DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5
A-Brands

Danone Posts 2.9% Like-For-Like Growth In 2016

By Steve Wynne-Jones
Share this article
Danone Posts 2.9% Like-For-Like Growth In 2016

Yoghurt company Danone has reported a 2.9% growth in like-for-like sales for 2016 – an increase of €21.9 billion.

Reported sales declined 2.1%, due to currency fluctuations in countries like Argentina and Russia, and the effects of consolidation.

Fresh dairy products grew by 2% in like-for-like sales, although its volume growth fell by 2.6%. This was aggravated by Activia's performance and difficult market conditions in Spain. Sales for Activia have not recovered since its relaunch, the company said.

Danone's water segment saw 2.9% growth in sales and volume, but its medical-nutrition unit saw the largest growth, seeing sales increase by 7.4%, with a volume growth of 4.8%.

This was encouraged by 'solid gains' in the UK and the Benelux region, as well as increased expansion in China and Brazil.

ADVERTISEMENT

Geographically, Danone's European division saw a hit (largely due to dairy products), with sales growth declining by 1.4% and volume growth by 1.8%.

Its sales in the Russian commonwealth and North America hit 4.6% growth, but fell more than 2% in volume growth.

Its sales growth in Latin America, Asia Pacific, the Middle East and Africa was 6.7%. Volume growth increased by 2.7%, affected by inflation and low consumer spending in countries like Brazil.

'Alimentation-Revolution Journey'

CEO Emmanuel Faber commented on the 2016 results, saying, “With the upcoming addition of WhiteWave, we will soon start a whole new and exciting chapter of our alimentation-revolution journey.

ADVERTISEMENT

"While we delivered a robust performance, leading to a very strong recurring EPS growth in 2016, the challenges we faced, including a slower turnaround of dairy in Europe and major market volatility, are a clear case to step up in our ability to seize consumer opportunities and improve our efficiency."

To this end, Danone announced a comprehensive efficiency programme called 'Protein', designed to deliver €1 billion in savings by 2020.

The programme 'consists in creating the best conditions to spend better, buy better, and work more efficiently in a sustainable manner', with savings reinvested in growth projects.

In addition, Danone will undergo an organisational revamp, including the creation of a more effective regional business team and a 'tighter' executive committee team.

ADVERTISEMENT

A strategic business unit for North America will also be created after the acquisition of WhiteWave in the US.

As for 2017, Danone expects its raw-material costs to experience single-digit growth, with rising costs of milk, plastic and fruit. It aims to deliver recurring EPS like-for-like growth of more than 5%.

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. Click subscribe to sign up to ESM: The European Supermarket Magazine.

 

Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.