Danone Aims for Profitable Growth via Focus on Core Activities, Expansion

By Joshua Kirby

Danone SA said Tuesday that it will focus on selective expansion as well as its core business categories ahead as it set out its future strategy and growth targets.

Ahead of a capital-markets event Tuesday under new Chief Executive Antoine de Saint-Affrique, the French food-products group said its new strategic plan aims to build a model of sustainable and profitable growth, based on four pillars.

The four focuses of the plan are restoring Danone's competitiveness in core categories and geographies; selective expansion of the company's presence across segments and geographies; seeding of future growth avenues; and portfolio rotation.

As well as the new strategy, Danone is targeting like-for-like sales growth between 3% and 5% in 2022, 2023 and 2024. This year, the company is aiming for a recurring operating margin above 12%, as well as higher productivity than last year, with input-cost inflation in the low-to-mid teens, based on current macroeconomic assumptions.

In 2023 and 2024, recurring operating income should grow faster than like-for-like sales, Danone said.

The company is also focusing on capital-allocation discipline, with annual capital expenditure at a maximum 4.5% of net sales, and net debt should be below three times earnings before interest, taxes, depreciation and amortization. The dividend should be stable or grow every year, Danone said.

Write to Joshua Kirby at [e-mail]; @joshualeokirby

(END) Dow Jones Newswires

March 08, 2022 01:42 ET (06:42 GMT)

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