Company Reports

Danone has undergone a transformation in recent years, fueled by management’s efforts to address shortcomings in execution and financial discipline, underpinned by a cultural reset. Under the refreshed strategy, the company has optimized its category and channel footprint, divested assets representing almost 10% of sales, and increased investment in research, innovation, digital capabilities, and, most importantly, brand and marketing support.

Danone's organic sales growth recovered to 4.2% in the second quarter, outpacing the company-compiled consensus—though the latter had expected a higher volume contribution than the 1.9% Danone delivered. The market reacted negatively, with shares down 3% at the market open on July 29.

Danone delivered 2.7% organic sales growth with a 1.5% volume contribution in the first quarter, slightly above the company-compiled consensus. The market reacted positively, with the shares 2% rising at the April 22 market open.

Danone reported 4.7% like-for-like sales growth in the fourth quarter, with 2.5% coming from volume, although this was a sequential slowdown. That brought full-year like-for-like sales growth to 4.5% and volume to 2.7%. Both the full-year and quarterly numbers were above company-compiled consensus.

Danone has undergone a transformation in recent years, fueled by management’s efforts to address shortcomings in execution and financial discipline, underpinned by a cultural reset. Under the refreshed strategy, the company has optimized its category and channel footprint, divested assets representing almost 10% of sales, and increased investment in research, innovation, digital capabilities, and, most importantly, brand and marketing support.

Danone has undergone a transformation in recent years, fueled by management’s efforts to address shortcomings in execution and financial discipline, underpinned by a cultural reset. Under the refreshed strategy, the company has optimized its category and channel footprint, divested assets representing almost 10% of sales, and increased investment in research, innovation, digital capabilities, and, most importantly, brand and marketing support.

Danone reported sequentially accelerating third-quarter organic sales growth of 4.8%, with a 3.2% contribution from volume and mix. Management reaffirmed the full-year guidance, and shares were broadly flat in intraday trading on Oct 28.

Danone reported 4.2% like-for-like sales growth for the first half of 2025, outperforming company-compiled consensus expectations. Management reaffirmed full-year 2025 guidance. The share price was up 7% on July 30 trading.

Danone delivered 4.3% like-for-like sales growth for the first quarter of 2025. Management reconfirmed the 2025 guidance and midterm ambitions. Shares were trading 1% higher at the market's opening on April 23.

Danone has undergone a transformation in recent years, fueled by management’s efforts to address shortcomings in execution and financial discipline, underpinned by a cultural reset. Under the refreshed strategy, the company has optimized its category and channel footprint, divested assets representing almost 10% of sales, and increased investment in research, innovation, digital capabilities, and, most importantly, brand and marketing support.

We are transferring coverage of Danone, a key player in the packaged food and beverage industry with leading market share positions in specialized nutrition and dairy and plant-based dairy product categories.

Danone reported 4.7% like-for-like sales growth in the fourth quarter, above the company-complied consensus of 4.2%, driven by stronger-than-expected volume/mix growth of 4.2%. Recurring operating margin for 2024 was up 40 basis points to 13%.

Danone's third-quarter results reflect continued solid performance, with like-for-like, or LFL, sales increasing by 4.2% year over year. Volume/mix was up 3.6%, while pricing contributed 0.7%. Growth was seen across all categories, particularly in North America, where LFL sales grew by 5.8%, driven by strong demand for High Protein, Coffee Creations, and Waters brands. Europe also posted solid results, with further acceleration in volume/mix, particularly in essential dairy and plant-based, or EDP, products. The China, North Asia, and Oceania regions posted an impressive 8.0% LFL growth, led by all categories, especially specialized nutrition.

After years of suboptimal capital allocation decisions and execution, which have resulted in poor shareholder returns, Danone needs a new strategic plan. New management has attributed the company's historical underperformance versus peers to a lack of focus on the core portfolio, late and subscale innovation efforts, inconsistent execution, and low investment, an assessment we agree with.

Danone's first-half results included like-for-like, or LFL, sales up 4% year over year, slightly ahead of company-compiled consensus of 3.9% growth. Within this, volume/mix was up 2.1% (up 2.9% in the second quarter), ahead of consensus (up 1.7%), while pricing was up 1.9% versus 2.2% for consensus. Volume/mix held up well across categories, driven by the waters division (up 3.2% in the first half, up 2.6% in the second quarter) and the good performance of Evian and Volvic. The group's largest business, EDP—essential dairy and plant-based products—achieved 1.7% volume/mix growth for the half-year period and 2.6% in the second quarter. This follows a positive 2% volume/mix performance in the fourth quarter from negative 0.8% in the third quarter and negative 3.3% in the second and first quarters of last year, reflecting good momentum in turning around the business. LFL sales for the specialized nutrition business increased 3.6% in the second quarter (solid up 7% in China, North Asia, and Oceania). Another positive highlight was that the China, North Asia, and Oceania region posted solid LFL sales growth of 8.4% year over year in the second quarter (8.6% in the first half), driven by momentum in specialized nutrition.

Danone's June 20 press release, ahead of its Capital Markets Day, aligns with our view that the company's equity story revolves around two key steps: 1) restoring the performance of key brands, and 2) expanding into more advantageous categories and markets. With new management taking over a couple of years ago, we believe step 1 has largely been completed. Danone has made significant progress in improving performance in its core categories (EDP volume/mix turning positive in the last two quarters), fixing underperformers (Mizone), and focusing more on "winners" (up double digits in fiscal 2023 versus high single digits in fiscal 2021). However, step 2 is expected to be a longer-term journey rather than a short-term fix.

Danone's first-quarter sales update included like-for-like, or LFL, sales up 4.1% year over year, ahead of company-compiled consensus of 3.4% growth. Within this, volume/mix was up 1.2%, ahead of consensus (up 0.8%), while pricing was up 2.9% versus 2.7% for consensus. Volume/mix held up well across categories, driven by the waters division (up 3.9%) and the good performance of Evian and Volvic. The group's largest business, EDP—essential dairy and plant-based products— achieved 0.8% volume/mix growth for the period despite shipment disruptions, though the company does not comment on the actual impact. This follows a positive 2% volume/mix performance in the fourth quarter from negative 0.8% in the third quarter and negative 3.3% in the second and first quarters of last year, reflecting good momentum in turning around the business. LFL sales for the specialized nutrition business increased 3.8% (up 4% in China, North Asia, and Oceania) on a high comparison base.

After years of suboptimal capital allocation decisions and execution, which have resulted in poor shareholder returns, Danone needs a new strategic plan. New management has attributed the company's historical underperformance versus peers to a lack of focus on the core portfolio, late and subscale innovation efforts, inconsistent execution, and low investment, an assessment we agree with.

After years of suboptimal capital allocation decisions and execution, which have resulted in poor shareholder returns, Danone needs a new strategic plan. New management has attributed the company's historical underperformance versus peers to a lack of focus on the core portfolio, late and subscale innovation efforts, inconsistent execution, and low investment, an assessment we agree with.

Danone reported fourth-quarter sales and fiscal 2023 results that included like-for-like sales up 5.1% and 7%, respectively, broadly in line with company-compiled consensus but ahead of our estimates (up 6%). Within this, in fiscal 2023, volume/mix was down 0.4%, in line with consensus, while pricing was up 6.6%. This closes a solid recovery year for Danone, with volumes/mix holding up surprisingly well, driven by impressive sequential improvements in the group's largest business, EDP—essential dairy and plant-based products—to positive 2% in the fourth quarter from negative 0.8% in the third quarter, negative 3.3% in the second and first quarters.