Danone // 2020 Universal Registration Document

Share capital and ownership 7.4 Financial instruments not representing share capital DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 298 CHANGES TO SHARE CAPITAL AND RIGHTS ATTACHED TO SHARES Any changes to share capital or rights attached to shares constituting the share capital are subject to statutory law, as the by-laws contain no specific provisions. 7.4 FINANCIAL INSTRUMENTS NOT REPRESENTING SHARE CAPITAL The Board of Directors, fundamental authority in the area of bound issuances, decided at its meeting of February 18, 2021, to renew, for one year, the authorization granted to General Management to issue, in France or abroad (including, in particular, in the United States of America by means of private placements to institutional investors), any type of bonds or debt securities, including ordinary bonds, subor- dinated debt securities or complex securities (whether fixed-termor perpetual) or any other type of negotiable debt instrument for up to a maximum outstanding principal amount at any time of €18 billion (or the equivalent amount in any other currency or unit of account). As of December 31, 2020, the total outstanding principal amount of the bonds issued by the Company (Danone’s only bond issuer) was €13,339 million (amount recognized in the consolidated financial statements). 7.5 DIVIDENDS PAID BY THE COMPANY DIVIDEND PAY-OUT POLICY Rules set by French law and the Company’s by-laws In accordance with law, the following amounts are withheld from earnings from which any past losses have already been deducted: (i) at least 5% for the creation of the legal reserve, a deduction that will cease to be mandatory when the legal reserve has reached one-tenth of the share capital, but that will be reinstituted if, for any reason whatsoever, the legal reserve falls below this amount; and (ii) any sums to be allocated to reserves in accordance with the law. The balance, to which are added retained earnings, represents the distributable earnings. Under the terms of the by-laws, the amount necessary to consti- tute a first dividend payment to shareholders is deducted from the distributable earnings. This amount corresponds to interest of 6% per annum on the amount of their shares that has been paid up and not reimbursed, it being specified that if in a given fiscal year earnings are not sufficient to make this payment, the shortfall may be paid by deduction from the earnings of subsequent fiscal years. Any remaining balance is available for allocation by the annual Shareholders’ Meeting, in accordance with a proposal by the Board of Directors, to shares as dividends or, in full or in part, to any reserve accounts or to retained earnings. The reserves available to the Shareholders’ Meeting can be used, if it so decides, to pay a stock dividend. Company’s pay-out policy The Board of Directors implements a measured and balanced di- vidend pay-out policy, which is based on an analysis that takes into account the history of dividend payments, the Company’s financial position and results, the outlook as well as the dividend pay-out practices of Danone’s business sector. DIVIDEND PAID IN RESPECT OF 2020 FISCAL YEAR A dividend of €1.94 per share will be proposed to the Shareholders’ Meeting of April 29, 2021 on shares eligible to receive the dividend as of January 1, 2020. The dividend is down 8% from last year, reflec- ting on the one hand the impact of the deteriorated environment on 2020 results, and demonstrating on the other Danone’s confidence in rapidly reconnecting with profitable growth, as reflected by the increased pay-out ratio to 58%. If this dividend is approved, the ex-dividend date will be May 10, 2020 and the payment date will be May 12, 2020. DIVIDENDS PAID IN RESPECT OF THE PREVIOUS THREE FISCAL YEARS PRIOR TO 2020 Dividend relating to the fiscal year Dividend per share (in € per share) Dividend approved (in € millions) Dividend paid (a) (in € millions) 2017 1.90 1,274 428 (b) 2018 1.94 1,329 1,266 2019 2.10 1,441 1,374 (a) Treasury shares directly held by the Company do not carry the right to receive a dividend. However, the Company’s shares held by its Danone Spain subsidiary carry the right to receive a dividend. (b) The Shareholders’ Meeting of April 26, 2018 decided that each shareholder could choose to receive payment of the dividend in cash or in DANONE shares. The amount of the dividend paid in cash corresponds to the dividend paid to those shareholders who did not opt for payment in shares.