Danone delivers solid year results despite volatile food prices and rising costs

16 Feb 2018 --- Danone has delivered its full-year results for 2017 claiming that despite volatile food and beverage markets and rising input costs, the French giant continues its transformation and outperformed the industry average. Danone’s 2017 full-year results reveal that consolidated sales were €24,677 million (US$30.8 million), up 2.5 percent. The sales growth included an increase of 3.9 percent in value showing continued mix and value enhancement in all entities.

Strong recurring EPS growth of €3.49 (US$4.37), up 14.2 percent at constant exchange rate, in line with full-year guidance, while sales growth was up 2.5 percent, with acceleration as expected in the second half of the year at +4.2 percent driven by improvement in all businesses and acceleration of the innovation pipeline.

According to Danone, there was also very strong improvement of recurring operating margin at 14.36 percent, up 70bps despite strong raw materials inflation.

And the WhiteWave integration is progressing well with more than US$50 million worth of synergies delivered in 2017, with a strong free cash flow delivery up 18.4 percent at over €2 billion (US$2.5 bn).

Last April Danone completed the acquisition of organic producer Whitewave and under the merger agreement, the two combined activities in North America to operate under the name “DanoneWave."

Danone’s results come just a few days after the French multinational food products corporation announced plans to offload part of its 21.29 percent stake in Japan’s Yakult as part of its capital allocation strategy. At the same time, Danone bolsters its collaboration in probiotics by signing a Memorandum of Understanding with the Japanese company.

A statement from Emmanuel Faber, Chairman and CEO says that last year the company demonstrated the strength of its portfolio and the resilience of its business model.

“Despite volatile food and beverage markets and rising input costs, we delivered very strong full-year results, with double-digit recurring earnings per share growth in line with our latest guidance,” he said.

“We closed the year with an accelerated sales growth rate, outperforming the industry average, along with very strong margin improvement and free cash flow above €2bn. In addition to strong results delivery, 2017 has been a year of preparation and continued transformation with the onboarding of WhiteWave, and the launch of our ambitious €1bn ‘Protein’ savings program.”

“We have also continued to strengthen our organization and governance, backing the launch of our One Planet.One Health. vision to sustainable value creation for all our stakeholders. This achievement reflects the unparalleled engagement of all the Danone teams, which I am proud to lead and would like to thank for making this possible every day.”

He adds that although the trading environment remains volatile and fragmented, Danone is well positioned to start 2018 with “stronger foundations” and is confident of the outlook.

“I am confident that we are on track to accelerate towards our 2020 ambition, with another year of delivery against the commitment we made to our shareholders for consistent EPS growth,” Faber added.