By Dominique Vidalon
PARIS (Reuters) – Danone said on Wednesday that it was starting the next leg of its revival plan with confidence after it delivered 2024 sales and cash above analysts’ expectations.
The consumer goods giant, whose brands include Evian and Badoit water and Activia yoghurt, also improved its profit margin thanks to higher volumes as price hikes slowed.
Danone reported 2024 sales of 27.376 billion euros ($28.72 billion), a like-for-like rise of 4.3%, compared with analysts’ expectations of 4.2% in a company-provided consensus.
The performance reflected sustained demand for medical nutrition and baby food in China as well as coffee creamers and high protein products in North America.
The recurring operating margin for 2024 rose to 13% of sales from 12.6% in 2023, in line with expectations of 13%.
For 2025, Danone said its forecast was in line with its mid-term ambition of like-for-like sales growth of 3-5%, with recurring operating income growing faster than sales.
Last June, Danone gave these annual targets for the 2025-2028 period, which it said was the next leg of a revival launched in 2022 as the food group further expands into health and medical nutrition.
With record cash flow of 3 billion euros in 2024, which came above analysts’ expectations of 2.45 billion, Danone said it would hand investors a dividend of 2.15 euros per share, up 2.4% compared to the previous year.
“Danone is now stronger, more resilient. The company is ready for more challenges,” CEO Antoine de Saint-Affrique said.
Danone, like rivals Unilever and NESTLE, has slowed price hikes – after three years of steep increases following the COVID-19 pandemic – to win back shoppers who had turned to cheaper brands during a surge in inflation.
For the fourth quarter alone, sales grew 4.7%, beating analysts’ estimates of 4.2%, with contributions from all its three businesses – Essential Dairy products (EDP), Specialised Nutrition and Waters.
This was as sales volumes rose 4.2% in the quarter and price hikes slowed to 0.6% from 0.7% in the previous quarter.
Analysts had expected sales volumes to increase by 3.4% in the fourth quarter and prices to slow to 0.8%.
Wednesday’s publication marks Danone’s sixth consecutive quarter of sales volume growth.
($1 = 0.9531 euros)
(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta, Ingrid Melander)
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