Breaking News
Investing Pro 0

Food group Danone raises 2022 outlook as third-quarter sales beat expectations

Stock Markets Oct 27, 2022 19:31
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: French food group Danone logo is seen at the company headquarters in Rueil-Malmaison near Paris, France, February 20, 2022. REUTERS/Gonzalo Fuentes
 
DANO
+0.04%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Dominique Vidalon

PARIS (Reuters) - French food group Danone on Thursday raised its 2022 revenue growth forecast after its third-quarter sales beat analysts' estimates as the firm was able to raise prices to counter soaring costs.

The consumer goods giant and owner of Evian and Badoit water and Activia yoghurt said it now expected like-for-like sales growth to reach 7-8% this year compared with the already raised forecast of 5-6% it gave in July.

It said it expects a recurring operating margin above 12%, down from 13.7% last year.

Danone posted a 9.5% rise in third-quarter like-for-like sales to 7.334 billion euros ($7.35 billion), beating analysts' expectations for a 6.9% rise in a poll compiled by the company.

This also marked a sequential acceleration from 7.7% sales growth achieved in the second quarter and reflected strength in all the group's businesses, notably in baby food in China and in bottled waters.

CEO Antoine de Saint-Affrique, who took over in September 2021, must conduct a revival plan amid mounting input costs, coupled with further uncertainties caused by Russia's invasion of Ukraine, which led the group to unveil plans to shed control of its dairy food business in Russia.

Price increases contributed 10.9% to third-quarter revenue growth.

Finance chief Juergen Esser reiterated that cost inflation was expected to be in the "mid-teens" this year but said it was hard to make predictions for 2023.

While Danone was conscious that consumer wallets are tightening, Esser said: "If we need to do more on prices, we will do it in a responsible manner even if it costs us a little bit of volume".

In the third quarter, the closely-watched Essential Dairy and Plant-based (EDP) business in Europe registered 2.2% sales growth with a contrasted performance by geography.

Sales and volumes were impacted by portfolio choices, namely the pruning of underperforming brands, and temporary delivery suspensions in some countries such as Germany and Belgium due to lengthy price negotiations with retailers, Esser said.

Other countries like France, benefited from the good momentum of key brands like Actimel, Danone, Yopro and Danette.

One positive was the Mizone water business in China which returned to growth in the quarter despite challenging operating conditions.

Rival Unilever (LON:ULVR) Plc also on Thursday raised its full-year sales forecast as it lifted prices to counter costs.

($1 = 0.9974 euros)

Food group Danone raises 2022 outlook as third-quarter sales beat expectations
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email