Connect with us

Hi, what are you looking for?


French food group Danone sticks to goals after weak start to 2021

Stock Markets37 minutes ago (Apr 20, 2021 03:35AM ET)

(C) Reuters. FILE PHOTO: Logo of French food group Danone at the company headquarters in Rueil-Malmaison

By Dominique Vidalon

PARIS (Reuters) -Danone on Tuesday stuck to its goal of returning to profitable growth in the second half of 2021 after posting a 3.3% fall in first quarter sales, as COVID-19 lockdowns continued to dent its bottled water and baby food sales.

The French food group, which is searching for a new chief executive, said it was banking on a gradual reopening of economies from the second half of this year as COVID-19 vaccination programs are rolled out.

Former boss Emmanuel Faber was abruptly ousted as chairman and CEO last month following clashes with some board members over strategy and calls from activist funds for him to resign over the group’s lackluster returns compared with some rivals.

Danone did not elaborate on its search for a new CEO but said it would pay “careful attention to ensuring a proper transition”. It said previously that it was looking for an external candidate after appointing a duo to manage operations in the interim period.

The company also said it would continue with board-backed changes set in motion by Faber to reorganise Danone around regional hubs rather than brands under a “Local First” plan.

It reiterated its expectations for a return to like-for-like sales growth in the second quarter and for a full-year 2021 operating margin broadly in line with the 14% achieved in 2020.

Danone, the world’s largest yoghurt maker, said like-for-like sales fell 3.3% to 5.657 billion euros ($6.82 billion) in the first quarter, compared with expectations for a 3.7% decline in a company-compiled consensus of 19 analysts.

A 1.6% rise in Essential Dairy and Plant-based sales was largely offset by an 11.6% fall in water sales and a 7.7% drop in Specialized Nutrition sales.

Infant Nutrition sales continued to be hit by slowing birth rates and COVID-related disruption in China, notably cross-border sales were down by around 45%.

Under Faber, the company pursued a strategy centered on diversifying into fast-growing products featuring probiotics, protein and plant-based ingredients to mitigate slower growth in dairy.

However, the pandemic complicated prospects for the company, which suffered as sales of products such as Evian bottled water to the restaurant sector dwindled during government-enforced lockdowns.

“We would expect this release to support share price performance until we get some more newsflow on a new CEO before the summer,” Citi analysts wrote in a note.

Danone shares were 0.7% lower in early trade at 59.91 euros. They have gained 12% so far this year, supported by speculation around activist shareholder intervention and following a 27% fall last year. The shares have outperformed their European sector, which has lost 7.6% so far this year.

($1 = 0.8293 euros)

French food group Danone sticks to goals after weak start to 2021

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like


Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.


Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.


Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.


Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Buzz Clever. All Rights Reserved