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Danone SA DANOY

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Morningstar’s Analysis

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No Surprises in Danone's Q1; 2021 Guidance Reiterated, CEO Search Continues

Analyst Note

| Ioannis Pontikis, CFA |

Danone reported first-quarter results with like-for-like sales down 3.3%, largely in line with Visible Alpha consensus expectations. Essential dairy and plant-based was up 1.6% on a like-for-like basis (plant-based growing double digits like for like versus 15% in the last quarter) while specialized nutrition and water were down 7.7% (down 3.1% in the fourth quarter) and 11.6% (down 15.6% in the fourth quarter), respectively, due to the effect of coronavirus lockdowns, with channel logistics issues in China for the former and a change in the channel and format mix for the latter. Danone reiterated guidance to be back to profitable growth in the second half of 2021 with margins broadly in line with 2020 (at 14%, in line with consensus). Longer-term targets include over 15% margin for 2022 and midterm ambitions of 3%-5% like-for-like sales growth and mid- to high-teens operating margin (versus 2.9% and 15% by 2024 in our model), but Danone did not comment on those.

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Company Profile

Business Description

Following the acquisition of WhiteWave, Danone restructured the firm into three broad segments: essential dairy and plant-based products, which represents just over half of group revenue; specialised nutrition; and bottled water. The firm's portfolio includes well-known brands such as Danone/Dannon dairy products, Nutrilon and Cow & Gate infant nutrition, and Evian and Volvic bottled water. Danone derives about 60% of its annual sales outside Western Europe, up from about just one third in 2001.

Contact
17, Boulevard Haussmann
Paris, 75009, France
T +33 144352020
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Jun 30, 2006
Fiscal Year End Dec 31, 2020
Stock Type
Employees 101,911

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