Danone: a first quarter of 2021 to forget
Sales dropped by 9.4% due to the negative impact of exchange rates
Danone recorded € 5.66 billion in sales in the first quarter of 2021, reporting a decline of 9.4%, mainly caused by the negative impact of exchange rates. However, the company called that just ended "the last quarter of decline" before returning to like-for-like prominence in Q2. The French group has achieved its goal of returning to profitable growth in H2, thanks to the gradual reopening of the economies with the launch of vaccination programs. Sales increased by Lfl 1.6% to € 3.15 billion for Danone's Edp (Essential Dairy and Plant-based) division. Conversely, there was a 7.7% drop in the "Specialized Nutrition" unit and an 11.6% drop in water sales.
Within the EDP unit, Europe and North America recorded solid growth thanks to probiotics, proteins and plant-based products. Danone's plant-based portfolio grew double-digit in Europe, while essential dairy products saw large market share growth thanks to sales of the Actimel, Danette and YoPro brands. Adult medical nutrition remained strong, particularly in China; however, infant nutrition continued to suffer from pandemic-related channel closures in China, reporting a drop in cross-border channel sales of around 45%. Danone's Waters division has shown a gradual improvement over previous quarters, especially in Europe.
The company has come under a lot of pressure from investors over the past year, so much so that former CEO and chairman of Danone Emmanuel Faber has left both roles (see EFA News article from 3-3-21 ). While the search for a replacement is underway, Véronique Penchienati-Bosetta and Shane Grant have taken on the role of interim co-CEO. "We have now experienced more than a year of Covid and the pandemic continues to impact our markets. Even though this has led to an overall drop in sales, -3.3% on a like-for-like basis, this first quarter. confirmed many of Danone's strengths and ability to pull it off", they said. "It is to our highly motivated Danoners that we send our thanks for their resilience and hard work during these unprecedented times. Thanks to them, together, we will bring Danone back to profitable growth and a leading role in the market".
EFA News - European Food Agency