Danone: Strong Q2 performance and solid H1 results, demonstrating the relevance of our health-focused portfolio

2026 Half-Year Results
Press release – Paris, July 29, 2026, at 7:30am CEST

Strong Q2 performance and solid H1 results,
demonstrating the relevance of our health-focused portfolio

¹

Antoine de Saint-Affrique: CEO statement

We are closing a solid first half, demonstrating once again the relevance of our health-focused portfolio and the strength of our multi-engine growth model.

We delivered strong quality growth in Q2, with like-for-like sales up +4.2%, reflecting broad-based performance across categories and geographies. Demand for our winning platforms remained strong, including High-protein products and Medical Nutrition across all regions, and Skyr, Kefir and Plant-based in Europe. At the same time, we made step-by-step progress in North America EDP and saw improving trends in Infant Milk Formula in EMEA.

During the semester, we continued to enhance our portfolio in attractive health-focused categories through our disciplined approach to M&A, including the signing of agreements to acquire Huel and, more recently, Made Group in APAC, both with strong potential across key geographies.

While some areas still require further progress and the environment remains unstable, we enter the second half of the year with confidence that 2026 will be another year of delivery, aligned with our value creation model and mid-term ambitions.

I. HALF-YEAR RESULTS

Second quarter and half-year sales

In Q2 2026, sales stood at €7,215m, up +4.2% LFL, with a contribution of +1.9% from volume/mix and +2.3% from price. On a reported basis, sales increased by +4.4%, including a positive scope effect of +0.8%, mainly reflecting the consolidation of Kate Farms in the Americas and of the joint venture with Saputo Dairy Australia in APAC, and a negative impact of currencies (-1.0%). Additionally, both hyperinflation (+0.2%) and the application of IAS29 (+0.1%) contributed positively to reported sales.

In H1 2026, sales stood at €13,936m, up +3.5% LFL, with a contribution of +1.7% from volume/mix and +1.8% from price. On a reported basis, sales increased by +1.4%, including a positive scope effect of +0.7%, mainly reflecting the consolidation of Kate Farms and of the joint venture with Saputo Dairy Australia, and a negative impact of currencies (-3.3%). Both hyperinflation (+0.3%) and the application of IAS29 (+0.5%) had a positive effect on reported net sales.

Sales by operating segment

In Q2 2026, EMEA sales were up +3.6% LFL, led by volume/mix at +2.2% and price at +1.5%. Within the region, Europe delivered LFL sales growth of +0.6%, with volume/mix at +0.3% and price at +0.3%.
EDP showed continued momentum across the region, with functional dairy and Alpro in strong demand. Specialized Nutrition delivered an improved performance supported by a catch-up in the Middle East and a progressive recovery in Europe throughout Q2. Waters delivered a solid start to the summer season, led by Volvic.

In the Americas, sales were up +4.3% LFL in Q2, with volume/mix at +0.3% and price up +4.0%. Within the region, North America posted LFL sales growth of +2.6%, with volume/mix at +0.7% and price at +2.0%.
EDP delivered a solid performance across the region, driven by functional yogurts. North America saw progressive improvement, with continued strong growth in High Protein and better momentum in creamers. In Specialized Nutrition, both Medical Nutrition – driven by Neocate – and IMF across Latin America delivered competitive double-digit growth.

In Asia Pacific, LFL sales were up +5.2% in Q2, led by volume/mix at +3.5% and price at +1.6%. Within the region, China, North Asia & Oceania (CNAO) posted LFL sales growth of +3.6% with volume/mix at +1.5% and price at +2.2%.
Specialized Nutrition delivered a solid performance, with competitive growth in IMF China amid a normalizing category. EDP Japan saw continued strong activation driving demand for Oikos and Activia, while the performance in Waters reflected a mix of strong, competitive growth with Aqua in Indonesia and soft category for Mizone in China.

Sales by geography by category

Recurring Operating Margin

Danone posted recurring operating income of €1,854m in H1 2026, up +2.3% year-on-year. Recurring operating margin stood at 13.3%, up +12 basis points (bps) compared to last year. This performance was achieved thanks to strong productivity gains, including in overheads (+84 bps), in a context of pressure on margin from operations
(-54bps) notably linked to the IMF recall in EMEA and initial effects of inflation. Continued reinvestments behind key drivers of competitiveness – A&P, product superiority, capabilities – resulted in a -25 bps impact in H1. Finally, other effects had a combined impact of +7 bps.

Net income and Earnings per share

Recurring EPS increased by +0.9% to €1.92 in H1 2026, driven by higher recurring operating income.

Non-recurring operating income and expense amounted to -€161 million, compared to -€238 million in H1 2025. It mainly includes costs of transformation projects, as well as costs related to the IMF recall. As a result, Reported EPS stood at €1.81 in H1 2026, vs. €1.61 in H1 2025.

Cash flow and Debt

Free cash flow generation amounted to €852 million in H1 2026. This reflects strong operational performance and focused discipline on financial costs, while additional investments behind winning platforms led to an increase in capital expenditure to €414 million. Change in Working Capital Requirement was impacted by actions to secure supply, in the context of the Middle East situation.

As of June 30, 2026, Danone’s net debt stood at €9.0 billion, slightly up from €8.4 billion at the end of December 2025, reflecting the annual dividend payment in May 2026, partly offset by the solid free cash flow generation in the first half.

II. 2026 GUIDANCE

2026 guidance confirmed, in line with mid-term ambition: LFL sales growth expected between +3% and +5%, with recurring operating income growing faster than sales.

III. GOVERNANCE

Appointment of a New Independent Director

At its meeting on July 28, 2026, and upon the recommendation of the Nomination, Compensation and Governance Committee, the Board of Directors decided to submit the appointment of Ms. Emmanuelle Menning as an independent Director for a three-year term to the Shareholders’ Meeting to be held on April 29, 2027.
A French and German national, Ms. Emmanuelle Menning has served as Deputy Chief Executive Officer in charge of Finance at Veolia and as a member of the Group’s Executive Committee since September 2024. Since April 2026, her responsibilities have been expanded to include the management of Germany.
Her appointment would enable the Board of Directors to benefit from her recognized financial, strategic and operational expertise, gained through her experience within a leading international listed group. Her track record in mergers and acquisitions, business transformation and sustainability-related matters would further strengthen the skills base and diversity of experience of Danone’s Board of Directors.

IV. RECENT MAJOR DEVELOPMENTS

• June 22, 2026: Danone announced that it has entered into two definitive agreements that will enable it to expand its presence in the Asia-Pacific (APAC) region in the fast-growing healthy nutrition space:
  • Acquisition of MADE Group; a fast-growing Australia-based company with a health-focused portfolio.
  • Acquisition of the remaining 49% stake in its existing fresh dairy joint venture with Saputo Dairy Australia.

Both transactions are subject to customary closing conditions, including regulatory approvals, and are expected to be completed in the second half of 2026.

• April 23, 2026: Danone announced that its Shareholders’ Meeting was held on April 23, 2026, chaired by Gilles Schnepp, Chairman of the Board of Directors. 73.08% of Danone’s total outstanding share capital was present or represented in this Shareholders’ Meeting. Danone’s shareholders approved all the resolutions put to the vote, including the statutory and consolidated financial statements for the 2025 fiscal year and the distribution of a dividend of €2.25 per share in cash, up +4.7% compared to last year. The ex-dividend date (or ex-date) was set on May 4, 2026, and the dividend was payable on May 6, 2026.

V. IFRS STANDARDS AND ALTERNATIVE PERFORMANCE MEASURES NOT DEFINED BY IFRS

IAS 29: impact on reported data

Danone has applied IAS 29 in hyperinflationary countries, as defined in IFRS. Adoption of IAS 29 in hyperinflationary countries requires their non-monetary assets and liabilities and their income statement to be restated to reflect the changes in the general purchasing power of their functional currency, leading to a gain or loss on the net monetary position, included in the net income. Moreover, their financial statements are converted into euros using the closing exchange rate of the relevant period.

Breakdown by quarter of H1 2026 sales after application of IAS 29
H1 2026 sales correspond to the addition of:

• Q2 2026 reported sales;
• Q1 2026 sales resulting from the application of IAS 29 until June 30, 2026, to sales of entities in hyperinflationary countries (application of the inflation rate until June 30, 2026, and translation into euros using the June 30, 2026, closing rate) and provided in the table below for information (unaudited data)

¹Results from the application of IAS 29 until June 30, 2026, to Q1 sales of entities of hyperinflation countries.

Definitions of geographical zones

EMEA refers to European countries, Turkey, Middle East, Africa and CIS.

The Americas refers to North America (the United States and Canada) and Latin America (including Mexico, Brazil, Argentina and Uruguay).

APAC or Asia Pacific refers to China, Japan, Australia and New Zealand (former CNAO – China, North Asia & Oceania – region) as well as the rest of Asia (including Indonesia, Thailand, Vietnam and India).

Financial indicators not defined in IFRS

Due to rounding, the sum of values presented may differ from totals as reported. Such differences are not material.

Like-for-like changes in sales reflect Danone’s organic performance and essentially exclude the impact of:

• changes in consolidation scope, with indicators related to a given fiscal year calculated on the basis of the previous year’s scope;
• changes in applicable accounting principles;
• changes in exchange rates, with both previous-year and current-year indicators calculated using the same exchange rate (the exchange rate used is a projected annual rate determined by Danone for the current year and applied to both previous and current years).

Since January 1, 2023, all countries with hyperinflationary economies are taken into account in like-for-like changes as follows: sales growth in excess of around 26% per year (a three-year average at 26% would generally trigger the application of hyperinflationary accounting as defined in IFRS) is now excluded from the like-for-like sales growth calculation.

Bridge from like-for-like data to reported data

Margin from operations is defined as the Gross margin over Sales ratio, where Gross margin corresponds to the difference between Sales, Industrial costs (excluding reengineering initiatives) and Logistics / Transportation costs.

Recurring operating income is defined as Danone’s operating income excluding Other operating income and expenses. Other operating income and expenses comprise items that, because of their significant or unusual nature, cannot be viewed as inherent to Danone’s recurring activity and have limited predictive value, thus distorting the assessment of its recurring operating performance and its evolution. These mainly include:

• capital gains and losses on disposals of businesses and fully consolidated companies;
• under IAS 36, impairment charges on intangible assets with indefinite useful lives;
• costs related to strategic restructuring operations or transformation plans;
• costs related to major external growth transactions;
• costs related to crises and major disputes;
• in connection with IFRS 3 and IFRS 10, (i) acquisition costs related to acquisitions of companies resulting in control, (ii) revaluation gains or losses accounted for following a loss of control, and (iii) changes in earn-outs subsequent to acquisitions resulting in control.

Recurring operating margin is defined as the Recurring operating income over Sales ratio.

Other non-recurring financial income and expense corresponds to financial income and expense items that, in view of their significant or unusual nature, cannot be considered as inherent to Danone’s recurring financial management. These notably include changes in the value of non-consolidated interests and profits or losses on the net monetary position.

Non-recurring income tax corresponds to income tax on non-recurring items as well as tax income and expense items that, in view of their significant or unusual nature, cannot be considered as inherent to Danone’s recurring performance.

Recurring effective tax rate measures the effective tax rate of Danone’s recurring performance and is computed as the ratio of income tax related to recurring items over recurring net income before tax.

Non-recurring share of profit (loss) of equity-accounted companies includes items that, because of their significant or unusual nature, cannot be viewed as inherent to the companies’ recurring activity and thereby distort the assessment of their recurring performance and trends in that performance. These items mainly relate to:

• capital gains and losses on disposals of Investments in equity-accounted companies;
• impairment of investments in equity-accounted companies;
• non-recurring items, as defined by Danone, included in the share of profit (loss) of equity-accounted companies.

Recurring net income (or Recurring net income – Group Share) corresponds to the Group share of the consolidated Recurring net income. The Recurring net income excludes items that, because of their significant or unusual nature, cannot be viewed as inherent to Danone’s recurring activity and have limited predictive value, thus distorting the assessment of its recurring performance and its evolution. Such non-recurring income and expenses correspond to Other operating income and expenses, Other non-recurring financial income and expenses, Non-recurring income tax, and Non-recurring share of profit (loss) of equity-accounted companies. These items, excluded from Net income, represent Non-recurring net income.

Recurring EPS (or Recurring net income – Group Share, per share after dilution) is defined as the ratio of Recurring net income adjusted for hybrid financing over Diluted number of shares. In compliance with IFRS, income used to calculate EPS is adjusted for the coupon related to the hybrid financing accrued for the period and presented net of tax.

Free cash flow represents cash flows provided or used by operating activities less capital expenditure net of disposals and, in connection with IFRS 3, excluding (i) acquisition costs related to acquisitions of companies resulting in control, and (ii) earn-outs related to acquisitions of companies resulting in control and paid subsequently to acquisition date.

¹ Represents acquisition costs related to acquisitions of companies resulting in control that were paid during the period

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

¹ Managing net debt only

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FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements concerning Danone that are subject to risks and uncertainties. In some cases, you can identify these forward-looking statements by forward-looking words, such as “estimate”, “expect”, “anticipate”, “project”, “plan”, “intend”, “objective”, “believe”, “forecast”, “guidance”, “foresee”, “likely”, “may”, “should”, “goal”, “target”, “might”, “will”, “could”, “predict”, “continue”, “convinced” and “confident,” the negative or plural of these words and other comparable terminology, or by using future dates. Forward looking statements in this document include, but are not limited to, predictions of future activities, operations, direction, performance and results of Danone.

These forward-looking statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those anticipated in these forward-looking statements. For a detailed description of these risks and uncertainties, please refer to the “Risk Factors” section of Danone’s Universal Registration Document (the current version of which is available at www.danone.com).

Subject to regulatory requirements, Danone does not undertake to publicly update or revise any of these forward-looking statements. This document does not constitute an offer to sell, or a solicitation of an offer to buy Danone securities.

The presentation to analysts and investors will be broadcast live today from 8:15 a.m. (CEST)
on Danone’s website (www.danone.com).
Related slides will also be available on the website in the Investors section.

APPENDIX – Sales by geographical zone and by category (in € million)

All references in this document to Like-for-like (LFL) changes, Recurring operating income and margin, Margin from operations, Recurring net income, Recurring income tax rate, Recurring EPS, Free cash flow and Net financial debt, correspond to alternative performance measures not defined by IFRS. Their definitions, as well as their reconciliation with financial statements, are listed on pages 5 to 8.

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