Danone maintains its annual targets after a good start to 2022

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French food group Danone reiterated its 2022 financial targets after posting stronger-than-expected 7.1% sales growth in the first quarter amid rising input costs and uncertainty.

The strong start to the year, Danone’s strongest like-for-like sales growth since the fourth quarter of 2014, was broad-based across geographies and all three businesses – dairy and plant-based, infant formula and water in a bottle.

This reflects favorable comparables a year ago, price increases, stronger demand for baby formula in China and post-COVID improvement in consumption of its water products outside of the home environment.

“The operating environment remains highly volatile, with sustained supply disruptions and widespread inflation around mid-teen levels in 2022,” it said in a statement.

“Sustainable value creation”

“Our teams are ready to make 2022 the seminal year it should be for Danone as we move towards creating sustainable value for all,” Chief Financial Officer Juergen Esser said in a statement.

Danone, which is the world’s largest yogurt maker, said like-for-like sales hit 6.236 billion euros in the first quarter, amid consensus expectations of a 5.5% rise. of 19 analysts compiled by the company.

Danone’s new boss, Antoine de Saint-Affrique, is leading a recovery plan amid rising input costs, coupled with new uncertainties caused by the Russian invasion of Ukraine, which forced Danone to suspend its investments in Russia.

The group reiterated that it expects a 2022 operating margin above 12% compared to 13.7% in 2021, with like-for-like sales growth driven by prices in a range of 3% to 5% compared to 3.4%. in 2021.

This assumed 100% reinvestment of its local savings first, higher productivity than last year and a level of input cost inflation in the mid-teens.

News by Reuters, edited by ESM- your source for the latest A-Brands news. Click subscribe to register ESM: European Supermarket Magazine.

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