Danone: Making progress on Renew Danone Further growth acceleration
in the third quarter
2022 Third-Quarter SalesPress
release – Paris, October 27, 2022
Making progress on Renew
DanoneFurther growth acceleration in the third
quarter
- Q3 net sales up +19.1% on a reported basis and +9.5% on
a like-for-like (LFL) basis, with price up +10.9%, and
volume/mix down -1.4%; proforma volume/mix -0.2% excluding
EDP Russia
- Accelerated like-for-like sales growth in all
geographies and categories
- +11.2% in North America driven by balanced competitive growth
across categories
- +6.0% in Europe led by Specialized Nutrition and Waters
- +6.8% in China, North Asia & Oceania led by Specialized
Nutrition in China and EDP in Japan
- +13.6% in Rest of the World with price-led growth across all
countries and categories
- Portfolio management: initiation of a process
to transfer the effective control of the EDP
Russia business
- 2022 guidance upgraded: LFL net sales growth
now expected between +7 and +8%, versus +5 to +6% previously;
recurring operating margin above 12% confirmed
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1
Antoine de
Saint-Affrique: CEO statement
“In what remains a challenging environment, we
continue to display consistent progress in all aspects of our Renew
agenda, with active portfolio management and a disciplined approach
to boosting our winners, fixing our underperformers and driving our
core, as exemplified by the ongoing transformation of our European
dairy platform.Q3 was another quarter of strong growth, with sales
up +9.5% on a like-for-like basis, led by a sequential growth
acceleration across all our categories and geographies. We now
expect LFL sales growth between +7 and +8% in the full-year 2022.We
continue to implement pricing actions in a responsible and
disciplined manner, while focusing on the quality of our execution
and reinvesting behind our brands and capabilities. This shows
in the performance of our Specialized Nutrition business, led by
Aptamil, in Waters, where our evian, Bonafont and Aqua brands
continue to perform strongly in the marketplace, but also in EDP,
with the resilience of portfolio, notably in the US, Canada and
Japan.”
I. 2022
THIRD-QUARTER SALES
| € million except % |
Q32021 |
Q32022 |
Reported change |
LFL SalesGrowth |
Volume/Mix Growth |
9M2021 |
9M2022 |
Reported change |
LFL SalesGrowth |
Volume/MixGrowth |
|
|
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
|
|
|
|
Europe |
2,122 |
2,246 |
+5.9% |
+6.0% |
-2.0% |
6,264 |
6,628 |
+5.8% |
+5.6% |
+0.4% |
|
|
North America2 |
1,413 |
1,813 |
+28.3% |
+11.2% |
+1.0% |
4,120 |
4,953 |
+20.2% |
+8.6% |
+1.5% |
|
|
China, North Asia & Oceania2 |
801 |
940 |
+17.3% |
+6.8% |
+5.2% |
2,231 |
2,611 |
+17.0% |
+7.8% |
+5.8% |
|
|
Rest of the World |
1,822 |
2,335 |
+28.1% |
+13.6% |
-5.9% |
5,396 |
6,509 |
+20.6% |
+11.0% |
-3.0% |
|
|
BY CATEGORY |
|
|
|
|
|
|
|
|
|
|
|
EDP3 |
3,269 |
3,862 |
+18.1% |
+6.3% |
-6.0% |
9,686 |
10,946 |
+13.0% |
+5.2% |
-3.6% |
|
|
Specialized Nutrition |
1,777 |
2,134 |
+20.1% |
+12.2% |
+3.3% |
5,294 |
6,174 |
+16.6% |
+11.0% |
+5.3% |
|
|
Waters |
1,112 |
1,338 |
+20.4% |
+14.4% |
+4.4% |
3,031 |
3,580 |
+18.1% |
+12.3% |
+4.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
6,158 |
7,334 |
+19.1% |
+9.5% |
-1.4% |
18,011 |
20,700 |
+14.9% |
+8.1% |
+0.4% |
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In the third quarter of 2022,
consolidated sales stood at €7.3 bn, up +9.5% on a like-for-like
basis, with price up +10.9% and volume/mix down -1.4%. On a
reported basis, sales increased by +19.1%, benefiting notably from
a positive forex impact of +7.6%, reflecting in particular the
appreciation of the US dollar and various Asian and Latin American
currencies against the euro. Reported sales were also driven by a
positive organic contribution of hyperinflation geographies to
growth of +1.4%, as well as a slightly negative scope effect of
-0.2%, resulting mainly from the impact of the disposal of
Vega.
Performance by geographical
zone
Europe posted sales growth of +6.0% in
Q3 2022 on a like-for-like basis, driven by +8.0% growth
in price, while volume/mix declined by -2.0%. EDP registered +2.2%
growth in the region, with a contrasted performance by geography,
with sales and volumes impacted by portfolio choices and temporary
delivery suspensions in some countries such as Germany and Belgium.
Other countries benefited from the good momentum of key brands like
Actimel, Danone, Yopro and Danette. Specialized Nutrition posted
+9.5% growth, led by Aptamil, which registered broad-based and
competitive growth in the quarter. Waters reported +9.2% growth,
supported by all brands.
North America sales were up by +11.2% in
Q3 2022 on a like-for-like basis. Growth was balanced and
competitive, driven by accelerated pricing, up +10.2%, and by the
continued roll-out of Revenue Growth Management (RGM) initiatives,
leading to resilient volume/mix, at +1.0%. In EDP, growth was led
by both Dairy, with International Delight, Activia and Oikos up
double digits, and Plant-based, with Silk up high single digits.
Growth in the region was also sustained by the strong momentum in
Waters and Specialized Nutrition.
- CHINA, NORTH ASIA & OCEANIA
China, North Asia & Oceania posted
sales growth of +6.8% in Q3 2022 on a like-for-like
basis, with price up +1.6% and volume/mix up +5.2%. In
China, Infant Milk Formula sales registered competitive growth on a
high base, led by Aptamil, which continued to gain share in
international and domestic labels. Adult Nutrition and Pediatric
Specialties registered another quarter of outstanding growth, while
in Waters, Mizone’s performance improved sequentially and market
shares stabilized, despite challenging operating conditions. Beyond
China, sales in Japan accelerated further, led by Bio and Oikos
functional propositions.
Rest of the World registered sales
growth of +13.6% in Q3 2022 on a like-for-like basis,
driven by price up +19.5%, while volume/mix declined by -5.9%.
Excluding EDP Russia, volume/mix was down -1.7% in the region. In
Indonesia, sales increased by double digits, led by Aqua in Waters
and by SGM and Bebelac in Specialized Nutrition, with resilient
market share supported by disciplined execution. In Latin America,
sales were up double digits, with all categories contributing.
II. 2022
GUIDANCE UPGRADED
Price-led like-for-like sales growth now
expected between +7 and +8%, versus +5 to +6% previously; recurring
operating margin expected above 12%.
III. MAJOR
DEVELOPMENTS OVER THE PERIOD
- August 31, 2022: Danone successfully issued a
€600 million bond with a 10-year maturity and a 3.071% coupon. The
settlement took place on September 7, 2022, and the bonds are
listed on Euronext Paris.
- October 3, 2022: Danone announced that two
senior leaders, Gilbert Ghostine, Chief Executive Officer of
Firmenich, and Lise Kingo, former Chief Executive Officer and
Executive Director of the United Nations Global Compact, have been
co-opted to join the Board of Directors as independent members,
starting October 15 and December 1 respectively. They will replace
Guido Barilla and Cécile Cabanis.
- October 14, 2022: Danone has initiated a
process to transfer the effective control of its EDP business in
Russia, considering that this is the best option to ensure
long-term local business continuity for its employees, consumers
and partners. Once closed, the transaction, which will be subject
to regulatory approvals, will result in the deconsolidation of
Danone’s EDP Russia business. It could result in a write-off of up
to €1 billion3.
Proforma Like-for-like sales growth and
volume/mix growth by quarter excluding EDP Russia business
(unaudited figures):
| |
Q1 2022 |
Q2 2022 |
Q3 2022 |
|
| |
LFL SalesGrowth |
Volume/Mix Growth |
LFL SalesGrowth |
Volume/Mix Growth |
LFL SalesGrowth |
Volume/Mix Growth |
|
| |
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Rest of the World incl. EDP Russia |
+7.0% |
-2.2% |
+12.3% |
-0.8% |
+13.6% |
-5.9% |
|
|
Rest of the World excl. EDP Russia |
+7.9% |
-0.1% |
+14.9% |
+4.2% |
+16.9% |
-1.7% |
|
|
Total Company incl. EDP Russia |
+7.1% |
+2.2% |
+7.7% |
+0.9% |
+9.5% |
-1.4% |
|
|
Total Company excl. EDP Russia |
+7.3% |
+3.0% |
+8.1% |
+2.2% |
+10.0% |
-0.2% |
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- October 24, 2022: Danone and Royal Unibrew
agreed not to complete the contemplated sale to Royal Unibrew of
Aqua d’Or, Danone’s Water and Beverage’s business in Denmark, that
was announced on November 16, 2021. The Parties have determined
that they will not be able to fulfil the closing conditions,
including the approval by the Danish Competition and Consumer
Authority. The Parties have therefore withdrawn the notification of
the transaction to the Danish Competition and Consumer Authority.
Aqua d’Or remains under review.
IV. IFRS
STANDARDS AND FINANCIAL INDICATORS NOT DEFINED IN IFRS
IAS29: impact on reported
data
Danone has been applying IAS 29 in
hyperinflation countries as defined in IFRS, except for Turkey in
view of the unmaterial impact. Adoption of IAS 29 in these
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 % |
Q3 2022 |
|
|
Sales |
1.4 |
|
|
Sales growth (%) |
+0.02% |
|
Breakdown by quarter of 9M 2022 sales after
application of IAS 299M 2022 sales correspond to the addition
of:
- Q3 2022 reported sales;
- Q1 and Q2 2022 sales resulting from the application of IAS29
until September 30, 2022 to sales of entities of hyperinflation
countries (application of the inflation rate until September 30,
2022 and translation into euros using September 30, 2022 closing
rate) and provided in the table below for information (unaudited
data).
|
€ million |
Q1 20221 |
Q2 20222 |
Q3 2022 |
9M 2022 |
|
Europe |
2,114 |
2,267 |
2,246 |
6,628 |
| North
America |
1,477 |
1,662 |
1,813 |
4,953 |
| China,
North Asia & Oceania |
735 |
936 |
940 |
2,611 |
|
Rest of the World |
1,936 |
2,237 |
2,335 |
6,509 |
|
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|
|
|
|
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Total |
6,263 |
7,103 |
7,334 |
20,700 |
| |
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1Results from the application of IAS29 until
September 30, 2022 to Q1 sales of entities of hyperinflation
countries. 2Results from the application of IAS29 until September
30, 2022 to Q2 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 1st, 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 %) |
Q3 2021 |
Like-for-like change |
Impact of changesin scope of
consolidation |
Impact of changes in exchange rates & others incl.
IAS29 |
Organic contribution from hyperinflation
countries |
Reported change |
Q3 2022 |
|
|
|
|
|
|
|
|
|
|
Sales |
6,158 |
+9.5% |
-0.2% |
+8.4% |
+1.4% |
+19.1% |
7,334 |
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 of 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.
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 6:00 p.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 |
Third quarter |
|
| |
2021 |
2022 |
2021 |
2022 |
2021 |
2022 |
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BY GEOGRAPHICAL ZONE |
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Europe |
1,987 |
2,114 |
2,155 |
2,267 |
2,122 |
2,246 |
|
|
North America4 |
1,316 |
1,477 |
1,391 |
1,662 |
1,413 |
1,813 |
|
|
China, North Asia & Oceania2 |
598 |
735 |
832 |
936 |
801 |
940 |
|
|
Rest of the World |
1,756 |
1,909 |
1,793 |
2,202 |
1,822 |
2,335 |
|
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BY CATEGORY |
|
|
|
|
|
|
|
|
EDP3 |
3,149 |
3,365 |
3,254 |
3,684 |
3,269 |
3,862 |
|
|
Specialized Nutrition |
1,719 |
1,919 |
1,793 |
2,106 |
1,777 |
2,134 |
|
|
Waters |
790 |
951 |
1,125 |
1,277 |
1,112 |
1,338 |
|
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|
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|
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|
TOTAL |
5,657 |
6,236 |
6,171 |
7,067 |
6,158 |
7,334 |
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| |
First quarter 2022 |
Second quarter 2022 |
Third quarter 2022 |
|
| |
Reported change |
Like-for-like change |
Reported change |
Like-for-like change |
Reported change |
Like-for-like change |
|
|
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
|
Europe |
+6.4% |
+5.7% |
+5.2% |
+5.1% |
+5.9% |
+6.0% |
|
|
North America1 |
+12.2% |
+5.5% |
+19.5% |
+8.9% |
+28.3% |
+11.2% |
|
|
China, North Asia & Oceania2 |
+22.9% |
+15.3% |
+12.5% |
+3.3% |
+17.3% |
+6.8% |
|
|
Rest of the World |
+8.7% |
+7.0% |
+22.8% |
+12.3% |
+28.1% |
+13.6% |
|
|
BY CATEGORY |
|
|
|
|
|
|
|
|
EDP |
+6.9% |
+3.6% |
+13.2% |
+5.6% |
+18.1% |
+6.3% |
|
|
Specialized Nutrition |
+11.7% |
+9.5% |
+17.5% |
+11.4% |
+20.1% |
+12.2% |
|
|
Waters |
+20.5% |
+15.9% |
+13.6% |
+7.9% |
+20.4% |
+14.4% |
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
+10.2% |
+7.1% |
+14.5% |
+7.7% |
+19.1% |
+9.5% |
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All references in this document to Like-for-like
(LFL) changes, Recurring operating margin, correspond to financial
indicators not defined in IFRS. Their definitions, as well as their
reconciliation with financial statements, are listed on pages 4 and
5.
1United States and Canada; 2China, Japan, Australia and New
Zealand; 3Essential Dairy and Plant-based
3Based on the accounts and foreign exchange rates as of June
30th, 2022
1United States and Canada; 2China, Japan, Australia and New
Zealand; 3Essential Dairy and Plant-based
Danone (EU:BN)
Graphique Historique de l'Action
De Mar 2024 à Avr 2024
Danone (EU:BN)
Graphique Historique de l'Action
De Avr 2023 à Avr 2024
