FRANCE: Danone FY earnings down on margin pressure

By Katy Askew | 20 February 2014

Danone shares rise despite earnings drop

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

As a thank you for filling in the survey, you'll receive an executive summary detailing the results.

Sectors: Dairy, Financials

Companies: Danone

View next/previous articles

Currently reading -

FRANCE: Danone FY earnings down on margin pressure

There are currently no comments on this article

Be the first to comment on this article

Related research

Danone S.A. - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report

MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organization to sustain its competitive advantage....

Danone SA (BN) - Financial and Strategic SWOT Analysis Review

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 to bring to you a clear and an unbiased view of the...

Danone : Consumer Packaged Goods - Company Profile, SWOT & Financial Report

"Danone : Consumer Packaged Goods - Company Profile, SWOT & Financial Report" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major products and services, SWOT analysis,...

Related articles

CANADA: Danone launches Greek yoghurt for kids

Dairy giant Danone has launched a new Greek yoghurt which targets kids in Canada.

US: PE firm TPG Capital "in talks to buy Chobani stake"

Private-equity firm TPG Capital is in discussions with Chobani to buy a stake in the US yoghurt maker.

CHINA: Mengniu upbeat on growth prospects as earnings rise

Chinese dairy major China Mengniu Dairy Co. said today (26 March) expects to capitalise on the growth opportunities presented by the consolidation of an expanding domestic sector.

Welcome to the home of food information, insight & intelligence

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page