Dairy adds sour taste to ‘resilient’ year for Danone
French food giant Danone said Friday that profits and sales were resilient in 2017, driven largely by the success of it bottled water such as Evian and baby food brands, but its dairy business stagnated.
Danone said in a statement that bottom-line net profit jumped by 43 percent to 2.4 billion euros ($2.9 billion) last year, boosted by windfall gains from the sale of Stonyfield in the US and a positive impact from US tax reforms.
Underlying or operating profit grew by 17 percent to 3.5 billion euros, while revenues added 12.5 percent to 24.6 billion euros.
“In 2017, Danone once again demonstrated the strength of its portfolio (and) the resilience of its business model,” said chief executive Emmanuel Faber.
“Despite volatile food and beverage markets and rising input costs, we delivered very strong full-year results,” Faber said.
“We closed the year with an accelerated sales growth rate, outperforming the industry average, along with very strong margin improvement.”
Analysts at Jefferies welcomed the progress Danone had made on a group-wide basis, but noted the “recurring difficulties in fresh dairy products” business.
Sales in the “essential dairy and plant-based” food products division declined by 1.3 percent internationally and by 2.0 percent in the North American business.
By contrast, sales in the specialised nutrition division, which comprises both baby foods and medical nutrition, jumped by 9.3 percent and sales of bottled water were up by 4.7 percent.
Looking ahead to the current year, chief financial officer Cecile Cabanis said that “navigating sustained market volatility is becoming a normal and inherent part of our operating model. Our ongoing focus on accelerating growth and driving efficiencies makes us confident.”
(Agence France-Presse )