Danone: Continued strong momentum in Q3; Consistently delivering
quality growth
2024 Third-Quarter Sales
Press release – Paris, October 24, 2024
Continued strong momentum in
Q3
Consistently delivering quality growth
-
Sales reached €6,826m in Q3 2024, up +4.2% on a
like-for-like (LFL) basis
-
Strong volume/mix, up +3.6%, and price up +0.7%;
volume/mix and price positive in all categories
-
Continued strong performance in North America driven by High
Protein, Coffee Creations and Waters
-
Further acceleration in Europe volume/mix, driven by EDP
-
Another quarter of strong competitive momentum in China, North Asia
& Oceania, led by all categories
-
2024 guidance confirmed: like-for-like sales
growth expected between +3% and +5%, with moderate improvement in
recurring operating margin
|
3
|
€ million except % |
Q3
2023 |
Q3
2024 |
Reported change |
LFL sales
growth |
Volume/mix growth |
9M
2023 |
9M
2024 |
Reported change |
LFL sales
growth |
Volume/mix
growth |
|
|
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
|
|
|
|
Europe |
2,392 |
2,427 |
+1.5% |
+1.4% |
+2.4% |
7,069 |
7,210 |
+2.0% |
+1.6% |
+0.9% |
|
|
North America |
1,747 |
1,611 |
-7.7% |
+5.8% |
+4.9% |
5,164 |
4,943 |
-4.3% |
+4.4% |
+3.5% |
|
|
China, North Asia & Oceania |
896 |
967 |
+7.9% |
+8.0% |
+10.2% |
2,674 |
2,808 |
+5.0% |
+8.4% |
+8.9% |
|
|
Latin America |
771 |
706 |
-8.5% |
+2.7% |
-0.7% |
2,233 |
2,265 |
+1.4% |
+4.0% |
-0.4% |
|
|
Rest of the World |
1,100 |
1,115 |
+1.4% |
+6.0% |
+1.2% |
3,977 |
3,350 |
-15.8% |
+5.8% |
+1.4% |
|
|
BY CATEGORY |
|
|
|
|
|
|
|
|
|
|
|
EDP |
3,474 |
3,283 |
-5.5% |
+4.1% |
+3.8% |
10,973 |
10,066 |
-8.3% |
+3.5% |
+2.4% |
|
|
Specialized Nutrition |
2,070 |
2,189 |
+5.7% |
+5.2% |
+4.1% |
6,369 |
6,599 |
+3.6% |
+4.6% |
+2.7% |
|
|
Waters |
1,362 |
1,354 |
-0.6% |
+3.2% |
+2.3% |
3,775 |
3,910 |
+3.6% |
+5.0% |
+2.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
6,906 |
6,826 |
-1.2% |
+4.2% |
+3.6% |
21,118 |
20,575 |
-2.6% |
+4.1% |
+2.6% |
|
1
Antoine de Saint-Affrique: CEO
statement
With like-for-like sales growth of +4.2% in
Q3, driven by +3.6% volume/mix, we continue to deliver broad-based
quality growth, with both volume/mix and price positive in all
categories.
Our consistent focus on science based and
consumer and patient centric innovation, combined with strong
in-market execution keeps paying off, as demonstrated by the
continued good performance of our winning platforms such as High
Protein, Coffee Creations and Medical Nutrition. We have also
improved competitiveness within our Core portfolio across many
geographies.
In what remains a challenging environment,
we view our future with confidence, further leveraging the
fundamentals we reestablished with Renew Danone.
I. THIRD QUARTER SALES
In Q3 2024, consolidated sales
stood at €6,826m, up +4.2% on a like-for-like basis, led by an
increase of +3.6% from volume/mix and +0.7% from price. On a
reported basis, sales decreased by -1.2%, notably due to the
negative impact from scope (-3.1%), resulting predominantly from
the deconsolidation of Horizon Organic and Wallaby. Reported sales
were also negatively impacted by forex (-3.2%), reflecting the
depreciation of several currencies against the euro, notably the
Argentine Peso, the Mexican Peso, the Brazilian Real and the
Turkish Lira. In addition, hyperinflation contributed positively to
reported sales (+1.5%).
Sales by operating segment
In the third quarter, Europe
sales were up +1.4% on a like-for-like basis, led by further
acceleration of volume/mix, up +2.4%, while price stood at -1.0%.
EDP made additional progress in its transformation, notably led by
the strong competitive performance of YoPro,
Actimel and Alpro, while Waters posted solid
growth, despite adverse weather conditions in the region.
In North America, sales were up
+5.8% on a like-for-like basis, led by strong volume/mix, up +4.9%,
while price was resilient at +0.9%. The strong performance was
driven by Coffee Creations, growing double-digits, Yogurt,
accelerating in a very dynamic category, and Waters, with
evian posting strong performance and continued market
share gains.
China, North Asia & Oceania
delivered +8.0% like-for-like sales growth, with volume/mix
accelerating to +10.2% and price down -2.2%. In Specialized
Nutrition, Infant Milk Formula posted solid competitive growth, in
a category showing first signs of growth recovery, and Medical
Nutrition sustained its good momentum. In Waters, Mizone
pursued its strong performance, while EDP delivered another quarter
of strong growth in Japan.
In Latin America, sales were up
+2.7% on a like-for-like basis, with volume/mix slightly down -0.7%
and price up +3.5%. While the performance was impacted by the
licensing out of milk business in Brazil and poor weather
conditions in Mexico, Aptamil, Danone and
YoPro brands pursued their solid momentum.
In the Rest of the World, sales
increased by +6.0% on a like-for-like basis, with volume/mix up
+1.2% and price up +4.7%, notably led by the strong performance of
Specialized Nutrition across the region, and the solid growth of
Africa, where the dairy portfolio transformation starts to yield
results.
Sales by geography by
category
Q3 2024
|
Europe |
North America |
China/North Asia/Oceania |
AMEA, CIS &
Latin America |
Total |
|
Sales (€m) |
LFL sales growth (%) |
Sales (€m) |
LFL sales growth (%) |
Sales (€m) |
LFL sales growth (%) |
Sales (€m) |
LFL sales growth (%) |
Sales (€m) |
LFL sales growth (%) |
| |
|
|
|
|
|
|
|
|
|
|
|
EDP |
1,069 |
+0.9% |
1,438 |
+6.2% |
95 |
+9.3% |
683 |
+4.1% |
3,283 |
+4.1% |
|
Specialized Nutrition |
770 |
0.0% |
96 |
-2.6% |
620 |
+7.7% |
704 |
+10.3% |
2,189 |
+5.2% |
|
Waters |
589 |
+4.3% |
78 |
+9.6% |
252 |
+8.3% |
435 |
-1.7% |
1,354 |
+3.2% |
|
Total Company |
2,427 |
+1.4% |
1,611 |
+5.8% |
967 |
+8.0% |
1,821 |
+4.8% |
6,826 |
+4.2% |
9M 2024
|
Europe |
North America |
China/North Asia/Oceania |
AMEA, CIS &
Latin America |
Total |
|
Sales (€m) |
LFL sales growth (%) |
Sales (€m) |
LFL sales growth (%) |
Sales (€m) |
LFL sales growth (%) |
Sales (€m) |
LFL sales growth (%) |
Sales (€m) |
LFL sales growth (%) |
| |
|
|
|
|
|
|
|
|
|
|
|
EDP |
3,243 |
+1.2% |
4,448 |
+4.6% |
278 |
+12.8% |
2,097 |
+3.3% |
10,066 |
+3.5% |
|
Specialized Nutrition |
2,335 |
+1.2% |
263 |
-4.8% |
1,857 |
+6.2% |
2,144 |
+8.5% |
6,599 |
+4.6% |
|
Waters |
1,632 |
+3.1% |
231 |
+10.5% |
673 |
+12.9% |
1,374 |
+2.9% |
3,910 |
+5.0% |
|
Total Company |
7,210 |
+1.6% |
4,943 |
+4.4% |
2,808 |
+8.4% |
5,615 |
+5.1% |
20,575 |
+4.1% |
II. 2024
GUIDANCE
2024 guidance confirmed: Like-for-like sales
growth between +3% and +5% with moderate improvement in recurring
operating margin.
III. MAJOR
DEVELOPMENTS OVER THE PERIOD
- September 5, 2024:
Danone successfully issued a €700 million bond with a 7-year
maturity and a 3.20% coupon. The settlement took place on September
12, 2024 and the bonds are listed on Euronext Paris.
IV.
ALTERNATIVE PERFORMANCE MEASURES NOT DEFINED BY IFRS
IAS 29: impact on reported data
Danone has applied IAS 29 in hyperinflation
countries, as defined in IFRS. Adoption of IAS 29 in
hyperinflationary countries requires their non-monetary assets and
liabilities and their income statement to be restated to reflect
the changes in the general purchasing power of their functional
currency, leading to a gain or loss on the net monetary position,
recorded in net income. Moreover, their financial statements are
converted into euros using the closing exchange rate of the
relevant period.
|
IAS 29: impact on reported data |
Q3 2024 |
|
Sales (€ million) |
-5.0 |
|
Sales growth (%) |
-0.07% |
Breakdown by quarter of 9M 2024 sales after
application of IAS 29
9M 2024 sales correspond to the addition of:
- Q3 2024
reported sales;
- Q1 and Q2 2024
sales resulting from the application of IAS 29 until September 30,
2024, to sales of entities in hyperinflation countries (application
of the inflation rate until September 30, 2024, and translation
into euros using the September 30, 2024, closing rate) and provided
in the table below for information (unaudited data)
| Sales
after application of IAS 29 (€ million) |
Q1
20241 |
Q2
20242 |
Q3
2024 |
9M
2024 |
|
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
Europe |
2,336 |
2,447 |
2,427 |
7,210 |
|
North America |
1,737 |
1,595 |
1,611 |
4,943 |
|
China, North Asia & Oceania |
840 |
1,001 |
967 |
2,808 |
|
Latin America |
746 |
812 |
706 |
2,265 |
|
Rest of the World |
1,156 |
1,079 |
1,115 |
3,350 |
BY CATEGORY |
|
|
|
|
|
EDP |
3,489 |
3,294 |
3,283 |
10,066 |
|
Specialized Nutrition |
2,193 |
2,217 |
2,189 |
6,599 |
|
Waters |
1,133 |
1,423 |
1,354 |
3,910 |
|
|
|
|
|
|
|
Total |
6,815 |
6,934 |
6,826 |
20,575 |
1Results from the
application of IAS 29 until September
30, 2024, to Q1
sales of entities of hyperinflation countries.
2Results from the application of IAS 29
until September 30, 2024, to
Q2 sales of entities of hyperinflation
countries.
Definitions of geographical
zones
Europe refers to
European countries including Ukraine.
North America refers
to United States and Canada.
China, North Asia &
Oceania refers to China, Japan, Australia and
New-Zealand.
Latin America refers
to Mexico, Brazil, Argentina and Uruguay.
Rest of the World
refers to Asia, Middle East including Turkey, Africa and CIS.
Financial indicators not defined in
IFRS
Due to rounding, the sum of values presented may
differ from totals as reported. Such differences are not
material.
Like-for-like changes
in sales reflect Danone's organic performance and essentially
exclude the impact of:
- Changes in
consolidation scope, with indicators related to a given fiscal year
calculated on the basis of the previous year's scope;
- Changes in
applicable accounting principles;
- Changes in
exchange rates, with both previous-year and current-year indicators
calculated using the same exchange rate (the exchange rate used is
a projected annual rate determined by Danone for the current year
and applied to both previous and current years).
Since January 1, 2023, all countries with
hyperinflationary economies are taken into account in like-for-like
changes as follows: sales growth in excess of around 26% per year
(a three-year average at 26% would generally trigger the
application of hyperinflationary accounting as defined in IFRS) is
now excluded from the like-for-like sales growth calculation.
Bridge from like-for-like data to
reported data
|
(€ million except %) |
2023 sales |
Like-for-like change |
Impact of changes
in scope of consolidation |
Impact of changes in exchange rates & others incl.
IAS 29 |
Contribution of hyperinflation |
Reported change |
2024 sales |
|
|
|
|
|
|
|
|
|
|
Q3 |
6,906 |
+4.2% |
-3.1% |
-3.8% |
+1.5% |
-1.2% |
6,826 |
|
9M |
21,118 |
+4.1% |
-5.2% |
-3.1% |
+1.6% |
-2.6% |
20,575 |
Recurring operating
income is defined as Danone’s operating income
excluding Other operating income and expenses. Other operating
income and expenses comprise items that, because of their
significant or unusual nature, cannot be viewed as inherent to
Danone’s recurring activity and have limited predictive value, thus
distorting the assessment of its recurring operating performance
and its evolution. These mainly include:
- Capital gains
and losses on disposals of businesses and fully consolidated
companies;
- Impairment
charges on intangible assets with indefinite useful lives;
- Costs related
to strategic restructuring operations or transformation plans;
- Costs related
to major external growth transactions;
- Costs related
to crises and major disputes;
- In connection
with IFRS 3 and IFRS 10, (i) acquisition costs related to
acquisitions of companies resulting in control, (ii) revaluation
gains or losses accounted for following a loss of control, and
(iii) changes in earn-outs subsequent to acquisitions resulting in
control.
Recurring operating
margin is defined as the Recurring operating income
over Sales ratio.
o o O o o
FORWARD-LOOKING STATEMENTS
This press release contains certain
forward-looking statements concerning Danone. In some cases, you
can identify these forward-looking statements by forward-looking
words, such as “estimate”, “expect”, “anticipate”, “project”,
“plan”, “intend”, “objective”, “believe”, “forecast”, “guidance”,
“foresee”, “likely”, “may”, “should”, “goal”, “target”, “might”,
“will”, “could”, “predict”, “continue”, “convinced” and
“confident,” the negative or plural of these words and other
comparable terminology. Forward looking statements in this document
include, but are not limited to, predictions of future activities,
operations, direction, performance and results of Danone.
Although Danone believes its expectations
are based on reasonable assumptions, these forward-looking
statements are subject to numerous risks and uncertainties, which
could cause actual results to differ materially from those
anticipated in these forward-looking statements. For a detailed
description of these risks and uncertainties, please refer to the
“Risk Factor” section of Danone’s Universal Registration Document
(the current version of which is available at
www.danone.com).
Subject to regulatory requirements, Danone
does not undertake to publicly update or revise any of these
forward-looking statements. This document does not constitute an
offer to sell, or a solicitation of an offer to buy Danone
securities.
The
presentation to analysts and investors will be broadcast live today
from 8:15 a.m. (Paris time)
on Danone’s website
(www.danone.com).
Related slides will also be available on the website in
the Investors section.
APPENDIX – Sales by geographical zone
and by category (in € million)
|
|
First quarter |
Second quarter |
Third quarter |
|
|
2023 |
2024 |
2023 |
2024 |
2023 |
2024 |
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
|
|
|
|
|
Europe |
2,248 |
2,336 |
2,429 |
2,447 |
2,392 |
2,427 |
|
North America |
1,714 |
1,737 |
1,704 |
1,595 |
1,747 |
1,611 |
|
China, North Asia & Oceania |
824 |
840 |
954 |
1,001 |
896 |
967 |
|
Latin America |
689 |
727 |
779 |
810 |
771 |
706 |
|
Rest of the World |
1,486 |
1,150 |
1,369 |
1,084 |
1,100 |
1,115 |
BY CATEGORY |
|
|
|
|
|
|
|
|
|
|
|
EDP |
3,768 |
3,474 |
3,731 |
3,298 |
3,474 |
3,283 |
|
Specialized Nutrition |
2,143 |
2,183 |
2,142 |
2,213 |
2,070 |
2,189 |
|
Waters |
1,051 |
1,132 |
1,362 |
1,426 |
1,362 |
1,354 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
6,962 |
6,789 |
7,235 |
6,938 |
6,906 |
6,826 |
|
|
First quarter 2024 |
Second quarter 2024 |
Third quarter 2024 |
|
|
Reported change |
LFL change |
Reported change |
LFL change |
Reported change |
LFL change |
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
|
|
|
Europe |
+3.9% |
+2.8% |
+0.7% |
+0.7% |
+1.5% |
+1.4% |
|
North America |
+1.3% |
+2.5% |
-6.4% |
+5.0% |
-7.7% |
+5.8% |
|
China, North Asia & Oceania |
+1.9% |
+8.9% |
+5.0% |
+8.4% |
+7.9% |
+8.0% |
|
Latin America |
+5.4% |
+4.1% |
+4.0% |
+5.0% |
-8.5% |
+2.7% |
|
Rest of the World |
-22.7% |
+6.0% |
-20.8% |
+5.3% |
+1.4% |
+6.0% |
BY CATEGORY |
|
|
|
|
|
|
|
EDP |
-7.8% |
+3.0% |
-11.6% |
+3.3% |
-5.5% |
+4.1% |
|
Specialized Nutrition |
+1.9% |
+3.8% |
+3.3% |
+4.7% |
+5.7% |
+5.2% |
|
Waters |
+7.6% |
+8.1% |
+4.7% |
+4.4% |
-0.6% |
+3.2% |
|
|
|
|
|
|
|
|
|
TOTAL |
-2.5% |
+4.1% |
-4.1% |
+4.0% |
-1.2% |
+4.2% |
All references in this document to
Like-for-like (LFL) changes, and Recurring operating income and
margin, correspond to alternative performance measures not defined
by IFRS. Their definitions and their reconciliation with financial
statements, as well as the definitions of geographical zones, are
listed on pages 3 and 4.
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