Danone Shares Gain on 2022 Sales Growth, Positive Outlook

By Giulia Petroni

Shares in Danone SA rose Wednesday after the French major said that its full-year sales and recurring profit grew in 2022 and that it expects profitable growth in the current year.

At 0851 GMT, shares were 1.8% higher at EUR42.31. The overall market was lower, with the CAC index down 0.8%.

The maker of Activia yoghurt and Evian water said that 2022 sales rose 7.8% on a like-for-like basis to 27.66 billion euros ($29.45 billion) with an 8.7% contribution from price and a negative 0.8% contribution from volume/mix. The waters division saw 10.5% organic growth followed by 10% growth at specialized nutrition and 5.8% at the essential dairy and plant-based business.

Fourth-quarter sales increased 7% organically to EUR7.01 billion, driven by price increases of around 11% and beating a consensus forecast provided by the company for EUR6.93 billion.

Danone said it foresees like-for-like sales growth between 3% and 5% with moderate recurring operating margin improvement for 2023, in line with mid-term targets.

Net profit came in at EUR959 million in 2022, down from EUR1.92 billion. Recurring net income, which excludes exceptional items, was EUR2.21 billion, up 1.9% on year and above a company-provided consensus that forecast the figure at EUR2.15 billion.

The recurring operating margin was 12.2%, down 154 basis points compared with the previous year, mainly due to the impact of input-cost inflation net of productivity, it said.

Results were also affected by costs related to the "local first" reorganization plan and an impairment of around EUR500 million related to the company's EDP business in Russia, Danone said.

Danone's set of results were "reassuring" and "satisfactory," analysts at Citi and RBC Capital Markets said in research notes.

The board of directors will propose a 2022 dividend of EUR2 a share at the annual shareholder meeting on April 27, up 3.1% from the previous year, according to the company.

Write to Giulia Petroni at [e-mail]

(END) Dow Jones Newswires

February 22, 2023 04:23 ET (09:23 GMT)

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