Danone Lowers 2020 Guidance, Expects Coronavirus Hit -- Earnings Review
February 26 2020 - 10:05AM
Dow Jones News
By Giulia Petroni
Danone SA reported its full-year results on Wednesday. Here's
what we watched:
SALES: Full-year sales rose 2.6% on a like-for-like basis to
25.29 billion euros ($27.46 billion), up from the previous year and
ahead of a consensus provided by Danone that expected sales at
EUR25.25 billion.
NET INCOME: Danone reported a full-year net profit of EUR1.93
billion, compared with EUR2.35 billion the year previous. An
analyst consensus provided by the company saw net profit at EUR2.49
billion.
WHAT WE WATCHED:
-GUIDANCE: The company revised its guidance for 2020 and said it
now targets mid-single-digit recurring earnings per share growth
and like-for-like sales growth of between 2% and 4% from a
previously targeted 4% to 5% growth. It also targets a recurring
operating margin above 15%.
Beyond 2020, Danone expects to deliver recurring EPS growth in
the mid-to-high-single digits with a 3% to 5% sales growth on a
like-for-like basis.
-CORONAVIRUS: Danone said it estimates a sales loss of around
EUR100 million in the first-quarter of 2020 due to the coronavirus
outbreak, adding its Waters business in China was the most
impacted.
-CLIMATE PLAN: Danone plans to spend EUR2 billion over the next
three years to fight climate change through agriculture, packaging
and digital technology. "The challenge will be keeping all
stakeholders aligned through a period of great change," analysts at
Davy Research say. "For now, we applaud the move while recognising
the inherent uptick in volatility."
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
February 26, 2020 09:50 ET (14:50 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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