Danone has reported a return to growth across all categories in the second quarter after posting a 6.6% net sales increase on a like-for-like (LFL) basis.
The owner of Evian and Activia posted €6.17 billion in second-quarter sales, up 3.6% on a reported basis.
The results are in line with Danone’s expectations announced in Q1: a goal of returning to profitable growth in Q2 and H1 thanks to the gradual reopening of economies.
For the first half of the year, Danone’s like-for-like sales went up 1.6% to €11.84 billion, while operating income fell 4.2% LFL to €1.55 billion.
Danone’s second quarter results were driven by a recovery in the company’s Waters unit, as well as sustained momentum for its Essential Dairy and Plant-based (EDP) division and a return to growth for Specialized Nutrition.
In the quarter, the company’s Waters unit increased 19.5% to €1.13 billion, led by 6.6% volume growth. Recovery was mainly driven by Europe mobility, while emerging geographies remained more impacted by Covid-19 related restrictions.
Last year, Danone was significantly impacted by a 28% fall in bottled water sales amid Covid-19 related lockdowns, with Q2 2020 sales falling 5.7% to €5.94 billion.
Second quarter net sales in the company’s EDP unit rose 4.8% LFL to €3.25 billion, resulting in 3.2% growth in H1. Continued growth in dairy was driven by protein and probiotics (led by Actimel); while Danone’s plant-based portfolio was driven by its creamers and yogurt.
“We maintained strong momentum in our EDP business, led by growth in dairy, and plant-based reporting its 6th consecutive quarter of double-digit growth, and a solid performance in Europe and Noram,” said interim co-CEOs of Danone, Véronique Penchienati-Bosetta and Shane Grant.
Europe and North America sales rose by 6.4% LFL in Q2, while sales in the rest of the world increased 6.9%.
Danone’s Specialized Nutrition division also returned to growth in the quarter, rising at 2.8% to €1.79 billion; with adult nutrition delivering high single-digit growth and infant nutrition low single-digit growth.
Danone says its return to growth was driven by its portfolio review process – including the sale of its plant-based nutrition brand Vega and its minority stake in China Mengniu Dairy – supported by selective reinvestments and channel execution focus.
Danone has also launched a share buyback programme of up to €800 million, as it prepares for the appointment of Antoine de Saint-Affrique to CEO in September.
The company reiterated its 2021 guidance: a return to profitable growth in H2 and full-year recurring operating margin broadly in line with 2020.
© FoodBev Media Ltd 2021
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