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Danone: Continued strong momentum in Q3; Consistently delivering quality growth

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Danone reported strong Q3 2024 performance with sales reaching €6,826m, up +4.2% on a like-for-like basis. Growth was driven by +3.6% volume/mix increase and +0.7% price growth, with positive performance across all categories. Notable highlights include strong momentum in North America (+5.8% LFL) led by Coffee Creations and Waters, acceleration in Europe volume/mix driven by EDP, and robust growth in China (+8.0% LFL). The company confirmed its 2024 guidance of +3% to +5% like-for-like sales growth with moderate improvement in recurring operating margin.

Danone ha riportato una forte performance nel terzo trimestre del 2024, con vendite che hanno raggiunto €6.826m, in aumento del +4.2% su base omogenea. La crescita è stata trainata da un aumento del volume/mix di +3.6% e da una crescita dei prezzi del +0.7%, con performance positive in tutte le categorie. Tra i punti salienti, si segnala un forte slancio in Nord America (+5.8% LFL) guidato da Coffee Creations e Waters, un'accelerazione del volume/mix in Europa trainata da EDP e una robusta crescita in Cina (+8.0% LFL). L'azienda ha confermato le sue previsioni per il 2024, prevedendo una crescita delle vendite like-for-like del +3% a +5% con un miglioramento moderato nel margine operativo ricorrente.

Danone informó un sólido rendimiento en el tercer trimestre de 2024, con ventas que alcanzaron €6,826m, un aumento del +4.2% en base comparable. El crecimiento fue impulsado por un aumento en volumen/mix de +3.6% y un crecimiento de precios de +0.7%, con un desempeño positivo en todas las categorías. Los aspectos destacados incluyen un fuerte impulso en América del Norte (+5.8% LFL) liderado por Coffee Creations y Waters, aceleración del volumen/mix en Europa impulsada por EDP, y un sólido crecimiento en China (+8.0% LFL). La compañía confirmó su guía para 2024 de un crecimiento de ventas comparable del +3% al +5% con una mejora moderada en el margen operativo recurrente.

다논은 2024년 3분기 실적이 강세를 보이며 판매가 €6,826m에 도달하고 전년 동기 대비 +4.2% 증가했다고 보고했습니다. 성장은 +3.6%의 볼륨/믹스 증가와 +0.7%의 가격 인상이 주도했으며, 모든 카테고리에서 긍정적인 성과를 기록했습니다. 주요 하이라이트로는 커피 크리에이션과 음료수에 힘입어 북미에서의 강한 성장(+5.8% LFL), EDP에 의해 이끌어진 유럽의 볼륨/믹스 가속화, 그리고 중국에서의 견고한 성장(+8.0% LFL)이 포함됩니다. 회사는 2024년 가이던스를 확인하며, +3%에서 +5%의 동급대비 판매 성장과 운영 마진의 완만한 개선을 예상하고 있습니다.

Danone a annoncé une performance solide pour le troisième trimestre 2024, avec des ventes atteignant 6,826 M€, en hausse de +4,2% sur une base comparable. La croissance a été portée par une augmentation de volume/mix de +3,6% et une augmentation des prix de +0,7%, avec des performances positives dans toutes les catégories. Parmi les points forts figurent un bon élan en Amérique du Nord (+5,8% LFL) grâce à Coffee Creations et Waters, une accélération du volume/mix en Europe portée par l'EDP et une forte croissance en Chine (+8,0% LFL). L'entreprise a confirmé sa prévision pour 2024 d'une croissance des ventes comparables de +3% à +5% avec une amélioration modérée de la marge opérationnelle récurrente.

Danone berichtete über eine starke Leistung im dritten Quartal 2024 mit einem Umsatz von €6.826m, was einem Anstieg von +4,2% auf vergleichbarer Basis entspricht. Das Wachstum wurde durch einen Anstieg von +3,6% im Volumen/Mix und ein +0,7% Preiswachstum angetrieben, wobei die Leistung in allen Kategorien positiv war. Zu den bemerkenswerten Höhepunkten zählen ein starker Schwung in Nordamerika (+5,8% LFL), angeführt von Coffee Creations und Waters, eine Beschleunigung des Volumen/Mixes in Europa, die durch EDP unterstützt wurde, und ein robustes Wachstum in China (+8,0% LFL). Das Unternehmen bestätigte seine Prognose für 2024 mit einem erwarteten +3% bis +5% Wachstum der vergleichbaren Verkaufszahlen und einer moderaten Verbesserung der wiederkehrenden operativen Marge.

Positive
  • Strong Q3 sales growth of +4.2% LFL with positive volume/mix (+3.6%) and price (+0.7%)
  • Robust performance in China with +8.0% LFL growth and +10.2% volume/mix increase
  • North America showing strong momentum with +5.8% LFL growth
  • Successful €700 million bond issuance with 7-year maturity
Negative
  • Reported sales decreased by -1.2% due to negative scope impact (-3.1%)
  • Negative forex impact of -3.2% due to currency depreciation
  • Volume/mix decline in Latin America (-0.7%)

2024 Third-Quarter Sales
Press release – Paris, October 24, 2024

Continued strong momentum in Q3
Consistently delivering quality growth

  • Sales reached €6,826m in Q3 2024, up +4.2% on a like-for-like (LFL) basis
  • Strong volume/mix, up +3.6%, and price up +0.7%; volume/mix and price positive in all categories
  • Continued strong performance in North America driven by High Protein, Coffee Creations and Waters
  • Further acceleration in Europe volume/mix, driven by EDP
  • Another quarter of strong competitive momentum in China, North Asia & Oceania, led by all categories
  • 2024 guidance confirmed: like-for-like sales growth expected between +3% and +5%, with moderate improvement in recurring operating margin

3

€ million except %Q3
2023		Q3
2024		Reported changeLFL sales
growth		Volume/mix growth9M
2023		9M
2024		Reported changeLFL sales
growth		Volume/mix
growth		 
BY GEOGRAPHICAL ZONE          
Europe2,3922,427+1.5%+1.4%+2.4%7,0697,210+2.0%+1.6%+0.9% 
North America1,7471,611-7.7%+5.8%+4.9%5,1644,943-4.3%+4.4%+3.5% 
China, North Asia & Oceania896967+7.9%+8.0%+10.2%2,6742,808+5.0%+8.4%+8.9% 
Latin America771706-8.5%+2.7%-0.7%2,2332,265+1.4%+4.0%-0.4% 
Rest of the World1,1001,115+1.4%+6.0%+1.2%3,9773,350-15.8%+5.8%+1.4% 
BY CATEGORY          
EDP3,4743,283-5.5%+4.1%+3.8%10,97310,066-8.3%+3.5%+2.4% 
Specialized Nutrition2,0702,189+5.7%+5.2%+4.1%6,3696,599+3.6%+4.6%+2.7% 
Waters1,3621,354-0.6%+3.2%+2.3%3,7753,910+3.6%+5.0%+2.9% 
           
TOTAL6,9066,826-1.2%+4.2%+3.6%21,11820,575-2.6%+4.1%+2.6% 

1

Antoine de Saint-Affrique: CEO statement

With like-for-like sales growth of +4.2% in Q3, driven by +3.6% volume/mix, we continue to deliver broad-based quality growth, with both volume/mix and price positive in all categories.

Our consistent focus on science based and consumer and patient centric innovation, combined with strong in-market execution keeps paying off, as demonstrated by the continued good performance of our winning platforms such as High Protein, Coffee Creations and Medical Nutrition. We have also improved competitiveness within our Core portfolio across many geographies.

In what remains a challenging environment, we view our future with confidence, further leveraging the fundamentals we reestablished with Renew Danone.

I. THIRD QUARTER SALES

In Q3 2024, consolidated sales stood at €6,826m, up +4.2% on a like-for-like basis, led by an increase of +3.6% from volume/mix and +0.7% from price. On a reported basis, sales decreased by -1.2%, notably due to the negative impact from scope (-3.1%), resulting predominantly from the deconsolidation of Horizon Organic and Wallaby. Reported sales were also negatively impacted by forex (-3.2%), reflecting the depreciation of several currencies against the euro, notably the Argentine Peso, the Mexican Peso, the Brazilian Real and the Turkish Lira. In addition, hyperinflation contributed positively to reported sales (+1.5%).

Sales by operating segment

In the third quarter, Europe sales were up +1.4% on a like-for-like basis, led by further acceleration of volume/mix, up +2.4%, while price stood at -1.0%. EDP made additional progress in its transformation, notably led by the strong competitive performance of YoPro, Actimel and Alpro, while Waters posted solid growth, despite adverse weather conditions in the region.

In North America, sales were up +5.8% on a like-for-like basis, led by strong volume/mix, up +4.9%, while price was resilient at +0.9%. The strong performance was driven by Coffee Creations, growing double-digits, Yogurt, accelerating in a very dynamic category, and Waters, with evian posting strong performance and continued market share gains.

China, North Asia & Oceania delivered +8.0% like-for-like sales growth, with volume/mix accelerating to +10.2% and price down -2.2%. In Specialized Nutrition, Infant Milk Formula posted solid competitive growth, in a category showing first signs of growth recovery, and Medical Nutrition sustained its good momentum. In Waters, Mizone pursued its strong performance, while EDP delivered another quarter of strong growth in Japan.

In Latin America, sales were up +2.7% on a like-for-like basis, with volume/mix slightly down -0.7% and price up +3.5%. While the performance was impacted by the licensing out of milk business in Brazil and poor weather conditions in Mexico, Aptamil, Danone and YoPro brands pursued their solid momentum.

In the Rest of the World, sales increased by +6.0% on a like-for-like basis, with volume/mix up +1.2% and price up +4.7%, notably led by the strong performance of Specialized Nutrition across the region, and the solid growth of Africa, where the dairy portfolio transformation starts to yield results.

Sales by geography by category

Q3 2024

EuropeNorth AmericaChina/North Asia/OceaniaAMEA, CIS &
Latin America		Total
Sales (€m)LFL sales growth (%)Sales (€m)LFL sales growth (%)Sales (€m)LFL sales growth (%)Sales (€m)LFL sales growth (%)Sales (€m)LFL sales growth (%)
           
EDP1,069+0.9%1,438+6.2%95+9.3%683+4.1%3,283+4.1%
Specialized Nutrition7700.0%96-2.6%620+7.7%704+10.3%2,189+5.2%
Waters589+4.3%78+9.6%252+8.3%435-1.7%1,354+3.2%
Total Company2,427+1.4%1,611+5.8%967+8.0%1,821+4.8%6,826+4.2%


9M 2024

EuropeNorth AmericaChina/North Asia/OceaniaAMEA, CIS &
Latin America		Total
Sales (€m)LFL sales growth (%)Sales (€m)LFL sales growth (%)Sales (€m)LFL sales growth (%)Sales (€m)LFL sales growth (%)Sales (€m)LFL sales growth (%)
           
EDP3,243+1.2%4,448+4.6%278+12.8%2,097+3.3%10,066+3.5%
Specialized Nutrition2,335+1.2%263-4.8%1,857+6.2%2,144+8.5%6,599+4.6%
Waters1,632+3.1%231+10.5%673+12.9%1,374+2.9%3,910+5.0%
Total Company7,210+1.6%4,943+4.4%2,808+8.4%5,615+5.1%20,575+4.1%

II. 2024 GUIDANCE

2024 guidance confirmed: Like-for-like sales growth between +3% and +5% with moderate improvement in recurring operating margin.

III. MAJOR DEVELOPMENTS OVER THE PERIOD

  • September 5, 2024: Danone successfully issued a €700 million bond with a 7-year maturity and a 3.20% coupon. The settlement took place on September 12, 2024 and the bonds are listed on Euronext Paris.

IV. ALTERNATIVE PERFORMANCE MEASURES NOT DEFINED BY IFRS

IAS 29: impact on reported data

Danone has applied IAS 29 in hyperinflation countries, as defined in IFRS. Adoption of IAS 29 in hyperinflationary countries requires their non-monetary assets and liabilities and their income statement to be restated to reflect the changes in the general purchasing power of their functional currency, leading to a gain or loss on the net monetary position, recorded in net income. Moreover, their financial statements are converted into euros using the closing exchange rate of the relevant period.

IAS 29: impact on reported dataQ3 2024
Sales (€ million)-5.0
Sales growth (%)-0.07%

Breakdown by quarter of 9M 2024 sales after application of IAS 29
9M 2024 sales correspond to the addition of:

  • Q3 2024 reported sales;
  • Q1 and Q2 2024 sales resulting from the application of IAS 29 until September 30, 2024, to sales of entities in hyperinflation countries (application of the inflation rate until September 30, 2024, and translation into euros using the September 30, 2024, closing rate) and provided in the table below for information (unaudited data)
Sales after application of IAS 29 (€ million)Q1 20241Q2 20242Q3 20249M 2024
BY GEOGRAPHICAL ZONE    
Europe2,3362,4472,4277,210
North America1,7371,5951,6114,943
China, North Asia & Oceania8401,0019672,808
Latin America7468127062,265
Rest of the World1,1561,0791,1153,350


BY CATEGORY		    
EDP3,4893,2943,28310,066
Specialized Nutrition2,1932,2172,1896,599
Waters1,1331,4231,3543,910
     
Total6,8156,9346,82620,575

1Results from the application of IAS 29 until September 30, 2024, to Q1 sales of entities of hyperinflation countries.
2Results from the application of IAS 29 until September 30, 2024, to Q2 sales of entities of hyperinflation countries.

Definitions of geographical zones

Europe refers to European countries including Ukraine.

North America refers to United States and Canada.

China, North Asia & Oceania refers to China, Japan, Australia and New-Zealand.

Latin America refers to Mexico, Brazil, Argentina and Uruguay.

Rest of the World refers to Asia, Middle East including Turkey, Africa and CIS.

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 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 the previous year's scope;
  • Changes in applicable accounting principles;
  • Changes in exchange rates, with both previous-year and current-year indicators calculated using the same exchange rate (the exchange rate used is a projected annual rate determined by Danone for the current year and applied to both previous and current years).

Since January 1, 2023, all countries with hyperinflationary economies are taken into account in like-for-like changes as follows: sales growth in excess of around 26% per year (a three-year average at 26% would generally trigger the application of hyperinflationary accounting as defined in IFRS) is now excluded from the like-for-like sales growth calculation.

Bridge from like-for-like data to reported data

(€ million except %)2023 salesLike-for-like changeImpact of changes
in scope of consolidation 		Impact of changes in exchange rates & others incl. IAS 29Contribution of hyperinflationReported change2024 sales
        
Q36,906+4.2%-3.1%-3.8%+1.5%-1.2%6,826
9M21,118+4.1%-5.2%-3.1%+1.6%-2.6%20,575

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 businesses and fully consolidated companies;
  • Impairment charges on intangible assets with indefinite useful lives;
  • Costs related to strategic restructuring operations or transformation plans;
  • Costs related to major external growth transactions;
  • Costs related to crises and major disputes;
  • In connection with IFRS 3 and IFRS 10, (i) acquisition costs related to acquisitions of companies resulting in control, (ii) revaluation gains or losses accounted for following a loss of control, and (iii) changes in earn-outs subsequent to acquisitions resulting in control.

Recurring operating margin is defined as the Recurring operating income over Sales ratio.

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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 8:15 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 quarterThird quarter
 202320242023202420232024


BY GEOGRAPHICAL ZONE		           
Europe2,2482,3362,4292,4472,3922,427
North America1,7141,7371,7041,5951,7471,611
China, North Asia & Oceania8248409541,001896967
Latin America689727779810771706
Rest of the World1,4861,1501,3691,0841,1001,115


BY CATEGORY		          
EDP3,7683,4743,7313,2983,4743,283
Specialized Nutrition2,1432,1832,1422,2132,0702,189
Waters1,0511,1321,3621,4261,3621,354
           
TOTAL6,9626,7897,2356,9386,9066,826


 First quarter 2024Second quarter 2024Third quarter 2024
 Reported changeLFL changeReported changeLFL changeReported changeLFL change


BY GEOGRAPHICAL ZONE		         
Europe+3.9%+2.8%+0.7%+0.7%+1.5%+1.4%
North America+1.3%+2.5%-6.4%+5.0%-7.7%+5.8%
China, North Asia & Oceania+1.9%+8.9%+5.0%+8.4%+7.9%+8.0%
Latin America+5.4%+4.1%+4.0%+5.0%-8.5%+2.7%
Rest of the World-22.7%+6.0%-20.8%+5.3%+1.4%+6.0%


BY CATEGORY		      
EDP-7.8%+3.0%-11.6%+3.3%-5.5%+4.1%
Specialized Nutrition+1.9%+3.8%+3.3%+4.7%+5.7%+5.2%
Waters+7.6%+8.1%+4.7%+4.4%-0.6%+3.2%
       
TOTAL-2.5%+4.1%-4.1%+4.0%-1.2%+4.2%


All references in this document to Like-for-like (LFL) changes, and Recurring operating income and margin, correspond to alternative performance measures not defined by IFRS. Their definitions and their reconciliation with financial statements, as well as the definitions of geographical zones, are listed on pages 3 and 4.

Attachment


FAQ

What was Danone's (DANOY) Q3 2024 sales growth?

Danone's Q3 2024 like-for-like sales growth was +4.2%, reaching €6,826 million, driven by +3.6% volume/mix growth and +0.7% price increase.

How did Danone (DANOY) perform in China during Q3 2024?

Danone achieved +8.0% like-for-like sales growth in China, North Asia & Oceania, with volume/mix accelerating to +10.2%, driven by strong performance across all categories.

What is Danone's (DANOY) sales guidance for 2024?

Danone confirmed its 2024 guidance with like-for-like sales growth expected between +3% and +5%, along with moderate improvement in recurring operating margin.

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