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.
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 organi...
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 ...
Al Safi Danone aims to strengthen its position in dairy in Saudi Arabia and GCC countries through the provision of fresh products and heavy investment in product innovation and marketing....
South African dairy processor Clover Industries has forecast half-year earnings will rise by up to 46% on the back of success in pushing up prices....
Danone is the fourth largest health and wellness player, and while its core market is Western Europe it is concentrating ever more on emerging markets, in particular Asia Pacific and Latin America. Da...
- just-food's pick: Innovation on show at ISM 2016
- Mondelez results and outlook - 7 things to learn
- Richelieu Foods CEO eyes growth - interview
- Foodservice focus: McDonald's/Five Guys/Starbucks
- Can dairy-free Flora lift Unilever spreads sales?
- Chobani targets growth after rejecting offers
- Mars to cut artificial colours from global foods
- Private-equity firm HKW acquires Panos Brands
- WWF launches food security platform
- Arla eyes job cuts as part of 2020 growth push