Danone recorded a 2.9% increase in like-for-like sales last year, as it benefited from the strong performance of its specialised nutrition unit and water brands.
Full-year sales stood at €24.66 billion while operating income shrank 26.5% to €2.74 billion. Since April 2018, Danone has faced a consumer boycott in Morocco, which resulted in a €43 million decrease in recurring operating income last year.
Within its waters division, like-for-like sales were up 5.3%. In North America, Evian sales were up by more than 20%, including first acceleration benefits of the distribution agreement recently signed with Keurig Doctor Pepper in the US.
Like-for-like sales in the specialised nutrition unit rose 5.9%. However, in the fourth quarter, the company was hit by lower demand in China for infant formula products.
Danone CEO Emmanuel Faber.
Danone CEO Emmanuel Faber said: “I am proud of the results achieved by our teams at Danone in 2018. Our company is becoming more agile every day. We keep adjusting our ways of working and delivering efficiency. And we adapt to the ever-changing world around us, as exemplified by the impressive acceleration of our innovation rate, supplying a quarter of our total sales in 2018 from only 16% two years ago, and our 40% growth in e-commerce last year.
“With specialised nutrition, waters and our global plant-based brands from WhiteWave continuing to post strong growth despite a very volatile environment, the year has seen the encouraging progress of our essential dairy and plant-based business in Europe, which stabilised in the fourth quarter last year. This could not have happened without the multi-faceted reinvention of Activia, which shows that after years of decline, embracing with no fear the new paradigms can turn around a large global brand.
“We are actually further delayering our organisation, as another step to move away from the pyramidal model that built the giant food companies of the past. With this, we are becoming the most localised of our peers, prepared to capture the underlying value of the biodiversity of local food cultures and agricultures in tune with the new eating and drinking paradigms.”
Last year, Danone revealed plans to triple the size of its plant-based business by 2025 by combining its position in the dairy industry with the high plant-based growth potential. The company is looking to grow plant-based sales from €1.7 billion to around €5 billion.
Last week, Danone opened a new building at its DuBois, Pennsylvania, facility to increase production of plant-based foods.
© FoodBev Media Ltd 2019