Danone’s quarterly sales beat estimates, inflation leading

The logo of French food group Danone is seen at the company’s headquarters in Rueil-Malmaison near Paris, France, February 20, 2022. REUTERS/Gonzalo Fuentes

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  • 2021 sales €24.281 billion, up 3.4% lfl vs est. 3%
  • 2021 operating margin at 13.7% of revenue, in line with estimates
  • The new CEO will give his orientations for 2022 and the medium term on March 8

PARIS, Feb 23 (Reuters) – Danone (DANO.PA) posted stronger-than-expected sales growth in the final quarter of 2021 despite a challenging environment marked by rising inflation, although the new yogurt boss said he much remained to be done to turn the company around.

Antoine de Saint-Affrique, who took over as the French group’s chief executive in September, said on Wednesday that investors should wait until capital market day on March 8 for clues on its strategy and outlook for 2022 and medium term.

Consumer goods companies are grappling with soaring costs for raw materials, energy, transport and labour, prompting rival Unilever earlier this month to implement guard against declining margins as it strives to raise prices enough to offset the additional expenses. Read more

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While Danone “ended the year on a high… We still have a lot to do, and I look forward to our March 8 CME where we will be able to share more about the next steps in our growth and of our renewal”. trip,” Saint-Affrique said in a statement.

As of 08:01 GMT, the French group’s shares were up 2.4% at 55.88 euros after the pace of sales, which was largely driven by a continued recovery in its bottled water business as countries ease COVID restrictions.

“The fourth quarter is ahead of the top line with margins for FY21 on-line. The question remains whether or not new CEO Antoine de Saint-Affrique will perform a margin reset,” said the Jefferies analysts in a note.

WATER AND BABY FOOD

Former Danone boss Emmanuel Faber was abruptly ousted as chief executive officer last year following clashes with some board members over strategy and fundraising activists for him to quit due to the group’s lackluster performance compared to some rivals.

The main challenge for Saint-Affrique is to increase profit margins and sales of the group’s three businesses – dairy and plant-based products, infant formula and bottled water – while dealing with rising input costs. , with the added stress of a conflict in Ukraine.

Danone, which is the world’s largest yogurt maker, said its 2021 like-for-like sales rose 3.4% to 24.281 billion euros ($27.48 billion), slightly above analysts’ estimates in a consensus compiled by the company for a 3% increase.

Danone said this reflected an acceleration in the fourth quarter with sales growth of 6.7%, beating market expectations of 5.5% growth, with all three businesses contributing.

Most of the sales gain in the fourth quarter came from the bottled water division, which posted a 17.4% increase in sales. The division whose sales had been penalized by restaurant and bar closures linked to COVID-19 restrictions continued its recovery with the return of the Mizone and Aqua brands to positive growth in Asia.

Baby Nutrition also posted very strong growth over the quarter, driven by China and the rest of the world.

2021 operating margin decreased 30 basis points to 13.7% of sales, in line with company outlook and analyst expectations of 13.7%, as accelerating sales growth and strong productivity partially offset inflationary pressures.

($1 = 0.8837 euros)

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Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta, Sherry Jacob-Phillips and Emelia Sithole-Matarise

Our standards: The Thomson Reuters Trust Principles.

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