Danone delivered stronger-than-expected sales growth in the last quarter of 2021 amid a challenging environment marked by mounting inflation, with CEO Antoine de Saint-Affrique saying much remained to be done to turn the company around.
de Saint-Affrique, who took over as CEO in September, said investors would have to wait until a March 8 Capital Market Day to get clues on his strategy and guidance for 2022 and for the mid-term.
Danone, which is the world's largest yoghurt maker, reported 2021 like-for-like sales rose 3.4%, slightly above analysts' estimates in a company-compiled consensus for a 3% rise.
Fourth-Quarter Acceleration
Danone said this reflected an acceleration in the fourth quarter to 6.7% sales growth, above market expectations of 5.5% growth, with all three businesses contributing to growth.
"We delivered on our commitment to return to profitable growth in H2, with recurring operating margin at 13.7% in 2021. This was enabled by a strong focus on execution and a step-up in productivity, a pro-active approach to pricing and the disciplined implementation of Local First," said de Saint-Affrique.
The 2021 operating margin declined by 30 basis points to 13.7% of sales, in line with company's guidance and analysts' expectations of 13.7%.
Consumer goods companies are grappling with surging inflation costs for commodities, energy, transport and labour, prompting rival Unilever earlier this month to warn of a drop in margins as it struggles to lift prices enough to offset the extra expenses.
Transformation Agenda
"We have, over the last months, moved forward with determination on our transformation agenda, deploying Local First pragmatically and strengthening key capabilities, with the addition of globally recognized professionals in HR, Operations and R&I to Danone’s leadership team," de Saint-Affrique added.
"We still have much more to do, and I look forward to our CME on March 8 when we will be in a position to share more on the next steps in our growth and renewal journey."
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