FRANCE: Danone FY earnings down on margin pressure
Danone shares rise despite earnings drop
Danone has booked a drop in full-year earnings as profitability came under pressure from higher input costs and the infant formula recall associated with Fonterra's botulism scare.
The company said net income for fiscal 2013 fell to EUR1.64bn (US$2.25bn), down from EUR1.82bn in the comparable period of last year. Operating income dropped 1.1% to EUR2.8bn.
Trading operating profit was hit as the group's margin dropped 81 bps to 13.19% from 14.18%. Trading profit for fresh dairy products was impacted by rising raw materials costs. That issue was, Danone said, "compounded" by Fonterra's recall of concentrated whey powder supplied to the company. While the recall was a false alarm, Danone said it reduced trading profit by an estimated EUR105m.
The company did, however, book a 4.8% increase in organic sales, which rose to EUR21.3bn. The result was slightly above consensus expectations of 4.7%. Sales gains were driven by value and volume growth, Danone revealed.
Looking to 2014, Danone expects sales to grow by 4.5-5.5%. The group also said it would "stabilise" its operating margin, forecasting a range of a fall of 20 basis points and a rise of 20 basis points.
The market reacted positively to the outlook, with shares rising 2.61% at 10.16 GMT.
Click here to view the full earnings update.
Over the next fortnight, we'd like to hear how you see the outlook for your business in 2014.
Now in its third year, the just-food Confidence Survey provides a snapshot of how you and your colleagues in the industry see the year unfolding. The latest survey is live and takes just a few moments to fill in.
In the coming weeks, we'll be reporting on the highlights from the survey in a free webinar live on just-food.com.
As a thank you for filling in the survey, you'll receive an executive summary detailing the results.
Danone SA (BN) - Financial and Strategic SWOT Analysis Review provides you an in-depth strategic SWOT analysis of the company’s businesses and operations. The profile has been compiled by GlobalData t...
Danone SA - Strategy and SWOT Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and service offerings and ...
Project Synopsis: MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth act......
Danone is the number two French dairy company and it owes its status to a portfolio of world known and strong brands, including Danone and Activia. Danone is very well positioned to take advantage of ...
- Why Nestle is relaxed about the China "drag"
- SIAL 2014: Greek yoghurt firm Fage targets Europe
- Focus: Will Danone return to growth in dairy?
- On the money: Spreads, ice cream top Unilever woes
- Focus: Why French retail deals could hit suppliers
- SIAL 2014: Premier in talks over US manufacturing
- Symington's acquires Tanfield Foods
- Kellogg, Nestle slammed for "chaotic" salt policy
- Heinz silent over Polish factory expansion talk
- Danone "eyes acquisition of Mead Johnson"