Danone 2023 Results Preview

1 Mins read

Danone is gearing up to reveal its 2023 results this Thursday. Let’s dive into what we can anticipate from the French food group:

Sales Projection

The company is expected to report full-year sales of €27.71 billion ($29.87 billion) for 2023, slightly up from the previous year’s €27.66 billion. In the fourth quarter, sales are forecasted to land at €6.61 billion compared to €7.01 billion in the same period last year. The projected like-for-like sales growth stands at 7% for the full year and 5% for the fourth quarter.

Recurring Net Income

Excluding exceptional items, the recurring net income for 2023 is estimated at €2.22 billion according to the consensus, showing a slight increase from €2.21 billion in 2022.

Share Performance

With shares up approximately 18% over the past year, they are currently trading at €61.57.

Key Focus Areas

Volume and Sales Growth: Analysts are eyeing a 0.7% increase in volumes and a 5% like-for-like sales growth in the fourth quarter.

Product Pricing: Normalization is expected in pricing, with a rise of 3.7% in the quarter, a decrease from the 6.6% increase seen in the previous quarter.

Dairy and Plant-Based Business: Anticipated growth in volume and pricing due to positive developments in Europe, showcasing rebounding volume growth and sturdy pricing.

Specialized Nutrition Division: Potential volume decrease of 0.5% as Danone maintains a disciplined inventory management approach in China and other emerging markets. Challenges include subdued volume momentum in Europe and tough comparison figures in North America.

Water Unit Volume Growth: UBS models a 3% increase in volume for the waters unit.

Financial Outlook

Recurring Operating Margin: Expected to reach 12.5% for 2023 as per company consensus.

Guidance: Danone has set like-for-like sales growth expectations between 6% and 7% for 2023 along with a moderate improvement in recurring operating margin. Analysts at Citi predict a guidance for organic sales growth of 3%-5% in 2024 and a slight margin enhancement of around 40 basis points, potentially leading to negligible EPS adjustments amidst currency headwinds.

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