The latest news, trends, analysis, interviews and podcasts from the global food and beverage industry

Danone has reported a “solid” first half of the year, recording €14.17 billion in net sales, up 8.4% on a like-for-like (LFL) basis. Sales for the second quarter stood at €7.2 billion, up 6.4% on a LFL basis, with price up 8.7% and volume/mix down 2.3%. In Europe, Q2 saw a 6.5% sales increase driven by France, Poland and Spain. North America saw a 5% increase, led by the company’s Yogurt, Coffee Creations and Waters divisions, with its Oikos, International Delight, Stok and Evian brands growing at a double-digit rate. China, North Asia and Oceania saw a LFL increase of 9.6%, with Aptamil continuing to deliver solid growth in infant nutrition in China. In Waters, Mizone registered mid-teens growth, driven by volumes, with market share gains. In the company’s Essential Diary and Plant-Based Products (EDP) division, Japan delivered another quarter of double-digit growth. Meanwhile, Specialised Nutrition and EDP led a 10.8% sales increase in Latin America. Danone’s recurring operating income reached €1.7 billion in the first half of 2023. Recurring operating margin stood at 12.2%, up 14 basis points compared to last year. Reported earnings per share (EPS) increased by 48.3% to €1.70, while recurring EPS was up 7.6% to €1.76. The French dairy giant announced that it would deconsolidate its EDP Russia operations this month, triggering a €200 million cash impairment. This followed EDP Russia’s operations being placed under temporary external administration of the Russian Federal Agency for State Property Management on 16 July. Danone stated that while it no longer retains control over EDP Russia’s managements, it remains its legal owner. The multinational will remove EDP Russia from its LFL perimeter as of July 2023 and will exclude its contribution from its H2 2023 recurring performance reports. Antoine de Saint-Affrique, CEO of Danone, said that the company had made consistent progress on its strategic agenda and delivered solid growth despite a “volatile and challenging” environment. He commented: “As we navigate an unprecedented situation in Russia, my very first thoughts go to all our colleagues there”. “We remain, more than ever, focused on building further resilience into Danone, by further stepping up our execution, but also by leveraging increasingly more our Science, Operations and Investments”. “Importantly, the last 18 months’ efforts on restoring the fundamentals are starting to pay: our gross margin has expanded in the first half of the year, which allows us to significantly invest behind our brands – 99bps 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.” De-Saint Affrique emphasised the company’s confidence in the future and expects that Danone will deliver LFL sales growth in the upper end of its 4-6% increase guidance.