Danone: Consistent progress and solid delivery in 2022; Set for
profitable growth in 2023
2022 Full-Year ResultsPress
release – Paris, February 22, 2023
Consistent progress and solid delivery in
2022Set for profitable growth in 2023
- Net sales reached €27,661m in 2022, up
+13.9% on a reported basis and +7.8% on a like-for-like (LFL)
basis, with price up +8.7%, and volume/mix down -0.8%;
proforma volume/mix up +0.2% excluding EDP
Russia
- Q4 sales growth reached +7.0% LFL
- +9.7% in North America led by International Delight, Activia,
Oikos and Silk
- +4.0% price-led growth in Europe driven by Specialized
Nutrition
- +3.4% in China, North Asia & Oceania led by Specialized
Nutrition and EDP
- +9.8% in Rest of the World, led by price, with all categories
and geographies contributing
- Recurring operating margin at 12.2% while
reinvesting in A&P, product superiority and capabilities
- Resilient earnings in a context of
transformation: recurring EPS at €3.43,
up +3.6% from last year
- €2.1bn free-cash-flow with focus on cash
conversion cycle and capital allocation
- Proposed dividend of €2.00
- Next stage of Danone’s sustainability journey unveiled,
focused on impact
- 2023 guidance in line with mid-term targets:
like-for-like sales growth between +3 and +5% with moderate
improvement in recurring operating margin
|
2022
Full-Year Key Figures |
in millions of euros except if stated otherwise |
2021 |
2022 |
Reported Change |
Like-for-likeChange (LFL) |
Sales |
24,281 |
27,661 |
+13.9% |
+7.8% |
Recurring operating income |
3,337 |
3,377 |
+1.2% |
-4.3% |
Recurring operating margin |
13.7% |
12.2% |
-154 bps |
-161 bps |
Non-recurring operating income and expenses |
(1,080) |
(1,234) |
(154) |
|
Operating income |
2,257 |
2,143 |
-5.0% |
|
Operating margin |
9.3% |
7.7% |
-155 bps |
|
Recurring net income – Group share |
2,165 |
2,205 |
+1.9% |
|
Non-recurring net income – Group share |
(241) |
(1,246) |
(1,005) |
|
Net income – Group share |
1,924 |
959 |
-50.2% |
|
Recurring EPS (€) |
3.31 |
3.43 |
+3.6% |
|
EPS (€) |
2.94 |
1.48 |
-49.7% |
|
Free cash flow |
2,489 |
2,127 |
-14.6% |
|
Cash flow from operating activities |
3,474 |
2,964 |
-14.7% |
|
1
Antoine de
Saint-Affrique: CEO statement
“While 2022 was a year of unprecedented external
challenges and volatility, for Danone it has also been a year of
deep transformation and solid delivery. I am grateful to all
Danoners for their resilience and their passion for customers,
consumers, patients and for making our company a stronger one.
This year saw strong progress on many fronts,
with Local First fully implemented, a materially strengthened
Executive Committee, a renewed Board of Directors and a robust
governance now in place. We also defined and immediately put into
action our new strategy, Renew Danone.
Importantly, 2022 was not only a year of
strategy and transformation, but also one of meaningful progress
and delivery. We closed a year of solid growth, +7.8% on a
like-for-like basis, with all regions and categories contributing.
While delivering on our financial commitments for 2022, we started
reinvesting significantly in our capabilities, product superiority
and brand support. Of note are the performance and resilience of
our Noram and CNAO regions, where we continue to drive balanced and
competitive growth, building on strong brands, consistent
investments and solid execution. We also made rapid progress on our
portfolio management agenda, notably with announcements on EDP
Russia and US Organic Dairy platforms.
Building on 2022 momentum, we are entering 2023
with renewed ambition and confidence in our strategy. In 2023, we
will pursue our transformation, and further invest in our brands,
products and capabilities while delivering in line with the
mid-term guidance defined last year.”
I. FOURTH
QUARTER AND FULL-YEAR RESULTS
Fourth quarter and full-year
sales
€ million except % |
Q42021 |
Q42022 |
Reported change |
LFL SalesGrowth |
Volume/Mix Growth |
FY2021 |
FY2022 |
Reported change |
LFL SalesGrowth |
Volume/MixGrowth |
|
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
|
|
|
Europe |
2,077 |
2,145 |
+3.3% |
+4.0% |
-5.9% |
8,341 |
8,773 |
+5.2% |
+5.2% |
-1.2% |
|
North America2 |
1,443 |
1,759 |
+21.9% |
+9.7% |
-2.1% |
5,564 |
6,712 |
+20.6% |
+8.9% |
+0.5% |
|
China, North Asia & Oceania2 |
777 |
817 |
+5.2% |
+3.4% |
+2.1% |
3,008 |
3,428 |
+14.0% |
+6.7% |
+4.9% |
|
Rest of the World |
1,944 |
2,285 |
+17.5% |
+9.8% |
-7.2% |
7,369 |
8,748 |
+18.7% |
+10.7% |
-4.1% |
|
BY CATEGORY |
|
|
|
|
|
|
|
|
|
|
EDP |
3,386 |
3,887 |
+14.8% |
+7.6% |
-6.5% |
13,090 |
14,799 |
+13.1% |
+5.8% |
-4.3% |
|
Specialized Nutrition |
1,931 |
2,147 |
+11.2% |
+7.1% |
-0.3% |
7,230 |
8,319 |
+15.1% |
+10.0% |
+3.8% |
|
Waters |
925 |
972 |
+5.1% |
+4.4% |
-5.0% |
3,961 |
4,543 |
+14.7% |
+10.5% |
+2.2% |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
6,242 |
7,007 |
+12.3% |
+7.0% |
-4.4% |
24,281 |
27,661 |
+13.9% |
+7.8% |
-0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In 2022, consolidated sales
stood at €27.7 bn, up +7.8% on a like-for-like basis, with a +8.7%
contribution from price and a -0.8% contribution from volume/mix.
On a reported basis, sales increased by +13.9%, benefiting from a
positive forex impact of +4.9%, reflecting in particular the
appreciation of the US dollar and various Asian and Latin American
currencies against the euro. Reported sales were also impacted by a
positive organic contribution of +1.2% from hyperinflation
geographies.
In the fourth quarter, sales
increased by +7.0% on a like-for-like basis, with a +11.3%
contribution from price and a -4.4% contribution from volume/mix.
On a reported basis, sales increased by +12.3%, benefiting in
particular from a positive forex impact of +3.7% and a positive
organic contribution to growth of +1.7% by hyperinflation
countries.
Recurring Operating Margin
Recurring operating profit
(€m) and margin (%) |
FY 2021 |
FY 2022 |
Change |
€m |
Margin (%) |
€m |
Margin (%) |
Reported |
Like-for-like |
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
Europe |
1,291 |
15.5% |
1,088 |
12.4% |
-307
bps |
-297 bps |
North America3 |
603 |
10.8% |
679 |
10.1% |
-72
bps |
-73 bps |
China, North Asia & Oceania2 |
939 |
31.2% |
1,037 |
30.2% |
-99
bps |
-121 bps |
Rest of the World |
504 |
6.8% |
573 |
6.6% |
-29 bps |
-61 bps |
BY CATEGORY |
|
|
|
|
|
|
|
EDP |
1,355 |
10.4% |
1,207 |
8.2% |
-219
bps |
-229 bps |
Specialized Nutrition |
1,634 |
22.6% |
1,799 |
21.6% |
-97
bps |
-84 bps |
Waters |
348 |
8.8% |
370 |
8.2% |
-63 bps |
-128 bps |
|
|
|
|
|
|
|
|
Total |
3,337 |
13.7% |
3,377 |
12.2% |
-154 bps |
-161 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
Danone’s recurring operating income reached €3.4
bn in 2022. Recurring operating margin stood at 12.2%, down -154
basis points (bps) compared to last year. This decrease was mainly
driven by the strong negative impact of input-cost inflation net of
productivity, estimated at c. -730 bps. This negative effect was
partially offset by the positive effect of topline drivers –
including volume, mix and price – for a combined estimated
impact of c. +570 bps.
Danone accelerated its reinvestment journey in
the second half of 2022: reinvestments in A&P, product
superiority and capabilities had a negative effect of -105 bps in
H2 2022, resulting in full-year impact of -58 bps in 2022. Finally,
Overheads before reinvestments had a positive effect of +83 bps in
2022, including +56 bps in H2, reflecting the savings achieved as
part of Local First.
In addition to like-for-like effects, reported
margin also includes the negative impact of Forex and others,
changes in scope, organic contribution from hyperinflation
countries, and effects from other income and expenses, for a total
combined effect of -20 bps.
Performance by geographical
zone
Europe posted sales growth of
+5.2% in 2022 on a like-for-like basis and recurring operating
margin stood at 12.4%, down -307 bps compared to last year.
In the fourth quarter, sales
increased by +4.0% on a like-for-like basis, driven by +9.9% growth
in price and a -5.9% decrease in volume/mix. Volumes were impacted
by the sequential acceleration of portfolio rationalization
initiatives, and by some temporary delivery suspensions. EDP
registered +2.2% growth in Europe, led by both Dairy and
Plant-based, while Waters registered moderate growth of +1.5%.
Specialized Nutrition posted +7.8% growth, led by Aptamil in Infant
Nutrition, and Fortimel in Adult Nutrition, which delivered strong
growth in the quarter.
North America posted +8.9%
sales growth in 2022 on a like-for-like basis and recurring
operating margin decreased by -72 bps to 10.1%.
In the fourth quarter, sales
increased by +9.7% on a like-for-like basis, driven by +11.8%
growth in price and a -2.1% decline in volume/mix. North America
maintained strong and competitive growth momentum across
categories. In EDP, sales were up by +11,1%, led in particular by
International Delight in Coffee Creations, Activia and Oikos in
Yogurt and Silk in Plant-based. In Waters, evian posted
double-digit growth, while in Specialized Nutrition, the situation
normalized, after two quarters of stepped-up exports to help
address baby formula shortages.
- CHINA, NORTH ASIA & OCEANIA
China, North Asia & Oceania
posted sales growth of +6.7% in 2022 on a like-for-like basis and
recurring operating margin was down -99 bps to 30.2%.
In the fourth quarter, sales
increased by +3.4% on a like-for-like basis, led by +1.3% growth in
price and +2.1% growth in volume/mix. In China, Infant Milk Formula
continued to register competitive growth, on a high base. The
performance was led by Aptamil, which continued to gain share for
both international and domestic labels. Adult Nutrition and
Pediatric Specialties pursued their good momentum, while Mizone
continued to be penalized by covid-related mobility restrictions.
Outside China, EDP posted a +15.5%, led by Activia, Danone and
Oikos in Japan.
Rest of the World registered
sales growth of +10.7% in 2022 on a like-for-like basis and
recurring operating margin stood at 6.6% (-29 bps compared to last
year). Excluding EDP Russia, volume/mix was resilient this year,
down -0.7% in the region in FY22, despite strong pricing.
In the fourth quarter, sales
increased by +9.8% on a like-for-like basis, with price up +17.0%
and volume/mix down -7.2%. In Latin America, sales grew by double
digits in the fourth quarter, with all categories contributing,
while in Indonesia, sales were up by mid-single digits, driven by
both Aqua and SGM, which posted strong growth and market share
gains.
Net income and Earnings per
share
|
FY 2021 |
FY 2022 |
|
in millions of
euros except if stated otherwise |
Recurring |
Non-recurring |
Total |
|
Recurring |
Non-recurring |
Total |
|
Recurring operating income |
3,337 |
|
3,337 |
|
3,377 |
|
3,377 |
|
Other
operating income and expense |
|
(1,080) |
(1,080) |
|
|
(1,234) |
(1,234) |
|
Operating income |
3,337 |
(1,080) |
2,257 |
|
3,377 |
(1,234) |
2,143 |
|
Cost of net
debt |
(167) |
|
(167) |
|
(153) |
|
(153) |
|
Other financial income and expense |
(100) |
5 |
(95) |
|
(138) |
(20) |
(158) |
|
Income
before taxes |
3,070 |
(1,075) |
1,995 |
|
3,086 |
(1,253) |
1,832 |
|
Income
tax |
(841) |
252 |
(589) |
|
(841) |
64 |
(778) |
|
Effective tax rate |
27.4% |
|
29.5% |
|
27.3% |
|
42.4% |
|
Net
income from fully consolidated companies |
2,229 |
(822) |
1,406 |
|
2,244 |
(1,190) |
1,054 |
|
Net income
from associates |
7 |
578 |
585 |
|
31 |
(63) |
(32) |
|
Net
income |
2,235 |
(244) |
1,992 |
|
2,275 |
(1,252) |
1,023 |
|
• Group
share |
2,165 |
(241) |
1,924 |
|
2,205 |
(1,246) |
959 |
|
• Non-controlling interests |
70 |
(3) |
67 |
|
70 |
(6) |
64 |
|
EPS (€) |
3.31 |
|
2.94 |
|
3.43 |
|
1.48 |
|
|
|
|
|
|
|
|
|
|
|
Other operating income and
expense reached -€1,234 million vs -€1,080 million in the
prior year, mainly driven by implementation costs related to the
Local First project and impairment related to EDP Russia, for
around €500m. As a result, reported operating margin was down -155
bps in 2022, from 9.3% to 7.7%.
Net financial costs increased
by €49 million to -€311 million, resulting from appreciation of the
US dollar against the euro.
Net income from associates
decreased significantly from €585 million to -€32 million,
reflecting the combined impacts of the Mengniu disposal in H1 2021
and impairment related to the disposal of the remaining minority
investments in Mengniu partnerships announced in H1 2022.
As a result, Reported EPS decreased by -49.7% to
€1.48, while Recurring EPS was up
+3.6% to €3.43.
Cash flow and Debt
Free cash flow reached €2,127
million in 2022, down from €2,489 million in 2021, reflecting the
decrease in cash-flow from operating activities. Capex stood at
€873 million.
As of December 31, 2022, Danone’s net
debt stood at €10.1 bn, down €0.4 bn from December 31,
2021.
Dividend
At the Annual Shareholders’ Meeting on April 27,
2023, Danone’s Board of Directors will propose a dividend
of €2.00 per share in respect of the 2022 fiscal year, up
+3.1% compared to last year. Assuming this proposal is approved,
the ex-dividend date will be May 9, 2023, and dividends will be
payable on May 11, 2023.
II. DANONE
IMPACT JOURNEY
In March 2022, Danone unveiled a new strategy,
Renew Danone, with the intent to reconnect with sustainable
profitable growth and value creation. As part of that strategy, the
company vowed at better connecting sustainability with
performance.
In this context, Danone reframed its
sustainability journey, articulated around 3 pillars: Health,
Nature and People. For each pillar, Danone defines a new set of
priorities which are translated into mid to long-term objectives,
focusing on where the company can deliver the most value with and
through our ecosystem of partners. In consistency with the
principles of Renew Danone, the investments related to these
commitments are fully embedded in the company’s financial
guidance.
Danone’s priorities and mid to long-term
objectives are detailed on Danone’s website
(https://www.danone.com/about-danone/sustainable-value-creation/danone-impact-journey.html).
More information on the existing policies,
action plans and 2022 results of Danone related to Heath, Nature
and People will be included in chapter 5 (social, societal and
environmental responsibility) of the 2022 Universal Registration
Document of Danone, that will be published in March 2023.
1 – Progress and lead Health through food for consumers
and patients
- Offer tastier and healthier food and drinks
- Promote healthier choices
- Provide positive nutrition & hydration for healthier
life
- Invest in nutrition and hydration science and research
2 – Preserve and regenerate
nature
- Curb GHG emissions in line with 1.5°C, leading the way on
methane reduction
- Pioneer and scale regenerative agriculture, leading the way for
regenerative dairy farming models
- Preserve and restore watersheds/water resources where we
operate and drive total water footprint reduction across the value
chain
- Drive the transition to a circular and low-carbon packaging
system & recover as much as we use
- Cut waste across the value chain
3 – Thriving People &
Communities
- Make Danone a force for good by fostering a unique, diverse and
inclusive culture and empowering Danoners for positive impact
- Equip and empower our communities (i.e. internal, external)
with skills and capabilities of the future to thrive in fast
changing economy
- Champion a renewed social contract by fostering a prosperous
& inclusive ecosystem, upholding human rights and pursuing
social progress
III. 2023
GUIDANCE
2023 guidance in line with mid-term targets:
Like-for-like sales growth between +3 and +5% with moderate
recurring operating margin improvement.
IV. MAJOR
DEVELOPMENTS OVER THE PERIOD
- January 18, 2023: Danone announced the
appointment of three Group Deputy CEOs with extended
responsibilities, with effect from February 1, 2023: Véronique
Penchienati-Bosetta was appointed Group Deputy CEO, CEO
International and EVP Specialized Nutrition, Waters, Global
Marketing & Digital; Shane Grant was appointed Group Deputy
CEO, CEO Americas and EVP Dairy, Plant-Based and Global Sales; and
Juergen Esser was appointed Group Deputy CEO in charge of Finance,
Technology & Data. Danone also announced that Nigyar
Makhmudova, EVP Chief Growth Officer, and Floris Wesseling, Europe
Zone President, members of the Executive Committee, have decided to
leave Danone to pursue professional interests outside of the
company. Finally, Danone announced the appointment of Pablo
Perversi, previously Chief Innovation, Sustainability & Quality
Officer at Barry Callebaut, as Europe Zone President, member of the
Executive Committee, replacing Floris Wesseling. He will be
reporting to Véronique Penchienati-Bosetta.
- January 26, 2023: Danone announced it will
explore strategic options, including a potential sale, for its
organic dairy activity in the U.S., comprised of the Horizon
Organic and Wallaby businesses. This announcement is an additional
step in the portfolio review and asset rotation program the company
announced in March 2022, as part of the Renew Danone strategy.
Horizon Organic and Wallaby represent approximately 3% of Danone’s
global revenues and had a dilutive impact on Danone’s like-for-like
sales growth and recurring operating margin in 2022.
- February 6, 2023: Danone inaugurated its new
Research and Innovation Center on the Paris-Saclay campus,
dedicating a new space to develop the products of the future within
its ecosystem. This research center will be dedicated to the
development and innovation of Danone's fresh dairy, plant-based
products and natural mineral water categories. It will include
laboratories at the forefront of research and pilot production
sites for innovation and limited production of specific
prototypes.
V. FINANCIAL
STATEMENTS
At its meeting on February 21, 2023, the Board
of Directors closed statutory and consolidated financial statements
for the 2022 fiscal year. Regarding the audit process, the
statutory auditors have substantially completed their examination
of financial statements as of today.
VI. NEW
FINANCIAL DISCLOSURE STARTING FROM Q1 2023
Financial disclosure
As announced in January 18, 2023, Danone’s
external reporting will be adjusted to reflect the organizational
changes. Starting from Q1 2023, the company will report its key
indicators (net sales, like-for-like sales growth, recurring
operating income and recurring operating margin) along four
adjusted operating segments:
- Europe, which will include Ukraine (was previously part of Rest
of the World zone);
- China, North Asia, Oceania (unchanged);
- Americas, which will include the United States, Canada and
Latin America;
- Rest of the World, which will include AMEA (Asia, Middle East
including Turkey, Africa) and CIS.
The global category reporting remains unchanged,
and Danone will continue to report performance, on both net sales
and recurring operating income and margin, for EDP, Specialized
Nutrition and Waters.
Like-For-Like Definition
Until Q4 2022, the definition of our
like-for-like changes has been excluding, for both previous and
current years, entities in countries that fall under hyperinflation
according to IAS 29 during the previous year. As since January 1st,
2022 Turkey has been an hyperinflationary economy, as for
Argentinian entities since January 1, 2019, we believe the total of
Net sales and Operating margin in hyperinflationary economies has
become material and as a result, we are announcing that we are
adopting a new definition of the like-for-like changes regarding
countries in hyperinflation according to IAS 29.
From Q1 2023 onwards, all countries with
hyperinflationary economies will be included in our like-for-like
changes. In order to limit the distorting effect of hyperinflation,
net sales growth in excess of around 26% per year (a three-year
average at 26% would generally trigger hyperinflation as defined by
IFRS rules) will be excluded from our like-for-like net sales
growth calculation in hyperinflationary economies.
We believe this new definition better reflects
our performance while excluding from our like-for-like performance
distortion of hyperinflationary economies beyond the abovementioned
cap. This also allows our definition of like-for-like changes to be
more in line with peer group companies.
Illustrative breakdown by quarter and full year
of 2022 like-for-like net sales change with the new LFL
methodology:
|
First quarter 2022 |
Second quarter 2022 |
Third quarter 2022 |
Fourth quarter 2022 |
Full year 2022 |
|
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
Europe |
+5.7% |
+5.1% |
+6.0% |
+4.0% |
+5.2% |
|
North America |
+5.5% |
+8.9% |
+11.2% |
+9.7% |
+8.9% |
|
China, North Asia & Oceania |
+15.3% |
+3.3% |
+6.8% |
+3.4% |
+6.7% |
|
Rest of the World |
+6.1% |
+9.3% |
+10.1% |
+7.3% |
+8.2% |
|
BY CATEGORY |
|
|
|
|
|
|
EDP |
+3.8% |
+5.6% |
+6.1% |
+7.5% |
+5.8% |
|
Specialized Nutrition |
+9.0% |
+10.4% |
+11.5% |
+6.5% |
+9.3% |
|
Waters |
+14.1% |
+5.1% |
+10.8% |
+0.9% |
+7.5% |
|
|
|
|
|
|
|
|
TOTAL |
+6.8% |
+6.9% |
+8.5% |
+6.2% |
+7.1% |
|
VII. IFRS
STANDARDS AND FINANCIAL INDICATORS NOT DEFINED IN IFRS
IAS 29: impact on reported
data
All necessary conditions have been reached
(including 3-year cumulative rate of inflation for consumer prices
exceeding the 100% threshold reached during the first half 2022) to
now consider Turkey as “hyperinflationary” as defined by IFRS rules
and therefore that IAS 29 rule related to Financial Reporting in
Hyperinflationary Economies becomes applicable to the country.
Consequently, Danone applies IAS 29 in Turkey with an effective
date of January 1st, 2022.
Adoption of IAS 29 in hyperinflationary
countries requires its non-monetary assets and liabilities and its
income statement to be restated to reflect the changes in the
general pricing power of its functional currency, leading to a gain
or loss on the net monetary position included in the net income.
Moreover, its financial statements are converted into euros using
the closing exchange rate of the relevant period.
IAS 29: impact on reported data €
million except % |
Q4 2022 |
|
FY 2022 |
|
Sales |
-20.60 |
|
+3.7 |
|
Sales growth (%) |
-0.29% |
|
+0.01% |
|
Recurring Operating Income |
|
|
-56 |
|
Recurring Net Income – Group share |
|
|
-108 |
|
Breakdown by quarter of 2022 sales after
application of IAS 29FY 2022 sales correspond to the addition
of:
- Q4 2022 reported sales;
- Q1, Q2 and Q3 2022 sales resulting from the application of IAS
29 until December 31, 2022, to sales of entities in hyperinflation
countries (application of the inflation rate until December 31,
2022, and translation into euros using the December 31, 2022,
closing rate) and provided in the table below for information
(unaudited data).
€ million |
Q1 20221 |
Q2 20222 |
Q3 20223 |
Q4 2022 |
FY 2022 |
Europe |
2,114 |
2,267 |
2,246 |
2,145 |
8,773 |
North
America |
1,477 |
1,662 |
1,813 |
1,759 |
6,712 |
China,
North Asia & Oceania |
735 |
936 |
940 |
817 |
3,428 |
Rest of the World |
1,876 |
2,272 |
2,315 |
2,285 |
8,748 |
|
|
|
|
|
|
Total |
6,203 |
7,137 |
7,314 |
7,007 |
27,661 |
1Results from the application of IAS 29 until
December 31, 2022, to Q1 sales of entities of hyperinflation
countries. 2Results from the application of IAS 29 until December
31, 2022, to Q2 sales of entities of hyperinflation
countries.3Results from the application of IAS 29 until December
31, 2022, to Q3 sales of entities of hyperinflation countries.
Financial
indicators not defined in IFRS
Due to rounding, the sum of values presented may
differ from totals as reported. Such differences are not
material.
Like-for-like changes in sales,
recurring operating income and recurring operating margin reflect
Danone's organic performance and essentially exclude the impact
of:
- changes in consolidation scope, with indicators related to a
given fiscal year calculated on the basis of previous-year scope,
both previous-year and current-year scopes excluding entities in
countries under hyperinflation according to IAS 29 during the
previous year (as for Argentinian entities since January 1, 2019,
and except for Turkey);
- changes in applicable accounting principles;
- changes in exchange rates with both previous-year and
current-year indicators calculated using the same exchange rates
(the exchange rate used is a projected annual rate determined by
Danone for the current year and applied to both previous and
current years).
Bridge from reported data to like-for-like
data
(€ million except %) |
FY 2021 |
Like-for-like change |
Impact of changesin scope of
consolidation |
Impact of changes in exchange rates & others incl.
IAS 29 |
Organic contribution from hyperinflation
countries |
Reported change |
FY 2022 |
|
|
|
|
|
|
|
|
Sales |
24,281 |
+7.8% |
-0.2% |
+5.1% |
+1.2% |
+13.9% |
27,661 |
Recurring operating margin |
13.7% |
-161 bps |
-1 bp |
+3 bps |
+4 bps |
-154 bps |
12.2% |
Recurring operating income is
defined as Danone’s operating income excluding Other operating
income and expenses. Other operating income and expenses comprise
items that, because of their significant or unusual nature, cannot
be viewed as inherent to Danone’s recurring activity and have
limited predictive value, thus distorting the assessment of its
recurring operating performance and its evolution. These mainly
include:
- capital gains and losses on disposals of fully consolidated
companies;
- impairment charges on intangible assets with indefinite useful
lives;
- costs related to strategic restructurings or transformation
plans;
- costs related to major external growth transactions;
- costs related to major crisis and major litigations;
- in connection with IFRS 3 (Revised) and IAS 27 (Revised)
relating to business combinations, (i) acquisition costs related to
business combinations, (ii) revaluation profit or loss accounted
for following a loss of control, and (iii) changes in earn-outs
relating to business combinations and subsequent to acquisition
date.
Recurring operating margin is
defined as Recurring operating income over Sales ratio.
Other non-recurring financial income and
expense corresponds to financial income and expense items
that, in view of their significant or unusual nature, cannot be
considered as inherent to Danone’s recurring financial management.
These mainly include changes in value of non-consolidated
interests.
Non-recurring income tax
corresponds to income tax on non-recurring items as well as tax
income and expense items that, in view of their significant or
unusual nature, cannot be considered as inherent to Danone’s
recurring performance.
Recurring effective tax rate
measures the effective tax rate of Danone’s recurring performance
and is computed as the ratio of income tax related to recurring
items over recurring net income before tax.
Non-recurring results from
associates include items that, because of their
significant or unusual nature, cannot be viewed as inherent to the
recurring activity of those companies and thus distort the
assessment of their recurring performance and its evolution. These
mainly include (i) capital gains and losses on disposal and
impairment of Investments in associates, and (ii) non-recurring
items, as defined by Danone, included in the net income from
associates.
Recurring net income (or
Recurring net income – Group Share) corresponds to the Group share
of the consolidated Recurring net income. The Recurring net income
excludes items that, because of their significant or unusual
nature, cannot be viewed as inherent to Danone’s recurring activity
and have limited predictive value, thus distorting the assessment
of its recurring performance and its evolution. Such non-recurring
income and expenses correspond to Other operating income and
expenses, Other non-recurring financial income and expenses,
Non-recurring income tax, and Non-recurring income from associates.
Such income and expenses, excluded from Net income, represent
Non-recurring net income.
Recurring EPS (or Recurring net
income – Group Share, per share after dilution) is defined as the
ratio of Recurring net income adjusted for hybrid financing over
Diluted number of shares. In compliance with IFRS, income used to
calculate EPS is adjusted for the coupon related to the hybrid
financing accrued for the period and presented net of tax.
|
FY 2021 |
|
FY 2022 |
|
Recurring |
|
Total |
|
Recurring |
|
Total |
|
Net income-Group share (€ million) |
2,165 |
|
1,924 |
|
2,205 |
|
959 |
|
Coupon related to hybrid financing net of tax (€ million) |
(26) |
|
(26) |
|
(13) |
|
(13) |
|
Number of shares |
|
|
|
|
|
|
|
|
• Before dilution |
646,155,699 |
|
646,155,699 |
|
639,050,821 |
|
639,050,821 |
|
• After dilution |
646,445,829 |
|
646,445,829 |
|
639,484,607 |
|
639,484,607 |
|
EPS (€) |
|
|
|
|
|
|
|
|
• Before dilution |
3.31 |
|
2.94 |
|
3.43 |
|
1.48 |
|
• After dilution |
3.31 |
|
2.94 |
|
3.43 |
|
1.48 |
|
|
|
|
|
|
|
|
|
|
|
Free cash flow represents cash
flows provided or used by operating activities less capital
expenditure net of disposals and, in connection with IFRS 3
(Revised), relating to business combinations, excluding (i)
acquisition costs related to business combinations, and (ii)
earn-outs related to business combinations and paid subsequently to
acquisition date.
(€ million) |
FY 2021 |
FY 2022 |
Cash-flow from operating activities |
3,474 |
2,964 |
Capital expenditure |
(1,043) |
(873) |
Disposal of tangible assets & transaction fees related to
business combinations1 |
58 |
37 |
Free cash-flow |
2,489 |
2,127 |
1 Represents acquisition costs related to business combinations
paid during the period.
Net financial debt represents the net debt
portion bearing interest. It corresponds to current and non-current
financial debt (i) excluding Liabilities related to put options
granted to non-controlling interests and earn-outs on acquisitions
resulting in control and (ii) net of Cash and cash equivalents,
Short term investments and Derivatives – assets managing net
debt.
(€ million) |
December 31, 2021 |
December 31, 2022 |
Non-current financial debt |
12,537 |
11,238 |
Current financial debt |
4,048 |
3,628 |
Short-term investments |
(5,197) |
(3,631) |
Cash and cash equivalents |
(659) |
(1,015) |
Derivatives — non-current assets1 |
(120) |
(18) |
Derivatives — current-assets1 |
(91) |
(60) |
Net debt |
10,519 |
10,107 |
- Liabilities related to put options granted to non-controlling
interests — non-current
|
(76) |
(59) |
- Liabilities related to put options granted to non-controlling
interests and earn-outs on acquisitions resulting in control —
current
|
(280) |
(263) |
Net financial debt |
10,163 |
9,785 |
1 Managing net debt only
o o O o o
FORWARD-LOOKING STATEMENTS
This press release contains certain
forward-looking statements concerning Danone. In some cases, you
can identify these forward-looking statements by forward-looking
words, such as “estimate”, “expect”, “anticipate”, “project”,
“plan”, “intend”, “objective”, “believe”, “forecast”, “guidance”,
“foresee”, “likely”, “may”, “should”, “goal”, “target”, “might”,
“will”, “could”, “predict”, “continue”, “convinced” and
“confident,” the negative or plural of these words and other
comparable terminology. Forward looking statements in this document
include, but are not limited to, predictions of future activities,
operations, direction, performance and results of Danone.
Although Danone believes its expectations are
based on reasonable assumptions, these forward-looking statements
are subject to numerous risks and uncertainties, which could cause
actual results to differ materially from those anticipated in these
forward-looking statements. For a detailed description of these
risks and uncertainties, please refer to the “Risk Factor” section
of Danone’s Universal Registration Document (the current version of
which is available at www.danone.com).
Subject to regulatory requirements, Danone does
not undertake to publicly update or revise any of these
forward-looking statements. This document does not constitute an
offer to sell, or a solicitation of an offer to buy Danone
securities.
The
presentation to analysts and investors will be broadcast live today
from 8:30 a.m. (Paris time) on Danone’s website
(www.danone.com).
Related slides will also be available on the website in the
Investors section.
APPENDIX –
Sales by geographical zone and by category (in €
million)
|
First quarter |
Second quarter |
Third quarter |
Fourth quarter |
Full year |
|
|
2021 |
2022 |
2021 |
2022 |
2021 |
2022 |
2021 |
2022 |
2021 |
2022 |
|
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
|
|
Europe |
1,987 |
2,114 |
2,155 |
2,267 |
2,122 |
2,246 |
2,077 |
2,145 |
8,341 |
8,773 |
|
North America4 |
1,316 |
1,477 |
1,391 |
1,662 |
1,413 |
1,813 |
1,443 |
1,759 |
5,564 |
6,712 |
|
China, North Asia & Oceania2 |
598 |
735 |
832 |
936 |
801 |
940 |
777 |
817 |
3,008 |
3,428 |
|
Rest of the World |
1,756 |
1,909 |
1,793 |
2,202 |
1,822 |
2,335 |
1,944 |
2,285 |
7,369 |
8,748 |
|
BY CATEGORY |
|
|
|
|
|
|
|
|
|
|
|
EDP3 |
3,149 |
3,365 |
3,254 |
3,684 |
3,269 |
3,862 |
3,386 |
3,887 |
13,090 |
14,799 |
|
Specialized Nutrition |
1,719 |
1,919 |
1,793 |
2,106 |
1,777 |
2,134 |
1,931 |
2,147 |
7,230 |
8,319 |
|
Waters |
790 |
951 |
1,125 |
1,277 |
1,112 |
1,338 |
925 |
972 |
3,961 |
4,543 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
5,657 |
6,236 |
6,171 |
7,067 |
6,158 |
7,334 |
6,242 |
7,007 |
24,281 |
27,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter 2022 |
Second quarter 2022 |
Third quarter 2022 |
Fourth quarter 2022 |
Full year 2022 |
|
|
Reported change |
Like-for-like change |
Reported change |
Like-for-like change |
Reported change |
Like-for-like change |
Reported change |
Like-for-like change |
Reported change |
Like-for-like change |
|
BY GEOGRAPHICAL ZONE |
|
|
|
|
|
|
|
|
|
|
|
Europe |
+6.4% |
+5.7% |
+5.2% |
+5.1% |
+5.9% |
+6.0% |
+3.3% |
+4.0% |
+5.2% |
+5.2% |
|
North America1 |
+12.2% |
+5.5% |
+19.5% |
+8.9% |
+28.3% |
+11.2% |
+21.9% |
+9.7% |
+20.6% |
+8.9% |
|
China, North Asia & Oceania2 |
+22.9% |
+15.3% |
+12.5% |
+3.3% |
+17.3% |
+6.8% |
+5.2% |
+3.4% |
+14.0% |
+6.7% |
|
Rest of the World |
+8.7% |
+7.0% |
+22.8% |
+12.3% |
+28.1% |
+13.6% |
+17.5% |
+9.8% |
+18.7% |
+10.7% |
|
BY CATEGORY |
|
|
|
|
|
|
|
|
|
|
|
EDP3 |
+6.9% |
+3.6% |
+13.2% |
+5.6% |
+18.1% |
+6.3% |
+14.8% |
+7.6% |
+13.1% |
+5.8% |
|
Specialized Nutrition |
+11.7% |
+9.5% |
+17.5% |
+11.4% |
+20.1% |
+12.2% |
+11.2% |
+7.1% |
+15.1% |
+10.0% |
|
Waters |
+20.5% |
+15.9% |
+13.6% |
+7.9% |
+20.4% |
+14.4% |
+5.1% |
+4.4% |
+14.7% |
+10.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
+10.2% |
+7.1% |
+14.5% |
+7.7% |
+19.1% |
+9.5% |
+12.3% |
+7.0% |
+13.9% |
+7.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All references in this document to Like-for-like
(LFL) changes, Recurring operating income and margin, Recurring net
income, Recurring income tax rate, Recurring EPS, Free cash-flow
and net financial debt, correspond to financial indicators not
defined in IFRS. Their definitions, as well as their reconciliation
with financial statements, are listed on pages 8 to 10.
1United States and Canada; 2China, Japan, Australia and New
Zealand
1United States and Canada; 2China, Japan, Australia and New
Zealand
1United States and Canada; 2China, Japan, Australia and New
Zealand; 3Essential Dairy and Plant-based
Grafico Azioni Danone (EU:BN)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Danone (EU:BN)
Storico
Da Lug 2023 a Lug 2024