FRANCE – Multinational food-products corporation Danone was adversely impacted by supply chain issues in 2021 leading to revenue losses and sometimes market share erosion.
According to the recently released results, net sales rose 2.8% in the 2021 fiscal year at Danone SA, but company executives know that percentage could have been higher.
Volume dipped 0.6% amid supply chain challenges that prevented the Paris-based company from serving customers and consumer demand in key geographies and categories.
Net income was also down 1.3% to €2.24 billion (US$2.53 billion), or €3.31 per share on the common stock, from €2.26 billion, or €3.34 per share, in the previous fiscal year.
Although unimpressive, the company’s net sales slightly rose to €24.28 billion (US$27.53 billion) from €23.62 billion in fiscal 2020.
Within Danone’s Essential Dairy and Plant-based (EDP) segment, 2021 net sales of €13.09 billion (US$14.84 billion) were up 2.1% from €12.82 billion.
Volume declined 0.4% in the fourth quarter even though sales increased thanks to solid growth in dairy and mid-single-digit growth, despite supply challenges, in the plant-based portfolio.
In Danone’s Specialized Nutrition segment, net sales of €7.23 billion for the year were up 0.5% from €7.19 billion while the Waters segment saw net sales jump 10% to €3.96 billion from €3.61 billion.
Companywide in the fourth quarter, net sales rose 11% to €6.24 billion from €5.63 billion.
“We are very pleased with the strong finish of the year ’21, very pleased with the plus 6.7% like-for-like net sales growth in Q4,” Juergen Esser, chief financial, technology and data officer.
Esser sees 2022 as another year of challenge and disruptions and expects input cost inflation to sequentially accelerate in the low to mid-teens range compared to the 8% we experienced in 2021.
“To navigate these headwinds, we will further step up our productivity and we will leverage broad-based pricing,” he said.
During the earning calls, Danone CEO Antoine de Saint-Affrique was questioned on the potential impact of the conflict developing in the Ukraine.
“Russia is slightly above 5% of our sales – the vast majority of the business is local. We source locally, we make locally, we sell locally,” he explained.
“We will be, on the vast majority of our business, impacted. But there are no things that are going across borders.”
He assured that Danone has been managing the thing for quite a while. “All the measures are in place so that we can navigate the crisis.”
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