Letter from the Artisan Global Value Strategy and the Artisan International Value Strategy to the Board of Directors of Danone S.A.

SAN FRANCISCO, March 3, 2021 /PRNewswire/ -- Please find following a letter sent by the Artisan Partners International Value and Global Value Teams to the board of directors of Danone SA.

Board of Directors
Danone SA

3 March 2021

To the Members of the Board:

The announcement regarding the separation of the roles of Chairman and CEO and the initiation of a search for a new CEO are positive steps for Danone. The lack of independent board oversight and the company's subsequent poor operating and financial performance over the last several years can only be reversed with fresh leadership and new direction. We are hopeful that a new era will soon begin, and Danone will be placed back on the path to restoring its vitality, not only for shareholders but for its employees and for France.

Unfortunately, however, the benefits of these steps forward will be negated by the retention of Mr. Faber as Chairman and a weakening of the board's oversight structure. Long-term institutional shareholders invest in companies that hold themselves to certain standards of corporate governance. The new changes announced at Danone violate the most basic of these standards.

• The non-executive Chairman will be the former CEO who is not independent.
• One of the two Vice Chairs of the board is the former CFO.
• The newly appointed Lead Independent Director and Chair of the Governance Committee has no FMCG experience and has been on the board for 10 years.
• The board continues to lack relevant industry experience.

With Mr. Faber as Chairman, the incoming CEO will not have the appropriate latitude to set a new direction. Instead, the new CEO will be in a position merely to execute the strategy already set in place by Mr. Faber, a circumstance in which it is highly unlikely that a world class executive will take the role.

We urge the board to reconsider its actions and to immediately implement the following:

• Appoint a truly independent Chairman - We believe Mr. Schnepp would be a good choice.
• Delay or cancel the implementation of the Local First strategy until a new CEO can evaluate the plan and either adopt it or take the company in a different direction.
• Add at least one new director with relevant consumer products experience.

We share the same objectives as the board. We are long-term investors, and we intend to continue to work to improve Danone in the interest of all stakeholders. It is clear to all objective observers that the company has been on the wrong path for years and a change of direction is desperately needed.

N. David Samra
Artisan International Value Lead Portfolio Manager

Daniel J. O'Keefe
Artisan Global Value Lead Portfolio Manager

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