Danone forecasts sales miss

22 Dec 2016

Danone now expects 2016 sales growth to be slightly below target (initially ranging from +3% to +5%1) and to deliver recurring operating margin improvement above target.

Danone forecasts sales miss

In February this year, Danone notes that it set a priority for 2016: continuing to build a more balanced and resilient model towards strong, sustainable and profitable growth. Throughout the year and in an increasingly volatile and complex environment, Danone says it has consistently focused on disciplined resource allocations to support strategic growth opportunities, avoiding short term tactical allocations, and has continued to work on its efficiencies and cost optimization.

In the 4th quarter, Danone reports, Activia’s performance as well as aggravated market conditions in Spain have impacted Europe dairy results. The implementation of Activia’s new brand identity across Europe has, it says, been well received by consumers and Danone will continue to build on it.

Nevertheless, local execution plans are being reworked and teams have already started to implement them country by country. As a result, Danone now expects 2016 sales growth to be slightly below target (initially ranging from +3% to +5%1) and to deliver recurring operating margin improvement above target (previously ranging from +50bps to +60bps1).

Claiming that it is uniquely positioned in food and beverage categories with the best long-term potential, Danone says it is fully committed to continuing to build a more resilient and balanced model for strong, sustainable and profitable growth. This commitment is the fundamental principle of the equation to create value for all its stakeholders, the company concludes.