PARIS (Reuters) – Food group Danone reported better-than-expected fourth-quarter sales on Wednesday, driven by higher prices to offset soaring raw material and energy costs, which weighed on its annual operating margin.

Fourth quarter revenue was €7.01 billion, up 7.0% year-on-year like-for-like.

Analysts were expecting a 6.2% like-for-like increase for the period.

Danone specifies in a press release that its 2023 objectives are in line with the medium-term outlook, namely like-for-like revenue growth of between 3 and 5% and a “moderate improvement” in the current operating margin.

For 2022, the world’s leading yogurt manufacturer reported sales of 27.66 billion euros, representing like-for-like growth of 7.8%, in line with the expectations of the group which had anticipated an increase of 7-8%.

The operating margin for the year 2022 fell to 12.2% of sales, compared to 13.7% in 2021, which is however largely in line with Danone’s expectations which aimed for a margin above 12%.

This decline reflects inflationary pressure and increased investment in brands during the second half of the year.

The owner of Activia yoghurts and Evian water also indicated that its board of directors would propose a dividend of 2 euros per share for the 2022 financial year, an increase of 3.1% compared to that of the previous year.

(Report Dominique Vidalon, written by Kate Entringer)

Copyright © 2023 Thomson Reuters