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Danone SA ADR - Stock Quote DANOY

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Morningstar's Danone SA ADR Stock Analysis

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Strong Performance for Nutrition and Waters in Danone's Q1; Shares Fairly Valued

Ioannis Pontikis, CFA Senior Equity Analyst

Analyst Note

| Ioannis Pontikis, CFA |

Danone reported first-quarter results with like-for-like sales up 7.1% (volume/mix up 2.2% and pricing up 4.9%). Essential dairy and plant-based was up 3.6% on a like-for-like basis (plant-based growing low single-digits in Europe) while specialized nutrition and water were up 9.5% and 15.9%, respectively. Danone reiterated fiscal 2022 guidance with organic sales growth of 3%-5% (versus 4.3% in our model) and operating margin above 12% (versus our 12.4%), assuming 100% reinvestment of cost savings and a low- to mid-teens level of input cost inflation based on current macroeconomic assumptions. Longer-term, Danone expects 3%-5% organic sales growth (versus 2.8% in our model) and operating income growth higher than sales growth in the midterm (2023-24, in line with our estimates). We maintain our EUR 54 fair value estimate and narrow-moat rating for Danone.

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Danone SA ADR's Company Profile

Business Description

Following the acquisition of WhiteWave, Danone restructured the firm into three broad segments: essential dairy and plant-based products, which represents just over half of group revenue; specialised nutrition; and bottled water. The firm's portfolio includes well-known brands such as Danone/Dannon dairy products, Nutrilon and Cow & Gate infant nutrition, and Evian and Volvic bottled water. Danone derives about 60% of its annual sales outside Western Europe, up from about just one third in 2001.

17, Boulevard Haussmann
Paris, 75009, France
T +33 144352020
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Jun 30, 2006
Fiscal Year End Dec 31, 2022
Stock Type
Employees 98,105

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