Danone: 2020 and 2021 key indicators restated by new operating segments

Rhea-AI Summary

Danone has restated its 2020 and 2021 key financial indicators to align with new operating segments: Europe, North America, China & Oceania, and Rest of the World. Key figures show a total net sales of €23.6 billion in 2020 and €24.3 billion in 2021. The recurring operating margin remained stable at approximately 14%. Like-for-like sales growth varied across regions, with North America showing a positive growth trend, while Europe and China faced declines. The company plans to report organic sales growth differently, reflecting new volume and mix disclosures.

Positive

• North America reported a like-for-like sales growth of 4.7% in FY 2021.
• Recurring operating margin for FY 2021 was stable at 13.7%.

Negative

• Europe's like-for-like sales decreased by 3.3% in FY 2021.
• China, North Asia & Oceania experienced a significant decrease, with like-for-like sales down 10.9% in Q1 2021.

Press Release – Paris, March 30, 2022

2020 and 2021 key indicators restated by new operating segments

As announced on March 8, 2022, starting from 2022, Danone will report its key indicators (net sales, like-for-like sales growth, recurring operating income and recurring operating margin) according to its new operating segments, corresponding to 4 zones¹:

• Europe;
• North America which is comprised of the United States and Canada;
• China, North Asia and Oceania which is comprised of China, Japan, Australia and New Zealand;
• Rest of the World including South-East Asia, Latam, CIS, Africa, Turkey and Middle-East.

The company will retain global category reporting, on both net sales, recurring operating income and margin, for EDP, Specialized Nutrition and Waters.

Danone will also adapt the way it reports organic sales growth: from now on, the Mix component will be grouped with Volumes, instead of Price.

Please refer to the restated 2020 and 2021 indicators (non-audited) by new operating segments below.

2020 and 2021 sales restated by new operating segments

	2020													2021
	Q1 2020			Q2 2020		Q3 2020			Q4 2020		FY 2020			Q1 2021		Q2 2021		Q3 2021	Q4 2021	FY 2021
BY GEOGRAPHICAL ZONE
Europe	2,127			1,995		2,048			1,987		8,156			1,987		2,155		2,122	2,077	8,341
North America	1,375			1,392		1,325			1,300		5,392			1,316		1,391		1,413	1,443	5,564
China, North Asia & Oceania	684			841		707			617		2,848			598		832		801	777	3,008
Rest of the World	2,056			1,727		1,741			1,725		7,225			1,756		1,793		1,822	1,944	7,369
BY CATEGORY
EDP	3,364			3,238		3,108			3,131		12,823			3,149		3,254		3,269	3,386	13,090
Specialized Nutrition	1,949			1,792		1,698			1,753		7,192			1,719		1,793		1,777	1,931	7,230
Waters	928			925		1,015			743		3,605			790		1,125		1,112	925	3,961
Total	6,242			5,954		5,821			5,628		23,620			5,657		6,171		6,158	6,242	24,281

2021 like-for-like sales growth restated by new operating segments and new volume/mix disclosure

First quarter 2021

Second quarter 2021

Third quarter 2021

Fourth quarter 2021

Full Year 2021

Like-for-like change

Volume/mix change

Like-for-like change

Volume/mix change

Like-for-like change

Volume/mix change

Like-for-like change

Volume/mix change

Like-for-like change

Volume/mix change

BY GEOGRAPHICAL ZONE

Europe

-6.1%

-5.1%

+7.1%

+6.2%

+2.8%

+2.1%

+3.5%

+2.5%

+1.7%

+1.3%

North America

+2.5%

+0.9%

+5.2%

+5.0%

+5.3%

+4.0%

+5.8%

+3.9%

+4.7%

+3.4%

China, North Asia & Oceania

-10.9%

-10.4%

+1.3%

+0.0%

+10.0%

+12.6%

+19.3%

+19.3%

+4.6%

+5.0%

Rest of the World

-1.3%

-4.8%

+10.0%

+5.9%

+1.3%

-2.3%

+6.3%

+0.2%

+4.0%

-0.3%

BY CATEGORY

EDP

+1.6%

+0.2%

+4.8%

+3.9%

+4.1%

+1.7%

+4.3%

+0.9%

+3.7%

+1.6%

Specialized Nutrition

-7.7%

-8.8%

+2.8%

+1.4%

+2.9%

+3.2%

+6.4%

+6.0%

+1.0%

+0.3%

Waters

-11.6%

-10.5%

+19.5%

+15.3%

+4.6%

+4.2%

+17.3%

+12.8%

+7.2%

+5.3%

Total

-3.3%

-4.3%

+6.6%

+4.9%

+3.8%

+2.6%

+6.7%

+4.0%

+3.4%

+1.8%

2020 and 2021 recurring operating income and margin restated by new operating segments

Net sales (€m), recurring operating profit (€m) and recurring operating margin (%)	H1 2020											FY 2020										H1 2021											FY 2021
	Net sales (€m)				Operating profit (€m)			Margin (%)				Net sales (€m)				Operating profit (€m)			Margin (%)			Net sales (€m)				Operating profit (€m)			Margin (%)				Net sales (€m)		Operating profit (€m)		Margin (%)
BY GEOGRAPHICAL ZONE
Europe	4,121				631			15.3%				8,156				1,221			15.0%			4,142				625			15.1%				8,341		1,291		15.5%
North America	2,767				277			10.0%				5,392				631			11.7%			2,707				283			10.4%				5,564		603		10.8%
China, North Asia & Oceania	1,525				504			33.0%				2,848				904			31.8%			1,430				423			29.6%				3,008		939		31.2%
Rest of the World	3,777				290			7.7%				7,225				561			7.8%			3,556				221			6.2%				7,369		504		6.8%
BY CATEGORY
EDP	6,599				598			9.1%				12,823				1,303			10.2%			6,406				584			9.1%				13,090		1,287		9.8%
Specialized Nutrition	3,739				987			26.4%				7,192				1,763			24.5%			3,513				804			22.9%				7,230		1,697		23.5%
Waters	1,851				117			6.3%				3,605				251			7.0%			1,916				163			8.5%				3,961		353		8.9%
Total	12,189				1,702			14.0%				23,620				3,317			14.0%			11,835				1,551			13.1%				24,281		3,337		13.7%

APPENDIX

Financial indicators not defined in IFRS

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^st, 2019);
• 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).

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 of 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.

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¹ As part of the new organization, the management of some entities has been changed, leading to the reallocation of €143m of Net Sales to Europe and North America zones in FY 2021 (from the previously known Rest of the World region).
All references in this document to like-for-like sales growth, recurring operating income and recurring operating margin correspond to financial indicators not defined in IFRS. Their definitions, as well as their reconciliation with financial statements, are listed on page 4.

Attachment

• danonepr300321

FAQ

What are Danone's new operating segments for 2022?

Danone's new operating segments include Europe, North America, China & Oceania, and Rest of the World.

What were Danone's total net sales for FY 2021?

Danone's total net sales for FY 2021 were €24.281 billion.

How did Danone's recurring operating margin perform in 2021?

Danone's recurring operating margin for FY 2021 was stable at 13.7%.

What was the like-for-like sales growth in North America for FY 2021?

North America achieved a like-for-like sales growth of 4.7% in FY 2021.

How did Europe perform in terms of sales growth in 2021?

Europe's like-for-like sales decreased by 3.3% in FY 2021.

What was the impact of the new reporting structure on Danone's financial results?

The new reporting structure affected how Danone reports organic sales growth and allocated net sales among the new segments.