Danone has reported net sales in the first half (H1) of 2023 reached €14.2 billion, up 8.4% on a like-for-like basis compared to the same period last year.
The Paris-headquartered global food and beverage group reported that pricing increased by 9.4% in the first six months of the year, while volume dropped by 1.1%.
The company noted that reported sales were impacted by inflation and currency pressures.
The data shows that sales in the second quarter (Q2) of 2023 were up 6.4% on a like-for-like basis to €7.2 billion, with price up 8.7% and volume down by 2.3%.
The company has reiterated its sales growth guidance for this year of between 4-6%.
Russia
Last month, the Russian government has announced that it was taking control of the Russian subsidiary of global food company Danone.
The move is part of Moscow’s response to a raft of international companies deciding to halt their operations in the country, following the Russian invasion of Ukraine in February 2022.
Last October, Danone announced that it was selling its essential dairy and plant-based (EDP) business in Russia.
On July 18, 2023, the Russian authorities indicated that the board of directors and chief executive of Danone Russia had been changed.
“These changes took place without the knowledge of, or approval by, Danone.
“While Danone no longer retains control of the management of its EDP operations in Russia, it remains their legal owner,” the company stated.
As a result of this, Danone is separating its Russian operations from its financial reporting leading to a cash impairment of €200 million.
“Danone will continue to investigate the situation to understand the implications of the decisions of the Russian authorities on the ongoing EDP operations of Danone in Russia, as well as on the ongoing sale process,” the company said.
Danone
“As we navigate an unprecedented situation in Russia, my very first thoughts go to all our colleagues there,” Antoine de Saint-Affrique, Danone chief executive, said.
“In an environment that remains volatile and challenging, we further built our track record of delivery with a solid first half of the year: like-for-like sales growth reached +8.4%, supported by resilient volume/mix and continued pricing.
“Growth remains broad-based, with all geographies contributing,” he added.
“Our gross margin has expanded in the first half of the year, which allows us to significantly invest behind our brands – 99bps [basis points] in the first half – while improving margins moderately and delivering healthy free cash flows.
“In short, we are progressing towards the business model we strive for.
“While a lot remains to be done, this makes us look at the future with confidence: this year, we expect to deliver a like-for-like sales growth in the upper end of our +4 and +6% guidance, underpinned by sequential volume/mix improvement in the second half, and moderate recurring operating margin improvement,” he said.
