Danone: Solid first half of the year; Making consistent progress on
Renew Danone
2023
Half-Year
ResultsPress release – Paris,
July 26, 2023
Solid first half of the
yearMaking consistent progress on Renew
Danone
-
Net sales reached
€14,167m
in H1
2023, up +6.3%
on a reported basis and
+8.4%
on a like-for-like (LFL) basis, with price up +9.4%, and
volume/mix down -1.1%
-
Q2 sales growth
reached
+6.4% on
a LFL basis, with price up +8.7% and volume/mix down -2.3%
-
+6.5% in Europe, driven by France, Poland and Spain; further
progress on EDP portfolio transformation
-
+5.0% in North America, led by Yogurt, Coffee Creations and
Waters
-
+9.6% in China, North Asia & Oceania, supported by all
categories
-
+10.8% in Latin America, led by EDP and Specialized Nutrition
-
+3.9% in Rest of the World, with Q2 performance normalizing after
Q1 one-offs
-
Recurring operating margin
up +14 bps at
12.2%;
significant reinvestments in A&P, product superiority and
capabilities (-99 bps impact)
-
Operational performance driving earnings:
recurring EPS at
€1.76,
up +7.6% from last year
-
€1.1 bn
free-cash-flow, driven by operational performance and
supported by disciplined capital allocation
-
2023 guidance
reiterated: like-for-like sales growth between +4
and +6%; moderate improvement in recurring operating margin
|
2023
Half-Year Key Figures |
in millions of euros except if stated otherwise |
H1 2022 |
H1 2023 |
Reported Change |
Like-for-likeChange
(LFL) |
Sales |
13,325 |
14,167 |
+6.3% |
+8.4% |
Recurring operating income |
1,612 |
1,734 |
+7.6% |
+5.8% |
Recurring operating margin |
12.1% |
12.2% |
+14 bps |
-30 bps |
Non-recurring operating income and expenses |
(233) |
(53) |
+180 |
|
Operating income |
1,380 |
1,681 |
+21.9% |
|
Operating margin |
10.4% |
11.9% |
+152 bps |
|
Recurring net income – Group share |
1,051 |
1,133 |
+7.8% |
|
Non-recurring net income – Group share |
(314) |
(40) |
+273 |
|
Net income – Group share |
737 |
1,093 |
+48.2% |
|
Recurring EPS (€) |
1.63 |
1.76 |
+7.6% |
|
EPS (€) |
1.14 |
1.70 |
+48.3% |
|
Free cash flow |
674 |
1,124 |
+66.9% |
|
Cash flow from operating activities |
970 |
1,424 |
+46.8% |
|
1
Antoine de
Saint-Affrique: CEO
statement
“As we navigate an unprecedented situation in
Russia, my very first thoughts go to all our colleagues there.
In an environment that remains volatile and
challenging, we further built our track record of delivery with a
solid first half of the year: like-for-like sales growth reached
+8.4%, supported by resilient volume/mix and continued pricing.
Growth remains broad-based, with all geographies contributing.
These past few months, we made consistent
progress on our strategic agenda, further strengthening our Core,
investing behind our winners and actively addressing our
underperformers. And while we see green shoots of success across
the portfolio - exemplified by the continued performance of
International Delight, Aptamil, evian and YoPro, or the encouraging
momentum behind Mizone – we know the job is not done. We remain,
more than ever, focused on building further resilience into Danone,
by further stepping up our execution, but also by leveraging
increasingly more our Science, Operations and Investments.
Importantly, the last 18 months’ efforts on
restoring the fundamentals are starting to pay: our gross margin
has expanded in the first half of the year, which allows us to
significantly invest behind our brands – 99bps in the first half –
while improving margins moderately and delivering healthy free cash
flows. In short, we are progressing towards the business model we
strive for.
While a lot remains to be done, this makes us
look at the future with confidence: this year, we expect to deliver
a like-for-like sales growth in the upper end of our +4 and +6%
guidance, underpinned by sequential volume/mix improvement in the
second half, and moderate recurring operating margin
improvement.”
I. SECOND
QUARTER AND
HALF-YEAR
SALES
Second quarter
and half-year sales
In Q2 2023,
consolidated sales stood at €7.2 bn, up +6.4% on a like-for-like
basis, with a +8.7% contribution from price and a -2.3%
contribution from volume/mix. On a reported basis, sales increased
by +2.4%, reflecting notably a negative impact from forex (-4.3%)
and scope (-0.4%), and a positive contribution of hyperinflation
(+1.3%).
In H1
2023, consolidated sales stood at
€14.2 bn, up +8.4% on a like-for-like basis, with a +9.4%
contribution from price and a -1.1% contribution from volume/mix.
On a reported basis, sales increased by +6.3%, notably penalized by
a negative forex effect of -2.0%, reflecting in particular the
depreciation of various Asian and Latin American currencies against
the euro. Reported sales were also impacted by a positive
contribution of hyperinflation of +1.3%, and a slightly negative
scope effect of -0.5%.
Sales by
operating segment
€ million except % |
Q22022 |
Q22023 |
Reported change |
LFL SalesGrowth |
Volume/Mix Growth |
H12022 |
H12023 |
Reported change |
LFL SalesGrowth |
Volume/MixGrowth |
|
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
|
|
|
Europe |
2,289 |
2,429 |
+6.1% |
+6.5% |
-5.1% |
4,431 |
4,677 |
+5.5% |
+6.4% |
-4.6% |
|
North America 2 |
1,662 |
1,704 |
+2.5% |
+5.0% |
-2.7% |
3,139 |
3,418 |
+8.9% |
+8.3% |
-1.0% |
|
China, North Asia & Oceania 2 |
936 |
954 |
+1.9% |
+9.6% |
+8.8% |
1,671 |
1,778 |
+6.4% |
+12.4% |
+11.2% |
|
Latin America 3 |
704 |
779 |
+10.7 |
+10.8% |
-2.0% |
1,327 |
1,466 |
+10.5% |
+11.7% |
-1.1% |
|
Rest of the World |
1,476 |
1,369 |
-7.2% |
+3.9% |
-4.3% |
2,756 |
2,828 |
+2.6% |
+7.7% |
-2.8% |
|
BY CATEGORY |
|
|
|
|
|
|
|
|
|
|
EDP |
3,684 |
3,731 |
+1.3% |
+6.2% |
-3.3% |
7,062 |
7,503 |
+6.3% |
+7.7% |
-3.3% |
|
Specialized Nutrition |
2,106 |
2,142 |
+1.7% |
+4.9% |
-1.7% |
4,029 |
4,250 |
+5.5% |
+8.3% |
+1.7% |
|
Waters |
1,277 |
1,362 |
+6.6% |
+9.6% |
0.0% |
2,234 |
2,413 |
+8.0% |
+10.6% |
+1.1% |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
7,067 |
7,235 |
+2.4% |
+6.4% |
-2.3% |
13,325 |
14,167 |
+6.3% |
+8.4% |
-1.1% |
|
In the second quarter, Europe
sales were up +6.5% on a like-for-like basis, with price up +11.7%
and volume/mix down -5.1%. Growth was led by France, Poland and
Spain, while Germany progressively recovers after several months of
supply disruptions and temporary delistings. By category,
Specialized Nutrition and Waters registered resilient growth, while
EDP made further progress in its portfolio transformation. In
North America, sales were up +5.0% on a
like-for-like basis, with price up +7.7% and volume/mix down -2.7%.
Growth was led by Yogurt, Coffee Creations and Waters, with Oikos,
International Delight, Stok and evian growing at a double-digit
rate, while Plant-based is lapping a high base of comparison.
Specialized Nutrition also lapped the high base of last year driven
by the shipments realized in the context of Operation Fly Formula.
China, North Asia & Oceania posted sales
growth of +9.6% on a like-for-like basis, led by +0.8% growth in
price and +8.8% growth in volume/mix. In China, Aptamil continued
to deliver solid growth in Infant Nutrition, coupled with further
market share gains, while Nutrison and Neocate posted strong growth
in Adult Nutrition and Pediatric Specialties respectively. In
Waters, Mizone registered mid-teens growth, driven by volumes, with
market share gains, while in EDP, Japan delivered another quarter
of double-digit growth. Latin America posted sales
growth of +10.8% on a like-for-like basis, with a +12.9% increase
in price and a -2.0% decline in volume/mix, led by Danonino and
Danette in Mexico and by Danone and Yopro in Brazil. In the
Rest of the World, the performance normalized in
the second quarter, after favorable calendar effects in Q1. Sales
were up +3.9% on a like-for-like basis, with price up +8.2% and
volume/mix down -4.3%, led by key Specialized Nutrition
platforms.
Recurring Operating Margin
Recurring operating profit (€m) and margin (%) |
H1 2022 |
H1 2023 |
Change |
€m |
Margin (%) |
€m |
Margin (%) |
Reported |
Like-for-like |
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
Europe |
574 |
12.9% |
497 |
10.6% |
-232 bps |
-290 bps |
North America3 |
254 |
8.1% |
353 |
10.3% |
+222 bps |
+229 bps |
China, North Asia & Oceania2 |
534 |
32.0% |
549 |
30.9% |
-107 bps |
-156 bps |
Latin America 3 |
-1 |
-0.1% |
42 |
2.8% |
+291 bps |
+155 bps |
Rest of the World |
251 |
9.1% |
294 |
10.4% |
+127 bps |
+13 bps |
BY CATEGORY |
|
|
|
|
|
|
|
EDP |
494 |
7.0% |
605 |
8.1% |
+107 bps |
+102 bps |
Specialized Nutrition |
933 |
23.2% |
885 |
20.8% |
-235 bps |
-351 bps |
Waters |
185 |
8.3% |
244 |
10.1% |
+185 bps |
+116 bps |
|
|
|
|
|
|
|
|
Total |
1,612 |
12.1% |
1,734 |
12.2% |
+14 bps |
-30 bps |
Danone’s recurring operating
income reached €1.7 bn in H1 2023. Recurring
operating margin stood at 12.2%, up +14 basis points (bps)
compared to last year. This increase was mainly driven by the
improvement of topline drivers – including volume, mix and price –
for a combined estimated impact of c. +630 bps. This positive
effect was partially offset by the still strong negative impact of
input-cost inflation net of productivity, at c. -540 bps.
Besides, Danone continued to step-up its
reinvestments in A&P, product superiority and capabilities,
that had a negative effect of -99 bps in H1 2023. Finally,
Overheads before reinvestments had a positive effect of +7 bps.
In addition to operating effects, reported
margin also includes the positive impact of Forex and others,
changes in scope, and contribution from hyperinflation, as well as
the negative effects from other income and expenses, for a total
combined effect of +13 bps.
Net income and Earnings per
share
|
H1 2022 |
H1 2023 |
|
in millions of euros except if stated otherwise |
Recurring |
Non-recurring |
Total |
|
Recurring |
Non-recurring |
Total |
|
Recurring operating income |
1,612 |
|
1,612 |
|
1,734 |
|
1,734 |
|
Other operating income and expense |
|
(233) |
(233) |
|
|
(53) |
(53) |
|
Operating income |
1,612 |
(233) |
1,380 |
|
1,734 |
(53) |
1,681 |
|
Cost of net debt |
(78) |
|
(78) |
|
(74) |
|
(74) |
|
Other financial income and expense |
(69) |
6 |
(63) |
|
(67) |
(15) |
(83) |
|
Income before taxes |
1,466 |
(227) |
1,239 |
|
1,593 |
(68) |
1,525 |
|
Income
tax |
(403) |
28 |
(376) |
|
(435) |
6 |
(429) |
|
Effective tax rate |
27.5% |
|
30.3% |
|
27.3% |
|
28.1% |
|
Net income from fully consolidated companies |
1,063 |
(199) |
863 |
|
1,158 |
(62) |
1,095 |
|
Share of
profit (loss) of equity-accounted companies |
25 |
(114) |
(89) |
|
14 |
19 |
33 |
|
Net
income |
1,088 |
(313) |
774 |
|
1,172 |
(44) |
1,129 |
|
• Group share |
1,051 |
(314) |
737 |
|
1,133 |
(40) |
1,093 |
|
• Non-controlling interests |
37 |
0 |
37 |
|
39 |
(3) |
36 |
|
EPS (€) |
1.63 |
|
1.14 |
|
1.76 |
|
1.70 |
|
Other operating income and
expense reached -€53 million in H1 2023, vs -€233 million
in the prior year. Reported operating margin was up +152 bps, from
10.4% to 11.9%.
Share of profit of
equity-accounted companies stood at €33 million,
mainly reflecting the gain on disposal of the 25% stake in Yashili
in H1 2023, improving from -€89 million last year, which reflected
the impairment related to the disposal of the remaining minority
investments in Mengniu partnerships.
As a result, Reported EPS
increased by +48.3% to €1.70, while
Recurring EPS was up +7.6% to
€1.76.
Cash flow and Debt
Free cash flow reached €1,124
million in H1 2023, increasing from €674 million in H1 2022,
reflecting the significant increase in cash-flow from operating
activities. Capex stood at €310 million.
As of June 30, 2023, Danone’s net debt
stood at €11.2 bn.
Sales by
geography and category
Q2 2023 |
Europe |
North America |
China/North Asia/Oceania |
AMEA, CIS & Latin America |
Total |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
|
|
|
|
|
|
|
|
|
|
|
EDP |
1,085 |
+5.8% |
1,539 |
+5.2% |
96 |
+14.9% |
1,012 |
+7.6% |
3,731 |
+6.2% |
Specialized Nutrition |
766 |
+3.4% |
87 |
-9.0% |
611 |
+6.9% |
677 |
+7.0% |
2,142 |
+4.9% |
Waters |
577 |
+12.4% |
78 |
+22.3% |
247 |
+15.1% |
459 |
+2.0% |
1,362 |
+9.6% |
Total Company |
2,429 |
+6.5% |
1,704 |
+5.0% |
954 |
+9.6% |
2,149 |
+6.1% |
7,235 |
+6.4% |
H1 2023 |
Europe |
North America |
China/North Asia/Oceania |
AMEA, CIS & Latin America |
Total |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
|
|
|
|
|
|
|
|
|
|
|
EDP |
2,152 |
+5.5% |
3,106 |
+8.4% |
180 |
+16.9% |
2,065 |
+8.1% |
7,503 |
+7.7% |
Specialized Nutrition |
1,518 |
+3.0% |
173 |
-1.9% |
1,220 |
+10.8% |
1,340 |
+14.1% |
4,250 |
+8.3% |
Waters |
1,007 |
+14.0% |
139 |
+21.0% |
378 |
+15.9% |
889 |
+3.9% |
2,413 |
+10.6% |
Total Company |
4,677 |
+6.4% |
3,418 |
+8.3% |
1,778 |
+12.4% |
4,294 |
+9.0% |
14,167 |
+8.4% |
II. EDP
RUSSIA UPDATE
On October 14, 2022, Danone launched a process
to transfer the control of its EDP (Essential Dairy &
Plant-based) Business in Russia, which was progressing according to
the expected schedule.
On July 16, 2023, Danone has taken note of the
decision of the Russian authorities aiming at placing Danone Russia
(EDP) under the temporary external administration of the Russian
Federal Agency for State Property Management (Rosimushchestvo).
On July 18, 2023, the Russian authorities
indicated that the Board of Directors and CEO of Danone Russia
(EDP) had been changed. These changes took place without the
knowledge of, or approval by, Danone. While Danone no longer
retains control of the management of its EDP operations in Russia,
it remains their legal owner.
As a result, and as per applicable accounting
standards (IFRS), Danone will deconsolidate its EDP Russia
operations in July 2023, triggering an approximately €(0.2)bn cash
impairment. In addition, Danone recognizes a non-cash RUB / EUR FX
translation difference of approximately €(0.5)bn, which has no
impact on Group’s total equity. Both will be recognized on December
31, 2023.
EDP Russia will therefore be taken out of
Danone’s like for like perimeter as of July 2023; Danone’s H2 2023
recurring performance will be reported excluding the contribution
of EDP Russia.
Danone will continue to investigate the
situation to understand the implications of the decisions of the
Russian authorities on the ongoing EDP operations of Danone in
Russia, as well as on the ongoing sale process. Danone will
continue to provide information on material developments related to
the situation of its EDP operations in Russia and keeps
investigating how to protect its assets and its rights as
shareholder, with a first priority to ensure people safety.
III.
2023 GUIDANCE
Like-for-like sales growth expected between +4
and +6%, with moderate recurring operating margin improvement.
IV.
MAJOR DEVELOPMENTS OVER THE PERIOD
- April 27, 2023: At
Danone’s 2023 Annual General Meeting, shareholders approved all
resolutions submitted to its approval by the Board of Directors,
including the distribution of a dividend of €2.00 per share in
cash, the appointment of Sanjiv Mehta as Director, the renewals of
terms of office of Valérie Chapoulaud-Floquet and Gilles Schnepp,
and the ratification of the co-opting of Gilbert Ghostine and Lise
Kingo, as Directors.
- May
15, 2023: Danone
issued a €800 million bond with an 8-year maturity and a 3.47%
coupon. The settlement took place on May 22, 2023, and the bonds
are listed on Euronext Paris.
V.
NEW FINANCIAL DISCLOSURE
PRO FORMA
Financial disclosure
Danone’s external reporting has been adjusted to
reflect the organizational changes. Starting from Q1 2023, the
company reports its key indicators (net sales, like-for-like sales
growth, recurring operating income and recurring operating margin)
along five adjusted operating segments:
- Europe, which
includes Ukraine (was previously part of Rest of the World
zone);
- North America,
which includes the United States and Canada (unchanged);
- China, North
Asia, Oceania (unchanged);
- Latin America
(was previously part of Rest of the World zone);
- Rest of the
World, which includes AMEA (Asia, Middle East including Turkey,
Africa) and CIS.
The global category reporting remains unchanged,
and Danone continues to report performance, on both net sales and
recurring operating income and margin, for EDP, Specialized
Nutrition and Waters.Like-For-Like
definition
All countries with hyperinflationary economies
are now included in our like-for-like changes. However, in order to
limit the distorting effect of hyperinflation, net sales growth in
excess of around 26% per year are excluded from like-for-like net
sales growth calculation in hyperinflationary economies. Indeed, a
three-year average at 26% would generally trigger hyperinflation as
defined by IFRS rules.
H1 and FY 2022 sales restated by new operating segments and new
LFL methodology
H1 2022 |
Europe |
North America |
China/North Asia/Oceania |
AMEA, CIS & Latin America |
Total |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EDP |
2,087 |
-0.2% |
2,851 |
+6.4% |
166 |
+9.6% |
1,958 |
+7.9% |
7,062 |
+4.7% |
Specialized Nutrition |
1,485 |
+8.4% |
174 |
+14.0% |
1,160 |
+15.0% |
1,209 |
+6.1% |
4,029 |
+9.7% |
Waters |
859 |
+11.4% |
114 |
+18.3% |
345 |
-9.9% |
916 |
+14.2% |
2,234 |
+8.8% |
Total Company |
4,431 |
+4.7% |
3,139 |
+7.2% |
1,671 |
+8.3% |
4,083 |
+8.6% |
13,325 |
+6.9% |
FY 2022 |
Europe |
North America |
China/North Asia/Oceania |
AMEA, CIS & Latin America |
Total |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
Net sales (€m) |
LFL sales growth (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EDP |
4,137 |
+0.6% |
6,085 |
+8.1% |
340 |
+12.4% |
4,237 |
+8.0% |
14,799 |
+5.8% |
Specialized Nutrition |
2,977 |
+8.3% |
376 |
+15.6% |
2,431 |
+9.3% |
2,535 |
+9.7% |
8,319 |
+9.3% |
Waters |
1,757 |
+8.5% |
251 |
+19.0% |
656 |
-4.4% |
1,879 |
+10.2% |
4,543 |
+7.5% |
Total Company |
8,871 |
+4.6% |
6,712 |
+8.9% |
3,428 |
+6.7% |
8,651 |
+9.0% |
27,661 |
+7.1% |
H1 and FY 2022 margin restated by new operating segments
Recurring operating profit (€m) and margin (%) |
H1 2022 |
FY 2022 |
€m |
Margin (%) |
€m |
Margin (%) |
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
Europe |
574 |
12.9% |
1,084 |
12.2% |
North America4 |
254 |
8.1% |
679 |
10.1% |
China, North Asia & Oceania2 |
534 |
32.0% |
1,037 |
30.2% |
Latin America 3 |
-1 |
-0.1% |
55 |
1.9% |
Rest of the World |
251 |
9.1% |
522 |
8.9% |
BY CATEGORY |
|
|
|
|
|
|
|
EDP |
494 |
7.0% |
1,207 |
8.2% |
Specialized Nutrition |
933 |
23.2% |
1,799 |
21.6% |
Waters |
185 |
8.3% |
370 |
8.2% |
|
|
|
|
|
|
|
|
Total |
1,612 |
12.1% |
3,377 |
12.2% |
VI.
ALTERNATIVE PERFORMANCE MEASURES NOT DEFINED BY
IFRS
IAS 29: impact on reported
data
All necessary conditions have been reached
(including 3-year cumulative rate of inflation for consumer prices
exceeding the 100% threshold reached during the first half 2022) to
now consider Turkey as “hyperinflationary” as defined by IFRS rules
and therefore that IAS 29 rule related to Financial Reporting in
Hyperinflationary Economies becomes applicable to the country.
Consequently, Danone applies IAS 29 in Turkey with an effective
date of January 1st, 2022.
Adoption of IAS 29 in hyperinflationary
countries requires its non-monetary assets and liabilities and its
income statement to be restated to reflect the changes in the
general pricing power of its functional currency, leading to a gain
or loss on the net monetary position included in the net income.
Moreover, its financial statements are converted into euros using
the closing exchange rate of the relevant period.
IAS 29: impact on reported data € million except
% |
Q2
2023 |
|
H1 2023 |
|
Sales |
-17.7 |
|
-54.2 |
|
Sales growth (%) |
-0.24% |
|
-0.38% |
|
Recurring Operating Income |
|
|
-35 |
|
Recurring Net Income – Group share |
|
|
-72 |
|
Breakdown by quarter of H1 2023 sales after
application of IAS 29H1 2023 sales correspond to the addition
of:
- Q2 2023
reported sales;
- Q1 2023 sales
resulting from the application of IAS 29 until June 30, 2023, to
sales of entities in hyperinflation countries (application of the
inflation rate until June 30, 2023, and translation into euros
using the June 30,
2023, closing rate) and provided in the table
below for information (unaudited data).
€ million |
Q1 20231 |
Q2 2023 |
H1 2023 |
Europe |
2,248 |
2,429 |
4,677 |
North America |
1,714 |
1,704 |
3,418 |
China, North Asia & Oceania |
824 |
954 |
1,778 |
Latin America |
687 |
779 |
1,466 |
Rest of the World |
1,459 |
1,369 |
2,828 |
|
|
|
|
Total |
6,932 |
7,235 |
14,167 |
1Results from the application of IAS 29 until
June 30, 2023, to Q1 sales of entities of hyperinflation
countries.
Financial indicators not defined in
IFRS
Due to rounding, the sum of values presented may
differ from totals as reported. Such differences are not
material.
Like-for-like changes in sales,
recurring operating income and recurring operating margin reflect
Danone's organic performance and essentially exclude the impact
of:
- changes in
consolidation scope, with indicators related to a given fiscal year
calculated on the basis of previous-year scope, both previous-year
and current-year scopes excluding entities in countries under
hyperinflation according to IAS 29 during the previous year (as for
Argentinian entities since January 1, 2019, and except for
Turkey);
- changes in
applicable accounting principles;
- changes in
exchange rates with both previous-year and current-year indicators
calculated using the same exchange rates (the exchange rate used is
a projected annual rate determined by Danone for the current year
and applied to both previous and current years).
Bridge from reported data to like-for-like
data
(€ million except %) |
H1 2022 |
Like-for-like change |
Impact of changesin scope of
consolidation |
Impact of changes in exchange rates & others incl.
IAS 29 |
Organic contribution from hyperinflation
countries |
Reported change |
H1 2023 |
|
|
|
|
|
|
|
|
Sales |
13,325 |
+8.4% |
-0.5% |
-2.9% |
+1.3% |
+6.3% |
14,167 |
Recurring operating margin |
12.1% |
-30 bps |
+6 bps |
+39 bps |
-2 bps |
+14 bps |
12.2% |
Recurring operating income is
defined as Danone’s operating income excluding Other operating
income and expenses. Other operating income and expenses comprise
items that, because of their significant or unusual nature, cannot
be viewed as inherent to Danone’s recurring activity and have
limited predictive value, thus distorting the assessment of its
recurring operating performance and its evolution. These mainly
include:
- capital gains
and losses on disposals of fully consolidated companies;
- impairment
charges on intangible assets with indefinite useful lives;
- costs related
to strategic restructurings or transformation plans;
- costs related
to major external growth transactions;
- costs related
to major crisis and major litigations;
- in connection
with IFRS 3 (Revised) and IAS 27 (Revised) relating to business
combinations, (i) acquisition costs related to business
combinations, (ii) revaluation profit or loss accounted for
following a loss of control, and (iii) changes in earn-outs
relating to business combinations and subsequent to acquisition
date.
Recurring operating margin is
defined as Recurring operating income over Sales ratio.
Other non-recurring financial income and
expense corresponds to financial income and expense items
that, in view of their significant or unusual nature, cannot be
considered as inherent to Danone’s recurring financial management.
These mainly include changes in value of non-consolidated
interests.
Non-recurring income tax
corresponds to income tax on non-recurring items as well as tax
income and expense items that, in view of their significant or
unusual nature, cannot be considered as inherent to Danone’s
recurring performance.Recurring effective tax rate
measures the effective tax rate of Danone’s recurring performance
and is computed as the ratio of income tax related to recurring
items over recurring net income before tax.
Non-recurring share of profit of
equity-accounted companies includes items that, because of
their significant or unusual nature, cannot be viewed as inherent
to the companies' recurring activity and thereby distort the
assessment of their recurring performance and trends in that
performance. These items mainly relate to (i) capital gains and
losses on disposals of investments in equity-accounted companies,
(ii) impairment of goodwill, and (iii) non-recurring items, as
defined by Danone, included in the share of profit of
equity-accounted companies.
Recurring net income (or
Recurring net income – Group Share) corresponds to the Group share
of the consolidated Recurring net income. The Recurring net income
excludes items that, because of their significant or unusual
nature, cannot be viewed as inherent to Danone’s recurring activity
and have limited predictive value, thus distorting the assessment
of its recurring performance and its evolution. Such non-recurring
income and expenses correspond to Other operating income and
expenses, Other non-recurring financial income and expenses,
Non-recurring income tax, and Non-recurring income from
equity-accounted companies. Such income and expenses, excluded from
Net income, represent Non-recurring net income.
Recurring EPS (or Recurring net
income – Group Share, per share after dilution) is defined as the
ratio of Recurring net income adjusted for hybrid financing over
Diluted number of shares. In compliance with IFRS, income used to
calculate EPS is adjusted for the coupon related to the hybrid
financing accrued for the period and presented net of tax.
|
H1 2022 |
|
H1 2023 |
|
Recurring |
|
Total |
|
Recurring |
|
Total |
|
Net income-Group share (€ million) |
1,051 |
|
737 |
|
1,133 |
|
1,093 |
|
Coupon related to hybrid financing net of tax (€ million) |
(7) |
|
(7) |
|
(6) |
|
(6) |
|
Number of shares |
|
|
|
|
|
|
|
|
• Before dilution |
638,514,268 |
|
638,514,268 |
|
640,196,786 |
|
640,196,786 |
|
• After dilution |
638,827,268 |
|
638,827,268 |
|
640,804,805 |
|
640,804,805 |
|
EPS (€) |
|
|
|
|
|
|
|
|
• Before dilution |
1.64 |
|
1.14 |
|
1.76 |
|
1.70 |
|
• After dilution |
1.63 |
|
1.14 |
|
1.76 |
|
1.70 |
|
Free cash flow represents cash
flows provided or used by operating activities less capital
expenditure net of disposals and, in connection with IFRS 3
(Revised), relating to business combinations, excluding (i)
acquisition costs related to business combinations, and (ii)
earn-outs related to business combinations and paid subsequently to
acquisition date.
(€ million) |
H1 2022 |
H1 2023 |
Cash-flow from operating activities |
970 |
1,424 |
Capital expenditure |
(318) |
(310) |
Disposal of tangible assets & transaction fees related to
business combinations1 |
22 |
10 |
Free cash-flow |
674 |
1,124 |
1 Represents acquisition costs related to business combinations
paid during the period.
Net financial debt represents the net debt
portion bearing interest. It corresponds to current and non-current
financial debt (i) excluding Liabilities related to put options
granted to non-controlling interests and earn-outs on acquisitions
resulting in control and (ii) net of Cash and cash equivalents,
Short term investments and Derivatives – assets managing net
debt.
(€ million) |
December 31, 2022 |
June 30,
2023 |
Non-current financial debt |
11,238 |
11,162 |
Current financial debt |
3,298 |
4,402 |
Short-term investments |
(3,631) |
(3,377) |
Cash |
(1,051) |
(1,880) |
Bank Overdraft |
330 |
940 |
Derivatives — non-current assets1 |
(18) |
(8) |
Derivatives — current-assets1 |
(60) |
(59) |
Net debt |
10,107 |
11,180 |
- Liabilities related to put options granted to non-controlling
interests — non-current
|
(59) |
(0) |
- Liabilities related to put options granted to non-controlling
interests and earn-outs on acquisitions resulting in control —
current
|
(263) |
(284) |
Net financial debt |
9,785 |
10,896 |
1 Managing net debt only
o o O o o
FORWARD-LOOKING STATEMENTS
This press release contains certain
forward-looking statements concerning Danone. In some cases, you
can identify these forward-looking statements by forward-looking
words, such as “estimate”, “expect”, “anticipate”, “project”,
“plan”, “intend”, “objective”, “believe”, “forecast”, “guidance”,
“foresee”, “likely”, “may”, “should”, “goal”, “target”, “might”,
“will”, “could”, “predict”, “continue”, “convinced” and
“confident,” the negative or plural of these words and other
comparable terminology. Forward looking statements in this document
include, but are not limited to, predictions of future activities,
operations, direction, performance and results of Danone.
Although Danone believes its expectations are
based on reasonable assumptions, these forward-looking statements
are subject to numerous risks and uncertainties, which could cause
actual results to differ materially from those anticipated in these
forward-looking statements. For a detailed description of these
risks and uncertainties, please refer to the “Risk Factor” section
of Danone’s Universal Registration Document (the current version of
which is available at www.danone.com).
Subject to regulatory requirements, Danone does
not undertake to publicly update or revise any of these
forward-looking statements. This document does not constitute an
offer to sell, or a solicitation of an offer to buy Danone
securities.
The
presentation to analysts and investors will be
broadcast live today from
8:30
a.m. (Paris time) on
Danone’s website
(www.danone.com).
Related slides will also be available on the website in the
Investors section.
APPENDIX – Sales by
geographical zone and by category
(in € million)
|
First quarter |
Second quarter |
First Half |
|
2022 |
2023 |
2022 |
2023 |
2022 |
2023 |
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
|
|
|
|
|
Europe |
2,142 |
2,248 |
2,289 |
2,429 |
4,431 |
4,677 |
North America5 |
1,477 |
1,714 |
1,662 |
1,704 |
3,139 |
3,418 |
China, North Asia & Oceania2 |
735 |
824 |
936 |
954 |
1,671 |
1,778 |
Latin America3 |
602 |
689 |
704 |
779 |
1,327 |
1,466 |
Rest of the World |
1,280 |
1,486 |
1,476 |
1,369 |
2,756 |
2,828 |
BY CATEGORY |
|
|
|
|
|
|
|
|
|
|
EDP |
3,365 |
3,768 |
3,684 |
3,731 |
7,062 |
7,503 |
Specialized Nutrition |
1,919 |
2,143 |
2,106 |
2,142 |
4,029 |
4,250 |
Waters |
951 |
1,051 |
1,277 |
1,362 |
2,234 |
2,413 |
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
6,236 |
6,962 |
7,067 |
7,235 |
13,325 |
14,167 |
|
First quarter
2023 |
Second quarter
2023 |
First Half
2023 |
|
Reported change |
Like-for-like change |
Reported change |
Like-for-like change |
Reported change |
Like-for-like change |
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
|
|
|
Europe |
+4.9% |
+6.2% |
+6.1% |
+6.5% |
+5.5% |
+6.4% |
North America1 |
+16.0% |
+11.8% |
+2.5% |
+5.0% |
+8.9% |
+8.3% |
China, North Asia & Oceania2 |
+12.1% |
+16.0% |
+1.9% |
+9.6% |
+6.4% |
+12.4% |
Latin America3 |
+14.6% |
+12.6% |
+10.7% |
+10.8% |
+10.5% |
+11.7% |
Rest of the World |
+16.2% |
+11.8% |
-7.2% |
+3.9% |
+2.6% |
+7.7% |
BY CATEGORY |
|
|
|
|
|
|
|
|
|
EDP |
+12.0% |
+9.3% |
+1.3% |
+6.2% |
+6.3% |
+7.7% |
Specialized Nutrition |
+11.6% |
+12.0% |
+1.7% |
+4.9% |
+5.5% |
+8.3% |
Waters |
+10.5% |
+12.0% |
+6.6% |
+9.6% |
+8.0% |
+10.6% |
|
|
|
|
|
|
|
|
|
|
TOTAL |
+11.6% |
+10.5% |
+2.4% |
+6.4% |
+6.3% |
+8.4% |
All references in this document to Like-for-like
(LFL) changes, Recurring operating income and margin, Recurring net
income, Recurring income tax rate, Recurring EPS, Free cash-flow
and net financial debt, correspond to alternative performance
measures not defined by IFRS. Their definitions, as well as their
reconciliation with financial statements, are listed on pages 8 to
11.1United States and Canada; 2China, Japan, Australia and New
Zealand; 3Mexico, Brazil, Argentina and Uruguay1United States and
Canada; 2China, Japan, Australia and New Zealand; 3Mexico, Brazil,
Argentina and Uruguay1United States and Canada; 2China, Japan,
Australia and New Zealand1United States and Canada; 2China, Japan,
Australia and New Zealand; 3Mexico, Brazil, Argentina and
Uruguay
Danone (EU:BN)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024
Danone (EU:BN)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024