Growth in Dairy Sees Danone Sales Rise
23 Feb 2016 --- French dairy giant Danone has reported a rise in sales and profits in its 2015 full year results, coupled with a rise in sales for the fourth quarter in a row. The makers of international brands such as Actimel and Danone, said a boost in US sales, as well as water and baby food, were fundamental to sales performance.
Emmanuel Faber, chief executive, said: “Over the past 18 months, we have been making the changes necessary to take up the challenges of a new and ever changing world, as we pursue our purpose to provide pleasurable, healthier, sustainable hydration and eating options to our consumers each and every day. With organic growth of +4.4% and trading operating margin up +17 basis points like-for-like, our results are very solid and perfectly aligned with our objectives. They confirm that we have taken this mission to a new level, paving the way for strong, profitable and sustainable growth by 2020. We have further sharpened the consumer relevance of our brands, invested more in research and reshaped our organization for greater efficiency and deeper expertise. At the same time, we have enhanced our knowledge and capabilities to protect and grow our businesses, and have moved toward an optimal combination of more agility and discipline in our resource allocation and decision processes.”
“Our choices in 2015 delivered these solid results, which came from the combination of our businesses in both developed and emerging markets across all four of our categories,” he said. “In 2016, in a global context that remains volatile, Danone will continue to invest behind its brands and will mark a further important step to develop a balanced model of strong, profitable and sustainable growth.”
Looking ahead, Danone assumes that economic conditions will remain volatile and uncertain overall, with fragile or even deflationary consumer trends in Europe, emerging markets undermined by volatile currencies, and difficulties specific to a few major markets, in particular the CIS, China and Brazil. In 2016, Danone also anticipates upward trends in the cost of its main strategic raw materials.
Against this backdrop, it will continue to strengthen its model through a range of initiatives aimed at offsetting inflation and limiting its exposure to volatility. Milk prices are thus expected to edge up, with variations from one geographical area to the next: - lower prices in Europe and the United States in the first half, with a possible rebound in the second half of the year, and - steady price increases in emerging countries all year long, particularly in the CIS.
Danone’s 2016 targets include: sales growth within a range of +3% to +5%; and solid improvement of trading operating margin. Danone will also focus on increasing the free cash-flow, without setting a short-term target.
