Danone beats forecasts with solid Q1 sales growth

18th Apr 2024 14:20

(Sharecast News) - French food manufacturer Danone said it made a "good start" to the year, with first-quarter sales rising on the back of broad-based growth amid a challenging environment.

First-quarter net sales totalled €6.79bn in the three months to 31 March, up 4.1% on like-for-like terms but down 2.5% on a reported basis due to currency movements and the "deconsolidation" of its Essential Dairy and Plant-based (EDP) operations in Russia. Hyperinflation, the company said, positive impacted the top line by 1.7%.

Consensus estimates put LFL sales growing at a lesser 3.4% in the first quarter, according to company-compiled forecasts.

LFL sales in the global EDP business, its biggest category that accounts for more than half of total revenues, gained 3.0%, while Specialized Nutrition LFL sales rose 3.8% and Waters LFL sales jumped 8.1%.

"We have delivered a good start to the year, with yet another quarter of quality growth and consistent delivery on our Renew Danone agenda," said chief executive Antoine de Saint-Affrique.

Renew Danone was introduced in 2022 shortly after Saint-Affrique joined the business, designed to raise the company's competitiveness in core categories and geographies, increase investments in consumer value and actively rotate the portfolio.

"In what remains a challenging environment, we continued making good progress on our transformation agenda, strengthening our category fundamentals, intentionally driving our winning mixes and geographies while delivering on portfolio rotation with the successful closing of the disposals of our milk and dairy activity Horizon Organic and Wallaby in the US and Michel & Augustin," Saint-Affrique said.

The company said it was holding on to guidance for full-year LFL Sales growth of between 3% and 5%, with a "moderate improvement" in the recurring operating margin.

The stock was 0.6% higher at €58.88 by 1611 in Paris.