(News Bulletin 247) – The French agrifood giant has unveiled more dynamic sales than expected at the start of the year. Danone raises its forecast for the full year 2023.

Danone’s recovery is on track. In March 2022, its Managing Director, Antoine de Saint-Affrique, initiated a strategic plan called “Renew Danone” intended to move towards the best standards of growth and profitability.

And the quarterly sales unveiled this Wednesday morning show that the food giant is in the right direction. Between January and March, Danone’s turnover increased by 11.6% over one year to 6.96 billion euros and by 10.5% on a like-for-like basis. This is more than the expectations of analysts who expected sales of 6.6 billion euros over the period. “Organic sales growth exceeded the company’s compiled expectations by 320 basis points (or 3.2%), notes Royal Bank of Canada.

The mix/volume effect (i.e. the contribution of volumes and the orientation of sales towards more expensive products) was positive at 0.2 percentage point, whereas analysts were expecting a negative contribution of 280 percentage, notes the bank.

The income of the owner of Activia yoghurts or Evian waters was once again driven by price increases (10.3%).

“Danone delivered an impressive performance in the first quarter, with positive volume/mix despite continued storage unit rationalization and pricing initiatives,” Royal Bank of Canada said.

“This is the seventh consecutive quarter of growth in turnover”, welcomes a spokesperson for the group’s agri-food group to AFP, “believing that the roadmap of the new management “port(ait) its fruit”.

“Consumer confidence”

Danone says it can count on the loyalty of its customers. “We have the confidence of consumers who continue to buy our products at the same level” despite the figures displayed on the receipt, adds the same source to AFP.

By division, the waters segment recorded the strongest like-for-like growth (12%) as did specialized nutrition – including, for example, infant milk – which also saw its business increase by 12%, “nutrition and pediatric nutrition have experienced double-digit growth in China,” notes Stifel.

The EDP division (dairy and plant-based products) saw its revenues increase by 9.3%. “Strategic high-growth sectors like Activia, Oikos, International Delight have seen good growth in North America and in selective markets in Europe like Poland, the United Kingdom and France,” says the research office on this EDP division.

“Regionally, all markets exceeded expectations, although we highlight a particularly impressive performance in China, North Asia and Oceania, where organic revenue increased by 16% (+14% volume/ mix) thanks to a strong start to the year in infant nutrition and double-digit growth in adult nutrition and EDP”, abounds for its part RBC.

2023 objectives raised

On the strength of this “solid start to the year 2023”, the management raised its growth objectives for the year, with an increase in turnover “now expected between +4% and +6%” excluding scope effects. and exchange rates (between +3% and +5% previously). Danone has also confirmed that it is aiming for a “moderate” improvement in its current operating margin in parallel.

“While this progress is encouraging, we still have a lot to do. We remain fully focused on the execution of our Renew Danone strategy, with the aim of reconnecting with a model of sustainable value creation”, adds Antoine de Saint-Affrique. .

Last January, Danone said it was studying its strategic options, including a sale, of its organic dairy products activities Horizon Organic – often cited by analysts as a source of underperformance for the group – and Wallaby, which together represent 3 % of his annual income.

The Paris Stock Exchange moderately appreciates Danone’s encouraging start to the year as well as the raising of its objectives. The title rose by 0.7% in a Parisian market in sharp decline with a CAC 40 which fell by more than 1%, around 10:30 a.m.