography and a list of all Mr. Benoît POTIER’s positions and
A biography and a list of all Mr. Jean LAURENT’s positions and responsibilities as of December 31, 2014 and of those held during
responsibilities as of December 31, 2014 and of those held during the last five years are included above in section 6.2 Positions and
the last five years are included above in section 6.2 Positions and responsibilities of the Directors and nominees to the Board of Directors.
2. Mr. Benoît POTIER’s attendance rate
2. Mr. Jean LAURENT’s attendance rate Over the past three years, Mr. Benoît POTIER’s attendance rate
Over the past three years, Mr. Jean LAURENT’s attendance rate has averaged 88% at Board meetings and 100% at Nomination and
has averaged 96% at Board meetings, 100% at Nomination and Compensation Committee meetings. As part of its review of Com-
Compensation Committee meetings and 100% at Social Responsi- mittee membership, the Board of Directors meeting of February
bility Committee meetings. As part of its review of Committee 19, 2015 appointed Mr. Benoît POTIER to the Strategy Committee
membership, the Board of Directors meeting of February 19, 2015 and confirmed his position as a Member of the Nomination and
confirmed Mr. Jean LAURENT in the position of Chairman of the Compensation Committee.
Nomination and Compensation Committee. The Board also decided
3. Mr. Benoît POTIER’s situation with regard to
to replace him with Mr. Bruno BONNELL as the Chairman of the
independence rules
Social Responsibility Committee.
In the annual individual review of independence of the Directors, the
3. Mr. Jean LAURENT’s situation with regard to Board of Directors of February 19, 2015 confirmed, upon recom-
independence rules mendation of the Nomination and Compensation Committee, the
In the annual individual review of the independence of Directors, the qualification of Mr. Benoît POTIER as an independent Director and
Board of Directors of February 19, 2015 confirmed, upon recom- confirmed that his seniority of more than 12 years did not prevent
mendation of the Nomination and Compensation Committee, the him from such qualification (see section 6.1 Governance bodies,
qualification of Mr. Jean LAURENT as an independent Director Review of Directors’ independence).
pursuant to the AFEP-MEDEF Code independence criteria (see
section 6.1 Governance bodies, Review of Directors’ independence). Regarding Mrs. Mouna SEPEHRI (8th resolution)
We request that you renew the term of office as Director of
4. Mr. Jean LAURENT’s situation with regard to the age limit
Mrs. Mouna SEPEHRI.
set in the by-laws
Mr. Jean LAURENT turned 70 in July 2014, thus the renewal of his 1. Mrs. Mouna SEPEHRI’s situation with regard to multiple
term of office shall be determined in accordance with the provisions directorships rules
of Article 15.II of the Company’s by-laws. This Article stipulates that On February 19, 2015, the Board of Directors, upon recommenda-
Directors of the Company who are over the age of 70 on the date when tion of the Nomination and Compensation Committee, examined
the decision is made to renew their term of office are not precluded Mrs. Mouna SEPEHRI’s situation with regard to the law and the
from having said term renewed by the Shareholders’ Meeting and recommendations of the AFEP-MEDEF Code concerning multiple
serving it in full, provided that the number of Directors affected by directorships. The Board came to the conclusion that, in this instance,
this age limit does not exceed one-fourth of the Directors serving the rules had been complied with in full. In particular, Mrs. Mouna
terms on the Board. This limit is largely satisfied, since at the end SEPEHRI currently holds three terms of office in other listed com-
of the April 29, 2015 Shareholders’ Meeting, Mr. Jean LAURENT will panies (Director of Nexans, Member of Supervisory Board of M6
be the only Director of the Company over the age of 70 and no other and Director of Orange).
Directors will reach that age during their respective terms of office.
A biography and a list of all Mrs. Mouna SEPEHRI’s positions and
5. Renewal of Mr. Jean LAURENT’s term of office as Lead responsibilities as of December 31, 2014 and of those held during
Independent Director the last five years are included above in section 6.2 Positions and
With the completion of Mr. Jean LAURENT’s initial term of office responsibilities of the Directors and nominees to the Board of Directors.
as Lead Independent Director and in accordance with its rules of
2. Mrs. Mouna SEPEHRI’s attendance rate
procedure, the Board of Directors meeting of February 19, 2015
Over the past three years, Mrs. Mouna SEPEHRI’s attendance rate
examined the operation of this body and reviewed its powers (see
has averaged 90% at Board meetings and 94% at Audit Committee
above section 6.1 Governance bodies, Review of the Lead Independent
meetings. As part of its review of Committee membership, the
Director at the end of his term of office). On that occasion, the Board
confirmed the powers of the Lead Independent Director and reap-
Board of Directors meeting of February 19, 2015 confirmed Mrs. 8
Mouna SEPEHRI’s position as a Member of the Audit Committee.
pointed Mr. Jean LAURENT to the position (subject to the condition
precedent of the renewal of his term of office as Director by the
Shareholders’ Meeting of April 29, 2015).

3. Mrs. Mouna SEPEHRI’s situation with regard to Appointment of a new Director

independence rules
In the annual individual review of independence of the Directors, the (10th resolution)
Board of Directors of February 19, 2015 confirmed, upon recom- On February 19, 2015, the Board of Directors, upon recommendation
mendation of the Nomination and Compensation Committee, the of the Nomination and Compensation Committee, examined the situa-
qualification of Mrs. Mouna SEPEHRI as an independent Director tion of Mrs. Serpil TIMURAY, whose appointment is proposed to you:
pursuant to the AFEP-MEDEF Code independence criteria (see
section 6.1 Governance bodies, Review of Directors’ independence). 1. Skills and expertise of Mrs. Serpil TIMURAY
A native of Turkey, 45-year-old Mrs. Serpil TIMURAY holds a degree
Regarding Mrs. Virginia A. STALLINGS in business administration from Bogazici University in Istanbul.
(9th resolution) Mrs. Serpil TIMURAY began her career in 1991 at Procter & Gamble,
We request that you renew the term of office as Director of Mrs. where she was later on appointed to the Executive Committee of
Virginia A. STALLINGS. Procter & Gamble Turkey. In 1999, she moved to the Danone group
as the marketing director and a member of the executive commit-
1. Mrs. Virginia A. STALLINGS’ situation with regard to
tee for the fresh dairy products subsidiary in Turkey. From 2002 to
multiple directorships rules
2008, she served as General Manager of Danone Turkey, overseeing
On February 19, 2015, the Board of Directors, upon recommendation
the acquisition and integration of several companies in the region.
of the Nomination and Compensation Committee, examined Mrs.
In 2009 she joined Vodafone Turkey as the Chief Executive Officer,
Virginia A. STALLINGS’ situation with regard to the law and the
contributing to the considerable growth of this company. Since
recommendations of the AFEP-MEDEF Code concerning multiple
January 2014, she is serving as the Regional CEO of Africa, Middle
directorships. The Board came to the conclusion that, in this instance,
East and Asia-Pacific and as a member of the Executive Committee
the rules had been complied with in full. In particular, Mrs. Virginia
of Vodafone group.
A. STALLINGS currently holds no other term of office as director of
another listed company. The Board noted that her widely recognized skills in executive
positions, her success in helping international groups grow their
A biography and a list of all Mrs. Virginia A. STALLINGS’ positions
business, and her thorough knowledge of markets that are critical for
and responsibilities as of December 31, 2014 and of those held during
Danone will be valuable assets for the work of the Board of Directors.
the last five years are included above in section 6.2 Positions and
responsibilities of the Directors and nominees to the Board of Directors. 2. Mrs. Serpil TIMURAY’s situation with regard to multiple
directorships rules
2. Mrs. Virginia A. STALLINGS’ attendance rate
On February 19, 2015, the Board of Directors, upon recommendation of
Over the past three years, Mrs. Virginia A. STALLINGS’ attendance
the Nomination and Compensation Committee, examined Mrs. Serpil
rate has averaged 100% at Board meetings. In 2014, she was not a
TIMURAY’s situation with regard to the law and the recommenda-
Member of any Board Committee. As part of its review of Committee
tions of the AFEP-MEDEF Code concerning multiple directorships.
membership, the Board of Directors meeting of February 19, 2015
The Board came to the conclusion that, in this instance, the rules
appointed Mrs. Virginia A. STALLINGS to the Social Responsibility
had been complied with in full. In particular, Mrs. Serpil TIMURAY
Committee.
currently holds only one term of office in another listed company
3. Mrs. Virginia A. STALLINGS’ situation with regard to (Director of Vodacom, a listed subsidiary of Vodafone group).
independence rules
A biography and a list of all Mrs. Serpil TIMURAY’s positions and
In the annual individual review of independence of the Directors, the
responsibilities as of December 31, 2014 and of those held during
Board of Directors of February 19, 2015 confirmed, upon recom-
the last five years are included above in section 6.2 Positions and
mendation of the Nomination and Compensation Committee, the
qualification of Mrs. Virginia A. STALLINGS as an independent
Director pursuant to the AFEP-MEDEF independence criteria (see 3. Mrs. Serpil TIMURAY’s situation with regard to
section 6.1 Governance bodies, Review of Directors’ independence). independence rules
In the annual individual review of independence of the Directors,
the Board of Directors of February 19, 2015, upon recommendation
of the Nomination and Compensation Committee, considered that
Mrs. Serpil TIMURAY is an independent Director pursuant to the
AFEP-MEDEF Code independence criteria (see section 6.1 Gover-
nance bodies, Review of Directors’ independence). In particular, the
Board considered that Mrs. Serpil TIMURAY’s prior position as an
employee and senior manager of a Group company until 2008 (i.e.
more than seven years ago) should not block her qualification as
an independent Director. The Board also noted the absence of any
significant business relationship between Mrs. Serpil TIMURAY
and the Danone group.

Approval of agreements and commitments referred to in the Statutory auditors’

special report (11th and 12th resolutions)
We are asking you to approve the regulated agreements referred to • systematic abstention by Mrs. Isabelle SEILLIER from parti-
in Articles L. 225-38 et seq. of the French commercial code, which cipating in discussions and voting on any deliberations which
were authorized by the Board of Directors during the 2014 fiscal year. could place her in a situation giving rise to a conflict of interest
involving (directly or indirectly) the J.P. Morgan group;
First, the Board would like to inform you that pursuant to the French
Order No. 2014-863 of July 31, 2014, agreements entered into with • express reference in the report of the Board of Directors to the
wholly-owned subsidiaries of the Company, previously approved by Shareholders’ Meeting of her qualification as a non-independent
shareholders, are no longer subject to the procedure of regulated Director and of the existence of potential conflicts of interest
agreements. Two agreements are covered by this provision and are involving her;
therefore excluded from this report: the guarantee granted by the
Company in respect of commitments of Danone Finance International
• complete transparency on terms of compensation for J.P. Morgan
group by the Group in connection with agreements subject to
(the subsidiary that notably manages the Group’s treasury centra-
shareholders’ approval; and
lization) and the guarantee granted by the Company in respect of
commitments of Danone Corporate Finance Services (a subsidiary • systematic resolution concerning all new regulated agreements
that carries out financial risk management transactions (mainly which might be entered into with the J.P. Morgan group in the
currency and interest rate risk) on behalf of Group companies). future, it being specified that this resolution would be automatically
be put to a separate shareholders’ vote during the subsequent
The only regulated agreements authorized by the Board of Directors
during fiscal year 2014 and submitted for approval are those entered
into between (i) the Company and J.P. Morgan group (11th resolution) 1. Consulting agreement of October 28, 2014
and (ii) the commitments regarding Mr. Emmanuel FABER as Chief
The Board of Directors of October 17, 2014 unanimously approved
Executive Officer in cases of termination of his duties (12 th resolution)
the signature of a consulting agreement with J.P. Morgan Limited
Lastly, it should be noted that, by law, only new agreements are relating to an eventual planned disposal of certain Group assets;
subject to a vote of the Shareholders’ Meeting. However, for the Mrs. Isabelle SEILLIER abstained from voting.
information of the shareholders, the special report of the Statutory
Under the terms of this consulting agreement, which was entered
auditors (see above section 6.5 Statutory auditors’ special report on
into on October 28, 2014, J.P. Morgan Limited acted as the Company’s
related party agreements and commitments) describes agreements
financial advisor and in particular agreed to assist the Company
authorized during prior fiscal years, the performance of which
in finding purchasers, in drafting a memorandum presenting the
continued during the fiscal year ended December 31, 2014. Those
activities to be sold, in analyzing the bids, coordinating due diligence
agreements were again reviewed by the Board of Directors of
work, structuring and defining the transaction’s terms and conditions
February 19, 2015, in accordance with the requirements of the French
and negotiating the documents needed to complete the transaction.
Order N°2014-863 of July 31, 2014. The Board intends to continue
providing a high level of information to shareholders concerning the Under the terms of the agreement and subject to the successful
execution of regulated agreements authorized during prior fiscal completion of the transaction, the Company was to pay J.P. Morgan
years and the performance of which may continue in future years. Limited a commission as consideration for its efforts, with the amount
representing approximately 0.32% of the total value of the assets
Approval of regulated agreements to be sold and measured as of the agreement date.
entered into with J.P. Morgan group Since the planned disposal was not completed, the consulting
agreement will expire on May 15, 2015 and will not give rise to the
(11th resolution) payment of the above-mentioned commission, in accordance with
As part of its activities, the Group works with various leading financial the terms of the agreement.
institutions, including the J.P. Morgan group.
As part of this planned disposal, the Company had also retained a
In 2014, the Board of Directors thus authorized the signing of the second advisory bank whose terms for participating in the transaction
following three agreements: (i) a consulting agreement in connection were similar to those applicable to the J.P. Morgan group, notably
with a possible planned disposal of certain Group assets; (ii) a new with regard to the scope of the assignment and compensation.
amendment to the syndicated facilities agreement signed in 2011;
and (iii) a subscription agreement as part of a bond issue. 2. New amendment to the December 18, 2014
syndicated facilities agreement
These three agreements constitute regulated agreements (subject to
the provisions of Articles L. 225-38 et seq. of the French commercial The Board of Directors of July 27, 2011 had unanimously authorized
code), given the presence on the Board of Directors of Mrs. Isabelle the Company, Mrs. Isabelle SEILLIER abstained from voting, to enter
SEILLIER, also a senior executive of the J.P. Morgan group. into a syndicated facilities agreement with J.P. Morgan Europe Limited
and J.P. Morgan Limited (hereinafter “J.P. Morgan”).
Mrs. Isabelle SEILLIER has been a Director of the Company since
the Shareholders’ Meeting of April 28, 2011. Due to her position at On July 28, 2011, the Company therefore entered into a syndicated
J.P. Morgan, she was designated non-independent Director by the facilities agreement with J.P. Morgan and several other banks, this
Board of Directors, upon recommendation of the Nomination and agreement providing for the establishment of a €2 billion (mul-
Compensation Committee. ti-currency) revolving credit line, combined with a €300 million
“swingline” facility, up to a maximum principal amount of €2 billion.
The Board of Directors noted in this regard that several measures The agreement’s term was initially five years, with the possibility of
8
have been taken to ensure that any potential conflict of interest linked renewal for up to two additional years subject to banks’ approval.
to Mrs. Isabelle SEILLIER’s responsibilities is properly controlled
by the Group, in particular: Interest owed by the Company on amounts drawn under this syn-

dicated facilities agreement are calculated on the basis of market 3. Subscription agreement of January 12, 2015
rates (EURIBOR, EONIA, or equivalent indices in other currencies), in connection with a bond issue
plus a margin and any additional costs under certain conditions.
A utilization fee is added to the interest due based on the credit At its December 11, 2014 meeting, the Board of Directors unani-
portion used and, if the facility is not drawn down, a non-utilization mously, Mrs. Isabelle SEILLIER abstained from voting, authorized
fee equivalent to a percentage of the margin is applied. Finally, the the Company to enter with the J.P. Morgan into group subscriptions
Company paid the customary fees to the banks as part of the esta- agreements in connection with a bond issue by the Company.
blishment of the syndicated facilities agreement in 2011. Under this authorization and within the scope of a €1.3 billion bond
The shareholders approved the signing of this syndicated facilities issue in two tranches under the EMTN program (a €550 million
agreement at the Shareholders’ Meeting of April 26, 2012. tranche with a five-year maturity and a €750 million tranche with a
10-year maturity), the Company entered into a subscription agree-
In 2012 and 2013, the Company twice exercised the extension options ment with the banks responsible for placing the bonds (including
included in the agreement. As a result, the syndicated facilities agree- J.P. Morgan Securities PLC) on January 12, 2015, under the terms
ment was extended for two additional years, i.e., until July 28, 2018. of which said banks underwrote the Company’s entire bond issue,
On December 11, 2014, the Board of Directors, Mrs. Isabelle SEIL- which they then immediately placed with investors wishing to par-
LIER abstained from voting, unanimously authorized the Company ticipate in the issue.
to enter into a new amendment to the syndicated loan facility in Under the subscription agreement, a fee of 0.21% of the nominal
order to: (i) lower the applicable margin and non-utilization fee; (ii) amount of the bonds issued (€1.3 billion) was equally divided among
cancel the additional margin for amounts drawn in U.S. dollars; (iii) the banks responsible for placing the bonds (including J.P. Morgan
extend the duration of the facility for up to five years as from the Securities PLC).
signature date of the amendment, with options to extend it by up to
two additional years, subject to the approval of the banks and under In this context, the amount paid to each of the banks responsible
the same terms as the initial syndicated facilities agreement; and for the placement of the bonds, including J.P. Morgan Securities
(iv) carry out other technical or legal adjustments in order to reflect PLC after equal sharing of the commission, amounted to €390,000.
changes in applicable legislation or market practices. 4. Benefit for the Company and its shareholders
Pursuant to this authorization and through a legal agreement dated of these agreements entered into with J.P. Morgan
December 18, 2014, the Company entered into a syndicated facilities The Board of Directors recalls that the decision to retain J.P. Morgan
agreement along these lines with all banks party to the syndicated for these three transactions is justified on objective grounds and is
facilities agreement (including J.P. Morgan). therefore in the strict interest of the Company and its shareholders.
J.P. Morgan’s commitment as a lender under the syndicated facilities In particular, the Board of Directors emphasizes that:
agreement remains equal to €210 million, i.e., 10.5% of the total,
which is the same percentage as the other banks having the first • it is essential that the Group be able to rely on first-tier interna-
rank in the syndicated facilities agreement. The fees and interest tional banks, especially in a period of financial crisis;
owed to the J.P. Morgan group by the Company are determined • the J.P. Morgan group is a major international bank, whose
on a strict pro-rated basis relative to its commitments under the expertise in strategic transactions is recognized in France and
syndicated facilities agreement and are therefore equivalent to the abroad (particularly in the United States);
fees and interest due to the other banking institutions having a first
rank in the facilities agreement. • this bank has worked in the past with the Group on similar stra-
tegic transactions and therefore has a very good understanding
No amount was drawn under this syndicated facilities agreement of the Group and its activities, as well as excellent knowledge of
in 2014. the various players in the worldwide food and beverage industry,
In 2014, the Company paid J.P. Morgan a total of €508,083 in fees which further adds to the relevance of its advice; and
related to these credit facilities (fees related to the establishment • the terms of J.P. Morgan’s involvement (and in particular its
of the amendment as well as non-utilization fees). compensation) are based on customary market practices, as
The Board of Directors noted that the shareholders will be informed evidenced by the presence, for each of the three respective
each year, by means of the Statutor y auditors’ special report agreements, of other banks receiving similar terms as those
on related party agreements and commitments, of the amount granted to J.P. Morgan.
actually paid to J.P. Morgan in respect of this agreement during In this context, we request that you approve the three above-mentio-
the preceding fiscal year. ned agreements entered into by the Company with the J.P. Morgan
group, which were authorized by the Board of Directors during the
fiscal year ended December 31, 2014.

Approval of related party agreements conditions more restrictive. These amendments were approved by
the Company’s Shareholders’ Meeting of April 25, 2013.
and commitments concerning In connection with the separation of the Chairman of the Board of
Mr. Emmanuel FABER (12th resolution) Directors and Chief Executive Officer offices and the appointment
By law, upon the appointment of Mr. Emmanuel Faber as Chief Exe- of Mr. Emmanuel Faber as Chief Executive Officer, the Board of
cutive Officer as from October 1, 2014, the Company’s shareholders Directors of September 2, 2014, upon recommendation of the
must decide as to the renewal of his rights to indemnity in the event Nomination and Compensation Committee, decided to maintain the
of termination of his duties. same rights to indemnity (by taking into account, for the calculation
basis of the indemnity, his average compensation received during
The Board of Directors of February 18, 2013, upon recommendation of the last 12 months in respect of his term of office as Chief Executive
the Nomination and Compensation Committee, unanimously decided, Officer and, in the event of termination of his duties before October
at the time of the renewal of Mr. Emmanuel Faber’s term of office 1, 2015, in respect of his term of office as Deputy General Manager,
as Director, subject to the vote of the Shareholders’ Meeting of April if appropriate), Mr. Emmanuel FABER abstained from voting, as
25, 2013, to renew his rights to indemnity applicable in certain cases approved by the Company’s Shareholders’ Meeting of April 25, 2013.
of termination of his duties, Mr. Emmanuel FABER abstained from
voting. These rights to indemnity were renewed on the same basis The rights to indemnity that entered into force as from October 1,
as that set by the Board of Directors of February 10, 2010 (approved 2014 (the date when Mr. Emmanuel Faber effectively assumed his
by the Shareholders’ Meeting of April 22, 2010), subject to certain duties as Chief Executive Officer) are described above in section
amendments made in order to ensure strict compliance with the 6.5 Statutory auditors’ special report on related party agreements
provisions of the AFEP-MEDEF Code, and to make the payment and commitments.
Advisory opinion on the components of compensation of corporate

officers for the fiscal year ended December 31, 2014 (13th to 17th resolutions)
Reminder of the principles of the Group’s Compensation of the Chairman and Chief Executive
compensation policy for corporate officers Officer and of the Deputy General Managers until
September 30, 2014, then as from October 1, 2014,
In accordance with the recommendations of the AFEP-MEDEF Code,
of the Chief Executive Officer
the Company submits to the advisory opinion of its shareholders
the components of compensation due or awarded for the fiscal The compensation of these corporate officers is divided into two
year ended December 31, 2014 to its corporate officers. Given the distinct components: an annual compensation and a multi-annual
changes in the Group’s governance decided by the Board of Directors compensation, whose principles are described hereafter.
of September 2, 2014, five resolutions will be presented to the vote The Nomination and Compensation Committee undertook an in-depth
of the shareholders for fiscal year 2014. study of best practices in the market on the basis of a benchmark
The compensation of Mr. Franck RIBOUD, Chairman and Chief prepared by external consultants, whose objectivity was verified
Executive Officer until September 30, 2014 and Chairman of the by the Nomination and Compensation Committee, including large
Board of Directors as from October 1, 2014, Mr. Emmanuel FABER, international companies listed in France (CAC 40) and a panel of
Deputy General Manager until September 30, 2014 and Chief Exe- eight leading international groups in the food and beverage sector
cutive Officer as from October 1, 2014, and Mr. Bernard HOURS, (the same panel as used for the performance conditions of Group
Deputy General Manager until September 2, 2014, was determined performance shares and termination indemnities of corporate
by the Board of Directors on the basis of recommendations made officers, and including Unilever N.V., Nestlé S.A., PespiCo Inc., The
by the Nomination and Compensation Committee. We remind you Coca-Cola Company, Kraft Foods Group Inc., Mondelez International
that these two bodies are predominantly (for the Board) or in whole Inc., General Mills Inc. and Kellogg Company).
(for the Nomination and Compensation Committee) composed of The Nomination and Compensation Committee determines the
independent directors. compensation of its corporate officers, taking care:
In accordance with the AFEP-MEDEF Code, the compensation of • on the one hand, that the mid-term and long-term portion is
the Company’s corporate officers is: sufficiently significant in relation to their annual compensation
• appropriate and balanced in its various components, while favoring (to motivate the corporate officers to work in a long-term pers-
the award of a main part in the form of a variable multi-annual pective); and
compensation; and • on the other hand, that the part subject to performance conditions
• determined in line with that of other directors and officers of the is also sufficiently significant when compared to the fixed part so
Group’s subsidiaries worldwide. as to ensure effective alignment of the interests of management
with the general interest of the Company and shareholders.

In addition, the Nomination and Compensation Committee determines The short-term annual variable compensation is granted subject
the overall compensation of its corporate officers by integrating the to predetermined performance conditions, calculated on the
advantage represented by the potential benefit of a supplementary basis of objective and precise quantitative and qualitative criteria
pension plan. and determined on the basis of economic, social and managerial
objectives. It includes:
The performance conditions are established so as to be both com-
plementary and stable over the long-term. They are drawn up with • a variable economic portion representing 60% for the corporate
reference to the Group’s objectives communicated to the market. officers (except for the Chairman and Chief Executive Officer),
In addition, these performance conditions reflect compensation calculated with reference to the Group’s objectives as commu-
best practices, such as the integration of internal and external nicated to the market in terms of the following indicators:
performance conditions, the latter being drawn up according to the
• sales;
“no pay below median” principle. The Nomination and Compensa-
tion Committee is therefore particularly careful to ensure that the • trading operating margin; and
performance criteria for compensation are demanding and reward
• free cash-flow;
long-term performance in line with market expectations.
The compensation policy implemented is based on simple, stable
• a variable social portion, representing 20% for the corporate
officers (except for the Chairman and Chief Executive Officer),
and transparent principles: thus Group performance units have been
calculated with reference to the Group’s social objectives (safety
awarded since 2005 and Group performance shares since 2010. All
at work, employee training, skills development, environmental
the components of compensation of corporate officers, as well as
parameters and societal initiatives); and
an assessment of whether they have been achieved, are published
on the Company’s website and in the Registration Document (see • a variable managerial portion, representing 20% for the corporate
section 6.3 Compensation and benefits for corporate officers and officers (except for the Chairman and Chief Executive Officer),
governance bodies). Lastly, for several years, the Company has calculated with reference to objectives related to growth of the
been holding regular dialogs with its shareholders on this subject. Group’s business (product innovation, market share, development
in new geographical areas, implementation of strategic decisions).
The annual compensation of the corporate officers comprises the
following components: The achievement evaluation of the annual variable compensation
different criteria is described in details in section 6.3 Compensation
• a fixed compensation, reviewed after relatively long periods (this and benefits for corporate officers and governance bodies related to
fixed compensation has been reviewed for Mr. Emmanuel FABER,
2014 annual short-term variable compensation.
on the occasion of his appointment as Chief Executive Officer;
his compensation for his duties as Deputy General Manager was During fiscal year 2014, the medium- and long-term variable
stable since 2011), in accordance with the recommendations of compensation of corporate officers was composed of the following
the AFEP-MEDEF Code and which reflects the experience and components:
level of responsibility of the beneficiary; and
• a medium-term variable compensation in the form of “Group
• a short-term annual variable compensation: performance units” paid subject to multi-annual performance
conditions being met over a three-year period; and
• with regard to the short-term annual variable compensation
granted to corporate officers until September 30, 2014: • a long-term variable compensation in the form of Group per-
formance shares subject to long-term performance conditions
• for the Chairman and Chief Executive Officer, the short-
based on internal performance criteria related to the objec-
term variable compensation target represents 135% of
tives communicated to the market by the Group and external
his fixed compensation and it is capped at 175% of his
performance criteria related to a comparison of the Group’s
annual variable target compensation;
performance against those of a panel of its peers. The Company’s
• for the Deputy General Managers, the short-term variable program for awarding Group performance shares is therefore
compensation target represents 83% of their fixed com- in line with best market practices (see comments on the 27th
pensation and it is capped at 200% of their annual variable resolution hereafter).
target compensation; and
• with regard to the short-term annual variable compensation
granted to the Chief Executive Officer as from October 1, 2014,
the target represents 100% of his fixed compensation and it
is capped at 20 0% of his annual variable target
compensation.
It is specified, as necessary, that, for fiscal year 2014, the annual
compensation of the corporate officers has been calculated pro
rata temporis depending on the effective date on which Mr. Franck
RIBOUD and Mr. Emmanuel FABER took up their new duties (as
from October 1, 2014) and on the date on which Mr. Bernard HOURS
ceased his duties as Deputy General Manager (on September 2, 2014).

Compensation of the Chairman of the Board of Since October 2014, beyond the charge of directing the work of
Directors as from October 1, 2014 the Board of Directors and within the framework of the reinforced
Chairmanship, Mr. Franck RIBOUD has been actively devoted to
In consistence with the organization of the transition of Danone’s several duties including in particular:
General Management, the compensation of Mr. Franck RIBOUD has
been globally reviewed. • support in the setting up of the new general management and
presentation of the new governance principles to Danone’s teams
The separation of the offices of Chief Executive Officer and Chairman (notably through the attendance at conventions and internal great
was proposed by Mr. Franck RIBOUD with the objective of laying events, and at various managerial meetings), and to the main
the groundwork for his smooth succession at the head of the Com- business and financial partners of the Company;
pany and of focusing on the key strategic issues for Danone in the
medium and long term. • configuration of the new Strategy Committee which will begin
its work at the first semester of 2015: composition proposal,
The Lead Independent Director, Mr. Jean LAURENT, was involved functioning, work and reflection items and themes, coordination
in the reflection and organization of the General Management’s of the Committee work with the Board, etc.;
succession.
• dialogue with the management on the Danone 2020 project,
Several elements were taken into consideration, in particular, the initiated in April 2014, in particular, to help fixing objectives and
fact that Mr. Franck RIBOUD, as Chairman and Chief Executive levels of ambition of the various work streams;
Officer, had transformed the Group in a worldwide company turned
to emerging markets and prepared for future challenges; but also • representation of the Company towards meetings with public
the fact that Danone share value was multiplied by five during his authorities of first rank, notably with French, Russian and Ame-
term of office and that the dividend was never lowered and finally, rican public authorities, or with the shareholders of certain of
the fact that Mr. Franck RIBOUD embodies Danone and its values, international Group entities, notably in Latin America;
its management style and its very specific culture. • participation to several symbolic events for Danone’s develop-
That is why, the Board of Directors, upon recommendation of ment and reputation like the inauguration of a research and
the Nomination and Compensation Committee and of the Lead development center in Argentina or the world final of the Danone
Independent Director, accepted the proposal made by Mr. Franck Nations Cup in Brazil; and
RIBOUD to lay the groundwork for his succession before being 60 • investment in various projects in connection with Danone’s culture
years old, but wished he remained involved full-time in the Com- and the dual economic and social project like the launch of the
pany life, without assuming executive responsibilities, in order to new Livelihoods fund for familial farming in alliance with Mars Inc.
ensure a smooth and progressive transition. It has thus organized
a reinforced Chairmanship enabling Mr. Franck RIBOUD to remain Thus, the annual fixed compensation, the amount of which was decided
totally involved in the company life. on September 2, 2014, for application as from October 1, 2014, is
the single component of compensation of Mr. Franck RIBOUD for
fiscal year 2015. Those conditions of compensation will be reviewed
on a regular basis in view of proposing a compensation structure
suited to the Chairman duties, in consistence with the interest of
the Company and of its shareholders.
For more information on the compensation policy for corporate
officers, see section 6.3 Compensation and benefits for corporate
officers and governance bodies.

Concerning the components of compensation due or awarded in respect of the fiscal

year ended December 31, 2014 to Mr. Franck RIBOUD, Chairman and Chief Executive
Officer until September 30, 2014 (13th resolution)
The shareholders are asked to issue an opinion on the following components of compensation due or awarded to Mr. Franck RIBOUD,
Chairman and Chief Executive Officer until September 30, 2014:
Amount or value for

accounting purposes
submitted to a vote
at the Shareholders’
Meeting of
(in €) April 29, 2015 Presentation
Components of compensation due or awarded to Mr. Franck RIBOUD, Chairman and Chief Executive Officer until September 30, 2014, in respect
of the fiscal year just ended
Fixed compensation 787,500 Fixed compensation is reviewed after relatively long periods in accordance
with the recommendations of the AFEP-MEDEF Code and takes into account
the executive’s experience and level of responsibility. Fixed compensation paid
to Mr. Franck RIBOUD has been stable during seven years.
Annual variable compensation 1,594,688 Short-term variable compensation is subject to performance conditions,
calculated on the basis of objective, specific quantitative and qualitative
criteria and determined on the basis of the economic, social and managerial
objectives described in section 6.3 Compensation and benefits for corporate
officers and governance bodies related to Principles applicable to annual variable
compensation.
The annual variable target compensation of Mr. Franck RIBOUD in respect of
this period was equal to €1,063,125. Concerning the achievement evaluation of
the annual variable compensation various criteria, see section 6.3 Compensation
and benefits for corporate officers and governance bodies related to 2014 annual
short-term variable compensation.
Deferred variable Not applicable Purposeless, the Group does not provide for deferred variable compensation
compensation for corporate officers.
Multi-annual variable 675,000 Multi-annual variable compensation consists of Group performance units (GPU)
compensation paid subject to multi-annual performance conditions over a three-year period.
(i.e. Group performance units) (a)
The 2014 GPU were allocated to Mr. Franck RIBOUD on July 24, 2014.
General principles as well as the annual objectives of GPU granted in 2014 are pre-
sented in section 6.3 Compensation and benefits for corporate officers and governance
bodies related to General principles of Group performance units and to Description of
the Group performance units program (multi-annual variable compensation).
Extraordinary compensation Not applicable Purposeless, the Group does not provide for extraordinary compensation for
corporate officers.
Stock-options, performance Options = None granted.

shares Not applicable
(i.e. Group performance The most recent grant of stock-options to corporate officers occurred in
shares) and other long-term November 2009 (see section 6.3 Compensation and benefits for corporate
compensation (b) officers and governance bodies related to Long-term compensation in the form
of stock-options (until 2009) and to Description of stock-options programs (as of
December 31, 2014)).
Group performance Long-term variable compensation takes the form of Group performance shares
shares = 2,513,500 (GPS). GPS are Company shares subject to performance conditions.
The 2014 GPS were allocated to Mr. Franck RIBOUD on July 24, 2014.
General principles and performance conditions applying to GPS granted in 2014
are presented in sections 6.3 Compensation and benefits for corporate officers
and governance bodies related to Long-term compensation in the form of Group
performance shares (program introduced in 2010) and to Description of the Group
performance shares program (long-term variable compensation).
Directors’ attendance fees Not applicable Directors who are also members of the Executive Committee and/or corporate
officers do not receive attendance fees.
Value of benefits of any kind 3,465 Benefits in kind correspond to the Company’s car pool and drivers made avai-
lable to all Executive Committee members.

Amount or value for

accounting purposes
submitted to a vote
Meeting of
Components of compensation due or awarded in respect of the fiscal year just ended and which are or were voted on by the Shareholders’
Meeting under the procedure for related party agreements and commitments
Termination indemnities No amount due in In accordance with French law, payment of termination indemnities to corporate
respect of the fiscal officers is subject to performance conditions. In addition, and in compliance
year just ended with the AFEP-MEDEF Code, the amount of these termination indemnities is
subject to a limit and they are to be paid only in certain cases.
Comprehensive information concerning the termination indemnity for Mr. Franck
RIBOUD is provided in section 6.5 Statutory auditors’ special report on related
party agreements and commitments.
Non-compete indemnities Not applicable No non-compete clause is applicable to Mr. Franck RIBOUD.
Supplementary retirement No amount due in Corporate officers are covered by the defined benefit retirement plan set up
plan respect of the fiscal for certain executives classified as Group Senior Managers (139 persons still
year just ended benefit from this plan). This retirement plan was closed to any new beneficiaries
as of December 31, 2003.
Eligibility for this plan is subject to the conditions described in section 6.3
Compensation and benefits for corporate officers and governance bodies related
to Obligations relative to executives’ supplementary retirement plans.
(a) Maximum value of GPU granted in the fiscal year in question, taking into account the partial achievement of the 2014 objective, i.e. €27 per GPU.
(b) Represents the estimated value as of the grant date in accordance with IFRS 2, Share-based Payment.

Concerning the components of compensation due or awarded in respect of the

fiscal year ended December 31, 2014 to Mr. Franck RIBOUD, Chairman of the board
of Directors as from October 1, 2014 (14th resolution)
The shareholders are asked to issue an opinion on the following components of compensation due or awarded to Mr. Franck RIBOUD,
Chairman of the Board of Directors as from October 1, 2014:
Amount or value for

accounting purposes
submitted to a vote
Meeting of
Components of compensation due or awarded to Mr. Franck RIBOUD, Chairman of the Board of Directors as from October 1, 2014, in respect of the
fiscal year just ended
Fixed compensation 500,000 As part of the new duties of Mr. Franck RIBOUD, which he exercises on a full-time
basis, his compensation has been globally reviewed and has led to significant
arbitration. Thus, for his annual compensation, he has only benefited from a
fixed compensation, the monetary annual and multi-annual variable compen-
sation being not applicable.
The amount of this compensation has been established both by taking into
account the importance of the duties entrusted to Mr. Franck RIBOUD which are,
within the framework of a reinforced Chairmanship, larger than those provided
by French Law, the active role played by Mr. Franck RIBOUD in the transition
of the General Management of Danone, his seniority within the Group, and his
in-depth knowledge of Danone’s markets, culture and environment.
With regard to the complementary tasks entrusted to Mr. Franck RIBOUD, he
chairs and leads the new Strategy Committee, ensures compliance with the values
of Danone and its culture, may represent the Group in its high-level relations
(at the request of the Chief Executive Officer) on a national and international
level, may be consulted on any significant events concerning the strategy of
the Group and participate to internal meetings with managers and teams of
the Group (see section 6.3 Compensation and benefits for corporate officers and
governance bodies related to Details of annual compensation and benefits due and
paid to corporate officers).
Annual variable compensation Not applicable Mr. Franck RIBOUD does not benefit from any variable compensation.
Deferred variable compensa- Not applicable Purposeless, the Group does not provide for deferred variable compensation
tion for corporate officers.
Multi-annual variable compen- 0 Multi-annual variable compensation consists of Group performance units (GPU)
sation (i.e. Group performance paid subject to multi-annual performance conditions over a three-year period.
units)
No GPU has been granted to corporate officers since October 1, 2014.
Extraordinary compensation Not applicable Purposeless, the Group has not introduced a system of extraordinary compen-
sation for corporate officers.
Stock-options, performance Options = Not None granted.

shares (i.e. Group performance applicable
The most recent grant of stock-options to corporate officers occurred in Novem-
shares) and other long-term
ber 2009 (see section 6.3 Compensation and benefits for corporate officers and
compensation
governance bodies related to Long-term compensation in the form of stock-options
(until 2009) and to Description of stock-options programs (as of December 31, 2014)).
shares = 0 (GPS). GPS are Company’s shares subject to performance conditions.
No GPS has been granted to corporate officers since October 1, 2014.

Amount or value for

accounting purposes
submitted to a vote
Meeting of
Components of compensation due or awarded in respect of the fiscal year just ended and which are or were voted on by the Shareholders’ Mee-
ting under the procedure for related party agreements and commitments
Termination indemnities Not applicable As part of his new duties, Mr. Franck RIBOUD waived his termination indemnity
in respect of his corporate office.
It should be noted that Mr. Franck RIBOUD also benefits from a termination
indemnity as part of his suspended employment contract (for more details,
see section 6.3 Compensation and benefits for corporate officers and governance
bodies related to Suspension of the employment contract of corporate officers)
Non-compete indemnities Not applicable No non-compete clause is applicable to Mr. Franck RIBOUD


year ended December 31, 2014 to Mr. Emmanuel FABER, Deputy General Manager
until September 30, 2014 (15th resolution)
The shareholders are asked to issue an opinion on the following components of the compensation due or awarded to Mr. Emmanuel
FABER, Deputy General Manager until September 30, 2014:
Amount or value for

accounting purposes
submitted to a vote
Meeting of
Components of compensation due or awarded to Mr. Emmanuel FABER, Deputy General Manager until September 30, 2014, in respect of the
fiscal year just ended
to Mr. Emmanuel FABER has been stable during four years.
Annual variable compensation 435,690 Short-term variable compensation is subject to performance conditions, cal-
culated on the basis of objective, specific quantitative and qualitative criteria
and determined on the basis of the economic, social and managerial objectives
described in section 6.3 Compensation and benefits for corporate officers and
governance bodies related to Principles applicable to annual variable compensation.
The annual variable target compensation of Mr. Emmanuel FABER in respect
of this period was equal to €423,000.
Concerning the achievement evaluation of the annual variable compensation
various criteria, see section 6.3 Compensation and benefits for corporate officers
and governance bodies related to 2014 annual short-term variable compensation.
Multi-annual variable compen- 486,000 Multi-annual variable compensation consists of Group performance units (GPU)
units) (a)
The 2014 GPU were allocated to Mr. Emmanuel FABER on July 24, 2014.
General principles as well as the annual objectives of the GPS granted in 2014
are presented in section 6.3 Compensation and benefits for corporate officers and
governance bodies related to General principles of Group performance units and to Des-
cription of the Group performance units program (multi-annual variable compensation).
shares (i.e. Group performance Not applicable
shares) and other long-term The most recent grant of stock-options to corporate officers occurred in Novem-
compensation (b) ber 2009 (see section 6.3 Compensation and benefits for corporate officers and
shares = 1,809,720 (GPS). GPS are Company’s shares subject to performance conditions.
The 2014 GPS were allocated to Mr. Emmanuel FABER on July 24, 2014.
General principles and performance conditions applying to GPS granted in 2014
are presented in section 6.3 Compensation and benefits for corporate officers
and governance bodies related to Long-term compensation in the form of Group
performance shares (program introduced in 2010) and to Description of the Group
performance shares program (long-term variable compensation).

Amount or value for

accounting purposes
submitted to a vote
Meeting of
Comprehensive information concerning the termination indemnity for Mr. Emma-
nuel FABER is provided in section 6.5 Statutory auditors’ special report on related
Non-compete indemnities No amount due in The non-compete clause currently applicable to Mr. Emmanuel FABER provides,
respect of the fiscal at Danone’s discretion, either for the activation of the clause for a 18-month
year just ended period subject to a gross monthly payment equivalent to 50% of his gross ave-
rage base salary and of his target bonus paid over the last 12 months, or for
his release from the clause without any financial compensation.
To avoid any situation of aggregation, which would not fall within the recom-
mendations of the AFEP-MEDEF Code, the Board of Directors of February 10,
2010, and as recommended by the Nomination and Compensation Committee,
amended Mr. Emmanuel FABER’s suspended employment contract to ensure
that the non-compete clause may only be activated by the Company in the event
of his resignation, in respect of which neither the indemnity for the termination
of his employment contract nor the indemnity due in certain cases upon the
cessation of his duties would be paid.
(a) Maximum value of GPU granted in the fiscal year in question, taking into account the partial achievement of the 2014 objective, i.e. €27 per GPU.
(b) Represents the estimated value as of the grant date in accordance with IFRS 2, Share-based payment.


year ended December 31, 2014 to Mr. Emmanuel FABER, Chief Executive Officer
as from October 1, 2014, (16th resolution)
The shareholders are asked to issue an opinion on the following components of the compensation due or awarded to Mr. Emmanuel
FABER, Chief Executive Officer as from October 1, 2014:
Amount or value for

accounting purposes
submitted to a vote
Meeting of
Components of compensation due or awarded to Mr. Emmanuel FABER, Deputy General Manager, as from October 1, 2014, in respect of the fiscal
year just ended
Fixed compensation 250,000 Within the framework of the new duties of Mr. Emmanuel FABER, his fixed
compensation has been reviewed globally. It takes into account in accordance
with the recommendations of the AFEP-MEDEF Code, his executive’s experience
and his level of responsibility.
The annual variable compensation of Mr. Emmanuel FABER in respect of this
period was equal to €250,000.
Multi-annual variable compen- 0 Multi-annual variable compensation consists of Group performance units (GPU)
units)(a)
No GPU has been granted to corporate officers since October 1, 2014.
Stock-options, performance Options = Not None granted.

shares (i.e. Group performance applicable
compensation (b)
No GPS has been granted to corporate officers since October 1, 2014

Amount or value for

accounting purposes
submitted to a vote
Meeting of
Comprehensive information concerning the termination indemnity for Mr. Emma-
nuel FABER is provided in section 6.5 Statutory auditors’ special report on related
Non-compete indemnities No amount due in The non-compete clause currently applicable to Mr. Emmanuel FABER provides,
respect of the fiscal at Danone’s discretion, either for the activation of the clause for a 18-month
year just ended period subject to a gross monthly compensation equivalent to 50% of his gross
average base salary and of his target bonus paid over the last 12 months, or for
his release from the clause without any financial compensation.
To avoid any situation of aggregation, which would not fall within the recom-
mendations of the AFEP-MEDEF Code, the Board of Directors of February 10,
2010, and as recommended by the Nomination and Compensation Committee,
amended Mr. Emmanuel FABER’s suspended employment contract to ensure
that the non-compete clause may only be activated by the Company in the event
of his resignation, in respect of which neither the indemnity for the termination
of his employment contract nor the indemnity due in certain cases upon the
cessation of his duties would be paid.
plan respect of the fiscal for certain executives classified as Group Senior Managers, (139 persons still


year ended December 31, 2014 to Mr. Bernard HOURS, Deputy General Manager until
September 2, 2014, (17th resolution)
The shareholders are asked to issue an opinion on the following components of the compensation due or awarded in respect of the fiscal
year just ended to Mr. Bernard HOURS, Deputy General Manager until September 2, 2014:
Amount or value for

accounting purposes
submitted to a vote
Meeting of
Components of compensation due or awarded to Mr. Bernard HOURS, Deputy General Manager, until September 2, 2014, in respect of the fiscal
year just ended
to Mr. Bernard HOURS has been stable during four years.
The annual variable target compensation of Mr. Bernard HOURS in respect of
this period was equal to €376,000.
Multi-annual variable 0 Multi-annual variable compensation consists of Group performance units (GPU)
compensation paid subject to multi-annual performance conditions over a three-year period.
(i.e. Group performance units)(a)
The 18,000 GPU allocated to Mr. Bernard HOURS on July 24, 2014 became void
as a result of his departure from the Group.
shares (i.e. Group performance Not applicable
compensation(b)
(until 2009) and to Description of stock-options programs (as of December 31, 2014).
The 36,000 GPS allocated to Mr. Bernard HOURS on July 24, 2014 became void
as a result of his departure from the Group.

Amount or value for

accounting purposes
submitted to a vote
Meeting of
Components of compensation due or awarded in respect of the fiscal year just ended and which are or were voted on by the Shareholders’ Mee-
ting under the procedure for related party agreements and commitments
Termination indemnities 2,109,640 Following the Board of Directors decision to abolish the two offices of Deputy
General Managers as part of the evolution of the Group’s strategic directions,
Mr. Bernard HOURS’ office as Deputy General Manager and his Dutch statu-
tory director contract were terminated on September 2, 2014, as well as his
employment contract.
Consequently, Mr. Bernard HOURS received an indemnity of a global amount of
€2,109,640, comprising €321,720 pursuant to the termination of his corporate
office and equal to €1,787,920 pursuant to the termination of his employment
contract.
In accordance with the recommendations of the AFEP-MEDEF Code, (i) all sums
received by Mr. Bernard HOURS in the framework of the cessation of his duties
within the Group have not exceeded an amount equal to twice the gross annual
compensation (comprising both fixed and variable compensation) received
during the last 12 months preceding the date on which duties ceased and (ii) the
indemnity has been paid only after the acknowledgement of the achievement of
the applicable performance condition by the Board of Directors.
Comprehensive information concerning the termination indemnity for Mr. Bernard
HOURS is provided in section 6.5 Statutory auditor’s special report on agreements
and commitments.
Non-compete indemnities Not applicable The non-compete clause which benefited to Mr. Bernard HOURS was not
implemented and he did not receive any non-compete indemnity, as the payment
of the financial counterpart which solely applies in the event of a resignation.

Fixing of the amount of Directors’ attendance fees (18th resolution)

We propose to increase the maximum amount of attendance fees (ii) Variable portion
that may be paid to all Directors from €800,000 to €1 million per
(a) Board of Directors’ meetings
fiscal year. As a reminder, this overall annual amount of €800,000
was set by your Shareholders’ Meeting in 2013. • a new amount of €3,000 per meeting (up from €2,000 currently);
and
The increase in the overall amount of attendance fees would make
it possible to: • for travel by Directors residing outside of France:
• bear the costs relating to the functioning of the Strategy Com- • an additional amount of €2,000 per trip to a meeting of the
mittee created by the Board of Directors of September 2, 2014 Board of Directors for Directors residing elsewhere in Europe
as well as the costs relating to the functioning and composition (amount unchanged);and
of the other Committees; and
• an additional amount of €4,000 per trip to a meeting of the
• increase the variable portion paid out for Board meetings (from Board of Directors for Directors residing outside of Europe
€2,000 to €3,000, with no changes to the other rules) in order (amount unchanged).
to better take into account the Directors’ effective attendance
It should be noted that the aforementioned rules also apply for
at Board meetings, in accordance with the best governance
meetings of independent Directors convened by the Lead Inde-
practices and the recommendations of the AFEP-MEDEF Code.
pendent Director.
The Board reviewed the distribution rules for allocating attendance
(b) Board committees’ meetings
fees among CAC 40 companies and its international peers, with
regard to the overall annual amount authorized by the Shareholders’ • Members: €4,000 per meeting (amount unchanged); and
Meeting and the amount actually paid out to Directors, regardless of
whether they are or not members of committees. The Board noted
• Chairman: €8,000 per meeting (amount unchanged).
that this increase in the amount of attendance fees to be paid out to Moreover, for the additional amounts linked to travel to the Board
Directors for their attendance at Board meetings is in line with its Committees’ meetings, the same rules apply as those specified
policy to renew the membership and is consistent with the objectives for Directors.
of independent, diverse and international Board members.
The Board noted that in accordance with its rules of procedure,
In 2015 and subject to the adoption of this resolution, the allocation Directors who are also members of the Executive Committee or
formula would therefore still include a fixed portion that remains employees or corporate officers (including the Chairman of the Board
unchanged, and the allocation of the overall amount of attendance of Directors) within the Group do not receive these attendance fees.
fees between Directors would be made as follows:
The individual amounts of attendance fees due for the 2013 and 2014
(i) Fixed portion fiscal years are described in section 6.3 Compensation and benefits
for corporate officers and governance bodies.
• Director: fixed amount of €10,000 per year (amount unchanged);
and Finally, the Board undertook that as part of this resolution, any
change in the allocation rules presented above shall be disclosed
• Lead Independent Director: fixed amount of €50,000 per year in the Registration Document.
(amount unchanged).

Acquisition by the Company of its own shares (19th resolution)

The 19 th resolution renews the authorization granted to the Board Justification for the authorization request
to purchase or transfer Company shares.
It is important for the Company and its shareholders that your Board
Description of the authorization continues to have the necessary powers to carry out transactions
involving the Company’s shares.
We ask you to authorize your Board to purchase, hold or transfer
Company shares within the scope of a repurchase program coming These transactions enable the Board to make payments in Company
under the provisions of Article L. 225-209 et seq. of the French com- shares in the context of external growth transactions and to offer
mercial code and European Regulation 2273/2003 of December 22, shares to the Group’s employees and corporate officers, notably
2003 implementing European Directive 2003/6/EC of January 28, 2003. as part of allocations of shares subject to performance conditions.
A description of the share repurchase program set up in accordance In 2014, therefore, the share repurchase program implemented
with Articles 241-1 et seq. of the general regulations of the French resulted in the acquisition of 1.7 million shares for the purpose
Financial Markets Authority is given in section 7.2 Treasury shares of granting shares to the Group’s corporate officers and eligible
and DANONE call options held by the Company and its subsidiaries. employees and in connection with a liquidity agreement (for more
information on these transactions, see section 7.2 Treasury shares
The repurchase by the Company of its own shares may be imple-
and DANONE call options held by the Company and its subsidiaries).
mented for any of the following purposes:
It should be noted, insofar as it is necessary, that the Company pur-
• the allocation of shares with respect to the exercise of stock chased call options on DANONE shares in 2011 to cover a portion of
purchase options by employees and/or corporate officers of the
the stock purchase option plans granted to certain employees and
corporate officers. These calls, which represented a total of 0.16%
of the company’s share capital as of December 31, 2014, may be
• the implementation of any plan for the allocation of Group per- exercised at any time to allow the Company to fulfill its obligations
formance shares to employees and/or corporate officers of the to deliver shares to these beneficiaries.
In accordance with the regulation of the French Financial Markets
Authority, share repurchase transactions are disclosed in detail
• the sale of shares to employees (either directly or through an each week on the Company’s website.
employee savings mutual fund) within the context of employee
shareholding plans or company savings plans;
• the delivery of shares upon the exercise of rights attached to
securities giving access to the Company’s share capital;
• the cancellation of shares within the maximum legal limit; or
• supporting the market for the shares pursuant to a liquidity
contract entered into with an investment service provider in
accordance with the Ethical Charter recognized by the French
Financial Markets Authority.
These transactions may not be carried out during periods of public
tender offers on the Company’s shares.
Depending on the case, the shares may be acquired, sold, exchan-
ged or transferred, in whole or in part, as the case may be, by
any means on any stock markets or over the counter, including
by external growth transactions or disposal of blocks of shares
(without limiting the portion of the share repurchase program that
may be completed this way). These means include the use of any
financial contract or instrument (including in particular any future
or any option), except the sale of put options, in the conditions set
out by applicable regulations.
The maximum number of shares that may be purchased would repre-
sent 10% of the share capital, or 64,379,200 shares as of February
28, 2015, at a maximum purchase price of €70 (net of acquisition
costs), resulting in a maximum theoretical total purchase amount
of €4,506,544,000. The latter figure is for information purposes
only, as it does not include shares already held by the Company.
This authorization would be given for a 18-month period as of the
Meeting and would supersede with effect from its adoption the 18 th 8
resolution approved by the Shareholders’ Meeting of April 29, 2014.

Financial authorizations (20th to 27th resolutions)

Proposed financial authorizations(a) – 26 months(b)
Maximum amount
applicable to
non-dilutive Capital increase with preferential subscription right for shareholders
35 %
issuances: (20 th resolution)
35%
of capital
Common Capital increase without preferential subscription right but with

maximum amount a priority period for shareholders (21st resolution) 10 %
applicable
to all dilutive Overallotment (as a % of initial issuance)(c)
and non-dilutive (22nd resolution) 15 %
issuances: 35% Maximum amount Public exchange offer initiated by the Company
of capital applicable (23rd resolution) 10 %
to dilutive
issuances:
10% of capital Contributions in-kind (24th resolution) 10 %
Capital increase reserved for employees (26th resolution) 2 %
Grants of shares subject to performance conditions

(Group performance shares) (27th resolution) 0,2 %
Incorporation of reserves, earnings,

premiums or other amounts (25th resolution) 25 %
(a) T he percentages indicated in the above table are indicative rounded-off amounts, as the maximum amounts applicable to the authorizations are set in
nominal amounts and not in percentages of share capital (the nominal amounts of such ceilings are described hereafter for each resolution).
(b) Except for the authorization to grant Group performance shares (27th resolution) which would expire on December 31, 2015.
(c) T he 15% ceiling would be calculated relative to the amount of each issuance made pursuant to the resolution to increase the capital without preferential
subscription right but with a priority period (21st resolution).
We recommend that you renew the financial authorizations approved • the maximum amount applicable to the resolution on a capital
by the Shareholders’ Meetings of April 25, 2013 and April 29, 2014, increase without preferential subscription right but with an
whose use is presented in section 7.3 Authorizations for securities obligation to grant a priority period (21st resolution) was lowered
issues giving rights to the share capital, under the terms and condi- from 14.7% to 10% of the share capital, it being noted that this
tions presented hereafter. limit applies to all dilutive issuances; and
The proposed authorizations would empower the Board with regard • the issuances with or without preferential subscription right
to financial management by enabling it to increase the share capital (20 th, 21st, 22nd, 23rd, 24th and 25th resolutions), excluding tran-
using various means and to serve different purposes. sactions reserved for employees and corporate officers, may not
be decided by the Board of Directors during periods of a public
Each authorization corresponds to a specific objective. Like all
tender offer on the Company’s shares, in accordance with the
major multinational groups, Danone needs to have the flexibility to
recommendations of shareholders following the enactment of
respond quickly to changes in market conditions and thereby be able
Law No. 2014-384 of March 29, 2014 aimed at reconquering the
to obtain financing under the best possible conditions.
real economy (so-called “Florange law”);
Any use of these authorizations will take into account the impact
In addition, the financial authorizations retain the provisions favo-
on existing shareholders. Moreover, such use will be subject to an
rable to shareholders which were adopted within the framework
offering memorandum (note d’information) approved by the French
of previous authorizations, in particular:
Financial Markets Authority on the reasons and conditions of the
transaction in all cases required by applicable regulations. • the resolution on a capital increase without preferential subscription
right but with an obligation to grant a priority period (21st resolution)
We draw your attention to the fact that the approval of certain reso-
provides as was the case under the previous authorization for a
lutions (21st, 22nd, 23rd, 24th, 26th and 27th resolutions) is intended to
priority period of a minimum duration of at least five trading days,
enable capital increases while waiving the preferential subscription
which exceeds the legal minimum period of three trading days;
right for shareholders.
In order to respect shareholders’ interests to the greatest extent
• the limitation on the application scope for the overallotment
option (22nd resolution) was maintained only for share capital
possible, this waiver of preferential subscription right is accompanied,
increases without preferential subscription right, as was the
in the context of the general authorization (21st resolution), by an
case under the previous authorization; and
obligation for the Board to grant a priority period to shareholders.
In accordance with financial market best practices and shareholders’
• the resolution allowing the allocation of Group performance
shares (27th resolution) makes it possible to submit all shares
recommendations, the financial authorizations subject to your vote
to be issued to performance conditions and is applicable for a
were also restricted in several regards. Thus:
one-year period.

The Board will also continue to use these authorizations strictly in • as was the case under the previous authorization, the nominal
accordance with the Group’s strategic needs. It should be noted that amount of ordinary shares that would potentially be issued under
the authorizations to be renewed were not used, with the exception the 21st resolution (dilutive issuance without preferential subs-
of the authorization for capital increases reserved for employees cription right but with the obligation to grant a priority period),
(in the amount of approximately 0.13% of the share capital) and the 22nd resolution (authorization to increase the number of securities
one relating to the allocation of Group performance shares (in the to be issued), 23rd resolution (issuance of shares and securities in
amount of approximately 0.12% of the share capital). the event of a public exchange offer), 24th resolution (issuance of
shares and securities as consideration for contributions in-kind),
The Board therefore recommends that you renew the following
26th resolution (issuance of shares and securities reserved for
financial authorizations:
employees) and 27th resolution (allocation of Group performance
• 20th resolution: issuance of shares and securities with preferential shares) would be applied to this maximum amount; and
subscription right;
(ii) for issuances of debt securities carried out pursuant to this
• 21st resolution: issuance of shares and securities, without pre- authorization: a principal amount of €2 billion, unchanged from the
ferential subscription right but with the obligation to grant a amount authorized by the Shareholders’ Meeting of April 25, 2013
priority period; (maximum amount unchanged and common with the 21st, 22nd and
23rd resolutions).
• 22nd resolution: increase in the number of securities to be issued
in the event of an issuance of shares and securities without These issuances may not be decided by the Board of Directors
preferential subscription right of the shareholders (overallot- during a period of a public tender offer on the Company’s shares.
ment option);
No amount was used pursuant to the preceding authorization granted
• 23rd resolution: issuance of shares and securities in the event of by your Shareholders’ Meeting in 2013.
a public exchange offer initiated by the Company;
This new authorization would supersede with effect from its adop-
• 24th resolution: issuance of shares and securities as consideration tion the 12 th resolution approved by the Shareholders’ Meeting of
for contributions in-kind; April 25, 2013.
• 25th resolution: capital increase through incorporation of reserves, Justification for the authorization request
earnings, premiums or other amounts;
The renewal of this general authorization is intended to enable the
• 26th resolution: issuance of shares and securities reserved for Company to obtain financing any time through the issuance of shares
employees who are members of a company savings plan; and or securities giving access to the share capital by calling on the
Company’s shareholders. They will be given, under the applicable
• 27th resolution: allocation of Group performance shares. legal provisions and in proportion to their ownership interest in
Following this general presentation of the resolutions, the conditions the Company’s share capital, a preferential right to subscribe new
and objectives specific to each financial authorization subject to shares or securities. This detachable and negotiable right will make
your vote are described hereafter. it possible, if the holder does not wish to subscribe to the capital
increase, to financially offset the dilution resulting from the non-
Issuance of shares and securities subscription to the capital increase.
with preferential subscription right Moreover, in accordance with the recommendations of shareholders
following the enactment of the Florange law, this resolution has been
(20th resolution) supplemented by the Board of Directors in order to introduce the
Description of the authorization prohibition of deciding to issue securities during a period of a public
tender offer on the Company’s shares on the basis of this resolution
We request that you renew, for a 26-month period, the delegation of
(and, therefore, without a new decision by the shareholders).
authority granted to the Board of Directors to decide to issue, with
preferential subscription right, (a) ordinary shares of the Company
and/or (b) securities which are equity securities of the Company
Issuance of shares and securities without
giving access to other equity securities of the Company and/or to an preferential subscription right but with
allotment of debt securities, and/or (c) debt securities giving access
to equity securities of the Company to be issued.
a priority period (21st resolution)
In comparison with the previous authorization granted by the Sha- Description of the authorization
reholders’ Meeting in 2013 and that is soon to expire, the maximum We request that you renew the delegation of authority granted to
amounts of this new authorization would be as follows: the Board of Directors, for a 26-month period, in order to issue (a)
ordinary shares of the Company and/or (b) securities which are equity
(i) for ordinary shares to be issued by the Company:
securities of the Company giving access to other equity securities
• a nominal amount of €56.3 million representing, on an indicative of the Company and/or to an allotment of debt securities, and/or (c)
basis, approximately 35% of the share capital as of February debt securities giving access to equity securities of the Company
28, 2015, similar to the amount authorized by the Shareholders’ to be issued, without preferential subscription right, and by public
Meeting of April 25, 2013; offering, both in France and abroad. When using this authorization,
a priority period must be granted to existing shareholders for the
entire issuance. When renewing this authorization, the Company
decided to maintain the minimum priority period set up at five trading
days within the framework of the previous authorization. 8
In comparison with the previous authorization granted by the 2013
Shareholders’ Meeting, and that is soon to expire, the maximum

amounts of this new authorization would be as follows: Besides, in accordance with the recommendations of shareholders
(i) for ordinary shares to be issued by the Company:
supplemented by the Board of Directors in order to introduce the
• an nominal amount of €16 million, representing, on an indicative prohibition of deciding to issue securities during a period of a public
basis, approximately 10% of the share capital as of February 28, tender offer on the Company’s shares on the basis of this resolution
2015, lowered relative to the nominal amount of 14.7% of the share (and, therefore, without a new decision by the shareholders).
capital authorized by the Shareholders’ Meeting of April 25, 2013;
• this maximum amount would apply to all dilutive issuances: Authorization to increase the number
capital increases carried out pursuant to the 22 nd resolution of securities to be issued, as part
(authorization to increase the number of securities to be issued),
23rd resolution (issuance of shares and securities in the event of
of a capital increase without
a public exchange offer), 24th resolution (issuance of shares and preferential subscription right
securities as consideration for contributions in-kind), 26th reso-
lution (issuance of shares and securities reserved for employees)
of shareholders (22nd resolution)
and 27th resolution (allocation of Grant performance shares); Description of the authorization
• as was the case under the previous authorization, this common We request that you renew the authorization granted to the Board
maximum amount would apply to the global maximum amount of Directors, for a 26-month period, to increase, for each issuance
of 35% of the share capital set forth in the 20 th resolution (non- that may be decided pursuant to the aforementioned 21st resolution
dilutive issuance with preferential subscription right); and (dilutive issuance without preferential subscription right but with
a priority period), the number of securities to be issued, in accor-
(ii) for issuances of debt securities carried out pursuant to this
dance with the conditions set in Article L.225-135-1 of the French
authorization: a principal amount of €2 billion, identical to the
commercial code, within a limit of 15% of the initial issuance and
amount authorized by the Shareholders’ Meeting of April 25, 2013
at the same price as the price of the initial issue (overallotment
(maximum amount unchanged and common with the 20 th, 22nd and
option). It should be noted that this authorization could not result
23rd resolutions).
in an increase in the limit of 10% of the share capital provided for
We inform you that, pursuant to the applicable legal and regulatory in the aforementioned resolution.
provisions, the issuance price of the ordinary shares and securities
These increases in the number of securities to be issued may not be
giving access to the Company’s share capital shall be at least equal
decided by the Board of Directors during a period of a public tender
to the weighted average price of the Company’s share during the last
offer on the Company’s shares.
three trading sessions preceding the fixing of the issuance price,
possibly subject to a maximum 5% discount. No amount was used pursuant to the preceding authorization granted
by your Shareholders’ Meeting in 2013.
These issuances may not be decided by the Board of Directors
during a period of a public tender offer on the Company’s shares. This new authorization would supersede with effect from its adop-
tion the 14th resolution approved by the Shareholders’ Meeting of
No amount was used pursuant to the preceding authorization granted
April 25, 2013.
by your Shareholders’ Meeting in 2013.
This new authorization would supersede with effect from its adop- Justification for the authorization request
tion the 13 th resolution approved by the Shareholders’ Meeting of Given in particular the volatility of current market conditions, the
April 25, 2013. Board feels that it is necessary to renew this authorization, which
enables the implementation of a customary mechanism that com-
Justification for the authorization request plies with financial market practices.
The renewal of this general authorization is intended to enable the
As was the case under the previous authorization granted by the 2013
Company to obtain financing at any time through the issuance of
Shareholders’ Meeting, the application scope of this new authorization
shares or securities giving access to the share capital by calling
is limited to issuances of shares or securities without preferential
on investors who are not yet shareholders of the Company. The
subscription right but with a priority period (21st resolution). This
implementation of this authorization could therefore enable quick
limitation is consistent with financial market best practices.
access to sources of financing that may be needed by the Company.
Moreover, in accordance with the recommendations of shareholders
As consideration for the waiver of preferential subscription right, the
Board would be required to grant shareholders a priority period of
at least five trading days, in accordance with financial market best
prohibition of deciding to issue securities during a period of a public
practices and the recommendations of shareholders. This minimum
priority period, which is identical to the one previously set forth under
the previous authorization approved by the Shareholders’ Meeting
of April 25, 2013, is greater than the three trading day minimum
period provided for in Article R. 225-131 of the French commercial
code. The shareholders will therefore be able to subscribe the
capital increase with priority over third parties and in proportion to
their ownership interest in the share capital (it being noted that this
priority right does not give rise to the creation of negotiable rights).
Moreover, in accordance with financial market best practices and
the recommendations of shareholders, the Board of Directors
decided to significantly lower the limit applicable to this resolution
and all dilutive transactions, from 14.7% to 10% of the share capital.

Issuance of shares and securities, shareholders of the target company who accept the offer.
without preferential subscription right, In addition, the renewal of this financial authorization appeared to
be necessary in order to preserve the Company’s competitiveness
in the event of a public exchange offer relative to some of its competitors, which have similar financial
initiated by the Company (23rd resolution) authorizations.
Finally, in accordance with the recommendations of shareholders
Description of the authorization following the enactment of the Florange law, this resolution has been
We request that you renew, for a 26-month period, the delegation supplemented by the Board of Directors in order to introduce the
of authority granted to the Board of Directors to issue (a) ordinary prohibition of deciding to issue securities during a period of a public
shares of the Company and/or (b) securities which are equity secu- tender offer on the Company’s shares on the basis of this resolution
rities of the Company giving access to other equity securities of the (and, therefore, without a new decision by the shareholders).
Company and/or to an allotment of debt securities, in the event of
a public exchange offer initiated by the Company on the securities Issuance of shares and securities,
of another Company whose shares have been admitted for trading
on a regulated market. without preferential subscription right
The issuance of ordinary shares and/or securities would be carried for shareholders as consideration
out without preferential subscription right of the shareholders. for contributions in-kind granted
Compared with the previous authorization granted by the 2013 Sha- to the Company (24th resolution)
reholders’ Meeting, that is soon to expire, the maximum amounts
of this new authorization would be as follows: Description of the authorization
(i) for ordinary shares to be issued by the Company: We request that you renew, for a 26-month period, the delegation
of authority granted to the Board of Directors to decide to issue (a)
• a nominal amount of €16 million representing, on an indicative ordinary shares of the Company and/or (b) securities which are equity
basis, approximately 10% of the share capital as of February securities of the Company giving access to other equity securities of
28, 2015, similar to the amount authorized by the Shareholders’ the Company, within a limit of 10% of the Company’s share capital
Meeting of April 25, 2013; at the date of the Board decision, in consideration for contributions
• as was the case under the previous authorization, issuances in-kind granted to the Company and consisting of equity securities
carried out pursuant to this authorization would apply to the or securities giving access to the share capital.
maximum amounts of 35% of the share capital set forth in the 20 th The issuance of ordinary shares or securities would be carried out
resolution (non-dilutive issuance with preferential subscription without any preferential subscription right of shareholders to the
right) and 10% of the share capital set forth in the 21st resolution securities issued pursuant to this delegation. Moreover, this dele-
(dilutive issuance without preferential subscription right but with gation would automatically entail a waiver by the shareholders to
a priority period); and their preferential subscription right to the ordinary shares of the
(ii) for issuances of debt securities carried out pursuant to this Company to which securities could entitle to, in favor of the holders
authorization: a principal amount of €2 billion, identical to the of securities giving access to the Company’s share capital issued
amount authorized by the Shareholders’ Meeting of April 25, 2013 pursuant to this delegation.
(maximum amount unchanged and common to the 20 th, 21st and As was the case under the previous authorization, this authorization
22nd resolutions). would have to respect the statutory limit of 10% of the share capital.
Your Board of Directors would have to determine, for each offering, Issuances carried out pursuant to this authorization would also be
the nature and characteristics of the securities to be issued, the applicable to the limits of 35% of the share capital set forth in the
amount of the capital increase depending on the results of the 20 th resolution (non-dilutive issuance with preferential subscription
offering and on the number of target company securities presented right) and 10% of the share capital set forth in the 21st resolution
for exchange, taking into consideration the parities and the shares (dilutive issuance without preferential subscription right but with
or securities issued. a priority period).
These issuances may not be decided by the Board of Directors These issuances may not be decided by the Board of Directors
during a period of a public tender offer on the Company’s shares. during a period of a public tender offer on the Company’s shares.
No amount was used pursuant to the preceding authorization granted No amount was used pursuant to the preceding authorization granted
by your Shareholders’ Meeting in 2013. by your Shareholders’ Meeting in 2013.
This new authorization would supersede with effect from its adop- This new authorization would supersede with effect from its adop-
tion the 15th resolution approved by the Shareholders’ Meeting of tion the 16th resolution approved by the Shareholders’ Meeting of
April 25, 2013. April 25, 2013.
Justification for the authorization request Justification for the authorization request
The Board felt it was necessary to renew this authorization in order The renewal of this authorization appeared necessary to the Board
to enable the Company to maintain its ability to acquire medium- to allow the Company to maintain its capacity to acquire stakes in
sized stakes in companies whose shares are listed on a regulated unlisted medium-sized companies. These acquisitions could then
be financed, in whole or in part, using shares or securities instead
market. These acquisitions could then be financed, in whole or in
of debt. The Board may therefore decide to increase the share 8
part, using shares instead of debt. The Board would therefore be
able to respond quickly to market opportunities and have the option capital in consideration for the contribution of shares or securities
of issuing shares or securities to be used as consideration for the to the Company.

In addition, the renewal of this financial authorization is also neces-

sary in order to preserve the Company’s competitiveness relative to
Issuance of shares and securities
some of its competitors, which have similar financial authorizations. reserved for employees who are
Finally, in accordance with the recommendations of shareholders members of a company savings plan,
without preferential subscription right
prohibition of deciding to issue securities during a period of a public of the shareholders (26th resolution)
Description of the authorization
We request that you renew, for a 26-month period, the delegation of
Capital increase through the incorporation authority granted to the Board of Directors to decide to increase the
Company’s share capital through the issuance of ordinary shares
of reserves, earnings, premiums and/or securities giving access to ordinary shares of your Com-
or other amounts (25th resolution) pany and reserved for employees who are members of a company
savings plan of the Company or related French or foreign companies
Description of the authorization according to Article L.225-180 of the French commercial code and
We request that you renew, for a 26-month period, the delegation L.3344-1 of the French labor code.
of authority granted to the Board of Directors to decide to increase Compared with the previous authorization granted by the 2013 Sha-
the share capital through the incorporation of reserves, earnings, reholders’ Meeting, which is soon to expire, the maximum nominal
premiums or any other amounts that may be capitalized, followed by amount of ordinary share issuances under the present authorization
the issuance and the free allocation of shares and/or the increase would be as follows:
in the par value of the existing ordinary shares.
• an amount set at €3.2 million representing, on an indicative
Compared with the previous authorization granted by the 2013 Sha- basis, approximately 2% of the share capital as of February 28,
reholders’ Meeting, which is soon to expire, the maximum nominal 2015, similar to the amount authorized by April 25, 2013 Share-
amount of ordinary shares issuances under the present resolution holders’ Meeting; and
would be as follows:
• as was the case under the previous authorization, the issuances
• an amount set at €40.2 million, representing, on an indicative carried out pursuant to this authorization would apply to the
basis, approximately 25% of the share capital as of February ceilings of 35% of share capital set forth in the 20 th resolution
28, 2015, similar to the amount authorized by the April 25, 2013 (non-dilutive issuance with preferential subscription right) and
Shareholders’ Meeting; and 10% of the share capital set forth in the 21st resolution (dilu-
• as was the case under the previous authorization, this maximum tive issuance without preferential subscription right but with a
amount would be independent of the ceilings set by the 20 th priority period).
resolution (non-dilutive issuance with preferential subscription The issuance of ordinary shares would be carried out without pre-
right), 21st resolution (dilutive issuance without preferential ferential subscription right of the shareholders.
subscription right but with a priority period), 22 nd resolution
(authorization to increase the number of securities to be issued), The discount offered as part of the company savings plan or employee
23rd resolution (issuance of shares and securities in the event of shareholding transactions would be set at 20%, which is the maximum
a public exchange offer), 24th resolution (issuance of shares and allowed under French regulations. This discount would be calculated
securities in consideration for contributions in-kind), 26th resolu- on the basis of the DANONE share’s average opening list price on
tion (issuance of shares and securities reserved for employees) Euronext Paris during the 20 trading sessions preceding the date
and 27th resolution (allocation of Group performance shares). of the decision setting the opening date for subscription. It should
be noted that during the implementation of this authorization, the
These issuances may not be decided by the Board of Directors Board of Directors may only reduce the amount of the discount on
during a period of a public tender offer on the Company’s shares. a case-by-case basis for reasons of legal, tax or social constraints
No amount was used pursuant to the preceding authorization granted that may apply outside of France, in any countries where Group
by your Shareholders’ Meeting in 2013. entities are located and where the employees are participating
to the share capital increases. The Board of Directors may also
This new authorization would supersede with effect from its adoption the decide, pursuant to Article L.3332-21 of the French labor code, to
17th resolution approved by the Shareholders’ Meeting of April 25, 2013. freely allocate shares to subscribers of new shares instead of a
Justification for the authorization request discount, or in connection with a company contribution as part of
the company savings plan.
The renewal of this authorization is designed to enable the Company
to increase its share capital through a simple transfer of reserves, In accordance with applicable legal provisions, the proposed tran-
earnings, premiums or other amounts whose capitalization would sactions could also take the form of selling shares to members of
be permitted in the “share capital” account. These transactions a company savings plan.
do not alter the Company’s value nor do they affect the rights of It should be noted that under the previous authorization granted by
shareholders and, in particular, can be used to bring the nominal your 2013 Shareholders’ Meeting, a capital increase with a nominal
value of the shares more in line with their market value. amount of €207,996.50 was carried out in June 2014 following a deci-
Finally, in accordance with the recommendations of shareholders sion of the Board of Directors of February 19, 2014 (corresponding
following the enactment of the Florange law, this resolution has been to around 6.7% of the total authorized amount), leaving an available
supplemented by the Board of Directors in order to introduce the balance of €2,892,003.50 as of December 31, 2014, against which
prohibition of deciding to issue securities during a period of a public will be deducted another capital increase reserved for employees
tender offer on the Company’s shares on the basis of this resolution participating in a company savings plan approved by the Board of
(and, therefore, without a new decision by the shareholders). Directors of February 19, 2015 and scheduled to occur in June 2015.

This new authorization would supersede with effect from its adop- • the first criterion (an external performance criterion) would be
tion the 18 th resolution approved by the Shareholders’ Meeting of based on the Group’s sales growth over three years (2015, 2016
April 25, 2013. and 2017) compared to that of a panel of the group’s historical
peers, comprising benchmark multinational companies in the
Justification for the authorization request food and beverage sector; and
As of December 31, 2014, employees held approximately 1.3% of
the share capital through the “Fonds Danone” company investment
• the second criterion (an internal performance criterion) would
be based on the improvement, over three years (2015, 2016 and
fund, which corresponds to shares subscribed as part of the annual
2017), in the Group’s trading operating margin on a like-for-like
capital increases reserved for employees.
basis, as communicated to the market.
The Group would like to continue to enable employees to participate
The allocated shares would continue to be subject for two-thirds to
in its development. The employee shareholder transactions covered
the sales growth criterion and for one-third to the trading operating
by this resolution are designed to strengthen their motivation and
margin criterion.
commitment and to enhance their sense of belonging to the Group.
The vote on this resolution would therefore enable your Board The Board also emphasizes that these two objectives are comple-
of Directors to continue to implement this policy of associating mentary in nature and reflect key indicators followed by investors
employees in the Group’s development. and analysts to measure companies’ performance in the food and
beverage sector. In particular, the heavier weighting of the sales
Allocations of ordinary shares growth criterion reflects its importance in the valuation of compa-
of the Company (27th resolution) nies in the sector.
(vi) Performance conditions continuing to apply to 100% of
Context of the authorization request allocated shares
Your Board of Directors, upon recommendation of the Nomination In accordance with best market practices and recommendations
and Compensation Committee, asks you to renew the authorization of shareholders, the Board of Directors has chosen to continue to
granted to it at the Shareholders’ Meeting of April 29, 2014, for a require that 100% of the allocated shares be subject to performance
period of one year (until December 31, 2014), to allocate Group conditions by virtue of this resolution, as in 2014.
performance shares (GPS).
Identical structure and dilutive effect 1. Nature of the authorization
The new resolution is based on a structure which is identical to that We request that you authorize the Board of Directors, until Decem-
adopted in 2014 and brings no change in terms of dilution (0.2% of ber 31, 2015, to freely allocate, subject to performance conditions,
share capital). shares of the Company, existing or to be issued, to employees or
to certain categories thereof that it shall select among eligible
The main characteristics of this new resolution are as follows:
employees, and to corporate officers of the Company and of affi-
(i) Authorization to allocate Group performance shares is liates of the Company within the meaning of Article L.225-197-2 of
again proposed for one year the French commercial code. It should be noted that for the 2013
The resolution submitted to your vote would expire on December 31, and 2014 fiscal years, approximately 1,300 people benefited from
2015 and could therefore only give rise to share allocations in 2015. such share allocations.
A vote will thus enable shareholders to ensure in 2015 that, as in 2014, 2. Maximum amount of the authorization
based on a strict and precise definition of performance conditions, These allocations may not represent a number of existing or newly
the expected level of objectives would continue to be sufficiently issued shares exceeding 0.2% of the Company’s share capital, as
ambitious and motivating, in line with the Group’s performance. determined at the end of the Shareholders’ Meeting of April 29,
2015, which corresponds to the same amount as that approved by
(ii) Group performance shares could be allocated only to
the Shareholders’ Meeting of April 29, 2014.
employees and executive corporate officers, the Chairman
of the Board being not eligible in 2015 The nominal amount of the existing or newly issued shares allocated
under this authorization would apply to the limits of 35% of the share
(iii) Maintenance of a single reference period of three years capital set forth in the 20 th resolution (non-dilutive issuances with
applicable to all performance conditions preferential subscription right) and of 10% of the share capital set
In order to comply with investors’ expectations, the reference period forth in the 21st resolution (dilutive issuances without preferential
relating to the two performance conditions is, as in the preceding subscription right, but with a priority period).
authorization, of a single period of three years.
This number of shares does not reflect potential adjustments that
(iv) Stability of performance conditions may be made in accordance with applicable legal and regulatory
The Board considers that a certain degree of consistency in perfor- requirements and, where applicable, to contractual provisions calling
mance conditions is an essential factor for long-term value creation. for other adjustments in order to maintain the rights of holders of
In that regard, the Board of Directors proposes to shareholders securities or other rights giving access to the share capital. Thus to
performance conditions that will continue to include growth in the the extent that share allocation plans include adjustment clauses to
Group’s sales and trading operating margin. the number of shares granted in the event of transactions involving
the share capital during the vesting period, the application of these
(v) Demanding performance conditions that are suited to
adjustment clauses could result in the final number of allocated
the Group’s current environment
shares exceeding 0.2% of the share capital.
The performance conditions for shares allocated under this new 8
resolution would consist of two complementary criteria represen- 3. Sub-ceiling for allocations to corporate officers
tative of the Group’s performances and adapted to the specificity The shares allocated pursuant to this authorization may be allocated,
of its activity: subject to performance conditions, to executive corporate officers,
but within the maximum limit of 0.03% of the share capital at the end

of the Shareholders’ Meeting of April 29, 2015 (subject to the same • the CA of each Panel member refers to the arithmetic average
potential adjustments mentioned in point 2 above). Following the internal (“organic”) net sales growth recorded by the said member
separation of the offices of Chairman and Chief Executive Officer of the Panel during the fiscal years 2015, 2016 and 2017 (on a
and the suppression of the offices of Deputy General Managers in consolidated basis and on a like-for-like basis;
September 2014, this limit has been lowered relative to the sub-
ceiling of the authorization approved by the Shareholders’ Meeting
• the Panel CAs refers to the CAs of all members of the Panel;
of April 29, 2014 (which was of 0.05%). • the Median CA of the Panel refers to the value of the CA of the
In 2014, a total of 122,000 shares subject to performance conditions
were allocated to the three corporate officers, corresponding to
0.02% of the Company’s share capital and 15.7% of all shares subject
to performance conditions allocated in the Group in 2014.
4. Vesting period Panel will be equal to the arithmetic average of the two central
4.1 The allocation of shares to their beneficiaries will become final values of the Panel CAs;
after a vesting period, the duration of which will be set by the Board
of Directors and shall not be less than three years. In principle, the
• the Panel refers to eight benchmark multinational groups in the
food and beverage sector, namely: Unilever N.V., Nestlé S.A.,
beneficiaries must hold said shares for a duration set by the Board
PepsiCo Inc., The Coca-Cola Company, Kraft Foods Group Inc.,
of Directors and the holding period may not be less than two years
Mondelez International Inc., General Mills Inc. and Kellogg
after the final allocation of such shares.
Company;
4.2 However, if the vesting period for all or a part of one or more
allocations is a minimum of four years, the Shareholders’ Meeting
• restatements (mainly adjustments of scope and/or foreign ex-
change effects) will be made only to the extent strictly necessary
authorizes the Board of Directors not to impose any holding period
in order to ensure the consistency of the calculation method for
for the shares in question.
the CAs of all Panel members and the CA of the Group over the
4.3 Since July 2013, in order to increase the duration of the vesting entire period under review;
period, the Board of Directors decided to grant performance shares
solely in the form of “4+0”, corresponding to a vesting period of four
• in the event that the audited accounting or financial results of one
of the Panel members are not published or are published late,
years and no holding period (rather than granting performance
the Board of Directors may, exceptionally, exclude this member
shares in the form of “4+0” to non-French residents and in the
of the Panel through a duly justified decision taken at a later date
form of “3+2” for individuals domiciled in France for tax purposes).
that is mentioned in the Report of the Board of Directors to the
Nevertheless, the corporate officers and the members of the Exe-
Shareholders’ Meeting;
cutive Committee remain subject to the requirement that they hold
a significant number of shares stemming from GPS allocations until • in the event that the audited accounting or financial results of two
the termination of their duties (see section 6.3 Compensation and or more members of the Panel are not published or published
benefits for corporate officers and governance bodies). late, the Board of Directors will make a decision duly justified at
5. Conditionality of the definitive allocation of shares
The definitive allocation of shares either in existence or to be issued
will necessarily be subject to (i) the achievement of the performance
Panel and by the Company over the three latest completed fis-
conditions to be determined by the Board of Directors in accordance
cal years for which financial statements were published by all
with the terms described hereafter (the “Performance Conditions”)
members of the Panel and by the Company;
and (ii) a condition of continued employment within the Group (see
point 5.2 hereafter). • the Board of Directors may, through a duly justified decision
taken at a later date and mentioned in the Report of the Board
5.1 Performance conditions
of Directors to the Shareholders’ Meeting, exclude a member of
The Performance Conditions applied by your Board would be as
the Panel in the event of an acquisition, absorption, dissolution,
follows:
spin-off, merger or change of activity of this member of the
(i) These conditions consist of two complementary criteria, indicative Panel, provided that it maintains the overall consistency of the
of the Group’s performance and adapted to the specific nature of peer group;
its business, namely:
• the Board of Directors must state whether this first performance
(a) Comparison of the arithmetic average net sales growth (the “CA”) condition was attained, on the basis of a duly justified decision
of the Group with that of a reference panel, on a like-for-like basis, taken at a later date and mentioned in the Report of the Board
for a period of three years, i.e. 2015, 2016 and 2017: of Directors to the Shareholders’ Meeting, following a recom-
mendation by the Nomination and Compensation Committee,
• if the Group’s CA exceeds or is equal to the Median CA of the and based on a report of a financial advisor;
Panel, the definitive allocation shall be 100%;
(b) The improvement in trading operating margin on a like-for like
• if the Group’s CA is less than the Median CA of the Panel, the basis, over a period of three years, i.e. the years 2015, 2016 and 2017:
below median” principle; • if the arithmetic average of the change on a like-for-like basis in
trading operating margin calculated over the three years (2015,
Where:
2016 and 2017) is positive (i.e. greater than or equal to +1 basis
• the Group’s CA refers to the arithmetic average internal (“organic”) point), the definitive allocation will be 100%;
net sales growth of the Group during the fiscal years 2015, 2016
and 2017 (on a consolidated basis and on a like-for-like basis);

• if the arithmetic average of the change (on a like-for-like basis) Thus:

in trading operating margin calculated over the three years
(2015, 2016 and 2017) is zero or negative, the definitive allocation
• the outstanding number of stock-options not yet exercised as
of December 31, 2014 totaled 5,688,697 options or 0.9% of the
will be 0%;
share capital;
Where:
• the outstanding number of shares subject to performance condi-
• the arithmetic average of the change in trading operating margin tions granted but not yet definitively vested as of December 31,
means the arithmetic average of: 2014 totaled 1,950,995 or 0.3% of the share capital; and
(i) growth in trading operating margin for 2015 compared on a • the number of shares that may be issued through allocations of
like-for-like basis to 2014; shares subject to performance conditions under this resolution
may not exceed 0.2% of the share capital,
(ii) growth in trading operating margin for 2016 compared on a
like-for-like basis to 2015; which represents a total of around 1.4% of the share capital.
(iii) growth in trading operating margin for 2017 compared on a Finally, the Board noted that in the absence of any outstanding
like-for-like basis to 2016; authorization as a result of the termination of the Group’s stock-
option program, the Company has not granted any option to purchase
• the “trading operating margin”, “trading operating income”, “net and/or subscribe shares since October 2009.
sales” and the change on a “like-for like basis” are financial
indicators not defined by the IFRS regulations which are used Each year, the Shareholders’ Meeting will be informed by the Board
by the Group and whose calculation is specified in the financial of Directors as to the share allocations subject to performance
press releases published by the Company (see also section 3.6 conditions that have been made. These allocations will continue to
Financial indicators not defined by IFRS); and comply with the principles and best practices applied by the Board
(see section 6.3 Compensation and benefits for corporate officers and
• the Board of Directors will need to state whether this second governance bodies), which include in particular:
performance condition has been achieved through a duly informed
decision made at a later date and mentioned in the Report of the • involvement at every stage (allocation, achievement evaluation
Board of Directors to the Shareholders’ Meeting, upon recom- of performance conditions, etc.) by the Nomination and Compen-
mendation of the Nomination and Compensation Committee. sation Committee, entirely composed of independent Directors;
(ii) For all beneficiaries, provided that the condition of continued • compliance with best market practices concerning ceilings,
employment with the Group is met (see point 5.2 hereafter), two- applicable to GPS allocations in terms of percentage of the share
thirds of the shares will be definitively allocated subject to the achie- capital, as well as sub-ceilings for allocations to executives;
vement of the performance condition related to sales growth, and
the remaining third will be allocated subject to the achievement of
• continuation by the Board of its policy for the allocation of “4+0”
GPS, applied since 2013 to corporate officers, as recommended
the performance condition related to the trading operating margin.
by the Nomination and Compensation Committee, henceforth
5.2 Condition of continued employment with the Group extended to all beneficiaries in order to increase the length of the
The beneficiary of a share allocation who leaves the Group before vesting period, thus conforming to financial market best practices;
the end of the vesting period may not retain his or her shares except
in the case of legally mandated early departure (including death
• setting demanding and motivating performance conditions,
affecting 100% of the shares allocated;
and disability) and in exceptional cases determined by the Board
of Directors. • stability of allocation periods, with the main allocation in principle
taking place yearly at the Board meeting convened to approve
Moreover, it should be noted that the GPS plans allocated as of
the semi-annual financial statements, i.e. at the end of July; and
July 26, 2010 provide that all GPS beneficiaries may be exempted
from the conditions of continuous employment and performance • adherence to stringent ethical rules, including the prohibition
in the event of the Company’s change of control (see section 7.10 for beneficiaries who are members of the Executive Committee
Change of control). to use any hedging instrument in respect of GPS and shares
stemming from GPS allocations, and holding obligation of a
6. Impact in terms of dilution/ownership of the Company’s
significant number of shares stemming from GPS allocations,
share capital
periodically set by the Board, until the termination of their duties
The Board wishes to point out that the Group’s policy concerning
within the Company.
authorizations to grant stock-options and shares subject to perfor-
mance conditions has always had a limited impact in terms of the
dilution/ownership of share capital.

Authorization to reduce the share capital by canceling shares (28th resolution)

The authorization granted to the Board of Directors in 2013 to cancel Justification for the authorization request
shares acquired by the Company pursuant to Article L.225-209 of
This mechanism complements the implementation of a share buy-
the French commercial code is soon to expire and you are asked
back program that would be authorized under the terms of the 19 th
to renew it.
resolution submitted to the Shareholders’ Meeting.
We therefore request that you renew the authorization granted to
your Board of Directors, for a 24-month period, to reduce the share
capital by cancelling, on one or more occasions, within the limit of
10% of the share capital (per 24-month period), part or all of the
Company’s shares that the Company holds or may acquire within
the framework of share repurchase programs authorized by the
The difference between the accounting amount of the canceled
shares and their par value will be applied to the “Additional paid-in
capital” account or on any available reserve account, including the
legal reserve, within the limit of 10% of the share capital reduction
achieved.
On July 26, 2013, the Board of Directors, using this delegation,
cancelled 4,252,000 shares (representing approximately 0.7% of the
share capital). This authorization was not used in 2014.
This new authorization would replace the 20 th resolution approved
by the Shareholders’ Meeting of April 25, 2013.

Special reports of the Statutory auditors to the Shareholders’ Meeting
8.4 Special reports of the Statutory auditors to the

Shareholders’ Meeting
Extraordinary Shareholders’ Meeting of April 29, 2015 (20th, 21st, 22nd, 23rd
and 24th resolutions)
Statutory auditors’ report on the issuance of shares and various securities with
or without preferential subscription right
This is a free translation into English of the Statutory auditors’ report issued in the French language and is provided solely for the convenience
of English-speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional
auditing standards applicable in France.
In our capacity as Statutory auditors of your Company and in execution of our assignment pursuant to Articles L. 228-92 and L. 225-135
et seq. of the French commercial code, we hereby present our report on the proposed authorizations to the Board of Directors for various
issues of shares and securities, upon which you are called to vote.
Your Board of Directors requests, on the basis of its report:
• that it be delegated the authority, for a 26-month period, to decide on the following transactions and set the final terms and conditions
of these issues, and also proposes, if applicable, to cancel your preferential subscription right:
• issuance, with preferential subscription right (20 th resolution), of ordinary shares and/or securities that are equity securities giving
access to other equity securities or giving right to the allocation of debt securities and/or debt securities entitling access to equity
securities of the Company to be issued;
• issuance, without of preferential subscription right but with the obligation to grant a priority period through a public offering (21st
resolution) of ordinary shares and/or securities that are equity securities giving access to other equity securities or giving the right
to the allocation of debt securities and/or debt securities entitling access to equity securities of the Company to be issued;
• issuance, in the event of a public exchange offer initiated by your Company (23rd resolution) of ordinary shares and/or securities
that are equity securities giving access to other equity securities or giving the right to the allocation of debt securities;
• that it be delegated the necessary powers, for a 26-month period, to execute the issuance of ordinary shares and/or securities that
are equity securities giving right to other equity securities, in consideration for the contributions in kind granted to the Company and
comprised of equity securities or debt securities giving access to the share capital (24th resolution), within the limit of 10% of the share
capital.
The maximum nominal amount of capital increases that can be implemented immediately or at a later date may not exceed:
• €56.3 million pursuant to the 20th resolution, it being specified that the nominal amount of ordinary shares that would be issued under
the 21st, 22nd, 23rd, 24th, 26th and 27th resolutions shall comply with this maximum amount,
• €16 million pursuant to the 21st resolution, it being specified that this limit is shared with the 22nd, 23rd, 24th, 26th and 27th resolutions
and that the capital increases carried out pursuant to this resolution shall comply with the limit set by the 20 th resolution,
• €16 million pursuant to the 23rd resolution, it being specified that the issues carried out pursuant to this resolution shall comply with
the limits set by the 20 th and 21st resolutions.
The total nominal amount of debt securities that may be issued shall not exceed €2 billion for the 20 th, 21st, 22nd and 23rd resolutions.
These maximum amounts take into account the additional number of securities to be created pursuant to the delegation of authority
specified in the 21st resolution, in accordance with the provisions of Article L. 225-135-1 of the French commercial code, if you adopt the
22nd resolution.
It is the responsibility of the Board of Directors to prepare a report in accordance with Articles R. 225-113 et seq. of the French commercial
code. Our role is to report on the fairness of the financial information taken from the financial statements on the proposed cancellation
of preferential subscription right and on certain other information relating to the transactions provided in the report.
French Institute of Statutory auditors (Compagnie nationale des Commissaires aux comptes) for this type of assignment. These procedures
consist in verifying the information provided in the Board of Directors’ report in respect of these transactions and the terms and conditions
governing the determination of the issue price of securities to be issued.
Subject to a subsequent review of the terms and conditions for the issues that may be made, we have no observation to make on the
terms and conditions governing the determination of the issue price of equity securities to be issued and that are provided in the Board
of Directors’ report pursuant to the 21st resolution.
8
Moreover, since this report did not specify the terms and conditions governing the determination of the issue price of equity securities to be
issued pursuant to the 20 th, 23rd and 24th resolutions, we cannot express our opinion regarding the factors used to determine the issue price.

As the final terms and conditions under which the issues will be carried out have not yet been set, we do not express an opinion on them
nor, consequently, on the proposed cancellation of preferential subscription right which the Board of Directors has proposed in the 21st
resolution.
In accordance with Article R. 225-116 of the French commercial code, we will issue an additional report, if applicable, when your Board
of Directors uses these delegations in respect of an issue of securities that are equity securities giving access to other equity securities
or the right to the allocation of debt securities, in the event of an issue of securities giving access to equity securities to be issued and in
the event of a share issue without preferential subscription right.


Extraordinary Shareholders’ Meeting of April 29, 2015 (26th resolution)

Statutory auditors’ report on the issuance of shares or securities reserved
for members of a company savings plan (plan d’épargne d’entreprise)
In our capacity as Statutory auditors of your Company and in execution of our assignment pursuant to Articles L. 228-92 and L. 225-135
et seq. of the French commercial code, we hereby present our report on the proposed authorizations to the Board of Directors for various
issues of ordinary shares and securities giving access to ordinary shares, without preferential subscription right, reserved for members
of a company savings plan of the Company or of related French or foreign companies as defined by article L. 225-180 of the French com-
mercial code and L. 3344-1 of the French labor code, a transaction submitted to you for approval.
The maximum nominal amount of the capital increase that may be achieved by all share issues carried out pursuant to this resolution
is set at €3.2 million, it being specified that the issues carried out must comply with the limits provided for in paragraphs (a) of the 20 th
and 21st resolutions.
This transaction is submitted for your approval in accordance with Articles L. 225-129-6 of the French commercial code and L. 3332-18
et seq. of the French Labor Code.
Your Board of Directors requests, on the basis of its report, that you authorize it, for a 26-month period, to increase the Company’s share
capital on one or more occasions, and proposes that you waive your preferential subscription right to the securities to be issued. In that
case, the Board shall determine the final terms and conditions of this transaction.
It is the responsibility of the Board of Directors to prepare a report in accordance with Articles R. 225-113 et seq. of the French commercial
code. Our role is to report on the fairness of the financial information taken from the financial statements, on the proposed cancellation
of preferential subscription right and on certain other information relating to the issue provided in the report.
French Institute of Statutory auditors (Compagnie nationale des Commissaries aux comptes) for this type of assignment. These procedures
consist in verifying the information provided in the Board of Directors’ report in respect of this transaction and the terms and conditions
governing the determination of the issue price of securities to be issued.
Subject to a subsequent review of the terms and conditions of the issues that may be made, we have no observation to make on the
terms and conditions governing the determination of the issue price of equity securities to be issued and that are provided in the Board
of Directors’ report.
As the final terms and conditions under which the issues will be carried out have not yet been set, we do not express an opinion on them
nor, consequently, on the proposed cancellation of preferential subscription rights.
In accordance with Article R. 225-116 of the French commercial code, we will issue an additional report, as necessary, when your Board of
Directors exercises this delegation in the event of an issue of securities that are equity securities giving rights to other equity securities,
in the event of an issue of securities giving access to equity securities to be issued and in the event of share issues, without preferential
subscription right.

Combined Shareholders’ Meeting of April 29, 2015 (27th resolution)

Statutory auditors’ report on the authorization to freely allocate existing shares
or shares to be issued
In our capacity as Statutory auditors of your Company, and in execution of our assignment pursuant to Article L. 225-197-1 of the French
commercial code, we hereby present our report on the proposed authorization to freely allocate existing shares or shares to be issued,
to employees or certain categories thereof and to corporate officers of your Company or related companies as defined by Articles L. 225-
197-2 of the French commercial code. You are being asked to vote on this proposed authorization.
Your Board of Directors proposes, based upon its report, that you authorize it to freely allocate existing shares or shares to be issued,
until December 31, 2015.
It is the responsibility of the Board of Directors to prepare a report on this transaction, which it hopes to carry out. Our duty is to provide
you with our observations, if any, on the information thus provided to you on the proposed transaction.
French Institute of Statutory auditors (Compagnie nationale des Commissaires aux comptes) for this type of assignment. These procedures
consist in verifying that the methods proposed and disclosed in the Board of Directors’ report comply with the statutory requirements.
We have no observation to make regarding the information provided in the Board of Directors’ report on the proposed authorization to
freely allocate shares.

Extraordinary Shareholders’ Meeting of April 29, 2015 (28th resolution)

Statutory auditors’ report on the capital reduction
In our capacity as Statutory auditors of your Company and in execution of our assignment pursuant to Article L. 225-209 of the French
commercial code in the event of a capital reduction by the cancellation of purchased shares, we hereby report on our assessment of the
justifications, terms and conditions for, the proposed reduction in share capital.
Your Board of Directors requests that you authorize it, for a 24-month period starting from the date of this Shareholders’ Meeting, all
powers to cancel, up to 10% of its share capital per 24-month period, the shares purchased in accordance with an authorization by your
Company to purchase its own shares in accordance with the provisions of the aforementioned article.
French Institute of Statutory auditors (Compagnie nationale des Commissaries aux comptes) for this type of assignment. These procedures
consist in assessing whether the justifications, terms and conditions for the proposed capital reduction, which is not of a nature to jeo-
pardize the equal treatment of shareholders, are legitimate.
We have no observation to make on the justifications, terms and conditions of the proposed capital reduction.

Annexes
PARTIE A METTRE À JOUR
Appendix

Cross-reference tables 388
Cross-reference table to the Annual Financial Report 388
Cross-reference table to the provisions

of Annex 1 of the 809/2004 Regulation
of the European Commission 389
Cross-reference table with the Management

Report, parent company Danone 392
Cross-reference table with the

Management Report, Danone group 393
List of subsidiaries 394

Appendix
Cross-reference tables
Cross-reference table to the Annual Financial Report
In order to facilitate the reading of this Registration Document, the cross-reference table hereafter enables to identify the main information
required in accordance with Article L. 451-1-2 of the French monetary and financial code and Article 222-3 of the general regulations of the
French Financial Markets Authority.
Pages of the
Annual Financial Report Registration Document
1. Company financial statements 153
2. Consolidated financial statements 74
3. Management report (within the meaning of the French monetary and financial code)
3.1 Information required by Articles L. 225-100 and L. 225-100-2 of the French commercial code
Analysis of the business trends 18, 42 to 65
Analysis of the results 13, 46
Analysis of the financial position 54, 56
Major risk factors and uncertainties 27
Table of the capital increases delegations 322

3.2 Information required by Article L. 225-100-3 of the French commercial code
Elements that might have an impact in the event of a public tender offer 334
3.3 Information required by Article L. 225-211 of the French commercial code
Share buyback programs of the Company 319
4. Statements of the persons responsible for the Annual Financial Report 9
5. Statutory auditors’ report on the Company’s financial statements and the consolidated 151, 173
6. Information on the fees of the Statutory auditors 174

7. Report of the Chairman of the Board of Directors on the corporate governance, the internal control 216, 262, 298
and risk management procedures (Article L. 225-37 of the French commercial code)
8. Statutory auditors’ report on the report of the Chairman on the internal control and risk management 305

Appendix
Cross-reference table to the provisions of Annex 1 of the 809/2004 Regulation

of the European Commission
This cross-reference table identifies the main information required by Annex 1 of the 809/2004 Regulation of the European Commission dated
April 29, 2004. This table refers to the pages of this Registration Document on which the information related to each item is indicated.
Pages of the
Document of registration relating to shares Registration Document
1. Persons responsible
1.1 Identity 9
1.2 Statement 9
2. Statutory auditors
2.1 Identity 7
2.2 Potential change 7
3. Selected financial information
3.1 Historical financial information 6, 9
3.2 Financial information for interim periods N/A
4. Risk factors 27
5. Information about the issuer
5.1 History and development of the Company

5.1.1 Legal and commercial name 6
5.1.2 Registration place and number 6
5.1.3 Incorporation date and term 6
5.1.4 Registered office, legal form, applicable legislation, country of incorporation, address and telephone
number of the registered office 6, 7
5.1.5 Important events in the business development 12 to 26, 42, 65
5.2 Investments
5.2.1 Principal investments made 42, 54
5.2.2 Principal investments in progress 42, 54
5.2.3 Principal future investments 42, 54, 65
6. Business overview
6.1 Principal activities
6.1.1 Nature of operations and principal activities 13 to 18, 42, 65
6.1.2 Development of new products and/or services 15, 16
6.2 Principal markets 13, 16
6.3 Exceptional events N/A
6.4 Dependence of the issuer N/A
6.5 Competitive position of the issuer 13, 18
7. Organizational structure
7.1 Brief description of the Group 24, 74

7.2 List of the significant subsidiaries 24, 74
8. Property, plants and equipment
8.1 Material tangible fixed assets 18, 74

8.2 Environmental issues 18, 178, 181
9. Operating and financial review
9.1 Financial position 42 to 56, 74

Appendix
9.2 Operating results

9.2.1 Significant factors materially influencing the operating income 13, 27, 46, 74
9.2.2 Evolution of net sales or net revenues 13, 46, 74
9.2.3 External factors materially influencing the operations 18, 27
10. Capital resources
10.1 Issuer’s capital resources 56, 74, 318
10.2 Cash-flows 54, 74
10.3 Information on the borrowing requirements and funding structure of the issuer 56, 74
10.4 Restrictions on the use of capital resources 56, 74
10.5 Anticipated sources of funds 56, 74
11. Research and development, patents and licenses 18, 42
12. Trend information
12.1 Most significant recent trends since the end of the last fiscal year 65
12.2 Events that are reasonably likely to have a material effect on the issuer’s prospects 65
13. Profit forecasts or estimates 65
14. Administrative and senior management
14.1 Information on the members 216 to 242

14.2 Conflicts of interests 217
15. Remuneration and benefits
15.1 Remuneration and benefits in kind 262

15.2 Provisions for retirement obligations 262
16. Functioning of the board and management
16.1 Expiration date of the terms of office 216, 242

16.2 Services agreements relating to the members of the Board and of the management 216
16.3 Information about the Audit Committee, the Nomination and Compensation Committee
and the Social Responsibility Committee and the Strategy Committee 232 to 239
16.4 Corporate governance 240
17. Employees
17.1 Number of employees 181

17.2 Shareholdings and stock-options 262
17.3 Arrangements involving the employees in the capital of the issuer 181
18. Major shareholders
18.1 Shareholding of the issuer 330

18.2 Voting rights 327
18.3 Control of the issuer 330
18.4 Change of control 336
19. Related party transactions 42
20. Financial information concerning the issuer’s assets and liabilities, financial position
and profits and losses
20.1 Historical financial information 9, 74, 153

20.2 Pro forma financial information N/A
20.3 Financial statements 9, 74, 153
20.4 Auditing of historical annual financial information
20.4.1 Statement of audit of the historical financial information 9, 74, 153

Appendix
20.4.2 Other information audited by the auditors 9, 65, 74, 153

20.4.3 Financial data not extracted from audited financial statements of the issuer 68
20.5 Date of latest financial information December 31, 2014
20.6 Interim and other financial information N/A
20.6.1 Half yearly and quarterly financial information N/A
20.6.2 Interim Financial Information N/A
20.7 Dividend policy 326
20.7.1 Amount of the dividend per share 326
20.8 Legal and arbitration proceedings 42
20.9 Significant change in the issuer’s financial or commercial position 65
21. Additional information
21.1 Share Capital

21.1.1 Amount of issued and authorized capital 318, 322
21.1.2 Shares not representing capital N/A
21.1.3 Shares held by the issuer or its subsidiaries 319, 330
21.1.4 Convertible securities, exchangeable securities or securities with warrants 322
21.1.5 Acquisition rights and/or obligations over authorized but unissued capital or an undertaking to
increase the capital 322
21.1.6 Options on the capital of Group members 74, 334
21.1.7 History of share capital 330
21.2 Incorporation documents and by-laws
21.2.1 Objects and purposes 7
21.2.2 Administrative, management and supervisory bodies 216
21.2.3 Rights, preferences and restrictions attaching to shares 326, 327
21.2.4 Change of shareholders’ rights 322, 327, 340
21.2.5 Invitation to shareholders’ meetings and conditions of admissions 327, 340
21.2.6 Provisions that may delay, defer or prevent a change of control 334, 336
21.2.7 Declarations of crossing statutory thresholds 327
21.2.8 Stringent conditions than required by the law for any change in the capital 322
22. Material contracts 42
23. Third party information and statement by experts and declarations of any interest
23.1 Identity 175
23.2 Statement 175
24. Documents available to the public 70
25. Information on holdings 24, 74, 319, 394

Appendix
Cross-reference table with the Management Report, parent company Danone

This Registration Document includes all the items of the Management Report as required pursuant to Article L. 225-100 et seq., L. 232-1, II
and R. 225-102 and subsequent of the French commercial code.
Pages of the Registration

Management Report Document
Financial position and activity of the Company during the fiscal year 153
Information on trends and outlook 65
Material events occurred since the end of the fiscal year 65
Research and development activities 18, 42
Activities of the Company’s subsidiaries 13, 42 to 56
Acquisition of significant equity interests or control in companies headquartered in France N/A
Amount of dividends distributed during the last three fiscal years 326
Changes to the presentation of the Company’s financial statements 153
Injunctions or financial penalties for antitrust practices N/A
Information relating to suppliers and clients’ terms of payment 153
Directorship and offices held by each corporate officers 242
Indication on the use of financial instruments by the Company 153
Analysis of the business performance, results and financial position of the Company during the fiscal year 153
Description of the major risk factors and uncertainties 27
Company’s exposure to price, credit, liquidity and cash-flows risks 153
Information relating to the breakdown of the share capital 330
Shares held by the subsidiaries of the Company 319
Employee shareholding on the last day of the fiscal year 330
Summary statement of the transactions relating to shares carried out by executives 297
Table and report on the share capital increase delegations 322
Compensation and benefits of any kind paid to each corporate officer 262
Table of the Company’s financial results over the last five years 153
Information required by Article L. 225-211 of the French commercial code in case of transactions carried out 319
by the Company on its own shares
Information required by Article L. 225-100-3 of the French commercial code that may have an impact 334
regarding a public tender offer
Information required by Article L. 225-102-1 of the French commercial code relating to social and 181
environmental consequences of the Company’s business and to its societal commitments

Appendix
Cross-reference table with the Management Report, Danone group

This Registration Document includes all the items of the Management Report as required pursuant to Articles L. 233-26 and L. 225-100-2 of
the French commercial code.
Pages of the Registration

Management Report Document
Financial position and activity of the Group during the fiscal year 13, 18, 42 to 56
Information on trends and outlook 65
Material events occurred since the end of the fiscal year 65
Research and development activities 18, 42
Indication on the use of financial instruments by the Group 27, 46, 74
Analysis of the business performance, results and financial position of the Group during the fiscal year 13, 18, 42 to 56
Description of the major risk factors and uncertainties 27, 65

Appendix
List of subsidiaries
The following table lists by country, the companies included in the Group’s scope of consolidation, whether directly, indirectly or fully
consolidated and whether accounted for using the equity method as of December 31, 2014.
Name Country
DANONE DJURDJURA Algeria

DANONE TESSALA BOISSONS Algeria
ADVANCED MEDICAL NUTRITION SA Argentina
AGUAS DANONE DE ARGENTINA SA Argentina
BAGLEY ARGENTINA SA Argentina
DANONE ARGENTINA SA Argentina
DAN-TRADE SA Argentina
KASDORF SA Argentina
LAS MAJADAS SA Argentina
LOGISTICA LA SERENISIMA Argentina
NUTRICIA-BAGO SA Argentina
DANONE ARMENIA LLC Armenia
DANONE MURRAY GOULBURN PTY LTD Australia
NUMICO RESEARCH AUSTRALIA PTY LTD Australia
NUTRICIA AUSTRALIA HOLDINGS PTY LTD Australia
NUTRICIA AUSTRALIA PTY LTD Australia
DANONE GESMBH Austria
MILUPA GMBH Austria
NUTRICIA GMBH Austria
DANONE LLC Azerbaijan
GRAMEEN DANONE FOODS LIMITED Bangladesh
DANONEBEL Belarus
JLLC DANONE SHKLOV Belarus
JLLC UNIMILK PRUZHANY Belarus
LLC VYSOKVOYE Belarus
BIALIM BELGIQUE SA Belgium
DANONE FINANCE INTERNATIONAL Belgium
DANONE WATERS BENELUX Belgium
NV DANONE SA Belgium
NV NUTRICIA BELGIË Belgium
FAN MILK SARL (a) Benin
AGUAS MINERAIS BACCARELLI LTDA Brazil
BAGLEY DO BRASIL ALIMENTOS LTDA Brazil
CPN MINERACAO Brazil
DANONE LTDA Brazil
MINERAÇÃO JOANA LEITE LTDA Brazil
NUTRIMED INDUSTRIAL LTDA Brazil
SUPPORT PRODUTOS NUTRICIONAIS LTDA Brazil
TINGUA EMPRESA DE MINERACAO E AGUAS LTDA Brazil
(a) Company not directly held by the Group but subsidiary of a company consolidated using the equity method.

Appendix
Name Country
IBIC SDN BHD Brunei

DANONE SERDIKA Bulgaria
FAN MILK BURKINA FASO SARL (a) Burkina Faso
DAIRYLICIOUS PRODUCTS INC Canada
DANONE INC Canada
AGUAS DANONE DE CHILE SA Chile
BAGLEY CHILE SA Chile
DANONE CHILE SA Chile
ASIA HOST INVESTMENTS LTD China
DANONE (SHANGHAI) HOLDING CO LTD China
DANONE ASIA HOLDINGS PTE LTD China
DANONE ASIA PACIFIC MANAGEMENT CO LTD China
DANONE DAIRY BEIJING CO LTD (a) China
DANONE DAIRY SALES SHANGHAI CO LTD China
DANONE DAIRY SHANGHAI CO LTD (a) China
DANONE PREMIUM BRANDS (SHANGHAI) TRADING CO LTD China
DANONE YILI DRINKS TRADING (SHENZHEN) CO LTD China
DANONE YILI (HUIZHOU) BEVERAGES CO LTD China
DANONE YILI TRADING (SHENZHEN) CO LTD China
DUMEX BABY FOOD CO LTD China
HUBEI FREALTH DAIRY CO LTD (a) China
HUBEI ROBUST FOOD & BEVERAGE CO LTD China
INNER MONGOLIA MENGNIU DAIRY (GROUP) CO LTD China
INNER MONGOLIA MENGNIU DANONE DAIRY CO LTD China
MENGNIU DAIRY (JIAOZUO) CO LTD (a) China
MENGNIU DAIRY (MEISHAN) CO LTD (a) China
MENGNIU DAIRY (QINGYUAN) CO LTD (a) China
MENGNIU DAIRY (TAI’AN) CO LTD (a) China
MENGNIU DAIRY (TIANJIN) CO LTD (a) China
MENGNIU HIGH TECHNOLOGY DAIRY (BEIJING) CO LTD (a) China
MENGNIU HIGH TECHNOLOGY DAIRY (MA’ANSHAN) CO LTD (a) China
NANJING ZILE BEVERAGE INDUSTRY CO LTD China
NINGXIA MENGNIU DAIRY CO LTD (a) China
NUTRICIA EARLY LIFE NUTRITION (SHANGHAI) CO LTD China
NUTRICIA PHARMACEUTICAL (WUXI) CO LTD China
NUTRICIA TRADING (SHANGHAI) CO LTD China
NUTRICIA (CHINA) MEDICAL NUTRITION CO LTD China
ROBUST (CHONGQING) FOOD & BEVERAGE CO LTD China
ROBUST (FENGRUN) FOOD & BEVERAGE CO LTD China
ROBUST (GUANGDONG) DRINKING WATER CO LTD China
ROBUST (GUANGDONG) FOOD & BEVERAGE CO LTD China
ROBUST (GUANGDONG) HOD DEVELOPMENT CO LTD China

Appendix
Name Country
ROBUST (SHAAN’XI) FOOD & BEVERAGE CO LTD China

ROBUST (WUHAN) FOOD & BEVERAGE CO LTD China
ROBUST (ZHENGZHOU) FOOD & BEVERAGE CO LTD China
SHENZHEN DANONE YILI DRINKS CO LTD China
SICHUAN ROBUST FOOD & BEVERAGE CO LTD China
TONGLIAO MENGNIU DAIRY CO LTD (a) China
DANONE ALQUERIA SA Colombia
DANONE BABY NUTRITION COLOMBIA Colombia
NUTRICIA COLOMBIA LTDA Colombia
DANONE DOO Croatia
NUTRICIA AMERICAS NV Curacao
DAIRY JV (CIS) HOLDINGS (CYPRUS) LIMITED Cyprus
DANONE AS Czech Republic
NUTRICIA AS Czech Republic
NUTRICIA DEVA AS Czech Republic
DANONE AS Denmark
NUTRICIA AS Denmark
AQUA D’OR MINERAL WATER AS Denmark
DUMEX NUTRITION LTD AS Denmark
EMIDAN AS (a) Denmark
FAN MILK INTERNATIONAL AS Denmark
INC SHANGHAI (HOLDING) LTD AS Denmark
INTERNATIONAL NUTRITION CO LTD AS Denmark
DANONE DAIRY FARM SAE Egypt
DANONE EGYPT SAE Egypt
NUTRICIA EGYPT SERVICES LLC Egypt
DANONE FINLAND OY Finland
NUTRICIA BABY OY Finland
NUTRICIA MEDICAL OY Finland
BLEDINA France
COMPAGNIE GERVAIS DANONE France
DAN INVESTMENTS France
DANONE BABY AND MEDICAL HOLDING France
DANONE CORPORATE FINANCE SERVICES France
DANONE DAIRY ASIA France
DANONE NUTRICIA AFRICA & OVERSEAS France
DANONE PRODUITS FRAIS FRANCE France
DANONE RESEARCH France
EVIAN RESORT France
FERMINVEST France
HOLDING INTERNATIONALE DE BOISSONS France
ID LOGISTICS FRANCE 4 France

Appendix
Name Country
NUTRICIA NUTRITION CLINIQUE SAS France

PRODUITS LAITIERS FRAIS ESPAGNE France
PRODUITS LAITIERS FRAIS EST EUROPE France
PRODUITS LAITIERS FRAIS SUD EUROPE France
SOCIETE ANONYME DES EAUX MINERALES D'EVIAN France
SOCIETE DES EAUX DE VOLVIC France
STEP ST JUST France
STONYFIELD FRANCE France
MILUPA GMBH Germany
NUTRICIA GMBH Germany
DANONE GMBH Germany
DANONE PENSIONS MANAGEMENT GMBH Germany
DANONE WATERS DEUTSCHLAND GMBH Germany
NUTRICIA DEUTSCHLAND GMBH Germany
NUTRICIA GRUNDSTÜCKSVERWALTUNGS GMBH Germany
FAN MILK LTD (a) Ghana
DANONE GALAKTOKOMIKA PROIONTA Greece
NUMIL HELLAS SA Greece
DANONE DE GUATEMALA SA Guatemala
CHINA MENGNIU DAIRY COMPANY LIMITED Hong Kong
COFCO DAIRY INVESTMENTS LIMITED Hong Kong
DANONE NUTRICIA EARLY LIFE NUTRITION (HONG KONG) LIMITED Hong Kong
NUTRICIA (ASIA PACIFIC) LIMITED Hong Kong
NUTRICIA CLINICAL (HONG KONG) LIMITED Hong Kong
PROMINENT ACHIEVER LIMITED Hong Kong
DANONE KFT Hungary
NUMIL HUNGARY KFT Hungary
DANONE FOOD & BEVERAGES INDIA PRIVATE LTD India
DANONE INDIA PRIVATE LTD India
DANONE NARANG BEVERAGES PRIVATE LTD India
NARANG DANONE ACCESS PRIVATE LTD India
NUTRICIA INTERNATIONAL PRIVATE LTD India
YAKULT DANONE INDIA PVT LTD India
PT AQUA GOLDEN MISSISSIPPI Indonesia
PT DANONE INDONESIA Indonesia
PT NUTRICIA INDONESIA SEJAHTERA Indonesia
PT NUTRICIA MEDICAL NUTRITION Indonesia
PT SARIHUSADA GENERASI MAHARDHIKA Indonesia
PT SUGIZINDO Indonesia
PT TIRTA INVESTAMA Indonesia
PT TIRTA SIBAYAKINDO Indonesia
PT WINDU INTI EXPO Indonesia

Appendix
Name Country
AL SAFI DANONE FOR DAIRY PRODUCTION AND DISTRIBUTION LLC (a) Iraq
DAMAVAND MINERAL WATER CO Iran
DANONE SAHAR Iran
MASHHAD MILK POWDER INDUSTRIES CO Iran
DANONE LTD Ireland
GLENISK Ireland
NUTRICIA INFANT NUTRITION LTD Ireland
NUTRICIA IRELAND LTD Ireland
NUTRICIA MEDICAL IRELAND LTD Ireland
STONYFIELD EUROPE LTD Ireland
STRAUSS HEALTH LTD Israel
DANONE SPA Italy
MELLIN SPA Italy
NUTRICIA ITALIA SPA Italy
DANONE NUTRICIA COTE D’IVOIRE SA Ivory Coast
FAN MILK COTE D’IVOIRE SA (a) Ivory Coast
DANONE JAPAN Japan
DANONE WATERS OF JAPAN CO Japan
YAKULT HONSHA CO LTD Japan
DANONE Kazakhstan
DANONE BERKUT LLP Kazakhstan
NUTRICIA KAZAKHSTAN LLP Kazakhstan
TOO UNIMILK KAZAKHSTAN Kazakhstan
BROOKSIDE AFRICA LIMITED Kenya
BROOKSIDE DAIRY LIMITED (a) Kenya
SIA NUTRICIA Latvia
UAB NUTRICIA BALTICS Lithuania
DANONE RE Luxembourg
PLF LICENSING SARL Luxembourg
ICE MIDCO LIMITED SA Luxembourg
DANONE DUMEX (MALAYSIA) SDN BHD Malaysia
DANONE INFORMATION SERVICES ASIA PACIFIC SDN BHD Malaysia
INC CONTRACT MANUFACTURERS SDN BHD Malaysia
AGUAS EMBOTELLADAS LOS PINOS Mexico
AGUAS PURIFICADAS NATURALES Mexico
BONAFONT GARRAFONES Y SERVICIOS Mexico
BONAFONT SA DE CV Mexico
COMPANIA GENERAL DE AGUAS S DE RL DE CV Mexico
DANONE BABY NUTRITION MEXICO SA DE CV Mexico
DANONE DE MEXICO Mexico
DANONE HOLDING DE MEXICO Mexico
DANONE MEDICAL NUTRITION MEXICO SA DE CV Mexico

Appendix
Name Country
DERIVADOS LACTEOS FLN-DDM SA DE CV Mexico

DISTRIBUIDORA SEMILLA SAPI DE CV Mexico
ENVASABON S DE RL DE CV Mexico
ENVASADORA AUGUABON S DE RL DE CV Mexico
ENVASADORA DE AGUAS EN MEXICO Mexico
ENVASADORA LA SUPREMA, SA DE CV Mexico
GRUPO CUZCO INTERNATIONAL S DE RL DE CV Mexico
LIQUIMEX SA DE CV Mexico
NOMISER SA DE CV Mexico
ORGANIZACIÓN DE AGUAS DE MÉXICO SA DE CV Mexico
AGRIGENE Morocco
CENTRALE LAITIÈRE Morocco
FROMAGERIE DES DOUKKALA Morocco
LAITPLUS Morocco
LES TEXTILES Morocco
SOCIETE DU THERMALISME MAROCAIN (SOTHERMA) Morocco
DANONE MOZAMBIQUE LIMITADA Mozambique
DAN TRADE BV Netherlands
DANONE BABY AND MEDICAL NUTRITION BV Netherlands
DANONE BABY AND MEDICAL NUTRITION NEDERLAND BV Netherlands
DANONE CIS HOLDINGS BV Netherlands
DANONE FINANCE NETHERLANDS BV Netherlands
DANONE MEDICAL NUTRITION HOLDING BV Netherlands
DANONE MEDICAL NUTRITION INTERNATIONAL BV Netherlands
DANONE NEDERLAND BV Netherlands
DANONE TRADING ELN BV Netherlands
DANONE TRADING MEDICAL BV Netherlands
HELDINVEST BV Netherlands
INFANT NUTRITION MANAGEMENT 1 BV Netherlands
NUTRICIA CUIJK BV Netherlands
NUTRICIA EXPORT BV Netherlands
NUTRICIA INTERNATIONAL BV Netherlands
NUTRICIA MEDICAL DEVICES BV Netherlands
NUTRICIA NEDERLAND BV Netherlands
NUTRICIA POLAND BV Netherlands
NUTRICIA RESEARCH BV Netherlands
NV NUTRICIA Netherlands
SORGENTE BV Netherlands
SORGENTE HOLDING BV Netherlands
TOECA INTERNATIONAL COMPANY BV Netherlands

Appendix
Name Country
DANONE NUTRICIA NZ LTD New Zealand

NUTRICIA LTD New Zealand
NUTRITIONAL CAN MANUFACTURERS LTD New Zealand
NUTRITIONAL PACKERS LTD New Zealand
ABEBA ADEWARA VENTURES LTD (a) Nigeria
FAN MILK PLC (a) Nigeria
NUTRICIA NORGE AS Norway
NUTRICIA PAKISTAN (PRIVATE) LIMITED Pakistan
DANONE PARAGUAY SA Paraguay
DANONE UNIVERSAL ROBINA BEVERAGES INC Philippines
DUMEX PHILIPPINES INC Philippines
EAC DISTRIBUTORS INC Philippines
EAC PHILIPPINES INC Philippines
DANONE SP ZOO Poland
NUTRICIA POLSKA SP ZOO Poland
NUTRICIA ZAKLADY PRODUKCYNE SP ZOO Poland
NUTRIMED SP ZOO Poland
WOMIR SPA Poland
ZYWIEC ZDROJ SA Poland
DANONE PORTUGAL SA Portugal
MILUPA COMERCIAL SA Portugal
NUTRICIA ADVANCED MEDICAL NUTRITION UNIPESSOAL LDA Portugal
DANONE SRL Romania
NDL FRIGO LOGISTICS SRL Romania
NUTRICIA EARLY LIFE NUTRITION ROMANIA SRL Romania
CJSC EDELWEISS-M Russia
CJSC TIKHORETSKY Russia
DANONE INDUSTRIA LLC Russia
DANONE TRADE LLC Russia
DANONE VOLGA Russia
LLC MASLENITSA Russia
LLC UNIMILK Russia
LLC UNIMILK INVEST Russia
LLC URAL BABY FOOD Russia
LLC VERBILOVOSKOYE Russia
NDL HOLDING RUSSIA BV Russia
ND LOGISTICS FRESH LLC Russia
NUTRICIA ADVANCED LLC Russia
NUTRICIA LLC Russia
OJSC EKATERINBURGSKIY GORODSKOY MOLOCHNY ZAVOD N 1 Russia
OJSC ISTRA - NUTRICIA BABY FOODS Russia
OJSC KEMEROVSKY MOLOCHNIY KOMBINAT Russia

Appendix
Name Country
OJSC KINGISEPPSKIY MOLOCHNIY KOMBINAT Russia

OJSC MASLODELNY KOMBINAT CHANOVSKY Russia
OJSC MK SARANSKY Russia
OJSC STARITSKY SYR Russia
OJSC TVERMOLOKO Russia
OJSC UNIMILK COMPANY Russia
DANONE EL SALVADOR SA DE CV Salvador
ALSAFI DANONE COMPANY LIMITED Saudi Arabia
DANONE BABY NUTRITION OPERATIONS KSA Saudi Arabia
ND LOGISTICS LLC (a) Saudi Arabia
DANONE ADRIATIC DOO Serbia
DANONE ASIA BABY NUTRITION PTE LTD Singapore
DANONE ASIA PACIFIC HOLDINGS PTE LTD Singapore
DANONE ASIA PACIFIC MANUFACTURING PTE LTD Singapore
DANONE ASIA PTE LTD Singapore
DANONE DAIRY INVESTMENTS INDONESIA Singapore
DANONE PROBIOTICS PTE LTD Singapore
DANONE SINGAPORE HOLDINGS PTE LTD Singapore
DANONE WATERS CHINA HOLDING PTE LTD Singapore
MYEN PTE LTD Singapore
PTNIS HOLDING SINGAPORE PTE LTD Singapore
PTSH HOLDING SINGAPORE PTE LTD Singapore
DANONE SPOL SRO Slovakia
NUTRICIA SPOL SRO Slovakia
DANONE SOUTHERN AFRICA PTY LTD South Africa
IDL FRESH SOUTH AFRICA PTY LTD South Africa
MAYO DAIRY (PROPRIETARY) LTD South Africa
NUTRICIA SOUTHERN AFRICA PTY LTD South Africa
DANONE PULMUONE COMPANY LIMITED South Korea
AGUAS FONT VELLA Y LANJARON SA Spain
BAGLEY LATINO AMERICA SA Spain
DAIRY LATAM SL Spain
DANONE SA Spain
ILTESA - INDUSTRIAS LACTEAS DE CANARIAS SA Spain
NUMIL NUTRICIÓN SRL Spain
NUTRICIA SRL Spain
PRODUITS LAITIERS FRAIS IBERIA SL Spain
WATER LATAM SL Spain
DANONE AB Sweden
NUTRICIA NORDICA AB Sweden
OSTERLENMEJERIET Sweden
PRO VIVA AB Sweden

Appendix
Name Country
DANONE AG Switzerland
DANONE FINANCIAL SERVICES SA Switzerland
EVIAN-VOLVIC SUISSE SA Switzerland
NUTRICIA SA Switzerland
BROOKSIDE DAIRY TANZANIA LTD (a) Tanzania
BJC DANONE DAIRY CO Thailand
DANONE DAIRY THAILAND Thailand
DUMEX LTD Thailand
FAN MILK TOGO SA (a) Togo
SOCIETE DE COMMERCE ET DE GESTION (SOCOGES) Tunisia
SOCIETE TUNISIENNE DES INDUSTRIES ALIMENTAIRES (STIAL) Tunisia
DANONE HAYAT IÇECEK VE GIDA SA Turkey
DANONE TIKVESLI GIDA VE TAS Turkey
NUMIL GIDA ÜRÜNLERI AS Turkey
SIRMAGRUP IÇECEK AS Turkey
BROOKSIDE DAIRY UGANDA LTD (a) Uganda
DANONE LLC Ukraine
DANONE DNIPRO LLC Ukraine
LLC UNIMILK (UKRAINE) Ukraine
LLCFI NUTRICIA UKRAINE Ukraine
PJSC GALAKTON Ukraine
PJSC KREMENCHUG DAIRY PLANT Ukraine
ALC HOLDING 1 LIMITED (a) United Arab Emirates
DANONE BABY NUTRITION MIDDLE EAST HOLDING LIMITED United Arab Emirates
NUTRICIA MIDDLE EAST DMCC United Arab Emirates
DANONE LTD United Kingdom
NUTRICIA LTD United Kingdom
COMPLAN FOODS LIMTED United Kingdom
DANONE FINANCING UK LTD United Kingdom
DANONE HOLDINGS (UK) United Kingdom
DANONE WATERS (UK & IRELAND) LTD United Kingdom
NUTRICIA (COW & GATE, MILUPA) HOLDINGS LTD United Kingdom
SCIENTIFIC HOSPITAL SUPPLIES (UK) LTD United Kingdom
SCIENTIFIC HOSPITAL SUPPLIES HOLDINGS LTD United Kingdom
SHS INTERNATIONAL LTD United Kingdom
UK HOLDINGS CAP (COMMONWEALTH, ASIA AND PACIFIC) LTD United Kingdom
DANONE DAIRY HOLDINGS INC United States
DANONE FOODS INC United States
DANONE NORTH AMERICA LLC United States
DANONE WATER HOLDINGS LLC United States
DANONE WATERS OF AMERICA INC United States
DANONE-NUTRICIA EARLY LIFE NUTRITION INC United States

Appendix
Name Country
DANNON PR INC United States

HAPPY FAMILY HOLDING COMPANY United States
HEALTHY FOOD HOLDINGS INC United States
HF OFFICE LLC United States
NL YOGURT INC United States
NURTURE INC United States
NUTRICIA NORTH AMERICA INC United States
STONYFIELD FARM INC United States
SWIRL HOLDING CORPORATION United States
THE DANNON COMPANY INC United States
THE YOCRUNCH COMPANY LLC United States
THE YOFARM COMPANY INC United States
THE YOGURT CULTURE COMPANY LLC United States
YOCREAM INTERNATIONAL INC United States
YOCREAM OREGON LLC United States
YOGURT HOLDINGS II INC United States
YOHO II IP SUB United States
COMPANIA SALUS SA Uruguay
FORT MASIS SA Uruguay
DANONE VIETNAM COMPANY LTD Vietnam
YAKULT VIETNAM CO LTD Vietnam

Design and realization by
Claire Faÿ and Caroline Pauchant
with Luce Théry, Hind Mellah, Adrien Labbe and Violaine Aurias
Printed on the presses of Snel

Z.I. des Hauts-Sarts – zone 3 – rue Fond des Fourches 21 – 4041 Vottem – Herstal – Belgium
March 2015

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Danone Annual Report 2014

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CONTENTS 5

Selected financial information,

and information on the

4 Meeting of April 29, 2015

This Registration Document

“OUR 2014 ACHIEVEMENTS LAID A SOLID FOUNDATION FOR DANONE TO BUILD ON

+4.7% 21,144 MLN 2,662 MLN

Full-year Group sales DIVIDEND

The Group’s Strategy is consistent with

Evolution of the Group’s sales

Key Financial Figures

Like-for-like growth (b) +5.4% +4.8% +4.7%

Trading operating income (a) (b) 2,958 2,809 2,662

Trading operating margin (b) 14.18% 13.19% 12.59%

Like-for-like growth (b) - 50 bps - 81 bps -12 bps

Net income (a) 1,787 1,550 1,253

Earnings per share - Group share (c) 2.78 2.42 1.88

Underlying fully diluted EPS (b) (c) 3.01 2.78 2.62

Dividend (c) 1.45 1.45 1.50

DANONE REGISTRATION DOCUMENT 2014 3

1.2 Information about the issuer 6

Registration number in the Register of commerce and

Date of incorporation and term of the Company 6

Legal form and applicable law 6

1.3 Information about

Persons responsible for the Registration Document 9

DANONE REGISTRATION DOCUMENT 2014 5

1.1 Selected financial information

1.2 Information about the issuer

Registration number in the Register of commerce and companies

Date of incorporation and term of the Company

Legal form and applicable law

6 DANONE REGISTRATION DOCUMENT 2014

Represented by Anik CHAUMARTIN and Philippe VOGT

Start date of first term of office: May 21, 1992

Expiration date of term of office: date of the Shareholders’ Meeting

DANONE REGISTRATION DOCUMENT 2014 7

1.3 Information about the Registration Document

8 DANONE REGISTRATION DOCUMENT 2014

Persons responsible for the Registration Document

Statement by the person responsible for the Registration Document

DANONE REGISTRATION DOCUMENT 2014 9

10 DANONE REGISTRATION DOCUMENT 2014

1973-1990: European expansion 12 Distribution18

1990-1996: global ambitions 12 Marketing18

1996-2007: refocus on health food 12 Competition19

Since 2007: acceleration of international development 12 Acquisitions19

Research and Development 19

Promote a holistic approach of health through food,

Waters16 Main publicly traded companies 26

Early Life Nutrition  17

Operational risks related to the Group’s activity 28

Operational risks specific to the Group’s activity and

Legal and regulatory risks 34

Industrial and environmental risks 35

Insurance and risk coverage 38

DANONE REGISTRATION DOCUMENT 2014 11

1973-1990: European expansion

1990-1996: global ambitions

4 Meeting of April 29, 2015

1.2 Information about the issuer 6

Date of incorporation and term of the Company 6

Legal form and applicable law 6

Persons responsible for the Registration Document 9

1973-1990: European expansion 12 Distribution18

1990-1996: global ambitions 12 Marketing18

1996-2007: refocus on health food 12 Competition19

Since 2007: acceleration of international development 12 Acquisitions19

Research and Development 19

Waters16 Main publicly traded companies 26

Early Life Nutrition 17

Operational risks related to the Group’s activity 28

Legal and regulatory risks 34

Industrial and environmental risks 35

Insurance and risk coverage 38

Other business activities in 2014 43 Subsequent events 65 3

3.3 Free cash-flow 54

Consolidated statement of cash-flows 55