FRANCE – Danone, a French multinational food-products corporation has reported its first-quarter results with a 10.8% increase in sales to Euro 6,085 million (US$7,477 million) boosted by its strong performance in infant nutrition foods in China.
The company reported a strong start to the year with an increase of 4.9% sales growth and very strong performance in Specialized Nutrition driven by Early Life Nutrition in China, solid start in Waters and on-going recovery of Essential Dairy and Plant-Based activities.
“I am very pleased with the strong results we have achieved in the first quarter.
With organic growth of almost 5%, this start to the year confirms the strength of our portfolio, reflects our relentless focus on execution and delivery, and our continued investment in brands and innovations.
We have achieved further progress in developing a more sustainable platform of growth and in the premiumization of our offering in Early Life Nutrition in China, broad-based growth in Waters, and gradual improvement in our Essential Dairy and Plant-Based activities,” said Emmanuel Faber, Chairman and Chief Executive Officer.
In the first quarter 2018, consolidated sales stood at US$8.65 million, up 4.9% on a like-for-like New Danone basis, reflecting a positive contribution from both volume and value growth.
Reported sales were up 10.8%, including the base effect (16.2%), corresponding to the contribution of WhiteWave over the period from January 1 to March 31, 2017.
A negative currency impact of 8.9% reflected an unfavorable currency context with the appreciation of the euro against the US dollar, the Argentinian peso, the Indonesian rupiah, and the Russian ruble.
“With the issuance of the first social bond by a multinational company and the B Corp certification of its subsidiaries in North America, Danone has also reached in the first quarter important milestones in its ambition to lead the way in creating and sharing value for all,” added Emmanuel Faber.
“We are reaffirming our confidence in the agility of our model to navigate a volatile environment to deliver our 2018 guidance and to accelerate towards our 2020 ambition.”
Danone continued in the first quarter to work on executing competitive plans to consolidate its leadership.
In Yogurts, sales declined slightly, while Danone marginally outperformed a category that remained soft in Q1.
Outperformance resulted from well-performing innovations and favorable mix across a multitude of subcategories (notably probiotics, organic, kids, and plant-based) and formats, while promotional intensity increased in the Greek yogurt segment.
Plant-based foods and beverages again delivered strong sales growth, driven by the ongoing rebound in nut-based beverages, successful media and marketing campaigns and premium innovations.
Specialized Nutrition reported sales up 14.5% on a like-for-like New Danone basis, including a 5.6% increase in volume and a 8.9% rise in value.
Early Life Nutrition (ELN) reported high-teen sales growth, with the very strong momentum continuing in China (over 50% like-for-like growth).
This benefitted from particularly strong market demand following the peak in births in H2 2016, market share gains, and from positive mix as a result of Aptamil Platinum expansion in the ultra-premium segment, and further progress in building a sustainable direct sales model in China.
In the current year, Danone will make further progress towards its 2020 ambition through its separate focuses on both mid-term growth and short-term efficiency.
It will also start rolling out the ‘Protein’ efficiency program and continue to capture the synergies from the WhiteWave acquisition.
These activities will underpin its ability to deliver sustainable growth in sales and profits.